HomeMy WebLinkAboutC-7308-13 - Beacon Bay, 55 - Lease 1994LEASE
THIS LEASE is made and entered into as of the day of , 1994, by and between the CITY
OF NEWPORT BEACH, a Charter City and nicipa corporation ("Lessor"), and
ac.4t kR-el W. 6 0J*? ve (No Keno zi e ("Lessee"), regarding the real property commonly
referred to as Beacon Bay Lot 5`
RECITALS
A. The City of Newport Beach, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes
of 1978 (the 'Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly
known as Beacon Bay and generally described in Exhibit A attached hereto and incorporated by reference.
B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and
specifically authorizes the lease of the property for residential purposes subject to certain express statutory
conditions.
C. Beacon Bay, including the "Westerly Portion" thereof, has been divided into individual lots, with each
lot leased by the City for residential purposes until December 31, 2005.
D. On November 3, 1987, a majority of electors of the City approved a measure which authorized the
City Council to enter into new leases of residential lots in Beacon Bay for a period not to exceed fifty (50)
years.
E. On November 3, 1992, a majority of electors of the City approved Measure M which authorized the
City Council to lease tidelands and waterfront property consistent with the provisions of state law.
F. The City Council, pursuant to the authority conferred by the electors, entered into negotiations with
current lessees and the parties have agreed on the terms and conditions of a new lease with a fifty (50) year
term, provision for adjustments in lease payments to reflect changes in the value of Beacon Bay leaseholds,
and a recalculation of lease payments in the event of a transfer of the Lease by the Current Lessee or any
Subsequent Lessee (as defined herein).
G. Lessee acknowledges that the terms and conditions of this Lease may result in Lessee paying
substantially more or less than another Lessee for similar property depending upon the date this Lease is
executed, the date of any subsequent transfer, and the consideration paid for transfers of similarly situated
property.
H. Lessee acknowledges that accurate and complete reporting to the City of all consi&ration paid for
the transfer of this Lease is vitally important to the City in that failure to fully report all consideration could
materially reduce the amount of rent received by the City from other Beacon Bay Lessees.
I. Lessor and Lessee acknowledge that the City has agreed to a fifty (50) year term and limited lease
payment increases in consideration of provisions which require payment of rent approximating fair market
rental value, without regard to any advantage maintained by Current Lessees, upon transfer by Current
Lessees and payment of deferred rent in the event the Lease is not signed on or before the Effective Date
(as defined herein).
J. The California State Lands Commission has reviewed the form of this Lease and determined that
it is in conformance with the provisions of relevant statutes, rules and regulations, including, without
limitation, the Beacon Bay Bill.
NB1-187371.V2 1 05/24/94
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situated parcels most recently transferred. Exempt transfers, as defined in Paragraph
3.B(3), shall not be used to calculate Average Actual Sales Value rent.
(3) "CPP' shall mean the Consumer Price Index - Los Angeles -Anaheim -Riverside Area,
All Urban Consumers, All Items, published by the United States Department of Labor,
Bureau of Labor Statistics (1982-1984=100). If the 1982-1984 base of said Consumer Price
Index should hereafter be changed, then the new base shall be converted to the 1982-1984
base and the base as so converted shall be used. In the event that the Consumer Price
Index, as now compiled and published, shall cease to be published, then the successor
index shall be used provided that an appropriate conversion from the old index to the new
index can feasibly be made. If such conversion cannot be made, or if no such index is
published, then another index most nearly comparable thereto recognized as authoritative
shall be substituted by agreement.
(4) "Current Lessee" shall mean the person or persons who, as of April 1, 1994 (the
"Cut-off Date"), was or were the Lessee under the Pre-existing Lease.
(5) "Deferred Rent" shall mean the total rent that a Current Lessee would have paid
had this Lease been executed on the Effective Date, through and including the date on
which this Lease was first executed, less the rent actually paid pursuant to the Pre-existing
Lease, together with interest at the rate of eight percent (8%) per annum calculated on the
balance due at the end of each Lease Year or portion thereof.
(6) "Effective Date" shall mean July 1, 1994.
(7) "Execution Date" shall mean the date when this Lease is executed by Lessee.
(8) 'Initial Rent' shall mean the effective net rent for the Leased Land as determined
by the appraisal of George Hamilton Jones, with due consideration to the leasehold
advantage created by the Pre-existing Lease, all as shown on Exhibit C attached hereto
and incorporated herein by reference.
(9) "Person" shall mean any natural person or natural person(s) and does not include
any corporation, association, or business entity in any form except a financial institution or
other bona fide lender acting in the capacity of a lender or an inter vivos or living trust.
(10) 'Pre-existing Lease" shall mean the Lease for the Leased Land which was effective
on January 1, 1988, and would, absent this Lease, expire on July 1, 2006.
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(11) "Transferred" shall mean any sale, assignment, sublease or other transaction, other
than an exempt transfer as defined in Paragraph 3.B(3), pursuant to which the right to
possession of the premises and the right to sign a new lease identical to this Lease is
transferred to another person.
B. Rental Payments. etg�fi
A,
Lessee shall pay annual rent i the sum of Vuo lR_tA 51�- �iu
payable at the rate of S�� cv, ($ a . 0 )per month. Lessee shall
also pay, if applicable, deferred ret in the sum of ry
($ ) upon execution of this Lease. Rent shall(shall not ircle one) be adjusted every
seven (7) years after the date of transfer in accordance with the provisions of Paragraph 3.6(4).
Annual rent, deferred rent, and periodic adjustments are based upon the following:
NB1-187371.V2 3 05/24/94
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off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half
percent (21/2%) of Actual Sales Value determined as of the date of execution and in
accordance with Paragraph 3.A(1). The Subsequent Lessee shall also pay all
Deferred Rent concurrent with the execution of this Lease. The annual rent shall be
adjusted every seven (7) years following the Execution Date in accordance with the
provisions of Paragraph 3.6(4).
(d) Subsequent Lessee: In the event of any transfer of this Lease to a
Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a
transaction other than an arm's length assignment of this Lease, and sale of the
improvements on the Leased Land, if any, such as a gift or transfer by inheritance
other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall
pay annual rent equal to the Average Actual Sales Value Rent calculated as of the
date of the transfer in accordance with the provisions of Paragraph 3.A(2). The
Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution
of this Lease. The annual rent shall be adjusted every seven (7) years following the
Execution Date in accordance with the provisions of Paragraph 3.6(4).
(3) Exempt Transfers.
The provisions of Paragraph 3.13 regarding transfers shall not operate to increase rent if:
(a) Lessee is assigning an interest in this Lease to a trustee under a deed of
trust for the benefit of a lender;
(b) the transfer is caused by the death of a spouse and the full interest of the
deceased spouse is transferred to a surviving spouse;
(c) the transfer of an interest in this Lease is between or among tenants in
common or joint tenants in ownership of the leasehold estate created by this
Lease, and such tenants in common or joint tenants first acquired their respective
interests in this Lease simultaneously;
(d) the transfer or assignment is by a bona fide lender acquiring title by
foreclosure or deed in lieu of foreclosure of a trust deed; or
(e) the transfer is a sublease of the premises for three years or less; provided,
however, that in determining the term of a sublease, any options or rights to renew
or extend the sublease shall be considered part of the term whether or not
exercised;
(f) the transfer is caused by the dissolution of the marriage of Lessee and the
full interest of one of the spouses is transferred to the other spouse;
(g) the transfer is to an inter vivos trust, living trust or other similar estate
planning arrangement of Lessee; provided, however, that the provisions of
Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such
trust or other arrangement is other than the surviving spouse or a tenant in
common or joint tenant in ownership of the leasehold estate created by this Lease,
and such tenants in common or joint tenants first acquired their respective interests
in this Lease simultaneously; or
NB1-187371.V2 5 05/24/94
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expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four
percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to
the City of Newport Beach and sent, or delivered, to the Finance Director at the address
specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or
currency to the United States as at the time of payment is legal tender for public and private
debts. Lessor and Lessee agree that late charges specified in this paragraph represent a
fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by
Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 13
of this Lease. Any failure by Lessor to declare a default and initiate termination of this
Lease due to a late or missed payment shall not be considered a waiver of the right of
Lessor to do so for that or any other late or missed payment.
