LEASE AGREEMENT
This Lease ("Lease") made and entered into as of January 1, 2021 ("Effective Date"), by and between the Karagines Family Trust and the Dennis and Deborah Sigalos Family Trust (collectively the "LESSOR") and the City of Placentia, a Charter City and municipal corporation ("CITY") (collectively the "Parties" sometimes hereinafter) regarding that certain parcel of real property, with improvements thereon, as depicted in Exhibit "A" hereto and commonly referred to as 166 East La Jolla Avenue, Placentia, California ("Property").
A. Recitals.
(i). Lessor represents and warrants that it owns that certain real property, located entirely within City, the common and legal description of which is set forth in Exhibit "A," attached hereto and incorporated herein by this reference and hereinafter are referred to as "the Premises.". (ii). All legal prerequisites to the making of this Lease have occurred.
B. Lease.
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby the parties hereto agree as follows:
1. Rent. The rent for the Premises -shall be at the following rent schedule: tp, 2 ft' January 1, 2021— December 31, 2021 $11,830.10 per month'G January 1, 2022 — December 31, 2022 $12,421.61 per month January 1, 2023 —December 31, 2023 $13,042.69 per month s, 3 1�� .' �- - The rent shall be due and payable quarterly, in advance, commencing January 1, 2021, and due and payable on or before the first day of each and every quarter thereafter. Said rent shall be paid to Lessor in equal amounts to the Lessors' address of record.
2. Term. The term of this Lease shall commence on January 1, 2021 ("Commencement Date"). Unless earlier terminated as provided herein, this Lease shall expire and be of no further force and effect at midnight December 31, 2023 (the "Initial Term"). Notwithstanding the foregoing, the Parties hereto may mutually agree in writing to extend the term hereof; provided, however, that no such extension shall exceed a period of two (2) one (1) year periods. This Lease may be terminated without further liability on one -hundred, eighty (180) days prior written notice as follows: (a) by either party upon a default of any covenant, condition, or term hereof by the other party, which default is not cured within one -hundred, eighty (180) days of receipt of written notice of default; (b) by CITY in its sole discretion upon written notice to LESSOR, this Lease, and upon CITY's written notice and payment to LESSOR of an early termination payment as liquidated damages by CITY to LESSOR equal to four (4) months rental at the Rent rate then in effect. The early termination payment in this Section shall not in any way be considered as Rent or Rent offset. Other than as stated herein, LESSOR and CITY shall not have the right to terminate, revoke or cancel this Lease Agreement.
3. Property Acceptance. CITY accepts the Premises in "as -is" condition and acknowledges LESSOR has not made any representations, express or implied, as to its condition.
CITY, as part of the consideration for the Premises, agrees at CITY's sole cost and expense, to keep the Premises in good condition and repair, and surrender the Premises in good condition and repair with the exception of reasonable wear and tear thereof.
4. Utilities. CITY shall pay promptly all charges for gas, electricity, water, refuse removal, sewer assessment, and other utility bills applicable to the Premises during CITY's occupation, and hold LESSOR harmless therefrom.
5. Equipment. All shelving and storage racks throughout the commissary and warehouse areas shall not be removed from the property without previous written consent from LESSOR. All storage shelving and warehouse racks shall be maintained. Refrigeration and freezers shall be maintained up until end of life is determined by a third party vendor.
6. Maintenance. CITY rents the Premises "as is" and is responsible for all maintenance. At the sole cost of CITY, CITY shall maintain the Premises in good, clean, and safe condition. LESSOR shall not have any responsibility to maintain the Premises. CITY is responsible for all repair and/or replacement of glass as necessary and for all cleaning and general maintenance of the Premises including, but not limited to plumbing, heating, electrical and parking surfaces. CITY and LESSOR understand and acknowledge that due to the age of the building that the roof may leak or currently leaks. The Parties agree that LESSOR has the obligation to make such roof repairs as reasonably necessary. CITY shall maintain open space and parking areas in a weed -free groomed condition. Plantings are encouraged. Painting of the building or any part of the Premises shall be at the approval of LESSOR. All signing shall conform to CITY code and permits obtained from CITY Building Inspector.
7. LESSOR Representations and Warranties. LESSOR makes the following representations and warranties as of the Effective Date and again as of Closing:
7.1. LESSOR has obtained all necessary authorizations and consents to enable it to execute and deliver this Lease and to consummate the transaction contemplated hereby. This Lease and the other documents to be executed by LESSOR hereunder will have been duly entered into by LESSOR and will constitute legal, valid and binding obligations of LESSOR enforceable in accordance with their respective terms.
