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Home My WebLink AboutBEACON BAY LEASE LOT 2_05_FINANCE_DOCUMENTSBeacon Bay Lease Lot 2 05_FINANCE_DOCUMENTS 0 a Oborn , Shirley From: Parker, Kristy Sent: Tuesday, May 26. 2009 1:22 PM To: Danes, Amy; Mayfield, Amy. Cc: Oborny, Shirley; McDonald, Cristal; Wolcott, Cathy Subject: Past Due Rent re Beacon Bay Leases Attachments: Ward from DRH 052109 re Final Notice.pdf; Arnold D from DRH 052109 re Final Notice.pdf; Dowd S from DRH 052109 re Final Notice.pdf; Grimstad from DRH 052109 re Final notice.pdf Hi Ladies - Can you take note that final notices to pay rent were issued for the following: Ward (2 Beacon Bay), Arnold (14 Beacon Bay), Dowd (50 Beacon Bay) and Grimstad (48 Beacon Bay) The deadline to pay is Friday May 29th. Can you make a note to e-mail me on Monday, June 1st with current account balance information? If the tenants don't make significant strides to catch up, we will issue.3-day notices to pay or quit the premises on the 2nd. Copy of notices attached for your reference. Thank you Kristy Parker Paralegal City Attorney's Office City of Newport Beach (949) 644-3131 CONFIDENTIALITY NOTICE: This email may contain material that is confidential, privileged and/or attorney -work product for the sole use of the addressee. Any review by, relianlce or distribution by others or forwarding to others without express permission is strictly prohibited. If you receive this transmission in error, you are advised that any disclosure, copying, distribution, or the taking of any action in reliance upon the communication•is strictly prohibited. Moreover, any such inadvertent disclosure shall not compromise dr waive the attorney -client privilege as to this communication. If you have received this communication in error, immediately notify the sender. Thank you. 1 Oborny, Shirley From: Oborny, Shirley Sent: Tuesday, May 26, 2009 9:36 AM To: Kiff, Dave Cc: Hunt, David Subject: 2 Beacon Bay - late rent notice Dave/David - Mr. Patrick Ward of 2 Beacon Bay called in response to David's letter. Mr. Ward said he can probably pay $8K or $9K next week so that he's only one payment behind instead of three. He's concerned about his water being shut off because it's tied into the lease payment. His number is 833-2238. skm(ey 060el( Administrative Assistant City Manager's Office City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 949-644-3002 949.644-3008 (fax) soborny(a, city. n ew port- beach. ca. u s Mr. and Mrs. Ward Date: May 29, 2009 Page: 3 Bcc: Shirley Oborney, City Manager's Office in Tome • a wA CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY David R. Hunt, City Attorney May 21, 2009 VIA CERTIFIED MAIL AND FIRST CLASS MAIL Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Dr. Corona del Mar, CA 92625 RE: FINAL NOTICE PAST DUE RENT BEACON BAY LEASE — LOT 2 A09-00140 Dear Mr. and Mrs. Ward: The City Manager's Office has brought it to our attention that rents due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA are seriously delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which is recorded with the County of Orange as Document No. 2007000484299. It is the City of Newport Beach's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a three-day notice to pay or quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and late fees due on your account is $14,453.19, which represents the amounts past due for the months of March thru May, 2009. Please make immediate arrangements to pay this amount. Failure to pay all past due amounts by Tuesday, May 29th, 2009 will result in further'action by the City including, but not limited to, the service a three-day notice to pay or quit, commencement of legal proceedings against you and termination of your lease. Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8915, Phone (949) 644-3121. The Cashier is available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658-8915 Telephone: (949) 644-3131 • Fax: (949) 644-3139 • www.city.newport-beach.ca.us ,. Mr. and Mrs. Ward Date: May 29, 2009 Page: 2 Thank you for your prompt attention to resolving this issue. Should you have any questions, I can be reached at (949) 644-3131. Very Truly Yours, OFFICE OF THE CITY ATTORNEY David R. Hunt City Attorney DRH:ksp cc: Carol Ward 1001 Dove St., Suite 200 Newport Beach, CA 92660 Y _ 'A r CITY OF NEWPORT BEACH OFFICE OF THE CITY MANAGER August 6, 2007 TO: REVENUE DEPARTMENT FROM: SHIRLEY OBORNY SUBJECT: CHANGE IN OWNERSHIP FOR 2 BEACON BAY Escrow closed for subject property (2 Beacon Bay) on August 2, 2007. The new lessees are Patrick and Carol Ward. 1. Mariners Escrow has forwarded the attached check in the amount of $4,756.25 for the month of August, 2007. 2. Please bill new lessees $4,756.25 for the month of September 2007. Thank you. Attachment: Check from Mariners Escrow MARINERS ESCROW 1100 NEWPORT CENTER DR SUITE 200 / NEWPORT BEACH / CA / 92660 / USA T 949.640.6040 1 F 949.721.8157 1 W W W..MARINERSESCROW.COM City of Newport Beach Date: August 6, 2007 3300 Newport Blvd. Newport Beach, CA 92660 Escrow No.: 32083-BF Attn: Shirley Obomy Re: 2 Beacon Bay, Newport Beach, CA 92660 In connection with the above referenced escrow, we enclose the following: Our check for $100.00, Leasehold Transfer Fee. August Land Lease Rent check in the amount of $4,756.25. Original Executed Lease dated August 2, 2007 If you have any questions or need anything further, please do not hesitate to call. Sincerely, ////�/ Mariners Escrow Comoratio�d / vW/W Brian Foxcroft Escrow Officer MW W MARINERS ESCROW CORPORATION Newport Beach, CA 92660 V: 8/03/2007 Escrow No. 3; Payee: City Of Newport Beach Seller: John D. Eversoll and Jessie J. Eversoll, Trustees of the Eversoll Family Trust d Buyer: Patrick Ward and Carol Ward ,I'Rel; Memo 1: Mepno 2: betail: Leasehold Transfer Fee 100.00 Check Amount Miscellaneous Fee 432939 Property: 2 Beacon Bay, Newport Beach, CA 92660 •' te-2ai22UM - IvI1�RINERSESCROW `` EscpOWINO" - uwt¢tivPoercv,r�nrsyTAwo -_ p��J - H6W_PBRT'DGCH'✓,CAL9�60/VSA. - :"320O63�B,F` PAY10URTHOUS9Np;SEVENHUNDRED;FIFTYSIXHNg25/ OO, DOLLgRS, j', _ •MAR domiE : i360, f e port Bl d.- ORDERch 3300�NewportBlvd. Newport Beach, CA 92663 ,e UUCUR1ENT INCLUDES AN -ASTIR( 1 MARINERS ESCROW CORPORATION Newport Beach, CA 92660 Data. 8/03/2007 Escro'No. 32083-BF {M1ig'. Clc Payee: City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 laIler: John D. Eversoll and Jessie J. Eversoll, Trustees of the Eversoll Family Trust d Buyer. Patrick Ward and Carol Ward Ref. Memo 1: Memo 2: Detail: August Land Lease Rent 4,756.25 4 m Miscellaneous Fee 432'94.0, . ` 'OATt 8103/2007 ; .. - AMDUNT CheckAmount , 432940 Property: 2 Beacon Bay, Newport Beach, CA 92660 We Appreciate Your Business! CITY OF NEWPORT BEACH Office of City Manager (949)644-3002 July 31, 2007 Brian Foxcroft Mariners Escrow 1100 Newport Center Drive, Ste. 200 Newport Beach, CA 92660 Subject: 2 Beacon Bay Escrow No.32083-BF Dear Brian: Enclosed please find: ■ One Lease for the Ward's records • Memorandum of Lease to be recorded ■ Termination of Leasehold to be recorded At the close of Escrow, please collect $4,756.25 from the Wards for the August 2007 land lease rent. If you have any questions, please call me. Enclosures City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.city.newport-beach.ca.us 0 MARINERS ESCROW 1100 NEWPORT CENTER DR SUITE 200 / NEWPORT BEACH / CA / 92660 / USA T 949.640.6040 1 P949.721.8157 WWW.MARINERSESCROW.COM City of Newport Beach Date: July 27, 2007 City Manager's Office Escrow No.: 32083-BF 3300 Newport Blvd. Newport Beach, CA 92659 Attn: Shirley / Dave Kiff Re: 2 Beacon Bay, Newport Beach, CA 92660 In connection with the above mentioned escrow, enclosed herewith please find the following: 1. Landlease 2. Lender's Executed Note and Deed of Trust Kindly call our office as soon as documents are executed and ready for pick up. Brian Foxcroft's direct number is 949-719-2113 Should you have any questions or need any further assistance, please do not hesitate to contact the undersigned. Thank you. Sincerely, Mariners Escrow Corporation t Brian Foxcroft Escrow Officer Im 05-08-07;11:44AM; A y 1 Date: May 7, 2007 To: Mr. and Mrs. Patrick Ward ;9498332238 # 2/ 2 41 CITY OF NEWPORT BEACH From: Dave