C. Credit to Tidelands Fund. In calculating Initial Rent under this Lease, a credit was given
to certain of the Current Lessees equal to the annual amortization of the present value of the
additional property tax to be paid by such lessees during the remaining period of the Pre-existing
Lease. This credit, commonly referred to as the 'tax advantage", is shown on Exhibit D for each
affected lot. This credit was extended by Lessor to Current Lessees as consideration for entering
into this Lease. As a consideration in its approval of this Lease, the California State Lands
Commission required Lessor to credit its State supervised Tidelands Trust Fund by an amount
equivalent to the tax advantage derived from those lots in Beacon Bay comprising tidelands. This
amount is shown on Exhibit D for each affected lot comprising tidelands. Accordingly, Lessor has
unilaterally agreed to annually calculate the amount of such tax advantage derived from the
tidelands parcels in Beacon Bay and to credit an equivalent amount as revenue to the State
supervised Tidelands Trust Fund. This provision is included in this Lease to acknowledge the
agreement of Lessor with the California State Lands Commission, and does not affect the rights and
obligations of Lessor or Lessee under this Lease.
4. TRANSFERS.
A. Conditions Precedent to Transfer. Lessee may transfer this Lease subject to the prior
written consent of Lessor, which consent shall not be unreasonably withheld, delayed or
conditioned. Lessor shall consent to any transfer when Lessee and the proposed transferee have
complied with the following:
(1) Lessee shall furnish Lessor with executed copies of each and every document used
to effect the transfer.
(2) Lessee or the proposed transferee shall pay to Lessor a transfer fee of one hundred
dollars ($100.00); 'Ai
(3) Lessee shall execute a 'Termination of Leasehold Interest" for recordation; and
(4) The proposed transferee shall execute a new lease and execute a "Memorandum
of Lease" for recordation, which lease shall be identical to this Lease and have a term equal
to the remaining term of this Lease at the time of the transfer.
B. Transfer Information. The parties to any non-exempt transfer of this Lease shall provide
Lessor with all information relevant to a determination of the total consideration paid for the transfer,
as well as all documents which are relevant to the total consideration paid for the transfer. Lessee
and the proposed transferee shall provide this information not later than forty-five (45) days prior
to the proposed effective date of the transfer of this Lease. Lessor shall have the right, at its sole
discretion, to commission an appraisal of the fair market value of this Lease and improvements
NB1-187371.V2 1 05/24/94
46/9Z/90 9 W TLEL9i-IHN
sJy6!j s,eassaq loage � m yo!ynn ao!Jou jaylo jo uo!leu!wial to ao!lou 'llnelep to ao!lou ueu!jm Aue
l0 � d* 03 a sJapua-I 6uu(Idwo0 Ile 8n46 lieys Jossaq . (Apuaq 6UTAIdwo0„) eouejgwnoue to einleu
pue sseippe `eweu sl! to ao!lou uau!jm jossaq uan!6 sey japuaq ay; ssalun aseaq sigl of luensind
ao!lou uau!jm Aug japuaq Aue OA16 of uo!le6llgo ou aney Ileys jossaq •aapua-i o; aa!;oN •8
•eouejgwnoue Aue to aollou ueuljm jo!jd
jossaq eA16 Ileys aassaq *esee-I s!yi u! pap!Aoid Aissejdxe esimiaylo se ideoxe jossaq to sisaja;ul
pue sly6u Ile 01 pue aseaq s!y1 ul suolloulsej pue suo!ilpuoo 'slueuanoo Ile o; loe[gns aq Ileys
aouejgwnoue Auy -pueq peseaq ay; u! ;sojalui s,jossaq jegwnoue o; jemod eqj aney Keys jossaq
jou aassaq jayi!aN •josses to lsenbei uodn ueol ay; bulujeouoo jepuel ay; pue aassaq ueamleq
pelhoexe uo!Jeluawnoop Ile yl!M jossaq ap!Aojd of aaj6e japual ayl pue aossaq 19puel eAquind
eqI 01 seslwajd ay1 01 ellll 10 uo!ssessod aLii to jalsuejl jol Juawa6umie ue lou pue `u01loesuml
6ulpual epy euoq a si ueol a jaylew eu!wjalap of "Ossaq to Juesuoo @q1 Jnoyl!M asodjnd
Aug jol uo!loesijejl ueol apl euoq a u! („japua-j j jepuel apy euoq Aue to jonel u! 'luawnjlsui jel!w!s
J0 'e ebljow 'isnjl to peep Aq aseaq s!Lil jagwnoue � m aassaq •jagwnou3 0; ;y6!a •b
'S3�Nd»8Wf1�N3 'S
-9.0 uolloaS to suo!s!Aoid eqi 01 loalgns aseaq s!yl to jalsuejl a se asealgns
Lions leajl of aossaq i!wjed (11) jo 'aseaq slLil japun aassaq aLil Aq ilnelep to Juana up eq (!) 'josse-1
to uo!ido ayi 1e 'lleys asealgns paliodjnd jo paldwalle Lions pue 'loage jo eojol ou to pue p!oA eq
Ileys easselgns aA!leind 9y1 of aseaq slyl ut isajalu! jay/s!y 10 Ile Ailegueisgns jo lie to aassaq uegl
ayl Aq jalsumi a 'asinftp of papuelu, s! jo se loege o!wouooe awes aLil AIle!luelsgns aney jo '01
lualen!nbe � lluiluelsgns eq o1 peumejap s! Lioigm ses!weid ayi to asealgns poiAodind Auy -pueq
peseag ayi to aassalgns Aue pue aassaq 841 uaamgeq 'sluawaaj6e Iwo lie to Ilnl ui pas!Ape aq of
Pug 'sluawaaj6e uauunn Ile to saldoo aA!aoaj of 'aassaq ay1 of lsenbei uau!jm uodn 'ly61j ayl aney
saw!1 Ile le Ileys jossaq -aassalgns aA!leind ayl of aseaq slyl ul iseJOILll jay/s!y 10 Ile AIle1lue1sgns
JO Ile to aassaq uayl eqj Aq jelsuejl a 'as!n6slp o1 popualu! We jo 'se loalla olwouooe awes
ayi AIleiluelsgns aney lou op '01 lualeA!nbe Alleguelsgns Jou eje seseelgns Lions l! (sluawisn(pe
Ieluej to Joedsaj u!) 9.0 Licimbejed to suo!s!Aojd jaylinl ayi wojl idwaxe eq Aluo Ileys (e)(E)90
uo!loes u! 01 pajjejej sjelsuejl leLil sa!ljed ayi to wee aq) s! 11 •sesealgnS to ;!pnd •Q
-jelsueil ldwaxa Aue loalla of pasn sluawnoop
Ile to sa!doo yi!M aossaq ys!ujnl Ileys aassaq `jeAemoLl `pep►noad :(£)9'E Lideibuied u! peouejejej
„sjalsuml ldwaxa„ ayl jol pannbei lou si luasuoo s,jossaq •uo!;ewjolul jelsuejl;dwex3 •3
•elujolpeo ujaylnoS ui slesimcIde lepuap!saj ul peoua!jadxe pue elujol!Ie3 to
ajeiS ayi ui sseu!snq lonpuoo 01 pasueo!I jes!ejdde I` Vq up Aq palonpuoo eq Ileys 9-b ydeibuled
slyl japun aassaq jo jossaq Aq pauo!ss!wwoo les!ejdde /buy -sleslejdde omi ayi to 96ejane eql
(!!) jo 'Jelsuejl ayl j01 uo!lejep!suoo palels ay1 (I) to jaleej6 ayl aq Ileys sluawAed leluaj pue lua)j
anleA saleS lenJod ebejany 6upalnoleo to sesodind jol enleA sales Ienloy aLil vo!leldwoo uodn
Ies!ejdde 9y1 to Adoo Iinl a yl!M aossaq ap!Aoid Ileys pue aossaq 01 0311ou ayl jaJle sAep (0E) A:p!Lil
ueyl jalel ou palaldwoo eq of les!eidde Lions asneo aassaq `Juana Lions ul jas!ejdde Juapuadapu!
up Aq palonpuoo eq o1 jalsuml to alep ay; to se uoelegl sluawanojdwi pue aseaq s!yl to
enleA 18MJUw j!el ayl to Ies!ejdde us esneo of sioela aassaq leyl jossaq sa!l!lou aassaq ayl liodej
ayl pue eo!lou-Lions 6u!Alaoaj jape sAep (91) uaell!l u!yl!m ssalun sluawked Ieluej pue;usH anleA
sales lenlod a6ejany 6u!lelnoleo to sesodind jol enIgA saieS Ienlo`d ayi peweep eq Ileys enleA
pies pue 'ijodaj Ies!ejdde Lions to Adoo llnl a y;!nn aassaq ep!Aojd pue aassaq ayi /4110u os Ileys
JOssaq '(%o l) lueoied uai ueyl ejow Aq aassaq ayi wojl paA!aoaj uo!lewjolu! 8y1 u0 paseq pled
aq of uo!lejap!suoo Ielol pejels ayl spaeoxe jossaq Aq pauo!ss!wwoo Jes!ejdde 8y1 Aq peu!wjeleP
enleA ayJ ll aassaq ayi wojl uo!lewjolu! pauolluawajole ay1 to jossaq Aq id!eoej jade s�(ep
(0E) Alj!yi Ueyi jejel lou pelaldwoo eq Ileys les!ejdde Lions Auy -jelsuea to Enep ayi 10 se uoajayl
under this Lease. Notice shall be deemed given by Lessor to Lender five (5) days following deposit
in the United States mail, certified and return receipt requested, postage prepaid, and sent to Lender
at the address furnished in writing by Lender.
C. Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this
Lease by mutual agreement without the prior written consent of Lender.
D. Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on
this Lease and the leasehold estate created hereby shall have the right, during the term of the
Lease, to:
(1) perform any act required of Lessee pursuant to this Lease;
(2) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the
event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant
to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor.
Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults
requiring the payment or expenditure of money by Lessee.
E. Right of Lender to Cure Default. Lessor shall give written notice of any default or breach
of this Lease by Lessee to Lender and afford Lender the opportunity, after notice, to:
(1) cure the breach or default within ten (10) days after expiration of the time period
granted to Lessee for curing the default if the default can be cured by payment of money;
(2) cure the breach or default within thirty (30) days after expiration of the time period
granted to Lessee for curing the default when the breach or default can be cured within that
period of time; or
(3) cure the breach or default in a reasonable time when something other than money
is required to cure the breach or default and cannot be performed within thirty (30) days
after expiration of the time period granted to Lessee for curing the default, provided the acts
necessary to cure the breach are commenced within thirty (30) days and thereafter
diligently pursued to completion by Lender.
F. Foreclosure in Lieu of Cure. Lender may forestall termination of this Lease for a default
or breach by Lessee by commencing foreclosure proceedings subject to strict compliance with the
following:
(1) proceedings are commenced within thirty (30) days after the later of (i) expiration
of the time period granted to Lessee for curing the default, or (ii) service on Lender of the
notice describing the breach or default;
(2) the proceedings are diligently pursued to completion in the manner authorized by
law; and
(3) Lender performs all of the terms, covenants and conditions of this Lease requiring
the payment or expenditure of money by Lessee until the proceedings are complete or are
discharged by redemption, satisfaction, payment or conveyance of this Lease to Lender.
NB1-187371.V2 9 05/24/94
b6/VZI90 0t ZA'ILEL9T-I8N
easse-1 pue 'Aq pannbei eq Am go!gnn sas!waJd ag1 uo luaweAojdwi ao ainlonals Aue of sa!edej Jo
suo!leaalle 'suo!l!ppe Aue 'apew eq of asneo jo 'a4ew pegs easse-1 'SmEq 411M aouepdwoo •0
-uo!l!puoo tiel!ues pue ales pue i!edaa pue japio poo6 ui luaweAo.idwi aq1 u!elu!ew
of tiessooeu se to Mel Aq pai!nbei luaixe agl 01 sasnuaad 8141 uo sluaweAoidwi jaglo pue 'su!eip
'scannas 'sllenn 'sed!d `sa!l!l!ln Ile pai!edaa pue pou!elu!ew 'polonilsuoo aq of asneo Ilegs e8ss8-I
uo!1onalsap jo a6ewep 814101 '6u!1pM u! 'paluasuoo seq fossa -1 pue uo!lonjlsuooei ao 6u!lepowei
gl!nn uo!lounfuoo u! p@Aojlsep 6u!aq aie sluawanoidwi e4l ssalun 'joeiagl uo!lonilsep ao a6ewep
AUL,6u!Mollol pue, pasea, aql uo sluawanoidw! Aue 1onulsuooaa to a!edai lle14s 98ss9-1 •uoll!puoo
Apapio pue tiel!ues 'ales 'uealo a ul pue nedai pue lepio pooh u! 'sluawanoidwi jaglo pue
sAuM.* )laed 'sgmo 'sNieM 'sa!l!l!oel 'samlonals Ile 'uo!lel!w!I inogl!M '6u!pnlou! 'sos!waad 041 'u!elu!ew
pue Bawl Iossa-1 of asuadxa to lsoo Aue 1no41!M pue asea-1 s!g1 10 waa181416u!anp sawn Ile le 'Ilegs
aassaq •sas!waJd aql to lied jo 11e lnoge ao uo ui sj!edaa jo sluaweAoidwi 'suolllppe 'suo!leialle
'sebuego Aue *Mew of pai!nbei eq lou Ilegs josse-i 'sluawanoidwl to eoueuetuleW '8
-Mel Aq pel!nbei l! Aouebe Owns aaglo Aue pue uo!ss!wwo0
lelseoo e!uaol!leo eq1 wal sainlonuls u!elu!ew jo/pue lonalsuoo of uo!sslwied u!elgo osle pegs
aassaq •sueld pue 'sa!o!lod 'suo!leln6al 'suo!lnlosel 'saoueu!pio A1!O Ile g1!M Aldwoo Allnl pue l!waed
A1!o alepdoidde Aq pezuoglne an uo!lonilsuoo pue sainlonuls eq1 se 6uol os sasodand leguop!sai
fol pueq paseaq aql uo sainlonuls ulelu!ew pue lonjlsuooaa 'lapouaaJ 'lonllsuoo 'gs!lowep Aew
aassaq •sasodand le!luep!sai col Amos aq Ilegs pueq peseaq 841 •pueq paseaq to ash d
30NVN31NIVW CINV 3sn '9
.Mel
alels Aq p0p!Aoid se lsnil to peep Aue japun ales to ao!lou jo/pue l!nelep to a3!1ou Aue 10
Adoo a col lsenbei ua11!aM s jossa-1 `asuadxa alos s,aassa-1 le 'piooai 'luawnilsu! Alpnoas
jaglo ao peep lsnal Aue to uo!1ep.io3ai 8141 Salle sARP (00 ual u!gl!M 'pegs easse-1 (Z)
:aseaq s!ql 01811!1 sploq aapua-1 0141 se 6uol os Aluo
asea-1 s!gl aapun easse-1 aq1 to suo!le6!igo ag1 wioped of algE1l aq llegs aapuaq Auy W
:19pue-1 Aug pup aassaq jossa-1 of Aldde Ilegs suo!s!Aad 6u!Mollol 0141 •snoauellaos'W 'N
-aseal Mau ag1 6upedaid u! aassaq wal ses!waad agl to uo!ssessod
bulaanooaj 'asee-1 s1q1 6UIleUIWJa1 u! pennou! (seal s,AouaoAe bulpnloul) sesuedxa
pue slsoo algeuoseai pe �(ed `asuel Mau eql to uollnoexe uodn 'pe14s aapuaq (b)
-japue-1 Aq pa!pawai aq Algeuoseal ueo legl
aassaq Aq pe:a!wwoo goeajq jo llnelap jaglo Aue 'Apawaa 01 6u!1!Jm ul M6e ao '/%Pewaa
AIlnl (legs pue'uo!leulwial sl! fol 1nq 'aseal Mau eql to uo!lnoaxe uodn anp aq pinoM
legs swns Ile pue Aue Aed pegs japue-1 jossaq Aq aseel Mau eql l0 uo!lnoexe uo (E)
•algeopdde jeOuol ou eie jo pall!llnl ueeq Apeaile OAeg golgm asogl
fol ldeoxe eseaq s!ql se suo!l!puoo pue swaal awes eql su!eluoo aseal Mau agl (Z)
•asea-1 s1q1 to uolleulwaal eql jade sAup
(OI;) A1a!g1 uI1411m japue-1 Aq aosse-1 uo panaas s! aseal Mau eq1 fol lsenbei uaU!Jm a141 (1)
:p0p!Aoid aessal se Japua-1 g1!M
aseal Mau 8 olul .Ialua llegs jossa-I `aassaq Aq goeajq jo llnelop �(ue to asneoeq paleu!wjal aq Jo
aleulwiel aseaq s!ql pinogs 'eseaq slgl to uols!Aojd jaglo Aue bu!puelsgl!M10N -Osea-1 MON •0
shall otherwise observe and comply with, any law, statute, ordinance, plan, resolution or policy
applicable to the Premises. Lessee shall indemnify, defend and hold Lessor harmless from and
against any loss, liability, action, claim or damage, arising out of, or in any way related, to Lessee's
failure to comply with, and perform pursuant to, provisions of this subparagraph C. All repairs,
additions, and alterations to the structures or improvements on the Premises shall conform to all
applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be
performed with reasonable diligence, completed within a reasonable time, and performed at the sole
cost and expense of Lessee.
