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HomeMy WebLinkAboutILLUMINATION FOUNDATION & DYER 18, LLC (2)MqR '02tir ,,Mk, cOUIRFD ,OCE. ) p:cDpjci)(ievvi-fcj crs)Rv->r ASSIGNMENT OF LEASE AND LEASE TERMINATION AGREEMENT 4-2020-131-01A This ASSIGNMENT OF LEASE AND LEASE TERMINATION AGREEMENT ("Agreement"), dated as of March _, 2021, is entered into by and between DYER 18, LLC, a Delaware limited liability company ("Lessor" or"Dyer'), THE ILLUMINATION FOUNDATION, a California Nonprofit Public Benefit Corporation ("Lessee" or "IF" or "Assignor") and the CITY OF SANTA ANA ("City" or "Assigneel. This Agreement shall become effective when it has been fully signed and delivered by Lessor, Lessee and City, and the date it becomes effective is referred to in this Agreement as the "Effective Date." RECITALS A. Pursuant to that certain Lease dated as of July 13, 2020, by and between Lessor, and Lessee (the "Lease"), Lessor currently leases to Lessee, and Lessee currently leases from Lessor, certain premises ("Premises"), consisting of an approximately 29,503 square foot residential building ("Building") and related improvements commonly known as 1815 East Carnegie Avenue, Santa Ana, California, all as more particularly described in the Lease. Pursuant to the Lease, Lessee was to construct and operate a homeless navigation and recuperative care center ("IF Shelter") at the Premises on behalf of the City of Santa Ana ("City'), B. The Original Term of the Lease is scheduled to expire by its terms on July 12, 2035 ("Expiration Date"). C. The City has guaranteed certain obligations of Lessee under the Lease pursuant to that certain Guaranty of Lease, dated as of July 14, 2020, City Agreement No. A-2020-131.01 ("Lease Guaranty'). D. As a result of various disputes between the City and Lessee with respect to the construction of the IF Shelter, the City has requested that the Lease be terminated so that the City can enter into a new direct lease with Lessor to have a different kind of shelter ("City Shelter") constructed and operated on the Premises. Lessee has agreed with the City to terminate the Lease to allow City to enter into a lease direcllywith Lessor (such new lease between the City, as lessee, and lessor, as lessor, for the Premises, being herein the'New Lease"). Lessor is willing to terminate the Lease and to enter into the New Lease with the City. F. Certain construction timesensitivifies regarding the completion of the City Shelter have now arisen such that the termination of the Lease and the entering of the New Lease is paramount and time sensitive. However, City procedures for entering into th a New Lease prevent the concurrent termination of the Lease and execution of the New Lease, but will permit a concurrent assignment of the Lease from Lessee to the City herewith and a subsequent entering into of the New Lease. As such, the parties have now agreed to an assignment of the Lease effective as of the Effective Date and a subsequent termination of the Lease upon the City's entering into the New Leas e, subject to the terms and conditions set forth in this Agreement Lease. H. All capitalized terms not otherwise defined in this Agreement shall have the same meanings assigned to such terms in the NOW, THEREFORE, in consideration of the foregoing recitals, the terms and mutual covenants contained herein, and for other goad and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee hereby agree as follows: AGREEMENT 1. Assionment and Assumption of Lease. Assignor hereby assigns and transfers to Assignee, effective as of the Effective Date (a) all of Assignor's right title and interest in, to and under the Lease, including without limitation, Assignors interest in the Security Deposit, held by Lessor under the Lease, together with all present and future rights, benefits and claims arising therefrom and together with all of the rights, privileges and appurtenances with respect to the leasehold estates created thereby, and (b) all of Assignor's right title and interest in and to any leasehold improvements located in, on or about the Premises, and (c) all rights to any remedies available to Assignor under the Lease. all upon all of the terms and conditions herein set forth, to have and to hold all of the same unto Assignee. Assignee hereby accepts the foregoing assignment and expressly assumes and agrees, effective as of the Effective Date, to fully and punctually pay, perform and observe all of the terms, covenants, conditions and obligations of the Lease required to be paid, performed and observed on the pad of "Lessee" under the Lease. In accordance with Assignee accepting assignment of the Lease, the Lease Guaranty shall be concurrently terminated on the Effective Date. 2. Indemnifications. Except as may otherwise be set forth herein, Assignee shall indemnify, defend and hold Assignor harmless from and against any and all demands, claims, actions, losses, damages, liabilities, litigation and costs and expenses thereof unk nown to the parties at this time, including, without limitation reasonable attorneys' fees and disbursements of any kind and nature whatsoever (collectively, "Assignor Claims'), which may be imposed on, asserted against or otherwise incurred by Assignor by or on behalf of any person or entity whatsoever due to or arising from the failure or alleged failure of Assignee, to undertake, perform, pay, discharge or observe any of the covenants, terms and conditions of the Lease. Except