Patterson City Council
October 1, 2026

AMENDED

CITY OF PATTERSON
City Council Special Meeting Agenda
October 01, 2026, 06:00 PM
City Council Chambers
1 Plaza, Patterson, CA 95363

PUBLIC MEETING GUIDELINES
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The City Council agenda and supporting public documents are available for viewing in City Hall, Administration Department, 1 Plaza, 2nd Floor, Patterson, California, during normal business hours.

The City Council agenda and supporting public documents are also available online on the City web site www.pattersonca.gov or please call or email the City Clerk at (209) 895-8012 or [email protected]  If you wish to be notified of future City Council Meetings, please visit our web site www.pattersonca.gov and go to “City Council Agendas”.

Call to Order
Pledge of Allegiance
Statements of Conflict
Public Hearing
Public hearing and consideration of censure resolution or other disciplinary action under the City Officials’ Handbook.

Staff Report: Deputy City Attorney Pritchard
Council: Motion to consider censure Resolution No. 2026-58 or other disciplinary action under the City Official's Handbook.

PUBLIC COMMENT
Members of the Public may address the City Council regarding this agenda item before the Council Considers or takes action on the item. Comments are limited to three (3) minutes per speaker unless otherwise determined by presiding officer (Resolution No. 2025-11).

City Staff Reports
Approve Resolution No. 2026-57 the acquisition of real property for a groundwater recharge basin, authorizing the City Manager to execute the Certificate of Acceptance and closing documents, and authorizing a $1,989,373.79 budget adjustment.

Staff Report: Deputy City Attorney Pritchard
Council: Motion to Approve Resolution No. 2026-57 the acquisition of real property for a groundwater recharge basin, authorizing the City Manager to execute the Certificate of Acceptance and closing documents, and authorizing a $1,989,373.79 budget adjustment.

1. 2.

3. 4.

4.1 5.

5.1

PUBLIC COMMENT
Members of the Public may address the City Council regarding this agenda item before the Council Considers or takes action on the item. Comments are limited to three (3) minutes per speaker unless otherwise determined by presiding officer (Resolution No. 2025-11).

Adjournment

DECLARATION OF POSTING
I, Aracely, Alegre, City Clerk of the City of Patterson, California do hereby declare that the foregoing notice was posted on the Bulletin Board at City Hall, 1 Plaza, Patterson, California on September 30, 2026.

The Agenda is also posted for public view on the Bulletin Boards of the Patterson Branch Library, 46 N. Salado Avenue, Patterson, and the City of Patterson City Web Site www.pattersonca.gov Dated this September 30, 2026
/s/ Aracely Alegre, CMC

6.

CITY COUNCIL

AGENDA REPORT
TO: Mayor Clauzel and Members of the City Council
FROM: Fernando Ulloa, City Manager
BY: Christina M. Pritchard, Deputy City Attorney
MEETING DATE: October 1, 2026
ITEM: 4.1
SUBJECT : Public hearing and consideration of censure Resolution No. 2026-58 or other disciplinary action under the City Officials’ Handbook.

RECOMMENDATION
The Rules Committee recommends that the City Council consider discipline concerning Mayor Michael Clauzel based on the existing third-party investigation. On September 28, 2026, the Committee held a public hearing, received public comment,and provided the Mayor an opportunity to be heard. The Mayor did not appear and did not send a representative. The Committee determined that the investigation was sufficient and that no additional investigation was necessary before Council consideration.

The Council is not required to adopt the proposed censure Resolution No. 2026-58. After considering the complete record and the Mayor’s response, the Council may censure, reprimand, admonish, dismiss the matter, or take no disciplinary action, subject to the voting requirements summarized below.

BACKGROUND
City employees submitted complaints concerning the Mayor’s conduct and involvement in City operations. Human Resources reviewed the complaints and recommended an independent investigation. The City retained Liebert Cassidy Whitmore, which interviewed witnesses, reviewed documents, made credibility determinations when necessary, and applied the civil preponderance-of-the-evidence standard. The investigator issued a report on July 21, 2026.

The investigator did not sustain the allegation of unlawful harassment, discrimination, or retaliation. The investigator sustained allegations that the Mayor engaged in bullying and abusive conduct toward City employees and Councilmembers and became directly involved in City operations while bypassing the City’s organizational structure. The sustained findings cite Chapters 7, 8, and 9 of the City Officials’ Handbook; Patterson Municipal Code sections 2.16.030,

2.16.040, and 2.16.050; and applicable City personnel policies.

Following completion of the investigation, a written request for discipline was submitted, pursuant to Chapter 7, Section D of the Handbook. The City Council selected a three-member Rules Committee. The request and notice of the Committee hearing were served on counsel for the Mayor at least 72 hours before the hearing.

At its September 28, 2026 public hearing, the Rules Committee reviewed the request and investigative materials, took public comment, and offered the Mayor an opportunity to respond.

The Mayor did not attend and did not send a representative. By a vote of 3 to 0, the Committee determined that the investigation was sufficient, no further investigation was warranted, and the matter should be transmitted to the Council for consideration of discipline. The Committee report was served on the Mayor and Council on September 29, 2026.

COUNCIL REVIEW
Chapter 7, Section D of the City Officials' Handbook provides that City Officials who violate the Handbook, state or federal law, or the Patterson Municipal Code may be subject to disciplinary measures, including admonishment, reprimand, or censure. The Handbook defines censure as a formal resolution reprimanding an individual for misconduct and identifies censure as a disciplinary action.

The Council should independently consider the Rules Committee report, the investigation materials included in the public record, any properly submitted evidence, public comment, and the Mayor’s oral or written response. The fact that the investigator sustained allegations or that the Rules Committee forwarded the matter does not require the Council to impose any particular discipline.

The Mayor must be permitted to make opening and closing statements, question the accuser or accusers consistent with reasonable meeting procedures, submit evidence, and be represented by counsel. The Mayor’s decision not to participate in the Rules Committee hearing does not eliminate the opportunity to participate in the Council hearing.

A. Summary of Investigator’s Findings
The following summarizes the investigator's conclusions. These are the investigator's findings and do not constitute findings independently made by the Rules Committee or the City Council. • Not sustained:The investigator did not sustain the allegation that the Mayor engaged in unlawful harassment, discrimination, or retaliation in violation of state or federal law. • Sustained: The investigator sustained the allegation that the Mayor violated City policies by engaging in bullying and abusive conduct toward City employees and City Councilmembers.
• Sustained: The investigator sustained the allegation that the Mayor violated City policies and the Patterson Municipal Code by becoming directly involved in City operations and bypassing the City's organizational structure.

B. Available Actions and Vote Requirements

1. Censure: Adopt a formal resolution reprimanding the Mayor for misconduct. Censure is disciplinary in nature. A Censure Resolution requires a 4/5 vote of the Council.

2. Reprimand: Find that misconduct occurred but did not rise to the level requiring censure, and issue a formal reprimand. Reprimand is a minute action and requires a 3/5 vote of the Council.

3. Admonishment: Issue a formal reminder of applicable rules. Under the Handbook, an admonishment is not disciplinary in nature and need not be directed at one official.

Admonishment is a minute action and requires a 3/5 vote of the Council.

4. Dismissal or No Discipline: Dismiss the request or determine that no disciplinary action is warranted. Dismissal is a minute action and requires a 3/5 vote of the Council.

5. Additional Investigation: Direct additional investigation if the Council concludes the existing record is insufficient before final action. Requires a 3/5 vote of the Council and direction to the City Attorney regarding the scope of the additional investigation to be conducted.

The attached resolution is available if at least four-fifths (4/5) of the Council determines, after the public hearing, that the sustained conduct occurred, violated the cited City standards, and warrants formal censure. The resolution formally censures the Mayor and directs future compliance with the Council Manager form of government and the City’s civility requirements. The Council may revise the resolution before adoption, provided the final action remains within the scope of the noticed agenda item and the City Officials’ Handbook, and the Mayor has a fair opportunity to respond.

FISCAL IMPACT
Costs associated with this item include staff and legal time. If the Council directs further investigation, additional costs may be incurred for the investigation and preparation of a public report.

ENVIRONMENTAL REVIEW
The proposed action is not a project subject to the California Environmental Quality Act (“CEQA”) because it is an organizational and administrative activity that will not result in a direct or reasonably foreseeable indirect physical change in the environment. (CEQA Guidelines, § 15378(b)(5).)

RECOMMENDED ACTION
It is recommended that the City Council open the public hearing; receive the Rules Committee report (attached hereto as Exhibit A), investigation report (attached hereto as Exhibit B), public comment, and any oral or written response from the Mayor; close the hearing; deliberate; and select one of the actions authorized by the City Officials’ Handbook (listed above).

If the Council determines that censure is warranted, adopt the attached resolution by at least a fourfifths (4/5) vote.

ATTACHMENTS
Resolution No. 2026-58
Rules Committee Report
Redacted Investigation Report
RESOLUTION NO. 2026-58

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PATTERSON

CENSURING MAYOR MICHAEL CLAUZEL
WHEREAS, the City Officials’ Handbook establishes standards of ethics, civility, and interaction with City staff and authorizes admonishment, reprimand, censure, and other measures when a City official violates the Handbook, state or federal law, or the Patterson Municipal Code; and WHEREAS, after City employees raised complaints concerning Mayor Michael Clauzel, Human Resources reviewed the complaints and recommended that the City retain an independent thirdparty investigator; and WHEREAS, the retained investigator interviewed witnesses, reviewed documents, considered the Mayor’s responses, and issued a report dated July 21, 2026 sustaining allegations that the Mayor engaged in bullying and abusive conduct toward City employees and Councilmembers and became directly involved in City operations while bypassing the City’s organizational structure; and WHEREAS, following review of the investigation report by the City Council, a written request for discipline under Chapter 7, Section D of the Handbook was submitted, and the City Council selected three Councilmembers to serve as the Rules Committee; and WHEREAS, on September 28, 2026, after notice to the Mayor, the Rules Committee held a public hearing, received public comment, and provided the Mayor an opportunity to be heard. The Mayor did not appear and did not send a representative; and
WHEREAS, at the close of the public hearing on September 28, 2026, the Rules Committee determined that the existing investigation was sufficient, that no further investigation was warranted, and that the matter should be forwarded to the City Council for consideration of censure or other discipline; and
WHEREAS, on October 1, 2026, the City Council held a noticed public hearing, considered the Rules Committee report, the investigation report, public comment, and any evidence or argument presented by or on behalf of the Mayor, and provided the Mayor the procedural opportunities required by the Handbook.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PATTERSON HEREBY RESOLVES AS FOLLOWS.

Section 1. Findings
The foregoing recitals are true and correct and are incorporated into this Resolution. The City Council’s action is based on the record before it and is limited to the conduct addressed in the sustained investigative findings.

Based on the entire record, the City Council finds that the conduct described in the sustained findings occurred and was inconsistent with the City Officials’ Handbook and the Council Manager form of government established by the Patterson Municipal Code. 4915-6290-6726, v. 4
Section 2. Censure
The City Council formally censures Mayor Michael Clauzel for engaging in bullying and abusive conduct toward City employees and Councilmembers and for becoming directly involved in City operations while bypassing the City’s organizational structure. The Council finds that this conduct failed to meet the standards expected of City officials and undermined the City’s established Council Manager form of government.

Section 3. Direction for Future Conduct
The City Council directs the Mayor to comply with the City Officials’ Handbook and the Patterson Municipal Code, to conduct City business through the City Manager when dealing with City staff and operations, to refrain from directing or pressuring City employees, and to maintain professional and civil communications with City employees, Councilmembers, and members of the public. Nothing in this Resolution restricts the Mayor’s lawful exercise of official duties or protected rights.

Section 4. No Retaliation
The City Council directs that no City official retaliate against any complainant, witness, employee, or other person for participating in the complaint, investigation, or disciplinary process.

Section 5. Effective Date
This Resolution takes effect immediately upon adoption. The City Clerk shall enter it into the official records of the City and provide a copy to the Mayor.

The foregoing resolution was adopted by the City Council at a regular meeting held on October 1, 2026, by __________________________, who moved its adoption, which motion was duly seconded by ________________________, and the resolution adopted by the following roll call vote:

AYES:

NOES:

EXCUSED:

APPROVED:

Carlos Roque
Mayor Pro Tem of the City of Patterson
ATTEST:

Aracely Alegre
City Clerk of the City of Patterson
4915-6290-6726, v. 4
I hereby certify that the foregoing is a full, correct and true copy of a resolution passed by the City Council of the City of Patterson, a Municipal Corporation of the County of Stanislaus, State of California, at a regular meeting held on the 1st day of October 2026, and I further certify that said resolution is in full force and effect and has never been rescinded or modified.

DATED:
______________________________________
City Clerk of the City of Patterson

RULES COMMITTEE REPORT
COMMITTEE MEETING DATE: September 28, 2026
REPORT DATE: September 29, 2026
SUBMITTED TO: Mayor Clauzel and Members of the City Council SUBJECT: Review of request for discipline concerning Mayor Michael Clauzel

COMMITTEE DETERMINATION
After reviewing the written request for discipline, the redacted independent investigation report, the applicable City policies, and the information received at its September 28, 2026 public hearing, the Rules Committee determined that the existing investigation is sufficient for the City Council to consider whether discipline should be imposed. The Committee determined that no additional investigation is necessary and recommends that the matter be presented to the City Council for consideration of a censure resolution or other action authorized by the City Officials’ Handbook.

BACKGROUND
Chapter 7, Section D of the City Officials' Handbook provides that City Officials who violate the Handbook, state or federal law, or the Patterson Municipal Code may be subject to disciplinary measures, including admonishment, reprimand, or censure. The Handbook defines censure as a formal resolution reprimanding an individual for misconduct and identifies censure as a disciplinary action.

The City Officials' Handbook establishes a Rules Committee as the first level of review for a request to discipline a member of the City Council, including the Mayor. The matter before the Rules Committee arose from employee complaints concerning Mayor Michael Clauzel. Human Resources reviewed the complaints and recommended that the City retain a third-party investigator.

