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HomeMy WebLinkAbout07 RENTAL AGMT BETWEEN THE CITY AND CORPORATE LIQUIDATION SERVICES FOR A PORTION OF THE BUILDING AT 15171 DEL AMO AVE'PORTAGENDAIDX_1_� MEETING DATE: JUNE 20, 2017 TO: JEFFREY C. PARKER, CITY MANAGER FROM: ECONOMIC DEVELOPMENT DEPARTMENT Agenda Item `I Reviewed: City Manager Finance Directorf r SUBJECT: RENTAL AGREEMENT BETWEEN THE CITY OF TUSTIN AND CORPORATE LIQUIDATION SERVICES FOR A PORTION OF THE BUILDING LOCATED AT 15171 DEL AMO AVENUE SUMMARY: Approval is requested for a Five (5) Year Rental Agreement between the City and Corporate Liquidation Services (Tenant), for a City -owned property located at 15171 Del Amo Avenue. RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute the attached Rental Agreement with Corporate Liquidation Services and support the finding that the Rental Agreement is at market value and no further policy directions, as outlined in Tustin City Code Section 7960(B), are required. FISCAL IMPACT: The Rental Agreement requires the Tenant in the first year pay $198,000, rent in an amount of $193,200 ($16,100 per month) for approximately 23,000 square feet in the northernmost section of the subject building and $4,800 ($400 per month) for temporary parking of trailers. Tenant will be required to obtain a Temporary Use Permit from Community Development in order to temporarily park four (4) trailers. In the first year, the Tenant will pay $.70 per square foot and in subsequent years the rate will increase 3% annually. During the first year of the Rental Agreement, the net rent proceeds available to the City General Fund will be $192,060, net of the 3% broker commission for the first year of $5,940. Although it is standard business practice for the brokerage fees to be paid upon agreement execution and to be based on the total rent generated during the term of an agreement, fees will be paid annually in order to reflect the option for either party to terminate at any time during the five-year Rental Agreement. COORELATION TO THE STRATEGIC PLAN: The Rental Agreement with Corporate Liquidation Services is consistent with the City's value of Fiscal Stewardship. In complying with Tustin City Code Section 7960(B), fact -based financial decisions ensure the City practices sound stewardship of its existing assets. Agenda Report June 20, 2017 Page 2 BACKGROUND: In August of 2014, the City entered into a Three (3) Year Rental Agreement with the Tenant and it expires on August 20, 2017. The Tenant has agreed to a new 5 -Year Rental Agreement. In order to maintain flexibility for site development, staff is recommending a minimum one-year term with the option at any point after the sixth month for either party to give a six-month Notice to Terminate. The negotiated rent rate is proposed at $.70 per square foot ($16,100 per month) and the premises would be rented on a triple -net basis, meaning the Tenant will pay all real estate taxes, insurance, maintenance, repairs, utilities and other items associated with tenancy. The Tenant will also be responsible for any additional capital expenses including tenant improvements and repairs to the facility and will accept the property in an "AS -IS WHERE -IS" condition. Tustin City Code (TCC) Section 7960, as enacted by Ordinance No. 1389, outlines the process City staff must follow for the approval, extension or modification of any existing City real property lease for less than market value. In the event a lease is less than market value, then staff must seek policy direction from the City Council as outlined in TCC Section 7960(B). Staff, in working with Lee & Associates, has reviewed comparables to confirm current asking rates for dead storage type spaces are in the same market range as the Del Amo building and the proposed Rental Agreement is not for less than market value. There are four properties advertised at a gross rental rate of 65 to 75 cents per square foot. The proposed rental rate for the Del Amo building is 70 cents per square foot triple -net, which is typically 5 to 10 cents a square foot less than a gross rental rate. In consideration of these facts, staff and Lee & Associates have determined and concur that the proposed rental rate of $.70 per square foot is at market value. The proposed Rental Agreement does not trigger further actions as outlined in TCC Section 7960(8). Upon execution of the Agreement, the Tenant shall be required to bring their current security deposit of $9,200, the original rent amount for one month, up to the equivalent of the new one month's rent, $16,100. Staff will be available to answer any questions the City Council may have. Jerry C4vty Acting Pt �e/ct�ofEconomic Development JohnBuchanan ctor of Economic Development Attachment: Rental Agreement between the City and Corporate Liquidation Services RENTAL AGREEMENT 1. PARTIES: The parties to this Rental Agreement are the City of Tustin, a municipal corporation ("City"), and Corporate Liquidation Services ("Tenant"), a Nevada corporation. 