7.2. LESSOR is not a "foreign person" within the meaning of 26 U. S . C. § 1445(f)(3) (Internal Revenue Code of 1986, as amended).
7.3. The execution, delivery and performance of this Lease hereunder will not conflict with any Le. - • r . _ • - . - e - - - - e ' .. " - AC, a default under-ry-Lease-or instrument to which LESSOR is a party or by which LESSOR or the Property are bound.
7.4. LESSOR has not: (1) made a general assignment for the benefit of creditors; (2) filed any voluntary petition in bankruptcy; (3) received notice of the appointment of a receiver to take possession of all or substantially all of its assets; (4) received notice of the attachment or other judicial seizure of all or substantially all of its assets; (5) admitted in writing its inability to pay its
debts as they come due; or (6) made an offer of settlement, extension or composition to its creditors generally.
8. CITY Representations. CITY represents and warrants as of the Effective Date and again as of the Closing as follows:
8.1. CITY has obtained all necessary authorizations and consents to enable it to execute and deliver this Lease and to consummate the transaction contemplated hereby. This Lease and the other documents to be executed by CITY hereunder will have been duly entered into by CITY and will constitute Legal, valid and binding obligations of CITY enforceable in accordance with their respective terins.
8.2. The execution, delivery and performance of this Lease and the Closing hereunder will not conflict with any Lease, contract or law applicable to CITY nor constitute a default under any Lease or instrument to which CITY is a party or by which CITY is bound.
8.3. C1TY has not (i) made a general assignment for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy against it; (iii) received notice of the appointment of a receiver to take possession of all or substantially all of its assets; (iv) received notice of the attachunent or other judicial seizure of all or substantially all of its assets; (v) admitted in writing its inability to pay its debts as they come due; or (vi) made an offer of settlement, extension or composition to its creditors generally.
8.4. CITY or its consultants/advisors have the expertise, knowledge and experience to analyze the Property. CITY acknowledges that, except for the § 7 representations and warranties, CITY will in no way rely on any records of LESSOR.
9. LESSOR has not made (and specifically negates and disclaims) any representations or warranties, promises, covenants, Leases or guarantees of any kind, character or nature whatsoever, whether express, implied or otherwise, oral, written, of, as to, concerning or relating to any Property Conditions. Except for Reserved Matters, the parties intend that the foregoing release shall be effective with respect to all matters, past and present, known and unknown, suspected and unsuspected. CITY realizes and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to losses, damages, liabilities, costs and expenses which are presentlyy unknown, unanticipated and unsuspected, and C1TY further agrees that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that CITY nevertheless hereby intends to release, discharge and acquit LESSOR from any such unknown losses, damages, liabilities, costs and expenses. In furtherance of this intention, the CITY hereby expressly waives any and all rights and benefits conferred upon it by the provisions of California Civil Code § 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." The CITY acknowledges that the foregoing acknowledgments, releases and waivers
including the waiver of the provisions of C alifornia Civil Code § 1542 were expressly bargained for.
City Initials
"Property Conditions" means any matter whatsoever relating to the Property or this Lease or of concern to CITY, i ncluding: title; the environmental condition of the Property (including the presence or absence of Hazardous Materials in, on or about the Property and Including:
claims, liabilities and contribution, reimbursement and indemnity rights relating to the presence, discovery or removal of any Hazardous Materials in, at, about or under any Property, or for, connected with or arising out of any and all claims or causes of action based thereon Including any claims made under CERCLA or other similar environmental laws, whether state or Federal, providing fQr contribution) water, soil pest and geological conditions of the Property; ; the financial condition of the Property; the suitability of the Property or any and all activities and/or uses which may be conducted thereon; the compliance of or by the Property with any and all laws, rules, ordinances or regulations of any applicable governmental authority or body (Including environmental, zoning, building codes, and the status of any development or use rights respecting the Property); the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property; or the physical condition of the Building, Including construction defects, deferred maintenance or other adverse physical conditions or defects.
