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Beacon Bay, Lot A (Harbor Island Road, 115)
LEASE THIS LEASE is made and entered into as of the of ( , 2007, by and between the CITY OF NEWPORT BEACH, a Charter City and municipal corporation ("Lessor"), and JULIE DIXON and JOHN W. DIXON, Husband and Wife as Joint Tenants ("Lessee"), regarding the real property commonly referred to as Beacon Bay Lot A. RECITALS A. The City of Newport Beach, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978 (the "Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly known as Beacon Bay and generally described in Exhibit A attached hereto and incorporated by reference. B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and specifically authorizes the lease of the property for residential purposes subject to certain express statutory conditions. C. Beacon Bay, including the "Westerly Portion" thereof, has been divided into individual lots, with each lot leased by the City for residential purposes until December 31, 2005. D. On November 3, 1987, a majority of electors of the City approved a measure which authorized the City Council to enter into new leases of residential lots in Beacon Bay for a period not to exceed fifty (50) years. E. On November 3, 1992, a majority of electors of the City approved Measure M which authorized the City Council to lease tidelands and waterfront property consistent with the provisions of state law. F. The City Council, pursuant to the authority conferred by the electors, entered into negotiations with current lessees and the parties have agreed on the terms and conditions of a new lease with a fifty (50) year term, provision for adjustments in lease payments to reflect changes in the value of Beacon Bay leaseholds, and a recalculation of lease payments in the event of a transfer of the Lease by the Current Lessee or any Subsequent Lessee (as defined herein). G. Lessee acknowledges that the terms and conditions of this Lease may result in Lessee paying substantially more or less than another Lessee for similar property depending upon the date this Lease is executed, the date of any subsequent transfer, and the consideration paid for transfers of similarly situated property. H. Lessee acknowledges that accurate and complete reporting to the City of all consideration paid for the transfer of this Lease is vitally important to the City in that failure to fully report all consideration could materially reduce the amount of rent received by the City from other Beacon Bay Lessees. I. Lessor and Lessee acknowledge that the City has agreed to a fifty (50) year term and limited lease payment increases in consideration of provisions which require payment of rent approximating fair market rental value, without regard to any advantage maintained by Current Lessees, upon transfer by Current Lessees and payment of deferred rent in the event the Lease is not signed on or before the Effective Date (as defined herein). J. The California State Lands Commission has reviewed the form of this Lease and determined that it is in conformance with the provisions of relevant statutes, rules and regulations, including, without limitation, the Beacon Bay Bill. K. Lessor has determined that this Lease is consistent with provisions of the Beacon Bay Bill, the Charter, General Plan and Zoning Ordinance of the City of Newport Beach, and of all other applicable state and local laws. L. Lessor has determined it is in the best interests of the citizens of Newport Beach to maintain the residential character of Beacon Bay and to enter into new leases with Current Lessees under the terms and conditions specified in this agreement. NOW, THEREFORE, in consideration of the foregoing recitals and the covenants in this lease, the parties agree as follows: 1. LEASED LAND. Lessor hereby leases to Lessee the real property commonly known as Beacon Bay Lot A (the "Leased Land"), which is more particularly described in Exhibit B, and generally depicted on Exhibit A, each attached hereto and incorporated by reference, subject to the limitations on use specified in Section 6. As used in this Lease, the term "Premises" shall refer to the Leased Land and any improvements constructed thereon. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Leased Land 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 for the exploration, development, production, extraction and taking of any such substance 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 Newport Beach City Charter or the Newport Beach Municipal Code. 2. TERM. The term of this Lease shall commence on the Execution Date, but in no event prior to the Effective Date, and shall expire on the date fifty (50) years following the Effective Date, unless earlier terminated as provided in this Lease. 3. RENTAL. A. Definitions. For the purposes of this Lease, the following terms shall be defined as specified in this paragraph. In certain cases, the definition of the term contains operative language that affects the rights of the parties: (1) "Actual Sales Value" shall mean the total of all consideration paid for the non-exempt transfer of this Lease or the Pre-existing Lease, including the improvements on the Leased Land, from the Current Lessee, or Subsequent Lessee, to another person, excluding any consideration paid for the transfer of personal property in connection with such transaction. (2) "Average Actual Sales Value Rent" shall mean two and one-half percent (2.5 %) of the mean of the Actual Sales Value of the non-exempt transfer of a similarly situated (waterfront or interior) Beacon Bay parcels as specified in this subparagraph. Average Actual Sales Value Rent shall be the mean of the Actual Sales Value of the three similarly situated parcels most recently transferred. Exempt transfers, as defined in Paragraph 3.13(3), shall not be used to calculate Average Actual Sales Value rent. 2 (3) "CPI" shall mean the Consumer Price Index - Los Angeles -Anaheim -Riverside Area, All Urban Consumers, All Items, published by the United States Department of Labor, Bureau of Labor Statistics (1982-1984=100). If the 1982-1984 base of said Consumer Price Index should hereafter be changed, then the new base shall be converted to the 1982-1984 base and the base as so converted shall be used. In the event that the Consumer Price Index, as now compiled and published, shall cease to be published, then the successor index shall be used provided that an appropriate conversion from the old index to the new index can feasibly be made. If such conversion cannot be made, or if no such index is published, then another index most nearly comparable thereto recognized as authoritative shall be substituted by agreement. (4) "Current Lessee" shall mean the person or persons who, as of April 1, 1994 (the "Cut-off Date"), was or were the Lessee under the Pre-existing Lease. (5) "Deferred Rent" shall mean the total rent that a Current Lessee would have paid had this Lease been executed on the Effective Date, through and including the date on which this Lease was first executed, less the rent actually paid pursuant to the Pre- existing Lease, together with interest at the rate of eight percent (8%) per annum calculated on the balance due at the end of each Lease Year or portion thereof. (6) "Effective Date" shall mean July 1, 1994. (7) "Execution Date" shall mean the date when this Lease is executed by Lessee. (8) "Initial Rent" shall mean the effective net rent for the Leased Land as determined by the appraisal of George Hamilton Jones, with due consideration to the leasehold advantage created by the Pre-existing Lease, all as shown on Exhibit C attached hereto and incorporated herein by reference. (9) "Person" shall mean any natural person or natural person(s) and does not include any corporation, association, or business entity in any form except a financial institution or other bona fide lender acting in the capacity of a lender or an inter vivos or living trust. (10) "Pre-existing Lease" shall mean the Lease for the Leased Land which was effective on January 1, 1988, and would, absent this Lease, expire on July 1, 2006. (11) "Transferred" shall mean any sale, assignment, sublease or other transaction, other than an exempt transfer as defined in Paragraph 3.B(3), pursuant to which the right to possession of the premises and the right to sign a new lease identical to this Lease is transferred to another person. B. Rental Payments. Lessee shall pay annual rent in the sum of One Hundred Fourteen Thousand Eight Hundred Seventy -Five ($114,875.00), payable at the rate of Nine Thousand Five Hundred Seventy -Two and 72/100s ($9,572.72) per month. Lessee shall also pay, if applicable, deferred rent in the sum of N/A upon execution of this Lease. Rent shall be adjusted every seven (7) years after the date of transfer (11/29/05) in accordance with the provisions of Paragraph 3.B(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: 3 (1) Execution Before Effective Date. In the event this Lease is executed by the Lessee on or before the Effective Date, Rent shall be paid as follows: (a) Current Lessee: Current Lessee shall pay annual rent equal to Initial Rent as specified in Exhibit C. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee (other than an exempt transfer as set forth in Paragraph 3.13(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.13(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of the Actual Sales Value determined as of the date of the transfer in accordance with the provisions of paragraph 3.A(1). Thereafter, rent shall be adjusted every seven years after the date of the transfer in accordance with the provisions of paragraph 3.13(4). (c) In the event of any transfer of this Lease to a Subsequent Lessee in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.B(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). (2) Execution After the Effective Date. In the event this Lease is first executed after the Effective Date, rent shall be determined and paid as follows: (a) Current Lessee/Within Five Years After Effective Date: In the event this Lease is executed by the Current Lessee within five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Initial Rent plus a sum calculated by multiplying the difference between Initial Rent and Average Actual Sales Value Rent by a fraction equal to the number of months between the Effective Date and Execution Date, divided by sixty. The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee, rent shall remain as specified in this subparagraph, notwithstanding the provisions of Paragraph 3.13(4). (b) Current Lessee/More Than Five Years After Effective Date: In the event this Lease is executed by the Current Lessee more than five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Average Actual Sales Value Rent calculated as of the date of execution in accordance with the provisions of Paragraph 3.A(2). The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, rent shall be adjusted every seven (7) years after the date of execution in accordance with the provisions of Paragraph 3.13(4). (c) Subsequent Lessee: In the event the Current Lessee transfers the Pre- existing Lease to a Subsequent Lessee who wishes to sign this Lease after the Cut-off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of Actual Sales Value determined as of the date of execution and in accordance with Paragraph 3.A(1). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.13(4). (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a 4 transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.B(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.B(4). (3) Exempt Transfers. The provisions of Paragraph 3.13 regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.13(I)(a), 3.13(2)(a) and 3.13(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven 5 (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage increase or decrease, if any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (i) the Execution Date, or (ii) the last rental adjustment date. Lessor shall endeavor to notify Lessee of rental adjustments at least forty-five (45) days prior to the end of each seventh (7th) lease year; provided, however, failure of Lessor to give forty-five (45) days' notice does not relieve Lessee from the obligation to pay increased rent or the right to pay less rent in the event of a decrease in the CPI; and, provided further, that Lessee shall have no obligation to pay rent increases which apply to any period greater than ninety (90) days prior to the receipt by Lessee of Lessor's notice of an increase in rent. (b) In the event Lessee is two or more persons owning the leasehold estate created hereby as tenants in common or joint tenants, and less than all of such persons transfer their interest in this Lease to a person other than to an existing tenant in common or joint tenant, the rent adjustment shall be prorated to reflect the percentage interest being transferred to a third party. For example, if two persons are the Lessee as tenants in common as to equal one-half interests, and one of such persons transfers his/her 50% interest to a third party, the rent shall be adjusted as provided in Paragraph 3.13(2)(c), and thereafter as provided in Paragraph 3.13(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 3.B(3). (5) Installment Payments/Grace Period. Lessee shall pay rent in equal monthly installments, in advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (15th) day of the month for which the payment is made ("Grace Period"). If a rent payment, or any portion thereof, is received by Lessor after expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to the City of Newport Beach and sent, or delivered, to the Finance Director at the address specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or currency to the United States as at the time of payment is legal tender for public and private debts. Lessor and Lessee agree that late charges specified in this paragraph represent a fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 14 of this Lease. Any failure by Lessor to declare a default and initiate termination of this Lease due to a late or missed payment shall not be considered a waiver of the right of Lessor to do so for that or any other late or missed payment. C. Credit to Tidelands Fund. In calculating Initial Rent under this Lease, a credit was given to certain of the Current Lessees equal to the annual amortization of the present value of the additional property tax to be paid by such lessees during the remaining period of the Pre-existing Lease. This credit, commonly referred to as the "tax advantage", is shown on Exhibit D for each affected lot. This credit was extended by Lessor to Current Lessees as consideration for entering into this Lease. As a consideration in its approval of this Lease, the California State Lands Commission required Lessor to credit its State supervised Tidelands Trust Fund by an amount equivalent to the tax advantage derived from those lots in Beacon Bay comprising tidelands. This amount is shown on Exhibit D for each affected lot comprising tidelands. Accordingly, Lessor has unilaterally agreed to annually calculate the amount of such tax advantage derived from the tidelands parcels in Beacon Bay and to credit an equivalent amount as revenue to the State supervised Tidelands Trust Fund. This provision is included in this Lease to acknowledge the 0 agreement of Lessor with the California State Lands Commission, and does not affect the rights and obligations of Lessor or Lessee under this Lease. 4. TRANSFERS. A. Conditions Precedent to Transfer. Lessee may transfer this Lease subject to the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or conditioned. Lessor shall consent to any transfer when Lessee and the proposed transferee have complied with the following: 0 ) Lessee shall furnish Lessor with executed copies of each and every document used to effect the transfer. (2) Lessee or the proposed transferee shall pay to Lessor a transfer fee of one hundred dollars ($100.00); (3) Lessee shall execute a "Termination of Leasehold Interest" for recordation; and (4) The proposed transferee shall execute a new lease and execute a "Memorandum of Lease" for recordation, which lease shall be identical to this Lease and have a term equal to the remaining term of this Lease at the time of the transfer. B. Transfer Information. The parties to any non-exempt transfer of this Lease shall provide Lessor with all information relevant to a determination of the total consideration paid for the transfer, as well as all documents which are relevant to the total consideration paid for the transfer. Lessee and the proposed transferee shall provide this information not later than forty- five (45) days prior to the proposed effective date of the transfer of this Lease. Lessor shall have the right, at its sole discretion, to commission an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer. Any such appraisal shall be completed not later than thirty (30) days after receipt by Lessor of the aforementioned information from the Lessee. If the value determined by the appraiser commissioned by Lessor exceeds the stated total consideration to be paid based on the information received from the Lessee by more than ten percent (10%), Lessor shall so notify the Lessee and provide Lessee with a full copy of such appraisal report, and said value shall be deemed the Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments unless within fifteen (15) days after receiving such notice and the report the Lessee notifies Lessor that Lessee elects to cause an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer to be conducted by an independent appraiser. In such event, Lessee cause such appraisal to be completed no later than thirty (30) days after the notice to Lessor and shall provide Lessor with a full copy of the appraisal upon completion. The Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments shall be the greater of (i) the stated consideration for the transfer, or (ii) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.13 shall be conducted by an MAI appraiser licensed to conduct business in the State of California and experienced in residential appraisals in Southern California. C. Exempt Transfer Information. Lessor's consent is not required for the "exempt transfers" referenced in Paragraph 3.13(3); provided, however, Lessee shall furnish Lessor with copies of all documents used to effect any exempt transfer. D. Audit of Subleases. It is the intent of the parties that transfers referred to in Section 3.13(3)(e) shall only be exempt from the further provisions of Paragraph 3.13 (in respect of rental adjustments) if such subleases are not substantially equivalent to, do not have substantially the same economic effect as, or are intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee. Lessor shall at all times have the right, upon written request to the Lessee, to receive copies of all written agreements, and to be advised in full of all oral agreements, between the Lessee and any sublessee of the Leased Land. Any purported sublease of the premises which is determined to be substantially equivalent to, or have substantially the same economic effect as, or is intended to disguise, a transfer by the 7 then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee shall be void and of no force or effect, and such attempted or purported sublease shall, at the option of Lessor, (i) be an event of default by the Lessee under this Lease, or (ii) permit Lessor to treat such sublease as a transfer of this Lease subject to the provisions of Section 3.B. 5. ENCUMBRANCES. A. Right to Encumber. Lessee may encumber this Lease by deed of trust, mortgage, or similar instrument, in favor of any bona fide lender ("Lender") 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 Premises 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 Leased Land. 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. B. Notice to Lender. Lessor shall have no obligation to give any Lender any written notice pursuant to this Lease unless the Lender has given Lessor written notice of its name, address, and nature of encumbrance ("Complying Lender") . 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 Lender at the address furnished in writing by Lender. C. Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this Lease by mutual agreement without the prior written consent of Lender. D. Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on this Lease and the leasehold estate created hereby shall have the right, during the term of the Lease, to: (1) perform any act required of Lessee pursuant to this Lease; (2) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor. Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults requiring the payment or expenditure of money by Lessee. E:3 E. Right of Lender to Cure Default. Lessor shall give written notice of any default or breach of this Lease by Lessee to Lender and afford Lender the opportunity, after notice, to: (1) cure the breach or default within ten (10) days after expiration of the time period granted to Lessee for curing the default if the default can be cured by payment of money; (2) cure the breach or default within thirty (30) days after expiration of the time period granted to Lessee for curing the default when the breach or default can be cured within that period of time; or (3) cure the breach or default in a reasonable time when something other than money is required to cure the breach or default and cannot be performed within thirty (30) days after expiration of the time period granted to Lessee for curing the default, provided the acts necessary to cure the breach are commenced within thirty (30) days and thereafter diligently pursued to completion by Lender. F. Foreclosure in Lieu of Cure. Lender may forestall termination of this Lease for a default or breach by Lessee by commencing foreclosure proceedings subject to strict compliance with the following: (1) proceedings are commenced within thirty (30) days after the later of (i) expiration of the time period granted to Lessee for curing the default, or (ii) service on Lender of the notice describing the breach or default; (2) the proceedings are diligently pursued to completion in the manner authorized by law; and (3) Lender performs all of the terms, covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until the proceedings are complete or are discharged by redemption, satisfaction, payment or conveyance of this Lease to Lender. G. 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: (1) the written request for the new lease is served on Lessor by Lender within thirty (30) days after the termination of this Lease. (2) 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. (3) 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. (4) 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 premises from Lessee, in preparing the new lease. H. Miscellaneous. The following provisions shall apply to Lessor, Lessee and any Lender: 0 ) 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; 'r (2) 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. 6. USE AND MAINTENANCE. A. Use of Leased Land. The Leased Land shall be solely for residential purposes. Lessee may demolish, construct, remodel, reconstruct and maintain structures on the Leased Land for residential purposes so long as the structures and construction are authorized by appropriate City permit 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 California Coastal Commission and any other state agency if required by law. B. 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 Premises. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain, the Premises, 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 repair or reconstruct any improvements on the Leased Land following any damage or destruction thereof, unless the improvements are being destroyed in conjunction with remodeling or reconstruction and Lessor has consented, in writing, to the damage or destruction. Lessee shall cause to be constructed, maintained and repaired all utilities, pipes, walls, sewers, drains, and other improvements on the Premises to the extent required by law or as necessary to maintain the improvement in good order and repair and safe and sanitary condition. C. Compliance with Laws. Lessee shall make, or cause to be made, any additions, alterations or repairs to any structure or improvement on the Premises which may be required by, and Lessee shall otherwise observe and comply with, any law, statute, ordinance, plan, resolution or policy applicable to the Premises. Lessee shall indemnify, defend and hold Lessor harmless from and against any loss, liability, action, claim or damage, arising out of, or in any way related, to Lessee's failure to comply with, and perform pursuant to, provisions of this subparagraph C. All repairs, additions, and alterations to the structures or improvements on the Premises shall conform to all applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. D. As Is Condition of Premises. Lessee expressly accepts the Premises "as is" and acknowledges that Lessor has made no representations or warranties as to the suitability of the property or any construction or improvement. Lessee shall conduct all tests necessary to determine the suitability of the property for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. Lessee expressly acknowledges that Lessor shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Premises or adjacent property. Lessee expressly acknowledges that, while the legislature of the State of California has purportedly removed the public trust restrictions on use of the Property pursuant to the Beacon Bay Bill, the Leased Land may constitute filled tidelands, and Lessor has made no representation or warranty relative to the validity of the Beacon Bay Bill or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease, Lessor agrees, at its sole cost and expense, to use all reasonable efforts to resist and defend against such challenge and to seek a ruling or judgment affirming and upholding the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease. 10 7. TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease shall give rise to a possessory interest tax obligation and that the execution of this Lease will constitute a reassessment event which may give rise to a material increase in the possessory interest tax currently payable by Lessee under the Pre-existing Lease. Lessee shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, and/or any improvements, including, without limitation, any possessory interest tax. Any lien for unpaid utilities, taxes, assessments or charges shall not attach to the leasehold interest but only to improvements located on the Leased Land. 8. USE AND MAINTENANCE 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 Beacon Bay Community Association by Lessor in consideration of the maintenance thereof by such Association and rent to be paid by individual Lessees under their respective leases. 9. MAINTENANCE AND IMPROVEMENT OF INFRASTRUCTURE. Lessor has no obligation to install, improve, repair, or maintain streets, curbs, gutters, water lines, sewer lines, drainage facilities, street lighting or other facilities used by the residents of Beacon Bay (Infrastructure). Notwithstanding Section 8 above, Lessor reserves the right, after a five (5) year period following the Effective Date and upon approval by the Lessees representing a majority of the lots in Beacon Bay, to improve and maintain streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for 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. 10. COMMUNITY ASSOCIATION. A. 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 Agreement, Lessee agrees to become, and during the term of this Lease to remain, a member in good standing of the Beacon Bay Community Association. B. Compliance with Rules and Regulations. Lessee agrees to abide by the Articles of Incorporation, bylaws, 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 Paragraph A and this Paragraph B shall constitute a material breach of this Lease. C. Lessor Maintenance of Common Areas. In addition to the rights reserved to Lessor pursuant to the provisions of Section 9, if the Community Association fails or ceases to maintain community facilities, Lessor may, at its option and without obligation, assume the obligations of the Community 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 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. 11 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit E attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim or suit, arising out of, or in any way related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. A. General Conditions. All insurance required to be carried pursuant to this Section 13 shall be obtained from reputable carriers licensed to conduct business in the State of California. Each policy required to be carried pursuant to this Section 13 shall name Lessee and Lessor as additional named insureds, and shall provide that the policy may not be surrendered, cancelled or terminated, or coverage reduced, without not less than twenty (20) days prior written notice to Lessor. B. Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and improvements on the Leased Land against loss or damage by fire or other risk for residential structures. The insurance shall provide coverage to at least ninety percent (90%) of the full insurable replacement value of all improvements on the Leased Land, with the loss payable to Lessee unless this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance shall be paid to Lessor. C. Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain during the term of this Lease, a broad form comprehensive coverage policy of public liability insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way related to, the condition, for Lessee's use and occupation, of the premises in amounts not less than: (1) $500,000 per occurrence for injury to, or death of, one person; (2) $100,000 for damage to or destruction of property. 12 14. DEFAULT. A. Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: 0 ) the abandonment of the Premises by Lessee; (2) the failure by Lessee to make any payment of rent when due if the failure continues for three (3) days after written notice has been given to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable unlawful detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this paragraph; (3) the failure by Lessee to perform any of the provisions of this Lease and any Exhibits attached hereto to be performed by Lessee, other than described in Paragraph 14.A(2) above, if the failure to perform continues for a period of thirty (30) days after written notice thereof has been given to Lessee. If the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be in default if Lessee commences the cure within said thirty (30) day period and thereafter diligently prosecutes the cure to completion; or (4) the failure of Lessee to provide Lessor with all relevant information regarding the total consideration paid in conjunction with any transfer of this Lease; (5) 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 Premises 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 Premises or of Lessee's interest in the Lease, where such seizure is not discharged within thirty (30) days. Notices given under this Paragraph 14.A 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. B. Landlord's Remedies. In the event of any default by Lessee as defined in Paragraph 14.A, Lessor may, in addition to any rights or remedies permitted by law, do the following: (1) Terminate Lessee's right to possession of the Leased Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises 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 California Civil Code, or any other provision of law, including, without limitation, the following: (a) The worth at the time of award of the amount by which the unpaid rent and additional rent for the balance of the term after the time of award exceeds the amount of the loss than Lessee proves could be reasonably avoided; and 13 (b) 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) reasonable attorneys' fees, 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 ten percent (10%) 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 percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) 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 Premises 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 Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. 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 Premises, 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 leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (3) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amount specified in Paragraph 14.13(1). C. Default By Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligation. If the nature of Lessor's obligation is such that more than thirty (30) days are required for performance, then Lessor shall not be in default if Lessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. D. Stay of Obligations. Neither party shall be under any obligation to perform or comply with its obligations pursuant to this Lease after the date of any default by the other party. E. Determination of Rental Value. In any action or unlawful detainer commenced by Lessor, the reasonable rental value of the Leased Land shall be deemed to be the amount of rent and additional rent (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless Lessor/Lessee shall prove to the contrary by competent evidence. F. Waiver of Rights. The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other party. 14 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. G. Waiver of Right of Redemption. Lessee waives any right of redemption or relief from forfeiture pursuant to Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to any existing or future statutory or decisional law in the event Lessee is evicted or Lessor takes possession of the Premises by reason of Lessee's default. 15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. A. Surrender of Premises. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Leased Land. Lessor, at its sole discretion, may record a document evidencing the expiration or termination of the leasehold interest. Lessee waives any right to receive relocation assistance or similar form of payment. B. 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 Leased Land all buildings and improvements built or installed on the Leased Land. 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 Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.13, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shall mean the taking of the entire Premises under the power of eminent domain or the taking of so much of the Leased Land as to prevent or substantially impair the use thereof by Lessee for the residential purposes. (2) The term "partial taking" shall mean the taking of a portion only of the Premises which does not constitute a total taking as defined above. (3) 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. (4) The term "date of taking" shall be the date upon which title to the Premises or portion thereof passes to and vests in the condemnor. B. 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 Leased Land or the portion thereof taken shall cease and terminate as of the date of taking of said Leased Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attributable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation thereto. C. Allocation of Award - Total Taking. All compensation and damages awarded for the total taking of the Premises and Lessee's leasehold interest therein shall be allocated as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: 15 (a) The fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of the expiration of the term of this Lease; and (b) The present worth of rents due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of one dollar ($1.00) per annum at nine percent (9%) per annum compound interest (Inwood Coefficient) for the number of years in such period. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. D. Allocation of Award - Partial Taking. All compensation and damages awarded for the taking of a portion of the Leased Premises shall be allocated and divided as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The proportionate reduction of the fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such proportionate reduction in fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (b) The present worth of the amount by which the rent is reduced computed by multiplying the amount by which the annual rent is reduced by the factor for the present worth of $1.00 per annum at 9% per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the Fair Market Rental Value of the Premises at the date of taking bears to the Fair Market Rental Value of the Premises immediately thereafter. 17. ATTORNEYS' FEES. Should either party be required to employ counsel to enforce the terms, conditions and covenants of this Lease, the prevailing party shall recover all reasonable attorneys' fees and charges (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 16 18. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other. 19. 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. 20. 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 Leased Land. KHOMER; [ IR61*3 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 Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659-1768, 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 residence or business address furnished by Lessee; or C. If the Lessee is absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land; or D. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Premises and also sending a copy through the mail addressed to the Lessee. 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. 22. HOLDING OVER. 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 expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The parties agree this Lease cannot be renewed, extended, or in any manner modified except in a writing signed by all parties. However, if Lessee, or anyone claiming under Lessee, shall remain in possession of the Premises after expiration of the term of this Lease without any agreement in writing between the parties and Lessor accepts rent from Lessee, then Lessee shall be deemed a tenant from month-to-month subject to the provisions of this Lease insofar as they may be applicable to a month-to-month tendency. The month-to-month tendency may be terminated by Lessor or Lessor upon thirty (30) days' prior written notice to the other. 23. QUIET ENJOYMENT. 17 Lessor covenants and agrees that Lessee, upon paying the rent set forth herein and observing and keeping all covenants and agreements to be observed or kept by Lessor hereunder, shall quietly have and enjoy the Leased Land during the term of this Lease without hindrance or molestation by anyone claiming by or through Lessor. 24. SEVERABILITY. If any term or provision of this Lease shall, to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 25. MISCELLANEOUS. A. Representations. Lessee agrees that no representations as to the Premises have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agrees and acknowledges that this document contains the entire agreement of the parties, that there are no verbal agreements" representations, warranties or other understandings affecting this agreement, and Lessor and Lessee, as a material part of the consideration of this Lease, waives all claims against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. B. Inurement. Each and all of the covenants, conditions and agreements herein contained shall,' in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors and administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. C. Joint Several Liability. If Lessee consists of more than one person, the covenants, obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants, obligations and liabilities of such persons. D. Captions. The section and paragraph captions used in this Lease are for the convenience of the parties and shall not be considered in the construction or interpretation of any provision. E. Gender. In this Lease, the masculine gender includes the feminine and neuter and the singular number includes the plural whenever the context so requires. 18 IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first above written. LESSOR: CITY OF NEWPORT BEACH, By: itle: CITY MANAG R ATTEST: Old C: CITY CLERK APPROMEQ AS TO FORM: CIT ATTORNEY LESSEES: 1�4c ii��- 0-1J JLWE DIXON' q,0-- �/ 4--j JOHN4�4. DIXON 19 ' � � �-, C� � r t • ttl• alt' o � u � 1 dd ,r � „• C<1 1 rr i / cJ J1• 0� r � `� o ,/ � Y •11 w z y `L14 N - n S rr .i1 � ro •�. pc-' � o.. � � e ►c �fiR. lt�L 7 0 tkl \ It Ic CL Ir Z. � •ate � V Gf +6 gc � � / � e- � . v � o O : C CtL [' O c Sv J6 4 -s g ZS J 0O a c� D �L .[� tP (� ✓ C!XQ N 40 Y f�� r Y r° •�+ p Val �4 CLI d r <p C�p d j5 0 0� �D{l to .v " o <<�� t Edo° If •�4 IN v ►n ��L L40 .lz ��� oR o�.eL1I �`� Q� o - S / o' Is S• ��l ' 06, o .tlf.G�r3. B� oa• `��i• Exhibit A EXHIBIT B Beacon Bay Lot A described as follows: Lot A as shown on the map filed in Book 13, Page 42 Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. EXHIBIT B S Y OF SALIENT FACTS AND CONCLUSIONS - continued SUMMARY OF VALUE INDICATIONS: Existing (1st year) Unencumbered$ Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Water Front Lots A $1,330,000 $48,520 $23,125.08 $31,940.00 B $1,200,000 $43,320 $12,506.85 $22,270.00 C $1,031,000 $37,560 $16,625.04 $22,480.00 1 $947,000 $34,200 $8,020.80 $15,030.00 2 $1,131,000 $41,640 $8,825.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 $31,560.00 4 $1,318,000 $49,120 $10,458.96 $21,260.00 5 $1,341,000 $50,120 $20,012.04 $28,840.00 6 $1,386,000 $51,680 $25,000.00 $34,260.00 7 $1,210,000 $44,800 $24,999.96 $31,870.00 8 $1,177,000 $43,480 $43,750.00 $43,480.00 9 $1,298,000 $47,840 $42,500.04 $44,350.00 10 $1,342,000 $49,600 $24,999.96 $33,540.00 11 $1,122,000 $41,280 $9,020.52 $17,020.00 12 $1,100,000 $40,400 $14,250.00 $22,190.00 13 $1,100,000 $40,400 $23,625.00 $29,450.00 14 $1,243,000 $45,640 $10,312.56 $19,690.00 k 15 $1,265,000 $46,520 $10,836.47 $20,240.00 16 $1,067,000 $39,080 $8,508.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 $21,750.00 18 $1,067,000 $39,080 $8,508.48 $16,480.00 19 $1,243,000 $45,640 $10,020.02 $19,500.00 20 $1,147,000 $42,320 $8,727.84 $17,910.00 21 $1,058,000 $38,760 $20,224.50 $26,660.00 22 $1,036,000 $37,880 $41,250.00 $37,880.00 ES 1 $1,037,000 $37,880 $28,749.96 $31,920.00 ES 2 $1,037,000 $37,880 $24,625.00 $29,220.00 Subtotals: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Exhibit C - Page 1 S Y OF SALIENT FACTS AND CONCLUSIONS - continued Exhibit C - Page 2 Existing (1st year) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Interior Lots s 23 $478,000 $14,487 $2,782.32 $6,297.00 24 $501,000 $15,237 $6,125.04 $8,897.00 25 $509,000 $15,537 $3,399.12 $6,977.00 26 $511,000 $15,612 $3,417.72 $6,942.00 27 $519,000 $15,912 $3,436.44 $7,102.00 28 $542,000 $16,775 $4,137.72 $7,785.00 29 $518,000 $15,650 $15,375.00 $15,470.00 30 $510,000 $15,462 $3,551.16 $7,102.00 31 $517,000 $15,725 $8,750.00 $10,515.00 32 $520,000 $15,837 $3,588.48 $7,217.00 33 $528,000 $16,137 $3,607.08 $7,307.00 34 $589,000 $18,200 $4,454.64 $8,490.00 35 $559,000 $17,000 $3,776.28 $7,780.00 36 $548,000 $16,662 $3,795.00 $7,672.00 37 $517,000 $15,725 $14,625.00 $15,005.00 38 $520,000 $15,837 $3,780.36 $7,967.00 39 $528,000 $16,137 $9,125.04 $11,557.00 40 $588,000 $18,162 $11,133.60 $13,572.00 41 $513,000 $15,500 $3,719.64 $7,300.00 6 42 $548,000 $16,662 $3,795.00 $7,672.00 43 $556,000 $16,962 $11,250.00 $13,232.00 44 $558,000 $17,037 $3,832.20 $7,787.00 45 $565,000 $17,300 $4,056.84 $7,990.00 46 $588,000 $18,162 $4,454.64 $8,492.00 47 $539,000 $16,475 $3,459.36 $7,365.00 48 $551,000 $16,775 $6,249.96 $9,305.00 49 $520,000 $15,837 $3,551.16 $7,197.00 50 $523,000 $15,950 $3,569.76 $7,240.00 51 $520,000 $15,837 $3,780.36 $7,857.00 52 $528,000 $16,137 $12,750.00 $13,927.00 53 $588,000 $18,162 $4,479.00 $8,492.00 54 $530,000 $15,987 $3,344.88 $7,227.00 55 $559,000 $17,075 $10,625.04 $12,865.00 56 $567,000 $17,375 $3,603.96 $7,915.00 57 $546,000 $16,737 $3,551.16 $7,427.00 58 $528,000 $16,137 $6,750.00 $10,007.00 59 $525,000 $16,025 $10,125.00 $12,175.00 60 $533,000 $16,325 $3,533.88 $7,315.00 Exhibit C - Page 2 SU-NQIARY OF SALIENT FACTS AND CONCLUSIONS - continued Unencumbered Fair Market Lot No. Fee Lot Va1u8 Rental Value Interior Lots - continued 61 $588,000 ES 3 $474,000 ES 4 $467,000 ES 5 $470,000 ES 6 $468,000 ES 7 $461,000 ES 8 $471,000 Subtotal Int.: $23,786,000 Subtotal W.F.: $31,563,000 Grand Totals: $55,349,000 $18,162 $14,225 $13,962 $14,075 $14,000 $13,737 $13.925 Existing Contract Rent $4,436.16 $8,750.04 $3,021.96 $10,000.08 $2,982.96 $2,966.04 $3.118.08 (1st year) Effective Net Rent $8,482.00 $10,325.00 $6,322.00 $11,415.00 $6,310.00 $6,057.00 $6,455.00 4;724,637 $254,617.16 $397,807.00 $1,160,640 $519,983.08 $705,220.00 $1,885,277 $774,600.24 $1,103,027.00 Exhibit C - Page 3 Distribution of Rents and Tax Advantage between Tidelands and Uplands* Beacon Bay 6,61194 - Page 1 Exhibit D - Page 1 (1st year) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage s 'aterfront Lots A $31,940.00 100% 0% $31,940 $0 $0 $0 B $22,270.00 100% 0% $22,270 $0 $930 $930 C $22,480.00 100% 0% $22,480 $0 $1,410 $1,410 1 $15,030.00 100% 0% $15,030 $0 $2,080 $2,080 2 $17,950.00 100% 0% $17,950 $0 $2,260 $2,260 3 $31,560.00 100% 0% $31,560 $0 .$560 $560 4 $21,260.00 100% 0% $21,260 $0 $2,610 $2,610 5 $28,840.00 100% 0% $28,840 $0 $1,620 $1,620 6 $34,260.00 100% 0170 $34,260 $0 $0 $0 7 $31,870.00 95% 5% $30,276 $1,594 $0 $0 8 $43,480.00 50% 50% $21,740 $21,740 $0 $0 9 $44,350.00 5% 95% $2,217 $42,132 $0 $0 10 $33,540.00 0% 100% $0 $33,540 $0 $0 11 $17,020.00 0% 100% $0 $17,020 $3,200 $0 12 $22,190.00 09,10 100% $0 $22,190 $1,130 $0 13 $29,450.00 0% 100% $0 $29,450 $0 $0 14 $19,690.00 0% 100% $0 $19,690 $2,880 $0 15 $20,240.00 20% 80% $4,048 $16,192 $2,980 $596 16 $16,480.00 95% 5% $15,656 $824 $2,640 $2,508 17 $21,750.00 100% 070 $21,750 $0 $2,420 $2,420 18 $16,480.00 100% 0% $16,480 $0 $2,640 $2,640 19 $19,500.00 100% 0% $19,500 $0 $2,880 $2,880 20 $17,910.00 100% 0% $17,910 $0 $2,470 $2,470 21 $26,660.00 100% 0% $26,660 $0 $0 $0 22 $37,880.00 10070 0% $37,880 $0 $0 $0 ES 1 $31,920.00 100% 0% $31,920 $0 $0 $0 ES 2 $29,220.00 100% 0% $29,220 $0 $0 $0 Waterfront ubtotal: $705,220.00 $500,848 $204,372 $34,710 $24,984 Beacon Bay 6,61194 - Page 1 Exhibit D - Page 1 Distribution of Rents and Tax Advantage between Tidelands and Uplands* Beacon Bay 616/94 -Page 2 Exhibit D -Page 2 (1st year) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage ,terior Lots ' 23 $6,297.00 0% 100% $0 $6,297 $550 $0 24 $8,897.00 0% 100% $0 $8,897 $390 $0 25 $6,977.00 5% 95% $349 $6,628 $630 $31 26 $6,942.00 99% 1% $6,873 $69 $710 $703 27 $7,102.00 100% 0% $7,102 $0 $660 $660 28 $7,785.00 100170 0% $7,785 $0 $740 $740 29 $15,470.00 0% 100% $0 $15,470 $0 $0 30 $7,102.00 0% 100% $0 $7,102 $580 $0 31 $10,515.00 30% 70% $3,154 $7,361 $660 $198 32 $7,217.00 100% 0% $7,217 $0 $620 $620 33 $7,307.00 100% 0% $7,307 $0 $650 $650 34 $8,490.00 100% 0% $8,490 $0 $730 $730 35 $7,780.00 0% 100% $0 $7,780 $580 $0 36 $7,672.00 0% 100% $0 $7,672 $590 $0 37 $15,005.00 5% 95% $750 $14,255 $0 $0 38 $7,967.00 99% 1% $7,887 $80 $0 $0 39 $11,557.00 100% 0% $11,557 $0 $0 $0 40 $13,572.00 100% 0% $13,572 $0 $0 $0 41 $7,300.00 0% 100% $0 $7,300 $510 $0 42 $7,672.00 0% 100% $0 $7,672 $590 $0 43 $13,2342.00 0% 100910 $0 $13,232 $0 $0 44 $7,787.00 0% 100% $0 $7,787 $630 $0 45 $7,990.00 15% 85% $1,198 $6,792 $660 $99 46 $8,492.00 0170 100% $0 $8,492 $720 $0 47 $7,365.00 0% 100% $0 $7,365 $610 $0 48 $9,305.00 0% 100% $0 $9,305 $600 $0 49 $7,197.00 0% 100% $0 $7,197 $620 $0 50 $7,240.00 0% 100% $0 $7,240 $630 $0 51 $7,857.00 00/0 100% $0 $7,857 $110 $0 52 $13,927.00 0% 100% $0 $13,927 $0 $0 53 $8,492.00 0170 100% $0 $8,492 $730 $0 54 $7,227.00 0% 100% $0 $7,227 $500 $0 55 $12,865.00 0% 100% $0 $12,865 $0 $0 56 $7,915.00 0% 100% $0 $7,915 $470 $0 57 $7,427.00 0% 100% $0 $7,427 $700 $0 58 $10,007.00 0% 100% $0 $10,007 $0 $0 59 $12,175.00 0170 100% $0 $12,175 $0 $0 60 $7,315.00 0170 100% $0 $7,315 $660 $0 Beacon Bay 616/94 -Page 2 Exhibit D -Page 2 Distribution of Rents and Tax Advantage between Tidelands and Uplands* id Waterfront $705,220.00 -and Total: $1,103,027.00 of Total: 100% u (Is t year) Proportionate Effective Lot No. Net Rent tenor Lots - continued 61 $8,482.00 ES 3 $10,325.00 ES 4 $6,322.00 ES 5 $11,415.00 ES 6 $6,310.00 ES 7 $6,057.00 ES 8 $6,455.00 terior Lots ibtotal: $397,807.00 id Waterfront $705,220.00 -and Total: $1,103,027.00 of Total: 100% u affective Net Rents consider tax advantage. Discount rate for present value of annual :vantage is 6%. Rate for asrkprtization of advantage is 7%. Rent and advantage ;uses are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6,16/94 -Page 3 Exhibit D - Pale 3 Proportionate Proportionate Annual Amort. Tidelands % % Rent Rent of PV of Tax Tax Tidelands Uplands Tidelands Uplands Advantage Advantage s 0% 100% $0 $8,482 $720 $0 100% 0% $10,325 $0 $320 $320 100% 0% $6,322 $0 $500 $500 85% 15% $9,703 $1,712 $0 $0 0% 100% $0 $6,310 $500 $0 0% 100% $0 $6,057 '$650 $0 0% 100% $0 $6,455 $410 $0 $109,592 $288,215 $19,930 $5,251 $500,848 $204,372 $34,710 $24,984 $610,440 $492,587 $54,640 $30,235 55% 45% 100% 55% affective Net Rents consider tax advantage. Discount rate for present value of annual :vantage is 6%. Rate for asrkprtization of advantage is 7%. Rent and advantage ;uses are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6,16/94 -Page 3 Exhibit D - Pale 3 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION Table of Contents Article I DEFINITIONS 1 - Architectural Committee 2 - Articles and Bylaws 3 - Assessments 4 - Association 5 - Association Rules 6 - Board 7 - City 8 - Common Expenses 9 - Common Area 10- Covered Property 1.1- Declarant 12- Exhibit 13- Member 14- Lessee 15- Residence 16- Setback II MEP-iBERSHIP 1 - Membership 2 - Transfer 3 - Voting Rights 4 - Classes of Voting membership 5 - Approval of Members III COti NANT FOR MAINTENANCE ASSESSMENTS I - - Creation of the Lien and Personal Obligation of Assessments 2 - Purpose of Assessments 3 - Regular Assessments 4 - Uniform Assessment 5 - Special Assessments 5 - No Offsets 7 - Reserves IV NO 74PA`_MENT OF ASSESSMENTS 1 - Delinquency Notice of Lien 3 - Foreclosure Sale Pa g e 2 2 2 2 3 3 3 3 3 4 4 4 4 4 4 4 5 0 5 5 5 5 5 6 6 6 6 6 6 7 7 (i) Exhibit E V VI VII VIII 4 - Relationship with Mortgage Liens 5 - Curing of Default ARCHITECTURAL CONTROL 1 - Appointment of Architectural Committee 2 - Gc-neral Provisions 3 - Approval and Conformity of Plans 4 - Nonliability for Approval of Plans DUTIES AND POWERS OF THE ASSOCIATION 1 - General Duties and Powers 2 - General Duties of the Association 3 - General Powers of the Associationon 4 - Association Rules REPAIR AND MAINTENANCE 1 -- Repair and Maintenance by Association 2 - Repair and Maintenance by Lessee 3 - Maintenance of- Public Utilities USE RESTRICTIONS 1 - Commercial Use 2 - Signs 3 - Nuisance 4 - Animals 5 - California Vehicle Code IX RIGHTS OF ENiOYMENT 1 - Members' Right of Enjoyment 2 - Delegation of Use 3 - Waiver of Use X GENERAL PROVISIONS 1 - Enforcement 2 - No Waiver 3 - Cumulative Remedies 4 - Severability 5 - Covenants to Run with the Land; Term 6 -- Heading 7 - Singular Includes Plural 8 - Attorneys' Fees 9 - Notices Effect of Declaration 1 l- Personal. Covenant 12- Nonliability of Officials ?�- Subleases 1-4- Amendments 8 9 9 9 9 10 10 10 10 11 11 11 12 12 12 12 12 12 13 13 13 13 13 13 14 14 14 14 15 15 15 15 15 15 16 16 16 16 17 17 17 DECLARA^1ION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION ORANGE COUNTY, CALIFORNIA THIS DECLARATION is made this day of , by the City of Newport Beach a chartered municipal corporation. Said corporation, its successors and assigns, shall hereafter be referred to as "Declarant." R E C I T A L S A. Dec! ar ant is the f ee owner of the real property described in Exhibit A to this Declaration, which shall be the Covered Property under this Declaration. This Declaration is being imposed by Declarant upon the Covered Property. S. Declarant has deemed it desirable to establish covenants, conditions and restrictions upon the Covered Property and each and every portion thereof, which will constitute a general scheme for the management of the Covered. Property, and for the use, occupancy and enjoyment thereof, all for the purpose of enhancing and protecting the value, desirability and attractiveness of the Covered Property and enhancing the quality of life within the Covered Property. C. It is desirable for the efficient management of the Property and the preservation of the value, desirability and attractiveness of the Covered Property to delegab,� and assigned the powers of managing;.the Covered Prope: L:,,, maintaining and administering the Common Area and al7i'L nistering and enforcing these covenants, con,�it i o:::; and restrictions and collecting and disbursing funds D'_rsuant to the assessment and charges hereinafter creates _+nd referred to and to perform such other acts as sh'�l1 (�e::erally benefit the Covered Property to the Beacon Bay Assocation, a California nonprofit coroo- -ion. D. T,eclarant will hereafter hold title to and lease all =` = Covered Property subject to certain protective coven--=;:ts, conditions and restrictions hereafter set forth. Deacon 2 L_°" 9/20/7Q Rev. 9/24/79 THEREFORE, Declarant hereby covenants, agrees and dec' ares that all of its interest as the same may from tiTe to time appear in the Covered Property shall be held and conveyed subject to the following covenants, conaitions, restrictions and easements which are hereby declared to be for the benefit of said interests.in the Covered Property, and the owners of said interests, their sucessors and assigns. These covenants, conditions, res�--rictions and easements shall run with said interests and shall be binding upon all parties having or acquiring any right or title in said interests or any part thereof, and shall inure to the benefit of each owner thereof and are imposed upon said interests and every part thereof as a servitude in favor of each and every of said interests as the dominant tenement or tenements. ARTICLE I DEFINITIONS Unless the context clearly indicates otherwise, the following terms used in this Declaration are defined as follows: Section 1. "Architectural Committee" shall mean and refer to the committee or committees provided for in the Article hereof entitled "Architectural Control". Section 2. "Articles" and "Bylaws shall mean and refer to the Articles of Incorporation and Bylaws of the Association as the same may from time to time be duly amen(2ed. Section 3. "Assessments:" The following meanings shall be given to the Assessments hereinafter defined: "Regular Assessment" shall mean the amount which is to be paid by each Member of the Association fors, Common Expenses. "Stec_=1 Assessment" shall mean a charge against a directly attributable par�_L.�c.�lar Lessee and his Residence, to tie Lessee, to reimburse the. Association for costs in bringing the Lessee and his Residence into :..--Lnce with the provisions of this Declaration, the Artie -s, Bylaws or Association Rules, or any other charge desi7„ted as a Special Assessment, together with att ys' fees and other charges payable, plus interest thele -or as provided for in this Declaration. Bcaccn Bay 9/20/9 2 Rev. 9/24/79 Section 4. "Association" shall mean and refer to Beacon Bay Community Assocation, a nonprofit corporation, incorporated under the laws of the State of California, its successors and assigns. Section 5. "Association Rules" shall mean rules adopted by the Association pursuant to the Article hereof entitled "Duties and Powers of the Association." Section 6. "Board" shall mean the Board of Directors of the Association. Section 7. "City" shall mean and refer to the City of Newport Beach, California, a municipal corporation of the State of California. Section 8. "Common Expenses" shall mean and refer to 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 Community Facilities; (`) the costs of fire, casualty, liability, workmen's compensation and other insurance covering the Common Area; i- (`) the costs of any other insurance obtained by the Aslz;oc_at ion ; (g) reasonable reserves as deemed appropriate by the Boars; (^) the costs of bonding of the members of the Board, any professional managing agent or any other person hanC:lin ; the funds of the Association; Beacon :3ay 9/20/-9 3 Rev. 9/24/79 (i) taxes paid by the Association; (') amounts paid by the Association for discharge of any lien or encumbrance levied against the Common Area or portions thereof; -(k) costs incurred by the Architectural Committee or other committee established by the Board; and (1) other expenses incurred by the Association for any reason whatsoever in connection with the Commo: Area, or the costs of any other item or items designated my this Declaration, the Articles, Bylaws or Association Ruies, or in furtherance of the purposes of the .Association or in the discharge of any duties or powers of ' the Association. Section 9. "Common Area" shall mean all streets, beaches, walkways, tennis courts, docks, piers, and common landscaped areas, including but not limited to Lots A through J inclusive as shown on Exhibit ".1 . Section 10. "Covered Property" shall mean and refer to property described onExhibitI . a,ll the real prop y Section 11. "Declarant" shall mean and refer to the City of i'.e�•-port Beach . Section 12. "Exhibit" shall mean and refer to those docu:-qents so designated herein and attached hereto and eac- of such Exhibits is by this reference incorporatE.:: in this Declaration. Section 13. "Member shall mean and refer to every person or er.t--ity who qualifies for membership pursuant to the Article of this Declaration entitled . Membership. Secti cn ; 4." "Lessee" shall mean and refer to one or more persk;:s or entities who are alone or collectively the lessee of a Residence. Sec _ _ on 15. "Residence" sh<<11. mean and refer to a nu;; b�--�r_' lot shown on the Record of Survey Map of Beacon Ba , ��,•: iv i sion. recorded in nook 91 pa9eso2 t��edCount ReCords of Survey, on file ill t1le Oftj.c Y Rec Orange County, California; provided, however, Re - d ` -:; c" shall not include any Common Area . 11R��� shall inclucic the residential dwelling unit 9/2rRev. 9/24/79 together with garages, structures and other improvements on the same lot or parcel. section internal shown on 16. "Setback" d is tances f rom Exhibit "II" shall mean and refer to those the property line of each lot as ARTICLE II NIEMBERSHIP Section 1 - Membership. Every Lessee shall be a 1� ember but there shall be only one membership per Residence. The term and provisions set forth in this Declaration, which are binding. upon all Lessees are not exclusive as Lessees shall, -in addition, be subject to the terms and provisions of the Articles, Bylaws and Association Rules to the extent the provisions thereof are not in conflict with this Declaration.- Membership of Lessees shall be appurtenant to and may not be separated from the interest of such Lessee in any Residence. Ownership of a Residence shall be the sole qualification for membership; provided, however, a t:ember's voting rights may be regulated or suspended as provided in this Declaration, the Bylaws or the Association Rules. Section 2 - Transfer. The membership held by any Lessee shall not be transferred, pledged or alienated in any way, except that such membership shall automatically be transferred to the transferee of the interest required for memr;ersh ip. Any attempt to make a prohibited transfer -is voic, and will not be reflected upon the books and records of the Association. The Association shall have the right to record the transfer upon the books of the Association wi t`:out any further action or consent by the transferring Lessee. Section 3 - Voting Ri hts. All voting right shall be subject to the restrictions and limitations provided herei-. 2n12 i*n the Articles, Bylaws and Association Rules. Sectc-: 4 _- Classos of Voting Menbershi The Association shill i:a�e one_ (1) class of voting membership. SCC`__c,� 3 - IPp-._oval of Members'. Unless elsewhere ot:,=r -se p��ciLically provided in this Declaration or the ;. E1.