Operating Covenant Agreement 2012-0056367s
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CHICAGO TITLE COP.IPANY
AND WHEN RECORDED MAIL TO:
City of Poway
13325 Civic Center Drive
Poway, CA 92064 24646
Attn: City Manager
NO FEE DOCUMENT PURSUANT TO
GOVERNMENT CODE SECTION 27383
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DOC# 2012 - 0056367
11111111111111111111 111 1 11111111111111111111III111111111 IN
JAN 31, 2012 4:08 PM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
Ernest J. Dronenburg, Jr., COUNTY RECORDER
FEES: 72.00
PAGES: 20
OPERATING COVENANT AGREEMENT
(Toyota of Poway Operating Covenant)
This Operating Covenant Agreement (this "Agreement ") is made and entered into as of
January 30 , 2012, by and between the City of Poway, a municipal corporation (the "City "), and
Pinnacle Realty of California, LLC, a California limited liability company ( "Pinnacle "), with
reference to the following facts, purposes, and understandings.
RECITALS
A. Capitalized terms used herein are defined in Article 1 of this Agreement.
B. The Poway Redevelopment Agency (the "Agency ") is responsible for
implementing the redevelopment program in the Paguay Redevelopment Project Area (the
"Project Area ") pursuant to the Redevelopment Plan for the Paguay Redevelopment Project
Area, as amended (the 'Plan"). This Agreement is subject to the terms and conditions of the
Redevelopment Plan.
C. The City owns certain real property located at 13655 Poway Road, Poway,
California (the "City Site "). The legal description of the City Site is contained in Exhibit A
attached hereto and incorporated herein by this reference.
D. Pinnacle owns certain real property located at 13611 and 13631 Poway Road,
Poway, California (the "Tenant Site "). The legal description of the Tenant Site is contained in
Exhibit B attached hereto and incorporated herein by this reference.
E. The Agency and Pinnacle entered into that certain Disposition and Development
Agreement, dated as of August 17, 2010, (the "Disposition and Development Agreement ").
Subsequent to its execution, the Disposition and Development Agreement was assigned to the
City pursuant to that certain Assignment and Assumption Agreement executed by and between
the City and the Agency dated as of March 11, 2011 (the "City /Agency Assignment "). Pursuant
to the Disposition and Development Agreement Pinnacle is required to redevelop the City Site
and the Tenant Site, hereinafter collectively referred to as the New Toyota Site. The Disposition
and Development Agreement will result in the rehabilitation of approximately 45,000 square feet
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of existing improvements, an expansion of not more than 10,000 square feet of new
improvements, together with landscaping and appurtenant onsite and off -site improvements to be
operated as a first -class Toyota Brand automobile sales showroom, full service auto repair, and
auto body facility (collectively the "Improvements ") as approved by the City under Minor
Development Review Application 10 -33 and Minor Conditional Use Permit 10 -08.
F. Pursuant to the terms of the Disposition and Development Agreement, the City is
conveying a leasehold interest in the City Site under the Ground Lease, in substantially the form
attached to the Disposition and Development Agreement as Exhibit E (the "Ground Lease "),
which is being executed concurrently herewith.
G. Pinnacle intends to finance the costs of the Development with sources that include
but are not limited to Pinnacle's equity investment of not less than ten percent (10%) of the total
acquisition and development costs for the Improvements and an acquisition and rehabilitation
loan of Ten Million One Hundred Twenty -Six Thousand Dollars ($10,126,000) (the "TMCC
Loan") from Toyota Motor Credit Corporation, a California corporation ( "TMCC "). The TMCC
Loan has been disbursed in two components, an acquisition component consisting of Five
Million Dollars ($5,000,000) to fund the acquisition costs for the Tenant Site which will be
secured only by the Tenant Site (the "Acquisition Component of the TMCC Loan") and a
construction component of Five Million One Hundred Twenty -Six Thousand Dollars
($5,126,000) to fund construction costs associated with the redevelopment of the New Toyota
Site which will be secured by Pinnacle's fee interest in the Tenant Site. In addition to the TMCC
Loan, TMCC will provide Pinnacle an unsecured line of credit of up to One Million Four
Hundred Fifty Thousand Dollars ($1,450,000) to assist Pinnacle in its acquisition and
construction of the Tenant Site.