D. As Is Condition of Premises. Lessee expressly accepts the Premises "as is" and
acknowledges that Lessor has made no representations or warranties as to the suitability of the
property or any construction or improvement. Lessee shall conduct all tests necessary to determine
the suitability of the property for any proposed construction or improvement, including, without
limitation, the amount and extent of any fill, and related factors. Lessee expressly acknowledges
that Lessor shall not be liable for any damage or loss resulting from any subsurface or soil condition
in, on, or under the Premises or adjacent property. Lessee expressly acknowledges that, while the
legislature of the State of California has purportedly removed the public trust restrictions on use of
the Property pursuant to the Beacon Bay Bill, the Leased Land may constitute filled tidelands, and
Lessor has made no representation or warranty relative to the validity of the Beacon Bay Bill or the
power of the legislature of the State of California to remove public trust restrictions on tidelands
through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and
power of Lessor to lease the Leased Land for the purposes provided in this Lease, Lessor agrees,
at its sole cost and expense, to use all reasonable efforts to resist and defend against such
challenge and to seek a ruling or judgment affirming and upholding the right and power of Lessor
to lease the Leased Land for the purposes provided in this Lease.
7. TAXES AND UTILITIES.
It is understood by Lessor and Lessee that this Lease shall give rise to a possessory interest tax obligation
and that the execution of this Lease will constitute a reassessment event which may give rise to a material
increase in the possessory interest tax currently payable by Lessee under the Pre-existing Lease. Lessee
shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other
governmental charges, if any, which may be levied on the Leased Land, and/or any improvements,
including, without limitation, any possessory interest tax. Any lien for unpaid utilities, taxes, assessments
or charges shall not attach to the leasehold interest but only to improvements located on the Leased Land.
USE AND MAINTENANCE OF COMMON AREA.
Lessee shall have the right to use the streets, beaches, walkways, tennis courts, docks, piens, and common
landscaped areas in Beacon Bay (as depicted on Exhibit A) and which are leased to the Beacon Bay
Community Association by Lessor in consideration of the maintenance thereof by such Association and rent
to be paid by individual Lessees under their respective leases.
9. MAINTENANCE AND IMPROVEMENT OF INFRASTRUCTURE.
Lessor has no obligation to install, improve, repair, or maintain streets, curbs, gutters, water lines, sewer
lines, drainage facilities, street lighting or other facilities used by the residents of Beacon Bay (Infrastructure).
Notwithstanding Section 8 above, Lessor reserves the right, after a five (5) year period following the Effective
Date and upon approval by the Lessees representing a majority of the lots in Beacon Bay, to improve and
maintain streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and
electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for
NB1-187371.V2 11 05/24/94
V6/VZ/90 Z L ZA'LLEL9i-L9N
of Ainfu! jo Aliedoid of abewep 10 Nsu Ila sownsse Agaaey easse-1 'bu!o6aaol ayi 10 /(l!leaaue6 ayi bul1!w!I
Inoyi!M 'sas!waJd ayi inoge ao u1 easse-1 Aq pajallns jo poulwied aq Am yo!ynn s6u!yl jo Maonn `AlIA110e
Aue woal ao easse-1 Aq sas!waJd ayi 10 uolssessod ao asn ay1 of peloeuuoo aauuew Am ui jo woal 6u1sue
sallddns ao Iuewdmbe 'sleualew •seowas '>{jom buiAlddns jo 6u!ys!uwnl suo!leaodioo jo swj11 'suosied Ile
pua Aue of bulllnsai ao 6ulniooa seel ,sAeuioue algauosuej bulpnpul `Janaoslegm ainleu Aue 10 spumep
pue `seil!I!geil 'sw!elo 'sassol sebewep 'sisoo 'suolle6llgo 'uo!loe 10 sasneo 'suolloe Ile pua Am isulebe
pue wa1 seeAoldwe pue sluemes 'siva6e 'siaolllo 'suolsslwwoO pue spieog 'llounoO Al!O sl! 'josse-1
sselLuMq ploy Pug pualap 'i4!uwapu! lla14s eessa-1 'ses!waad ayi uo ao u! aesse-1 Aq paaallns jo peu!wled
aq Am 14olynn s6ulyi ao lionn `Al!A!loe Aua se Mann se 'saai!Au1 ao sisenb 'saAlleluasaidej `slua6a 'seaftoldwe
s,eesse-1 ao 'aasse-1 Aq seslwa'd ayi 10 uolssessod jo asn ayi io 'seslwa'd 814110 uo11lpuo0 ayi of 'paialaa
Aum: Aue u! jo '10 Ino 6u!sue 'I!ns jo wlelo yons Am to ewoolno jo iliew ayi to sselpie6aa `seal ,sAeujoua
aigauoseai 6ulpnloui •1anaoslegm amieu Aue to spuewep pue se!lll!gell 'swlelo 'sassol 'sa6awep 'sisoo
`suolle6llgo 'uolloe to sasneo 'suolloa !le pua Aue lsule6a pue woal seeAoldwe pua simmies 'slua6a `siaoigo
'suolsslwwo0 ipue spieog 'llouno0 Aa!O si! 'josses sselwaey ploy pue pualap '/4!uwapu! Ileys aasse-1
'NOLILVOIdINW3aNl ZL
-isaaalut ut sioss000ns
s,aasse-1 pua easso-1 uo bulpulq aq hays pua pueq posee-I ayi 14l!nn un.i Ilays suolio!aisaa pue suoli!puoo
'slueuanoo p!eg *aouaaelaj slyl Aq u!aaay paieaodmoui pue oiaaay pa14oeue a 1!q!yx3 u!pauleluoo
se suollenaasaJ pue' suollo!JlsaJ 'suoll!puoo 'sivauanoo Ile Aq punoq aq pua ap!ge of saai6e easse-1
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-aosse-1 10 spiooai I-e!ouaull
ayi woal Alelos pue Allenuue paulwaalap aq Ilegs sali!I!oel Al!unwwoo 6ulleaado pue bululelulew
10 sisoo ayi -aseaq slyi 10 yoaaJq leualew a alni!lsuoo ileys Aud of aml!e1 /due pue 'anp lunowe
041 10 aoliou ueu!jm jaile sAep (p£) A1J!y1 u!yl!M pled aq pays josso-1 /(q pennoui sisoo lenuue
ayi 10 eiegs elej oad s,easse-1 • (siol omi-Aluanas Alivaiino) /deg uooeag ulyilM siol lelluep!saa
10 aagwnu ayi Aq sisoo s,jossa-i 6ulp!A!p Aq paulwaalap aq flays aaeys eiea oad s,eassa-I •luabe
ivawa6euew a Aq pa6ja14o eal ayi ao eel luawa6euew algeuoseei a 6ulpnlou! 'sallll!oel Al!unwwoo
ayi 6ulleaado pue 6ululelulew ui sesuadxe algeuosaaa s,iosse-1 to aaeys elei oad a Aed lleys easse-1
'luana yons ul -sa!i!I!3e1 Al!unwwoo eAoidwi ao lleisu! 'aledai 'ulelulew of uolleloossy Al!unwwoO
ayi 10 suolle6ligo ayl awnsse 'uo!le6ilgo inoyi!M pue uolido su, le'Am jossa-1 'sall!I!oa1 Al!unwwoo
ulelulew of seseeo ao diel uolleloossy Al!unwwoO ayi 1! '6 uolloaS 10 suolslAoad ayi of iuensind
Jossa-1 of panJasaa s11461J ayi of uolllppe ul •seeid uowwoO 10 eaueualu!ew aossa-1 •O
-eseaq slyi 10 goeaaq Ieualew a ainl!lsuoo Ileus g ydaj6eaed slyi
pue y ydej6ered to suolslAad ayi yilnn Aldwoo of einllel s,easse-1 -uolle!oossy ayi Aq possesse ao
palAel Aliedoid sa6aego aaylo pue sluawssesse 'seal 'senp p!IeA Ile 'Aouenbullep ajolaq 'uolieloossy
ayi of Aed of pue 'uolie!oossV ayi 10 suolieln6ai pue salni Ile pue `snnalAq 'uo!lmodmoul
10 salon_ V ayi Aq ap!ge of saau6e easso-1 •suolleln6aa pue solna yl!m aoue!idwoO •8
•uolieloossy AllunwwoO Aeg uooeog ayi 10
6u!puels pooh u! jegwew a 'ulewaa of esue-1 s1y110 waai ayi 6uunp pue 'awooeq of saaa6e oesse-1
'lueweejbv slyi of luensmd easse-1 10 siy6la eql 10 Aua 10 aouanu!luoo ayi of UOIIIPU03 ssaadxe ue
se pup '9sea-1 sly, to uollejap!suoo ayi 10 lied leuaiew a sy •uo!leloossd u! d!ysaagwaW 'v
NOI-LVIOOSSV )UlNf1WWOO OL
-esea-j slyl 10 weal
6ululawaJ ayi JOAO luaa 10 wJo18141 u1 aassa-1 woal sisoo yons ioalloo of pue 'slsoo yons 10 ejegs em oid e
persons in or about the Premises from any cause except for damage or injury resulting from the negligence
or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and
representatives, and Lessee hereby waives all claims in respect thereof against Lessor.