=-�s, any provision of this Declaration or the Bylaws which requires the vote or written assent of the voting po:i-r of the Association shall be deemed satisfied by the fol] -owing: (a) The vote in person or by proxy of the specified percentage at a. meeting duly called and noticed pursuant to the provisions of the Bylaws dealing. with annual or special meetings of the Members. (b) written consents signed by the specified percentage of Members as provided in the Bylaws. ARTICLE I I I COVENANT FOR MAINTENANCE ASSESSMENTS Section 1 - Creation of the Lien and Personal Obligation of Assessments. Each Lessee is deemed to covenant and agree to pay to the Association: Regular and Special Assessments, such Assessments to be fixed, established and collected from time to time as provided in this Declaration. The Assessments, together with interest thereon, late charges, attorneys' fees and court costs, and other costs of collection thereof, as hereinafter provided, shall be a continuing lien upon the Residence against which each such Assessment is made and shall also be the personal obligation of the Lessee of such Residence at the time when the Assessment becomes due. Notwithstanding the foregoing, the Assessment lien shall not affect the priority of any other existing liens. Section 2 - Pur.pose of Assessments. The Assessments levied by the Association shall be used exclusively to defray Common Expenses. Sectio„ 3 - Regular Assessments. Each year the Board shad i determine the amount of the Regular Assessment to be paid by each Member. The Regular Assessment shall be due and payable on such dates as the Board may .;-establish. Each LMember shall be sent written notice of the Regular Assess:,ent and shall thereafter pay the -Association in ins" -=.,7 -:rents as established by the Board. Secti 4 - Uniform Assessment. Regular Assessments shall be fixed at an equal amount for each Residence. Section 5 - Special_ Assessments. Special Assessments may be ievi`d by the Board from time to time. Beacon Bay 9/20/79 6 Rev. 9/24/79 Section 6 - No Offsets. All Assessments shall be payable in the amount specified by the Assessment and no offsets against such amount shall be permitted for any reason, including, without limitation, a claim that (i) the Association is not properly exercising its duties and powers as provided in this Declaration; or (ii) a Member has made and elects to make no use of the Common Areas. Section 7 - Reserves. The Regular Assessments may include reasonable amounts as determined by the Board collected as reserves for the future periodic maintenance, repair or replacement of all or a portion of the Common Area, or any other purpose as determined by the Board. All amounts collected as reserves, whether pursuant to this Section or otherwise, shall be deposited by the Board 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. Such reserves shall be deemed a contribution to the capital account of the Association by the Member. ARTICLE IV NONPAYMENT OF ASSESSMENTS Section 1 - Delinquency. Any assessment provided for in this Declaration which is not paid when due shall be delinquent on said date (the "delinquency date"). If any such Assessment is not paid within ten (10) days after delivery of notice of such delinquency from the Association, a late charge as established by the Board shall be levied and the Assessment shall bear interest from the delinquency date at the rate of ten percent (10%) per annum. The Association may at its option, and without waiving the right to judicially foreclose its. lien against the Residence, pursue any available remedies, including, witnc-ut limitation, bringing an action at law against the Me,m er personally obligated to pay the same, and/or upon comciiance with the notice provisions set forth in the Sec' ion entitled "Notice of Lien" of this Article to foreclose the lien against the Residence. If action is co= raced., there shall be added to the amount of such AsseSzm.ent 'the late charge, interest, the costs of such action, and attorneys' fees incurred in connection with suc:�. action; and in the event a judgment is obtained, such j .idcT int shall include said late charge, interest and a r� aso��ab1P attorney's fee, together with the costs of action:. Each Member vests in the Association, 'or its assign.:, the right and power to bring all actions at law Beac,jn Day_ 9/��/ 7 Rev. 9/24/79 or lien foreclosure against such Member or other Members for the collection of such delinquent Assessments. Section 2 - Notice of Lien. No action shall be brought to foreclose said Assessment lien or to proceed under the power of sale herein provided until thirty (30) days after the date a notice of claim of lien is deposited in the United States mail, certified or registered, postage prepaid, to the Lessee of said Residence, and a copy thereof is recorded by the Association in the office of the County Recorder of the County; said notice of claim of lien must recite a good and sufficient legal description of any such Residence, the record Lessee or reputed Lessee thereof, the amount claimed which shall include interest on the unpaid Assessment at the rate of ten percent (10%) per. annum, a late charge as established by the -Board, plus reasonable attorneys' fees and expenses of collection in connection with the debt secured by said lien, and the name and address of the claimant. Section 3 - Foreclosure Sale. Said Assessment lien may be enforced by sale by the Association, its attorney or any other person authorized by the Board to make the sale after failure of the Lessee to make the payments specified in the notice of claim of lien within said thirty (30) day period. Any such sale provided for above is to be conducted in accordance with the provisions of Sections 2924, 2924b, 2924c, 2924f, 29248 and 2924h of the Civil_ Code of the State of California as said statutes may from time to time be amended, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted or provided by law. Upon the affirmative vote of a majority of the voting power of the Association, the Association, through its duly authorized agents, shall have the power to bid on the Residence, u i ng t:ssociation funds, or funds borrowed for such purpose, at the sale, and to acquire and hold, lease, mortgage and convey the same. Section 4 - Relationship with Mortgage Liens: (a) The lien provided for in the Article hereof en -i tle-! "1"'4onpayment of Assessments" for the payment of Assess:-; -nts shall be subordinate to the lien of any 1•1or tca-e which was recorded prior to the date any such Asses; -:e -,t becomes due. (b) If any Residence subject to a monetary lien create: 'iny any provision hereof shall be subject to the lien 1f a Mortgage: (1) the foreclosure of any lien creat_: o_, anything set forth in this Declaration shall Beacon Eay 9/20/79 8 Rev. 9/24/79 not operate to affect or impair the lien of such Mortgage; and (2) the foreclosure of the lien of said Mortgage, or the sale under a power of sale included in such Mortgage (such events being hereinafter referred to as "Events of Foreclosure") shall not operate to affect or impair the lien hereof, except that any persons who obtain an interest through any of the Events of Foreclosure, and the successors in interest, shall take title free of the lien hereof or any personal obligation for said charges as shall have accrued up to the time of any of the Events of Foreclosure, but subject to the lien hereof for all said charges that shall accrue subsequent to the Events of Foreclosure. Section 5 - Curing of Default. Upon the timely payment or other satisfaction of: (a) all delinquent Assessments specified in the notice of claim of lien, (b) all other Assessments which have become due and payable with respect to the Residence as to which such notice of claim of lien was recorded, and (c) interest, late charges, attorneys' fees and other costs of collection pursuant to this Declaration and the notice of claim of lien which have accrued, officers of the Association or any other persons designated by the Board are hereby authorized to file or record, as the case may be, an appropriate release of such notice, upon payment by the defaulting Lessee of a fee, to be determined by the Association, but not to exceed Fifty Dollars * ($50.00) to cover the costs of preparing and filing or recording such release. ARTICLE V ARCHITECTURAL CONTROL Section 1 - L2oointment of Architectural Committee. The Architectural Committee shall consist of not less than three (3) nor more than five (5) persons as fixed from time to time by resolution of the Board. The Boa; shall have the right to appoint the -members of the tire_; : tectural Committee. Persons appointed by the Board to the Architectural Committee, however, must be Mem5erS, SectioT 2 - General Provisions. (a) The Architectural Committee may establish reaso;,able procedural rules and assess a fee in connection with = :, iew of plans and specifications including, without 1 i mi to t �_cn , the numbe- r of se is of plans to be submi tted; Beacon �,: Y 9/20/79 9 Rev. 9/24/79 however, the Architectural Committee may delegate rs of sits plan review r esoons i b i l i tes to one or more uch Architectural Committee. Upon such delegation, the approval or disapproval of plans and by such persons shall be equivalent toapproval or disapproval by the entire Architectural committee. (b) In the event the Architectural Committee fails to approve or disapprove such plans and specifications within thirty (30) days after the same have been submitted in accordance with any rules regardingts such submission and adopted by the Architectural Cort s plans specifications will be deemed approved. (c) Nothing in this Declaration or in the Association's Articles, Bylaws or Rules shall beconstrued t or amended to allow the Architectural committee y or eliminate the Setback requirements shown the Beacon shall Bay Subdivision Survey Map, and any attempt to doso have no effect. Section 3 - Aooroval and Conformity of Plans. No build i ng, f ence wall or other structure hall bed commenced, erected or maintained upon Property, nor shall there be any addition totr change to the exterior of any Residence, structure oo improvement except in compliance with plans and to and specifications therefor which have been approved by the Architectural committee a�toh armony of external design and location in relationou structures and topography. Section 4- Nonliability for Approval of Plans. Plans and specifications shall be approved by the Architectural o earance and Committee as to style, exterior forengineeringdesign or location, and are not approved9 for compliance with zoning and building ordinances, and by approving such plans and specifications eitheoff the Architectural Committee, the members Association, the members, the Board nor Declarant assumes liability or responsibility therefor, or for any defect in any str -: ture constructed from such plans and spec i _ri ca - ions. ARTICLE VI DUTIES AND POWERS OF THE ASSOCIATION section 1 - General Duties and Powers. In addition to the duties an,powers enumerated in its Articles and Bylaws, Beacon BzY 10 Rev. 9/24/79 9/20/79 or elsewhere provided for herein, and %.�ithou t limiting the generality thereof, the Association shall have the spa cific u*uties and powers specified in this Article. Section 2 - General Duties of the Association. The Association through the Board shall have the duty and obligation to: (a) enforce the provisions of this Declaration, the Articles, Bylaws, and Association Rules, by appropriate means and carry out the obligations of the Association hereunder; (b) maintain and otherwise manage the Common Area; (c) pay any real and personal property taxes and otheL charges assessed to or payable by the Association; and (d) obtain and continue in effect during the term of of the lease, in its own name a comprehensive policy of public liability insurance proving coveraue for the common area, and a policy of fire and casualty insurance with coverage as the Board deems appropriate. Section 3 - General Powers of the Association. The Association through the Board shall have the power but not the obligation to: (a) employ a Manager or other persons and contract cai th independent contractors or managing agents to perform all oL any part of the duties and responsibilities of the Association; - ( I'D ) borro�; money as may be needed in connection with the a i -sc a)- ge o` the Association's potyers and duties; and ( c ) establish. and maintain a working capital and con t i rag ='.cv fund in an amount to be determined by the Boars. C:a id fund shall be used by the' Board as it deems fit to carry out the objectives and purposes, of the Sec;-_' _ - Assc tion Rules. The Board shall have the and repeal such rules and rec,- i _� .::�s as It deems reasonable ( the "Assoc iati.oil FZu=e.!vent of ally conflict between any such and any other provisions of this o:. t`,e Articles or. I3yla�;s, the provisions of "I cs shall_ he deemed to be superseded by the `.r;.•: ;Mon- of this Dccla.ration, the Articles or the BylG��- -he cx tent, of any such conflict. 9/20/7: 1 �. Rev. 9/24/79 5/4/81 ARTICLE VII REPAIR AND MAINTENANCE Section 1 - Repair and Maintenance by Association. The Association shall have the, duty to: (a) maintain, repair, restore, replace and make necessary improvements to the Common Area; (b) maintain all other facilities, equipment, services or aesthetic components of whatsoever nature as may from time to time be requested by the vote or written consent of a majority of the voting power of the Members; (c) pay out of the general funds of the Association the costs of any maintenance and repair made .pursuant to this section, except as otherwise herein specified as payable by particular Lessees. Section 2 - Repair and Maintenance by Lessee. Except as the Association shall be obligated to maintain and repair as may be provided in this Declaration, every Lessee 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 in accordance with the provisions of this Article. Section 3 - Maintenance of Public Utilities. Nothing contained herein shall require or obligate the Association to ;;laintain, replace or restore the underground facilities or oublic utilities which are located within easements in the Common Area owned by such public utilities. However, the Association shall take such steps as are necessary or convenient to ensure that such facilities are properly maint-6,-, replaced or restored by such publ.ic utilities. -� e n 6 t ARTICLE VIII USE RESTRICTIONS Sect];.— Commercial Use. No part of a Residence shall be us --26. Lor any business, commercial, or nonresidential purposes, Beacon, S av 9/20/71,9 12 Rev. 9/24/79 Section 2 - Signs. No sign or billboard of any kind shall be displayed to the public view on any portion of the Covered Property; provided, however, that a Member may display on his Residence, a sign advertising its sale or lease so long as such sign shall comply with any customary and reasonable standards promulgated by the Board. Section 3 - Nuisance. No noxious or offensive activity shall be carried on upon any Residence, or any part of the Covered Property nor shall anything be done thereon which may be, or may become an annoyance or nuisance to the neighborhood, or which shall in any way interfere with the quiet enjoyment of each of the Lessees of his respective Residence. Section 4 - Animals. No animals, livestock or poultry of any kind shall be raised, bred or kept upon the Covered Property, except that dogs, cats or other household pets may be kept on the Residences, provided they are not kept, bred or maintained for any commercial purpose, or in numbers deemed unreasonable by the Board. Notwithstanding the foregoing, no animals or fowl may be kept on the Residences which in the good faith judgment of the Board or a committee selected by the Board for this purpose, result in any annoyance or are obnoxious to residents in the vicinity. All animals except cats permitted to be kept by this Section shall be kept on a leash when on any portion of the Covered Property except within a Residence. Section 5 - California Vehicle Code. The City i�ay be allowed to impose and enforce all provisions of the applicable California Vehicle Code sections on any private streets within the Covered Property. ARTICLE IX RIGHTS OF ENJOYMENT Section 2 - Members' Right of Enjoyment. Every Member shall have nonexclusive easement for use and enjoyment in and to the Common. Area and such right shall be appurtenant. to and s^all pass with the interest required to be a Lessee to every Residence, subject to all of the easements, covenants, conditions, restrictions and other prov is i ons contained in this Declaration, including, without limitation, the follo;,;ing provisions: Beacon Ba_v 9/20/79 13 Rev. 9/24/79 (a) The right of the Association to limit the number of guests of Members and to limit the use of the Common Area by persons not in possession of a Residence, but owning a portion of the interest in a Residence required for membership. .(b) The right of the Association to establish reasonable rules and regulations pertaining to the use of the Common Area. Section 2 - Delegation of Use. Any Member may delegate his right of enjoyment to the Common Areas to .the members of his family or his tenants -who reside on his Residence, or to his guests, subject to the rules and regulations adopted by the Board. In the event and for so long as a Lessee delegates said rights of enjoyment to his tenants, said Lessee shall not be entitled to said rights unless both he and the tenant reside on the Residence in separate dwelling units which conform to all applicable municipal laws and regulations. Section 3 - Waiver of Use. No member may exempt himself from personal liability for assessments duly levied by the Association, or release the Residence owned by him from the liens, charges and other provisions of this Declaration, the Articles, Bylaws and Association Rules, by waiver of the use. and enjoyment of the Common Area, or the abandonment of his Residence. ARTTCLE X GENERAL PROVISIONS Section. 1 - Enforcement. The Association, or any Lessee, shall ha,�e the right to enforce by proceedings at law or in ecruity, all restrictions., conditions, covenants and reservations, now or hereafter imposed by the provisions of this Declaration or any amendment thereto, including the right to prevent the violation of such restrictions, conditions, covenants, or reservations and the...right to recover amages or other dues for such violation. . The Assoc _at i on or any Lessee . shall also have the right to enforce proceedings at law' or in equity the provisions of the Articles or Bylaws and any amendments thereto. With i esoPct to architectural control and Association Rules, the Association shall have the exclusive right to the enLcrcement thereof unless the Association refuses or is u;:a.b'_e to effectuate such enforcement, in which case any Lessee who otherwise has standing shall have the right to unc2ertake such enforcement. With respect to Assessment Beacon Sa-_� 9/20/79 14 Rev. 9/24/79 Liens, the Association shall have the exclusive right to the enforcement thereof. Section 2 - No Waiver. Failure by the Association or by anv Member to enforce any covenant, condition, or restriction herein contained, or the Articles, Byla<<as or Association Rules, in any certain instance or on any particular occasion shall not be deemed a waiver of such right on any such future breach of the same or any other covenant, condition or restriction. Section 3 - Cumulative Remedies. All rights, options and reined ies of Declarant, the Association, or the Lessees under this Declaration are cumulative, and no one of them shall be exclusive of any other, and Declarant, the Association, and the Lessees 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 4 - Severability. Invalidation of any one or a portion of these covenants, conditions or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect. Section 5 - Covenants to Run with the Lana; Term. The covenants, conditions and restrictions of this Declaration shall run with and bind the Covered Property and shall inure to the benefit of and be enforceable by the Association or any Lessee, their respective legal representatives, heirs, successors and assigns, for a term of twenty five (25) years from the date this Declaration is recorded, after which time said covenants, conditions and restrictions shall be automatically extended for successive periods of ten (10) years, unless an instrument, signed by the Declarant and- a majority of the then Lessees, has been recorded at least one (1) year prior to the end of any such period, agreeing to change said covenants, conditions and restrictions in whole or in, part. r Section 5 - Heading. The Article and Section .-headings have been inserted for convenience only, and shall not be considered or referred to in resolving. questions of interpretation or construction. Section 7 -_Singular Includes Plural. Whenever the context of this Declaration requires same, the singular shall include the plural and the masculine shall include the feminine and the neuter. Beacon �a 9/20/79 15 Rev. 9/24/79 Section 8 - Attorneys' Fees. In the event action is instituted to enforce any of the provisions contained in this Declaration, the party prevailing in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorneys' fees and costs of such suit. Section 9 - Notices. Any notice to be given hereunder shall -be in writing and may be delivered as follows: (a) Notice to a Lessee shall be deemed to have been properly delivered when delivered to the Lessee's Residence, or placed in the first class United States mail, postage prepaid, to the most recent address furnished by such Lessee in writing to the Association for the purpose of giving notice, or if: no such address shall have been furnished, then to the street address of such Lessee's Residence*. Any notice so deposited in the mail within the City shall be deemed delivered forty-eight (48) hours after such deposit. In the case of co -Lessees any such notice may be delivered or sent to any one of the co -Lessees on behalf of all co -Lessees and shall be deemed delivery on all such co -Lessees. (b) Notice to the Association shall be deemed to have been properly delivered when placed in the first class United States mail, postage prepaid, to the address furnished by the Association or the address of its principal place of business. (c) The affidavit of an officer or authorized agent of the Association declaring under penalty of perjury that a notice has been mailed to any Lessee or Lessees, or to all Members, to the address or addresses shown on the records of the Association, shall be deemed conclusive proof of such mailing, whether or not such notices are actually received. Section 10 - Effect of Declaration. This Declaration is made for the purposes 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 app 1ica!Die thereto. Section. 11 - Personal Covenant. To the extent the accepta-:ce or conveyance of a Residence creates a covena^t between the Lessee of such Residence and Declarentt or other Lessees, such personal covenant shall Beacon �y 9/20/79 16 Rev. 9/24/79 personal terminate and be of no further force or effect from or after the date when a person or entity ceases to be an Lessee except to the extent this Declaration may provide otherwise with respect to the payment of money to the Association. Section 12 - Nonliability of Offic als. To the fullest extent permitted by law, neither the Board, the Architectural Cammittee, and other committees of the Association or anv 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 13 - Subleases. Any agreement for the subleasing or rental of Residence (hereinafter in this Section referred to as a "lease") shalt provide that the terms of such lease shall be subject in all respects to the provisions of this Declaration, the Articles, the Bylaws and the Association Rules. Said lease shall further provide that any f ail ur e by the lessee thereunder to comply with the terms of the foregoing documents shall be a default under the lease. All leases shall be in writing. Any Lessee who shall lease his Residence shall be responsible for assuring compliance by such Lessee's lessee with this Declaration, the Articles, the Bylaws and the Association Rules. Se -_ti on 14 - Amendments. Subject to the other provisions of this Declaration, this Declaration may be amended as follo,,,s : (a) Any amendment or modification of the Articles hereof entitled "Covenant for Maintenance Assessments," "Nonpayment of Assessments, "Architectural Control," and "Repair and Maintenance," or of this Section shall require the affirmative vote or written approval of not less than sixty percent (60%) of the Members. (b) Anv amendment or modification of any Ar t i cl e other 'those specif ied in subparagraph (a) above shall requ ire the of f i rmati ve vote or wr i tten approval of a ma j or i of the membf-rs . (c) An amendment or modification that requires the vote itten assent of the Members as hereinabove Beacon �'ay 9/20/79 17 Rev. 9/24/79 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 Records of the County. The notarized signatures of the Members shall not be required to effectuate an Amendment of this Declaration. (d) Notwithstanding the foregoing, any provision of this Declaration, or the Articles, Bylaws or Association Rules which expressly requires the approval of a specified percentage of the voting power of the Association for action to be taken under said provision can be amended only with the affirmative vote or written assent of not less than the same percentage of the Voting Power of the Association. IN WITNESS WHEREOF, Declarant has executed this instrument the day and year first herein above written. ATTEST: CITY OF NEWPORT BEACH, a chartered municipal corporation Mayor City Clerk APPRO%TED AS TO FOP24: City Attorney Beacon Lay 9/20/79 18 Rev. 9/24/79 STATE Or ) } ss. COUNTY Or ) On , 19 , before me the undersigned, a Notary Public in and for said State, personally appeared , known to me to be the of the corporation that executed the within Instrument, known to me to be the person who executed the within Instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its bylaws or a resolution of its board of directors. WITNESS my hand and official seal. Notary Public [Seal] Beaco^ 9/20/79 19 Rev. 9/24/79 y;, i ' l'1 '' r'�'' ISI � ,'J! �'' •'::.�.�i�i (•� ' ' .'ll '' `�-• •.l � 11 J n'1 Cl!•'Oz/ •I/'rfVi( ,1I, ;t ;I 1.1 , I '.I r� �I r • - -. � I .- .. -•I �r -- I I I•-- - -III ! --� t .. 1. 1 � I'�... ill l i l 1 I I 1 .� i r. ..1.._.•., I j Ili III I ' I I I I ' I, •;- yj , 'I I 4 •1 I J 0 10"1 VM:l7G'A4 I III 1 1 I Irn ' r ILL '• .' I � I I `� I I :.? 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N N N N N V1 Vl ul N ✓1 V1 Q 0.. ,••� N n n O ^ h h h h h h h h h h h h h h Q� E > H W Q x r z 10 _H W X W %_ C Y P N p T N m O b N b D v m F � Q P O O N n n b b pf P Pf n h m N ry (, W W 4• Y, 7 q '•� N N N N N N N N N n n n n � p W b L Y L Q � W ■ ■ ■ ■ Y r Y ■ M Y Y r i ■ 1 O O O O O O O O O O O O O O O O ✓ e P P T 'r � �• < T Q M Q v v v e 0 O O O O O O A O O O v iSi d C m m m m m m m m m m m m m m m m x x x x x x x x x x x x x x x x vl c 10 b b m tr r O+ O n p b h N P } v., b P h N b+ vl Q C N O 1 r♦ O N m 2 O ... N N m n Q ddd q a U — — — — — — — — — N N N N Q L c 0 u u c d c m 4 a C Q j u X Z (ja Y C Q O W I N N e� n a• .p �o t� e� m m oa{��d�Spp U wmWU 0 N N m n m Y m N m b m ^ m m q m\ Y p O V h ... - - - - - - r - - - - - - z EXHIBIT "D" I of 2 Pages )-15 w m Pm n N n O n T Qt n N t0 O m m n C A ✓f b 'r O Vt N O N n vt " ��.• .bit tT ! O N --. N A .O m �N.. .,,• r N N N n Y r > O m N N Ot n v O e O P O m P .G O h b m d O n Ot •• m T N b h N P � i h A = b dD b b Y h O N N O m h m Ot n n ! KIN N A N A A N 1 tl ■ t t 1 N N •O b ^ .� Q1 Qt N N Ot T ! ! Vt •!t m m N •A N O O O O O O O O O O N N N N N b b A A N N N N N N O O O O O O O O O O O O O O O X' K x x X X K K K X x X K K K x N N N f(y� N N N N N P• P ! 1F P P P ! ! U I O � Q a ! < P Ot Ot Ot Of CT T Ot Ot tT Ot m Ot O1 m m N N N N P P w m m !•'! A n Ot Ot h m N N O O M , U ! N V1 N to N b b n n to m m m Q O O O O O O O O O O O O O O O C6 d x, x x x x x x x x x x x x x x x x O A N ■ ■ M ■ ■ N t t A ■ ■ N ■ N a yt A� yt h N N V1 N to Vt 1fl Vl U: N N N 1/1 O w Y p o m N m P .m ! n n n P o b m O Y p A N b O n m O, Ot n N b N h •n cc an co Ol m 9 a A N t t t tl A 1 t M t t A Y N t ■ a p„ an d n n n n n n h n n n h n n n n n E % x X x X X X x X % K % x X X % U acp N NO O N n n m n v N .br V t0 O N t � ',7 r O N N N ! ♦ b b m m O O r1 n � C Q V .rn .-i .♦ �. ... .r �• •J ..t � N N N N 0 LL dY 0. A C Y Q Y X Q E .L.+ b m O• ! Nt b h m T O - N A P to ., Z •r U Q A. C t' .-• p L. !i h N N n A ! ! b t0 h h m m �t D" EXHIBIT � = m P m d C O 2 of 2 Pages a x V% ■ t ■ O O m m mNi m m ■ - y RECORDING REQUESTED BY EQUITY TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 This Document was electronically recorded by Equity Title B Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 15.00 2007000418863 08:00am 07/03/07 117 92 M10 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 5 S (12I 2-"' MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE is made and entered into by and between THE CITY OF NEWPORT BEACH, a chartered municipal corporation, herein called "Lessor", and JULIE DIXON and JOHN W. DIXON, Husband and Wife as Joint Tenants, herein called "Lessees", to witness that: Lessor hereby leases to Lessee, commencing on t DA and ending on July 1 2044 on the terms and conditions set forth in that certain lease'b and between � Y the parties hereto dated !D `Z--oj , all the terms and conditions of which lease are made a part hereof as though fully set forth herein, all those certain premises in the County of Orange, State of California, described as follows: Lot A as shown on the map filed in Book 13, Page 42 of Record of ~ Surveys, in the Office gf the County RPprder, County of Orange, State of California. Cvl-c es_/wk-r "A" a-� ��_�" EXECUTED on APrLju 3()Tj 2007, at Newport Beach, Orange County, California. LESSOR THE CITY OF NEWPORT BEACH d�Y k� rf(CITY MANAGER Homer Bludau ATTEST - CITY CLERK L ee: JULIE DIXON APP O ED AS TO FORM: Lesse JOHN W. DIX CITY ATTORNEY CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF } S.S. COUNTY OF On APa' I t- - °&u 12 b b-7 before me, E-Fz l r1 VyiaL*�'Cr a Notary Public , personally appeared :Tb! 14 0 D l xs J ANO —'T -U U:5 JD1 Asr l , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. FICIAL SEAL WITNESS my haDd and of cial seal. ERIN WALLACE NOTARY PUBLIC -OREGON Signature 57(0 COMMISSION NO. 387555 MY COMMISSION FX _S DEC. 8, 2008 This area for official notarial seal. OPTIONAL SECTION CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the document. [ ] INDIVIDUAL [ ] CORPORATE OFFICER(S) TITLES) [ ] PARTNER(S) — [ ] LIMITED [ ] GENERAL [ ] ATTORNEY-IN-FACT [ ] TRUSTEE(S) [ ] GUARDIAN/CONSERVATOR [ ] OTHER SIGNER IS REPRESENTING: Name of Person or Entity Name of Person or Entity OPTIONAL SECTION Though the date requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMENT: MVM MzA "00M pF L7EAIZ NUMBER OF PAGES ( DATE OF DOCUMENT `} /3c Pq SIGNER(S) OTHER THAN NAMED ABOVE CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of On10e before me,1/WA/1 kIC614/104i`&> *61-AR7 P06 IC to Name and The of Officer (e.g., "Jane e, Notary Public") personally appeared �.>2 t LuD4y Nanne(s) of Signer(s) Versonally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(' whose name'' is subscribed to the within instrument and L. WASHINGTON acknowledged to me that he /� executed Commission # 1556952 the same in his/I*/�lr authorized .e Notary AngePuMles County r capacityj*q, and that by his/ tJ�r Los Angeles CourNy signatureA on the instrument the person , or My Comm. Expires Mar 6.2009F the entity upon behalf of which the persot acted, executed the instrument. WITNESS an and official seal. 1 ignature of Nolary Pu L,/ l OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: 9. ❑ Individual Top of thumb T7 ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: © 1999 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 EXHIBIT "A" LOT A AS SHOWN ON THE MAP FILED IN BOOK 13, PAGE 42 OF RECORDS OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER, COUNTY OF ORANGE, STATE OF CALIFORNIA AS MORE PARTICULARLY DESCRIBED AS FOLLOWS: A PARCEL OF LAND SITUATED IN THE NORTHWEST QUARTER OF SECTION 35, TOWNSHIP 6 SOUTH, RANGE 10 WEST, S.B.B. & M., DESCRIBED AS FOLLOWS: BEGINNING AT A POINT, SAID POINT BEING SOUTH 39 DEGREES 48 MINUTES EAST DISTANT 88.97 FEET AND NORTH 23 DEGREES 57 MINUTES 30 SECONDS EAST DISTANT 66.34 FEET FROM U.S. BULKHEAD STATION NO. 136, AS SAID U.S. BULKHEAD STATION IS SHOWN ON MAP ENTITLED "HARBOR LINES, NEWPORT BAY HARBOR, CALIFORNIA", AS APPROVED MAY 2, 1936 BY THE SECRETARY OF WAR AND ON FILE IN THE OFFICE OF THE DISTRICT ENGINEER, LOS ANGELES, CALIFORNIA, RUNNING THENCE NORTH 23 DEGREES 57 MINUTES 30 SECONDS EAST A DISTANCE OF 60 FEET; THENCE SOUTH 39 DEGREES 48 MINUTES EAST 146.59 FEET TO A POINT IN THE NORTHEAST LINE OF HARBOR ISLAND DRIVE; THENCE SOUTH 18 DEGREES 03 MINUTES 45 SECONDS WEST ALONG THE NORTHWEST LINE OF HARBOR ISLAND DRIVE, A DISTANCE OF 30 FEET; THENCE NORTH 51 DEGREES 35 MINUTES 55 SECONDS WEST A DISTANCE OF 138.95 FEET TO THE POINT OF BEGINNING. RECORDING REQUESTED BY EQUITY TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 This Document was electronically recorded by Equity Title B Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 15.00 2007000418864 08:00am 07/03/07 117 92 T03 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 TERMINATION OF LEASEHOLD This agreement is made this a..- T� day of June 2007, by and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and JULIE DIXON and JOHN W. DIXON, hereinafter called "Lessees". RECITALS A. Lessor and Lessees executed a lease on November 29, 2005, and subsequently recorded November 29, 2005, by the County Recorder of Orange County, California as Instrument No. 2005000952658 By the terms of the lease, the following described property was leased to Lessee until July 1, 2044. Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the Office oft e County Recorders County of Orange, State of California. 44e.- "A I aMa cike 4 B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AGREEMEN/Ty�,, ,I Lessee agrees to terminate the lease as of l' l /Uri 2 an and Lessor agrees to accept such termination and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. CITY OF NEWPORT BEACH BY: Lessor: Homer Blu u, City Manager BY: Les e: Julie Dixon BY: Lesse John W. Dixon CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT oq lsl sr1 STATE OF EAb� } }S.S. COUNTY OF M `���� } On T -PAS-'S" 111 1 2 C� before me, 1� ' "'-'`v a Notary Public , personally appeared XkN I )t sN AND I_VU4E 1XSiJ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my d and official seal. OFFICIAL SEAL ��Woj_ ERIN WALLACE NOTARY PUBLIC-OREGON Signature �� � COMMISSION NO. 387555 MY COMMISSION EXPIRES DEC. 8, 2008 This area for official notarial seal. OPTIONAL SECTION CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the document. [ ] INDIVIDUAL [ ] CORPORATE OFFICER(S) TITLES) [ ] PARTNER(S) — [ ] LIMITED [ ] GENERAL [ ] ATTORNEY-IN-FACT [ ] TRUSTEE(S) [ ] GUARDIAN/CONSERVATOR [ ] OTHER SIGNER IS REPRESENTING: Name of Person or Entity Name of Person or Entity OPTIONAL SECTION Though the date requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMENT: ' tAwIrjWr$rj of LMW NCO NUMBER OF PAGES I DATE OF DOCUMENT 4 %3 a/b% SIGNER(S) OTHER THAN NAMED ABOVE CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of 6 " A)O C/ ss. On �,R)I E c& )(201 before me, t l "-J AI J 1'()P6h 1 IVCD/ A) h6TAl�y ate Name and Title of Officer (e.g., "Jane Doe, Not Public") personally appeared e� Z,0 o Names) of Signer(s) ersonally known to me proved to me on the basis of satisfactory evidence to be the person whose name( is/A subscribed to the within instrument and acknowledged to me that he/sy executedKlr the same in his/ authorized capacity(' and that by his/1t gnatur on the instrument the person the entity upon behalf of which the person acted, executed the instrument. ITNES d o icial seal. Signature of Notary Public L. WASHINGTON Commission # 1556952 Notary Public - Colifornio Los Angeles County @My Comm. Expires Mar 6, 2 si OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: P 1999 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 LEASE THIS LEASE is made and entered into as of the, i� of n cam hu , 2005, by and between the CITY OF NEWPORT BEACH, a Charter City and municipal corporation ("Lessor"), and JULIE DIXON and JOHN W. DIXON, ("Lessee"), regarding the real property commonly referred to as Beacon Bay Lot A. RECITALS A. The City of Newport Beach, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978 (the "Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly known as Beacon Bay and generally described in Exhibit A attached hereto and incorporated by reference. B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and specifically authorizes the lease of the property for residential purposes subject to certain express statutory conditions. C. Beacon Bay, including the "Westerly Portion" thereof, has been divided into individual lots, with each lot leased by the City for residential purposes until December 31, 2005, D. On November 3, 1987, a majority of electors of the City approved a measure which authorized the City Council to enter into new leases of residential lots in Beacon Bay for a period not to exceed fifty (50) years. E. On November 3, 1992, a majority of electors of the City approved Measure M which authorized the City Council to lease tidelands and waterfront property consistent with the provisions of state law. F. The City Council, pursuant to the authority conferred by the electors, entered into negotiations with current lessees and the parties have agreed on the terms and conditions of a new lease with a fifty (50) year term, provision for adjustments in lease payments to reflect changes in the value of Beacon Bay leaseholds, and a recalculation of lease payments in the event of a transfer of the Lease by the Current Lessee or any Subsequent Lessee (as defined herein). G. Lessee acknowledges that the terms and conditions of this Lease may result in Lessee paying substantially more or less than another Lessee for similar property depending upon the date this Lease is executed, the date of any subsequent transfer, and the consideration paid for transfers of similarly situated property. H. Lessee acknowledges that accurate and complete reporting to the City of all consideration paid for the transfer of this Lease is vitally important to the City in that failure to fully report all consideration could materially reduce the amount of rent received by the City from other Beacon Bay Lessees. I. Lessor and Lessee acknowledge that the City has agreed to a fifty (50) year term and limited lease payment increases in consideration of provisions which require payment of rent approximating fair market rental value, without regard to any advantage maintained by Current Lessees, upon transfer by Current Lessees and payment of deferred rent in the event the Lease is not signed on or before the Effective Date (as defined herein). J. The California State Lands Commission has reviewed the form of this Lease and determined that it is in conformance with the provisions of relevant statutes, rules and regulations, including, without limitation, the Beacon Bay Bill. K. Lessor has determined that this Lease is consistent with provisions of the Beacon Bay Bill, the Charter, General Plan and Zoning Ordinance of the City of Newport Beach, and of all other applicable state and local laws. L. Lessor has determined it is in the best interests of the citizens of Newport Beach to maintain the residential character of Beacon Bay and to enter into new leases with Current Lessees under the terms and conditions specified in this agreement. NOW, THEREFORE, in consideration of the foregoing recitals and the covenants in this lease, the parties agree as follows: LEASED LAND. Lessor hereby leases to Lessee the real property commonly known as Beacon Bay Lot A (the "Leased Land"), which is more particularly described in Exhibit B, and generally depicted on Exhibit A, each attached hereto and incorporated by reference, subject to the limitations on use specified in Section 6. As used in this Lease, the term "Premises" shall refer to the Leased Land and any improvements constructed thereon. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Leased Land 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 for the exploration, development, production, extraction and taking of any such substance 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 Newport Beach City Charter or the Newport Beach Municipal Code. 2. TERM. The term of this Lease shall commence on the Execution Date, but in no event prior to the Effective Date, and shall expire on the date fifty (50) years following the Effective Date, unless earlier terminated as provided in this Lease. 3. RENTAL. A. Definitions. For the purposes of this Lease, the following terms shall be defined as specified in this paragraph. In certain cases, the definition of the term contains operative language that affects the rights of the parties: (1) "Actual Sales Value" shall mean the total of all consideration paid for the non-exempt transfer of this Lease or the Pre-existing Lease, including the improvements on the Leased Land, from the Current Lessee, or Subsequent Lessee, to another person, excluding any consideration paid for the transfer of personal property in connection with such transaction. (2) "Average Actual Sales Value Rent" shall mean two and one-half percent (2.5 %) of the mean of the Actual Sales Value of the non-exempt transfer of a similarly situated (waterfront or interior) Beacon Bay parcels as specified in this subparagraph. Average Actual Sales Value Rent shall be the mean of the Actual Sales Value of the three similarly situated parcels most recently transferred. Exempt transfers, as defined in Paragraph 3.B(3), shall not be used to calculate Average Actual Sales Value rent. (3) "CPP' shall mean the Consumer Price Index - Los Angeles -Anaheim -Riverside Area, All Urban Consumers, All Items, published by the United States Department of Labor, Bureau of Labor Statistics (1982-1984=100). If the 1982-1984 base of said Consumer Price Index should hereafter be changed, then the new base shall be converted to the 1982-1984 base and the base as so converted shall be used. In the event that the Consumer Price Index, as now compiled and published, shall cease to be published, then the successor index shall be used provided that an appropriate conversion from the old index to the new index can feasibly be made. If such conversion cannot be made, or if no such index is published, then another index most nearly comparable thereto recognized as authoritative shall be substituted by agreement. (4) "Current Lessee" shall mean the person or persons who, as of April 1, 1994 (the "Cut-off Date"), was or were the Lessee under the Pre-existing Lease. (5) "Deferred Rent" shall mean the total rent that a Current Lessee would have paid had this Lease been executed on the Effective Date, through and including the date on which this Lease was first executed, less the rent actually paid pursuant to the Pre- existing Lease, together with interest at the rate of eight percent (8%) per annum calculated on the balance due at the end of each Lease Year or portion thereof. (6) "Effective Date" shall mean July 1, 1994. (7) "Execution Date" shall mean the date when this Lease is executed by Lessee. (8) 'Initial Rent" shall mean the effective net rent for the Leased Land as determined by the appraisal of George Hamilton Jones, with due consideration to the leasehold advantage created by the Pre-existing Lease, all as shown on Exhibit C attached hereto and incorporated herein by reference. (9) "Person" shall mean any natural person or natural person(s) and does not include any corporation, association, or business entity in any form except a financial institution or other bona fide lender acting in the capacity of a lender or an inter vivos or living trust. (10) "Pre-existing Lease" shall mean the Lease for the Leased Land which was effective on January 1, 1988, and would, absent this Lease, expire on July 1, 2006. (11) "Transferred" shall mean any sale, assignment, sublease or other transaction, other than an exempt transfer as defined in Paragraph 3.B(3), pursuant to which the right to possession of the premises and the right to sign a new lease identical to this Lease is transferred to another person. B. Rental Payments. Lessee shall pay annual rent in the sum of One Hundred Fourteen Thousand Eight Hundred Seventy -Five ($114,875.00), payable at the rate of Nine Thousand Five Hundred Seventy -Two and 72/100s ($9,572.72) per month. Lessee shall also pay, if applicable, deferred rent in the sum of N/A upon execution of this Lease. Rent shall be adjusted every seven (7) years after the date of transfer in accordance with the provisions of Paragraph 3.B(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: 3 (1) Execution Before Effective Date. In the event this Lease is executed by the Lessee on or before the Effective Date, Rent shall be paid as follows: (a) Current Lessee: Current Lessee shall pay annual rent equal to Initial Rent as specified in Exhibit C. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee (other than an exempt transfer as set forth in Paragraph 3.13(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.B(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of the Actual Sales Value determined as of the date of the transfer in accordance with the provisions of paragraph 3.A(1). Thereafter, rent shall be adjusted every seven years after the date of the transfer in accordance with the provisions of paragraph 3.13(4). (c) In the event of any transfer of this Lease to a Subsequent Lessee in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). (2) Execution After the Effective Date. In the event this Lease is first executed after the Effective Date, rent shall be determined and paid as follows: (a) Current Lessee/Within Five Years After Effective Date: In the event this Lease is executed by the Current Lessee within five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Initial Rent plus a sum calculated by multiplying the difference between Initial Rent and Average Actual Sales Value Rent by a fraction equal to the number of months between the Effective Date and Execution Date, divided by sixty. The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee, rent shall remain as specified in this subparagraph, notwithstanding the provisions of Paragraph 3.13(4). (b) Current Lessee/More Than Five Years After Effective Date: In the event this Lease is executed by the Current Lessee more than five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Average Actual Sales Value Rent calculated as of the date of execution in accordance with the provisions of Paragraph 3.A(2). The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, rent shall be adjusted every seven (7) years after the date of execution in accordance with the provisions of Paragraph 3.13(4). (c) Subsequent Lessee: In the event the Current Lessee transfers the Pre- existing Lease to a Subsequent Lessee who wishes to sign this Lease after the Cut-off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of Actual Sales Value determined as of the date of execution and in accordance with Paragraph 3.A(1). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.6(4). (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a 4 transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.B(4). (3) Exempt Transfers. The provisions of Paragraph 3.13 regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.13(I)(a), 3.B(2)(a) and 3.B(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage increase or decrease, if any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (i) the Execution Date, or (ii) the last rental adjustment date. Lessor shall endeavor to notify Lessee of rental adjustments at least forty-five (45) days prior to the end of each seventh (7th) lease year; provided, however, failure of Lessor to give forty-five (45) days' notice does not relieve Lessee from the obligation to pay increased rent or the right to pay less rent in the event of a decrease in the CPI; and, provided further, that Lessee shall have no obligation to pay rent increases which apply to any period greater than ninety (90) days prior to the receipt by Lessee of Lessor's notice of an increase in rent. (b) In the event Lessee is two or more persons owning the leasehold estate created hereby as tenants in common or joint tenants, and less than all of such persons transfer their interest in this Lease to a person other than to an existing tenant in common or joint tenant, the rent adjustment shall be prorated to reflect the percentage interest being transferred to a third party. For example, if two persons are the Lessee as tenants in common as to equal one-half interests, and one of such persons transfers his/her 50% interest to a third party, the rent shall be adjusted as provided in Paragraph 3.13(2)(c), and thereafter as provided in Paragraph 3.13(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 3.B(3). (5) Installment Payments/Grace Period. Lessee shall pay rent in equal monthly installments, in advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (15th) day of the month for which the payment is made ("Grace Period"). If a rent payment, or any portion thereof, is received by Lessor after expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to the City of Newport Beach and sent, or delivered, to the Finance Director at the address specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or currency to the United States as at the time of payment is legal tender for public and private debts. Lessor and Lessee agree that late charges specified in this paragraph represent a fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 14 of this Lease. Any failure by Lessor to declare a default and initiate termination of this Lease due to a late or missed payment shall not be considered a waiver of the right of Lessor to do so for that or any other late or missed payment. C. Credit to Tidelands Fund. In calculating Initial Rent under this Lease, a credit was given to certain of the Current Lessees equal to the annual amortization of the present value of the additional property tax to be paid by such lessees during the remaining period of the Pre-existing Lease. This credit, commonly referred to as the "tax advantage", is shown on Exhibit D for each affected lot. This credit was extended by Lessor to Current Lessees as consideration for entering into this Lease. As a consideration in its approval of this Lease, the California State Lands Commission required Lessor to credit its State supervised Tidelands Trust Fund by an amount equivalent to the tax advantage derived from those lots in Beacon Bay comprising tidelands. This amount is shown on Exhibit D for each affected lot comprising tidelands. Accordingly, Lessor has unilaterally agreed to annually calculate the amount of such tax advantage derived from the tidelands parcels in Beacon Bay and to credit an equivalent amount as revenue to the State supervised Tidelands Trust Fund. This provision is included in this Lease to acknowledge the 0 agreement of Lessor with the California State Lands Commission, and does not affect the rights and obligations of Lessor or Lessee under this Lease. 4. TRANSFERS. A. Conditions Precedent to Transfer. Lessee may transfer this Lease subject to the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or conditioned. Lessor shall consent to any transfer when Lessee and the proposed transferee have complied with the following: (1) Lessee shall furnish Lessor with executed copies of each and every document used to effect the transfer. (2) Lessee or the proposed transferee shall pay to Lessor a transfer fee of one hundred dollars ($100.00); (3) Lessee shall execute a "Termination of Leasehold Interest" for recordation; and (4) The proposed transferee shall execute a new lease and execute a "Memorandum of Lease" for recordation, which lease shall be identical to this Lease and have a term equal to the remaining term of this Lease at the time of the transfer. B. Transfer Information. The parties to any non-exempt transfer of this Lease shall provide Lessor with all information relevant to a determination of the total consideration paid for the transfer, as well as all documents which are relevant to the total consideration paid for the transfer. Lessee and the proposed transferee shall provide this information not later than forty- five (45) days prior to the proposed effective date of the transfer of this Lease. Lessor shall have the right, at its sole discretion, to commission an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer. Any such appraisal shall be completed not later than thirty (30) days after receipt by Lessor of the aforementioned information from the Lessee. If the value determined by the appraiser commissioned by Lessor exceeds the stated total consideration to be paid based on the information received from the Lessee by more than ten percent (10%), Lessor shall so notify the Lessee and provide Lessee with a full copy of such appraisal report, and said value shall be deemed the Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments unless within fifteen (15) days after receiving such notice and the report the Lessee notifies Lessor that Lessee elects to cause an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer to be conducted by an independent appraiser. In such event, Lessee cause such appraisal to be completed no later than thirty (30) days after the notice to Lessor and shall provide Lessor with a full copy of the appraisal upon completion. The Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments shall be the greater of (i) the stated consideration for the transfer, or (ii) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.B shall be conducted by an MAI appraiser licensed to conduct business in the State of California and experienced in residential appraisals in Southern California. C. Exempt Transfer Information. Lessor's consent is not required for the "exempt transfers" referenced in Paragraph 3.B(3); provided, however, Lessee shall furnish Lessor with copies of all documents used to effect any exempt transfer. D. Audit of Subleases. It is the intent of the parties that transfers referred to in Section 3.13(3)(e) shall only be exempt from the further provisions of Paragraph 3.B (in respect of rental adjustments) if such subleases are not substantially equivalent to, do not have substantially the same economic effect as, or are intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee. Lessor shall at all times have the right, upon written request to the Lessee, to receive copies of all written agreements, and to be advised in full of all oral agreements, between the Lessee and any sublessee of the Leased Land. Any purported sublease of the premises which is determined to be substantially equivalent to, or have substantially the same economic effect as, or is intended to disguise, a transfer by the 7 then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee shall be void and of no force or effect, and such attempted or purported sublease shall, at the option of Lessor, (i) be an event of default by the Lessee under this Lease, or (ii) permit Lessor to treat such sublease as a transfer of this Lease subject to the provisions of Section 3.13. 5. ENCUMBRANCES. A. Right to Encumber. Lessee may encumber this Lease by deed of trust, mortgage, or similar instrument, in favor of any bona fide lender ("Lender") 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 Premises 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 Leased Land. 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. B. Notice to Lender. Lessor shall have no obligation to give any Lender any written notice pursuant to this Lease unless the Lender has given Lessor written notice of its name, address, and nature of encumbrance ("Complying Lender") . 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 Lender at the address furnished in writing by Lender. C. Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this Lease by mutual agreement without the prior written consent of Lender. D. Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on this Lease and the leasehold estate created hereby shall have the right, during the term of the Lease, to: (1) perform any act required of Lessee pursuant to this Lease; (2) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor. Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults requiring the payment or expenditure of money by Lessee. W E. Right of Lender to Cure Default. Lessor shall give written notice of any default or breach of this Lease by Lessee to Lender and afford Lender the opportunity, after notice, to: (1) cure the breach or default within ten (10) days after expiration of the time period granted to Lessee for curing the default if the default can be cured by payment of money; (2) cure the breach or default within thirty (30) days after expiration of the time period granted to Lessee for curing the default when the breach or default can be cured within that period of time; or (3) cure the breach or default in a reasonable time when something other than money is required to cure the breach or default and cannot be performed within thirty (30) days after expiration of the time period granted to Lessee for curing the default, provided the acts necessary to cure the breach are commenced within thirty (30) days and thereafter diligently pursued to completion by Lender. F. Foreclosure in Lieu of Cure. Lender may forestall termination of this Lease for a default or breach by Lessee by commencing foreclosure proceedings subject to strict compliance with the following: (1) proceedings are commenced within thirty (30) days after the later of (i) expiration of the time period granted to Lessee for curing the default, or (ii) service on Lender of the notice describing the breach or default; (2) the proceedings are diligently pursued to completion in the manner authorized by law; and (3) Lender performs all of the terms, covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until the proceedings are complete or are discharged by redemption, satisfaction, payment or conveyance of this Lease to Lender. G. 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: (1) the written request for the new lease is served on Lessor by Lender within thirty (30) days after the termination of this Lease. (2) 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. (3) 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. (4) 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 premises from Lessee, in preparing the new lease. H. Miscellaneous. The following provisions shall apply to Lessor, Lessee and any Lender: (1) 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; 9 (2) 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. 6. USE AND MAINTENANCE. A. Use of Leased Land. The Leased Land shall be solely for residential purposes. Lessee may demolish, construct, remodel, reconstruct and maintain structures on the Leased Land for residential purposes so long as the structures and construction are authorized by appropriate City permit 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 California Coastal Commission and any other state agency if required by law. B. 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 Premises. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain, the Premises, 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 repair or reconstruct any improvements on the Leased Land following any damage or destruction thereof, unless the improvements are being destroyed in conjunction with remodeling or reconstruction and Lessor has consented, in writing, to the damage or destruction. Lessee shall cause to be constructed, maintained and repaired all utilities, pipes, walls, sewers, drains, and other improvements on the Premises to the extent required by law or as necessary to maintain the improvement in good order and repair and safe and sanitary condition. C. Compliance with Laws. Lessee shall make, or cause to be made, any additions, alterations or repairs to any structure or improvement on the Premises which may be required by, and Lessee shall otherwise observe and comply with, any law, statute, ordinance, plan, resolution or policy applicable to the Premises. Lessee shall indemnify, defend and hold Lessor harmless from and against any loss, liability, action, claim or damage, arising out of, or in any way related, to Lessee's failure to comply with, and perform pursuant to, provisions of this subparagraph C. All repairs, additions, and alterations to the structures or improvements on the Premises shall conform to all applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. D. As Is Condition of Premises. Lessee expressly accepts the Premises "as is" and acknowledges that Lessor has made no representations or warranties as to the suitability of the property or any construction or improvement. Lessee shall conduct all tests necessary to determine the suitability of the property for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. Lessee expressly acknowledges that Lessor shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Premises or adjacent property. Lessee expressly acknowledges that, while the legislature of the State of California has purportedly removed the public trust restrictions on use of the Property pursuant to the Beacon Bay Bill, the Leased Land may constitute filled tidelands, and Lessor has made no representation or warranty relative to the validity of the Beacon Bay Bill or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease, Lessor agrees, at its sole cost and expense, to use all reasonable efforts to resist and defend against such challenge and to seek a ruling or judgment affirming and upholding the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease. 10 TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease shall give rise to a possessory interest tax obligation and that the execution of this Lease will constitute a reassessment event which may give rise to a material increase in the possessory interest tax currently payable by Lessee under the Pre-existing Lease. Lessee shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, and/or any improvements, including, without limitation, any possessory interest tax. Any lien for unpaid utilities, taxes, assessments or charges shall not attach to the leasehold interest but only to improvements located on the Leased Land. 8. USE AND MAINTENANCE 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 Beacon Bay Community Association by Lessor in consideration of the maintenance thereof by such Association and rent to be paid by individual Lessees under their respective leases. 9. MAINTENANCE AND IMPROVEMENT OF INFRASTRUCTURE. Lessor has no obligation to install, improve, repair, or maintain streets, curbs, gutters, water lines, sewer lines, drainage facilities, street lighting or other facilities used by the residents of Beacon Bay (Infrastructure). Notwithstanding Section 8 above, Lessor reserves the right, after a five (5) year period following the Effective Date and upon approval by the Lessees representing a majority of the lots in Beacon Bay, to improve and maintain streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for 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. 10. COMMUNITY ASSOCIATION. A. 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 Agreement, Lessee agrees to become, and during the term of this Lease to remain, a member in good standing of the Beacon Bay Community Association. B. Compliance with Rules and Regulations. Lessee agrees to abide by the Articles of Incorporation, bylaws, 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 Paragraph A and this Paragraph B shall constitute a material breach of this Lease. C. Lessor Maintenance of Common Areas. In addition to the rights reserved to Lessor pursuant to the provisions of Section 9, if the Community Association fails or ceases to maintain community facilities, Lessor may, at its option and without obligation, assume the obligations of the Community 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 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. 11 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit E attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. iY�1►17��51T11�[d_��[�7►� Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim or suit, arising out of, or in any way related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. A. General Conditions. All insurance required to be carried pursuant to this Section 13 shall be obtained from reputable carriers licensed to conduct business in the State of California. Each policy required to be carried pursuant to this Section 13 shall name Lessee and Lessor as additional named insureds, and shall provide that the policy may not be surrendered, cancelled or terminated, or coverage reduced, without not less than twenty (20) days prior written notice to Lessor. B. Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and improvements on the Leased Land against loss or damage by fire or other risk for residential structures. The insurance shall provide coverage to at least ninety percent (90%) of the full insurable replacement value of all improvements on the Leased Land, with the loss payable to Lessee unless this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance shall be paid to Lessor. C. Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain during the term of this Lease, a broad form comprehensive coverage policy of public liability insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way related to, the condition, for Lessee's use and occupation, of the premises in amounts not less than: (1) $500,000 per occurrence for injury to, or death of, one person; (2) $100,000 for damage to or destruction of property. 12 14. DEFAULT. A. Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: (1) the abandonment of the Premises by Lessee; (2) the failure by Lessee to make any payment of rent when due if the failure continues for three (3) days after written notice has been given to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable unlawful detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this paragraph; (3) the failure by Lessee to perform any of the provisions of this Lease and any Exhibits attached hereto to be performed by Lessee, other than described in Paragraph 14.A(2) above, if the failure to perform continues for a period of thirty (30) days after written notice thereof has been given to Lessee. If the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be in default if Lessee commences the cure within said thirty (30) day period and thereafter diligently prosecutes the cure to completion; or (4) the failure of Lessee to provide Lessor with all relevant information regarding the total consideration paid in conjunction with any transfer of this Lease; (5) 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 Premises 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 Premises or of Lessee's interest in the Lease, where such seizure is not discharged within thirty (30) days. Notices given under this Paragraph 14.A 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. B. Landlord's Remedies. In the event of any default by Lessee as defined in Paragraph 14.A, Lessor may, in addition to any rights or remedies permitted by law, do the following: (1) Terminate Lessee's right to possession of the Leased Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises 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 California Civil Code, or any other provision of law, including, without limitation, the following: (a) The worth at the time of award of the amount by which the unpaid rent and additional rent for the balance of the term after the time of award exceeds the amount of the loss than Lessee proves could be reasonably avoided; and 13 (b) 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) reasonable attorneys' fees, 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 ten percent (10%) 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 percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) 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 Premises 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 Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. 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 Premises, 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 leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (3) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amount specified in Paragraph 14.13(1). C. Default By Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligation. If the nature of Lessor's obligation is such that more than thirty (30) days are required for performance, then Lessor shall not be in default if Lessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. D. Stay of Obligations. Neither party shall be under any obligation to perform or comply with its obligations pursuant to this Lease after the date of any default by the other party. E. Determination of Rental Value. In any action or unlawful detainer commenced by Lessor, the reasonable rental value of the Leased Land shall be deemed to be the amount of rent and additional rent (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless Lessor/Lessee shall prove to the contrary by competent evidence. F. Waiver of Rights. The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other party. 14 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. G. Waiver of Right of Redemption. Lessee waives any right of redemption or relief from forfeiture pursuant to Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to any existing or future statutory or decisional law in the event Lessee is evicted or Lessor takes possession of the Premises by reason of Lessee's default. 15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. A. Surrender of Premises. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Leased Land. Lessor, at its sole discretion, may record a document evidencing the expiration or termination of the leasehold interest. Lessee waives any right to receive relocation assistance or similar form of payment. B. 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 Leased Land all buildings and improvements built or installed on the Leased Land. 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 Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.6, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shall mean the taking of the entire Premises under the power of eminent domain or the taking of so much of the Leased Land as to prevent or substantially impair the use thereof by Lessee for the residential purposes. (2) The term "partial taking" shall mean the taking of a portion only of the Premises which does not constitute a total taking as defined above. (3) 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. (4) The term "date of taking" shall be the date upon which title to the Premises or portion thereof passes to and vests in the condemnor. B. 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 Leased Land or the portion thereof taken shall cease and terminate as of the date of taking of said Leased Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attributable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation thereto. C. Allocation of Award - Total Taking. All compensation and damages awarded for the total taking of the Premises and Lessee's leasehold interest therein shall be allocated as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: 15 (a) The fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of the expiration of the term of this Lease; and (b) The present worth of rents due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of one dollar ($1.00) per annum at nine percent (9%) per annum compound interest (Inwood Coefficient) for the number of years in such period. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. D. Allocation of Award - Partial Taking. All compensation and damages awarded for the taking of a portion of the Leased Premises shall be allocated and divided as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The proportionate reduction of the fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such proportionate reduction in fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (b) The present worth of the amount by which the rent is reduced computed by multiplying the amount by which the annual rent is reduced by the factor for the present worth of $1.00 per annum at 9% per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the Fair Market Rental Value of the Premises at the date of taking bears to the Fair Market Rental Value of the Premises immediately thereafter. 17. ATTORNEYS' FEES. Should either party be required to employ counsel to enforce the terms, conditions and covenants of this Lease, the prevailing party shall recover all reasonable attorneys' fees and charges (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 18. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other. 19. 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. 20. 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 Leased Land. 21. 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 Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659-1768, 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 residence or business address furnished by Lessee; or C. If the Lessee is absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land; or D. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Premises and also sending a copy through the mail addressed to the Lessee. 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. 22. HOLDING OVER. 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 expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The parties agree this Lease cannot be renewed, extended, or in any manner modified except in a writing signed by all parties. However, if Lessee, or anyone claiming under Lessee, shall remain in possession of the Premises after expiration of the term of this Lease without any agreement in writing between the parties and Lessor accepts rent from Lessee, then Lessee shall be deemed a tenant from month-to-month subject to the provisions of this Lease insofar as they may be applicable to a month-to-month tendency. The month-to-month tendency may be terminated by Lessor or Lessor upon thirty (30) days' prior written notice to the other. 23. QUIET ENJOYMENT. 17 Lessor covenants and agrees that Lessee, upon paying the rent set forth herein and observing and keeping all covenants and agreements to be observed or kept by Lessor hereunder, shall quietly have and enjoy the Leased Land during the term of this Lease without hindrance or molestation by anyone claiming by or through Lessor. 24. SEVERABILITY. If any term or provision of this Lease shall, to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 25. MISCELLANEOUS. A. Representations. Lessee agrees that no representations as to the Premises have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agrees and acknowledges that this document contains the entire agreement of the parties, that there are no verbal agreements" representations, warranties or other understandings affecting this agreement, and Lessor and Lessee, as a material part of the consideration of this Lease, waives all claims against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. B. Inurement. Each and all of the covenants, conditions and agreements herein contained shall,' in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors and administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. C. Joint Several Liability. If Lessee consists of more than one person, the covenants, obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants, obligations and liabilities of such persons. D. Captions. The section and paragraph captions used in this Lease are for the convenience of the parties and shall not be considered in the construction or interpretation of any provision. E. Gender. In this Lease, the masculine gender includes the feminine and neuter and the singular number includes the plural whenever the context so requires. 18 IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first above written. ATTEST: CITY CLERK APPROVE ,AS TO FORM: CITY ATTORNEY LESSOR: CITY OF NEWPORT BEACH, By: Title: CITY MANAGEPC LESSEES: i J6jt DIXON JO W. DIXON , 19 w �. "�, � .{♦ o,flit ty � "b•a Ai t. -•�'- � �9c '�� ',� 0�� � it ..a `' o �' �a`�.y � . cu N • � � � / e e S' IY " O � • 9 c• 1° •i.S-.c" Y r� ._ � ' � 11 ti r rS 49 \ ' �i-`•ed ,r-• �p0—Y 9.� c� 60 CL VI d O 4 ms`s-4 Ck a- N 9� J' •g c� � � '� vy + +`fi j n T 2,, �j, y .•I � ti . e ,.• 60 �' � i 9 . 'i• � yo �C °+° X1°00 - � �� �� l J, 1 o e S if : re •1'+ \ zm' / •!" 500 JOf. t'•f OP• oAII ,.o: T AND40 �QOa oa 8�fl ��' ♦ 4 I �A IJ tj�'• p Na / Es 11 _ W ,lam o 111 � m n+S r�°• � U � �� noc � I ss. � — 60 •g �� 'sd• QIP ss, ,f,�• � � �0°0• � �`riJ`• / , ■ ■ 14 %�_ N��a,. A G �� Exhibit A °rr'x. m •n ,// EXHIBIT B Beacon Bay Lot A described as follows: Lot A as shown on the map filed in Book 13, Page 42 Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. EXHIBIT B SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued SUMMARY OF VALUE INDICATIONS: Exhibit C - Page 1 Existing (1st year) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Water Front Lots A $1,330,000 $48,520 $23,125.08 $31,940.00 B $1,200,000 $43,320 $12,506.85 $22,270.00 C $1,031,000 $37,560 $16,625.04 $22,480.00 1 $947,000 $34,200 $8,020.80 $15,030.00 2 $1,131,000 $41,640 $8,825.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 $31,560.00 4 $1,318,000 $49,120 $10,458.96 $21,260.00 5 $1,341,000 $50,120 $20,012.04 $28,840.00 6 $1,386,000 $51,680 $25,000.00 $34,260.00 7 $1,210,000 $44,800 $24,999.96 $31,870.00 8 $1,177,000 $43,480 $43,750.00 $43,480.00 9 $1,298,000 $47,840 $42,500.04 $44,350.00 10 $1,342,000 $49,600 $24,999.96 $33,540.00 � 11 $1,122,000 $41,280 $9,020.52 $17,020.00 12 $1,100,000 $40,400 $14,250.00 $22,190.00 13 $1,100,000 $40,400 $23,625.00 $29,450.00 14 $1,243,000 $45,640 $10,312.56 $19,690.00 15 $1,265,000 $46,520 $10,836.47 $20,240.00 16 $1,067,000 $39,080 $8,508.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 $21,750.00 18 $1,067,000 $39,080 $8,508.48 $16,480.00 19 $1,243,000 $45,640 $10,020.02 $19,500.00 20 $1,147,000 $42,320 $8,727.84 $17,910.00 21 $1,058,000 $38,760 $20,224.50 $26,660.00 22 $1,036,000 $37,880 $41,250.00 $37,880.00 ES 1 $1,037,000 $37,880 $28,749.96 $31,920.00 ES 2 $1,037,000 $37,880 $24,625.00 $29,220.00 Subtotals: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Exhibit C - Page 1 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued Exhibit C - Paae 2 Existing (1st year) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Interior Lots 23 $478,000 $14,487 $2,782.32 $6,297.00 24 $501,000 $15,237 $6,125.04 $8,897.00 25 $509,000 $15,537 $3,399.12 $6,977.00 26 $511,000 $15,612 $3,417.72 $6,942.00 27 $519,000 $15,912 $3,436.44 $7,102.00 28 $542,000 $16,775 $4,137.72 $7,785.00 29 $518,000 $15,650 $15,375.00 $15,470.00 30 $510,000 $15,462 $3,551.16 $7,102.00 31 $517,000 $15,725 $8,750.00 $10,515.00 32 $520,000 $15,837 $3,588.48 $7,217.00 33 $528,000 $16,137 $3,607.08 $7,307.00 34 $589,000 $18,200 $4,454.64 $8,490.00 35 $559,000 $17,000 $3,776.28 $7,780.00 36 $548,000 $16,662 $3,795.00 $7,672.00 37 $517,000 $15,725 $14,625.00 $15,005.00 38 $520,000 $15,837 $3,780.36 $7,967.00 39 $528,000 $16,137 $9,125.04 $11,557.00 40 $588,000 $18,162 $11,133.60 $13,572.00 41 $513,000 $15,500 $3,719.64 $7,300.00 42 $548,000 $16,662 $3,795.00 $7,672.00 43 $556,000 $16,962 $11,250.00 $13,232.00 44 $558,000 $17,037 $3,832.20 $7,787.00 45 $565,000 $17,300 $4,056.84 $7,990.00 46 $588,000 $18,162 $4,454.64 $8,492.00 47 $539,000 $16,475 $3,459.36 $7,365.00 48 $551,000 $16,775 $6,249.96 $9,305.00 49 $520,000 $15,837 $3,551.16 $7,197.00 50 $523,000 $15,950 $3,569.76 $7,240.00 51 $520,000 $15,837 $3,780.36 $7,857.00 52 $528,000 $16,137 $12,750.00 $13,927.00 53 $588,000 $18,162 $4,479.00 $8,492.00 54 $530,000 $15,987 $3,344.88 $7,227.00 55 $559,000 $17,075 $10,625.04 $12,865.00 56 $567,000 $17,375 $3,603.96 $7,915.00 57 $546,000 $16,737 $3,551.16 $7,427.00 58 $528,000 $16,137 $6,750.00 $10,007.00 59 $525,000 $16,025 $10,125.00 $12,175.00 60 $533,000 $16,325 $3,533.88 $7,315.00 Exhibit C - Paae 2 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued �v Unencumbered Fair Market Lot No. Fee Lot Value Rental Value Interior Lots - continued 61 $588,000 ES 3 $474,000 ES 4 $467,000 ES 5 $470,000 ES 6 $468,000 ES 7 $461,000 ES 8 $471,000 Subtotal Int.: $23,786,000 $18,162 $14,225 $13,962 $14,075 $14,000 $13,737 $13,925 Existing Contract Rent $4,436.16 $8,750.04 $3,021.96 $10,000.08 $2,982.96 $2,966.04 $3,118.08 (1st year) Effective Net Rent $8,482.00 $10,325.00 $6,322.00 $11,415.00 $6,310.00 $6,057.00 $6,455.00 $724,637 $254,617.16 $397,807.00 Subtotal W.F.: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Grand Totals: $55,349,000 $1,885,277 $774,600.24 $1,103,027.00 Exhibit C - Page 3' Distribution of Rents and Tax Advantage between Tidelands and Uplands* Beacon Bay 6/6/94 - Page 1 Exhibit D (1st year) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage Waterfront Lots A $31,940.00 100% 0% $31,940 $0 $0 $0 B $22,270.00 100% 0% $22,270 $0 $930 $930 C $22,480.00 100% 0% $22,480 $0 $1,410 $1,410 1 $15,030.00 100% 0% $15,030 $0 $2,080 $2,080 2 $17,950.00 100% 0% $17,950 $0 $2,260 $2,260 3 $31,560.00 100% 0% $31,560 $0 $560 $560 4 $21,260.00 100% 0% $21,260 $0 $2,610 $2,610 5 $28,840.00 100% 0% $28,840 $0 $1,620 $1,620 6 $34,260.00 100% 0% $34,260 $0 $0 $0 7 $31,870.00 95% 5% $30,276 $1,594 $0 $0 8 $43,480.00 50% 50% $21,740 $21,740 $0 $0 9 $44,350.00 5% 95% $2,217 $42,132 $0 $0 10 $33,540.00 0% 100% $0 $33,540 $0 $0 11 $17,020.00 0% 100% $0 $17,020 $3,200 $0 12 $22,190.00 0% 100% $0 $22,190 $1,130 $0 13 $29,450.00 0% 100% $0 $29,450 $0 $0 14 v $19,690.00 0% 100% $0 $19,690 $2,880 $0 15 $20,240.00 20% 80% $4,048 $16,192 $2,980 $596 16 $16,480.00 95% 5% $15,656 $824 $2,640 $2,508 17 $21,750.00 100% 0% $21,750 $0 $2,420 $2,420 18 $16,480.00 100% 0% $16,480 $0 $2,640 $2,640 19 $19,500.00 100% 0% $19,500 $0 $2,880 $2,880 20 $17,910.00 100% 0% $17,910 $0 $2,470 $2,470 21 $26,660.00 100% 0% $26,660 $0 $0 $0 22 $37,880.00 100% 0% $37,880 $0 $0 $0 ES 1 $31,920.00 100% 0% $31,920 $0 $0 $0 ES 2 $29,220.00 100% 0% $29,220 $0 $0 $0 Waterfront Subtotal: $705,220.00 $500,848 $204,372 $34,710 $24,984 Beacon Bay 6/6/94 - Page 1 Exhibit D Distribution of Rents and Tax Advantage between Tidelands and Uplands* Beacon Bay 6/6/94 - Page 2 Exhibit D (1st year) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage Interior Lots 23 $6,297.00 0% 100% $0 $6,297 $550 $0 24 $8,897.00 0% 100% $0 $8,897 $390 $0 25 $6,977.00 5% 95% $349 $6,628 $630 $31 26 $6,942.00 99% 1% $6,873 $69 $710 $703 27 $7,102.00 100% 0% $7,102 $0 $660 $660 28 $7,785.00 100% 0% $7,785 $0 $740 $740 29 $15,470.00 0% 100% $0 $15,470 $0 $0 30 $7,102.00 0% 100% $0 $7,102 $580 $0 31 $10,515.00 30% 70% $3,154 $7,361 $660 $198 32 $7,217.00 100% 0% $7,217 $0 $620 $620 33 $7,307.00 100% 0% $7,307 $0 $650 $650 34 $8,490.00 100% 0% $8,490 $0 $730 $730 35 $7,780.00 0% 100% $0 $7,780 $580 $0 36 $7,672.00 0% 100% $0 $7,672 $590 $0 37 $15,005.00 5% 95% $750 $14,255 $0 $0 38 $7,967.00 99% 1% $7,887 $80 $0 $0 39 $11,557.00 100% 0% $11,557 $0 $0 $0 40 $13,572.00 100% 0% $13,572 $0 $0 $0 41 $7,300.00 0% 100% $0 $7,300 $510 $0 42 $7,672.00 0% 100% $0 $7,672 $590 $0 43 $13,232.00 0% 100% $0 $13,232 $0 $0 44 $7,787.00 0% 100% $0 $7,787 $630 $0 45 $7,990.00 15% 85% $1,198 $6,792 $660 $99 46 $8,492.00 0% 100% $0 $8,492 $720 $0 47 $7,365.00 0% 100% $0 $7,365 $610 $0 48 $9,305.00 0% 100% $0 $9,305 $600 $0 49 $7,197.00 0% 100% $0 $7,197 $620 $0 50 $7,240.00 0% 100% $0 $7,240 $630 $0 51 $7,857.00 0% 100% $0 $7,857 $110 $0 52 $13,927.00 0% 100% $0 $13,927 $0 $0 53 $8,492.00 0% 100% $0 $8,492 $730 $0 54 $7,227.00 0% 100% $0 $7,227 $500 $0 55 $12,865.00 0% 100% $0 $12,865 $0 $0 56 $7,915.00 0% 100% $0 0,915 $470 $0 57 $7,427.00 0% 100% $0 $7,427 $700 $0 58 $10,007.00 0% 100% $0 $10,007 $0 $0 59 $12,175.00 0% 100% $0 $12,175 $0 $0 60 $7,315.00 0% 100% $0 $7,315 $660 $0 Beacon Bay 6/6/94 - Page 2 Exhibit D Distribution of Rents and Tax Advantage between Tidelands and Uplands* (1st year) Effective Lot No. Net Rent Interior Lots - continued 61 $8,482.00 ES 3 $10,325.00 ES 4 $6,322.00 ES 5 $11,415.00 ES 6 $6,310.00 ES 7 $6,057.00 ES 8 $6,455.00 Interior Lots Uplands Subtotal: $397,807.00 Add Waterfront: $705,220.00 Grand Total: $1,103,027.00 % of Total: 100% V *Effective Net Rents consider tax advantage. Discount rate for present value of annual advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6/6/94 - Page 3 Exhibit D Proportionate Proportionate Annual Amort. Tidelands % % Rent Rent of PV of Tax Tax Tidelands Uplands Tidelands Uplands Advantage Advantage 0% 100% $0 $8,482 $720 $0 100% 0% $10,325 $0 $320 $320 100% 0% $6,322 $0 $500 $500 85% 15% $9,703 $1,712 $0 $0 0% 100% $0 $6,310 $500 $0 0% 100% $0 $6,057 $650 $0 0% 100% $0 $6,455 $410 $0 $109,592 $288,215 $19,930 $5,251 $500,848 $204,372 $34,710 $24,984 $610,440 $492,587 $54,640 $30,235 55% 45% 100% 55% *Effective Net Rents consider tax advantage. Discount rate for present value of annual advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6/6/94 - Page 3 Exhibit D DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION Table of Contents Article PSA I DEFINITIONS .2 1 - Architectural Committee 2 2 - Articles and Bylaws 2 3 - Assessments 2 4 - Association 3 5 - Association Rules 3 6 - Board 3 7 - City 3 8 - Common Expenses 3 9 - Common Area 4 10- Covered Property 4 7.1- Declarant 4 12- Exhibit 4 13- Member 4 14- Lessee 4 15- Residence 4 16- Setback 5 II MEt,BERSHIP 5 1 - Membership 5 2 - Transfer 5 3 - Voting Rights 5 4 - Classes of Voting Membership 5 5 - Approval of Members 5 III COVENANT FOR MAINTENANCE ASSESSMENTS 6 1 - Creation of the Lien and Personal Obligation of Assessments 6 2 - Purpose of Assessments 6 3 - Regular Assessments 6 4 - Uniform Assessment 6 5 - Special Assessments 6 5 - No Offsets 6 7 - Reserves 7 IV NOI,IPAYMENT OF ASSESSMENTS 7 1 - Delinquency 7 2 - Notice of Lien 8 3 - Foreclosure Sale 8 (i) Exhibit E 4 - Relationship with Mortgage Liens 8 5 - Curing of Default 9 V ARCHITECTURAL CONTROL 9 1 - Appointment of Architectural Committee 9 2 - General Provisions 9 3 - Approval and Conformity of Plans 10 4 - Nonliability for Approval of Plans 10 VI DUTIES AND POWERS OF THE ASSOCIATION 10 1 - General Duties and Powers 10 2 - General Duties of the Association 11 3 - General Powers of the Associationon 11 4 - Association Rules 11 VII REPAIR AND MAINTENANCE 12 1 -- Repair and Maintenance by Association 12 2 - Repair and Maintenance by Lessee 12 3 - Maintenance of Public Utilities 12 VIII USE RESTRICTIONS 12 1 - Commercial Use 12 2 - Signs 13 3 - Nuisance 13 4 - Animals 13 5 - California Vehicle Code 13 IX RIGHTS OF ENiOYMENT 13 1 - Members' Right of Enjoyment 13 2 - Delegation of Use 14 3 - Waiver of Use 14 X GENERAL PROVISIONS 14 1 - Enforcement 14 2 - No Waiver 15 3 - Cumulative Remedies 15 4 - Severability 15 5 - Covenants to Run with the Land; Term 15 6 - Heading 15 7 - Singular Includes Plural 15 8 - Attorneys' Fees 16 9 - Notices 16 1�- Effect of Declaration 16 11- Persona], Covenant 16 12- Nonliability of Officials 17 1 Subleases 17 1- Amendments 17 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION Table of Contents ArticlePSA I DEFINITIONS .2 1 - Architectural Committee 2 2 - Articles and Bylaws 2 3 - Assessments 2 4 - Association 3 5 - Association Rules 3 6 - Board 3 7 - City 3 8 - Common Expenses 3 9 - Common Area 4 10- Covered Property 4 1.1- Declarant 4 12- Exhibit 4 13- Member 4 14- Lessee 4 15- Residence 4 16- Setback 5 II MEP-LBERSHIP 5 1 - Membership 5 2 - Transfer 5 3 - Voting Rights 5 4 - Classes of Voting Membership 5 5 - Approval of Members 5 III COVENANT FOR MAINTENANCE ASSESSMENTS 6 1 - f Creation of the Lien and Personal Obligation of Assessments 6 2 - Purpose of Assessments 6 3 - Regular Assessments 6 4 - Uniform Assessment 6 5 - Special Assessments 6 5 - No Offsets 6 7 - Reserves 7 IV \O -+PAYMENT OF ASSESSMENTS 7 1 - Delinquency 7 2 - Notice of Lien 8 3 - Foreclosure Sale 8 (i) Exhibit E 4 - Relationship with Mortgage Liens 8 5 - Curing of Default 9 V ARCHITECTURAL CONTROL 9 1 - Appointment of Architectural Committee 9 2 - Gc-neral Provisions 9 3 - Approval and Conformity of Plans 10 4 - Nonliability for Approval of Plans 10 VI DUTIES AND POWERS OF THE ASSOCIATION 10 1 - General Duties and Powers 10 2 - General Duties of the Association 11 3 - General Powers of the Associationon 11 4 - Association Rules 11 VII REPAIR AND MAINTENANCE 12 1 - Repair and Maintenance by Association 12 2 - Repair and Maintenance by Lessee 12 3 - Maintenance of- Public Utilities 12 VIII USE RESTRICTIONS 12 1 - Commercial Use 12 2 - Signs 13 3 - Nuisance 13 4 - Animals 13 5 - California Vehicle Code 13 IX RIGHTS OF ENiOYMENT 13 1 - Members' Right of Enjoyment 13 2 - Delegation of Use 14 3 - Waiver of Use 14 X GEENTERAL PROVISIONS 14 1 - Enforcement 14 2 - No Waiver 15 3 - Cumulative Remedies 15 4 - Severability 15 , 5 - Covenants to Run with the Land; Term 15 6 -- Heading 15 1 - Singular Includes Plural 15 8 - Attorneys' Fees 16 9 - Notices 16 lam- Effect of Declaration 16 11- Personal Covenant 16 1=- Nonliability of Officials 17 3- Subleases 17 1 - Amendments 17 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION ORANGE COUNTY, CALIFORNIA THIS DECLARATION is made this day of , by the City of Newport Beach a chartered municipal corporation. Said corporation, its successors and assigns, shall hereafter be referred to as "Declarant." R E C I T A L S A. Declarant is the fee owner of the real property described in Exhibit A to this Declaration, which shall be the Covered Property under this Declaration. This Declaration is being imposed by Declarant upon the Covered Property. B. Declarant has deemed it desirable to establish covenants, conditions and restrictions upon the Covered Property and each and every portion thereof, which will constitute a general scheme for the management of the Covered• Property, and for the use, occupancy and enjoyment thereof, all for the purpose of enhancing and protecting the value, desirability and attractiveness of the Covered Property and enhancing the quality of life within the Covered Property. C. It is desirable for the efficient management of the Co -..e, -ed Property and the preservation of the value, desirability and attractiveness of the Covered Property to delegate and assigned the powers of managing the Covered Prope_=::, maintaining and administering the Common Area and ad, i nistering and enforcing these covenants, condit'iors and restrictions and collecting and disbursing funds u:-suant to the assessment and charges hereinafter create= _:nd referred to and to perform such other acts as shall ge;:erally benefit the Covered Property to the Beacon Bay C=-:;!:nity Assocation, a California nonprofit corno-azion. D. Declarant will hereafter hold title to and lease all Covered Property subject to certain protective covenants, conditions and restrictions hereafter set forth. Beacon 9/20/79 Rev. 9/24/79 NOW, THEREFORE, Declarant hereby covenants, agrees and declares that all of its interest as the same may from tiTe to time appear in the Covered Property shall be held and conveyed subject to the following covenants, conditions, restrictions and easements which are hereby declared to be for the benefit of said interests in the Covered Property, and the owners of said interests, their successors and assigns. These covenants, conditions, restrictions and easements shall run with said interests and shall be binding upon all parties having or acquiring any right or title in said interests or any part thereof, and shall inure to the benefit of each owner thereof and are imposed upon said interests and every part thereof as a servitude in favor of each and every of said interests as the dominant tenement or tenements. ARTICLE I DEFINITIONS Unless the context clearly indicates otherwise, the following terms used in this Declaration are defined as follows: Section 1. "Architectural Committee shall mean and refer to the committee or committees provided for in the Article hereof entitled "Architectural Control". Section 2. "Articles" and "Bylaws shall mean and refer to the Articles of Incorporation and Bylaws of the Association as the same may from time to time be duly amended. Section 3. "Assessments:" The following meanings shall be given to the Assessments hereinafter defined: "Regular Assessment" shall mean the amount which is to be paid by each Member of the Association forf.Common Expenses. "Sr=c_al Assessment" shall mean a charge against a part'-cular Lessee and his Residence, directly attributable to cite Lessee, to reimburse the Association for costs ince-rod in bringing the Lessee and his Residence into coxp`..-,nce with the provisions of this Declaration, the Articles, Bylaws or Association Rules, or any other charge desi7n�ted as a Special Assessment, together with att.—c-r eys' fees and other charges payable, plus interest thermi=on as provided for in this Declaration. Beacon Bay 9/20/9 2 Rev. 9/24/79 Section 4. "Association" shall mean and refer to Beacon Bay Community Assocation, a nonprofit corporation, incorporated under the laws of the State of California, its successors and assigns. Section 5. "Association Rules" shall mean rules adopted by the Association pursuant to the Article hereof entitled "Duties and Powers of the Association." Section 6. "Board" shall mean the Board of Directors of the Association. _ Section 7. "City" shall mean and -refer to the City of Newport Beach, California, a municipal corporation of the State of California. Section 8. "Common Expenses" shall mean and refer to 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 Community Facilities; (e) the costs of fire, casualty, liability, workmen's compensation and other insurance covering the Common Area; r (`) the costs of any other insurance obtained by the As-sociation; {g) reasonable reserves as deemed appropriate by the Boars; (h) the costs of bonding of the members of the Board, anv pr3fessional managing agent or any other person handling the funds of the Association; Beacon Bay 9/20/79 3 Rev. 9/24/79 (i) taxes paid by the Association; (j) amounts paid by the Association for discharge of any lien or encumbrance levied against the Common Area or portions thereon; •(k) costs incurred by the Architectural Committee or other committee established by the Board; and (1) other expenses incurred by the Association for any reason whatsoever in connection with the Commo: Area, or the costs of any other item or items designated ••y this Declaration, the Articles, Bylaws or Association Ru.ies, or in furtherance of the purposes of the Association or in the discharge of any duties or powers of'the Association. Section 9. "Common Area" shall mean all streets, beaches, walkways, tennis courts, docks, piers, and common landscaped areas, including but not limited to Lots A through J inclusive as shown on Exhibit ."a". Section 10. "Covered Property" shall mean and refer to all the real property described on Exhibit "I" Section 11. "Declarant" shall mean and refer to the City of Newport Beach. Section 12. "Exhibit" shall mean and refer to those documents so designated herein and attached hereto and eac- of such Exhibits is by this reference incorporatc:l in this Declaration. sec -on 13. "Member" shall mean and refer to every person or entity who qualifies for membership pursuant to the Article of this Declaration entitled "Membership." Section 14. "Lessee" shall mean and refer to one or more persons or entities who are alone or collectively the lessees of a Residence. Sec`_on 15. "Residence" shall. mean and refer to a n;,;•��rer, lot shown on the Record of Survey Map of Beacon recorded in Book 9, pages 42 and 43, Reco-C'S of Survey, on file in the Of Lice of the County Rec:r�er, Orange County, California; provided, however, shall not include any Common Area. shall include the residential dwelling unit 9/2 %7 ��� 4 Rev. 9/?.4/79 together with garages, structures and other improvements on the same lot or parcel. Section 16. "Setback" shall mean and refer to those internal distances from the property line of each lot as shown on Exhibit "II". ARTICLE II MEMBERSHIP Section 1 - Membership. Every Lessee shall be a Member but there shall be only one Membership per Residence. The term and provisions set forth in this Declaration, which are binding -upon all Lessees are not exclusive, as Lessees shall, -in addition, be subject to the terms and provisions of the Articles, Bylaws and Association Rules to the extent the provisions thereof are not in conflict with this Declaration.- Membership of Lessees shall be appurtenant to and may not be separated from the interest of such Lessee in any Residence. Ownership of a Residence shall be the sole qualification for membership; provided, however, a Mlember's voting rights may be regulated or suspended as provided in this Declaration, the Bylaws or the Association Rules. Section 2 - Transfer. The membership held by any Lessee shall not be transferred, pledged or alienated in any way, except that such membership shall automatically be transferred to the transferee of the interest required for membership. Any attempt: to make a prohibited transfer -is void and will not be reflected upon the books and records of the Association. The Association shall. have the right to record the transfer upon the books of the Association without any further action or consent by the transferring Lessee. Section 3 - Voting Rights. All voting ri'9ht shall be subject to the restrictions and limitations provided herein and i'n the Articles, Bylaws and Association Rules. Sectio_-: c - Classes of Voting Membership. The Association shy:_? :ave one. (1) class 'of voting membership. Sec`_ -_on 3_ --A E), -oval of Members. Unless elsewhere o.;ise sp<cifically provided in this Declaration or the any provision of this Declaration or the Bylaws }3e a c: on ! o /-)n /-7r, which requires the vote or written assent of the voting power of the Association shall be deemed satisfied by the following: (a) The vote in person or by proxy of the specified percentage at a meeting duly called and noticed pursuant to the provisions of the Bylaws dealing with annual or special meetings of the Members. (b) written consents signed by the specified percentage of Members as provided in the Bylaws. ARTICLE III COVENANT FOR MAINTENANCE ASSESSMENTS Section 1 - Creation of the Lien and Personal Obligation of Assessments. Each Lessee is deemed to covenant and agree to pay to the Association: Regular and Special Assessments, such Assessments to be fixed, established and collected from time to time as provided in this Declaration. The Assessments, together with interest thereon, late charges, attorneys' fees and court costs, and other costs of collection thereof, as hereinafter provided, shall be a continuing lien upon the Residence against which each such Assessment is made and shall also be the personal obligation of the Lessee of such Residence at the time when the Assessment becomes due. Notwithstanding the foregoing, the Assessment lien shall not affect the priority of any other existing liens. Section 2 - Purpose of Assessments. The Assessments levied by the Association shall be used exclusively to defray Common Expenses. Section 3 - Regular Assessments. Each year the Board shad determine the amount of the Regular Assessment to be paid by each Member. The Regular Assessme=nt shall be due and av able on such dates as the Board may;establish. Each :•`:e;-.iber shall be sent written notice of the Regular Asse7sment and shall thereafter pay the, Association in installments as established by the Board. Secti.cn 4 - Uniform Assessment. Regular Assessments shall be fixed at an equal amount for each Residence. Section 5 - Special Assessments. Special Assessments may be 1`vic:d by the Board from time to time. Beacon Bay 9/20/79 6 Rev. 9/24/79 Section G - No Offsets. All Assessments shall be payable in the amount specified by the Assessment and no offsets against such amount shall be permitted for any reason, including, without limitation, a claim that (i) the Association is not properly exercising its duties and powers as provided in this Declaration; or (ii) a Member has made and elects to make no use of the Common Areas. Section 7 - Reserves. The Regular Assessments may include reasonable amounts as determined by the Board collected as reserves for the future periodic maintenance, repair or replacement of all or a portion of the Common Area, or any other purpose as determined by the Board. All amounts collected as reserves, whether pursuant to this Section or otherwise, shall be deposited by the Board 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. Such reserves shall be deemed a contribution to the capital account of the Association by the Member. ARTICLE IV NONPAYMENT OF ASSESSMENTS Section 1 - Delinquency. Any assessment provided for in this Declaration which is not paid when due shall be delinquent on said date (the "delinquency date"). If any such Assessment is not paid within ten (10) days after delivery of notice of such delinquency from the Association, a late charge as established by the Board shall be levied and the Assessment shall bear interest from the delinquency date at the rate of ten percent (10%) per annum. The Association may at its option, and without waiving the right to judicially foreclose its. lien against the Residence, pursue any available remedies, including, without limitation, bringing an action at law against the Member personally obligated to pay the same, and/or upon compliance with the notice provisions set forth in the Section entitled "Notice of Lien" of this Article to forec.13se the lien against the Residence. If action is co^.nced, there shall be added to the amount of such Assessment -the late charge, interest, the costs of such actio-:, and attorneys' fees incurred in connection with suc action; and in the event a judgment is obtained, such jud"c-;,;int shall include said late charge, interest and a re__onable attorney's fee, together with the costs of ac -&_101'1. Each Member vests in the Association, or its assigns, the right and power to bring all actions at law Beacon Bay 9/io/ 9 7 Rev. 9/24/79 or lien foreclosure against such Member or other Members for the collection of such delinquent Assessments. Section 2 - Notice of Lien. No action shall be brought to foreclose said Assessment lien or to proceed under the power of sale herein provided until thirty (30) days after the date a notice of claim of lien is deposited in the United States mail, certified or registered, postage prepaid, to the Lessee of said Residence, and a copy thereof is recorded by the Association in the office of the County Recorder of the County; said notice of claim of lien must recite a good and sufficient legal description of any such Residence, the record Lessee or reputed Lessee thereof, the amount claimed which shall include interest on the unpaid Assessment at the rate of ten percent (10%) per annum, a late charge as established by the•Board, plus reasonable attorneys' fees and expenses of collection in connection with the debt secured by said lien, and the name and address of the claimant. Section 3 - Foreclosure Sale. Said Assessment lien may be enforced by sale by the Association, its attorney or any other person authorized by the Board to make the sale after failure of the Lessee to make the payments specified in the notice of claim of lien within said thirty (30) day period. Any such sale provided for above is to be conducted in accordance with the provisions of Sections 2924, 2924b, 2924c, 2924f, 29249 and 2924h of the Civil Code of the State of California as said statutes may from time to time be amended, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted or provided by law. Upon the affirmative vote of a majority of the voting power of the Association, the Association, through its duly authorized agents, shall have the power to bid on the Residence, using Association funds, or funds borrowed for such purpose, at the sale, and to acquire and hold, lease, mortgage and convey the same. Section 4 - Relationship with Mortgage Liens. (a) The lien provided for in the Article hereof entitle-! "nonpayment of Assessments" for the payment of Assess-,_-nts shall be subordinate to the lien of any H ortca�e which was recorded prior to the date any such Asses= -e nt becomes due. (b) If any Residence subject to a monetary .lien created % any provision hereof shall be subject to the lien of a Mortgage: (1) the foreclosure of any lien creat,_: by anything set forth in this Declaration shall Beacon gay 9/20/79 8 Rev. 9/24/79 not operate to affect or impair the lien of such Mortgage; and (2) the foreclosure of the lien of said Mortgage, or the sale under a power of sale included in such Mortgage (such events being hereinafter referred to as "Events of Foreclosure") shall not operate to affect or impair the lien hereof, except that any persons who obtain an interest through any of the Events of Foreclosure, and the successors in interest, shall take title free of the lien hereof or any personal obligation for said charges as shall have accrued up to the time of any of the Events of Foreclosure, but subject to the lien hereof for all said charges that shall accrue subsequent to the Events of Foreclosure. Section 5 - Curing of Default. Upon the timely payment or other satisfaction of: (a) all delinquent Assessments specified in the notice of claim of lien, (b) all other Assessments which have become due and payable with respect to the Residence as to which such notice of claim of lien was recorded, and (c) interest, late charges, attorneys' fees and other costs of collection pursuant to this Declaration and the notice of claim of lien which have accrued, -officers of the Association or any other persons designated by the Board are hereby authorized to file or record, as the case may be, an appropriate release of such notice, upon payment by the defaulting Lessee of a fee, to be determined by the Association, but not to exceed Fifty Dollars * ($50.00) to cover the costs of preparing and filing or recording such release. ARTICLE V ARCHITECTURAL CONTROL Section 1 -_.Appointment of Architectural Committee. The Architectural Committee shall consist of not less than three (3) nor more than five (5) persons as fixed from time to time by resolution of the Board. The Board shall have the right to appoint the..members of the Arc-,itectural Committee. Persons appointed by the Board to the Architectiural Committee, however, must be Member. Section 12 - General Provisions. (a) The Architectural Committee may establish reasor:able procedural rules and assess a fee in connection with-:,.-,iew of plans and specifications including, without limitation, the number of sets of plans to be submitted; Beacon "Eay 9/20/79 9 Rev. 9/24/79 however, the Architectural Committee may delegate its plan review responsibilites to one or more members of such Architectural Committee. Upon such delegation, the approval or disapproval of plans and specifications by such persons shall be equivalent to approval or disapproval by the entire Architectural Committee. (b) In the event the Architectural Committee fails to approve or disapprove such plans and specifications within thirty (30) days after the same have been submitted in accordance with any rules regarding such submission adopted by the Architectural Committee, such plans and specifications will be deemed approved. (c) Nothing in this Declaration or in the Association's Articles, Bylaws or Rules shall be construed or amended to allow the Architectural Committee 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 3= Approval and Conformity of Plans. No building, fence wall or other structure shall be commenced, erected or maintained upon the Covered Property, nor shall there be any addition to or change to the exterior of any Residence, structure or other improvement except in compliance with plans and specifications therefor which have been submitted to and approved by the Architectural Committee as to harmony of external design and location in relation to surrounding structures and topography. Section 4 - Nonliability for Approval of Plans. Plans and specifications shall be approved by the Architectural Committee as to style, exterior design, appearance and location, and are not approved for engineering design or for compliance with zoning and building ordinances, and by approving such plans and specifications neither the Architectural Committee, the members thereof, the Association, the Members, the Board nor Declarant assumes liability or responsibility therefor, or for any defect in any structure constructed from such plans and s.pecifica -ions. ARTICLE VI DUTIES AND POWERS OF THE ASSOCIATION Section 1 - General Duties and Powers. In addition to the duties powers enumerated in its Articles and Bylaws, Beacon 9/20/79 10 Rev. 9/24/79 or elsewhere provided for herein, and without limiting the generality thereof, the Association shall have the specific duties and powers specified in this Article. Section 2 - General Duties of the Association. The Association through the Board shall have the duty and obligation to: (a) enforce the provisions of this Declaration, the Articles, Bylaws, and Association Rules, by appropriate means and carry out the obligations of the Association hereunder; (b) maintain and otherwise manage the common Area; (c) pay any real and personal property taxes and other charges assessed to or payable by the Association; and (d) obtain and continue in effect during the term of of the lease, in its own name a comprehensive policy of public liability insurance proving coverage for the common area, and a policy of fire and casualty insurance with coverage as the Board deems appropriate. Section 3 - General Powers of the Association. The Association through the Board shall have the power but not the obligation to: (a) employ a manager or other persons and contract with independent contractors or managing agents to perform all or any part o1z the duties and responsibilities of the Association; (b) borrow money as may be needed in connection with the die;charge of the Association's potaers and duties; and (c) establish and maintain a working capital and coati -c =ncv fund in an amount to be determined by the Boar 6. Said fund shall be used by the' Board as it deems fit to carry out the objectives and purposed of the Assoc , ; -^ Sec". Assc=?tion Ru1.es. The Board shall have the c:opt amend, and repeal such rules and req -1 =� .:is as it -eems reasonable (the "Association I;ulIn tie C!:1ent of any conflict between any such "u1.e and any other provisions of this D __ :.n, o:., eArticles or. Byla�•:s, the provisions of -'Or, ulcs shall he deemed to be superseded by the _ ;.,ion: of this Declaration, the Articles or the Bylaw- the extent: of any such conflict. 13cacc;n _ • 9/20/7`° 11. Rev. 9/24/79 5/4/81 ARTICLE VII REPAIR AND MAINTENANCE Section 1 - Repair and Maintenance by Association. The Association shall have the, duty to: (a) maintain, repair, restore, replace and make necessary improvements to the Common Area; (b) maintain all other facilities, equipment, services or aesthetic components of whatsoever nature as may from time to time be requested by the vote or written consent of a majority of the voting power of the Members; (c) pay out of the general funds of the Association the costs of any maintenance and repair made .pursuant to this section, except as otherwise herein specified as payable by particular Lessees. Section 2 -_Repair and maintenance by Lessee. Except as the Association shall be obligated to maintain and repair as may be provided in this Declaration, every Lessee 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 in accordance with the - provisions of this Article. Section 3 - Maintenance of Public Utilities. Nothing contained herein shall require or obligate the Association to maintain, replace or restore the underground facilities or public utilities which are located within easements in the Ccmmmon Area owned by such public utilities. However, the Association shall take such steps as are necessary or convenient to ensure that such facilities are properly mzintai::nd, replaced or restored by such public utilities. ARTICLE VIII USE RESTRICTIONS S_ect_..^^ Commercial Use. No part of a Residence shall be us -2c for any business, commercial, or nonresidential purposes. Beacon 3a', 9/20/79 12 Rev. 9/24/79 Section 2 - Signs. No sign or billboard of any kind shall be displayed to the public view on any portion of the Covered Property; provided, however, that a Member may display on his Residence, a sign advertising its sale or lease so long as such sign shall comply with any customary and reasonable standards promulgated by the Board. Section 3 - Nuisance. No noxious or offensive activity shall be carried on upon any Residence, or any part of the Covered Property nor shall anything be done thereon which may be, or may become an annoyance or nuisance to the neighborhood, or which shall in any way interfere with the quiet enjoyment of each of the Lessees of his respective Residence. Section 4 - Animals. No animals, livestock or poultry of any kind shall be raised, bred or kept upon the Covered Property, except that dogs, cats or other household pets may be kept on the Residences, provided they are not kept, bred or maintained for any commercial purpose, or in numbers deemed unreasonable by the Board. Notwithstanding the foregoing, no animals or fowl may be kept on the Residences which in the good faith judgment of the Board or a committee selected by the Board for this purpose, result in any annoyance or are obnoxious to residents in the vicinity. All animals except cats permitted to be kept by this Section shall be kept on a lush when on any portion of the Covered Property except within a Residence. Section 5 - California Vehicle Code. The City may be allowed to impose and enforce all provisions of the applicable California Vehicle Code sections on any private streets within the Covered Property. ARTICLE IX RIGHTS OF ENJOYMENT Section i - Members' Right of Enjoyment. Ever.y Member shall have nonexclusive easement for use and enjoyment in and to the Common•Area and such right shall be appurtenant to and. s^m-11 pass with the interest required to be a Lessee to every Residence, subject to all of the easements, covenants, conditions, restrictions and other provisions contained in this Declaration, including, without limitation, the following provisions: Beacon Bay 9/20/79 13 Rev. 9/24/79 (a) The right of the Association to limit the number of guests of Members and to limit the use of the Common Area by persons not in possession of a Residence, but owning a portion of the interest in a Residence required for membership. .(b) The right of the Association to establish reasonable rules and regulations pertaining to the use of the Common Area. Section 2 - Delegation of Use. Any Member may delegate his right of enjoyment to the Common Areas to the members of his family or his tenants -who reside on his Residence, or to his guests, subject to the rules and regulations adopted by the Board. In the event and for so long as a Lessee delegates said rights of enjoyment to hi.s tenants, said Lessee shall not be entitled to said rights unless both he and the tenant reside on the Residence in separate dwelling units which conform to all applicable municipal laws and regulations. Section 3 - Waiver of Use. No member may exempt himself from personal liability for assessments duly levied by the Association, or release the Residence owned by him from the liens, charges and other provisions of this Declaration, the Articles, Bylaws and Association Rules, by waiver of the use. and enjoyment of the Common Area, or the abandonment of his Residence. ARTICLE X GENERAL PROVISIONS Section 1 - Enforcement. The Association, or any Lessee, shall have the right to enforce by proceedings at law or in equity, all restrictions., conditions, covenants and reservations, now or hereafter imposed by the provisions of this Declaration or any amendment thereto, including the right to prevent the violation of such restrictions, conditions, covenants, or reservations and the..,right to recover damages or other dues for such violation.. The Association or any Lessee.shall also have the right to enforce by proceedings at law'or in equity the provisions of the 'articles or Bylaws and any amendments thereto. With r Soect to architectural control and Association Rules, the Association shall have the exclusive right to thn enrcrcement thereof unless the Association refuses or is unable to effectuate such enforcement, in which case any Lessee who otherwise has standing shall have the right to undertake such enforcement. With respect to Assessment Beacon Blav 9/20/79 14 Rev. 9/24/79 Liens, the Association shall have the exclusive right to the enforcement thereof. Section 2 - No Waiver. Failure by the Association or by any Member to enforce any covenant, condition, or restriction herein contained, or the Articles, Bylaws or Association Rules, in any certain instance or on any particular occasion shall not be deemed a waiver of such right on any such future breach of the same or any other covenant, condition or restriction. Section 3 - Cumulative Remedies. All rights, options and remedies of Declarant, the Association, or the Lessees under this Declaration are cumulative, and no one of them shall be exclusive of any other, and Declarant, the Association, and the Lessees 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 4 - Severability. Invalidation of any one or a portion of these covenants, conditions or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect. Section 5 - Covenants to Run with the Land; Term. The covenants, conditions and restrictions of this Declaration shall run with and bind the Covered Property and shall inure to the benefit of and be enforceable by the Association or any Lessee, their respective legal representatives, heirs, successors and assigns, for a term of twenty five (25) years from the date this Declaration is recorded, after which time said covenants, conditions and restrictions shall be automatically extended for successive periods of ten (10) years, unless an instrument, signed by the Declarant and- a majority of the then Lessees, has been recorded at least one (1) year prior to the end of any such period, agreeing to change said covenants, conditions and restrictions in whole or in - part. r Sections -_Heading. The Article and Section -.-headings have be -n inserted for convenience only, and shall not be considered or referred to in resolving. questions of intercretation or construction. Section, 7 - Singular Includes Plural. Whenever the context oL this Declaration requires same, the singular shall include the plural and the masculine shall include the feminine and the neuter. Beacon 3a*7 9/20/79 15 Rev. 9/24/79 Section 8 - Attorneys' Fees. In the event action is instituted to enforce any of the provisions contained in this Declaration, the party prevailing in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorneys' fees and costs of such suit. Section 9 - Notices. Any notice to be given hereunder shall -be in writing and may be delivered as follows: (a) Notice to a Lessee shall be deemed to have been properly delivered when delivered to the Lessee's Residence, or placed in the first class United States mail, postage prepaid, to the most recent address furnished by such Lessee in writing to the Association for the purpose of giving notice, or if, no such address shall have been furnished, then to the street address of such Lessee's Residence. Any notice so deposited in the mail within the City shall be deemed delivered forty-eight (48) hours after such deposit. In the case of co -Lessees any such notice may be delivered or sent to any one of the co -Lessees on behalf of all co -Lessees and shall be deemed delivery on all such co -Lessees. (b) Notice to the Association shall be deemed to have been properly delivered when placed in the first class United States mail, postage prepaid, to the address furnished by the Association or the address of its principal place of business. (c) The affidavit of an officer or authorized agent of the Association declaring under penalty of perjury that a notice has been mailed to any Lessee or Lessees, or to all Members, to the address or addresses shown on the records of the Association, shall be deemed conclusive proof of such mailing, whether or not such notices are actually received. Section: 10 - Effect of Declaration. This Declaration is made for the purposes 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 Declarat-]Lon, or as to the compliance of any of these Provisions with public laws, ordinances and regulations applicable thereto. Section. 11 - Personal Covenant. To the extent the accepta-ce or conveyance of a Residence creates a personal covenant between the Lessee of such Residence and Declara-:t or other Lessees, such personal covenant shall Beacon -,y 9/20/79 16 Rev. 9/24/79 terminate and be of no further force or effect from or after the date when a person or entity ceases to be an Lessee except to the extent this Declaration may provide otherwise with respect to the payment of money to the Association. Section 12 - 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 13 - Subleases. Any agreement for the subleasing or rental of Residence (hereinafter in this Section referred to as a "lease") shall provide that the terms of such lease shall be subject in all respects to the provisions of this Declaration, the Articles, the Bylaws and the Association Rules. Said lease shall further provide that any failure by the lessee thereunder to comply with the terms of the foregoing documents shall be a default under the lease. All leases shall be in writing. Any Lessee who shall lease his Residence shall be responsible for assuring compliance by such Lessee's lessee with this Declaration, the Articles, the Bylaws and the Association Rules. Section 14 - Amendments. 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," "Nonpay-ent of Assessments," "Architectural Control," and "Repair and Maintenance," or of this Section shall require the affirmative vote or written approval of not less than sixty percent (60%) of the Members. (b) Any amendment or modification of any Article other t an those specified in subparagraph (a) above shall require the affirmative vote or written approval of a major i ty of the mem::ers. (c) An amendment or modification that requires the vote a^? written assent of the Members as hereinabove Beacon Bay 9/20/79 17 Rev. 9/24/79 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 Records of the County. The notarized signatures of the Members shall not be required to effectuate an Amendment of this Declaration. (d) Notwithstanding the foregoing, any provision of this Declaration, or the Articles, Bylaws or Association Rules which expressly requires the approval of a specified percentage of the voting power of the Association for action to be taken under said provision can be amended only with the affirmative vote or written assent of not less than the same percentage of the Voting Power of the Association. IN WITNESS WHEREOF, Declarant has executed this instrument the day and year first herein above written. ATTEST: CITY OF NEWPORT BEACH, a chartered municipal corporation LIM City Clerk APPROVED AS TO FOPJ4: City Attorney Mayor Beacon Lay 9/20/79 18 Rev. 9/24/79 STATE OF ) ss. COUNTY OF ) On , 19—, before me the undersigned, a Notary Public in and for said State, personally appeared , known to me to be the of the corporation that executed the within Instrument, known to me to be the person who executed the within Instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its bylaws or a resolution of its board of directors. [Seal] WITNESS my hand and official seal. Notary Public e Beacon. Say 9/20/79 19 Rev. 9/24/79 II ;i —"------ ! 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UI V • HHS n H 2 t o O x W H �<o i>< > H N m w0Z U M m < rZ001Wccx zU t,00 H , _ 0i1 ?�W Om I E-/ Q x a < HH 0 Ca..o�m H2:W u xUFCy x.w �INam w IO gJ(3AM3dV.,'a0i) AVIRY7VM -' d 10, OVOY b311na 7nz5 w r�1 107 7YN0/JY3b'V9b' L•� �_1 '- N � 'A � � �..i •l fi ui N ` / -' d 10, OVOY b311na 7nz5 w 107 7YN0/JY3b'V9b' L•� �_1 '- N � 'A � � �..i •l fi ui N ` / u�f V •"` `\ `vim ` N . - N O % ♦` � � —� � �.:y 5^.`✓"� Inti �.. O O � � s Z 2 W � W Z J W W `\ / tk P im LL o W v N N 1✓: / lJ W Z uj F W c<. � �•^ /1 f.f�. EXHIBIT "D" I of 2 Pages P.nq b Om LG o` u O ` ` R N N N T p '. II ■ . Y . Y . • . Y . . ■ ■ . pp. Y ' s O O � N , N •� a q I O O O O O O O O O O O O O O XI X K X X X K X X X X K X X X X U Nr N .. O . . . . . . . . . . . 4 . . . . e 'NO. m oN n m m ✓bi .bn r n , m Uo 4 a O O 0 0 0 0 0 0 0 0 O 4 F z cc W 4 XI X K X K X X K K X X X K X K X X b R n a N N n W J 4 � � Ln ^ n N m J N ^ n n n n n n n n l� n n n n a X v r N ? '� N A O O W • • • . • . . . . ■ ■ p N ql t r A m K C° O FE U r � X X X X X X K X X X X X X K X X c � N F 0� 7 C ✓, n n H N N C � A N 4W U `cu. a U Y O . � S L cd . ^ U C �;yx J Z X 04 E8 O q eUv 7 P q i 1 a o a�S a W a� U u m W'S EXHIBIT "D" I of 2 Pages q5 Pm ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ - ♦ a O .•� e < N N b b n m �` � o ■I tl Y tl Y Y tl Y Y Y ■ ■ Y ■ • ■ vI N N O b O G N p N n n m O O p M N O O O O O O O O O O O xl x X x x x X x x x X x x x x x PP F ♦ ♦ a ♦ f s ♦ a ♦ ♦ ♦ ♦ ♦ . . ♦ 0 0 e m q o 0 0 0 0 0 0 0 0 0 a w xl x x x X x x x x x x x x x x x x O Y Y M Y M ■ • M ■ • • • ■ • • • J a O N N O a "Y- x --- n n n n n n n n w N Nm c O Q m m m P P P r r r r - r r - r •• Q �cl 9 3 5: $ 3 vo $ 9 9 9 $ $ $ $ L V Y n n n n n A Q �'• m¢ n n n n n n n n n n n n n n n n • P E 5 X X X X X x x X x X % X % x X % U � Q �� O C m Om m n A � N ..e•) � b O ^ n a • �� 03 c cd c EE 4 u x0 7 c v o L� i j P y LO. 8g3a % Nm nm S EXHIBIT "D" 2 of 2 Pages RE -CORDING REQUESTED BY EQUITY TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 This Document—is electronically recorded by _quity Title B Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder I II III II II IIIII� I I��III 115.00 2005000952658 04:00pm 11/29/05 102 122 M11 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE is made and entered into by and between THE CITY OF NEWPORT BEACH, a chartered municipal corporation, herein called "Lessor", and JULIE DIXON and JOHN W. DIXON herein called "Lessees", to witness that: Lessor hereby leases to Lessee, commencing onNj)U9_VA6rUq and ending on July 1, 2044, on the terms and c9qnditions set forth in that certain lease by and between the parties hereto dated �JW2,W11CY)r 13 �Qbb all the terms and conditions of which lease are made a part hereof as though frilly set forth herein, all those certain premises in the County of Orange, State of California, described as follows: Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the Officeof the County Recorder, County of Orange, State of California. EXECUTED on IVbli'tM&)I( 14 2005, at Newport Beach, Orange County, California. ATTEST: 00V M11 L, V, 44 __ _. —9. Imen LESSOR THE CITY OF NEWPORT BEACH CITY MANAGER Homer Bludau Less : JULI DIXON APPP,OVVED AS TO FORM: la— Less JOHN W. DI ON CITY A ORNEY S T& - 6F O Ie� 5r -J OFFICIAL SEAL ERIN WALLACE 6vr4 � aF OvL%r/8fl- a NOTARY PUBLIC -OREGON y COMMISSION NO. 387555 MY COMMISSION EXPIRES DEC. 8, 2008 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of Califon is CCounty of �rd ss. 0 n 4'VtVv� � J before me, aAt pt4 1v Data j,,,�p, I VName and Title of Officer (e.g., "J a Doe, Notary Publi ') personally appeared RI 'v� , f \/1� AA Name(s) of Signer(s) LEILANI 1. BROWN Commission # 1336673 z Z ,,,a Notary Public - Califomia y Z .* orange Cauniy r GArnrn, .Ian 26, 210 k personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(* whose name* is/arm subscribed to the within instrument and acknowledged to me that he/aheA149 -executed the same in his/herftheir authorized capacity{+es}; and that by his/heFA*&ir signature(&} on the instrument the person(&), or the entity upon behalf of which the person(s4 acted, executed the instrument. WITNESS my hand d official seal. gV._ 1 t^ Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: © 1999 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1-800876-6827 NOV-28-05 03:06P01 FROM -Mariners Escrow Corporation 949-721-2310 T-349 P 002/002 F-899 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF � C 911 oTl )SS COUNTYOF Mt)cTf.1oM ) n� 06W� MREtZ WTH t 200 S before me. Fp-1 rj Personally appeareo I a t oto Personally known to me (or proved ro me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to tic within insmtment and acknowledged w me that he/shc/they executed the same in hisibcr/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument OFFICIAL SEAL :. WITNESS m and offi ' I seal. ERIN WALLACE � iy� NOTARY PUBLIC -OREGON Signature '/'�j��(�-j'�/ sCOMMISSION N0. 