as may otherwise be set forth herein, Assignor shall indemnify, defend and hold Assignee harmless from and against any and all demands, claims, actions, losses, damages, liabilities, I figation and acts and expenses thereof unknown to the parties at this time, including, without limitation, reasonable attorneys' fees and disbursements of any kind and nature whatsoever 5. Fge. Neither Lessee nor City shall be required to pay an assignment or termination fee to Lessor; however, Lessee and City expressly agree that Lessor may retain the entirety of the Security Deposit under the Lease, without deduction (and which such Security Deposit shall not be applied to any security deposit to be provided by City pursuant to the New Lease) and that Lessor may forever keep the entirety of said Security Deposit without any claim or right thereto by Lessee or City. Furthermore, in the event that Lessee or City owes any monies to Lessor as a result of any defaults or breaches under the Lease or this Agreement, Lessor has no obligation to first apply the amount of the Security Deposit to such monies owned and Lessor shall have no obligation to return the Security Deposit, or any portion thereof, to Lessee or City, it being agreed that the retention and application (if any) of the Security Deposit as set forth above in this Section 5, shall be deemed to be part of the consideration for Lessor entering into this Agreement and the New Lease and is in lieu of any additional assignment or termination fee, and shall satisfy any obligation of lessor to return all or any pad of the Security Deposit to Lessee or City. Notwithstanding the foregoing, nothing in this Section 5 shall be deemed or construed in any manner whatsoever as an amendment or waiver of any rights or obligations of Lessee or City under this Agreement with respect to any Lien Claims, nor require Lessor to apply any portion of the Security Deposit to satisfy any Lien Claims or Continuing Obligations. Additionally, in the event that the New Lease is not executed, the Security Deposit shall not be returned to the City or IF. 6. Lessees Representations and Wamanti , Lessee hereby represents and warrants to Lessor as follows (a) Lessee has not made any assignment, sublease, transfer, conveyance or other disposition of (i) the Lease, (11) its interest in the Lease or (ill) any claim, demand, obligation, liability; action, or cause of action arising under the terms of the Lease, to any person, firm, partnership, association, ar other entity; (b) Exceintfor the Hen Claims (1) the Promises are free and clear of all liens (including machanids and materialmen liens), encumbrances, claims, and rights of others arising from or resulting from work, contract, purchase, act, failure or omission to act, by or on behalf of, or with the knowledge or prior written consent of Lessee and (1i) no person has, or shall have with the passage of (line or file giving of notice or both, any rights against Lessor or City of Dyer 18 for payment as a result of any work, contract, purchase, act, failure or omission to act, by or on behalf of Lessee or with the knowledge or prior written consent of Lessee; (c) Lessee has full power and authority to sign and deliver this Agreement, and the execution and delivery of this Agreement will not violate and will not constitute a default under any agreements Lessee has with any third partial; (d) Lessee has not entered into any agreements (written or oral) that are currently in effect (and/or that contained surviving obligations) which affect the Premises other than the Lease, the Operating Agreement with the City and the documents giving rise to the Lien Claims; and (a) Lessee shall indemnify, defend (with counsel reasonably acceptable to Lessor) and hold Lessor harmless against all Claims and Liabilities based on, arising out of, or in connection with any breach of any of the representations a nd warranties set forth In this Section 6. 7. Voluntary Agreement Each party represents and warrants and agrees that it is entering into this Agreement freely and without undue influence or coercion by the other, and that it has done so only after obtaining advice of legal counsel, or after having had the opportunity to obtain such advice. 8. Fair consideration. The parties hereto acknowledge and agree that, among other things, Lessor's consent to the assignment of Lease, Lessor's agreement to enter into the Now Lease, and the validity and continuation of Lessee's and City s agreements to be obligated to pay all Lien Claims, and the other terms and conditions herein set forth, shall be sufficient consideration for relieving Lessee of its rental and other obligations under the Lease (in accordance with, and subject to the terms and conditions of, this Agreement) that would have accrued from and after the Effective Date had the Lease not been assigned or subsequently terminated pursuant to the terms hereof. The parties hereto also agree that such consideration given by Lessee and City, If received by Lessor as contemplated In this Agreement, consfitules fair consideration for the prospective relief to be given to Lessee and City as provided herein, is not Intended to be paid, and is not being paid, on account of an antecedent debt of Lessee or City to Lessor, but rather constitutes a contemporaneous exchange for new value given. 