H. In order to ensure that the Improvements will operate on the New Toyota Site in
accordance with these conditions and restrictions, the City and Pinnacle desire to enter into this
Agreement.
THEREFORE, the City and Pinnacle hereby agree as follows.
ARTICLE 1.
DEFINITIONS
Section 1.1 Definitions. When used in this Agreement, the following
terms shall have the respective meanings assigned to them in this Article 1. All
terms not defined herein shall have the meaning set forth in the Ground Lease.
(a) "Agency" means the Poway Redevelopment Agency, a public body,
corporate and politic.
(b) "City Site" has the meaning set forth in Recital C.
(c) "Agreement" means this Operating Covenant Agreement, as may be
amended as set forth herein.
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(d) "Approved Security Interests" means any and all mortgages, deeds of
trust, and other real property security instruments placed upon the New Toyota Site by Pinnacle,
approved by the City pursuant to the Disposition and Development Agreement, Ground Lease
and this Agreement. Approved Security Interest shall mean any one of the Approved Security
Interests.
(e) "Certificate of Completion" means the certificate to be issued by the City
following completion of certain obligations in accordance with the DDA.
(f) "City" means the City of Poway, a municipal corporation.
(g) "Disposition and Development Agreement" or "DDA" means that certain
Disposition and Development Agreement dated as of August 17, 2010, by and between the
Agency and Pinnacle and recorded against the New Toyota Site, assigned to the City pursuant to
the City /Agency Assignment.
(h) "Effective Date" means the earlier of: (i) August 17, 2013; (ii) or the date
on which the Certificate of Completion for the Improvements has been issued by the City.
(i) "Event of Default" has the meaning set forth in Article 4 below.
0) "Ground Lease" has the meaning set forth in Recital F.
(k) "Lease Commencement Date" means the date of the City's execution of
the Ground Lease, or January.30, 2012.
(1) "New Toyota Site" means that certain real property consisting of both the
City Site and Tenant Site and as more fully described in Exhibits A and B attached hereto.
(m) "Parties" means, collectively, the City and Pinnacle.
(n) "Pinnacle" means Pinnacle Realty of California, LLC, a California limited
liability company.
(o) "Security Interest Holder" means the holder, or beneficiary, of any
Approved Security Interest.
(p) "Tenant Site" has the meaning set forth in Recital D.
(q) "Term" means the minimum twelve (12) year term of this Agreement,
commencing on the Effective Date and ending on the twelfth (121') year anniversary thereof.
Provided, however, the Term shall automatically be extended for consecutive one (1) year
periods until the occurrence of the earlier of. (1) the expiration of the term of the Ground Lease,
subject to any Extension Period pursuant to Section 2.2 of the Ground Lease, or (2) the payment
of all outstanding Total Rent and interest thereon pursuant to Section 3.1 of the Ground Lease.
(r) "Toyota Brand" means the brand of passenger cars licensed and sold under
the Toyota Division of the Toyota Motor Sales, U.S.A., Inc., a California corporation.
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(s) "Transfer" means: (i) any total or partial sale, assignment or conveyance,
or any trust or power, or any transfer in any other mode or form, of or with respect to the Ground
Lease, Pinnacle's leasehold or fee interest (as applicable) in the New Toyota Site or fee estate in
the Improvements or any part thereof or any interest therein; (ii) any total or partial sale,
assignment or conveyance, any trust or power, or any transfer in any other mode or form, of or
with respect to the membership interests in Pinnacle or any member of Pinnacle or any contract
to any of the same, including without limitation, any transfer or sale of any interest in Pinnacle
for financing purposes unless approved by the City as part of the approved Financing Plan under
the terms of the Disposition and Development Agreement (as defined therein); (iii) any merger,
consolidation, sale, lease, assignment or conveyance of all or substantially all of the assets of
Pinnacle; (iv) any action that results in the change, removal, replacement or otherwise of the
"Toyota Brand "; or (v) the subletting of part or all of the Improvements.
