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HomeMy WebLinkAboutContracts & Agreements_204-2024REAL PROPERTY EXCHANGE AGREEMENT AND JOINT ESCROW INSTRUCTIONS Between CITY OF REDLANDS and PROPERTY ONE, LLC Effective Date: NOVEMBER 19, 2024 17942.00158\42470111.4 1:\cmo\Agtvc1ments\Properly One, LLC Real Property Exchange Agreement PY24-0045.docx-ms REAL PROPERTY EXCHANGE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS REAL PROPERTY EXCHANGE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ("Agreement") is entered into this 19th day of November 2024 ("Effective Date") by and between the CITY OF REDLANDS, a municipal corporation (the "City") and PROPERTY ONE, LLC, a California limited liability company, ("Property One'). The City and Property One are sometimes hereinafter referred to individually as a "Pady' and collectively as the "Parties." RECITALS A. The City owns that certain real property located at or about the West side of Eureka Street, North of West Redlands Blvd, and South of Oriental Avenue (APN: 0169-272-27-0000) within the city of Redlands, as more particularly described in Exhibit "A" attached hereto and incorporated herein (the "City Property"); and B. Property One owns that certain real property located at or about the West side of Division Street, South of Sylvan Blvd and North of Interstate 10 (APN: 0170-142-12-0000) within the city of Redlands, as more particularly described in Exhibit "B" attached hereto and incorporated herein (the "Property One Property"). C. The City Property and Property One Property are sometimes hereinafter referred to collectively as the "Properties." AGREEMENT Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Property One agree as follows: EXCHANGE OF PROPERTIES. 1.1 Agreement to Exchange. Subject to all the terms, conditions, and provisions of this Agreement, and for the consideration herein set forth, City and Property One agree to exchange title to their respective Properties, each including, to the extent owned by either Party, without limitation, such Party's interest in all mineral, oil, gas and other hydrocarbon substances on and under the properties as well as all development rights, air rights, water, water rights and water stock relating to the Properties and any other easements, rights -of -way or appurtenances, used in connection with the beneficial use and enjoyment of the Properties. 2. INSPECTIONS AND REVIEW. 2.1 Feasibility/Financing Period. As used herein, the term "Feasibility Period" shall refer to a period of time to expire at 5:00 p.m., California time, on the one hundred and twentieth (120th) calendar day following the Effective Date or the receipt of all Due Diligence Materials, whichever is later; provided, however, that if the one hundred and twentieth (120th) day is a Saturday, Sunday or holiday on which banking institutions are closed in the State of California, 17942.00158w24701t 1.4 then the Feasibility Period shall expire on the following business day. Each Party, in its sole and absolute discretion, may elect, by written notice at any time prior to the expiration of the Feasibility Period, to terminate this Agreement. If a Party desires to terminate this Agreement pursuant to this Section 2.1 then before the expiration of the Feasibility Period, it shall deliver written notice to of the election to terminate (the "Notice to Terminate"). If a Party fails to deliver a Notice to Terminate prior to the expiration of the Feasibility Period, then the Parties shall be deemed to have elected to proceed with this Agreement and the Closing, subject to Section 5, below. In the event of the termination of this Agreement pursuant to this Section 2.1, neither party shall have any further obligations to the other hereunder (except under provisions of this Agreement which specifically state that they survive termination). The following notwithstanding, either Party may extend the Feasibility Period one time by a period of sixty (60) days to complete the inspections identified in Section 2.4 below. 2.2 Delivery of Due Diligence Materials. Property One will provide City with copies of all documents in Property One's possession or control relating to the Property One Property and the general feasibility of use of the Property One Property by City, including but not limited to, zoning, use permits for commercial use, government approvals and entitlements, engineering drawings, biological surveys or reports, grading plans, improvement plans, conditions of approval, soils reports, surveys, and environmental reports (the "Property One Due Diligence Materials"). City will provide Property One with copies of all documents in City's possession or control relating to the City Property and the general feasibility of use of the City Property by City, including but not limited to, zoning, use permits for commercial use, government approvals and entitlements, engineering drawings, biological surveys or reports, grading plans, improvement plans, conditions of approval, soils reports, surveys, and environmental reports (the "City Due Diligence Materials"). In the event a Party elects to terminate this Agreement, or if Closing does not occur for any reason, the Parties shall return all Due Diligence Materials received. 2.3 Assumption of Risk. Any Due Diligence Materials shall be provided to the other Party without any recourse or liability of any type or nature. Each Party assumes all risk of any kind with regard to the use of and reliance upon any of the Due Diligence Materials provided by the other Party. Neither Party is relying upon the other Party for any information related to, concerning, or involving the respective properties for this transaction, including, without limitation, the monetary value of the Properties. 