LEASE REPAYMENT AGREEMENT
This LEASE REPAYMENT AGREEMENT (the “Agreement”), dated as of November 1, 2022, is made and entered into by and between the CITY OF FONTANA, CALIFORNIA, a municipal corporation (the “Payee”), and the FONTANA FIRE PROTECTION DISTRICT, a subsidiary district of the City of Fontana (the “Payor”).
WHEREAS, Payor has leased six separate parcels of real properties from Payee known as Fire Station No. 71 (APN 192-042-26), Fire Station No. 73 (APN 0230-041-01), Fire Station No. 74 (APN 0237-201-27), Fire Station No. 77 (APN 0256-011-22), Fire Station No. 78 (APN 0228-233-01), and Fire Station No. 79 (APN 1107-262-58) (collectively referred to herein as the “Property”); and WHEREAS, Payor owes Payee rental payments for the lease of the Property for the period covering July 1, 2015 to June 30, 2022 in the total amount of $30,663,178.54 (the “Owed Amount”); and WHEREAS, Payor and Payee now desire to enter into this Agreement in order to arrange for the payment of the Owed Amount pursuant to the terms herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Owed Amount. The Owed Amount by Payor to Payee for the lease of the Property is as follows:
Period of July 1-June 30
Amount Owed for all Property
2015-2016
$4,055,976.00
2016-2017
$4,164,135.36
2017-2018
$4,272,294.72
2018-2019
$4,380,454.08
2019-2020
$4,488,613.44
2020-2021
$4,596,772.80
2021-2022
$4,704,932.16
*2022-2023
$2,406,545.76
TOTAL
$33,069,724.32
* 2022-2023 partial year July 1, 2022 – December 31, 2022
2. Repayment of Owed Amount. The Owed Amount shall be repaid as follows:
a. At the time of execution of this Agreement, Payor shall pay to Payee a lump sum payment in the amount of $5,000,000.00. b. Thereafter, on July 1 in each year, commencing on July 1, 2023 and ending when the Owed Amount is fully repaid, Payor shall pay to Payee an annual payment in an amount which equals the Payor’s General Fund ending balance as of June 30 in each year (i.e., the previous fiscal year ending General Fund balance based on unaudited estimates after all expenses are paid), less twenty-five percent (25%) of Payor’s total General Fund budgeted expenses for the current fiscal year; provided, however, the final payment amount may be less based on the final amount owed. Notwithstanding the foregoing, the annual payment amount shall not be in an amount which leaves Payor with an amount less than twenty-five percent (25%) of the current fiscal year’s budgeted expenses in its General Fund.
3. Event of Default. Should Payor fail to pay when due any amount payable hereunder, the unpaid amount shall be subject to the maximum amount of interest allowable by law for each month it remains unpaid.
4. Entire Agreement; Amendments. This Agreement contains the entire agreement of the parties and supersedes all prior negotiations, drafts, and other understandings which the parties may have concerning the subject matter hereof. This Agreement may not be modified except by written instrument duly executed by the parties hereto or their successors in interest.
5. Attorneys’ Fees. If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to have and recover from the losing party reasonable attorneys’ fees and costs of suit.
6. Time is of the Essence. Time is of the essence of this Agreement as to the performance of all terms, covenants, and conditions stated herein.
7. Successors and Assigns. Except as otherwise provided herein, all of the terms and conditions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
8. No Third-Party Beneficiaries. This Agreement confers no rights on any party except the signatories to this Agreement.
9. Severability. If, for any reason whatsoever, any of the provisions hereof shall be unenforceable or ineffective, all of the other provisions shall be and remain in full force and effect.
10. Choice of Laws; Interpretation. This Agreement shall be governed by and construed pursuant to the laws of the State of California. The provisions of this Agreement shall be construed in accordance with the fair meaning of the language used and shall not be strictly construed against either party.
11. Execution in Counterpart. This Agreement may be executed in counterparts, each of which shall constitute an original of the Agreement.
IN WITNESS WHEREOF, Payor and Payee have executed this Agreement as of the day and year set forth above.
PAYEE
PAYOR
City of Fontana, a municipal corporation
By:
Name:
Title:
FONTANA FIRE PROTECTION DISTRICT, a subsidiary district of the City of Fontana By:
Name:
Title:
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By: _______________________________
2 Lease Repayment Agreement
City of Fontana
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16498.00372\40793126.1
16498.00372\40793126.1
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