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BINDING MEMORANDUM OF UNDERSTANDING
This Binding Memorandum of Understanding (this “Agreement”) is entered into as of , 2026 (the “Effective Date”) by and between WATER OF LIFE COMMUNITY CHURCH, a California non-profit corporation (“WOL”) and the CITY OF FONTANA, a California municipal corporation (the “City”) (each a “Party” and collectively the “Parties”) with reference to the following facts:
RECITALS
A. WHEREAS, WOL is the owner of that certain real property located at 16069 Arrow Blvd, Fontana, CA 92335, in the County of San Bernardino, California (“County”), with a County APN of 0232- 201-13-0000, as more particularly described on Exhibit “A” attached hereto.
B. WHEREAS, WOL is actively undertaking a lot line adjustment, subdivision, parcel map, or similar land division or reconfiguration with respect to the real property described on Exhibit “A” attached hereto, pursuant to which such real property will be legally reconfigured, including creation of the portion thereof upon which the Project contemplated herein will be developed (the “ Lot Line Adjustment”).
C. WHEREAS, WOL intends to develop the Project (defined below) on a portion of the Property (defined below), and in connection therewith is seeking to obtain construction financing in the form of a Construction Loan (defined below).
D. WHEREAS, in order to facilitate WOL’ s ability to obtain the Construction Loan and complete the Project, the City has agreed, subject to the terms and conditions set forth herein, to purchase the Property for a fixed purchase price, and to accept certain related notice and acquisition obligations with respect to the Property, upon the occurrence of any Triggering Event (defined below) if WOL elects to exercise its option rights more particularly set forth in this Agreement.
E. WHEREAS, concurrently with the execution of this Agreement, WOL and the City are entering into a separate transaction pursuant to which, among other things, WOL will convey certain real property interests to the City, and, in consideration therefor, the City will forgive and fully satisfy that certain Promissory Note dated March 22, 2023, in the original principal amount of $3,040,000.00, together with all amounts owing thereunder; and the Parties will enter into or deliver certain related transaction documents, including any applicable conveyance documents, leaseback, use covenant, and other agreements required thereunder, and the Parties will consummate the related exchange, conveyance, leaseback, public benefit, and closing transactions contemplated thereby (the “ Land Exchange Transaction”).
F. WHEREAS, the City's obligations under this Agreement, including its obligation to purchase the Property upon exercise of the Put Option, are given in consideration of, and as material inducement by, the mutual covenants herein and the benefits to the City under the Land Exchange Transaction, the sufficiency of which the City acknowledges.
NOW THEREFORE, in consideration of the recitals set forth above, the mutual agreements set forth herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as set forth below.
ATTACHMENT NO. 2
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AGREEMENT
1. Incorporation of Recitals; Definitions . The foregoing Recitals, along with all of the exhibits attached hereto, are hereby incorporated into this Agreement by reference, as if fully set forth herein, as the mutual understandings and intentions of the Parties and to inform the terms of this Agreement.
In addition to those defined terms set forth in the Recitals, the following capitalized terms used in this Agreement shall have the following definitions:
1.1. “City Support” means only the limited support provided by the City pursuant to this Agreement with respect to the Put Option. City Support shall not include any obligation under any Construction Loan Document or any separate guaranty, other lender document, or other obligation of City with respect to the Construction Loan, nor shall it include any cost of satisfying WOL’ s requirements for conveying to the City fee title to the Property in the condition required by the Option Documents, upon any exercise of the Put Option by WOL, which exceeds the Purchase Price.
1.2. “Construction Loan” means the construction and/or permanent financing to be obtained by WOL from one or more Lenders for the purpose of financing the development, construction, and completion of the Project, which financing may include one or more loans, credit facilities, or similar financing arrangements, and any refinancing, modification, extension, or replacement thereof, in such principal amount and on such terms as may be determined by WOL. For purposes of this Agreement, the term “Construction Loan” shall include any permanent loan or other financing that replaces, refinances, or succeeds the initial construction financing, whether upon completion of construction or otherwise.
1.3. “Construction Loan Documents ” means the loan agreement, promissory note, deed of trust, security agreement, assignments, indemnities, guaranties, disbursement agreements, completion documents, certificates, consents, and all other documents, instruments, and agreements evidencing, securing, governing, or otherwise executed in connection with the Construction Loan, as the same may be amended, modified, extended, refinanced, replaced, or supplemented from time to time.
1.4. “County Grant Documents ” means (a) that certain Regulatory Agreement and Declaration of Restrictive Covenants, dated February 6, 2024, and (b) that certain Revocable Grant Agreement, dated February 6, 2024, each by and between WOL and the County, together with any amendments, modifications, supplements, implementing agreements, or successor documents thereto.
1.5. “Lender” means any Person or Persons providing or committing to provide all or any portion of the Construction Loan, including, without limitation, any bank, financial institution, governmental entity, quasi-governmental entity, fund, investor, or other financing source, together with their respective successors, assigns, participants, agents, and any replacement or refinancing lenders with respect thereto.