2. RECITALS: This Rental Agreement is made with reference to the following facts: (a) City has acquired the property commonly known as 15171 Del Amo Avenue, Tustin, CA 92780 ("Premises") for a planned redevelopment project. (b) If Tenant chooses to occupy the Premises as a new tenant, Tenant understands it will not be eligible for relocation payments or assistance under the California Relocation Assistance and Real Property Acquisition Guidelines, Title 25, California Code of Regulations, Chapter 6, Section 6000 et seq. (the "Guidelines"). (c) Tenant has a desire to rent approximately 23,000 square feet of the northern section of the Premises and may use and occupy the Premises for the purpose of storage of office equipment and warehousing use only. The Premises are restricted to Tenant employees and retail sales are not permitted. Any other use of the Premises will constitute a breach of this contract and may result in an eviction. (d) By this Rental Agreement, the parties intend to establish a landlord/tenant relationship between them and to specify the rights and duties of the respective parties with reference to the Premises. 3. PREMISES: City does hereby rent to Tenant and Tenant hereby rents from City that certain real property situated in City of Tustin, County of Orange, State of California, commonly known as 15171 Del Amo Avenue and as shown on Exhibit A. The Land and Buildings are collectively referred to as the "Premises". 3.1 Office Use Prohibited. The Premises rented to Tenant under this Rental Agreement consists of approximately 23,000 square feet of warehouse space, exclusive of the approximately 5,000 square foot of office space (shown in crosshatch on Exhibit A) ("Office Space") that are not intended for use by Tenant. Tenant hereby acknowledges and agrees that should City discover that Tenant is utilizing the Office Space for any purpose, upon written demand from City ("First Notice") Tenant will immediately remove all belongings, equipment, and/or materials if any from the Office Space. If City discovers that Tenant is utilizing the Office Space for any purposes following the First Notice, upon written demand from City ("Final Notice") Tenant shall pay to City a monthly sum for the entire 28,000 square -foot warehouse building at a rate of $.70 per square foot, increased 3% annually as provided in Section 5.1.2 for the remainder of the Term. In any such event, following receipt of the Final Notice Tenant may use the Office Space for limited storage of belongings, equipment, and/or materials provided, however, that the Office Space doorways and walkways are kept clear and passable in accordance with Section 3.4. 1249959.1 3.2 Loading Docks, Parking Allocation, and Semi -Trailer Parking. Loading Dock Doors #8 and #9 and Loading Docks #6, #7 and #8 are reserved for the exclusive use of Tenant pursuant to this Rental Agreement. No more than a total of three (3) semi -trucks and/or semi- trailers may be parked in front of the Loading Docks at a time. No parking of service trucks, cargo vans, or passenger vehicles is allowed at the Loading Docks. Tenant may use up to twenty (20) striped parking spaces in connection with Tenant's use of the Premises ("Tenant's Parking Spaces"). Subject to Section 5.2, Tenant may use twelve (12) of Tenant's Parking Spaces to park no more than four (4) semi -trailers; the eight (8) remaining spaces should be used for employee parking. The parking of no more than four (4) semi -trailers is permitted subject to the annual issuance of a Temporary Use Permit (" TUP") to Tenant by the City of Tustin Community Development Department. The parking of such semi -trailers is prohibited absent a current and valid TUP. No vehicles or semi -trailers may be double-parked, parked in tandem, or parked in a manner that encroaches into the Premises' drive aisles. 3.3 No Outside Storage. No belongings, equipment, and/or materials shall be stored outdoors in any area on the Premises, including without limitation the parking lot and loading docks, except inside the enclosed warehouse space or inside semi -trailers parked in accordance with Section 3.2. 3.4 Interior Walkways. Tenant shall ensure that all interior walkways, aisles and passageways are kept clear and passable (32 inches minimum). 4. TERM: The term of this Rental Agreement shall commence on August 21, 2017, ("Commencement Date") and shall be in full force and effect through August 20, 2022, unless otherwise terminated as provided in this Section 4 and Section 15 herein ("Termination Date"). The Commencement Date shall be the date when Section 19. Insurance and Indemnity requirements are met and the Rental Agreement is executed by all parties. Following the six (6) month anniversary of the Commencement Date, either City or Tenant may terminate this Rental Agreement for any reason, without case, by providing six (6) months written notice to the other party prior to the requested termination. Except for termination upon default, where City provides Tenant with a six (6) month notice of termination, Tenant may elect to remain in the Premises for an additional two (2) months (a total of eight months following the notice of termination). In any such event, Tenant shall pay to City 125% of the then current Rent for the additional two-month period. Tenant agrees to vacate the Premises on or before the Termination Date. 5. RENT: For Purposes of this Rental Agreement, Base Rent and Cost Reimbursements are hereinafter collectively referred to as Rent. 5.1 Base Rent. 5. 