13. INSURANCE.
A. General Conditions. All insurance required to be carried pursuant to this Section 13 shall
be obtained from reputable carriers licensed to conduct business in the State of California. Each
policy required to be carried pursuant to this Section 13 shall name Lessee and Lessor as additional
named insureds, and shall provide that the policy may not be surrendered, cancelled or terminated,
or coverage reduced, without not less than twenty (20) days prior written notice to Lessor.
B. Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and
improvements on the Leased Land against loss or damage by fire or other risk for residential
structures. The insurance shall provide coverage to at least ninety percent (90%) of the full insurable
replacement value of all improvements on the Leased Land, with the loss payable to Lessee unless
this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance
shall be paid to Lessor.
C. Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain
during the term of this Lease, a broad form comprehensive coverage policy of public liability
insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way
related to, the condition, for Lessee's use and occupation, of the premises in amounts not less than:
(1) $500,000 per occurrence for injury to, or death of, one person;
(2) $100,000 for damage to or destruction of property.
14. DEFAULT.
A. Events of Default. The occurrence of any one or more of the following events shall
constitute a material default and breach of this Lease by Lessee:
(1) the abandonment of the Premises by Lessee;
(2) the failure by Lessee to make any payment of rent when due if the failure continues
for three (3) days after written notice has been given to Lessee. In the event that Lessor
serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable unlawful detainer
statutes, such Notice to Pay Rent or Quit shall also constitute the notice-equired by this
paragraph;
(3) the failure by Lessee to perform any of the provisions of this Lease and any Exhibits
attached hereto to be performed by Lessee, other than described in Paragraph 14.14(2)
above, if the failure to perform continues for a period of thirty (30) days after written notice
thereof has been given to Lessee. If the nature of Lessee's default is such that more than
thirty (30) days are reasonably required for its cure, then Lessee shall, not be in default if
Lessee commences the cure within said thirty (30) day period and thereafter diligently
prosecutes the cure to completion; or
(4) the failure of Lessee to provide Lessor with all relevant information regarding the
total consideration paid in conjunction with any transfer of this Lease;
NB1-167371.V2 13 05/24/94
46/4Z/50 171,
aassaq anallaJ lou Ileys 6ulllelaJ ayl 'seslwaJd ayl to uoi:pod a Jo pe slaloi Jossa-, lI -uollos
Ie6al /(q anp swns mom of ase@-, ayl to uol3euluua3 illun lieM lou peau Jossaq pue ase@-,
ayl ul pal}loads owll ayl le sluewAud yons alsw Keys aassaq 'saslwsJd ayl to uolssassod
03 3y61J s,aassa-, saleulwJal Jossaq legl alep ayl of do aseaq slyl /(q paJlnbaJ slunowe
lis /(ed ilsys aassaq `lel@J OR saslwOJd ayl lou Jo JaylegM •alepdoidde sweep 'uoiiejoslp
alos sl! le Jossaq se suoli!puOo pue suual yons uo pue `awll of own wolf Jo 'awll Aug
le saslwaJd ayl to uorpod a Jo Ile lalaJ 'lou peau inq 'Am Jossa-, '@sea-, slyl of 3uensmd
uol,e6ligo Aug to aassaq 6ulnallaJ 'os op of uolloale s,Jossaq to aollou ualllJM ssejdxe
to aouasge ay3 ul 'Jo aseaq slyl to einjispol eqi 6ulloage Jo 6uileulwJal 3noy1!M (Z)
-pJeMe
to awl, eq, le oosloueJd ueg to Nue8 a/uasaH IsJapad ayl to alsJ lunooslp ayl anoge ,ulod
e6elueoied ouo le lunowe yons bullunooslp /(q palndwoo aq !let's (!) asnelo ul of paJJalaJ
,unowe ay, to IaeMe to ewll eql le ylJOM ayl -Jossaq o3 annoe s3unowe alep ay3 woe}
wnuue Jad (%0 L) ,ueoied uel to aleJ ay, le,saJalul 6ulMolle /(q palndwoo aq Ileys anoge (!)
asnelo u, of poijejeJ leyl uey, Jaylo slunowe leluaJ Ile to „pJeMe to awll ayl le y,JOM„ ayl
-s,soo algeuoseei Jay,o Aue pue saal ,sAaujoue
algsuoseei (uo118Jalle pue uollsnouaJ 'Jnedej /Gessaoau 6ulpnloul) 6uluelaJ to
sesuedxe 'uolssassod 6ulaanooaJ 10 1SOo 8y3 'uolleliwil ,noy,lM '6ulpnloul 'yoeaaq
ayl woJl llnsaJ of Ale>i!j eq pinoM sbulyl to asJnoo AmulpJo ayl u! yoigm Jo ase@-,
s!yl of ,uensJnd suo1186!lgo wJolJad of aJnllel s,eassa-, /(q pasneo AlejewlxoJd
luawlalap lie Jol aossaq alesuadwoo o, /(Jessooau lunowe Jaylo Aug (q)
pue 'paplons Alcieuoseei aq pinoo sanoid aassaq ueyl ssol ayl to lunowe
ayl spaaoxe pJeMe to awl, eq, Ja,le wJal ayl to eoueleq ay, Jol luaJ leuolllppe
pue ,uej plsdun ay3 yoigm /(q ,unowe ay, to pjeMe,o awls ayl le y,JOM ayl (e)
:6UIM0II01
ayl 'uollellwll lnoyllM 'bulpnloul 'Mel to uolslnoJd Jaylo Aug Jo 'apoO I!n!:D slwol!!e0
ay, to Z1961. uo!,oaS of,usnsand pallljua sl Jossa-, yolyM of s,unowe Ile easse-I wOJI
mom of pel,llue aq lleys aossaq 'luana yons ul -Joss@1 of saslw@Jd ay, to uolssassod
Japue.uns Alalelpaww! Ileys aassaq pus a,eulwJal Ileys @sea-, slyl aseo yoigm U! 'susaw
In!Mel Aug /(q saslwaad pose@-, ay, to uolssassod of ,y6u s,eassa-, aleulwJal W
W T L6L81-i9N
:6ulMoliol ayl op 'Mel /(q pauiwied salpowei Jo s,y6u Aug of U011!ppe ul '/dew Joss@-,
'y,,t ydeJ6eied u! poullop s,eaassaq /(q linslap AuB to luana ay, uI •salpawaa s,pJolpueq .8
-ao!loN ayl ul sloole os Jossa-, ssalun @sea-, slyl to uolleumal a Jo aJnl!alJol a peweep
aq lleys aol3ou yons ON -awll to poped elgeolldde ay3 ulyllM 'aq Am aseo ayl se 'sJeane ul sl
leyl 3uej ay3 Aud Jo area-, slyl to suolslnaJd ayl wJolaad aassaq ley3 puewep pet's pue 'suolslnoJd
ase@l algeolidde ayl pue llnelep pa6alle ayl A}loeds Ileys d-vL ydeJ68Jsd slyl Japun uanl6 saoRON
-sAep (OE) A3a1y3 u!yl!M po6Jeyos!p Sou
si aJnzies yons ejegm 'aseaq ayl ul isaJalul s,eassaq to Jo saslwaad ayl le pa3800l slesse
s,aassaq to lie -Alls!luelsgns to einzies le!olpnl Jay3o Jo uo!lnoexe 'luewyoe33e ayl Jo 's/(ep
(0E) AlJlyl ulyl!M aassaq 03 paJolsaJ lou s! uo!ssessod.ejegm '@sea-, ay3 ul 1saJalul s,aasse-1
to Jo saslwaJd 0141 19 pa3e30l s39sse s,eassa-, to Ile AIleguelsgns to uolssassod oNel of
Ja/VaoaJ Jo aalsrul a to luewlulodde ay3 'sAup (09) /4xls ulgvm posslwslp si awes ayl ssalun
AoldruNueq o, bul3elaJ Mel Aug l0 3uawebmi a Jo uollezlue6JoaJ Jol uo!lged a Jo 1dniNueq e
pa6pnfpe aassaq.aney o3 uo!1ped a to aassaq 3sulube Jo /(q 6ullll ay3'sJollpejo to lllaueq
ay3 JO, ,uawa6ueJJe IeJaueb Jo 'Iuawu6issu IeJau96 Aug to aassaq Aq 6upiew ay3 (5)
of any obligation pursuant to this Lease; provided, however, Lessor shall apply the rent or
other proceeds actually collected by virtue of the reletting against amounts due from
Lessee. Lessor may execute any agreement reletting all or a portion of the leased premises
and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting.
