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HomeMy WebLinkAboutC-5454(B) - Termination and Settlement Agreement, 1000 Avocado (Inside Library)%N U TERMINATION AND SETTLEMENT AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND FOOD MASTERS, INC. This Termination and Settlement Agreement ("Agreement") is made and entered into as of the J8% day of , 2023 ("Effective Date"), by and between the City of Newport Beach ("City"), a California municipal corporation and charter city, and Food Masters, Inc., a California corporation ("Concessionaire"). City and Concessionaire may be individually referred to herein as a "Party," and collectively referred to herein as the "Parties." RECITALS A. On July 11, 2013, the City entered into that certain Concession Agreement with 24 Carrots, LLC, a California limited liability corporation, concerning the seven hundred fifty-seven (757) square foot concession facility located at 1000 Avocado Avenue, Newport Beach, California 92660, which is depicted on Exhibit "A" attached hereto and incorporated by reference ("Premises"), that was recorded on July 17, 2013 as Instrument No. 2013000429412 in the Official Records of Orange County ("Lease"). B. On August 8, 2016, City, 24 Carrots, LLC, and Concessionaire entered into an Assignment and Assumption of Concession Agreement and Consent, that was recorded in the Official Records of Orange County on August 10, 2016, as Instrument No. 2016000377357 ("Assignment"). C. On February 8, 2017, City and Concessionaire entered into a First Amendment to Concession Agreement, that was recorded February 8, 2017, as Instrument No. 2017000056527 ("First Amendment"). D. On March 4, 2020, Governor Gavin Newsom declared a State of Emergency in response to the COVID-19 outbreak, and issued a statement that "conditions of Government Code section 855(b), relating to the declaration of a State of Emergency, have been met." E. On March 15, 2020, Newport Beach City Manager, who serves as the Director Emergency Services for the City of Newport Beach, issued a Proclamation of Local Emergency based on the Governor's findings and in response to the COVID-19 outbreak, establishing local regulations regarding quarantining and staying at home. F. On March 18, 2020, the Newport Beach City Council ratified the Proclamation of Local Emergency by adopting Resolution No. 2020-25, and made findings regarding the threat and danger of COVID-19. G. Due to the stay-at-home regulations and closure of the Central Library within which the Premises sits, Concessionaire was unable to operate its business, and consequently, did not receive sufficient revenue to cover operating expenses, including the cost of rent for the Premises. H. On June 22, 2021, the Newport Beach City Council adopted Resolution 2021-62, terminating the Proclamation of Local Emergency based on findings that the COVID-19 infection rate had experienced a consistent drop, that the County had lowered the COVID-19 threat level to the least restrictive tier for over four weeks, and that statewide COVID-19 hospitalization and infection rates were at near record lows. I. Concessionaire has resumed operation of its business upon the Premises, but revenue has remained insufficient to cover operating expenses, rent for the Premises, and to bring current past delinquencies. J. As a full settlement, compromise, release, and discharge of any and all claims and causes of action that have accrued, or that may or could accrue in the future, based on the events or incidents referred to herein above, the Parties now desire to terminate the Lease and thereby effectuate an early return possession of the Premises to the City prior to the expiration date set forth in the Lease in exchange for waiver of Concessionaire's outstanding debt, pursuant to the terms of this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Concessionaire hereby agree as follows: 1. NO FAULT. Both Parties agree that this Agreement is not to be construed as, and is not, an admission of fault or breach of duties or obligations in any manner whatsoever. Neither this Agreement nor the implementation thereof shall be construed to be, or shall be admissible in any proceedings as, evidence of an admission by either Party of any violation of or failure to comply with any federal, state, or local law, common law, agreement, rule, regulation, or order. 