1.1 Effective August 21, 2017, Tenant shall pay City the monthly sum of Sixteen Thousand One Hundred Dollars ($16,100) for the Premises, a rate of $.70/sq. ft. for 23,000 square feet. It is payable in advance. 5.1.2 Effective each August 21 following the Commencement Date, the rent shall increase 3% annually. On August 21, 2018, Tenant shall pay City the monthly sum of Sixteen Thousand Five Hundred and Eight -Three Dollars ($16,583), prorated on the basis 1249959.1 of a thirty (30) day month. On August 21, 2019, Tenant shall pay City the monthly sum of Seventeen Thousand and Eighty Dollars and Forty -Nine Cents ($17,080.49), prorated on the basis of a thirty (30) day month. On August 21, 2020, Tenant shall pay City the monthly sum of Seventeen Thousand Five Hundred and Ninety -Two Dollars and Ninety Cents ($17,592.90), prorated on the basis of a thirty (30) day month. On August 21, 2021, Tenant shall pay City the monthly sum of Eighteen Thousand One Hundred and Twenty Dollars and Sixty -Nine Cents ($18,120.69), prorated on the basis of a thirty (30) day month. If the Commencement Date is other than the first day of a calendar month, the rent payable hereunder shall be prorated by City on the basis of a thirty (30) day month. Checks should be made out to the "City of Tustin" and delivered to City in accordance with Section 5.4. 5.2 Semi -Trailer Parking. In addition to the sums payable by Tenant to City as Base Rent, Effective August 21, 2017, Tenant shall pay City the monthly sum of Four Hundred Dollars ($400) for temporary parking of no more than four (4) semi -trailers on twelve (12) of Tenant's Parking Spaces as provided in Section 3.2 ("Semi -Trailer Parking Fee"). This Semi -Trailer Parking Fee shall automatically increase 3% annually effective each August 21 following the Commencement Date. Tenant may re -assess its need for semi -trailer parking annually at the time of TUP Renewal. If Tenant determines it will not need semi -trailer parking for the ensuing twelve- month period, it will refrain from renewing its TUP and notify City in writing of its determination. Upon receipt of said notice, the City will no longer require monthly payment of the Semi -Trailer Parking Fee until such time as a new TUP is issued and Tenant recommences parking of no more than (4) semi -trailers as provided herein. 5.3 Cost Reimbursements. All sums payable by Tenant to City under this Rental Agreement not otherwise required for Base Rent or Semi -Trailer Parking shall be deemed a Cost Reimbursement ("Cost Reimbursement"), including any special costs incurred by City, which are specifically attributable to an action (or inaction) of Tenant including without limitation Tenant's failure to provide the protection and maintenance services required by Section 6 herein. City will notify Tenant of such costs on a monthly basis and Tenant will be obligated to pay City within thirty (30) calendar days of the date of an invoice for such costs. 5.4 Place of Payment. All payments due and owing shall be made by Tenant to City, or to another party at such other place as City may designate in writing from time to time. Make checks payable to: The City of Tustin, Finance Department, 300 Centennial Way, Tustin, CA 92780. 5.5 Late Charge. If payment of or any part thereof to be made by Tenant to City become overdue for a period in excess of ten (10) calendar days, a late charge equal to ten (10) percent of such overdue amount shall be paid by Tenant for purposes of defraying the expense incidental to handling such delinquent payment. Pursuant to California law, if Tenant passes a check on insufficient funds, Tenant will be liable to City for the amount of the check plus a service charge of $55.00 for the first check passed on insufficient funds, and $55.00 for each subsequent check passed on insufficient funds. City may require future payments to be in a form other than a personal check in the event of a returned check, at City's sole discretion. 5.6 No City Responsibilities. Tenant hereby acknowledges and agrees that City is not 1249959.1 responsible for any costs, charges, expenses, outlays or any nature whatsoever arising from or relating to the Premises, or the use or occupancy thereof, of the contents thereof or the business carried on therein, and that Tenant shall pay all charges, impositions, costs and expenses of every nature and kind related to the Premises, including costs of maintenance and repair of the Premises, all costs of insuring the Premises, and all taxes and assessments attributable to the Premises and which might be associated with the possessory interest of said Rental Agreement and personal property of Tenant. Notwithstanding any of the foregoing, the City shall remain responsible for maintenance and repair of the fire sprinkler system and exterior roofing, except to the extent that any such costs arise from or are related to Tenant's use or occupancy of the Premises. 