9. Brokers. Each party represents and warrants to the other parties that it has not had dealings in any manner with any real estate broker, finder or other person with respect to the Premises and the negotiation and execution of this Agreement Each party shall indemnify, defend and hold harmless the others from all damage, loss, liability and expense (including attorneys' fees and related costs) arising out of or resulting from any claims for commissions or fees that may be or have been asserted against the indemnified parties by any broker, finder or other person with whom the indemnifying party has or purportedly has dealt In connection with the negotiation and execution of this Agreement. 10. Miscellaneous. Each party acknowledges that it has read and understood the terms hereof and the consequences of executing this Agreement, and that, except for the representations and warranties expressly set forth in this Agreement, no representations or warranties have been made by any party to induce another party to execute this Agreement In no event shall any draft of thi s Agreement create any obligations or liabilifies, it being intended that only a fully executed copy of this Agreement delivered by the parties hereto will bind the parties to the tanns and conditions of this Agreement. Lessor shall not be bound by this Agreement unless and until Lessor has executed and delivered it to Lessee and City. Lessee shall not be bound by this Agreement unless and until Lessee has executed and delivered it to Lessor and City, City, shall not be bound by this Agreement unless and until City has executed and delivered it to Lessee and Lessor. Lessor, City and Lessee hereby waive any right it may have to require any provision of this Agreement to be construed against any party who drafted t he same. Time is of the essence of each and every provision of this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to choice of law principles. This Agreement will be binding upon and Inure to the benefit of Lessor, Lessee and City, and their respective successors and assigns. This Agreement, together with the Lease, and the New Lease, consfitutes the omhe agreementof the parties hereto with respectto thespecific subject matter hereof and supersedes and replaces any and all prior negotiations and agreements between the parties, whether written or oral, as well as any contemporaneous oral negotiators and agreements, other than the Lease as modified hereby. in the event of any conflict or inconsistency between the Lease, or the New Lease, as applicable, on the one hand, and this Agreement, on the other hand, this Agreement shall control. This Agreement may only be amended by a written agreement executed by all parties. Any waiver of any portion of this Agreement must be in writing executed by the waiving party. The Recitals set forth above are true and correct and are Incorporated herein by reference. Each party hereto agrees to perform any further acts that may be reasonably necessary, and agrees to reasonably cooperate with the other party, to effectuate the purpose of this Agreement Caption and section headings in this Agreement are for convenience of reference only, and shall not be used to limit, extend or interpret the meaning of any part of this Agreement. If any term or provision of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. Venue shall take place in the County in which the Premises is located. If legal action, arbitration or other legal proceeding is brought by any Party to enforce or interpret any of the provisions of this Agreement, the prevailing patty(s) shall be entitled to recover all costs and reasonable attorneys' fees incurred in connection therewith. This Agreement may be signed in counterparts such that signatures may appear on separate signature pages. Signatures to this Agreement created by the signer by electronic means and/or transmitted by email or other electronic transmission shall be valid and effective to bind the party so signing and/or transmitting, and copies of this signed Agreement shall be valid and effective to bind the sfgning parties and be treated as originals. In addition, counterpart signature pages maybe (but shall not be required to be) annexed to one Agreement. [Balance of page intentionally left blank— Signatures appear an following page] (collectively, "Assignee Claims"), which may be imposed on, asserted against or otherwise incurred by Assignee by or on behalf of any person or entity whatsoever due to or arising from the failure or alleged failure of Assignor to undertake, perform, pay, discharge or observe any of the covenants, terms and conditions of the Lease which first arose or accrued prior to the Effective Date. Without limiting the generality of the foregoing, Assignee acknowledges that Assignee is aware of Lessor's claims that (i) Assignor failed to obtain Lessor's consent to contractors working at the Promises, (if) Assignor failed to obtain Lessor's consent to plans and specifications for work of the Premises, and (111) Assignor has failed to post bonds to protect the Premises from mechanics' liens and claims of liens. 