1.6. “Lender Coordination Documents ” means one or more agreements among WOL, the City, and/or the applicable Lender setting forth, as reasonably required by the Lender, arrangements for notice to the City and WOL of a default under the Construction Loan Documents, the Lender’ s recognition of the Put Option and of any collateral assignment thereof, and such standstill and coordination arrangements as are reasonably necessary to permit the exercise and consummation of the Put Option notwithstanding the Lender’ s senior lien position. The Lender Coordination Documents shall provide for the release or reconveyance of all liens encumbering the Property as security for the Construction Loan upon the Lender's receipt of all funds in the amount secured by such liens. City shall be required to enter into a Lender Coordination Document only to the extent such document is permitted by ATTACHMENT NO. 2
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applicable law and limited to the Put Option or substantially related to the recognition, exercise, and closing mechanics of the Put Option.
1.7. Purchase Price” means Twelve Million and No/100 Dollars ($12,000,000.00), being the absolute fixed price payable by the City for the Property upon exercise of the Put Option, including, without limitation, those prorations and closing adjustments customarily payable by buyers of real property in the County, as provided in the Option Documents. The Purchase Price shall be the absolute maximum aggregate amount payable by, recoverable from, or otherwise chargeable to the City in connection with the Construction Loan, the Project, the Property, the City Support, the Put Option, any acquisition of the Property, or any related document, obligation, or transaction. The Purchase Price includes, without limitation, any amounts paid by the City to or for the benefit of any Lender to obtain a release of liens securing the Construction Loan, all principal, interest, default interest, late charges, lender fees, attorneys’fees, costs, expenses, title charges, escrow fees, closing costs, recording charges, transfer taxes, protective advances, reimbursement obligations, indemnity obligations, enforcement costs, completion obligations, carry obligations, cure amounts, payoff amounts, acquisition amounts, and all other amounts of any kind or character, all of which shall be satisfied from, and shall not be in addition to, the Purchase Price. Any such amounts in excess of the Purchase Price shall be the sole obligation of WOL as provided in Section 4. In no event shall the City be required to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, replenish any reserve, or pay any amount in excess of the Purchase Price. Any City payment obligation is subject to all legally required City approvals and appropriations and shall be payable only from funds lawfully available and appropriated for that purpose.
1.8. “Maximum Loan Amount”means Eleven Million and No/100 Dollars ($11,000,000.00), which amount shall be the maximum aggregate principal amount of the Construction Loan and any refinancing, modification, extension, replacement, or restructuring thereof, unless otherwise approved by the City in writing in the City’ s sole and absolute discretion.
1.9. “Option Documents ” means the purchase and sale agreement, escrow instructions, conveyance instruments, and other documents reasonably necessary or customary to implement and close the Put Option in accordance with Section 4, including any documents relating to the City’ s taking title subject to the County Grant Documents, and to coordinate the same with the Construction Loan Documents and applicable Lender requirements. For the avoidance of doubt, no such document shall require the City to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, or become liable under any Construction Loan Document.
1.10. “Project” means the housing development and related improvements to be developed by WOL on all or any portion of the Property following completion of the Lot Line Adjustment, together with associated buildings, facilities, infrastructure, site improvements, utilities, parking, landscaping, and related uses, substantially consistent with the development concept reflected in plans and applications submitted in connection therewith, including Building Plans (BPCH25-01143), Rough Grade Plans (GRADE-26-00007), and Precise Grading Plans (BPCH25-01140), as any of the foregoing may be amended, supplemented, revised, reconfigured, phased, approved, replaced, or otherwise modified from time to time.
1.11. “Person” means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, governmental or quasi- governmental entity, or other legal entity.
1.12. “Property” means that certain portion of the real property located at 16069 Arrow Blvd, Fontana, California, as more particularly described on Exhibit “A” attached hereto, upon which the Project is to be developed following completion of the Lot Line Adjustment, as such portion is legally ATTACHMENT NO. 2
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created, configured, or described pursuant thereto, together with any related easement rights, appurtenances, and interests associated therewith, and as the same may thereafter be modified, adjusted, or reconfigured in accordance with applicable law. All references in this Agreement to the Property shall be deemed to refer to the Project parcel or parcels as finally configured pursuant to the Lot Line Adjustment.
1.13. “Put Option”means WOL’ s right, exercisable in WOL’ s sole discretion upon the occurrence of a Triggering Event, to require the City to purchase the Property for the Purchase Price in accordance with Section 4. Upon a valid exercise, the City shall be obligated to purchase the Property, and shall have no right to decline, condition, or defer such purchase except as expressly set forth in this Agreement. The Put Option shall not require the City to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, become a party to any Construction Loan Document, cure any default, complete the Project, reimburse WOL or any Lender, indemnify WOL or any Lender, or succeed to WOL’ s obligations under the Construction Loan Documents; the City’ s sole obligation upon exercise is to purchase the Property for the Purchase Price in accordance with Section 4. The Put Option shall expire upon the earlier of (i) full repayment of outstanding principal and interest under the Construction Loan, and (ii) the 20th anniversary of the Effective Date.
