HomeMy WebLinkAboutC-7409-15 - Beacon Bay, 2 - Lease 2021BEACON BAY LEASE
THIS BEACON BAY LEASE ("Lease") is entered into as of the 2 day of August,
2021 ("Effective Date"), by and between the City of Newport Beach, a California municipal
corporation and charter city ("Lessor" or "City") and Scott T. Burnham, Trustee of The
Burnham Family Trust, dated September 25, 1996 ("Lessee"). Lessor and Lessee are
sometimes individually referred to herein as "Party" and collectively as the "Parties."
RECITALS
A. Lessor by virtue of a 1978 legislative grant found in Chapter 74 of the
Statutes of 1978, as amended ("Beacon Bay Bill"), holds the right, title, and interest to
certain tidelands and uplands commonly known as Beacon Bay and generally depicted
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. As required by the Beacon Bay Bill, the consideration to be received by the
City for the residential leases is the fair market rental value of such lots as finished
subdivided lots with streets constructed and all utilities installed.
D. On November 3, 1987, a majority of the electors in the Ci'Ly' approved a
measure authorizing the City Council to enter into residential leases in Beacon Bay for a
period not to exceed fifty (50) years.
E. On November 3, 1992, a majority of the electors in the City approved
Measure M authorizing 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 and the
Beacon Bay Bill, leased out the residential lots within Beacon Bay for fifty (50) year terms.
G. The current residential leases are set to expire on July 1, 2044, which is
preventing certain persons with existing leases within Beacon Bay from obtaining a
traditional thirty (30) year mortgage.
H. Lessor and Lessee desire a new residential lease for Beacon Bay with a
new fifty (50) year term and new provisions that are reflective of current conditions.
I. City has determined this Lease is consistent with the Beacon Bay Bill, the
City's Charter, General Plan, Zoning Ordinances, and all other applicable state and local
laws.
J. The California State Lands Commission reviewed the form of this Lease
and the range of consideration to be received by the City and determined that the Lease
is in conformance with the provisions in the Beacon Bay Bill.
1. AGREEMENT TO LEASE
1.1 Lease. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Lessor hereby leases to Lessee the real property
commonly known as Beacon Bay Lot 2, ("Property") which is more particularly described
in Exhibit "B", and generally depicted on Exhibit "A", each attached hereto and
incorporated by reference herein. If Lessee is a Limited Liability Corporation ("LLC")
Lessee shall provide Lessor with the name of its majority shareholder at the time of
execution of this Lease. The LLC may not change its majority shareholder without the
prior written consent of the City's City Manager or his/her designee. If approved, a change
of the majority shareholder triggers a re -appraisal of the Property and an adjustment of
Base Rent pursuant to the re -appraisal process in Section 3.6(b).
1.2 Reservation of Mineral Rights. Lessor expressly reserves all oil, oil rights,
gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and
under the Property and the right to grant and transfer the same, together with all
necessary and convenient rights to explore for, develop, produce and extract and take
the same, subject to the express limitation that any and all operations shall be carried on
at levels below the depth of five hundred feet (500') from the surface of the land by means
of wells, derricks and other equipment from surface locations on adjoining or neighboring
land, and subject further to all restrictions and regulations concerning the drilling for, and
production of, oil, gas, minerals, petroleum and other hydrocarbon substances specified
in the City's Charter and Municipal Code.
1.3 Net Lease. This Lease is a net lease, pursuant to which Lessor has no
obligation with respect to the payment of taxes, insurance, the cost of maintenance,
utilities and repairs or other costs or obligations associated with the Property, except as
expressly stated herein.
1.4 Termination of Prior Lease(s). Lessee affirmatively represents that: (a) the
persons executing this Lease have a hundred percent (100%) of all interests in any prior
lease(s) covering the Property; and (b) have authority to execute this Lease and be bound
by the terms herein. Upon the execution of this Lease, any lease(s) between the City and
the Lessee or any other party covering the Property shall automatically terminate and be
of no further effect. Lessee shall execute and record any document(s) that may be
re quired by C1ly' t0 �vivCiivE' L..' t��.iiiiiriutiC11 of any pri�ir i'c.'use(j) a�,CL'e1 the Property.
City shall owe no compensation to Lessee or any other party for the termination of a lease
under this section. Lessee shall indemnify and hold the City harmless from any and all
liability, loss, expense, damage, or claims which may arise directly or indirectly from or in
connection with any allegation that the representations made is this section are false.
2. TERM OF LEASE
2.1 Fixed Term. The term of this Lease shall be for a fixed period of fifty (50)
years commencing as of August;Z , 2021 ("Commencement Date") and terminating on
August 2-,5, 2071. The total term may not exceed fifty (50) years pursuant to the Beacon
Bay Bill.
2.2 Options. Upon the written request of Lessee and in the sole and absolute
discretion of City, this Lease may be terminated and a new lease (with the most current
terms approved by the City and/or State Lands Commission) executed with a term not to
exceed fifty (50) years pursuant to the payment of the "Option Fee" by Lessee for each
year the term is extended. The new lease's term shall be the cumulative total of the
purchased years under this section and the remaining years in this Lease (i.e., if ten (10)
years and one (1) month remain in this Lease and five (5) years are purchased under this
section the new lease shall be for a term of fifteen (15) years and one (1) month). The
Option Fee shall be calculated pursuant to a specified percentage, as provided in Exhibit
"C", attached hereto and incorporated by reference, of the fair market value of the
Property as determined by an appraisal, multiplied by the number of years that are
purchased by the Lessee (i.e., for illustrative purposes, if the specified percentage is one
percent (1 %) and the appraised Property value is one hundred dollars ($100) and Lessee
desires to extend the term five (5) years, Lessee would owe the City five dollars ($5) [$1
x 5 years= $5]). The Option Fee shall be paid to City by Lessee at the time of execution
of the new lease.
The Property appraisal shall be conducted after the City's approval of the written
request submitted by Lessee. The City's approval of the written request shall be valid for
six (6) months or some other time period as may be agreed upon by the parties. Lessor
shall submit three (3) California licensed appraisers to Lessee; Lessee shall select one
(1) appraiser from the three (3) submitted appraisers to appraise the Property. Lessee
shall pay all costs associated with the appraiser and the appraisal. For purposes of the
Option Fee calculation, in no event shall the appraised fair market value be less than the
Property value used to determine Base Rent (as defined in Section 3.2) in Sections 3.1
and 3.2 of the then effective Lease. Because there will be no sale of the Property, the
Base Rent for the new lease shall be calculated pursuant to Section 3.6(b),
notwithstanding the appraisal requirement in Section 3.6(b), the parties may rely upon the
appraisal conducted pursuant to this section to calculate the Base Rent.
2.3 Holdover. This Lease shall terminate and become null and void
without further notice upon the expiration of the term of this Lease. Any holding over by
Lessee after the expiration of the term shall not constitute a renewal or extension and
shall not give Lessee any rights in or to the Property or any part thereof except as
expressly provided in this Lease. Any holding over after the expiration of the term with
the consent of Lessor shall be construed to be a tenancy from month-to-month on the
same terms and conditions set forth in this Lease insofar as such terms and conditions
can be applicable to a month-to-month tenancy, except that the rental for each month or
any portion thereof during such holdover period shall be an amount equal to one hundred
fifty percent (150%) of one -twelfth (1/12) of the annual rent for the most recent year paid.
The month-to-month tenancy may be terminated by Lessee or Lessor upon thirty (30)
calendar days' prior written notice to the other.
3. RENT & TRANSFERABILITY
3.1 Rent Calculation. Annual rent for the Property shall be calculated at the
rate of two and half percent (2.5%) of the total of all consideration paid for the Property
or the appraised value of the Property, including any improvements or structures, but
excluding any consideration paid for the transfer of personal property in connection with
such transaction. The annual rent shall be adjusted from time -to -time pursuant to Section
3.3. The rent calculation provided in this section shall serve as the basis for the Base
Rent (defined below) in Section 3.2.
3.2 Base Rent. Lessee agrees to pay Lessor rent for the use and occupancy
of the Property, in twelve (12) equal monthly installments on the first day of each month
("Base Rent"). Said sums shall be paid in lawful money of the United States of America.
If the Commencement Date is other than the first day of a month, rent during any partial
month at the beginning and at the end of the lease term will be prorated. Base Rent
hereunder will be Eleven Thousand Seven Hundred Ninety -Four Dollars and 79/100
($11,794.79) for an annual total of One Hundred Forty -One Thousand Five Hundred
Thirty -Seven Dollars and 50/100 ($141,537.50). Base Rent due hereunder will be subject
to the rent adjustment provisions of Section 3.3 below. Lessee shall send said rent to the
mailing address or send an electronic fund transfer via the web address provided in
Section 3.5. Lessee shall be responsible for any delays in the mode of sending the rent
payment to Lessor.
(a) Base Rent shall be due on the first day of each month. If said rent is
received later than the fifteenth (15th) day of the month, there shall be a delinquency
charge equal to five percent (5%) of the month's Base Rent due.
(b) Each monthly installment of Base Rent shall bear interest if not paid
promptly on or before the date it becomes delinquent at the rate of five percent (5%) per
annum from the date it becomes delinquent until it is paid by Lessee to Lessor. This
interest charge shall be in addition to the delinquency charge set forth in Section 3.2(a).
3.3 Rent Adiustments. Monthlv Base Rent may be adjusted on August 1St of
each Lease Year (the term "Lease Year" as used herein refers to successive twelve (12)
month periods, commencing with the Commencement Date of this Lease) to reflect
increases or decreases in the cost of living as indicated by the Consumer Price Index
described below. Monthly Base Rent may be adjusted if the Consumer Price Index for
the Los Angeles — Orange County - Riverside Area, All Urban Consumers, All Items
("Index"), as published by the United States Department of Labor, Bureau of Labor
Statistics ("Bureau"), increases or decreases over the Base Period Index. The initial
"Base Period Index" shall be the Index for the calendar month which is four (4) months
prior to the month of the Commencement Date (thus, April 2021, which equals 285.808).
The initial Base Period Index shall be compared with the Index for the same calendar
month for each subsequent Lease Year ("Comparison Index"). The Comparison Index
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used for a given year's adjustment calculation will become the Base Period Index for
purposes of the next annual rent adjustment calculation. If the Comparison Index is
higher or lower than the Base Period Index, then Base Rent for the next Lease Year shall
be increased or decreased by the amount of such percentage change. Should the Bureau
discontinue the publication of the above Index, or publish same less frequently, or alter
same in some other manner, then the Parties shall adopt a substitute Index or substitute
procedure which reasonably reflects and monitors consumer prices.
Notwithstanding the Index adjustments described above, if Lessor, in its sole and
absolute discretion, believes that notwithstanding such adjustments, monthly Base Rent,
as adjusted, does not accurately reflect the fair market rental value of the Property, Lessor
may elect to further adjust monthly Base Rent at the commencement of the thirtieth (30th)
Lease Year. Lessor will provide notice to Lessee not earlier than six (6) months nor later
than three (3) months prior to the expiration of the twenty-ninth (29th) Lease Year of
Lessor's election to further adjust monthly Base Rent. Within fifteen (15) days thereafter,
Lessor and Lessee will attempt to agree upon an adjustment in Base Rent. If Lessor and
Lessee are unable to agree, the Property will be appraised to determine its fair market
rental value. Lessor shall submit three (3) California licensed appraisers to Lessee;
Lessee shall select one (1) appraiser from the three (3) submitted appraisers to appraise
the Property. Lessor shall pay all costs associated with the appraiser and the appraisal.