2.4 Insnections. The Parties and their respective representatives, agents, engineers, consultants, contractors, and designees shall have the right to enter onto each other's Properties from and after the date of this Agreement through the Closing for purposes of examining, inspecting and investigating the other's Properties, including the site, soil, subsurface soils, drainage, seismic and other geological and topographical matters, location of asbestos, toxic substances, hazardous materials or wastes, if any, and, in each Party's sole and absolute discretion, determining whether the other's Properties are acceptable to them. Prior to entering the Properties, the entering Party (the "Entering Party') shall provide the welcoming Party (the "Welcoming Party") with at least twenty-four (24) hour written notice identifying the date and time of the planned inspection. The Welcoming Party will permit the Entering Party's planned inspection unless the planned inspection will interfere with a previously planned Welcoming Party activity or event in which case the Parties shall work together in good faith to identify another mutually convenient date or time as soon as possible. Both Parties shall have the right, for any reason and 3 17942.00158\42470111.4 at any time on or before the expiration of the Feasibility Period, to terminate this Agreement by delivering a written notice of such termination to the other Party and Escrow Agent. 2.5 Repair; Indemnification. The Entering Party shall, in a timely manner, repair any and all damage to the Welcoming Party's Properties caused by any inspection or investigation described herein, to a condition substantially the same as the condition of the Welcoming Party's Properties prior to such inspection or investigation. The Entering Party shall hold harmless, defend and indemnify the Welcoming Party and all of the principals, members, agents and partners of the Welcoming Party from any loss, expense (including attorney's fees), liability or cost which arises due to or out of any inspection by said Party. The foregoing indemnity shall survive the close or the termination of this transaction. 2.6 As -Is. Based on the inspection rights set forth in the preceding paragraph and in reliance on the due diligence of each Party, City and Property One acknowledge and agree that except for the limited warranties and representations expressly set forth in this Agreement, the exchange of the Properties is made solely on an AS IS WHERE IS BASIS, WITH ABSOLUTELY NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED. But for the foregoing understanding and agreement, the Parties would not have entered into this transaction. Each Party acknowledges that due to the expertise, experience and business acumen of both Parties and their respective consultants, each Party has the ability to conduct a complete and through due diligence of the respective Properties and would not close the transaction unless totally satisfied with the respective Property, and has otherwise conducted an exhaustive and complete due diligence which would enable the taking of the respective Property in an AS IS WHERE IS BASIS WITH ABSOLUTELY NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED. 2.7 Title Review. During each Parties' respective Feasibility Period, each Party shall obtain a preliminary title report for each respective Property, together with copies of all written instruments creating the exceptions specified therein, and plat maps plotting all easements specified therein (collectively, the "Title Reports'). The Parties shall notify one another in writing (each, an "Objection Notice") on or before the expiration of the Feasibility Period of any objections they may have to the title exceptions contained in the respective Title Report for the Properties. A Party's failure to provide an Objection Notice within said period shall constitute such Party's approval of all exceptions to title shown on the respective Title Report for the Properties. Upon receipt of an Objection Notice, the receiving Party (the "Receiving Party") shall have a period of ten (10) days after receipt of the objecting Party's (the "Objecting Party") Objection Notice in which to deliver written notice to the Objecting Party ("Objection Response") of the Receiving Party's election to either (i) agree to remove or cure the objected to items prior to the Close of Escrow, or (ii) decline to remove or cure any such title exceptions and, at the Receiving Party's discretion, terminate Escrow and this Agreement. If the Receiving Party notifies the Objecting Party of its election to terminate Escrow rather than remove and cure the objected to items, the Objecting Party shall have the right, by written notice delivered to the Receiving Party within ten (10) days after the Objecting Party's receipt of the Objection Response, to agree to accept the respective Property subject to the objected to items, in which event the Receiving Party's election to terminate the Escrow shall be of no effect, and the Objecting Party shall take title at the Close of Escrow subject to such objected to items without any adjustment to the Exchange. The Receiving Party may cure any objection by acquiring, at the Receiving Party's expense, a title 17942.00158\42470111.4 insurance endorsement related to the objected to exception, reasonably acceptable to the Objecting Party. Any extension of the time to review the Title Report for a Property subject to an Objection Notice shall only occur in strict accordance with the following paragraph. 2.8 Review of Amendments and Supplements. Upon the issuance of any amendment or supplement to the Title Report by the Receiving Party for a Property which adds additional exceptions, or adds any new requirement, the foregoing right of review and approval by the Objecting Party shall also apply to said amendment or supplement; provided, however, that the Objecting Party's period of review and approval or disapproval of any such additional exceptions shall be limited to fifteen (15) business days following the Objecting Party's and its counsel's receipt of the instrument(s) creating such additional exceptions. The foregoing extension shall only be allowed for and pertain to the review of the new matter and the Objecting Party shall not be entitled to object to any previously known exception or requirement for which the time for objection has expired. 