1.14. “Term” means the term of this Agreement as determined in accordance with Section 6.1.
2. Purpose and Framework. This Agreement sets forth the binding agreement of the Parties with respect to the principal terms and conditions pursuant to which, for the duration of the Term, (a) WOL shall hold the Put Option, and (b) upon the occurrence of a Triggering Event, WOL shall have the right, in its sole discretion, to exercise the Put Option and require the City to acquire the Property and apply the Purchase Price to obtain a release of the liens securing the Construction Loan, all as more particularly described herein. This Agreement is intended to be binding with respect to the matters expressly set forth herein. Except for the City’ s obligation to purchase the Property for the Purchase Price upon a valid exercise of the Put Option, no provision of this Agreement shall require the City to make any payment, assume any obligation, execute any document, cure any default, acquire any property, or take any other action that would cause the City’ s aggregate exposure to exceed the Purchase Price. This Agreement is intended to be the sole agreement, undertaking, and instrument governing the Put Option, City Support, and Purchase Price. No Construction Loan Document shall expand, modify, supplement, or otherwise affect the City Support, the Put Option, or the Purchase Price. This Agreement and City’ s obligations hereunder shall not constitute a guaranty of the Construction Loan, an assumption of any Construction Loan Document, a pledge of City’ s full faith and credit, a pledge of tax revenues, or an indebtedness or liability in violation of Article XVI, Section 18 of the California Constitution.
3. Construction Loan.
3.1. Financing Process. WOL shall have the exclusive right during the Term, in its sole and absolute discretion, to pursue, structure, negotiate, obtain, close, amend, modify, extend, refinance, replace, or otherwise restructure the Construction Loan, including selecting the Lender, determining its structure and components (including any construction and/or permanent financing components), and negotiating the economic and business terms thereof, subject only to the Maximum Loan Amount. The City shall not be part of the Construction Loan review, underwriting, approval, negotiation, or documentation process, and the City shall have no obligation to review, approve, execute, deliver, or be a party to any Construction Loan Document.
3.2. Agreed City Support Parameters . No City Support shall impose any payment, performance, reimbursement, indemnity, completion, carry, operating, cure, payoff, acquisition, assumption, or other obligation on the City in excess of the Purchase Price. Notwithstanding anything to ATTACHMENT NO. 2
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the contrary contained herein, the City shall not be required to undertake obligations that: (i) are unrelated to, or not reasonably connected with, the Construction Loan, the Construction Loan Documents, or the Project or otherwise reasonably anticipated by the terms and conditions of this Agreement; (ii) require the City to make capital contributions, invest equity, fund project costs, or provide voluntary operating subsidies independent of obligations expressly undertaken by the City in this Agreement, the Option Documents or any separate written agreement; (iii) require the City to pledge, encumber, mortgage, or grant a lien or security interest in any property, revenues, or other assets of the City (provided, however, that no interest in the Property arising out of this Agreement shall be deemed an asset of the City for the purposes of this clause (iii)); (iv) require the City to assume ownership of, or day -to-day managerial or operational responsibility for, WOL or the development, construction, leasing, management, or operation of the Project prior to any acquisition of the Property pursuant to Section 4; (v) require the City to make representations, warranties, certifications, or covenants regarding matters outside the City’ s reasonable knowledge, authority, organization, legal capacity; (vi) are expressly prohibited by applicable law or beyond the lawful authority of the City to undertake; (vii) would cause the City’ s aggregate exposure to exceed the Purchase Price; (viii) would constitute an uncapped guaranty, open -ended indemnity, pledge of the City’ s full faith and credit, or obligation payable from future- year revenues without required approvals; or (ix) would require the City to pay, assume, reimburse, cure, acquire, or otherwise support any amount in excess of the Purchase Price.
3.3. City Cooperation. In connection with WOL’ s efforts to obtain, close and perform its obligations under the Construction Loan, the City shall reasonably cooperate with WOL and the applicable Lender, at no cost or expense to City, including by participating in reasonable discussions and providing such information, confirmations, and documentation regarding the City and/or its obligations under this Agreement as may be reasonably requested in connection with underwriting, structuring, and closing the Construction Loan, or any sale or assignment of all or a portion of any interest of a Lender therein, subject to applicable law, including, without limitation, expressly acknowledging in writing its obligations under this Agreement subject to the terms and conditions of Section 3.4; provided that the City shall not be required to provide any information, confirmation, certificate, document, approval, or undertaking that expands the City’ s obligations, limits the City’ s discretion, or creates lender reliance, beyond the express terms of this Agreement, or which is inconsistent with the Purchase Price. The City’ s review and participation rights shall be exercised in accordance with, and shall not expand or modify, the review and execution procedures set forth in Section 5. Any Construction Loan Document that references the City, the City Support, the Purchase Price, the Put Option, or any other City obligation or support shall state that any such City Support is limited solely to the rights and obligations expressly set forth in this Agreement and is subject in all cases to the Purchase Price. No Construction Loan Document shall name the City as a borrower, guarantor, indemnitor, obligor, pledgor, grantor, assignee, successor borrower, purchaser of the Construction Loan, purchaser of the Lender’ s interest, or party, impose or purport to impose any obligation on the City, require any City approval or consent, impair the City’ s rights under this Agreement, or create any claim against the City, except to the extent expressly set forth in this Agreement.
