HomeMy WebLinkAboutC-3409 - Management Agreement for the Newport Theater Arts Center - 2501 Cliff Drive•
MANAGEMENT AGREEMENT
By and Between
THE CITY OF NEWPORT BEACH
AND
FRIENDS OF THE NEWPORT THEATRE ARTS CENTER
This Management Agreement (Agreement) entered into as of May 1, 2001
(Effective Date) between the City of Newport Beach (City) and the Friends of the
Newport Theatre Arts Center (Manager), is made with reference to the following:
RECITALS
A. City is the owner of the real property, structures, and related
improvements that are commonly known as the Newport Theatre
Arts Center, located at 2501 Cliff Drive in the City of Newport
Beach.
B. Manager is a non-profit corporation organized pursuant to and in
compliance with the provisions of California law and is presently in
good standing. Manager was organized by, and its members
include, individuals who have developed expertise in the operation
of a community theatre and the production of stage plays and
similar events.
C. In 1981, City adopted a policy that designated the Property as the
City's community theatre, a designation that is commonly
understood to describe a specific type of theatrical operation.
D. Since 1981, Manager has been primarily responsible for the
community theatre productions and program as well as the day to
day management of the Property.
E. Since 1981, Manager has invested more than $185,000 in the
Property including theatre lighting, building remodeling, seating,
stage turntable, sound equipment and dressing room
improvements.
F. The City Council of the City of Newport Beach (City Council) has
determined that Manager is uniquely qualified to conduct a
community theatre program on, and otherwise manage the use of,
the Property. Manager is uniquely qualified because of the skill
and knowledge of its members and the practical experience that
Manager has gained from the operation of a community theatre
program on the Property for more than twenty years.
G. The City Council has determined that this Agreement and the use
of the Property as a community theatre is consistent with the City
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Charter, the Newport Beach General Plan and Zoning Ordinance
and all other applicable Federal, State and local laws.
H. The City Council has also determined that this Agreement will
allow the Property to be used for community meetings conducted
by and/or on behalf of community organizations that will benefit
and serve the interests of nearby residents.
NOW, THEREFORE, in consideration of the following covenants and promises
City and Manager agree as follows:
ARTICLE 1 SUBJECT OF AGREEMENT
1.1 Purpose of the Agreement
The purpose of this Agreement is to provide for the management of the
Property in a manner that will allow Manager to continue to operate a
community theatre program on the Property. This Agreement is also
intended to designate Manager as the entity responsible for the
supervision and control over the use of the Property by other community
groups .and organizations. The Parties also intend that this Agreement
reflect and memorialize the manner in which Manager has conducted its
community theatre program for the benefit of the City for more than
twenty (20) years.
1.2 The Property
The Property that is the subject of this Agreement includes the
structures, improvements and real property located at 2501 Cliff Drive in
Newport Beach. The Property includes the Theatre, parking areas and
related improvements including Equipment purchased by Manager
before or after the Effective Date that is considered a fixture pursuant to
California law.
1.3 Theatre
The word "Theatre" refers to the theatre building on the Property.
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1.4 City
City is the City of Newport Beach, a charter city and includes the officers
and employees of the City of Newport Beach.
1.5 Manager
Manager is the Friends of the Newport Theatre Arts Center, a California
nonprofit public benefit corporation organized for the purpose of
operating a community theatre program in a manner which will serve the
interests of, and benefit, members and the community. Manager
includes all officers, agents, volunteers and employees of the Friends of
the Newport Theatre Arts Center.
1.6 Reserved Period
The term "Reserved Period" refers to one of the three (3) two -week periods
that Manager is required to designate pursuant to Article 8 and during
which the Property is available for use by a Third Party.
1.7 Third Party
The term "Third Party" shall refer to any individual, group or
organization, other than the Manager or any individual, group, or
organization acting pursuant to an agreement with the Manager, that
requests approval from City to use the Property during all or a portion of
any Reserved Period.
ARTICLE 2 APPOINTMENT OF MANAGER
City appoints Manager and Manager accepts appointment as Manager for
the Term pursuant to the terms and conditions of this Agreement.