ARTICLE 2.
COVENANTS AFFECTING CONSTRUCTION AND USE
Section 2.1 Covenant for Continuous Operation.
(a) For the duration of the Term, Pinnacle hereby covenants and agrees to
operate (or as permitted under the terms of the Ground Lease, cause its successors or assigns to
operate) the Improvements on the New Toyota Site on a continuous basis, devoted to the sale of
new automobiles and trucks under the Toyota Brand, with manufacturer's approval as a factory -
authorized Toyota Brand dealership as the principal activity on the New Toyota Site. The sale of
used automobiles and trucks, and the servicing and repair of vehicles, including auto body repair,
as approved by the City under Minor Development Review Application 10 -33 and Minor
Conditional Use Permit 10 -08, may also be conducted on the Site as a secondary use. No other
uses may be made on the New Toyota Site during the Term without prior City Approval. The
requirements of this Section 2.1 shall run with the land.
(b) For the duration of the Term, and subject to the terms of Article 5 of the
Ground Lease, the Improvements shall be open for business to the general public, and Pinnacle
shall operate the Improvements on a continuous basis three hundred and sixty -five (365) days a
year, excluding holidays recognized as industry standard holidays. Notwithstanding the
foregoing, Pinnacle shall have no obligation to operate the Improvements in the event of: war,
insurrection, strike, lockout, riot, flood, earthquake, fire, quarantine restriction, freight embargo,
court order, severe and adverse weather, or any other similar cause beyond the reasonable control
and without the fault of Pinnacle (each a "Closure Event ") provided that such Closure Event has
a material adverse impact on Pinnacle's ability to operate the Improvements using commercially
reasonable efforts. The Parties agree and acknowledge that in no event shall Pinnacle's lack of
funds to operate the Improvements in accordance with this Agreement constitute a "Closure
Event ". Within three (3) business days following a Closure Event Pinnacle shall deliver to the
City a written notice of such Closure Event and Pinnacle's anticipated schedule for returning the
Improvements to operation in accordance with this Agreement.
Section 2.2 Hours of Operation. Pinnacle shall operate the Improvements
during the normal business hours for auto dealerships as determined by industry
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standards for auto dealerships of similar size and quality operating under the Toyota
Brand.
Section 2.3 Permitted Uses.
(a) During the Term of this Agreement, Pinnacle shall use and operate the
Improvements consistent with:
(1) the Disposition and Development Agreement and Ground Lease;
(2) all City and other governmental approvals;
(3) all applicable local, state, and federal laws;
(4) the Redevelopment Plan, as applicable; and
(5) any other agreement governing the New Toyota Site.
(b) Provided, however, all uses of the New Toyota Site shall not limit, impair,
or otherwise have a material adverse effect on the operation of the Improvements in accordance
with Section 2.1 and Section 2.2 above.
ARTICLE 3.
ON -GOING OBLIGATIONS
Section 3.1 Management Responsibilities; Operating.
Notwithstanding any right provided to the City pursuant to this Agreement, Pinnacle shall be
solely responsible for all management functions with respect to the New Toyota Site and the
Improvements constructed thereon, including, without limitation, the day -to -day operation of the
Improvements, security, maintenance, landscaping, and routine and extraordinary repairs to the
Improvements and the New Toyota Site. The City shall have no direct responsibility over
management of the Improvements or the New Toyota Site; however, Pinnacle shall operate the
Improvements, in accordance with this Agreement and the Ground Lease, in a manner
reasonably acceptable to the City. Pinnacle shall be solely responsible for the payment of all
operating expenses and costs relating to the operation of the Improvements and the New Toyota
Site in accordance with this Agreement, the Disposition and Development Agreement and the
Ground Lease, including, but not limited to, all maintenance and repair costs.
Section 3.2 Maintenance.