Lessor shall not, by any reentry or reletting or other act, be deemed to:
(a) Have accepted any surrender by Lessee of this
Lease or the leased premises;
(b) have terminated this Lease; or
(c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor
has given Lessee express written notice of Lessor's election to do so.
(3) Lessor may terminate this Lease by express written notice to Lessee of its election
to do so. The termination shall not relieve Lessee of any obligation which has accrued prior
to the date of termination. In the event of termination, Lessor shall be entitled to recover the
amount specified in Paragraph 14.6(1).
C. Default By Lessor. Lessor shall not be in default unless Lessor fails to perform obligations
required of Lessor within a reasonable time, but in no event later than thirty (30) days after written
notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligation. If the
nature of Lessor's obligation is such that more than thirty (30) days are required for performance,
then Lessor shall not be in default if Lessor commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
D. Stay of Obligations. Neither party shall be under any obligation to perform or comply with
its obligations pursuant to this Lease after the date of any default by the other party.
E. Determination of Rental Value. In any action or unlawful detainer commenced by Lessor,
the reasonable rental value of the Leased Land shall be deemed to be the amount of rent and
additional rent (such as reimbursement for costs of Infrastructure improvements or the payment of
taxes or assessments) for the period of the unlawful detainer, unless Lessor/Lessee shall prove to
the contrary by competent evidence.
F. Waiver of Rights. The failure or delay of either party to exercise any right or remedy shall
not be construed as a waiver of such right or remedy or any default by the other party. Lessor's
acceptance of any rent shall not be considered a waiver of any preexisting breach of default by
Lessee other than the failure to pay the particular rent accepted regardless of Leswr's knowledge
of the preexisting breach of default at the time rent is accepted.
G. Waiver of Right of Redemption. Lessee waives any right of redemption or relief from
forfeiture pursuant to Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to' any
existing or future statutory or decisional law in the event Lessee is evicted or Lessor takes
possession of the Premises by reason of Lessee's default.
15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION.
A. Surrender of Premises. Upon the expiration or termination of this Lease, Lessee agrees
to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the
Leased Land. Lessor, at its sole discretion, may record a document evidencing the expiration or
NB1-187371.V2 15 05/24/94
ZA'TLEL8T-T9N
b6/4Z/90 9 1.
PUB :8sue-1 s!yl 10
wial 841 to uollealdxe ayi to alae 041016uP{el to alae qyl wal 6u!u!ewej saeaA 10
aagwnu ayi aol lsaaalu! punodwoo wnuue jad (%6) 1uaomadau!u 1e (00' l$) 001101)
quo to yljom luesaid ayi jol joloel ay1 Aq amen 194jew i!el Lions buiAld!11nw Ag
polunoos!p '6upie1 to elep 041 to se (6u!llemp Lions of saoueualmdde pue 6u111amp
ay>` to anlsnloxe) peno.idwi se sas!waJd ay1 to amen 1wlaew nel ayl (e)
6u,mollol 041 to wns ayi of lenbe iunowe ue 01 pall! ue aq Ileys fossa -I aLil W
:SM01101 se paleoolle aq IIEys u!ajayl lsaja,ul ployaseal s,aassaq pue sas!waJd 04110 bullel
Ielol 041 fol papaenne sabewep pue uoliesuadwoo II`d '6uD181 !8101- pa8nnb 10 u01180011`d 'O
-o3ajegj uollelaj ui f%1!I!ge!l aa4lanl Ile woil pesea!ai
aq uodnejayl IIe4s sallied ayi pue 'jouwapuoo a41 Aq builel to alep ay1 of do aesse-1 Aq pled
aq Ileys u@MB, loejayl uoluod jo pue-i pasea-1 ayl o1 elgeinqulle pue japunejeq aossa-1 01 eassaq
Aq a1geAed sa6teyo jaylo pue sleluej Ile 'lied ui jo alogm ul paleu!waal os sl aseaq s!yl ll 'puej
pasea-1 p!es 10 bulNe, 10 alep 041 to se eleu!waal pue aseao Ileys uaNel loaaayi uolliod ayi ao pue-I
pasea-1 ay101 pue u! @@ssa-1 a41 10 @,else ployaseal ayl uayl 'ulewop luawwo to aamod ay1 aapun
6u!>lel leilied jo bulNel lelol a aq IIe4s ajegl 'loaaay weal ayi buunp 'll '6upjel 10 100113 8
•jouwapuoo ayi ul slsan pue of sassed loaaay, uolliod
Jo sas!w@Jd ayl of all!1 yo!LiM uodn alep @yl aq Keys ,builel to alep„ weal 841 (b)
•sbulpaeowd Iewaol 10
nail ui ulewop luaulwa to jamod ayi japun bu!Nei a to leaayl aapun Aj!Illn ollgnd jo Alpoylne
,Aoua6e ue 01 Josse-1 /(q @oue/(@nuoo /jelunlon a apnlou! Ileys „6u!)1e1„ Waal ayl (>;)
-anoge pau!lap se bulNel le,ol a elnl!lsuoo lou scop yolgm
sas!waad a41 to Aluo uo!liod a to 6uiNel 841 ueaw Heys pu!Nel legied„ weal a41 (Z)
-sesodind lelluap!saa ayl fol aassa-1 /(q lowayl esn eqj nedw! Allelluelsgns Jo luanaJd of se
puej pasea-1 ayl to yonw os 10 bulgy el 04110 ulewop JU@Ulwa to aaMod aLil aapun ses!waad
aillue 041 10 6u!Nei 041 ueew IIe4s 9l uo!loag s!yl ui pasn se fimmei 18101„ Luae104-L W
'sw.ial to suo!1!ullaa d
'NIt/WOa 1N3NIW3 '9t
•uollejap!suoo ,(ue to luawAed 9y1 lnoyl!M aosse-1
to Apecloid a41 awooeq Ileys 1,ayl '9'91. ydeifted s!y1 ul pap!noid awg aLi1 u!yl!M panowaJ lou
OR sluawanadwi pue sbu!pl!nq ayl to Aue luana 841 u! •uo!l!puoo Aliepio pue uealo a u! aosse-1
01 saslwaad ayl to uo!ssassod japueuns pue lenowaI 00118 6u!u!ewai sluawanoadwi ao s6u!pl!nq
041 to shed aaylo pue sugap 'suo!lepunol lie anowaa pue suo!leneoxa Ile II!l Ileys aassa� @sea -I s!Lil
to wia1 ay1 to uo!lej!dxa je:ue s�(ep (06) A19ulu ueyi jejei ou alaldwoo aq Ism lenowaa pue aass9-1
to asuedxe pue lsoo alos ay1 ie aq IIe4s luawanadw! ao 6ulpllnq Am jo Ienowa�l pue-I pasea-i
041 uo pallelsu! jo 11!nq sluawanoidwi pue s6ulpl!nq Ile pueq pasea-1 eLil woal anowaJ 01146U 041
aney Heys easse-1 asge-I s!yi to suolsmoid eql to Aue to 11nelep ui uegl lou sl easse-1 ley, u0!1!pu03
uo pue `asea-1 sl4i 10 wiai a41 to uo!lea!dxa ayl uodn •sluawano.idwl to 19AOWOIJ '8
•1uawAud 10 w101 aepw!s
ao eouels!sse uo!ie00181 an!aoal 01146u /due sanlEM aassa-I lsa�alu! ployaseal aLil to uo!leu!waal
(b) The present worth of rents due during the period from the date of taking
to the date of the expiration of the term of this Lease, computed by multiplying the
annual rent then payable by the factor for the present worth of one dollar ($1.00)
per annum at nine percent (9%) per annum compound interest (Inwood Coefficient)
for the number of years in such period.
