AGREEMENT FOR EXCHANGE OF REAL PROPERTY
AND JOINT ESCROW INSTRUCTIONS
This AGREEMENT FOR EXCHANGE OF REAL PROPERTY AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is entered into as of February ___, 2023 (the “Effective Date”), by and between NH SOUTHRIDGE LLC, a California limited liability company ("NH Southridge"), and CITY OF FONTANA, a California municipal corporation ("City"). NH Southridge and CITY are referred to herein individually as a “Party” and collectively as the “Parties.”
R E C I T A L S
NH Southridge holds: (i) fee interest in that certain real property consisting of approximately 4.83 acres in the City of Fontana, California, as depicted in Exhibit “A-1” attached hereto (the “NH Southridge Property”) being a portion of a larger parcel owned by NH Southridge [APN: 0237-411-14], the rest of which is not subject to this Agreement; and (ii) contractual right to acquire that certain real property consisting of approximately 5.46 acres in the City of Fontana, California, as depicted in Exhibit “A-2” attached hereto (the “Conifer Property”), from the current fee owner thereof (“Conifer”), pursuant to a purchase agreement between NH Southridge and Conifer (the “Conifer Purchase Agreement”). The Conifer Property is part of a larger parcel [APN: 0237-411-27], the rest of which is not subject to this Agreement. The NH Southridge Property and the Conifer Property create contiguous property which expands and allows circulation and access to the City’s current open space recreational parcels.
City is the owner of that certain real property located to the southeast of the NH Southridge Property and consisting of approximately 9.96 acres [APN: 0237-411-13], in the City of Fontana, California, as more particularly described in Exhibit “B” attached hereto (the “City Property”).
Subject to each of the NH Southridge Property and Conifer Property becoming legal parcels as set forth in this Agreement, NH Southridge desires to convey the NH Southridge Property and Conifer Property to City and City desires to convey the City Property to NH Southridge.
The Parties desire to enter into this Agreement to establish the terms, covenants and conditions upon which they will carry out the foregoing intentions.
A G R E E M E N T
NOW, THEREFORE, based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
EXCHANGE OF PARCELS.
Exchange. Subject to all of the terms, conditions, and provisions of this Agreement, NH Southridge agrees to transfer and convey the NH Southridge Property and the Conifer Property to City, free and clear of all encumbrances, in exchange for the City Property, and City agrees to transfer and convey the City Property to NH Southridge, free and clear of all encumbrances, in exchange for the NH Southridge Property and Conifer Property, to occur in a concurrent exchange through Escrow (as hereinafter defined). The City Property, NH Southridge Property, and Conifer Property shall each be referred to hereinafter in this Agreement individually as a “Parcel” and collectively as the “Parcels.” Additional Consideration. Although, NH Southridge and City agree that the NH Southridge Property and the Conifer Property, collectively, are of approximately equal size and value to the City Property, upon the Close of Escrow, NH Southridge shall also: (i) pay to the City the sum of One Million Dollars ($1,000,000) which shall be paid through Escrow (the “Additional Consideration”; and (ii) complete the Trailhead Park as set forth in Section 8 below which shall occur post-Closing, as further required by the “Approvals” (as defined in Section 4.2 below). City and NH Southridge confirm and agree that NH Southridge has already paid to the City Seventy-Five Thousand Dollars ($75,000) which shall be deemed a portion of the Additional Consideration.
LOT LINE ADJUSTMENT AND PROJECT APPROVALS.
Subdivision. The Parties acknowledge that the NH Southridge Property and Conifer Property are not currently separate legal lots under the California Subdivision Map Act. Accordingly, the NH Southridge Property and the Conifer Property will be subdivided as follows prior to the Closing:
NH Southridge Property: Subdivided by Parcel Map (“Parcel Map”) Conifer Property: Subdivided by Certificate of Compliance by City (“Certificate of Compliance”) INSPECTIONS AND REVIEW.
Parcel Documents; Party’s Investigations. In addition to any documents previously delivered by the Parties, each Party shall deliver to the other, within five (5) days after the date of this Agreement, copies of all written materials in its possession relating to the physical condition of the Parcel it is conveying (collectively, the “Due Diligence Items”). Until 5:00 p.m. Pacific time on the date that is thirty (30) days following the Effective Date (the “Due Diligence Period”), each Party shall have the right to examine, inspect and investigate the Parcel it is acquiring and the Due Diligence Items and to determine, in its sole and absolute discretion, whether the Parcel it is acquiring is acceptable in all respects. Each Party shall permit the other, its engineers, analysts, contractors and agents to conduct physical inspections of the respective Parcels. Such investigations may be made by the Parties and/or their agents during any normal business hours upon no less than twenty-four (24) hours’ notice. The Parties will keep the Parcels free and clear of mechanic’s or materialman’s liens arising out of such entry, shall repair any and all damage caused by such inspections or investigations, and shall indemnify the other Party from and against any liability arising from its physical inspection hereunder.