(a) Pinnacle hereby agrees that the New Toyota Site shall be maintained in a
neat and orderly condition to the extent practicable and in accordance with existing industry
health and safety standards (as such standards may evolve, or otherwise be adjusted, during the
Term), and that the Improvements shall be well maintained in good repair and working order,
and in a neat, clean and orderly condition. In accordance with the Ground Lease and the
Disposition and Development Agreement, from time to time, Pinnacle shall make all necessary
and proper repairs to the Improvements and the New Toyota Site. To the extent commercially
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reasonable, maintenance and repairs to the Improvements and/or the New Toyota Site shall be
performed during times when Pinnacle is not obligated to operate the Improvements as set forth
in Article 2 above. To the extent any repair or maintenance will require the Improvements to be
out of operation, and unavailable during the hours set forth in Section 2.2, above, Pinnacle shall
first obtain the prior written consent of the City, which shall not be unreasonably, withheld,
delayed, or conditioned; provided, however, Pinnacle shall not be required to obtain the City's
prior written consent in the event of an emergency or any repair necessary to prevent a threat to
health and safety of the general public. In such event, Pinnacle shall deliver a written notice to
the City within two (2) business days of such closure, setting forth, in reasonable detail, the
reason(s) the Improvements, or any portion thereof, are not in operation, and the schedule for
repair.
(b) Pinnacle shall maintain the Improvements and the New Toyota Site in
accordance with the following standards ( "Maintenance Standards ") for the duration of the Term:
(1) Landscape maintenance shall include, but not be limited to:
drought resistant 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; control of weeds in all planters, shrubs, lawns, ground covers, or
other planted areas; and staking for support of trees; and to the extent possible free of all
pesticides.
(2) Clean-up maintenance shall include, but not be 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 that all cuttings, weeds, leaves and other
debris are properly disposed of by maintenance workers.
(3) All maintenance work shall conform to all applicable federal and
state Occupational Safety and Health Act standards and regulations for the performance of
maintenance.
(4) Any and all chemicals, unhealthful substances, and pesticides to
the extent allowed under section (b)(2) above, 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.
(5) The Improvements and the New Toyota Site shall be maintained in
conformance and in compliance with the approved construction and architectural plans and
design scheme, as the same may be amended from time to time with the approval of the City, and
reasonable commercial development maintenance standards for similar projects, including but
not limited to: painting and cleaning of all exterior surfaces and other exterior facades
comprising all private improvements and public improvements to the curbline.
(6) The Improvements and the New Toyota Site shall be maintained as
required by this Section 3.2 in good condition and in accordance with the custom and practice
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generally applicable to comparable automobile dealership facilities located in the San Diego
Area.
Section 3.3 Taxes. Pinnacle shall pay, when due, all real and personal
property taxes and any and all other assessments assessed and levied on the New
Toyota Site, and shall remove any levy or attachment made on the New Toyota Site
and the Improvements following the Effective Date. Pinnacle may, however, contest
the validity or amount of any tax, assessment, or lien on the New Toyota Site or the
Improvements.
Section 3.4 Transfers.
(a) Pinnacle Propert y. During the Term of this Agreement, subject to the
terms of Article 7 of the Ground Lease and Article 6 of the Disposition and Development
Agreement, Pinnacle shall not make or create any Transfer, either voluntarily or by operation of
law, without the prior written approval of the City, which may be granted or denied in the City's
reasonable discretion. Any Transfer made in contravention of this Section 3.4(a) shall be void
and shall be deemed to be a material default of this Agreement by Pinnacle.
(b) Existence of Toyota Brand. To the extent that the Toyota Brand no longer
is in existence, the Parties hereby agree that any Transfers resulting therefrom must comply with
Section 7.4 of the Ground Lease.