3.3.1. No Separate City Loan Documents . The City shall not be required to execute any guaranty, reimbursement agreement, indemnity, consent, direct agreement, subordination agreement, intercreditor agreement, loan assumption agreement, lender consent, certificate, legal opinion, estoppel, or other document in favor of or for the benefit of any Lender (other than the Lender Coordination Documents and the Option Documents contemplated by this Agreement). Any Lender’ s rights against the City, if any, shall arise solely under this Agreement and shall be subject to the Purchase Price and all other limitations set forth herein.
3.4. Reliance by Lender; Disclosure. WOL may disclose this Agreement to any actual or prospective Lender and its advisors in connection with WOL’ s efforts to obtain the Construction Loan, and each Lender shall be permitted to disclose this Agreement to prospective investors, creditors and assigns ATTACHMENT NO. 2
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of its interest in the Construction Loan. Notwithstanding, the City acknowledges that WOL and any such Lender and its respective, investors, creditors, successors and assigns, may rely on this Agreement solely for purposes of evaluating and underwriting the Construction Loan. Notwithstanding the foregoing, this Agreement does not, by itself, constitute a guaranty or other City Support in favor of any Lender, and no Lender shall be deemed a third-party beneficiary hereof, except as expressly set forth herein. The City acknowledges that any Lender may rely on this Agreement solely for the limited purpose of confirming the City Support expressly set forth herein. No such reliance shall expand the City Support, modify the Purchase Price, make the City a party to any Construction Loan Document, or create any City obligation not expressly set forth in this Agreement. Any Lender accepting or relying on this Agreement shall be deemed to acknowledge that the City has no obligation with respect to the Construction Loan except as expressly provided in this Agreement and subject in all cases to the Purchase Price. No Lender shall have any right to require the City to assume, purchase, refinance, repay, reimburse, indemnify, cure, or otherwise become liable for the Construction Loan. For the avoidance of doubt, the City’ s obligation to purchase the Property upon a valid exercise of the Put Option is an express obligation of the City set forth in this Agreement upon which any Lender may rely, subject in all cases to the Purchase Price and the terms of this Agreement. WOL shall deliver to City, within two (2) business days after receipt, any written notice of default, acceleration, foreclosure, enforcement, payoff demand, lien-release condition, or other material written communication from Lender relating to the Construction Loan, the Property, or any Triggering Event. Delivery of any such notice shall not require City to cure any default, assume any obligation, or make any payment except as expressly provided in this Agreement. WOL shall provide the City, upon request, reasonably current information regarding the outstanding balance of the Construction Loan, the status of any default received by WOL, and the Lender contact responsible for payoff and lien-release coordination. Delivery of any notice or information under this Section shall be for informational and coordination purposes only and shall not require the City to cure any default, assume any obligation, make any payment, or take any action except as expressly required under this Agreement.
4. Put Option; Acquisition. In consideration of the benefits to the City associated with the Land Exchange Transaction and the Project, which are hereby acknowledged by the City, along with the value of the Property itself (as represented by the Purchase Price payable pursuant to the Put Option), to be fair and valuable consideration for the rights of WOL to enforce the Put Option, commencing upon the closing of the Construction Loan, WOL shall have, and the City hereby grants to WOL, the Put Option, exercisable in accordance with this Section 4. The Put Option is intended to permit WOL, upon any Triggering Event that may occur during the Term, to require the City to purchase the Property for the Purchase Price, all or a portion of which shall be applied by WOL to obtain a release of any and all liens securing the Construction Loan. Upon a valid exercise of the Put Option, the City hereby covenants, and shall be irrevocably obligated to purchase the Property for the Purchase Price in accordance with this Section 4 and the Option Documents, and the City’ s obligation to complete such purchase shall not be conditioned on the City’ s discretion or election to cure any default, payoff any loan, or assume any obligation of WOL relating to the Project or the Property, or any other condition not expressly set forth herein.