The fair market rental value determined by the appraiser will constitute monthly Base
Rent for the thirtieth (30th) Lease Year and each successive year remaining on the Lease;
provided, however, that in no event will monthly Base Rent so determined be less than
that otherwise payable through the annual Index adjustments described above.
3.4 Additional Rent. All other payments from Lessee described in this Lease,
whether to Lessor or third parties (i.e., for the payment of taxes, utilities, insurance,
maintenance and the like) constitute "Additional Rent." Included within Additional Rent is
any service charge incurred by City when processing the Rent (e.g., credit card
transaction fee, etc.), such service charged shall be passed onto Lessee without any
additional mark-up by the City. All references in this Lease to "Rent" include Base Rent
and Additional Rent.
3.5 Place for Payment of Rent. All Rent that becomes due and payable under
this Lease shall be paid to Lessor in person or by United States mail at the Cashier's
Office located at 100 Civic Center Drive, P.O. Box 1768, Newport Beach, California
92658-8915, or electronically at www.newportbeachca.gov, or at any other place or
places that Lessor may designate by written notice to Lessee.
3.6 Calculation of Base Rent for Leases Without Corresponding Sale.
(a) Through January 1, 2015, Lessor will allow current lessees within
Beacon Bay to voluntarily terminate their prior lease (that had an effective date of July 1,
1994 and an expiration date of July 1, 2044) and enter into this Lease. No transfers from
the prior lease to this Lease are allowed after January 1, 2015. If a current lessee
terminates their prior lease and enters into this Lease prior to January 1, 2015 or if Lessee
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purchases additional years pursuant to Section 2.2, there will not be a sale price to
calculate Base Rent.
(b) The Base Rent shall be calculated at the rate of two and half percent
(2.5%) of the appraised fair market value of the Property including any improvements or
structures, but excluding any personal property. Lessor shall submit three (3) California
licensed appraisers to Lessee; Lessee shall select one (1) appraiser from the three (3)
submitted appraisers to appraise the Property. Lessee shall pay all costs associated with
the appraiser and the appraisal. In no event shall the Base Rent be less than the dollar
amount received by the Lessor under the former lease. The annual Base Rent shall be
adjusted from time -to -time pursuant to Section 3.3.
3.7 Prohibition Against Transfer or Assignment. With the exception of the
transfer and assignment provisions in Section 7 and Section 3.8, this Lease may not be
transferred or assigned by Lessee. Any attempt to transfer or assign this Lease shall be
an event of default subject to the remedies provided in Section 13.2. Any purported
assignment or transfer in violation of this section shall be null and void.
3.8 Exempt Transfers or Assignments. Notwithstanding the prohibition against
transfer and assignment provided in Section 3.7, the Lease may be transferred by Lessee
if:
(a) the transfer is caused by the death of a spouse and the full interest
of the deceased spouse is transferred to a surviving spouse;
(b) 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;
(c) 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;
(d) the transfer is to an inter vivos trust, living trust, or other similar estate
planning arrangement of Lessee and the sole beneficiaries are the Lessee, the Lessee's
spouse, or a tenant as contemplated in Section 3.8(b); or
(e) the transfer is to a LLC; provided at the time of transfer the Lessee
is the majority share holder of the LLC. The LLC may not change its majority shareholder
without the prior written consent of the City's City Manager or his/her designee. If
approved, a change of the majority shareholder triggers a re -appraisal of the Property
and an adjustment of Base Rent pursuant to the re -appraisal process in Section 3.6(b).
In the event of any transfer under this Section 3.8 the Lease term shall be
for the remaining years existing on the Lease prior to the transfer (i.e., the term shall not
be extended due to the transfer).
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4. LESSOR'S TITLE
Lessor covenants, represents and warrants that Lessee, its guests and permitted
successors and assigns shall peaceably and quietly have, hold and enjoy the sole and
exclusive use and enjoyment of the Property, or any part thereof, for the full term of this
Lease and as the same may be extended as provided herein. This covenant and warranty
of quiet enjoyment shall only apply to Lessor and those claiming or acting by, through or
under Lessor.
5. USE AND CONDITION OF PROPERTY
5.1 Use of Property. The Property shall be used solely for residential purposes
consistent with the City's Zoning and Municipal Code. Lessee may demolish, construct,
remodel, reconstruct and maintain structures on the Property for residential purposes so
long as the structures and construction are authorized by appropriate City permits and
fully comply with all City ordinances, resolutions, regulations, policies, and plans. Lessee
shall also obtain permission to construct and/or maintain structures from the Beacon Bay
Community Association, California Coastal Commission, and any other private or
governmental agency if required by law. Nothing in this section shall be interpreted as a
pre -approval of any permit or other approval required for the use of the Property.
5.2 Maintenance of Improvements. Lessor shall not be required to make any
changes, alterations, additions, improvements, or repairs in on or about all or part of the
Property. Lessee shall, at all times during the term of this Lease and without any cost or
expense to Lessor, keep and maintain, the Property, including, without limitation, all
structures, facilities, walks, curbs, parkways and other improvements, in good order and
repair and in a clean, safe, sanitary and orderly condition. Lessee shall cause to be
constructed, maintained and repaired all utilities, pipes, walls, sewers, drains, and other
improvements on the Property to the extent required by law or as necessary to maintain
the improvement in good order and repair and safe and sanitary condition.
5.3 Compliance with Laws. Lessee shall make, or cause to be made, any
additions, alterations or repairs to any structure or improvement on the Property which
may be required by, and Lessee shall otherwise observe and comply with, any law,
statute, ordinance, plan, resolution or policy applicable to the Property. Lessee shall
indemnify, defend and hold Lessor har-mless irorr, 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 Lease. All repairs, additions, and alterations
to the structures or improvements on the Property 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.
5.4 As Is Condition of Property. Lessee expressly accepts the Property "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 Property 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 Property 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 Property 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 Property for the purposes provided
in this Lease.
5.5 Tidelands Grant. The Property may be located on land that is the subject
of a Tidelands Grant from the State of California to the City. Lessee shall not take any
action that would cause the City to be in violation of any provisions of that Tidelands
Grant. If the Property is located upon tidelands and the State of California terminates, or
modifies the Tidelands Grant to prohibit the uses contemplated under this Lease, this
Lease shall terminate as a result and the Parties shall be released from all Liabilities and
obligations under this Lease and Lessor shall owe no compensation to Lessee.
6. TAXES AND UTILITIES
6.1 Lessee to Pay Taxes. In addition to the Base Rent required to be paid under
this Lease, Lessee shall pay any and all real and personal property taxes, including
possessory interest tax (California Revenue and Taxation Code § 107.6), assessments,
and other charges of any description levied or assessed during the term of this Lease by
any governmental agency or entity on or against the Property, any portion of or interest
in the Property, or any improvements on the Property.
6.2 Proration of Taxes. In the event that this Lease commences, terminates or
expires during a tax year, Lessee shall pay the taxes for the period of such year during
which this Lease was in effect.
6.3 Payment Before Delinquency. Any and all taxes and assessments and
installments of taxes and assessments required to be paid by Lessee under this Lease
shall be paid when due and the official and original receipt for the payment of such tax,
assessment, or installment shall be given to Lessor upon request.
6.4 Contest of Tax. Lessee shall have the right to contest, oppose, or object to
the amount or validity of any tax, assessment, or other charge levied on or assessed
against the Property or any part thereof; provided, however, that the contest, opposition
or objection must be filed before the tax, assessment or other charge at which it is directed
becomes delinquent and written notice of the contest, opposition or objection must be
given to Lessor at least twenty (20) days before the date the tax, assessment, or other
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charge becomes delinquent. Furthermore, no such contest, opposition or objection shall
be continued or maintained after the date the tax, assessment, or other charge at which
it is directed becomes delinquent unless Lessee has:
(a) Paid such tax, assessment, or other charge under protest prior to its
becoming delinquent; or
(b) Obtained and maintained a stay of all proceedings for enforcement
and collection of the tax, assessment, or other charge by posting such bond or other
matter required by law for such a stay; or
(c) Delivered to Lessor a good and sufficient undertaking in an amount
reasonably specified by Lessor and issued by a bonding corporation authorized to issue
undertakings in California conditioned on the payment by Lessee of the tax, assessment
or other charge together with any fines, interest, penalties, costs and expenses that may
have accrued or been imposed thereon within thirty (30) days after final determination of
Lessee's contest, opposition or objection to such tax, assessment or other charge.
6.5 Tax Returns and Statements. Lessee shall, as between Lessor and
Lessee, have the duty of attending to, preparing, making, and filing any statement, return,
report, or other instrument required or permitted by law in connection with the
determination, equalization, reduction or payment of any taxes, assessments or other
charges that are or may be levied on or assessed against the Property, any portion or
interest in the Property, or any improvements on the Property.
6.6 Tax Hold -Harmless Clause. Lessee shall indemnify and hold Lessor and
the property of Lessor, including the Property and any improvements now or hereafter
located thereon, free and harmless from any liability, loss, or damage resulting from any
taxes, assessments, or other charges required by this Lease to be' paid by Lessee and
from all interests, penalties, and other sums imposed thereon and from any sales or other
proceedings to enforce collection of any such taxes, assessments, or other charges.
6.7 Utilities. Lessee shall contract in its own name and fully and promptly pay
for all water, gas, heat, light, power, telephone service, and other public utilities of every
kind furnished to the Property throughout the term hereof, and all other costs and
expenses of every kind whatsoever of or in connection with the use, operation, and
maintenance of the Property and all activities conducted thereon, and Lessor shall have
no responsibility of any kind for any thereof. In the event that it is necessary for Lessor
to provide any of the foregoing utilities to Lessee on a pass through basis, Lessee shall
provide a separate meter for the Property and shall reimburse Lessor for Lessee's usage
of such utility service within ten (10) days of Lessor's invoice to Lessee. Furthermore,
Lessee shall be solely responsible for the cost and expense of any upgrade, modification
or other utility installation which is required as a result of Lessee's use of the Property.
6.8 Payment by Lessor. Should Lessee fail to pay within the time specified in
this Lease any taxes, assessments, or other charges required by this Lease to be paid
by Lessee, Lessor may, upon ten (10) days prior written notice and demand to Lessee,
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pay, discharge or adjust such tax, assessment, or other charge for the benefit of Lessee.
In such event, Lessee shall promptly on written demand of Lessor reimburse Lessor for
the full amount paid by Lessor in paying, discharging or adjusting such tax, assessment
or other charge, together with interest thereon at the rate of ten percent (10%) per annum
from the date of payment by Lessor until the date of repayment by Lessee. Where no
time within which any charge required by this Lease to be paid by Lessee is specified in
this Lease, such charge must be paid by Lessee before it becomes delinquent.
7. ENCUMBERANCES
7.1 Right to Encumber. Lessee may encumber this Lease by deed of trust,
mortgage, or similar instrument, in favor of any bona fide lender ("Lender" or "Mortgagee")
in a bona fide loan transaction for any purpose without the consent of Lessor. To
determine whether a loan is a bona fide lending transaction, and not an arrangement for
transfer of the possession or title to the Property to the putative lender, Lessee and the
Lender agree to provide Lessor with all documentation executed between Lessee and the
Lender concerning the loan upon request of Lessor. Neither Lessee nor Lessor shall
have the power to encumber Lessor's interest in the Property. Any encumbrance shall
be subject to all covenants, conditions and restrictions in this Lease and to all rights and
interests of Lessor except as otherwise expressly provided in this Lease. Lessee shall
give Lessor prior written notice of any encumbrance.