Termination Right. If a Party is not satisfied with any of the foregoing matters, that Party may terminate this Agreement for any reason or no reason by giving written notice of termination to other Party and Escrow Holder prior to the expiration of the Due Diligence Period (a “Due Diligence Termination Notice”). Alternatively, such Party may elect to unconditionally waive all due diligence contingencies and continue under this Agreement by giving written notice of acceptance to the other Party and Escrow Holder prior to the expiration of the Due Diligence Period (an “Approval Notice”). If both Parties timely deliver an Approval Notice, this Agreement shall continue in full force and effect, and the Parties shall be deemed to have waived their rights to terminate this Agreement pursuant to this Section. If either Party fails to timely deliver a Due Diligence Termination Notice, this Agreement shall continue in full force and effect, and the Parties shall be deemed to have waived their rights to terminate this Agreement pursuant to this Section. If a Party timely elects to terminate this Agreement pursuant to this Section, the Parties shall have no further obligations hereunder except for obligations that expressly survive the termination hereof.
Review of Title. No later than fifteen (15) days after the Effective Date, Fidelity National Title Company at 1300 Dove Street, Suite 310, Newport Beach, CA 92660 (the “Title Company”) shall prepare, issue and deliver to the Parties the following: (a) a preliminary title report and underlying title documents for the NH Southridge Property (the “NH Southridge Property Title Report”); (b) a preliminary title report and underlying title documents for the Conifer Property (the “Conifer Property Title Report”) and (c) a preliminary title report and underlying title documents for the City Property (the “City Property Title Report”). The NH Southridge Property Title Report, the Conifer Property Title Report, and the City Property Title Report are individually referred to herein as a “Title Report.” Each Party shall review title to the Parcel it is acquiring as disclosed by the applicable Title Report. On or before the date that is five (5) days prior to the expiration of the Due Diligence Period (the “Title Review Period”), each Party shall notify the other Party in writing (a “Title Objection Notice”) of any objections such Party may have to title exceptions or other matters contained in the applicable Title Report (“Title Objections”). Notwithstanding anything to the contrary contained in this Agreement, the Parties hereby disapprove all deeds of trust, delinquent taxes and assessments and other monetary liens affecting the Parcel such Party is acquiring (other than liens for non-delinquent property and assessments as described above) and each Party agrees to remove such items as of the Close of Escrow in order to convey its Parcel free and clear of such monetary encumbrances. If a Party does not give such notice by the expiration of the Title Review Period, such failure shall conclusively be deemed to be such Party’s approval of those matters. If a Party timely provides a Title Objection Notice, the other Party shall have two (2) business days after receipt thereof to deliver a response indicating whether it will cause any Title Objections to be removed. A failure to respond shall be deemed an election by such Party not to remove such Title Objections. Each Party shall then have until the expiration of the Due Diligence Period to satisfy itself with the state of title for the Parcel it is acquiring. A Party’s delivery of an Approval Notice prior to the expiration of the Due Diligence Period shall be deemed such Party’s waiver of any Title Objections, other than those Title Objections that the other Party has agreed to cure. If either Party receives any supplement to the Title Report for the Parcel it is acquiring disclosing any new materially adverse title matters, the foregoing right of review and approval shall also apply to said new matter.
ESCROW.
Opening of Escrow. The Closing shall take place through an escrow (“Escrow”) to be established with Fidelity National Title Company (“Escrow Holder”). Escrow shall be opened by delivering to Escrow Holder a fully executed copy of this Agreement. Upon receipt of a fully executed copy of this Agreement, Escrow Holder shall execute the Escrow Holder’s acceptance attached hereto and notify NH Southridge and City of the escrow number it assigns to the Escrow.
Close of Escrow; Closing Date. The Close of Escrow shall occur on the date that is thirty (30) days after the last of the following to occur: (i) Approval and recording of the Parcel Map; (ii) Approval and recording of the Certificate of Compliance; (iii) Approval of all entitlements and discretionary approvals required for the “Project” (as defined below), after compliance with the California Environmental Quality Act (“CEQA”); and (iv) eighteen (18) months following the Effective Date (the “Closing Date”). As used herein, the terms “Close of Escrow” and/or the “Closing” shall mean the consummation of the transactions contemplated by this Agreement to occur through the Escrow including NH Southridge’s conveyance of the NH Southridge Property and the Conifer Property to City and City’s conveyance of the City Property to NH Southridge. As used herein, the term “Approval” means, with respect to the various entitlements and development approvals to be processed for the Project that the respective development approval has been: (a) formally approved by the City and all other applicable agencies in a form and content and subject to conditions of approval acceptable to NH Southridge in its sole and absolute discretion; and (b) any statutorily provided time periods to appeal, challenge, object and/or protest the approval of the development approval have expired without an appeal, challenge, objection or protest being taken. If any appeal is taken or any challenge, objection or protest to the development approval is made, the body ruling on the appeal, challenge, objection or protest shall have made a formal, final finding unconditionally upholding approval of the development approval in a form and content and subject to conditions of approval acceptable to NH Southridge in its reasonable discretion and all further appeal, challenge, protest, or objection periods have expired without further appeal, challenge, protest, or objection being taken. Notwithstanding anything to the contrary contained herein, in the event the Close of Escrow has not occurred on or before twenty-six (26) months following the Due Diligence Termination Date, either Party shall have the right to terminate this Agreement, in which event the Parties shall have no further obligations hereunder except for obligations that expressly survive the termination hereof. As used in this Agreement, the term “Project” shall mean a future development project proposed to be developed by NH Southridge on the City Property and certain adjacent real property, including the development of the Trailhead Park and conveyance of property to the City contemplated herein. Notwithstanding anything in this Agreement, including, without limitation, anything in this Section 4.2, this Agreement shall not commit the City to approve any entitlement or other development approval necessary for the Project. In considering any entitlements processed in connection with the Project, the City shall retain the absolute discretion to impose mitigation measures, consider alternative uses, require modifications to the proposed Project, and/or to disapprove the Project or any proposed use. The transactions contemplated by this Agreement are thus conditioned on the City’s determination to approve the necessary entitlements for the Project after compliance with CEQA and in consideration of the results of the environmental review process required by CEQA.