(2) The Lessee shall be entitled to the amount remaining of the total award after
deducting therefrom the sums to be paid to Lessor as hereinafter provided.
D. Allocation of Award - Partial Taking. All compensation and damages awarded for the
taking of a portion of the Leased Premises shall be allocated and divided as follows:
(1) The Lessor shall be entitled to an amount equal to the sum of the following:
(a) The proportionate reduction of the fair market value of the Premises as
improved (exclusive of the dwelling and appurtenances to such dwelling) as of the
date of taking, discounted by multiplying such proportionate reduction in fair
market value by the factor for the present worth of one dollar ($1.00) at nine
percent (9%) per annum compound interest for the number of years remaining from
the date of taking to the date of expiration of the term of this Lease; and
(b) The present worth of the amount by which the rent is reduced computed
by multiplying the amount by which the annual rent is reduced by the factor for the
present worth of $1.00 per annum at 9% per annum compound interest (Inwood
Coefficient) for the number of years remaining from the date of taking to the date
of expiration of the term of this Lease.
(2) The Lessee shall be entitled to the amount remaining of the total award after
deducting therefrom the sums to be paid to Lessor as hereinabove provided.
E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by
Lessee hereunder shall be adjusted from the date of taking to the date of the expiration of the term
of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee
in the ratio that the Fair Market Rental Value of the Premises at the date of taking bears to the Fair
Market Rental Value of the Premises immediately thereafter.
17. ATTORNEYS' FEES.
Should either party be required to employ counsel to enforce the terms, conditions and g9venants of this
Lease, the prevailing party shall recover all reasonable attorneys' fees and charges (and court costs if
applicable) incurred therein, whether or not court proceedings were commenced.
18. REMEDIES CUMULATIVE.
The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be
construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any
rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies
shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other.
NB1-187371.V2 17 05/24/94
b6/bZ/90 81
ZA'iL£G8i-i9N
'aaylo aql of
ao!lou ua111M jopd ,sAep (OE) Alj!gl uodn jossaq jo jossaq Aq palau!wial aq Am Aouepual yluow-of-yluow
ayl •/,ouepual gluow-of-yluow a of apeo!!dde eq Am /rayl se jelosui aseaq s!yl jo suo!s!noid ayl
of 1oafgns yluow-of-gluow woj1 lueuel a pawaap eq !!eys aassaq uegi 'aassaq woj1 luej sldeooe jossaq
pue sallied eql ue@Ageq 6u!1!jm u! luaweei6e Am lnoll!M aseaq slyl to wiel eql 10 uo!lea!dxe aal}e sas!waJd
aql 10 uolssessod u! u!ewal I!els aassaq japun 6u!w!e10 auoAue ao 'aassaq 11 'aanaMoH -sallied ile Aq
pou61s 6u!1l.iM a ui idaoxa pa!1lpow iauuew Aue u! io 'pepualxe 'paMauej aq louueo aseaq s141 aai6e sallied
aq l •uo!loas s!y1 u! pap!nad �(Issa�dxa se idaoxa sas!wa�d ay1 0l ao u! s1g6!a �(ue aassaq an!6 ao aseaq
s1410 lemeuaa a alni psuoo lou pegs weal eql 10 uo!lendxe aa:4e aassaq Aq lino 6ulplog Auy 'aseaq sl4110
weal agl 10 uo!lendxe all uodn eollou jay1Jn11noy1!M pion pue pnu awooeq pue eleupiel Ilels aseaq sill
113AO JNla'1OH 'ZZ
-uo!leo!unwwoo ao puewep
'oollou yons 10 I!ew saielS Pai!un all u! 1lsodap aqi jap, pue woal sinoq (ZL) oM1-Aluanas 10 uollendxe ayl
(!!) ao 'AJan!Iap lenloe (!) to ja!pea aql uodn alaldwoo pawaap aq 11egs aassaq jo jossaq uodn eo!/uas Yong
•aassaq all 01 possaippe 1!ew aql y6noayl Adoo a 6u!pues osle pue sespaad
all uo weld snono!dsuoo a ul ao!lou eql to Adoo a 6u!x!}1e Aq uall 'punol aq ueo auo ou 11 .d
jo :pueq posea-I aql 6uiAdn000 aq Am oqM uo!laaos!p pue obe olquips
to uosied awns yl!m Adoo a 6u!ne81 Aq pueq poseaq eql wal luesge si aassaq all 11 .O
jo :aassaq Aq pegs!uwnl ssaippe ssou!snq ao eouep!saj aql of 'p!edaid
96elsod yl!M 'paiplaao ao paialsibei 'I!ew salelS Pown aql ul 80110N all builpodep Aq '9
jo 'Alleuosiad aassaq eqi of Adoo a 6ula8n!1ap A8 y
:jayl!a pames aq Am 1! 'aassaq uo aossaq Aq pa/uas aq of popualui si
ao!lou ll -6ul1 jM u! aassaq of pags!uanl ial;eaaaq eq /,ew se ssaippe aaylo yons 1e ao '89L L-65926 eluaol!IBO
'goea8 jjodMaN '89L l x08 'O'd `Pjenalno8 liodMaN OOEE �aal0 Al!O ao 'aabuuuN 41!0 'aoAeW all 01
passaippe 'goea9 liodMaN 10 40 ayl uo 'p!edaad abulsod qlp 'pa!llpoo ao peials!69J '11ew Aq pa/uas ao
uan!6 aq Aew 'aassaq Aq panus ao uanl6 aq of 'Mel Aq ao aseaq s!ql Aq X01 pep!nad sao!lou jo eollou Auy
'S3O11ON 'LZ
'pueq paseaq agl aano uo!1olpsunf 1%mul
6ulneq � o.ua6e ao Apoq leluawuaano6 Jeglo �(ue jo 'yoea8 liodMaN 10 Al!O 'a6ueaO to AlunoO 'e!u�ol!1eO to
81elS aql to sMe1 pue seoueulpio 'salnlels 'suollelnbaa 'sa1ni 11e ql!M Aldwoo 01 saai6e pue slueuanoo aassaq
SMVI HIM 3ONVildWOO 'OZ
-as-ea-1 slgl 10 suoll!puoo jo suo!lo!alsaj 'sluawaaa6e
'slueuanoo `swjal aqi 10 Aue 10 jo awes eg110 goeaaq 6u!paaoons Aue 10 JanleM a se penjlsuoo eq Keys
aseaq s!g110 suo!1!puoo ao suo!loiilsei 'sluawaaj6e `slueuanoo 'swieI aql to Aue 10 goeaaq AUe 10 aan!eM ON
•uiejegl ooueosa!nboe Aue ao /(lied aaglo eql 10 1jed aql uo llnelop ao loalbau 'uo!ss!wo
qons Aue 10 Jan!eM a se panilsuoo eq pegs jo lemod j01y6u yons Aue nedw! llegs (lied jello eql 10 llnelop
jo loal6au uoissiwo Aue woal bulsue laMod j01y6u Aue as!oaaxe 01 i1jed aali!a 10 uolsslwo Jo Aelap ON
'a3AIVM ON 6l
23. QUIET ENJOYMENT.
Lessor covenants and agrees that Lessee, upon paying the rent set forth herein and observing and keeping
all covenants and agreements to be observed or kept by Lessor hereunder, shall quietly have and enjoy the
Leased Land during the term of this Lease without hindrance or molestation by anyone claiming by or
through Lessor.
24. SEVERABILITY.
If any term or provision of this Lease shall, to any extent be invalid or unenforceable, the remainder of this
Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and
enforceable to the fullest extent permitted by law.
25. MISCELLANEOUS.
A. Representations. Lessee agrees that no representations as to the Premises have been
made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agrees and
acknowledges that this document contains the entire agreement of the parties, that there are no
verbal agreements" representations, warranties or other understandings affecting this agreement,
and Lessor and Lessee, as a material part of the consideration of this Lease, waives all claims
against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement
or understanding not contained in this Lease.
