LEASE AGREEMENT
This Lease Agreement (the "Lease") is dated as of ________________, 20 24, between the CITY OF ORANGE (the "Landlord") and ORANGE CHILDREN AND PARENTS TOGETHER, Inc., a California corporation (“Tenant”), who agree as follows:
1. The Leased Property: The property to be leased hereunder is that certain real property with the address of 392 South Hewes in the City of Orange, adjacent to the El Modena Branch Library (“Library”) and as is more specifically described in the Legal Description attached hereto as Exhibit "A" (the “Leased Property”) and incorporated herein.
2. Term: The term of the Lease shall commence on January 1, 2024 (hereafter “Anniversary Date”) and shall continue for ten years until December 31, 2033 (“Initial Term”), unless terminated in accordance with this Lease. Tenant has two (2) five-year options to extend the term of the Lease upon the same terms and provisions as the Initial Term, at Landlord’s sole and absolute discretion (“Extended Term”). Either party may terminate the Lease at any time by providing at least sixty (60) days’ advance written notice to the other party.
3. Rent: Tenant shall pay to Landlord rent in the annual amount as follows for the lease of the Property, which sum shall be payable by the annual Anniversary Date of the Lease.
2024 – Annual Rent - $16,000 ($1,600 per month)
2025 – Annual Rent - $16,000 ($1,600 per month)
2026 – Annual Rent - $17,000 ($1,700 per month)
2027 – Annual Rent - $17,000 ($1,700 per month)
2028 – Annual Rent - $18,000 ($1,800 per month)
2029 – Annual Rent - $18,000 ($1,800 per month)
2030 – Annual Rent - $19,000 ($1,900 per month)
2031 – Annual Rent - $19,000 ($1,900 per month)
2032 – Annual Rent - $20,000 ($2,000 per month)
2033 – Annual Rent - $20,000 ($2,000 per month)
Rent is payable in ten equal monthly installments. The first installment shall be due on January 1, 2024, and then on the 1st day of each of month thereafter except during the months of July and August in which months no rent shall be paid. During the Extended Term, the rent shall be increased by $100/month every even-numbered year of that Extended Term.
4. Improvements: Under this Lease, Landlord shall have no obligation or responsibility, actual or implied, to install, construct, accommodate, or make any improvements to the Leased Property prior to, or as a condition of, Tenant's occupation of the Leased Property.
5. As-Is Condition: Tenant warrants and agrees that Tenant has inspected the Leased Property. Tenant agrees to take possession of the Leased Property in an AS -IS condition (which exists on the date this Lease is signed). Landlord makes no representations regarding the condition, status, compliance with laws or suitability for a particular purpose for Tenant's use. 2 6. Condition Upon Surrender: Upon termination of this Lease, Tenant shall surrender the Leased Property to Landlord in as good condition as when originally received, ordinary wear and tear and damage by fire, earthquake, flood or act of God excepted, and including any repairs or improvements made by Tenant, provided, however, Tenant shall be required to shampoo the carpets and clean the Leased Property , including, without limitation, the restrooms. If Tenant fails to maintain the Leased Property in good order and repair, after thirty (30) days' prior written notice, Landlord may, at its option, make such repairs, and Tenant shall pay the reasonable cost thereof as additional rent hereunder within ten (10) days after receipt of a written statement therefor. In the event the giving of thirty (30) days' prior notice may result in additional damage to the Leased Property, Landlord may make such repairs, at Tenant's expense, without thirty days' prior written notice.
7. Maintenance: Tenant shall, at its sole expense, be responsible for all maintenance of the Leased Property and shall keep the Leased Property in good order, condition and repair. Landlord may enter the Leased Property to make repairs after providing Tenant with seventy-two (72) hours written notice to Tenant to make the necessary repairs. The costs thereof shall be the responsibility of Tenant, which shall pay such costs within thirty (30) days of receiving an invoice. Failure to pay such costs shall be grounds for termination of the Lease.
8. Alterations: Tenant shall not make, or allow to be made, any permanent alterations to the Leased Property without the prior written consent of Landlord. Any such request shall be directed to the City Manager or their designee.
9. Use: Tenant shall use the Leased Property to operate a Headstart/Preschool and related programs (“Permitted Use”) and for no other unrelated use or purpose. Tenant shall maintain all federal Headstrart Performance standards and comply with any and all federal and State laws related to the provision of services to children . Tenants shall not commit, or allow to be committed, upon the Leased Property, any waste or nuisance, or any act disturbing the operation of the Library.
Landlord shall assure the same co nsiderations be given to the Tenant by persons employed at or utilizing the Library.