(c) Approved Security Interest. Upon written request by Pinnacle, the City
shall consent to a Security Interest provided that: (1) such Transfer is permitted by the Ground
Lease; (2) the lien evidencing the Security Interest is subordinate to this Agreement, (3) the
proceeds of such Security Interest are used in connection with operation of the Property (as
reasonably determined by the City), (4) the Security Interest will not impair Pinnacle's ability to
comply with the obligations set forth in this Agreement, and (5) the Security Interest Holder
agrees, in writing, that in the event of default by Pinnacle, the City may, but shall have no
obligation to, cure such default according to the same rights provided to Pinnacle under the
documents evidencing the Security Interest.
(d) Rights of Security Interest Holders. The rights, duties and obligation of
Security Interest Holders contained in Article 9 of the Ground Lease are incorporated herein by
this reference and shall be applicable for the duration of the Term of this Agreement, as such
may be extended pursuant to the terms of 1.1(q) above.
Section 3.5 Non - Discrimination. Pinnacle covenants by and for itself and
its successors and assigns that there shall be no discrimination against or segregation
of a person or of a group of persons on account of race, color, religion, creed, sex,
sexual orientation, marital status, ancestry or national origin in the construction, sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of the New Toyota
Site, nor shall Pinnacle or any person claiming under or through Pinnacle establish
or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, vendees or employees in the New Toyota Site. The
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foregoing covenant shall run with the City Site and shall remain in effect in
perpetuity.
(a) In Deeds:
(1) "Grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of any basis listed in
subdivision (a) and (d) of Section 12955 of the Government Code, as those bases are defined in
Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955
and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the property herein conveyed, nor shall the grantee or any
person claiming under or through the grantee, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The
foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status,
paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall
be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the
Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1)."
(b) In Leases:
(1) "Grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of any basis listed in
subdivision (a) and (d) of Section 12955 of the Government Code, as those bases are defined in
Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955
and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the property herein conveyed, nor shall the grantee or any
person claiming under or through the grantee, establish or permit any practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The
foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status,
paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall
be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the
Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1)."
(c) In Contracts:
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(1) "There shall be no discrimination against or segregation of, any
person or group of persons on account of any basis listed in subdivision (a) and (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of
the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment
of the property nor shall the transferee or any person claiming under or through the transferee
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the land.
(2) Notwithstanding paragraph (1), with respect to familial status,
paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section
12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall
be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code,
relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the
Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall
apply to paragraph (1) ".
ARTICLE 4.
DF.FAI J .T
Section 4.1 Events of Default. Any of the following events, subject to the
applicable notice and cure period (if any), shall constitute an Event of Default by
Pinnacle:
(a) Failure to Operate Improvements. Pinnacle fails to operate the
Improvements in accordance with the use and operating standards set forth in Article 2 and
Article 3, above;
(b) Failure to Pay Annual Rent. Pinnacle fails to pay Annual Rent, as defined
in the Ground Lease, pursuant to the terms of Article 3 of the Ground Lease;
(c) Other Breach of Agreement. Pinnacle breaches any other material
provision of this Agreement, the Ground Lease, or the Disposition and Development Agreement;
or
(d) Unauthorized Transfer. Any Transfer occurs in violation of Article 7 of
the Ground Lease or any Transfer in violation of Article 6 of the Disposition and Development
Agreement.
Section 4.2 Notice and Cure; Remedies Upon Default. Upon any of
the above - described events, the City shall give Pinnacle the opportunity to cure the
default by delivering a written notice of default to Pinnacle, which notice shall
provide thirty (30) days, from the date thereof, to cure the default; provided,
however, if the default cannot be cured within thirty (30) days, Pinnacle shall not be
deemed to be in default if Pinnacle shall within such period commence to cure and
thereafter diligently prosecute the same to completion within ninety (90) days from
the date of the City's initial written notice to Pinnacle. Upon an Event of Default, the
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City shall have the right to enforce this Agreement by any or all remedies provided
by law or equity, including, but not limited to, specific performance, seeking an
action for damages, or any other right or remedy set forth in the Ground Lease or
Disposition and Development Agreement.
