2022/11/16 Agreement COVENANTS. CONDITIONS. AND RESTRICTIONS AFFECTING INTERESTS IN REAL PROPERTY - 27990 Bradley Rd, Menifee - SB Diner LLC, Black Bear DinerPLEASE RECORD AND WHEN RECORDED
RETURN TO:
CITY OF MENIFEE
29844 Haun Road
Menifee, CA 92586
Attn: City Clerk
2A22-A472784
11/16/2022 0l:10 PlI Fee: i 0.0O
PaE€ I of 19
Recorded in 0ff i cia I Records
County of R.ivcrsidePetcr Aldana
Assessor-County C I Grk-Recorder
lilt lut [Httfi t[,llifl lffi l,tllffi ] il I
734
lspace above this line for Recorder's use onlyl
lRecorded for the benefit of the City of Menifee
and exempt from recording fees pursuant to
Government Code Section 273831
COVENANTS . CONDIT IONS. AND RESTRICTIONS
AFFECT ING INTERESTS I N REAL PROPE RTY
This COVENANTS, CONDITIONS, AND RESTRICTIONS AFFECTING
INTERESTS lN REAL PROPERTY (the "Covenant") is entered into as of this september
21 , 2022, by and between the clTY oF MENIFEE, a California municipal corporation
("City"), anO SB DINER LLC., a California corporation ("Developer") (individually a
"Party" and collectively lhe "Parties")
REc!IAts
A. Developer has a leasehold interest in that certain real property consisting
of approximately six thousand, four hundred seventy-six (6,476 sf), at 27990 Bradley
RoaO, in the city of Menifee, county of Riverside, State of california, which is more
particularly described in the legal description attached hereto as Exhibit "A" and
incorporated herein by this reference (the "Site").
B.OnoraboutSeptember2l,2022,CityandDeveloperenteredintothat
certain unrecorded agreement captioned "Agreement to Enter into Covenant to Operate
and to Share Sales Tix Revenue" (the "Agreement") authorizing the recordation of this
covenant against the site upon the timely satisfaction of the "covenant conditions"
identified therein.
c. subject to the terms and conditions hereof and of the "Entitlements" (as that
term is defined below), Developer has agreed to construct certain tenant improvements
and the Site and open and operate thereon a Black Bear Diner restaurant (the
"Restaurant").
D. ln consideration for Developer's encumbrance of the Site by this covenant
and Developer's performance of its obligations hereunder, city has agreed to rnake
certain payments io Developer, the amount of which are measured by the "Sales Taxes
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From the Site" (as that term is defined below) generated by the operation of the
Restaurant on the Site. City and Developer have agreed that the portion of Sales Taxes
From the Site required to be paid by City to Developer hereunder during each "Fiscal
Year" of the "Operating Period" (as those terms are defined below) provided for herein is
a fair exchange for the consideration to be furnished by Developer to City in that Fiscal
Y ear.
cov ENANTS
Based upon the foregoing Recitals, which are incorporated herein by this reference
and are acknowledged by the Parties as true and correct, and for other good and valuable
consideration, the receipt and sufficiency of which is acknowledged by both Parties, City
and Developer hereby agree as follows:
1 DEFINED TERMS
The following terms when used in this covenant shall have the meanings set forth
below:
The term ,,Agreement,' shall have the meaning ascribed in Recital B of this
Covenant.
The term "Commencement Date" shall mean the first day of the flrst month
following the date City issues to Developer a Certificate of Occupancy for the Restaurant
The term "Covenant Payments" shall mean the amounts to be paid by City to
Developer with respect to each Fiscal Year of the Operating Period'
The term ,,Govenant Payments cap Amount" shall have the meaning ascribed
in Section 4.1.1(b) of this Covenant.
The term ,.Default,, shall have the meaning ascribed in Section 5.1 of this
Covenant.
The term ,,Entitlements" shall mean those discretionary city land use permits and
approvals (including all conditions of approval therein) required to authorize development
and operation of thi Restaurant on the Site, as the same may be amended from time to
time.
The term "Fiscal Year" shall mean City's fiscal year, which commences on July 1
and ends on the next succeeding June 30
The term ,,Holder,, shall have the meaning ascribed in section 5.'1(b) of this
Covenant.
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The term "Quality of Life Measure DD Tax" shall mean the sales and use taxes
received by City as a result of Ballot Measure DD, which was approved in the November
2016 election and authorizes City to impose a sales tax of one percent (1%) to fund
general City services.
The term "Municipal Code" shall mean the Menifee Municipal Code'
The term "Operating Period" refers to the period between the Commencement
Date and the Termination Date.
The term "Restaurant" shall have the meaning described in Recital C.
The term ,,Site" shall have the meaning ascribed in Recital A of this covenant.