Escrow Instructions. This Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of NH Southridge and City to Escrow Holder as well as an agreement between NH Southridge and City. In the event of any conflict between the provisions of this Agreement and Escrow Holder’s standard instructions, this Agreement shall prevail.
Deliveries by NH Southridge. No later than one (1) business day preceding the Closing Date, NH Southridge shall deliver the following to Escrow Holder:
The Additional Consideration in good and immediately available funds.
One (1) executed and acknowledged original of each grant deed to transfer title of the Conifer Property and the NH Southridge Property in a form reasonably acceptable to City (collectively, the “NH Transfer Deeds”).
Two (2) original counterparts to the General Assignment in the form attached as Exhibit “D” pertaining to the NH Southridge Property (the “NH Southridge Property General Assignment”).
An original Non-Foreign Affidavit and California Form 593-C, executed by NH Southridge.
All other sums and documents reasonably required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement.
Deliveries by City. No later than one (1) business day preceding the Closing Date, City shall deliver the following to Escrow Holder:
One (1) fully-executed and acknowledged grant deed conveying the City Property to NH Southridge in substantially the same form attached hereto as Exhibit “E” (the “City Property Grant Deed”).
Two (2) original counterparts to the General Assignment in the form attached as Exhibit “D” pertaining to the City Property (the “City Property General Assignment”).
An original Non-Foreign Affidavit and California Form 593-C, executed by City.
All other sums and documents reasonably required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement.
Closing, Recording and Disbursements. On or before the Closing Date (except as otherwise provided below), and when all of the conditions precedent to the Close of Escrow set forth in Section 5 of this Agreement have been satisfied or waived in writing, Escrow Holder shall take the actions set forth in this Section.
Recording. Escrow Holder shall cause the recording of documents in the Official Records of San Bernardino County, California, in the following order: (i) the City Property Grant Deed; and (ii) the NH Transfer Deeds.
Delivery of Documents.
To NH Southridge. Escrow Holder shall deliver to NH Southridge (i) the NH Southridge Title Policy (as hereinafter defined); (ii) a conformed copy of the City Property Grant Deed, with an original to be mailed following recordation thereof in accordance with the information provided thereon; and (iii) one (1) original each of the City Property General Assignment, City’s Non-Foreign Affidavit and City’s California Form 593-C.
To City. Escrow Holder shall deliver to City (i) the City Title Policy (as hereinafter defined); (ii) a conformed copy of each NH Transfer Deed, with the originals to be mailed following recordation thereof in accordance with the information provided thereon; and (iii) one (1) original each of the NH Southridge Property General Assignment, NH Southridge’s Non-Foreign Affidavit and NH Southridge’s California Form 593-C.
Real Property Taxes. All non-delinquent general and special real property taxes shall be prorated to the Close of Escrow on the basis of the actual number of days in the month and year. Any supplemental tax bills for the NH Southridge Property or Conifer Property received after the Close of Escrow shall be paid by NH Southridge to the extent they relate to a period prior to the Close of Escrow. Any supplemental tax bills for the City Property received after the Close of Escrow shall be paid by City to the extent they relate to a period prior to the Close of Escrow, and by NH Southridge, to the extent they relate to a period after the Close of Escrow. If a supplemental tax bill covers a period commencing before and continuing after the Close of Escrow, the Party named in the bill or receiving the bill will pay the tax and the other Party shall reimburse the first Party its pro rata share within thirty (30) days after receipt of a copy of the tax bill and evidence of the second Party’s payment of same. The provisions of this Section shall survive the Close of Escrow. If either Party fails to pay its pro rata share of taxes by the times herein provided, interest shall accrue on all unpaid amounts from when owing until paid at the lesser of ten percent (10%) per annum or the maximum amount of interest permitted by law.
Closing Costs. Each Party shall pay the cost of a premium for its respective Title Policy, any endorsements thereto, and the title charges incurred in connection therewith. NH Southridge shall pay all documentary or other transfer taxes payable on account of the conveyance of the City Property and all escrow fees charged by Escrow Holder shall be split equally between the Parties. Any other expenses or closing costs in connection with this transaction shall be apportioned in the manner customary in San Bernardino County, California.
Commissions. NH Southridge and City each represent and warrant to the other that no real estate brokerage commission is payable to any person or entity in connection with the transactions contemplated hereby on account of or due to the acts or omissions of such representing Party, and each agrees to and does hereby indemnify, defend and hold the other harmless from and against the payment of any commission to any other person or entity claiming by, through or under NH Southridge or City, as applicable. This indemnification shall extend to any and all claims, liabilities, costs and expenses (including reasonable attorneys’ fees and litigation costs) arising as a result of such claims and shall survive the Closing.
Escrow Cancellation. If Escrow fails to close for any reason other than a default of one of the Parties under this Agreement, all cancellation fees, charges and expenses actually charged by Escrow Holder and the Title Company shall be split evenly by the Parties. If Escrow fails to close because of a default of either Party under this Agreement, such defaulting Party shall pay all such charges.
CONDITIONS TO CLOSE OF ESCROW.