4.1. Purchase Price. Upon exercise of the Put Option, the City shall purchase the Property for the Purchase Price in strict accordance with this Section 4. The Purchase Price shall be deposited by the City into escrow during the Escrow Period (as defined below) and disbursed from escrow as follows: (a) first, to the Lender in the amount required to pay off the Construction Loan and obtain the release and reconveyance of the liens securing it; (b) second, to pay all other costs payable by WOL pursuant to the Option Documents, and (c) third, the balance, if any, to WOL. If the amount required to release such liens and pay such costs exceeds the Purchase Price, WOL shall deposit the deficiency into escrow at or before closing, and in no event shall the City be required to pay more than the Purchase Price. The payoff of the Construction Loan shall be satisfied from the Purchase Price and shall not constitute a separate, additional, or offsetting obligation of the City, nor reduce the total consideration payable by the City below ATTACHMENT NO. 2
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the Purchase Price. In the event that the Put Option is exercised during the Term and the Term would expire during the Escrow Period, the Parties agree that the Term and the term of the Option Documents shall be automatically extended to expire upon the expiration of the Escrow Period.
4.2. Triggering Event; City Rights and Obligations . Upon the occurrence of a Triggering Event, and following any notice and cure periods afforded to the City under the Lender Coordination Documents (if any), WOL shall have the right, in its sole discretion, to exercise the Put Option by delivering written notice to the City (the “Exercise Notice”). Upon delivery of a valid Exercise Notice, the City shall be unconditionally obligated to purchase the Property for the Purchase Price and to close such purchase within ninety (90) days thereafter (or such shorter or longer period as required by the Lender Coordination Documents; as applicable, the “Escrow Period”), subject only to the closing mechanics set forth in this Section 4. The City shall have no right to decline, condition, or defer such purchase. As used herein, “Triggering Event” means WOL's receipt of a written notice of default from the Lender under the Construction Loan Documents that continues beyond all applicable notice and cure periods that permits Lender to accelerate the Construction Loan or exercise remedies against the Property or the Project. Any Exercise Notice shall include copies of the applicable Lender default notice and the then-current payoff demand or payoff estimate for the Construction Loan.
4.3. Acquisition Mechanics. The purchase of the Property upon exercise of the Put Option shall be consummated through escrow in accordance with the disbursement provisions of Section
4.1. The Put Option may be exercised by WOL or, pursuant to a collateral assignment permitted under Section 13, by the Lender as collateral assignee, and the City shall recognize and honor an exercise by such collateral assignee to the same extent as an exercise by WOL.
4.4. Basic Terms of Option Documents . The Option Documents shall contain such terms, provisions, rights, obligations, conditions, covenants, remedies, and transaction mechanics as are reasonably necessary or customary to implement the acquisition contemplated by this Section 4 and to coordinate such rights with the Construction Loan Documents and the Lender Coordination Documents, provided that no such document shall impose any obligation on the City in excess of the Purchase Price nor extend or delay the City’ s payment of the Purchase Price beyond the Escrow Period.
4.4.1. Post-Acquisition Property Obligations.If the City acquires the Property, the City shall accept the Property subject to the County Grant Documents and any related covenants, restrictions, compliance obligations, reporting obligations, and amounts then owing or thereafter becoming owing thereunder, in each case subject to any required third- party approvals and the Purchase Price; provided that no such acceptance shall require the City to assume the Construction Loan or any obligation of WOL under the Construction Loan Documents.
4.4.2. Customary Transaction Terms . Representations and warranties, covenants, indemnities, conditions precedent, title matters, default provisions, dispute resolution provisions, and such other customary transaction terms and protections as are consistent with this Agreement and subject to the Purchase Price.
4.4.3. Closing and Transfer Mechanics . Customary title review, escrow arrangements, lender lien release procedures, conveyancing documentation, prorations, cost allocations, release documentation, and such other closing mechanics as are reasonably necessary to consummate the acquisition contemplated by this Agreement in accordance with the terms and conditions of this Section 4.
5. Definitive Documents.
5.1. Preparing Definitive Documents . WOL and the City shall cooperate in good ATTACHMENT NO. 2
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faith, at no cost or expense to the City, to promptly prepare, negotiate, and finalize the Option Documents in connection with the Put Option and pay off of the lien after a Triggering Event. The Option Documents shall be prepared and finalized upon exercise of the Put Option, except that if the applicable Lender requires the form of the Option Documents to be agreed earlier, the Parties shall cooperate in good faith to do so.
WOL shall have sole responsibility for preparing and finalizing the Construction Loan Documents with the applicable Lender, and the City shall not be a party to, or required to approve, the Construction Loan Documents. If the Parties have not agreed upon the form of the definitive purchase and sale agreement and related Option Documents within thirty (30) days after the form is first required (whether upon delivery of the Exercise Notice or upon the Lender’ s earlier request; as applicable, the “Initial Documentation Period”), the purchase and sale of the Property shall be documented using the then-current AIR Commercial Real Estate Association Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (or the AIR form most applicable to the Property; as applicable , the “AIR Form”), modified only as necessary to conform to the terms of this Agreement, including the Purchase Price, the mandatory and non-contingent nature of the City’ s obligation to purchase upon exercise of the Put Option, and the disbursement provisions of Section 4.1; provided that the City’ s payment of the Purchase Price shall not be subject to any financing contingency or discretionary approval of the City Council or any other board or agency that has not been obtained upon the City’ s execution of this Agreement as of the Effective Date, provided that City Council approval of this Agreement shall constitute City’ s approval of the potential acquisition obligation expressly set forth herein, subject to the Purchase Price and the express terms and limitations of this Agreement. No additional discretionary City Council approval shall be required solely to pay the Purchase Price upon a valid exercise of the Put Option, provided that the exercise and closing comply with this Agreement and no Option Document expands City’ s obligations. In the event of any conflict between such AIR form and the terms of this Agreement, the terms of this Agreement shall control.
