Loading...
HomeMy WebLinkAboutBEACON BAY LEASE LOT 62_02_LEASE_DOCUMENTSa It. copy LEASE THIS LEASE is made and entered into as of the. U ndday of gicrid , 2000, by and between the CITY OF NEWPORT BEACH, a Charter City and municipal corporation ("Lessor"), and Chad E. Steelberq and Cristina M. Steelberq. husband and wife as community property. ("Lessee"), regarding the real property to as Beacon Bay Lot 62 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. N81-187371.V20524/94 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 62 (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 0 0 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 ride 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 Thirty -Seven thousand five hundred and 00/100 ($37 500.00 ), payable at the rate of Three thousand one hundred and twenty-five dollars and 00/100 ($3.125.00 ) per month. Lessee shall also pay, if applicable, deferred rent in the sum of ($ ) upon execution of this Lease. Rent shal shall not (circle one) be adjusted every seven (7) years after the date of transfer in accor ance with the provisions of Paragraph 3.13(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: (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 3.13(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.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 3.6(4). (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.6(4). (3) Exempt Transfers. The provisions of Paragraph 3.6 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 (a) 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), 3.6(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 (71h) 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 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 parry 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 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 ty 4. 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. 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 4.13 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. 7 D. Audit of Subleases. It is the intent of the parties that transfers referred to in Section 33(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, (1) 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. 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; (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. 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, 10 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. 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 and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, 11 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. 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 12 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 (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 13 r 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. 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. 14 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: (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. 15 C� • 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. 16 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 (ii) the expiration of seventy-two (72) hours from and notice, demand or communication. 22. HOLDING OVER. complete upon the earlier of (i) actual delivery, or after the deposit in the United States mail of such 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. 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 17 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. In IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first above written. ATTEST: APPRO AS TO FORM: CITY ATTORNEY LESSOR: CITY OF NEWPORT BEACH, By: Tite: CITY MANAGE 19 I47� l 00 r- Cb �ecoroing Rdqu b Thi ocument electronically recorded by Orange Coast ,_1t1 C ORANGE AST`TITLE COMPANY RECORDING REQUESTED AND WHEN RECORDED RETURN TO: Recorded In Official Records,CounV of Orange City Manager's Office L. Granville, O IIIIIIII Clerk-Recorder 0 F E E City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 2000035614010:53am 07/07/00 MEMORA L ASE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 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 Chad E. Steelberg and Cristina M. Steelberg, husband and wife as community property, herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on �T11T.y 3 2000 and ending on July 1, 2044, on the terms and conditions set forth in that certain lease by and between the parties hereto dated . A iA4 Z � , 2000Z � , 2000, 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 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. EXECUTED on 4 khg, Zz 2000, at Newport Beach, Orange County, �MELISSA K.HERRERAK.HERRERA OCommission # 1153558 Notary Public - Califomla LESSOR THE CITY OF NEWPORT BEACH AS TO FORM: Lessee: Cristina M. Steelberg TTORNEY A4e' ` Jun,21. 2000 11:59AM �JEDDM ESCROW 9496443933 No-4497 P. 2/2 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA ! SS COUNTY OF i%/if/r q Jr On (JLAO. ZZ/ �od�. before personally appeared c%lA�b, �' 5'7-SC-G64-,6 £ C,elsTiv�.. Sf3'£c-b £sz •� personally known to me (or purred m me on me ass o acmty et eras m e panon s whose names) ivare su scn edto he within instrucceset and acknowledged to me that halshNthey executed the same In bts/hedthoir authorized aapactty(le ,alggatga(a)„ea.,the,� ant S the person($) or the sntIW upon belu)t of which the person(e) acted, executed the buitu Bent. (0CZ •6*&& s9jfoltsir, , WITNESS my hand end official seat. r A1unoC a6,c. z Sigtlaldre 899c61 10 uo'sz Y?13b?J3H'Y �; w X J Y�' �4`h1a""iiei fo effiafd notarlat $eat. - OPTIONAL Though the I*MWIat Maw h nor Mtdred by taw, It mqy prove valuable to persona relying on the document and croxld prevent/Yaudutent reniotml and reattachment of dda form to another docanrenr. DESCRIPTION OF ATTACHED DOCUMENT Title or Type of Document; A51)la l- ✓Ai O� G £fl,S c Document Date: obnp— ZZi 20 cla Number of Pages: Signer(s) other than named above CAPACITY(IES) CLAIMED BY SIGNERS) [ 7 INDIVIDUAL tI ] rNnn�n�a Right Thu Itildnt / Right Thumbprint [ ] CORPORA780FPICER(S ot5 ,, [ CORPORATi�OPPICER(S) II of Signer TrrLE(S) � m,l here TrME(S).. IIII Top of Womb bete C 1 PARTNER(S)• [ 1 L17 pITED [ ] PARTNER(S�JI LIMITED II [ ] GSENNEERAL II I I ] GENERAL !! [ ] ATTORNEY -IN -FACT II II� I ] ATTORNEY. v' I.FACT [ ] TRUSTEES) II I [ ) TRUSTMS) II !I [ ) OUART)L4NORCONSERfA'Tp II I [ ] GUARDIAN RCONSERVATOR II [ ] OTHER All 11 [ ] OMU II !I SIOMM IS MELISSA K. HERRERA t i Commission n 115355E .� Nolory Public - California Orange County MyComm.ExplraAug29,2001 r t►�av ' 3 4 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California (� O County of `-' S 0-�V��-- SS. On ?before me, Do p i - personally appeared \(\� Jy�v L CATHY FISHER r Commission # 1174329 -e Notory Public-•Colitornfa Orange County MYComm. B(Plres Fah21,2002 Place Notary Seal Above J�4� t vJ 15cer (e g., *Jane Doe, N, 9?iersonally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(' whose nameWGYare subscribed to the with' instrument and acknowledged to meVia he she/they executed the same in tljjs/her/their authorized capacity(i , and that by hi/her/their signature( on the instrument the personw, or the entity upon behalf of which the personM acted, executed the instrument. TN _ S my hand and off ial seal. Slgna re of otaryPublic 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 Attache Title or Type of Document: L Document Date: �J - t� Number of Pages: �� 1"J Signer(s) Other Than Named Above: V� �.+C Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer—Title(s): ❑ Partner —❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMSPRINT', OF SIGNER w mar neeenai rvOioryHssociauon • uacu ue =o Ave., P.O BOX 2402 1 Chatsworth, CA 91313-2402 Prod, No. 5907 Reorder; Call Toll -Free I-B00-876.6827 L • 0 Govenunent code - 2736.17 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: ����Ix5 . - eaflzr,c^ DATE COMMISSION EXPIRES: COUNTY WHERE BOND IS FILED: COMMISSION NO.: MANUFACTURER/ VENDER NO.. PLACE OF EXECUTION: DATE OF EXECUTION: I I SIGNATURE: Government code - 2736.17 I CERTIFY UNDER PENALTY OF PERJURY THAT THE ILLEGIBLE PORTION OF THIS DOCUMENT, TO WHICH THIS STATEMENT IS ATTACHED, READS AS FOLLOWS: of,,�A V�C •, 115,t✓J PLACE OF EXECUTION DATE OF EXECUTION: SIGNATURE: 06 I/ PyhIs document,k electronically recorded by Recording Requested bya• ORANGE JAST TITLE COMPANY Orange Coast Title I bP Recorded in Official Records,Count of Orange RECORDING REQUESTED BY AND 12 Ga L. G WHEN RECORDED RETURN TO: Clerk -Recorder City Manager's Office IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIranville IIIIIIIIIIIIIIIIIIIIII 10.00 City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 2000035613910:53am 07/07/00 104 30 TO TERMrrrATWDb O� #%; .00 0.00 0.00 0.00 This agreement is made this day of 2000, by and between the CITY OF NEWPORT BEACH, hereina cal ed "Lessor", and John Davenport and Caroline Davenport, husband and wife, hereinafter called "Lessee". RECITALS A. Lessor and Lessee executed a ;ease on June 12, 1996, and subsequently recorded June 12, 1996, by the County Recorder of Orange County, California as Instrument No. 19960300125. By the terms of the lease, the following described property was leased to Lessee until July 1, 2044. Lot 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30, in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. 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 o terminate the lease and vacate the premises as described herein above as of and Lessor agrees to accept such termination and the premises, d *Ls`o�ra�nd_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 Lessor:. >` . City Manager BY:ti / Lessee: John Davenp BY: &WM ZIL'A A46/ Lessee: Caroline Davenport CAU.rG tNIA ALL -PURE RE ACKNOWLEDGMENT �r.��.cY.,cr..=rr=r..c��c�'yr.�-rr=r-iri-ri--rr-rr-n�•r>Ma•,-wr-w.-•n- mow- -•-•rr-r<-^-,ti.-....�.. �..-..,._ - - - - - �y r: State of I County of �3Ihh t z4� 2 C�'O before me riff f—! A c c No r4l Z On .. U nlc` r � � - 1 � ln.inl l ,ti �3 nF, Date Name and Title of Officer e personally appeared _ _ JQ/-/(V 7.a't/E/V POC % r �fN2( 8•�JaneDoe,Note Publics ?� oc-t ,/L4-t/L7y! NemO(s) of Signers) 'Oi� kpersonally known to me — OR — ❑ proved to me on the basis of satisfactory evidence to be the person(s) lI� whose name(s) is/are subscribed to the within instrument N and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by ANGELAS.TINNIN his/her/their signature(s) on the instrument the person(s), Commission# 1157487' or the entity upon behalf of which the person(s) acted, -. Notary Pubfic-CalfforNa executed the instrument. Orange County MyComm.Fxpkesoct3,2001 WITNESS my hand and official seal. I(`J - I, J 11Blgnature of Notary Public OPTIONAL Though the Information below Is not required bylaw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. scription of Attached Document Title or pe of Document: Document Da tuber of Pages: Signer(s) Other Than amed Above: Capacity(ies) Claimed y Signer(s) Signer's Name: / Signer's Name: ❑ Individual / ❑Individual ❑ Corporate Officer / ❑ Corporate Officer t Title(s): \ Tltle(s): ' ❑ Partner—❑ Limited ❑ Gen ral ar�ner—❑ Limited ❑ General ❑Attorney -in -Fact ❑ Attor�y in -Fact ❑ Trustee ❑ Trustee ❑Guardian or Consery or ❑ Guardian or C ervator ❑ Other: Top of thumb here C Other: Top of thumb here Signer Is epresenting: Signer Is Representing: �5 Fn A�'�`_t�.c:`��..��=Z",'�2s.��t�a����.��'�Z.�`�'�`zt.�4--v,�2+?�,.�+.;�z�'.