The term ,,sales Taxes From the site" means the amount equal to the sales and
use taxes that are generated from sales occurring on the Site on which sales or use taxes
are imposed pursuant to applicable california law in each Fiscal Year during the
Operating Period which are actually received by City from the State Department of Tax
and Fee Administration, but excluding any Measure DD Tax. ln connection therewith:
(i) Developer shall timely report, and shall cause its
tenants (if any) to report, all sales and use taxes from the Site to the State Department of
Tax and Fee Administration in accordance with the laws, rules, and regulations applicable
to such reporting.
(ii) Sales Taxes from the Site shall be deemed to have
been paid by the state Department of Tax and Fee Administration to city if and to the
exteni the Siate Department of Tax and Fee Administration elects to offset the payment
of any such Sales Taxes From the Site against any other obligation of City'
The term "Maintenance Standards" shall have the meaning ascribed in Section
3.3 of this Covenant.
(iii) Developer acknowledges that the State Department of
Tax and Fee Administralion makes payments to City based on both actual and anticipated
sales and use tax revenues and that the State Department of Tax and Fee Administralion
makes periodic reconciliations. The determination of Sales Taxes From the Site for any
annual, quarterly, or other period shall be subject to theliming and reconciliation process
i"r"t"o ti, the jrocessing by the State Department of Tax and Fee Administration of
payments of such Sales iaxes From the Site to City. Any adjustments resulting from any
interim or estimated determination of Sales Taxes From the Site for any annual, quarterly,
or other period shall be reconciled by the Parties as soon as practicable without inclusion
of, or any obligation to pay, interest.
(iv) Sales Taxes From the Site shall be determined based
on actual amounts received by City based only on City's share of the State sales and use
Lx applicable to the Site (which, is of the Effective Date, is 1% of the taxable amo-unt).
Srtui'f"*". From the Site shall not include (a) amounts paid to City by the State
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Department of Tax and Fee Administration derived from any sales tax overrides or special
tax amounts received by City, such as Quality of Life Measure DD Tax, or property taxes,
or (b) any administrative fees or charges imposed by the State Department of Tax and
Fee Administration that reduce the actual amounts of sales and use taxes received by
City.
(v) Developer shall, and shall cause its tenants (if any) to'
keep full and accurate books of accounl, records, and other pertinent data showing all
gross income earned upon the Site that is reportable for California sales and use tax
purposes, including all documents required to be maintained by the State of California for
sales and use tax purposes.
(vi) Developer shall furnish, and shall cause its tenants (if
any) to furnish, to city true and correct photocopies of its quarterly california sales and
use tax returns at the time each is filed with the State of California, together with a copy
of all checks or wire transfers or other forms of transfer of funds sent for such payment of
sales and use taxes.
The term ,,Termination Date" shall mean the date that is the earliest of (i) the date
that is three (3) years following the commencement Date, (ii) the date that the covenant
payments CapAmount is paid in full; or (iii) the date on which this Covenant is terminated
puisuant to Sections 5.2 or 5.3 of this Covenant, as applicable.
2. coNDlTl ON TO DE VELOPER'S IGHT TO REC EIVE COVE NANT
PAYMENTS
2 'l Outside Dates. Notwithstandin g any other provision set forth in this
Covenant, and sub.iect to exte nsion for events of force majeure as provided in Seclion 6.6
of this Covenant, (i) if the Co mmencement Date does not occur before the date that is
twelve ( 12) months after the d ate of this Covenant, or (ii) if a building permit is not issued
for the Restaurant within thirty (30 ) days after the Effective Date, either Developer or City
may terminate this Covenant by delivery of written notice of termination to the other Party
and, in such event, neither Party shall hav
other Party arising out of this Covenant.
e any further rights against or obligations to the
2.2 Ooeni o Date As a condition precedent to Developer's right to receive the
Covenant Payments, Developer shall be
accordance with the development plan set fo
and incorporated herein by this reference,
Restaurant to members of the public within
Date
required to develop the Restaurant in
rth in Exhibit "B", which is attached hereto
and commence operations and open the
thirty (30) days after the Commencement
Covenant, ceases to operate a Restaurant on the
that is permitted by this Covenant, then this Ag
such operation is discontinued (other than by rea
2.3 Opera tinq Condition. lf Develo per, or any assignee permitted by this
Site other than by reason of any closure
reement shall terminate as of the date
son of a closure that is permitted by this
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3.1 Continuou Ooeration. Durin g the Operating Period, Developer covenants
and agrees to continuously operate the Restaurant on the Site, serving, at a minimum,
lunch ind dinner, seven (7) days a week (subject to temporary interruptions for casualty
losses, repairs, labor unrest, and the like, provided, however, that no such interruptions
shall continue for more than five (5) days without city's prior written consent, which
consent may be withheld in City's sole and absolute discretion during the entire Operating
Period).