I<iff, Assistant City Manager Re: Beacon Bay Land Lease for 2 Beacon Bay Attached is the land lease for the above property. As indicated at the bottom of page 3, your monthly land lease rent will be: $4,756.25 per month Your lease payments will be invoiced as a part of your municipal services statement that includes water, sewer and recycling charges. In order to activate your water service at the close of Escrow, please contact Seanne Carney in the Revenue Division, She can be reached at 949-644-3051. If you have any questions, please contact my assistant, Shirley Oborny, at 949- 644-3002. My Initials below represent my acknowledgement of the foregoing Qw BUYERS INITALS f `r Attachment City Hall - 3300 Newport Boulevard - Post Office Box 1768 • Newport Beach, California 92659-1768 a �EwPoR� CITY OF NEWPORT BEACH u z e•� C�c,FOF- Office of City Manager (949) 644-3002 May 3, 2007 Brian Foxcroft Mariners Escrow 1100 Newport Center Drive, Ste. 200 Newport Beach, CA 92660 Subject: 2 Beacon Bay Escrow No. 32083-BF Dear Brian: Enclosed please find: • Two original Leases • Memorandum of Lease • Termination of Leasehold Please have the leases signed, the Memorandum of Lease and Termination of Leasehold signed and notarized and all dates left blank at this time. If you have any questions, please call me. Sincerely, Shirley b my Administ ive Assista Enclosures City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach.ca.us 0 6 MARINERS ESCROW 1100 NEWPORT CENTER DR. SUITE 200 / NEWPORT BEACH / CA / 92660 / USA T 949.640.6040 I F 949.721,8157 W W WMARINERSESCROW.COM City of Newport Beach Date: May 1, 2007 City Manager's Office Escrow No.: 32083-BF Your Re: Attn: Shirley Re: 2 Beacon Bay, Newport Beach, CA 92660 Shirley, In connection with the above mentioned escrow, enclosed herewith please find the following: 1. Certified Escrow Instructions 2. Preliminary Title Report issued by Southland Title Company 3. Vesting Worksheet Please prepare the leasehold documents and contact our office when ready. Should you have any questions or need any further assistance, please do not hesitate to contact the undersigned. Thank you. LandAmerical SoujMff 5M 8001 300 Escrow No.: 31954BF Order No.: 27532493 MARINERS ESCROW 1100 NEWPORT CENTER DRIVE SUITE 200 NEWPORT BEACH, CA 92660 Attentlon: BRIAN FOXCROFT Property Address: 2 Beacon Bay, Newport Beach, California DATED AS OF April 2, 2007 AT 7:30 A.M. "PRELIMINARY REPORT" IN RESPONSE TO THE ABOVE REFERENCED APPLICATION FOR A POLICY OF TITLE INSURANCE, LANDAMERICA SOUTHLAND TITLE HEREBY REPORTS THAT IS PREPARED TO ISSUE, OR CAUSE TO BE ISSUED, AS OF THE DATE HEREOF, A POLICY OR POLICIES OF TITLE INSURANCE DESCRIBING THE LAND AND THE ESTATE OR INTEREST THEREIN HEREINAFTER SET FORTH, INSURING AGAINST LOSS WHICH MAY BE SUSTAINED BY REASON OF ANY DEFECT, LIEN OR ENCUMBRANCE NOT SHOWN OR REFERRED TO AS AN EXCEPTION BELOW OR NOT EXCLUDED FROM COVERAGE PURSUANT TO THE PRINTED SCHEDULES, CONDITIONS AND STIPULATIONS OF SAID POLICY FORMS. THE PRINTED EXCEPTIONS AND EXCLUSIONS FROM THE COVERAGE AND LIMITATIONS ON COVERED RISKS OF SAID POLICY OR POLICIES ARE SET FORTH IN EXHIBIT 1 ATTACHED. LIMITATIONS ON COVERED RISKS APPLICABLE TO THE CLTA AND ALTA HOMEOWNER'S POLICIES OF TITLE INSURANCE WHICH ESTABLISH A DEDUCTIBLE AMOUNT AND A MAXIMUM DOLLAR LIMIT OF LIABILITY FOR CERTAIN COVERAGES ARE ALSO SET FORTH IN EXHIBIT 1. COPIES OF THE POLICY FORMS SHOULD BE READ. THEY ARE AVAILABLE FROM THE OFFICE WHICH ISSUED THIS REPORT. PLEASE READ THE EXCEPTIONS SHOWN OR REFERRED TO BELOW AND THE EXCEPTIONS AND EXCLUSIONS SET FORTH IN EXHIBIT 1 OF THIS REPORT CAREFULLY. THE EXCEPTIONS AND EXCLUSIONS ARE MEANT TO PROVIDE YOU WITH NOTICE OF MATTERS THAT ARE NOT COVERED UNDER THE TERMS OF THE TITLE INSURANCE POLICY AND SHOULD BE CAREFULLY CONSIDERED. IT IS IMPORTANT TO NOTE THAT THIS PRELIMINARY REPORT IS NOT A WRITTEN REPRESENTATION AS TO THE CONDITION OF TITLE AND MAY NOT LIST ALL LIENS, DEFECTS AND ENCUMBRANCES AFFECTING TITLE TO THE LAND. THIS REPORT (AND ANY SUPPLEMENTS OR AMENDMENTS HERETO) IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF A POLICY OF TITLE INSURANCE