The City retained Liebert Cassidy Whitmore, which investigated the allegations and issued a report dated July 21, 2026. The investigator interviewed witnesses, reviewed documents, made credibility determinations when necessary, and applied the civil preponderance-of-the-evidence standard.

Under that standard, an allegation was sustained when the investigator concluded that it was more likely than not that the alleged conduct occurred.

The Mayor was interviewed during the investigation and was given an opportunity to respond to the allegations. The investigation report reflects the Mayor's responses, including admissions, denials, explanations, and contextual information offered in response to the allegations.

The investigator applied a preponderance-of-the-evidence standard and made the following determinations:
• Not sustained: unlawful harassment, discrimination, or retaliation in violation of state or federal law.
• Sustained: bullying and abusive conduct toward City employees and Councilmembers in violation of City policies.
• Sustained: direct involvement in City operations and circumvention of the City’s organizational structure in violation of City policies and the Patterson Municipal Code.

Following review of the investigation report by City Council, a written request was submitted to the Rules Committee requesting that the matter proceed under Chapter 7, Section D of the City Officials’ Handbook.

SEPTEMBER 28, 2026 PUBLIC HEARING
The Rules Committee convened on September 28, 2026, and opened a public hearing on the request for discipline. Public comment was received and the Mayor was provided an opportunity to address the request and the investigative findings. The Mayor was not present for the duration of the meeting. The City Attorney inquired into the presence of any authorized representative who may have been present on behalf of the Mayor, with no such representative appearing. The public hearing was closed before the Committee considered the request for discipline, the redacted investigation report, and relevant procedural advice provided by the City Attorney.

RECOMMENDATION TO THE CITY COUNCIL
Following its review, by a vote of 3-0, the Committee determined that no additional investigation is necessary and directed preparation of a report for City Council consideration of disciplinary action based on the existing investigative record.

The Committee’s recommendation is procedural. The Rules Committee does not impose discipline and does not predetermine the action the City Council should take after hearing from the Mayor and considering the full record.

SERVICE
In accordance with Chapter 7, Section D, of the City Officials’ Handbook, this report was served on the Mayor and the City Council on September 29, 2026, within ten (10) days after the Rules Committee meeting.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013

WHETHER MICHAEL CLAUZEL VIOLATED CITY POLICIES AND CODE

BY BECOMING DIRECTLY INVOLVED IN CITY OPERATIONS BYPASSING THE CITY ORGANIZATIONAL STRUCTURE.

II. METHODOLOGY
A. WITNESSES INTERVIEWED
I interviewed each of the following witnesses. All interviews, except as noted below, were conducted via Zoom. I recorded each interview, except as noted below. A copy of all such recordings and Rev transcriptions is provided in the following link: ____..  – June 1, 20261
 – June 5, 2026
 – June 9, 2026
 – June 9, 2026
 – June 9, 2026
 – June 15 and June 18
 – June 16, 2026
 Michael Clauzel – June 25, 2026 (in person at Patterson City Hall)  – June 29, 2026
 – June 29, 2026 (most not recorded due to technical difficulties)  – July 1, 2026
 – July 1, 2026
 – July 8, 2026
 – July 8, 2026
B. CREDIBILITY DETERMINATIONS
1 , a local AFSCME representative, attended ’ interview.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
I made credibility determinations during this investigation as necessary. To determine credibility, I used the following factors from the California Civil Rights Department investigation guidelines:

1. Inherent plausibility;

2. Motive to lie (based on the existence of a bias, interest or other motive);

3. Corroboration;

4. Extent a witness was able to perceive, recollect, or communicate about the matter;

5. History of honesty/dishonesty;

6. Habit/consistency;

7. Inconsistent statements;

8. Manner of testimony; and

9. Demeanor.

C. STANDARD OF PROOF
In weighing the available evidence, I used the civil law preponderance of evidence standard of proof. I could make one of two findings:

Not Sustained - There is insufficient evidence to determine whether the alleged conduct occurred.

Sustained - The alleged conduct occurred.

I analyzed the facts and determined whether the allegations were with or without merit under a preponderance of the evidence standard. “Preponderance of the evidence,” for purposes of this report, means that the evidence on one side outweighs, or is more than, the evidence on the other side.

D. DOCUMENTS REVIEWED
In conducting this investigation, I received and reviewed the attached documents forwarded to me, which are included in the following share link file: (_____).

III. RELEVANT WITNESS INTERVIEW SUMMARIES
A.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
. During the May 19, 2026
closed session, the City Attorney gave the Council Member’s Clauzel’s 20–25-page document.

The City Attorney indicated that if the Council does not accept the Mayor’s proposal, “He is prepared to go scorched earth on you guys, on Council, on City Manager, and on City Attorney’s office. He also wants to know who votes on the third-party investigation and how they vote.

And he will demand that the City pay for all of his legal services to protect himself.” What heard was if they follow City policy/handbook, Clauzel would come after them personally. And the City Attorney responded, “’It looks as so.’” said they were then asked what they wanted to do but were not given any guidance by the City Attorney. said at the meeting, “’So, what I’m hearing is that what he’s being accused of is exactly what he’s doing to us and nobody’s saying anything.’” said now they are being threatened by Clauzel who is a sheriff, and was concerned about being protected during the investigation, “but they literally just let him roll back into Council.” “And they just proceeded on like nothing happened.

And I’m still waiting, so what about us? So he gets to threaten us. He gets to say he’s going to come after us, he’s going to do all these things. And then he just gets to sit next to us and we’re just okay…” Then started thinking about the complainants. “This is what’s happening to the complainants. Still nothing’s been addressed.” feels threatened and concerned. does not feel physically threatened by Clauzel, but she does feel threatened by what he is capable of doing.

Before being on Council, had an incident with Clauzel where he told her about a community member, “’You better get your girl in line right now.’” Another incident occurred around the time first became a Council Member when Clauzel was upset when the Fire union picketed the City. Clauzel called and said, “’Oh, it’s just and Mike talking, but fuck him, fuck that. I’m never fucking having anything to do with him again. You’re going to have to deal with him because I don’t want to fucking see him.’” At first, Clauzel called her and would start the conversation with “’friend to friend,’” then he would start talking City business. stopped answering his calls. “I just do not communicate with him at all. If he needs something from me, I’ve made it very clear, just text me what you need. I will take care of it. Outside of that, I do not want to talk to him.”
H. MAYOR MICHAEL CLAUZEL
Clauzel has been the Mayor since December 2022. He is also a Lieutenant with the San Francisco Sheriff’s office, which he has been since 2007. Clauzel identified and confirmed he prepared and the documents he provided to me are accurate, including the first via email with a series of emails. Clauzel indicated he started preparing the document over the course of the last month and a half. The approximate 25-page document that he prepared and was given to Council, Clauzel said it took him a couple of weeks to put it together before it was given to Council. In response to being asked why he prepared the 25-page document, Clauzel said he knew they were going to be discussing “this issue.” Clauzel said he has had “literally hundreds, if not thousands of conversations with the city employees over the course of the last three and a half years, and it didn’t take a rocket scientist, ma’am, to figure out which ones would appear, Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
that there could be some sort of issue with them.” Clauzel denied seeing any written complaints related to what he is responding to. Clauzel also provided me with Council Member Romero’s two-and-a-half-page resignation letter, which is “straight off the Irrigator” – the local newspaper.

Clauzel said Jessica Romero was the Council Member he confided in the most, and they were the minority voices on the Council. Clauzel said it was important for me to speak to , who are witnesses to the “ABS investigation…which
is what spawned all of this.”
Clauzel said he thought about resigning from the position of Mayor before Romero resigned because the Council continues to go outside its scope of authority… “Just like what Jessica has articulated.” Clauzel said they called for an investigation of the Fire Chief and then put pressure on the City Manager to terminate him. Clauzel cited that the HR Director and Park and Rec Director have been let go. “The City Manager…is being heavily monitored as well at this time” by the three on the City Council. “Both Jessica and I feel we no longer have any capacity to make decisions whatsoever because the three consistently out vote us.” In response to being asked about the incident in October 2025 with and what alleged, Clauzel said he did have a conversation with and admitted that he (Clauzel) was “emotionally escalated before” he went to the event. “And I freely will admit to you that I should not have placed myself in that situation.” “I did not grab him, wrestle him, turn him in any way using force. And the reason why he hasn’t made a complaint until this time is because he knows the entire context of the whole conversation.” Clauzel noted it was 200 days between the incident and complaint.

In response to being asked if he said, “If you come after me, I’m coming after you,” Clauzel said “context is important.” Clauzel described how the union “pelted this community with a whole slew of lies that I was not acting in good faith to try and correct the grievances that they had, that I wasn’t communicating with the City Manager. It was just a huge amount of slander against my character and that with which that ‘coming after you,’ as I fully admit and document, right, I absolutely said it, but the context wasn’t like I’m coming after him as a person. He knew exactly what I was referring to because there was a whole bit of conversation that happened surround that.” Clauzel said he was “advocating for peace between the unions…’You guys come to these meetings. We need to resolve this. We can find a way. I know we can.’ Again, I wasn’t talking about direct negotiations. It was more the tenor and tone of like, ‘We can work together to resolve all these issues. I know we can.” Clauzel said he admits to using the language “if you come after me, I’m coming after you.” “And I admit to fault that night. I should have been out of character. I should always maintain my composure and I did not. I fully admit that, right.” “That part of the wrongdoing to me is clear and a bright line.” But Clauzel said his words needs to be seen within the full context of “all the lies and defamation.” “Had the context or the inference that night been any type of threatening behavior, believe me, they would have gone after the authorities,” in reference to and his girlfriend. Clauzel said knew it was not a threat.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
character and not about specific employees. Clauzel admitted to raising his voice and cussing, but nothing intended by him to intimidate. “It was intended to make sure that they fully understood my position, right, and that I was passionate about resolving problems.” Clauzel does not remember the 2021 allegations of Clauzel yelling at and Regarding the 2024 / 2025 allegation about Clauzel pulling up on a motorcycle and being unhappy with the union, Clauzel said, “This is kind of like an asked and answered situation in the sense that it’s the same thing, ma’am. I continued to communicate with them that we need to resolve these issues.”
Clauzel said, “so there’s a lot of stuff. I make no excuses for my actions. I want to get that on the record. I messed up in many cases. I have corrected my behavior…I wizened up that I can’t trust these people at all as far as I can throw them. Because if their interests are threatened, they’re going to throw me under the bus.” “The problem is I’m interacting so much with these people. I’m having too many free-wheeling conversations with them, but there’s no malice intent. There’s none of that. It is just trying to resolve problems and I’m trying to get the crux of it so we can move on and get to building parks and doing other things that are important, right. And so, I am going to restrict myself from even talking to any of these people anymore.

That’s what the offer was, so that we can resolve the issue and move on. The employees can get notified. I’m just going to say hi and bye. How you doing? Stuff like that. But other than that, I am stepping back and it’s all going to go through the City Manager.” In response to being asked about the allegation that his document made the Council Members feel threatened, Clauzel said, “Of course.” Clauzel believes this is in reference to a line in his document that refers to him going to file a civil grand jury complaint “and we’re going to get to the bottom of this.” “What happened to Jessica, and myself, and a lot of the employees in this building once you talk to them is not right.” “And this Council is basically…digging up whatever they can find to throw dirt on me. And again, rightfully so, ma’am, I’m not trying to excuse my actions at all. Okay. I’m a cop. What’s done is done. What I did, I did. But believe me, I wasn’t trying to threaten or intimidate anybody.” “I’m a passionate guy…they probably felt that that line where I basically state…’I am going to get to the bottom of this and I’m going to prosecute those individuals that have falsely accused me because this is retaliatory.’ It is very clearly retaliatory. They know what they did. They know that there are very clear, what I believe, are very clear Brown Act violations that have occurred. There has been undue influence by having them present in staff meetings.” Clauzel referred to one City Council Member telling the City Manager to take two options off related to the ABS project and just have “approved” on the item. Clauzel said was made to feel extremely uncomfortable in this situation and voiced her concerns to Clauzel.

Clauzel said, “I know that once we go through this investigation…I’m going to have my own comeuppance with this because I shouldn’t be talking to employees…without questions.

That’s why I don’t do it anymore.”
Clauzel said, “I stopped communicating with any of those Council Members. So when I wrote down that statement, honestly, probably shouldn’t have done that. But again, you’ve seen

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
Manager will report the concern to the full Council with potential action taken against the Councilmember as outlined in Chapter 7, “Ethics and Civility,” of this Handbook.

2. Chapter 7: Code of Ethics and Civility, pages 19, 22-26 Number 2: Comply with both the spirit and the letter of the Law and City Policy.

Members shall comply with the laws of the United States, the State of California, and the City of Patterson in the performance of their public duties. These laws include but are not limited to:
…the City’s Municipal Code…employer responsibilities…and City ordinances and policies.

Number 3: Conduct of Members. The professional and personal conduct of members must be above reproach and avoid even the appearance of impropriety. Members shall refrain from abusive conduct, personal charges or verbal attacks upon the character or motives of other members of the Council, boards and commission, the staff, or public.

Enforcement of Misconduct
When a City official violates this chapter, this Handbook, state or federal law, or any part of the Patterson Municipal Code, they are subject to disciplinary measures including, but not limited to admonishment, reprimand, or censure..(See attached pages 22-26 for specific process)

3. Chapter 8: Anti-Harassment Policy, pages 28 -30
Abusive Conduct: is also knows as “workplace bullying.” This conduct is conduct that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests. Abusive conduct may include: i. Repeated infliction of verbal abuse such as derogatory remarks, insults, or epithets; ii. Verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating…
Retaliation: any adverse conduct taken against an individual by a City Official because the individual has reported harassment, or has participated in the Complaint Procedure described below, is prohibited. A. Adverse conduct: includes…real or implied threats of intimidating to prevent an individual from reporting harassment.

4. Chapter 9 – City Official – Interaction with Staff and Officials, pages 34-37
Council-Manager Form of Government. Patterson governs under a Council-City Manager form of government…The council has appointed a City Manager to implement this policy and undertake the administration of the organization. The Council is to work through the City Manager in dealing with City staff. Indeed, the P.M.C. requires Councilmembers to work through the City Manager unless simply requesting information from other staff members.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
The City Manager is appointed by the Council…to direct the daily operations of City government…The City Manager is responsible to the Council rather than to individual Councilmembers and directs and coordinates the various departments.