,,Maintenance standards"). During such period, Developer shall not abandon any
portion of the Site or leave the Site unguarded or unprotected, and shall not otherwise act
or fail to act in such a way as to unreaionably increase the risk of any damage to the Site
or of any other impairment of City's interest set forth in this Covenant. During the entire
Operating period, Developer, at iis sole cost and expense shall maintain the landscaping
on the Siie in compliance with the approved landscape plans'
n aff Land During the entire Operating
nd maintain the Site and the
in first class condition and
3.3 intenance Re
Period, Developer, at its sole cost and expense, shall keep a
imp rovements thereon and all facilities appurtenant thereto
repair, consistent with Develope r's other restaurants in Temecula' such as Zoro's
Mediterranean, and free from a ccumulations of debris, weeds, graffiti, and waste
materials, with landscaping in a healthy condition, and shall otheruise fully comply with
the Site's maintenance standards est ablished in the Entitlements (collectively, the
3.4 Failure to Maintain Site and Res ura nt. ln the event Developer does not
maintain the Site or the Restaurant in the manner set forth herein and in accordance with
the Maintenance Standards, City shall have the right,but not the obligation, to maintain
such pr ivate and/or public improvements, or to co ntract for the correction of such
deficien ctes,in accordance with the provisions of this Section 3.4.City shall notify
Developer in writing if the condition of said improvements do not meet with the
Maintenance Standard s and to specify the deficiencies and the actions required to be
3.2 Use Restriction. During the entire operating Period, the site shall not be
put to any use other than the operation of the Restaurant and uses ancillary thereto.
ln the event Developer or any person or entity acting on behalf of Developer fails
to correct, remedy, or cure after notification and after the period of correction has lapsed
taken by Developer to cure the deficiencies. subject to the following sentence, upon
notification of any maintenance deficiency, Developer shall have thirty (30) days within
which to correcti remedy or cure the deficiency. lf the written notification states the
frone;n is urgent relating to the public health and safety of City, then Developer shall
'have forty-eight (48) hours to correct, remedy, or cure the problem'
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Covenant) and no further payments shall be due under Section 4.1 below by reference to
Sales Taxes From the Site generated in any calendar quarters after such date.
3. DEVELOPER'SOBLIGATIONS.
(or, for deficiencies that cannot reasonably be corrected, remedied, or cured within such
period, if Developer or any person or entity acting on behalf of Developer has not
commenced correcting, remedying or curing such maintenance deficiency within such
period and diligently pursued such correction, remedy or cure to completion), then City
shall have the right to maintain such improvements. Developer agrees to pay City such
charges and costs. Until so paid, City shall have a lien on the Site 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 Site. Upon recordation of a Notice of a Claim of Lien against the Site,
such lien shall constitute a lien on the fee estate in and to the Site 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
Covenant shall date from the date of the recordation of the Notice of Claim of Lien. Any
lien in favor of City created or claimed hereunder is expressly made subject and
subordinate to the lien of 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. 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
foreclosu re-purchaser shall take title to the Site free of any lien imposed by City that has
accrued up to the time of the foreclosure sale, and upon taking title to the Site, such
foreclosure-pu rchaser shall only be obligated to pay costs associated with this Covenant
accruing after the foreclosure-purchaser acquires title to the Site. Developer
acknowledges and agrees City may also pursue any and all other remedies available in
law or equity. Developer shall be liable for any and all attorneys'fees, and other legal
costs or fees incurred in collecting said maintenance costs.
3.5 Continued Operation of Beslauant. Durin g the entire Operating Period,
Developer shall operate the Dine- in area of the Restaurant. Developer shall also use its
best efforts to review and hire Restaurant employees from Menifee or the local area, to
the extent legally permissible.
3.6 Comolian with Laws. Duri ng the entire Operating Period, Developer shall
construct and operate the Restaurant on the Site in conformity with all applicable federal,
state (including without limitation the California Civil Code, the California Government
Code, the California Health & Safety Code, the California Labor Code, the California
Public Resources Code, and the California Revenue & Taxation Code), and local laws,
ordinances, and regulations (including without limitation City standards relating to the
placement of storage containers), provided that Developer does not waive its right to
challenge the validity or applicability thereof to Developer or the Site. The operation of
the Restaurant shall be in compliance with all of the requirements of any permits issued
by City for the Restaurant, including, without limitation, all of the conditions of approval
issued in connection therewith.
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Nothing herein constitutes a representation or warranty by City that the
construction of the Restaurant is not a "public work" or otherwise subject to California
Health and Safety Code Sections 33423 through 33426, or Chapter 'l of Part 7 of the
California Labor Code (commencing with section 1720), and all applicable statutory and
regulatory provisions related thereto, and Developer expressly waives any right of
reimbursement for any "increased costs" under California Labor Code Section 1781 or
otheMise with respect to the Restaurant or Developer's development thereof. Developer
shall indemnify, defend, and hold City and City's representatives, volunteers, officers,
officials, members, employees, and agents harmless, including, but not limited to,
litigation costs, expert witness fees, and reasonable attorneys'fees, from and against any
and all claims pertaining to the payment of wages in connection with Developer's
development of the Restaurant on the Site or failure to comply with federal or state labor
laws, regulations, or standards.
