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Operating Covenant 2004-0094741�r �v' V RECORDED AT THE R DURST OF CHIrArr TITLE -COMR4 SUBUNIS10N.DE0 .1111iiii 11111W e Poway Redevelopment Agency 13325'CMc Center Drive P.O. Box 789 Poway, California 92064 Order #33051208-U52 This 6103. DC * 100490094741 FEB'05, 2004 3:53 OFFICIAL RECORDS SAKDIESO COUNTY RECORDER'S OFFICE GREGORY 1, SMITH COUNTY RECORDER FEES: 0.00 l IIIIIIIIIIIIIIIII, IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIILIIIIIIIIIII it is exempt from thePayment ota pursuant to Government Code _Section OPERATING COVENANT THIS''OPERATING COVENANT is made'by POW,AY.- NIERMAN LIMITED PARTNERSHIP,; a California Limited Partnership (the "Participant'); in favor of the POWAY REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency "), as.of January 16, 2004. RECITALS Unrecorded loan agreement A. The Agency and the Participant have entered:into that - certain Agreement;re Operating Covenant'and Restrictive Covenants dated May 30, 2003 (the "Agreement "),.concerning certain.real property situated 'in the'Cityof Poway, California, as more fully described in Exhibit "A attached hereto and made a part hereof,(the "Property"). B. As referenced in the Agreement, the Pa"rticipantis required to execute an operating covenant with respect to the, Property in favor of the Agency. NOW, THEREFORE, the Participant agrees as follows: 1. Operating Covenant. The Participant hereby covenants and agrees to operate a first class retail shopping center on the Property ,(the "Facility"). The Participant shall cause the Facility on'the Property to.bc continuously operated during normal business hours (subject to temporary - interruptions for casualty losses, repairs, and the like) during the "Operating Period" defined herembelowi All uses conducted on the Property, including, without limitation, all activities undertaken,by the Participant;pursuant to this Operating Covenant, shall conform to all applicable provisions ofthe Poway Municipal Code, and the.recorded documents pertaining to and running with the Property, The,Operating Period sh511 commence on the date of this Operating Covenant and shall terminate flee (5),years thereafter; In the event that the;Participant repays in.full the loan made pursuantdo the Agreement,prior to the end ofthe term =of this Operating Period, the Operating Period shall be terrninated,as of theAate of such.payment, and the parties agree to execute and record a notice of termination which memorializes such termination. Except with'the prior written consent of DOCSOC \1012688x3\22345.0000 F M, io50 0 the Agency for each instance, which consent may be granted or withheld in the Agency's sole and absolute discretion; the failure of the Participant to operate the Facility as provided herein for ninety (90) or more' consecutive days shall, at the,Agency's option, constitute a Default hereunder; provided, however, that the Participant shall.not be in default of this Section 1 during any period that the Participant'is prevented from operating the Facility due to (i) required or necessary rehabilitation or remodeling of the Facility (provided that the period during which the Facility is not operated as a result of the rehabilitaiiori or remodeling of the Facility shall.in -no event exceed ninety (90) days withoutthe prior approval of the Agency), or (ii) events of force majeure as set forth in the Agreement. The term of the Operating Covenant shall be extended for each day of closure permitted hereunder. 2. Performance of Maintenance. a. Participant shall maintain the improvements and landscaping on the Property in accordance with the Maintenance Standards, as hereinafter defined. Said improvements shall include, but not be limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural elements identifying the Property and any and all other improvements on the Property. r b. The following standards ( "Maintenance Standards ") shall be complied with by Participant and its maintenance staff,, contractors or subcontractors: 1. The Improvements (as the term'is defined in the Agreement) shall "be maintained in conformance and in compliance with the approved Scope of Work and reasonable commercial development maintenance standards for similar projects, including but not limited to the painting and cleaning of all exterior surfaces and other exterior-facades in the improvements on'the Property. 