�=rc��•r.Ta�vs-ref •--••-•-•••••o•>--I.,-„=,n,,,=,mv., 1v. oes nw- Canoga raM. un alau9a159 Prod. No. 5907 RwfdOr. Cell 7011-Free 1.800.876-6827 i 4/ CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of (1) C ss. Clnn ' 5 _ 0 C before me, � �� lv ID Date Nartie a \ 7 e of Olgcer (a g ,'Jane 1106. Notary Public') personally appeared Names) of Signer(s) *ersonally known to me ❑ proved to me on the basis of satisfactory evidence CATHY FISHER Commission # 1174329 z .a Notary Public - California is Orange County My Comm. FxpYes Feb 21,20D2 Place Notary Seal Above to be the person(Wwhose name)'(gare subscribed to the within instrument and acknowledged to me that�she/they executed the same in her/their authorized capacity('IA), and that by iOITer/their signatureXon the instrument the person((( or the entity upon behalf of which the person( acted, executed the instrument. SS my hand and fficial seal. Sign"ofgryPublic 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: Dsf M Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual ❑ Corporate Officer—Title(s): ❑ Partner —❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: O, o �- Ut";500 (J Number of Pages: k RIGHT THUMBPRINT OP SIGNER 01997 National Notary Assoclahon • 9350 De Solo Ave, P.C. Box 2402 • Chatsmrlh. CA 91313-2402 Prod. No. 5907 Reorder. Call Tall -Free 1-800.876.6827 t ' Recording Requested By FIDELITY NATIONAL TITLE AND WHEN RECORDED MAIL TO CITY MANAGER'S OFFICE CITY OF NEWPORT BEACH 3300 NEWPORT BLVD NEWPORT BEACH, CA 92663 Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 39,00 19960300125 3; 59pm 06/12/96 009 23000944 23 18 M11 5 07 7.00 12.00 0.00 0.00 0.00 20.00 0.00 This space for recorder's use only MEMORANDUM OF LEASE `f.ryvvt or— U-ggSe +fn DOCUMENTARY 7RANSFER TAX s �VJ 140 --TO. MTVTFD ON FULL VALUE OF PROPERTY CONVEYED --OR COMPUTED ON FU VALUE LESS LIENS AND ICUA RANCES REM N1NG AT TIME OF SALE. `ildcfl�- _. _ ,.►M:'OFDOGWiY1tQABaDiaexe„ llp; taTC FUn1 �. THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (ADDITIONAL RECORDING FEE APPLIES) ! ! RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 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 JOHN DAVENPORT AND CAROLINE DAVENPORT, husband and'wife, herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on Suns 12, i 1996 and ending on July 1, 2044, on the terms and conditions set forth in that certain lease by and between the parties hereto dated dune 5 ;1996 , 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 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30, in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. EXEC ATTEST: 0151. /' / 1996, at Newport Beach, Orange County, California. LESSOR THE CITY OF NEWPORT BEACH /__.;.�.r�... oG�t. �✓�- l� Lessee: John Davenport i CALIFORNIA ALL-PURPE ACKNOWLEDGMENT No 5907 State Of California County of San Francisco On May 24, 1996 before me, L. Von Wiedenfield, Notary Public DATE NAME, TITLE OF OFFICER - E.a. -JANE DOE, NOTARY PUBLIC' personally appeared John Davenport and Caroline Davenport NAME(S) OF SIGNER(S) ' 0 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 ac- knowledged to me that *eiske/they executed the same in his/her/their authorized capacity(ies), and that by I is,"im/their _ _ _ _ _ _ _ _ _ _ _ signature(s) on the instrument the person(s), W . Von Wiedenfield 3 or the entity upon behalf of which the Comm. #f1034961 person(s) acted, executed the instrument. UTARY PUBLIC CALIFORNIA ty & County of Son FranciscoortlDl. Expires Sept. 4. 1998 WITNESS my hand and official seal. SIGNA UREO 1OTARY 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 ❑ CORPORATE OFFICER ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY -IN -FACT ❑ TRUSTEE(S) ❑ GUARDIAN/CONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) DESCRIPTION OF ATTACHED DOCUMENT Memorandum of Lease TITLE OR TYPE OF DOCUMENT One NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER THAN NAMED ABOVE 01993 NATIONAL NOTARY ASSOCIATION - 8236 Remmet Ave., P.O. Box 7184 -Canoga Park, CA 91309-7184 State of California County of Orange 0am IN9 before me, Monica S. Kutz, Notary Public, personally appeared [P personally known to me - OR - ❑ ------------- Monica S. 0 Comm #1013469 0 G NOTANYFUBUC CALIFORNIAA c ORANGE COUNTY n Comm Explres Jan 13,1998 CAPACITY CLAIMED BY SIGNER _ Individual Corporate Officer Limited Partner General Partner Attorney -in -Fact Trustee(s) Guardian/Conservator Other: Signer is Representing: 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/theirauthorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), orthe entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. DESCRIPTION OF ATTACHED DOCUMENT Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above • GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE ILLEGIBLE PORTIONS OF THIS DOCUMENT, TO WHICH THIS STATEMENT IS ATTACHED, READS AS FOLLOWS: EXECUTED on DUNE TITLE INSURANCE COMPANY : JUNE 12, 19V TUSTIN, CA M r�L RECORDING REGUESay FIDELITY NATIONAL TITLE INS CO. RECORDING REQUESTED BY AND WHEN RECORDED 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 19960300124 3:59pm 06/12/96 005 23000944 23 18 T03 3 7.00 6.00 0.00 0.00 0.00 0.00 O/ Z 95 - Giq TERMINATION OF LEASEHOLD This agreement is made this 2I th day of M AY , 1996, by and between the CITY OF NEWPORT BEACH, hereinafter called "Lessor", and C. KENT FREUNDT AND BARBARA CASEY FREUNDT, hereinafter called "Lessee". RECITALS A. Lessor and Lessee executed a lease on June 21, 1994, and subsequently recorded December 7, 1994, by the County Recorder of Orange County, California as Instrument No. 94-0701515. By the terms of the lease, the following described property was leased to Lessee until July 1, 2044. Lot 1 of the eastside addition to Beacon Bay recorded on Official Maps 3� Book 2, Page 30, in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. 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 Tune 111 199 C , 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 :9 Lessor:1461n eN{�frphy, City Manager BY� — Lessee: C. Ke Freundt BY: Lessee: Barbara Case Fre ntlt State of �. a. < L�aoY• t1 l�l County of S[sn 1�%% a On 5 -24-9 (o before me, AtAAvl ( K n t2o 5 cts r N. f'r (DATEI INAME/rl� E OLOFFICER-Le.-VANE DOE. NOTARY PUBLIC') personally appeared G I(B,(it `i� ra.urdk ound (NAMEISI OF SIGNERIS)) arbara Gkn et -r—¢-e undk known to me -OR- 0 JUDYANN ROJAS COMM. #975712 i *,My Notary Public — CaliforniaSAN DIEGO COUNTY Comm. Expko3 OCT 18,1996 (SEAL) 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 methat he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrumentthe person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. ATTENTION NOTARY The information requested below and in the column to the right is OPTIONAL. Recording of this document is not required by law and is also optional. It could, however, prevent fraudulent attachment of this certificate to any unauthorized document. j ((' j THIS CERTIFICATE TNe or Type of Document TiC't'IYt(y1 LOg 0; LCLl,CA10�� MUST BE ATTACHED (;/ TO THE DOCUMENT Number of Pages Date of Document 5--2 If-q(P DESCRIBED AT RIGHT: Signer(s) Other Than Named Above WOLCOTTS FORM 63240 Rev. 3.94 Iprice class 8.211 01894 WOLCOTTS FORMS, INC. ALL PURPOSE ACKNOWLEDGMENT WITH SIGNER CAPACITYIREPRESENTATION TWO FINGERPRINTS RIGHT THUMBPRINT (Optional) CAPACITY CLAIMED BY SIGNERIS) ❑INDIVIDUALIST ❑CORPORATE OFFICERIS) ITITLESI ❑PARTNERIS) OLIMITED ❑GENERAL OATTORNEY IN FACT OTRUSTEEIS) OGUARDIAN/CONSERVATOR OOTHER: SIGNER IS REPRESENTING: (Name of PersonN) or Entitylies) RIGHT THUMBPRINT )Optional) CAPACITY CLAIMED BY SIGNERIS) ❑INDIVIDUAMS) ❑CORPORATE OFFICERISI mnES) OPARTNER(S) OLIMITED ❑GENERAL OATTORNEY IN FACT OTRUSTEE(S) OGUARDIAN/CONSERVATOR OOTHER: SIGNER IS REPRESENTING: (Name of Parson(s) or Entkylies) IIIIIIIIIIIIIIII I3IIII0 IIIII B State of California County of Orange On, �r l�%�v before me, Monica S. Kutz, Notary Public, personally appeared personally known to me - OR - ❑ proved to me on the basis of satisfactory evidence Monica S. Kutz ; Comm #1013469 (� VOTARY PUBLIC CALIFORNIA" e ORANGE COUNTY 0 Comm Explros Jan 13. togs CAPACITY CLAIMED BY SIGNER Individual Corporate Officer Limited Partner General Partner _ Attorney -in -Fact _ Trustee(s) Guardian/Conservator Other: Signer is Representing: 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), orthe entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. '1 Itl,lt 1. �B MW DESCRIPTION OF ATTACHED DOCUMENT li'm W Llwa-. Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above { �. LEASE THIS LEASE is made and entered into as of the day of 1996, by and between the CITY OF NEWPORT BEACH, a Charter City and municipal corp ton ("Lessor"), and JOHN DAVENPORT AND CARO INN DAVENPORT husband and wife ("Lessee"), regarding the real property commonly referred to as Beacon Bay Lot 62 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. N81.187371,V2052V.44 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. 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. 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. • (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 twenty-one thousand seven hundred and thirty- one and 25/100 ($21.731.25 ), payable at the rate of one thousand fight hundred and ten and ^4/100 per month. Lessee shall also pay, if applicable, deferred rent in the sum ($ 1 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 the provisions of Paragraph 3.B(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: 0 0 (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.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 • 0 (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 3.8 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 orother 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), 3.6(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 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 (if) 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 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. 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 4.13 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 3.6(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 3.13(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, (1) 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. 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: 19 • Lender: (1) proceedings are commenced within thirty (30) days after the later of (1) 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 (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 • 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. 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 rate 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 rate 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 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. 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: 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 shallimmediately, 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 (1) 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. 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. Lessors 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 153, 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 (1) 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. 16 • 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. a L ATTEST: VA !/.fti✓ T LESSOR: CITY OF NEWPORT BEACH, ,_ak- .�Tale: ICIT"ANA(?E LESSEE: JOHN DAVENPORT -•1 ■• -•� M DOC # 94--0701515 RECORDING REQUESTED BY 07—DEC-1994: 11958 €M AND WHEN RECORDED RETURN TO: City Manager's Office Recorded in Official Records City of Newport Beach of Orange County, California 3300 Newport Boulevard Lee A. Branch, County Recorder Newport Beach, CA 92663 Page 1 of 2 Fees: $ 14.00 MEMORANDUM OF LEASE Tax.0.00 This MEMORANDUM OF LEASE is entered into as of the 21 day of June 1994, by and ,e en THE CITY OF NEWPORT BEAC , a ch rtered municipal corporation ("Lessor"), and L. KPH+ FveDhd� Ba✓bA✓A (S�etf �rruh�k("Lessee"), to witness that 1 �� Lessggr and Lessee executed a lease dated -it) I V I , 19J, a memorandum of which was recorded �=l' on .1vly.9, 191I1, as Instrument No. qf-348Lo610 in the Official Records of Orange County. y 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, R 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 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease as of the date first about APP VED AS TO FORM: ity Attorney STATE OF CALIFORNIA COUNTY OF ORANGE LESSOR: CITY OF -•- •• i_!