ARTICLE 3 GENERAL PROVISIONS
3.1 Non-interference
Manager shall be entitled to perform its duties as Manager of the
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Property for the Term without hindrance or interruption except for the
exercise of City's rights pursuant to this Agreement and City's right to
inspect the Property pursuant to its police power. City shall also have
the right to enter and/or inspect the Property to perform its duties
pursuant to this Agreement and to re-enter the Property should Manager
be in breach or default.
3.2 Condition of Property
Manager will keep City informed as to the condition of the Property
including soil conditions, the condition of structures, hardscape and
landscaping, and the condition of utilities.
3.3 Ownership of Improvements
During the Term of this Agreement, City shall hold title to the Property
and Manager will retain title to the personal property that Manager
purchased before or after the Effective Date that is necessary or
convenient to the operation or maintenance of the Theater. Manager
has, during the past twenty years, purchased and installed fixtures,
machinery, computers, controls, rigging, sound and lighting apparatus,
staging, costumes, props, merchandise, trade fixtures (collectively, the
"Equipment") that have been constructed, installed or placed on or in the
Property by Manager. Any Equipment purchased by Manager prior to, or
after, the Effective Date that is considered a fixture pursuant to
California lawshall become the property of the City upon the expiration
or termination of this Agreement
3.4 Surrender of Property
On expiration of the Term or earlier termination of this Agreement,
Manager shall peaceably and quietly leave and surrender the Property to
City in good order, condition and repair, reasonable wear and tear and
obsolescence excepted. Manager shall deliver to City all assignable
contracts, agreements, and other documents related to the operation,
maintenance or use of the Property.
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ARTICLE 4 TERM
4.1 Duration and Commencement
The initial term ("Initial Term") of this Agreement shall commence on the
Effective Date. The Initial Term shall expire on April 30, 2011, unless
this Agreement is terminated earlier as provided in Article 17.
4.2 Extension of Term
The term of this Agreement will be automatically renewed for an
additional five (5) years (Initial Extension) unless either party provides
the other party with written notice of non -renewal at least (90) days prior
to the expiration of the Initial Term of this Agreement. The Term of this
Agreement shall be extended for a second five (5) year period (Second
Extension) upon expiration of the Initial Extension unless either party
provides the other with written notice of non -renewal at least ninety (90)
days prior to the expiration of the Initial Extension.
4.3 Annual Extension
Assuming the Tenn of this Agreement is extended as provided in Section
4.2 and Manager is not in default upon expiration of the Second
Extension, the Term of this Agreement shall be automatically extended
for successive twelve-month periods after the Second Extension (Annual
Extension(s)). This Agreement shall expire at the end of any Annual
Extension if either party gives the other party written notice of non -
renewal no less than sixty (60) days prior to the expiration of any Annual
Extension.
4.4 Extensions
The Initial Extension, the Second Extension and the Annual Extension(s)
are occasionally referred to as the "Extensions" or Extended Term"
ARTICLE 5 DUTIES OF MANAGER
5.1 Duties of Manager
The duties of the Manager include the following:
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5.1.1 Operate and maintain a community theatre program
(Program) in accordance with the provisions of Article 6.
5.1.2 Maintain, and replace as necessary, all theatrical stage
lighting, sound apparatus, computers, sets and other
equipment and facilities necessary to the operation of a
community theatre.
5.1.3 Authorize, manage and supervise the use of the Property by
any Third Party as provided in this Agreement.
ARTICLE 6 PROGRAM STANDARDS AND OPERATION
As primary consideration for this Agreement, Manager shall operate the
Program in accordance with the criteria and objectives specified in this Article.
6.1 Productions
The Program shall offer to the general public a minimum of four
theatrical productions during each twelve-month period during the Term
or any Extended Tenn. The quality of the theatrical productions shall
equal or exceed the high quality productions that Manager has presented
at the Theatre during the past twenty (20) years.
6.2 Open to Public
The theatrical productions shall be open to the general public at a
reasonable admission price. The admission price shall be established at
a rate that encourages attendance by all economic segments of the
community while providing income that, when combined with other
sources of revenue, will fully fund the operation of the Program and the
maintenance obligations of Manager.
6.3 Volunteers
The Program shall be administered by experienced volunteers and/or
paid personnel capable of operating and managing the Property in good
condition, producing high quality theatrical productions and to
performing the fund raising and other tasks necessary to a successful
Program.