387555 MY COMMISSION EXPIRES DEC. 8, 2008 This area for official notarial seal. OPTIONAL SECTION CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the document. ( ] INDIVIDUAL [ ] CORPORATE OFFICER(S) [ J PARTNER(S) - I. l L1MrrF_D l ]GENERAL [ ] ATTORNEY-IN-FACT [ ] TRUSTEE(S) [ ] GUARDIAN/CONSERVATOR [ ] OTHER SIGNER IS REPRESENTING: T1TLE(S) Name of Person or Entity Name of Person or Entity OPTIONAL SECTION Though the date requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO TBE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMENT: N1 Em o;z_&wovm O LE7& S E NUMBER OF PAGES SIGNER(S) OTHER THAN NAMED ABOVE DATE OF DOCUMENT Government Code 2 73 61. i I certify under penalty of perjury that the notary seal on the document to which this statement is attached reads as follows: d Name of Notary: v, Conuidssion Number, _Z 3 3 661 "j County Where Bond is Filed: Date Commission Expires: 0 Vendor Number: -V A1 Place of Execution: SANTA ANA Date: _ ( /—oZ-(—o-f— Siguattiire: I CERTJI Y UNDER PENALTY OF PERJURY THAT THE ILLEGB3LE PORTION OF TMS DOCUI MNT TO Vi7MCII TIlIS STATEMENT IS ATTACBED DADS AS FOLLOWS: PLACE OF EXECUTION: SANTA ANA DATE: EQUITY TITLE COMPANY/SIGNATURE RECORD G REQUESTED BY �EQUITY'TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 This Document -,as electronically recorded by .quity Title B Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder II 1111 II 1111111111111111111 11� 1 1111 15.00 2005000952657 04:00pm 11/29/05 102 122 T03 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 TERMINATION OF LEASEHOLD This agreement is madE. this J3 day of NQUellj&C , 2005, by \ and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and DOUGLAS O. ALLRED, and ANN M. ALLRED, Trustees of The Allred Family Living Trust, hereinafter called "Lessees". :a:�•111111111r_11w-i A. Lessor and Lessees executed a lease on August 31, 2005, and subsequently recorded August 31, 2005, by the County Recorder of Orange County, California as Instrument No. 2005-00685334. By the terms of the lease, the following described property was leased to Lessee until July 1, 2044. Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AGREEMENT Lessee agrees to terminate the lease and vacate the premises as described herein above as of _ j/ -j -ae3 , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. CITY OF NEWPORT BEACH BY: Lessor: Homer Blu au, City Manager BY: <��V'LQ Lessee: Dou as O. Allred Trustee BY: Lessee: Ann M. Allred Trustee CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California `�,�,� County of Ora v "'I c ss. �( h � 2 j� j i On 1`�����,J"e�/before me, Imo-( ��iil I.}���H�j Date Q Name and Title of Officer (e.g., "Jane Doe, Notary ublic") personally appeared t I ��C 5)��(/l au Name(s) of Signer(s) ,(personally known to me ❑ proved to me on the basis of satisfactory LEILAN1 1. BROWN evidence Commission* 13366173 Z z Notary Public - California Z Orange County [ My Comm. Expires Jan 2a, 2706 � to be the person# whose name(* is/a+e- subscribed to the within instrument and acknowledged to me that h e/&4oA4@y. executed the same in his/4efA4@rr- authorized capacity(tes}; and that by his/he�— signatureH on the instrument the person(s), or the entity upon behalf of which the persor" acted, executed the instrument. WITNESS ��m"y"hand and official seal. jNyw ,(. myy" J Signature of Mary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: © 1999 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.nationainotary.org Prod. No. 5907 Reorder: Call Toll -Free 1-800-876-6827 Equilty'71fle Company 44 ZII2 E. &&reet, Suite 100 Sanf&Ayu, CA 92705 (714) 9724200 Xone (714) 9721201 F= Government -Carle 27'361.7 I certify under penalty of perjury that the notary seal on the document to which this statement is attached reads as Njows-' Name ofNotary: C� Y4,1410 Commission Numb= County Where Bond is Filed: 4.4 -44 o -0 Date Commission Expires: Vendor Number: -VX44-1 Place of Execution: SANTA ANA Date: 0 Signature: I CERTIFY UNDER PENALTY OF PERJMY TD AT TBI ILLEGIBLE PORTION OFTMS DOCUMENT TO VMCH THIS STATE' YMNT IS ATTkCEL'D READS AS FOLLOWS: PLACE OF EXECUTION: SANTA ANA DATE: EQUITY TITLF, COMPANY/SIGNATURE CALIFORNIA•ACKNOWLEDGMENT CL�e,.�S�S,..�.���.�.'....�.�5,�: .��� .•,a�•,s��v.a�C,c�:�S �.•�.' v!1t�� ca.�S._c�.,.�,c�S�S�r�.�S� ,�.,ca�,.c�t aiC..s�C��,.�:,v State of California } County of S�k ss. � IJ4 f�-Es 1 On I4'®5 before me, N - �k� L-,L�, , Date me and Title of Officere. ( g., "Jane Doe, NotaryPublic") personally appeared TW&- L-Fic_- 0• NLL2zy_--, 4-o j\QtJ 0, ALS Name(s) of Signer(s) ioiWENDY A. HANCOCK COMM. #1464229 NOTARY PUBLIC • CALIFORNIA SAN DIEGO COUNTY Commission Expires Jan. 20, 2008+ 'personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) 09/are subscribed to the within instrument and acknowledged to me that 1*/they executed the same in 11,Mkr/their authorized capacity(ies), and that by */bar/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer —Title(s): ❑ Partner — ❑ Limited ❑ Ger ❑ Attorney in Fact ❑ Trustee ❑ Guardian or CoriZrvato, Ll Other: f Sign s Representing RIGHT THUMBPRINT OF SIGNER Ii oi' Signer's Name: ❑ Individual ❑ Corporate Officer— Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER L:�✓Z`••✓'��✓2�:"•✓';`:•3.l✓.�✓:�:v:`✓3�:�4�.�.�✓ti:�✓.`✓G`✓:�L`✓:v:`✓3�✓i'L.Y 3 d 'e7,y�'✓',',"�d',' 2Yi �' '•✓• ✓. 3 ti "•✓'; e' 0 20049350t• Soto Ave., P.O.1 41 •1 • :11: LEASE THIS LEASE is made and entered into as of the�of S� , 2005, by and between the CITY OF NEWPORT BEACH, a Charter City and municipal corporatio ( Lessor"), and DOUGLAS O. ALLRED and ANN M. ALLRED, Trustees of The Allred Family Living Trust, ("Les ee"), regarding the real property commonly referred to as Beacon Bay Lot A. + RECITALS A. The City of Newport Beach, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978 (the 'Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly known as Beacon Bay and generally described in Exhibit A attached hereto and incorporated by reference. B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and specifically authorizes the lease of the property for residential purposes subject to certain express statutory conditions. C. Beacon Bay, including the "Westerly Portion" thereof, has been divided into individual lots, with each lot leased by the City for residential purposes until December 31, 2005. D. On November 3, 1987, a majority of electors of the City approved a measure which authorized the City Council to enter into new leases of residential lots in Beacon Bay for a period not to exceed fifty (50) years. E. On November 3, 1992, a majority of electors of the City approved Measure M which authorized the City Council to lease tidelands and waterfront property consistent with the provisions of state law. F. The City Council, pursuant to the authority conferred by the electors, entered into negotiations with current lessees and the parties have agreed on the terms and conditions of a new lease with a fifty (50) year term, provision for adjustments in lease payments to reflect changes in the value of Beacon Bay leaseholds,,,and a recalculation of lease payments in the event of a transfer of the Lease by the Current Lessee or any Subsequent Lessee (as defined herein). G. Lessee acknowledges that the terms and conditions of this Lease may result in Lessee paying substantially more or less than another Lessee for similar property depending upon the date this Lease is executed, the date of any subsequent transfer, and the consideration paid for transfers of similarly situated property. H. Lessee acknowledges that accurate and complete reporting to the City of all consideration paid for the transfer of this Lease is vitally important to the City in that failure to fully report all consideration could materially reduce the amount of rent received by the City from other Beacon Bay Lessees. I. Lessor and Lessee acknowledge that the City has agreed to a fifty (50) year term and limited lease payment increases in consideration of provisions which require payment of rent approximating fair market rental value, without regard to any advantage maintained by Current Lessees, upon transfer by Current Lessees and payment of deferred rent in the event the Lease is not signed on or before the Effective Date (as defined herein). J. The California State Lands Commission has reviewed the form of this Lease and determined that it is in conformance with the provisions of relevant statutes, rules and regulations, including, without limitation, the Beacon Bay Bill. K. Lessor has determined that this Lease is consistent with provisions of the Beacon Bay Bill, the Charter, General Plan and Zoning Ordinance of the City of Newport Beach, and of all other applicable state and local laws. L. Lessor has determined it is in the best interests of the citizens of Newport Beach to maintain the residential character of Beacon Bay and to enter into new leases with Current Lessees under the terms and conditions specified in this agreement. NOW, THEREFORE, in consideration of the foregoing recitals and the covenants in this lease, the parties agree as follows: LEASED LAND. I Lessor hereby leases to Lessee the real property commonly known as Beacon Bay Lot A (the "Leased Land"), which is more particularly described in Exhibit B, and generally depicted on Exhibit A, each attached hereto and incorporated by reference, subject to the limitations on use specified in Section 6. As used in this Lease, the term "Premises" shall refer to the Leased Land and any improvements constructed thereon. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Leased Land 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 for the exploration, development, production, extraction and taking of any such substance 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 Newport Beach City Charter or the Newport Beach Municipal Code. TERM. The term of this Lease shall commence on the Execution Date, but in no event prior to the Effective Date, and shall expire on the date fifty (50) years following the Effective Date, unless earlier terminated as provided in this Lease. 3. RENTAL. A. Definitions. For the purposes of this Lease, the following terms shall be defined as specified in this paragraph. In certain cases, the definition of the term contains operative language that affects the rights of the parties: (1) "Actual Sales Value" shall mean the total of all consideration paid for the non-exempt transfer of this Lease or the Pre-existing Lease, including the improvements on the Leased Land, from the Current Lessee, or Subsequent Lessee, to another person, excluding any consideration paid for the transfer of personal property in connection with such transaction. (2) "Average Actual Sales Value Rent" shall mean two and one-half percent (2.5 %) of the mean of the Actual Sales Value of the non-exempt transfer of a similarly situated (waterfront or interior) Beacon Bay parcels as specified in this subparagraph. Average Actual Sales Value Rent shall be the mean of the Actual Sales Value of the three similarly situated parcels most recently transferred. Exempt transfers, as defined in Paragraph 3.B(3), shall not be used to calculate Average Actual Sales Value rent. (3) "CPP' shall mean the Consumer Price Index - Los Angeles -Anaheim -Riverside Area, All Urban Consumers, All Items, published by the United States Department of Labor, Bureau of Labor Statistics (1982-1984=100). If the 1982-1984 base of said Consumer Price Index should hereafter be changed, then the new base shall be converted to the 1982-1984 base and the base as so converted shall be used. In the event that the Consumer Price Index, as now compiled and published, shall cease to be published, then the successor index shall be used provided that an appropriate conversion from the old index to the new index can feasibly be made. If such conversion cannot be made, or if no such index is published, then another index most nearly comparable thereto recognized as authoritative shall be substituted by agreement. (4) "Current Lessee" shall mean the person or persons who, as of April 1, 1994 (the "Cut-off Date"), was or were the Lessee under the Pre-existing Lease. (5) "Deferred Rent" shall mean the total rent that a Current Lessee would have paid had this Lease been executed on the Effective Date, through and including the date on which this Lease was first executed, less the rent actually paid pursuant to the Pre- existing Lease, together with interest at the rate of eight percent (8%) per annum calculated on the balance due at the end of each Lease Year or portion thereof. (6) "Effective Date" shall mean July 1, 1994. (7) "Execution Date" shall mean the date when this Lease is executed by Lessee. (8) "Initial Rent" shall mean the effective net rent for the Leased Land as determined by the appraisal of George Hamilton Jones, with due consideration to the leasehold advantage created by the Pre-existing Lease, all as shown on Exhibit C attached hereto and incorporated herein by reference. (9) "Person" shall mean any natural person or natural person(s) and does not include any corporation, association, or business entity in any form except a financial institution or other bona fide lender acting in the capacity of a lender or an inter vivos or living trust. (10) "Pre-existing Lease" shall mean the Lease for the Leased Land which was effective on January 1, 1988, and would, absent this Lease, expire on July 1, 2006. (11) "Transferred" shall mean any sale, assignment, sublease or other transaction, other than an exempt transfer as defined in Paragraph 3.13(3), pursuant to which the right to possession of the premises and the right to sign a new lease identical to this Lease is transferred to another person. B. Rental Payments. Lessee shall pay annual rent in the sum of One Hundred Nine Thousand Eight Hundred Seventy - Five ($109,875.00), payable at the rate of Nine Thousand One Hundred Fifty -Six and 25/100s ($9,156.25) per month. Lessee shall also pay, if applicable, deferred rent in the sum of N/A upon execution of this Lease. Rent shall be adjusted every seven (7) years after the date of transfer in accordance with the provisions of Paragraph 3.B(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: 3 (1) Execution Before Effective Date. In the event this Lease is executed by the Lessee on or before the Effective Date, Rent shall be paid as follows: (a) Current lessee: Current Lessee shall pay annual rent equal to Initial Rent as specified in Exhibit C. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee (other than an exempt transfer as set forth in Paragraph 3.13(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.13(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of the Actual Sales Value determined as of the date of the transfer in accordance with the provisions of paragraph 3.A(1). Thereafter, rent shall be adjusted every seven years after the date of the transfer in accordance with the provisions of paragraph 3.13(4). (c) In the event of any transfer of this Lease to a Subsequent Lessee in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.6(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). (2) Execution After the Effective Date. In the event this Lease is first executed after the Effective Date, rent shall be determined and paid as follows: (a) Current Lessee[Within Five Years After Effective Date: In the event this Lease is executed by the Current Lessee within five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Initial Rent plus a sum calculated by multiplying the difference between Initial Rent and Average Actual Sales Value Rent by a fraction equal to the number of months between the Effective Date and Execution Date, divided by sixty. The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee, rent shall remain as specified in this subparagraph, notwithstanding the provisions of Paragraph 3.13(4). (b) Current Lessee/More Than Five Years After Effective Date: In the event this Lease is executed by the Current Lessee more than five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Average Actual Sales Value Rent calculated as of the date of execution in accordance with the provisions of Paragraph 3.A(2). The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, rent shall be adjusted every seven (7) years after the date of execution in accordance with the provisions of Paragraph 3.13(4). (c) Subsequent Lessee: In the event the Current Lessee transfers the Pre- existing Lease to a Subsequent Lessee who wishes to sign this Lease after the Cut-off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of Actual Sales Value determined as of the date of execution and in accordance with Paragraph 3.A(1). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.13(4). (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a 4 transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.B(4). (3) Exempt Transfers. The provisions of Paragraph 3.B regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.13(I)(a), 3.13(2)(a) and 3.13(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage increase or decrease, if any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (i) the Execution Date, or (ii) the last rental adjustment date. Lessor shall endeavor to notify Lessee of rental adjustments at least forty-five (45) days prior to the end of each seventh (7th) lease year; provided, however, failure of Lessor to give forty-five (45) days' notice does not relieve Lessee from the obligation to pay increased rent or the right to pay less rent in the event of a decrease in the CPI; and, provided further, that Lessee shall have no obligation to pay rent increases which apply to any period greater than ninety (90) days prior to the receipt by Lessee of Lessor's notice of an increase in rent. (b) In the event Lessee is two or more persons owning the leasehold estate created hereby as tenants in common or joint tenants, and less than all of such persons transfer their interest in this Lease to a person other than to an existing tenant in common or joint tenant, the rent adjustment shall be prorated to reflect the percentage interest being transferred to a third party. For example, if two persons are the Lessee as tenants in common as to equal one-half interests, and one of such persons transfers his/her 50% interest to a third party, the rent shall be adjusted as provided in Paragraph 3.13(2)(c), and thereafter as provided in Paragraph 3.13(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 3.B(3). (5) Installment Payments/Grace Period. Lessee shall pay rent in equal monthly installments, in advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (15th) day of the month for which the payment is made ("Grace Period"). If a rent payment, or any portion thereof, is received by Lessor after expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to the City of Newport Beach and sent, or delivered, to the Finance Director at the address specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or currency to the United States as at the time of payment is legal tender for public and private debts. Lessor and Lessee agree that late charges specified in this paragraph represent a fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 14 of this Lease. Any failure by Lessor to declare a default and initiate termination of this Lease due to a late or missed payment shall not be considered a waiver of the right of Lessor to do so for that or any other late or missed payment. C. Credit to Tidelands Fund. In calculating Initial Rent under this Lease, a credit was given to certain of the Current Lessees equal to the annual amortization of the present value of the additional property tax to be paid by such lessees during the remaining period of the Pre-existing Lease. This credit, commonly referred to as the "tax advantage", is shown on Exhibit D for each affected lot. This credit was extended by Lessor to Current Lessees as consideration for entering into this Lease. As a consideration in its approval of this Lease, the California State Lands Commission required Lessor to credit its State supervised Tidelands Trust Fund by an amount equivalent to the tax advantage derived from those lots in Beacon Bay comprising tidelands. This amount is shown on Exhibit D for each affected lot comprising tidelands. Accordingly, Lessor has unilaterally agreed to annually calculate the amount of such tax advantage derived from the tidelands parcels in Beacon Bay and to credit an equivalent amount as revenue to the State supervised Tidelands Trust Fund. This provision is included in this Lease to acknowledge the agreement of Lessor with the California State Lands Commission, and does not affect the rights and obligations of Lessor or Lessee under this Lease. 4. TRANSFERS. A. Conditions Precedent tq Transfer. Lessee may transfer this Lease subject to the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or conditioned. Lessor shall consent to any transfer when Lessee and the proposed transferee have complied with the following: (1) Lessee shall furnish Lessor with executed copies of each and every document used to effect the transfer. (2) Lessee or the proposed transferee shall pay to Lessor a transfer fee of one hundred dollars ($100.00); (3) Lessee shall execute a "Termination of Leasehold Interest" for recordation; and (4) The proposed transferee shall execute a new lease and execute a "Memorandum of Lease" for recordation, which lease shall be identical to this Lease and have a term equal to the remaining term of this Lease at the time of the transfer. B. Transfer Information. The parties to any non-exempt transfer of this Lease shall provide Lessor with all information relevant to a determination of the total consideration paid for the transfer, as well as all documents which are relevant to the total consideration paid for the transfer. Lessee and the proposed transferee shall provide this information not later than forty- five (45) days prior to the proposed effective date of the transfer of this Lease. Lessor shall have the right, at its sole discretion, to commission an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer. Any such appraisal shall be completed not later than thirty (30) days after receipt by Lessor of the aforementioned information from the Lessee. If the value determined by the appraiser commissioned by Lessor exceeds the stated total consideration to be paid based on the information received from the Lessee by more than ten percent (10%), Lessor shall so notify the Lessee and provide Lessee with a full copy of such appraisal report, and said value shall be deemed the Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments unless within fifteen (15) days after receiving such notice and the report the Lessee notifies Lessor that Lessee elects to cause an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer to be conducted by an independent appraiser. In such event, Lessee cause such appraisal to be completed no later than thirty (30) days after the notice to Lessor and shall provide Lessor with a full copy of the appraisal upon completion. The Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments shall be the greater of (i) the stated consideration for the transfer, or (ii) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.13 shall be conducted by an MAI appraiser licensed to conduct business in the State of California and experienced in residential appraisals in Southern California. C. Exempt Transfer Information. Lessor's consent is not required for the "exempt transfers" referenced in Paragraph 3.13(3); provided, however, Lessee shall furnish Lessor with copies of all documents used to effect any exempt transfer. D. Audit of Subleases. It is the intent of the parties that transfers referred to in Section 3.13(3)(e) shall only be exempt from the further provisions of Paragraph 3.13 (in respect of rental adjustments) if such subleases are not substantially equivalent to, do not have substantially the same economic effect as, or are intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee. Lessor shall at all times have the right, upon written request to the Lessee, to receive copies of all written agreements, and to be advised in full of all oral agreements, between the Lessee and any sublessee of the Leased Land. Any purported sublease of the premises which is determined to be substantially equivalent to, or have substantially the same economic effect as, or is intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee shall be void and of no force or effect, and such attempted or purported sublease shall, at the option of Lessor, (i) be an event of default by the Lessee under this Lease, or (ii) permit Lessor to treat such sublease as a transfer of this Lease subject to the provisions of Section 3.B. 5. ENCUMBRANCES. A. Right to Encumber. Lessee may encumber this Lease by deed of trust, mortgage, or similar instrument, in favor of any bona fide lender ("Lender") 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 Premises 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 Leased Land. 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. B. Notice to Lender. Lessor shall have no obligation to give any Lender any written notice pursuant to this Lease unless the Lender has given Lessor written notice of its name, address, and nature of encumbrance ("Complying Lender") . 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 Lender at the address furnished in writing by Lender. C. Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this Lease by mutual agreement without the prior written consent of Lender. D. Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on this Lease and the leasehold estate created hereby shall have the right, during the term of the Lease, to: (1) perform any act required of Lessee pursuant to this Lease; (2) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor. Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults requiring the payment or expenditure of money by Lessee. E. Right of Lender to Cure Default. Lessor shall give written notice of any default or breach of this Lease by Lessee to Lender and afford Lender the opportunity, after notice, to: (1) cure the breach or default within ten (10) days after expiration of the time period granted to Lessee for curing the default if the default can be cured by payment of money; (2) cure the breach or default within thirty (30) days after expiration of the time period granted to Lessee for curing the default when the breach or default can be cured within that period of time; or (3) cure the breach or default in a reasonable time when something other than money is required to cure the breach or default and cannot be performed within thirty (30) days after expiration of the time period granted to Lessee for curing the default, provided the acts necessary to cure the breach are commenced within thirty (30) days and thereafter diligently pursued to completion by Lender. F. Foreclosure in Lieu of Cure. Lender may forestall termination of this Lease for a default or breach by Lessee by commencing foreclosure proceedings subject to strict compliance with the following: (1) proceedings are commenced within thirty (30) days after the later of (i) expiration of the time period granted to Lessee for curing the default, or (ii) service on Lender of the notice describing the breach or default; (2) the proceedings are diligently pursued to completion in the manner authorized by law; and (3) Lender performs all of the terms, covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until the proceedings are complete or are discharged by redemption, satisfaction, payment or conveyance of this Lease to Lender. G. 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: (1) the written request for the new lease is served on Lessor by Lender within thirty (30) days after the termination of this Lease. (2) 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. (3) 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. (4) 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 premises from Lessee, in preparing the new lease. H. Miscellaneous. The following provisions shall apply to Lessor, Lessee and any Lender: 0 ) 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; 9 (2) 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. 6. USE AND MAINTENANCE. A. Use of Leased Land. The Leased Land shall be solely for residential purposes. Lessee may demolish, construct, remodel, reconstruct and maintain structures on the Leased Land for residential purposes so long as the structures and construction are authorized by appropriate City permit 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 California Coastal Commission and any other state agency if required by law. B. 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 Premises. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain, the Premises, 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 repair or reconstruct any improvements on the Leased Land following any damage or destruction thereof, unless the improvements are being destroyed in conjunction with remodeling or reconstruction and Lessor has consented, in writing, to the damage or destruction. Lessee shall cause to be constructed, maintained and repaired all utilities, pipes, walls, sewers, drains, and other improvements on the Premises to the extent required by law or as necessary to maintain the improvement in good order and repair and safe and sanitary condition. C. Compliance with Laws. Lessee shall make, or cause to be made, any additions, alterations or repairs to any structure or improvement on the Premises which may be required by, and Lessee shall otherwise observe and comply with, any law, statute, ordinance, plan, resolution or policy applicable to the Premises. Lessee shall indemnify, defend and hold Lessor harmless from and against any loss, liability, action, claim or damage, arising out of, or in any way related, to Lessee's failure to comply with, and perform pursuant to, provisions of this subparagraph C. All repairs, additions, and alterations to the structures or improvements on the Premises shall conform to all applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. D. As Is Condition of Premises. Lessee expressly accepts the Premises "as is" and acknowledges that Lessor has made no representations or warranties as to the suitability of the property or any construction or improvement. Lessee shall conduct all tests necessary to determine the suitability of the property for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. Lessee expressly acknowledges that Lessor shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Premises or adjacent property. Lessee expressly acknowledges that, while the legislature of the State of California has purportedly removed the public trust restrictions on use of the Property pursuant to the Beacon Bay Bill, the Leased Land may constitute filled tidelands, and Lessor has made no representation or warranty relative to the validity of the Beacon Bay Bill or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease, Lessor agrees, at its sole cost and expense, to use all reasonable efforts to resist and defend against such challenge and to seek a ruling or judgment affirming and upholding the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease. 10 7. TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease shall give rise to a possessory interest tax obligation and that the execution of this Lease will constitute a reassessment event which may give rise to a material increase in the possessory interest tax currently payable by Lessee under the Pre-existing Lease. Lessee shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, and/or any improvements, including, without limitation, any possessory interest tax. Any lien for unpaid utilities, taxes, assessments or charges shall not attach to the leasehold interest but only to improvements located on the Leased Land. 8. USE AND MAINTENANCE 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 Beacon Bay Community Association by Lessor in consideration of the maintenance thereof by such Association and rent to be paid by individual Lessees under their respective leases. 9. MAINTENANCE AND IMPROVEMENT OF INFRASTRUCTURE. Lessor has no obligation to install, improve, repair, or maintain streets, curbs, gutters, water lines, sewer lines, drainage facilities, street lighting or other facilities used by the residents of Beacon Bay (Infrastructure). Notwithstanding Section 8 above, Lessor reserves the right, after a five (5) year period following the Effective Date and upon approval by the Lessees representing a majority of the lots in Beacon Bay, to improve and maintain streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for 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. 10. COMMUNITY ASSOCIATION. A. 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 Agreement, Lessee agrees to become, and during the term of this Lease to remain, a member in good standing of the Beacon Bay Community Association. B. Compliance with Rules and Regulations. Lessee agrees to abide by the Articles of Incorporation, bylaws, 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 Paragraph A and this Paragraph B shall constitute a material breach of this Lease. C. Lessor Maintenance of Common Areas. In addition to the rights reserved to Lessor pursuant to the provisions of Section 9, if the Community Association fails or ceases to maintain community facilities, Lessor may, at its option and without obligation, assume the obligations of the Community 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 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. 11 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit E attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. I 12. INDEMNIFICATION. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim or suit, arising out of, or in any way related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. A. General Conditions. All insurance required to be carried pursuant to this Section 13 shall be obtained from reputable carriers licensed to conduct business in the State of California. Each policy required to be carried pursuant to this Section 13 shall name Lessee and Lessor as additional named insureds, and shall provide that the policy may not be surrendered, cancelled or terminated, or coverage reduced, without not less than twenty (20) days prior written notice to Lessor. B. Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and improvements on the Leased Land against loss or damage by fire or other risk for residential structures. The insurance shall provide coverage to at least ninety percent (90%) of the full insurable replacement value of all improvements on the Leased Land, with the loss payable to Lessee unless this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance shall be paid to Lessor. C. Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain during the term of this Lease, a broad form comprehensive coverage policy of public liability insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way related to, the condition, for Lessee's use and occupation, of the premises in amounts not less than: (1) $500,000 per occurrence for injury to, or death of, one person; (2) $100,000 for damage to or destruction of property. 12 14. DEFAULT. A. Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: (1) the abandonmeVf the Premises by Lessee; (2) the failure by Lessee to make any payment of rent when due if the failure continues for three (3) days after written notice has been given to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable unlawful detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this paragraph; (3) the failure by Lessee to perform any of the provisions of this Lease and any Exhibits attached hereto to be performed by Lessee, other than described in Paragraph 14.A(2) above, if the failure to perform continues for a period of thirty (30) days after written notice thereof has been given to Lessee. If the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be in default if Lessee commences the cure within said thirty (30) day period and thereafter diligently prosecutes the cure to completion; or (4) the failure of Lessee to provide Lessor with all relevant information regarding the total consideration paid in conjunction with any transfer of this Lease; (5) 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 Premises 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 Premises or of Lessee's interest in the Lease, where such seizure is not discharged within thirty (30) days. Notices given under this Paragraph 14.A 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. B. Landlord's Remedies. In the event of any default by Lessee as defined in Paragraph 14.A, Lessor may, in addition to any rights or remedies permitted by law, do the following: (1) Terminate Lessee's right to possession of the Leased Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises 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 California Civil Code, or any other provision of law, including, without limitation, the following: (a) The worth at the time of award of the amount by which the unpaid rent and additional rent for the balance of the term after the time of award exceeds the amount of the loss than Lessee proves could be reasonably avoided; and 13 (b) 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) reasonable attorneys' fees, 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 ten percent (10%) 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 percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) 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 Premises 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 Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. 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 Premises, 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 leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (3) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amount specified in Paragraph 14.13(1). C. Default By Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligation. If the nature of Lessor's obligation is such that more than thirty (30) days are required for performance, then Lessor shall not be in default if Lessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. D. Stay of Obligations. Neither party shall be under any obligation to perform or comply with its obligations pursuant to this Lease after the date of any default by the other party. E. Determination of Rental Value. In any action or unlawful detainer commenced by Lessor, the reasonable rental value of the Leased Land shall be deemed to be the amount of rent and additional rent (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless Lessor/Lessee shall prove to the contrary by competent evidence. F. Waiver of Rights. The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other party. 14 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. G. Waiver of Right of Redemption. Lessee waives any right of redemption or relief from forfeiture pursuant to Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to any existing or future statutory or d6cisional law in the event Lessee is evicted or Lessor takes possession of the Premises by reason of Lessee's default. 15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. A. Surrender of Premises. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Leased Land. Lessor, at its sole discretion, may record a document evidencing the expiration or termination of the leasehold interest. Lessee waives any right to receive relocation assistance or similar form of payment. B. 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 Leased Land all buildings and improvements built or installed on the Leased Land. 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 Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.6, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shall mean the taking of the entire Premises under the power of eminent domain or the taking of so much of the Leased Land as to prevent or substantially impair the use thereof by Lessee for the residential purposes. (2) The term "partial taking" shall mean the taking of a portion only of the Premises which does not constitute a total taking as defined above. (3) 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. (4) The term "date of taking" shall be the date upon which title to the Premises or portion thereof passes to and vests in the condemnor. B. 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 Leased Land or the portion thereof taken shall cease and terminate as of the date of taking of said Leased Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attributable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation thereto. C. Allocation of Award - Total Taking. All compensation and damages awarded for the total taking of the Premises and Lessee's leasehold interest therein shall be allocated as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: 15 (a) The fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of the expiration of the term of this Lease; and (b) The present worth of rents due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of one dollar ($1.00) per annum at nine percent (9%) per annum compound interest (Inwood Coefficient) for the number of years in such period. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. D. Allocation of Award - Partial Taking. All compensation and damages awarded for the taking of a portion of the Leased Premises shall be allocated and divided as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The proportionate reduction of the fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such proportionate reduction in fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (b) The present worth of the amount by which the rent is reduced computed by multiplying the amount by which the annual rent is reduced by the factor for the present worth of $1.00 per annum at 9% per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the Fair Market Rental Value of the Premises at the date of taking bears to the Fair Market Rental Value of the Premises immediately thereafter. 17. ATTORNEYS' FEES. Should either party be required to employ counsel to enforce the terms, conditions and covenants of this Lease, the prevailing party shall recover all reasonable attorneys' fees and charges (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 16 18. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be construed as cumulative and no one of them shall be -considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other. 19. 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. 20. 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 Leased Land. 21. 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 Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659-1768, 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 residence or business address furnished by Lessee; or C. If the Lessee is absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land; or D. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Premises and also sending a copy through the mail addressed to the Lessee. 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. 22. HOLDING OVER. 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 expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The parties agree this Lease cannot be renewed, extended, or in any manner modified except in a writing signed by all parties. However, if Lessee, or anyone claiming under Lessee, shall remain in possession of the Premises after expiration of the term of this Lease without any agreement in writing between the parties and Lessor accepts rent from Lessee, then Lessee shall be deemed a tenant from month-to-month subject to the provisions of this Lease insofar as they may be applicable to a month-to-month tendency. The month-to-month tendency may be terminated by Lessor or Lessor upon thirty (30) days' prior written notice to the other. 23. QUIET ENJOYMENT. 17 Lessor covenants and agrees that Lessee, upon paying the rent set forth herein and observing and keeping all covenants and agreements to be observed or kept by Lessor hereunder, shall quietly have and enjoy the Leased Land during the term of this Lease without hindrance or molestation by anyone claiming by or through Lessor. 24. SEVERABILITY. If any term or provision of this Lease shall, to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 25. MISCELLANEOUS. A. Representations. Lessee agrees that no representations as to the Premises have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agrees and acknowledges that this document contains the entire agreement of the parties, that there are no verbal agreements" representations, warranties or other understandings affecting this agreement, and Lessor and Lessee, as a material part of the consideration of this Lease, waives all claims against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. B. Inurement. Each and all of the covenants, conditions and agreements herein contained shall,' in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors and administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. C. Joint Several Liability. If Lessee consists of more than one person, the covenants, obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants, obligations and liabilities of such persons. D. Captions. The section and paragraph captions used in this Lease are for the convenience of the parties and shall not be considered in the construction or interpretation of any provision. E. Gender. In this Lease, the masculine gender includes the feminine and neuter and the singular number includes the plural whenever the context so requires. 18 IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first above written. LESSOR: CITY OF NEWPORT BEACH, By: pe -lam.., Title: CITY MANA ATTEST: OF PVPJ CITY CLERK APPROVED AS TO FORM: CITY A NEY LESSEES: DOUGLAS . LLRED, Trustee ANN M. ALLRED, Trustee 19 3/IV 3N V✓ a o� '�• 7 .to o, .tr,s Z p F Z Aki G 7 t, t Jl• d a J.1 H a� w sy w4 N :a � \i,// .a1 .4 p0 SAO '�~LL� �� •\ At ji r r of � / 1' S` _ t/ �O ✓� ' q� o� �' O- l� . n � t C-' 7 li t1� • .i��' 9. ��n�r p ii�,� . Y ch of � � o�(j r9 3 d o� 4�_ a^ t- Lp 6 t� O�V tS� IS� o° o g v Q I W S�ttC�o SO� �`� t y, �, o✓ i �' Q b. �,j' ?010 D Wk •� L°. d, tt c a \ ►m N 0 '4. c4 e e OV ,o po A ul 10 0 LEI r n tea s� AO ps. f1 P. o °° f D4tl ,zax 8 pa II op, t .v Cn t✓EOp Nil .n � � A A" .,moo Exhibit A OWORDING REQUESTED BY VZOIATY'TITLE COMPAMY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 This Document ...is electronically recorded by _quity Title B Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 1111111111111111111111 111111111111111111111111111111111 27.00 2005000685334 08:00am 08/31/05 104 200 M11 8 0.00 0.00 0.00 0.00 21.00 0.00 0.00 0.00 MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE is made and entered into by and between THE CITY OF NEWPORT BEACH, a chartered municipal corporation, herein called "Lessor", and DOUGLAS O. ALLRED and ANN M. ALLRED, Trustees of The Allred Family Living Trust herein called "Lessees", to witness that: a Lessor hereby leases to Lessee, commencing on D� and endingon July 1, 2044, on the terms and conditions set forth in that certain lease by and between the parties hereto dated 9-o?5 "05 , all the terms and conditions of which lease are made a part hereof as though fully set forth herein, all those certain premises in the County of Orange, State of California, described as follows: Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. (See Exhibit "A" attached hereto and made a part hereof) EXECUTED on �5 ' oZJr ' �rJ 2005, at Newport Beach, Orange County, California. ATTEST: LESSOR THE CITY OF NEWPORT BEACH o� CITY MANAG : Homer Bludau CITY CLERK Lessee: DOU� LAS O. ALLRED, Trustee APP VED AS TO FORM: Lessee: _AffR M. ALLRED, Trus e n -- CITY ATTORNEY CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA )SS COUNTY p OF 5Atj (E.6 -C? ) On AuusT i (o, 20.75 before me,�El�p�l • i� �nlc of �!, OYAI�A j 'pLgL.l( personally appeared r2OU6LAS, O. AcLAZD AtJD AcNN H. U2 -Go , personally -�e) to be the person(s) whose name(s) Ware subscribed to the within instrument and acknowledged to me that M/§hv/they executed the same in 1pis/*r/their authorized capacity(ies) and that by'14*r/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official sea. WENDY A. HANd Signature_�0,0,, ,,, V COMM. *1464229 �7 NOTARY PUBLIC • CALIFORNIA SAN DIEGO COUNTY Commission Jan. 20, 2008 is area oro icia no ria sea . OPTIONAL SECTION CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to pers relying on the document. [ ] INDIVIDUAL [ ] CORPORATE OFFICER(S) [ ] PARTNER(S) - [ ] LIMITED [ ] GENERAL [ ] ATTORNEY-IN-FACT [ ] TRUSTEE(S) [ ] GUARDIAN/CONSERVATOR [ ] OTHER SIGNER I5-IfEPRESENTING: Name of Person or Entity Name of Person or Entity OPTIONAL SECTION Though the date requested here is not required by 1 , tt could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST B TACHED TO THE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMF.Mf- NUMBER OF P THAN NAMED ABOVE DATE OF DOCUMENT Equity Title Company �, }, 2112E.4 yg,g S®s p 00 SANTA ANA, CA. 92705 GOVERNMENT CODE 27361.7 I certify under penalty of perjury that the notary Seal on the Document to Which this statement is attached reads as follows., Name of Notary: Gl/.evll� CommIssdon Number: l County Where Bond i5 Filed Date Commission Expires: Vendor /Number: /-SO i Place of Execution:_ -,So� Date: ten /o Signature: rol 9 I CERTIFY UNDER PENAL TY OF PERJURY THA T THE ILLEGIBLE PORTIOfV OF T,qI DOCUMENT TO WHICH THIS STA TEMENT IS A T7 -ACHED R2�ADS AS r -O! 1. ') y'V PLACE OF EXECUTION ` ORANGE CA_ DATE. SIGNA TORE STATE OF CALIFORNIA) ) ss: COUNTY OF ORANGE ) On a41zc. Xe personally 2005, before me, Shauna Lyn Oyler Vey"cam ' , personally known to me (or proved to me on the basis of satisfactory evidence) to be the personW whose name i re subscribed to the within instrument and acknowledged to me th /she/they has executed the same i hi /her/their authorized capacity i rand that b his/ r/their signature(sron the instrument the person( o/r the entity upon behalf of which the person acted, executed the instrument.. S my hand and official seal. otary Public in and -,Tor said S SHAUNA LVPW YYLER � � Commission 01331209 c x cranoo (i'OW V ff Official Notarial Seal GOVERNMENT CODE 27.361.7 I certify under penalty of perjury that the notary seal on the Document to which this statement is attached reads as follows. Name .,of Nctarysd Commission Number: County Where Bond is Filed Date Commission Expires. Vendor /dumber: Place of Executi n; ORANGE G4 Date: 0, A67o r ,Signature,: I CER T IfY UNDER PENAL TY OF PERIUR Y THAT THE ILLEGIBLE PORTION O THIS DOCUMENT TO WHICH THIS STA TEMENT ISA TTACHED READS AS FO' 1_')„,'%. PLACE OE EXECUTION._ ORANGE, CA_ DATE. SIGMA TORE ORDER NO.: OR0553589 EXHIBIT "A" A PARCEL OF LAND SITUATED IN THE NORTHWEST QUARTER OF SECTION 35, TOWNSHIP 6 SOUTH, RANGE 10 WEST, S.B.B. & M., DESCRIBED AS FOLLOWS: BEGINNING AT A POINT, SAID POINT BEING SOUTH 39 DEGREES 48 MINUTES EAST DISTANT 88.97 FEET AND NORTH 23 DEGREES 57 MINUTES 30 SECONDS EAST DISTANT 66.34 FEET FROM U.S. BULKHEAD STATION NO. 136, AS SAID U.S. BULKHEAD STATION IS SHOWN ON MAP ENTITLED "HARBOR LINES, NEWPORT BAY HARBOR, CALIFORNIA", AS APPROVED MAY 2, 1936 BY THE SECRETARY OF WAR AND ON FILE IN THE OFFICE OF THE DISTRICT ENGINEER, LOS ANGELES, CALIFORNIA, RUNNING THENCE NORTH 23 DEGREES 57 MINUTES 30 SECONDS EAST A DISTANCE OF 60 FEET; THENCE SOUTH 39 DEGREES 48 MINUTES EAST 146.59 FEET TO A POINT IN THE NORTHEAST LINE OF HARBOR ISLAND DRIVE; THENCE SOUTH 18 DEGREES 03 MINUTES 45 SECONDS WEST ALONG THE NORTHWEST LINE OF HARBOR ISLAND DRIVE, A DISTANCE OF 30 FEET; THENCE NORTH 51 DEGREES 35 MINUTES 55 SECONDS WEST A DISTANCE OF 138.95 FEET TO THE POINT OF BEGINNING. 3 ;uC0[2DING REQUFSTE0 9Y k.4UITY TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 This Document - -as electronically recorded by -quity Title B Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder 11111111111111111111111111111111 21.00 2005000685333 08:00am 08/31/05 104 200 T03 6 0.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 5SS3.S'l TERMINATION OF LEASEHOLD This agreement is made this 0<1j day ofhVaQ:S 2005, by and between the CITY OF NEWPORT BEACH, hereirWter called "Lessor", and COLLEEN B. MANCHESTER, Trustee, and COLLEEN B. MANCHESTER, Surviving Trustee, hereinafter called "Lessees". RECITALS A. Lessor and Lessees executed a lease on January 9, 1996, and subsequently recorded January 9, 1996, by the County Recorder of Orange County, California as Instrument No. 19960013205. By the terms of the lease, the following described property was leased to Lessee until July 1, 2044. Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the Office of the County Recorder, County of Orange State of California. (See Exhibit "A" attached hereto and made a part hereof) B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AGREEMENT Lessee agrees to terminate the lease and vacate the premises as described herein above as of �?- 3) -OS , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. CITY OF NEWPORT BEACH BY: Lessor: Homer ludau, City Manager Lessee: Colleen B. Manchester Trustee BY: 6wj Lessee: Colleen B. Manchester Surviving Trustee CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA )SS COUNTY OF .0(y ) On C'Et bef me, p&I, eo ersonally appe red « personally known tome (or proved tome on the basis of satisfactory evidence) to be a person(s) whose name(s) is/are subscribed to the within instrument and acknowledged tome that he/she/they executed the same in his/her/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s) or the en ' upon If of which the person(s) acted, executed the instrument. WITNESS h ficial gp1AN a. FOXCROFT Signature AyMMIlmARV pUSU � IES 67FMM ���Y 0 P00� -i 1 This area for official notarial seal. OPTIONAL SECTION CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the document. [ ] INDIVIDUAL [ ] CORPORATE OFFICER(S) TITLE(S) [ ] PARTNER(S) - [ ] LIMITED [ ] GENERAL [ ] ATTORNEY-IN-FACT [ ] TRUSTEE(S) [ ] GUARDIAN/CONSERVATOR [ ] OTHER SIGNER IS REPRESENTING: Name of Person or Entity Name of Person or Entity OPTIONAL SECTION Though the date requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW TITLE OR TYPE OF DOCUMENT: NUMBER OF PAGES SIGNERS) OTHER THAN NAMED ABOVE DATE OF DOCUMENT Equity TI tle 0, , I., I WO I Company �I - rggg;xTM 2112 E, 4 STREET, SUITE 100 SANTA ANA, CA. 9270.E GOVERNMENT CODE 27361.7 I certify under penalty of perjury that the notary seal on the Document to which this statement is attached reads as follows: //fig)/ p N�/�o /,L'. Name ��f tarye �� ammrssion Number' ��-l- County Where Bond is Filed: Staw o� Date Commission Expires: S/3 /0 9 Vendor Number: sl U 1 Place of Execution: ORANGE; CA Date: olor Signature:, I CERTIFY UNDER PENAL TY OF PERJUR Y THA T THE ILLEGIBLE PORT1015v O,c 7-,ql5 DOCUMENT TO WHICH THIS STA TEMENT IS A 7TACHED REALS AS FOL L !7VV5 PLACE OF EXECU77ON_ ORANGE, CA_ 04 TF. SIGIVA TUR STATE OF CALIFORNIA) ) ss: COUNTY OF ORANGE ) On 44 5/ o75- 2005, before me, Shauna Lyn Oyler personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(W-whose namere subscribed to the within instrument and acknowledged to me that Qhe/they has executed the same i his)her/their authorized capacity([esf, and that by&her/their signature(s)/on the instrument the persons) or the entity upon behalf of which the person acted, executed the instrument. ESS my hand and official seal. " y m1wion 01331209 Myr:: ,. Eiq*w DM5. 2005 Notary Public in and foa State Official Notarial Seal Equity Title Compaq 21/2 t; 4 STREET, SUMS 100 SANTA ANA, CA. 92705 GOVERNMENT CODE 27.361.7 I certify under penalty of perjury that the notary seal on the Document to which this statement is attached reads as follows., Name ..Of Notary: S Commission Number: /33/20 9 County !/here Bond is Filed: Date Commission Expres, Vendor /Number Place of Execution: ORANGE; CA Date: ���n /,.)(— Signatures. I CERTIFY UNDER PENAL TY OF PERMR Y THA T THE ILLEGIBLE PORTION O;- T,ql DOCU14ENT TO WHICH THIS STA TEMENT I5 A TTA CHED READS A5 FO' L 0 v/1/ . PLACE OF EXECU770N ,-_ ORANGE, CA - DATE SIGNA TU, ORDER NO.: OR0553589 EXHIBIT "A" A PARCEL OF LAND SITUATED IN THE NORTHWEST QUARTER OF SECTION 35, TOWNSHIP 6 SOUTH, RANGE 10 WEST, S.B.B. & M., DESCRIBED AS FOLLOWS: BEGINNING AT A POINT, SAID POINT BEING SOUTH 39 DEGREES 48 MINUTES EAST DISTANT 88.97 FEET AND NORTH 23 DEGREES 57 MINUTES 30 SECONDS EAST DISTANT 66.34 FEET FROM U.S. BULKHEAD STATION NO. 136, AS SAID U.S. BULKHEAD STATION IS SHOWN ON MAP ENTITLED "HARBOR LINES, NEWPORT BAY HARBOR, CALIFORNIA", AS APPROVED MAY 2, 1936 BY THE SECRETARY OF WAR AND ON FILE IN THE OFFICE OF THE DISTRICT ENGINEER, LOS ANGELES, CALIFORNIA, RUNNING THENCE NORTH 23 DEGREES 57 MINUTES 30 SECONDS EAST A DISTANCE OF 60 FEET; THENCE SOUTH 39 DEGREES 48 MINUTES EAST 146.59 FEET TO A POINT IN THE NORTHEAST LINE OF HARBOR ISLAND DRIVE; THENCE SOUTH 18 DEGREES 03 MINUTES 45 SECONDS WEST ALONG THE NORTHWEST LINE OF HARBOR ISLAND DRIVE, A DISTANCE OF 30 FEET; THENCE NORTH 51 DEGREES 35 MINUTES 55 SECONDS WEST A DISTANCE OF 138.95 FEET TO THE POINT OF BEGINNING. 3 City Manager's Office City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658-8915 THIS SPACE FOR RECORDER'S USE ONLY LESSOR'S CONSENT AND AGREEMENT Loan No: 06014126 Recitals Borrower, referred to in this Agreement as "Lessee" and as more particularly described in Exhibit A, has applied for a loan from First Pacific Financial, Inc. ("Lender) to be secured by leased property, as such property is more particularly described in Exhibit A ("Property"). Lessee currently holds or will acquire upon consummation of the pending transaction, a leasehold interest under the lease described in Exhibit A ("Lease") in which the undersigned ("Lessor") is the lessor. Agreement 1. The information on Exhibit A is incorporated herein by reference. 2. The property is subject to the Lease described in Exhibit A. The lease documents described in Exhibit A constitute the entire agreement of Lessee and Lessor regarding the Property. The lease is in full force and effect and unmodified. All rents and other charges due have been paid, there are no other defaults and the Lease is in good standing. Lessor has no knowledge of any facts which now or after the passage of time or the giving notice, or both, would constitute a default under the Lease. The payments required under the Lease are set forth in Exhibit A. Payments and notices to Lessor are deliverable as set forth in Exhibit A. Lessor has no claims outstanding against Lessee in connection with the Property. 1 Loan No: 06014126 3. Lessor consents to the granting of a security interest in Lessee's interest in the lease to Lender. Lessor agrees to send concurrently to Lender copies of any notices sent to Lessee pertaining to Lessee's default or Lessor's intent to terminate the Lease or any part thereof by certified U.S. mail. No modification or termination of the Lease agreed upon by Lessee shall be effective without the express written consent of Lender. Notice will be provided to Lender by certified mail at the following address: First Pacific Financial, Inc. at 4 Hutton Centre Drive, Ste. 500, Santa Ana, CA 92707-8710, referencing the Loan Number set forth on Exhibit A or at such other address given to the undersigned by Lender, at the same time as the notices are sent to Lessee. 4. Should the Lease be terminated for any reason prior to expiration of its stated term, Lessor shall, upon written request by Lender to Lessor made within sixty (60) days after such termination, enter into a new lease ("New Lessee") with Lender as the Lessee. The New Lease shall have a term equal to the remainder to the stated term of the Lease has it not been terminated prior to the end its stated term. The New Lease shall have the same covenants, conditions and agreements (except for any requirements which have been satisfied by Lessee prior to termination) as are contained in the lease. Lessor shall be required to enter into the New Lease only if Lender has remedied and cured all monetary defaults under the lease and has cured or has commenced and is diligently pursing completion of the cure of all non -monetary defaults of Lessee susceptible to sure any party other than by the original Lessee. 5. This consent and agreement shall not operate to change or supercede the terms & conditions of the lease in the event of a conflict, the terms of the lease shall prevail. Lessor 7 Loan No: 06014126 STATE OF CALIFORNIA COUNTY OF (1� C"�W� >� On � 11)Q;, 2), before me, fJksk6--"') AW , personally appeared personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that(Ze he\they executed the same in his (1 her\their authorized capacity s), and that by his her/their signature(17,11- von the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Sig natur Notary Public in and for the State of 3 CATHY FISHER Commission* 1341009 Z z Notary Public - California > Orange County v My Comm. Expires Feb 21, 2006 EXHIBIT A — LESSOR'S CONSENT AND AGREEMENT Loan No. 06014126 Unit No. 1. Borrower's (Lessee) Name: Joel H. Manchester and Colleen B. Manchester 2. Property Address: 115 Harbor Island Road, also known as Lot A, Beacon Bay, Newport Beach, CA 92660 3. Property's Legal Description (if a metes & bounds attach legal): See Attached. 4. Developer/Condo Homeowners Assoc. (Lessor) Name: Beacon Bay 5. Lease (including all amendments and dates): Attached. 6. Borrower (Lessee's) Current Monthly Lease Payment: $3,541.67 Payments are current (circle eithe Yes r No). 7. Deliver notices and payments to Lessor at: City Manager's Office, City of Newport Beach, P.O. Box 1768, Newport Beach, CA 92658-8915 8. Tern of Lease: 50 Years; commenced on January 9, 1996; Expires on July 1, 2044 If applicable: Pursuant to the Lease, Lessee has the right, at its option, to renew the term of the Lease for N/A consecutive renewal terns of N/A years each. 4 ATTACHMENT TO EXHIBIT A — LESSOR'S CONSENT AND AGREEMENT Property Description Lot A 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. t EXHIBIT B Beacon Bay Lot A described as follows: Lot A as shown on the map filed in Book 13, Page 42 Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. EXHIBIT B LEASE THIS LEASE is made and entered into as of the -!Z�day ofVg:221dM:::�194, by and between the CITY OF NEWPORT BEACH, a Charter City and municipal corpor n ("Lessor , and JOEL H. MANCHESTER AND ("Lessee"), regarding the real property commonly referred to as Beacon Bay Lot RECITALS A. The City of Newport Beach, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978 (the 'Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly known as Beacon Bay and generally described in Exhibit A attached hereto and incorporated by reference. B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and specifically authorizes the lease of the property for residential purposes subject to certain express statutory conditions. C. Beacon Bay, including the "Westerly Portion" thereof, has been divided into individual lots, with each lot leased by the City for residential purposes until December 31, 2005. D. On November 3, 1987, a majority of electors of the City approved a measure which authorized the City Council to enter into new leases of residential lots in Beacon Bay for a period not to exceed fifty (50) years. E. On November 3, 1992, a majority of electors of the City approved Measure M which authorized the City Council to lease tidelands and waterfront property consistent with the provisions of state law. F. The City Council, pursuant to the authority conferred by the electors, entered into negotiations with current lessees and the parties have agreed on the terms and conditions of a new lease with a fifty (50) year term, provision for adjustments in lease payments to reflect changes in the value of Beacon Bay leaseholds, and a recalculation of lease payments in the event of a transfer of the Lease by the Current Lessee or any Subsequent Lessee (as defined herein). G. Lessee acknowledges that the terms and conditions of this Lease may result in Lessee paying substantially more or less than another Lessee for similar property depending upon the date this Lease is executed, the date of any subsequent transfer, and the consideration paid for transfers of similarly situated property. H. Lessee acknowledges that accurate and complete reporting to the City of all consideration paid for the transfer of this Lease is vitally important to the City in that failure to fully report all consideration could materially reduce the amount of rent received by the City from other Beacon Bay Lessees. I. Lessor and Lessee acknowledge that the City has agreed to a fifty (50) year term and limited lease payment increases in consideration of provisions which require payment of rent approximating fair market rental value, without regard to any advantage maintained by Current Lessees, upon transfer by Current Lessees and payment of deferred rent in the event the Lease is not signed on or before the Effective Date (as defined herein). J. The California State Lands Commission has reviewed the form of this Lease and determined that it is in conformance with the provisions of relevant statutes, rules and regulations, including, without limitation, the Beacon Bay Bill. K. Lessor has determined that this Lease is consistent with provisions of the Beacon Bay Bill, the Charter, General Plan and Zoning Ordinance of the City of Newport Beach, and of all other applicable state and local laws. N B 1-187371. V 20.5241 9 4 L. Lessor has determined it is in the best interests of the citizens of Newport Beach to maintain the residential character of Beacon Bay and to enter into new leases with Current Lessees under the terms and conditions specified in this agreement. NOW, THEREFORE, in consideration of the foregoing recitals and the covenants in this lease, the parties agree as follows: 1. LEASED LAND. Lessor hereby leases to Lessee the real property commonly known as Beacon Bay Lot A (the "Leased Land"), which is more particularly described in Exhibit B, and generally depicted on Exhibit A, each attached hereto and incorporated by reference, subject to the limitations on use specified in Section 6. As used in this Lease, the term "Premises" shall refer to the Leased Land and any improvements constructed thereon. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Leased Land 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 for the exploration, development, production, extraction and taking of any such substance 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 Newport Beach City Charter or the Newport Beach Municipal Code. 2. TERM. The term of this Lease shall commence on the Execution Date, but in no event prior to the Effective Date, and shall expire on the date fifty (50) years following the Effective Date, unless earlier terminated as provided in this Lease. 3. RENTAL. A. Definitions. For the purposes of this Lease, the following terms shall be defined as specified in this paragraph. In certain cases, the definition of the term contains operative language that affects the rights of the parties: (1) "Actual Sales Value" shall mean the total of all consideration paid for the non-exempt transfer of this Lease or the Pre-existing Lease, including the improvements on the Leased Land, from the Current Lessee, or Subsequent Lessee, to another person, excluding any consideration paid for the transfer of personal property in connection with such transaction. (2) "Average Actual Sales Value Rent" shall mean two and one-half percent (2.5 %) of the mean of the Actual Sales Value of the non-exempt transfer of a similarly situated (waterfront or interior) Beacon Bay parcels as specified in this subparagraph. Average Actual Sales Value Rent shall be the mean of the Actual Sales Value of the three similarly situated parcels most recently transferred. Exempt transfers, as defined in Paragraph 3.B(3), shall not be used to calculate Average Actual Sales Value rent. (3) "CPI" shall mean the Consumer Price Index - Los Angeles -Anaheim -Riverside Area, All Urban Consumers, All Items, published by the United States Department of Labor, Bureau of Labor Statistics (1982-1984=100). If the 1982-1984 base of said Consumer Price Index should hereafter be changed, then the new base shall be converted to the 1982-1984 base and the base as so converted shall be used. In the event that the Consumer Price Index, as now compiled and published, shall cease to be published, then the successor index shall be used provided that an appropriate conversion from the old index to the new index can feasibly be made. If such conversion cannot be made, or if no such index is published, then another index most nearly comparable thereto recognized as authoritative shall be substituted by agreement. 2 (4) "Current Lessee" shall mean the person or persons who, as of April 1, 1994 (the "Cut-off Date"), was or were the Lessee under the Pre-existing Lease. (5) "Deferred Rent" shall mean the total rent that a Current Lessee would have paid had this Lease been executed on the Effective Date, through and including the date on which this Lease was first executed, less the rent actually paid pursuant to the Pre- existing Lease, together with interest at the rate of eight percent (8%) per annum calculated on the balance due at the end of each Lease Year or portion thereof. (6) "Effective Date" shall mean July 1, 1994. (7) "Execution Date" shall mean the date when this Lease is executed by Lessee. (8) "Initial Rent" shall mean the effective net rent for the Leased Land as determined by the appraisal of George Hamilton Jones, with due consideration to the leasehold advantage created by the Pre-existing Lease, all as shown on Exhibit C attached hereto and incorporated herein by reference. (9) "Person" shall mean any natural person or natural person(s) and does not include any corporation, association, or business entity in any form except a financial institution or other bona fide lender acting in the capacity of a lender or an inter vivos or living trust. (10) "Pre-existing Lease" shall mean the Lease for the Leased Land which was effective on January 1, 1988, and would, absent this Lease, expire on July 1, 2006. (11) "Transferred" shall mean any sale, assignment, sublease or other transaction, other than an exempt transfer as defined in Paragraph 3.13(3), pursuant to which the right to possession of the premises and the right to sign a new lease identical to this Lease is transferred to another person. B . Rental Payments. Lessee shall pay annual rent in the sum of 11 11 1 1•111 , ,•l 1111 ll lill 11111 11111 1111 ll III • 1 l• .l� '1.1•. '•. •l •1' •.1� • 11 ($3.541.67 ) per month. Lessee shall also pay, if applicable, deferred rent in the sum of ($ ) upon execution of this Lease. Ren shall shall not (circle one) be adjusted every seven (7) years after the date of transfer in accordance with the provisions of Paragraph 3.6(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: R1 (1) Execution Before Effective Date. In the event this Lease is executed by the Lessee on or before the Effective Date, Rent shall be paid as follows: (a) Current Lessee: Current Lessee shall pay annual rent equal to Initial Rent as specified in Exhibit C. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee (other than an exempt transfer as set forth in Paragraph 3.6(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.6(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of the Actual Sales Value determined as of the date of the transfer in accordance with the provisions of paragraph 3.A(1). Thereafter, rent shall be adjusted every seven years after the date of the transfer in accordance with the provisions of paragraph 3.B(4). (c) In the event of any transfer of this Lease to a Subsequent Lessee in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.B(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). (2) Execution After the Effective Date. In the event this Lease is first executed after the Effective Date, rent shall be determined and paid as follows: (a) Current Lessee/Within Five Years After Effective Date: In the event this Lease is executed by the Current Lessee within five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Initial Rent plus a sum calculated by multiplying the difference between Initial Rent and Average Actual Sales Value Rent by a fraction equal to the number of months between the Effective Date and Execution Date, divided by sixty. The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee, rent shall remain as specified in this subparagraph, notwithstanding the provisions of Paragraph 3.B(4). (b) Current Lessee/More Than Five Years After Effective Date: In the event this Lease is executed by the Current Lessee more than five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Average Actual Sales Value Rent calculated as of the date of execution in accordance with the provisions of Paragraph 3.A(2). The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, rent shall be adjusted every seven (7) years after the date of execution in accordance with the provisions of Paragraph 3.B(4). (c) Subsequent Lessee: In the event the Current Lessee transfers the Pre- existing Lease to a Subsequent Lessee who wishes to sign this Lease after the Cut-off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of Actual Sales Value determined as of the date of execution and in accordance with Paragraph 3.A(1). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.B(4). 4 (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.6(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.B(4). (3) Exempt Transfers. The provisions of Paragraph 3.6 regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.6(I)(a), 3.B(2)(a) and 3.6(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety 5 (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage increase or decrease, if any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (i) the Execution Date, or (ii) the last rental adjustment date. Lessor shall endeavor to notify Lessee of rental adjustments at least forty-five (45) days prior to the end of each seventh (7th) lease year; provided, however, failure of Lessor to give forty-five (45) days' notice does not relieve Lessee from the obligation to pay increased rent or the right to pay less rent in the event of a decrease in the CPI; and, provided further, that Lessee shall have no obligation to pay rent increases which apply to any period greater than ninety (90) days prior to the receipt by Lessee of Lessor's notice of an increase in rent. (b) In the event Lessee is two or more persons owning the leasehold estate created hereby as tenants in common or joint tenants, and less than all of such persons transfer their interest in this Lease to a person other than to an existing tenant in common or joint tenant, the rent adjustment shall be prorated to reflect the percentage interest being transferred to a third party. For example, if two persons are the Lessee as tenants in common as to equal one-half interests, and one of such persons transfers his/her 50% interest to a third party, the rent shall be adjusted as provided in Paragraph 3.13(2)(c), and thereafter as provided in Paragraph 3.6(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 3.6(3). (5) Installment Payments/Grace Period, Lessee shall pay rent in equal monthly installments, in advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (15th) day of the month for which the payment is made ("Grace Period") . If a rent payment, or any portion thereof, is received by Lessor after expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to the City of Newport Beach and sent, or delivered, to the Finance Director at the address specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or currency to the United States as at the time of payment is legal tender for public and private debts. Lessor and Lessee agree that late charges specified in this paragraph represent a fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 13 of this Lease. Any failure by Lessor to declare a default and initiate termination of this Lease due to a late or missed payment shall not be considered a waiver of the right of Lessor to do so for that or any other late or missed payment. C. Credit to Tidelands Fund. In calculating Initial Rent under this Lease, a credit was given to certain of the Current Lessees equal to the annual amortization of the present value of the additional property tax to be paid by such lessees during the remaining period of the Pre- existing Lease. This credit, commonly referred to as the "tax advantage", is shown on Exhibit D for each affected lot. This credit was extended by Lessor to Current Lessees as consideration for entering into this Lease. As a consideration in its approval of this Lease, the California State Lands Commission required Lessor to credit its State supervised Tidelands Trust Fund by an amount equivalent to the tax advantage derived from those lots in Beacon Bay comprising tidelands. This amount is shown on Exhibit D for each affected lot comprising tidelands. Accordingly, Lessor has unilaterally agreed to annually calculate the amount of such tax advantage derived from the tidelands parcels in Beacon Bay and to credit an equivalent amount as revenue to the State supervised Tidelands Trust Fund. This provision is included in this Lease to 6 acknowledge the agreement of Lessor with the California State Lands Commission, and does not affect the rights and obligations of Lessor or Lessee under this Lease. 4. TRANSFERS, A . Conditions Precedent to Transfer. Lessee may transfer this Lease subject to the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or conditioned. Lessor shall consent to any transfer when Lessee and the proposed transferee have complied with the following: (1) Lessee shall furnish Lessor with executed copies of each and every document used to effect the transfer. (2) Lessee or the proposed transferee shall pay to Lessor a transfer fee of one hundred dollars ($100.00); (3) Lessee shall execute a "Termination of Leasehold Interest" for recordation; and (4) The proposed transferee shall execute a new lease and execute a "Memorandum of Lease" for recordation, which lease shall be identical to this Lease and have a term equal to the remaining term of this Lease at the time of the transfer. B. Transfer Information. The parties to any non-exempt transfer of this Lease shall provide Lessor with all information relevant to a determination of the total consideration paid for the transfer, as well as all documents which are relevant to the total consideration paid for the transfer. Lessee and the proposed transferee shall provide this information not later than forty- five (45) days prior to the proposed effective date of the transfer of this Lease. Lessor shall have the right, at its sole discretion, to commission an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer. Any such appraisal shall be completed not later than thirty (30) days after receipt by Lessor of the aforementioned information from the Lessee. If the value determined by the appraiser commissioned by Lessor exceeds the stated total consideration to be paid based on the information received from the Lessee by more than ten percent (10%), Lessor shall so notify the Lessee and provide Lessee with a full copy of such appraisal report, and said value shall be deemed the Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments unless within fifteen (15) days after receiving such notice and the report the Lessee notifies Lessor that Lessee elects to cause an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer to be conducted by an independent appraiser. In such event, Lessee cause such appraisal to be completed no later than thirty (30) days after the notice to Lessor and shall provide Lessor with a full copy of the appraisal upon completion. The Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments shall be the greater of (i) the stated consideration for the transfer, or (ii) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.6 shall be conducted by an MAI appraiser licensed to conduct business in the State of California and experienced in residential appraisals in Southern California. C. Exempt Transfer Information. Lessor's consent is not required for the "exempt transfers" referenced in Paragraph 3.6(3); provided, however, Lessee shall furnish Lessor with copies of all documents used to effect any exempt transfer. D . Audit of Subleases. It is the intent of the parties that transfers referred to in Section 3.6(3)(e) shall only be exempt from the further provisions of Paragraph 3.13 (in respect of rental adjustments) if such subleases are not substantially equivalent to, do not have substantially the same economic effect as, or are intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee. Lessor shall at all times have the right, upon written request to the Lessee, to receive copies of all written agreements, and to be advised in full of all oral agreements, between the Lessee and any sublessee of the Leased Land. Any purported sublease of the premises which is determined to be substantially equivalent to, or have substantially the same economic effect as, or is intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee shall be void and of no force or effect, and such attempted or purported sublease shall, at the option of Lessor, (i) be an event of default by the Lessee under this Lease, or (ii) permit Lessor to treat such sublease as a transfer of this Lease subject to the provisions of Section 3.6. 5. ENCUMBRANCES. A . Right to Encumber. Lessee may encumber this Lease by deed of trust, mortgage, or similar instrument, in favor of any bona fide lender ("Lender") 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 Premises 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 Leased Land. 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. B . Notice to Lender. Lessor shall have no obligation to give any Lender any written notice pursuant to this Lease unless the Lender has given Lessor written notice of its name, address, and nature of encumbrance ("Complying Lender") . 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 Lender at the address furnished in writing by Lender. C . Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this Lease by mutual agreement without the prior written consent of Lender. D. Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on this Lease and the leasehold estate created hereby shall have the right, during the term of the Lease, to: (1) perform any act required of Lessee pursuant to this Lease; (2) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor. Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults requiring the payment or expenditure of money by Lessee. E . Right of Lender to Cure Default. Lessor shall give written notice of any default or breach of this Lease by Lessee to Lender and afford Lender the opportunity, after notice, to: (1) cure the breach or default within ten (10) days after expiration of the time period granted to Lessee for curing the default if the default can be cured by payment of money; (2) cure the breach or default within thirty (30) days after expiration of the time period granted to Lessee for curing the default when the breach or default can be cured within that period of time; or (3) cure the breach or default in a reasonable time when something other than money is required to cure the breach or default and cannot be performed within thirty (30) days after expiration of the time period granted to Lessee for curing the default, provided the acts necessary to cure the breach are commenced within thirty (30) days and thereafter diligently pursued to completion by Lender. F . Foreclosure in Lieu of Cure. Lender may forestall termination of this Lease for a default or breach by Lessee by commencing foreclosure proceedings subject to strict compliance with the following: 0 (1) proceedings are commenced within thirty (30) days after the later of (i) expiration of the time period granted to Lessee for curing the default, or (ii) service on Lender of the notice describing the breach or default; (2) the proceedings are diligently pursued to completion in the manner authorized by law; and (3) Lender performs all of the terms, covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until the proceedings are complete or are discharged by redemption, satisfaction, payment or conveyance of this Lease to Lender. G. 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: (1) the written request for the new lease is served on Lessor by Lender within thirty (30) days after the termination of this Lease. (2) 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. (3) 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. (4) 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 premises from Lessee, in preparing the new lease. H . Miscellaneous. The following provisions shall apply to Lessor, Lessee and any Lender: (1) 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; (2) 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. 6. USE AND MAINTENANCE. A. Use of Leased Land. The Leased Land shall be solely for residential purposes. Lessee may demolish, construct, remodel, reconstruct and maintain structures on the Leased Land for residential purposes so long as the structures and construction are authorized by appropriate City permit 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 California Coastal Commission and any other state agency if required by law. B . 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 Premises. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain, the Premises, 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 repair or reconstruct any improvements on the Leased Land following any damage or destruction thereof, unless the improvements are being destroyed in conjunction with remodeling or reconstruction and Lessor has consented, in writing, to the damage or destruction. Lessee shall cause to be constructed, maintained and repaired all utilities, pipes, walls, sewers, drains, and other improvements on the Premises to the extent required by 9 law or as necessary to maintain the improvement in good order and repair and safe and sanitary condition. C. Compliance with Laws. Lessee shall make, or cause to be made, any additions, alterations or repairs to any structure or improvement on the Premises which may be required by, and Lessee shall otherwise observe and comply with, any law, statute, ordinance, plan, resolution or policy applicable to the Premises. Lessee shall indemnify, defend and hold Lessor harmless from and against any loss, liability, action, claim or damage, arising out of, or in any way related, to Lessee's failure to comply with, and perform pursuant to, provisions of this subparagraph C. All repairs, additions, and alterations to the structures or improvements on the Premises shall conform to all applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. D. As Is Condition of Premises. Lessee expressly accepts the Premises "as is" and acknowledges that Lessor has made no representations or warranties as to the suitability of the property or any construction or improvement. Lessee shall conduct all tests necessary to determine the suitability of the property for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. Lessee expressly acknowledges that Lessor shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Premises or adjacent property. Lessee expressly acknowledges that, while the legislature of the State of California has purportedly removed the public trust restrictions on use of the Property pursuant to the Beacon Bay Bill, the Leased Land may constitute filled tidelands, and Lessor has made no representation or warranty relative to the validity of the Beacon Bay Bill or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease, Lessor agrees, at its sole cost and expense, to use all reasonable efforts to resist and defend against such challenge and to seek a ruling or judgment affirming and upholding the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease. 7. TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease shall give rise to a possessory interest tax obligation and that the execution of this Lease will constitute a reassessment event which may give rise to a material increase in the possessory interest tax currently payable by Lessee under the Pre-existing Lease. Lessee shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, and/or any improvements, including, without limitation, any possessory interest tax. Any lien for unpaid utilities, taxes, assessments or charges shall not attach to the leasehold interest but only to improvements located on the Leased Land. 8. USE AND MAINTENANCE 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 Beacon Bay Community Association by Lessor in consideration of the maintenance thereof by such Association and rent to be paid by individual Lessees under their respective leases. 9. MAINTENANCE AND IMPROVEMENT OF INFRASTRUCTURE. Lessor has no obligation to install, improve, repair, or maintain streets, curbs, gutters, water lines, sewer lines, drainage facilities, street lighting or other facilities used by the residents of Beacon Bay (Infrastructure). Notwithstanding Section 8 above, Lessor reserves the right, after a five (5) year period following the Effective Date and upon approval by the Lessees representing a majority of the lots in Beacon Bay, to improve and maintain streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for 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. 10 10. COMMUNITY ASSOCIATION. A. 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 Agreement, Lessee agrees to become, and during the term of this Lease to remain, a member in good standing of the Beacon Bay Community Association. B . Compliance with Rules and Regulations. Lessee agrees to abide by the Articles of Incorporation, bylaws, 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 Paragraph A and this Paragraph B shall constitute a material breach of this Lease. C. Lessor Maintenance of Common Areas. In addition to the rights reserved to Lessor pursuant to the provisions of Section 9, if the Community Association fails or ceases to maintain community facilities, Lessor may, at its option and without obligation, assume the obligations of the Community 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 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. 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit E attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 12. INDEMNIFICATION. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim or suit, arising out of, or in any way related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. A. General Conditions. All insurance required to be carried pursuant to this Section 13 shall be obtained from reputable carriers licensed to conduct business in the State of California. Each policy required to be carried pursuant to this Section 13 shall name Lessee and Lessor as additional named insureds, and shall provide that the policy may not be surrendered, cancelled or 11 terminated, or coverage reduced, without not less than twenty (20) days prior written notice to Lessor. B . Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and improvements on the Leased Land against loss or damage by fire or other risk for residential structures. The insurance shall provide coverage to at least ninety percent (90%) of the full insurable replacement value of all improvements on the Leased Land, with the loss payable to Lessee unless this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance shall be paid to Lessor. C. Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain during the term of this Lease, a broad form comprehensive coverage policy of public liability insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way related to, the condition, for Lessee's use and occupation, of the premises in amounts not less than: (1) $500,000 per occurrence for injury to, or death of, one person; (2) $100,000 for damage to or destruction of property. 14. DEFAULT. A . Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: the abandonment of the Premises by Lessee; (2) the failure by Lessee to make any payment of rent when due if the failure continues for three (3) days after written notice has been given to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable unlawful detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this paragraph; (3) the failure by Lessee to perform any of the provisions of this Lease and any Exhibits attached hereto to be performed by Lessee, other than described in Paragraph 14.A(2) above, if the failure to perform continues for a period of thirty (30) days after written notice thereof has been given to Lessee. If the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be in default if Lessee commences the cure within said thirty (30) day period and thereafter diligently prosecutes the cure to completion; or (4) the failure of Lessee to provide Lessor with all relevant information regarding the total consideration paid in conjunction with any transfer of this Lease; (5) 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 Premises 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 Premises or of Lessee's interest in the Lease, where such seizure is not discharged within thirty (30) days. Notices given under this Paragraph 14.A 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. B . Landlord's Remedies. In the event of any default by Lessee as defined in Paragraph 14.A, Lessor may, in addition to any rights or remedies permitted by law, do the following: 12 (1) Terminate Lessee's right to possession of the Leased Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises 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 California Civil Code, or any other provision of law, including, without limitation, the following: (a) The worth at the time of award of the amount by which the unpaid rent and additional rent for the balance of the term after the time of award exceeds the amount of the loss than Lessee proves could be reasonably avoided; and (b) 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) reasonable attorneys' fees, 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 ten percent (10%) 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 percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) 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 Premises 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 Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. 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 Premises, 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 leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (3) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amount specified in Paragraph 14.6(1). C. Default By Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligation. If the nature of Lessor's obligation is such that more than thirty (30) days are required for performance, then Lessor shall not be in default if Lessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. 13 D . Stay of Obligations. Neither party shall be under any obligation to perform or comply with its obligations pursuant to this Lease after the date of any default by the other party. E . Determination of Rental Value. In any action or unlawful detainer commenced by Lessor, the reasonable rental value of the Leased Land shall be deemed to be the amount of rent and additional rent (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless Lessor/Lessee shall prove to the contrary by competent evidence. F. Waiver of Rights. The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other party. Lessor's acceptance of any rent shall not be considered a waiver of any preexisting breach of default by Lessee other than the failure to pay the particular rent accepted regardless of Lessor's knowledge of the preexisting breach of default at the time rent is accepted. G. Waiver of Right of Redemption. Lessee waives any right of redemption or relief from forfeiture pursuant to Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to any existing or future statutory or decisional law in the event Lessee is evicted or Lessor takes possession of the Premises by reason of Lessee's default. 15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. A. Surrender of Premises. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Leased Land. Lessor, at its sole discretion, may record a document evidencing the expiration or termination of the leasehold interest. Lessee waives any right to receive relocation assistance or similar form of payment. B . 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 Leased Land all buildings and improvements built or installed on the Leased Land. 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 Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.13, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shall mean the taking of the entire Premises under the power of eminent domain or the taking of so much of the Leased Land as to prevent or substantially impair the use thereof by Lessee for the residential purposes. (2) The term "partial taking" shall mean the taking of a portion only of the Premises which does not constitute a total taking as defined above. (3) 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. (4) The term "date of taking" shall be the date upon which title to the Premises or portion thereof passes to and vests in the condemnor. B . 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 14 Leased Land or the portion thereof taken shall cease and terminate as of the date of taking of said Leased Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attributable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation thereto. C . Allocation of Award - Total Taking. All compensation and damages awarded for the total taking of the Premises and Lessee's leasehold interest therein shall be allocated as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of the expiration of the term of this Lease; and (b) The present worth of rents due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of one dollar ($1.00) per annum at nine percent (9%) per annum compound interest (Inwood Coefficient) for the number of years in such period. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. D . Allocation of Award - Partial Taking. All compensation and damages awarded for the taking of a portion of the Leased Premises shall be allocated and divided as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The proportionate reduction of the fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such proportionate reduction in fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (b) The present worth of the amount by which the rent is reduced computed by multiplying the amount by which the annual rent is reduced by the factor for the present worth of $1.00 per annum at 9% per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E . Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the Fair Market Rental Value of the Premises at the date of taking bears to the Fair Market Rental Value of the Premises immediately thereafter. 17. ATTORNEYS' FEES. Should either party be required to employ counsel to enforce the terms, conditions and covenants of this Lease, the prevailing party shall recover all reasonable attorneys' fees and charges (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 15 18. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other. 19. 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. 20. 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 Leased Land. 21. 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 Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659-1768, 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 residence or business address furnished by Lessee; or C. If the Lessee is absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land; or D. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Premises and also sending a copy through the mail addressed to the Lessee. 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. 22. HOLDING OVER. 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 expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The parties agree this Lease cannot be renewed, extended, or in any manner modified except in a writing signed by all parties. However, if Lessee, or anyone claiming under Lessee, shall remain in possession of the Premises after expiration of the term of this Lease without any agreement in writing between the parties and Lessor accepts rent from Lessee, then Lessee shall be deemed a tenant from month-to-month subject to the provisions of this Lease insofar as they may be applicable to a month-to-month tendency. The month-to-month tendency may be terminated by Lessor or Lessor upon thirty (30) days' prior written notice to the other. HIA. 23. QUIET ENJOYMENT. Lessor covenants and agrees that Lessee, upon paying the rent set forth herein and observing and keeping all covenants and agreements to be observed or kept by Lessor hereunder, shall quietly have and enjoy the Leased Land during the term of this Lease without hindrance or molestation by anyone claiming by or through Lessor. 24. SEVERABILITY. If any term or provision of this Lease shall, to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 25. MISCELLANEOUS. A. Representations. Lessee agrees that no representations as to the Premises have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agrees and acknowledges that this document contains the entire agreement of the parties, that there are no verbal agreements" representations, warranties or other understandings affecting this agreement, and Lessor and Lessee, as a material part of the consideration of this Lease, waives all claims against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. B. Inurement. Each and all of the covenants, conditions and agreements herein contained shall,' in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors and administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. C. Joint Several Liability. If Lessee consists of more than one person, the covenants, obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants, obligations and liabilities of such persons. D. Captions. The section and paragraph captions used in this Lease are for the convenience of the parties and shall not be considered in the construction or interpretation of any provision. E . Gender. In this Lease, the masculine gender includes the feminine and neuter and the singular number includes the plural whenever the context so requires. 17 IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first above written. LESSOR: CITY OF NEWPORT BEACH, ATTEST: �?Ft CITY CLERK» APPROVED AS TO FORM: {",� E� f - lY ATTORNEY LESSEE: JO ' . MANCHESTER COLLEEN B. MANCHESTER 18 • 4 � Za d� � � �/' V ��U V ✓ � ae � 1 �, 7 .r. • 9 •' u CX 0 ../ ., . Q J to d cf� K AA � �d�. /// q11-0� � +' �` r• /r viJ cls �. fY \ ,taN � c to o4 -0 ~ `t dp � f G � � a• � �• z m °�' ' c. • �o °i � •� •r• �. `� .yea ' `E S st O�\V,dad/ 10 / Q 4 vQk d 'S �1�F• .L1 • � � ``b� �$. � � a �rT �1 io N , Z ti�oa �• ROP cr s �'► OL, 7 M Cil y q • \ 't i Sb 1 . S 00 Cal CA i r. s s G zz y n it s� '�� N `� s •F .1=0. IAMD If - PAP it .11 °° :ADD13 6a / 1 Exhibt C,,y ° � 1• ° °. .sus' N •� �/ \ _.�—,.._ Beacon Bay Lot -A, described as follows: Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued SUMMARY OF VALUE INDICATIONS: Existing (1st year) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Water Front Lots A $1,330,000 $48,520 $23,125.08 $31,940.00 B $1,200,000 $43,320 $12,506.85 $22,270.00 C $1,031,000 $37,560 $16,625.04 $22,480.00 1 $947,000 $34,200 $8,020.80 $15,030.00 2 $1,131,000 $41,640 $8,825.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 $31,560.00 4 $1,318,000 $49,120 $10,458.96 $21,260.00 5 $1,341,000 $50,120 $20,012.04 $28,840.00 6 $1,386,000 $51,680 $25,000.00 $34,260.00 7 $1,210,000 $44,800 $24,999.96 $31,870.00 8 $1,177,000 $43,480 $43,750.00 $43,480.00 9 $1,298,000 $47,840 $42,500.04 $44,350.00 10 $1,342,000 $49,600 $24,999.96 $33,540.00 11 $1,122,000 $41,280 $9,020.52 $17,020.00 12 $1,100,000 $40,400 $14,250.00 $22,190.00 13 $1,100,000 $40,400 $23,625.00 $29,450.00 14 $1,243,000 $45,640 $10,312.56 $19,690.00 15 $1,265,000 $46,520 $10,836.47 $20,240.00 16 $1,067,000 $39,080 $8,508.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 $21,750.00 18 $1,067,000 $39,080 $8,508.48 $16,480.00 19 $1,243,000 $45,640 $10,020.02 $19,500.00 20 $1,147,000 $42,320 $8,727.84 $17,910.00 21 $1,058,000 $38,760 $20,224.50 $26,660.00 22 $1,036,000 $37,880 $41,250.00 $37,880.00 ES 1 $1,037,000 $37,880 $28,749.96 $31,920.00 ES 2 $1,037,000 $37,880 $24,625.00 $29,220.00 Subtotals: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Exhibit C 0 Page 1 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued Exhibit C - Page 2 Existing (1st year) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Interior Lots 23 $478,000 $14,487 $2,782.32 $6,297.00 24 $501,000 $15,237 $6,125.04 $8,897.00 25 $509,000 $15,537 $3,399.12 $6,977.00 26 $511,000 $15,612 $3,417.72 $6,942.00 27 $519,000 $15,912 $3,436.44 $7,102.00 28 $542,000 $16,775 $4,137.72 $7,785.00 29 $518,000 $15,650 $15,375.00 $15,470.00 30 $510,000 $15,462 $3,551.16 $7,102.00 31 $517,000 $15,725 $8,750.00 $10,515.00 32 $520,000 $15,837 $3,588.48 $7,217.00 33 $528,000 $16,137 $3,607.08 $7,307.00 34 $589,000 $18,200 $4,454.64 $8,490.00 35 $559,000 $17,000 $3,776.28 $7,780.00 36 $548,000 $16,662 $3,795.00 $7,672.00 37 $517,000 $15,725 $14,625.00 $15,005.00 38 $520,000 $15,837 $3,780.36 $7,967.00 39 $528,000 $16,137 $9,125.04 $11,557.00 40 $588,000 $18,162 $11,133.60 $13,572.00 41 $513,000 $15,500 $3,719.64 $7,300.00 42 $548,000 $16,662 $3,795.00 $7,672.00 43 $556,000 $16,962 $11,250.00 $13,232.00 44 $558,000 $17,037 $3,832.20 $7,787.00 45 $565,000 $17,300 $4,056.84 $7,990.00 46 $588,000 $18,162 $4,454.64 $8,492.00 47 $539,000 $16,475 $3,459.36 $7,365.00 48 $551,000 $16,775 $6,249.96 $9,305.00 49 $520,000 $15,837 $3,551.16 $7,197.00 50 $523,000 $15,950 $3,569.76 $7,240.00 51 $520,000 $15,837 $3,780.36 $7,857.00 52 $528,000 $16,137 $12,750.00 $13,927.00 53 $588,000 $18,162 $4,479.00 $8,492.00 54 $530,000 $15,987 $3,344.88 $7,227.00 55 $559,000 $17,075 $10,625.04 $12,865.00 56 $567,000 $17,375 $3,603.96 $7,915.00 57 $546,000 $16,737 $3,551.16 $7,427.00 58 $528,000 $16,137 $6,750.00 $10,007.00 59 $525,000 $16,025 $10,125.00 $12,175.00 60 $533,000 $16,325 $3,533.88 $7,315.00 Exhibit C - Page 2 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued v Exhibit C - Page 3' Existing (1st year) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Interior Lots - continued 61 $588,000 $18,162 $4,436.16 $8,482.00 ES 3 $474,000 $14,225 $8,750.04 $10,325.00 ES 4 $467,000 $13,962 $3,021.96 $6,322.00 ES 5 $470,000 $14,075 $10,000.08 $11,415.00 ES 6 $468,000 $14,000 $2,982.96 $6,310.00 ES 7 $461,000 $13,737 $2,966.04 $6,057.00 ES 8 $471,000 $13,925 $3,118.08 $6,455.00 Subtotal Int.: $23,786,000 $724,637 $254,617.16 $397,807.00 Subtotal W.F.: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Grand Totals: $55,349,000 $1,885,277 $774,600.24 $1,103,027.00 Exhibit C - Page 3' Distribution of T�, s and Tax Advantage between Tidelands an,' . ands* Beacon Bay 6/6/94 - Page 2 Exhibit D (Istyear) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage Interior Lots 23 $6,297.00 0% 100% $0 $6,297 $550 $0 24 $8,897.00 0% 100% $0 $8,897 $390 $0 25 $6,977.00 5% 95% $349 $6,628 $630 $31 26 $6,942.00 99% 1% $6,873 $69 $710 $703 27 $7,102.00 100% 0% $7,102 $0 $660 $660 28 $7,785.00 100% 0% $7,785 $0 $740 $740 29 $15,470.00 0% 100% $0 $15,470 $0 $0 30 $7,102.00 0% 100% $0 $7,102 $580 $0 31 $10,515.00 30% 70% $3,154 $7,361 $660 $198 32 $7,217.00 100% 0% $7,217 $0 $620 $620 33 $7,307.00 100% 0% $7,307 $0 $650 $650 34 $8,490.00 100% 0% $8,490 $0 $730 $730 35 $7,780.00 0% 100% $0 $7,780 $580 $0 36 $7,672.00 0% 100% $0 $7,672 $590 $0 37 $15,005.00 5% 95% $750 $14,255 $0 $0 38 $7,967.00 99% 1% $7,887 $80 $0 $0 39 $11,557.00 100% 0% $11,557 $0 $0 $0 40 $13,572.00 100% 0% $13,572 $0 $0 $0 41 $7,300.00 0% 100% $0 $7,300 $510 $0 42 $7,672.00 0% 100% $0 $7,672 $590 $0 43 $13,232.00 0% 100% $0 $13,232 $0 $0 44 $7,787.00 0% 100% $0 $7,787 $630 $0 45 $7,990.00 15% 85% $1,198 $6,792 $660 $99 46 $8,492.00 0% 100% $0 $8,492 $720 $0 47 $7,365.00 0% 100% $0 $7,365 $610 $0 48 $9,305.00 0% 100% $0 $9,305 $600 $0 49 $7,197.00 0% 100% $0 $7,197 $620 $0 50 $7,240.00 0% 100% $0 $7,240 $630 $0 51 $7,857.00 0% 100% $0 $7,857 $110 $0 52 $13,927.00 0% 100% $0 $13,927 $0 $0 53 $8,492.00 0% 100% $0 $8,492 $730 $0 54 $7,227.00 0% 100% $0 $7,227 $500 $0 55 $12,865.00 0% 100% $0 $12,865 $0 $0 56 $7,915.00 0% 100% $0 $7,915 $470 $0 57 $7,427.00 0% 100% $0 $7,427 $700 $0 58 $10,007.00 0% 100% $0 $10,007 $0 $0 59 $12,175.00 0% 100% $0 $12,175 $0 $0 60 $7,315.00 0% 100% $0 $7,315 $660 $0 Beacon Bay 6/6/94 - Page 2 Exhibit D Beacon Bay 6/6/94 - Page 1 Exhibit D Distribution of Rents and Tax Advantage between Tidelands and Jpiands* (1st year) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage Waterfront Lots A $31,940.00 100% 0% $31,940 $0 $0 $0 B $22,270.00 100% 0% $22,270 $0 $930 $930 C $22,480.00 100% 0% $22,480 $0 $1,410 $1,410 1 $15,030.00 100% 0% $15,030 $0 $2,080 $2,080 2 $17,950.00 100% 0% $17,950 $0 $2,260 $2,260 3 $31,560.00 100% 0% $31,560 $0 $560 $560 4 $21,260.00 100% 0% $21,260 $0 $2,610 $2,610 5 $28,840.00 100% 0% $28,840 $0 $1,620 $1,620 6 $34,260.00 100% 0% $34,260 $0 $0 $0 7 $31,870.00 95% 5% $30,276 $1,594 $0 $0 8 $43,480.00 50% 50% $21,740 $21,740 $0 $0 9 $44,350.00 5% 95% $2,217 $42,132 $0 $0 10 $33,540.00 0% 100% $0 $33,540 $0 $0 11 $17,020.00 0% 100% $0 $17,020 $3,200 $0 12 $22,190.00 0% 100% $0 $22,190 $1,130 $0 13 $29,450.00 0% 100% $0 $29,450 $0 $0 14 $19,690.00 0% 100% $0 $19,690 $2,880 $0 15 $20,240.00 20% 80% $4,048 $16,192 $2,980 $596 16 $16,480.00 95% 5% $15,656 $824 $2,640 $2,508 17 $21,750.00 100% 0% $21,750 $0 $2,420 $2,420 18 $16,480.00 100% 0% $16,480 $0 $2,640 $2,640 19 $19,500.00 100% 0% $19,500 $0 $2,880 $2,880 20 $17,910.00 100% 0% $17,910 $0 $2,470 $2,470 21 $26,660.00 100% 0% $26,660 $0 $0 $0 22 $37,880.00 100% 0% $37,880 $0 $0 $0 ES 1 $31,920.00 100% 0% $31,920 $0 $0 $0 ES 2 $29,220.00 100% 0% $29,220 $0 $0 $0 Waterfront Subtotal: $705,220.00 $500,848 $204,372 $34,710 $24,984 Beacon Bay 6/6/94 - Page 1 Exhibit D Distribution of Rents and Tax Advantage between Tidelands and Uplands* Add Waterfront: $705,220.00 Grand Total: $1,103,027.00 % of Total: 100% (1st year) Proportionate Effective Lot No. Net Rent Interior Lots - continued 61 $8,482.00 ES 3 $10,325.00 ES 4 $6,322.00 ES 5 $11,415.00 ES 6 $6,310.00 ES 7 $6,057.00 ES 8 $6,455.00 Interior Lots $720 Subtotal: $397,807.00 Add Waterfront: $705,220.00 Grand Total: $1,103,027.00 % of Total: 100% *Effective Net Rents consider tax advantage. Discount rate for present value of annual advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6/6/94 - Page 3 Exhibit 13 Proportionate Proportionate Annual Amort. Tidelands % % Rent Rent of PV of Tax Tax Tidelands Uplands Tidelands Uplands Advantage Advantage 0% 100% $0 $8,482 $720 $0 100% 00/0 $10,325 $0 $320 $320 100% 0% $6,322 $0 $500 $500 85% 15% $9,703 $1,712 $0 $0 0% 100% $0 $6,310 $500 $0 00/0 100% $0 $6,057 $650 $0 0% 100% $0 $6,455 $410 $0 $109,592 $288,215 $19,930 $5,251 $500,848 $204,372 $34,710 $24,984 $610,440 $492,587 $54,640 $30,235 55% 45% 100% 55% *Effective Net Rents consider tax advantage. Discount rate for present value of annual advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6/6/94 - Page 3 Exhibit 13 FEMFDi'Sb.. F sees _ •'s' 4 -Pow mama Tau W4�4c! RECORDING REQUESTED BY AND�/— /.WHEN� C\R_E_CORDE_ D RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder IIII IIII III!IIIIIII!IIIIIIiI!IIIIiIIIIIIIIIIIIIIIIII IIII 13 , �0 19960013205 4:30pm 01/09/96 005 156088 17 21 IB30 M11 3 7.00 6.00 0.00 0.00 0.00 0.00 DOC TAX: 0- no consideratMEMORANDUM OF LEASE ion term of lease less than 99 years THIS MEMORANDUM OF LEASE is made and entered into by and between THE CITY OF NEWPORT BEACH, a chartered municipal corporation, herein called "Lessor", and JOEL i -i. MANvHESTER AND COLLEEN B. MANCriESTER, husband anti wife as community property, herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on Jan, 09, 1996 and ending on July 1, ties on the terms an conditions set forth in that certain lease by and between the parties hereto dated --;;9 /> 9S" , all the terms and conditions of which lease are made a part hereof as though fully set forth herein, all those certain premises in the County of Orange, State of California, described as follows: Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys in the Office of the County Recorder, County of Orange, State of California. (See attached Amendment on Legal Description.) EXECUTED on eP/rJ��/^ �919�s at Newport Beach, Orange Count , California. Y ATTEST: /122-U- IS.'UK fat CITY CLERK jTY VED AS TO FORM: TORNEY LESSOR THE CITY OF NEWPORT BEACH vin J. Murphy Lessee': Joel H. anchester Lessee: Colleen B. Manchester STATE OF CALIFORNIA COUNTY OF ORANGE On December 22, 1995 ) ss. before me, Diane Simmons in and for said County and State, personally appeared Joel H. Manchester and a Notary Public Colleen B. Manchester personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my and official seal DANE SIMMONS COMM. f 1011239 Z Notary Public — CaNtornfa a V� ORANGE COUNTY Signature: My Comm, Expires DEC 19, 1997 1 STATE OF /irn /i "'e- ss. COUNTY OF rah Onace277/J I, C�Q /� �s before me, Q57/a a 17ez' �W!% D �/� a Notary Public in and for said County and State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the persou(<whose name is are subscribed to the within instrument and acknowledged to me that�she/they executed the same i 1 her/their authorized capacity�eand that by (gPher/their signature(<on the instrument the person(Wor the entity upon behalf of which the person acted, executed the instrument. WITNESS my and official seal S 3 U ES.i •,F Shauna Lyn Oyler > COMM #1002681 c`� : o NOTARY PUBLIC CALIFORNIA G ORANGE COUNTY `) A Comm Expires Aug 22, 1997I -A Alta Plain Language Commitment OR -9516559 TITLE OFFICER - LOPEZ ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF NEWPORT BEACH, DESCRIBED AS FOLLOWS: A PARCEL OF LAND SITUATED IN THE NORTHWEST QUARTER OF SECTION 35, TOWNSHIP 6 SOUTH, RANGE 10 WEST, S. B. B. & M., DESCRIBED AS FOLLOWS: BEGINNING AT A POINT, SAID POINT BEING SOUTH 39° 48' EAST DISTANT 88.97 FEET AND NORTH 230 57' 30" EAST DISTANT 66.34 FEET FROM U.S. BULKHEAD STATION NO, 136, AS SAID U.S. BULKHEAD STATION IS SHOWN ON Il1AP ENTITLED "HARBOR LINES, NEWPORT BAY HARBOR_ CALIFORNIA", AS APPROVED MAY 2, 1936 BY THE SECRETARY OF WAR AND ON FILE IN THE OFFICE OF THE DISTRICT ENGINEER, LOS ANGELES, CALIFORNIA, RUNNING THENCE NORTH 230 57' 30" EAST A DISTANCE OF 60 FEET; THENCE SOUTH 39° 48' EAST 146.59 FEET TO A POINT IN THE NORTHWEST LINE OF HARBOR ISLAND DRIVE; THENCE SOUTH 18° 03'45 " WEST ALONG THE NORTHWEST LINE OF HARBOR ISLAND DRIVE, A DISTANCE OF 30 FEET; THENCE NORTH 510 35' 55" WEST A DISTANCE OF 138.95 FEET TO THE POINT OF BEGINNING. b 'mm was= 9, ? :fia Ta& IC RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 recoraea in the county of orange, caiifornia Gary L. Granvilll�l it IlClerk/Recorder 13, 00 19960013204 4 ; 30pm 011109/96 005 156083 17 21 IB30 T03 3 7.00 6.00 0.00 0.00 0.00 0.00 TERMINATION OF LEASEHOLD 10 q This agreement is made this -elz day of 1995, by and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and DAVID �1 A. FREIMANN AND KERRY L. FREIMANN, hereinafter called "Lessee". RECITALS A. Lessor and Lessee executed a lease on July 1, 1994, and subsequently recorded July 8, 1994, by the County Recorder of Orange County, California as Instrument No. 94-0446196. By the terms of the lease, the following described property was leased to Lessee until July 1, 2044. Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys in the Office of the County Recorder, County of Orange, State of California. B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AGREEMENT Lessee agrees to terminate the lease and vacate the premises as described herein above as of Jan 09, 1996 , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. CITY OF NEWPORT BEACH 1-1 Lessor: K6virf J. Murohy�/City Manager 7 BY: �� 9 Lessee:'David A. Freimann Lessee: Kerry �(Freimann STATE OF CALIFORNIA COUNTY OF ORANGE On December 20, 1995 ) ss. before me, Diane Simmons in and for said County and State, personally appeared David A. Freimann and a Notary Public Kerry L. Freimann personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/slie/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my and official seal ✓._.___............. _ ..__� DIANE SIMMONS .;4• ;,': COMM. # 1011239 Notary Public — Colifomia v �_ ORANGE COUNTY Signature: /�Z� My Comm. Expires DEC 14.1997 STATE OF ( ,"7. � ss. COUNTY OF"ra �i On Pm b er a % /%9S before me, Y,J �QC[- /'I Q� !ifecIle"i— a Notary Public in and for said County and Slate, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person`(, whose naive 1`s/ re subscribed to the within instrument and ac iowledged to me thaljh he/they executed the same <71her/their authorized capacityomkl and that by his er/their signature(-.kon the instrument the person(5 or the entity upon behalf of which the person acted, executed the instrument. WITNESS my and official seal k 3 Shauna Lyn Oyler ¢ Comm #1002681 NOTARY PUBLIC CALIFORNIA^ GC ° ORANGE COUNTY Fo Comm Expires Aug 22, 1997 Alta Plain Language Commitment OR -9516559 TITLE OFFICER - LOPEZ ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF NEWPORT BEACH, DESCRIBED AS FOLLOWS: A PARCEL OF LAND SITUATED IN THE NORTHWEST QUARTER OF SECTION 35, TOWNSHIP 6 SOUTH, RANGE -10 WEST, S. B. B. & M., DESCRIBED AS FOLLOWS: BEGINNING AT A POINT, SAID POINT BEING SOUTH 39° 48' EAST DISTANT 88.97 FEET AND NORTH 230 57' 30" EAST DISTANT 66.34 FEET FROM U.S. BULKHEAD STATION NO. 136, AS SAID U.S. BULKHEAD STATION IS SHOWN ON MAP ENTITLED "HARBOR LINES, NEWPORT BAY HARBOR, CALIFORNIA", AS APPROVED MAY 2, 1936 BY THE SECRETARY OF WAR AND -ON -FILE -IN -THE OFFICE OF THE DISTRICT ENGINEER, LOS ANGELES, CALIFORNIA, RUNNING THENCE NORTH 23- 57' 30" EAST A DISTANCE OF 60 FEET; THENCE SOUTH 39° 48' EAST 146.59 FEET TO A POINT IN THE NORTHWEST LINE OF HARBOR ISLAND DRIVE; THENCE SOUTH 18° 03'45 " WEST ALONG THE NORTHWEST LINE OF HARBOR ISLAND DRIVE, A DISTANCE OF 30 FEET; THENCE NORTH 51 ° 35' 55" WEST A DISTANCE OF 138.95 FEET TO THE POINT OF BEGINNING. LEASE THIS LEASE is made and entered into as of the 36 t'day o�Wi 1994, by and between the CITY OF NEWPORT BEACH, a Charter City and cipal corporation ("Lessor"), and �llAd + A • �'yflt vin &O vi yr v vy t • V i v,n�lnv, ("Lessee"), regarding the real property commonly referred to as Beacon Bay Lot A . RECITALS A. The City of Newport Beach, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978 (the "Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly known as Beacon Bay and generally described in Exhibit A attached hereto and incorporated by reference. B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and specifically authorizes the lease of the property for residential purposes subject to certain express statutory conditions. C. Beacon Bay, including the "Westerly Portion" thereof, has been divided into individual lots, with each lot leased by the City for residential purposes until December 31, 2005. D. On November 3, 1987, a majority of electors of the City approved a measure which authorized the City Council to enter into new leases of residential lots in Beacon Bay for a period not to exceed fifty (50) years. E. On November 3, 1992, a majority of electors of the City approved Measure M which authorized the City Council to lease tidelands and waterfront property consistent with the provisions of state law. F. The City Council, pursuant to the authority conferred by the electors, entered into negotiations with. current lessees and the parties have agreed on the terms and conditions of a new lease with a fifty (50) year term, provision for adjustments in lease payments to reflect changes in the value of Beacon Bay leaseholds, and a recalculation of lease payments in the event of a transfer of the Lease by the Current Lessee or any Subsequent Lessee (as defined herein). G. Lessee acknowledges that the terms and conditions of this Lease may result in Lessee paying substantially more or less than another Lessee for similar property depending upon the date this Lease is executed, the date of any subsequent transfer, and the consideration paid for transfers of similarly situated property. H. Lessee acknowledges that accurate and complete reporting to the City of all consideration paid for the transfer of this Lease is vitally important to the City in that failure to fully report all consideration could materially reduce the amount of rent received by the City from other Beacon Bay Lessees. I. Lessor and Lessee acknowledge that the City has agreed to a fifty (50) year term and limited lease payment increases in consideration of provisions which require payment of rent approximating fair market rental value, without regard to any advantage maintained by Current Lessees, upon transfer by Current Lessees and payment of deferred rent in the event the Lease is not signed on or before the Effective Date (as defined herein). J. The California State Lands Commission has reviewed the form of this Lease and determined that it is in conformance with the provisions of relevant statutes, rules and regulations, including, without limitation, the Beacon Bay Bill. NB1-187371.V2 1 05/24/94 se is consistent with ovisions of thBeacon Bay General Plan and Zoning Ordinance of the City of Newport Breach and of al other applicable Charter, GeeK. LethiBill, to C and local laws. L. it is in the best Lessorharacte of B afcon Bay and to enter interests e ach to maintain the nto new le ses with Current Lesse e runder the terms and residential c conditions specified in this agreement. NOW, THEREFORE, in consideration of the foregoing recitals and the covenants in this lease, the parties agree as follows: LEASED LAND. Lessor hereby leases to Lessee the real property commonly known as Beacon Bay Lot (the "Leased Land"), which is more particularly described in Exhibit B, and generally depicted on Exhibit A, each attached hereto and incorporated by reference, subject to the limitations on use specified in Section 6. As used in this Lease, the term "Premises" shall refer to the Leased Land and any improvements constructed thereon. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Leased Land 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 for the exploration, development, production, extraction and taking of any such substance 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 producon of, oil, gs, minerals, petroleum aort Beaeh City Charteaor the Newport Beach Mu d ipal Codeother �rocarbon New substances specified in the p 2. TERM. The term of this Lease shall commence on the Execution Date, but in no event prior to the Effective Date, and shall expire on the date fifty (50) years following the Effective Date, unless earlier terminated as provided in this Lease. 3. RENTAL. A. Definitions. For the purposes of this Lease, the following terms shall be defined as specified in this paragraph. In certain cases, the definition of the term contains op®rative language that affects the rights of the parties: (1) "Actual Sales Value" shall mean the total of all consideration paid for. the non-exempt transfer of this Lease or the Pre-existing Lease, including the improvements on the Leased Land, from the Current Lessee, or Subsequent Lessee, to another person, excluding any consideration paid for the transfer of personal property in connection with such transaction. (2) Average Actual Sales Value Rent" shall mean two and one-half percent (21/z%) of the mean of the Actual Sales Value of the non-exempt transfer of a similarly situated (waterfront or interior) Beacon Bay parcels as specified in this subparagraph. Average Actual Sales Value Rent shall be the mean of the Actual Sales Value of the three similarly 2 os/2a/9a NB1-187371.V2 situated parcels most recently transferred. Exempt transfers, as defined in Paragraph 3.B(3), shall not be used to calculate Average Actual Sales Value rent. (3) "CPI" shall mean the Consumer Price Index - Los Angeles -Anaheim -Riverside Area, All Urban Consumers, All Items, published by the United States Department of Labor, Bureau of Labor Statistics (1982-1984=100). If the 1982-1984 base of said Consumer Price Index should hereafter be changed, then the new base shall be converted to the 1982-1984 base and the base as so converted shall be used. In the event that the Consumer Price Index, as now compiled and published, shall cease to be published, then the successor index shall be used provided that an appropriate conversion from the old index to the new index can feasibly be made. If such conversion cannot be made, or if no such index is published, then another index most nearly comparable thereto recognized as authoritative shall be substituted by agreement. (4) "Current Lessee" shall mean the person or persons who, as of April 1, 1994 (the "Cut-off Date"), was or were the Lessee under the Pre-existing Lease. (5) "Deferred Rent" shall mean the total rent that a Current Lessee would have paid had this Lease been executed on the Effective Date, through and including the date on which this Lease was first executed, less the rent actually paid pursuant to the Pre-existing Lease, together with interest at the rate of eight percent (8%) per annum calculated on the balance due at the end of each Lease Year or portion thereof. (6) "Effective Date" shall mean July 1, 1994. (7) "Execution Date" shall mean the date when this Lease is executed by Lessee. (8) "Initial Rent" shall mean the effective net rent for the Leased Land as determined by the appraisal of George Hamilton Jones, with due consideration to the leasehold advantage created by the Pre-existing Lease, all as shown on Exhibit C attached hereto and incorporated herein by reference. (9) "Person" shall mean any natural person or natural person(s) and does not include any corporation, association, or business entity in any form except a financial institution or other bona fide lender acting in the capacity of a lender or an inter vivos or living trust. (10) "Pre-existing Lease" shall mean the Lease for the Leased Land which was effective on January 1, 1988, and would, absent this Lease, expire on July 1, 2006. 