5.7 Security Deposit. Prior to the Commencement Date, Tenant shall provide an additional $6,900 security deposit to City (thereby increasing the Tenant's initial deposit of $9,200 held on account by City to $16,100 in total), which shall be refundable upon termination of the Rental Agreement provided that the Premises is returned to City upon termination in the condition in which it was first received. No part of this deposit is to be considered an advance payment of rent, including last month's rent, nor is it to be used or refunded prior to the leased premises being permanently and totally vacated by Tenant. 6. PROTECTION, MAINTENANCE, AND REPAIRS: City will not make any modifications, alterations, improvements or repairs to the Premises of any nature whatsoever and the Premises is rented to Tenant in an "As -Is Where Is, With ALL Faults basis", in its present state and condition with all faults. Tenant acknowledges that City has made no representations or warranties of any kind whatsoever, either express or implied in connection with any matters with respect to the Premises, or any portion thereof. Tenant shall be allowed no credit by City for costs of any repair work performed or ordered by Tenant to the Premises. Tenant shall, at Tenant's own expense, maintain and repair the Premises in good order and condition as the same were on Commencement Date. The degree of such maintenance and repair to be furnished by Tenant shall be that which is sufficient to maintain weather tightness, structural stability, protection from fire hazards, elimination of safety and health hazards which may arise during the term of this Rental Agreement. City, upon due notice, may inspect the Premises to insure performance of the maintenance required. Further, Tenant shall be responsible for the repair and maintenance of all interior utility systems and those exterior utility systems, distribution lines, connections and equipment which support the Premises. 6.1. Security and Fire Protection. Tenant shall provide for all security and safety within the Premises. Tenant shall ensure that all electrical panels, the fire sprinkler system and heads and all fire extinguishers remain unobstructed and accessible at all times. No materials may be stored on the Premises in a manner which would impede access to any electrical panel, the fire sprinkler system or fire extinguisher, or hinder the free flow of water from any fire sprinkler head in the event of an emergency. Tenant shall install signs (or other means of identification) to enable the location of the fire extinguishers to be identified from a distance. 7. [Reserved] 1249959.1 8. WAIVERS 8.1 Waiver of Claims. Neither the City of Tustin or the Tustin Community Redevelopment Agency ("Agency") nor any of their officers, agents, representatives and employees will be liable and Tenant waives all claims for damage to persons or property sustained by Tenant or any occupant of the Premises resulting from the Premises or any part of it, becoming out of repair, resulting from any accident in or about the Premises or resulting directly or indirectly from any act or neglect of Tenant, occupant or of any other person including Tenant's agents and employees. All property belonging to Tenant or any occupant of the Premises will be there at the risk of Tenant or such other person only and City will not be liable for damages, theft or misappropriation. 8.2 Relocation and Compensation waivers. Tenant by signing this Rental Agreement is waiving any and all rights of any kind or amount for relocation benefits including but not limited to any such or similar rights prescribed by any state, federal or local law and/or regulation and waiving any and all rights to just compensation under U.S. and California constitutions, and agreeing and acknowledging that they waive any rights to payments for Loss of Goodwill. 8.3 No Waivers. The failure or omission of City to terminate this tenancy for any violation of any of its terms, conditions or covenants, shall not be deemed to be a consent by City to such violation and shall not bar, stop or prevent City from terminating this Agreement thereafter, either for such or for any subsequent violation of any such term condition or covenant. The acceptance of rent under this Agreement shall not be or be construed to be a waiver of any breach of any term covenant or condition of this Agreement. Nothing contained in this Agreement shall be construed as limiting City from performing all acts required by City in connection with the relocation of occupants of the Premises, or taking such steps as it may deem necessary to remove occupants of the Premises at any time. 9. CLEANLINESS AND WASTE: Tenant will keep the Premises inclusive of, but not limited to, the parking lot, loading docks, and exterior walks/alley adjacent to it at all times in a neat, orderly, clean and sanitary condition, free from waste or debris and will neither commit nor permit any waste or nuisance on the Premises nor store materials hazardous to health or safety. Debris, trash, and other used materials shall be promptly removed from the Premises and the Premises shall be kept reasonably clean and free of unused materials at all times. At termination, the Premises shall be left without containers, tenant's equipment, and other undesirable materials, and in an acceptably clean condition. 