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6.4 Variety
The Program shall include a variety of theatrical, cultural or artistic
productions to ensure that the community is offered a wide range of
entertainment.
ARTICLE 7 ANNUAL BUDGET
7.1 Budgeting Schedule
7.1.1 Initial Budget Manager shall prepare and make available
to the City an annual budget (Budget) covering its planned
operations for each full twelve- month period from August 1
through July 31 during the Initial Tenn and any Extended
Term.
7.1.2 Annual Financial Report Manager shall make available
to City for inspection during normal business hours any
financial statement Manager is required to prepare pursuant
to State law.
7.2 Contents of Budget
The Budget shall state, as appropriate and in reasonable detail: (i) the
proposed rates and charges for the use of the Theater; (ii) all anticipated
revenues and sources of funds of Manager, including contributions; (iii)
the expenditures proposed to be made by Manager in fulfilling its
obligations pursuant to this Agreement; (iv) all other budgeted
expenditures of Manager, if any; (v) cash reserves, if any.
7.3 Records
Manager shall keep and maintain complete, accurate and customary
records and books of account on all sales and expenditures, whether for
cash or on credit, and all business transactions made with respect to the
Property during each year. These records shall be retained for a period of
not less than three (3) years after the end of the operating year (August 1
through July 31) during which the records or books were prepared. City
shall be entitled, upon reasonable notice and during business hours, to
inspect and make copies (at City's costs) of any records and books
required by this Section.
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7.4 Audit
City shall, once per year and at its cost, be entitled to conduct an audit
of all records and books of account required to be maintained pursuant
to this Agreement or State law.
7.5 Fiscal Policy
Manager will adhere to the fiscal policy that has characterized Manager's
use of the Property during the preceding twenty years. Manager agrees
to continue to maintain an account with sufficient funds to cover the
anticipated maintenance obligations of Manager during the following
twelve months (Maintenance Account). Manager also agrees that, should
revenue from ticket prices and other sources exceed the costs of
operating the Program and funding the Maintenance Account, the excess
funds shall be used exclusively to improve the quality of the Program, the
Property or the Equipment.
ARTICLE 8 USE OF PROPERTY
8.1 Permitted Use by Manager
In addition to the Program, Manager may conduct benefits, fund-raising
events, previews, receptions and other similar activities that are related
to the operation or funding of the Program, the presentation of any
artistic or cultural event or the improvement of the Property. Manager
may conduct incidental operations such as limited food service, the
service of alcoholic beverages as and to the extent permitted by law,
catering, concessions, and limited retail sales in conjunction with any of
the events or activities, and for the purposes, described above. The uses
and activities authorized in this Section are referred to as Permitted
Uses.
8.2 Use of Property By Manager
Except for the Reserved Periods, Manager shall have the exclusive right
to use or authorize the use of the Property. Manager may enter into
agreements with any individual or entity authorizing use of the Property
for Permitted Uses. Manager shall authorize use of the Property by any
individual, group or organization that owns residential or commercial
parcels in the vicinity of the Property for meetings or community events
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of limited duration provided the meeting or event will not interfere with
Manager's use of the Property.
8.3 Use of Property By Third Party
Manager shall permit Third Party use of the Property during all or a
portion of any Reserved Period for plays, performances, or
cultural/artistic activity in accordance with the provisions of this
Section.
8.3.1 Manager shall, within sixty (60) days after the Effective Date,
and every twelve months thereafter during the Term and any
Extended Term, provide City with a schedule identifying at
least three (3) two -week periods when the Property is
available for Third Party use.
8.3.2 City shall, after consultation with Manager, establish criteria
and procedures for selecting any Third Party to be granted a
license for use of the Property during all or a portion of any
Reserved Period. The criteria for Third Party use for
extended periods shall, in light of the nature and designation
of the Property, give priority to use by any qualified and
experienced non-profit theatrical production group or
organization comprised of Newport Beach residents.
8.3.3 City shall not approve the Third Party use of all or a portion
of the Property at any time other than a Reserved Period
without the express consent of the Manager. City shall only
authorize Third Party use of the Property pursuant to a
license agreement and subject to strict compliance with all
conditions of approval and any rules adopted by the
Community Services Department of City. The license
agreement shall specify that all Third Party use of the
Property is subject to the control and supervision by
Manager and shall establish conditions on Third Party use
that fully protect Manager and the Property. City shall
indemnify, defend and hold Manager harmless with respect
to any damage, loss or liability resulting from use of the
Property by any Third Party.