Section 4.3 Remedies Cumulative. No right, power, or remedy given by
the terms of this Agreement or, to the extent applicable, the Security Agreement, is
intended to be exclusive of any other right, power, or remedy; and each and every
such right, power, or remedy shall be cumulative and in addition to every other right,
power, or remedy given by the terms of any such instrument, or by any statute or
otherwise.
ARTICLE 5.
MISCELLANEOUS
Section 5.1 Term. The provisions of this Agreement shall apply to the
New Toyota Site for the entire twelve (12) year Term as defined in Section 1.1(q)
above; provided, however, that the nondiscrimination provisions of Section 3.5 of
this Agreement shall run with the City Site and shall remain in effect in perpetuity.
The issuance of the Certificate of Completion, or the termination of the Disposition
and Development Agreement, or termination of the Ground Lease, shall in no way
limit the Term of this Agreement. Notwithstanding any provision herein to the
contrary (if any), this Agreement shall bind any successor, heir or assign of Pinnacle,
whether a change in interest occurs voluntarily or involuntarily, by operation of law
or otherwise, except as expressly released by the City.
Section 5.2 Covenants to Run With the Land. The City and Pinnacle
hereby declare their express intent that the covenants and restrictions set forth in this
Agreement shall run with the land, and shall bind all successors in title to the New
Toyota Site, provided, however, that on the expiration of the Term of this Agreement
said covenants and restrictions shall expire (excluding those provisions that
expressly survive the termination of this Agreement). Each and every contract, deed
or other instrument hereafter executed covering or conveying the Improvements or
the New Toyota Site or any portion thereof shall be held conclusively to have been
executed, delivered and accepted subject to such covenants and restrictions,
regardless of whether such covenants or restrictions are set forth in such contract,
deed or other instrument, unless the City expressly releases such conveyed portion of
the New Toyota Site from the requirements of this Agreement.
Section 5.3 Pinnacle to Indemnify Agency and City. Except as expressly
provided below, Pinnacle shall indemnify, defend (with counsel reasonably
approved by the Agency and the City), and hold the Agency and the City, and their
respective council members, board members, officers, employees, agents, and
successors (collectively, the "Indemnified Parties ") harmless against any and all
claims for bodily injury, death or property damage, or any other cause of action,
which arise out of or in connection with the ownership of, occupancy in, or operation
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of, the Improvements and the New Toyota Site by Pinnacle or its contractors,
subcontractors, agents, employees or tenants. This indemnity obligation shall not
extend to any claim to the extent arising solely from the Indemnified Parties' gross
negligence or willful misconduct, and shall survive the termination of this
Agreement.
Section 5.4 Recording and Filing. The City and Pinnacle shall cause this
Agreement, and all amendments and supplements to it, to be recorded against the
New Toyota Site in the Official Records of the County of San Diego. As applicable
from time to time, Pinnacle shall execute such documents necessary for the
Operating Covenant to remain in effect.
Section 5.5 Execution of Other Agreements. Pinnacle agrees that it has
not and will not execute any other agreement with provisions contradictory of, or in
opposition to, the provisions of this Agreement, including, but not limited to, any
Approved Security Interest documents, and that in any event, the provisions of this
Agreement are paramount and controlling as to the rights and obligations set forth
and supersede any other requirements in conflict herewith.
Section 5.6 Amendments, Modifications, and Waivers. This Agreement
may not be amended, modified or changed, nor shall any waiver of any provision
hereof be effective, except by an instrument in writing and signed by Pinnacle and
the City, and if applicable approved by the City Council.
Section 5.7 Waiver. The City's waiver of any term, covenant, or condition
shall not be deemed to be a waiver of such term, covenant or condition of any
subsequent breach of the same or any other term, covenant or condition. The City's
failure to exercise any right, option or privilege hereunder shall not be deemed a
waiver of such right, option or privilege nor shall it relieve Pinnacle from (1) its
obligation to perform each and every covenant and condition on its part to be
performed, or (2) from any damages or other remedy for failure to perform the
obligations of this Agreement.