4 (11) "Transferred" shall mean any sale, assignment, sublease or other transaction, other than an exempt transfer as defined in Paragraph 3.6(3), pursuant to which the right to possession of the premises and the right to sign a new lease identical to this Lease is transferred to another person. B. Rental Payments. Lessee shall pay annual rent in the sum ofkh'�� nn� k%ovs►n� hone, w. aA&"($ 31 I CIAO. 00 ), payable at the rate of4w, 4t6b68hkii Inu,AA 4x.4y nne 1,1/,o ($ 26,, t . ),7 ) p r month. Lessee shall also pay, if applicable, deferred rent 'in the sum ($ ) upon execution of this Lease. Rent shall shall not circle one) be adjusted every seven (7) years after the date of transfer in accordance with provisions of Paragraph 3.6(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: NBI-187371.V2 v 05/24/94 (1) Execution Before Effective Date. In the event this Lease is executed by the Lessee on or before the Effective Date, Rent shall be paid as follows: (a) Current Lessee: Current Lessee shall pay annual rent equal to Initial Rent as specified in Exhibit C. Thereafter, so long as there has been no.transfer of this Lease by the Current Lessee (other than an exempt transfer as set forth in Paragraph 3.B(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.B(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (21/2%) of the Actual Sales Value determined as of the date of the transfer in accordance with the provisions of paragraph 3.A(1). Thereafter, rent shall be adjusted every seven years after the date of the transfer in accordance with the provisions of paragraph 3.B(4). (c) In the event of any transfer of this Lease to a Subsequent Lessee in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.6(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). (2) Execution After the Effective Date. In the event this Lease is first executed after the Effective Date, rent shall be determined and paid as follows: (a) Current Lessee/Within Five Years After Effective Date: In the event this Lease is executed by the Current Lessee within five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Initial Rent plus a sum calculated by multiplying the difference between Initial Rent and Average Actual Sales Value Rent by a fraction equal to the number of months between the Effective Date and Execution Date, divided by sixty. The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee, rent shall remain as specified in this subparagraph, notwithstanding the provisions of Paragraph 3.B(4). (b) Current Lessee/More Than Five Years After Effective Date: In the event this Lease is executed by the Current Lessee more than five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Average Actual Sales Value Rent calculated as of the date of execution in accordance with the provisions of Paragraph 3.A(2). The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, rent shall be adjusted every seven (7) years after the date of execution in accordance with the provisions of Paragraph 3.B(4). (c) Subsequent Lessee: In the event the Current Lessee transfers the Pre- existing Lease to a Subsequent Lessee who wishes to sign this Lease after the Cut- NB1-187371.V2 - 4 05/24/94 off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (21/2%) of Actual Sales Value determined as of the date of execution and in accordance with Paragraph 3.A(1). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.13(4). (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.13(4). (3) Exempt Transfers. The provisions of Paragraph 3.13 regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or NB1-187371.V2 D 05/24/94 (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.6(I)(a), 3.13(2)(a) and 3.6(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage increase or decrease, if any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (i) the Execution Date, or (ii) the last rental adjustment date. Lessor shall endeavor to notify Lessee of rental adjustments at least forty-five (45) days prior to the end of each seventh (7th) lease year; provided, however, failure of Lessor to give forty-five (45) days' notice does not relieve Lessee from the obligation to pay increased rent or the right to pay less rent in the event of a decrease in the CPI; and, provided further, that Lessee shall have no obligation to pay rent increases which apply to any period greater than ninety (90) days prior to the receipt by Lessee of Lessor's notice of an increase in rent. (b) In the event Lessee is two or more persons owning the leasehold estate created hereby as tenants in common or joint tenants, and less than all of such persons transfer their interest in this Lease to a person other than to an existing tenant in common or joint tenant, the rent adjustment shall be prorated to reflect the percentage interest being transferred to a third party. For example, if two persons are the Lessee as tenants in common as to equal one-half interests, and one of such persons transfers his/her 50% interest to a third party, the rent shall be adjusted as provided in Paragraph 3.6(2)(c), and thereafteivas provided in Paragraph 3.6(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 3.6(3). (5) Installment Payments/Grace Period. Lessee shall pay rent in equal monthly installments, in advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (15th) day of the month for which the payment is made ("Grace Period") . If a rent payment, or any portion thereof, is received by Lessor after NB1-187371.V2 6 05/24/94 expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to the City of Newport Beach and sent, or delivered, to the Finance Director at the address specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or currency to the United States as at the time of payment is legal tender for public and private debts. Lessor and Lessee agree that late charges specified in this paragraph represent a fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 13 of this Lease. Any failure by Lessor to declare a default and initiate termination of this Lease due to a late or missed payment shall not be considered a waiver of the right of Lessor to do so for that or any other late or missed payment. C. Credit to Tidelands Fund. In calculating Initial Rent under this Lease, a credit was given to certain of the Current Lessees equal to the annual amortization of the present value of the additional property tax to be paid by such lessees during the remaining period of the Pre-existing Lease. This credit, commonly referred to as the "tax advantage", is shown on Exhibit D for each affected lot. This credit was extended by Lessor to Current Lessees as consideration for entering into this Lease. As a consideration in its approval of this Lease, the California State Lands Commission required Lessor to credit its State supervised Tidelands Trust Fund by an amount equivalent to the tax advantage derived from those lots in Beacon Bay comprising tidelands. This amount is shown on Exhibit D for each affected lot comprising tidelands. Accordingly, Lessor has unilaterally agreed to annually calculate the amount of such tax advantage derived from the tidelands parcels in Beacon Bay and to credit an equivalent amount as revenue to the State supervised Tidelands Trust Fund. This provision is included in this Lease to acknowledge the agreement of Lessor with the California State Lands Commission, and does not affect the rights and obligations of Lessor or Lessee under this Lease. 4. TRANSFERS. A. Conditions Precedent to Transfer. Lessee may transfer this Lease subject to the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or conditioned. Lessor shall consent to any transfer when Lessee and the proposed transferee have complied with the following: (1) Lessee shall furnish Lessor with executed copies of each and every document used to effect the transfer. (2) Lessee or the proposed transferee shall pay to Lessor a transfer fee of one hundred dollars ($100.00); .A; (3) Lessee shall execute a 'Termination of Leasehold Interest' for recordation; and (4) The proposed transferee shall execute a new lease and execute a "Memorandum of Lease" for recordation, which lease shall be identical to this Lease and have a term equal to the remaining term of this Lease at the time of the transfer. B. Transfer Information. The parties to any non-exempt transfer of this Lease shall provide Lessor with all information relevant to a determination of the total consideration paid for the transfer, as well as all documents which are relevant to the total consideration paid for the transfer. Lessee and the proposed transferee shall provide this information not later than forty-five (45) days prior to the proposed effective date of the transfer of this Lease. Lessor shall have the right, at its sole discretion, to commission an appraisal of the fair market value of this Lease and improvements NB1-187371.V2 1 05/24/94 thereon as of the date of transfer. Any such appraisal shall be completed not later than thirty (30) days after receipt by Lessor of the aforementioned information from the Lessee. If the value determined by the appraiser commissioned by Lessor exceeds the stated total consideration to be paid based on the information received from the Lessee by more than ten percent (10%), Lessor shall so notify the Lessee and provide Lessee with a full copy of such appraisal report, and said value shall be deemed the Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments unless within fifteen (15) days after receiving such:notice and the report the Lessee notifies Lessor that Lessee elects to cause an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer to be conducted by an independent appraiser. In such event, Lessee cause such appraisal to be completed no later than thirty (30) days after the notice to Lessor and shall provide Lessor with a full copy of the appraisal upon completion. The Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments shall be the greater of (i) the stated consideration for the transfer, or (ii) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.13 shall be conducted by an MAI appraiser licensed to conduct business in the State of California and experienced in residential appraisals in Southern California. C. Exempt Transfer Information. Lessor's consent is not required for the "exempt transfers" referenced in Paragraph 3.B(3); provided, however, Lessee shall furnish Lessor with copies of all documents used to effect any exempt transfer. D. Audit of Subleases. It is the intent of the parties that transfers referred to in Section 3.13(3)(e) shall only be exempt from the further provisions of Paragraph 3.13 (in respect of rental adjustments) if such subleases are not substantially equivalent to, do not have substantially the same economic effect as, or are intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee. Lessor shall at all times have the right, upon written request to the Lessee, to receive copies of all written agreements, and to be advised in full of all oral agreements, between the Lessee and any sublessee of the Leased Land. Any purported sublease of the premises which is determined to be substantially equivalent to, or have substantially the same economic effect as, or is intended to disguise, a transfer by the then Lessee of all or substantially all of his/her interest in this Lease to the putative sublessee shall be void and of no force or effect, and such attempted or purported sublease shall, at the option of Lessor, (i) be an event of default by the Lessee under this Lease, or (ii) permit Lessor to treat such sublease as a transfer of this Lease subject to the provisions of Section 3.6. 5. ENCUMBRANCES. A. Right to Encumber. Lessee may encumber this Lease by deed of trust, mortgage, or similar instrument, in favor of any bona fide lender ("Lender") 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 Premises 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 Leased Land. 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. B. Notice to Lender. Lessor shall have no obligation to give any Lender any written notice pursuant to this Lease unless the Lender has given Lessor written notice of its name, address, and nature of encumbrance ("Complying Lender) . 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 8 05/24/94 N81 -187371.V2 under this Lease. Notice shall be deemed given by Lessor to Lender five (5) days following deposit in the United States mail, certified and return receipt requested, postage prepaid, and sent to Lender at the address furnished in writing by Lender. C. Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this Lease by mutual agreement without the prior written consent of Lender. D. Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on this Lease and the leasehold estate created hereby shall have the right, during the term of the Lease, to: (1) perform any act required of Lessee pursuant to this Lease; (2) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor. Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults requiring the payment or expenditure of money by Lessee. E. Right of Lender to Cure Default. Lessor shall give written notice of any default or breach of this Lease by Lessee to Lender and afford Lender the opportunity, after notice, to: (1) cure the breach or default within ten (10) days after expiration of the time period granted to Lessee for curing the default if the default can be cured by payment of money; (2) cure the breach or default within thirty (30) days after expiration of the time period granted to Lessee for curing the default when the breach or default can be cured within that period of time; or (3) cure the breach or default in a reasonable time when something other than money is required to cure the breach or default and cannot be performed within thirty (30) days after expiration of the time period granted to Lessee for curing the default, provided the acts necessary to cure the breach are commenced within thirty (30) days and thereafter diligently pursued to completion by Lender. F. Foreclosure in Lieu of Cure. Lender may forestall termination of this Lease for a default or breach by Lessee by commencing foreclosure proceedings subject to strict compliance with the following: •�. (1) proceedings are commenced within thirty (30) days after the later of (i) expiration of the time period granted to Lessee for curing the default, or (ii) service on Lender of the notice describing the breach or default; (2) the proceedings are diligently pursued to completion in the manner authorized by law; and (3) Lender performs all of the terms, covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until the proceedings are complete or are discharged by redemption, satisfaction, payment or conveyance of this Lease to Lender. N81 -187371.V2 9 05/24/94 G. 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: (1) the written request for the new lease is served on Lessor by Lender within thirty (30) days after the termination of this Lease. (2) 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. (3) 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. (4) 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 premises from Lessee, in preparing the new lease. H. Miscellaneous. The following provisions shall apply to Lessor, Lessee and any Lender: (1) 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; (2) 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. 6. USE AND MAINTENANCE. A. Use of Leased Land. The Leased Land shall be solely for residential purposes. Lessee may demolish, construct, remodel, reconstruct and maintain structures on the Leased Land for residential purposes so long as the structures and construction are authorized by appropriate City permit 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 California Coastal Commission and any other state agency if required by law. B. Maintenance of Improvements. Lessor shall not be required to makes any changes, alterations, additions, improvements, or repairs in on or about all or part of the Premises. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain, the Premises, 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 repair or reconstruct any improvements on the Leased Land following any damage or destruction thereof, unless the improvements are being destroyed in conjunction with remodeling or reconstruction and Lessor has consented, in writing, to the damage or destruction. Lessee shall cause to be constructed, maintained and repaired all utilities, pipes, walls, sewers, drains, and other improvements on the Premises to the extent required by law or as necessary to maintain the improvement in good order and repair and safe and sanitary condition. C. Compliance with Laws. Lessee shall make, or cause to be made, any additions, alterations or repairs to any structure or improvement on the Premises which may be required by, and Lessee NB1-187371.V2 10 05/24/94 shall otherwise observe and comply with, any law, statute, ordinance, plan, resolution or policy applicable to the Premises. Lessee shall indemnify, defend and hold Lessor harmless from and against any loss, liability, action, claim or damage, arising out of, or in any way related, to Lessee's failure to comply with, and perform pursuant to, provisions of this subparagraph C. All repairs, additions, and alterations to the structures or improvements on the Premises shall conform to all applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. D. As Is Condition of Premises. Lessee expressly accepts the Premises "as is" and acknowledges that Lessor has made no representations or warranties as to the suitability of the property or any construction or improvement. Lessee shall conduct all tests necessary to determine the suitability of the property for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. Lessee expressly acknowledges that Lessor shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Premises or adjacent property. Lessee expressly acknowledges that, while the legislature of the State of California has purportedly removed the public trust restrictions on use of the Property pursuant to the Beacon Bay Bill, the Leased Land may constitute filled tidelands, and Lessor has made no representation or warranty relative to the validity of the Beacon Bay Bill or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease, Lessor agrees, at its sole cost and expense, to use all reasonable efforts to resist and defend against such challenge and to seek a ruling or judgment affirming and upholding the right and power of Lessor to lease the Leased Land for the purposes provided in this Lease. 7. TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease shall give rise to a possessory interest tax obligation and that the execution of this Lease will constitute a reassessment event which may give rise to a material increase in the possessory interest tax currently payable by Lessee under the Pre-existing Lease. Lessee shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, and/or any improvements, including, without limitation, any possessory interest tax. Any lien for unpaid utilities, taxes, assessments or charges shall not attach to the leasehold interest but only to improvements located on the Leased Land. 8. USE AND MAINTENANCE OF COMMON AREA. Lessee shall have the right to use the streets, beaches, walkways, tennis courts, docks, piens, and common landscaped areas in Beacon Bay (as depicted on Exhibit A) and which are leased to the Beacon Bay Community Association by Lessor in consideration of the maintenance thereof by such Association and rent to be paid by individual Lessees under their respective leases. 9. MAINTENANCE AND IMPROVEMENT OF INFRASTRUCTURE. Lessor has no obligation to install, improve, repair, or maintain streets, curbs, gutters, water lines, sewer lines, drainage facilities, street lighting or other facilities used by the residents of Beacon Bay (Infrastructure). Notwithstanding Section 8 above, Lessor reserves the right, after a five (5) year period following the Effective Date and upon approval by the Lessees representing a majority of the lots in Beacon Bay, to improve and maintain streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for NB1-187371.V2 11 05/24/94 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. 10. COMMUNITY ASSOCIATION. A. 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 Agreement, Lessee agrees to become, and during the term of this Lease to remain, a member in good standing of the Beacon Bay Community Association. B. Compliance with Rules and Regulations. Lessee agrees to abide by the Articles of Incorporation, bylaws, 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 Paragraph A and this Paragraph B shall constitute a material breach of this Lease. C. Lessor Maintenance of Common Areas. In addition to the rights reserved to Lessor pursuant to the provisions of Section 9, if the Community Association fails or ceases to maintain community facilities, Lessor may, at its option and without obligation, assume the obligations of the Community 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 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. 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit D attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 12. INDEMNIFICATION. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards anek Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim.or suit, arising out of, or in anyway related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to NBI-187371.V2 12 05/24/94 persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. A. General Conditions. All insurance required to be carried pursuant to this Section 13 shall be obtained from reputable carriers licensed to conduct business in the State of California. Each policy required to be carried pursuant to this Section 13 shall name Lessee and Lessor as additional named insureds, and shall provide that the policy may not be surrendered, cancelled or terminated, or coverage reduced, without not less than twenty (20) days prior written notice to Lessor. B. Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and improvements on the Leased Land against loss or damage by fire or other risk for residential structures. The insurance shall provide coverage to at least ninety percent (90%) of the full insurable replacement value of all improvements on the Leased Land, with the loss payable to Lessee unless this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance shall be paid to Lessor. C. Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain during the term of this Lease, a broad form comprehensive coverage policy of public liability insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way related to, the condition, for Lessee's use and occupation, of the premises in amounts not less than: (1) $500,000 per occurrence for injury to, or death of, one person; (2) $100,000 for damage to or destruction of property. 14. DEFAULT. A. Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: (1) the abandonment of the Premises by Lessee; (2) the failure by Lessee to make any payment of rent when due if the failure continues for three (3) days after written notice has been given to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable unlawful detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice.iequired by this paragraph; (3) the failure by Lessee to perform any of the provisions of this Lease and any Exhibits attached hereto to be performed by Lessee, other than described in Paragraph 14.14(2) above, if the failure to perform continues for a period of thirty (30) days after written notice thereof has been given to Lessee. If the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall. not be in default if Lessee commences the cure within said thirty (30) day period and thereafter diligently prosecutes the cure to completion; or (4) the failure of Lessee to provide Lessor with all relevant information regarding the total consideration paid in conjunction with any transfer of this Lease; NB1-187371.V2 13 05/24/94 (5) 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 slxry (60) days; the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises 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 Premises or of Lessee's interest in the Lease, where such seizure is not discharged within thirty (30) days. Notices given under this Paragraph 14.A 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. B. Landlord's Remedies. In the event of any default by Lessee as defined in Paragraph 14.A, Lessor may, in addition to any rights or remedies permitted by law, do the following: (1) Terminate Lessee's right to possession of the Leased Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises 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 California Civil Code, or any other provision of law, including, without limitation, the following: (a) The worth at the time of award of the amount by which the unpaid rent and additional rent for the balance of the term after the time of award exceeds the amount of the loss than Lessee proves could be reasonably avoided; and (b) 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) reasonable attorneys' fees, 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 ten percent (10%) per annum from the date amounts accrue to Lessor. The worth at the time of awartil: of the amount referred to in clause (i) shall be computed by discounting such amount at one percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) 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 Premises 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 Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. 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 Premises, the reletting shall not relieve Lessee N81 -187371.V2 1 14 05/24/94 of any obligation pursuant to this Lease; provided, however, Lessor shall apply the rent or other proceeds actually collected by virtue of the reletting against amounts due from Lessee. Lessor may execute any agreement reletting all or a portion of the leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (3) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amount specified in Paragraph 14.13(1). C. Default By Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligation. If the nature of Lessor's obligation is such that more than thirty (30) days are required for performance, then Lessor shall not be in default if Lessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. D. Stay of Obligations. Neither party shall be under any obligation to perform or comply with its obligations pursuant to this Lease after the date of any default by the other party. E. Determination of Rental Value. In any action or unlawful detainer commenced by Lessor, the reasonable rental value of the Leased Land shall be deemed to be the amount of rent and additional rent (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless Lessor/Lessee shall prove to the contrary by competent evidence. F. Waiver of Rights. The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other party. Lessor's acceptance of any rent shall not be considered a waiver of any preexisting breach of default by Lessee other than the failure to pay the particular rent accepted regardless of Les&or's knowledge of the preexisting breach of default at the time rent is accepted. G. Waiver of Right of Redemption. Lessee waives any right of redemption or relief from forfeiture pursuant to Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to`any existing or future statutory or decisional law in the event Lessee is evicted or Lessor takes possession of the Premises by reason of Lessee's default. 15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. A. Surrender of Premises. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Leased Land. Lessor, at its sole discretion, may record a document evidencing the expiration or NB1-187371.V2 15 05/24/94 termination of the leasehold interest. Lessee waives any right to receive relocation assistance or similar form of payment. B. 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 Leased Land all buildings and improvements built or installed on the Leased Land. 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 Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.6, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shall mean the taking of the entire Premises under the power of eminent domain or the taking of so much of the Leased Land as to prevent or substantially impair the use thereof by Lessee for the residential purposes. (2) The term "partial taking" shall mean the taking of a portion only of the Premises which does not constitute a total taking as defined above. (3) 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. (4) The term "date of taking" shall be the date upon which title to the Premises or portion thereof passes to and vests in the condemnor. B. 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 Leased Land or the portion thereof taken shall cease and terminate as of the date of taking of said Leased Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attributable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation thereto. zii C. Allocation of Award - Total Taking. All compensation and damages awarded for the total taking of the Premises and Lessee's leasehold interest therein shall be allocated as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of the expiration of the term of this Lease; and 16 05/24/94 NB1-187371.V2 (b) The present worth of rents due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of one dollar ($1.00) per annum at nine percent (9%) per annum compound interest (Inwood Coefficient) for the number of years in such period. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. D. Allocation of Award - Partial Taking. All compensation and damages awarded for the taking of a portion of the Leased Premises shall be allocated and divided as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The proportionate reduction of the fair market value of the Premises as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such proportionate reduction in fair market value by the factor for the present worth of one dollar ($1.00) at nine percent (9%) per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (b) The present worth of the amount by which the rent is reduced computed by multiplying the amount by which the annual rent is reduced by the factor for the present worth of $1.00 per annum at 9% per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the Fair Market Rental Value of the Premises at the date of taking bears to the Fair Market Rental Value of the Premises immediately thereafter. 17. ATTORNEYS' FEES. Should either party be required to employ counsel to enforce the terms, conditions and ggvenants of this Lease, the prevailing party shall recover all reasonable attorneys' fees and charges (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 18. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other. NB1-187371.V2 17 05/24/94 19. 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. 20. 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 Leased Land. 21. 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 Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659-1768, 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 residence or business address furnished by Lessee; or C. If the Lessee is absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land; or D. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Premises and also sending a copy through the mail addressed to the Lessee. 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. 22. HOLDING OVER. 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 expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The parties agree this Lease cannot be renewed, extended, or in any manner modified except in a writing signed by all parties. However, if Lessee, or anyone claiming under Lessee, shall remain in possession of the Premises after expiration of the term of this Lease without any agreement in writing between the parties and Lessor accepts rent from Lessee, then Lessee shall be deemed a tenant from month-to-month subject to the provisions of this Lease insofar as they may be applicable to a month-to-month tendency. The month-to-month tendency may be terminated by Lessor or Lessor upon thirty (30) days' prior written notice to the other. N81 -187371.V2 18 05/24/94 23. QUIET ENJOYMENT. Lessor covenants and agrees that Lessee, upon paying the rent set forth herein and observing and keeping all covenants and agreements to be observed or kept by Lessor hereunder, shall quietly have and enjoy the Leased Land during the term of this Lease without hindrance or molestation by anyone claiming by or through Lessor. 24. SEVERABILITY. If any term or provision of this Lease shall, to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 25. MISCELLANEOUS. A. Representations. Lessee agrees that no representations as to the Premises have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agrees and acknowledges that this document contains the entire agreement of the parties, that there are no verbal agreements" representations, warranties or other understandings affecting this agreement, and Lessor and Lessee, as a material part of the consideration of this Lease, waives all claims against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. B. Inurement. Each and all of the covenants, conditions and agreements herein contained shall,' in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors and administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. C. Joint Several Liability. If Lessee consists of more than one person, the covenants, obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants, obligations and liabilities of such persons. D. Captions. The section and paragraph captions used in this Lease are for the convenience of the parties and shall not be considered in the construction or interpretation of any provision. E. Gender. In this Lease, the masculine gender includes the feminine and. neuter and the singular number includes the plural whenever the context so requires. N81 -187371.V2 19 05/24/94 IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first above written. PC) iv �lo v ATTEST: c'It/ Folp, P CITY CLERK/ APPR07D AS TO FORM: ITY ATTORNEY LESSOR: CITY OF NEWPORT BEACH, By: Title: MAYOR LESSEE: i✓�Jc.. n �j . FhG'i M�.e�e-� NB1-187371.V2 20 - _ 05/24/94 �- � � � � �— �--� M f r r • rN• of r. Z_ t} -� 0 C 7 cr% M C; (tA .^ Y 414 f -11 30 s. A i SOe � �` N � ••� � r- IS. . c • I mac+ °f .^Y 9 ` .��.n6 O n Q � Z c s V `� �a 00 1�� y F d �PeF+ IN lrT�1 Q �p to V 4, a P� • •°°� ,be �°" n ?L . 4 IKI a v t 1 d d P+ 1 °0 k 00 m y All O \4 c er G ti r 170. .17 poAO M ►ea; c NDe 05S �0 .1100 [� fJ M �r1 � "�� •IjS• p Na Es �JON6. M •g 193 - i�1 � � _ 't�f' DIS •5�,.3 `000, � b�.`c'J`' / • ■ Exhibit A sls EXHIBIT B Beacon Bay Lot _A, described as follows: Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued SUMMARY OF VALUE INDICATIONS: Existing (Istyear) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Water Front Lots A $1,330,000 $48,520 $23,125.08 $31,940.00 B $1,200,000 $43,320 $12,506.85 $22,270.00 C $1,031,000 $37,560 $16,625.04 $22,480.00 1 $947,000 $34,200 $8,020.80 $15,030.00 2 $1,131,000 $41,640 $8,825.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 $31,560.00 4 $1,318,000 $49,120 $10,458.96 $21,260.00 5 $1,341,000 $50,120 $20,012.04 $28,840.00 6 $1,386,000 $51,680 $25,000.00 $34,260.00 7 $1,210,000 $44,800 $24,999.96 $31,870.00 8 $1,177,000 $43,480 $43,750.00 $43,480.00 9 $1,298,000 $47,840 $42,500.04 $44,350.00 10 $1,342,000 $49,600 $24,999.96 $33,540.00 11 $1,122,000 $41,280 $9,020.52 $17,020.00 � 12 $1,100,000 $40,400 $14,250.00 $22,190.00 13 $1,100,000 $40,400 $23,625.00 $29,450.00 14 $1,243,000 $45,640 $10,312.56 $19,690.00 15 $1,265,000 $46,520 $10,836.47 $20,240.00 16 $1,067,000 $39,080 $8,508.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 $21,750.00 18 $1,067,000 $39,080 $8,508.48 $16,480.00 19 $1,243,000 $45,640 $10,020.02 $19,500.00 20 $1,147,000 $42,320 $8,727.84 $17,910.00 21 $1,058,000 $38,760 $20,224.50 $26,660.00 22 $1,036,000 $37,880 $41,250.00 $37,880.00 ES 1 $1,037,000 $37,880 $28,749.96 $31,920.00 ES 2 $1,037,000 $37,880 $24,625.00 $29,220.00 Subtotals: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Exhibit C - Page 1 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued Exhibit C = Page 2 Existing (1st year) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Interior Lots 23 $478,000 $14,487 $2,782.32 $6,297.00 24 $501,000 $15,237 $6,125.04 $8,897.00 25 $509,000 $15,537 $3,399.12 $6,977.00 26 $511,000 $15,612 $3,417.72 $6,942.00 27 $519,000 $15,912 $3,436.44 $7,102.00 28 $542,000 $16,775 $4,137.72 $7,785.00 29 $518,000 $15,650 $15,375.00 $15,470.00 30 $510,000 $15,462 $3,551.16 $7,102.00 31 $517,000 $15,725 $8,750.00 $10,515.00 32 $520,000 $15,837 $3,588.48 $7,217.00 33 $528,000 $16,137 $3,607.08 $7,307.00 34 $589,000 $18,200 $4,454.64 $8,490.00 35 $559,000 $17,000 $3,776.28 $7,780.00 36 $548,000 $16,662 $3,795.00 $7,672.00 37 $517,000 $15,725 $14,625.00 $15,005.00 38 $520,000 $15,837 $3,780.36 $7,967.00 v 39 $528,000 $16,137 $9,125.04 $11,557.00 40 $588,000 $18,162 $11,133.60 $13,572.00 41 $513,000 $15,500 $3,719.64 $7,300.00 42 $548,000 $16,662 $3,795.00 $7,672.00 43 $556,000 $16,962 $11,250.00 $13,232.00 44 $558,000 $17,037 $3,832.20 $7,787.00 45 $565,000 $17,300 $4,056.84 $7,990.00 46 $588,000 $18,162 $4,454.64 $8,492.00 47 $539,000 $16,475 $3,459.36 $7,365.00 48 $551,000 $16,775 $6,249.96 $9,305.00 49 $520,000 $15,837 $3,551.16 $7,197.00 50 $523,000 $15,950 $3,569.76 $7,240.00 51 $520,000 $15,837 $3,780.36 $7,857.00 52 $528,000 $16,137 $12,750.00 $13,927.00 53 $588,000 $18,162 $4479.00 $8,492.00 54 $530,000 $15,987 $3,344.88 $7,227.00 55 $559,000 $17,075 $10,625.04 $12,865.00 56 $567,000 $17,375 $3,603.96 $7,915.00 57 $546,000 $16,737 $3,551.16 $7,427.00 58 $528,000 $16,137 $6,750.00 $10,007.00 59 $525,000 $16,025 $10,125.00 $12,175.00 60 $533,000 $16,325 $3,533.88 $7,315.00 Exhibit C = Page 2 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued Unencumbered Fair Market Lot No. Fee Lot Value Rental Value Interior Lots - continued 61 $588,000 ES 3 $474,000 ES 4 $467,000 ES 5 $470,000 ES 6 $468,000 ES 7 $461,000 ES 8 $471,000 Subtotal Int.: $23,786,000 $18,162 $14,225 $13,962 $14,075 $14,000 $13,737 $13,925 Existing Contract Rent $4,436.16 $8,750.04 $3,021.96 $10,000.08 $2,982.96 $2,966.04 $3,118.08 (1st year) Effective Net Rent $8,482.00 $10,325.00 $6,322.00 $11,415.00 $6,310.00 $6,057.00 $6,455.00 $724,637 $254,617.16 $397,807.00 Subtotal W.F.: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Grand Totals: $55,349,000 $1,885,277 $774,600.24 $1,103,027.00 Exhibit C = Page 3' Lot No. Waterfront Lots A B C 1 2 3 4 5 6 7 8 9 10 11 12 13 .d 14 15 16 17 18 19 20 21 22 ES 1 ES 2 Waterfront Subtotal: Distribution of Rents and Tax Advantage between Tidelands and Uplands* (1st year) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage $31,940.00 100% 0% $31,940 $0 $0 $0 $22,270.00 100% 0% $22,270 $0 $930 $930 $22,480.00 100% 0% $22,480 $0 $1,410 $1,410 $15,030.00 100% 0% $15,030 $0 $2,080 $2,080 $17,950.00 100% 0% $17,950 $0 $2,260 $2,260 $31,560.00 100% 0% $31,560 $0 $560 $560 $21,260.00 100% 0% $21,260 $0 $2,610 $2,610 $28,840.00 100% 0% $28,840 $0 $1,620 $1,620 $34,260.00 100% 0% $34,260 $0 $0 $0 $31,870.00 95% 5% $30,276 $1,594 $0 $0 $43,480.00 50% 50% $21,740 $21,740 $0 $0 $44,350.00 5% 95% $2,217 $42,132 $0 $0 $33,540.00 0% 100% $0 $33,540 $0 $0 $17,020.00 0% 100% $0 $17,020 $3,200 $0 $22,190.00 0% 100% $0 $22,190 $1,130 $0 $29,450.00 0% 100% $0 $29,450 $0 $0 $19,690.00 0% 100% $0 $19,690 $2,880 $0 $20,240.00 20% 80% $4,048 $16,192 $2,980 $596 $16,480.00 95% 5% $15,656 $824 $2,640 $2,508 $21,750.00 100% 0% $21,750 $0 $2,420 $2,420 $16,480.00 100% 0% $16,480 $0 $2,640 $2,640 $19,500.00 100% 0% $19,500 $0 $2,880 $2,880 $17,910.00 100% 0% $17,910 $0 $2,470 $2,470 $26,660.00 100% 0% $26,660 $0 $0 $0 $37,880.00 100% 0% $37,880 $0 $0 $0 $31,920.00 100% 0% $31,920 $0 $0 $0 $29,220.00 100% 0% $29,220 $0 $0 $0 $705,220.00 $500,848 $204,372 Beacon Bay 6/6/94 - Page 1 $34,710 $24,984 Exhibit D r Distribution of Rents and Tax Advantage between Tidelands and Uplands* Beacon Bay 6/6/94 - Page 2 Exhibit D (1st year) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage Interior Lots 23 $6,297.00 0% 100% $0 $6,297 $550 $0 24 $8,897.00 0% 100% $0 $8,897 $390 $0 25 $6,977.00 5% 95% $349 $6,628 $630 $31 26 $6,942.00 99% 1% $6,873 $69 $710 $703 27 $7,102.00 100% 0% $7,102 $0 $660 $660 28 $7,785.00 100% 0% $7,785 $0 $740 $740 29 $15,470.00 0% 100% $0 $15,470 $0 $0 30 $7,102.00 0% 100% $0 $7,102 $580 $0 31 $10,515.00 30% 70% $3,154 $7,361 $660 $198 32 $7,217.00 100% 0% $7,217 $0 $620 $620 33 $7,307.00 100% 0% $7,307 $0 $650 $650 34 $8,490.00 100% 0% $8,490 $0 $730 $730 35 $7,780.00 0% 100% $0 $7,780 $580 $0 36 $7,672.00 0% 100% $0 $7,672 $590 $0 37 $15,005.00 5% 95% $750 $14,255 $0 $0 38 $7,967.00 99% 1% $7,887 $80 $0 $0 39 at $11,557.00 100% 0% $11,557 $0 $0 $0 40 $13,572.00 100% 0% $13,572 $0 $0 $0 41 $7,300.00 0% 100% $0 $7,300 $510 $0 42 $7,672.00 0% 100% $0 $7,672 $590 $0 43 $13,232.00 0% 100% $0 $13,232 $0 $0 44 $7,787.00 0% 100% $0 $7,787 $630 $0 45 $7,990.00 15% 85% $1,198 $6,792 $660 $99 46 $8,492.00 0% 100% $0 $8,492 $720 $0 47 $7,365.00 0% 100% $0 $7,365 $610 $0 48 $9,305.00 0% 100% $0 $9,305 $600 $0 49 $7,197.00 0% 100% $0 $7,197 $620 $0 50 $7,240.00 0% 100% $0 $7,240 $630 $0 51 $7,857.00 0% 100% $0 $7,857 $110 $0 52 $13,927.00 0% 100% $0 $13,927 $0 $0 53 $8,492.00 0% 100% $0 $8,492 $730 $0 54 $7,227.00 0% 100% $0 $7,227 $500 $0 55 $12,865.00 0% 100% $0 $12,865 $0 $0 56 $7,915.00 0% 100% $0 0,915 $470 $0 57 $7,427.00 0% 100% $0 $7,427 $700 $0 58 $10,007.00 0% 100% $0 $10,007 $0 $0 59 $12,175.00 0% 100% $0 $12,175 $0 $0 60 $7,315.00 0% 100% $0 $7,315 $660 $0 Beacon Bay 6/6/94 - Page 2 Exhibit D Distribution of Rents and Tax Advantage between Tidelands and Uplands* Add Waterfront: $705,220.00 Grand Total: $1,103,027.00 % of Total: 100% (1st year) Proportionate Effective Lot No. Net Rent Interior Lots - continued 61 $8,482.00 ES 3 $10,325.00 ES 4 $6,322.00 ES 5 $11,415.00 ES 6 $6,310.00 ES 7 $6,057.00 ES 8 $6,455.00 Interior Lots $720 Subtotal: $397,807.00 Add Waterfront: $705,220.00 Grand Total: $1,103,027.00 % of Total: 100% *Effective Net Rents consider tax advantage. Discount rate for present value of annual advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6/6/94 - Page 3 Exhibit D Proportionate Proportionate Annual Amort. Tidelands % % Rent Rent of PV of Tax Tax Tidelands Uplands Tidelands Uplands Advantage Advantage 0% 100% $0 $8,482 $720 $0 100% 0% $10,325 $0 $320 $320 100% 0% $6,322 $0 $500 $500 85% 15% $9,703 $1,712 $0 $0 0% 100% $0 $6,310 $500 $0 0% 100% $0 $6,057 $650 $0 0% 100% $0 $6,455 $410 $0 $109,592 $288,215 $19,930 $5,251 $500,848 $204,372 $34,710 $24,984 $610,440 $492,587 $54,640 $30,235 55% 45% 100% 55% *Effective Net Rents consider tax advantage. Discount rate for present value of annual advantage is 6%. Rate for amortization of advantage is 7%. Rent and advantage figures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 6/6/94 - Page 3 Exhibit D :gym P r a t.? max,_ ..0 N mss: ° o a- ft.? - .F &r i - ae "ss_ c a?�:az"_,yzg .11�; RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: ° :_n , City Manager's OfficeA s: -,•_ -� -. ._.�.. - Lce A. iii vii..ii? Lii?117L3 S�v.•,.S.fS F.i�i City of Newport Beach u.>;e 1 unf - 3300 Newport Boulevard _ _` Newport Beach, CA 92663 MEMORANDUM OF LEASE .r This MEMORANDUM OF LEASE is entered into as of the day o 1994, by and between THE CITY OF NEWPORT BEACH, a chartered municipal corporation ("Lessor"), and _�(�y s li IA FtrP w�� r►�n K e ra a 1_ % r l dnn �i �/1 ("Lessee"), to witness that Lessor and Lessee executed a lease dated 1YM, y c Vi , 19_`l, a memorandum of which was recorded on 17 M i& r t. V\ 19�`� as Instrument No. q - 1 �q�l in the Official Records of Orange County. By said lease, the Real Property described below was leased to Lessee until July 1, 2006. The parties agree to terminate said lease as of the Commencement Date set forth below, and to discharge and release each other from all obligations under said lease as of said date (other than delinquent rent or other charges, if any, owed by Lessee pursuant to said lease as of the termination). Lessor hereby leases to Lessee, commencing on July 1, 1994 (the "commencement Date"), and ending on July 1, 2044, on the terms and conditions set forth in that certain lease by and between the parties hereto executed concurrently herewith, all the terms and conditions of which are made a part hereof as though fully set forth herein, those certain premises in the City of Newport Beach, County of Orange, State of California (the "Real Property"), described as follows: Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease as of the date first about written. ATTEST: O� l..,: n U ' 2 City Clerk.�. cgt.1 FOfk APPID16 ED AS TO FORM: ity Attorney 6" STATE OF CALIFORNIA COUNTY O O NGE O 1994, ore me, In-coJ "-,UTI t§ , a Notary. Public in and for said State, personally appeared >I - z ,ona y cnnown to me (or proved to me on the basis of satisfactory evidence) to be the perso (s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. LESSOR: ITY OF NEWPORT BEACH Mayor LESSEE: WITNE my hand and official seal. Signature (Seal) STATE OF CALIFORNIA COUNTY OF ORANGE *--WPCW,"V-V-Q BUTLER Comm. #1008878((��ARY PUBLIC CALIFORNIA8ORANGE COUNTY�``)))mm. Expires Nov. 11, 1997 On June , 1994, before me, , a Notary Public in and for said State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) LEASE THIS LEASE, made and entered into on this day of 1989, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter "Lessor," and David A. Freimann and Kerry L. Freimann hereinafter "Lessee." RECITALS A. Lessor holds title to and is the owner of certain harbor frontage and tidelands, together with certain uplands abutting thereon known as Beacon Bay and more particularly described as Exhibit 111," attached hereto and made a part hereof by this reference. B. Carroll B. Beek, Barton Beek, Joseph Allan Beek, Jr., and Seymour Beek jointly hold a Master Lease to said property, dated January 9, 1950, which Master Lease expires on December 31, 1987. C. The "Westerly Portion" of the Beacon Bay property has been divided into individual lots and subleased for residential purposes. D. All of said subleases expire on the same date as the Master Lease, to -wit: December 31, 1987. E. Lessor believes it to be in the best interest and welfare of said Lessor (1) that the portion of Beacon Bay which is currently leased for residential purposes remain residential in character, and (2) to enter into new subleases with the sublessees under the terms, conditions and for the consideration as hereinafter set forth. F. It is the judgment of Lessor that the leasing of the property hereinafter described is consistent with the trust purposes imposed upon such portions of the leased lands which may constitute tidelands as authorized by Chapter 74, Statutes of 1978. G. It is further the judgment of City that in entering into this Lease in the future, City is acting pursuant to its proprietary powers. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL AGREEMENTS SET FORTH BELOW, LESSOR AND LESSEE HEREBY AGREE AS FOLLOWS: 1. DESCRIPTION OF LEASED PREMISES. Lessor hereby leases, and Lessee hereby accepts this Lease of the real property described in Exhibit 112," attached hereto and made a part hereof by this reference under the terms and conditions as set forth below (hereinafter the "Leased Land"). 2. TERM. Unless terminated sooner as provided herein, the term of this Lease is for a period commencing on the 1st day of January, 1988, and ending on the 1st day of July, 2006. 3. BASE RENTAL. As base rental, Lessee agrees to pay to Lessor the sum of One Thousand Nine Hundred Twenty -Seven and 09/100 DOLLARS ($ 1,927.09 ) per month, payable on the 1st day of each month so long as this Lease remains in effect subject to a base rental adjustment, as provided in paragraph 4 below. Said rental payment is deemed to 1 be the fair market value of the Leased Land as an improved subdivision lot. 4. SALE, ASSIGNMENT, SUBLEASE. Lessee may sell, assign, exchange, convey or sublease his leasehold interest or encumber such interest without a prior written consent of Lessor; provided, however, that the Lessee, proposed transferee, assignee or encumbrancer shall: A. Furnish Lessor with an executed copy of such assignment, Trust Deed, or other document used to effect such transfer; B. Furnish to Lessor the express agreement of the proposed transferee or encumbrance assuming, and agreeing to perform, all of the obligations under this Lease; C. Pay to Lessor a transfer fee of $50.00; and D. Pay to Lessor the adjusted base rental which shall be the greater of the following: (1) The base rental as set forth in paragraph 3 above, or (2) An amount, equal to two and one half percent (2 1/2%) of the actual sales value of the leasehold estate, including the improvements thereon, divided by twelve (12) and payable monthly. The actual sales value shall be the total value of the transfer, as established by the Assessor of Orange County or verified by Lessor. The parties to said transaction shall furnish Lessor with any information regarding the transaction as Lessor may deem necessary to verify the total value of the transaction. If said transfer transaction cannot be verified by normal and accepted methods of verification, Lessor, at its sole discretion, may cause the leasehold estate and improvements thereon to be appraised to establish the fair market value of the property, which value shall be deemed the actual sales value thereof, as of the date of transfer, and establish thereby the adjusted base rental. The adjusted base rental shall become effective on the date of transfer. The provisions of this subparagraph shall not cause an adjustment of rentals if: A. Lessee is assigning his interest in this Lease to a Trustee under a Deed of Trust for the benefit of the lender as provided in paragraph 5, below; or B. The transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to the surviving spouse. 5. ENCUMBRANCES. If the Lessee assigns his interest in this Lease to a Trustee under a Deed of Trust (hereinafter called "Trust Deed") for the benefit of the lender hereinafter called "Encumbrancer"), such encumbrance shall be upon and subject to the following covenants and conditions: A. Said Trust Deed and all rights acquired C. Any Encumbrancer which is an established bank, savings and loan association or insurance company, and is the purchaser at a foreclosure sale, or is an assignee under an assignment in lieu of foreclosure shall be liable to perform the obligations of the Lessee under the Lease only so long as such Encumbrancer holds title to the leasehold. D. Lessee shall furnish to Lessor a complete copy of the Trust Deed and Note secured thereby, together with the name and address of the holder thereof. E. Upon and immediately after the recording of the Trust Deed, Lessee, at Lessee's expense, shall cause to be recorded in the office of the Recorder of Orange County, California, a written request executed and acknowledged by Lessor for a copy of any notice of default and of any notice of sale under the Trust Deed as provided by the statutes of the State of California relating thereto. F. Lessee agrees that it will not terminate this Lease because of any default or breach hereunder on the part of Lessee if the Encumbrancer under such Trust Deed, within ninety (90) days after service of written notice on the Encumbrancer by Lessor of its intention to terminate this Lease for such default or breach, shall: (1) Cure such default or breach if the same can be cured by the payment or expenditure of money provided to be paid under the terms of this Lease; provided, however, that for the purpose of the foregoing, Encumbrancer shall not be required to pay money to cure the bankruptcy or insolvency of Lessee or to satisfy Lessee's obligations under paragraph 12 hereof, "Indemnification," or (2) If such default or breach is not so curable, cause the Trustee under the Trust Deed to commence and thereafter to diligently pursue to completion steps and proceedings for judicial foreclosure, the exercise of the power of sale under and pursuant to the Trust Deed in the manner provided by law, or accept from the Lessee an assignment in lieu of foreclosure; and (3) Keep and perform all of the covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until such time as said leasehold shall be sold upon foreclosure pursuant to the Trust Deed, be released or reconveyed thereunder, sold upon judicial foreclosure or transferred by Deed in lieu of foreclosure; provided, however, if the holder of the Trust Deed shall fail or refuse to comply with any and all of the conditions of this paragraph, then and thereupon Lessor shall be released from the covenant of forbearance herein contained. 6. USE. The Leased Land shall be used solely for residential purposes and any appurtenant uses associated therewith. Lessee agrees to comply with all laws, regulations and ordinances of Lessor, the County and State affecting the Leased Land and any improvements located thereon. 7. TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease may give rise to a possessory interest tax obligation. Lessee shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, including any improvements located thereon or associated therewith, or any possessory interest therein arising out of or based upon the leasehold interest throughout the term hereof. Satisfactory evidence of such payments shall be made available to Lessor upon demand. Any lien for unpaid utilities, taxes, 3 assessments or charges shall not attach to the leasehold interest but only to improvements located thereon. 8. USE AND MAINTENANCE 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 which shall be leased to the Beacon Bay Community Association by the City, in consideration of the maintenance thereof by such Association and fair market value rent to be paid by individual Lessees. Lessor shall not be obligated to make any repairs, alterations or improvements in or to, or upon or adjoining the Leased Land or any structure or other improvement that may be constructed or installed therein, but Lessee shall, at all times during the terms of this Lease and at its sole cost and expense, keep and maintain all buildings, structures, and other improvements on the Leased Land in good order and repair, and the whole of the Leased Land and all improvements thereto free of weeds and rubbish, and in a clean, sanitary and neat condition. 9. COMMUNITY ASSOCIATION. Lessee agrees to become and during the term of this Lease remain a member in good standing of the Beacon Bay Community Association, and to abide by the Articles of Incorporation, Bylaws and rules and regulations of the Association, now or hereafter existing, and to pay to said Association before delinquency all dues, fees, assessments and other charges from time to time duly levied or assessed in furtherance of the Association's community purpose. 10. COVENANTS, CONDITIONS AND RESTRICTIONS Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit 113," attached hereto and made a part hereof by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 11. INDEMNIFICATION. Lessee agrees that he will hold and save Lessor, its officers, agents and employees harmless from any and all claims or demands of any kind or nature whatsoever arising out of, or incident to, the use and occupancy of the Leased Land, and to indemnify Lessor for any cost, liability or expense caused by or arising out of any injury or death of persons or damage to property which may occur upon or about the Leased Land or caused by or arising out of any activities or omission of Lessee, his agents, employees, licensees, and/or invitees, including, without limitation, injury or death of Lessee, his agents, employees, licensees and invitees and damage to his property or Lessee's property; except for any damage or injury or any kind arising out of the negligence of Lessor, its agents or employees. 12. NON-COMPLIANCE AND TERMINATION OF LEASE. Time and each of the terms, covenants and conditions hereof are expressly made the essence of this Lease. If Lessee shall fail to comply with any of the terms, covenants or conditions of this Lease, including the payment of rental herein reserved, at the time and in the amount herein required, and shall fail to remedy such default within sixty (60) days and thereafter comply with each and every term of this Lease, or if a Lessee shall abandon or vacate the Leased Land, Lessor may, at its option, and without further notice or demand, terminate this Lease and enter upon the Leased Land and take possession thereof, and remove any and all persons therefrom with or without process of law. Lessor may elect to terminate this Lease for any event of default or breach hereof or of the covenants, conditions and restrictions contained in Exhibit 113." Should Lessor elect to terminate, it may recover from Lessee all damages incurred by Lessor by reason of such breach, including, without limitation, 4 the cost of recovering the Leased Land, and the worth at the time of such termination of the excess, if any, of the amount of unpaid rent and unpaid charges reserved under this Lease over the amount of the rental loss which Lessee proves could be reasonably avoided, for the remainder of the term of this Lease. Such amount shall be immediately due and payable from Lessee to Lessor, together with interest at the rate of 10% per annum from the date owing until paid. The remedies of Lessor specified herein are in addition to and cumulative of any remedies provided Lessor by statute, including the remedies provided in California Civil Code Sections 1951.2 , et sect. 13. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of the Leased Land to Lessor and unconditionally agrees to vacate the Leased Land without contest, legal or otherwise. Lessee further expressly agrees to waive any and all legal rights it may have to contest vacating the Leased Land and further agrees to release Lessor from any and all claims it may have of whatever nature. Lessee further agrees to waive any relocation assistance or any other assistance from Lessor resulting from vacating the Leased Land. Lessee shall have the right prior to and for a period of ninety (90) days after the expiration of this Lease to remove any buildings or improvements appurtenant thereto from the Leased Land, except that all streets, walkways, common area landscaping, docks, piers, and any other installation constructed or installed in the common areas, shall be the property of Lessor. 14. EMINENT DOMAIN. A. Definitions of Terms. The term "total taking" as used in this paragraph means the taking of the entire Leased Land under the power of eminent domain or the taking of so much of said Land as to prevent or substantially impair the use thereof by Lessee for the uses and purposes hereinabove provided. The term "partial taking" means the taking of a portion only of the Leased Land which does not constitute a total taking as defined above. 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. The term "date of taking" shall be the date upon which title to the Leased Land or portion thereof passes to and vests in the condemnor. The term "Leased Land" means the real property belonging to Lessor, together with any and all improvements placed thereon by Lessor or to which Lessor has gained title. B. 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 Leased Land or the portion thereof taken shall cease and terminate, as of the date of taking of said Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attributable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation thereto. C. Allocation of Award - Total Taking. All compensation and damages awarded for the total taking of the Leased Land and Lessee's leasehold interest therein shall be allocated as follows: 5 (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The fair market value of the Leased Land 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 $1.00 at 9% 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 (b) The present worth of rents due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of $1.00 per annum at 12% per annum compound interest (Inwood Coefficient) for the number of years in such period. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. D. Allocation of Award - Partial Taking. All compensation and damages awarded for the taking of a portion of the Leased Land shall be allocated and divided as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The proportionate reduction of the fair market value of the Leased Land 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 $1.00 at 9% per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (b) The present worth of the amount by which the rent is reduced computed by multiplying the amount by which the annual rent is reduced by the factor for the present worth of $1.00 per annum at 12% per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking or to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the fair market rental value of the Leased Land at the date of taking bears to the fair market value of the Leased Land immediately thereafter. 15. ATTORNEYS' FEES. Should either Lessor or Lessee be required to employ counsel to enforce the terms, conditions and covenants of this Lease Agreement, the prevailing party shall recover all reasonable attorneys' fees (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 16. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor contained in this Lease shall be constructed as cumulative and no one of them shall be considered N. exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's rights to exercise any other. 17. NO WAIVER. No delay or omission of the Lessor to exercise any right or power arising from any omission, neglect or default of the Lessee 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 Lessor 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 Leased Land. 19. NOTICES. It is mutually agreed that 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 Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, Newport Beach, California 92663, 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. If he be absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land, or C. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the property or also sending a copy through the mail addressed to the Lessee. Such service upon Lessor or Lessee shall be deemed complete at the expiration of forty-eight (48) hours from and after the deposit in the United States mail of such notice, demand or communication. 20. HOLDING OVER. This Lease shall terminate and become null and void without further notice upon the expiration of said term. Any holding over shall not constitute a renewal hereof, but the tenancy shall thereafter be on a month-to-month basis and otherwise on the same terms and conditions as herein set forth. 21. MISCELLANEOUS. 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 apply to and bind Lessee, his respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. 7 IN WITNESS WHEREOF, the parties have caused this Lease to be executed on the date first above written. CITY OF NEWPORT BEACH, LESSOR ATTEST: r� PQM ,<< \ CITY CLERK t ;� 4 0 APP ED AS TO FORM: c�� L� FL"y Rrt CITY ATTO EY / LESSEE avid A. Freimann LESSEE Keri L. Freimann E -fl EXFIBIT "1" LEGAL DESCRIPTION OF BEACON BAY A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S. B. B. & M., Orange County, California, more particularly described as follows, to wit: Beginning at the United States Bulkhead Station No. 200, as shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California," approved May 2, 1936, by the Secretary of War and on file in the office of the United States District Engineer at Los Angeles, California; running thence West along the United States Bulkhead line 147.50 feet to United States Station No. 137*; thence North 39048' West along said Bulkhead line 535.53 feet; thence North 23057'30" East 126.34 feet to an angle point in the ordinary high tide line of the Pacific Ocean in Newport Bay, as described in €ourt Case No.,'24026 of the Superior Court of the State of California, in and for the County of Orange; thence South 39048' East along said ordinary high tide line 334.47 feet to the most Westerly corner of that certain parcel of land conveyed to the City of Newport Beach by The Irvine Company, as described in deed recorded September 25, 1929, in Book 306, page 375 of Official Records of Orange County, California; thence North 23057'30" East along the Northwesterly line of said parcel of land 317.57 feet; thence South 71054' East along the Northerly line of said parcel of land 290.24 feet; thence South 85043' East along the Northerly line of said parcel of land, said Northerly line being the Southerly line of Bayside Drive, 606.01 feet; thence South 424.71 feet to a point in the United States Government Bulkhead Line between United States Stations Nos. 101 and 200; thence West along said Bulkhead line 784.25 feet to the point of beginning; containing approximately twelve (12) acres. Said parcel of land is shown on Attachment 2 for identification purposes only and is not to be a part of this document. 