2.9 Removal of Certain Exceptions. Notwithstanding anything else stated in this Agreement, in all events, the Parties shall satisfy and otherwise remove all monetary and financial liens and encumbrances on their respective Properties in existence as of the Effective Date or incurred on or before Closing (other than current taxes not yet due). In addition, the Parties shall, except as may be otherwise specifically set forth in this Agreement, terminate all leases, possessory agreements, licenses, and operating agreements that affect the respective Properties and cause all parties -in -possession title exceptions shown on the Title Report, if any, to be deleted, and neither Party need object to any such matters. 2.10 Governmental Approvals. During the course of the Escrow, each Party shall be entitled to seek all necessary approvals from any applicable governmental authorities, quasi - governmental authorities, and/or utility providers and regulators (collectively, "Governmental Authorities" and the approvals, collectively, the "Government Approvals") necessary to utilize the Properties they will receive via this Exchange in any way they see fit. The Parties shall reasonably cooperate with each other to support their efforts to obtain each other's Governmental Approvals and shall timely execute any and all applications, consents, and other documents reasonably requested by the other Party in connection therewith. 3. ESCROW. 3.1 Opening of Escrow. Within five (5) business days following the Effective Date, the Parties shall open an escrow (the "Escrow") with Chicago Title ("Escrow Agent'), at its offices located at 9090 Milliken Avenue, Suite 100, Rancho Cucamonga, CA 91730, Attn: Erin Graeberbougie, Escrow Officer, by causing a fully executed copy of this Agreement to be deposited with Escrow Agent (the "Opening of Escrow"). Escrow Agent shall provide each of the Parties with written confirmation of the date of the Opening of Escrow. Chicago Title NCS California (the "Title Company") shall also provide title insurance services related to this Agreement. 3.2 Close of Escrow; Closing Date. Escrow shall close on or prior to the date which is thirty (30) days after the conclusion of the Feasibility Period, unless mutually extended by both Parties, provided that the conditions to Closing described in Section 4 below have been satisfied 5 17942.00158\42470111.4 or waived (the "Closing Date"). The terms the "Close of Escrow", and/or the "Closing" are used herein to mean the date the Grant Deeds (as the term is defined in Section 3.5 herein) are recorded in the Office of the County Recorder of the County of San Bernardino (the "Official Records"). 3.3 Possession. Respective possession of the Properties shall be delivered to each Party at the Close of Escrow, free and clear of all liens, encumbrances, tenancies, lessees, occupants, licensees, and all possessory rights of any kind or nature, except for any Permitted Exceptions, as set forth and defined in Section 4.1.3. 3.4 Joint Escrow Instructions. This Agreement, together with any standard instructions of Escrow Agent, shall constitute the joint escrow instructions of the Parties to Escrow Agent. In the event of any conflict between the provisions of this Agreement and Escrow Agent's standard instructions, this Agreement shall prevail. 3.5 Deliveries by City. No later than 5:00 p.m. on the business day preceding the Closing Date, City shall deliver to Escrow Agent: (a) A fully executed and acknowledged grant deed conveying fee simple title to the City Property to Property One, in the form of Exhibit "C," attached hereto, in recordable form; (b) A non -foreign affidavit (the "Non -Foreign Affidavit") in the form of Exhibit "D", attached hereto; (c) A certificate of acceptance for the Property One Property Grant Deed, in the form of Exhibit "E", attached hereto; (d) Such other documents as may be reasonably required by Title Company or Escrow Agent in order to issue the City Title Policy, transfer the City Property to Property One, or otherwise fulfill the terms and intent of this Agreement. 3.6 Deliveries by Property One. No later than 5:00 p.m. on the business day preceding the Closing Date, Property One shall deliver to Escrow Agent: (a) A fully executed and acknowledged grant deed conveying fee simple title to the Property One Property to the City, in the form of Exhibit "E," attached hereto, in recordable form; (b) A Non -Foreign Affidavit in the form of Exhibit "D' ; and (c) Such other documents as may be reasonably required by Title Company or Escrow Agent in order to issue the Property One Title Policy, or otherwise required to transfer the Property One Property to City in accordance with the terms of this Agreement. 3.7 Closing, Recording and Disbursements. On or before the Closing Date, and when all of the conditions precedent to the Close of Escrow set forth in Section 4 of this Agreement have been satisfied or waived in writing, Escrow Agent shall take the actions set forth in this Section 3.7. IMMDI6fiARK111=1 3.7.1 Recording. Escrow Agent shall cause the Grant Deeds to be recorded in the Official Records. 3.7.2 Title Policy. Escrow Agent shall deliver to both Parties a commitment to issue Title Policies for the respective Properties, as referred to in Section 4.1.3 of this Agreement. 3.7.3 Delivery of Documents. Escrow Agent shall deliver to the respective Parties a conformed copy of the respective Grant Deeds, and any other documents (or copies thereof) deposited by the other Party with Escrow Agent pursuant to this Agreement. The originals of the Grant Deeds shall be returned to the respective Parties after recordation. 3.7.4 Real Property Taxes. All non -delinquent general and special real property taxes and assessments shall be prorated as of the Close of Escrow. 