�,_ Mayor/ On June, 1994, before me Qeve�l �� ��, a Notary Public in and for said State, personally appeared C. Ck 1— 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. Signature33 �� (Seal) STATE OF CALIFORNIA COUNTY OF ORANGE BEVERLEY SEID COMM. #1001964 ch ' n NOTANY PUBLIC • CALIFORNIA r J SANDIEGOCOUNTY My Comm. Expires Oct. 26, 1997 .vvwwM On Junes, 1994, bef�¢1[[e me, �Ier 1t� r6 , a Notary Public in and for said State, personally appeared kSorVz,orckCose* cl\— , personally known to me (or proved to me on the basis of satisfactory evidence) td 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 '�� `—' �1cY _ (Seal) �gEVERLEY SEID COMM.#1001984 r NOTARY PUBLIC • CALIFORNIA V! J SAN DIEGO COUNTY My Comm. Explrea Ocr. 28, 7997 i4 • 40 State of California County of Orange • r r .a'. •Iv before me, Monica personally appeared Ua c 1 • %(>rMC , 1,9 personally known to me - OR - ❑ Monica S. Kutz Comm 01013469 • C NOTARY PUBLIC CALIFORNIA, ONANOiiCOUNTY t7 Comm Exoros Jan 13 1lM3 .t CAPACITY CLAIMED BY SIGNER Individual Corporate Officer _ Limited Partner General Partner _ Attorney -in -Fact _ Trustee(s) _ Guardian/Conservator Other: Signer Is Representing: Cum &-f- Abu �� �A 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 si,gnature(s) on the instrument the person(s), orthe entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. DESCRIPTION OF ATTACHED DOCUMENT Number of Pages -a/ -4�1 Date of Document Signer(s) Other Than Named Above LEASE THIS LEASE is made and entered Into as of the 2�day of-a,lde 1994, by and between the CITY OF NEWPORT1 ByACH, a harter r City land municipal corporation ("Lessor"), and �- Ch4 PVVI�t� 17DvhAva�A� v V4v yyAl ('Lessee"), regarding the real propertydommonly referred to as Beacorl 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. NO1-187371.V2 1 05/24/94 • 0 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_ (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 all, 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 oparative 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 (21/2%) 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 shalt be the mean of the Actual Sales Value of the three similarly NB1-107371.Y2 L -05/24/94 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. (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($) 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 3.6(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 of} ' S $ 3 1 "12 0 . ' 01. payable at the rate o c ($ 2l,1�0.Op ) per month. essee shall also pay, if applicable, deferred rent in thb 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 a provisions of Paragraph 3.6•(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: NB1-187371.V2 `J 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 3.8(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 (21/9%) of the Actual Sales Value determined as of the date of the transfer in accordance with the provisions of paragraph 3.A(t). 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 exempttransfer 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, rentshall 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 aftet 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- NBI-107371.V2 4 05/94/94 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(t). 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). (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.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 3.6 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 (a) 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 Net-187371.V2 0 05/24/94 0 (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 3.130)(8), 3,B(2)(a) and 3.B(3), on the seventh (7th) anniversary ofthe 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 (1) 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 parry, the rent shall be adjusted as provided In Paragraph 3.8(2)(c), and thereafterias provided in Paragraph 33(4) (a), and the,resuitant 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 33(3). (6) 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 whenn-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 NBI-187371.V2 0 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); (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 NBI-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 (1) the stated consideration for the transfer, or (it) 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.-B(3)(e) shall only be exempt from the further provisions of Paragraph 3.8 (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 (11) permit Lessor to treat such sublease as a transfer of this Lease subject to the provisions of Section 33. 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 Ne1-107071.V2 8 o5/21/94 • 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 (1) expiration of the time period granted to Lessee for curing the default, or (ii) service on Lender of the notice describing the breach or default; (2) the proceedings are diligently pursued to completion in the manner authorized by law; and (3) Lender performs all of the terms, covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until the proceedings are complete or are discharged by redemption, satisfaction, payment or conveyance of this Lease to Lender. NB1-187371.V2 & 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 Lenderwithin thirty (30) days after the termination of this Lease. (2) the new lease contains the same terms and conditions a& 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 Ilable 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 makb 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 wrlting, 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 N81-187371.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. 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 NB3-107371.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 rate 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 rate 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 N01-107371.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 detalner statutes, such Notice to Pay Rent or Quit shall also constitute the noticezequired 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; N51-107371.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 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'possesslon 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 atthe 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 (1) 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 awar4of the amount referred to in clause (1) 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 relate all or a portion of the Premises, the retailing shall not relieve Lessee H81.187371M 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 falls 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 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 N01-107371.V2 15 05/24/94 • 0 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 163, 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 ofa taking under the power of eminent domain in ileu 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. .Q 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 N01-107371.V2 16 05/24/94 (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. NB2-167371.V2 17 05/24/94 0 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 parry 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 -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 (1) actual delivery, or (11) the expiration of seventy-two (72) hours from and after the deposit in the United States mail of such notice, demand or communication. L 22. HOLDING OVER. This -Lease shall terminate and become null and void without further notice upon the expiration of theterm of this Lease. Any holding over by Lessee after expiration of the term shall not constitute a renewal ofthis 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. NO1-107371.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. ATTEST: CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY LESSOR: CITY OF NEWPORT BEACH, By: C?� Title: MAYOR LESSEE: NB1-187371.V2 20 05/24/94 �Altr P/ R EA�•\ j3 �'a yells sp so P.eDA10NTO.C�Y BAY EPD rII ��E t , i °E t?aly. / Soab LOT -5 ('� D. � ,S• �/ � 0, - w 34 PIE SEA g c z5 `Z : ADD �N ^� ° o 6 P. -_;. � s 33 3z =S. xY J' 3 i £ 1� S o ��•ti-F m sg 10 a % *a Z qua •ran. .cne.. .sov 'Y3 �tS�yS��d �S. e� 4 "3� % _ �3 � '�� , �•� . 3 -n c 3b a'' P7 eq0 °5 r6•° �"� � I �n�t� , _.� M1� � - � �Fv� � 3� � e. �n t �,d � t9t� F _Y A 9c —1 5a b o Eq SP be _ =� � ��. a` o a-Ifop r - B x r �,Vt.a.,e� y Z420 If oo sm M�ti aF ,$? 5a �a �-k .°a`I�'a Ib� A' �. {Iao 4 E,b { p0A _ a v 20 ce , M 9 Y^ fi, BE - �. �, ,� boo P iJfY , rib JP �. , ��,,cc��33 MIN . Ss MIN PF 9 197 MAP OF BEACO /01 N BAY EXHIBIT B Beacon Bay Lot 62 described as follows: Lot 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. SLWMARY OF SALIENT FACTS AND CONCLUSIONS - continued SUMMARY OF VALUE INDICATIONS: Existing (lstyear) 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;o00 $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 v 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 • 0 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued Existing (istyear) 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 $3t417.72 $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 $3r588.48 $7,217.00 33 $528,000 $16.137 $3,607.08 $7,307.00 34 $589,000 $18,200 $4,45C64 $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 SUNIMARX OF SALIENT FACTS AND CONCLUSIONS - continued At Existing (Istyear) 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 SubtotalInt.: $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 m Page 3' Distribution of Rents and Tax Advantage between Tidelands and•Uplands* (lstyear) 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%v 090 $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%n 0% $17,950 $0 $2,260 $2,260 3 $31,560.00 100% 0% $31,560 $0 $560 $560 4 $21,260.00 100% 0170 $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 0170 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 616/94 - Page 1 Exhibit D Distribution of Rents and Tax Advantage between Tidelands and Uplands* (lstyear) Proportionate Proportionate AnnualAmom Tidelands Effective % % Rent Rent ofPV of Tax Tax Lot No, Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage Interior Lots 23 $6,297.00 0% 100% $0 $6,291 $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 0170 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 017o 100% $0 $7,365 $610 $0 48 $9,305.00 0% 10090 $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 616194 • Page 2 Exhibit D Distribution of Rents and Tax Advantage between Tidelands and Uplands* (lstyear) 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 - continued 61 $8,482.00 0% 100% $0 $8,482 $720 $0 ES 3 $10,325.00 100% 0% $10,325 $0 $320 $320 ES 4 $6,322.00 100% 0% $6,322 $0 $500 $500 ES 5 $11,415.00 85% 15% $9,703 $1,712 $0 $0 ES 6 $6,310.00 0% 100% $0 $6,310 $500 $0 ES 7 $6,057.00 0% 100% $0 $6,057 $650 $0 ES 8 $6,455.00 0% 100% $0 $6,455 $410 $0 Interior Lots Subtotal: $397,807.00 $109,592 $288,215 $19,930 $5,251 Add Waterfront: $705,220.00 $500,848 $204,372 $34,710 $24,984 Grand Total: $1,103,027.00 $610,440 $492,587 $54,640 $30,235 %of'Total: 100% 55% 45% 100% 55% 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 616194 - Page 3 Exhibit D 9-348606 XRDING REQUESTED BY M3 iT 1jAT10itAiL Tj.