10. VACATION OF PREMISES: Tenant will give City immediate notice of his/her intention to move or vacate the Premises, and on that vacation agrees to leave same in good condition, clear of all debris, hazardous materials and personal property. 11. DAMAGE TO PREMISES: Any damage to the Premises in excess of above ordinary and normal usage may be charged to Tenant. 12. NUISANCE AND WASTE: Tenant shall not commit, suffer or permit any nuisance or 1249959.1 waste in or about the Premises, and shall not permit the use of the Premises for any illegal or immoral purpose. Tenant further agrees to comply with all State and Federal laws and local ordinances concerning the Premises and the use of the Premises. 13. INSPECTION BY CITY: City by and through its employees or agents, shall have the right to enter upon the Premises at all reasonable times during the term of this tenancy for the purpose of inspecting the same, making such repairs as City may deem desirable, and conducting any investigation, study or remediation activity City may deem desirable upon providing Tenant with reasonable advance notice, whenever practicable. 14. PERSONAL PROPERTY LEFT ON PREMISES: City shall have the right, WITHOUT NOTICE, to sell, destroy or otherwise dispose of any personal property left on the Premises by Tenant after he/she has vacated or abandoned the Premises, or when this tenancy has been terminated, or when Tenant may be evicted from the Premises. 15. DEFAULT AND TERMINATION UPON DEFAULT: 15.1 Events of Default. The following events shall constitute events of default under this rental agreement: (a) A default by Tenant in payment when due of any rent or other sum payable under this Agreement and the continuation of this default for five (5) or more days after notice of the default by City. (b) A default by Tenant in the performance of any of the terms, covenants, or conditions of the Agreement, other than a default by Tenant in the rent payment, and the continuation of the default beyond fifteen (15) days after notice by City, or if the default is curable and would require more than fifteen days, then such reasonable time to cure as authorized by City. (c) The bankruptcy or insolvency of Tenant. (d) The appointment of a receiver for a substantial part of Tenant's assets. (e) Tenant's abandonment of the Premises. (f) The levy upon this Rental Agreement by attachment or execution and the failure to have the attachment or execution vacated within thirty (30) days. 15.2 Termination Upon Default. On the occurrence of any event of default by Tenant, City may, in addition to any other rights and remedies given here or by law, terminate this Rental Agreement and exercise remedies relating to it without further notice or demand in accordance with the following provisions: (a) So long as the event of default remains uncured, City shall have the right to give notice of termination to Tenant, and on the date specified in the termination notice, this 1249959.1 Rental Agreement shall terminate. (b) If this Rental Agreement is terminated, City may, by judicial process, reenter the Premises, remove all persons and property, and repossess and enjoy the Premises, all without prejudice to other remedies that City may have because of Tenant's default or the termination. (c) If this Rental Agreement is terminated, City shall have all of the rights and remedies of a landlord provided by Civil Code section 1951.2, in addition to any other rights and remedies City may have. If any rent shall be due or unpaid, or if default shall be made in any of the provisions otherwise contained in this Rental Agreement on the part of Tenant to be observed and performed, City may exercise any and all remedies provided by law or equity by reason of such default, including without limitation the right at City's option of terminating this tenancy. Each and all of the remedies of City shall be construed as cumulative and no one of them as exclusive of the other or as exclusive of any remedy provided by law or equity. 