7.2 Notice to Lender. Lessor shall have no obligation to give any Lender any
written notice pursuant to this Lease unless tie Lender has givers Lessor written notice of
its name, address, and nature of encumbrance ("Complying Lender(s)"). Lessor shall
give all Complying Lenders a copy of any written notice of default, notice of termination
or other notice which may affect Lessee's rights 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 Complying Lender at
the address furnished in writing by Complying Lender. Failure by Complying Lender to
actually receive notice shall not affect Lessor's compliance with this section provided
notice was deposited in the United States mail.
7.3 Modification. Lessor and Lessee agree that they will not modify, surrender
or cancel this Lease by mutual agreement without providing prior written notice to the
Lender.
7.4 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:
(a) perform any act required of Lessee pursuant to this Lease;
(b) 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
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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.
7.5 Right of Lender to Cure Default. Lessor shall give written notice of any
default or breach of this Lease by Lessee to Complying Lenders and afford Complying
Lenders the opportunity, after notice, to:
(a) 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;
(b) 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
(c) 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 Complying Lender.
7.6 Foreclosure in Lieu of Cure. Complying 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:
(a) 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
Complying Lender of the notice describing the breach or default;
(b) the proceedings are diligently pursued to completion in the manner
authorized by law; and
(c) Complying 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 Complying Lender.
7.7 New Lease. Notwithstanding any other provision of this Lease, should this
Lease terminate or be terminated because of any default or breach by Lessee, Lessor
shall enter into a new lease with Lender as lessee provided:
(a) the written request for the new lease is served on Lessor by Lender
within thirty (30) days after the termination of this Lease.
(b) the new lease contains the same terms and conditions as this Lease
except for those which have already been fulfilled or are no longer applicable.
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(c) on execution of the new lease by Lessor, Lender shall pay any and
all sums that would be due upon execution of the new lease, but for its termination, and
shall fully remedy, or agree in writing to remedy, any other default or breach committed
by Lessee that can reasonably be remedied by Lender.
(d) Lender shall, upon execution of the new lease, pay all reasonable
costs and expenses (including attorney's fees) incurred in terminating this Lease,
recovering possession of the Property from Lessee, in preparing the new lease.
(e) The new lease with Lender shall be for the remainder of the term
existing in the prior Lease (i.e., if twenty-five (25) years remain on the Lease at the time
of termination/breach the new lease shall be for a term of twenty-five (25) years).
7.8 Miscellaneous. The following provisions shall apply to Lessee and any
Lender:
(a) Any Lender shall be liable to perform the obligations of the Lessee
under this Lease only so long as the Lender holds title to this Lease; and
(b) Lessee shall, within ten (10) days after the recordation of any trust
deed or other security instrument, record, at Lessee's sole expense, Lessor's written
request for a copy of any notice of default and/or notice of sale under any deed of trust
as provided by state law.
8. RESTORATION AND ENVIRONMENTAL MATTERS
8.1 Restoration of the Property. Should any improvements on the Property be
damaged or destroyed by fire or other casualty or any cause whatsoever, Lessee, will
cause the commencement of reconstruction to the damaged or destroyed improvements
within ninety (90) days, or such other time period as may be mutually agreed upon by the
Parties, after such damage and destruction and will thereafter cause such reconstruction
to be diligently prosecuted to completion.
8.2 Environmental Matters.
(a) Definitions. The following terms will be defined as follows:
(i) Environmental Law. "Environmental Law" shall include all
federal, state, and local environmental, health, and safety laws, statutes, ordinances,
regulations, rules, judgments, orders, and notice requirements, which were in effect as of
the date of closing, which regulate or relate to (a) the protection or clean-up of the
environment; (b) the use, treatment, storage, transportation, handling or disposal of
hazardous, toxic or otherwise dangerous substances, wastes or materials; (c) the quality
of the air and the discharge of airborne wastes, gases, particles, or other emissions; (d)
the preservation or protection of waterways, groundwater, or drinking water; (e) the health
and safety of persons or property; or (6) impose liability with respect to any of the
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foregoing, including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA) [42 USCS §§ 9601 et seq.]; the
Resource Conservation and Recovery Act of 1976 (RCRA) [42 USCS §§ 6901 et seq.];
the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) [33
USCS §§ 1251 et seq.]; the Toxic Substances Control Act (TSCA) [15 USCS §§ 2601 et
seq.]; the Hazardous Materials Transportation Act (HMTA) [49 USCS §§ 1801 et seq.]; the
Insecticide, Fungicide, Rodenticide Act [7 USCS §§ 136 et seq.]; the Superfund
Amendments and Reauthorization Act [42 USCS §§ 6901 et seq.]; the Clean Air Act [42
USCS §§ 7401 et seq.]; the Safe Drinking Water Act [42 USCS §§ 300f et seq.]; the Solid
Waste Disposal Act [42 USCS §§ 6901 et seq.]; the Surface Mining Control and
Reclamation Act [30 USCS §§ 1201 et seq.]; the Emergency Planning and Community
Right to Know Act [42 USCS §§ 11001 et seq.]; the Occupational Safety and Health Act
[29 USCS §§ 655 and 657]; the California Underground Storage of Hazardous Substances
Act [H & S C §§ 25280 et seq.]; the California Hazardous Substances Account Act [H & S
C §§ 25300 et seq.]; the California Hazardous Waste Control Act [H & S C §§ 25100 et
seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C §§ 24249.5
et seq.]; the Porter -Cologne Water Quality Act [Water C §§ 13000 et seq.] together with
any amendments of or regulations promulgated under the statutes cited above.
(ii) Hazardous Materials. "Hazardous Materials" shall include any
substance which falls within the definition of hazardous substance, hazardous waste,
hazardous material, toxic substance, solid waste, or pollutant or contaminant, under any
Environmental Law.
(b) Lessee's Obligations. Lessee will not use, occupy, or permit any
portion of the Property to be used or occupied in violation of any Environmental Law or to
store any Hazardous Material.
(c) Environmental Indemnity. Lessee shall indemnify, defend, and hold
Lessor and Lessor's, City Council, officers, appointees, volunteers, employees, agents,
successors and assigns free and harmless from and against all Damages (as defined
below) that may at any time be imposed upon, incurred by, or asserted or awarded against
Lessor or any of them in connection with or arising from any breach of Lessee's
obligations hereunder or out of any violation by Lessee of any Environmental Law; or
resulting in the imposition of any lien or claim for the recovery of any costs for
Ci�vifui^iitieriitdi Gieanii�i or other response l;oStS relating to rile release or hreateneu
release of Hazardous Materials due to the construction of any improvements on the
Property or the use or misuse of the Property by the Lessee. The term "Damages" shall
mean all liabilities, demands, claims, actions or causes of action, regulatory, legislative or
judicial proceedings, assessments, levies, losses, fines, penalties, damages, costs and
expenses, in each case as awarded by a court or arbitrator, including, without limitation:
(i) reasonable attorneys', accountants', investigators', and experts' fees and expenses
sustained or incurred in connection with the defense or investigation of any such liability,
and (ii) costs and expenses incurred to bring the Property into compliance with
Environmental Laws. The term "Damages" also includes, expressly, those Damages that
arise as a result of strict liability, whether arising under Environmental Laws and
13
regulations or otherwise. Lessee's obligations hereunder will survive the expiration or
sooner termination of this Lease.
9. INDEMNITY
9.1 Indemnity Agreement. In addition to the Environmental Indemnity provided
above, except to the extent caused by the sole negligence and/or willful misconduct of
the Lessor, Lessee shall defend, indemnify and hold Lessor and Lessor's City Council,
officers, appointees, volunteers, employees, agents, successors and assigns free and
harmless from any and all liability, claims, loss, damages, or expenses resulting from
Lessee's occupation and use of the Property, specifically including, without limitation, any
liability, claim, loss, damage, or expense arising by reason of:
(a) The death or injury of any person, including any person who is a
guest or invitee of Lessee, or by reason of the damage to or destruction of any property,
including property owned by Lessee or by any person who is a guest or invitee of Lessee,
from any cause whatever while such person or property is in or on the Property or in any
way connected with the Property or with any of the improvements or personal property
on the Property;
(b) The death or injury of any person, including any person who is a
guest or invitee of Lessee, or by reason of the damage to or destruction of any property,
including property owned by Lessee or any person who is a guest or invitee of Lessee,
caused or allegedly caused by either (i) the condition of the Property, or improvements
on the Property, or (ii) some act or omission on the Property by Lessee or any person in,
on, or about the Property with or without the permission and consent of Lessee;
(c) Any work performed on the Property or material furnished to the
Property at the request of Lessee or any person or entity acting for or on behalf of Lessee;
or
(d) Lessee's failure to comply with any material legal or other
requirement validly imposed on Lessee or the Property by a governmental agency or
authority having jurisdiction over the Property.
10. CONDEMNATION
10.1 Definitions of Terms.
(a) The term "total taking" as used in this Lease shall mean the taking of
the entire Property under the power of eminent domain or the taking of so much of the
Property as to prevent or substantially impair the use thereof by Lessee for residential
purposes.
(b) The term "partial taking" shall mean the taking of only a portion of the
Property which does not constitute a total taking as defined above.
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(c) The term "taking" shall include a voluntary conveyance by Lessor to
an agency, authority or public utility under threat of a taking under the power of eminent
domain in lieu of formal proceedings.
(d) The term "date of taking" shall be the date upon which title to the
Property or portion thereof passes to and vests in the condemner.
10.2 Effect of Taking. If, during the term hereof, there shall be a total taking or
partial taking under the power of eminent domain, then the leasehold estate of the Lessee
in and to the Property or the portion thereof taken shall cease and terminate as of the
date of taking of said Property. If this Lease is so terminated in whole or in part, all Rent
and other charges payable by Lessee to Lessor hereunder and attributable to the
Property or portion thereof taken shall be paid by Lessee up to the date of taking by the
condemner, and the Parties shall thereupon be released from all further liability in relation
thereto.
10.3 Allocation of Award for Total Taking. All compensation and damages
awarded for the total taking of the Property and Lessee's leasehold interest therein shall
be allocated as follows:
(a) The Lessor shall be entitled to an amount equal to the sum of the
following:
(i) The fair market Value of the Property as improved (exclusive
of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted
by multiplying such fair market value by the factor for the present worth of one dollar
($1.00) at five percent (5%) per annum compound interest for the number of years
remaining from the date of taking to the date of the expiration of the term of this Lease;
and
(ii) The present worth of Rent 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 five percent (5%) per annum compound interest (Inwood Coefficient) for the
number of years in such period.
(b) The Lessee and the Mortgagee, if any shall be entitled to the amount
remaining of the total award after deducting therefrom the sums to be paid to Lessor as
hereinafter provided. Lessee and Mortgagee may decide between themselves how an
award will be divided between them. In the event of any dispute between the Lessee and
Mortgagee as to the division of an award the City may satisfy its responsibilities under
this Lease by transferring any money due under this section to Lessee. Lessee shall
indemnify City from any and all claims or actions brought by Mortgagee or any other party
for any award under this section.
15
10.4 Allocation of Award for Partial Taking. All compensation and damages
awarded for the taking of a portion of the Property shall be allocated and divided as
follows:
(a) The Lessor shall be entitled to an amount equal to the sum of the
following:
(i) The proportionate reduction of the fair market value of the
Property 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 five percent (5%) 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
(ii) 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 one dollar ($1.00) per annum at five percent (5%) 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.
(b) The Lessee and the Mortgagee, if any shall be entitled to the amount
remaining of the total award after deducting therefrom the sums to be paid to Lessor as
hereinabove provided. Lessee and Mortgagee may decide between themselves how an
award will be divided between them. In the event of any dispute between the Lessee and
Mortgagee as to the division of an award the City may satisfy its responsibilities under
this Lease by transferring any money due under this section to Lessee. Lessee shall
indemnify City from any and all claims or actions brought by Mortgagee or any other party
for any award under this section.