3.8 Payment of Costs. The Parties shall be responsible for payment of all applicable documentary transfer taxes and costs associated with recording the Grant Deeds for the respective Properties they are acquiring. The Parties shall also be responsible for all title insurance premiums for the respective ALTA standard owner's form policy for the respective Properties they are acquiring, as well as all charges associated with the title insurance premiums for any additional cost of obtaining any additional coverage requested by a Party, including the difference between an ALTA standard owner's policy and an ALTA extended owner's policy. The Parties shall share the Escrow fees or Escrow Agent's termination fees, as applicable, 50-50, unless the termination is caused by one Party's default (pursuant to Section 6), in which case the defaulting Party shall be liable for all outstanding Escrow fees, including Escrow termination fees. The Parties shall each be responsible for their respective attorneys' fees. All other costs of Escrow not specifically allocated in this Agreement shall be split equally among the Parties. 4. CONDITIONS PRECEDENT TO CLOSE OF ESCROW. 4.1 Conditions to City's Obligations. City's obligation to close the Exchange shall be subject to the satisfaction or written waiver by City of each of the conditions precedent set forth in this Section 4.1. 4.1.1 Property One's Performance. Property One is not in default of any term or condition of this Agreement. In the event City alleges that Property One is in default, City shall notify Property One in writing and describe the alleged default in detail. Property One shall have a reasonable time, but not less than fifteen (15) days, to cure any alleged default. 4.1.2 Property One Deliveries Made. Property One has deposited with Escrow Agent all documents required of Property One by this Agreement. 4.1.3 Title Policy. Title Company has committed to issue to City an ALTA standard, or at City's choice, an ALTA extended coverage owner's policy of title insurance ("Title Policy'), showing fee title to Property One's Property vested in City, subject only to: (a) the standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by Title Company; 7 17942.00158\42470111.4 (b) title exceptions approved by City pursuant to Section 2.6 and 2.7 of this Agreement; (c) title exceptions resulting from documents being recorded or delivered through Escrow pursuant to this Agreement; and (d) any other exceptions approved in writing by City in its sole and absolute discretion. The terms of sub -sections (a) through (d), inclusive, being herein collectively referred to as "Permitted Exceptions." 4.1.4 Representations and Warranties. All representations and warranties made by Property One in this Agreement, to the best of Property One's actual knowledge, are true and correct as of the Closing as though made at that time. 4.2 Conditions to Property One's Obligations. Property One's obligation to close the Exchange shall be subject to the satisfaction or written waiver by Property One of each of the conditions precedent set forth in this Section 4.2. 4.2.1 City's Performance. City is not in default of any term or condition of this Agreement. In the event City alleges that City is in default, Property One shall notify City in writing and describe the alleged default in detail. City shall have a reasonable time, but not less than fifteen (15) days, to cure any alleged default. 4.2.2 City's Deliveries Made. City has deposited with Escrow Agent all documents required of City by this Agreement. 4.2.3 Title Policv. Title Company has committed to issue to Property One an ALTA standard, or at Property One's choice, an ALTA extended coverage owner's policy of title insurance ("Title Policv"), showing fee title to the City Property vested in Property One, subject only to: (a) the standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by Title Company; (b) title exceptions approved by Property One pursuant to Section 2.6 and 2.7 of this Agreement; (c) title exceptions resulting from documents being recorded or delivered through Escrow pursuant to this Agreement; and (d) any other exceptions approved in writing by Property One in its sole and absolute discretion. The terms of sub -sections (a) through (d), inclusive, being herein collectively referred to as "Permitted Exceptions." 8 17942.00158\4247011 L4 4.2.4 Representations and Warranties. All representations and warranties made by City in this Agreement, to the best of City's actual knowledge, are true and correct as of the Closing as though made at that time. 4.2.5 No Challenges. There shall not be pending any challenge to the validity of this Agreement or the Exchange contemplated herein, including but not limited to any challenges pursuant to the Surplus Land Act. 4.3 Hazardous Materials: Environmental Compliance. As a result of the Parties' respective inspections pursuant to Section 2.3 herein, each Party intends to satisfy itself that the Properties, as applicable, are not in violation of any federal, state, or local law, ordinance, or regulation relating to Hazardous Materials, industrial hygiene, or to the environmental conditions on, under, or about the respective Properties, or any portion thereof, including, but not limited to, soil and groundwater conditions (together, "Environmental Laws"). If, at any time prior to the expiration of the Diligence Period, a Party determines that a Property it is intending to acquire, or any portion thereof, is in violation of said Environmental Laws, such Party may elect to terminate this Agreement and cancel the Escrow by delivering written notice to that effect to the other Party and Escrow Agent, thereby rendering this entire Agreement invalid, void, and unenforceable. The term "Hazardous Materials" when used in this Agreement shall mean any hazardous waste, hazardous substance, hazardous materials or toxic substances as defined, as of the Closing Date, in any federal, state, or local statute, ordinance, rule, or regulation applicable to the Property, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (Title 42 United States Code sections 9601-9675), the Resource Conservation and Recovery Act (Title 42 United States Code sections 6901-6992k), the Carpenter -Presley -Tanner Hazardous Substance Account Act (Health and Safety Code sections 25300-25395), Hazardous Waste Control Law (Health and Safety Code section 25100-25250.25); the Hazardous Materials Transportation Act, as amended (Title 49 United States Code Sections 1801-1819); and any substance defined as "hazardous waste" in Health and Safety Code Section 25117 or as a "hazardous substance" in Health and Safety Code Section 25316, and in the regulations adopted and publications promulgated under these laws. "Hazardous Materials" shall also include asbestos or asbestos -containing materials, radon gas, and petroleum or petroleum fractions, whether or not defined as a hazardous waste or hazardous substance in any such statute, ordinance, rule, or regulation as of the Closing Date. 4.4 Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by a Party, such Party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a Party, such approval shall be granted in such Party's sole and absolute discretion. 