16. UTILITIES AND TAXES: The Premises has one electric meter for the entire facility and it is currently in the name of the National Office Liquidators, the tenant renting space in the southern section of the facility. Prior to the Commencement Date, Tenant will enter into a cost- sharing agreement with the existing tenant to pay for electric utilities, subject to any license approval of tenancy by City. 17. DAMAGE BY FIRE: In the event the Premises are destroyed or so damaged by fire or other casualty or act of God, then this Rental Agreement shall terminate, and any advance or unearned rent that may have at such time been paid will be refunded to Tenant on a pro rata basis. 18. ASSIGNMENT AND SUBLETTING: Tenant shall not assign this tenancy in whole or in part, nor sublet the Premises or any portion of the Premises. In the event of a breach of this condition, City shall have the power to immediately declare this Rental Agreement terminated and will then be entitled to immediate possession of the Premises. 19. INSURANCE AND INDEMNITY: 19.1 Insurance. Tenant shall provide and maintain in full force and effect at its own expense during the Term of this Rental Agreement the following insurance covering its operations under this Rental Agreement. Such insurance shall be provided with insurers licensed to do business in the State of California, with a rating of at least A VII, according to the latest Best's Key Rating Guide or A -X (if offered by a surplus line carrier that is non -admitted). Evidence of such insurance shall be delivered to City prior to the Commencement Date, including provision of certificates of insurance and required insurer endorsements. Insurance endorsements (or a copy of the policy, if applicable) shall be provided as evidence of meeting the requirements of this Section. If self-insured for workers compensation, Tenant shall submit to the Lessee a copy of its certification of self-insurance issued by the Department of Industrial Relations. The Insurers shall specifically identify this Rental Agreement and shall contain express conditions. Such insurance, 1249959.1 shall include an endorsement that coverages are to be primary to and not contributing with any other insurance maintained by City, and an endorsement shall name City, and their respective officers, officials, employees, agents and contractors as additional named insured (except for workers' compensation insurance) and by an endorsement provide that all losses shall be payable notwithstanding any act or failure to act or negligence of City, or any other person. All insurance shall be maintained on an occurrence basis. Insurer or Insurer's agent and Tenant shall give City thirty (30) days advance written notice of any written material modification or termination of any insurance required under the provisions of this Rental Agreement. Failure of Tenant to provide such notice shall be deemed a material breach of this Rental Agreement. 19.1.1 Comprehensive General Liability Insurance. Comprehensive general liability and property damage insurance covering the rented Premises, contractual, broad form property damage, and bodily injury or death, with a combined single limit of not less than $1,000,000 per occurrence with respect to personal injury or death, and $1,000,000 per occurrence with respect to property damage. The general liability policy is to contain, or be endorsed to contain, the following provisions: (1) City and their respective officers, officials, employees, agents and contractors are to be covered as additional named insureds as respects: liability arising out of use of the Premises. The coverage shall contain no special limitations on the scope of protection afforded to City, its officers, officials, employees, agents or contractors. (2) Tenant's insurance coverage shall be primary insurance as respects City, and their respective officers, officials, employees and contractors. Any insurance or self-insurance maintained by City shall be in excess of Tenant's insurance and shall not contribute with it. (3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to City, its officers, officials, employees, agents, or contractors. (4) Coverage shall state that Tenant's insurance shall apply separately to each additional insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. (5) Each insurance policy shall include an endorsement that the Insurer waives any right of subrogation against City which may arise by reason of any activities of Tenant, City or payments under a policy. 19.1.2 Workers Compensation Insurance. Workers compensation insurance shall be in an amount and form meeting all applicable requirements of the California Labor Code, covering all persons providing services by or on behalf of Lessee and all risks to such persons. The worker's compensation is to contain, or be endorsed to contain, a waiver of subrogation against City. 19.2 Indemnity. Notwithstanding anything to the contrary hereinabove contained, and irrespective of any insurance carried by Tenant, Tenant shall defend, with counsel acceptable to City, indemnify, protect, and save harmless City and their respective officers, officials, employees, agents and contractors from, and shall pay all costs, expenses and reasonable attorney 1249959.1 fees for all trial and appellate levels and post judgment proceedings in connection with and from any and all demands, claims, actions, proceedings, suits, losses, liens, costs, judgments, damages or liabilities of any kind and nature whatsoever, including expenses incurred in defending against legal actions, for death or injury to persons or damage to property and for civil fines and penalties arising , or for any violation or alleged violation of local, state or federal law or regulation at the Premises, or for any breach of this Rental Agreement growing out of , or in connection, or in any manner predicated upon the use of, occupancy of and/or operations carried on upon the Premises by Tenant, its officers, officials, employees, agents, servants, guests, invitees, or contractors. 