Council-Manager Relationship. Employment relationship between the Council and City Manager: this relationship honors the fact that the City manager is the chief executive officer of the City. The Council should avoid situations that can result in City staff being directed, intentionally or unintentionally, by one or more members of the Council…All dealings with the City Manager, whether in public or private, should respect the authority of the City Manager in administrative matters. Disagreements should be expressed in policy terms, rather than in terms that question satisfaction with or support of the City Manager.

Staff roles: …Staff is obligated to take guidance and direction only from the Council as a whole through the City Manager or from the appropriate management supervisors. Staff is directed to reject any attempts by individual members of the Council to unduly direct or otherwise pressure them into making, changing or otherwise influencing recommendations.

City staff will make every effort to respond in a timely and professional manner to all requests made by individual City Officials for information or assistance, provided that, in the judgement of the City manager, the request is not of a magnitude, either in terms of workload or policy, which would require that it would be more appropriately assigned to staff through the direction of full Council.

Access to Information and Communications Flow…City Officials must avoid intrusion into those areas that are the responsibility of the staff. Individual City Officials may not intervene in staff decision-making, the development of staff recommendations, scheduling of work, and executing department priorities without the prior knowledge and approval of the Council as a whole. This is necessary to protect staff from undue influence and pressure from individual City Officials, and to allow staff to execute priorities given by management and the Council without fear of reprisal.

Council Roes:…Individual members of Council should not make attempts to pressure or influence staff decisions, recommendations, workloads, schedules, and department priorities without the prior knowledge and approval of the Council as a whole… B. CITY OF PATTERSON MUNICIPAL CODE
Chapter 2.16.030, 040, and 050
The city manager shall be the administrative head of the city government under the direction and control of the council, except as otherwise provided in this chapter. He shall have the authority to appoint the city clerk. He shall have the authority over all other department heads and employees except the city treasurer and city attorney.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
The city council and its members shall deal with the administrative services of the city only through the city manager. The city manager shall take his orders and instructions from the city council as a body, and no individual councilman shall give any orders or instructions to the city manager or his subordinates…
…The city manager shall appoint and promote, discipline, suspend or dismiss all employees of the city except for the city attorney and the city treasurer. No department head shall be appointed or removed until the city manager shall have first reviewed such appointment or removal with the city council in executive session.

C. CITY OF PATTERSON PERSONNEL POLICIES MERIT SYSTEM

RULES & REGULATIONS

1. City of Patterson Code of Ethics, section 107, page 3, 6 The following value statement whether elected, appointed or employed, guides us, as officials and employees of the City of Patterson: “Ethical behavior is critical to this organizations ability to achieve Its mission, goals, and objectives. The community’s perception of and confidence in City employees and officials is fundamental to quality government. As public servant, we are accountable for high standards of conduct.” The uses of the term “employee” in this document is intended to apply to all employees and officials whether elected, appointed or employed.

Behavior in the Workplace. Employees are responsible for conducting themselves professionally and lawfully in the workplace. Employees are expected to be aware of and conduct themselves in accordance with the Administrative policies of the City of Patterson.

2. Causes for Disciplinary Action, Section 1002, page 35 Causes for disciplinary action against any employee may include, but shall not be limited to, the following: …Intemperance; Discourteous treatment of the public or other City staff; Violation of any of the Merit System Rules and Regulations…City’s Code of Ethics, State or Federal Law. Other failure of good behavior either during or outside of duty hours, which of such a nature, that causes discredit to the City.

V. FINDINGS, ANALYSIS, AND RECOMMENDATIONS
A. FINDINGS

WHETHER MICHAEL CLAUZEL ENGAGED IN UNLAWFUL HARASSMENT,

DISCRIMINATION, OR RETALIATION IN VIOLATION OF STATE OR FEDERAL LAW. NOT SUSTAINED.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
want you to stop a thing.’” There was no need for Clauzel to state let the process continue, and his stating so raising an air of his “allowing” it to continue.

In speaking about the Wine and Cheese event on May 23/24, 2026, Clauzel said, “And I even cleared up with that night. I told him I was totally out of pocket. I let him know straight up, right. My behavior’s unacceptable. At the end, it was not, I mean, it wasn’t great because again, I was acting like an idiot and I fully admit that to you, but we ended the conversation on an even keel and I left.” “And this Council is basically…digging up whatever they can find to throw dirt on me. And again, rightfully so, ma’am, I’m not trying to excuse my actions at all. Okay. I’m a cop. What’s done is done. What I did, I did. But believe me, I wasn’t trying to threaten or intimidate anybody.”
Clauzel either lacks self-awareness or is arrogant or both. He repeats that although he admits wrongdoing, he is not guilty of violating any laws because he had no intent. Clauzel either completely discounts or is unaware that his intent has no bearing on the receiver’s perceptions. In response to being told perceived the conversation as very intimidating and threatening to where he did not know if he should call law enforcement, Clauzel said that is not true “because I told him I’m not acting as Mayor, right. I’m acting as Mike. I’m calling you as Mike, because again, we have that tight relationship. So I find that very hard to believe based off the context of the conversation.” Separately, described Clauzel’s conduct as almost like “demanding friendship.” Clauzel’s continued belief, including during his interview, that there is no liability by simply stating he is not speaking as the Mayor and then discussing City business, is legally misplaced.

Clauzel has a linguist pattern of: emphatically admitting fault; then immediately providing a justification or mitigation for his conduct; then saying his behavior should not be that of a Mayor; then demanding acceptance of his proposed resolution and to move past his transgression, and the demand is consistent with the bully behavior. He leaves the receiver feeling that must agree or else. Clauzel essentially says – I am guilty; I had a reason; you need to accept it and my resolution – or as he said to Council, I will come after you, “So help me God.” Clauzel’s linguist pattern, lack of self-awareness, and bully behavior is evident in his document provided to the Council on May 19, 2026. Clauzel offers to resolve the issues by stating he will have no direct communications with employees, but then he threatens in bold stating, “If the investigation determines these allegations or the investigation itself is retaliatory or politically motivated, I will prosecute the individuals responsible. So help me God.” And in bold he also states, “…I will vigorously, publicly, and relentlessly defend myself.” Whether Clauzel intended it or not, a reasonable interpretation of his communication is he is trying to pressure Council to not follow through on an investigation mandated not just by City policy but law. This is bully behavior. Clauzel compared his 2024 document to the Sherriff with his May 2026 document to Council. Clauzel said it is a similar document to what he shared with Council, “A resolution to the problem at hand, right. And so instead of allowing this problem to go on, I always decide, look, I acted like an idiot, no problem. I’m just going to admit to it and I’m going to provide a resolution and that’ll be that. We can bury this and we can

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
 City of Patterson Personnel Polices Merit System Rules and Regulations, Code of Ethics, Section 107
 City of Patterson Personnel Polices Merit System Rules and Regulations, Code of Ethics, Section 1002

4. Michael Clauzel violated City policies and code by becoming directly involved in City operations and bypassing the City organizational structure.4
Based again on Clauzel’s own admissions, he has had and continued even after indicating he would cease, having direct communications with employees and involvement in operational matters, bypassing the required administrative structure. His repeatedly saying he spoke as a friend and “Mike” and not as the Mayor and then discussed City business and operations does not remedy the violation of City policies and code.

The example here is said, “It was almost as if the Mayor was running the City. Everything was coming from his shop.” But the problem seems to be bigger with staff also reaching out back to Council. said he reached out to the Mayor about another job offer he had, and when the Mayor told him not to take the job, said he ended up not taking the job because Clauzel told him not to take it.

Clauzel told “I got you hired…I got you the job, you work for me,” and “I’m the boss out here.” Clauzel told “They work for us. They do whatever the fuck we tell them to.” The plausible reaction to this is that the Mayor is seeking a quid pro quo in a transactional exchange.

Clauzel knows better and has known the required process for a while. At least going back to November of 2024 when he sent a written offer of resolution to Sheriff Dirkse, which says, “I make no excuses and assume full responsibility for my actions the night of Thursday, October 31st.” Clauzel committed in 2024 that he would not communicate with any member of Stanislaus County Law enforcement, and all communications between City employees and City Council with Stanislaus County Sheriff’s office would go through the City Manager or Assistant City Manager. Despite being aware of this issue, Clauzel repeated his direct interactions in operational matters after this written commitment. Up to April 28, 2026, when Clauzel reached out directly to to set up a meeting to discuss union issues, Clauzel continued the direct contacts.

Based upon the above, Clauzel has violated:
4 Allegations came up of other Council Members involving themselves in operational/personnel matters, which is outside the scope of this investigation; however, Council may want to consider this in following up on this sustained allegation against Clauzel.

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
 City of Patterson City Official Handbook, Chapter 9, City Official Interaction with Staff and Officials
 City of Patterson, Municipal Code, Chapter 2.16.030
 City of Patterson, Municipal Code, Chapter 2.16.040
 City of Patterson, Municipal Code, Chapter 2.16.050
 City of Patterson Personnel Polices Merit System Rules and Regulations, Code of Ethics, Section 1002
C. RECOMMENDATIONS
Since the allegations are sustained above, the City Official Handbook, Chapter 7 states that the City Official is subject to disciplinary measures, including but not limited to admonishment, reprimand, or censure, and sets for the process for going about such discipline. It is recommended that the Council follow that process.

The City should also advise the complainants that the investigation is complete and that the City is following up as it deems appropriate based on the investigation findings.

Council should also consider that although outside the scope of the investigation, witnesses identified by Clauzel noted that Council Members other than Clauzel involved themselves in personnel and/or operational matters. Council should consider either an open session or closed session training on the City policies and Code requirements for them staying out of personnel and operational issues and liability they can create for both the City and themselves individually when individually going outside their legislative lane.

CONCLUSION
Thank you for allowing us to assist the City. We appreciate the opportunity. If you have any questions, please do not hesitate to contact me.

Very truly yours,

LIEBERT CASSIDY WHITMORE
Shelline K. Bennett
SKB:mf
Enclosures
cc: Lakisha Callum

Ms. Nubia Goldstein
Re: City of Patterson – Investigation
July 21, 2026

13399899.1 PA057-013
bcc: BCCNameList

CITY COUNCIL

AGENDA REPORT
TO: Mayor Clauzel and Members of the City Council
FROM: Fernando Ulloa, City Manager
BY: Christina M. Pritchard, Deputy City Attorney
MEETING DATE: October 1, 2026
ITEM: 5.1
SUBJECT : Approve Resolution No. 2026-57 the acquisition of real property for a groundwater recharge basin, authorizing the City Manager to execute the Certificate of Acceptance and closing documents, and authorizing a $1,989,373.79 budget adjustment.

RECOMMENDATION
Discuss and consider adoption of Resolution No. 2026-57 approving the acquisition of real property for a groundwater recharge basin, authorizing the City Manager to execute the Certificate of Acceptance and closing documents, and authorizing a $1,989,379,79 budget adjustment.

BACKGROUND
On July 16, 2026, the City of Patterson City Council authorized the City Manager to negotiate the acquisition of APNs 021-019-019-000 (portion) and 021-019-020-000 (the “Property”) and enter into a purchase agreement, subject to due diligence review of the properties and final approval of the City Council. The purpose of this purchase is to secure land on a site suitable for the potential construction of a groundwater recharge basin facility. The Agreement of Purchase and Sale and Joint Escrow Instructions, attached hereto (“Agreement”), was executed on July 28, 2026 which provided for a purchase price of $2,000,000 with a deposit of $100,000 to be placed with an escrow agent. The Agreement provided for a due diligence period for inspections, studies, and testing to be conducted prior to the close of escrow. Pursuant to the Agreement, the City is responsible for the costs of any due diligence investigation conducted. The City must adopt a resolution accepting the Property or terminate the Agreement no later than October 1, 2026.

DISCUSSION
During the Due Diligence period City staff and legal counsel reviewed the following:
• Preliminary Title Report
• Phase I Environmental Site Assessment
• Prime Civil Solutions, Technical Memorandum regarding Boring Results • Quality Control Southwest, Inc., Subsurface Exploration Report Any preexisting liens and deeds of trust have been removed from the title report and are being resolved prior to closing so title can be taken free of liens. The Phase I Environmental Assessment revealed no evidence of recognized environmental conditions, controlled recognized environmental conditions, or historical recognized environmental conditions in connection with the Site and concluded that no Phase II assessment was warranted.

Test borings were conducted across both sides of the Property to approximately 250 feet deep in order to test for the presence of the Corcoran Clay layer. The boring results demonstrate that the Corcoran Clay has pinched out or is no longer laterally continuous beneath the Property, which confirms this is a suitable location for groundwater recharge to the Lower Aquifer. Similarly, the Subsurface Exploration Report evaluated subsurface investigation and percolation testing performed on the Property. Study of the soil samples indicates Corcoran Clay is not present and the nature of the soil samples was determined to provide a “very favorable recharge opportunity.”

FINANCIAL IMPACT
The total cost of the property acquisition is $2,089,373.79. This includes:
• The $2,000,000 purchase price;
• $76,084 in due diligence costs for Westwood Professional Services, Inc. ($6,410), Quality Control Southwest, Inc. ($59,750), and Prime Civil Engineering, LLC ($9,924); and • $13,289.79 in additional escrow, title policy, recording, and transfer costs.

After applying the $100,000 deposit toward the purchase price, the remaining amount to be paid is $1,989,373.79. Upon approval by the City Council, funds for the acquisition and related costs will be appropriated from the Water Fund. The deposit is included in the total acquisition cost and is shown separately to identify the remaining expense.

ENVIRONMENTAL REVIEW
The Zacharias-Baldwin Ranch Master Plan Environmental Impact Report evaluated the construction of a recharge basin facility at this location on a programmatic level. At that time, the prospective recharge basin lacked sufficient detail to be studied on a project level. However, now that additional due diligence has been completed and the property is secured, the City and the Master Plan Developers can proceed with completing the design and conducting project-level environmental review. In order to comply with the California Environmental Quality Act, projectlevel environmental review will be required before the City considers any action to provide final approval of the recharge basin facility.