2. The Improvements shall be maintained as required by this Section 1 in,good condition and in accordance with the custom and practice generally.applicable to comparable first -class commercial facilities similar to the Improvements located within the Southern California area. 3. Landscape maintenance shall include; but not limited to: watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and.shaping of trees and shrubs to maintain a healthy; natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; controLof weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking.for support of trees. 4. Clean -up maintenance shall include, but not limited to: maintenance of all sidewalks; paths,and other paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure thatall cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers. DOCSOCV 012688v3\22345.0000 5. All maintenance work shall conform.to all applicable federal and state Occupational. Safety and Health Act*standards and regulations for the performance of maintenance. 6. Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied in.strict accordance with all governing regulations. Precautionary measures shall be employed recognizing" that all areas are open to public °access. 3. Failure to Maintain Improvements. In the event Participant does not maintain the improvements on the Property in the manner set forth herein and in accordance with the Maintenance Standards, Agency and/or City shall have the right to maintain such :improvements, or to contract for the correction of such deficiencies, after written notice to Participant. However, prior to.taking any such action, Agency agrees to notify Participant in writing if the condition of said improvements do not meet with the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Participant to cure the deficiencies. Upon notification of any maintenance deficiency, Participant shall have thirty (30) days within which to correct, remedy or cure the deficiency. If the written notification states the,problem is urgent relating to the public.health and safety of the City or the Agency, then Participant shall have forty -eight (48) hours to rectify the problem. In the event Participant fails to correct, remedy; or cure or has not commenced correcting, remedying orcuring such maintenance deficiency after notification and after the period of correction has lapsed, then City and/or Agency shall have the right.to maintain such improvements. Participant agrees to pay Agency.such reasonable and documented third party charges and costs. Until so paid, the Agency shall have a lien on the Property for the amount of such charges or costs, which lien shall be perfected by the recordation of a "Notice of Claim of Lien" against the Property. Upon recordation of a Notice of a'Claim of Lien against the Property, such lien shall constitute a lien on the fee estate in and to the Property prior and superior to all other monetary liens except: (i) all taxes, bonds, . assessments, and other levies which, by law, would be superior thereto; (ii) the lien or charge of any mortgage, deed of trust, or other security interest then of record made in good faith and for value, it being understood that the priority of any such lien for, costs incurred to comply with this Agreement'"shall date from th'e;date of the recordation of.the Notice of Claim of Lien. Any such lien shall be subject and subordinate to any lease or sublease of the interest of Participant in the Property or any portion thereof and to any easement affecting the Property or any portion thereof entered into at any time (either before or after) the date of recordation of such a Notice. Any lien in favor of the Agency created or claimed hereunder is expressly made subject and subordinate to any mortgage or deed of trust made in good faith and for value, recorded as of the date of the recordation of the Notice of Claim of Lien describing such lien as aforesaid, and no such lien shall in any way defeat, invalidate, or impair the obligation or priority of any such mortgage or deed of trust, unless the mortgage or beneficiary thereunder expressly subordinates his - interest, of record, to such lien. No lien in favor of the Agency created or claimed hereunder shall in any way defeat, invalidate, or impair the obligation or priority of any lease, sublease or easement unless such instrument is expressly subordinated to such`lien. Upon foreclosure of any mortgage or deed of trust made in good faith and for value and recorded prior to the recordation of any unsatisfied Notice of Claim of Lien, the foreclosure - purchaser shall take title to the Property free of any lien imposed.by the Agency that has accrued up to the time of the foreclosure sale, and upon taking title to the Property, such foreclosure - purchaser shall only be obligated to pay costs associated with this Agreement accruing after the foreclosure- purchaser acquires title to the Property. If the Property is ever legally divided with the written approval of the Agency and fee title to various portions of the Property is held under separate ownerships, then the burdens of the maintenance obligations set forth herein and in this DOCSOCU 012688v3\22345.0000 -' . 