NH Southridge Closing Conditions. In addition to any other condition set forth in this Agreement in favor of NH Southridge, NH Southridge shall have the right to condition its obligation to convey the NH Southridge Property and the Conifer Property to City and to accept the City Property from City and close the Escrow, upon the satisfaction, or written waiver by NH Southridge, of each of the following conditions precedent on the Closing Date or such earlier time as provided for herein (collectively, the “NH Southridge Closing Conditions”):
Recorded Parcel Map. The recording of the Parcel Map referred to in Section 2 of this Agreement shall have been satisfied.
Recorded Certificate of Compliance. The recording of the Certificate of Compliance referred to in Section 2 of this Agreement shall have been satisfied.
City Deliveries Made. City shall have deposited with Escrow Holder all documents required of City by this Agreement.
NH Southridge Title Policy. Title Company shall be unconditionally and irrevocably committed to issue to NH Southridge at Closing a CLTA standard coverage owner’s policy of title insurance (the “NH Southridge Title Policy”), which shall insure NH Southridge’s title to the City Property in an amount equal to $2,000,000, subject only to the following (collectively, the “NH Southridge Permitted Exceptions”): (i) the standard exceptions and exclusions from coverage contained in such form of the policy; (ii) real estate taxes not yet due and payable; (iii) matters created by, through or under NH Southridge; (iv) items disclosed by the City Property Title Report (including any supplements) and approved or deemed approved by NH Southridge pursuant to the title review provisions in this Agreement; and (v) the documents to be recorded under this Agreement. NH Southridge may elect to obtain an ALTA extended coverage owner’s policy of title insurance; provided, however, Title Company’s willingness to issue such extended coverage, or any endorsements, shall not be a condition to Closing.
No Default. City shall not then be in default of any of its obligations under this Agreement (and shall not have received notice of a default hereunder which has not been cured), and all representations and warranties of City contained herein shall be true and correct in all material respects as of the date of this Agreement and the Closing Date.
City Closing Conditions. In addition to any other condition set forth in this Agreement in favor of City, City shall have the right to condition its obligation to convey the City Property to NH Southridge and to accept the NH Southridge Property and the Conifer Property from NH Southridge and close the Escrow, upon the satisfaction, or written waiver by City, of each of the following conditions precedent on the Closing Date or such earlier time as provided for herein (collectively, the “City Closing Conditions”):
Recorded Parcel Map. The recording of the Parcel Map referred to in Section 2 of this Agreement shall have been satisfied.
Recorded Certificate of Compliance. The recording of the Certificate of Compliance referred to in Section 2 of this Agreement shall have been satisfied.
NH Southridge Deliveries Made. NH Southridge shall have deposited with Escrow Holder all sums and documents required of NH Southridge by this Agreement to close Escrow.
City Title Policies. Title Company shall be unconditionally and irrevocably committed to issue to City at Closing the following CLTA standard coverage owner’s policies of title insurance (collectively, the “City Title Policies”):
a policy which shall insure City’s title to the NH Southridge Property in an amount of $1,000,000, subject only to the following exceptions: (i) the standard exceptions and exclusions from coverage contained in such form of the policy; (ii) real estate taxes not yet due and payable; (iii) matters created by, through or under City; (iv) items disclosed by the NH Southridge Property Title Report (including any supplements) and approved or deemed approved by City pursuant to the title review provisions in this Agreement; and (v) the documents to be recorded under this Agreement. City may elect to obtain an ALTA extended coverage owner’s policy of title insurance; provided, however, Title Company’s willingness to issue such extended coverage, or any endorsements, shall not be a condition to Closing; and a policy which shall insure City’s title to the
Conifer Property in an amount of $1,000,000, subject only to the following exceptions: (i) the standard exceptions and exclusions from coverage contained in such form of the policy; (ii) real estate taxes not yet due and payable; (iii) matters created by, through or under City; (iv) items disclosed by the Conifer Property Title Report (including any supplements) and approved or deemed approved by City pursuant to the title review provisions in this Agreement; and (v) the documents to be recorded under this Agreement. City may elect to obtain an ALTA extended coverage owner’s policy of title insurance; provided, however, Title Company’s willingness to issue such extended coverage, or any endorsements, shall not be a condition to Closing.
No Default. NH Southridge shall not then be in default of any of its obligations under this Agreement (and shall not have received notice of a default hereunder which has not been cured), and NH Southridge’s representations and warranties contained herein shall be true and correct in all material respects as of the date of this Agreement and the Closing Date.
Waiver. NH Southridge may at any time or times, at its election, waive any of the conditions set forth in Section 5.1 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by NH Southridge and delivered to City and Escrow Holder. City may at any time or times, at their election, waive any of the conditions set forth in Section 5.2 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by City and delivered to NH Southridge and Escrow Holder. Notwithstanding the foregoing, neither party may waive the conditions set forth in Sections 5.1(a), 5.1(b), 5.2(a) or 5.2(b).
REPRESENTATIONS AND WARRANTIES.
Representations and Warranties. Each Party hereby makes the following representations and warranties to the other:
Authority. Each Party has the requisite right, legal capacity and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.
Title. Neither City nor NH Southridge have entered into any unrecorded purchase agreements, option agreements, rights of first refusal, conditional sales contracts, or other title retention agreements which would prevent the Parties from conveying their respective Parcels to the other Party pursuant to the terms of this Agreement.