RECOMMENDATION
Motion to adopt Resolution 2026-57 approving the following:

1. Authorizing the City Manager to execute the Certificate of Acceptance of Grant Deed and all additional paperwork required for close of escrow; and

2. Authorizing a total expenditure of $1,989,373.79 for the acquisition of APNs 021-019-019- 000 (portion) and 021-019-020-000 from the Water Fund (Fund 610).

ATTACHMENTS
City Council Resolution No. 2026-57
Certificate Of Acceptance
Agreement of Purchase and Sale and Joint Escrow Instructions, dated July 28, 2026 RESOLUTION NO. 2026-57

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PATTERSON

APPROVING THE ACQUISITION OF REAL PROPERTY FOR A POTENTIAL

GROUNDWATER RECHARGE BASIN, AUTHORIZING THE CITY MANAGER TO

EXECUTE THE CERTIFICATE OF ACCEPTANCE AND CLOSING DOCUMENTS, AND

APPROVING A BUDGET ADJUSTMENT
WHEREAS, the 2024 Groundwater Sustainability Plan and Pumping Reduction Plan requires the City to reduce groundwater pumping from the lower aquifer by 2030; and WHEREAS, on July 16, 2026, the City Council authorized the City Manager to negotiate an agreement to acquire property identified as a portion of Assessor’s Parcel Number (APN) 021-019- 019-000 and APN 021-019-020-000 (“Property”), subject to due diligence and final City Council approval; and
WHEREAS, the City and Land Development Consulting Group, LLC entered into an Agreement of Purchase and Sale and Joint Escrow Instructions (“Agreement”) for the Property, at a purchase price of $2,000,000, with a $100,000 deposit credited toward that price at closing; and WHEREAS, City staff has completed due diligence concerning title, environmental conditions, subsurface conditions, and the Property’s potential suitability for groundwater recharge; and WHEREAS, the estimated total acquisition cost, including the purchase price, $76,084 in due diligence costs, and $13,289.79 in escrow, title, recording, and transfer costs, is $2,089,373.79; after crediting the $100,000 deposit, the remaining expenditure is estimated at $1,989,373.79; and WHEREAS, acquisition of the Property does not constitute approval of the design or construction of a groundwater recharge basin, which will be considered separately following applicable projectlevel environmental review; WHEREAS, the Property is designated in Section 5.4 of the Zacharias Master Plan as a storm drain recharge basin; and
WHEREAS, the City requires a recharge basin and associated improvements to be built as needed to support future development.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Patterson as follows:

1. The City Council approves the acquisition of the Property pursuant to the Agreement, subject to satisfaction or lawful waiver of the applicable closing conditions, including conveyance of title as required by the Agreement.

2. The City Manager is authorized, on behalf of the City, to execute the Certificate of Acceptance of the Grant Deed, substantially in the form attached hereto, and to consent to recordation of the Grant Deed. The City Manager is further authorized to execute and deliver escrow instructions, closing statements, notices, certifications, and other documents reasonably necessary to complete the acquisition and close escrow in accordance with the Agreement. This authority includes delivery of the due diligence approval notice required by the Agreement, if timely and appropriate.

3. The City Council authorizes a budget adjustment appropriating $1,989,373.79 from the Water Fund (Fund 610) for the remaining acquisition and related costs. The City Manager and Finance Director are authorized to make the corresponding budget entries and disburse funds necessary to close escrow, consistent with the Agreement and the approved appropriation.

4. This Resolution authorizes the acquisition of the Property only. It does not approve construction or operation of a recharge basin or waive any later approval or environmental review required for such a project.

PASSED AND ADOPTED by the City Council of the City of Patterson at a regular meeting held on October 1, 2026, by the following roll call vote:

AYES:

NOES:

EXCUSED:

APPROVED:
__________________________
Michael Clauzel
Mayor of the City of Patterson
ATTEST:
______________________________
Aracely Alegre
City Clerk of the City of Patterson

I hereby certify that the foregoing is a full, correct and true copy of a resolution passed by the City Council of the City of Patterson, a Municipal Corporation of the County of Stanislaus, State of California, at a regular meeting held on the 1st day of October 2026, and I further certify that said resolution is in full force and effect and has never been rescinded or modified.

DATED:
______________________________________
City Clerk of the City of Patterson

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by the Grant Deed dated _________________, 2026, from the Land Development Consulting group, LLC, a California Limited Liability Company, to the City of Patterson, a California municipal corporation, is hereby accepted by the undersigned officer on behalf of the City. This acceptance is made pursuant to the authority conferred by Resolution No. 2026-_____ of the City Council adopted on October 1, 2026, and the City consents to the recordation of the Grant Deed to which this Certificate of Acceptance is attached by its duly authorized officer.

By:

Fernando Ulloa, City Manager
Date:

AGREEMENT OF PURCHASE AND SALE

AND JOINT ESCROW INSTRUCTIONS
(Stanislaus County, California)
This Agreement of Purchase and Sale and Joint Escrow Instructions(" Agreement"), dated for reference purposes only July 20, 2026, is entered into by and between Land Development Consulting Group, LLC a California limited liability company ("Seller"), and City of Pattenon ("Buyer11). Seller and Buyer may herein be referred to individually as a "party" and collectively as the "parties."
Recitals
A. Seller owns and/or has secured the contractual right to acquire that certain real property consisting of approximately 42.89 gross acres in aggregate of vacant, unimproved land located in the City of Patterson ("City") and the County of Stanislaus ("County"), State of California, and identified as Assessor's Parcel Numbers 021-019-019-000 30.l0ac. and 021-019-020-000 +/-12. 79ac (collectively, the "Master Parcel").

B. Seller desires to sell to the City and the City desires to purchase from Seller approximately 27. 79 acres comprised of a +/- 15.00 acre portion of Assessor's Parcel Numbers 021-019-019-000 30.1 0ac. and 021-019-020-000 +/-12. 79ac., as more particularly described on Exhibit A and depicted in Exhibit B both attached hereto and incorporated herewith (collectively, the "Property"). The Master Parcel, less the Property being sold by Seller and acquired by City, shall be defined herein as the "Remainder Parcel." C. The term "Property" as used in this Agreement shall include all nonagricultural equipment used in connection with the operation of the Property, all assignable warranties, guaranties, studies, reports, service contracts, causes of action, licenses, pennits, plans, maps, entitlements, rights and development approvals, and all rights, privileges, easements and appurtenances owned by Seller benefitting such real property, including, without limitation, all mineral and water rights and all easements, rights of way and other appurtenances used in or connected with the beneficial use of such real property.

D. Buyer desires to purchase the Property from Seller and Seller desires to sell the Property to Buyer upon the tenns, conditions and provisions set forth in this Agreement .

E. Property is designated in Section 5.4 of the Zaccharias Master Plan as a storm drain recharge basin.

F. The City requires a recharge basin and associated improvements to be built as needed to support future development ("Basin Requirements").

G. The City and Developer (defined below) desire for the Basin Requirements needed to support future development, including the Baldwin Ranch South development project ("Baldwin Ranch South") located within the City limits to be constructed on the Remainder Parcel ("Basin Project)
4924-0113-7856, V. 2
H. The City and Developer (defined below) desire to enter into a separate agreement for the development of the Baldwin Ranch South project area, which will include Developer's development of the Basin Project on the Remainder Parcel and dedication of the Remainder Parcel and the Basin Project to the City, all incorporated herein by this reference ("Development Agreement").

I. The City and Developer desire for the Developer to receive the Fee Credits by separate agreement in consideration for Developer's commitment to complete a portion of the Basin Project which will support the Baldwin Ranch South development project and incrementally have capacity to support the City's own need for recharge. The parties acknowledge that the Fee Credits are intended to reimburse Developer for the portion of the Basin Project costs allocable to the Baldwin Ranch South development.

J. The Property is being bought "AS-IS" "WHERE IS" condition.

NOW, THEREFORE, in consideration of the foregoing Recitals, incorporated into the Agreement, and the mutual covenants contained herein, the parties agree as follows:

Agreement

1. Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase and accept from Seller, the Property on the terms and subject to the conditions set forth in this Agreement. The "Effective Date" of this Agreement shall be the date that Escrow Holder (as hereinafter defined) executes the Receipt by Escrow Holder attached to this Agreement immediately following the signatures of the parties hereto. Escrow Holder shall notify Buyer and Seller within three (3) days of executing the Receipt.

2. Consideration. The total consideration provided by the Buyer to the Seller for the Property and the Basin Project shall be as follows:
(a) The purchase price of the Property shall be Two Million and 00/100 Dollars ($2,000,000) ("Purchase Price"), payable as set forth in Section 3 below; and (b) The consideration for Seller, its assignee or affiliates, which includes Baldwin Ranch Development, LLC, a California limited liability company, (collectively, the "Developer") agreement to construct the Basin Project on a portion of the Remainder Parcel and dedicate the Basin Project to the City per the Development Agreement, shall be development fee credits given by the City to the Developer by separate agreement ("Fee Credits"). The value of the Fee Credits shall be based on the estimated cost of the Basin Project to be constructed on the Property by Developer as presented to and approved by the City Engineer of the City of Patterson, in their sole discretion. The Fee Credits are transferrable by Seller and shall be made available immediately to the Developer for Baldwin Ranch South or other approved project selected by the Developer within the City upon Closing of the Property. The parties acknowledge that the Fee Credits are intended to reimburse Developer for the portion of the Basin Project costs built for the Baldwin Ranch South development.
2 4924-0113-7856, v. 2

3. Payment of Purchase Price. The Purchase Price for the Property shall be payable by Buyer as follows:
(a) Deposit. Within five (5) business days after the Effective Date, Buyer shall deposit with First American Title Insurance Company,** 4750 Willow Road, Suite 275 Pleasanton California 94588 Escrow Officer: Jules Fulop, Telephone: (925) 201-6603, Email:
[email protected] ("Escrow Holder"), the amount of One Hundred Thousand and No/lOO ths Dollars ($100,000) ("Deposit"). The Deposit shall be refundable to Buyer through the end of the Due Diligence Period. The Deposit shall be invested by Escrow Holder with a financial institution acceptable to Buyer in a federally insured interest-bearing demand account, and shall be credited against the Purchase Price upon the Close of Escrow (as hereinafter defined). Any accrued interest on the Deposit during the time it is held by Escrow Holder shall be credited to Buyer.
(b) Balance of Purchase Price. On or before the Close of Escrow, Buyer shall deposit with Escrow Holder the balance of the Purchase Price, in immediately available funds.

The Deposit shall be applied to Purchase Price.

4. Escrow.
(a) Opening of Escrow. On the Effective Date, Escrow Holder shall open an escrow ("Escrow") for this transaction. Buyer and Seller agree to execute and deliver to Escrow Holder, in a timely manner, all escrow instructions necessary to consummate the transaction contemplated by this Agreement. This Agreement shall constitute the initial escrow instructions to Escrow Holder by Seller and Buyer. Any supplemental instructions shall not conflict with, amend or supersede any portion of this Agreement. If there is any inconsistency between such supplemental instructions and this Agreement, the tenns of this Agreement shall control. Escrow Holder shall, upon receipt of a fully executed copy of this Agreement, sign and date the Receipt by Escrow Holder attached hereto, and immediately distribute it to all parties listed in the "Notices" section of this Agreement.
(b) Close of Escrow. For purposes of this Agreement, "Close of Escrow" shall be defined as the date that the Grant Deed (as hereinafter defined) for the Property is recorded in the Official Records of the County. The Close of Escrow shall occur on or before the date that is fifteen (15) days after Buyer's delivery of the Due Diligence Notice approving the condition of the Property.
(c) Disbursement. Upon the Close of Escrow, Escrow shall disburse funds and record documents in accordance with the Closing Statement and escrow instructions approved by the parties.

5. Conditions of Title. At the Closing , the Property being conveyed to Buyer by Seller shall be by a grant deed free and clear of all liens and encumbrances, in the recordable form customarily used by Escrow Holder in the County ("Grant Deed"), subject to only the following permitted liens: (a) a lien to secure payment of current real estate taxes, not delinquent; (b) the lien of current supplemental taxes, not delinquent; (c) liens to secure payment of non3 4924-0113-7856,v.2
--------------------------------
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** 3130 Crow Canyon Place Suite 170
San Ramon, CA 94583
delinquent assessments or bonds affecting the Property; and (d) exceptions which are approved and/or accepted by Buyer in accordance with this Agreement ( collectively "Approved Condition of Title").

6. Title Policy.
(a) Owner's Policy. Title shall be evidenced by Escrow Holder's underwriter ("Title Company") issuing a standard American Land Title Association ("ALTA") Owner's Policy of Title Insurance to Buyer in an amount equal to the Purchase Price, showing title to the Property vested in Buyer, subject to the Approved Condition of Title ("Title Policy"). Buyer shall pay the expense of issuing the Title Policy. Seller shall pay for any endorsements Seller agrees to obtain to remove any exceptions disclosed by the Title Documents (as defined below).

If Buyer elects to have Title Company issue an ALTA Extended Coverage Owner's Policy of Title Insurance, Buyer shall pay any ALT A extended coverage premium increment over the standard ALT A, and any survey costs or other costs associated with such ALT A extended coverage policy.