- ]TIS i IG O PANY FIDELITY NATIONAL TITLE INS. CO. RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: RECORDED IN OFFICIAL RECORDS OF ORANGE COUNTY. CALIFORNIA City Manager's Office City of•Newport Beach -252 PM JUL 5'91 3300 Newport Boulevard F�1796010 ��Newport Beach, CA 92663a4 a vew* F ECORDER 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 C. Kent Freundt and Barbara Casey Freundt, herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on July 1, 1991, and ending on July 1, 2006, on the terms and conditions set forth in that certain lease by and between the parties hereto dated July 1, 1991, 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: C i r y of /V twPORT BegchLot 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County s Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. EXECUTED on June 26, , _ . _ - 19 9.1 at Newport Beach, Orange County, California. ATTEST: 6 LESSOR THE CITY OF NEWPORT BEACH C. Kent Freundt AS TO FORM: ✓%Q / Barbara Casey Freundt r .1% i 4k DOCUMENTARY TRANSFER TAX SnQO........... X COR}PU EED ON FULL 14ALUE pF pR p L O FRTY ure a; Dae4trani or Aunt datorminingt�o�Nertro STATE OF CALIFORNIA, Orange SS, cCOUNTYof ) r On this 1� & "'day of in the year/y/Q , before the undersigned a Notary Public in and for said State, personally appeared o known to me to be the Mayor of the City of Newport Beach and known to me to be the City Clerk of the City of Newport Beach and known to me av be the persons 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. OFFICIAL SEAL DOROTHY L. PAUN NOTARY ANGEPUBLIC •CALIFORNIA • ORANGE COUNTY Iro My Comm. Expires May 25.1993 Notary Public gand for said State. A r GENERAL ACKNOWLEDGMENT car.-23 State of California On this the 18th day of June 19 91 before me, SS. ESTHER CATHERINE PAER County of ORANGE the undersigned Notary Public, personally appeared C. KENT FREUNDT and BARBARA CASEY FREUNDT " personally known to me WE pL❑ proved to me on the basis of satisfactory evidence ne PaerALIFGgNIAto be the person(s) whose name(s) are subscribed to theNTYthey xecuted it.` uly8, 199a within instrument, and acknowledged that WITNESS my hand and officials ��aaiI�� n rt, A I.. \ n,- Notary's Signature 4'MLLM11A110NAL TI'PLE iTWRti XE 00N PANT RECORDING REQUESTED BY: CITY Or NEWPORT BEACH CITY MANAGER'S OFFICE AND WHEN RECORDED MAIL TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 91=348605 RECORDING REQUESTED BY FIDELITY NATIONAL TITLE INS. CO. RECORDED IN OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA -1250 PM JUL 5'91 $11.00 oee� CZ•`?�;mcomm C1 (Space Above For Recorder's Use) TERMINATION OF LEASEHOLD n�1 THIS AGREEMENT is made this 1st day of July, 1991 by and aC between the CITY OF NEWPORT BEACH, hereinafter called "Lessor," and the undersigned, Trustors and Co -Trustees of the J. WILLIAM BACK AND MONIQUE T. BACK TRUST DATED SEPTEMBER 15, 1982, hereinafter called "Lessee." R E C I T A L !: A. Lessor and Lessee executed a lease on November 13, 1989 and subsequently recorded a Memorandum of Lease December 20, 1989, Instrument No. 89-687991, in Official Records of the Orange County Recorder, State of California. By the terms of the lease, the following described property was leased to Lessee until July 1, 2006: Lot 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. 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 as described herein above as of July 1, 1991, and Lessor agrees to accept such 4/40229-01D/terlea0626/aib062691 termination, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of the said date. Executed on , 1991 at Newport Beach, California. LESSOR: LESSEE: J. WILLIAM BACK AND MONIQUE T. BACK TRUST DATED 9/15/82 CITY OF NEWPORT BEACH By: w STATE OF CALIFORNIA BY: J. William Back, By Monique Gretchen Anderson, his Attorney - In -Fact By: Ave M UE T. BACK SS. COUNTY OF ORANGE On 2 , 1991, before me rLtJ-t 1// personally a eared MONIQUE T. BACK, personalcfy known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. and official seal. !� ����I Jt4N.W4'.htiryWrytitiTi ` OFFICIAL SEAL Raa ne. Packer rN i in and for said State L nLlbni JM! M. EXP. F�Eg26 1943 is This/executed in counterparts -2- I ;t 0 ti STATE OF CALIFORNIA ) ss. County of ) On this day of undersigned, a Notary Public !q an foj the (or proved 46 me on the basis of sati instrument as the Attorney -in -Fact of (Acknowledgment -Attorney in Fact) in the year 19 9/ before me, the u ty and State, personally appeared personally known to me 'VT mce) to be the person whose name is subscribed to this and acknowledged to me that --L he subscribed the name off hereto as principal and h-4A✓ own.name as Attorney -in -Fact. WITNE S my hand and official seal. Notary Public in and fors ' .County and State. FD-IA (Notary -Seal) .a 0 termination, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of the said date. Executed on , 1991 at Newport Beach, California. LESSOR• CITY OF NEWPORT BEACH a.'� By: w ±—" STATE OF CALIFORNIA LESSEE: J. WILLIAM BACK AND MONIQUE T. BA CTR�TED 9 15/ 2 BY�U..IJIc.t-�� J. Will Back, By Monique v Gretchen Anderson, his Attorney - In -Fact SS. COUNTY OF ORANGE ) // On, 1991, before me �oLG.�I �� personally a eared MONIQUE T. BACK, personal y known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. . seal. •• SLa..`irv�.l.yyry�.K�lQ'SY+L�n OFFICIALSEAL m .`Rayrneil Packer tN; LQS'�cI�} ALI COU1NTy 1111 C�E'B. 26,1943 o- -2- STATE OF CALIFORNIA ss. COUNTY OF On this � day of in the year 1991, before me the undersigned z notarrIf P li& in and for said State, personally appeared /V known to me to be the of Newport Beach and known to me to be the jabrsons 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. OFFICIAL.SEAIr DOROTHY L. PALEN NOTARY PUBLIC • CALIFORNIA ORANGE COUNTY y< a„ My Comm. Expires May 25,1993 LEASE 1991 THIS LEASE, made and entered into this 1st day. of July , 19 91, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter "Lessor," and C. KENT FREUNDT and BARBARA CASEY FREUNDT, husband and wife 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. Carrol 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 July , 19 gy and ending on the 1st day of July, 2006. 3. BASE RENTAL. As base rental, Lessee agrees to pay to Lessor the sum of Two Thousand Three Hundred and Ninety -Five DOLLARS ($ 2,395.83 ) 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 value of the Leased Land as an improved subdivision lot. 1 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 thereunder shall be subject to each and all of the covenants, conditions and restrictions 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 provisions 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 2 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. 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: (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 to 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, 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, 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 4 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: (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 5 1' 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 perm 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 hereinafter 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 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 9 2 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 It I IN WITNESS WHEREOF, the parties have caused this Lease to be executed on the date first above written. • EXHIBIT "1" • LEGAL DESCRIPTION OF BEACON BAY A parcel of land situatedin 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 23057130" 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 23057130" 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 t 2 or parcel identification document m I� ' I iL � ' a�i' `� .I f•'D n_1:J CRS /113 STAFC-A::?C7SES•IF 7HC SAME, a:, h-:FiCAiiC.N L2:7, ER SPC IIN 1HI:S "-LJ A::RSSS IF C:=F CRC::: '1'A`+LDi NO.IS "„ v --us --- J ------- -NOTES CE'EACY. :mES `•J.� -CnOTiS a:ICitC U.;• :TY CA::.IC:IT5. A-J A' E O:CN 57ACE LCTS. Y'=.3 SE OALX D,S-. N'C4S ARE 5. UNL:55 SHOWN OTHERWISE. G I S4 55 =' 1 57 1 ''1 7 �11 h 8 LOT H f.' •' Li: 9 1 r'- _ilia . I;iL 10 jll I: j'j 12 13 jj; 14 ; i HRRliO�! /SGAND DR/Vg 35 I trs:.r'` 3G �i I ' r'= 34 ^ 1 40 BAY �•L3v J 31 y'1 L I I , 32 �: Q L 1 1L--.__,_J 34 --- --ill ------1 6t .t 5:4 �!- i.4 i I'' III IG !j! 17 :Ii 13 E'T 1 - WEST \fr i 1¢7070 Srn�2D0 U.S. L. UC n'l:f..61.) LINC sTe.m DO „ N.• 1 g10r - U.S. 9IFR,IFAC LINE f T_ y yP� Attachment 2 Reference- R.S. Book 9, pages 42 and 43, R.S. Book 13, page 42 and Eastside Addition to Beacon Bay per'Book 2, page 30 of Official Maps. F. SCALE In FLCT V }G F�•Tt>4n �1-Ir; lti:lu-r:s �C� �. .i ,011P EXHIBIT 112" That certain parcel of land.in.the City of Newport Beach, County of Orange, State of California, situated in the northwest quarter of Section 35, Township 6 South, Range 10 West, S. B. B. & M., more particularly described as follows: Beginning at a point, which point bears East 684.25 feet along the United States Bulkhead Line between United States Bulkhead Stations 101 and 200., as shown upon Sheet 1 of a Map of HARBOR LINES', NEWPORT BAY HARBOR, CALIFORNIA, approved by the Secretary of War on May 2, 1936, and North 28.00 feet from United States Bulkhead Station 200 as shown upon said map; thence from said point of beginning North 100.00 feet; thence East 40.00 feet; thence South 100.00 feet; thence West 40.00 feet to the point of beginning. The westerly line of said parcel being also the easterly line of that certain property shown upon a Record of Survey Filed in Book 9, Pages 42 and 43 of Record of Surveys in the office of the County Recorder of Orange County, California. Said parcel of land is shown as Lot 1 on Attachment 1; said Attach- , ment 1 being a portion of the map of East Side Addition to Beacon Bay filed in Book 2, Pages 30 and 31 of Official Maps in the Office of the County Recorder, County of Orange, State of California. =TYNATIONALTHU, II46°U 41Z COMPANY RECORDING REQUESTED AND WHEN RECORDED RETURN TO: Citi Managerts Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Attn: Kenneth J. Delino 91'348608 RECORDING REQUESTED BY FIDELITY NATIONAL TITLE INS. CO. RECORDED IN OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA -1252 PM JUL 5'91 7$11.00 �O, Q c�J�,�,�CORD� I 1 �'N" Space above line for Recorder's use only CONSENT TO ASSIGNMENT OF (/y1 .AGREEMENT TO LEASE THIS CONSENT is given this 1st day of July , 1991 by the CITY OF NEWPORT BEACH, a chartered municipal cor- poration (hereinafter the "City") on the following terms and conditions: RECITALS A. The City entered into a Lease dated July 1, 1991' ("the Lease"), with C. Kent Freundt and Barbara Casey Freundt ("Lessee") covering certain real property described as Lot 62 in the City of Newport Beach, County of Orange, State of California, as per Record of Survey Map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder of said County (the "Property"). B. Lessee is currently leasing the Property from The City. The lease expires July 1, 2006. C. Lessee has applied to California Federal ("Lender") for a real estate loan to be secured by Lessee's interest in the Property. Lessee has also agreed to assign Lessee's rights under the Lease to Lender. As a condition to making such loan, Lender has required that the City consent to such assignment of the Lease according to the terms hereof. CONSENT NOW, THEREFORE, the City does hereby consent to the assignment to Lender of Lessee's rights under the Lease and further agrees in favor of Lender as follows: 1. Should Lessee default under the loancbscribed above and Lender foreclose on the leasehold interest under the Lease, the City agrees that it shall confirm in writing to Lender or any other purchaser of Lender or such other purchaser has the rights of Lessee under the Lease and is entitled to enter into a lease with the City pursuant to the terms and conditions of the Lease. The foregoing agreement of the City shall apply with equal force if the leasehold interest under the lease is assigned to Lender in lieu of foreclosure. The amounts to be paid to the City pursuant to the Lease shall be adjusted pursuant to Section 4 of the Lease upon the earlier of (a) any transfer by Lender of the leasehold interest under the lease and the rights of Lessee under the Lease, or (b) a date six months after acquisition by Lender of the leasehold interest under the Lease by foreclosure or in lieu of foreclosure. J 2. Said assignment of the Lease to Lender and all rights } acquired thereunder shall be subject to each and all of the covenants, conditions and restrictions set forth in the Lease and to all rights and interest of the City thereunder, except as herein otherwise provided. 