If the Parties are unable to reach agreement on any modifications to the terms of the AIR Form within thirty (30) days after the expiration of the Initial Documentation Period, the AIR Form shall be deemed modified to conform to this Agreement and shall be used to close the purchase of the Property. Any unresolved terms shall be limited to ministerial escrow, title, payoff, lien-release, prorations, and closing mechanics customarily handled by escrow and title and no unresolved term shall delay City’ s obligation to close if WOL is otherwise able to convey the Property in accordance with this Agreement.
5.2. No Separate City Loan Documents.The Parties acknowledge and agree that this Agreement is intended to be the sole agreement, undertaking, and instrument on which WOL or any Lender may rely for any City Support. Except for this Agreement, and any document the City later elects to execute in connection with an exercise of the Put Option, the City shall have no obligation to prepare, negotiate, review, approve, execute, deliver, or be a party to any Construction Loan Document. The Construction Loan Documents may reference this Agreement as the sole source of any City Support, but shall not modify, expand, supplement, impair, or conflict with this Agreement. Any provision in any Construction Loan Document that purports to impose obligations on the City beyond this Agreement shall be void and unenforceable against the City. No failure by the City to review, comment on, object to, or receive any Construction Loan Document shall be deemed approval, consent, waiver, acceptance, or agreement by the City. No Construction Loan Document shall require or imply that the City has assumed, guaranteed, purchased, refinanced, repaid, reimbursed, indemnified, or otherwise become liable for the Construction Loan.
6. Term; Default; Effect of Termination.
6.1. Term. This Agreement shall become effective as of the Effective Date and shall remain in full force and effect until the earliest to occur of: (a) the mutual written agreement of the Parties to terminate this Agreement; (b) WOL’ s full repayment of the Construction Loan and the reconveyance or release of all liens encumbering the Property as security for such repayment; (c) the consummation of the transaction contemplated by the Put Option; or (d) a final, non-appealable order of a court of competent ATTACHMENT NO. 2
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jurisdiction declaring performance of the material obligations contemplated by this Agreement unlawful or permanently enjoining such performance. No Party shall have any unilateral right to terminate, rescind, withdraw from, or decline performance of this Agreement except as expressly set forth in this Section. No termination of this Agreement shall release WOL from transfer restrictions, accrued obligations, or any obligations that expressly survive termination.
6.2. Default. If either Party materially defaults in the performance of any material obligation under this Agreement, and such default continues for a period of ten (10) business days after written notice from the non-defaulting Party specifying the nature of such default, then the non-defaulting Party shall be entitled to pursue any rights or remedies available at law or in equity, including specific performance, injunctive relief, and damages; provided, however, that no default by WOL shall release the City from its obligation to pay the Purchase Price for the Property if title is conveyed to the City free and clear of all liens securing repayment of the Construction Loan notwithstanding such default. If the nature of such default is such that it cannot reasonably be cured within such ten (10) business day period, the defaulting Party shall not be deemed in default so long as it commences cure within such period and thereafter diligently prosecutes such cure to completion (or, if WOL is the defaulting Party and proceeds of the Purchase Price are sufficient to cure any such default when such close of escrow occurs, escrow instructions executed by the City and WOL requiring the payment of such amount as a condition of closing shall cure such default). The City shall not be in default for refusing to review, approve, execute, deliver, or perform under any document or transaction not expressly required by this Agreement, or for refusing to take any action that would require the City to pay in excess of the Purchase Price, is not authorized by applicable law, or is inconsistent with this Agreement.
6.3. Effect of Termination; Survival. Termination of this Agreement shall not release either Party from liability for any breach occurring prior to such termination, nor impair any rights or remedies accrued prior thereto. Any provisions of this Agreement which by their nature are intended to survive termination, including provisions relating to confidentiality, dispute resolution, enforcement of rights and remedies, and accrued liabilities or obligations, shall survive such termination.