No Insolvency, etc. Neither Party (a) has made any assignment for the benefit of creditors; (b) has admitted in writing its inability to pay its debts as they mature; (c) has been adjudicated a bankrupt; or (d) has filed a petition in voluntary bankruptcy, a petition or answer seeking reorganization, or an arrangement with creditors under any bankruptcy law or any other similar law or statute of the United States or any state, nor are any of such proceedings contemplated by either Party, nor is any such petition filed against either Party.
Foreign Person or Entity; OFAC. Neither Party is not a foreign person, nonresident alien, foreign corporation, foreign partnership, foreign trust, or foreign estate, as those terms are defined in the Internal Revenue Code and the Income Tax Regulations promulgated thereunder. Each Party has at all applicable times been, is now and will in the future be, in compliance with all laws, statutes, rules and regulations or any federal, state or local governmental authority in the United States of America applicable to such Party, including, without limitation, the requirements of Executive Order No. 133224, 66 Fed Reg. 49079 (September 25, 2001) and other similar requirements contained in the rules and regulations of the Office of Foreign Asset Control, Department of the Treasury and in any enabling legislation in respect thereof.
Acknowledgments and Representations Regarding Conifer Property. NH Southridge represents and warrants that it has the right, power, and authority to undertake all of its obligations hereunder with respect to the Conifer Property, or to cause the fee owner of the Conifer Property (the “Conifer Owner”) to perform such obligations, including, without limitation, NH Southridge’s obligation to convey the Conifer Property to City pursuant to the terms hereof. City and NH Southridge acknowledge and agree that NH Southridge may satisfy some or all of its obligations hereunder with respect to the Conifer Property by causing the Conifer Owner to perform such obligations, and such performance by the Conifer Owner shall constitute performance by NH Southridge hereunder.
All representations and warranties contained in Section 6.1 made in writing by the Parties in connection with the transactions herein provided for shall be true and correct on the date hereof and on the Closing Date, which representations and warranties shall survive the Closing for a period of one (1) year.
DISCLAIMERS AND RELEASE.
Disclaimer. Except for the specific representations and warranties set forth herein, each Party acknowledges and agrees that it will be provided the opportunity to thoroughly inspect, investigate and exercise due diligence, and the opportunity to fully and independently become familiar with, and fully satisfy itself regarding, any and all matters relating to the Parcel it is acquiring. Except as provided in this Agreement, neither Party has made nor makes, and specifically negates and disclaims any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to the Parcel it is conveying or its condition, including, without limitation, (i) the value of the such Parcel; (ii) the income to be derived from such Parcel; (iii) the suitability of such Parcel for any and all activities and uses which the other Party may conduct thereon, including, without limitation, the possibilities for future development of such Parcel; (iv) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of such Parcel; (v) the manner, quality, state of repair or lack of repair of such Parcel; (vi) the nature, quality or condition of such Parcel, including, without limitation, the water, soil and geology; (vii) the compliance of or by such Parcel or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body including, without limitation, Title III of the Americans With Disabilities Act of 1990; (viii) the manner or quality of the construction or materials incorporated into such Parcel; (ix) compliance with any environmental protection, pollution or land use laws, rules, regulations, orders or requirements including, without limitation, the Federal Water Pollution Control Act, the Federal Resource Conservation and Recovery Act, the U.S. Environmental Protection Agency Regulations at 40 C.F.R., Part 261, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, the Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, the Toxic Substance Control Act, and regulations promulgated under any of the foregoing (collectively, “Environmental Laws”); (x) the presence or absence of hazardous materials at, on, under, or adjacent to such Parcel including, but not limited to, petroleum products, asbestos, lead-based paint, mold or fungi; (xi) the content, completeness or accuracy of any of the Due Diligence Items; (xii) the conformity of any improvements to any plans or specifications for such Parcel; (xiii) the conformity of such Parcel to past, current or future applicable zoning or building requirements; (xiv) the fact that all or a portion of such Parcel may be located on or near an earthquake fault line; and (xv) the existence of vested land use, zoning or building entitlements affecting such Parcel. Neither Party is liable or bound in any manner by any oral or written statements, representations or information pertaining to the Parcel it is conveying, or the operation thereof, furnished by any real estate broker, agent, employee, servant or other person. Except as otherwise provided in this Agreement, each Party further acknowledges and agrees that to the maximum extent permitted by law, the exchange of the Parcels as provided for herein is made on an “AS‑IS” condition and basis as of the Closing Date with all faults, and that the conveying Party has no obligations to make repairs, replacements or improvements, whether before or after the Close of Escrow. Each Party covenants to the other, which covenant will survive the Close of Escrow and not be merged with any deeds, that, except as otherwise provided in this Agreement, it will solely rely upon its own investigation of the Parcel it is acquiring and all other matters relating to such Parcel, and not on any information provided or to be provided by the conveying Party or anyone acting on its behalf.
Release and Waiver.