10.5 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 Base Rent payable by Lessee in the ratio that the Fair Market Rental Value
of the Property at the date of taking bears to the Fair Market Rental Value of the Property
immediately thereafter.
11. BEACON BAY COMMUNITY ASSOCIATION
11.1 Membership in Association. As a material part of the consideration of this
Lease, and as an express condition to the continuance of any of the rights of Lessee
pursuant to this Lease, Lessee agrees to become, and during the term of this Lease to
remain, a member in good standing of the Beacon Bay Community Association
("Association").
11.2 Compliance with Rules and Regulations. Lessee agrees to abide by the
articles of incorporation, bylaws, covenants, conditions and restrictions and any
amendment thereto ("CC&Rs") attached hereto as Exhibit "D" and incorporated herein by
16
reference, and all rules and regulations of the Association, and to pay to the Association,
before delinquency, all valid dues, fees, assessments and other charges properly levied
or assessed by the Association. Lessee's failure to comply with the provisions of Section
11.1 or 11.2 shall constitute a material breach of this Lease.
11.3 Use of Common Area. Lessee shall have the right to use the streets,
beaches, walkways, tennis courts, docks, piers, and common landscaped areas in
Beacon Bay (as depicted on Exhibit "A") and which are leased to the Association by
Lessor in consideration of the maintenance thereof by such Association and Rent to be
paid by individual Lessees under their respective leases.
11.4 Maintenance 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).
Lessor reserves the right to 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 a pro rata share of such
costs, and to collect such costs from Lessee in the form of Rent over the remaining term
of this Lease. Subject to a public health, safety, and welfare finding, Lessor reserves the
right to commence improvements to the streets, curbs, gutters, water lines, sewer lines',
drainage facilities, street lighting, telephone and electricity lines and other Infrastructure
facilities in Beacon Bay. If Lessor constructs any improvements Lessor has the right to
assess Lessee for a pro rata share of such costs, and to collect such costs from Lessee
in the form of Rent over the remaining term of this Lease.
11.5 Lessor Maintenance of Common Areas. If the Association, after receiving
prior written notice from Lessor, fails or ceases to maintain community facilities, Lessor
may, at its option and without obligation, assume the obligations of the Association to
maintain, repair, install or improve community facilities. In such event, Lessee shall pay
a pro rata share of Lessor's reasonable expenses in maintaining and operating the
community facilities, including a reasonable management fee or the fee charged by a
management agent. Lessee's pro rata share shall be determined by dividing Lessor's
costs by the number of residential lots within Beacon Bay (currently seventy-two (72) lots).
Lessee's pro rata share of the annual costs incurred by Lessor shall be paid within thirty
(30) days after written notice of the amount due, and any failure to pay shall constitute a
material breach of this Lease. The costs of maintaining and operating community facilities
shall be determined annually and solely from the financial records of Lessor.
12. INSURANCE
12.1 General Conditions. All insurance required to be carried pursuant to this
Lease shall be obtained from reputable carriers licensed to conduct business in the State
of California. Each policy required to be carried pursuant to this Lease 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 less than twenty (20)
days prior written notice to Lessor.
17
12.2 Fire Insurance. Lessee shall, during the term of this Lease, insure all
structures and improvements on the Property against loss or damage by fire or other risk
for residential structures. The insurance shall provide coverage to one hundred percent
(100%) of the full insurable replacement value of all improvements on the Property, with
the loss payable to Lessee and Lessor unless this Lease is terminated by Lessor for
default of Lessee in which case the proceeds of insurance shall be paid to Lessor.
12.3 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 Property in amounts not less than:
(a) $1,000,000 per occurrence for injury to or death of, one (1) person;
(b) $1,000,000 for damage to or destruction of property.
These dollar amounts may be adjusted by Lessor with no less than ninety (90)
days prior written notice to Lessee.
12.4 Primary Insurance Coverage. Lessee's insurance coverage shall be
primary insurance and/or primary source of recovery as respects to City, its elected or
appointed officers, agents, officials, employees and volunteers as respects to all claims,
losses, or liability arising directly or indirectly from the Lessee's use and occupation of
Property. Any insurance or self-insurance maintained by City, its officers, officials,
employees and volunteers shall be excess of the Lessee's insurance and shall not
contribute with it.
13. DEFAULT
13.1 Events of Default. The occurrence of any one (1) or more of the following
events shall constitute a material default and breach of this Lease by Lessee:
(a) The maintenance of the Property in violation of any applicable
provisions of the City's Municipal Code and Zoning Code, State Law, Federal Law, and/or
the Association's CC&Rs;
(b) 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
required by this paragraph;
(c) The failure by Lessee to perform any of the provisions of this Lease
and any Exhibits attached hereto to be performed by Lessee, if the failure to perform
continues for a period of thirty (30) days after written notice thereof has been given to
18
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
(d) The making by Lessee of any general assignment, or general
arrangement for the benefit of creditors; the filing by or against Lessee of a petition to
have Lessee adjudged a bankrupt or a petition for reorganization or arrangement of any
law relating to bankruptcy unless the same is dismissed within sixty (60) days; the
appointment of a trustee or receiver to take possession of substantially all of Lessee's
assets located at the Property or of Lessee's interest in the Lease, where possession is
not restored to Lessee within thirty (30) days; or the attachment, execution or other judicial
seizure of substantially all of Lessee's assets located at the Property or of Lessee's
interest in the Lease, where such seizure is not discharged within thirty (30) days. Notices
given under this paragraph shall specify the alleged default and the applicable Lease
provisions, and shall demand that Lessee perform the provisions of this Lease or pay the
rent that is in arrears, as the case may be, within the applicable period of time. No such
notice shall be deemed a forfeiture or a termination of this Lease unless Lessor so elects
in the notice.
13.2 Lessor's Remedies. In the event of any default by Lessee as defined in this
Lease, Lessor may, in addition to any rights or remedies permitted by law, do the
following:
(a) Terminate Lessee's right to possession of the Property by any lawful
means, in which case this Lease shall terminate and Lessee shall immediately surrender
possession of the Property to Lessor. In such event, Lessor shall be entitled to recover
from Lessee all amounts to which Lessor is entitled pursuant to Section 1951.2 of the
Califomia Civil Code, or any other provision of law, including, without limitation, the
following:
(i) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the amount of
the loss that Lessee proves could be reasonably avoided: and
(ii) Any other amount necessary to compensate Lessor for all
detriment proximately caused by Lessee's failure to perform obligations pursuant to this
Lease or which in the ordinary course of things would be likely to result from the breach,
including, without limitation, the cost of recovering possession, expenses of reletting
(including necessary repair, renovation and alteration, and any other reasonable costs.
The "worth at the time of award" of all rental amounts other than that referred to in clause
(i) above shall be computed by allowing interest at the rate of five percent (5%) per annum
from the date amounts accrue to Lessor. The worth at the time of award of the amount
referred to in clause (i) shall be computed by discounting such amount at one (1)
percentage point above the discount rate of the Federal Reserve Bank of San Francisco
at the time of award.
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(b) Without terminating or affecting the forfeiture of this Lease or, in the
absence of express written notice of Lessor's election to do so, relieving Lessee of any
obligation pursuant to this Lease, Lessor may, but need not, relet all or a portion of the
Property at any time, or from time -to -time, and on such terms and conditions as Lessor,
at its sole discretion, deems appropriate. Whether or not the Property is relet, Lessee
shall pay all amounts required by this Lease up to the date that Lessor terminates
Lessee's right to possession of the Property. Lessee shall make such payments at the
time specified in the Lease and Lessor need not wait until termination of the Lease to
recover sums due by legal action. If Lessor relets all or a portion of the Property, the
reletting shall not relieve Lessee 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 Property 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:
Property;
(i) Have accepted any surrender by Lessee of this Lease or the
(ii) Have terminated this Lease; or
(iii) 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.
(c) 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 amounts specified in this Lease.
13.3 Default By Lessor. Lessor shall not be in default under this Lease 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. Alternatively, Lessor may in its sole and
absolute discretion decide not to cure a default and instead elect to terminate this Lease.
In the event of termination under this section Lessor shall owe no compensation to
Lessee.
(a) No Damages. The parties acknowledge that Lessor would not have
entered into this Lease if it were to be liable in damages under, or with respect to, this
Lease or any of the matters referred to in this Lease. Accordingly, Lessee covenants on
behalf of itself and its successors and assigns, not to sue Lessor (either in its capacity as
lessor in this Lease or in its capacity as the City of Newport Beach) for damages or
monetary relief for any breach of this Lease by Lessor or arising out of or connected with
20
any dispute, controversy, or issue between Lessor and Lessee regarding this Lease or
any of the matters referred to in this Lease or any future amendments or enactments
thereto, or any land use permits or approvals sought in connection with the Property, the
parties agreeing that declaratory and injunctive relief, mandate, and specific performance
shall be Lessee's sole and exclusive judicial remedies.
13.4 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.
13.5 Determination of Rental Value. In any action or unlawful detainer
commenced by Lessor, the reasonable rental value of the Property shall be deemed to
be the amount of Rent and/or additional monies due (such as reimbursement for costs of
Infrastructure improvements or the payment of taxes or assessments) for the period of
the unlawful detainer, unless Lessee shall prove to the contrary by competent evidence.
13.6 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 Lessor's knowledge of the preexisting breach of default at the time
Rent is accepted.
13.7 Waiver of Right of Redemption. Lessee waives any right of redemption or
relief from forfeiture pursuant to California 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 Property by reason of Lessee's
default.
14. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION
14.1 Surrender of Property. 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 Property. Lessor, at its sole discretion, may record a document
evidencing the expiration or termination of the leasehold interest. Lessee waives any
right to receive relocation assistance or simiiar form of payment from Lessor.
14.2 Removal of Improvements. Upon the expiration of the term of this Lease,
and on condition that Lessee is not then in default of any of the provisions of this Lease,
Lessee shall have the right to remove from the Property all buildings and improvements
built or installed on the Property. Removal of any building or improvement shall be at the
sole cost and expense of Lessee and removal must be complete no later than ninety (90)
days after expiration of the term of this Lease. Lessee shall fill all excavations and remove
all foundations, debris and other parts of the buildings or improvements remaining after
removal and surrender possession of the Property to Lessor in a clean and orderly
condition. In the event any of the buildings and improvements are not removed within the
21
time provided in this paragraph they shall become the property of Lessor without the
payment of any consideration to Lessee.
15. NO ATTORNEYS' FEES
Should either Party be required to employ counsel to enforce the terms, conditions and
covenants of this Lease, the prevailing Party shall not be entitled to attorneys' fees.
16. 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 (1) of them shall be considered
exclusive of the other or exclusive of any rights or remedies allowed by law, and the
exercise of one (1) 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.
17. NO WAIVER
No delay or omission of either Party to exercise any right or power arising from any
omission, neglect or default of the other Party shall impair any such right or power or shall
be construed as a waiver of any such omission, neglect or default on the part of the other
Party or any acquiescence therein. No waiver of any breach of any of the terms,
covenants, agreements, restrictions or conditions of this Lease shall be construed as a
waiver of any succeeding breach of the same or of any of the terms, covenants,
agreements, restrictions or conditions of this Lease.
18. COMPLIANCE WITH LAWS
Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances
and laws of the State of California. County of Orange, City of Newport Beach, or any other
governmental body or agency having lawful jurisdiction over the Property.
