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FOURTH AMENDMENT TO LEASE (C2000-101)
This Fourth Amendment to Lease (“Fourth Amendment”) is made and entered into as of November 19, 2024, by and between the CITY OF TORRANCE, a municipal corporation (“CITY”), and KinderCare Education, LLC, a Delaware limited liability company (“Tenant”).
RECITALS:
WHEREAS, City and Children’s Discovery Centers of America, Inc. (“CDCA”) entered into a Lease dated May 9, 2000 (the “Original Lease”), for the premises commonly known as 1520 Greenwood Avenue, Torrance, California (the “Premises”)
WHEREAS, CDCA changed its name to Knowledge Learning Corporation (“KLC”) by Certificate of Amendment of Certificate of Incorporation dated May 5, 2003;
WHEREAS, City and KLC executed an Option Exercise letter dated as of October 11, 2004;
WHEREAS, City and KLC executed a First Amendment to Lease on or about December 8, 2009. The Original Lease, as amended by the First Amendment is collectively referred to herein as the “Lease.”
WHEREAS, on May 2, 2011, KLC converted to a limited liability company known as Knowledge Universe Education, LLC.
WHEREAS, City and Knowledge Universe Education LLC entered into a Second Amendment to Lease on or about September 16, 2014.
WHEREAS, on December 24, 2015, Knowledge Universe Education LLC changed its name to KinderCare Education LLC by Certificate of Amendment.
WHEREAS, on June 25, 2019, City and KinderCare Education LLC entered into a Third Amendment to Lease to allow tenant additional time beyond June 30, 2019 to notify City of any intention to exercise its option to renew the lease and the parties agreed to amend the lease to extend the notification deadline.
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WHEREAS, on or before September 15, 2019, KinderCare Education LLC notified the City its intent to exercise its option to renew the lease, in which the renewal period extended to term to December 31, 2024.
WHEREAS, the term of the Lease is set to expire on December 31, 2024, and the City and Tenant desire to modify the terms of the Lease and extend the Lease term as set forth herein.
NOW, THEREFORE, for an in consideration of the mutual covenants and promises herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties hereto, the parties agree as follows:
AGREEMENT:
1. 1.1 Extension of Term. City and Tenant hereby extend the term of the Lease for a period of one (1) year commencing January 1, 2025, and ending December 31, 2025 (the “Extension Term”).
1.2 Renewal Period. City hereby grants Tenant the option to extend the term of the Lease for two (2) additional periods of six (6) months (hereinafter called the “Renewal Period”), commencing upon the termination date of the Extension of Term, upon the following terms and conditions:
(a) that Tenant shall not be in default beyond any applicable notice and cure period(s), at the time it exercises its option to extend, under any of the terms, covenants, conditions, provisions, or agreements of this Lease.
(b) that Tenant shall exercise its option to extend by notifying the City, in writing, of its election to exercise such option or before 180 days prior to the end of the Extension Term and before 90 days prior to the end of the first Renewal Period, otherwise said option shall be null and void.
(c) that such Renewal Period shall be upon the same, covenants, conditions, provisions and agreements as in this Lease, except that Rent payable during the Extension Term and each Renewal Period shall be as specified in 2 below:
2. Base Rent.
2.1 Base Rent during Extension of Term. Annual base rent for the period from January 1, 2025, through December 31, 20 25 shall be the monthly sum per month paid as of December 2024 (“Monthly Base Rent”), such amount when multiplied by 12 will equal the Annual Base Rent (“Annual Base Rent”). Beginning January 1, 2025, Annual Base Rent shall be adjusted effective each January 1 ATTACHMENT 1
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(“Adjustment Date”) an amount that is not less than 3% nor more than 5% of the prior year’s Annual Base Rent, based on the change, if any , in the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index (“CPI”) for All Items -All Urban Consumers (base year 1982 -84 = 100) for the U.S. City Average, (“Index”) as follows:
The adjustment to Annual Base Rent shall be determined using the Index published nearest to the date four (4) months prior to the Commencement Date described in Section 2.01 of the Lease as the “Beginning Index.” The Index published nearest to the date four (4) months prior to the applicable Adjustment Date shall be the “Adjustment Index.” On each Adjustment Date (the first day of January each year) during the term of this Lease, including all option or extension periods, the adjustment to Rent shall be calculated by multiplying the Annual Base Rent by a fraction, the numerator of which fraction is the applicable Adjustment Date Index and the denominator of which fraction is the Beginning Index. The amount of the adjustment shall be the difference between the amount so determined and the prior year’s Annual Base Rent, which sum shall be added to the prior year’s Annual Base Rent to arrive at the ensuing year’s Rent. If the Index has changed so that the base year differs from that used in this section, the Index shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised during the Term hereof, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the Index has not been discontinued or revised.
Notwithstanding the above, however, the Rent for the applicable Adjustment Date shall be the amount determined in accordance with the above formula but in no event shall it be less than 3% nor more than 5% of the prior year’s Annual Base Rent.
2.2 Base Rent during Renewal Period. If the Tenant exercises its option to extend the lease, the monthly base rent for the two renewal periods—from January 1, 2026, to June 30, 2026, and from July 1, 2026, to December 31, 2026—shall be subject to a fixed increase of five percent (5%) from the rent applicable in the preceding period.
3. In all other respects, the Original Lease dated May 9, 2000, the Lease dated December 8, 2009, the Second Amendment to Lease dated September 16, 2014, and Third Amendment to Lease dated June 25, 2019, are ratified and reaffirmed and remain in full force and effect.
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CITY OF TORRANCE,
a municipal corporation
__________________________
George K. Chen, Mayor
KinderCare Education LLC
a Delaware Limited Liability Corporation
______________________
Merry Convery
Asset Manager
ATTEST:
______________________
Rebecca Poirier
City Clerk
APPROVED AS TO FORM:
PATRICK Q. SULLIVAN
City Attorney
By: ____________________
Tatia Y. Strader
Assistant City Attorney