7. Remedies. In the event of any breach or threatened breach of this Agreement by WOL, City shall be entitled to pursue any and all rights and remedies available at law or in equity, including, without limitation, damages, injunctive relief, and specific performance. In the event of any breach or threatened breach of this Agreement by City, WOL shall not be entitled to recover monetary damages from the City, and WOL’ s sole remedies against the City shall be declaratory relief or specific performance of the City’ s express, non-discretionary obligations, including the City’ s obligation to purchase the Property for the Purchase Price upon a valid exercise of the Put Option. The Parties acknowledge and agree that a breach of this Agreement may cause irreparable harm for which monetary damages alone may be an inadequate remedy, and that equitable relief, including specific performance and injunctive relief, shall therefore be available to enforce the terms of this Agreement, without the necessity of proving actual damages or posting bond, except as required by applicable law. All rights and remedies under this Agreement shall be cumulative and not exclusive of any other rights or remedies available at law or in equity. In any action or proceeding arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’fees and costs, and, in the case of WOL, such recovery shall not be limited by the Purchase Price. Notwithstanding anything to the contrary, except for the City’ s obligation to purchase the Property for the Purchase Price upon a valid exercise of the Put Option, which obligation shall be specifically enforceable, and except for the recovery of attorneys’fees as set forth herein, no remedy, including specific performance or injunctive relief, shall require the City to approve any document, execute any document, make any payment, assume any obligation, cure any default, acquire any property, purchase the Construction Loan, purchase any Lender interest, reimburse or indemnify any party, become liable under any Construction Loan Document, or take any other action that would exceed the Purchase Price, violate applicable law, or require an unlawful debt or liability.
ATTACHMENT NO. 2
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8. Representations and Warranties. Each Party represents and warrants to the other Party that: (a) it has full power, right, and authority to execute, deliver, and perform this Agreement and the transactions contemplated hereby; (b) the execution, delivery, and performance of this Agreeme nt have been duly authorized by all necessary action required of such Party; and (c) this Agreement constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, and other laws affecting creditors’rights generally and general principles of equity. Notwithstanding the foregoing, the City’ s obligations under this Agreement and any related documents are subject to applicable law, required City Council approvals, and the Purchase Price.
Nothing in this Agreement shall be construed as a pledge of the City’ s full faith and credit, a pledge of tax revenues, an obligation payable from future fiscal year revenues without required approvals, or an obligation of the City in excess of the Purchase Price.
9. Governing Law; Venue . This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located in San Bernardino County, California, and each Party irrevocably submits to the jurisdiction of such courts.
10. Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, understandings, letters of intent, memoranda, term sheets, and agreements, whether oral or written, relating to such subject matter. No Party has relied upon any representation, warranty, promise, covenant, agreement, or undertaking not expressly set forth in this Agreement.
11. Amendments; Waivers. This Agreement may be amended, modified, supplemented, or waived only by a written instrument expressly referring to this Agreement and executed by duly authorized representatives of each Party. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party against whom such waiver is sought to be enforced. No waiver of any breach or default shall be deemed a waiver of any preceding, concurrent, or subsequent breach or default.
12. Severability. If any provision of this Agreement, or the application thereof to any Person or circumstance, is held to be invalid, illegal, unenforceable, or incapable of being enforced to any extent by a court of competent jurisdiction, the remainder of this Agreement, and the application of such provision to other Persons or circumstances, shall not be affected thereby and shall be enforced to the greatest extent permitted by law; provided, however, that if such invalidity, illegality, or unenforceabilitymaterially alters the economic substance, allocation of rights, or allocation of obligations contemplated by this Agreement, either Party may seek equitable reformation to give effect as nearly as possible to the original intent of the Parties.
13. Assignment; Successors and Assigns . Neither Party may assign, delegate, transfer, or otherwise convey any of its rights or obligations under this Agreement without the prior written consent of the other Party, not to be unreasonably withheld; provided however, that WOL may, without the City’ s consent, collaterally assign to the Lender, as security for the Construction Loan, all or any portion of WOL’ s rights under this Agreement, including the Put Option and WOL’ s rights to notice, cure, and the Purchase Price and other acquisition consideration hereunder (collectively, the “Assigned Rights”), and any such collateral assignee shall be entitled to exercise the Put Option and enforce the Assigned Rights in accordance with the applicable collateral assignment, subject in all cases to the Purchase Price and all terms, conditions, limitations, and defenses of the City set forth in this Agreement. In addition, any Person that acquires the Property or the Assigned Rights (or WOL’ s interest therein) through foreclosure, trustee's sale, deed in lieu of foreclosure, or other exercise of remedies under the Construction Loan Documents shall succeed to WOL’ s right to exercise the Put Option and enforce the Assigned Rights as WOL’ s successor, in ATTACHMENT NO. 2
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each case subject in all cases to the Purchase Price and all terms, conditions, limitations, and defenses of the City set forth in this Agreement. The City shall recognize and honor an exercise of the Put Option by any such collateral assignee or successor to the same extent as an exercise by WOL. Concurrently with the closing of the Construction Loan, and thereafter from time to time at the Lender’ s reasonable request, WOL shall execute, deliver, and, where applicable, record or file such collateral assignments, UCC financing statements, memoranda of option, and other instruments as the Lender reasonably requires to assign and perfect its security interest in the Assigned Rights, whether the Assigned Rights (or any of them) constitute a general intangible, an interest in real property, or both, and by whichever method or methods of perfection may be applicable, together with such further instruments and actions as may be necessary or appropriate to perfect, continue, and evidence the same under applicable law. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
14. Notices. Any notice, demand, request, consent, approval, objection, communication, or other notice required or permitted under this Agreement shall be in writing and shall be deemed given: (a) when personally delivered; (b) one (1) business day after deposit with a nationally recognized overnight courier, charges prepaid; (c) upon confirmed transmission by electronic mail during normal business hours (or, if transmitted after business hours, on the next business day), provided that a copy is also sent by one of the methods described in clause (a) or (b); or (d) three (3) business days after deposit in the United States mail, certified or registered, postage prepaid, return receipt requested, addressed to the Parties at their respective addresses set forth below, or to such other address as a Party may designate by notice given in accordance herewith.