7. Conditions to Close Escrow.
(a) Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligations to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions (or Buyer's waiver thereof) which are for Buyer's sole benefit, on or prior to the dates designated below for the satisfaction of such conditions, or the Close of Escrow in absence of a specified date:
(i) Title. Pursuant to the terms and conditions of this subsection, Buyer shall have the right to approve any and all matters of and exceptions to title of the Property, including the legal description, as disclosed by the following documents and instruments, which documents shall be delivered to Buyer by Escrow Holder within five (5) business days after the Effective Date (collectively, "Title Documents"): (A) a preliminary report issued by Escrow Holder with respect to the Property ("Preliminary Report"); (B) legible copies of all recorded documents referred to in such Preliminary Report; and (C) a map of which all easements capable of being plotted have been so plotted. Buyer shall have until the date that is thirty (30) days prior to the expiration of the Due Diligence Period to give Seller written notice ("Buyer's Title Notice") of Buyer's approval or disapproval, which shall be made in Buyer's sole and absolute discretion, of the legal description and every item or exception disclosed by the Title Documents. Buyer's failure to provide Buyer's Title Notice to Seller within the specified time period shall be deemed Buyer's disapproval of the Title Documents. If Buyer disapproves, or is deemed to disapprove, of any matter of title shown in the Title Documents, Seller shall, within five (5) days from receipt of Buyer's Title Notice, give Buyer written notice ("Seller's Title Notice") of those disapproved title matters, if any, which Seller is unwilling or unable to have eliminated from title to the Property by Close of Escrow. Seller's failure to deliver Seller's Title Notice by the time set forth herein, shall be deemed Seller's refusal to remove the disapproved title matters. In the event that Seller is unable or unwilling to remove, or is deemed to refuse to remove, any of the title matters objected to by Buyer, Buyer shall have until the expiration of the Due Diligence Period to notify Seller in writing that either (1) Buyer is willing to purchase the Property subject to such disapproved exceptions, or (2) Buyer elects to 4 4924-0113-7856, v.2
terminate this Agreement. If this Agreement is terminated pursuant to this Section 7(a)(i), the Deposit and any accrued interest shall be returned to Buyer and, except as otherwise provided in this Agreement, Seller and Buyer will have no further obligations or rights to one another under this Agreement. Notwithstanding the foregoing provisions, Buyer hereby objects to all liens evidencing monetary encumbrances ( other than liens for non-delinquent real estate taxes, supplemental taxes and assessments) and Seller agrees to cause all such liens, to be eliminated, at Seller's sole costs, on or prior to the Close of Escrow.

A. New Title Matters. If any new items (each a "New Title Matter") are added to the Preliminary Report or survey after Buyer has notified, or is deemed to have notified, Seller of its willingness to purchase the Property subject to any disapproved exceptions, Buyer shall have the right to object to any New Title Matter by the same process contained in Section 7(a)(i) above, provided, however, that the objection and response times of each of the parties shall be limited to three (3) business days each, and the Close of Escrow shaJl be extended accordingly. In the event of termination of this Agreement pursuant to this Section 7(a)(i)(A), Buyer's Deposit then in Escrow as of such date shall be promptly returned to Buyer.

Seller being named as the owner of the Property shall not be deemed a New Title Matter under this Section. •
(ii) Inspections and Studies.

A. Due Diligence Period. During the period commencing on the Effective Date, and terminating at 5:00 p.m. (California time) fifty-three (53) days thereafter ("Due Diligence Period"), Buyer shall have the right to (1) review and approve the Documents and Materials (as defined in Section 12 below), (2) conduct any and all inspections, investigations, tests and studies (including, without limitation, investigations with regard to zoning, building codes and other governmental regulations, architectural inspections, engineering tests, economic feasibility studies, soils, seismic and geologic reports, environmental testing, both Phase I and/or Phase II if necessary) with respect to the Property as Buyer may elect to make or maintain, and (3) otherwise examine the feasibility of the Property for Buyer's intended uses. The cost of any such inspections, tests and/or studies shall be borne by Buyer.

B. Right of Entry. Between the Effective Date and the Close of Escrow, Buyer and its agents, contractors, subcontractors and employees (collectively, "Buyer's Representatives") shall have the right to enter upon the Property, at reasonable times during ordinary business hours to perform such inspections, investigations, tests and studies.

Buyer, in performing its inspections, investigations, tests and studies or inquiries or interviews hereunder shall not unreasonably interfere with the operation of the Property. Buyer shall indemnify, defend and hold Seller, its agents, employees, trustees, directors and officers harmless from any and all damage arising out of or in connection with such entry and/or activities on the Property by Buyer or Buyer's Representatives. Notwithstanding the foregoing, Buyer and Buyer's Representatives shall not be responsible for any costs, damages, liabilities, losses, expenses, injuries, liens or claims (including, without limitation, reasonable attorneys' fees) (i) arising out of the results of any tests, or for the reporting of any test results required by law; or (ii) arising out of any pre-existing adverse physical condition or defect of the Property not caused by Buyer or Buyer's Representatives.
5 4924-0113-7856, v. 2
C. Insurance for Entry. Prior to entry on the Property by any Buyer's Representative, Buyer shall deliver to Seller an endorsement to such Buyer's Representative's commercial general liability insurance policy which evidences that Buyer's Representative is carrying a commercial general liability insurance policy with a financially responsible insurance company, covering the activities of Buyer's Representative(s) on or upon the Property. Such endorsement shall evidence that such insurance policy shall have a per occurrence limit of at least Two Million and No/I 0Oths Dollars ($2,000,000.00) and an aggregate limit of at least Two Million and Noll OOths Dollars ($2,000,000.00).

D. Due Diligence Notice. Prior to the expiration of the Due Diligence Period, Buyer shall deliver to Seller and Escrow Holder written notice ("Due Diligence Notice") of its approval or disapproval of the Property and the Documents and Materials, which approval or disapproval shall be in Buyer's sole and absolute discretion. The failure of Buyer to timely deliver the Due Diligence Notice shall be deemed to constitute Buyer's disapproval of the Property and the Documents and Materials. In the event Buyer disapproves, or is deemed to disapprove, of the condition of the Property or the Docwnents and Materials on or prior to the expiration of the Due Diligence Period, (i) this Agreement shall terminate and the parties shall have no further obligations under this Agreement except for those obligations • hereunder that expressly survive under this Agreement, and (ii) the Deposit and any accrued interest shall immediately be returned to Buyer.

E. Right to Tenninate. Notwithstanding any other provision in this Agreement to the contrary, at any time prior to the expiration of the Due Diligence Period, Buyer shall have the right to terminate this Agreement by providing written notice to the other party "Termination Notice". Upon termination, Seller shall promptly return to Buyer the Deposit, and the parties shall have no further obligations hereunder, except those obligations expressly intended to survive termination of this Agreement.
(iii) Natural Hazards Disclosure Statement. On or before the date that is thirty (30) days prior to the expiration of the Due Diligence Period, Escrow Holder shall deliver to Seller and Buyer a Natural Hazards Disclosure Statement for the Property ("NHDS").

Seller shall pay for the NHDS. Buyer shall have approved the NHDS and returned a signed copy thereof to Seller prior to the Close of Escrow.
(iv) Leases, New Leases; Alteration to Property. Seller shall deliver the Property to Buyer free and clear of all leases. Including agricultural leases, agricultural agreements or agricultural alterations made prior to the end of the Due Diligence Period, Seller shall terminate all existing leases and shall not (i) enter into any new leases with respect to the Property, or (ii) make any material alterations to the Property. (v) Title Insurance. Prior to the Close of Escrow, Title Company shall have committed to issue the Title Policy to Buyer.
(vi) Seller's Obligations. As of the Close of Escrow, Seller shall have performed all of the obligations required to be performed by Seller under this Agreement. 6 4924--0113-7856, v. 2
(vii) Seller's Representations. All representations and warranties made by Seller to Buyer in this Agreement shall be true and correct in all material respects as of the Close of Escrow.
(b) Conditions to Seller's Obligations. The Close of Escrow and Seller's obligation to consummate the transaction contemplated by this Agreement is subject to the satisfaction of the following conditions (or Seller's written waiver thereof) which are for Seller's sole benefit, on or prior to the date designated below for the satisfaction of such conditions, or the Close of Escrow:
(i) Natural Hazards Disclosure Statement. Buyer shall have approved the NHDS and returned a signed copy thereof to Seller prior to the Close of Escrow. (ii) Buyer's Obligations. As of Close of Escrow, Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer, including delivery of the Purchase Price to Escrow. (iii) Buyer's Representations. All representations and warranties made by Buyer to Seller in this Agreement shall be true and correct in all material respects as of each Close of Escrow.
(c) Failure of Condition to the Close of Escrow. Except as expressly provided in Section 7(a) or 7(b), in the event any of the conditions set forth in Section 7(a) or 7(b) are not timely satisfied or waived by the appropriate benefited party, for a reason other than the default of Buyer or Seller (the consequences of a failure of Close of Escrow as a result of a default by Seller or Buyer are addressed in Section 16 of this Agreement), this Agreement shall terminate, and the Deposit and all interest accrued thereon during the period of time that the Deposit was invested by Escrow Holder shall be returned to Buyer, and, except as otherwise provided herein, the parties shall have no further obligations hereunder (excepting those obligations that are expressly intended to survive the termination of this Agreement, including, without limitation, the parties' indemnification, defense and hold harmless obligations under this Agreement).

8. Deposits by Seller. Unless otherwise provided in this Section, at least one (1) business day prior to the Close of Escrow, Seller shall deposit with Escrow Holder the following documents:
(a) Grant Deed. The Grant Deed , duly executed and acknowledged in recordable form by Seller, conveying fee simple title to the Property to Buyer subject only to the Approved Condition of Title.
(b) General Assignment. Two (2) original counterparts of the General Assignment ("General Assignment") in the form attached hereto as Exhibit D, which assigns all of Seller's right, title and interest in and to the intangibles relating to the Property and all assignable warranties relating to the Property, if any, to Buyer. (c) Bill of Sale. Two (2) original counterparts of a Bill of Sale ("Bill of Sale"), duly executed by Seller, in the form attached hereto as Exhibit C, which Bill of Sale 7 4924-0113-7856,v. 2
transfers and conveys all of Seller's right, title and interest in and to any personal property ("Personal Property") that will remain on the Property after the Close of Escrow to Buyer. (d) FIRPTA Certificate. A certification acceptable to Escrow Holder, duly ex.ecuted by Seller under penalty of perjury setting forth Seller's address and federal tax identification nwnber in accordance with and/or for the pw-pose of the provisions of Sections 7701 and 1445, as may be amended, of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.
(e) California Franchise Tax. Withholding. A certification acceptable to Escrow Holder that Seller is exempt from the withholding provisions of the California Revenue and Taxation Code, as amended from time to time, and that neither Buyer nor Escrow Holder is required to withhold any amounts from the Purchase Price pursuant to such provisions. (f) Other Documents. Any other documents reasonably required by Escrow Holder or otherwise reasonably required to cause the Close of Escrow to occur.

9. Deposits by Buyer. At least one (]) business day prior to the Close of Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder the following items:
(a) Purchase Price. The balance of the Purchase Price, and all other funds required to be paid by Buyer under this Agreement, in cash or immediately available funds. (b) General Assignment. Two (2) original counterparts of the General Assignment, duly executed by Buyer.
(c) Bill of Sale. Two (2) original counterparts of the Bill of Sale, duly executed by Buyer.
(d) Other Documents. Any other documents reasonably required by Escrow Holder or otherwise reasonably required to cause the Close of Escrow to occur.

I 0. Costs and Expenses. Any documentary transfer tax charged by the County and any recording fees shall be paid by Buyer. The costs for Escrow Holder's services and the Escrow and any recording fees shall be split evenly (50/50) between Buyer and Seller. Any other costs incurred through the Escrow relating to the Property that are not specifically allocated to Buyer or Seller under this Agreement shall be apportioned in the manner customary in the County. Buyer and Seller shall each pay all legal and professional fees and fees ofother consultants incurred by Buyer and Seller, respectively.

11. Prorations.
( a) Taxes/ Assessments. All non-delinquent real estate taxes and non-delinquent assessments on the Property shall be prorated as of 12:01 a.m. on the day of the Close of Escrow based on the actual current tax bill, but if such tax bill has not yet been received by Seller by the Close of Escrow, then the current year's taxes shall be deemed to be one hundred two percent (102%) of the amount of the previous year's tax bill for the Property. All delinquent taxes and all delinquent assessments, interest and penalties approved by Seller, if any, on the 8 4924-0113-7856, v. 2
Property shall be paid at the Close of Escrow from funds accruing to Seller. All supplemental taxes billed after the Close of Escrow for periods prior to the Close of Escrow shall be paid promptly by Seller to Buyer in immediately available funds. Buyer shall not cause any increase in real estate taxes or assessments to be placed on the Property prior to Close of Escrow. If Buyer causes any increase in real estate taxes or assessments, all such costs caused by Buyer shall be paid by Buyer. If Close of Escrow does not occur, Buyer shall to be liable for such continuing costs caused by Buyer that survive escrow.
(b) Other Expenses. Any other expenses for the Property, shall be prorated as of 12:01 a.m. on the day of the Close of Escrow, if approved by Seller, based upon the latest available information. If Buyer is responsible for other expenses on the Property, Buyer shall pay such other expenses. Jf Close of Escrow does not occur, Buyer shall to be liable for such continuing other expenses that survive escrow.
(c) This Section 11 shall survive the Close of Escrow for a period ofone hundred twenty (120) days, and no claims for prorations, including errors, omissions or corrections thereof, shall be made after such date unless Seller or Buyer notifies the other of a specific claim or right under this Section 11 prior to such date.

12. Documents and Materials. Within ten (10) days following the Effective Date ("Document Delivery Deadline"), SelJer shall deliver to Buyer all documents and materials related to the condition of the Property within Seller's, or the current property manager's reasonable, possession, which shall include, but shall not be limited to, copies of any leases (and all amendments thereto), if any, affecting the Property, all documents, records, plans, site plans, building plans, reports (including, but not limited to, environmental testing results, data and reports, whether preliminary or final in form), surveys, governmental approvals, property condition reports, engineering studies, notices from local, state and federal governmental agencies, service and maintenance reports, records and agreements, and other information related to the Property or the operation thereof (collectively, the "Documents and Materials"). If Seller fails to deliver the Docwnents and Materials by the Document Delivery Deadline, the Due Diligence Period shall be extended for each day that Seller fails to comply with this Section.