3. Waiver Mall. As used herein, "Lien Claims" means any liens, claims for labor or materials, demands, liabilities, costs and expenses arising from, or related in any manner, to any work, construction, Alterations, Maintenance, Repairs, Utility Installations and Trade Fixtures commenced, done or allowed by or on behalf of Lessee, by Turelk, Gensler and Trestle, or any other person or entity, prior to the Effective Date but excepting therefrom any such liens arising from any work done on the Premises by Lessor. Dyer 18 represents and warrants to IF and City that Dyer 18 has received, as of the date hereof, no preliminary notices (i.e., "20-day notices") for work on the Premises from any subcontractor or supplier other then Turelk, Gensler and Trestle. IF, City and Dyer 18 hereby expressly acknowledge and agree that It is their express intent to waive and release each other from and against all claims and liabilities relating to any work, construction, Alterations, Maintenance, Repairs, Utility Installations and Trade Fixtures commenced, done or allowed by or on behalf of lessee, and any other construction activities that may have occurred on the Premises, on or prior to the Effective Date, whether or not the some constitutes a Default or Breach under the lease, except for the Lien Claims. T'he Lien Claims shall remain the sole responsibility and liability of IF, IF agrees to pay all such Lien Claims as soon as reasonably possible. Notwithstanding the foregoing, Assignee acknowledges that Assignee remains liable to fund Assignor's payment of the Lien Claims upon review and approval pursuant to separate agreements between Assignor and Assignee and further, notwithstanding the termination of the Lease Guaranty as set forth above herein, Assignee hereby agrees to indemnify, defend and hold Dyer 18 harmless from and against any and all demands, claims, actions, losses, damages, liabilities, litigation and costs and expenses thereof unknown to the parties at this time, including, without limitation reasonable attorney fees, which may be imposed on, asserted against or otherwise incurred by Dyer 18 arising from any Hen Claims, which such indemnification shall survive any termination of the Lease as herein set forth. As such, except with respect to the Lien Claims (and as set forth In the previous sentence), each party hereto hereby waves and releases any and all other claims, demands, rights, covenerib, causes of action, damages, and liabilities which they may now own or hold, or may in the future own or hold, against each other Party hereto, arising out of or relating to acts, failure to act or any breach or default under the Lease on or prior to the Effective pate. Each Party acknowledges and agrees that it is familiar with and understands and has been counseled by its attorneys regarding the provisions of California Civil Code Section 1842, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECTTO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." Each Part, being aware of said Code Section, hereby expressly waive any rights it may have thereunder, as well as any other statute or common law principle yooffsimilar effect asmay relate, tothisWai Release. jDositials IF's Initials Ci is s 4. Eadv Terminagon of t gorse. City hereby agrees to maintain the Premises and perform under the Lease from and after the Effective Date, and that the Lease shall remain in full farce and effect, until such time as the New Lease is adopted and signed by the City and Lessor (the "New Lease Effective Date,), at which time, and notwithstanding anything to the contrary contained in the Lease. the Lease shall terminate as of the New Lease Effective Date (the "Lease Termination Date"). Upon the Effective Date of this Agreement, all rights and obligations of IF under the Lease shall cease. Upon the Lease Termination Date, all rights and obligations of Lessor and City under the Lease shall cease. Notwithstanding the foregoing or the following, nothing in (his Section 4 shall be deemed or construed in any manner whatsoever as an amendment or waiver of any rights or obligations of Lessee, City or Lessor under this Agreement with respect to any Lien Claims, indemnifications or waivers set forth elsewhere In this Agreement. . Notwithstanding anything to the contrary contained in the herein, City agrees to use its good faith diligent efforts to cause the Now Lease to be approved and executed as soon as possible; provided, however, that in the event that the New Lease is not so approved and executed, the Lease shall continue in full force and effect, City will reimburse Lessor for all costs incurred by Lessor in connection with any approved construction activity relating to the City Shelter, which such activity City hereby authorizes Lessor to commence and proceed with and City will reimburse lessor for all costs incurred by Lessor in connection with any approved construction activity relating to the City Shelter, which such activity City hereby authorizes Lessor to commence and proceed with, and in the event that the City Shelter Is not timely constructed, for all other costs and expenses incurred or to be incurred by Lessor in (a) removing or replacing any work so authorized, (b) returning the Premises to the condition it was in prior to the start of any construction activity by, for or on behalf of IF or City and to) in restoring the Premises and the building thereon to a habitable condition. A-2020-131-01A IN WITNESS WHEREOF, Lessor and Lessee have executed this Agreement on the date first written above- LESSOR/DYER IS: DYER 18, L-C, a Delaw limi li ility company By: Its: Date: pp21 LESSEEIIFIASSIGNOR. THE ILLUMINATION FOUNDATION., a California corporalpff By: Its: IF t O Date: 3-4 2021 CITYIGUARANTOR: THE CITY OF SANTA ANA By: Its: Date: 3—e 4 .20 1 App>� ed as to form: • I' Ryan O HHodge Assistant City Attorney Kristine ge City Manager ATTEST. CLERK OF THE COUNCIL Daisy Gomez, MMC Clerk of the Council