Except for the specific covenants, representations and warranties set forth in this Agreement, each Party hereby fully and forever releases, acquits and discharges the other Party, their respective partners, members, affiliates, officers, employees and agents (collectively, the “Related Parties”) of and from, and hereby fully and forever waives any and all claims, actions, causes of action, suits, proceedings, demands, rights, damages, costs, expenses or other compensation whatsoever, whether known or unknown, direct or indirect, foreseeable or unforeseeable, absolute or contingent, that the indemnifying party now has or may have or which may arise in the future arising out of, directly or indirectly, or in any way connected with the Parcel it is acquiring or any other matters relating to such Parcel, including, without limitation: (A) any condition of environmental contamination or pollution at such Parcel, however and whenever occurring (including, without limitation, the contamination or pollution of any soils, subsoil media, surface waters or groundwaters at such Parcel) including, but not limited to, petroleum products, asbestos, lead-based paint, mold or fungi; (B) to the extent not already included in (A) above, the prior, present or future existence, release or discharge, or threatened release, of any hazardous materials or substances (as defined in any Environmental Law) at such Parcel, however and whenever occurring; (C) the violation of, or non-compliance with, any applicable law now or hereafter in effect, however or whenever occurring; (D) the condition of the soil at such Parcel; (E) the condition of any improvements including, without limitation, the structural integrity and seismic compliance of such improvements; (F) the inaccuracy, unreliability, or incompleteness of, or any defect or mistake in, any Due Diligence Items; or (G) to the extent not already covered by any of the foregoing clauses (A) through (F), above, the use, maintenance, development, construction, conversion of use, ownership or operation of such Parcel by the conveying Party, its Related Parties or any of their respective predecessor(s)-in-interest.
Without limiting the scope or generality of the foregoing release and waiver provisions, except as provided below with respect to matters arising prior to Closing, those provisions shall specifically include and cover (1) any claim for or right to indemnification, contribution or other compensation based on or arising under any Environmental Law now or hereafter in effect, and (2) any claim for or based on trespass, nuisance, waste, negligence, negligence per se, strict liability, ultrahazardous activity, indemnification, contribution of other theory arising under the common law of the State of California (or any other applicable jurisdiction) or arising, under any applicable law now or hereafter in effect. Notwithstanding anything to the contrary contained in this Agreement, the foregoing release and waiver provisions shall not apply to or otherwise affect (a) each Party’s obligations with respect to any covenants, representations or warranties of such Party set forth in this Agreement or any document executed in connection herewith, (b) any claims against any contractor, subcontractor, design professional or other consultant performing work or services with respect to such Parcel, or (c) any claims arising from the acts of such Party or its Related Parties after the Closing (the matters described in clauses (a) through (c) may be collectively referred to as the “Excluded Matters”).
Waiver of Civil Code § 1542. Each Party hereby acknowledges that it has read and is familiar with the provisions of California Civil Code § 1542 (“Section 1542”), which are set forth below:
"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 THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." Each Party hereby waives the provisions of Section 1542, and of any statute, principle of common law or case law which would limit the scope of the foregoing waiver and release, in connection with matters which are the subject of the foregoing waiver and release.
NH SOUTHRIDGE’S INITIALS: _________ CITY’S INITIALS: __________ Natural Hazards. EACH PARTY ACKNOWLEDGES THAT “NATURAL HAZARDS” DESCRIBED IN THE FOLLOWING CALIFORNIA CODE SECTIONS (THE “NATURAL HAZARD LAWS”) MAY AFFECT THE PARCEL IT IS ACQUIRING: GOVERNMENT CODE SECTIONS 8589.4; 8589.3; GOVERNMENT CODE SECTIONS 51183.4, 51183.5 (FIRE HAZARD SEVERITY ZONE); PUBLIC RESOURCE CODE SECTION 2621.9 (EARTHQUAKE FAULT ZONE); PUBLIC RESOURCE CODE SECTION 2694 (SEISMIC HAZARD ZONE); AND PUBLIC RESOURCE CODE SECTION 4136 (WILDLAND AREA). EACH PARTY ACKNOWLEDGES AND AGREES THAT IT WILL HAVE THE OPPORTUNITY TO INDEPENDENTLY EVALUATE AND INVESTIGATE WHETHER ANY OR ALL OF SUCH NATURAL HAZARDS AFFECT THE PARCEL IT IS ACQUIRING AND THE CONVEYING PARTY SHALL HAVE NO LIABILITIES OR OBLIGATIONS WITH RESPECT THERETO. WITHOUT LIMITING THE FOREGOING, EACH PARTY ACKNOWLEDGES AND AGREES THAT IT KNOWINGLY AND INTENTIONALLY WAIVES ANY DISCLOSURES, OBLIGATIONS OR REQUIREMENTS OF THE CONVEYING PARTY WITH RESPECT TO NATURAL HAZARDS, INCLUDING, WITHOUT LIMITATION, ANY DISCLOSURE OBLIGATIONS OR REQUIREMENTS UNDER THE AFOREMENTIONED CODE SECTIONS OR UNDER CALIFORNIA CIVIL CODE SECTION 1102C. EACH PARTY REPRESENTS THAT IT HAS EXPERIENCE ACQUIRING AND CONDUCTING DUE DILIGENCE, AND THAT THIS WAIVER HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THE BARGAIN BETWEEN THE PARTIES.
Survival. The acknowledgements, consents, agreements and releases set forth in this Article 7 shall survive the Closing.
POST-CLOSING COVENANTS.
New Public Park. Following the Closing, NH Southridge shall construct a new approximately 1.6 acre park on the NH Southridge Property at the corner of Village Drive and Live Oak Ave. for use by the public (the “Trailhead Park”). The Trailhead Park shall include new parking lot, passive play area, pickleball courts trailhead entrance, and related improvements, except as approved by the City in the future. The collective costs to be incurred by Developer to construct Trailhead Park shall not need to exceed $950,000. NH Southridge, or its successor-in-interest, shall design, entitle and build the Trailhead Park with any entitlement related to the City Property. The City may require the completion of the Trailhead Park as a condition of approval to any entitlement approved with respect to the development of the City Property.