Section 5.8 Entire Understanding of the Parties. This Agreement (together
with the Disposition and Development Agreement and the Ground Lease) constitutes
the entire understanding and agreement of the Parties with respect to the operation of
the Improvements and the New Toyota Site. In the event of any conflict between the
terms of this Agreement and the Disposition and Development Agreement and the
Ground Lease, the terms of the Ground Lease shall prevail. The Parties and their
counsel have read and reviewed this Agreement and agree that any rule of
construction to the effect that ambiguities are to be resolved against the drafting
party (including, but not limited to Civil Code Section 1654, as may be amended
from time to time) shall not apply to the interpretation of this Agreement.
Section 5.9 Severability. If any term, provision, covenant or condition of
this Agreement is held in a final disposition by a court of competent jurisdiction to
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be invalid, void or unenforceable, the remaining provisions shall continue in full
force and effect.
Section 5.10 Governing Law. This Agreement shall be governed by the
laws of the State of California.
Section 5.11 Time. In all matters under this Agreement, the Parties agree
that time is of the essence.
Section 5.12 Notice. Formal notices, demands, and communications between the City
and Pinnacle shall be in writing and shall be sufficiently given if and shall not be deemed given
unless dispatched by registered or certified mail/return receipt, or delivered personally, to the
principal offices of the City and the Tenant as follows:
City: City of Poway
13325 Civic Center Drive
Poway, CA 92064
Attn: City Manager
Pinnacle: Pinnacle Realty of California, LLC
c/o Pinnacle Realty of Louisiana, L.L.C.
13510 I -10 Service Road
New Orleans, LA 70128
Attn: Troy Duhon
Pinnacle Realty of California, LLC
13670 Poway Road
Poway, CA 92064
Attn: Troy Duhon
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected party may from time to time designate by mail as provided in this
Section 5.12. No party shall evade or refuse delivery of any notice.
Section 5.13 Discretion Retained by City. The City's execution of this Agreement does
not constitute approval by the City in any manner and in no way limits the discretion of
the City in the permit and approval process in connection with the development or
operation of the New Toyota Site.
Section 5.14 No Third Party Beneficiaries. This Agreement is not intended to create,
nor shall it be in any way interpreted or construed to create, any third party beneficiary
rights in any person not a party hereto.
Section 5.15 No Partnership. This Agreement shall not be construed to constitute any
form of partnership or joint venture between the Parties.
12
24658
Section 5.16 Article Headings. Article headings are for convenience only and are not
to be used to interpret this Agreement.
Section 5.17 Multiple Originals; Counterparts. This Agreement may be executed in
multiple originals, each of which is deemed to be an original, and may be signed in
counterparts.
[Remainder of Page Left Intentionally Blank]
13
24669
IN WITNESS WHEREOF, this Agreement has been executed, in triplicate, by the Parties on the
date first above written.
APPROVED AS TO FORM:
GOLDFARB & LIPMAN, LLP
Special Counsel to the City
PINNACLE:
PINNACLE REALTY OF CALIFORNIA, LLC, a
California limited liability company
IN
Troy Duhon, Manager
CITY:
CITY OF POWAY, apublic municipal corporation
IAn
14
Penny Riley, City Manager
24660
IN WITNESS WHEREOF, this Agreement has been executed, in triplicate, by the Parties on the
date first above written.
PINNACLE:
APPROVED AS TO FORM:
GOLDFARB & LIPMAN, LLP
IM
Special Counsel to the City
PINNACLE REALTY OF CALIFORNIA, LLC, a
California limited liability company
By:
Troy Duhon, ager
CITY:
CITY OF POWAY, a public municipal corporation
In,
14
Penny Riley, City Manager
2466
LO Sit'
�
�T �`� �
Ci OF 4519LEWS
t
-- 11 �-
On efore me, � a� / C otary Pubh , W"
personally appe ed 1\1 , who proved to me on the
basis of satisfactory evidence to be th 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 signature(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 eMi€v that the
foregoing paragraph is true and correct. W u io fc( f7a,
WITNESS my hand and official seal.