2. EARLY TERMINATION. The Parties agree that in lieu of the original expiration date of set forth the Lease of July 11, 2023, the Lease shall terminate, for convenience, effective as of 5:00 p.m. on the Effective Date ("Termination Date"). Concessionaire shall quit the Premises, and shall surrender and return the Premises to City in clean and good condition and repair. Concessionaire shall also return to City all keys and other similar Termination and Settlement Agreement Page 2 items provided to Concessionaire by City in connection with the Premises. Concessionaire also agrees that all of its personal property shall be removed from the Premises by the Termination Date. 3. WAIVER OF DEBT. In consideration of Concessionaire surrendering the Premises earlier than set as forth in the Lease, City and Concessionaire agree that all outstanding debt owed by Concessionaire to the City pursuant to the Lease, to include rent, late fees, interest on unpaid sums, and inclusive of utilities, is hereby waived. The amount so waived is One Hundred Six Thousand Three Hundred Seventy Nine Dollars and 64/100 ($106,379.64) ("Debt"). City acknowledges and agrees that other than the Debt, all other amounts due and owing by Concessionaire to City under the Lease have been paid. 4. RETURN OF PREMISES. Concessionaire shall, at its sole cost, remove any alterations made to the Premises, and restore the Premises to a broom -clean condition prior to the Termination Date. Concessionaire shall remove any moveable partitions, machinery, equipment, furniture and trade fixtures previously installed by Concessionaire, and repair any damage to the Premises caused by such removal. 5. RELEASE. Concessionaire agrees to release, discharge and waive any claims, known or unknown, against the City, its successors, assigns, its elected or appointed officers, officials, employees, agents and volunteers, arising out of or in any way connected with the Lease. Concessionaire agrees that this release includes those claims protected by California Civil Code § 1542, which states: A general release does not extend to claims that the creditor or releasing party does not know or suspect to 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. Concessionaire has read, understands, and hereby waives all rights and protections otherwise available to it under §1542, having had full opportunity to consult with counsel of their choosing regarding the matter. Concessionaire Initials: 6. INDEMNITY. Concessionaire agrees to defend and indemnify the City, its elected and appointed officers, officials, employees, agents and volunteers, from and against any and all loss or damage sustained by the City (and all expenses, costs and attorneys' fees of the City in any action or defense undertaken to protect itself from such loss or damage) resulting from a breach by Concessionaire of the duties and representations made herein. 7. SURVIVAL. As of the Effective Date, neither Party shall have any further rights or obligations under or arising out of the Lease, except for those rights and obligations that survive pursuant to the terms of the Lease. Termination and Settlement Agreement Page 3 8. REPRESENTATION. Each Party acknowledges that it has obtained, or has had the opportunity to obtain and has voluntarily waived said opportunity, the advice of independent legal counsel prior to entering into this Agreement. Each Party acknowledges that it has read this entire Agreement, has had a full opportunity to have this Agreement fully explained by legal counsel of its choice, and that it fully understands and agrees to the terms, conditions, and legal significance of this Agreement. 9. VOLUNTARY. The Parties acknowledge that they have entered into this Agreement voluntarily, on the basis of their own judgment and without coercion, and not in reliance on any promises, representations, or statements made other than those contained in this Agreement. Each Party represents and warrants that each has read this Agreement and are fully aware of its contents and legal effect. 10. MEMORANDUM OF TERMIATION OF LEASEHOLD. The Parties agree to execute and record, in the Official Records of Orange County, a Memorandum of Termination of Leasehold, as attached hereto and incorporated herein as Exhibit "B." 11. CONFIDENTIALITY. Except to the extent compelled by law or as may be necessary for taxes, creditors, or other legitimate business purposes, this Agreement and the terms contained herein shall be confidential and shall not be disclosed by either Party. 