AND NO LIABILITY IS ASSUMED HEREBY. IF IT IS DESIRED THAT LIABILITY BE ASSUMED PRIOR TO THE ISSUANCE OF A POLICY OF TITLE INSURANCE, A BINDER OR COMMITMENT SHOULD BE REQUESTED. THE FORM OF POLICY OF TITLE INSURANCE CONTEMPLATED BY THIS REPORT IS: California Land Title Association Homeowner's Policy American Land Title Association Loan Policy "ALL POLICIES WILL BE ISSUED BY TRANSNATION TITLE INSURANCE COMPANY" LANDAMERICA SOUTHLAND TITLE RON FERNANDO, TITLE OFFICER Fax: (949) 453-1921 ) ORDER NO.27532493 SCHEDULE A THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS: A leasehold as created by that certain lease dated January 1, 1988, executed by City of Newport Beach, a Chartered Municipal Corporation, as lessor, and John D. Eversoll and Jessie J. Eversoll, Trustees of the Eversoll Family Trust dated December 9, 1975, as lessee, as referenced in the document entitled "Memorandum of Lease" which was recorded March 2, 1988 as Instrument No. 88-098120, Official Records, for the term and upon and subject to all the provisions contained in said document, and in said lease. TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN: John D. Eversoll and Jessie J. Eversoll, husband and wife as joint tenants THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF Orange, AND IS DESCRIBED IN THE ATTACHED EXHIBIT "A": "WE HAVE ENCLOSED EXTRA COPIES OF THE LEGAL DESCRIPTION FOR YOUR CONVENIENCE." j ORDER NO.27532493 EXHIBIT " N, The Westerly 45 feet of Lot(s) 2, and the Easterly 10 feet of Lot 1, in the City of Newport Beach, County of Orange, State of California, as shown upon a Record of Survey map recorded in Book 9 Pages 42 and 43 of Record of Surveys, on file in the Office of the County Recorder of said County,, together with certain portions of adjoining Lots I and H as shown upon said map and as more fully in said lease. ` ORDER NO.27532493 SCHEDULE B AT THE DATE HEREOF EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS: A. Property taxes, including general and special taxes, personal property taxes, if any, and any assessments collected with taxes, to be levied for the fiscal year 2007 - 2008 which are a lien not yet payable. B. Property taxes, including general and special taxes, personal property taxes, if any, and any assessments collected with taxes, for the fiscal year shown below, arm paid. For proration purposes the amounts are: Fiscal year: 1st Installment: 2nd Installment: Homeowners Exemption: Code Area: Assessment No.: 2006 — 2007 $5,480.89 $5,480.89 $7,000.00, Homeowners 07001 988-88-369 C. An assessment (1915 Act) by the improvement district shown below. Assessment (or Bond) No.: Series: District: For: Bond Issued: Original Amount: Parcel 79 Newport Beach-07 Underground Utilities December 14, 2000 (none shown) Said assessment may be, and usually is, collected with the County/City general and special taxes. D. If Southland Title is asked to hold money for any taxes shown above, a satisfactory indemnity along with written consent by Borrower/Seller and/or Lender M1j-gI be submitted prior to closing. Please contact your title officer for the appropriate forms. E. Assessments, if any, for community facility districts affecting said land which may exist by virtue of assessment maps or notices filed by said districts. F. Supplemental or escaped assessments of property taxes, if any, assessed pursuant to the Revenue and Taxation Code of the State of California. 4 t i ORDER NO.27532493 1. The trusts affecting the parties of said land acquired by City of Newport Beach by the legislative grant from the State of California, for uses and purposes and upon the express conditions set 'forth in said legislative grant, as amended, and the rights reserved therein to the people of. the State of California. 2. The terms, covenants, conditions, agreements and provisions of the lease dated November 9, 1927 by and between the City of Newport Beach, as Lessor, and J.A. Beek, as Lessee, recorded March 8, 1939 in Book 984 Page 350, Official Records and as amended by instruments recorded March 9, 1939 in Book 988 Page 146, Official Records in Book 982 Page 449, Official Records and in Book 987 Page 183 Official Records and recorded December 8, 1945 in Book 1370 Page 241, Official Records, and recorded January 25, 1950 in Book 1959 Page 189, Official Records. The present ownership of the leasehold created by said lease and other matters affecting the Interest of the lessee are not shown herein. 