5Y I- 0 -i m H _371\ rJ � 1Z1_CRC.1T10A1A1. Lor 5'F.0 r. CUTTER R>f?D �..• -;.._ •••� yj7 .1 �--i� l L_1=_; �_j_� I {- jll _III - {• —_•^ b.'/+LKi%AY. ( FOR. C; COVE) LOT 3 = 5 P..V E. i; c_ 7'Z H PD.i D LOT C. 1 r-- , , Ir.i I I .••�•, I I 1! I V✓:,LY,�✓:;Y (Fc:Z.SP.EL: ErRco,1E) LOT D 1 r ! I I I S' V U •C. SCHOONER POAD LOT E -i--- --- -- - —�- I.1 , , I , :L: I�• 1 ?., . 1,�"• -,-•.III I , i I 11• I , J I 1 , �. I I ;t t o il.� it o I!I y„ c ,i IN Ij 1 t '. JVA1 ;1,1i,Y (Fomturc:ovF.) LOT F ! I I I S' V U •C. SCHOONER POAD LOT E -i--- --- -- - —�- 1�-- , 1:.. 1 I III � 1. .._ i• --J' '•I I lJ , I. t.) I I W,•1 I W{ I W r I N O v7 JVA1 ;1,1i,Y (Fomturc:ovF.) LOT F • a 1-7 i' i ,• I ,• I I I .. .. '. L•:_!. I i..... 1 .. i I 1 1 _ I , 1 1 r,l I I ry I r•J I I I••• , I ''ter I •v I V. I, I .,� I 1 6• I I (f , I .t. { 1 t� r l ' II _1._. r _ l ;_ - it II •. I/ 1 r{ - r I _ I, SO,IT.0 r42. iii 1 ,.., EXHIBIT "2" Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. s. . J-- 39244 RECORDING REQUESTED BY AND N� C1V'iieErSHIP WHEN RECORDED RETURN T0: star�r�E X20.NT 00 City Manager's Office City of Newport Beach $7 00 3300 Newport Boulevard C2 Newport Beach, CA 92663 Attention: Kenneth J. Delino RECORDING REQUESTED By CHICAGO TITLE INS. CO. RECORDED IN OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA -1152 AM MAR 17 '89 oez-e- Q• V&t&e6t RECORDER /VO C0A Jl* 9arL f 7 I n , L�q� MEMORANDUM OF LEASE ?Or a. -err, s P �t J THIS MEMORANDUM OF LEASE is made and entered into by and between the City of Newport Beach, a chartered municipal corporation, herein called "Lessor", and David A Freimann and Kerry L. Freimann herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on Put, ! -( �1 /S fpx and ending on July 1, 2006, on the terms and conditions set for. in tha cgrtain lease by and between the parties hereto dated ,�)Aer � (� / , all the terms and conditions of which lease are mad4e a part hereof as though fully set forth herein, all those certain premises in the County of Orange, State of California. Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. EXECUTED on ,6 ?cN /S� , 1989, Newport Beach, Orange County, California. ATTEST: City Clerk OVED AS TO FORM: y Attorney LESSOR The City of Newport Beach, a Chartered Municipal Corporation 1 ,r� City Manager E: David A. Freimann BY: Kerry L. eimann STATE OF CALIFOR } SS. COUNTY OF 4` c On t s d of in the year before me, the undersigned, a Notary Public in and jor said �o n ansa, State, personally appeare V1�\� iii GfZ. f'/C/t/ 7 personally known to me (or proved to me on the basis of satisfactory evidence) to be the person S whose name subscribed to the within instrument and knowled / '`� �" executed the acge same. ,,that Nam (Typed or Printed) Notary Public in and for said County d State 89-!89244 ,yam CL?1r - �1t: ST i P'v. iVOt4tJ FUi?!IC-i,,atijp`t1i8 ORANGE C00t4T Y Er.0. �P Comm. F. 2492 R. 11 /82 FOR NOTARY SEAL OR STAMP 1 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of� County of �►�2 , On L / q before me, dIA4eA- z ZUOtbl�G ATE / NAME, TITLE OF OFFICER - E. ., "JANE DOE, T RY PUBLIC' personally appeared Cld 9 t)ry)e.y— NAMES) OF SIGNER(S) L Ppersonally known to me - OR - ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and ac- knowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. U t>" Monica S. Kutz WITNESS my hand and official seal 0 Comm- 1 1013469 0 NOTARY PUBLIC CALIFORN ORANGE COUNTY � 1L„ Fo Comm Expiras Jan 13. I SM J Ci M l /r /l \ SIGNATURE OF NOTAR� OPTIONAL Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER ❑ INDIVIDUAL V -CORPORATE OFFICER TITLE(S) ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY-IN-FACT ❑ TRUSTEE(S) ❑ GUARDIAN/CONSERVATOR ❑ OTHER: DESCRIPTION OF ATTACHED DOCUMENT TITLE OR TYPE OF DOCUMENT NUMBER OF PAGES DATE OF DOCUMENT SIGNER IS REPRESENTING: NAME OF PERSON( � OR ENTITY(IES) SIGNER(S) OTHER THAN Nn Som ©1993 NATIONAL NOTARY ASSOCIATION • 8236 Remmet Ave., P.O. Box 7184 • Canoga Park, CA 91309-7184 D 0-j- 39242 RECORDING REQUESTED BY RECORDING REQUESTED BY CHICAGO TITLE INS. CO. AND WHEN RECORDED MAIL TO: RECORDED IN OFFICIAL RECORDS CITY OF NEWPORT BEACH OF ORANGE COUNTY, CALIFORNIA Attn: Ken Delino 3300 Newport Blvd., $7.00 -11 55 AM MAR 17'89 P.O. box 1768 C2 Newport Beach, CA � �� 92658-8915 RECORDER TERMINATION OF LEASEHOLD This agreement is made this _j_(z day of March , 1989, by and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and Founders Title Corp. hereinafter called "Lessee". RECITALS A. Lessor and Lessee executed a lease on 15 March , 19 89 and subsequently recorded Con r a r -E- by the County Recorder of Orange County, Califo r. No. By the terms of the lease, the property was leased to Lessee until July 1, 2006. is as Instrument following described ** This document is being executed and recorded in counterpart B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AC,RF.RMRNT Lessee agrees to terminate the lease and vacate the premises as described hereinabove as of March 16, 1989 , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. LESSEE Founders Title Corp. CITY'OF NEWPORT BEACH l N i By: Flo Robert L. Wynn, City manager "Lessor" LESSEE 8(1 -1 j9242 State of California County of Orange On March 16, 1989 , before me, the undersigned, a notary public in and for said State, personally appeared Robert L. Wynn Known to me to be the City Manager of Newport Beach City and known to me to be the person who executed the within instrument on behalf of said governmental agency, and acknowledged to me that such governmental agency executed the same. WITNESS my hand and official seal. Lai&- Z( Notary Publ (SEAL) OFFICIAL SEAL DOROTHY L. PALEN NOTARY PUBLIC . CALIFORNIA PRINCIPAL OFFICE IN ORANGE COUNTY MY COnM iWon Exp. Apr. 5, 1989 Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. 89-139243 RECORDING ]REQUESTED BY RECORDING REOUESTED By �,ND WHEN RECORDED MAIL TO: CHICAGO TITLE INS, CO. CITY OF NEWPORT BEACH RECORDED IN OFFICIAL RECORDS Attn : Ken Del ino OF ORANGE COUNTY, CALIFORNIA 3300 Newport Blvd., n`.00 P.O. Box 1768 C2 'll H AM MAR 17'89 Newport Beach, CA 92658-8915 Q' CI31'a� RECORDER TERMINATION OF LEASEHOLD This agreement is made this _ja day of March 1989, by and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and Found Ti 1 P �Qrp" hereinafter called "Lessee", t Ov 3 RECITALS A. Lessor and Lessee executed a lease on and subsequently recorded 1� March 19 89 by the County Recorder of Orange County, California as Instrument No. By the terms of the lease, the following described property was leased to Lessee until July 1, 2006, ** This document is being executed and recorded in counterpart n j:e,e /V4,1 ft B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AGREEMENT Lessee agrees to terminate the ,lease and vacate the premises as described hereinabove as of March 1h,9 and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. .-.� CITY NEWPORT BEACH By: � .. 1 Robert L. Wynn, Ci Onager "Lessor" W LESSEE Founders Title Corp. aysc,. V/ cE PK.63i /TCA-! LESSEE uj-!39243 STATE OF _HAWAII ) SS. CITY AND COUNTY OF HONOLULU ) On this day of 19�, before me personally appeared all tonme personall known- who be3*axa by me dulry sworn, did say that 129: , '��e the X ��U ind - respectively, of u�r,d�C'S �i`itle �f,bcDrCuf 0-yL- , a Hawaii corporation, and that said instrument was signed in behalf of said corporation by authority of its Board of Directors and the said Officers acknowledged said instrument to be the free act and deed of said corporation. otary Public, St �- f Hawaii j y C mission expires: Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. LEASE ,HIS LEASE, made and entered into on this L day of � 1989, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter "Lessor," and Founders Title Corporation hereinafter "Lessee." RECITALS A. Lessor holds title to and is the owner of certain harbor frontage and tidelands, together with certain uplands abutting thereon known as Beacon Bay and more particularly described as Exhibit 111," attached hereto and made a part hereof by this reference. B. Carroll B. Beek, Barton Beek, Joseph Allan Beek, Jr., and Seymour Beek jointly hold a Master Lease to said property, dated January 9, 1950, which Master Lease expires on December 31, 1987. C. The "Westerly Portion" of the Beacon Bay property has been divided into individual lots and subleased for residential purposes. D. All of said subleases expire on the same date as the Master Lease, to -wit: December 31, 1987. E. Lessor believes it to be in the best interest and welfare of said Lessor (1) that the portion of Beacon Bay which is currently leased for residential purposes remain residential in character, and (2) to enter into new subleases with the sublessees under the terms, conditions and for the consideration as hereinafter set forth. F. It is the judgment of Lessor that the leasing of the property hereinafter described is consistent with the trust purposes imposed upon such portions of the leased lands which may constitute tidelands as authorized by Chapter 74, Statutes of 1978. G. It is further the judgment of City that in entering into this Lease in the future, City is acting pursuant to its proprietary powers. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL AGREEMENTS SET FORTH BELOW, LESSOR AND LESSEE HEREBY AGREE AS FOLLOWS: 1. DESCRIPTION OF LEASED PREMISES. Lessor hereby leases, and Lessee hereby accepts this Lease of the real property described in Exhibit 112," attached hereto and made a part hereof by this reference under the terms and conditions as set forth below (hereinafter the "Leased Land"). 2. TERM. Unless terminated sooner as provided herein, be the fair market value of the Leased Land as an improved subdivision lot. 4. SALE, ASSIGNMENT, SUBLEASE. Lessee may sell, assign, exchange, convey or sublease his leasehold interest or encumber such interest without a prior written consent of Lessor; provided, however, that the Lessee, proposed transferee, assignee or encumbrancer shall: A. Furnish Lessor with an executed copy of such assignment, Trust Deed, or other document used to effect such transfer; B. Furnish to Lessor the express agreement of the proposed transferee or encumbrance assuming, and agreeing to perform, all of the obligations under this Lease; C. Pay to Lessor a transfer fee of $50.00; and D. Pay to Lessor the adjusted base rental which shall be the greater of the following: (1) The base rental as set forth in paragraph 3 above, or (2) An amount, equal to two and one half percent (2 1/2%) of the actual sales value of the leasehold estate, including the improvements thereon, divided by twelve (12) and payable monthly. The actual sales value shall be the total value of the transfer, as established by the Assessor of Orange County or verified by Lessor. The parties to said transaction shall furnish Lessor with any information regarding the transaction as Lessor may deem necessary to verify the total value of the transaction. If said transfer transaction cannot be verified by normal and accepted methods of verification, Lessor, at its sole discretion, may cause the leasehold estate and improvements thereon to be appraised to establish the fair market value of the property, which value shall be deemed the actual sales value thereof, as of the date of transfer, and establish thereby the adjusted base rental. The adjusted base rental shall become effective on the date of transfer. The provisions of this subparagraph shall not cause an adjustment of rentals if: A. Lessee is assigning his interest in this Lease to a Trustee under a Deed of Trust for the benefit of the lender as provided in paragraph 5, below; or B. The transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to the surviving spouse. 5. ENCUMBRANCES. If the Lessee assigns his interest in this Lease to a Trustee under a Deed of Trust (hereinafter called "Trust Deed") for the benefit of the lender hereinafter called "Encumbrancer"), such encumbrance shall be upon and subject to the following covenants and conditions: A. Said Trust Deed and all rights a C. Any Encumbrancer which is an established bank, savings and loan association or insurance company, and is the purchaser at a foreclosure sale, or is an assignee under an assignment in lieu of foreclosure shall be liable to perform the obligations of the Lessee under the Lease only so long as such Encumbrancer holds title to the leasehold. D. Lessee shall furnish to Lessor a complete copy of the Trust Deed and Note secured thereby, together with the name and address of the holder thereof. E. Upon and immediately after the recording of the Trust Deed, Lessee, at Lessee's expense, shall cause to be recorded in the office of the Recorder of Orange County, California, a written request executed and acknowledged by Lessor for a copy of any notice of default and of any notice of sale under the Trust Deed as provided by the statutes of the State of California relating thereto. F. Lessee agrees that it will not terminate this Lease because of any default or breach hereunder on the part of Lessee if the Encumbrancer under such Trust Deed, within ninety (90) days after service of written notice on the Encumbrancer by Lessor of its intention to terminate this Lease for such default or breach, shall: (1) Cure such default or breach if the same can be cured by the payment or expenditure of money provided to be paid under the terms of this Lease; provided, however, that for the purpose of the foregoing, Encumbrancer shall not be required to pay money to cure the bankruptcy or insolvency of Lessee or to satisfy Lessee's obligations under paragraph 12 hereof, "Indemnification," or (2) If such default or breach is not so curable, cause the Trustee under the Trust Deed to commence and thereafter to diligently pursue to completion steps and proceedings for judicial foreclosure, the exercise of the power of sale under and pursuant to the Trust Deed in the manner provided by law, or accept from the Lessee an assignment in lieu of foreclosure; and (3) Keep and perform all of the covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until such time as said leasehold shall be sold upon foreclosure pursuant to the Trust Deed, be released or reconveyed thereunder, sold upon judicial foreclosure or transferred by Deed in lieu of foreclosure; provided, however, if the holder of the Trust Deed shall fail or refuse to comply with any and all of the conditions of this paragraph, then and thereupon Lessor shall be released from the covenant of forbearance herein contained. 6. USE. The Leased Land shall be used solely for residential purposes and any appurtenant uses associated therewith. Lessee agrees to comply with all laws, regulations and ordinances of Lessor, the County and State affecting the Leased Land and any improvements located thereon. 7. TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease may give rise to a possessory interest tax obligation. Lessee shall pay, before delinquent, all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, including any improvements located thereon or associated therewith, or any possessory interest therein arising out of or based upon the leasehold interest throughout the term hereof. Satisfactory evidence of such payments shall be made available to Lessor upon demand. Any lien for unpaid utilities, taxes, 3 assessments or charges shall not attach to the leasehold interest but only to improvements located thereon. 8. USE AND MAINTENANCE 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 which shall be leased to the Beacon Bay Community Association by the City, in consideration of the maintenance thereof by such Association and fair market value rent to be paid by individual Lessees. Lessor shall not be obligated to make any repairs, alterations or improvements in or to, or upon or adjoining the Leased Land or any structure or other improvement that may be constructed or installed therein, but Lessee shall, at all times during the terms of this Lease and at its sole cost and expense, keep and maintain all buildings, structures, and other improvements on the Leased Land in good order and repair, and the whole of the Leased Land and all improvements thereto free of weeds and rubbish, and in a clean, sanitary and neat condition. 9. COMMUNITY ASSOCIATION. Lessee agrees to become and during the term of this Lease remain a member in good standing of the Beacon Bay Community Association, and to abide by the Articles of Incorporation, Bylaws and rules and regulations of the Association, now or hereafter existing, and to pay to said Association before delinquency all dues, fees, assessments and other charges from time to time duly levied or assessed in furtherance of the Association's community purpose. 10. COVENANTS, CONDITIONS AND RESTRICTIONS Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit 113," attached hereto and made a part hereof by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 11. INDEMNIFICATION. Lessee agrees that he will hold and save Lessor, its officers, agents and employees harmless from any and all claims or demands of any kind or nature whatsoever arising out of, or incident to, the use and occupancy of the Leased Land, and to indemnify Lessor for any cost, liability or expense caused by or arising out of any injury or death of persons or damage to property which may occur upon or about the Leased Land or caused by or arising out of any activities or omission of Lessee, his agents, employees, licensees, and/or invitees, including, without limitation, injury or death of Lessee, his agents, employees, licensees and invitees and damage to his property or Lessee's property; except for any damage or injury or any kind arising out of the negligence of Lessor, its agents or employees. 12. NON-COMPLIANCE AND TERMINATION OF LEASE. Time and each of the terms, covenants and conditions hereof are expressly made the essence of this Lease. If Lessee shall fail to comply with any of the terms, covenants or conditions of this Lease, including the payment of rental herein reserved, at the time and in the amount herein required, and shall fail to remedy such default within sixty (60) days and thereafter comply with each and every term of this Lease, or if a Lessee shall abandon or vacate the Leased Land, Lessor may, at its option, and without further notice or demand, terminate this Lease and enter upon the Leased Land and take possession thereof, and remove any and all persons therefrom with or without process of law. Lessor may elect to terminate this Lease for any event of default or breach hereof or of the covenants, conditions and restrictions contained in Exhibit 113." Should Lessor elect to terminate, it may recover from Lessee all damages incurred by Lessor by reason of such breach, including, without limitation, 4 the cost of recovering the Leased Land, and the worth at the time of such termination of the excess, if any, of the amount of unpaid rent and unpaid charges reserved under this Lease over the amount of the rental loss which Lessee proves could be reasonably avoided, for the remainder of the term of this Lease. Such amount shall be immediately due and payable from Lessee to Lessor, together with interest at the rate of 10% per annum from the date owing until paid. The remedies of Lessor specified herein are in addition to and cumulative of any remedies provided Lessor by statute, including the remedies provided in California Civil Code Sections 1951.2, et sea. 13. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of the Leased Land to Lessor and unconditionally agrees to vacate the Leased Land without contest, legal or otherwise. Lessee further expressly agrees to waive any and all legal rights it may have to contest vacating the Leased Land and further agrees to release Lessor from any and all claims it may have of whatever nature. Lessee further agrees to waive any relocation assistance or any other assistance from Lessor resulting from vacating the Leased Land. Lessee shall have the right prior to and for a period of ninety (90) days after the expiration of this Lease to remove any buildings or improvements appurtenant thereto from the Leased Land, except that all streets, walkways, common area landscaping, docks, piers, and any other installation constructed or installed in the common areas, shall be the property of Lessor. 14. EMINENT DOMAIN. A. Definitions of Terms. The term "total taking" as used in this paragraph means the taking of the entire Leased Land under the power of eminent domain or the taking of so much of said Land as to prevent or substantially impair the use thereof by Lessee for the uses and purposes hereinabove provided. The term "partial taking" means the taking of a portion only of the Leased Land which does not constitute a total taking as defined above. 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. The term "date of taking" shall be the date upon which title to the Leased Land or portion thereof passes to and vests in the condemnor. The term "Leased Land" means the real property belonging to Lessor, together with any and all improvements placed thereon by Lessor or to which Lessor has gained title. B. 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 Leased Land or the portion thereof taken shall cease and terminate, as of the date of taking of said Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attributable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation thereto. C. Allocation of Award - Total Taking. All compensation and damages awarded for the total taking of the Leased Land and Lessee's leasehold interest therein shall be allocated as follows: 9 (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The fair market value of the Leased Land 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 $1.00 at 9% 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 (b) The present worth of rents due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of $1.00 per annum at 12% per annum compound interest (Inwood Coefficient) for the number of years in such period. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. D. Allocation of Award - Partial Taking All compensation and damages awarded for the taking of a portion of the Leased Land shall be allocated and divided as follows: (1) The Lessor shall be entitled to an amount equal to the sum of the following: (a) The proportionate reduction of the fair market value of the Leased Land 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 $1.00 at 9% per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (b) The present worth of the amount by which the rent is reduced computed by multiplying the amount by which the annual rent is reduced by the factor for the present worth of $1.00 per annum at 12% per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (2) The Lessee shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking or to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the fair market rental value of the Leased Land at the date of taking bears to the fair market value of the Leased Land immediately thereafter. 15. ATTORNEYS' FEES. Should either Lessor or Lessee be required to employ counsel to enforce the terms, conditions and covenants of this Lease Agreement, the prevailing party shall recover all reasonable attorneys' fees (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 16. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor contained in this Lease shall be constructed as cumulative and no one of them shall be considered 2 exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's rights to exercise any other. 17. NO WAIVER. No delay or omission of the Lessor to exercise any right or power arising from any omission, neglect or default of the Lessee 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 Lessor 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 Leased Land. 19. NOTICES. It is mutually agreed that 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 Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, Newport Beach, California 92663, 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. If he be absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land, or C. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the property or also sending a copy through the mail addressed to the Lessee. Such service upon Lessor or Lessee shall be deemed complete at the expiration of forty-eight (48) hours from and after the deposit in the United States mail of such notice, demand or communication. 20. HOLDING OVER. This Lease shall terminate and become null and void without further notice upon the expiration of said term. Any holding over shall not constitute a renewal hereof, but the tenancy shall thereafter be on a month-to-month basis and otherwise on the same terms and conditions as herein set forth. 21. MISCELLANEOUS. 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 apply to and bind Lessee, his respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. 7 IN WITNESS WHEREOF, the parties have caused this Lease to be executed on the date first above written. CITY OF EWPORT BEACH, LESSOR By: MAYOR Vi CITY CLERK APKRD AS TO FORM:ORNEY Gti' LESSEE Founders Tit e Corporation LESSEE 9 EXF1BI'" "1" LEGAL DESCRIPTION OF BEACON BAY A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S. B. B. & M., Orange County, California, more particularly described as follows, to wit: Beginning at the United States Bulkhead Station No. 200, as shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California," approved May 2, 1936, by the Secretary of War and on file in the office of the United States District Engineer at Los Angeles, California; running thence West along the United States Bulkhead line 147.50 feet to United States Station No. 137; thence North 39°4^ 0' West along said Bulkhead line 535.53 feet; thence North 23°57'30" East 126.34 feet to an angle point in the ordinary high tide line of the Pacific Ocean in Newport Bay, as described in court Case No. 24026 of the Superior Court of the State of California, in and for the County of Orange; thence South 39048' East along said ordinary high tide line 334.47 feet to the most Westerly corner of that certain parcel of land conveyed to the City of Newport Beach by The Irvine Company, as described in deed recorded September 25, 1929, in Book 306, page 375 of Official Records of Orange County, California; thence North 23057'30" East along the Northwesterly line of said parcel of land 317.57 feet; thence South 71054' East along the Northerly line of said parcel of land 290.24 feet; thence South 85043' East along the Northerly line of said parcel of land, said Northerly line being the Southerly line of Bayside Drive, 606.01 feet; thence South 424.71 feet to a point in the United States Government Bulkhead Line between United States Stations Nos. 101 and 200; thence West along said Bulkhead line 784.25 feet to the point of beginning; containing approximately twelve (12) acres. Said parcel of land is shown on Attachment 2 for identification purposes only and is not to be a part of this document. , _. ':I ' � u I -' -amu •, ., �� ,' > J . j.1, / obi (� ,I • �} • / �1 C \11 % /�,'� N < 3 a m w o •wr7 rp n N rD ^J [w Q ICJ CD cnn n o o = O � � W co C CD r — O O W O r4• O T\ - •—h Q N M-0 Q0 O r=' r) -nnL� -h o rD -c J• � i,J r) QNRJ J< N 1< G G N sr C N U RFCRCAT/O/`/At. LOT CUTTER A10/10 :—I,__i_�� rT--1•__IT_--- 7 �_—,�rr--_�_�I•T'�'lT.—'!-.-_-._..____.�,.__,_-T.._;� f � a r.��._-•-i 1 h: II1 , I III I l ••r•, ili il! i 1 Y / ri 1 • ,S I I m , c I 1 cn ! vt ! ! � 1 , I 1 •n , I v. .! i I'• � I I I I 1 I III ,I, l •II III / �--o---1---i1 L-_.l__t 1-�--' L_1. -- v ( FOP. C,, COVE) LOT 3 • I � 11 II Io L__l_._..;.__.J� Tri F, I III• 1 r•� , III I I 1 ,N j ..I I '• + 1 ,h 1 l 1 \, � I I N , r• I 1 h t l l � � I I l I, I I IR I I I• s. , o 1 w 1 •0 1, i �, I •-+ I, w I c` CAD I 1 i�j I I 4 li O ,�t`y- .. ... !�,-_. _ -:-; ( FOP. C,, COVE) LOT 3 • I = 6P.U'E- -,CrOhl 90r4D LOT , Tri F, I III• llj �. i„ III III i j ..I I '• + 1 ,h 1 l 1 \, I I A 1 1 h t l l � � I I l I, I I IR I I I• s. , o 1 w 1 •0 1, o �, I •-+ I, w I c` CAD I 1 i�j 4 li O ,�t`y- = 6P.U'E- -,CrOhl 90r4D LOT , . 1 i 1 I I I YX,LlC,','Zf1Y (FOR.SPE ERCO E) LOT D Tri I III• llj �. i„ III III i j ..I I '• + 1 ,h 1 l 1 \, I I A 1 1 h t l l � � I I l I, I I IR I I I• s. , o 1 w 1 •0 1, l w l a III �, I •-+ I, w I c` I. ._J . 1 i 1 I I I YX,LlC,','Zf1Y (FOR.SPE ERCO E) LOT D SCflOOI✓FR RO;;Q LOT E I -F- 1 c' !j I I 1 C i r.'-r--��- ---II 1 > I I^••w 1 1 N, 1 I I C, I I -0 1 � 1 , I I 11• r.,• I I I ,.•I I I l I, I I IR I I I• s. , o 1 w 1 •0 1, l w l a III �, I •-+ I, w I c` Iw 1 v, 1 SCflOOI✓FR RO;;Q LOT E I -F- 1 c' !j I I 1 C i r.'-r--��- ---II 1 > I I^••w 1 1 N, 1 I I C, I I -0 1 � 1 1✓)5/_A'Y,'/iY (Fo;.sur•c:ovF.) LOT r 4 li O ,�t`y- .. ... !�,-_. _ -:-; hl ;II fV ; I I•J 1 1 ,.,, , 1 ; ! .y ; r, III I I I I I .. '.:•::-4.--'---� ; ,, III I , � I I I I I _�' IJ •' r. I j Iyy. s P l a Y/„'✓/. Al 0/1 D Lor G_. 1 . I11fj 1 I I'. J r .•) r` I 1 .... I, I \r 'J III I I• 1 I• I II \' � I / 1 II � Ili CJ I J• l� I i I C,l• 1 I I _ll (I !.I - ' III I I• 1 4 O EXHIBIT "2" Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Attention: Kenneth J. Delino U -j-139241 RECORDING REQUESTED BY CHICAGO TITLE INS. CO. NO OV-,, icRSHIP RECORDED IN OFFICIAL RECORDS STATEMENT OF ORANGE COUNTY, CALIFORNIA $20.00 -11 H AM MAR 17'89 ffC 0yy 0a Q• y�W�,REC0RDER \ MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE is made and entered into by between the City of Newport Beach, a chartered municipal corporation, herein called "Lessor", and Founders Title Corporation herein called "Lessee", to witness that: /4/6 c or► f i aft G rt-- m" Lem -Po P., 4� and q 8 y t-aff 113) Lessor hereby leases to Lessee, commencing on fi1d;,&C''..f� and ending on July 1, 2006, on the terms and conditions set fofth in that certain lease by and between the parties hereto dated (rch K1 ( �,'y , all the terms and conditions of which lease are made a part hereof as though fully set forth herein, all those certain premises in the County of Orange, State of California. Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. EXECUTED on fir✓ cJ�; I--- 1989, Newport Beach, Orange County, California. LESSOR The City of Newport Beach, a Chartered Municipal Corporation ATTEST: BY: _ City Clerk,. City Manager APPROVED AS TO FOR W. / BY: City Attorn y EE: - &J- Ae-1, Founders Title Cor ora ion ccc�. STATE OF CALIFORNIA COUNTY OF (2.e a L (7 r * me that said governmental agency executed the same. ACKNOWLEDGMENT— General —Wolcotts Form 233CA—Rev. 5-82 ©1982 WOLCOTTS, INC. llonce class 8-2) 8-139241 On this / J D2 day of 41 �1 /'3 L ( , in the year 19�, before me, the undersigned, a Notary Public in and for said State, personally appeared 12"/6it.7 C. (j'�/vN , personally known to me to be the City Manager of the City of Newport Beach, and known to me to be the person who executed the within instrument on behalf of said governmental agency, and acknowledged to* WITNESS my hand and official seal.,--- . votary Public in andfor said State. �•� �w �� �tif OFFICIAL SEAL WILLIAM E. BROWN v �� NOTARY PUBLIC - CALIFORNIA Y c PRINCIPAL OFFICE IN ORANGE COUNTY t:.,,, Commission Exp. Dec. 8, 1992 n * me that said governmental agency executed the same. ACKNOWLEDGMENT— General —Wolcotts Form 233CA—Rev. 5-82 ©1982 WOLCOTTS, INC. llonce class 8-2) 8-139241 On this / J D2 day of 41 �1 /'3 L ( , in the year 19�, before me, the undersigned, a Notary Public in and for said State, personally appeared 12"/6it.7 C. (j'�/vN , personally known to me to be the City Manager of the City of Newport Beach, and known to me to be the person who executed the within instrument on behalf of said governmental agency, and acknowledged to* WITNESS my hand and official seal.,--- . votary Public in andfor said State. 89-139241 STATE OF HAWAII ) ) SS. CITY & COUNTY OF HONOLULU ) On this 10th day of March, 1989, before me appeared DALE W. RENO, to me personally known, who being by me duly sworn did say that he is the EXECUTIVE VICE PRESIDENT of FOUNDERS TITLE CORPORATION, and that the seal affixed to the foregoing instrument is the corporate seal of said corporation, and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and said officer acknowledged said instrument to be the free act and deed of said corporation. A9(121 Notary P li State of Hawaii My commission expires 3/15/93 it f.&Ie- &4-f4X A4o�- ** This document is being executed and recorded in counterpart B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AGREEMENT Lessee agrees to terminate the lease and vacate the premises as described hereinabove as of March 15, 1989 , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. ...� CITY OE�� NEWPORT BEACH Robert L. Wynn, City Manager "Lessor" LESSEE S. Snider Vick LESSEE Janet R. Vic 89-139239 RECORDING REQUESTED BY CHICAGO TITLE INS. CO. RECORDING REQUESTED BY AND WHEN RECORDED MAIL RECORDED IN OFFICIAL RECORDS TO: OF ORANGE COUNTY, CALIFORNIA City of Newport Beach Attn : Ken Del ino $7 pp "1� 5s A�9 MAR 17'89 3300 Newport Blvd, BOX 1768 Q•� RECORDER New Newport Beach, cA 92658-8915 TERMINATION OF LEASEHOLD This agreement is made this 15 day of March 1989, by and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and S. Snider Vick and Janet R. Vick, husband and wife, hereinafter called "Lessee". RECITALS A. Lessor and Lessee executed a lease on 1 January 19 88 and subsequently recorded July 19, 1988 by the County Recorder of Orange County, California as Instrument No. 88-346589 By the terms of the lease, the following described property was leased to Lessee until July 1, 2006. it f.&Ie- &4-f4X A4o�- ** This document is being executed and recorded in counterpart B. Lessee desires to terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to release Lessee from their obligations under the lease. AGREEMENT Lessee agrees to terminate the lease and vacate the premises as described hereinabove as of March 15, 1989 , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. ...� CITY OE�� NEWPORT BEACH Robert L. Wynn, City Manager "Lessor" LESSEE S. Snider Vick LESSEE Janet R. Vic 89- 1',--J239 State of California County of Orange On March 16, 1989 before me, the undersigned, a notary public in and for said State, personally appeared Robert L. Wynn Known to me to be the City Manager of Newport Beach City and known to me to be the person who executed the within instrument on behalf of said governmental agency, and acknowledged to me that such governmental agency executed the same. WITNESS my hand and official seal. I" z Notary Public (SEAL) OFFICIAL SEAL DOROTHY L. PALEN NOTARY PUBLIC • CALIFORNIA PRINCIPAL OFFICE IN ORANGE COUNTY Mr Canmis*n EXP. Apr. 5. 1989 Lot A as shown on the map filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. fl.. RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF NEWPORT BEACH Attn: Ken Delino 3300 Newport Blvd., P.O. box 1768 Newport Beach, CA 92658-8915 ,RECORDING REQUESTED BY 89-139240 CHICAGO TITLE INS. CO. RECORDED IN OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA -11 K AM MAR 17'89 $7.00 czar RECORDER TERMINATION OF LEASEHOLD This agreement is made this _1,5 day of March 1989, by and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and S. Snider Vick and Janet R. Vick, husband and wife, hereinafter called "Lessee", RECITALS A. Lessor and Lessee executed a lease on 1 Januar, __, 19 88 �o and subsequently recorded ZV4 lA ZgR - ^ by the County Recorder of Ordinge County, California as Instrument No. 88-346589 By the terms of the lease, the following described property was leased to Lessee: until July 1, 2006. /l f -L c. ** This document is being executed and recorded in counterpart B. Lessee desires to -terminate said lease and all rights to the possession of the lease premises and to release Lessor from its obligations under the lease, and Lessor desires to accept said termination and to .release Lessee from their obligations sunder the lease. AGREEMENT Lessee agrees to terminate.the Lease and vacate the premises as described hereinabove as of March 19, 1-98o , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. CITY:' O NEWPORT' BEjA�C)H BY: i W Robert L. Wynn, Citly Manager "Lessor" LESSEE S. Snider Vick LESSEE Janet R. Vick Lot A as shown on the map filed in Book 13, Page 42 of Record Of Surveys, in the office of the County Recorder, County of Orange, State of California. CA3 IN01VIOUAL LO STATE OF HAIVAII- City and County of Honolulu. ss:C-D On thif ............ day of ................. ......... ........... .4. D. 19...:........, before me personally appeared j- ............ ................................................................................... I ....... . .......................................................................... .. ..... ....... to me ,known to be the person..-Ae3cribed in and who executed the foregoing instrument and acknowledged that ... .......... executed the same as .. ......... free act and deed. . . . . . . . . . . . . . . . . . . . . ... .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. .. . . . . .. . . . . . .. Notary Public. First Judicial Circuit. State of Hawaii. My Commission Expires ig ... MISC.1 (,/Sol EXEMPT RECORDING REQ[ : ,PM GOVERNMENT CODE.6H8 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Attention: Kenneth J. Delino Ci7T i�i01V • : • _ - D Recorded at the request of STEWART TITLE COMPANY 8:OOJUL 191988 A.M. Official Records Orange County, California Q • Vtatel,Recorder THIS MEMORANDUM OF LEASE is made and entered into by and r between the City of Newport Beach, a chartered municipal corporation, herein called "Lessor," and S. SNIDER VICK and JANET R. VICK, husband and wife Aherein called "Lessee," to witness that: Lessor hereby leases to Lessee for a term of eighteen (18) years commencing on January 1, 1988, and ending on July 1, 2006, on the terms and conditions set forth in that certain lease by and between the parties hereto dated January 1, 1988, all the terms and conditions of which lease are made a part hereof as though fully set forth herein, all those certain premises in the County of Orange, State of California. Lot A as shown on the nap filed in Book 13, Page 42 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. This Memorandum is a rerecording to correct the legal description contained in legal document #RA -1 7671 recorded on March 25. 1988 , 1988. EXECUTED on June 29, , County, California. ATTEST: ez • City Clerk 1988, Newport Beach, Orange LESSOR BY: 41 - — �Z, S. Snider Vic/k BY: l/„G(�f✓ anet R. Vick n STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On before me, the undersigned, a Notary Public in and for said State, personally appeared John C. Cox, Jr., Mayor of the City of Newport Beach, personally known to me (or proved to me on the basis of satisfactory evidence) to be the Mayor of the City of Newport Beach whose name is subscribed to the within instrument called Memorandum of Lease and acknowledged to me that he executed the same. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE X ( SEAL) On �,t.v�.� ,l �S� before me, the undersigned, a Notary PubliceJin and for said State, personally appeared S. SNIDER VICK and JANET R. VICK, husband and wife, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names are subscribed to the within instrument called Memorandum -of Lease and acknowledged to me that they executed the same. . WITNESS my hand and official seal. OFFICIAL SEAL DOROTHY L. PALEN NOTARY PUBLIC - CALIFORNIA PRINCIPAL OFFICE IN ORANGE COUNTY My Commission Exp. Apr. 5, 1989 l Not Public 0 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Attn: Kenneth J. Delino 88-.131611: EXEMPT C16 MEMORANDUM OF LEASE RECORDED IN OFFICIAL RECORDS OF ORANGE COUNTY. CALIFORNIA -4 oo PIM MAR Z5'88 �_ RECORDER ECORDER THIS MEMORANDUM OF LEASE is made and entered into by and between The City of Newport Beach, a chartered municipal corporation, herein called "Lessor," and S. SNIDER VICK AND JANET R. VICK, husband and wife herein called "Lessee," to witness that: Lessor hereby leases to Lessee for a term of eighteen (18) years commencing on January 1, 1988, and ending on July 1, 2006, on the terms and conditions set forth in that certain lease by and between the parties hereto dated January 1, 1988, all the terms and conditions of which lease are made a part hereof as though fully set forth herein, all those certain premises in the County of Orange, State of California. Lot A as shown on the map filed in Book,.9, Page -7T -and -41 ----of Record of Surveys, in the office of the County Recorder, County of Orange, State of California. EXECUTED on �tq-e-r- [-f-- 19 -ft, Newport Beach, Orange County, California. ATTEST: City'Clerk �O AP ROVED AS TO FORM: ity Attorney �c SCI F0 LESSOR The City of Newport Beach LESSEE V�* X, 0 z, NIDEA VICK Q-1i Z, e"t - / < J T R. VICK EXHIBIT "C" L E A S E THIS LEASE, made and entered into on the 1st day of January, 1988, by and between the CITY OF NEWPORT BEACH, a chart- ered municipal corporation, hereinafter "Lessor", and J. SNIDER VICK and JANET_ R. VICK, husband and wife . herein- after "Lessee." RECITALS A. Lessor holds title to and is the owner of certain harbor frontage and tidelands, together with certain uplands abutting thereon known as Beacon Bay and more particularly described in Exhibit 111" attached hereto and made a part hereof by this reference. B. Carroll B. Beek, Barton Beek, Joseph Allan Beek, Jr., and Seymour Beek jointly hold a Master Lease to said proper- ty, dated January 9, 1950, which Master Lease expires on December 31, 1987. C. The "Westerly Portion" of the Beacon Bay property has been divided into individual lots and subleased for residen- tial purposes. D. All of said subleases expire on the same date as the Master Lease, to wit: December 31, 1987. E. Lessor believes it to be in the best interest and welfare of said Lessor (1) that the portion of Beacon Bay which is currently leased for residential purposes remain residential in character, and (2) to enter into new subleases with the sub - 1 lessees under the terms, conditions and for the consideration as hereinafter set forth. F. It is the judgment of Lessor that the leasing of the property hereinafter described is consistent with the trust purposes imposed upon such portions of the leased lands which may constitute tidelands as authorized by Chapter 74, Statutes of 1978. G. It is further the judgment of City that in entering into this Lease in the future, City is acting pursuant to its proprietary powers. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, Lessor and Lessee hereby agree as follows: 1. DESCRIPTION OF LEASED PRKVIISES. Lessor hereby leases, and Lessee hereby accepts this lease of the real property described in Exhibit 112" attached hereto and made a part hereof by this reference under the terms and conditions as set forth below (hereinafter the "Leased Land"). 2. TERM. Unless terminated sooner as provided herein, the term of this Lease is for a period commencing on the 1st day of January, 1988, and ending on the 1st day of July 2006. 3. BASE RENTAL. As base rental, Lessee agrees to pay to Lessor the sum of ONE THOUSAND NINE HUNDRED TWENTY-SEVEN and 09/100ths ($ f L.Q ) per month, payable on the 1st day of each month so long as this Lease remains in effect subject to a base rental adjustment, as provided in paragraph 4 below. Said rental payment is deemed to be the fair market rental value of the Leased Land as an improved subdivision lot. Lessee also agrees to pay a one-time lump sum payment of $ 110,468.00 , or in lieu, a constant monthly additional payment of $ 1,104.50 which shall be added to the base rental and represents the amortized value of the lun�p sum payment at Ten Percent (10%) interest over the life of the lease. Upon sale or assignment as 2 set forth in Paragraph s below, Lessee shall have the option of paying the remaining balance of the one-time lump sum payment, which upon receipt by City shall eliminate the constant monthly additional payment added to the base rental. 4. SALE, ASSIGNMENT, SUBLEASE Lessee may sell, assign, exchange, convey or sublease his leasehold interest or encumber such interest without a prior written consent of Lessor; provided, however, that the Lessee, proposed transferee, assignee or encumbrancer shall: (a) Furnish Lessor with an executed copy of such assignment, Trust Deed, or other document used to effect such transfer; (b) Furnish to Lessor the express agreement of the proposed transferee or encumbrance assuming, and agreeing to per- form, all of the obligations under this Lease; (c) Pay to Lessor a transfer fee of $50.00; and (d) Pay to Lessor the adjusted base rental which shall be the greater of the following: 3 above, or ( i) The base rental as set forth in paragraph (ii) An amount, equal to two and one half percent (2 1/2%) of the actual sales value of the leasehold estate, including the improvements thereon, divided by'.twelve ( 12) and payable monthly. The actual sales value shall be the total value of the transfer, as established by the Assessor of Orange County or verified by Lessor. The parties to said transaction shall furnish Lessor with any information regarding the transaction as Lessor may deem necessary to verify the total value of the transaction. If said transfer transaction cannot be verified by normal and accepted methods of verification, Lessor, at its sole discretion, may cause the leasehold estate and improvements thereon to be appraised to establish the fair market value of the property, which value shall be deemed the actual sales value thereof, as of the date of transfer, and establish 3 thereby the adjusted base rental. The adjusted base rental sha11 become effective on the date of transfer. The provisions of this subparagraph shall not cause an adjustment of rentals if: (a) Lessee is assigning his interest in this Lease to a Trustee under a Deed of Trust for the benefit of the lender as provided in paragraph 5, below; or ( b) The transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to the surviving spouse. 5. ENCUMBRANCES. If Lessee assigns his interest in this Lease to a Trustee under a Deed of Trust (hereinafter called "Trust Deed") for the benefit of the lender hereinafter called "Encumbrancer"), such encumbrance shall be upon and subject to the following covenants and conditions: (a) Said Trust Deed and all rights acquired there- under shall be subject to each and all of the covenants, condit- ions and restr ictions set forth in this Lease and to all rights and interest of the Lessor hereunder, except as herein otherwise provided. (b) In the event of any conflict between the pro- visions ro- visions of this Lease and the provisions of any such Trust Deed, the provisions of this Lease shall control. (c) Any Encumbrancer which is an established bank, savings and loan association or insurance company, and is the purchaser at a foreclosure sale, or is an assignee under an assignment in lieu of foreclosure shall be liable to perform the obligations of the Lessee under the Lease only so long as such Encumbrancer holds title to the leasehold. (d) Lessee shall furnish to Lessor a complete copy of the Trust Deed and Note secured thereby, together with the name and the address of the holder thereof . (e) Upon and immediately after the recording of the Trust Deed, Lessee, at Lessee's expense, shall cause to be 4 A c recorded in the office of the Recorder of Orange County, California, a written request executed and acknowledged by Lessor for a copy of any notice of default and of any notice of sale under the Trust Deed as provided by the statutes of the State of California relating thereto. ( f) Lessor agrees that it will not terminate this Lease because of any default or breach hereunder on the part of Lessee if the Encumbrancer under such Trust Deed, within ninety (90) days after service of written notice on the Encumbrancer by Lessor of its intention to terminate this Lease for such default or breach, shall: ( i) Cure such default or breach if the same can be cured by the payment or expenditure of money provided to be paid under the terms of this Lease; provided, however, that for the purpose of the foregoing, Encumbrancer shall not be required to pay money to cure the bankruptcy or insolvency of Lessee or to satisfy Lessee's obligations under Paragraph 12 hereof, "Indemnification", or ( i i ) If such default or breach is not so curable, cause the Trustee under the Trust Deed to commence and thereafter to diligently pursue to completion steps and proceed- ings for judicial foreclosure, the exercise of the power of sale under and pursuant to the Trust Deed in the manner provided by law, or accept from the Lessee an assignment in lieu of foreclo- sure; and ( i i i ) Keep and perform all of the covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until such time as said leasehold shall be sold upon foreclosure pursuant to the Trust Deed, be released or reconveyed thereunder, sold upon judicial foreclosure or transferred by Deed in lieu of foreclosure; provided, however, if the holder of the Trust Deed shall fail or refuse to comply with any and all of the conditions of this paragraph, then and thereupon Lessor shall be released from the covenant of forebear - 5 ance herein contained. 6. USE. The Leased Land shall be used solely for resi- dential purposes and any appurtenant uses associated therewith. Lessee agrees to comply with all laws, regulations and ordinances of Lessor, the County and State affecting the Leased Land and any improvements located thereon. 7. TAXES AND UTILITIES. It is understood by Lessor and Lessee that this Lease may give rise to a possessory interest tax obligation. Lessee shall pay before delinquent all utility charges and any general and special taxes, assessments or other governmental charges, if any, which may be levied on the Leased Land, including any improvements located thereon or associated therewith, or any possessory interest therein arising out of or based upon the leasehold interest throughout the term hereof . Satisfactory evidence of such payments shall be made available to Lessor upon demand. Any lien for unpaid ut i 1 it ies, taxes, assessments or charges shall not attach to the leasehold interest but only to improvements located thereon. 8. USE AND MAINTENANCE 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 which shall be leased to the Beacon Bay Community Association by the City, in consideration of the maintenance thereof by such Association and fair market value rent to be paid by individual Lessees. Lessor shall not be obligated to make any repairs, alterations or improvements in or to, or upon or adjoining the Leased Land or any structure or other improvement that may be constructed or installed therein, but Lessee shall, at all times during the terms of this Lease and at its sole cost and expense, keep and maintain all buildings, structures and other improvements on the Leased Land in good order and repair, and the whole of the Leased Land and all improvements thereto free of weeds and rubbish, and in a clean, sanitary and neat condition. 9. COIMMUNITY ASSOCIATION. Lessee agrees to become and 6 during the term of tris Lease remain a member in good standing of the Beacon Bay Community Association, and to abide by the Articles of Incorporation, Bylaws and rules and regulations of said Association, now or hereafter existing, and to pay to said Association before delinquency all dues, fees, assessments and other charges from time to time duly levied or assessed in furtherance of the Association's community purpose. 10. COVENANTS. CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restr ict ions and reservations as contained in Exhibit 113" attach- ed hereto and made a part hereof by this reference. Said cove- nants, condit ions and restr ict ions shal l run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 1 1 . INDITANIFICATION. Lessee agrees that he will hold and save Lessor, its officers, agents and employees harmless from any and all claims or demands of any kind or nature whatsoever arising out of, or incident to, the use and occupancy of the Leased Land, and to indemnify Lessor for any cost, liability or expense caused by or arising out of any injury or death of persons or damage to property which may occur upon or about the Leased Land or caused by or arising out of any act ivit ies or omission of Lessee, his agents, employees, licensees, and/ or invitees, including, without limitation, injury or death of Lessee, his agents, employees, licensees and invitees and damage to his property or Lessee's property; except for any damage or injury of any kind arising out of the negligence of Lessor, its agents or employees. 12. NON-CCMPLI ANCE AND TERMINATION OF LEASE Time and each of the terms, covenants and condi- tions hereof are expressly made the essence of this Lease. If Lessee shall fail to comply with any of the terms, covenants or conditions of this Lease, including the pay- ment of renta 1 here in reserved, a t the t ime and in the amount 7 herein required, and shall fail to remedy such default within sixty (60) days and thereafter comply with each and every term of this Lease, or if a Lessee shall abandon or vacate the Leased Land, Lessor may, at its opt ion, and without further not ice or demand, terminate this Lease and enter upon the Leased Land and take possession thereof, and remove any and all persons therefrom with or without process of law. Lessor may elect to terminate this Lease for any event of default or breach hereof or of the covenants, conditions and restrictions contained in Exhibit 113". Should Lessor elect to terminate, it may recover from Lessee all damages incurred by Lessor by reason of such breach, including, without limitation, the cost of recovering the Leased Land, and the worth at the time of such termination of the excess, if any, of the amount of unpaid rent and unpaid charges reserved under this Lease over the amount of the rental loss which Lessee proves could be reasonably avoided, for the remainder of the term of this Lease. Such amount shall be immediately due and payable from Lessee to Lessor, together with interest at the rate of 10% per annum from the date owing until paid. The remedies of Lessor specified herein are in addition to and cumulative of any remedies provided Lessor by statute, including the remedies provided in California Civil Code Sections 1951 .2, et seq. 13. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of the Leased Land to Lessor and unconditionally agrees to vacate the Leased Land without contest, legal or otherwise. Lessee further expressly agrees to waive any and all legal rights it may have to contest vacating the Leased Land and further agrees to release Lessor from any and all claims it may have of whatever nature. Lessee further agrees to waive any relocation assistance or any other assistance from Lessor resulting from vacating the Leased Land. Lessee shall have the right prior to and for a period of ninety 0 (90) days after the expiration ofthis Lease to remove any build- ings or improvements appurtenant thereto from the Leased Land, except that all streets, walkways, common area landscaping, docks, piers and any other installation constructed or installed in the common areas, shall be the property of Lessor. 14. EMINENT DOMAIN A. Definition of Terms. The term "total taking" as used in this paragraph means the taking of the entire Leased Land under the power of eminent domain or the taking of so much of said Land as to prevent or substantially impair the use there- of by Lessee for the uses and purposes hereinabove provided. The term "partial taking" means the taking of a portion only of the Leased Land which does not constitute a total taking as defined above. 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. The term "date of taking" shall be the date upon which title to the Leased Land or portion thereof passes to and vests in the condemnor. The term "Leased Land" means the real property belonging to Lessor, together with any and all improvemens placed thereon by Lessor or to which Lessor has gained title. B. Effect of Taking. If durng 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 Leased Land or the portion thereof taken shall cease and terminate, as of the date of taking of said Land. If this Lease is so terminated in whole or in part, all rentals and other charges payable by Lessee to Lessor hereunder and attr ibutable to the Leased Land or portion thereof taken shall be paid by Lessee up to the date of taking by the condemnor, and the parties shall thereupon be released from all further liability in relation 9 thereto. C. Allocation of ;Award - Total Taking. All compensat ion and damages awarded for the total taking of the Leased Land and Lessee's leasehold interest therein shall be allocated as follows: (a) The Lessor shall be ent it led to an amount equal to the sum of the following: (i) The fair market value of the Leased Land as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiply- ing such fair market value by the factor for the present worth of $1 .00 at —9—_% 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 rents due dur- ing the period from the date of taking to the date of the expira- tion of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of $1.00 per annum at -L-I,—% per annum compound interest (Inwood Coeff is fent) for the number of years in . such per iod. ( b) The Lessee shall be ent it led to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. D. Allocation of Award - Partial Taking All com- pensation om- pensation and damages awarded for the taking of a portion of the Leased Land 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 Leased Land as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by mult iplying such proport ionate reduct ion in fair market value by the factor for the present worth of $1.00 at q % per annum compound interest for the number of years re - 10 ma in ing from the date of taking to the date of the expira tion of the term o f th is Lea se ; 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 $1 .00 per annum at _2�,_9b 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 shal l be ent it led to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. E. Reduction of Rent on Partial Taking. In the event of a partial taking, the rent payable by Lessee hereunder shall be adjusted from the date of taking or to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the basic rental payable by Lessee in the ratio that the fair market rental value of the Leased Land at the date of taking bears to the fair market value of the Leased Land immediately thereafter. 15. ATTORNEYS' FEES Should either Lessor or Lessee be required to employ counsel to enforce the terms, conditions and covenants of this Lease Agreement, the prevailing party shall recover all reasonable attorneys' fees (and court fees if applic- able) incurred therein, whether or not court proceedings were commenced. 16. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor contained in this Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's right to exercise any other. 17. NO WAIVER. No delay or omission of the Lessor to 11 exercise any right or power arising from any omission, neglect or default of the Lessee 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 Lessor or any acquiescence therein. No waiver of any breach of any of the terms, cove- nants, agreements, restr ict ions 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, regulat ions, 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 Leased Land. 19. NOTICES. It is mutually agreed that 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 Mayor, City Manager, or City Clerk, 3300 Newport Blvd., Newport Beach, California 92663, or at such other address as may be hereafter furnished to Lessee in writing. If not ice is intended to be served by Lessor on Lessee, it may be served e ither: personally, or A. By delivering a copy to the Lessee B. If he be absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land, or C. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the property or also sending a copy through the mail addressed to the Lessee. Such service upon Lessor or Lessee shall be deemed complete at the expiration of forty-eight (48) hours from and after the deposit in the United States mail of such 12 notice, demand or communication. 20. HOLDING OVER. This Lease shall terminate and be- come null and void without further notice upon the expiration of sa id term. Any holding over shall not constitute a renewal here- of, but the tenancy shall thereafter be on a month-to-month basis and otherwise on the same terms and conditions as herein set forth. 2 1. MI SCELLANBDUS Inurement. Each and all of the covenants, condi- t ions and agreements herein contained shall, in accordance with the context, inure to the benefit of Lessor and apply to and bind Lessee, his respective heirs, legatees, devisees, executors, ad- ministators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein con- tained against assignment or subletting. IN WITNESS WHEREOF, the parties have caused this Lease to be executed on the date first above written. ATTEST: WANDA E. RAGGIO City Clerk APPROVED AS TO FORM: City Attorney CITY OF NEWPORT BEACH BY Mayor Lessee S . Snider Vick n Less/ Janet R. Vick 13 EXHIBIT "yep LEGAL DESCRIPTION OF BEACON BAY A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S. B. B. & M., Orange County, California, more particularly described as follows, to wit: Beginning at the United States Bulkhead Station No. 200, as shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California," approved May 2, 1936, by the Secretary of War and on file in the office of the United States District Engineer at Los Angeles, California; running thence West along the United States Bulkhead line 147.50 feet to United States Station No. 137; thence North 39048' West along said Bulkhead line 535.53 feet; thence North 23057'30" East 126.34 feet to an angle point in the ordinary high tide line of the Pacific Ocean in Newport Bay, as described in .€ourt Case No. 24026 of the Superior Court of the State of California, in and for the County of Orange; thence South 39048' East along said ordinary high tide line 334.47 feet to the most Westerly corner of that certain parcel of land conveyed to the City of Newport Beach by The Irvine Company, as described in deed recorded September 25, 1929, in Book 306, page 375 of Official Records of Orange County, California; thence North 23057'30" East along the Northwesterly line of said parcel of land 317.57 feet; thence South 71054' East along the Northerly line of said parcel of land 290.24 feet; thence South 85043' East along the Northerly line of said parcel of land, said Northerly line being the Southerly line of Bayside Drive, 606.01 feet; thence South 424.71 feet to a point in the United States Government Bulkhead Line between United States Stations Nos. 101 and 200; thence West along said Bulkhead line 784.25 feet to the point of beginning; containing approximately twelve (12) acres. Said parcel of land is shown on Attachment 2 for identification purposes only and is not to be a part of this document. r r n • n a.. n �� z Z T71 �n�\ • �\�• � _ RF_CRrAT/O/A/itl. LOT J---�-- ; seur. �O i. -V � ar ;! ! 