8.3.4 Manager shall determine the technical and supervisory
personnel, if any, whose presence and involvement is
required as a condition of permitting Third Party use of the
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Property and Equipment. Manager shall, in determining the
necessary technical and supervisory personnel, consider the
extent to which the Third Party intends to use the
Equipment and nature of the production to be presented by
the Third Party. The Manager shall require only the
personnel necessary to ensure that Third Party use will not
damage the Equipment and that Third Party use of the
Property or Equipment will not disrupt or impair the
Manager's use of the Property. Manager shall authorize the
Third Party to provide any technical or supervisory personnel
deemed necessary upon proof that the personnel are capable
and experienced. Manager shall provide necessary technical
and/or supervisory personnel upon request or in the event
that Third Party is unable to provide experienced and
capable personnel.
8.3.5 City shall, after consultation with Manager, establish a
uniform schedule of fees or charges (which may be changed
from time to time) to be paid by any Third Party for use of
the Property, use of the Equipment, or .to pay for the services
of qualified technical and/or supervisory personnel. City
shall retain revenue generated by fees and charges for use of
the Property and City reserves the right to modify or waive
fees charged any Third Party for use of the Property. City
shall transmit to Manager the revenue generated by use of
the Equipment and the service of technical or supervisory
personnel provided by or on behalf of the Manager. City
shall not, without the prior consent of the Manager, waive or
reduce fees or charges for use of the Equipment or the
services of technical or supervisory personnel provided by or
on behalf of the Manager.
8.4 Change of Use
Manager shall use the Property in full compliance with this Agreement
unless Manager has received the prior written consent of City authorizing
a use other than a Permitted Use. The consent may be withheld at City's
sole discretion.
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8.5 Compliance with Laws
Manager shall not use the Property in a manner likely to cause a public
or private nuisance, to damage the Property or equipment or to cause
injury to any person. Manager shall not violate any local, state or federal
law in the renovation, maintenance, management or operation of the
Property or Theatre.
8.6 Zoning and Planning
Manager shall be entitled to repair, alter, and modify the structures and
improvements on the Property in accordance with the provisions of the
Zoning Code, provided Manager complies with this Agreement. Manager
shall also use the Property in conformance with the Newport Beach
General Plan and all applicable ordinances and policies of the City.
8.7 Nondiscrimination
8.7.1 Manager shall not discriminate against any person or group
of persons, on account of race, color, creed, religion, gender,
sexual orientation, marital status, national origin, or
ancestry, in the operation, management, use or occupancy of
the Property.
8.7.2 Manager agrees not discriminate on the basis of gender,
sexual orientation, marital status, race, color, religion, creed,
ancestry or national origin of any person with respect to any
agreement, license, or contract related to the alteration,
repair, operation, use or management of the Property.
8.7.3 All contracts, licenses, and agreements between Manager
and any individual or entity with respect to the Property or
the Program shall contain non-discrimination provisions
substantially similar to this Agreement.
ARTICLE 9 REPAIRS AND MAINTENANCE
9.1 Manager's Obligations
Manager shall, at Manager's sole cost and expense, perform all routine
and recurring maintenance, including replacement if necessary, to keep
the theatrical stage, lighting, sound equipment, telephone equipment,
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theatre seats, kitchen equipment and appliances and furniture and
furnishings in good condition and repair.
9.2 Citv's Obligations
City will use reasonable efforts to maintain the Property consistent with
levels of maintenance during the past twenty years. City shall annually
inspect the property and, after consultation with Manager, determine the
nature and extent of the repairs and maintenance that should be
undertaken in the succeeding twelve months. City shall establish a fund
or account for purposes of funding necessary maintenance and repair of
the Property. City will also use reasonable efforts to repair any conditions
that would hinder Manager in the performance of its duties and
responsibilities. The maintenance and repair obligations of City
pursuant to this subsection are limited to the funds appropriated, during
any fiscal year, by the City Council for the express purposes specified in
this subsection. City shall perform the following routine and recurring
maintenance and repair subject to the provisions of this Section.