20. NOTICES. Any notice shall be personally delivered or placed in a sealed envelope postage paid, addressed to the person on whom it is to be served with return receipt requested and deposited in the United States Mail. Personal service shall be deemed complete upon delivery and service by mail shall be deemed complete upon receipt as reflected by the return receipt. The address to be used for any notice served by mail shall be as follows: Tenant Corporate Liquidated Services C/O Carl Weisman, President 2512 Ocean Boulevard Corona Del Mar, CA 92625 City City Manager City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: Jeffrey C. Parker, City Manager 21. REFUND OF RENT: In the event Tenant vacates the Premises and terminates this tenancy before expiration of the rental term for which rent has been paid, City shall refund the pro rata portion of such rent which is unearned at the time of vacancy. 22. ANTI -DISCRIMINATION: Tenants agrees that this rental Agreement is made and accepted on and subject to the following conditions: That there will be no discrimination against or segregation of any person or group of persons, on account of race, color, sex, age, handicap, marital status, religion, national origin or ancestry in the use, occupancy, tenure or enjoyment of the Premises, nor will Tenant or any person claiming under or through it establish or permit any practice or practices of discrimination or segregation with reference to the Premises. 23. ATTORNEY FEES. If as a result of a breach or default under this Rental Agreement, City uses an attorney to secure compliance with Agreement provisions to recover damages, to terminate this Agreement, or to evict Tenant, Tenant shall reimburse City, on demand, for all reasonable attorney fees and expenses incurred by City. 1249959.1 24. KEYS: Tenant agrees on vacating the Premises that Tenant will deliver all keys to the Premises in Tenant's possession to City at the address stated in Section 5.3, and on failure to deliver the keys, Tenant agrees that rent for the Premises will continue to be paid to City until such time as the keys are delivered. 25. TIME OF ESSENCE. Time is of the essence in this Rental Agreement and all of its provisions. 26. ENTIRE AGREEMENT: It is understood that there are no oral agreements between the parties affecting this Rental Agreement and this Rental Agreement supersedes and cancels any and all previous negotiations and understanding, if any, between the parties and none will be used to interpret or construe this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 1249959.1 Approval as to Form David E. Kendig City Attorney CITY OF TUSTIN "CITY" Jeffrey C. Parker, City Manager Date Corporate Liquidation Services "TENANT" By: By: Carl Weisman, President Name: Title: Date: < Note two corporate signatories authorized to sign by corporation resolution should sign unless the corporation resolution permits one signatory> 1249959.1 EXHIBIT "A" 15171 Del Amo Avenue, Tustin In accordance with Section 3.2, Tenant acknowledges and agrees that Loading Dock Doors 48 and 9 and Loading Docks 46, 47 and 48 are reserved for the exclusive use of Tenant pursuant to this Rental Agreement. No more than a total of three (3) semi -trucks and/or semi- trailers may be parked in front of the Loading Docks at a time. No parking of service trucks, cargo vans, or passenger vehicles is allowed at the Loading Docks. Tenant may use up to twenty (20) striped parking spaces in connection with Tenant's use of the Premises ("Tenant's Parking Spaces"). Subject to Section 5.2, Tenant may use twelve (12) of Tenant's Parking Spaces to park no more than four (4) semi trailers; the eight (8) remaining spaces should be used for employee parking. The parking of no more than four (4) semi -trailers is permitted subject to the annual issuance of a Temporary Use Permit ("TUP") to Tenant by the City of Tustin Community Development Department. The parking of such semi -trailers is prohibited absent a current and valid TUP. No vehicles or semi -trailers may be double-parked, parked in tandem, or parked in a manner that encroaches into the Premises' drive aisles. Tenant agrees to utilize parking spaces in a manner that does not interfere with the operations of the other tenants on the property.