3. In the event of any conflict between the provisions of the Lease and the provisions of any such assignment to Lender, the provisions of the Lease shall control. 4. Lender shall be liable to perform the obligations of Lessee under the Agreement only so long as Lender holds title to the leasehold interest under the Lease. 5. The City agrees that it will not terminate the Lease because of any default or breach thereunder on the part of Lessee if Lender, within sixty (60) days after service of written notice on Lender by the City of its intention to terminate the Lease for such default or breach, shall: (a) Cure such default or breach if the same can be cured by the payment or expenditure of money pro- vided to be paid under the terms of the Agreement; or (b) If such default or breach is not curable, cause the Trustee under the Trust Deed securing Lender's loan to Lessee 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 said Trust Deed in the manner provided by law, or accept from the Lessee an assignment in lieu of foreclosure; and (c) Keep and perform all of the covenants and conditions of the Lease requiring the payment or ex- penditure of money by Lessee until the time as said leasehold shall be sold upon foreclosure pursuant to said Trust Deed, be released or reconveyed thereunder, sold upon judicial foreclosure or transferred by assignment in lieu of foreclosure; provided, however, if Lender shall fail or refuse to comply with any and all of the conditions of this paragraph, then and thereupon the City shall be released from the covenant of forebearance herein contained. 6. The prior written consent of the City shall not be required; (a) To a further assignment by Lender of its rights under the Lease in connection with a transfer of the leasehold interest under the Lease at foreclosure sold under Lender's Trust Deed, under judicial foreclosure, or (b) To any subsequent assignment by Lender if Lender is the purchaser at such foreclosure sale; provided that in either such event Lender forthwith gives notice to the City in writing of any such assignment setting forth the name and address of the assignee, the effective date of such assignment and the express agreement of the assignee assuming and agreeing to perform all of the ob- ligations of the Lease together with a copy of the document by which such assignment was made. Any assignee under the above shall be liable to perform the obligations of Lessee under the Lease only so long as such assignee holds title to the leasehold interest under the Lease. Any subsequent assignment of the Lease shall be made subject to the conditions relating thereto as set forth in the Lease. 2. 7. The City that there exists thereto. Without sentence, there i of any of the rig is not in default thereunder. hereby represents and warrants to Lender no default under the Lease by any party limiting the generality of the foregoing s no defense or offset to the enforcement its of Lessee under the Lease and Lessee of any of Lessee's monetary obligations 8. All notices and other communications required or permitted under this Consent to Assignment shall be in writing, served personally on, or mailed by certified or registered United States mail to, the party to be charged with receipt thereof. Notices and other communications served by mail or communication in a United States post office in Orange County, California, as certified or registered mail with postage prepaid, and duly addressed to the party to whom such notice or communication is to be given, in the case of Lender: California Federal, 1515 Walnut Grove Avenue, In the case of the City: City of Newport Beach, 3300 Newport Boulevard, Newport Beach, California 92663, Attention: City Manager. Any such party may change.said party's address for purposes of this Section 8 by giving the party intended to be bound hereby, in the manner provided herein, a written notice of such change. 9. The provisions hereof shall be binding upon and inure to the benefit of the Lender and its transferee(s). In this context, the•City acknowledges that Lender intends to assign its interest under the Lease and the loar).to Lessee, and the City consents thereto under the terms hereof. IN WITNESS WHEREOF, the City has executed this Consent as of the day and year first above written. ATTEST: CITY OF NEWPORT BEACH By oi Robert L. Wynn City Manager APPROVED AS TO FORM AND CONTENT 3. STATE OF CALIFORNIA COUNTY OF ) ss. On this _a r� day of is in the year 1991, before me the undersign d a notary u lic in and for said State, personally appeared a , known to me to be the of Newport Beach and known to me to be the persons 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. EAL ATEN ALIfORNU1 NTY Notary Pu is in and for said Stateam y25,1993 91.-348604 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard $7'0 Newport Beach, CA 92663 C1 MEMORANDUM OF LEASE CORDING REQUESTED SY FIDELITY NATIONAL TITLE INS. CO, RECORDED IN OFFICIAL REOORDB OF ORANGE COUNTY. CALIFORNIA -1252 PM JUL 5'91 Q•� RECORDER THIS RECORDING corrects and replaces the previous Memorandum of Lease reoorded December 20, 1989, Instrument Number 89-687991. (� 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 J. / William Back and Monique T. Back, Trustors of the Back Trust, dated September 15, 1982 herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on November 13, 1989, and ending on July / 1, 2006, on the terms and conditions set forth in that certain lease by and between the parties hereto dated November 13, 1989, 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 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. EXECUTED on N'une 2.8-, 199.1 at Newport Beach, Orange County, California. ATTEST: /✓//�/ ' v Nx / r LESSOR THE CITY OF NEWPORT BEACH J\/WilliamBack, Trustor-, By V bloniaue Gretchen Ander on, his AttorneyIn Fac np Monique ack, Trustor , By Alonique Gretchen Anderson-; her Attorney -In -Fact ATTACHMENT TO MEMOR REPLACING MEMORANDU STATE OF CALIFORNIA COUNTY OF ORANGE DUM OF LEASE OF LEASE RECORDED 12/20/89 SS. On June 28, 1991, before me ASHLEIGH BROWN, personally appeared GRETCHEN MONIQUE ANDERSON personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose is subscribed to the within instrument and acknowledged to me she executed the same in her authorized capacity, and that by signature on the instrument the person(s), or the entity upon of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Pub is in and for said State STATE OF CALIFORNIA, COUNTY OF Orange name that her behalf ASKS H B OWN m ' NolaryPubllc•CalUorNo ORANGE COUNTY My CoMnVr on Explret February 15,1994 [SEAL] On this At?Ck day of in the year MI , b fore me he undersigned a Notary Public in and foyVsaid State, personally appeared , known to -me to be the Mayor of the City of Newport Beach and � cam_, known to me to be the City Clerk of the City of Newport Beach and known to me to the persons 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. � �� Notary Pubin and for said State. EeOFFICIAL SEAL DOROTHY L. PA€ENNOTARY PUBLIC-CALIFORNIA ORANGE COUNTY hty Comm. Fires hSa/ 25,1993 CAT. NO. NNO0627 TO 1944 CA (1-83) (Individual) STATE OF CAI COUNTY OnYc2 said rate, verso J TICOR TITLE INSURANCE } SS. ')))before rn y,the undersigged, a Notary Public in and for V , personally known to me or proved to me on the basis of satisfactory evidence to be the persons whose nameS CVGe_ subs rlbed to the within instrument and acknowledged that exe- cuted the same. WITNESS m hand and offic' Signatur (This area for official notarial seal) STATE OF CALIFORNIA, j( COUNTY OF Orange ( SS. On this 21st day of November , in -the year-1989 , before me the undersigned a Notary Public in and for said State, personally appeared Donald A. Strauss , known to me to be the Mayor of the City of Newport Beach and Wanda E. Raggio known to me to be the City Clerk of the City of Newport Beach and known to me to be the persons 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. OFFICIAL SEAL OTNY L. PAtEN aC �plB � m NOTARYARY PUBLIC • CALIFORNIA • +" ORANGE COUNTY Notary Publio and for said State. ° .o" MY Comm. EvIras May 25,1993 DOROTHY L. PALEN RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 9.2663 Attn: Kenneth J. Delino 89=68T99C MMPTREROR U REQUESTPER ODVO MEHTCQDE 610a MEMORANDUM OF LEASE RECORDED IN OFFICIAL REQORDS OF ORANGE COUNTY, CALIFORNIA -945 AM DEC20'89 4 Q • ` t RECORDER THIS MEMORANDUM OF LEASE is made and entered into by and between the City of Newport Beach, a chartered municipal corpor- ation, herein called "Lessor", and J. WILLIAM BACK and MONIQUE T. BACK, TRUSTORS OF THE BACK TRUST, herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on November 13, 1989 and ending on July 1, 2006, on the terms and conditions set forth in that certain lease by and between the parties hereto dated November 13, 1989, 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 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as Beacon Bay Lot 62. EXECUTED on November 13, 1989, Newport Beach, Orange County, California. APPROVED AS TO FORM: LESSOR The City of Newport Bea h a Chartere Munic'Coation By: Mayor LESSEE: By J. Williarm`M-Ki. Trustor 6,Ak.Tity Attorney (J Monique/ T. Back, 'I:rustor 1� RECEI` e JANO 21990 j r-�� w.._ c CAT. NO. NNO0627 TO 1944 CA (1-83) (Individual) STATE OF CA] COUNTY Of On J TICOR TITLE INSURANCE } SS. V , personally known to me or proved to me on the basis of satisfactory evidence to be the personF_whose names !�� subscribed --tt—o""the within instrument and acknowledged that --ram, Cxe- cuted the same. ff// WITNESS m hand and official seal_. Signal: Public in and for (This area for official notarial seal) STATE OF CALIFORNIA COUNTY OF Orange ra(� '11'1• � ACKNOWLEDGMENT—Goneral—WoWls Form 233CA—Nay. 5 82 ©1982 WOLCOTTS, INC. (priceclass8-2) On this 21st day of November , in the year 19 89 before me, the undersigned, 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_ whose name- 7 s subscribed to the within Instrument, and acknowledged,to me that _he_ executed it. WITNESS my hand and official seal. � Notary Public qand for said State. DOROTHY L. PALEN N RECORDING REQUESTED BY AND WHEN RECORDED 'MAIL TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 and and here 89=687990 -i I= TERMINATION OF LEASEHOLD j RECORDED IN OFFICIAL RECORDS -OF-MNGE-GO U14TY.CALWORN IA — .945 AM DEC20'89 oeez, Q - y� RECORDER This agreement is made rihi. 13th day of November 1989, by �� between the CITY OFiNEWPORT BEACH, hereinafter called Lessor T Tdi l l i am' Rack and Moniaue T. Back _ _ ' nafteri called -"Lessee". RECITALS A. Lessor and Lessee executed a lease on January 12 1988 and subsequently recorded September 15, 1988 by the County Recorder of Orange County, California as Instrument No. 88-463725 . By the terms of the lease, the following described property was leased to Lessee until July 11 2006. Lot 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 22 Pag`e 30-in the Office of the County Recorder, County of Orange, State of California, sometimes referred to as'Beacoh Bay Lot 62. 