3.7 Non-Disc rimination. ln the develo pment, opening, and operation of the
Restaurant, Developer agrees not to violate applicable laws that prohibit discrimination
against any person or class of persons by reason of gender, sexual orientation, marital
status, race, color, creed, mental or physical disability, religion, age, ancestry, or national
origin.
3.8 lndemnification of City. Develo per shall defend, indemnify, assume all
responsibility for, and hold City, and City's representatives, volunteers, officers,
employees and agents, harmless from any and all claims, demands, damages, defense
costs or liability of any kind (including attorneys' fees and costs), that arise from
Developeis operation of the Site orwhich may be caused by any acts or omissions of the
Developer under this Covenant, whether such activities or performance thereof be by
Developer or by anyone directly or indirectly employed or contracted with by Developer
and whether such damage shall accrue or be discovered before or after termination of
this Covenant including, but not limited to, Developer's failure to pay, if required,
prevailing wages on the construction and development of the Restaurant. Developer shall
be solely responsible for determining and effectuating compliance with prevailing wage
laws, and the City makes no representation as to the applicability or non-applicability of
any of such laws to the development and construction of the Restaurant or any part
thereof. Developer hereby expressly acknowledges and agrees that City has not
previously affirmatively represented to Developer or its contracto(s), in writing or
otherwise, in a call for bids or otherwise, that the development or construction of the
Restaurant is not a "public work," as defined in Section 1720 of the Labor Code.
4. OBLIGATIONS OF CITY.
4.1 Covenant Payme nts to Develooer
4.'l .1 Amount of Coven nt Pavments: Cao. ln consideration for
Developer's undertakings pursuant to this Covenant and the encumbrance of Developer's
interest in the Site pursuant to this Covenant, City shall make the following Covenant
Payments to Developer after the end of each Fiscal Year (or part thereof) during the
Operating Period:
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(a) Subject to subparagraph (b) below, the Covenant Payments
with respect to each Fiscal Year shall be in an amount equal to fifty percent (50%) of the
Sales Taxes From the Site for that Fiscal Year (excluding Quality of Life Measure DD
sales and Use tax and property tax) except that in the Fiscal Year during which the
Termination Date occurs, the Covenant Payments shall be prorated such that City shall
only pay to Developer 50% of the Sales Taxes From the Site.
(b) Notwithstanding any other provision set forth in this Covenant
to the contrary, in no event shall the total amount of Covenant Payments made by City to
Developer exceed the sum of Fifty Thousand Dollars ($50,000) (the "Covenant
Payments Cap Amount"). ln this regard, it is understood and agreed that the Covenant
Payments are in consideration of Developer's performance during each Fiscal Year of the
Operating Period and are not repayments of a loan.
(c) Notwithstanding any other provision set forth in this Covenant
to the contrary, even in the event the Covenant Payments Cap Amount has not been
reached at the end of the Operating Period, City shall have no further obligation after that
time to make additional Covenant Payments.
4.1.2 Source of Pavments. The Covenant Pa yments shall be payable from
any source of funds legally available to City, including City's general fund. ln this regard,
it is understood and agreed that the Sales Taxes From the Site are being used merely as
a measure of the amount of the Covenant Payments that are periodically owing by City
to Developer, and that City is not pledging any portion of the actual Sales Taxes From the
Site to Developer.
4.1 .3 Payment Procedure. Not later than one hundred twen ty (120) days
aftertheendof each Fiscal Year during the Operating Period, City shall pay the Covenant
Payment for said Fiscal Year, or portion thereof, to Developer. Each such Covenant
Payment shall be accompanied by a statement identifying (i) the amount of Sales Taxes
From the Site upon which the Covenant Payment was calculated, and (ii) a cumulative
total comparing how the Covenant Payment in question, together with all prior Covenant
Payments, relate to the Covenant Payments Cap Amount..
4.1.4 Books and Records. Upon the written request of either Party,
the other Party shall make available for inspection (at City Hall in the event of a review of
City records and at Developer's place of business in Menifee in the event of a review of
Developer's records) such of its books and records as the requesting Party may
reasonably determine must be reviewed in order determine whether the correct amount
of Covenant Payments have been made or are being made hereunder. Notwithstanding
the foregoing, City shall not be required to produce any books or records that it is
prohibited from producing by law and Developer shall not be required to produce
information that violates the statutorily prescribed privacy rights of individual customers.
4.1.5 No Accele ration: Preoavment Pe rmitted. lt is acknowled ged by the
Parties that any payments by City provided for in this Covenant are in consideration for
the performance by Developer during the time period(s) for which payments are due.
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Therefore, City's failure to timely make any payments or City's failure to perform any of
its other obligations hereunder shall not cause the acceleration of any anticipated future
Covenant Payments by City to Developer. The City shall be permitted to prepay any of
the Covenant Payments at any time without penalty.