10. Inspection by a Certified Access Specialist : Landlord discloses that the. Leased Property have not undergone inspection by a Certified Access Specialist as referenced in California Civil Code Section 1938 subsection (e) which provides: "A Certified Access Specialist (CASp) can inspect the subject Leased Property and determine whether the subject Leased Property comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspecti on of the subject Leased Property, the commercial property owner or landlord may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject Leased Property for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to conect violations of construction-related accessibility standards within the Leased Property." Pursuant to the foregoing Section 1938(e), Tenant acknowledges and agrees that, if Tenant wishes to have the Lease Leased Property inspected by a CASp: (1) Tenant must notify Landlord on or before the date when Tenant executes this Lease pursuant to the election below; (ii) the inspection will be at Tenant’s sole cost and expense; (iii) the inspection must be scheduled through Landlo rd and in coordination with the Building’s property manager; (iv) any repairs or modifications necessary 3 to correct any violation of construction-related accessibility standards that is noted in the CASp report shall be Tenat’s responsibility; and (v) Tenant must provide a copy of the CASp report to Landlord on completion.By initialing below, Tenant represents that:
Tenant wishes to have a CASp inspection of the Leased Leased Property Initials: ________
Tenant hereby waives its right to have a CASp inspection of the Leased Leased Property Initials: ________
11. Late Charge: Landlord may assess a late charge not to exceed ten percent (10%) for any Rent payment not received by Landlord by the 15 th day of each month in which it is due. Rent shall be paid to Landlord at the address specified in Section 25 of this Lease, or at such other address as Landlord may from time to time designate upon written notice. Parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will inure by reasons of late payments by Tenant. Acceptance of any late charge shall not constitute a waiver of Tennant’s default with respect to the overdue amount or prevent Landlord from exercising any of the other rights and remedies available to Landlord. Any Rent not received by the 25 th day of each month in which it is due shall in addition, accrue interest at a rate of ten percent (10%) per annum.
12. Non-Discrimination: The tenant herein covenants by and for himself or herself (as the case may be), his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, religion, creed, national origin or ancestry, in the leasing, subleasing, transferring, use or enjoyment of the land herein leased nor shall the tenant himself or herself (as the case may be), or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the land herein leased.
13. Assignment: Tenant may not assign or sublet any part of the Leased Property without the written permission of Landlord. Any attempted assignment, whether voluntary or involuntary, without such permission, is grounds for termination of the Lease.
14. Right of Re-Entry; Temporary Use: Landlord and its agents all have the right to enter the Leased Property at any reasonable time to inspect and to perform needed work on the Leased Property as provided in this Lease. Landlord, subject to the approval of Tenant's Executive Director after reasonable notice, may temporarily occupy the Leased Property on weekends and after 6:00 p.m. on weekdays for any Landlord purpose. In this event, the Leased Property shall be returned to Tenant in the same condition as when Landlord occupied the Leased Property.
15. Compliance with the Law:
a. Tenant shall not use the Property or permit anything to be done in or about the Property which will in any way conflict with any applicable law or regulation.
4 b. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereof or not, that Tenant has violated any law or regulation shall be conclusive of that fact as between Landlord and Tenant.
c. Tenant shall keep the Property free and clear of any and all liens and encumbrances which may arise at any time in connection with any improvement work by Tenant or its agents and contractors. In addition, Tenant shall indemnify, defend, and hold Landl ord harmless from and against any and all costs, expenses, claims, demands, damages, actions or liabilities of any kind which may arise in connection with any improvement work by Tenant or its agents and contractors.
16. Taxes: Tenant shall pay, at least 5 days prior to the date the same shall be delinquent, all real estate and real property taxes, or possessory interest tax, assessed against the Property, including any added assessment or omitted assessment which may be levied against the Property commencing upon the Anniversary Date and any increase in the assessment to the Property. In addition, Tenant shall, during the term of this Lease, pay any levy for the installation, maintenance or operations of improvements affecting the Property as may be assessed by any governmental boards or bureaus. Tenant shall furnish in writing to Landlord, within five (5) days before the applicable delinquency date for the tax, evidence of payment of all taxes and assessments required to be paid by Tenant. If Landlord does not receive reasonable evidence of payment by the 5th day prior to the delinquency date, Landlord may, at its option, pay the tax for Tenant, following written notice to Tenant of Landlord's intent to pay such tax. In such case, Tenant shall reimburse Landlord immediately upon demand, plus interest at the rate of 10% per annum.