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 as described herein above as of November 13, 1989, 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. / LESSEE: J. Wil iam''Back CITY D NEWPORT BEACH BY: Ro ert L. Wynn, City anager "Lessor" LESSEE. Moniqu T. Back R LEASE THIS LEASE, made and entered into this 13th day. of November , 19gq, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter "Lessor," and 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. Carrol 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 Six Hundred and Sixt.y_Eight and 40/100 DOLLARS ($ 669.40 ) 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 value of the Leased Land as an improved subdivision lot. 1 0 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 thereunder shall be subject to each and all of the covenants, conditions and restrictions 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 provisions of this Lease and the provisions of any such Trust Deed, the provisions of this Lease shall control. K 0 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 to 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, assessments or charges shall not attach to the leasehold interest but only to improvements located thereon. 3 • 0 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 OP 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, 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 4 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 (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: (1) The Lessor shall be entitled to an amount equal to the sum of the following: 5 0 (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 perm 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 hereinafter 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 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. N • 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 %A IN WITNESS WHEREOF, the parties have caused this Lease to be executed on the date first above written. CITY OF NEWPORT BEACH, LESSOR 411d R J. WILLIAM BACK, TRUSTOR LESSEE APPROVED AS TO FORM: CITY TTORNEY MONIQUE T. ACK1 TRU T6 LESSEE n ,w AMPT RECORDINGREQUESTf& Gif'JERNMENT CODE 6103 88-463725 C OM"& RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: 42paze- - City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Attn: Kenneth J. Delino Wl EXEMPT. 02-- -- OF LEASE •200 PM SEP 15'88 off- a 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 J. WILLIAM BACK and MONIQUE T. BACK 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 w between the parties hereto dated January 1, 1988, all the terms and conditions of which lease are made a part hereof as though J fully set forth herein, all those certain permises in the County of Orange, State of California. Lot 1 of the eastside addition to Beacon Bay recorded on Official Maps Book 2, Page 30 in the Office of the County Recorder,'County of Orange, State of California. EXECUTED on. July � 1988,+Newport Beach, Orange County, California.' TF.R R(lR , " ATTEST: �} M City Clerk (%/C- AS TO FORM: Th a 3 )06y; 'LESSEE:, BY-: z R'• r• ilAft OF CALIFORNIA, W COUNTY of Orange I ss $8-463725 On this 1st day of July in the year7.966 , before me the undersigned a Notary Public in and for said State, personally appeared John C. Cox. Jr. , known to me to be the Mayor of the City of Newport Beach and Wanda E. Raogio known to me to be the City Clerk of the City of Newport Beach and known to me to be the persons who executed the within instrument on behalf of said governmental agency, and acknowledged to me that such governmental agency executed the same. WITNESS my hand and official seal. OFFICIAL SEAL DOROTHY L. PALEN NOTA �. RY PUBLIC • o PRINCIPAL OFFICEFICE IN Not Public in and for said State.' ORANOECOUNTY Dorothy L. Palen MyCommissianExP•AM.5,1989 �' 1 (General) F�c STATE OF CALIFORNIA � .,p1SAngeles SS. COUNTY OF On V k before meh the undersigned, a Notary Public in and for said State, personally appeared L to be the person ✓whose name t to the within instrument and acknowledged executed the same. WITNESS my -I and and official seal. Signs tur nown to me (or proved to me on the basis of satisfactory evidence) ;uhscrihed that Kenneth Morris Levtow Name (Typed or Printed) OFC-2056 ��__ STATE OF CALIFORNIA { COUNTY OF Les Angeles Ji l l l it llm l ml li lnilhnit ll 111 lltl lI I I I II II II II II II I I IIIII IIIIIIIIIL OFFICIALSEAL ' KENNETN MORRIS LEVfOW = y� NOTARY PUBLIC-CALIFORNIA =_ — PRINCIPAL OFFICE.IN B LOS ANGELES COUNTY = — My Commission Expires May R, 1990 111111111111111II II IIIIiI11111111111111111111111111111111111IIllilllllllltr ACKNOWLEDGMENT—General—Walcotls Form 233CA—Rev. 5.82 01982 WOLCOTT$. INC (prim class 8.2) On this day of TV in the year 19k before me, the undersigned, a Notary Pub��IC,l; and for said State, personally appeared �n N\Qu�?� ,ES�J� K , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person_ whose name_ 4_S subscribed to the within instrument, and acknowledged to me thatnihe_ executed it. WITNESS my hand and official -seal. Notary Public in and for said State. RESOLUTION NO. 10040 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH APPROVING AN AGREEMENT TO LEASE AND LEASE OF BEACON BAY RESIDENTIAL LOTS AND AGREEMENT TO LEASE AND LEASE OF BEACON BAY COMMON AREA CONSISTENT WITH CHAPTER 74,, STATUTES OF 1978 AND THE CHARTER OF THE CITY OF NEWPORT BEACH WHEREAS, the City owns certain tidelands and uplands in an area known as Beacon Bay; and WHEREAS, on January 9, 1950 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 Council 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 residental 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 in the best interest and welfare of the City that the streets, walkways, 1 r common areas, landscaped areas, beaches and other areas presently leased to the Beacon Bay Community Association should remain in said status in consideration 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, said Statute provides that the maximum term of leases of residential lots in Beacon Bay located on tidelands shall not exceed fifty years; and WHEREAS, Section 1402 of the Charter of the City of Newport Beach permits the leasing and re -leasing of water front property, provided the property was under lease as of January 11, 1957, the date of adoption of said provision of the Charter of the City of Newport Beach; and WHEREAS, the City Council hereby finds that the maximum lease term for the residential lots in Beacon Bay shall not exceed twenty-five years for the following reasons: A. Section 420 of the Charter of the City of Newport Beach prohibits the City entering into a lease in excess of twenty-five years without voter approval. B. The City Council finds it undesirable to commit the residential portion of Beacon Bay to residential use for a period longer than twenty-five years. At the termination of a twenty- five year lease renewal, the City Council of the City of Newport 2 Beach will be given another opportunity to determine whether or not residential uses on that property are appropriate or whether other uses are more appropriate. A lease term longer than twenty-five years would be an excessive commitment for this particular residential use of tidelands and uplands property owned by the City of Newport Beach. C. The extension of the residential lease term beyond twenty-five years would provide very little financial advantage to the City. An analysis of rental values has shown that a 35 year Lease will only increase the rental by 12.4% per annum. Therefore, the modest increase in lease payments to the City do not offset the disadvantage of committing the land to residential uses for a period longer than twenty-five years; 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 and the common areas in the westerly portion of Beacon Bay binds the City of Newport Beach to execute the Leases of said properties 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 Council 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 and Lease of the residential lots in Beacon Bay, respectively attached hereto, be and they are hereby approved. 3 a BE IT FURTHER RESOLVED that the Agreement to Lease and Lease of the Common Area of Beacon Bay, respectively attached hereto, be and they are hereby approved. BE IT FURTHER RESOLVED that the Mayor and City Clerk are hereby authorized and directed to execute each individual Agreement to Lease the respective residential lots in the westerly portion of the Beacon Bay property and the common areas in the western portion of the Beacon Bay property and that the Mayor 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 and the common areas of the western portion of the Beacon Bay property during the month of December, 1987, provided that the Sublessees and the Beacon Bay Community Association and their heirs, devisees, and assigns, as the case might be, have fully performed and executed their obligation under said Agreements to Lease. ATTEST: City Clerk ADOPTED this llthday of May , 1981. 7 ayo I. WANDA E. ANDERSEN, City Clerk, do hereby certify the foregoing to be a full, true and correct copy of Resolution No. 10040 adopted by the City Council at their regular meeting held May 11, 1981. x 1106 City Clerk AGREEMENT TO LEASE THIS AGREEMENT TO LEASE, made and entered into on the, ef day ofAyr�/, 1981, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter "City," and 4 U/'144/ ,6� &MUMr 7- r349k hereinafter "Sublessee." RECITALS A. City 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 residential 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 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. i 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 1 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. In consideration of City's agreement to lease to Sublessee hereunder, Sublessee agrees to pay to City on the 1st day of each month following the date of this Agreement and on the lst day of each month thereafter through the 1st day of December, 1987, a sum determined by subtracting from the fair market rental value of OPS,' DaZD- dfU (annualized) on July 1, 1981 (the "Effective Date"), the payments made by Sublessee under a sublease on the Leased Land to the Master Lessee of Beacon Bay described in Paragraph A of the Recitals above. 3. The Base Rental under Paragraph 3 of the Lease, Exhibit "C" attached hereto, shall be the fair market rental value of the land on the Effective Date subject to adjustment of the base rental, hereafter "Adjusted Base Rental", as set forth in paragraphs 4 or 5 hereof. P 1 a a 4. Should any Sublessee not execute this Agreement on or prior to the Effective Date, but execute this Agreement after Effective Date and prior to December 31, 1987, the rental 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 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 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 provide 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. 5. 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 9 0 0 Section 4 of the Lease Exhibit "C" attached hereto, shall determine the amounts 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. 6. The parties agree to execute the Lease, Exhibit "C" hereto, during the month of December, 1967 and concurrently therewith to execute and record a short form memorandum thereof. 7. Time and each of the terms, covenants and conditions hereof are expressly made the essence of this Agreement. If Sublessee shall fail to comply with any of the terms, covenants or conditions of this Agreement, including making the payments provided for herein at the time 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. In addition to termination of this Agreement to Lease, City may recover from Sublessee all damages incurred by N 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. 8. 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 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 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. 9. 