Rock Fall Mitigation. City shall permit NH Southridge and its successors-in-interest, to access the NH Southridge Property and certain adjacent City-owned property commonly known as APN: 0237-411-15 (the “Adjacent City Property”) to institute, construct and maintain any rock fall mitigation necessary to increase the safety of the NH Southridge Property and Adjacent City Property, including, without limitation, the removal of boulders and rocks hanging from the face of the old granite quarry, and installation of a rockfall protection barrier on the NH Southridge Property and the Adjacent City Property.
MISCELLANEOUS.
Attorneys’ Fees. If either Party commences an action against the other Party arising out of or in connection with this Agreement, the prevailing Party shall be entitled to recover reasonable attorney’s fees and litigation costs of suit from the other, including all such fees and costs incurred on any appeal.
Notices. All notices required to be delivered under this Agreement to the other Party must be in writing and shall be effective (a) when personally delivered by the other Party or messenger or courier thereof; (b) three (3) business days after deposit in the United States mail, registered or certified; (c) the next business day after deposit before the daily deadline time with a reputable overnight courier or service; or (d) if by electronic mail or facsimile, on the date of transmission with confirmed successful transmission, in each case postage fully prepaid and addressed to the respective Parties as set forth below or to such other address and to such other persons as a Party may hereafter designate by written notice to the other Party hereto:
To NH Southridge:NH Southridge
c/o NewBridge Homes
500 Newport Center Drive, Suite 570
Newport Beach, CA 92660
Attn: J. Robert Meserve, Esq., General Counsel
Email: HYPERLINK "mailto:[email protected]" [email protected] To City:City of Fontana
8353 Sierra Ave
Fontana, CA 92335
Attn: Matthew Ballantyne, City Manager
Email: HYPERLINK "mailto:[email protected]" [email protected] With a copy to:Rutan & Tucker LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attn: Jennifer Farrell, Esq.
Email: HYPERLINK "mailto:[email protected]" [email protected] To Escrow Holder:Fidelity National Title Company
3237 E. Guasti Road, Suite 105
Ontario, CA 91761
Attn: Mary Lou Adame
Email: HYPERLINK "mailto:[email protected]" [email protected] Assignment. Neither Party shall assign this Agreement without the other Party’s prior written consent, which may be withheld in such other Party’s reasonable discretion. Notwithstanding the foregoing, NH Southridge may, upon prior written notice to City, assign this Agreement, provided the assignee (“Assignee”) must assume in writing the obligations of NH Southridge hereunder prior to the Close of Escrow and also provided that Assignee is the owner of the City Property.
Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of this Agreement.
Computation of Time. Any reference in this Agreement to time for performance of obligations or elapsed time shall mean consecutive calendar days or months, as applicable, unless otherwise explicitly indicated herein. The time in which any act is to be done under this Agreement is computed by excluding the first day and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term “holiday” shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code.
Successors and Assigns. Subject to the limitations of Section 9.3, this Agreement shall be binding upon the Parties hereto and their respective heirs, representatives, transferees, successors, and assigns.
Entire Agreement, Waivers, and Amendments. This Agreement incorporates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and previous agreements between the Parties with respect to all or part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Party to be charged. Any amendment or modification to this Agreement must be in writing and executed by NH Southridge and City.
Interpretation; Governing Law. This Agreement shall be construed according to its fair meaning and as if prepared by both Parties hereto. This Agreement shall be construed in accordance with the laws of the State of California without regard to conflict of law principles.
Severability. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement, which purposes include an exchange of the Parcels.
Covenants to Survive Escrow. The covenants, terms, and agreements contained in this Agreement shall survive the Closing except to the extent such provisions are expressly limited in time, shall not merge with the provisions of any closing documents, and shall not be merged with any of the City Property Grant Deed or the Transfer Deeds.
Termination. No termination of this Agreement shall release any Party in default and this Agreement shall survive for purposes of allowing a Party to enforce its rights and remedies under this Agreement in the event of a default.
Execution in Counterpart. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on both Parties hereto, notwithstanding that both Parties are not signatories to the original or the same counterpart Implementation of Agreement. The City Manager shall have the authority to implement this Agreement and the transaction contemplated herein, including, without limitation, authorizing approvals and consents, granting extensions of time to perform, and executing documents, including amendments to the terms of this Agreement, provided that any approvals, consents or amendments that increase the risk or cost to be incurred by City hereunder, or decrease the revenue to be received by City hereunder, shall require the approval of the Fontana City Council.
Exhibits. The exhibits attached to this Agreement are incorporated herein by this reference and made a part hereof. Said Exhibits are identified as follows:
Exhibit “A-1” - Depiction of NH Southridge Property
Exhibit “A-2” - Depiction of Conifer Property
Exhibit “B” - Legal Description of City Property
Exhibit “C” - Site Map
Exhibit “D” - Form of General Assignment
Exhibit “E” - City Property Grant Deed
[signatures follow]
IN WITNESS WHEREOF, NH Southridge and CITY have entered into this Agreement as of the date first set forth above.