4.2 Additional Condition Pre ent to Citv's Oblioations. ln addition to the
provisions set forth in Section 2 of this Covenant, City's obligation to make the Covenant
Payments pursuant to Section 4.1 of this Covenant for any Fiscal Year during the
Operating Period shall be contingent and conditional upon Developer's performance of
its obligations set forth in Section 3 of this Covenant during such Fiscal Year.
5. DEFAULTS A D REMEDIES
5.1 Defaults
(a) Subject to Force Majeure (Section 6.6 of this Covenant), the
occurrence of any of the following shall constitute a "Default":
(i) the failure by either Party to perform any obligation of
such Party for the payment of money under this Covenant if such failure is not cured
within fifteen (15) calendar days after the nonperforming Party's receipt of written notice
from the other Party that such obligation was not performed when due; or
(ii) the failure by either Party to perform any of its
obligations (other than obligations described in clause (i) of this Section 5.1) set forth in
this Covenant, if such failure is not cured within thirty (30) days after the nonperforming
Party's receipt of written notice from the other Party or, if such failure is of a nature that
cannot reasonably be cured within thirty (30) days, the failure by such Party to commence
such cure within thirty (30) days and thereafter diligently and continuously prosecutes
such cure to completion; or
(iii) any representation or warranty by a Party set forth in
this Covenant proves to have been incorrect in any material respect when made; or
(iv) Developer fails to meet any Development Milestone,
attached hereto as Exhibit "B or
(v) Developer closes the Restaurant; or
(vi) the Restaurant is materially damaged or destroyed by
fire or other casualty during the Operating Period and Developer fails to commence
restoration of the improvements within six (6) months or thereafter fails to diligently and
continuously proceed to complete such restoration in accordance with this Covenant; or
(vii) Developer makes any total or partial sale, transfer,
conveyance, assignment, subdivision, or lease of the whole or any part of any of the Site'
the Restaurant, the Agreement, and/or this Covenant without City's prior written consent,
which consent City may grant or withhold in its sole and absolute discretion, or if any
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voluntary or involuntary successor-in-interest of Developer acquires any rights or powers
under the Agreement and/or this Covenant without City's prior written consent, which
consent City may grant or withhold in its sole and absolute discretion; or
(viii) the ownership and/or control of Developer changes
without the prior written consent of City; or
(ix) Developer refinances any existing construction,
permanent, or other loans encumbering the Site without the City's prior written consent,
which consent City may grant or withhold in its sole and absolute discretion; or
(x) Developer, or any constituent member of Developer,
(1) is the subject of an order for relief for a bankruptcy court, or is unable or admits its
inability to pay its debts as they mature, or makes an assignment for the benefit of
creditors; (2) applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its
property; or (3) institutes or consents to any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, custodianship, conservatorsh ip,
liquidation, rehabilitation or similar proceeding relating to it or any part of its property, or
any similar proceeding is instituted without the consent of Developer and continues
undismissed or unstayed for ninety (90) days; or
(xi) any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the application or consent of
Developer, and the appointment continues undischarged or unstayed for ninety (90) days;
or any judgment, writ, warrant of attachment or execution, or similar process is issued or
levied against the Site and is not released, vacated, or fully bonded within ninety (90)
days after its issue or levy; or
(xii) Developer is enjoined or otherwise prohibited by any
governmental agency from occupying the Site at any time during the Operating Period
and such injunction or prohibition continues unstayed for ninety (90) days or more for any
reason.
(b) ln the event Developer fails to perform any of its obligations
under this Covenant and City sends a notice of such failure to Developer, concurrently
therewith City shall send a copy of such notice to any mortgagee or deed of trust holder
with respect to the Site (herein the "Holderr') (the name and address of which Holder shall
be furnished by Developer or such Holder to City) and the Holder shall have the same
period of time as is available to Developer to remedy such breach or failure under this
Covenant. City shall accept any proper cu re of a breach or failu re tendered by the Holder.
5.2 Citv's Remedies U oon Default bv Develooer. U pon the occurrence of any
Default by Developer, and after Developer's receipt of written notice of default and
expiration of the time for Developer to cure such Default as provided in Section 5.1 of this
Covenant, City may at its option:
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(i) suspend the payment of Covenant Payments
othenivise due and payable to Developer hereunder for the period that Developer remains
in Default. lf City has so suspended its payments in accordance with the terms of this
clause (i), then upon Developer's cure of such Default, City shall resume its payment
obligations, but shall have no obligation to make payments for any Fiscal Year or portion
thereof during which City's obligation to make payments was so suspended; or
(ii) if the Default continues uninterrupted for a period of six
(6) months, City may terminate this Covenant, in which case City's obligation to make
payments to Developer for any period of time after the occurrence of the Default shall be
finally terminated and discharged.
ln no event, however, shall City have the right (i) to specifically enforce Developeis
covenants set forth in Section 3 of this Covenant, (ii) to seek damages other than by offset
of future Covenant Payments otherwise due hereunder, (iii) to prevent Developer's
conversion of the Site to another lawful use (even if such use would be inconsistent with
this Covenant), or (iv) to sue Developer or to recover from Developer any amount that is
actually or allegedly attributable to loss of anticipated Sales Taxes From the Site or other
revenues, whether because the amount of Sales Taxes From the Site is less than
projected by Developer or City, or because Developer does not operate the Restaurant
on the Site for the entire Operating Period, or otheMise.