12. TAXES. Concessionaire agrees to be solely responsible for any and all taxes that may accrue or arise out of this Agreement, and agrees to defend and indemnity the City from any action or proceeding against the City by any taxing authority related to this Agreement. 13. STANDARD PROVISIONS 13.1 Recitals. City and Concessionaire acknowledge that the above Recitals are true and correct and are hereby incorporated by reference into this Agreement. 13.2 Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 13.3 Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Agreement and any other attachments attached hereto, the terms of this Agreement shall govern. 13.4 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. In the event of any conflict between a provision in the Lease and a provision in this Agreement, this Agreement will control. Termination and Settlement Agreement Page 4 13.5 Amendments. This Agreement may be modified or amended only by a written document executed by both Parties and approved as to form by the City Attorney. 13.6 Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 13.7 Controlling Law and Venue. The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange, State of California. 13.8 No Attorney's Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys' fees. 13.9 Authority. The Parties and the persons executing this Agreement on behalf of the Parties represent and warrant that they are duly authorized and empowered to so execute and deliver this Agreement, and that this Agreement is binding upon the Parties in accordance with the terms herein. 13.10 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) and the same instrument. [SIGNATURES ON NEXT PAGE] Termination and Settlement Agreement Page 5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. APPROVED AS TO FORM: CITY A-ITO NEY'S OFFE3 Date: Afth C. Harp City Attorney ATTEST: Date: �.1% '' BrownAMAL)4��,� City Clerk CITY OF NEWPORT BEACH, a Californiq municipal corporation Date-. By: K. Leung ity Manager Concessionaire: FOOD MASTERS, INC., a Cal'fIrnia Irporation Date:_ BY Khalida Rashid Chief Executive Officer, Secretary, and Chief Financial Officer [END OF SIGNATURES] Owners must sign in the presence of notary public Attachment: Exhibit A -- Depiction of Leasehold Premises Exhibit B -- Memorandum of Termination of Leasehold Termination and Settlement Agreement Page 6 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of U QA elt SS. On 0 before me, 641AC&1,10 Notary Public, personally appeared r ' who proved to me on the basis of satisfactory evidence to e the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. CHRISTOPHER CARTER HENNIGAN Notary Public • California Orange County x i ,i ' j ° Commission k 2365365 Signa �s My Comm. Expires Jul 13. 2025 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of } ss. On 20 before me, Notary Public, personally appeared proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) Termination and Settlement Agreement Page 7 EXHIBIT "A" DEPICTION OF LEASEHOLD PREMISES (SEE ATTACHED) Exhibit A EXHIBIT "B" MEMORANDUM OF TERMIATION OF LEASEHOLD (SEE ATTACHED) 4/18/23, 4:10 PM Batch 15614920 Confirmation Recording Requested By and When Recorded Return To: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Clerk Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder 1111111111111111111111111111111111111111111111111111111111111111111111 NO FEE *$ R 0 0 1 4 3 0 7 5 4 2 $ * 2023000088709 4:04 pm 04/18/23 418 503A M11 5 0.00 0.00 0.00 0.00 12.00 0.00 0.000.000.00 0.00 (Exempt From Recording Fees Pursuant to Government Code § 27383) (SPACE ABOVE THIS LINE FOR RECORDER'S USE) MEMORANDUM OF TERMINATION OF LEASEHOLD This Memorandum of Termination of Leasehold is made this (8 day of APPLIL , 2023, by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city hereinafter called "Lessor", and FOOD MASTERS, INC., a California corporation, hereinafter called "Lessee". RECITALS A. On July 11, 2013, Lessor entered into a Concession Agreement with 24 Carrots, LLC, a California limited liability corporation, concerning the seven hundred fifty- seven (757) square foot concession facility located at 1000 Avocado Avenue, Newport Beach, California 92660, that was recorded on July 17, 2013, as Instrument No. 2013000429412 in the Official