NH SOUTHRIDGE:
NH SOUTHRIDGE LLC,
a California corporation
By: NewBridge Homes LLC,
a California corporation
Its Managing Member
By:
Ian Harvey, Manager
CITY:
CITY OF FONTANA,
a California municipal corporation
By:
Matthew Ballantyne, City Manager
ATTEST:
_________________________
____________, City Clerk
ACCEPTANCE BY ESCROW HOLDER
The undersigned hereby acknowledges that it has received a fully executed copy of the foregoing Agreement for Exchange of Real Property and Joint Escrow Instructions and agrees to act as Escrow Holder thereunder and to be bound by and perform the terms thereof as such terms apply to Escrow Holder.
Date executed by
Escrow Holder:
FIDELITY NATIONAL TITLE COMPANY
, 2023
By:
Name: Mary Lou Adame
Title:
EXHIBIT “A-1”
DEPICTION OF NH SOUTHRIDGE PROPERTY
[To be inserted]
EXHIBIT “A-2”
DEPICTION OF CONIFER PROPERTY
[To be inserted]
EXHIBIT “B”
LEGAL DESCRIPTION OF CITY PROPERTY
The land referred to in this Agreement is situated in the City of Fontana, County of San Bernardino, State of California, and is described as follows:
LOT 11 OF TRACT NO. 15117, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 275, PAGES 66 THROUGH 90, INCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 0237-411-13-0-000
EXHIBIT “C”
Site Map
EXHIBIT “D”
GENERAL ASSIGNMENT
THIS GENERAL ASSIGNMENT (this “Assignment”) is entered into as of ________________, by ____________________ (“Assignor”), in favor of ____________________ (“Assignee”), in connection with that certain Agreement for Exchange of Real Property and Joint Escrow Instructions dated as of February __, 2023, by and between Assignor and Assignee, as the same has been or may be amended (the “Exchange Agreement”) pursuant to which Assignor and Assignee agreed to exchange certain real property as more particularly described therein. All terms with initial capital letters shall have the meaning ascribed thereto in the Exchange Agreement except as otherwise defined herein.
NOW, THEREFORE, in consideration of the covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Assignment. Assignor hereby assigns and transfers to Assignee all of Assignor’s right, title and interest in, to and arising out of the [NH Southridge/Conifer Property and City Property] and/or development entitlements related to the [NH Southridge Property/Conifer and City Property] (including any pending applications), including, but not limited to, all reports, studies, permits, licenses, rights of way, plans, maps, site plans, drawings, specifications, surveys, consultant work product, warranties, guaranties, agreements, contracts, development agreements, subdivision improvement agreements, utility rights, development rights, approvals, entitlements, indemnities, claims, actions or defenses, prepaid development fees, credits, rights of reimbursement, governmental permits, certifications, licenses, variances, specific plan amendments, variances, site plans, general plan amendments, maps, negative declarations, environmental impact reports, CEQA findings and determinations, will serve letters and all similar rights related to the [NH Southridge/Conifer Property and City Property], whether granted by governmental or quasi-governmental authorities or private persons or entities and all Due Diligence Items (as defined in the Exchange Agreement) pertaining to the [NH Southridge/Conifer Property and City Property].
2. Further Assurances. Assignor shall execute and deliver to the Assignee any additional instrument or other document that Assignee reasonably requests to evidence the assignment of the rights hereunder promptly upon request. Assignor shall cooperate and assist Assignee in obtaining any consents required to effectuate this Assignment. [signatures follow]
IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above written.
ASSIGNOR:
ASSIGNEE:
EXHIBIT “E”
CITY PROPERTY GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
_____________________
_____________________
_____________________
_____________________
SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 0237-411-13
Grant Deed
The undersigned Grantor(s) declare(s):
Documentary transfer tax is $_________________
FORMCHECKBOX Computed on full value of property conveyed, or FORMCHECKBOX Computed on full value less value of liens and encumbrances remaining at time of sale.
FORMCHECKBOX Unincorporated area FORMCHECKBOX City of _______________, and FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of Fontana, a municipal corporation
hereby GRANT(S) to
NH SOUTHRIDGE LLC, a California limited liability company the following described real property in the City of ___________, County of _____________, State of California:
SEE ATTACHED EXHIBIT A.
Dated: _______________, 20___
_______________________, a __________________
By: _________________________________
___________________ (Name)
___________________ (Title)
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
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)
On
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before me,
FORMTEXT , Notary Public (insert name and title of the officer)
personally appeared
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,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
FORMTEXT
(Seal)
FORMTEXT
EXHIBIT "A"
LEGAL DESCRIPTION
The real property is situated in the City of Fontana, County of San Bernardino, State of California, and is described as follows:
LOT 11 OF TRACT NO. 15117, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 275, PAGES 66 THROUGH 90, INCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 0237-411-13-0-000
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EXHIBIT “A-1”
EXHIBIT “A-2”
DOCPROPERTY "User Id" 882/ DOCPROPERTY "Client" 035458- DOCPROPERTY "Matter" 0014 DOCPROPERTY "Document number" 18687592 - PAGE 1-
EXHIBIT “B”
DOCPROPERTY "User Id" 882/ DOCPROPERTY "Client" 035458- DOCPROPERTY "Matter" 0014 DOCPROPERTY "Document number" 18687592 - PAGE 1-
EXHIBIT “C”
EXHIBIT “D”
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EXHIBIT “D”
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EXHIBIT “E”
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DOCPROPERTY "User Id" 882/ DOCPROPERTY "Client" 035458- DOCPROPERTY "Matter" 0014 DOCPROPERTY "Document number" 18687592 EXHIBIT “E”
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