B. Inurement. Each and all of the covenants, conditions and agreements herein contained
shall,' in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and
bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors
and administrators, successors, assigns, licensees, permittees, or any person who may come into
possession or occupancy of said Leased Land or any part thereof in any manner whatsoever.
Nothing in this paragraph shall in any way alter the provisions herein contained against assignment
or subletting.
C. Joint Several Liability. If Lessee consists of more than one person, the covenants,
obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants,
obligations and liabilities of such persons.
D. Captions. The section and paragraph captions used in this Lease are for the convenience
of the parties and shall not be considered in the construction or interpretation of any provision.
E. Gender. In this Lease, the masculine gender includes the feminine and neuter and the
singular number includes the plural whenever the context so requires.
NB1-187371.V2 19 05/24/94
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EXHIBIT B
Beacon Bay Lot 55 described as follows:
Lot 55 as shown on the map filed in Book 9, Pages 42 and 43 of Record
of Surveys, in the office of the County Recorder, County of Orange, State
of California.
SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued
SUMMARY OF VALUE INDICATIONS:
Existing
(1st year)
Unencumbered
Fair Market
Contract
Effective
Lot No.
Fee Lot Value
Rental Value
Rent
Net Rent
Water Front Lots
A
$1,330,000
$48,520
$23,125.08
$31,940.00
B
$1,200,000
$43,320
$12,506.85
$22,270.00
C
$1,031,000
$37,560
$16,625.04
$22,480.00
1
$947,000
$34,200
$8,020.80
$15,030.00
2
$1,131,000
$41,640
$8,825.40
$17,950.00
3
$1,263,000
$46,920
$24,250.08
$31,560.00
4
$1,318,000
$49,120
$10,458.96
$21,260.00
5
$1,341,000
$50,120
$20,012.04
$28,840.00
6
$1,386,000
$51,680
$25,000.00
$34,260.00
7
$1,210,000
$44,800
$24,999.96
$31,870.00
8
$1,177,000
$43,480
$43,750.00
$43,480.00
9
$1,298,000
$47,840
$42,500.04
$44,350.00
10
$1,342,000
$49,600
$24,999.96
$33,540.00
� 11
$1,122,000
$41,280
$9,020.52
$17,020.00
12
$1,100,000
$40,400
$14,250.00
$22,190.00
13
$1,100,000
$40,400
$23,625.00
$29,450.00
14
$1,243,000
$45,640
$10,312.56
$19,690.00
15
$1,265,000
$46,520
$10,836.47
$20,240.00
16
$1,067,000
$39,080
$8,508.48
$16,480.00
17
$1,067,000
$39,080
$16,250.04
$21,750.00
18
$1,067,000
$39,080
$8,508.48
$16,480.00
19
$1,243,000
$45,640
$10,020.02
$19,500.00
20
$1,147,000
$42,320
$8,727.84
$17,910.00
21
$1,058,000
$38,760
$20,224.50
$26,660.00
22
$1,036,000
$37,880
$41,250.00
$37,880.00
ES 1
$1,037,000
$37,880
$28,749.96
$31,920.00
ES 2
$1,037,000
$37,880
$24,625.00
$29,220.00
Subtotals:
$31,563,000
$1,160,640
$519,983.08
$705,220.00
Exhibit C m Page 1
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SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued
V .
Unencumbered Fair Market
Lot No. Fee Lot Value Rental Value
Interior Lots - continued
61
$588,000
ES 3
$474,000
ES 4
$467,000
ES 5
$470,000
ES 6
$468,000
ES 7
$461,000
ES 8
$471,000
Subtotal Int.: $23,786,000
$18,162
$14,225
$13,962
$14,075
$14,000
$13,737
$13,925
Existing
Contract
Rent
$4,436.16
$8,750.04
$3,021.96
$10,000.08
$2,982.96
$2,966.04
$3,118.08
(1st year)
Effective
Net Rent
$8,482.00
$10,325.00
$6,322.00
$11,415.00
$6,310.00
$6,057.00
$6,455.00
$724,637 $254,617.16 $397,807.00
Subtotal W.F.: $31,563,000 $1,160,640 $519,983.08 $705,220.00
Grand Totals: $55,349,000 $1,885,277 $774,600.24 $1,103,027.00
Exhibit C = Page 3'
Distribution of Rents and Tax Advantage between Tidelands and Uplands*
Beacon Bay 6/6/94 - Page 1
Exhibit D
(1st year)
Proportionate Proportionate
Annual Amort.
Tidelands
Effective
%
%
Rent
Rent
of PV of Tax
Tax
Lot No.
Net Rent
Tidelands
Uplands
Tidelands
Uplands
Advantage
Advantage
Waterfront Lots
A
$31,940.00
100%
0%
$31,940
$0
$0
$0
B
$22,270.00
100%
0%
$22,270
$0
$930
$930
C
$22,480.00
100%
0%
$22,480
$0
$1,410
$1,410
1
$15,030.00
100%
0%
$15,030
$0
$2,080
$2,080
2
$17,950.00
100%
0%
$17,950
$0
$2,260
$2,260
3
$31,560.00
100%
0%
$31,560
$0
$560
$560
4
$21,260.00
100%
0%
$21,260
$0
$2,610
$2,610
5
$28,840.00
100%
0%
$28,840
$0
$1,620
$1,620
6
$34,260.00
100%
0%
$34,260
$0
$0
$0
7
$31,870.00
95%
5%
$30,276
$1,594
$0
$0
8
$43,480.00
50%
50%
$21,740
$21,740
$0
$0
9
$44,350.00
5%
95%
$2,217
$42,132
$0
$0
10
$33,540.00
0%
100%
$0
$33,540
$0
$0
11
$17,020.00
0%
100%
$0
$17,020
$3,200
$0
12
$22,190.00
0%
100%
$0
$22,190
$1,130
$0
13
$29,450.00
0%
100%
$0
$29,450
$0
$0
v
14
.
$19,690.00
0%
100%
$0
$19,690
$2,880
$0
15
$20,240.00
20%
80%
$4,048
$16,192
$2,980
$596
16
$16,480.00
95%
5%
$15,656
$824
$2,640
$2,508
17
$21,750.00
100%
0%
$21,750
$0
$2,420
$2,420
18
$16,480.00
100%
0%
$16,480
$0
$2,640
$2,640
19
$19,500.00
100%
0%
$19,500
$0
$2,880
$2,880
20
$17,910.00
100%
0%
$17,910
$0
$2,470
$2,470
21
$26,660.00
100%
0%
$26,660
$0
$0
$0
22
$37,880.00
100%
0%
$37,880
$0
$0
$0
ES 1
$31,920.00
100%
0%
$31,920
$0
$0
$0
ES 2
$29,220.00
100%
0%
$29,220
$0
$0
$0
Waterfront
Subtotal:
$705,220.00
$500,848
$204,372
$34,710
$24,984
Beacon Bay 6/6/94 - Page 1
Exhibit D
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Distribution of Rents and Tax Advantage between Tidelands and Uplands*
Add Waterfront: $705,220.00
Grand Total: $1,103,027.00
of Total: 100%
(1st year)
Proportionate
Effective
Lot No.
Net Rent
Interior Lots - continued
61
$8,482.00
ES 3
$10,325.00
ES 4
$6,322.00
ES 5
$11,415.00
ES 6
$6,310.00
ES 7
$6,057.00
ES 8
$6,455.00
Interior Lots
$720
Subtotal:
$397,807.00
Add Waterfront: $705,220.00
Grand Total: $1,103,027.00
of Total: 100%
*Effective Net Rents consider tax advantage. Discount rate for present value of annual
advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage
figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes.
Beacon Bay 6/6/94 - Page 3
Exhibit D
Proportionate
Proportionate
Annual Amort.
Tidelands
%
%
Rent
Rent
of PV of Tax
Tax
Tidelands
Uplands
Tidelands
Uplands
Advantage
Advantage
0%
100%
$0
$8,482
$720
$0
100%
0%
$10,325
$0
$320
$320
100%
0%
$6,322
$0
$500
$500
85%
15%
$9,703
$1,712
$0
$0
0%
100%
$0
$6,310
$500
$0
0%
100%
$0
$6,057
$650
$0
0%
100%
$0
$6,455
$410
$0
$109,592
$288,215
$19,930
$5,251
$500,848
$204,372
$34,710
$24,984
$610,440
$492,587
$54,640
$30,235
55%
45%
100%
55%
*Effective Net Rents consider tax advantage. Discount rate for present value of annual
advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage
figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes.
Beacon Bay 6/6/94 - Page 3
Exhibit D