4.5 Waiver. The Parties may at any time or times, at their respective election, waive any of the conditions set forth in Sections 4.1 or 4.2, as applicable, but any such waiver shall be effective only if contained in a writing signed by the waiving Party and delivered to the other Party. 4.6 Termination. Subject to Section 6, in the event all of the conditions set forth in Sections 4.1 and 4.2 are not timely satisfied or waived, the Party whose conditions are not satisfied may, at its option, terminate this Agreement and the Escrow, thereby releasing the Parties from further obligations related to the Exchange of the Properties hereunder. Furthermore, in the event 9 17942.00158\42470111.4 this Agreement is terminated by either Party, all documents delivered by any Party to Escrow Agent shall be returned within a reasonable time to the original Party. Nothing in this Section 4.6 shall be construed as releasing any Party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder. 5. REPRESENTATIONS AND WARRANTIES -BROKERAGE COMMISSIONS. 5.1 Representations and Warranties. The Parties hereby make the following representations and warranties to one another, each of which (i) is material and relied upon by the other in malting their respective determinations to enter into this Agreement, (ii) is to the best of each Party's actual knowledge true in all respects as of the Effective Date and shall be true in all respects on the Closing Date, and (iii) shall survive the Close of Escrow for one (1) year: (a) Each Party has the full right, power, and authority to enter into this Agreement and to perform its obligations hereunder. This Agreement and all other documents delivered by one Party to the other now or at the Close of Escrow, have been or will be duly executed and delivered by such Party and are legal, valid, and binding obligations of such Party, sufficient to convey to the other Party good and marketable title to the respective Properties, are enforceable in accordance with their respective terms, and do not materially violate any provision of law or any agreement to which such Party is a party. (b) Other than those matters actually known and disclosed by the Parties as of the Effective Date, there are no pending or known threatened actions, suits, writs, injunctions, decrees, legal proceedings or governmental investigations against or affecting the Properties or relating to the ownership, maintenance, use or operation of the Properties. (c) Other than those matters actually known and disclosed by the Parties as of the Effective Date, neither Party has received any written notices nor has any actual knowledge of any violation of any laws, ordinances, rules, regulations or requirements of any Governmental Authority affecting or relating to the Properties. (d) Other than those matters actually known and disclosed by the Parties as of the Effective Date, there are no written leases, rights of first refusal, or other agreements relating to the right of possession and/or occupancy of any of the Properties by any person or entity, except for matters of record approved by such Party pursuant to Sections 2.6 and 2.7 above. (e) Other than those matters actually known and disclosed by the Parties as of the Effective Date, to the best of each Party's actual knowledge, neither the Properties nor the Parties are in violation of any applicable Federal, State or local statute, ordinance, order, requirement, law, or regulation materially adversely affecting the Properties or construction of any improvement thereon. Neither Party has received a written notice of any such violation of applicable law. The Parties shall make their own independent determination of the feasibility of the use of the respective Properties they seep to acquire for their intended use. {I) Neither Party has personally caused or knowingly permitted any contamination by Hazardous Materials (as defined in Section 4.3 of this Agreement) to occur on, at, about, or within their respective Properties, or any portion thereof, or otherwise knows of any 10 17942.00158\42470111.4 such contamination of Hazardous Materials on, at, about, or within their respective Properties, or any portion thereof. 5.2 Duty to Notify of Changed Circumstances; "Knowledge'. If either Party becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by such Party, whether as of the Effective Date or any time thereafter through the Closing Date, such Party will give immediate written notice of such changed fact or circumstance to the other Party, but such notice shall not release the noticing Party of any liabilities or obligations with respect thereto. In the event a Party delivers such notice, the other Party shall have the right, upon written notice, to terminate this Agreement. For purposes of this Agreement, the knowledge requirement shall be based on actual written notice to each Party's designated person in a form which would provide actual notice to a person without a duty of inquiry. City's designated person is solely limited to Chris Boatman, personally, and does not include his or any of City's agents, advisors or consultants. Property One's designated person is solely limited to Lance Lenhert, personally, and does not include his/her or any of Property One's agents, advisors or consultants. The Parties' respective designated persons shall incur no personal liability for any breach or alleged breach under this Agreement. 