19. NOTICES
Any notice or notices provided for by this Lease or by law, to be given or served by
Lessee, may be given or served by mail, registered or certified, with postage prepaid, on
the City of Newport Beach, addressed to the City Manager and City Clerk, 100 Civic
Center Drive, P.O. Box 1768, Newport Beach, California 92658-8915, or at such other
address as may be hereafter furnished to Lessee in writing. If notice is intended to be
served by Lessor on Lessee, it may be served either:
(a) By delivering a copy to the Lessee personally; or
(b) By depositing the notice in the United States Mail, registered or
certified, with postage prepaid, to the Property or business address furnished by Lessee;
or
22
(c) If the Lessee is absent from the Property by leaving a copy with some
person of suitable age and discretion who may be occupying the Property; or
(d) If no one can be found, then by affixing a copy of the notice in a
conspicuous place on the Property and also sending a copy through the mail addressed
to the Lessee at the Property. Such service upon Lessor or Lessee shall be deemed
complete upon the earlier of (i) actual delivery, or (ii) the expiration of seventy-two (72)
hours from and after the deposit in the United States mail of such notice, demand or
communication.
20. 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.
21. MISCELLANEOUS
21.1 Representations. Lessee agrees that no representations as to the Property
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 Lease, 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.
21.2 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 the Property
or any part thereof in any manner whatsoever.
21.3 Joint Several Liability. If Lessee consists of more than one (1) 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.
21.4 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.
21.5 Gender. In this Lease, the masculine gender includes the feminine and
neuter and the singular number includes the plural whenever the context so requires.
21.6 Governing Law and Venue. This Lease, and all matters relating to this
Lease, shall be governed by the laws of the State of California in force at the time any
23
need for interpretation of this Lease or any decision or holding concerning this Lease
arises. Venue for any legal action between the parties shall be in Orange County,
California or, if appropriate, the nearest federal district court having jurisdiction over the
Property.
21.7 Time of Essence. Time is expressly declared to be of the essence in this
Lease.
21.8 Memorandum of Lease. Pursuant to California Government Code Section
37393 the Parties shall execute, acknowledge and Lessor may record at any time
following the date hereof, a memorandum of this Lease, in the same form as that attached
hereto as Exhibit "E" and incorporated herein by reference.
[SIGNATURES ON NEXT PAGE]
24
IN WITNESS WHEREOF, the Parties have caused this Lease to be executed on
the dates written below.
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
Date:
�Z ( to 1211 -7
By: (.�-, A,--- -Por
Aaron Harp
City Attorney
ATTEST -n.)
� I
Date:
C
By: r
Leilani . Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation and
charter city
Date: AUG 2 0 2021
By:
Grace eung
City Wager
LESSEE
Date:_ r"- j Z --7i J
By: I I '
Scott Burnham,
Trustee of The Burnham Family Trust,
dated September 25, 1996
Attachments: Exhibit "A" - Depiction of Beacon Bay
Exhibit "B" - Legal Description of Property
Exhibit "C" - Option Fee Percentages
Exhibit "D"- CC&Rs
Exhibit "E" - Memorandum of Lease
[END OF SIGNATURES]
25
EXHIBIT "A"
DEPICTION OF BEACON BAY
See Attached
A-1
LEGAL DESCRIPTION OF THE PROPERTY
That certain real property located in the City of Newport Beach, County of Orange,
California, described as follows:
The northwesterly 45.00 feet of Lot 2 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, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are
shown on said map.
As more specifically described as follows:
Parcel 1:
The Westerly 45 feet of Lot 2, and the Easterly 10 feet of Lot 1, in the City of Newport
Beach, County of Orange, State of California, as shown upon a Record of Survey map
recorded in Book 9 Pages 42 and 43 of Record of Surveys, on file in the Office of the
County Recorder of said County, together with certain portions of adjoining Lots I and H
as shown upon said map and as more fully in said lease.
Parcel 2:
That Portion of Lot "I" Fronting the Westerly 45 Feet of Lot 1 and the Easterly 10 feet of
Lot 1 and Extending Southward To The U.S. Bulkhead Line.
Parcel 3:
That Portion of Lot "H" Fronting The Westerly 45 Feet of Lot 2 and the Easterly 10 Feet
of Lot 1, Being that portion bounded by the prolongation of the West and East Lines of
the Westerly 45 Feet of Lot 2 and the Easterly 10 Feet of Lot 1 Northward to the Boundary
of Beacon Bay Subdivision.
B-1
EXHIBIT "C"
OPTION FEE PERCENTAGES
LENGTH OF EXTENSION
% OF FAIR MARKET VALUE OF
(YEARS)
PROPERTY PER
YEAR OF EXTENSION
1 - 5
0.10%
6-10
0.15%
11-50
0.25%
C-1
EXHIBIT T"
CC&Rs
See Attached
D-1
RECORDING REQUESTED BY AND
WHEN RECORDEDRETURN TO:
City Clerk'
City of Newport Beach
3300 Newport Boulevard
P, O. B610768
Newport Beach, CA 92658-8915
D-2246
Recorded in Official. Records_, Orange County
Torii Daly, Clerk -Recorder
III Jill 11111111111111111111111111111111111111111111111111111 NO FEE
$ R 0 0 0 5 0 5 6'0 8 9$*
201200046439010:26 am 08114/12
210 403 A17 36
0.00 0.00 0.00 0.00 105.00 0.00 0.00 0.00
I THIS SPACE FOR RECORI)ER'S USE QNLY.
Exempt Recording Request per Government Code 27383
AMENDED AND RESTATED
DECLARATION TOR
BEACON BAY COMMUNITY ASSOCIATION,
A PLANNED DEVELOPMENT
Section 3.08 General Powers and Authority.....................................................................9
Section 3.09 Duties of the Association...........................................................................10
Section 3.10 Board of Directors._ ......... ......................... .. ........ .......................13
Section 3.11 Inspection of Books and Records..............................................................13
Section 3,12 Resolution of Disputes........... ... ........ ...13
ARTICLE IV ASSESSMENTS AND COLLECTION PROCEDURES..:::..........::.........:.......:...14
Section 4.01 Covenant to Pay :.::.................: .................. 14
Section 4.02 Purpose .of Assessments..._ ................................:....... ...,..,., ...,..:.: .....::..
14
Section 4,03 Assessment Period
Section 4.04 Regular Assessments.....................:...........:.......I.. .............I..... .......,14
Section 4.05 Special Assessments 1
Section 4.06 Limitations on Assessments ............ .................... ... .14
Section 4.07 Late Charges .......... ......... ...................................................... .........15
Section 4.08Enforcement of Assessments and Late Charges .:.,..... ............................16
Section 4.09 Statement Regarding Assessments 1
S'eetion 43 0 Reserves ........................ ...... ........... 17
ARTICLE V USE RESTRICTIONS AND COVENANTS .............. ............................ ........17
Section 5.01 General Restrictions on Use...,..,.:,.. .............._ ................_.. ,.................17
Section 5.02 Damage Liability .........,. 18
Section 5.03 Equitable Servitudes lg
ARTICLE VI ARCHITECTURAL AND DESIGN CONTROL ....................... .....:::......:::19
Section 6.01 Architectural and Design Approval ......:......:19
Section 6.02` Architectural Committee...
Section 6.03 Procedural Rules and Fees ..............::........ .....:. ......, ,,, 11 ,...19
Section 6.04 The Board of Directors
Section 6.05 No Power to Modify Setback Requirements .. ....:..:........ ::.......::.....:.::19
Section 6.06 Nonliability for Approval of Plans ............................. 19
ARTICLEVII INSURANCE..::....:........................................................ ....................::......20
Section 7.01
Fire and Casualty Insurance .......
Section 7.02
,. ,. ,,,..,..,.....,,..,
General Liability and Individual Liability Insurance.; .....,::. ,.................20
.......,.20
Section 7.03
Other Association' Insurance.
.20
Section 7.04
Trustee for Policies ..........................
Section 7:05
............
Individual Insurance,.., ....................... ........
... ..20
20
i..)C+V 61VAi / .l/t)
....
. .... .....
Ir1JUl _ • •
..... G.1
Section 7.07
Additional t al Rrovisions....... ............. ...........................................................
ARTICLE VIII DAMAGE OR DESTRUCTION ...................................... ......... .....:::........: 21
Section 8.0.1 Duty to Restore and Replace .................................... ......... . ....., :21
Section 8.02 Proceeds Justifying Automatic Restoration and Repair ............................. 21
Section 8.03 Approval by Members of Special Assessment for Certain
Restorations and Repairs.:.....::.... ........................... ...:.........................21
Section 8.04 Ordering Reconstruction or Repair...........................................................22
Section 8.05 Election Not to Rebuild............................................................................22
Section 8.06 Minor Restoration and Repair Work..:.......................................................22
3/1/12 10120.4
#114293 v 1i
AMENDED AND RESTATED
DECLARATION FOR
BEACON BAY COMMUNITY ASSOCIATION,
A PLANNED DEVELOPMENT
THIS DECLARATION is made as of February 28, 2012, by the City of Newport Beach
("Declarant"), a chartered municipal corporation, having been approved and adopted by Beacon
Bay Community Association, a California non-profit mutual benefit corporation,
RECITALS
A. This Declaration amends and restates the Declaration of Covenants, Conditions
and Restrictions imposed upon the Covered Property, as. hereinafter defined, on or about
September 24, 1979 and has been approved by the Members of Beacon Bay Community
Association, a California non-profit corporation (the "Association"), in accordance with the
provisions of that Declaration.
B. The City of Newport Beach, referred to herein as Declarant, 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, more
particularly described in Exhibit "A" attached to and made part of this Declaration..
C: Beacon Bay has been divided into individual residential lots, commonly known as
1 through and including 59 Beacon Bay and 101, 107 and 115 Harbor Island Drive, Newport
Beach (the "Residential Lots"). Within Beacon Bay are certain streets, walkways, beaches,
common landscaped areas and tennis courts, identified as Lots A through J and Lot 62 (the
"Common Area!),. Both the Residential Lots and the 'Common Area are shown on Exhibit"B,"
attached to and made part of this Declaration.
D, Declarant has leased the Residential Lots to the respective members of the
Association and the Common Area to the Association until July 1, 2044. The leasehold interests
in, the Residential Lots and in the Common Area are together referred to herein as the Covered
Property.
E This Declaration is imposed by Declarant, with the approval of the Association,
upon the Covered Property, a planned development subject to the provisions of the Davis-
Stirling Common Interest Development. Act contained in Division II, pt. 4; Title 6 of the
California Civil Code,
F. In furtherance of this intent, Declarant hereby declares that all of the Covered
Property shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied, and
improved subject to the declarations, limitations, covenants, conditions, restrictions, reservations,
rights, and easements set forth in this Declaration, as this Declaration may be amended from time
to time, all of which are declared and agreed to be in furtherance of a general plan established for
the purpose of enhancing and perfecting the value, desirability, and attractiveness of the Covered
Property. All covenants and restrictions ;set forth in this Declaration shall constitute`
covenants
running with the land and enforceable equitable servitudes upon the Covered Property, and shall
be binding on and for the benefit of all of the Covered Property and all parties having or
3/1/12 10120.4
#114293 v
Special Assessment; together with attorneys' fees and other charges payable, plus interest
thereon as provided for in this Declaration.
Section 1.04 "Association" means Beacon Bay Community Association,'a California
nonprofit mutual benefit corporation.
Section 1.05 "Board" means the Board of Directors of the Association,
Section 1.06 `Bylaws" means the Bylaws of the Association and any amendments to
the Bylaws that are or shall be adopted by the Board and approved by the Members.
Section 1.07 "City" means the City of Newport Beach, a municipal corporation of the
State of California.