13. Condition and Inspection of Property.
(a) Buyer understands that Seller has acquired or is in the process of acquiring the Property from SBN V Ag 1 LLC who acquired the property by foreclosure, deed-in-lieu of foreclosure, forfeiture, tax sale, or similar process, and, consequently, Seller has little or no direct knowledge concerning the condition of the Property. Notwithstanding anything contained in this Agreement, except for the express representations, warranties and covenants of Seller under this Agreement ("Seller's Representations"), it is understood and agreed that Seller has not made and is not now making, and Seller specifically disclaims, any warranties, representations, or guaranties of any kind or character, express or implied, oral or written, past, present or future, with respect to the Property including without limitation warranties, representations or guaranties as to (i) matters of title, (ii) environmental matters relating to the Property or any portion thereof, (iii) geological conditions including without limitation subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water and earthquake faults and the resulting damage of past or future earthquakes, (iv) whether, and to the 9 4924-0113-7856, v.2
extent to which, the Property or any portion thereof is affected by any stream (surface or underground), body of water, flood prone area, flood plain, floodway or special flood hazard, (v) drainage, (vi) soil conditions including without limitation the existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any undershoring, (vii) zoning to which the Property or any portion thereof may be subject, (viii) usages of adjoining real estate, (ix) the value, design, quality, suitability, title to, or physical or financial condition of the Property or any portion thereof, (x) any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part thereof, (xi) the existence or non-existence of underground storage tanks, (xii) any other matter affecting the stability or integrity of the Property, (xiii) the potential for further development of the Property, (xiv) the existence of vested land use, zoning or building entitlements affecting the Property, (xv) the merchantability of the Property or fitness of the Property for any particular purpose (Buyer affirming that Buyer has not relied on Seller's skill or judgment to select or furnish the Property for any particular purpose, and that Seller makes no warranty that the Property is fit for any particular purpose), (xvi) tax consequences, (xvi) the content or accuracy of any report, study, opinion or conclusion of any soils, environmental or other engineer or other pei:son or entity who has examined the Property or any aspect thereof, (xvii) the content or accuracy of any information released to Buyer by an engineer or planner in connection with the development of the Property, or the content or accuracy of any documents or materials or any other information given to Buyer by Seller with respect to the Property. (b) Buyer represents that it is relying solely on its own expertise and that of Buyer's consultants in purchasing the Property and that, as of the Close of Escrow, Buyer is familiar with the Property. Except for Seller's Representations, Buyer is relying solely upon its own independent inspection, investigation and analysis of the Property as it deems necessary or appropriate in so acquiring the Property from Seller including without limitation an analysis of any and all matters concerning the condition of the Property and its suitability for Buyer's intended purposes, and a review of all applicable laws, ordinances, rules and regulations (including without limitation those relative to building, zoning, subdivision, and land use), affecting the development, use, occupancy or enjoyment of the Property. Upon Closing, except for Seller's Representations, Buyer shall assume the risk that adverse matters including without limitation adverse physical and environmental conditions, may not have been revealed by Buyer's inspections and investigations. Buyer acknowledges and agrees that upon Closing, subject only to Seller's Representations, Seller shall sell and convey to Buyer and Buyer shall accept the Property "AS-IS, WHERE-IS" and "WITH ALL FAULTS." Except for Seller's Representations, Seller is not liable or bound in any manner by any oral or written statements, representations, or information pertaining to the Property furnished by any real estate broker, • agent, employee, servant or other person, unless the same are specifically set forth or referred to herein. Except for Seller's Representations, Buyer acknowledges that subject to Seller's Representations, the Purchase Price reflects the "AS IS" nature of this sale and any faults, liabilities, defects or other adverse matters that may be associated with the Property. Buyer has had the opportunity to review the disclaimers and waivers set forth in this Agreement with its counsel, and understands the significance and effect thereof. Buyer acknowledges and agrees that the disclaimers and other agreements set forth in this Agreement are an integral part of this Agreement, and that Seller would not have agreed to sell the Property to Buyer for the Purchase Price without this disclaimer and other agreements set forth in this Agreement. 4924-0113-7856, v. 2
(c) Without limiting the generality of the foregoing, subject only to Seller's Representations, Buyer hereby expressly waives and relinquishes any and all rights and remedies Buyer may now or hereafter have against Seller, whether known or unknown, with respect to (i) the nature or condition of the Property (including without limitation any design or natural defect of any kind or nature whatsoever), (ii) the condition of title to the Property, (iii) the Property's fitness for Buyer's intended use (including without limitation Buyer's ability to construct or otherwise develop the Property) and (iv) any past, present, or future presence or existence of "Hazardous Materials" (as herein defined) on, under or about the Property or with respect to any past, present, or future violations of any laws, ordinances, rules and regulations, now or hereafter enacted, regulating or governing the use, handling, storage, or disposal of Hazardous Materials including without limitation (a) any and all rights Buyer may now or hereafter have, to seek contribution from Seller under (1) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.A. §9613), as the same may further amended or replaced by any similar federal laws, ordinances, rules and regulations or (2) similar state or local laws, ordinances, rules and regulations, as the same may be further amended or replace by any similar laws, ordinances, rules and regulations, and (b) any and all claims, whether known or unknown, now or hereafter existing, with respect to the Property under Section 107 of CERCLA ( 42 U.S.C.A. §9607), or based upon nuisance, trespass or other common law or statutory provisions.

14. Seller's Representations and Warranties. In consideration for Buyer entering into this Agreement, Seller makes the representations and warranties set forth in this Section 14 below, effective as of the Effective Date and the Close of Escrow. For the purpose of this Agreement, usage of "SeUer's Knowledge" is limited to its period of ownership of the Property and shall refer only to the current actual (as opposed to implied or constructive) knowledge of Sener.
(a) Seller's Authority. Seller has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transactions contemplated hereby in the execution, delivery and perfonnance of this Agreement. Seller presently owns, controls, or possesses enforceable contractual rights to acquire and convey the Property. Prior to or concurrently with Closing, Seller shall acquire and convey to Buyer good and marketable fee simple title to the Property, free and clear of an liens and encwnbrances except for the Permitted Exceptions.
(b) Signatory. The individuals executing this Agreement and the instruments referenced herein on behalf of Seller and the partners of Seller, if any, have the legal power, right, and actual authority to bind Sel1er to the terms and conditions hereof and thereof. (c) Actions. All requisite action (corporate, trust, partnership or otherwise) has been taken by Seller in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transaction contemplated hereby. No consent of any partner, shareholder, member, trustee, trustor, beneficiary, creditor, investor,judicial or administrative body, governmental authority or other party is required. 11 4924-0113-7856, V. 2
(d) Enforceability. This Agreement and all docwnents required hereby to be executed by Seller are and shall be valid, legally binding obligations of and enforceable against Seller in accordance with their terms.
(e) Conflicting Documents. Neither the execution and delivery of this Agreement and the documents and instruments referenced herein, nor the occurrence of the obligations set forth herein, nor the consummation of the transactions contemplated herein, nor compliance with the terms of this Agreement and the docwnents and instruments referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreement or instrument to which Seller is a party.
(f) No Violations. To Seller's Knowledge, Seller has received no written notice from any governmental agency or third party of any fire, zoning, health, environmental, or building code violations, or any other violations of any laws applicable to the Property. (g) Hazardous Materials. To Seller's Knowledge, there are no Hazardous Materials (as defined below) in existence in, on or below the surface of the Property, including, without limitation, contamination of the soil, subsoil, or groundwater which constitutes a violation of any law, rule or regulation of any government entity having jurisdiction therefore, including, but not limited to, Environmental Laws (as defined below), which exposes Buyer to liability to third parties. To Seller's knowledge, there are no storage or treatment tanks, gas or oil wells on or under the Property.
"Environmental Laws" shall mean all federal, state and local laws, rules and regulations relating to Hazardous Materials (as defined below) including, without limitation, the California Water Code, the California Health & Safety Code, the federal Water Pollution Control Act, the federal Resource Conservation and Recovery Act, the U.S. Environmental Protection Agency regulations at 40 CFR, part 261, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA), the Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, the Toxic Substance Control Act, the Clean Air Act, all regulations promulgated under any of the foregoing, and any other federal, state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree regulating, relating to, or imposing criminal or civil liability or standards of conduct concerning, any hazardous, toxic or dangerous material, substance or waste, as now or at any time hereafter in effect. "Hazardous Materials" shall mean any hazardous, toxic or dangerous material, substance or waste that is or becomes regulated by any federal, state or local governmental authority, including, without limitation, (i) substances defined as "hazardous substances," "hazardous materials" or "toxic substances" in any Environmental Laws; (ii) those materials defined in section 66261.3 of title 22 of the California Code of Regulations, division 4.5, chapter 11, as amended from time to time; (iii) those materials defined in section 25501 (n) of the California Health and Safety Code, as amended from time to time; (iv) any materials, substances or wastes which are toxic, ignitable, radioactive, corrosive or reactive and which are regulated by any local governmental authority, any agency or department of the State of California or any agency of the United States of America; (v) asbestos, mold, fungi, petroleum and petroleum based products, urea formaldehyde foam insulation, perfluorooctanoic acid (PFOA), 12 4924-0113•7856,v. 2
perfluorooctane sulfonate (PFOS), and any other perfluoroalkyl substances (PFAS), polychlorinated biphenyls (PCBs), and freon and other chlorofluorocarbons; and (vi) those substances defined as any of the foregoing in the regulations adopted and publications promulgated pursuant to each of the aforesaid laws.
(h) Lawsuits. To Seller's Knowledge, there are no lawsuits, actions, or arbitrations in existence with respect to the Property, or pending or threatened against or affecting the Property.
(i) Leases. Seller has not created any leases or other agreements (whether oral or written) affecting or relating to the rights of any party with respect to the possession of the Property or any portion thereof which will be in effect after the Close of Escrow. (j) Documents and Materials. To Seller's Knowledge, the Documents and Materials are true, correct and complete in all material respects, and no information or item has been knowingly withheld or modified in a manner that would render the Documents and Materials inaccurate or misleading.
(k) No Other Transfers. Seller is not a party to any executory contracts for the sale of all or any part of the Property (other than this Agreement), nor do there exist any rights of first refusal or option to purchase the Property created by Seller, other than this Agreement. (1) Payments. Except as may be reflected on the closing statements with respect to prorations, all bills and other payments due and payable before the Close of Escrow with respect to the ownership, operation and maintenance of the Property by Seller have been paid or will be paid prior to the Close of Escrow.
(m) No Land Use Proceedings. To Seller's Knowledge, there is no (i) special assessment proceeding affecting the Property, (ii) existing or proposed easement, covenant, restriction, agreement or other document, or (iii) pending or threatened condemnation, eminent domain or governmental taking proceedings which affects title to the Property and which is not disclosed by the Preliminary Report.
(n) Seller Status. Seller is not a "foreign person" as defined in§ 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), or under any similar sections of any similar laws of the State of California; i.e., Seller is not a nonresident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and Income Tax Regulations or similar California laws or regulations. Seller shall sign under penalty of perjury and deliver to Buyer at Close of Escrow a certification thereof indicating thereon Seller's U.S. taxpayer identification number and address. ( o) Improvement Contracts. There are no outstanding contracts made by Seller for any improvements on the Property which have not been paid in full, and Seller shall cause to be discharged all mechanical and materialmen's liens arising from any labor and material furnished to Seller prior to the Close of Escrow. (p) Storm Drain Basin. Seller acknowledges that Buyer may use all or a portion of the Property for storm water detention, retention, recharge, drainage, or related water 13 4924-0113-7856, V. 2
management purposes, and that the Property is identified in Section 5.4 of the Zaccharias Master Plan as a potential stonn drain recharge basin area. Seller makes no representation or warranty regarding the ultimate design, approval, feasibility, capacity, or governmental requirements relating to any such storm water or recharge facilities.

15. Buyer's Representations and Warranties. In consideration of Seller entering into this Agreement, and as an inducement to Seller to sell the Property, Buyer makes the following representations and warranties:
(a) Buyer's Authority. Buyer has the legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Agreement and no other action by Buyer is requisite to the valid and binding execution, delivery and performance of this Agreement. (b) Actions. All requisite action has been taken by Buyer in connection with the entering into this Agreement, the instruments referenced herein, and the consummation of the transaction contemplated hereby.
(c) Signatory. The individuals executing this Agreement and the instruments referenced herein on behalf of Buyer and the partners of Buyer, if any, have the legal power, right, and actual authority to bind Buyer to the terms and conditions hereof and thereof. (d) Enforceability. This Agreement and all documents required hereby to be executed by Buyer are and shall be valid, legally binding obligations of and enforceable against Buyer in accordance with their terms.
(e) Conflicting Documents. Neither the execution and delivery of this Agreement and the documents and instruments referenced herein, nor the occurrence of the obligations set forth herein, nor the consummation of the transaction contemplated herein, nor compliance with the terms of this Agreement and the documents and instruments referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, (i) any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreement or instrument to which Buyer is a party, or (ii) any laws, rules, regulations, codes or ordinances applicable to Buyer.

16. Default and Remedies.
(a) Buyer's Default. PURSUANT TO CALIFORNIA CIVIL CODE
SECTION 1671 (b), THE PARTIES HAVE DETERMINED AND AGREE THAT IF THE

TRANSACTION CONTEMPLATED BY THIS AGREEMENT IS NOT CONSUMMATED

BECAUSE OF BUYER'S DEFAULT AFTER ITS DELIVERY OF THE DUE DILIGENCE

NOTICE APPROVING THE PROPERTY AND DOCUMENTS AND MATERIALS, IT

WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN THE

EXTENT OF THE DETRIMENT TO SELLER AND THAT THE ACTUAL AMOUNT OF

DAMAGES THAT WOULD BE SUFFERED BY SELLER AS A RESULT OF ANY SUCH

DEF AULT IS DIFFICULT OR IMPRACTICABLE TO DETERMINE AS OF THE DATE OF

THIS AGREEMENT AND THAT THE DEPOSIT, TOGETHER WITH ALL INTEREST 14 4924-0113-7856, V. 2
ACCRUED THEREON ("LIQUIDATED DAMAGES") IS A REASONABLE ESTIMATE OF THE AMOUNT OF SUCH DAMAGES. FOR THESE REASONS, THE PARTIES AGREE

THAT IF THE PURCHASE AND SALE IS NOT CONSUMMATED BECAUSE OF BUYER'S

DEFAULT, SELLER SHALL BE ENTITLED TO THE LIQUIDATED DAMAGES AND

ESCROW HOLDER IS HEREBY INSTRUCTED TO RELEASE THE LIQUIDATED DAMAGES TO SELLER. SELLER'S RECEIPT AND RETENTION OF THE LIQUIDATED

DAMAGES SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY FOR BUYER'S DEF AULT, AND SELLER HEREBY WAIVES (i) ANY RIGHT TO RECOVER DAMAGES IN EXCESS OF THE LIQUIDATED DAMAGES, (ii) ANY RIGHT

TO PROCEED AGAINST BUYER OR ANY OF BUYER'S ASSETS FOR ANY DEFICIENCY. UPON SELLER'S RECEIPT OF THE FULL LIQUID A TED DAMAGES,

NEITHER PARTY SHALL HA VE ANY FURTHER LIABILITY TO THE OTHER ARISING

FROM BUYER'S DEFAULT UNDER THIS AGREEMENT, EXCEPT FOR OBLIGATIONS THAT EXPRESSLY SURVIVE TERMINATION OF THIS AGREEMENT. BUYER

REPRESENTS AND WARRANTS THAT THE OBLIGATION TO PAY THE LIQUIDATED

DAMAGES CONSTITUTES AV ALID AND BINDING CONTRACTUAL OBLIGATION OF BUYER, BUYER HAS Ol)TAINED, OR WILL TIMELY OBTAIN PRIOR TO THE

EXPIRATION OF BUYER'S CONTINGENCY PERIOD, ALL APPROVALS AND

APPROPRIATIONS NECESSARY TO SATISFY ITS OBLIGATIONS UNDER THIS

AGREEMENT, INCLUDING PAYMENT OF THE LIQUIDATED DAMAGES IF THEY BECOME DUE ..