Records of Orange County, for the property depicted on Exhibit "A" attached hereto and incorporated herein by this reference ("Lease"). B. On August 8, 2016, Lessor, 24 Carrots, LLC, and Lessee entered into an Assignment and Assumption of Concession Agreement and Consent, that was recorded in the Official Records of Orange County on August 10, 2016, as Instrument No. 2016000377357, pursuant to which, the Lease was assigned to Lessee ("Assignment'). C. On February 8, 2017, Lessor and Lessee entered into a First Amendment to Concession Agreement, that was recorded February 8, 2017 as Instrument No. 2017000056527 ("First Amendment"). D. On 1 �, 2023, Lessor and Lessee entered into a Termination and Settlement Agreement, whereby Lessor and Lessee agreed to terminate said Lease as assigned and as amended, and all rights to the possession of the Lease premises and to release Lessor from its obligations under the Lease, and Lessor desires to accept said termination and to release Lessee from his obligations under the Lease, as of said date (Termination Agreement"). [SIGNATURES ON NEXT PAGE] https://gs.secure-recording.com/Batch/Confirmation/l5614920 1/14 Recording Requested By and When Recorded Return To: City of Newport Beach 100 Civic Center Drive Newport Beach, California 92660 Attn: City Clerk (Exempt From Recording Fees Pursuant to Government Code § 27383) (SPACE ABOVE THIS LINE FOR RECORDER'S USE) MEMORANDUM OF TERMINATION OF LEASEHOLD This Memorandum of Termination of Leasehold is made this 1$ day of APR1L , 2023, by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city hereinafter called "Lessor", and FOOD MASTERS, INC., a California corporation, hereinafter called "Lessee". RECITALS A. On July 11, 2013, Lessor entered into a Concession Agreement with 24 Carrots, LLC, a California limited liability corporation, concerning the seven hundred fifty- seven (757) square foot concession facility located at 1000 Avocado Avenue, Newport Beach, California 92660, that was recorded on July 17, 2013, as Instrument No. 2013000429412 in the Official Records of Orange County, for the property depicted on Exhibit "A" attached hereto and incorporated herein by this reference ("Lease"). B. On August 8, 2016, Lessor, 24 Carrots, LLC, and Lessee entered into an Assignment and Assumption of Concession Agreement and Consent, that was recorded in the Official Records of Orange County on August 10, 2016, as Instrument No. 2016000377357, pursuant to which, the Lease was assigned to Lessee ("Assignment"). C. On February 8, 2017, Lessor and Lessee entered into a First Amendment to Concession Agreement, that was recorded February 8, 2017 as Instrument No. 2017000056527 ("First Amendment"). D. On 2023, Lessor and Lessee entered into a Termination and Settlement Agreement, whereby Lessor and Lessee agreed to terminate said Lease as assigned and as amended, and all rights to the possession of the Lease premises and to release Lessor from its obligations under the Lease, and Lessor desires to accept said termination and to release Lessee from his obligations under the Lease, as of said date (Termination Agreement"). [SIGNATURES ON NEXT PAGE] IN WITNESS WHEREOF, the Parties have caused this Memorandum of Termination of Leasehold to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: 3 / Z (I / 25 By: elf�--� Aaron '7(C. Harp City Attorney ATTEST: Date: �, l oas � r � �.�.�1 �►�il A Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation Date: 4114 )10" Gr Leung City Manager LESSEE: FOOD MASTERS, INC., a California corporation Date: '-1 / 2-3 By: �t�n � 2 Khalida Rashid Chief Executive Officer, Secretary, and Chief Financial Officer [END OF SIGNATURES] Owners must sign in the presence of notary public Attachment: Exhibit A -- Depiction of Leasehold Premises ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of Califor is County of ss. / On 14114 0 a befo e e Public, Notary personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS m hand and official seal. """"� Y ;� - CNRIS'"OPHER CARTER HENNIGAN Notary Public -California Orange County Commission 2365365 My Comm. Expires Jul 13, 2025 Signa r (s a ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of } ss. On 20 before me, Notary Public, personally appeared proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal EXHIBIT "A" DEPICTION OF LEASEHOLD PREMISES (SEE ATTACHED) '- _,- �' � - � -� 8 Exhibit A