Section 1:08 "Common Area" means those portions of the Development leased by the
Association for the common use and enjoyment of the Members. This Common Area includes all
streets, beaches, walkways,, tennis courts, docks, piers, storage areas and common landscaped
areas within the Covered Property and, includes without limitation, Lots A through J, inclusive,
as shown on the Subdivision Map.
Section 1.09 "CommonExpenses" means the actual and estimated costs of,
(a) maintenance, management, operation, repair and replacement - of the
Common Area, and all other areas on the Covered Property which are maintained by the
Association;
(b) maintenance by the ;Association of areas within the public right-of-way of
public streets in the vicinity of the Covered Property as provided in this Declaration or pursuant
to agreements with the City
(c) costs of management and administration of the Association, including, but.
not limited to compensation paid by the Association to managers, accountants, attorneys and
employees;
(d) the costs of utilities, gardening and other services which_ generally benefit
and enhance the value and desirability of the Residential Lot;
(e) the costs of fire, casualty, liability, workmen's compensation and other
insurance covering the Common Area
(f) the costs of any other insurance obtained by the Association;
(g) reasonable reserves deemed appropriate by the Board;
(h) the costs of bonding of the members of the Board, and any professional
managing agent or any other person handling the funds of the Association;
(i) taxes paid by the Association;
3/1112 10120.4
#114293 Y
National Mortgage Association (GNMA). "First Mortgagee" means a Mortgagee that has priority
over all other mortgages or holders of mortgages encumbering the same Residential Lot or other
portion of the Development. The term "Beneficiary" shall be synonymous with the term
"Mortgagee."
Section 1.21 "Mortgagor" means a Person who mortgages his, her, or its Residential
Lot to another (i.e., the maker of a mortgage), and shall include the trustor of a deed of trust. The
term "Trustor" shall be synonymous with the term "Mortgagor."
Section L22 "Person" means a natural individual, a corporation, or any other entity
with the legal right to hold title to real property.
Section 1.23 "Residence means the residential dwelling unit Including garages,
structures and other improvements on a Residential Lot,
Section L24 "Residential Lot" means a numbered lot shown on the Subdivision Map
not including any Common Area, but including the residential dwelling unit together with
garages, structures and other improvements on the same lot or parcel. Beacon Bay has been
divided into individual residential lots, commonly known as 1 through and including 69 Beacon
Bay and,101, 107 and 115 Harbor Island Drive, Newport Beach (the "Residential Lots").
Section 1.25 "Rules and Regulations" means any Rules and Regulations for Beacon
Bay Community Association regulating the use, of ;the Common Area and adopted by the
Association pursuant to Section 3.08(b) of this Declaration.
Section .1.26 "Setback" means those internal distances from the property line of each
Residential Lot as shown on Exhibit H.
Section 1.27` "Subdivision Map" means the Record of Survey Map. of Beacon Bay
Subdivision recorded in Boak 9, Pages 42 and 43, Records of Survey, on file in the Office of the
County Recorder, Orange County, California.
ARTICLE -11
THE PROPERTY
Section 2.01 Property Subject to Declaration. All of the Covered Property shall be
subject to this Declaration.
Section 2.02 Use and Enjoyment of Common Area. The following provisions govern
the use and enjoyment of the Common Area:
(a) The Common Area shall be used solely and exclusively for vehicular
ingress and egress and parking, boat storage and launching, pedestrian walkway purposes,
recreational uses for Beacon 'Bay -residents, and the property designated as Lot "62" shall be used
exclusively for tennis court and park purposes and for construction and maintenance of an office
and meeting facilities for Lessee in connection with the maintenance and operation of the
homeowners' association in Beacon Bay. The property designated as beach property hereunder
shall be used exclusively for beach purposes.
3/1/12 10120.4
#114293 vl 5
Common Area to any contract purchaser or subtenant who resides in the Member's Residence,
subject to reasonable regulation by the Board. If the Member makes such a delegation of rights,
the Member and the Member's family, guests, employees, and invitees shall not be entitled to
use and enjoy the Common Area for so long as the delegation remains effective.
(0 Each Member shall be liable to the Association for any damage to the
Common Area or to Association -owned property, to the extent that the damage is not covered by
insurance, if the damage is sustained because of the negligence, willful misconduct, or
unauthorized or improper installment ormaintenance of any improvement by the Member or the
Member's family, guests, sub -tenants, contract purchasers or invitees. In the case of joint
ownership of a Residence, the liability of the co-owners shall be joint and several, unless the co-
owners and the Association have agreed in writing to an alternative allocation of liability.
(g) Nothing in this Declaration shall limit Declarant's right to use any
properties held in trust by Declarant (including tidelands) for the purposes of establishing,
maintaining, and operating' mitigation bank locations for Eelgr4ss (zoostera marina} or projects
that are intended to enhance the water quality or ecosystem of Newport Bay without infringing
on or limiting Beacon Bay residents' 'ability to operate and maintain legal and permitted
residential piers.
(h) The Association may not encumber the Common Area except to finance
improvements thereon.
Section 2.03 Maintenance by Members. Except as the Association shall be obligated to
maintain and repair as. provided in this Declaration, every Member shall:
(a) maintain all portions of the exterior of his Residence, including without
limitation, the walls,, fences and roof of such Residence in good condition and repair; and
(b) install and thereafter maintain in attractive condition yard landscaping of
his Residential Lot in accordance with the provisions of this Article.
Section 2.04 Prohibition Against Severance of Elements of Residence. Any
conveyance, judicial sale; or other'voluntary or involuntary transfer of the Member's entire estate
shall also include the -Member's Membership interest in the Association, as provided in Section
3.02 of this Declaration. Any transfer that attempts to sever those component interests shall be
void.
ARTICLE III
THE ASSOCIATION
Section 3.01 Organization of the Association. The Association is incorporated under
the name of Beacon Bay Community Association, as a nonprofit corporation organized under the
California Nonprofit Mutual Benefit Corporation Law. The Association is charged with the
duties and invested with the powers prescribed by law and set forth in this Declaration, the
Articles of Incorporation, the Bylaws and the Common Area Lease.
311/12 10120.4
fi114293 vl 7
of the meeting. The record date for voting shall not be more than 60 days before the date of the
meeting or before the date on which the first written ballot is mailed or solicited. The Board may
also fix, in advance, a record date for the purpose of determining the Members entitled to
exercise any rights in connection with any other action. Any such date shall not be more than 60
days prior to the action.
(e) Every Member entitled to vote at any election of the Directors in which
more than two Directors are to be elected may cumulate the Member's votes and give one
candidate a number of votes equal to the number of Directors to be elected multiplied by the
number of votes to which the Member is entitled, or distribute the Member's votes on the same
principle among asmany candidates as the Member thinks fit. No Member shall be entitled to
cumulate votes for a candidate or candidates unless more than two Directors are to be elected.
(f) All voting rights shall be subject to the restrictions and limitations
provided herein and in the .Articles; Bylaws and Assoc ationRules.
Section 3.06 Approval of Members. Unless elsewhere otherwise specifically provided
in this Declaration or the Bylaws, any provision of this Declaration or the Bylaws which requires
the vote or written assent of the voting power of the Association shall be deemed satisfied by the
fallowing:
(a) The vote in person or by proxy of the specified percentage of the Voting
Members present at a meeting duly called and noticed pursuant to the provisions of the Bylaws
dealing with annual or special meetings of the Members at which a 'quorum is present as
determined in accordance with Section "2s$ of the Bylaws.
(b) Written consents signed by the specified Te of Voting Members as
provided in the Bylaws:
Section 3.07 Meinbershp Meetings. Article II of the Bylaws governing,meetings of the
Members is hereby incorporated by.reference.
Section 3.0$ General Powers and Authority. The Association shall have all the powers
of a nonprofit mutual 'benefit corporation organized under the California Nonprofit Mutual.
Benefit Corporation Law, subject to any limitations set forth in this Declaration or in the Articles.
and Bylaws of the Association. It may perform all acts that may be necessary for or incidental to
the performance of the obligations and duties imposed upon it by this Declaration or the other
VilvGllling mstbatnenLs. I s powGlj shall Include, but zto not lirnitcd'6o, the fo11CIWing:
(a) The Association shall have the power to establish, fix, levy, collect, and
enforce, and shall enforce, the payment of assessments against the Members in accordance with
the procedures set out in Article IV of this Declaration.
(b) The Association shall have the power to adopt reasonable Rules and
Regulations governing the use of the Common Area and its facilities, and of any other
Association property. These Rules and Regulations may include; but are not limited to:
reasonable restrictions on use by the Members and their family, guests, employees, tenants, and
invitees; rules of conduct; and the setting of reasonable fees for the use of recreational facilities.
A copy of the current Rules and Regulations, if any, shall be given to each Member and shall be
3/1/12 10120.4
#114293 vl 9
(a) The Association, acting through the Board, shall operate, maintain, repair,
and replace the Common Area, its improvements including all landscaping within the Common
Area, or contract for the performance of that work, subject to the provisions of Article VIII of
this Declaration relating to destruction of improvements, Article IX of this Declaration
pertaining to eminent domain, and Section 2,02(f) of this Declaration relating to damage caused
by Members. The foregoing areas and improvements shall be kept in a clean, sanitary, and
attractive condition. The Association shall also have the exclusive right and duty to acquire and
maintain any furnishings and equipment for the Common Area that it determines are necessary
and proper, As a general rule, maintenance costs shall be included in the regular assessments.
(b) The Association shall. use the maintenance fund described in Section 4.02
of this Declaration to, among other things, acquire and pay for the following:
(1)Water, sewer, trash, electrical, gas, and other necessary utility
service for the Common Area;
(2) The insurance policies described in Article VII of this Declaration;
(3) The services of any personnel that the Board determines are
necessary or proper for the operation of the Common Area; and
(4) Legal and accounting services'necessary or proper in the operation
of the Common Area or the -enforcement of this Declaration.
(c) The Association shall prepare a pro forma operating budget for each fiscal
year, and shall distribute a copy of the budget to each Member not less than 45 and not more than
60 days before :the beginning of the fiscal. year. As an alternative to the foregoing distribution of
the budget, the Association inay elect to do all of the following in the manner required by statute:
distribute a summary of the budget to each Member, make the budget available for inspection at
a designated location, and provide copies of the budget to Members on request and at, the
expense of the Association. The budget shall contain at least the following;
(I) The estimated revenue and expenses on an accrual basis;
(2) A summary (printed in bold type) of the Association's reserves that
is 'based on the most recent review or study conducted pursuant to Civil Code Section 1365.5.
This summary shall include; the following: (i) the current estimated replacement cost, estimated
re—mainunR life; and Pstimaterl trcPfiil 11fP of each major cmmppnent that the Agcngiati4n is
obligated to maintain (hereafter referred to as the "major components"); (ii) the _current estimate,
as of the end of the fiscal year for which the study is prepared, of the amount of cash reserves
necessary to repair, replace,; restore, or maintain the major components; (iii) the current amount,
as of the end of the fiscal year for which the study is prepared, of accumulated cash reserves
actually set aside to repair, replace, restore, or maintain the major components; and (iv) the
percentage that the amount described in (iii), above, is of the amount determined for purposes of
(ii), above (that is, the percentage obtained by dividing the amount described in (iii), above, by
the amount described in (ii), above).
311/12 10120.4
#114293 vt 11
(3) A written statement from an authorized representative of the
Association specifying (i) the amount of any assessments levied on the Member's Residence that
are unpaid on the date of the statement; and (ii) the amount of late charges, interest, and costs of
collection that, as of the date of the statement, are or may be made a lien on the Member's
Residential Lot pursuant to Section 4.08 of this Declaration. The Association may charge the
Member a reasonable fee to cover its cost to prepare and reproduce those requested items.