17. Hold Harmless; Indemnification: Tenant shall indemnify, defend, and hold Landlord and the Property harmless from and against any and all costs, claims, demands, actions, liability, loss, or damage, including attorney's fees and costs (collectively, "Claims") whether for injury to or death of persons or damage to real or personal property or otherwise, arising out of or in connection with the Property, Tenant's use or occupancy of the Property or any activity, work, or other thing done or permitted by Tenant in or about the Property during the term of this Lease. These provisions shall not apply to any active negligence or intentional acts or omissions of Landlord and its agents, servants, and employees. In any claims brought against Landlord by reason of any such Claims, Tenant shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord. If the ability of Tenant to use the Property is interrupted, Landlord shall not be liable to Tenant for any loss or damages occasioned by such loss of use.
18. Insurance:
a. Tenant shall maintain in force at all times during the term of this Lease fire and extended coverage insurance (all risk of physical loss) covering the Property, in an amount of $500,000.
b. Tenant shall maintain at all times during the term of this Lease commercial general liability insurance, insuring Landlord and Tenant against any liability arising out of the use, occupancy, or maintenance of the Property and all areas appurtenant thereto, including without limitation personal injury, death and property damage. Such insurance shall be in an amount not less than $2,000,000 per occurrence, combined single limit. This policy shall include contractual liability 5 and indemnity coverage which shall insure performance by Tenant of the indemnity and defense provisions set forth in this Lease. The limits of said insurance shall not, however, be construed to limit the liability of Tenant under this Lease.
c. Tenant shall procure and maintain at all times during the term of this Lease Workers' Compensation coverage as required by law.
d. All insurance shall be written on an occurrence basis and shall be with financially responsible insurance companies acceptable to Landlord.
e. Except for Workers’ Compensation insurance, all insurance shall: (1) name the Landlord, the City of Orange, and their officers, employees, contractors and agents as additional insureds and (2) provide that the coverage is primary and non -contributory wi th respect to all additional insureds. All insurance shall waive all right of recovery by way of subrogation against all additional insureds.
f. Prior to the execution of the Lease, Tenant shall deliver to Landlord certificates of insurance evidencing the existence and amount of such insurance. Endorsements evidencing the required additional insureds and waiver of subrogation rights on all appl icable policies shall also be provided. The certificates shall provide that no policy shall be cancelled or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to Landlord by the insurer. Tenant shall, upon request from Landlord, immediately deliver to Landlord copies of all insurance policies (including the declarations pages) in effect with respect to Tenant's business and the Property.
19. Utilities: Tenant shall make all arrangements for and pay for all services and utilities to the Leased Property. Landlord shall not be responsible or liable to Tenant for interruption or stoppages of utilities or other services to the Leased Property.
20. Holding Over: In the event Tenant fails to vacate the Leased Property and fulfill all of its obligations of the Lease at the end of the term, Tenant shall be liable for all damages incurred by Landlord by reason of the inability to deliver possession of the Property or any portion thereof to any other person.
21. Damage, Reconstruction:
a. Tenant shall immediately deliver to Landlord any insurance proceeds received in connection with any damage or destruction of the Leased Property, with the exception of amounts specifically attributable to the loss or damage of Tenant's own personal property. The entire insurance proceeds shall remain the sole property of Landlord, without regard to whether the Property is actually restored or the actual cost of any restoration. Tenant shall be liable to Landlord for any shortfall in insurance proceeds to repair any damage to the Leased Property. In the event of any significant damage, the parties shall meet and mutually agree whether or not to terminate the Lease.
b. Tenant shall not be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Property, Tenant's personal property, or any 6 inconvenience or annoyance occasioned by such damage, repair, reconstruction, or restoration.
Tenant waives the provisions of California Civil Code sections 1932(2) and 1933(4) with respect to any destruction of the Property.
22. Default: Upon any default or breach of this Lease by Tenant, Landlord shall deliver written notice to Tenant, which notice shall specify the nature of the default or breach. If the default or breach is not cured by Tenant within seventy-two (72) hours after the delivery of such written notice, then Landlord shall be entitled to exercise any and all rights or remedies which may be available at law or in equity, including terminating this Lease. Any and all rights or remedies available to Landlord shall be cumulative, and not alternative. Notwithstanding any provision to the contrary contained herein, if any default which cannot be cured by the payment of money is not reasonably curable within seventy-two (72) hours, then Landlord shall allow a reasonable period to cure the default as long as Tenant commences the cure within the 72 hour period and diligently proceeds to completion of the cure, and as long as Landlord's rights with respect to the Property are not prejudiced by so doing.
23. Signs: Tenant shall not have the right to place or maintain any sign on the Leased Property without the prior written consent of the Landlord. Any such request shall be directed to the City Manager or his designee.