STATE OF CALIFORNIA
COUNTY OF
My
L i 1�tj.-Ly"
On , before me, , Notary Public,
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 signature(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.
Notary Public
1552\10\846776.4
.24662
IN WITNESS WHEREOF, this Agreement has been executed, in triplicate, by the Parties on the
date first above written.
PINNACLE:
APPROVED AS TO FORM:
GOLDFARB & LIPMAN, LLP
Special Counsel to the City
PINNACLE REALTY OF CALIFORNIA, LLC, a
California limited liability company
Troy Duhon, Manager
CITY:
CITY OF POWAY, a public municipal corporation
LE
14
24663
STATE OF CALIFORNIA
COUNTY OF
On �GtnuarN 3 o�,� of a- , before me, Carol S . Le44 ,Notary Public,
personally appeared �a� (L: leH , who proved to me on the
basis of satisfactory evidence to be the person(s4 whose name(0 is /am subscribed to the within
instrument and acknowledged to me that j= /she /thy executed the same in 1*/her /ter
authorized capacity(o), and that by 1s/her/tl�& signature(or) on the instrument the person(>O, or
the entity upon behalf of which the person(.x) 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.
LCAROL S. LEGG
IS Commission # 1934186
Ndwy Public - California
San Diego County
M Cow Ex*n AN 28.2016
STATE OF CALIFORNIA
COUNTY OF
Notary Public
On , before me, , Notary Public,
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 signature(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.
Notary Public
1552 \10 \846776.4
24664
..1: Y
LEGAL DESCRIPTION OF CITY SITE
The land is situated in the State of California, County of San Diego, City of Poway, and is
described as follows:
Parcel A:
Parcel 2, in the City of Poway, County of San Diego, State of California, as shown at Page
15255 of Parcel Maps, filed in the office of the County Recorder of San Diego County,
June 6, 1988.
Parcel B:
An easement for ingress and egress, over, along, and across that portion of Parcel 1 in the City of
Poway, County of San Diego, State of California, as shown at Page 15255 of
Parcel Maps, filed in the Office of the County Recorder of San Diego County, June 6,
1988, delineated as "mutual ingress and egress easement reserved hereon" on said Parcel Map
15255.
Assessor's Parcel No: 317 -190 -21/45
FEW
2466
EXHIBIT R
LEGAL DESCRIPTION OF TENANT SITE
The land is situated in the State of California, County of San Diego, City of Poway, and is
described as follows:
For APN /Parcel ID(s): 317 - 190-43 and 317 - 190-44
PARCEL A:
THE NORTH 1.35 OACRES OF THE WEST 4 ACRES OF THE NORTHEAST QUARTER OF THE
SOUTHEAST QUARTER OF SECTION 13, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN
BERNARDINO MERIDIAN, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF.
EXCEPT THE NORTH 50 FEET
ALSO EXCEPTING THAT PORTION CONVEYED TO THE CITY OF POWAY BY DEED RECORDED
OCTOBER 1, 1987, FILE NO. 87- 555826 OF OFFICIAL RECORDS.
PARCEL B:
PARCEL 1 OF PARCEL MAP NO. 15255 IN THE CITY OF POWAY, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF AS FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 6, 1988.
EXCEPTING OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND
CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT
TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE SITE LYING MORE
THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO
THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR
MINERAL FROM SAID SITE OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE
EITHER THE SURFACE OF THE SITE OR ANY PORTION THEREOF WITHIN 500 FEET OF THE
SURFACE FOR ANY PURPOSES OR PURPOSES WHATSOEVER, OR TO USE THE SITE IN SUCH A
MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE SITE.
PARCEL B -I
AN EASEMENT FOR INGRESS AND EGRESS, OVER, ALONG AND ACROSS THAT PORTION OF
PARCEL 2 OF SAID PARCEL MAP NO. 15255, IN THE CITY OF POWAY, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, JUNE 6, 1988, DELINEATED AS "MUTUAL INGRESS AND EGRESS EASEMENT
RESERVED HEREON."
Im