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 possession or occupancy of the Leased Land, or any part thereof in any manner whatsoever. R IN WITNESS WHEREOF, the parties have caused this Agree- ment to Lease to be executed on the date first above written. ATTEST: AC Clerk APPROVED AS TO.FOAM: CITY OF NEWPORT BEACH Sublessee fib/ t%lG�r✓I / �G2%�' 5-4-81 / C M 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 , 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 "1" 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 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 lst 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 �wOL ARS, ($ (o (PQ• t/O ) 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. 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: 2 3 0 - i (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 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 3 (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 restrictions 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 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 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. 4 II 0 (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 (ii) 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 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- 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 5 I 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, 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 be- come and during the term of this Lease remain a member in good standing of the Beacon Bay Community Association, and C r� 0 0 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, restrictions and reservations as contained in Exhibit 113" attach- ed hereto and made a part hereof by this reference. Said cove- nants, 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 of 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 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 rental herein reserved, at the time and in the amount herein required, and shall fail to remedy such default within 7 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, 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 N (90) days after the expiration of this 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 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. E 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: (a) The Lessor shall be entitled 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 7 % 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 //-I a per annum compound interest (Inwood Coefficient) for the number of years in such period. (b) 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. D. Allocation of Award - Partial Taking All com- 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 multiplying such proportionate reduction in fair market value by the factor for the present worth of $1.00 at -I1% per annum compound interest for the number of years re- maining from the date of taking to the date of the expiration of the term of this Lease; and 10 (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 /iC. % 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 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 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 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 11 default on the part of the Lessor or any acquiescence therein. No waiver of any breach of any of the terms, cove- nants, 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 Blvd., 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: 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 notice, demand or communication. 20. HOLDING OVER. This Lease shall terminate and be- come null and void without further notice upon the expiration of said term. Any holding over shall not constitute a renewal here- 12 I� ! 0 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. 21. MISCELLANEOUS Inurement. Each and all of the covenants, condi- tions 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- ministrators, 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. CITY OF NEWPORT BEACH *1000 BY Mayor ATTEST: WANDA E. RAGG O City Clerk AP ROVED AS TO FORM: City Attorney . �t Le,ffsefe essee 13 4-21-81 0 EXHIBIT "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 23057130" 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 h ,� `r �1• .. =� {� IV O ryY\\ tY 1r -• LESENDApr ­11 ;:: n1h:JEkS AIIO STAi E-F:OiE'aSES, IF THE SAIAE; 10E\-:FICAT7CIR I;: TEn SY.0 /R: 7HU5 ••-J AZ;r;SS if C•'FEn E:;- THAN LOT NO. IS ..an•v T.•Us ---J ------- };ROTES r_CTCAOY, Lm ES ••• J.;, nE,OTI S °LCLIC LT;.:TY CASEMENTS, '•�Ji G:a L:•'S A•J Al E OPCN STAG_ LCTS. Sr BACK 015T•0:CES A;C S' UNLESS SHOWN OTHCFWISE. R BOA) /SL A < D D 55 -ir 471`5.6543',- II L---------I 3s G 1 0 L-------- 59 ----{-- —_ . r1•, 3G 1—_ C---50 me.� I,m• 50 I 43 --I o I 1"a7 17 , u I Q L----------1 n= F-- i I--------_ __ ___ li .�J [.J I _ .._ __ __` _ ) I >p �� 59 a•i x J i.i2• 5; i( I 17 of ..1 i.!?'::: 38. e II 1 I -- '----'� K V II I•—•1----_J i _—_-----I' ��---_ O I� 1� I C I tF— GOB q >.!i 52 i I \ i j ... `' .�•� I i•'= 39 .� I I VJ I 61 1= i I..' 1''1' S3 �•. �!' _ S6 !4.� I is 40 IlJ' i I '.' i 1' •' .� F= I. J I •—..._-----' 1 L-------- „ IL_'-__-__� I L------ LOT H B A Y .a AIL it II 2R l- I•-_____- '� If.____N -__- 1 \ .L liJ' .f__—_ Cr —+t L 31 O • 5` ---- Z---_ �i C ; I'�`` I(n� L�T-- i. r, --q - -- J" - / 1 1 l i I ---- I I - - - - -- -._— - i III I I 11 111 .I -'- - — — - _- -- 1 ilt— ( :I:. r• S-•1' i-..I':.i C 1I1 itI �,f I 1 i- LLa 1 r_ _ fi ./J ...SC 1 Ld: 9 Lr -'�'y �I III �•I --: , I I -I J I I I 1 Ir LS .L; :.1: _J }S: S'_� _ :i.•1 I' II 1�1 lil 11.1 I i^ 1:: I II -1 -`� 1� ,I�. ,1• "�"— -�•. 6 I � I I 7 i 9 9 j I I 5.1 I .' • , J }-_ �.- •:- ..::1 I . I I r. 11 I I' I .. I I r 1 �. SJ L/.. ....T- a � F- I � .1 :Z _ _. ; • ; I : ' I I i LJ L___J L-.—J i L___J 110 jll It lij 12 III I3 III Ih I IS ilI I6 III 17 ii1 I3 it- i9 i i• 2J 27 122 .i: t :;� 2 t _JIL___J C___�iL___a 1L___1 L___J L___JIL___J; L___ I L___J - -- -L- _:�� - -�-- :___J'�..-_: L__.J. ._l.. .i \fu'seH. 1471,r0 us on I STA OT - ISTA.200 . Wu do pp6tod 1 yip LOT 2 W65Y _.764.25' U. S• LIt/1.n1JA%40 Lhvc •/ - U.S. PJERJJFAtl Un•E -� ._:._—•---� Attachment 2 Reference: R.S. Book 9, pages 42 and 43, R.S. Book 13, page 42 and Eastside Addition to Beacon Bay per Book 2, page 30 of Official Maps. 5CALC v, rCCT ,I EXHIBIT "2" That certain parcel of land.in.the City of Newport Beach, County of Orange, State of California, situated in the northwest quarter of Section 35, Township 6 South, Range 10 West, S. B. B. & M., more particularly described as follows: Beginning at a point, which point bears East 684.25 feet along the United States Bulkhead Line between United States Bulkhead Stations 101 and 200, as shown upon Sheet 1 of a Map of HARBOR LINES', NEWPORT BAY HARBOR, CALIFORNIA, approved by the Secretary of War on May 2, 1936, and North 28.00 feet from United States Bulkhead Station 200 as shown upon said map; thence from said point of beginning North 100.00 feet; thence East 40.00 feet; thence South 100.00 feet; thence West 40.00 feet to the point of beginning. The westerly line of said parcel being also the easterly line of that certain property shown upon a Record of Survey •filed in Book 9, Pages 42 and 43 of Record of Surveys in the office of the County Recorder of Orange County, California. Said parcel of land is shown as Lot 1 on Attachment 1; said Attach- ment 1 being a portion of •the map of East Side Addition to Beacon Bay filed in Book 2, Pages 30 and 31 of Official Maps in the Office of the County Recorder, County of Orange, State of California. i I71 i •••'. , i i I � w Al' LOT i�/" ---•-•—� •, I i I I I — 288.02' LOT 28 �. zs. z7 • ,— LOTS En5T a i. 9500' `I LOT 7 v Ensr �� a 95Jo' ! LOTG t}! ensr OI 9S.Jo' ,4 O Lola- 5 En5T ^Ib 9S.JJ• I Lora ui EAST �I )5'.00• • LOT& l SAST 95"od i 000.71— r eo o• ro:,�oo oo' O `,7 .a o/vi J— /-//6// T/GE L//✓E P.fR SC/Pc1?/.9R COURT CgSE 2g02l O. R. / 951275 7P_•%YS-' .3390.40' REG. PE.0 U.S EiY6/NcE.t'_S F/LE .yf.FO 9gB) U.S. BULKHE,40 Z116C PORTION OF MAP OF EASTSIDE ADDITION TO BEACON BAY FILED IN BK.'2, PAGES 30 & 31 OF OFFICIAL MAPS ATTACHMENT 1 EXHIBIT "3" DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION Table of Contents Article Page I DEFINITIONS 2 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 11- Declarant 12- Exhibit 13- Member 14- Lessee 15- Residence 16- Setback 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 1 - Creation of the Lien and Personal Obligation of Assessments 2 - Purpose of Assessments 3 - Regular,Assessments 4 - Uniform Assessment 5 - Special Assessments 6 - No Offsets 7 - Reserves IV NONPAYMENT OF ASSESSMENTS 1 - Delinquency 2 - Notice of Lien 3 - Foreclosure Sale (i) 0 6 6 6 6 6 6 7 7 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 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 10- Effect of Declaration 16 11- Personal. Covenant 16 12- Nonliability of Officials 17 13- Subleases 17 14- Amendments 17 24% i 0 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 delegate and assigned the powers of managing the Covered Property, maintaining and administering the Common Area and administering and enforcing these covenants, conditions and restrictions and collecting and disbursing funds pursuant to the assessment and charges hereinafter createa and referred to and to perform such other acts as shall generally benefit the Covered Property to the Beacon Bay Cammunity Assocation, a'California nonprofit corporation. D. Declarant will. hereafter hold title to and lease all of the Covered Property subject to certain protective covenants, conditions and restrictions hereafter set forth. Beacon Bay 9/20/79 Rev. 9/24/79 Z5. 0 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 Expenses. "Special Assessment" shall mean a charge against a particular Lessee and his Residence, directly attributable to the Lessee, to reimburse the Association for costs incurred in bringing the Lessee and his Residence into compliance with the provisions of this Declaration, the Articles, Bylaws or Association Rules, or any other charge designated as a Special Assessment, together with attorneys' fees and other charges payable, plus interest thereon as provided for in this Declaration. A Beacon Bay 9/20/79 Iz 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; (f) the costs of any other insurance obtained by the Association; (g) reasonable reserves as deemed appropriate by the Board; (h) the costs of bonding of the members of the Board, any professional 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 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 Commot Area, or the costs of any other item or items designated ',y this Declaration, the Articles, Bylaws or Association Rules, 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 'U". Section 10. "Covered Property" shall mean and refer to a11— t— he real property described on Exhibit "I". Section 11. "Declarant" shall mean and refer to the City of r:e%,port Beach. Section 12. "Exhibit" shall mean and refer to those documents so designated herein and attached hereto and each of such Exhibits is by this reference incorporated 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." Secticz 14-- "Lessee" shall persons 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 number d lot shown on the Record of Survey Map of Beacon Ba,y S'.:3division recorded in Book 9, pages 42 and 43, Records of Survey, on file in the office of the County Recorder, Orange County, California; provided, however, �'Rr•sidence" shall not include any Common Area. "Resid_^ce" shall include the residential dwelling unit Bea .'