3. The charges, restrictions, conditions and covenants created for the benefit of all land shown on said map as contained in the leases recorded in Book 1959 Page 189, Official Records. 4. An easement for the purpose shown below and rights incidental thereto as set forth in a document Granted to: Southern California Edison Company Purpose: pole lines and conduits Recorded: in Book 1075 Page(s) 53, Official Records Affects: that portion of said land described therein Reference is made to said document for full particulars. 5. Any adverse claim based upon the assertion that some portion of said land is tide or submerged lands, or has been created by artificial means or has been accreted to such portion so created. 6. Any rights of the public which may exist on said land for access, parking, beach or recreational uses, if said land or portions thereof were at any time used by the public for such purposes. 7. Any easement or claim of easement based on prescription or implied dedication to he public over said land or any part thereof for access to the adjoining beach or body of water or for recreational purposes. 8. An easement for the purpose shown below and rights incidental thereto as reserved in a document Purpose: public utility and the construction, reconstruction, operation, maintenance and repair of same Recorded: March 20, 2001 as Instrument No. 20010159276, Official Records Affects: a portion of said land ORDER NO. 27532493 9. An easement for the purpose shown below and rights incidental thereto as reserved in a document Purpose: public utility and the construction, reconstruction, operation, maintenance and repair of same Recorded: April 15, 2003 as Instrument No. 2003000415999, Official Records Affects: a portion of said land 10. An easement for the purpose shown below and rights incidental thereto as reserved in a document Purpose: public utility and the construction, reconstruction, operation, maintenance and repair of same Recorded: June 11, 2003 as Instrument No. 2003000679816, Official Records Affects: a portion of said land 11. A deed of trust to secure an indebtedness in the amount shown below, and any other obligations secured thereby Amount: $500,000.00 v Dated: September 22, 2003 Trustor: John D. Eversoll and J ie J. ver tenants Trustee: Ticor Title NLS, a California rpor ion Beneficiary: Washington Mutual Bank, FA, a Fed ra Recorded: September 29, 2003 as Instrument Records Original Loan No.: 0078546694 husband and wife as joint Association No. 2003001191996, Official Said deed of trust recites that it secures a line of credit. If the line of credit is to be paid off in this transaction, this Company will require that the written demand for payment state that the line of credit has been frozen and that the demand is not subject to increase for any additional advances or draws. Accordingly, it is recommended that any request for a payoff demand statement advise the beneficiary of our requirement, and that the request be accompanied by: the borrower's written request to freeze the line of credit, the surrender of any unused checks or drafts, and anything else that may be required by the lender in order to issue an unconditional demand. 12. A document subject to all the terms, provisions and conditions therein contained Dated: September 12, 2003 Entitled: Lessor's Consent and Agreement Executed by: Washington Mutual Bank, FA Recorded: September 29, 2003 as Instrument No. 2003001191997, Official Records Reference is made to said document for full particulars. 