5.3 Developer's Remed ies Uoon Default bv Citv Upon the occurrence of any
Default by City, and after City's receipt of written notice of Default from Developer and
expiration of the time for City to cure such Default as provided in Section 5.1 of this
Covenant, Developer may terminate this Covenant by written notice to City and/or seek
whatever legal or equitable remedies may be available to Developer, subject to the
provisions of Section 4.1.5 and Section 5.5 of this Covenant.
5.4 Cumulative Rem dies: No Waiver. Exce pt as expressly provided herein,
the non-defaulting Party's rights and remedies hereunder are cumulative and in addition
to all rights and remedies provided by law from time to time and the exercise by the non-
defaulting Party of any right or remedy shall not prejudice such Party in the exercise of
any other right or remedy. None of the provisions of this Covenant shall be considered
waived by either Party except when such waiver is delivered in writing. No waiver of any
Default shall be implied from any omission by City to take action on account of such
Default if such Default persists or is repeated. No waiver of any Default shall affect any
Default other than the Default expressly waived, and any such waiver shall be operative
only for the time and to the extent stated. No waiver of any provision of this Covenant
shall be construed as a waiver of any subsequent breach of the same provision. A Pafi's
consent to or approval of any act by the other Party requiring further consent or approval
shall not be deemed to waive or render unnecessary the consenting Party's consent to
or approval of any subsequent act. A Party's acceptance of the late performance of any
obligation shall not constitute a waiver by such Party of the right to require prompt
performance of all further obligations. A Party's acceptance of any performance following
the sending or filing of any notice of Default shall not constitute a waiver of that Party's
right to proceed with the exercise of its remedies for any unfulfilled obligations. A Party's
-13-6E2/0]l858-0001
1169E595 J r09nl/22
acceptance of any partial performance shall not constitute a waiver by that Party of any
rights relating to the unfulfilled portion of the applicable obligation.
5.5 Limitations on City's Liability. Deve loper acknowledges and agrees that: (i)
this Covenant shall not be deemed or construed as creating a partnership, joint venture,
or similar association between Developer and City, the relationship between Developer
and City pursuant to this Covenant is and shall remain solely that of contracting Parties,
that the development and operation of the Restaurant is a private undertaking and is not
a public work, and Cig neither undertakes nor assumes any responsibility pursuant to
this Covenant to review, inspect, supervise, approve, or inform Developer of any matter
in connection with the development or operation of the Restaurant on the Site other than
as expressly provided for herein, including matters relating to architects, designers'
suppliers, or the materials used by any of them; and Developer shall rely entirely on its
own judgment with respect to such matters; (ii) by virtue of this Agreement and/or
Covenant, City shall not be directly or indirectly liable or responsible for any loss or injury
of any kind to any person or property resulting from any construction on, or occupancy or
use of, the Site, whether arising from: (a) any defect in any building, grading, landscaping,
or other onsite or offsite improvement; (b) any act or omission of Developer or any of
Developer's agents, employees, independent contractors, licensees, lessees, or invitees;
or (c) any accident on the Site or any fire or other casualty or hazard thereon; and (iii) by
accepting or approving anything required to be performed or given to City under this
Covenant, including any certificate, survey, appraisal, or insurance policy, City shall not
be deemed to have warranted or represented the sufficiency or legal effect of the same,
and no such acceptance or approval shall constitute a warranty or representation by City
to anyone.
6. GENERAL PROVISIONS.
6.'r ln teqration an d Amendment. This Covenant and the Agreement constitute
the entire agreement by and between the Parties pertaining to the subject matter hereof,
and supersede all prior agreements and understandings of the Parties with respect
thereto. This Covenant may not be modified, amended, supplemented, or otherwise
changed except by a writing executed by both Parties.
6.2 Caotions. Section headings used in this Covenant are for convenience of
reference only and shall not affect the construction of any provisions of this Covenant.
6.3 Bindinq Effect :Successors and Assions: Assi onments. This Covenant shall
run with the land and shall be binding upon and inure to the benefit of, the Parties an d
their respective successors and assigns, as limited by this section 6.3. Except as such
assignment relates to Holder, the Developer shall not assign, hypothecate, encumber or
otherwise transfer, either voluntarily, involuntarily or by operation of law, its rights or
obligations as set forth in this Covenant without first obtaining the City's written consent,
whiih may be given or denied or conditioned in the City's sole and absolute discretion.