9.2.1 The maintenance of the exterior and interior surfaces of the
Theatre (including patching and resurfacing the roof
membrane and painting or other protective treatment of the
exterior wall of the Theater);
9.2.2 The maintenance of the public rest rooms (including repairs
or replacements of tile or rest room fixtures);
9.2.3 The maintenance of electrical systems serving the Theatre
and the repair and replacement of components;
9.2.4 The maintenance of all pipes and plumbing systems serving
the Property and the repair and replacement of components;
9.2.5 The maintenance of all building service equipment (includes
HVAC equipment, conveyance systems, and fire, life safety,
and emergency equipment) and the repair and replacement
of components;
9.2.6 The maintenance and repair of all carpeting, flooring, drapes,
window coverings and similar items;
9.2.7 The maintenance and repair of all exterior lighting,
landscaping, signage, parking facilities and hardscape;
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9.2.8 The provision of all janitorial services and supplies.
ARTICLE 10 STATUS AND MANAGEMENT OF MANAGER
10.1 Nonprofit Status
During the Term, Manager shall maintain its status as a California
public benefit nonprofit corporation in full compliance with the California
Nonprofit Corporation Law (California Corporation Code Section 5000 et
seq.). Manager shall also maintain its qualification as a tax-exempt
organization under 501(c)(3) of the Internal Revenue Code or any
successor statute.
10.2 Executive Committee
During the Term, Manager shall appoint an Executive Committee
consisting of no more than five (5) members. The Executive Committee
shall be authorized by Manager to interact with City and promptly
respond to problems or concerns expressed by City or members of the
general public relative to the operation of the Program.
ARTICLE 11 ALTERATIONS
Manager shall obtain the written consent of City prior to making any structural
alterations to the Property or any structure on the Property. Manager shall be
solely responsible for all costs and expenses incurred in making any such
alteration. All alterations shall be surrendered with the Property when this
Agreement expires or terminates. All structural alterations shall be made by a
licensed contractor.
ARTICLE 12 UTILITIES, TAXES, AND FEES
12.1 Public and Private Utility Services
City will pay all charges for all public or private utility services and all
sprinkler systems and interior protective services provided to or for the
Property. Manager will comply with the terms and conditions of
contracts relating to such services. City shall not be liable to Manager
for any failure or defect in the supply of any utility.
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12.2 Taxes, Assessments and Charges
Except as provided in Section 12.3, Manager is not responsible for any
taxes, assessments, fees, charges, and levies of every type and character,
including all interest and penalties, that may be imposed, assessed or
levied on the Property or any occupancy or use of the Property.
12.3 Possessory Interest
In accordance with California Revenue and Taxation Code Section
107.6(a) and Health and Safety Code Section 33673, City states that by
entering into this Agreement, a possessory interest subject to property
taxes may be created, and if so, that Manager shall pay any such tax or
assessment.
ARTICLE 13 LIENS
13.1 Timely Payment
Manager shall pay, prior to delinquency, for all work performed and
material furnished to the Property by Manager or on Manager's behalf
that may result in a lien on the Property.
13.2 Written Notice
Manager shall give City written notice of any claim or lien filed against
the Property and any action or proceeding instituted affecting the title to
the Property that is related to Manager's work on, or improvement of, the
Property.
ARTICLE 14 INDEMNIFICATION/INSURANCE
14.1 City Indemnity
City shall defend, indemnify and hold harmless Manager from and
against any and all claims, damages, and losses that are in any way
related to the condition of the Property, any maintenance or repair City is
required to perform pursuant to this Agreement, or any act or omission
of City. City's obligations do not extend to claims, damages or losses
that are proximately caused by the sole negligence, fraud or willful
misconduct of Manager.
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14.2 Manager Indemnity
Manager shall indemnify City with respect to any claim, damage or loss
arising from the sole negligence, fraud, willful misconduct of Manager or
any violation of law by Manager.
14.3 Liability
City shall not be liable to Manager for any loss of revenue, any loss of use
of the Property or for compensatory damages except for reimbursement
for any damage to the Equipment or other personal property owned by
Manager that is proximately caused by City.