13. The effect of any failure to comply with the terms, covenants, conditions and provisions of the lease described or referred to in Schedule A. ORDER NO.27532493 Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by making inquiry of the lessors and their successors in interest, in the lease described or referred to in Schedule A. 14. Matters which may be disclosed by an inspection or by a survey of said land that is satisfactory to this Company, or by inquiry of the parties in possession thereof. An inspection of said land has been ordered, which may result in additional exceptions. ORDER NO.27532493 iv -14 11 ►.. ► Req. No. 1: The Company will require a statement of information from the parties named below in order to complete this report, based on the effect of documents, proceedings, liens, decrees, or other matters which do not specifically describe said land, but which, if any do exist, may affect the title or impose liens or encumbrances thereon. Parties: All Parties (Note: The statement of information is necessary to complete the search and examination of title under this order. Any title search includes matters that are indexed by name only, and having a completed statement of information assists the Company in the elimination of certain matters which appear to involve the parties but in fact affect another party with the same or similar name. Be assured that the statement of information is essential and will be kept strictly confidential to this file.) 4) ORDER NO.27532493 "NOTES SES:TION" Note No. 1: The charges which the Company will make for next day messenger services (i.e. Federal Express, UPS, DHL, Airborne, Express Mail, etc.) are $15.00 per letter, standard overnight service, and $25.00 for larger size packages and/or priority delivery services. Such charges include the cost of such messenger service and the Company's expenses for arranging such messenger service and its overhead and profit. Special messenger services will be billed at the cost of such services. There will be no additional charge for pick-up or delivery of packages via the Company's regularly scheduled messenger runs. Note No. 2: Should this Company be asked to issue an ALTA Residential Policy then the following exceptions will be added to the policy. In addition to the exclusion, you are not insured against loss, costs, attorney's fees and expenses resulting from someone else claiming an interest in your land by reason of: A. Easements not shown in the public records; B. Boundary disputes not shown in the public records; C. Improvements owned by your neighbor placed on your land. Note No. 3: The char based on the basic (n, L ORDER NO.27532493 California Insurance Code §12413.1 regulates the disbursement of escrow and sub escrow funds by title companies. The law requires that funds be deposited in the title company escrow account and available for withdrawal prior to disbursement. Funds deposited with the Company via wire transfer may be disbursed upon receipt. Funds deposited with the Company via cashiers or teller's checks drawn on a California -based bank may be disbursed the next business day after the day of deposit. If funds are deposited with the Company by other methods, recording and/or disbursement may be delayed. All escrow and sub -escrow funds received by the Company will be deposited with other escrow funds in one or more non -interest bearing escrow accounts of the Company in a financial institution selected by the Company. The Company and/or its parent company may receive certain direct or indirect benefits from the financial institution by reason of the deposit of such funds or the maintenance of such accounts with such financial institution, and the Company shall have no obligation to account to the depositing party in any manner for the value of, or to pay to such party, any benefit received by the Company and/or its parent company. Those benefits may include, without limitation, credits allowed by such financial institution on loans to the Company and/or its parent company and earnings on investments made with the proceeds of such loans, accounting, reporting and other services and products of such financial institution. Such, benefits shall be deemed additional compensation of the Company for its services In connection with the escrow or sub -escrow. WIRING INSTRUCTIONS FOR THIS OFFICE ARE: Comerica Bank 2321 Rosecrans Avenue, 5th floor El Segundo, CA 