Developer may assign its right to receive the covenant Payments to any Holder for
Security purposes or to any lessee or business owning and operating the Restaurant on
the Site. ln the event of an assignment for security purposes to a Holder, City agrees that
EE2/0ll85E-0001
1769X595I ai9nlD2 -14-
this Covenant shall be subordinated to the lien of said Holder's deed of trust or mortgage
and City agrees to cooperate with Developer in executing an appropriate subordination
agreement.
ln the event of any assignment that is consented to in writing by the City, the
references in this Covenant to "Developer" shall be deemed to refer to the assignee.
6.4 Cou nterDarts. This Covenant ma y be executed in two or more counterparts,
each of which when so executed and delivered shall be deemed an original and all of
which, when taken together, shall constitute one and the same instrument.
6.5 Governino Law. This Covenant shall be governed by and construed in
accordance with the internal laws of the State of California without regard to conflict of
law principles.
6.6 Force ateure Notwithstanding any other provision set forth in this
Covenant to the contrary, in no event shall a Party be deemed to be in Default of its
obligations set forth herein where delays or failures to perform are caused by
circimstances without the fault and beyond the reasonable control of such Party, which
circumstances shall include, without limitation, fire/casualty losses; strikes; litigation;
unusually severe weather; inability to secure necessary labor, materials, or tools; delays
of any contractor, subcontractor, or supplier; unjustified acts or failure to act by city or
other governmental agency in the processing or approval of plans or permits or inspection
or app-roval of the construition of the Restaurant; litigation by third Parties challenging the
vatidiiy or enforceability of the Agreement or this Covenant or the Entitlements; and acts
of God (collectively, "force majeure"). Adverse market conditions or Developer's inability
to obtain financing or approval to operate the Restaurant shall not constitute events of
force majeure. lntheeventof aneventof force majeure, the Party so delayed shall notify
the othei Party of the circumstances and cause of the delay within a reasonable time
period after c-ommencement of the delay, it shall keep the other Party informed at
ieasonable intervals upon request regarding the status of its efforts to overcome said
delay, and it shall exercise commercially reasonable diligence to perform as soon as
practicable thereafter.
6.TNotices.NoticestobegivenbyCityorDeveloperhereundermaybe
delivered person'rtty or may be delivered by certified mail or by reputable overnight
delivery service providing i delivery conformation receipt, with mailed notices to be
addresied to the appropriate address(es) hereinafter set forth or to such other
address(es) that a Party may hereafter designate by written notice. lf served by overnight
delivery service or certified mail, service will be considered completed and binding on the
Party served on the date set forth in the confirmation or certification receipt.
-15-t82103t858,0003
1169A59a 3 ,09/21122
lf notice is to City:
City Manager
c/o Economic Development Director
City of Menifee
29844 Haun Road
Menifee, California 92586
City Attorney
City of Menifee
29844 Haun Road
Menifee, California 92586
Attention: Jeffrey T. Melching, City Attorney
6.8 FurtherActs. Each Party agrees to take such further actions and to execute
such other documents as may be reasonable and necessary in the performance of its
obligations hereunder; reserving to city, however, its lawful discretionary and police
polv-er authority. without limiting the generality of the foregoing, upon the expiration or
iermination of ihe Operating Period, City will execute and deliver such instruments as
may be prepared by beveloper at Developer's expense to release the cloud upon title to
the site created bythis covenant; provided, however, that any such document shall be
with a copy to:
lf notice is to Developer: SB DINER, LLC
27990 BradleY Road, in Menifee
Menifee, CA 92584
Attention: Parth Mehta
xception of the specific provisions set
in a form reasonably acceptable to the City Attorney of City
6.9 Third P artv Benefi ciaries. With the e
forth in this Covenant for the benefit of Holder, there are no in
beneficiaries under this Covenant and no such other third parties shal
tended third party
I have any rights or
reasonable attorney's fees and costs' including without limita
connection with any breach or default by the other party unde
obligations hereunder.
6.10 Attorney 's Fees The prevailing party shall be entitled to recover its
tion expert witness fees, in
r this Agreement.
[End - Signature Page follows]
E82/03185E.0003
\769A595 1
^09121122
-16-
lN WITNESS WHEREOF, the Parties have executed this Covenant to be effective
as of the Effective Date.
CITY:
CITY OF MENIFEE, a California municipal
corporation
J
ATTEST:
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
n ie Roseen, Acting City Clerk
Armando la, City Manager
"Developer"
SB DINER LLC., a California corporation
By:
Parth Mehta
T. Melchi Attorney
6EZ03l65E-0003
1769at95 3 .OgDtt22 -17-
Its:
(
DocuSEn Envelope lO: C246EA0B-07D94D5C-99AA-E636U3474969
lN WITNESS WHEREOF, the Parties have executed this Covenant to be effective
as of the Effective Date.