3 �, ill �j` •--,-• l!` �i i 1 ^r / x j L--1--= L._�":_Ji`—�-_ 1 tMi1AP1AY (Fa?..u, cove) ^T 3 t 3'0 m iv # I �;•-.lit lli; i SL rD �-j =3 !. I ! r-----1---�� t ! 1 CA ^} tj I 1�� t ' W = rD + o o r—� 4 r' r --r-_ i ! OW rD Sr --�-- '( -V sil � !/ r 1 tl O Q :3 r f + f' , _ 7c' rD n 1 r 1 ra v c r CD a sa C++ i rCT�f. P 0 AD LOT C rD Co. I �;•-.lit lli; i � !�: !. I ! r•. ! ! t ! 1 CA ^} tj I 1�� t ' W = rD + o o r—� 4 r' r ' I I i ! � ` il• � o iii •�' i�� ! -V sil � !/ r 1 tl C-+- O r f _ _, -h co N ra v c C++ i rCT�f. P 0 AD LOT C rD Co. I �;•-.lit lli; i � !�: !. I ! r•. ! ! t ! 1 CA ^} !•`• 1 I 1�� t ' W = rD + o o r—� 4 r' r i owo - -AL _ C-+- O r f _ _, -h co N ra v c CD a sa -h O rD -G W N CD a \ i ! V/nLf %f,Y (r02.S !ELT=R C4"E) LOT D = _P�- a N I �;•-.lit lli; i � !�: !. I ! r•. ! ! t ! 1 CA ^} !•`• 1 I 1�� t 1 Ali , Q JL_t_J { r f W N CD a \ i ! V/nLf %f,Y (r02.S !ELT=R C4"E) LOT D = _P�- a N i I �;•-.lit lli; i � !�: !. I ! r•. ! ! t ! 1 CA ^} !•`• 1 I 1�� t 1 Ali f� Q { r f i S-Fu.E.� SCf/GO/JF_R P• ,,iO LOT t ! r--r--i----11 I -> ! I-f••w ! , N •(II w ��� c � i � �r }Q 44 t,, 1 t ! 1 !! ! 0 All 1'✓.iLf;'/,�ltY (FOR.REEFCOYF,) LOT r 1 , I �;•-.lit lli; i � !�: !. I ! r•. ! ! t ! 1 CA 1 ! !•`• 1 I 1�� t 1 Ali f� S-Fu.E.� SCf/GO/JF_R P• ,,iO LOT t ! r--r--i----11 I -> ! I-f••w ! , N •(II w ��� c � i � �r }Q 44 t,, 1 t ! 1 !! ! 0 All 1'✓.iLf;'/,�ltY (FOR.REEFCOYF,) LOT r 1 , W 1 CA z a Q :v ' Svu, Y/16'11_ ROAD ,.. ^ 1 :. - t r , . i 1. l ' ` I i t ' ` , t i f - _ _ __- _ _ �• - -_ j--- _ ... ..!'., ` �... SC %T. •' 42G. 7i' i b W 1 CA z ,;O W z a Q Lot R as shown on the map filed in _43of Record of Surveys, in the office County of Orange, State of California. Book,, Pages` 42 aed~—_. of the County Recorder, EXHIBIT "3" DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY C014MUNITY ASSOCIATION Table of Contents Article Page I DEFINITIONS 2 1 - Architectural Committee 2 2 - Articles and Bylaws 2 3 - Assessments 2 4 - Association 3 5 - Association Rules 3 6 - Board 3 7 - City 3 8 - Common Expenses 3 9 - Common Area 4 10- Covered Property 4 1.1- Declarant 4 12- Exhibit 4 13- Member 4 14- Lessee 4 15- Residence 4 16- Setback 5 II MEMBERSHIP 5 1 - Membership 5 2 - Transfer 5 3 - Voting Rights 5 4 - Classes of Voting Membership 5 5 - Approval of Members 5 III COVENANT FOR MAINTENANCE ASSESSMENTS 6 1 - Creation of the Lien and Personal Obligation of Assessments 6 2 - Purpose of Assessments 6 3 - Regular Assessments 6 4 - Uniform Assessment 6 5 - Special Assessments 6 6 - No Offsets 6 7 - Reserves 7 IV NO 74PAYMENT OF ASSESSMENTS 7 1 - Delinquency 7 - Notice of Lien 8 3 - Forecl-osure Sale 8 (i) 4 - Relationship with Mortgage Liens 8 5 - Curing of Default 9 V ARCHITECTURAL CONTROL 9 1 - Appointment of Architectural Committee 9 2 - General Provisions 9 3 - Approval and Conformity of Plans 10 4 - Nonliability for Approval of Plans 10 VI DUTIES AND POWERS OF THE ASSOCIATION 10 1 - General Duties and Powers 10 2 - General Duties of the Association 11 3 - General Powers of the Associationon 11 4 - Association Rules 11 VII REPAIR AND MAINTENANCE 12 1 -- Repair and Maintenance by Association 12 2 - Repair and Maintenance by Lessee 12 3 - Maintenance of'Public Utilities 12 VIII USE RESTRICTIONS 12 1 - Commercial Use 12 2 - Signs 13 3 - Nuisance 13 4 - Animals 13 5 - California Vehicle Code 13 IX RIGHTS OF ENJOYMENT 13 I - Members' Right of Enjoyment 13 2 - Delegation of Use 14 3 - Waiver of Use 14 X GENERAL PROVISIONS 14 1 - Enforcement 14 2 - No Waiver 15 3 - Cumulative Remedies 15 e - Severability 15 5 - Covenants to Run with the Land; Term 15 6 -- Heading 15 7 - Singular Includes Plural 15 8 - Attorneys' Fees 16 9 - Notices 16 l'u- Effect of Declaration 16 11- Personal. Covenant 16 2- Nonli.abil_ity of Officials 17 1--- Subleases 17 1 <- Amendments 17 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION ORANGE COUNTY, CALIFORNIA THIS DECLARATION is made this day of by the City of Newport Beach a chartered municipal corporation. Said corporation, its successors and assigns, shall hereafter be referred to as "Declarant." R E C I T A L S A. Declarant is the fee owner of the real property described in Exhibit A to this Declaration, which shall be the Covered Property under this Declaration. This Declaration is being imposed by Declarant upon the Covered Property. B. Declarant has deemed it desirable to establish covenants, conditions and restrictions upon the Covered Property and each and every portion thereof, which will constitute a general scheme for the management of the Covered.Property, and for the use, occupancy and enjoyment thereof, all for the purpose of enhancing and protecting the value, desirability and attractiveness of the Covered Property and enhancing the quality of life within the Covered Property. : C. It is desirable for the efficient management of the Covered Property and the preservation of the value, desirability and attractiveness of the Covered Property to del egat,� and assigned the powers of managing the Covered Propert_;, maintaining and administering the Common Area and ad -i nistering and enforcing these covenants, con(?it o 3 and restrictions and collecting and disbursing funds :)!rsuant to the assessment and charges hereinafter creat= and referred to and to perform such other acts as shall generally benefit the Covered Property to the Beacon Bay Ca-i--,nity Assocation, a California nonprofit cornu a -ion. D. �-'"eclarant will hereafter hold title to and lease all o Covered Property subject to certain protective coven�-.ts, conditions and restrictions hereafter set forth. Beacon , 9/20/719 Rev. 9/24/79 NOW, THEREFORE, Declarant hereby covenants, agrees and declares that all of its interest as the same may from time to time appear in the Covered Property shall be held and conveyed subject to the following covenants, conditions, restrictions and easements which are hereby declared to be for the benefit of said interests in the Covered Property, and the owners of said interests, their successors and assigns. These covenants, conditions, restrictions and easements shall run with said interests and shall be binding upon all parties having or acquiring any right or title in said interests or any part thereof, and shall inure to the benefit of each owner thereof and are imposed upon said interests and every part thereof as a servitude in favor of each and every of said interests as the dominant tenement or tenements. ARTICLE I DEFINITIONS Unless the context clearly indicates otherwise, the following terms used in this Declaration are defined as follows: Section 1. "Architectural Committee" shall mean and refer to the committee or committees provided for in the Article hereof entitled "Architectural Control". Section 2. "Articles" and "Bylaws" shall mean and refer to the Articles of Incorporation and Bylaws of the Association as the same may from time to time be duly amended. Section 3. "Assessments:" The following meanings shall be given to the Assessments hereinafter defined: "Regular Assessment" shall mean the amount which is to be paid by each Member of the Association for Common Expense's. "S—c_a1 Assessment" shall mean a charge against a partecular Lessee and his Residence, directly attributable to the Lessee, to reimburse the Association for costs insu=red in bringing the Lessee and his Residence into co:�pl.nce with the provisions of this Declaration, the Articles, Bylaws or Association Rules, or any other charge desi7 ted as a Special Assessment, together with att--ofneys' fees and other charges payable, plus interest thereon as provided for in this Declaration. Beacon Say 9/20/,.Y 2 Rev. 9/24/70 Section 4. "Association" shall mean and refer to Beacon Bay Community Assocation, a nonprofit corporation, incorporated under the laws of the State of California, its successors and assigns. Section 5. "Association Rules" shall mean rules adopted by the Association pursuant to the Article hereof entitled "Duties and Powers of the Association." Section 6. "Board" shall mean the Board of Directors of the Association. Section 7. "City" shall mean and refer to the City of Newport Beach, California, a municipal corporation of the State of California. Section 8. "Common Expenses" shall mean and refer to 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 Community Facilities; (e) the costs of fire, casualty, liability, workmen's compensation and other insurance covering the Common Area; the costs of any other insurance obtained by the Assoc_ation; (7) reasonable reserves as deemed appropriate by the Bcarc; (:) the costs of bonding of the members of the Board, any professional managing agent or any other person handing the funds of the Association; Beaco-. Bay 9/20/7-; 3 Rev. 9/24/79 (i) taxes paid by the Association; (j) amounts paid by the Association for discharge of any lien or encumbrance levied against the Common Area or portions thereof; •(k) costs incurred by the Architectural Committee or other committee established by the Board; and {1) other expenses incurred by the Association for any reason whatsoever in connection with the Commo: Area, or the costs of any other item or items designated �y this Declaration, the Articles, Bylaws or Association Ruses, or in furtherance of the purposes of the .Association or in the discharge of any duties or powers of the Association. Section 9. "Common Area" shall mean all streets, beaches, walkways, tennis courts, docks, piers, and common landscaped areas, including but not limited to Lots A through J inclusive as shown on Exhibit "�I". Section 10. "Covered Property" shall mean and refer to all the real property described on Exhibit "I". Section 11. "Declarant" shall mean and refer to the City of Newport Beach. Sectio; 12. "Exhibit" shall mean and refer to those documents so designated herein and attached hereto and each of such Exhibits is by this reference incorporatE-31 in this Declaration. Section 13. "Member" -shall mean and refer to every person or entity who qualifies for membership pursuant to the Article of this Declaration entitled "Membership." Secticn 14. "Lessee" shall perzscns or entities who are lessees of a Residence. mean and refer to one or more alone or collectively the Section 15. "Residence" shall. mean and refer to a -lot shown on the Record of Survey Map of Beacon Bay 5'_,:36ivzsion recorder] in Book 9, pages 42 and 43, i;ecc��s of Survey, on file in the Office of the County Rec_,r-fer, Orange County, California; provided, however, shall not include any Common Area. shall include the residential dwelling unit Be 9/2! 4 Rev. 9/24/79 A together with garages, structures and other improvements on the same lot or parcel. Section 16. "Setback" shall mean and refer to those internal distances from the property line of each lot as shown on Exhibit ARTICLE II MEMBERSHIP Section 1 - Membership. Every Lessee shall be a Member but there shall be only one Membership per Residence. The term and provisions set forth in this Declaration, which are binding upon all Lessees are not exclusive, as Lessees shall, -in addition, be subject to the terms and provisions of the Articles, Bylaws and Association Rules to the extent the provisions thereof are not in conflict with this Declaration.- Membership of Lessees shall be appurtenant to and may not be separated from the interest of such Lessee in any Residence. Ownership of a Residence shall be the sole qualification for membership; provided, however, a Member's voting rights may be regulated or suspended as provided in this Declaration, the Bylaws or the Association Rules. Section 2 - Transfer. The membership held by any Lessee shall not be transferred, pledged or alienated in any way, except that such membership shall automatically be transferred to the transferee of the interest required for membership. Any attempt: to make a prohibited transfer is void and will not be reflected upon the boors and records of the Association. The Association shall have the right to record the transfer upon the books of the Association without any further action or consent by the transferring Lessee. Section 3 - Voting Rights. All voting right shall be subject to the restrictions and limitations provided here-,- aid in the Articles, Bylaws and Association Rules. Section e - Classes of Voting Membership. The Association shall ;:a-ve one (1.) class of voting membership. Sec` ion 5. - Approval _of Members. Unless elsewhere of r:+i Specifically provided in this Declaration or the Bl s, any provision of this Declaration or the Bylaws 9/20/79 Rev_ 9/24/79 which, requires the vote or written assent of the voting power of the Association shall be deemed satisfied by the following: (a) The vote in person or by proxy of the specified percentage at a meeting duly called and noticed pursuant to the provisions of the Bylaws dealing with annual or special meetings of the Members. (b) Written consents signed by the specified percentage of Members as provided in the Bylaws. ARTICLE III COVENANT FOR MAINTENANCE ASSESSMENTS Section 1 - Creation of the Lien and Personal Obligation of Assessments. Each Lessee is deemed to covenant and agree to pay to the Association: Regular and Special Assessments, such Assessments to be fixed, established and collected from time to time as provided in this Declaration. The Assessments, together with interest thereon, late charges, attorneys` fees and court costs, and other costs of collection thereof, as hereinafter provided, shall be a continuing lien upon the Residence against which each such Assessment is made and shall also be the personal obligation of the Lessee of such Residence at the time when the Assessment becomes due. Notwithstanding the foregoing, the Assessment lien shall not affect the priority of any other existing liens. Section 2 - Pur.00se of Assessments. The Assessments levied by the Association shall be used exclusively to defray Common Expenses. Section 3 - Regular Assessments. Each year the Board shall determine the amount of the Regular Assessment to be paid by each Member. The Regular Assessment shall be due and payable on such dates as the Board may establish. Each "-;:ober shall be sent written notice of the Regular Assessment and shall thereafter pay the Association in inst 17—ments as established by the Board. Sect cn 4 - Uniform Assessment. Regular Assessments shall be fixed at an equal amount for each Residence. Section 5 - Specia]_ Assessments. Special Assessments may be I ,.7 ic.d by the Board from time to time. Beacon Bay 9/20/79 6 Rev. 9/24/79 Section 6 - No Offsets. All Assessments shall be payable in the amount specified by the Assessment and no offsets against such amount shall be permitted for any reason, including, without limitation, a claim that (i) the Association is not properly exercising its duties and powers as provided in this Declaration; or (ii) a Member has made and elects to make no use of the Common Areas, Section 7 - Reserves. The Regular Assessments may include reasonable amounts as determined by the Board collected as reserves for the future periodic maintenance, repair or replacement of all or a portion of the Common Area, or any other purpose as determined by the Board. All amounts collected as reserves, whether pursuant to this Section or otherwise, shall be deposited by the Board 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 ''trot commingled with any other funds of the Association. Such reserves shall be deemed a contribution to the capital account of the Association by the Member. ARTICLE IV NONPAYMENT OF ASSESSMENTS Section 1 - Delinquency. Any assessment provided for in this Declaration which is not paid when due shall be delinquent on said date (the "delinquency date"). If any such Assessment is not paid within ten (10) days after delivery of notice of such delinquency from the Association, a late charge as established by the Board shall be levied and the Assessment shall bear interest from the delinquency date at the rate of ten percent (10%) per annum. The Association may at its option, and without waiving the right to judicially foreclose its. lien against the Residence, pursue any available remedies, including, without limitation, bringing an action at law against the Member personally obligated to pay the same, and/or upon compliance with the notice provisions set forth in the Section entitled "Notice of Lien" of this Article to foreclose the lien against the Residence. If action is co:-:enced, there shall be added to the amount of such As-c-essment the late charge, interest, the costs of such action, and attorneys' fees incurred in connection with suc: action; and in the event a judgment is obtained, such ju;c:,ent shall include said late charge, interest and a reasc_:able attorney's fee, together with the costs of action. Each Member vests in the Association, or its assigns, the right and power to bring all actions at law Bel=:1- Bay 9 -0 9 7 Rev. 9/21/79 or lien foreclosure against such Member or other Members for the collection of such delinquent Assessments. Section 2 - Notice of Lien. No action shall be brought to foreclose said Assessment lien or to proceed under the power of sale herein provided until thirty (30) days after the date a notice of claim of lien is deposited in the United States mail, certified or registered, postage prepaid, to the Lessee of said Residence, and a copy thereof is recorded by the Association in the office of the County Recorder of the County; said notice of claim of lien must recite a good and sufficient legal description of any such Residence, the record Lessee or reputed Lessee thereof, the amount claimed which shall include interest on the unpaid Assessment at the rate of ten percent (10%) per .annum, a late charge as established by the Board, plus rea-tonable attorneys' fees and expenses of collection in connection with the debt secured by said lien, and the name and address of the claimant. Section 3 - Foreclosure Sale. Said Assessment lien may be enforced by sale by the Association, its attorney or any other person authorized by the Board to make the sale after failure of the Lessee to make the payments specified in the notice of claim of lien within said thirty (30) day period. Any such sale provided for above is to be conducted in accordance with the provisions of Sections 2924, 2924b, 2924c, 2924f, 29248 and 2924h of the Civil_ Code of the State of California as said statutes may from time to time be amended, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner_ permitted or provided by law. Upon the affirmative vote of a majority of the voting power of the Association, the Association, through its duly authorized agents, shall have the power to bid on the Residence, using Association funds, or funds borrowed for such purpose, at the sale., and to acquire and hold, lease, mortgage and convey the same. Section 4 - Relationship with Mortgage Liens. (a) The lien provided for in the Article hereof entitled "N'onpayment of Assessments" for the payment of Assess -n -_l is shall be subordinate to the lien of any PIortc=.ce which was recorded prior to the date any such Asses. lie- t becomes due. (b) If any Residence subject to a monetary lien creat--,.d:any provision hereof shall be subject to the lien of a Mortgage: (1) the foreclosure of any lien creat_. y anything set forth in this Declaration shall Beacon 9/20/79 8 Rev. 9/24/79 not operate to affect or impair the.'lien of such Mortgage; and (2) the foreclosure of the lien of said Mortgage, or the sale under a power of sale included in such Mortgage (such events being hereinafter referred to as "Events of Foreclosure") shall not operate to affect or impair the lien hereof, except that any persons who obtain an interest through any of the Events of Foreclosure, and the successors in interest, shall take title free of the lien hereof or any personal obligation for said charges as shall have accrued up to the time of any of the Events of Foreclosure, but subject to the lien hereof for all said charges that shall accrue subsequent to the Events of Foreclosure. Section 5 - Curing of Default. Upon the timely payment or other satisfaction of: (a) all delinquent Assessments specified in the notice of c1 -aim of lien, (b) all other Assessments which have become due and payable with respect to the Residence as to which such notice of claim of lien was recorded, and (c) interest, late charges, attorneys' fees and other costs of collection pursuant to this Declaration and the notice of claim of lien which have accrued, officers of the Association or any other persons designated by the Board are hereby authorized to file or record, as the case may be, an appropriate release of such notice, upon payment by the defaulting Lessee of a fee, to be determined by the Association, but not to exceed Fifty Dollars ($50.00) to cover the costs of preparing and filing or recording such release. ARTICLE V ARCHITECTURAL CONTROL Section 1 - Appointment of Architectural Committee. The Architectural Committee shall consist of not less than three (3) nor more than five (5) persons as fixed from time to time by resolution of the Board. The Boars shall have the right to appoint the members of the hrcitectural Committee. Persons appointed by the Board to the Architectural Committee, however, must be Member... Section 2 - General Provisions. (a) The Architectural Committee may establish reasor<able procedural rules and assess a fee in connection with r=:%iew of plans and specifications including, without limitaticn, the number of sets of plans to be submitted; Beacon 9/20/77 9 Rev. 9/24/79 however, the Architectural Committee may delegate its plan review responsibilites to one or more members of such Architectural Committee. Upon such delegation, the approval or disapproval of plans and specifications by such persons shall be equivalent to approval or disapproval by the entire Architectural Committee. (b) In the event the Architectural Committee fails to approve or disapprove such plans and specifications within thirty (30) days after the same have been submitted in accordance with any rules regarding such submission adopted by the Architectural Committee, such plans and specifications will be deemed approved. (c) Nothing in this Declaration or in the Association's Articles, Bylaws or Rules shall be construed or amended to allow the Architectural Cammittee 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 3 - Approval and Conformity of Plans. No building, fence wall or other structure shall be com,menced, erected or maintained upon the Covered Property, nor shall there be any addition to or change to the exterior of any Residence, structure or other improvement except in compliance with plans and specifications therefor which have been submitted to and approved by the Architectural Committee as to harmony of external design and location in relation to surrounding structures and topography. Section 4 - Nonliability for Approval of Plans. Plans and specifications shall be approved by the Architectural Committee as to style, exterior design., appearance and location, and are not approved for engineering design or for cor:ipliance with zoning and building ordinances, and by approving such plans and specifications neither the Architectural Committee, the members thereof, the Association, the Members, the Board nor Declarant assumes liability or responsibility therefor, or for any defect in any structure constructed from such plans and specifications. ARTICLE VI DUTIES AND POWERS OF THE ASSOCIATION Sectio- 1 - General Duties and Powers. In addition to the duties n�' powers enumerated in its Articles and Bylaws, Beacon may 9/20/79 10 Rev. 9/24/79 or. elsewhere provided for herein, and without limiting the generality thereof, the Association shall have the specific duties and powers specified in this Article. Section 2 - General Duties of the Association. The Association through the Board shall have the duty and obligation to: (a) enforce the provisions of this Declaration, the Articles, Bylaws, and Association Rules, by appropriate means and carry out the obligations of the Association hereunder; (b) maintain and otherwise manage the Common Area; (c) pay any real and personal property taxes and oth,er charges assessed to or payable by the Association; and` (d) obtain and continue in effect during the term of of the lease, in its own name a comprehensive policy of public liability insurance proving coverage for the common area, and a policy of fire and casualty insurance with coverage as the Board deems appropriate. Section 3 - General Powers of the Association. The Association through the Board shall have the power but not the obligation to: (a) employ a manager or other persons and contract with independent contractors or managing agents to perform all or any part of the duties and responsibilities of the Association; (b) borrow money as may be needed in connection with the discharge of the Association's powers and duties; and (c) establish and maintain a working capital and coati _ncy fund in an amount to be determined by the Board. Said fund shall be used by the' Board as it deems fit to carry out the objectives and purposes of the FiSSCC 4 - - SecAs-,nc_ation Rules. The Board shall have the _ po ; :opt, a<<1.end, and repeal such rules and rea :; at-. �;is s it :seems reasonable (the "Association F�uie In t: -Ie event of any conflict between any such ARule:: and any other provisions of this _=._on, o:: tie Articles or Bylat•:s, the provisions of Rules shall he deemed to be superseded by the _ -_s:.on of this Declaration, the Articles or the ByIa: c7 thc, extent of any such conflict. 9/20/7 .l .l. Rev. 9/24/79 5/4/81 ARTICLE VII REPAIR AND MAINTENANCE Section 1 - Repair and Maintenance by Association. The Association shall have the duty to: (a) maintain, repair, restore, replace and make necessary improvements to the Common Area; (b) maintain all other facilities, equipment, services or aesthetic components of whatsoever nature as may from time to time be requested by the vote or written consent of a majority of the voting power of the Members; (c) pay out of the general funds of the Association the; costs of any maintenance and repair made.pursuant to this section, except as otherwise herein specified as payable by particular Lessees. Section 2 -_Repair and Maintenance by Lessee. Except as the Association shall be obligated to maintain and repair as may be provided in this Declaration, every Lessee 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 in accordance with the provisions of this Article. Section 3 - Maintenance of Public Utilities. Nothing contained herein shall require or obligate the Association to maintain, replace or restore the underground facilities or public utilities which are located within easements in the Common Area owned by such public utilities. However, the Association shall take such steps as are necessary or convenient to ensure that such facilities are properly maintained, replaced or restored by such public utilities. ARTICLE VIII USE RESTRICTIONS Section 1 - Commercial Use. No part of a Residence shall be us -26 `or any business, commercial, or nonresidential purpose -s. Beacon. 3ay 9/20/79 12 Rev. 9/24/79 Section 2 -.Signs. No sign or billboard of any kind shall be displayed to the public view on,Iany portion of the Covered Property; provided, however, that a Member may display on his Residence, a sign advertising its sale or lease so long as such sign shall comply with any customary and reasonable standards promulgated by the Board. Section 3 - Nuisance. No noxious or offensive activity shall be carried on upon any Residence, or any part of the Covered Property nor shall anything be done thereon which may be, or may become an annoyance or nuisance to the neighborhood, or which shall in any way interfere with the quiet enjoyment of each of the Lessees of his respective Residence. Section 4 - Animals. No animals, livestock or poultry of any. kind shall be raised, bred or kept upon the Covered Proerty, except that dogs, cats or other household pets may be kept on the Residences, provided they are not kept, bred or maintained for any commercial purpose, or in numbers deemed unreasonable by the Board. Notwithstanding the foregoing, no animals or fowl may be kept on the Residences which in the good faith judgment of the Board or a committee selected by the Board for this purpose, result in any annoyance or are obnoxious to residents in the vicinity. All animals except cats permitted to be kept by this Section shall be kept on a leash when on any portion of the Covered Property except within a Residence. Section 5 - California Vehicle Code. The City may be allowed to impose and enforce all provisions of the applicable California Vehicle Code sections on any private streets within the Covered Property. ARTICLE IX RIGHTS OF ENJOYMENT Section_ 1 —Members' Right of Enjoyment. Every Member shall i a -:e nonexclusive easement for use and enjoyment in and to the Common Area and such right shall be appurtenant to and shall pass with the interest required to be a Lessee to every Residence, subject to all of the ease~ents, covenants, conditions, restrictions and other provisions contained in this Declaration, including, without limitation, the following provisions: Beacon Bav 9/2.0/79 13 Rev. 9/2.4/79 (a) The right of the Association to limit the number of guests of Members and to limit the use of the Common Area by persons not in possession of a Residence, but owning a portion of the interest in a Residence required for membership. (b) The right of the Association to establish reasonable rules and regulations pertaining to the use of the Common Area. Section 2 - Delegation of Use. Any Member may delegate his right of enjoyment to the Common Areas to the members of his family or his tenants who reside on his Residence, or to his guests, subject to the rules and regulations adopted by the Board. In the event and for so long as a Lessee delegates said rights of enjoyment to his tenants, sai,d Lessee shall not be entitled to said rights unless both he and the tenant reside on the Residence in separate dwelling units which conform to all applicable municipal laws and regulations. Section 3 - Waiver of Use. No member may exempt himself from personal liability for assessments duly levied by the Association, or release the Residence owned by him from the liens, charges and other provisions of this Declaration, the Articles, Bylaws and Association Rules, by waiver of the use and enjoyment of the Common Area, or the abandonment of his Residence. ARTT('7,R X GENERAL PROVISIONS Section 1 - Enforcement. The Association, or any Lessee, shall have the right to enforce by proceedings at law or in equi'-v, all restrictions, conditions, covenants and reservations, now or hereafter imposed by the provisions of this Declaration or any amendment thereto, including the right to prevent the violation of such restrictions, conditions, covenants, or reservations and the right to recover damages or other dues for such violation. The Association or any Lessee shall also have the right to enforce by proceedings at law or in equity the provisions of the Articles or Bylaws and any amendments thereto. With re-oect to architectural control and Association Rules, the Association shall have the exclusive right to the enforcement thereof unless the Association refuses or is unable to effectuate such enforcement, in which case any Lessee who otherwise has standing shall. have the right to undc_rtake such enforcement. With respect to Assessment Beacon 2,;v 9/20/79 14 Rev. 9/7.4/79 Liens, the Association shall have the exclusive right to the enforcement thereof. Section 2 - No Waiver. Failure by the Association or by any Member to enforce any covenant, condition, or restriction herein contained, or the Articles, Bylaws or Association Rules, in any certain instance or on any particular occasion shall not be deemed a waiver of such right on any such future breach of the same or any other covenant, condition or restriction. Section 3 - Cumulative Remedies. All rights, options and remedies of Declarant, the Association, or the Lessees under this Declaration are cumulative, and no one of them shall be exclusive of any other, and Declarant, the Association, and the Lessees 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 4 - Severability. Invalidation of any one or a portion of these covenants, conditions or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect. Section, 5 - Covenants to Run with the Land; Term. The covenants, conditions and restrictions of this Declaration shall run with and bind the Covered Property and shall inure to the benefit of and be enforceable by the Association or any Lessee, their respective legal representatives, heirs, successors and assigns, for a term of twenty five (25) years from the date this Declaration is recorded, after which time said covenants, conditions and restrictions shall be automatically extended for successive periods of ten (10) years, unless an instru:,,ent, signed by the Declarant and a majority of the then Lessees, has been recorded at least one (1) year prior to the end of any such period, agreeing to change said covenants, conditions and restrictions in whole or in part. Section 5 -_Heading. The Article and Section headings have been inserted for convenience only, and shall not be considered or referred to in resolving questions of interpretation or construction. Section. 7 - Singular Includes Plural. Whenever the context of this Declaration requires same, the singular shall include the plural and the masculine shall include the feminine and the neuter. . Beacon. 9/20/79 15 Rev. 9/24/79 Section 8 - Attorneys' Fees. In the event action is instituted to enforce any of the provisions contained in this Declaration, the party prevailing in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorneys' fees and costs of such suit. Section 9 - Notices. Any notice to be given hereunder shall -be in writing and may be delivered as follows: (a) Notice to a Lessee shall be deemed to have been properly delivered when delivered to the Lessee's Residence, or placed in the first class United States mail, postage prepaid, to the most recent address furnished by such Lessee in writing to the Association for the purpose of giving notice, or if no such address shall have been furnished, then to the street address of such Lessee's Residence. Any notice so deposited in the mail within the City shall be deemed delivered forty-eight (48) hours after such deposit. In the case of co -Lessees any such notice may be delivered or sent to any one of the co -Lessees on behalf of all co -Lessees and shall be deemed delivery on all such co -Lessees. (b) Notice to the Association shall be deemed to have been properly delivered when placed in the first class United States mail, postage prepaid, to the address furnished by the Association or the address of its principal place of business. (c) The affidavit of an officer or authorized agent of the Association declaring under penalty of perjury that a notice has been mailed to any Lessee or Lessees, or to all Members, to the address or addresses shown on the records of the Association, shall be deemed conclusive proof of such mailing, whether or not such notices are actually received. Section 10 - Effect of Declaration. This Declaration is made for the purposes 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 Decla-rat-on, or as to the compliance of any of these Provisions with public laws, ordinances and regulations applic=ble thereto. Section 11 - Personal Covenant. To the extent the acceptance or conveyance of a Residence creates a personal cove.ant between the Lessee of such Residence and Declarant or other Lessees, such personal covenant shall Beacon 3av 9/20/79 16 Rev. 9/24/79 terminate and be of no further force or effect from or after the date when a person or entity ceases to be an Lessee except to the extent this Declaration may provide otherwise with respect to the payment of money to the Association. Section 12 - 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 13 - Subleases. Any agreement for the subleasing or rental of Residence (hereinafter in this Section referred to as a "lease") shall provide that the terms of such lease shall be subject in all respects to the provisions of this Declaration, the Articles, the Bylaws and the Association Rul.es. Said lease shall further provide that any failure by the lessee thereunder to comply with the terms of the foregoing documents shall be a default under the lease. All leases shall be in writing. Any Lessee who shall lease his Residence shall be responsible for assuring compliance by such Lessee's lessee with this Declaration, the Articles, the Bylaws and the Association Rules. Section 14 - Amendments. 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 Maintenance," or of this Section shall require the affirmative vote or written approval of not less than sixty percent (60%) of the Members. (b) Any amendment or modification of any Article other ti n those specified in subparagraph (a) above shall require the affirmative vote or written approval of a majority of the members. (c) An amendment or modification that requires the vote a written assent of the Members as hereinabove Beacon :,-y 9/20/79 17 Rev. 9/24/79 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 Records of the County. The notarized signatures of the Members shall not be required to effectuate an Amendment of this Declaration. (d) Notwithstanding the foregoing, any provision of this Declaration, or the Articles, Bylaws or Association Rules which expressly requires the approval of a specified percentage of the voting power of the Association for action to be taken under said provision can be amended only with the affirmative vote or written assent of not less than the same percentage of the Voting Power of the Association. IN WITNESS WHEREOF, Declarant has executed this instrument the day and year first herein above written. ATTEST: City Clerk APPROVED AS TO FOPd4: Cty Attorney Beacon Bav 9/20/79 CITY OF NEWPORT BEACH, a chartered municipal corporation ZZ Mayor 18 Rev. 9/24/79 STATE OF ) COUNTY OF ss. ) On , 19—, before me the undersigned, a Notary Public in and for said State, personally appeared , known to me to be the of the corporation that executed the within Instrument, known to me to be the person who executed the within Instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its bylaws or a resolution of its board of directors. [Seal] Beacon 9/20/7 032381 WITNESS my hand and official seal. 19 Notary Public Rev. 9/24/79 RESOLUTION NO. 87- 148 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH APPROVING AN AGREEMENT TO LEASE OF BEACON BAY RESIDENTIAL LOTS A, 17, 31 AND 6 3 WHEREAS, the City owns certain tidelands and uplands in an area known as Beacon Bay; and WHEREAS, on January 9, 1950, the City entered into a master lease to said property with Carroll B. Beek, Barton Beek, Joseph Allan Beek, Jr. and Seymour Beek jointly, which master lease expires on December 31, 1987; and WHEREAS, the westerly portion of the Beacon Bay property has been divided into individual lots and sublet for residential purposes; and WHEREAS, all said subleases will expire on the same date as the master lease, December 31, 1987; and WHEREAS, the City Counc it finds it to be in the public interest and the welfare of the City that the portion of Beacon Bay which is currently leased for residential purposes remain residential in character and that to enter into new agreements to lease with the sublessees under terms and conditions set forth in the Agreement to Lease and Lease is in the public interest; and WHEREAS, the City Council finds that it is ih the best interest and welfare of the City that the streets, walkways, common areas, landscaped areas, beaches and other areas presently leased to the Beacon Bay Community Association should remain in sa id status in considerat ion of the Beacon Bay Community Association maintaining said areas at no expense to the City and further providing that the areas designated as tidelands within said leased area remain open, available and accessible to the public; and WHEREAS, Chapter 74, Statutes of 1978 permits the leasing of the residential lots in Beacon Bay which are located on tidelands; and WHEREAS, Section 1042 of the Charter of the City of Newport Beach permits the leasing and re-leasing of water front -1- V property, provided the property was under lease as of January 11, 1957, the date of adopt ion of sa id prov is ion of the Char ter of the City of Newport Beach; and WHEREAS, the City Council by Resolution No. 10040 approved a Lease and Agreement to Lease of the resident ial lots in Beacon Bay; and WHEREAS, the sublessees of Lots A, 179 31 and 63 elected not to execute the Agreement to Lease approved by Resolution No. 10040; and WHEREAS, the City Council has negotiated in good faith with the sublessees of Lots A, 17, 31 and 63 and desires to offer to these sublessees a new agreement to lease which would commit the City and sublessees to enter the Lease approved by Resolution No. 10040; and WHEREAS, the City Council hereby finds and determines that the `leasing of the subject property is an act by the City of Newport Beach in its proprietary capacity and further that the execution of the Agreements to Lease the respective residential lots binds the City of Newport Beach to execute the Leases of sa id propert ies in December, 1987, and said execution of said Leases by and on behalf of the City of Newport Beach constitutes a ministerial act and a furtherance of the obligation of the City of Newport Beach hereby created. NOW, THEREFORE, BE IT RESOLVED by the City Cou nc i 1 of the City of Newport Beach that pursuant to the recitals hereinabove set forth, the Charter of the City of Newport Beach and Chapter 74, Statutes of 1978, the.form of Agreement to Lease of the residential lots in Beacon Bay, attached hereto is approved. r BE IT FURTHER RESOLVED that the approval of the form of the Agreement to Lease attached hereto is rescinded effective November 1, 1987 unless such Agreement to Lease is executed by sublessees prior to that date. BE IT FURTHER RESOLVED that the Mayor and the City Clerk are hereby authorized and directed to execute each individual Agreement to Lease the respective residential lots in the westerly port ion of the Beacon Bay property and that the Mayor -2- c.' and City Clerk of the City of Newport Beach are further authorized and directed to execute said Lease for the respective residential lots in the westerly portion of the Beacon Bay property during the month of December, 1987, provided that the sublessees and their heirs, devisees, and assigns, as the case might be, have fully performed and executed their obligation under said Agreements to Lease. ADOPTED this 28th day of September, x:1987. Mayor' - ATTEST: J/J� r City Clerk ;e y. -3- AGREEMENT TO LEASE THIS AGREEMENT TO LEASE, made and entered into on the qday of OG oiiR, 1987, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter "City," and __ e. Y -M km S-videR 111,cK hereinafter "Sublessee." RECITALS A. City holds t it le to and is the owner of certa in harbor frontage and tidelands, together with certain uplands abutting thereon known as Beacon Bay and more particularly de scr ibed in Exh ib it "1 " at tached here to and made a par t hereo f by this reference. B. Carroll B. Beek, Barton Beek, Joseph AllAn Beek, Jr., and Seymour Beek jointly hold a Master Lease to said proper- ty dated January 9. 1950, which Master Lease expires on December 31, 1987. C. The "Westerly Portion" of the Beacon Bay property has been divided into individual lots and subleased for resident ial purposes. D. All of said subleases expire on the same date as the Master Lease, to wit: December 311 1987. E. City believes it to be in the best interest and welfare of City: (1) that the portion of Beacon Bay which is currently leased for residential purposes remain residential in -1- character; and (2) to enter into new agreements to lease with the sublessees under the terms, conditions and for the considera- tion as hereinafter set forth. F. It is the judgment of City that the leasing of the property hereinafter described is consistent with the trust pur- poses imposed upon such portions of the leased land which may constitute tidelands as authorized by Chapter 749 Statutes of 1978. G. It is further the judgment of City that in entering into this Agreement to Lease in the future, City is acting pur- suant to its proprietary powers. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, City and Sub- lessee hereby agree as follows: 1. City hereby agrees to lease to Sublessee and Sub- lessee hereby agrees to lease from City the real property described in Exhibit 112" attached hereto and by this reference made a part hereof (hereinafter the "Leased Land") pursuant to a lease substantially in the form of Lease which is attached hereto marked Exhibit "C" and by this reference made a part hereof, and under the terms and conditions as set forth below. 2. The Base Rental under Paragraph 3 of the Lease, Exhibit "C" attached hereto, shall be the sum described by Alternate 4- , hereby selected by the Sublessee as described on the Schedule of Fees attached hereto as Exhibit "A." 3. Should any Sublessee not execute this Agreement on or pr for to the October 3 1, 1987, but execute th is Agreement -2- after October 31, 1987, and prior to December 31, 1987, the renta)= sum to be used in paragraph 2 hereof and the Base Rental under Paragraph 3 of the Lease, Exhib it "C" a ttached hereto, shall be the total of the fair market rental value of the land as established by the Appraisal Report prepared by George Hamilton Jones, M.A.I., dated November 5, 1980, plus an amount equal to the L.A. - Long Beach Consumer Price Index (C.P.I.) increase, from July 1, 1981 to the date of execution, or 1% per month increase from July 1, 1981, whichever is greater, plus an amount equal to the increase in rental value change due to the reduced lease advantage, as of the date of execution, as set forth in the effective rental value change sheet attached hereto as Exhibit "D", said total rental rate shall be referred to as Adjusted Base Rental. The different Adjusted. Base Rental provided for in this paragraph is imposed unilaterally by the City out of what is deemed to be fair and equitable to those Sublessees who choose to enter into this Agreement on its Effective Da to . Sa id d i fference in Adjusted Base Rentals is in no manner to be considered a penalty but moreover a procedure developed solely by City to pro- vide the incentive to enter into this Agreement of Lease at the earliest date possible. Commencing January 1, 1988 City is under no obligation to enter into this Agreement or a Lease in the form of Exhib it "C" attached hereto with any sublessee who has not executed this Agreement and shall be free to deal with respect to the lease of any unleased portions of Beacon Bay on any terms and conditions it deems f it, e i ther w ith third part ies or pr for sublessees. 4. Sublessee may sell, assign, exchange or convey his interest in this Agreement without prior written consent of the City, provided that upon any such transfer the provisions of Section 4 of the Lease Exhibit "C" attached hereto, shall Ma determine the Base Rental to be paid by assignee to City, and further provided that the assignee execute an acceptance of the assignment and an agreement to be bound by all the terms of this Agreement and to make the payments provided for hereunder which Assignment and acceptance shall be delivered to and accepted by City. Upon such assignment and acceptance, Sublessee shall be released of any further obligation and liabilities under this Agreement to Lease. 5. The parties agree to execute the Lease, Exhibit "C" hereto, dur ing the month of December, 1987 and concurrently therewith to execute and record a short form memorandum thereof. 6. Time and each of the terms, covenants and conditions hereof are expressly made the essence of th is Agreement. If Sublessee shall fail to comply with any of the terms, covenants or conditions of this Agreement, including making the payments prov ided for here in at the t ime and in the amount herein required, and shall fail to remedy such default within sixty (60) days and thereafter diligently prosecute the same to completion, or if a Sublessee shall abandon or vacate the Leased Land, City may, at its option and without further demand, terminate this Agreement. Upon service by City on Sublessee of Notice of Termination of this Agreement to Lease, notice being given in the same manner as provided in paragraph 19 of the Lease appended hereto as Exhibit "C" this Agreement to Lease shall be terminated as to Sublessee and City's obligation to enter into the Lease appended hereto as Exhibit "C" is likewise terminated and City is under no obligation whatsoever to enter into said Lease with Sublessee. -4- Should either City or Sublessee be required to employ counsel to enforce the terms, conditions and covenants of this Agreement to Lease, the prevailing party shall recover all reasonable attorney's fees (and court costs if applicable) incurred therein whether or not court proceedings were commenced. 7. Sublessee agrees that he will hold and save City, its officers, agents and employees harmless from any and all claims or demands of any kind or nature whatsoever arising out of, or incident to, the use and occupancy of the Leased Land, and to indemnify City for any cost, liability or expense caused by or ar is ing out of any injury or death of persons or damage to property which may occur upon or about the Leased Land or caused by or arising out of any activities or omission of Sublessee, his agents, employees, licensees, and/or invitees, including, without limitation, injury or death of Sublessee, his agents, employees, licensees and invitees and damage to his property or Sublessee's property; except for any damage or injury of any kind arising out of the negligence of City, its agents or employees. 8. Each and every covenant, condition and agreement hereof, in accordance with the context, shall inure to the benefit of City and apply to and bind Sublessee, their respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into -5- In add it ion to termina t ion of this Agreement to Lease= City may recover from Sublessee all damages incurred by City by reason of said breach, including, without limitation, any payments due and owing from Sublessee to City and any other costs due and owing from Sublessee to City at the date of termination of this Agreement to Lease. Should either City or Sublessee be required to employ counsel to enforce the terms, conditions and covenants of this Agreement to Lease, the prevailing party shall recover all reasonable attorney's fees (and court costs if applicable) incurred therein whether or not court proceedings were commenced. 7. Sublessee agrees that he will hold and save City, its officers, agents and employees harmless from any and all claims or demands of any kind or nature whatsoever arising out of, or incident to, the use and occupancy of the Leased Land, and to indemnify City for any cost, liability or expense caused by or ar is ing out of any injury or death of persons or damage to property which may occur upon or about the Leased Land or caused by or arising out of any activities or omission of Sublessee, his agents, employees, licensees, and/or invitees, including, without limitation, injury or death of Sublessee, his agents, employees, licensees and invitees and damage to his property or Sublessee's property; except for any damage or injury of any kind arising out of the negligence of City, its agents or employees. 8. Each and every covenant, condition and agreement hereof, in accordance with the context, shall inure to the benefit of City and apply to and bind Sublessee, their respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into -5- Possession or occupancy of the Leased Land, or any part thereof in any manner whatsoever. IN WITNESS WHEREOF, the parties have caused this Ao ree- ment to Lease to be executed on the date first above written. ATTEST: City Cler APPR ED AS TO FORM: ity Attornbyl -6- Sub 1 sse 5 SNi�E2vtc.r. A.N) Alternate 1 Lot A 17 31 63 Alternate 2 Lot A 17 31 63 Alternate 3 Lot A 17 31 63 Alternate 4 Lot A 17 31 63 SCHEDULE OF FEES EXHIBIT A Lump Sum Payment $ 110,468 $ 64,442 $ 27,390 $ 60,370 Base Rental $ 2,072.92 $ 1,354.17 $ 729.17 $ 1,354.17 and Base Rental $ 2,072.92 $ 1,354.17 $ 729.17 $ 1,354.17 Constant Addit ional and Payment $ 1,104.50 $ 644 .17 $ 297. 50 $ 668.42 Lump Sum Payment $ 110,468 $ 64,442 $ 27,390 $ 60,370 Constant Add it ionaI Payment $ 1,104.50 $ 644.17 $ 297.50 $ 668.42 and Base Rental 2.5% of City approved appraisal divided by 12 2.5% of City appraisal divided by 12 2.5% of City approved appraisal divided by 12 2.5% of City approved appraisal divided by 12 and Base Rental 2.5% of City approved appra isa 1 divided by 12 2.5% of City approved appra isa 1 divided by 12 2.5% of City approved appraisal divided by 12 2.5% of City approved appraisal divided by 12 a AGREEMENT TO LEASE THIS AGREEMENT TO LEASE, made and entered into on the day of , 1987, by and between the CITY OF NE`SPORT BEACH, a chartered municipal corporation, hereinafter "City, it and hereinafter "Sublessee." RECITALS A. City holds t it le to and is the owner of certa in harbor frontage and t idelands, together with certain uplands abutting thereon known as Beacon Bay and more particularly described in Exhibit "I" attached hereto and made a part hereof by this reference. B. Carroll B. Beek, Barton Beek, Joseph ' A> I n Beek, Jr., and Seymour Beek jointly hold a Master Lease to said proper- ty dated January 9. 1950, which blaster Lease expires on December 31, 1987. C. The "Westerly Portion" of the Beacon Bay property has been divided into individual lots and subleased for resident ial purposes. D. All of said subleases expire on the same date as the Master Lease, to wit: December 31, 1987. E. City believes it to be in the best interest and welfare of City: (1) that the portion of Beacon Bay which is currently leased for residential purposes remain residential in -1 - v character; and (2) to enter into new agreements to lease with the ;sublessees under the terms, conditions and for the considera- ;: tion as hereinafter set forth. F. It is the judgment of City that the leasing of the property hereinafter described is consistent with the trust pur- poses imposed upon such portions of the leased land which may constitute tidelands as authorized by Chapter 74, Statutes of 1978. G. It is further the judgment of City that in entering into this Agreement to Lease in the future, City is acting pur- suant to its proprietary powers. NOW, THEREFORE, IN CONSIDERATION OF THE` FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, City and Sub- lessee hereby agree as follows: 1. City hereby agrees to lease to Sublessee and Sub- lessee hereby agrees to lease from City the real property described in Exhibit 112" attached hereto and by this reference made a part hereof (hereinafter the "Leased Land") pursuant to a lease substantially in the form of Lease which is attached hereto marked Exhibit "C" and by this reference made a part hereof, and under the terms and conditions as set forth below. 2. The Base Rental under Paragraph 3 of the Lease, Exhibit "C" attached hereto, shall be the sum described by Alternate , hereby selected by the Sublessee as described on the Schedule of Fees attached hereto as Exhibit "A." 3. Should any Sublessee not execute this Agreement on or pr for to the Oc tober 3 1, 1987, but execute this Agreement -2- after October 31, 1987, and prior to December 31, 1987) the ren tai° sum to be used in paragraph 2 hereof and the Base Rental under Paragraph 3 of the Lease, Exhibit "C" attached hereto, shall be the total of the fair market rental value of the land as established by the Appraisal Report prepared by George Hamilton Jones, M.A.I., dated November 5, 1980, plus an amount equal to the L.A. - Long Beach Consumer Price Index (C.P.I.) increase, from July 1, 1981 to the date of execution, or 1% per month increase from July 1, 1981, whichever is greater, plus an amount equal to the increase in rental value change due to the reduced lease advantage, as of the date of execution, as set forth in the effective rental value change sheet attached hereto as Exhibit "D", said total rental rate shall be referred to as Adjusted Base Ren taI . The different Ad jus.ted. Ba se Renta 1 provided for in this paragraph is imposed unilaterally by the City out of what is deemed to be fair and equitable to those Sublessees who choose to enter into this Agreement on its Effective Date. Said difference in Adjusted Base Rentals is in no manner to be considered a penalty but moreover a procedure developed solely by City to pro- vide the incentive to enter into this Agreement of Lease at the earliest date possible. Commencing January 1, 1988 City is under no obligation to enter into this Agreement or a Lease in the form of Exhibit "C" attached hereto with any sublessee who has not executed this Agreement and shall be free to deal with respect to the lease of any unleased portions of Beacon Bay on any terms and conditions it deems fit, either with third parties or prior sublessees. 4. Sublessee may sell, assign, exchange or convey his interest in this Agreement without prior written consent of the City, provided that upon any such transfer the provisions of Sect ion 4 of the Lease Exhibit "C" attached hereto, sisal l ORB V determine the Base Rental to be paid by assignee to City, and further;- provided that the assignee execute an acceptance of the assignment and an agreement to be bound by all the terms of this Agreement and to make the payments provided for hereunder which Assignment and acceptance shall be delivered to and accepted by City. Upon such assignment and acceptance, Sublessee shall be released of any further obligation and liabilities under this Agreement to Lease. S. The parties agree to execute the Lease, Exhibit "C" hereto, dur ing the month of December, 1987 and concurrent ly therewith to execute and record a short form memorandum thereof. 6. Time and each . of the : terms, covenants and conditions hereof are expressly made the essence of th is Agreement. If Sublessee shall fail to comply with any of the terms, covenants or conditions of this Agreement, including making the payment s prov ided for here in a t the t ime and in the amount herein required, and shall fa i 1 to remedy such default within sixty (60) days and thereafter diligently prosecute the same to completion, or if a Sublessee shall abandon or vacate the Leased Land, City may, at its option and without further demand, terminate this Agreement. Upon service by City on Sublessee of Notice of Termination of this Agreement to Lease, notice being given in the same manner as provided in paragraph 19 of the Lease appended hereto as Exhibit "C" this Agreement to Lease shall be terminated as to Sublessee and City's obligation to enter in to the Lease appended hereto as Exhibit "C" is likewise terminated and City is under no obligation whatsoever to enter into said Lease with Sublessee. -4- Should either City or Sublessee be required to employ counsel to enforce the terms, conditions and covenants of this Agreement to Lease, the prevailing party shall recover all reasonable attorney's fees (and court costs if applicable) incurred therein whether or not court proceedings were comnenced. 7. Sublessee agrees _that he will hold and, save City, its officers, agents and employees harmless from any and all claims or demands of any kind or nature whatsoever arising out of, or incident to, the use and occupancy of the Leased Land, and to indemnify City for any cost, liability or expense caused by or ar is ing out of any in jury or death of persons or damage to property which may occur upon or about the Leased Land or caused by or arising out of any activities or omission of Sublessee, his agents, employees, licensees, and/or invitees, including, without limitation, injury or death of Sublessee, his agents, employees, licensees and invitees and damage to his property or Sublessee's property; except for any damage or injury of any kind arising out of the negligence of City, its agents or employees. 8. Each and every covenant, cond it ion and aU reement hereof, in accordance with the context, shall inure to the benefit of City and apply to and bind Sublessee, their respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into -5- In add it ion to termination of th is Agreement to Leasee= City may recover from Sublessee all damages incurred by City by reason of said breach, including, without limitation, any payments due and owing from Sublessee to City and any other costs due and owing from Sublessee to City at the date of termination of this Agreement to Lease. Should either City or Sublessee be required to employ counsel to enforce the terms, conditions and covenants of this Agreement to Lease, the prevailing party shall recover all reasonable attorney's fees (and court costs if applicable) incurred therein whether or not court proceedings were comnenced. 7. Sublessee agrees _that he will hold and, save City, its officers, agents and employees harmless from any and all claims or demands of any kind or nature whatsoever arising out of, or incident to, the use and occupancy of the Leased Land, and to indemnify City for any cost, liability or expense caused by or ar is ing out of any in jury or death of persons or damage to property which may occur upon or about the Leased Land or caused by or arising out of any activities or omission of Sublessee, his agents, employees, licensees, and/or invitees, including, without limitation, injury or death of Sublessee, his agents, employees, licensees and invitees and damage to his property or Sublessee's property; except for any damage or injury of any kind arising out of the negligence of City, its agents or employees. 8. Each and every covenant, cond it ion and aU reement hereof, in accordance with the context, shall inure to the benefit of City and apply to and bind Sublessee, their respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into -5- Possession or occupancy of the Leased Land, or any part thereof in any manner whatsoever. IN WITNESS WHEREOF, the parties have caused this Agree- ment to Lease to be executed on the date first above written. ATTEST: City Clerk APPROVED AS TO FORM: City Attorney CITY OF NEWPORT BEACH By Mayor -6- Sublessee Alternate 1 Lo t A 17 31 63 Alternate 2 Lot A 17 31 63 Alternate 3 Lot A 17 31 63 Alternate 4 Lot A 17 31 63 SCHEDULE OF FEES EXHIBIT A Lump Sum Payment $ 110,468 $ 64,442 $ 27,390 $ 60,370 Base Rental $ 2,072.92 $ 1,354.17 $ 729.17 $ 1,354.17 and Base Rental $ 2,072.92 $ 1,354.17 $ 729.17 $ 1,354.17 Constant Addit ional and Payment $ 1,104.50 $ 644.17 $ 297.50 $ 668.42 Lump Sum Payment $ 110,468 $ 64,442 $ 27,390 $ 60,370 Constant Add it ionaI Payment. $ 1,104.50 $ 644.17 $ 29 7.50 $ 668.42 and Base Rental 2.5% of City approved appraisal divided by 12 2.5% of City appraisal divided by 12 2.5% of City approved appraisal divided by 12 2.5% of City approved appraisal divided by 12 and Base Rental 2.5% of City approved appraisal divided by 12 2.5% of City approved appraisal divided by 12 2.590 of Ci ty approved appraisal divided by 12 2.5% of City approved appra isa 1 divided by 12