10. Brokerage Commissions. LESSOR and CITY each represent and warrant that no real estate commission, broker's fee or finder's fee is payable in connection with the transaction contemplated by this Lease. LESSOR indemnifies CITY from and against any and all liabilities, claims, demands, damages, or costs of any kind arising from or connected with any broker's or finder's fee or commission or charge ("Broker Claims") claimed to be due by any person arising from or by reason of the conduct of LESSOR with respect to this transaction.
CITY Indemnifies LESSOR from and against any and all Broker Claims claimed to be due by any person arising from or by reason of the conduct of CITY with respect to this transaction.
12. LESSOR Default. If LESSOR defaults under any of the terms of this Lease and if such default is not cured within thirty (30) days after receipt by LESSOR of written notice from CITY, CITY shall be entitled as the sole and exclusive remedy of CITY to either: (1) terminate this Lease; or (2) commence an action for specific performance, provided however that as a condition to specific performance CITY shall have performed all of its obligations hereunder and waived all conditions for CITY's benefit. In no event shall CITY be entitled to actual, punitive or consequential damages. CITY acknowledges and agrees that its recourse against LESSOR under this Lease for a default by LESSOR hereunder is limited to the remedies set forth -n -this -Section, and -in -no -event -shall e-event-sha11 CITY a.tukxipL to obtain any recovery or judgment against any other assets (if any) of LESSOR, or against any of LESSOR'S direct or indirect members, partners, directors, officers, employees or. shareholders.
13. Notices. All notices, elections, requests and other communication hereunder shall be in writing and shall be deemed given (a) when personally delivered or delivered by
reputable overnight courier service; or (b) two (2) business days after being deposited in the United States mail, postage prepaid, certified or registered, or (c) when sent by facsimile before 5:00 p.m. Pacific time on a business day (as evidenced by a confirmation slip from sender's fax machine showing the transmission date and time and recipient's fax number) and otherwise on the next business day. Phone and email addresses are provided for convenience only and shall not constitute effective notice. Notices shall be addressed as follows (or to such other person or at such other address, of which any party hereto shall have given written notice as provided herein):
If to LESSOR: Addresses on File
If to CITY:
With a copy to:
City of Placentia
Attention: City Administrator
401 E. Chapman Avenue
Placentia, California 92870
Christian L. Bettenhausen
City Attorney
City of Placentia
37777 N. Harbor Blvd.
Fullerton, CA92835
14. General Provisions. This Lease: (1) shall be binding upon and shall inure to the benefit of LESSOR and CITY and their respective successors and assigns; (2) is assignable by CITY to any entity, provided that: (i) such assignment shall be subject to a written assignment executed by assignor and assignee as in form and substance reasonably acceptable to LESSOR, Including provisions whereby assignee assumes all of assignor's liability and assignor acknowledges that assignor is not released from liability as a result of the assignment; and (ii) the Lease is being assigned concurrently to such assignee; (3) constitutes the entire Lease of CITY and LESSOR with respect to the purchase and sale of the Property, and supersedes any prior or contemporaneous Lease with respect thereto. No amendment or modification of this Lease shall be binding upon the parties unless made in writing and signed by both LESSOR and CITY; (4) shall not be recorded by any party and, if recorded by any party, the other party hereto may immediately terminate all of its obligations under this Lease, and the party who recorded the Lease shall pay all reasonable costs and attorneys' fees in removing this Lease of record; (5) is governed by and construed in accordance with the laws and customs of the State of California; (6). may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument; (7) may be executed and then delivered by fax or scanned email which shall constitute effective execution and delivery. If any action is instituted between LESSOR and CITY in connection with the enforcement of this Lease or any provision hereof, the party prevailing in such action shall be entitled to recover from the other party all of its reasonable costs in bringing such action, Including reasonable attorney fees.
In witness whereof, the parties hereto have executed- this Lease as of the Effective Date.
LESSOR
app r
Tnz
Dei is an
Famil Trust
CITY
Damien R. Arrula
City Administrator
City of Placentia
ATTEST:
Approved as to form:
Christian L. Bettenhausen
City Attorney
k
City Clerk
alos
Exhibit "A" (166 E. La Jolla)
Property Description:
The property located at 166 E. La Jolla Street is bounded by 160 E. La Jolla Street to the North, 172 E. La Jolla Street to the east, The City of Placentia boundary to the south, and 1037, 1040, 1020, and 1000 Segovia Circle to the west. The legal description being P Bk 84 Pg 16 Par 1, and Assessor's Parcel Number (APN): 344-241-
03. Parcel Data
344.111.03
EXHIBIT A