14.4 Insurance
Manager shall maintain, throughout the Initial Term and any Extended
Term of this Agreement, general liability insurance coverage in an
amount not less than one million dollars ($1,000,000.00) per occurrence
and not less than two million dollars ($2,000,000.00) aggregate. The City
shall be named as an additional insured and shall be entitled to receive
thirty (30) days prior written notice of cancellation.
ARTICLE 15 DAMAGE BY FIRE OR CASUALTY
City shall have no obligation to repair or restore the Property to its original
condition in the event of damage or destruction to the extent of twenty percent
(20%) of the then full replacement cost of the Property. In the event City elects
to repair or restore the Property, then this Agreement shall continue in full
force and effect. In the event City elects not to restore the Property when
damage exceeds twenty percent (20%) of the full replacement cost, this
Agreement shall terminate.
ARTICLE 16 ASSIGNMENT
Manager may not assign this Agreement without City's prior written consent,
which consent may be withheld in City's sole discretion. Manager may grant or
approve any agreement or contract with any individual or entity to promote a
Permitted Use or facilitate the operation of the Program.
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ARTICLE
17.1
17 DEFAULTS, REMEDIES AND TERMINATION
Legal Actions
In addition to any other rights or remedies, either Party may
institute legal action to cure, correct, or remedy any default, to
recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Agreement. Any legal action
shall be filed in the County of Orange. The laws of the State of
California shall govern the interpretation and enforcement of this
Agreement.
17.2 Occurrence of Default
The following acts or omissions shall be considered material
breaches of this Agreement if Manager fails to cure the default
within thirty (30) days after written notice of default from City or, if
cure is not feasible within thirty (30) days, Manager has failed to
commence cure within thirty (30) days or fails to diligently proceed
to cure:
17.2.1 The failure of Manager to operate the Theatre in
compliance with the provisions of this Agreement.
17.2.2 The failure of Manager
specified in this Agreement.
17.3 Remedies
to maintain the Property as
If Manager has materially breached this Agreement then a Default
shall be deemed to have occurred, and City may give written notice
of termination to Manager, and on the date specified in the notice
this Agreement shall terminate. In addition to the right of
termination, City shall have the immediate right to reenter the
Property and take possession of the Theatre.
ARTICLE 18 ENTRY BY CITY
City may enter the Property at reasonable times for the purpose of inspecting,
servicing or posting notices, protecting the Property or the Theatre, or for any
other lawful purposes. City shall use reasonable care to avoid unreasonable
interference with the use of the Property during events open to the public.
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However, nothing in this Agreement shall be considered to alter or impair City's
authority to inspect the Property in the course of exercising its police powers
such as the enforcement of provisions of the Newport Beach Municipal Code.
ARTICLE
19.1
19 MISCELLANEOUS
Notices
All notices and other communications shall be in writing, shall be
sent by first class, registered or certified United States mail,
postage prepaid, and shall be deemed to have been given two (2)
days after the day of mailing, addressed:
(a) if to City:
(b)
City of Newport Beach
Attn: City Manager
3300 Newport Boulevard
Newport Beach, CA 92663
if to Manager:
Friends of Newport Theatre Arts Center
Attention: President
2501 Cliff Drive
Newport Beach, CA 92663
19.2 No Claims Against City
19.3
Nothing in this Agreement constitutes any consent or request by
City for the performance of any labor or services or the furnishing
of any materials to the Property
Integration
This Agreement represents the entire understanding between the
parties, and there are no agreements or representations between
the parties except those contained in this Agreement. This
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Agreement supersedes any prior negotiations, representations,
discussions or agreements between the Parties with respect to the
Property or the Theatre. Except as otherwise provided, no
subsequent change or addition to this Agreement shall be binding
unless in writing and signed by the Parties.
19.4 Severability; Consent
If a term of this Agreement or any application is declared invalid or
unenforceable by a court of competent jurisdiction, the remainder
of this Agreement shall not be effected.
Manager: Dated:
Q C, 0-61P/1-eA/\
Rae A. Cohen, President
Friends of Newport Theatre Arts Center
City of Newport Beach:
Gary Adams
Mayor of Newport Beach
Attest:
gip,4,0 7?) x4,4:
LaVonne Harkless
City Clerk
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VV\C(A/22 , 2001
Dated:
4•11 -`"7.►,2001
Appr ed as to Form:
Robert Burnham
City Attorney