If to WOL: Water of Life Community Church
14418 Miller Avenue, Suite K
Fontana CA 92336
Attention: Mark Nuaimi
Email: [email protected]
With copy
(such copy not constituting notice to): Solomon Ward Seidenwurm & Smith LLP 401 B Street, Suite 1200
San Diego, CA 92101
Attention: Joshua Jacobs
Email: [email protected]
If to City: City of Fontana
Attn: City Manager
8353 Sierra Ave.
Fontana, CA 92335
Email: [email protected]
With a copy to: Best Best & Krieger LLP
Attn: Ruben Duran
2855 E. Guasti Rd., Suite 400
Ontario, CA 91761
Email: [email protected]
ATTACHMENT NO. 2
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15. Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures delivered by electronic transmission, including by PDF, DocuSign, or other electronic signature technology, shall be deemed original signatures for all purposes and shall be fully binding upon the executing Party.
16. No-Third Party Beneficiaries. Except as expressly provided herein, nothing contained in this Agreement, express or implied, is intended to confer upon any Person other than the Parties and their respective permitted successors and assigns any rights, benefits, remedies, claims, obligations, or liabilities under or by reason of this Agreement. No Lender shall have any right to enforce any obligation against the City arising under any Construction Loan Document or any document other than this Agreement, or to require the City to assume, guarantee, purchase, refinance, repay, reimburse, indemnify, cure, or otherwise become liable for the Construction Loan; provided however, the foregoing shall not limit the right of a Lender, as collateral assignee of the Put Option pursuant to Section 13, to exercise the Put Option in accordance with this Agreement.
17. Further Assurances. Each Party shall execute and deliver such further documents and instruments, and take such further actions, as may be reasonably necessary or appropriate to carry out the intent of this Agreement and consummate the transactions contemplated hereby, provided that such documents, instruments, and actions are consistent with the express terms of this Agreement. The City shall not be required to execute any Construction Loan Document, lender document, guaranty, reimbursement agreement, indemnity, consent, acknowledgment, direct agreement, subordination agreement, intercreditor agreement, loan assumption agreement, certificate, legal opinion, estoppel, or other ancillary document (other than the Lender Coordination Documents and the Option Documents contemplated by this Agreement), and no further document or action shall expand the City Support, increase the Purchase Price, require the City to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, reimburse any party, indemnify any party, become liable under any Construction Loan Document, or impose any obligation on the City not expressly set forth in this Agreement.
18. Interpretation. The Parties acknowledge that each Party and its respective counsel has participated in the negotiation and drafting of this Agreement. Accordingly, this Agreement shall be construed as though jointly drafted by the Parties, and no presumption or rule of construction shall apply against any Party by reason of authorship or drafting. The words “include,” “includes,” and “including” shall be deemed followed by the phrase “without limitation.” Unless the context otherwise requires, the singular includes the plural and vice versa, and references to Sections are references to Sections of this Agreement.
19. Time of Essence. Time is of the essence with respect to each provision of this Agreement in which time for performance is specified and with respect to the performance of each Party’ s obligations hereunder.
20. Independent Agreements; No Cross -Incorporation. This Agreement and the Land Exchange Transaction (and all documents comprising said Land Exchange Transaction) are separate and independent agreements. No defined term or provision of either applies to, modifies, or is incorporated into the other, and neither is conditioned upon the closing or continued effectiveness of the other.
Notwithstanding the foregoing to the contrary, Land Exchange Transaction remains part of the consideration and inducement for the City’ s obligations under this Agreement, as recited herein. [Signatures on Following Page]
ATTACHMENT NO. 2
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The Parties hereby agree to the terms and conditions set forth herein and have executed this Agreement as of the Effective Date.
WOL:
WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit corporation
By: ___________________________
Name: Jim Kensinger
Title: Executive Director of Ministry Operations
CITY:
CITY OF FONTANA,
a California municipal corporation
By: ___________________________
Name: Matt Ballantyne
Title: City Manager
ATTACHMENT NO. 2
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EXHIBIT “A”
Legal Description
ATTACHMENT NO. 2