1,6752, ' 0 Agreement arid the charges levied;bythe:Agency to reimburse the Agency for the cost of undertaking such maintenance obligations ofParticipant and its "successors and the lien for such charges shall be apportioned among the fee.owners of the various portions of,tlie,Property under different ownerships according to the square footage of the land contained'inthe respective portions of the Property owned by them. Upon apportionment, noiseparate'owner ofa portion of theTroperty shall have any liability, for the apportioned liabilities of any other separate owner of another portion of the Property, and the lien shall be similarly apportioned and shall.onlyconstitute a lien against theportion;of the Property owne&M fee by the owner who is liable for the apportioned charges levied by the Agency and secured by the apportioned lienand against no other portion ofthe Property. Participant acknowledges and agrees,City and Agency may also pursue any arid all. other remedies available in law or equity. Participant. shall be liable for any and all attorneys' fees, and other legal costs or fees incurred in collecting saidmaintenaiice costs. 4. Compliance,with`Law. Participant shall complywith all local, state and federal laws relating to the uses of or condition of the improvements;on the Property. Local laws for the purposes of this section shall include only.those ordinances which are nondiscriminatory in nature and applicable to the public welfare, health, safety and aesthetics. If any new local laws relating to uses of or condition of the improvements create a condition onsituation,that constitutes a lawful nonconforming use as-defined bylocal ordinance with respectto,the Property orany portion thereof, then so long,as.the lawful nonconforming use status remains in effect (i.e., until such lawful status is properly terminated by amortizationas,provided for in the new local law or. otherwise), Participant shall be entitled to enjoy the benefits of such lawful nonconforming use pursuant to the lawful nonconforming uses ordinance. 5. Nondiser`imitiation. The Participant by and for itself and any successors in interest covenantsthatthere shall be no discrimination against.or segregation:of any person or group of persons on account of race, color; creed; religion, sex, marital status; physical or mental disability or medical condition, national.origin or ancestry in the sale, lease, sublease; transfer, use, occupancy, tenure or enjoyment of the Property, nor,shall the Participant itself or'any person claiming under or through it establish or perniitanysuch practice orpractices'of discrimination or segregation with reference to the selection, location,'number, use of occupancy tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land and shall remain in effect in perpetuity. 6. Effect of Violation of the Terms and Provisions of this Operating Covenant. The covenants established in this Operating Covenant shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, as to those, covenants.which are for its benefit: The covenants contained in this Operating'Covenant shall remain in effect-for the periodsbf time specified therein. The Agehey is deemed the beneficiary of the terms and provisions ofthi's Operating Covenant and of the covenants running with the land, for and in its own rights and,for the purposes of protecting the interests ofthe community and other parties;,public:or private, in whose favor and for whose benefit this Operating Covenant and the covenants running with the land have been provided. The Operating Covenant and the covenants herein shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or.,interestadjacent to the Property; The Agency shall have the right, if the Operating Covenant or- covenants are breached,.to,exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedingsto enforce the curing of such breaches to which it or -any other beneficiaries of this Operating Covenant and covenants may be entitled. DOCSOC \101268843\22345.0000 1. Miscellaneous Provisions. a. If any provision of this OperatingCoverumt