SELLER'S INITIALS IALS
(b) Seller Default. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN THIS AGREEMENT, SELLER'S LIABiLITY AND BUYER'S SOLE AND

EXCLUSIVE REMEDY IN ALL CIRCUMSTANCES AND FOR ALL CLAIMS ARISING

OUT OF OR RELATING IN ANYWAY TO THIS AGREEMENT OR THE SALE OF THE

PROPERTY TO BUYER INCLUDING, BUT NOT LIMITED TO, SELLER'S BREACH OR

TERMINATION OF THIS AGREEMENT, THE CONDITION OF THE PROPERTY,

SELLER'S TITLE TO THE PROPERTY, THE OCCUPANCY STATUS OF THE PROPERTY,

THE SIZE, SQUARE FOOTAGE, BOUNDARIES, OR LOCATION OF THE PROPERTY, OR

ANY COSTS OR EXPENSES INCURRED BY BUYER IN CONNECTION WITH THIS

AGREEMENT SHALL BE LIMITED TO NO MORE THAN ALL OF THE FOLLOWING RIGHTS AND REMEDIES:
(i)
DOES NOT CLOSE;

A RETURN OF THE DEPOSIT IF THE SALE TO BUYER
(ii) BUYER'S ACTUAL DAMAGES, IF ANY, NOT TO EXCEED
THE AMOUNT ONE HUNDRED THOUSAND DOLLARS ($100,000) IF THE SALE TO BUYER CLOSES; AND
15 4924-0113-7856, v.2
(iii) the right to file and maintain an action against Seller for specific performance and the right to record a lis pendens or the contract against the Property with or after such action for specific perfonnance is filed against Seller if the sale to Buyer does not close due to SELLER'S DEFAULT or Seller's execution or negotiation of a sale of the Property to another purchaser prior to or WITHIN ONE HUNDRED EIGHTY (1 0) DAYS AFTER the Close of Escrow DA TE PROVIDED THAT BUYER HAS NOT TE A TED OR DEFAULTED UND~WTRACT.

SELLER'S INITIALS
THIS SECTION 16(b) SHALL SURVIVE TERMINATION OF THE AGREEMENT. (c) No Special, Consequential or Punitive Damages. The parties agree that neither party shall be liable, under any circumstances, for any special, consequential, or punitive damages whatsoever, whether in contract, tort (including negligence and strict liability), or any other legal or equitable principle, theory, or cause of action arising out of or related in any way to any claim, including, but not limited to, the aforementioned claims. (d) Refund of Deposit is Adequate and Fair Compensation to Buyer. To the fullest extent permitted by law, the Buyer waives any claims that the Property is unique and the Buyer acknowledges that, in the event that there is no Close of Escrow, a return of its Deposit (less escrow cancellation fees and fees and costs payable for services and products provided during Escrow for Buyer at Buyer's request) can adequately and fairly compensate the Buyer for all claims. Upon return of the Deposit to the Buyer (less escrow cancellation fees and fees and costs payable for services and products provided during Escrow for Buyer at Buyer's request) this Agreement shall terminate and neither party shall have any further liabilities, responsibilities, obligations or rights hereunder. If the Close of Escrow occurs, and Seller compensates Buyer as provided above for Buyer's actual damages, if any, then the Buyer and the Seller shall have no further liability, obligation, or responsibility to each other in connection with this Agreement.
(e) Materiality. Each party's limitation of liability and waivers provided in this Agreement are a material part of the consideration to be received by each party under this Agreement as negotiated and agreed to by the Buyer and the Seller. (f) BUYER'S ADDITIONAL WAIVERS. The Buyer further waives the following, to the fullest extent permitted by law:
(g) any right to hold the Seller liable for any claims arising out of or related in any way to the condition, construction, repair, or treatment of the Property, or any defects, apparent or latent, that may now or hereafter exist with respect to the Property except for the representations, warranties, and covenants of Seller as set forth in this Agreement. Nothing in this Section 16(g) or any other provisions of this Agreement shall release or discharge Seller in any way from, or to be deemed waiver of any Claims by Buyer with respect to (i) a breach of, or failure to comply with, any obligation, covenant, representation, or warranty of Seller set forth in this Agreement, to the extent they survive the Close of Escrow, or other documents executed by 16 4924-0113-7856. v. 2
Seller in connection with the Close of Escrow; (ii) the gross negligence, fraud or willful misconduct of Seller, (iii) any personal injury or tort Claims brought by any third party arising or occurring prior to the Close of Escrow, provided such personal injury or tort Claims do not arise from and are not caused by the actions or omissions of Buyer, Buyer's agents, employees, contractors or subcontractors, (iv) any acts of Seller occurring after the Close of Escrow or (v) any release, deposit or migration of Hazardous Materials occurring after the Close of Escrow caused or pennitted by Seller(collectively items (ii)-(v), the "Excluded Claims"); and (h) any claims arising out of or relating in any way to the square footage, size, or location of the Property, or any infonnation provided on the multiple listing service, or brochures or web sites of Seller or Seller's agent or broker. (i) Claim Period. Buyer must deliver written notice of any claim against Seller under this Agreement or arising out of the sale of the Property prior to one hundred twenty (120) days from the Close of Escrow. Any claim not so noticed shall be deemed waived. (j)

SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVIS! S OF THIS SECTION 16(n) AND BY THEIR INITIALS IMMEDIATELY BELOW AGRE BE BOUND BY ITS g
ials Seller's Initials
(k) Specific Waiver. With the exception of the Excluded Claims as set forth above, Buyer hereby expressly waives the provisions of Section 1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR

RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND TI!A T, IF KNOWN BY HIM OR HER, WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

17. Seller Covenants.
(a) Until the Close of Escrow, Seller shall continue to maintain any insurance policies affecting the Property in effect as of the Effective Date, but shall have no obligation to obtain any insurance which Seller does not have in place as of the Effective Date. Seller's insurance policies shall not be assigned to Buyer at the Close of Escrow, and Buyer shall be obligated to obtain its own insurance coverage from and after the Close of Escrow. (b) Until the Close of Escrow, Seller shall operate and maintain the Property in substantially the manner being operated and maintained as of the Effective Date of this Agreement and there shall be no material change in the Property prior to the Close of Escrow. (c) Seller covenants and agrees that it, nor its employees, agents, brokers, and controlled affiliates (collectively referred to in this Section l 7(c) as "Seller and Seller's 17 4924-0113-7856,v. 2
Affiliates") will not, directly or indirectly, enter into any negotiations for the purchase and sale of the Property with any other person or entity after the execution of this Agreement and continuing until the earlier of Buyer's tennination of this Agreement or Buyer's default and failure to timely cure a monetary default within five (5) business days or a non-monetary default within thirty (30) calendar days.

18. Destruction or Condemnation. Prior to the Close of Escrow, the entire risk ofloss or damage by earthquake, flood, landslide, fire or other casualty, or any condemnation, shall be borne and assumed by Seller, except as otherwise provided in this Section. If, prior to the Close of Escrow, any part of the Property is damaged or destroyed by earthquake, flood, landslide, fire or other casualty, or any portion of the Property is subject to a condemnation or threat thereof, Seller shall immediately notify Buyer of such fact in writing. If such damage or destruction or condemnation is "material", Buyer or Seller shall have the option to (a) tenninate this Agreement, in which event the Deposit shall be promptly returned to Buyer and neither party shall have any further rights or obligations under this Agreement, except any that expressly survive tennination, or (b) to accept the Property in its then condition and to proceed with the Close of Escrow with a credit against the Closing Payment for any deductible incurred and uninsured loss but without any other abatement or reduction in the Purchase Price and Buyer shall receive an assignment of all of Seller's right to any insurance proceeds paid and/or payable by reason of such damage or destruction and any condemnation proceeds. A failure by Buyer or Seller to notify the other party of such election to proceed to with the Close of Escrow shall be deemed an election to terminate this Agreement. For purposes hereof, "material" shall be deemed to be any damage or condemnation exceeding One Hundred Thousand and No/1 00ths Dollars ($100,000.00) or more. If Buyer and Seller elect to proceed under subsection (b), above, Seller shall not compromise, settle or adjust any claims to such proceeds or award without Buyer's prior written consent, which shall not be unreasonably delayed, conditioned or withheld.

19. Notices. All notices, demands, consents, requests or other communications required to or pennitted to be given pursuant to this Agreement shall be in writing, shall be given only in accordance with the provisions of this Section, shall be addressed to the parties in the manner set forth below, and shall be conclusively deemed to have been properly delivered:
(a) upon receipt when hand delivered during normal business hours (provided that, notices which are hand delivered shall not be effective unless the sending party obtains a signature of a person at such address that the notice has been received); (b) upon transmission when sent by electronic mail if sent before 5:00 p.m. on a business day to the email address set forth below with computer confirmation from recipient; (c) upon the day of delivery if the notice has been deposited in an authorized receptacle of the United States Postal Service as first-class, registered or certified mail, postage prepaid, with a return receipt requested (provided that, the sender has in its possession the return receipt to prove actual delivery); or (d) one (1) business day after the notice has been deposited with a nationally recognized overnight courier to be delivered by overnight delivery (provided that, the sending party receives a confirmation of actual delivery from the courier). The addresses of the parties to receive notices are as follows:
18 4924-0113-7856. Y. 2
TO SELLER:

WITH A COPY TO:

TO BUYER:

WITH COPY TO:

TO ESCROW HOLDER:

LDC Group LLC
1412 Rockhaven Dr.

Modesto, California 95356
Attention: Joe Hollowell
Telephone: 209-535-4012
Email: [email protected]
City of Patterson
1 Plaza Circle
Patterson, CA 95363
Attention: City Manager Fernando Ulloa
Telephone: 209-895-8000
Email: [email protected]
White Brenner LLP
1608 T Street
Sacramento CA 95811
Attention: Nubia Goldstein
Telephone: 916-468-0950
Email: [email protected]
First American Title Company
4750 Willow Road, Suite 275
Pleasanton, California 94588,
Attention: Jules Fulop
Telephone: (925) 201-6603
Email: [email protected]
Each party shall make an ordinary, good faith effort to ensure that it will accept or receive notices that are given in accordance with this Section, and that any person to be given notice actually receives such notice. Any notice to a party which is required to be given to multiple addresses shall only be deemed to have been delivered when all of the notices to that party have been delivered pursuant to this Section. If any notice is refused, the notice shall be deemed to have been delivered upon such refusal. Any notice delivered after 5:00 p.m. (recipient's time) or on a non-business day shall be deemed delivered on the next business day.

A party may change or supplement the addresses given above, or designate additional addressees, for purposes of this Section by delivering to the other party written notice in the manner set forth above. The parties agree that the attorney for any party shall have the authority to deliver binding notices on his/her client's behalf to the other party(ies) hereto.

20. Brokers and Consultants. Seller and Buyer acknowledge that any broker's commission and/or consultant fees, if any, shall be paid by the respective parties in accordance 19 4924-0113-7856, v. 2
3130 Crow Canyon Place, Suite 170
San Ramon, CA 94583
with the tenns of their separate agreements. The parties hereby indemnify and hold each other free and harmless from and against any and all costs and liabilities including, without limitation attorneys' fees, for causes of action or proceedings which may be instituted by any broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the other in connection with this transaction. The foregoing representation and indemnity shall survive the Close of Escrow.

21. 22.

Intentionally left Blank .