24. Hazardous Materials: Tenant shall not use, store or dispose of on the Leased Property any solid, liquid, or gaseous matter, or any combination thereof, which is, or may become, hazardous, toxic, or radioactive including, but not limited to, those materials listed in Sections 66680 through 66685 of Title 22 of the California Administrative Code, Division 4, Chapter 30 (as may be amended from time to time). Tenant shall not discharge, leak, or emit into the atmosphere, the ground, or any body of water, any material which may pollute or contaminate the same, or adversely affect the health or safety of persons, whether on the Leased Property or anywhere else, or the condition, use, or enjoyment of the Property.
25. Notices: Any notices required to be given or allowed to be given under this Lease shall be deemed given and completed upon the deposit into the U.S. Mail of a sealed envelope, with adequate postage, containing the subject notice and addressed to the party receiving the notice at the dress set forth below. Any change in address by either party shall not be deemed effective for purposes of this article unless the party changing addresses gives notice of the change pursuant to this Section.
All written notices to Landlord shall be addressed to:
City of Orange
City Manager
300 East Chapman Avenue
Orange, CA 92866
All written notices to Tenant shall be addressed to:
Orange Children and Parents Together, Inc.
Executive Director
392 South Hewes Street
Orange, CA 92869
7 26. Miscellaneous Provisions:
a. Enrollment Summary . By November 15 th of each year the Tenant, shall provide a written report indicating the city of residency of all children enrolled in the Program , the total number of participants, the services provided at the facility and a facility capital improvement project list.
b. Notice to Program Participants . Tenant shall provide to each of its students and his or her parents a notice, with a copy to Landlord, stating: (1) that Tenant is an entity distinct and separate from Landlord; (2) that Tenant is leasing facility from Landlord; (3) that the operation of the Program by Tenant is the sole responsibility of Tenant and not of Landlord; and (4) that the Tenant is solely responsible for all aspects of the Program.
c. Disclosure to Landlord. Tenant shall submit to Landlord a copy of its financial and program audit by November 15th of each year.
27. General Provisions:
a. Waiver. The waiver by the parties of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach.
b. Notices. All notices and demands which are required to be given by either party to the other shall be in writing. All notices shall be sent by United States Mail, postage prepaid, and addressed to the parties at the address set forth below, or to such other place as either party may from time to time designate in a written notice.
c. Binding. The covenants and conditions of this Lease, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators, and assigns of the parties.
d. Attorney’s Fees. If any action or proceeding is brought by either party against the other under this Lease, whether for interpretation, enforcement, recovery of possession, or otherwise, the prevailing party shall be entitled to recover all costs and expenses, including th e fees of its attorney in such action or proceeding. This provision shall also apply to any post judgment action by either party, including without limitation efforts to enforce a judgment.
e. Severability. Any provisions of this Lease which are held invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision and such other provisions shall remain in full force and effect.
f. Cumulative Remedies. No remedy or election shall be deemed exclusive but shall be cumulative with all other remedies at law or in equity.
g. Governing Law . This Lease shall be governed by the laws of the State of California.
8 h. Amendments. No amendment, change, or addition to, or waiver of termination of, this Lease shall be valid unless in writing and signed by both Landlord and Tenant.
i. Authority. The party executing this Lease on behalf of Tenant has full authority to do so and to bind Tenant to perform this Lease.
j. Ambiguities. This Lease has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters dealt with in this Lease. Each party has been given the opportunity to consult with experienced and knowledgeable legal counsel. Any law that would require interpretation of any ambiguities in this Lease against the drafting party is not applicable and is waived.
k. Counterparts. This Lease may be executed in one more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
l. Entire Agreement. This Lease is the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral and written agreements and discussions between or among them. The parties hereto acknowledge and agree that there are no conditions, covenants, agreements, or understandings between or among them with respect to the subject matter of this Lease except as set forth in this case. This Lease may be amended only by a further writing signed by all parties hereto.
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9 “TENANT” “CITY”
ORANGE CHILDREN & PARENTS CITY OF ORANGE, a municipal corporation TOGETHER, INC., a California corporation
By: By:
Printed Name: Daniel R. Slater, Mayor
Title:
*By: ATTEST:
Printed Name:
Title:
Pamela Coleman, City Clerk
APPROVED AS TO FORM:
Melissa M. Crosthwaite
Senior Assistant City Attorney
*NOTE: City requires the following signature(s) on behalf of the Tenant:
-- (1) the Chairman of the Board, the President or a Vice -President, AND (2) the Secretary, the Chief Financial Officer, the Treasurer, an Assistant Secretary or an Assistant Treasurer. If only one corporate officer exists or one corporate officer holds more than one corporate office, please so indicate. OR -- The corporate officer named in a corporate resolution as authorized to enter into this Agreement. A copy of the corporate resolution, certified by the Secretary close in time to the execution of the Agreement, must be provided to City.
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