5.3 Brokerage Commissions. The Parties hereby each represent and acknowledge that neither Party has hired or otherwise engaged in an agreement with a broker or other party who is entitled to a commission or payment based on the transactions set forth herein. The Parties hereby indemnify and hold the other free and harmless from and against any and all costs and liabilities including, without limitation attorneys' fees, for causes of action or proceedings which may be instituted by a broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the indemnifying Party in connection with this Agreement. The foregoing representation and indemnity shall survive the termination of this Agreement. 6. DEFAULT. In the event either Party defaults under any of the terms and provisions of this Agreement (and such default continues for a period of fifteen (15) business days following receipt of written notice of such default from the non -breaching Party), the non -breaching Party shall have the right, but not the obligation, as its sole remedy for such default, to terminate this Agreement and the Escrow created hereby. In the event of such termination, the breaching Party shall deliver to the non -breaching Party all work product prepared by or on behalf of the breaching Party with respect to the Properties which the breaching Party would have received in the Exchange, but excluding internally prepared financial analyses, work product subject to proprietary rights of third parties and the attorney work product doctrine, and any documents protected by attorney client privilege, and without representation or warranty or right to rely thereon. MISCELLANEOUS. 7.1 Costs of Conveyance. All costs related to each Party's due diligence inspections and testing, and production of and/or reproduction of the Due Diligence Materials shall be the sole responsibility of the Party expending such costs. 7.2 Attorneys' Fees; Litigation. If any arbitration or action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party (including on 11 17942.00158\42470111.4 appeal) shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such Party may be entitled. 7.3 Notices. All notices required to be delivered under this Agreement to the other Party must be in writing and shall be effective (i) on the date of personally delivery by the other Parry, by messenger or by courier; (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty-four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of an email, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); 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 the Parties may hereafter designate by written notice to the other Party hereto: To City: CITY OF REDLANDS Assistant City Manager Attn: Chris Boatman City of Redlands P.O. Box 3005 Redlands, CA 92373 With copy to: CITY OF REDLANDS City Attorney Attn: Yvette M. Abich Garcia 300 E. State Street, Suite 690 Redlands, CA 92373 And: Best Best & Krieger LLP Attn: Todd M. Gee 500 Capitol Mall, Suite 2500 Sacramento, CA 95814 To Property One: PROPERTY ONE, LLC P.O. Box 7538 Redlands, CA 92375 Attn: Veronica Burgess With A Copy To: Legal Dept. P.O. Box 7538 Redlands, CA 92375 Attn: , Sim Saran, Esq. 7.4 Authori . The person(s) executing this Agreement on behalf of the Parties hereto warrant that (i) such Party is duly organized and existing, (iii) they are duly authorized to execute and deliver this Agreement on behalf of said Party, (iii) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which said Parry is bound. 12 17942.00158\424701 11 A 7.5 Execution in Counterparts. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all Parties hereto, notwithstanding that all Parties are not signatories to the original or the same counterpart. 7.6 Assignment. Neither Party hereto may assign its rights or delegate its obligations hereunder without the prior written consent of the other Party. 7.7 Third Party Beneficiaries. Nothing in this Agreement shall be construed to confer any rights upon any person or entity not signatory to this Agreement. 7.8 Binding on Heirs. This Agreement shall be binding upon the Parties hereto and their respective heirs, representatives, transferees, successors, and assigns. 7.9 Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of this Agreement. 7.10 Condemnation and Casualty. In the event either of the Properties are (i) taken, in whole or in part, or designated to be taken by condemnation proceedings other than condemnation proceedings instigated by the City, or proceedings in lieu thereof, or (ii) damaged as a result of any earthquake, hurricane, tornado, flood, sinkhole, landslide, fire, or other casualty, prior to the Close of Escrow, each Party shall have the right to terminate this Agreement and cancel Escrow by delivering to the other Party and Escrow Agent written notice thereof. 7.11 City's Authority. Property One acknowledges City is entering into this Agreement in its proprietary capacity and not in its regulatory or governmental capacity. Nothing in this Agreement shall be interpreted or construed as restraining, impairing, limiting, impeding or restricting the City of Redlands in its regulatory capacity, or granting any rights upon Property One with respect to the use, occupancy, development, or operation of the City Property in a manner inconsistent with any laws or applicable requirements. 7.12 Entire Agreement, Waivers and Amendments. This Agreement and any written agreement entered into by the Parties with respect to the Properties, incorporate all of the terms and conditions mentioned herein, or incidental hereto, and supersede all negotiations and previous agreements between the Parties with respect to all or part of the subject matter thereof. 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 both Parties. The City Manager of the City of Redlands, in consultation with the City Attorney, shall determine whether any such amendment or modification requires City Council approval. Amendments and modifications of this Agreement that only extend the time for the Parties to complete actions prior to the Closing Date or extend the Closing Date shall not require City Council approval. 