(h) The Association shall pay all real and personal property taxes and
assessments levied against it, its personal property and the Common Area.
Section 3.10 Board of Directors. The affairs of the Association shall be managed and
its rights, duties and obligations performed by an elected Board of Directors, as provided in
Article III of the Bylaws, which is hereby incorporated by reference.
Section 3.11 Inspection of Books and Records. Article XI of the Bylaws, governing the
duty of the Association to maintain certain books and records and the rights of Members and
Directors to obtain and inspect those books and records, is hereby incorporated by reference.
Section 3.12 Resolution of Disputes. As required by Civil Code Section 1363.820(x),
the Association shall offer a fair, reasonable, and expeditious procedure for resolving any dispute
between the Association and a member involving their rights, duties, or liabilities `under the
Davis -Stirling Common Interest Development Act '(Civil Code Section 1350 et seq.), the
Nonprofit Mutual Benefit Corporation Law (Corporations Code Section 7110 et seq.) or under
the As governing documents. This dispute resolution procedure is supplementary to
the alternative dispute resolution procedure prescribed by Civil Code Section 1369.510 et seq. as
a prerequisite to commencing civil action. The dispute resolution procedure shall consist of the
following;
(a) Either party may initiate the procedure by making a written request to the
other party to meet and confer in an 'effort to resolve the dispute. If the request is by the
Association, the member may refuse to participate. If the request is by a member, however, the
Association may not refuse to participate:
(b) Within 5 days ,of the written request, the Board of Directors shall
designate a member of the Board to meet and confer with the other party.
(c) Within 10 days of the Board member's designation, the parties shall meet
at.'a _rmllftlally convenient time and place, explain their positions to each other; and confer in good
faith in an effort to resolve the dispute.
(d) If the parties reach agreement on a resolution of the dispute, that
resolution shall be memorialized in writing and signed by the parties with the Board designee
signing on behalf of the Association.
(e) An agreement reached by the parties is binding on them and may be
judicially enforced provided the agreement is consistent with the authority granted by the Board
of Directors to its designee, and further provided the agreement is not in conflict with law or the
Association's governing documents.
3/1112 10120.4
9114293 vl 13
Members constituting a majority of the votes at a meeting or in an election of the Association
conducted in accordance with Corporations Code Sections 7510-7527 and 7613
(b) The Board may impose, for any fiscal year, a regular assessment per
Residential Lot that is more than 20 percent greater than the regular assessment for the preceding
fiscal year, or may levy special assessments that in the aggregate exceed 5 percent of the
budgeted gross expenses of the Association for'that fiscal year, provided the increase or levy is
approved by Voting Members constituting a majority of the votes of the Association and casting
a majority of the votes at a meeting or election of the Association conducted in accordance with
Corporations Code Sections 7510=7527 and 7613 ,
(c) The Board may, without complying with the foregoing requirements,
make an assessment increase that is necessary for an emergency situation. An emergency
situation is an extraordinary expense that is
(1) Required by a court order.
(2) Necessary to repair or maintain the Common Area or any part of it
for which the Association is responsible when a threat to personal safety in the Development is
discovered.
(3) Necessary`to'repair or maintain the Common Area or any, part of it
for which the Association is responsible that could not have been reasonably foreseen by the:
Board inpreparing and distributing the pro forma operating budget pursuant to Section 3.09(c).
Before the Board may impose or collect an assessment in the type of emergency situation
described in (3) above, it shall pass a resolution containing written findings as to the necessity of
the extraordinary expense and why the expense was not or could not ;have been reasonably
foreseen m the budgeting process, and shall distribute. the resolution to the "Members with the
notice of assessment.
(d) The Board shall notify the Members in writing of any increase in the
amount of a regular or special assessment. The Board:shall provide this notice by first-class mail
not less than 30 or more than 60 days, prior to the due date of the increased assessment.
Section 4.07Late. Charges. Late charges may be levied by the Association against' a
Member for the delinquent payment of regular or special assessments. An assessment is
delinquent 15 days after its due date. If an assessment is delinquent the Association may recover
all of the following from the Member:
(a) Reasonable costs incurred in collecting the delinquent assessment,
including reasonable attorneys' fees.
(b) A late charge not exceeding ten (10) percent of the delinquent assessment
or $10, whichever is greater.
(c) Interest on the foregoing sums, at an annual percentage rate of ten (10)
percent, commencing 30 days after the assessment becomes due.
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A debt for a delinquent regular or special assessment and any late charges, reasonable fees and
costs of collection, reasonable attorneys' fees, and interest shall become a lien on the Residence
when a notice of delinquent assessment is duly recorded and mailed as provided in Section
1367.1 of the California Civil Code.
Except as provided below regarding debts arising from delinquent assessments when the debt
arose on or after January 1, 2006, and the delinquent amount is less than $1,800, any such 'lien
may be enforced in any manner permitted by law, including judicial foreclosure or nonjudicial
foreclosure. Any nonjudicial foreclosure shall be conducted by the trustee named in the notice of
delinquent assessment or by a trustee substituted pursuant to Section 2934a of the California
Civil Code, in accordance with the provisions of Sections 2924, 2924b, and 2924c of the
California Civil Code.
If the sums specified in the notice of delinquent assessment are paid before the completion of any
judicial or nonjudicial foreclosure, the Association shall record a notice of satisfaction and
release of the lien. On receipt of .a written request by the 'Member, the Association shall also
record a notice of rescission of any declaration of default and demand for sale.
In accordance with Section; 136Z4 of the California Civil Code,: a lien securing a debt arising
from a delinquent regular or special assessment when the debt arose on or after January 1, 2006,
and the delinquent amount is less than $1,800, excluding accelerated assessments, late charges,
fees and costs of collection, attorney's. fees, and interest, shall not be; enforced by judicial or
nonjudicial foreclosure unless and until either (1) the debt, equals. or exceeds $'1,800,excluding
accelerated assessments, late charges, fees and costs of collection, attorney's fees; and interest, or
(2) the debt secured by the lien is more than 12 months delinquent.
Section 4.09 Statement Regardiri Assessments. The Association shall provide any
Member, upon written request, with a statement specifying (1) the amounts of the Association's
current regular and special assessments and fees, and (2) the amounts of any delinquent
assessments and related late charges, interest, and costs levied against the Member's Residential
Lot, as provided in Section 4.08 of this Declaration.
Section 4.10 Reserves. All amounts collected as reserves shall be deposited by the
Association in a separate bank account to be held in trust for the ;purposes for which they' are
collected and are to be segregated from and not commingled with any other funds of ' the
Association.
ARTICLE V
USE RESTRICTIONS AND COVENANTS
Section 5.01 General Restrictions on Use. In exercising the right to occupy or use a
Residence, Residential Lot or the Common Area and its improvements, the Member and the
Member's family, guests, employees, tenants, and invitees shall not do any of the following:
(a) Attempt to further subdivide a Residential Lot without obtaining the prior
approval of the Association and the Declarant.
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ARTICLE VI
ARCHITECTURAL AND DESIGN CONTROL
Section 6.01 Architectural and Design Approval. No building, addition, wall, fence, or
alteration shall be begun, constructed, maintained, or permitted to remain on any Residential Lot,
or on the Common Area, until complete plans and specifications of the proposed work have been
submitted to the. Architectural Committee and approved by the Board as to harmony of external
design and location in relation to surrounding structures and topography. The Architectural
Committee shall review the plans and specifications to determine whether they are compatible
with the aforementioned standards and, if they are not, shall require that changes be made before
recommending approval to the Board.
Section 6.02 Architectural Committee. The Architectural Committee shall consist of
not less than three nor more than five members, as fixed by the Board from time to time.
(a) The Board shall have the right to appoint all members of the Committee,
(b) Members appointed 'to the Committee shall be Members of the
Association.
(c) The term of the appointees shall be one year. Notwithstanding the
foregoing, all members of the Committee shall serve at the will of the Board, and maybe
removedby the Board at any time with or without cause..
(d) The Committee shall meet as often as it deems necessary to properly carry
out the obligations imposed on it, unless otherwise directed by the:Board.
Section 6.03 ,Procedural Rules and Fees. The Board may establish reasonable
procedural rules and assess a fee in connection with review of plans and specif cations including,
without limitation, the number of sets of plans to be submitted. In the event the Board fails to
approve or disapprove such plans' and specifications within thirty (30) days after the same have
been properly submitted in accordance with any rules. regarding such submission adopted by the
Board, such plans and specifications will be deemed approved.
Section 6,04 The Board of Directors. After the Architectural Committee has completed
its review of plans andspecifications submitted under this Article, the Architectural Committee
shall submit such plans and specifications, together with its recommendation as to arprn�,a ar
disapproval, to the Board for approval or disapproval by the ,Board. Thereafter, the Board shall
take any actions it deems necessary, in accordance with the provisions of this Declaration.
Section 6.05 No Power to Modify Setback Requirements. Nothing in this Declaration
or in the Association's Articles, Bylaws or Rules shall be construed or amended to allow the
Board to modify or eliminate the Setback requirements shown on the Beacon Bay Subdivision
Survey Map, and any attempt to do so shall have no effect.
Section 6.06 Nonliability for Approval of Plans. Plans and specifications shall be
approved by the Board as to style, exterior sign, appearance and location, and are not approved
for engineering design or for compliance with zoning and building ordinances, and by approving
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# 114293 v1 19
liability insurance for his or her Residence, provided that the insurance contains a waiver of
subrogation rights by the carrier as to the Association, Declarant, and the institutional First
Mortgagees of the Member's Residential Lot.
Section 7.06 Insurance ,Premiums. Insurance premiums for any insurance coverage
obtained by the Association shall be included in the regular assessments. That portion of the
regular assessments necessary for the required insurance premiums shall be used solely for the
payment of the premiums when due.
Section 7.07 Additional Provisions, The Association shall file a copy of each of the
above insurance policies with Declarant. Except for workers compensation insurance, all of the
above insurance policies shall include Declarant and its elected officials, officers, agents,
representatives and employees as additional insureds. Except for worker's
compensationinsurance, all policies shall be endorsed to state that coverage shall not be canceled
by the insurer except after thirty (30) days' prior written notice to Declarant. The Assocaition
shall give Declarant prompt and timely notice of claim made or suit instituted againt the
Associaton. The Association shall grant to Declarant, on behalf of the insurer providing general.
liability 'insurance to the Association, -a waiver of any right of subrogation which any such
insurer may acquire against Declarant by virtue of the payment of any loss under such insurance:.
ARTICLE VIII
DAMAGE OR DESTRUCTION
Section 8.01 DMfy to Restore and Replace. if any of the improvements in the Common,
Area are destroyed or damaged, the Association shall restore and replace the improvements,
using the proceeds of insurance 'maintained pursuant to Article VII of this Declaration, subject to
the provisions of this Article.
Section 8.02 Proceeds Justify Automatic Restoration and Repair. If'the proceeds of
any insurance maintained pursuant to Article VII of this Declaration for reconstruction or repair
of the Common Area are equal to at least eighty-five (85) percent of the estimated cost of
restoration and repair, the Board shall use the 'insurance proceeds for that purpose, shall levy a
special 'assessment to ';provide the necessary additional funds, and shall have the improvements'
promptly rebuilt, unless the Members by the vote or written consent of not less than seventy-five
(75) percent of the total voting power of the Association object to the restoration or repair work
within sixty (60) days of the damage or destruction.