or portion thereof, or the application to any ,person or circumstances, shall,to' any extent be held'iitvalid „inoperative,or unenforceable; the remainder of this:Operating:Covenant „or the application of such provision�or pottionahereof to:any'other persons or circumstances, ahall not be.affected thereby; it shall:not be deemed that any such invalid' provision affects the consideration, for this Operating'Covenant; and each provision of this Operating Covenant shall be valid and enforceable'to the fullest extent permitted by law. b. This Operating Covenant shall be construed in accordance with1he laws of the State of California. C. This: Operating Covenant shall be bindingupon +and inure to the benefit of the successors and assigns of the Participant. d. In the event.actiowis instituted to enforce any of the provisions of this Operating Covenant, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment,, reasonable attorney's fees and,costs. 8. Effect of Operating;:Covenant. The covenants and. agreements established in.this Operating Covenant shall, without regard',to,technical classification and designation, run with'the land and be binding on each owner of.the Property and any successor in interest to the Property, or any part thereof (including eacfi;parcel thereof), for the benefit of and in favor of the Agency. PARTICIPANT: POWAY- NIERMAN LIMITED PARTNERSHIP, a California Limited Partnership By: Nierman Pomerado GP.,,LLC, a California 'Limited Liability Company, (Its General Partner). By: es S. Nierman, rustee of the S. Nierman Trust dated May 9; 1990„ (Its Manager) oocsocvoi 2683y3\22345.0000 S 1'67154 ACCEPTED'BY AGENCY' POWAY REDEVELOPMENT AGENCY, a.public M. C ATTEST: Age cy Secretary APPROVED AS TO FORM: — C�r AW Agency i nsel 6 DOCSOC\ 1012688v3\22345.0000 S 16755 0 CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California County of On \b Date personally appeared before me, MICHfltE PAULJNE HE(T132GOTi Commission N 1298219 -s Notary Public - California £ z San Diego County My Comm. Expires Mar23, 2005 Place Notary Seal Above I ss. plpersonally known to me 7 proved to me on the basis of satisfactory evidence to be the persons) whose name(s) &e subscribed to the with. Instrument and acknowledged to me t e/s e /they executed the same in is er heir thorized capacity(ies), and that by is er /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. my \mil official Signature OPTIONAL Though the information below . is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of muom here ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: P 1999 Noteral Wory A550Gia ,ou • 9350 De Solo Ave., PC, Box 2402 • Cha15woch CA 91313 -2402 • www.nationalnotory .org Prod No 5907 Rau,drr'. Cou To'I'Free 1.6016]6.692] .1 I ♦ 16756 � GALIFUKNIA ALL- VUKVUSt AGKNU1NLtUU1VItN,I State of California ) ss. County. of San Diego On February 4;`2004, before me, Sherrie D. Worrell, Notary°Public, personally'appeared James L. Bowersox; personally known to me .to be the person whose name is subscribed to -the within instrument and acknowledgedio,:me that he,executed'the. same in his authorized capacity, and that by his signature,on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS' my hand and, official seal. OPTIONAL Though'the information 6eloia;is not req@Td iviaiv,,it'may. prove valuable to ;persons I relying on the document and could prevent fraudulent removal; and reattachment of, this form to another document. Description of Attached' Document Title or Type, of Document: Operating Covenant Document. Date: January:16'.2004 Number of Pages: 8 Sidher(s) Other Than Named Above: James S. Nierman Capacity(ies)'Claimed by Signer Signer's Name: James L. Bowersox _ Individual _ Corporate Officer — Title(s): _ Partner-- Limited _ General _ Attorney-in=Fact _ Trustee _ Guardian:or Conservator Other: Signer is Representing: 0 1675" 0. EXHIBIT A TO OPERATING COVENANT LEGAL DESCRIPTION: OF PROPERTY PARCEL A: PARCELS 1, OF PARCEL MAP 'NO..I3714; IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY - RECORDER OF SAN DIEGO COUNTY, MARCH 12, 1985 AS FILE NO. 85- 0S0780 OF OFFICIAL RECORDS. PARCEL B: NON - EXCLUSIVE EASEMENTS FOR INGRESS AND EGRESS;AND FOR THE PASSAGE OF MOTOR VEHICLES INTO, OUT OF, ON, OVER AND ACROSS THOSE CERTAIN EASEMENTS DESCRIBED IN ARTICLE 1 OF THAT CERTAIN DOCUMENT ENTITLED "RECIPROCAL MUTUAL ACCESS EASEMENT AGREEMENT "RECORDED JULY 2, 1985 AS FILED NO. '85-238010 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDEWOF SAN DIEGO COUNTY'. APN: 317 - 153 -24 Exhibit A -1 DOCSOC\ 1012688v3\22345.0000