7.13 Exhibits. All exhibits attached to this Agreement are incorporated herein by this reference and made a part hereof. Said Exhibits are identified as follows: "A" Legal Description of City Property "B" Legal Description of Property One Property 13 17942.0015M42470111.4 "C" Form of City Property Grant Deed "D" Non -Foreign Affidavit "E" Form of Property One Property Grant Deed "F" Certificate of Acceptance 7.14 Effect of Recitals. The Recitals above are deemed true and correct, are hereby incorporated into this Section as though fully set forth herein, and the Parties acknowledge and agree that they are each bound by same. 7.15 Section References. Any reference to any section of this Agreement cited without a decimal includes all sections following the cited section. For example, a reference to Section 5 includes Sections 5.1, 5.1(a), etc. 7.16 Severability. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way. 7.17 Interpretation: Governing Law; Venue. 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 in effect on the Effective Date with venue in San Bernardino County, California 7.18 Covenants to Survive Escrow. The covenants and agreements contained in this Agreement shall survive the Close of Escrow. 7.19 Conflicts of Interest. No director, officer, official, representative, agent or employee of either Party shall have any financial interest, direct or indirect, in this Agreement. 7.20 Nondiscrimination. There shall be no discrimination by the Parties against any person on account of race, color, religion, sex, marital status, national origin, ancestry, or any other protected class under the Constitution of the State of California or of the United States in the performance of their respective obligations under this Agreement. 7.21 Rights and Remedies are Cumulative. Except as may be otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by any Party of one or more of its right or remedies shall not preclude the exercise by it, at the same time or at different times, of any other rights or remedies for the same default or any other default by another Party. 7.22 Provisions Required by Law Deemed Inserted. Each and every provision of law and clause required by law to be inserted in this Agreement shall be deemed to be inserted herein and the Agreement shall be read and enforced as though it were included herein, and if through mistake or otherwise, any such provision is not inserted, or is not correctly inserted, then upon application of either Party, the Agreement shall forthwith be physically amended to make such 14 t7942,00158\42470111.4 insertion or correction. The foregoing shall not be read in a manner which works to strike or modify a negotiated term of this Agreement. 7.23 Coo eru ation. The Parties acknowledge that it may be necessary to execute documents other than those specifically referred to herein in order to complete the Exchange and/or to accomplish the objectives and requirements that are set out in this Agreement. Both Parties hereby agree to cooperate with each other by executing such other documents or taking such other actions as may be reasonably necessary to complete this transaction in accordance with the intent of the Parties as evidenced in this Agreement and attached Exhibits hereto. [Signatures on Following Page] 15 17942.00158\42470111.4 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers, as of the Effective Date. CITY OF REDLANDS a Califomia municipal corporation By: Its: ATT. By: Its: * Clerk: APPROVED AS TO FORM: P. By. -Ct vette M. Abich Garcia, City Attorney PROPERTY ONE, LLC a California limited liability company. Its: 16 l 7942.00l 58'424701 l l .2 EXHIBIT A LEGAL DESCRIPTION OF CITY PROPERTY The subject property Is identified as being situated on the West side of Eureka Street, north of W Redlands Blvd, and south of Oriental Avenue, within the city of Redlands, California. With a site identified as being San Bernardino County/City of Redlands Assessor's Parcel (AM Number 0169.272-27-0000. 0169-272-27-0000 With a legal description of "PARCEL MAP 11197 EX THEREFROM THOSE PTN OF SD PARCEL DESC AS FOL. DEC AT NW COR OF SD PARCEL 4 TH ALG N BNDRY LI OF SD PARCEL N 89 DEG 53 MIN 38 SECONDS E 328.20 FT TH S 00 DEG 17 MIN 46 SECONDS E 5 FT TH S 89 DEG 53 MIN 38 SECONDS W 38.20 FT PARALLEL WITH AND 5 I7T SLY OF SD N LI TO W LI OF SD PARCEL 4 TH N 00 DEG 17 MIN 17 SECONDS W 5 FT TO POD AND BEG AT SW COR OF SD PARCEL 4 TH ALG S BNDRY LI OF SD PARCEL N 89 DEG 53 MIN 38 SECONDS E 328.20 FT TH N 00 DEG 17 MIN 46 SECONDS W 5 FT TH S 89 DEG 53 MIN 38 SECONDS W 328.20 PARALLEL WITH AND 5 FT NLY OF SD S LI TO W LI OF SD PARCEL 4 TH S 00 DEG 17 MIN 17 SECONDS TO POD 12-9-94 94.489049 CC *****, according to the OfficialMap thereof." 17 17942.0015 8\42470111.4 EXHIBIT B LEGAL DESCRIPTION OF PROPERTY ONE PROPERTY The subject property is identified as being situated on the West side of Division Streat, South of Sylvan Blvd, and north of Interstate 10, within the city of Redlands, California. With a site identified as being San Bernardino County/City of Redlands Assessor's Paroel (APN) Number 0170-142-12-0000, 0170-142-12-0000 With a legal description of "LUGONIA PARK PTN LOTS 2, 3 AND 4 BLK D LYING SLY FROM SLY LI 75 FT WIDE FLOOD CONTROL BEING 37.50 FT ON EACH SIDE FOL D ,SC C/I. BEG AT PT IN C/L UNIVERSITY ST 60 FT WIDE DISTANT ALG SD CIL NO DEG 16 MIN 15 SECONDS W 551.81 FT FROM INTERSECTION OF SO C/L WITH CIL A T SF RR 100 FT WIDE R/W Tn S 71 DEG 48 MIN 06 SECONDS W 1419,15 FT TFI SWLY 105.17 FT ALG TANGENT CURVE. CONCAVE TO SE HAVING RADIUS OF 800 FT AND C/A OF 7 DEG 31 MIN 53 SECONDS TH S 64 DEG 16 MIN 13 SECONDS W 297.27 FT TH SWLY 163.22 FT ALG TANGENT CURVE CONCAVE TO NW HAVING RADIUS OF 800 FT AND CENTRAL ANGLE OF 11 DEG 41 MIN 19 SECONDS TH S 75 DEG 57 MIN 32 SECONDS W 268.35 FT TO PT OF TERMINATION IN CIL CHURCH ST 60 FT WIDE SD PT TERMINATION BEING DISTANT ALG SD CIL CHURCH ST N 0, according to the Ojjiciai Map thereof" 18 17942.00158W2470111.4 EXHIBIT C FORM OF CITY PROPERTY GRANT DEED RECORDING REQUESTED BY City of Redlands 1AS \ 1 4 ' Z AND MAIL TAX STATEMENTS TO Property One, LLC Attn: Veronica Burgess P.O. 7538 Redlands, CA 92375 APN:0169-272-27-0000 SPACE ABOVE THIS LINE FOR RECORDER'S USE Grant Deed The undersigned declare(s): Documentary transfer tax is $ ® Computed on full value of property conveyed, or ❑ Computed on full value less value of liens and encumbrances remaining at time of sale. ❑ Unincorporated area ® City of Redlands, and FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The CITY OF REDLANDS, a California municipal corporation does hereby grant to PROPERTY ONE, LLC, a California limited liability company any and all rights, title and interests in and to that certain real property in the City of Redlands, County of San Bernardino, State of California, specifically described in EXHIBIT A and depicted in EXHIBIT B, attached hereto and incorporated herein. Dated: 2024 CITY OF REDLANDS, a municipal corporation By: _ Name: Its: 19 17942,00158\42470111.4 EXHIBIT "A" TO GRANT DEED LEGAL DESCRIPTION The subject property is identified as being situated on the West side of Eureka Street, north of W Redlands Blvd, and south of Oriental Avenue, within the city of Redlands, California. With a site Identified as being San Bernardino County/City of Redlands Assessor's Parcel (AM Number 0169-272-27.0000. 0169-272-27-0000 With a legal description of "PARCEL MAP 11197 EX'THEREFROM THOSB PIN OF SD PARCEL DESC AS FOL BEG AT NW COR OF SD PARCEL 4 TH ALG N BNDRY LI OF SD PARCEL N 89 DEG 53 MIN 38 SECONDS F 328.20 FT TH S 00 DEC 17 MIN 46 SECONDS E 5 FT TH S 89 DEG 53 MIN 38 SECONDS W 38.20 FT PARALLEL WITH AND 5 FT SLY OF SD N LI TO W Ll OF SD PARCEL 4 TH N 00 DEG 17 MIN 17 SECONDS W 5 FT TO POB AND BEG AT SW COR OF Sl) PARCEL 4 TH ALG S BNDRY Ll OF SD PARCEL N 89 DEG 53 MIN 38 SECONDS E 328.20 FT TII N 00 DEG 17 MIN 46 SECONDS W 5 FT TH $ 89 DEG 53 MIN 38 SECONDS W 328.20 PARALLEL WITII AND 5 FT NLY OF SD S LI TO W LI OF SD PARCEL 4 T11 S 00 DEO 17 MIN 17 SECONDS TO POD ***** 12-9-94 94.488049 CC *****, according to the Official Map thereof." 20 17942.00158\42470111.4 EXHIBIT D NON -FOREIGN AFFIDAVIT Section 1445 of the Internal Revenue Code provides that the transferee of an interest in real property located in the United States must withhold tax if the transferor is a foreign person. To inform the ("Transferee"), that withholding of tax is not required upon the sale by ("Transferor"), of its fee simple interest in that certain real property sold pursuant to the Real Property Exchange Agreement and Joint Escrow Instructions dated , 2024 ("Agreement'), which real property is described in the legal description attached to the Agreement as Exhibit "A," and incorporated herein by this reference, the undersigned hereby certifies the following: 1. The Transferor is not a 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); 2. The Transferor's United States Taxpayer Identification Number is The Transferor's office address is [address]; and 4. The Internal Revenue Service has not issued any notice with respect to Transferor or listed Transferor as a person whose affidavit may not be relied upon for purposes of Section 1445 of the Internal Revenue Code. The Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalty of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I am the of the Transferor, and that I have authority to sign this document on behalf of the Transferor. Dated: M Its: 21 1794100 1 59\42470111.4 EXHIBIT E FORM OF PROPERTY ONE PROPERTY GRANT DEED RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF REDLANDS Attn: City Clerk 300 E. State Street, Suite 690 Redlands, CA 92373 APN: 0170-142-12-0000 SPACE ABOVE THIS LINE Grant Deed This document is being recorded for the benefit of the City of Redlands and is exempt from the payment of a recordation fee pursuant to Govt. Code Section 6103 The undersigned declare(s): This conveyance is exempt from the payment of a documentary transfer tax pursuant to Revenue and Taxation Code Section 11922. FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, PROPERTY ONE, LLC, a California limited liability company does hereby grant to The CITY OF REDLANDS, a California municipal corporation any and all rights, title and interests in and to that certain real property in the City of F County of San Bernardino, State of California, specifically described in EXHIBIT A, hereto and incorporated herein. Dated: 2024 PROPERTY ONE, LLC, a California limited liability company By: Name: Its: 22 17942.00158W2470111.4 EXHIBIT "A" TO GRANT DEED LEGAL DESCRIPTION The subject property is Identified as being situated on the West side of Division Street, South of Sylvan Blvd, and north of Interstate 10, within the city of Redlands, California. With a site Identified as being San Bernardino County/City of Redlands Assessor's Parcel (APN) Nurnbor 0170-142-12-0000. 0170-142-12-0000 With a legal description of "LUGONIA PARK PTN LOTS 2, 3 AND 4 BLK D LYING SLY FROM SLY LI 75 FT WIDE FLOOD CONTROL BEING 37,50 FT ON EACH SIDE TOL DI3SC C/L BEG AT PT IN C/L UNIVERSITY ST 60 FT WIDE DISTANT ALG SD C/L N 0 DEG 16 MIN 15 SECONDS W 551.81 FT FROM INTERSECTION OF SD C/L WITH C/L A T SP RR 100 FT WIDE R/W T14 S 71 DEG 48 MIN 06 SECONDS W 1419,15 I"T TH SWI Y 105.171 T ALG TANGENT CURVE CONCAVE TO SE HAVING RADIUS OF 800 FT AND C/A OF 7 DEG 31 MIN 53 SECONDS 1'FI S 64 DEG 16 MIN 13 SECONDS W 297.27 PT TH SWLY 163.22 FT ALG TANGENT CURVE CONCAVE TO NW HAVING RADIUS OF 800 IT AND CENTRAL ANGLE OF I DEG 41 MIN 19 SECONDS TH S 75 DEG 57 MIN 32 sTCONDS W 268.35 FT TO PT OF TERMINATION IN C/L CHURCH ST 60 FT WIDE SD PT '1,ERMINATION BEING DISTANT ALG SD C/L CHURCH ST N 0, according to the official Map thereof," 23 17942.00158\42470111.4 EXHIBIT F CERTIFICATE OF ACCEPTANCE (Government Code Section 27281) This is to certify that the interest in real property conveyed by the Grant Deed dated from PROPERTY ONE, LLC, a California limited liability company duly organized and validly existing under the Constitution and the laws of the State of California, to the CITY OF REDLANDS, a California municipal corporation, is hereby accepted by the undersigned officer on behalf of the Grantee pursuant to authority conferred by the California Constitution and City Council action dated 2024, and the Grantee consents to recordation thereof by its duly authorized officer. Dated: ATTEST: [NAME] , Clerk CITY OF REDLANDS 24 17942.00158412470111.4