CITY
CITY OF MENIFEE, a California municipal
corporation
Armando G. Villa, City Manager
ATTEST:
Stephanie Roseen, Acting City Clerk
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Jeffrey T. Melching, City Attorney
"Developer"
SB DINER LLC., a California corporation
By
Parth
Its: l1
EE2/031858-0003
17698595 3 *9171122 -17-
CALIFORNIA ALL-PUNPOSE ACKNOWLEDGMENT CIVIL CODE S '1189
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document
to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of Lr9 Yl'N\Ll4
On 2oL?--before me,A d ,u- \)a +,H ?ul',1,.
Date Here lnsen and Title of the Officer
personally appeared ?a6+h $Ae\*"t
Nome(s) of signe4s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in hls/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
PAUL ^uil RErlYtR
xot.ry Arblic ' C.liforni.
Lot Afl$l.t CountY
Conmlleon t 227'9'7
lly Comm. Expires F.b 8, 2023
o Partner - tr Limited tr General
El lndivldual tr Attorney in Fact
tr Trustee tr Guardian of Conservator
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.
D Partner - tr Limited tr General
tr lndividual trl Attorney in Fact
tr Trustee D Guardian of Conservator
Signature
Ploce Notory Seol ond/or Stomp Above Signoture of Notory Public
OPTIONAL
Completing this information con deter olteration of the document or
froudulent reottochment of this form to on unintended document.
Descriptlon of Attached Document
Title or Type of Document:
DocumentDate: Number of Pages:-
Signe(s) Other Than Named Above:
Capaclty(ies) clslmed by Slgner(s)
Signer's Name:Signer's Name
tr Corporate Officer - Title(s)tr Corporate Ofiicer - Title(s):
E Other:tr Other:
Signer is Representing:
@2017 National Notary Association
)
Signer is Representing:
EXHIBIT "A''
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SUN CITY, IN THE
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL A:
PARCEL 1 IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP
ON FILE IN BOOK ,14, PAGE 5 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA; EXCEPTING THEREFROM THAT PORTION CONVEYED BY DEED
RECORDED NOVEMBER 9, 1978 AS INSTRUMENT NO. 237273, OFFICIAL RECORDS
DESCRIBED AS FOLLOWS:
BEGINNING ON THE NORTHEASTERLY LINE OF SAID PARCEL 1, NORTH 26' 30' 50'WEST,
95,00 FEET FROM THE MOST EASTERLY CORNER THEREOF;
THENCE SOUTH 26' 30' 50' EAST 95.00 FEET ON SAID NORTHEASTERLY LINE TO SAID
MOST EASTERLY CORNER;
THENCE SOUTH 26' 30' 50" EAST 95,00 FEET ON SAID NORTHEASTERLY LINE TO SAID
MOST EASTERLY CORNER:
THENCE SOUTH 69'44' 14'WEST, 362.59 FEET ON THE SOUTHEAST LINE OF SAID
PARCEL 1 TO THE SOUTHWEST CORNER THEREOF, AND THE BEGINNING OF A
NONTANGENT CURVE. CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 556.00 FEET,
A RADIAL TO SAID BEGINNING BEARS SOUTH 36'47'45" WEST;
THENCE NORTHWEST 60,00 FEET ON SAID CURE AND THE SOUTHWESTERLY LINE OF
SAID PARCEL 1 THROUGH A CENTRAL ANGLE OF 06" 10' 59":
THENCE, LEAVING SAID SOUTHWESTERLY LINE, NORTH 69'44' 14" EAST, 108,85 FEET'
PARALLEL WITH SAID SOUTHEAST LINE;
THENCE NORTH 20" 15'46" WEST, 97.99 FEET;
THENCE NoRTH 69.44, 14, EAST, 246'35 FEET, PARALLEL WITH SAID SoUTHEAST LINE
OF PARCEL 1 TO A POINT ON SAID NORTHEASTERLY LINE THEREOF, SAID POINT BEING
NORTH 46" 05' 41' WEST 61 .73 FEET FROM THE POINT OF BEGINNING;
THENCE SOUTH 46' 05'41" EAST, 61.73 FEET ON SAID NORTHEASTERLY LINE TO THE
POINT OF BEGINNING.
EXCEPT FIFTY.TWO PERCENT OF THE ONE-HUNDRED PERCENT OF ALL OIL AND
r"I \IERNIS, RIGHTS IN, ON AND UNDER THE HEREIN DESCRIBED PROPERTY WITHOUT
ANYRIGHTSoFINGRESSoREGRESSASRESERVEDINDEEDFRoMGEoRGED,
NEWPoRT AND DoRoTHEA K. NEWPoRT, HUSBAND AND WIFE, RECoRDED NoVEMBER
2:g, 1957 lN BooK 2185, PAGE 189 oF oFFICIAL RECoRDS oF RIVERSIDE CoUNTY,
CALIFORNIA,
PARC EL B:
A NoN-EXCLUS|VE EASEMENT FoR INGRESS, EGRESS AND PARKING PURPoSES AS
iesenveo By THE MARRTOTT CORPoRATION lN THE DEED RECORDED NOVEMBER 9,
1978 AS INSTRUMENT NO. 237273 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
882/0lt65E-0003
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