Section 8.03 Approval by Members of Special Assessment for Certain Restorations and
Repairs: If the proceeds of any insurance maintained pursuant to Article VII of this Declaration
for reconstruction or repair of the Property are less than eighty-five (85) percent of the estimated
cost of restoration and repair, any restoration and repair work must be authorized by the vote or
written consent of Members representing at least seventy-five (75) percent of the total voting
power of the Association. This authorization must be given within ninety (90) days of the
damage or destruction and must authorize the Board to levy a special assessment to provide the
necessary funds over and above the amount of any insurance proceeds available for the work.
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#114293 vl 21
assessment for the cost of the work. The Assessment shall be levied in the manner described in
Section 4.05 of this Declaration.
ARTICLE IX
EMINENT DOMAIN
Section 9.01 Sale to Condemning Authority. If a governmental agency proposes to
condemn all or a portion of the Common Area, the Association, with the _approval of the
Declarant, may sell all or any portion of its interest in the Common Area to the condemning
authority if seventy-five (75) percent of the voting power of the Associations and sixty (60)
percent of all institutional First Mortgagees approve the sale in advance. Any such sale shall be
made by the Association in the capacity of attomey-in-fact for the Members, acting under an
irrevocable power of attorney which each Member grants to the Association. The sales price
shall be any amount deemed reasonable by the Board.
Section 9.02 Distribution of Sales Proceeds, That portion of proceeds of a sale
conducted pursuant to Section 9.0,1 which constitutes compensation for the condemnation of all
or any portion of the improvements constructed by the Association on the Common Area and
any and all compensation for the termination .or diminution of the Association's interest in the
Common Area Lease shall. be .distributed among the Members and their respective Mortgagees,
as their interests may appear, and the balance of such proceeds shall be paid to the Declarant.
:Section 9.03 Taking and Condemnation Awards. If there is a taking by a governmental
agency of all or any portion of the Common Area, the condemnation award shall be distributed
to among the Declarant, the Members and their respective Mortgagees in accordance with the
court judgment,; if any such judgrnent exists. In all other cases, the proceeds shall be distributed
as set forth in Section_9.02 above:
ARTICLE X
RIGHTS OF MORTGAGEES
Section 10.01 Warranty. The Association hereby warrants that Mortgagees of
Residential Lots in the Development shall be entitled to the rights and guaranties set forth in this
Article. No amendment of this Article shall affect the rights of the holder of any Mortgage
recorded prior to the recordation of the amendment who does not join in the execution of the
amendment,
Section 10.02 Subordination. Notwithstanding any 'other provision of this Declaration,
liens created under Section 4.08 of this Declaration upon any Residential Lot shall be subject and
subordinate to, and shall not affect the rights of the holder of, the indebtedness secured by any
recorded First Mortgage upon such an'interest made in good faith and for value, provided that
any transfer of a Residential Lot as the result of a foreclosure or exercise of a power of sale shall
not relieve the new Member from liability for assessments that become due after the transfer.
Such a transfer shall extinguish the lien of assessments that were due and payable prior to the
transfer of the Residential Lot.
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Section 1.0.07 Liens. All taxes, assessments, and charges that may become liens prior to
the First Mortgage under local law, shall relate only to the individual Residential Lot and not to
the Development as a whole.
Section 10.08 Priori1y. No provision of the Governing Instruments gives any Member,
or any other party, priority over any rights of the First Mortgagee of the Residential Lot pursuant
to its Mortgage in the case of a distribution to the Member of insurance proceeds or
condemnation awards for losses to, or a taking of, all or a portion of the Common Area.
Section 10.09 Reserve Fund. Association assessments shall be large enough to provide
for an adequate reserve fund for maintenance, repairs, and replacement of those common
elements that must be replaced on a periodic basis: The reserve fund shall be funded by the
regular assessments rather than by special assessments.
Section 10.1:0 Management.. Any agreement for professional management of the
Development shall not exceed three years and shall provide that either party may terminate the
agreement, with or without cause and withoutthe imposition of a termination fee, on 90 days
written notice.
Section '10,11 Rightlo Inspect Books and Records. Institutional First Mortgagees, upon
written request, shall have the right to (1) examine the books and records of the Association
during normal business hours; and (2) require the submission of any financial data furnished to
the Members by the Association.,
Section 10.12 Right to Furnish Mortgage Information. Each Member hereby authorizes
the First Mortgagee of a First Mortgage on the Member's Residential Lot to furnish'information
to the Board concerning the status of the First Mortgage and the loan that it secures.
ARTICLE XI
AMENDMENTS
Section l l.01 Amendments by Members. Subject to the other provisions of this
Declaration, this Declaration may be amended as follows:
(a) Any amendment or modification of the Articles hereof entitled "Covenant
for Maintenance Assessments," "Nonpayment of Assessments," "Architectural Control," and
"Repair and Maiintenance." or of tris Section shall regi re the a_ffirmati,,e ,,rote or 'written
approval of not less than sixty percent (60%) of the of the voting,power of the Association.
(b) Any amendment or modification of any Article other than those specified
in subparagraph (a) above shall require the affirmative vote or written approval of a majority of
the voting power of the Association,
(c) An amendment or, modification that requires the vote and written assent of
the of the voting power of the Association as hereinabove provided shall be effective when
executed by the President and Secretary of the Association who shall certify that the amendment
or ,modification has been approved as hereinabove provided, and when recorded in the Official
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#114293 v1 25
Section 12.03 Cumulative Remedies. All rights, options and remedies of Declarant, the
Association, or the Members under this Declaration are cumulative, and no one of them shall be
exclusive of any other, and Declarant, the Association, and the Members shall have the right to
pursue any one or all of such rights, options and remedies or any other remedy or relief which
may, be provided by law, whether or not stated in this Declaration.
Section 12.04 Nonwaiver of Remedies. Each remedy provided for in this Declaration is
separate, distinct, and nonexclusive. Failure to exercise a particular remedy shall not be
construed as a waiver of the remedy.
Section 12.05 Attorneys' Fees. In any action to enforce this Declaration, the prevailing
party shall be entitled to recover reasonable attorneys' fees and costs.
Section 12.00 Severability. The provisions of this Declaration shall be deemed
independent and severable, and the invalidity or partial invalidity or unenforceability of any one
provision shall not affect the validity or enforceability of any other provision.
Section 12.07 Bindin . This Declaration, as well as any amendment to.it and any valid.
action or directive made:pursuant to it, shall be binding on the Declarant and the Members and
their heirs, grantees, tenants, successors, and assigns.
Sectiop 12.08 Interpretation. The provisions of this Declaration shall be liberally
construed and interpreted to effectuate its purpose of creating a uniform plan for the operation of
a planned development. Failure to enforce any provision of this Declaration shall not constitute a,
waiver of the right to enforce that provision or any other provision of this Declaration..
Section 12.09 Effect of Declaration. This Declaration is. made. for the purpose set forth
in the Recitals to this Declaration and Declarant makes no warranties or representations, express
or implied as to the binding effect or enforceability of all or any portion of this Declaration, or as
to the compliance of any of these Provisions with public laws, ordinances and regulations
applicable thereto.
Section 12.10 Limitation of Liability. The liability of any Member for performance of
any of the provisions of this Declaration shall terminate upon sale, transfer, assignment, or other
divestment of the Member's entire interest in his or her Residential Lot with respect to
obligations arising from and after the date of the divestment.
Section 12.11 Nonliability_ :of ~Officials. To the fullest extent permitted by law, neither
the Board, the Architectural Committee,°.and other committees of the Association or any member,
of such Board or committee shall be liable to any Member or the Association for any damage,
loss or prejudice suffered or claimed on account of any decision, approval or disapproval of
plans or specifications (whether or not defective), course of action, act, omission, error,
negligence or the like made in good faith within which such Board, committees or persons'
reasonably believed to be the scope of their duties.
Section 12.12 Fair Housing. Neither Declarant nor any Member shall, either directly or
indirectly, forbid the conveyance, encumbrance, renting; leasing, or occupancy of the Member's
Residence or Residential Lot to any person on the basis of race, color, sex, religion, ancestry, or
national origin.
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# 114293 v1 27
Acknowledgment
STATE OF CALIFORNIA )
ss
COUNTY OF ORANGE )
On Wo befor, me, a Notary Public,
personall appeared who proved to me on the basis of
satisfactory evidence to be the, person(s) whose nameN is/ subscribed to the within
instrument, and acknowledged to me that she/*y executed the same in Kyher/tblib
authorized capacity(k, and that by)Wher/tl & signaturec n, the instrument the person(s), or
the entity upon behalf of which the person(;acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws, ;of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal..
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#114293 vt 29
EXHIBIT B
COMMON AREA LEGAL (DESCRIPTION
Lots 62 and A through J as shown on that certain record of Survey filed in the Official
Records of the County of Orange, Siete of Califomia, as Instrument Number 5383 on
i ebruary 28, 1939 covering a portion of the projected Northwest ane -quarter (114) of
section 35, TownsWip 6 South, Mange 10 (Nast, S.B.B.M.
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4 114293 v1 B-1
EXHIBIT "E"
Recording Requested By
and When Recorded Return To:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Clerk
(Exempt from Recording Fees — Government Code §§ 6103 and 27383)
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE is made and entered into between the City of
Newport Beach, a California municipal corporation and charter city ("Lessor") and Scott
T. Burnham, Trustee of The Burnham Family Trust, dated September 25, 1996
("Lessee").
Lessor hereby leases to Lessee that real property located in the City of Newport
Beach, County of Orange, California, described in Attachment "1" attached hereto
("Property"). The term of the Lease is fifty (50) years, commencing August , 2021 and
ending August , 2071.
This Memorandum of Lease is subject to the terms, conditions and provisions of
an unrecorded Lease between the parties dated August , 2021, which is incorporated
herein by reference. Unless extended by a recorded amendment or supplement hereto,
this Memorandum of Lease will automatically terminate as of August , 2071.
[SIGNATURES ON NEXT PAGE]
EXHIBIT "E"
1
IN WITNESS WHEREOF, the Parties have caused this Memorandum of Lease
to be executed on the dates written below.
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
Date:
By:
Aaron Harp
City Attorney
ATTEST:
Date:
By:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation and
charter city
Date:
By:
Grace K. Leung
City Manager
LESSEE
Date:
By:
Scott T. Burnham,
Trustee of The Burnham Family Trust,
dated September 25, 1996
EXHIBIT "E"
2
ATTACHMENT "1"
LEGAL DESCRIPTION OF THE PROPERTY
That certain real property located in the City of Newport Beach, County of Orange,
California, described as follows:
The northwesterly 45.00 feet of Lot 2 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, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are
shown on said map.
As more specifically described as follows:
Parcel 1:
The Westerly 45 feet of Lot 2, and the Easterly 10 feet of Lot 1, in the City of Newport
Beach, County of Orange, State of California, as shown upon a Record of Survey map
recorded in Book 9 Pages 42 and 43 of Record of Surveys, on file in the Office of the
County Recorder of said County, together with certain portions of adjoining Lots I and H
as shown upon said map and as more fully in said lease.
Parcel 2:
That Portion of Lot "I" Fronting the Westerly 45 Feet of Lot 1 and the Easterly 10 feet of
Lot 1 and Extending Southward To The U.S. Bulkhead Line.
Parcel 3:
That Portion of Lot "H" Fronting The Westerly 45 Feet of Lot 2 and the Easterly 10 Feet
of Lot 1, Being that portion bounded by the prolongation of the West and East Lines of
the Westerly 45 Feet of Lot 2 and the Easterly 10 Feet of Lot 1 Northward to the Boundary
of Beacon Bay Subdivision.
EXHIBIT "E"
3