Miscellaneous.
(a) Possession of Property. Buyer shall be entitled to the possession of the Property immediately upon the Close of Escrow.
(b) Recitals. The recitals set forth at the beginning of this Agreement, including any recitals of consideration, are hereby fully incorporated by reference into this Agreement.
( c) Partial Invalidity. If any tem1 or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid, and shall be enforced to the fullest extent permitted by law. (d) Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of time for performance of any other obligation or act except those of the waiving party, which shall be extended by a period of time equal to the period of the delay.
(e) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the permitted successors and assigns of the parties hereto. (f) Entire Agreement. This Agreement (including all Recitals and Exhibits attached hereto) is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Agreement may not be modified, changed, supplemented, superseded, canceled or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the party to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein. The parties do not intend to confer any benefit hereunder on any person, finn or corporation other than the parties hereto.
(g) Assignment. Except as otherwise provided herein, Buyer may not assign this Agreement, voluntarily or by operation oflaw, without Seller's prior written consent which shall be granted so long as the assignment satisfies the Permitted Assignment below. Provided that Buyer complies with the terms of this Section, Buyer shall have the right to assign this 20 4924-0113-7856,v. 2
Agreement without Seller's prior written consent to an entity owned by or affiliated with Buyer {"Permitted Assignment"). In order for any assignment or Permitted Assignment to be valid, {i) any such assignment shall be in writing, (ii) the assignee shall have agreed in such written assignment to assume all of the obligations of Buyer under this Agreement, {iii) any such assignment shall be an assignment of all of Buyer's rights and obligations under this Agreement, (iv) Buyer shall remain liable for its obligations under this Agreement, and (v) Buyer shall provide Seller with a fully executed copy of the assignment. Seller shall have the right to assign this Agreement without Buyer's consent.
(h) Time of Essence. Time is of the essence with respect to each and every term, condition, obligation and provision of this Agreement. Notwithstanding the foregoing, neither party shall be in default under this Agreement unless and until the non-performing party has received written notice from the other party specifying the nature of the failure to perfonn, and such failure remains uncured (i) in the case of a failure to pay or deposit money, for five (5) business days after receipt of such notice, or (ii) in the case of any other failure to perform, for thirty (30) calendar days after receipt of such notice; provided, however, that if such nonmonetary failure cannot reasonably be cured within such thirty {30) day period, the nonperforming party shall not be in default so long as it commences to cure within such period and thereafter dj}jgentJy prosecutes such cure to completion within an additional thirty (30) days. The parties acknowledge that Buyer is a public agency whose actions may require action by its City Council taken at a meeting noticed and conducted in accordance with the Ralph M. Brown Act (California Government Code Section 54950 et seq.). Accordingly, if Buyer's cure of any nonmonetary failure to perform requires action by Buyer's City Council, the cure period set forth in clause (ii) above shall be extended to the date that is ten ( 10) days after the first regular meeting of the City Council for which the matter may lawfully be agendized following Buyer's receipt of such notice, but in no event more than sixty (60) days after Buyer's receipt of such notice. Each cure period set forth in this Section shall automatically extend the Close of Escrow and any other date for performance under this Agreement by the number of days in such cure period actually used.
(i) Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed by the parties to create the relationship of principal and agent, a partnership, joint venture or any other association between Buyer and Seller. (j) Construction. Headings at the beginning of each paragraph and subparagraph are solely for the convenience of the parties and are not a part of this Agreement.

Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. Unless otherwise indicated, all references to paragraphs, sections, subparagraphs and subsections are to this Agreement. All exhibits referred to in this Agreement are attached and incorporated herein by this reference. (k) Negotiated Agreement. The parties have negotiated this Agreement and agree that it shall not be construed against the party preparing it. Rather, this Agreement shall be construed as if the parties jointly prepared it. Any uncertainty or ambiguity contained within or relating to this Agreement shall not be interpreted against any one party. 21 4924-0113-7856, v. 2
(1) Governing Law; Jurisdiction and Venue. This Agreement is subject to, and shall be construed in accordance with and governed by the laws of the State of California applicable to contracts executed and performed in such State without giving effect to conflicts of laws principles. The state and federal courts of California located in the County shall have exclusive jurisdiction over any action at law, suit in equity or judicial proceedings relating the enforcement of this Agreement or any disputes or claims arising out of or in connection with this Agreement, the interpretation, performance, breach, termination or invalidity thereof or of any provision contained herein. Each party agrees that personal jurisdiction over him, her or it may be effected by service of process by registered or certified mail addressed as provided herein, and that when so made shall be as if served upon him, her or it personally within the State of California.
(m) Confidentiality. Buyer and Seller shall make no public disclosure of the terms of this transaction and any of the due diligence materials furnished by Seller to Buyer without the prior written consent of the other, except that the parties may discuss the transaction in confidence with their respective accountants, legal counsel, consultants, proposed joint venturers, investors, or prospective mortgagees. Notwithstanding the foregoing, Buyer may disclose this Agreement, its terms, and any documents and materials to the extent Buyer determines such disclosure is required or permitted under the Ralph M. Brown Act, the California Public Records Act, the California Environmental Quality Act, or any other applicable law, or by subpoena or court order. No such disclosure shall constitute a breach of this Agreement or give rise to any liability or right of termination on the part of Seller. Seller acknowledges that Buyer is a public agency and cannot warrant the confidentiality of information in its possession.
(n) Agreement Not to be Recorded. Seller and Buyer acknowledge and agree that neither this Agreement nor any memorandum of this Agreement or any reference to this Agreement or Buyer's agents under this Agreement or summary shall be recorded. If any such matter is recorded, Buyer shall execute and deliver to Seller at the request of Seller a quitclaim deed quitclaiming to Seller its interest in the Property with its signature acknowledged in a form suitable for recordation.
(o) Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. The parties to this Agreement agree that a PDF, scanned copy or facsimile copy of this Agreement will be deemed an original for all purposes and each party hereby waives the necessity of providing the original copy of this Agreement to bind the other. (p) Days of Week. Unless otherwise indicated, "day" as used herein means a calendar day. A "business day" as used herein, shall mean any day other than a Saturday, Sunday or holiday, as defined in Section 6700 of the California Government Code. If any date (whether calculated based on business days or calendar days) for performance herein falls on a day other than a business day, the time for such performance shall be extended to 5:00 p.m. on the next business day. The time in which any act is to be done hereunder is computed by excluding the first day and including the last.
22 4924-0113-7856, V. 2
(q) Representation by Counsel. Notwithstanding any rule or maxim of construction to the contrary, any ambiguity or uncertainty shall not be construed against either Seller or Buyer based upon authorship of any of the provisions hereof. Seller and Buyer each hereby warrant, represent and certify to the other as follows: (a) that the contents of this Agreement have been completely and carefully read by the representing party and counsel for the representing party; (b) that the representing party has been separately represented by counsel and the representing party is satisfied with such representation; (c) that the representing party's counsel has advised the representing party of, and the representing party fully understands, the legal consequences of this Agreement; and (d) that no other person (whether a party to this Agreement or not) has made any threats, promises or representations of any kind whatsoever to induce the execution hereof, other than the performance of the terms and provisions hereof. (r) No Obligations to Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, 'nOr obligate any of the parties hereto to, any person or entity other than the Seller and Buyer named herein. (s) Attorneys' Fees. In the event that any action is brought by either party to enforce the terms of this Agreement or to determine the rights of the parties hereunder, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs. (t) Waiver of Jury Trial. To the fullest extent permitted by law, the parties hereto waive trial by jury in any action or proceeding arising out of or relating to this Agreement. (u) Survival of Representation. Warranties and Covenants. The representations, warranties, and covenants of Buyer set forth .in this Agreement shall survive the recordation of the Grant Deed and the Close of Escrow and shall not be deemed merged into the Grant Deed upon its recordation. The covenants, representations and warranties of Seller set forth in this Agreement shall survive the recordation of the Grant Deed and the Close of Escrow for a period of one hundred twenty (120) days following Closing and shall not be deemed merged into the Grant Deed upon its recordation.
[Signatures on Following Page]
23 4924-0113-7856.v. 2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates written below.

BUYER:

By:

Name: Fe
Its: City Manager
Date: 7 • Z.Y • 2-~
[Seller's signatures are on the following pages]
As Approved by City Attorney
By: #
yo< Name: Nubia I. Goldstein -
9999.076.2395214. l 24
SELLER:

Land Development Consulting Group LLC, a California limited liability Company :~:~
Date: "/. ~',- _a.~
9999.076.2395214.1 25

RECEIPT BY ESCROW HOLDER
Escrow Holder hereby acknowledges receipt of a fully executed copy of the foregoing Agreement on this date and agrees to abide by the escrow instructions contained therein, and hereby confirms that the Effective Date of this Agreement is as set forth below.

Escrow Holder: __________ _
By:--------------
Name: _____________ _
Its: ______________ _
Effective Date: __________ _
9999074.1427356.2 09/13/2018.V2
First American Title Company
Jules Fulop
Senior Escrow Officer
July 28, 2026
Exhibit A
Exhibit B
Exhibit C
Exhibit D
4924-0113•7856, v. 2

EXHIBIT LIST
Legal Description of Property
Map of Property
Bill of Sale
General Assignment
26 EXHIBIT A
Legal Description of Property
[To be attached by Escrow Holder.]
9999074.1427356.2 09/13/2018.V2
Order Number: 0131-628482ala
Page Number: 7
First American Title

LEGAL DESCRIPTION
Real property in the City of Patterson (Parcel One) and Unincorporated Area (Parcel Two), County of Stanislaus, State of California, described as follows:

Parcel One:

All that portion of the East Half of the Southwest Quarter of Section 15, Township 5 South, Range 7 East, Mount Diablo Base and Meridian, described as follows:

Commencing at the South quarter corner of said Section 15; thence along the south line of Section 15, North 89° 52‘ West 15.00 feet to the POINT OF BEGINNING; thence continuing along the south line, North 89° 52‘ West 1311.90 feet to the southerly extension of the eastline of Parcel A as shown on Parcel Map filed in Book 23 of Parcel Maps, at Page 28, Records of Stanislaus County; thence along the southerly extension and east line of said Parcel A, North 00° 22’ 30” East 498.16 feet; thence leaving said east line, South 89° 52’ East 1311.39 feet; thence South 00° 19’ West 498.16 feet to the POINT OF BEGINNING.

Parcel Two:

Parcel A as per Parcel Map filed June 29, 1976 in Book 23 of Parcel Maps, at Page 28, Stanislaus County Records, being a portion of the Southwest Quarter of Section 15, Township 5 South, Range 7 East, Mount Diablo base and Meridian.

EXCEPTING THEREFROM all oil, gas and minerals in and under said premises below a depth of 100 feet, as reserved by Ethel L. Schuler, et al in deed recorded July 22, 1976, in Book 2816, Page 96 and as Document No. 3897.

APN's: 021-019-019-000 (Parcel one) and 021-019-020-000 (Parcel Two) 4924-0113-7856,v. 2

EXHIBIT B
Map of Property
(To be attached by Escrow Holder.]
2 EXHIBITD
Fonn of General Assignment

QUITCLAIM GENERAL ASSIGNMENT
This General Assignment (this "Assignment") made this ___ day of _ _ _____ 202 _ ("Effective Date"), is entered into by and between _____ _ a(n) _______ ("Assignor"), and ______ , a(n) ______ _
(" Assignee").

Recitals
A. Assignor And Assignee entered into that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated ____ , 202_ ("Purchase Agreement"), whereby Assignor agreed to sell to Assignee, and Assignee agreed to purchase from Assignor, the real property commonly known as - --------identified as Assessor's Parcel Nwnber _ _ __ ("Property"), all as more fully described in the Purchase Agreement.

Capitalized tenns defined in the Purchase Agreement shall have the same meaning in this Assignment.

B. In conjunction with the sale of the Property, Assignor agrees to assign to Assignee, to the extent assignable, all of Assignor's right, title and interest in and to all warranties, causes of action, guaranties, licenses, permits, plans, maps, entitlements, rights and development approvals relating to the Property; and any rights, claims or awards benefiting the Property (collectively, the "Assigned Rights").

C. By grant deed dated as of the date hereof, recorded in the Official Records of ____ County, California, with the delivery hereof, Assignor conveyed the Property, with all improvements thereon, to Assignee.

NOW, THEREFORE, in consideration of the Purchase Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

Agreement

1. Assignment. Assignor hereby quitclaims, assigns, sells, transfers, sets over and delivers unto Assignee, all of Assignor's estate, right, title and interest in and to the Assigned Rights without representation or warranty of any kind, and Assignee hereby accepts such assignment.

2. Governing Law. This Assignment and all other instruments referred to herein shall be governed by, and shall be construed in accordance with, the laws of the State of California.

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3. Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, permitted assigns and representatives.

4. No Merger. This Assignment shall not merge with or limit any provision of the Purchase Agreement.

5. Authority. The undersigned persons represent that they are authorized and have the legal capacity to enter into this Assignment.

6. Counterparts. This Assignment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. A PDF or electronically transmitted signature on this Assignment shall be binding as an original.
[Signatures on Following Page.]
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4924--0113-7856, V. 2
IN WITNESS WHEREOF, the parties have executed this General Assignment effective as of the date first above written.

ASSIGNOR: ASSIGNEE:
---------~ a(n) _________ a(n)
By: DO NOT SIGN - EXHIBIT ONLY By: DO NOT SIGN - EXHIBIT ONLY Name: _ __________ _ Name: ___________ _
Its: Its:

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EXHIBITC
Fonn of Bill of Sale

QUITCLAIM BILL OF SALE
This Bill of Sale (this "Bill of Sale") is made this_ day of _ _ _ _ _, 202_, by and between _____ _, a(n) _______ ("Seller"), and , a(n) _____ ("Buyer").

WITNESS ETH:

Seller and Buyer entered into that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated ____ , 202_ ("Purchase Agreement"), whereby Seller agreed to sell to Buyer, and Buyer agreed to purchase from Seller, the real property commonly known as _______ ("Property"), all as more fully described in the Purchase Agreement.

Capitalized terms defined in the Purchase Agreement shall have the same meaning in this Assignment.

Under the Purchase Agreement, Seller is obligated to transfer the personal property described on the attached Schedule 1 (the "Personal Property") to Buyer.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller does hereby absolutely and unconditionally quitclaim, give, grant, bargain, transfer, sell, set over, assign, convey, release, confirm and deliver to Buyer all of the Personal Property located at the Property.

Except as otherwise provided herein, Seller makes no representation or warranty regarding the condition, fitness or usefulness of the Personal Property and Buyer acknowledges and agrees that Buyer is acquiring the aforesaid Personal Property in its AS-IS, WHERE-IS CONDITION, WITHOUT WARRANTY, EITHER EXPRESS OR IMPLIED.

This Bill of Sale shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, permitted assigns and representatives of Buyer and Seller.

This Bill of Sale shall be governed by, interpreted under, and construed and enforced in accordance with, the laws of the State of California.

This Bill of Sale may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.

The undersigned persons represent that they are authorized and have the legal capacity to enter into this Bill of Sale.
[Signatures on Following Page.]
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IN WITNESS WHEREOF, the parties have executed this Bill of Sale effective as of the date first above written.

SELLER: BUYER:
_____________ , a ____________ _, a
By: DONOTSJGN-EXHIBITONLY By: DONOTSIGN-EXHIB/TONLY
Name: ____________ Name: ___________ _
Its: ____________ Its:

Date: ___________ _ Date:

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