.'Un nay 9/20/7) 4 Rev. 9/?.4/79 s z5 0 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 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 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 right shall be subject to the restrictions and limitations provided herei^ and in the Articles, Bylaws and Association Rules. Sectio- 4 - Classes of Voting Membership. The Association shall have one (1) class of voting membership. Section 5 - Approval of Members. Unless elsewhere otherwise specifically provided in this Declaration or the Bylaws, any provision of this Declaration or the Bylaws Beacon _,ay 9/20/79 5 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 - 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 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 Member shall be sent written notice of the Regular Assessment and shall thereafter pay the Association in installments as established by the Board. Section 4 - Uniform Assessment. Regular Assessments shall be fixed at an equal amount for each Residence. Section 5 - Special Assessments. Special Assessments may be levied by the Board from time to time. Beacon Bay 9/20/79 Rev. 9/24/79 0 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, 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 commenced, there shall be added to the amount of such Assessment the late charge, interest, the costs of such action, and attorneys' fees incurred in connection with su= action; and in the event a judgment is obtained, such judgment shall include said late charge, interest and a reasonable 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 Beacon Bay 9/20/79 7 Rev. 9/24/79 31 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, 2924g 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 "Nonpayment of Assessments" for the payment of Assessments shall be subordinate to the lien of any Mortgage which was recorded prior to the date any such Assessment becomes due. (b) If any Residence subject to a monetary .lien created by any provision hereof shall be subject to the lien of a Mortgage: (1) the foreclosure of any lien created by anything set forth in this Declaration shall Beacon Bay 9/20/79 8 Rev. 9/24/79 i 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 t of Archite Architectural Committee shall consist or three (3) nor more than five (5) persons time to time by resolution of the Board. Committee. The not less than as fixed from The Board shall have the right to appoint the members of the Architectural Committee. Persons appointed by the Board to the Architectural Committee, however, must be Members. Section 2 - General Provisions. (a) The Architectural Committee may establish reasonable procedural rules and assess a fee in connection with review of plans and specifications including, without limitation, the number of sets of plans to be submitted; Beacon Bay 9/20/79 9 Rev. 9/24/79 9 F 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 9 - 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 specifications. ARTICLE VI DUTIES AND POWERS OF THE ASSOCIATION Section 1 - General Duties and Powers. In addition to the duties and powers enumerated in its Articles and Bylaws, Beacon Bay 9/20/79 10 Rev. 9/24/79 or.elsewher.e 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 Association through the Board the obligation to: (a) employ a manager or with independent contractors all or any part of the duties Association; ociation. The ave the power but not other persons and contract or managing agents to perform and responsibilities of the (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 contingency 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 Association. Sec" on - Association Rules. The Board shall have the power tc adopt, amend, and repeal such rules and reguIati.ons as it deems reasonable (the "Association Rules";. In the event of any conflict between any such Assoc, " on Rules and any other provisions of this Dec: ;_z:.on, or the Articles or Bylaws, the provisions of the F.sa-•ciation Ru.Les shall be deemed to be superseded by the r:'-isions of this Declaration, the Articles or the Bylaws -c• the extent: of any such conflict. 9/20/79 Rev, 9/24/79 5/4/81 35� 0 ion 1 - �iation it ARTICLE VII REPAIR AND MAINTENANCE iat . The (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 - R�air and Paintenance 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 used for any business, commercial, or nonresidential purposes. Beacon Bay 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 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 have 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 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 -3TV i i (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 - Deleqation 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. ARTICLE X GENERAL PROVISIONS Section 1 - Enforcement. The Association, or any Lessee, sha11 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 respect 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 undertake such enforcement. With respect to Assessment Beacon Bay 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. Section 6 - 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 content of this Declaration requires same, the singular shall include the plural and the masculine shall include the feminine and the neuter. Beacon. Bay 9/20/79 15 Rev. 9/24/79 3"1 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 applicable thereto. Section 11 - Persona]. Covenant. To the extent the accepta-ce or conveyance of a Residence creates a personal covenant between the Lessee of such Residence and Declarant or other Lessees, such personal covenant shall Beacon Bay 9/20/79 16 Rev. 9/24/79 40 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," "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 than 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 and 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 Clerk APPROVED AS TO FOP14: City Attorney Beacon Bay 9/20/79 S3 CITY OF NEWPORT BEACH, a chartered municipal corporation By: Mayor 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. WITNESS my hand and official seal. [Seal) Beacon. Bay 9/20/79 �7 Notary Public Rev. 9/24/79 032381 4o 54 HARB�/✓D OR/VE ' 5i 47 --- -I � _-8__- ___-•I'Ii _--_.i%-_ -.' -- - — 66 48 3_5 O n�r-_____-_ F42 . 57 r1L 3649 I'IL -_ v 43 .. _-- rI- o-IL IJ'•• 50 37 � L 2 = L L_______6Q lia-_._I3 r3-�-_--D I It 4459Iri 51 i �- N lz L::• 33 w I` --------------- -------J ci ------ ; r------ r--------, C I To j h W j GO" 11.5: 52 45 , 'a,'j I 3. i•" .39-- f r,• L____-_ 1 -.� ¢ I(-''- 40 • 61 I I=6- 53 46 'S:1 LEGEND — LOT NUMBERS AND STREET ADDRESSES, IF 7HE SAME; ARE SHOWNTHUS ---3 PARCEL ICEN 71FiCATION LETTER SHOWN THUS ---� STREET ADD; --SS If DIFFERENT THAN -LOT NO. IS SHOWN THUS --- O3 ------= )EKOTES SETBACK LINES. PU.E. DENOT.S PU0LIC UTILITY EASEMENTS. I /✓OTES LOTS A-J A' E OPEN SPACE LOTS. i S•C:YA50 SE SA:K DISTANCES ARE S' UNLESS SHOWN OTHERWISE LOT H BAY ° r(' i ---? i ---1 r---- t -- � i -- i --I i ---� ---; ---? --- I I I I I 1 I 1 1 III I I Ji:l 1 Je:I I SJ 144 116- 15• Li JJ LE �I � i I . I I i I ( I I.v- J Ih"- I -':i 1 J I 5.-li-• (Ii3 6 l i 7 1 i B l i 9 1 i 10 j i II j j 12 iI� 13 j i 14 i i IS ij� 16 L___J L___J L___J L___J L___wIL___i L--- JI L__. LOT I STA6.13'I I ISTA 2o0 N U.S. QUCKHEAD L/NC: I U.S. I 2q z: 1 I Li 1 J' I -f }- L LL ___—___ " U 1 �- L i 31 IO'i O it ,C 25 1 -- - --------- I l tI � ,t 32 Iry h- - c -------_: � i Wiz• i � v f --------- ..i" C33 zs it 4 i � II Iji 1I 1 111 IS �I! 19 j 20 ': 21 i:1 22 1- 2 EXHIBIT "I" AND EXHIBIT "II" FOR THE ^^'�-�>�=—_ DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS,'" 5: BEACON BAY COMMUNITY ASSOCIATION sc E- SKETCH. SHOVING SETBACK LINES WITHIN LOTS 1-62 OF RS.9/42643, PARCELS A,5 & C OF R.S. 13/42 AND LOTS I-B OF EASTSIOE ADDITION TO k' � r l r;; 'Jy-,•{};;II�;,y;1c.; ++-<:m BEACON BAY PER BOOK 2, PAGE 30 OF OFFICIAL MAPS. --{, L.......Y.... ....... :. EXHIBIT "Du (BAYFRONT PARCEL LOT 12) EFFECTIVE RENTAL VALUE CHANGE WITH ASSUMED 12% PER YEAR INCREASE BASIC FORMULA: R = A (1-f) + •Cf R = Effective Net Rent A = Base Rent x CPI Increase - 5735 (Common area adjustment) C = Existing Contract Rent f = Combined Present Worth and Annualizing Factor EXAMPLE: BAYFRONT PARCEL: LOT 12 Adjustment New Months Factor 0 Time Lease From 18/Mo. Base Adjusted Date 1/1/81 Conpunding Rent Rental 7181 7 L072135 x 18,400 = 19,727.29 - 12/81 12 1.126825 x 18; 400 = 20,733.58 - 1/82 13 1.138093 x 18,400 = 20,940.92 - 7/82 19 1.208109 x 18,400 = 22,229.20 - 12/82 24 1.269735 x 18,400 = 23,363.11 - 1/83 25 1.282432 x 18,400 = 23,596.75 - 12/83 36 1.430769 x 18,400 = 26,326.15 - 1/84 37 1.445076 x 18,400 = 26,589.41 - 12/84 48 1.612226 x 18,400 = 29.664.96 - 1/85 49 1.628348 x 18,400 = 29,961.61 - 12/85 60 1.816697 x 18,400 = 33,427.22 - 1/86 61 1.834864 x 18,400 = 33.761.49 - 12/86 72 2.047099 x 18,400 = 37,666.63 - 1/87 73 2.067570 x 18.400 = 38,043.29 - 12/87 84 2.306723 x 18.400 = 42.443.70 - 11e8 85 2.329790 x 18,400 42,868.14 - Less $735 [A X (1-f) + (C X f) 1 735 = 18,992 x 0.4876140 + (793.76 x 0.512386) _ 735 19,998 x 0.4876140 + (793.76 x 0.512386) _ 735 = 20,206 x 0.537849 + (793.76 x 0.462151) _ 735 = 21,494 x 0.537849 + (793.76 x 0.462151) _ 735 = 22,628 x 0.537849 + (793.76 x 0.462151) _ 735 = 22,862 x 0.593991 + (793.76 x 0.406009) _ 735 = 25,591 x 0.593991 + (793.76 x 0,406009) _ 735 = 25,854 x 0.656898 + (793.76 _ x 0.343102) _ 735 = 28,930 x 0.65689B + (793.76 x 0.343102) _ 735 = 29,227 x 0.727591 + (1,292.52 x 0.272409) _ 735 = 32,692 x 0.727591 + (1,292.52 x 0.272409) 735 = 33,026 x 0.807296 + (1,292.52 x 0.192704) _ 735 = 36,932 x 0.807296 + (1,292.52 x 0.192704) 735 = 37,308 x 0.897495 + (1,292.52 x 0.102505) _ 735 = 41,709 x 0.897495 + (1,292.52 x 0.102505) _ 900 = 41,968 x - - - _ A 9.667.62 10,158.30 11,234.57 11,927.47 12,537.35 13,901.95 15.523.18 17,256.04 19,276.37 21,617.11 24,138.69 26,911.23 30,063.83 33,616.50 37,565.84 41.968.14 8 Change Over $9.667.62. + 5.08 + 16.21 +23.38 + 29.68 +43.80 +80.57 +78.49 + 99.39 + 123.60 + 149.69 + 178.36 +210.97 + 247.72 '+ 288. 57 + 334.10 v 01 4I EXHIBIT uDn (INTERIOR LOT 32) EFFECTIVE RENTAL VALUE CHANGE WITH ASSUMED 12% PER YEAR INCREASE BASIC FORMULA: R-A(1-f)+Cf R - Effective Net Rent A - Base Rent x CPI Increase -$735 (Comm. Area AdJ.) C - Existing Contract Rent f = Combined Present Worth and Annuallzing Factor Adjustment New Months Factor e - Time Lease From 18/M0. Base Adjusted Date ill/81 Compounding Rent Rental 7181 7 1.072135 x 7,750 = 8,309.05 - 12/81 12 1.126825 x 7,750 = 8,732.89 - 1/82 13 1.138093 x 7,750 = 8,820.22 - 7182 19 1.208109 x 7,750 = 9,352.84 - 12/82 24 1.269735 x 7,750 = 9,840.44 - 1/83 25 1.282432 x 7,750 = 9,938.85 - 12183 36 1.430769 x 7,750 = 11,088.46 - 1/84 37 1.445076 x 7,750 = 11,199.34 - 12/84 48 1.612226 x 7,750 = 12,494.75 - 1/85 49 1.628348 x 7,750 - 12,619.70 - 12/85 60 1.816697 x 7,750 - 14,079.40 - 1186 61 1.834864 x 7,750 = 14,220.19 - 12/86 72 2.047099 x 7,750 = 15,865.02 - 1/87 73 2.067670 x 7,750 = 16,023.67 - 12/87 84 2.306723 x 7.750 = 17,877.10 - 1/88 85 2.329790 x 7,750 = 18.055.87 - N L=J D4 o x Fh H 07 N H H ro jv - w d (e = U) EXAMPLE: INTERIOR PARCEL: LOT 32 Less S 735 (A X (1-f) + (C X f) I 735 = 7,574 x 0.4876140 + (327.42 x 0.512386) _ 735. = 7,998 x 0.4876140 + (327.42 x 0.512386) _ 735 = 8,085 x 0.537849 + (327.42 x 0.462151) 735 = 8,62B x 0.537849 + (327.42 x 0.462151) 735 = 9,105 x 0.537849 + (327.42 x 0.462151) _ 735 = 9,204 x 0.593991 + (327.42 x 0.406009) _ 735 = 10,353 x 0.593991 + (327.42 x 0.406009) _ 735 = 10,464 x 0.656898 + (327.42 x 0.343102) _ 735 = 11,760 x 0.656898 + (327.42 x 0.343102) _ 735 = 11,885 x 0.727591 + (533.15 x 0.272409) 735 = 13,344 x 0.727591 + (533.15 x 0.272409) _ 735 - 13,485 x 0.807296 + (533.15 x 0.192704) _ 73S = 15,130 x 0.807296 + (533.15 x 0.192704) _ 73S = 15,289 x 0.897495 + (533.15 x 0.102505) _ 735 = 17,142 x 0.897495 + (533.15 x 0.102505) 900 = 17,156 x - - - _ R 3,860.98 4,067.65 4,499.95 4,791.79 5,04B.67 5,599.94 6,282.80 6,986.34 7,837.30 8.792.44 9,854.50 10,989.26 12,317.14 13,776.16 15,439.60 17.155.87 t Change Over $3.860.98 + 5.35 + 16.55 +24.11 + 30.76 +45.04 + 62.73 +80.95 +102.99 + 127.73 + 155.23 +184.62 +219.02 +256.80 + 299.89 + 344.34 Al