90245-4903 (800) 376-0430 CREDIT: LANDAMERICA SOUTHLAND TITLE ACCOUNT NO.: 1891612739 ROUTING NO.: 121137522 FOR THE ACCOUNT OF: LANDAMERICA SOUTHLAND TITLE — LOAN PAYOFF DEPT. OUR ORDER NUMBER OR ESCROW NUMBER MUST ALWAYS BE REFERENCED. FAILURE TO DO SO MAY CAUSE DELAYS IN THE CLOSING OF A TRANSACTION AND/OR MISPLACED OR LOST FUNDS. LANDAMERICA SOUTHLAND TITLE DOES NOT ACCEPT LIABILITY FOR SUCH DELAYS IN CLOSING, MISPLACED AND/OR LOST FUNDS, OR DAMAGES (IE. INTEREST, PENALTIES) SUFFERED BY REASON OF ONE'S FAILURE TO COMPLY WITH THE IDENTIFICATION/CREDIT PROCEDURE SET FORTH ABOVE. ALL UNIDENTIFIED/UNCLAIMED WIRES WILL BE RETURNED AFTER FORTY-EIGHT (48) HOURS. SHOULD YOU HAVE ANY QUESTIONS REGARDING THE DEPOSIT OR DISBURSEMENT OF FUNDS, PLEASE CONTACT YOUR TITLE OFFICER IMMEDIATELY. 10 MI LandAmerica" Southland Title 8001 Irvine Center Drive, Suite 300 Irvine, CA 92618 PHONE: (949) 453-9000 ORDER NO.: 27532493 ATTENTION: REF: Dated as of April 2, 2007 at 8:00 A.M. LENDER'S SUPPLEMENTAL REPORT The above numbered report (including any supplement thereto) is hereby modified and/or supplemented in order to reflect the following additional items relating to the issuance of an American Land Title Association form policy as follows: 1. None of the Items shown in this report will cause the company to decline to attach CLTA Endorsement Form 100 to an ALTA loan policy, when issued. 2. The following information will be included in the CLTA Form 116 or 116.2 Endorsement to be issued pursuant to this order: There is located on said land A Single Family Residence Known as: 2 Beacon Bay Newport Beach, California 3. The only conveyances affecting said land, which recorded within 24 months of the date of this report, are as follows: NONE ORDER NO.27532493 LINE OF CREDIT LETTER TO LENDER Date: To: Attention: Payoff Department Subject: Account/Loan No.: Order No.: Dear Sir or Madam: We hereby request that the above referenced credit line account be frozen as of this date. Please release payoff information to LandAmerica/Southland Title because you will be receiving payment in full shortly, either through a sale or refinance of the secured property. We agree not to request any advances on this account on or after the date of this letter. Upon receipt of payoff, please close credit line account. Sincerely, (All borrowers ntnst sign) NOTE: This letter must be sent to the lender directly at the time the demand is requested to Insure that the account Is frozen at the time of closing. DT4A }I�YV W!llIm1Y1114Y11tC0UlIr ApO11oL1A0Rp(TMAB- �� R. SEC. 35, T6S. R/O.{S! 44 t s r O .. A 2 : ! 0 • � I 'tp a Q� A 1° p �4 corn 23 t `• b A • o , "• O !� 221 LOT F • IA/IR uA! As PER AA/K PROM p4) Z 9 A m O 9 4 Y �qy O MARCH /949 01 TR.AO 2/72 MM.66-47 H.S. 9-4443 R.S. /3-42 WEST SIDE ADD. -BEACON BAY is�rs�o\ 4p 0 ® 11 . ron 02 NOTE - ASSESSOR'S BLOCK B PARCEL AMBERS SHOWN IN CIRCLES Y 50-22 N ASSESSOR'S MAP BOOK 50 PAGE PP O COUNTY OF ORANGE L "s L P u to i • ORDER NO.27532493 EXHIBIT 1 (REV. 11117104) CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY -1000 EXCLUSIONS FROM COVERAGE THE FOLLOWING MATTERS ARE EXPRESSLY EXCLUDED FROM THE COVERAGE OF THIS POLICYAND THE COMPANY W ILL NOT PAY LOSS OR DAMAGE, COSTS, ATTORNEYS' FEES OR EXPENSES WHICH ARISE BY REASON OF: 1. A. ANY LAW, ORDINANCE OR GOVERNMENTAL REGULATION (INCLUDING BUT NOT LIMITED TO BUILDING OR ZONING LAWS, ORDINANCES, OR REGULATIONS) RESTRICTING, REGULATING, PROHIBITING OR RELATING TO (1) THE OCCUPANCY, USE, OR ENJOYMENT OF THE LAND; (2) THE CHARACTER, DIMENSIONS OR LOCATION OF ANY IMPROVEMENT NOW OR HEREAFTER ERECTED ON THE LAND; (3) A SEPARATION IN OWNERSHIP OR A'CHANGE IN THE DIMENSIONS OR AREA OF THE LAND OR ANY PARCEL OF WHICH THE LAND IS OR WAS A PART; OR (4) ENVIRONMENTAL PROTECTION, OR THE EFFECT OF ANY VIOLATION OF THESE LAWS, ORDINANCES OR GOVERNMENTAL REGULATIONS, EXCEPT TO THE EXTENT THAT NOTICE OF THE ENFORCEMENT THEREOF OR A NOTICE OF A DEFECT, LIEN, OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. B. ANY GOVERNMENTAL POLICE POWER NOT EXCLUDED BY (A) ABOVE, EXCEPT TO THE EXTENT THAT A NOTICE OF THE EXERCISE THEREOF OR NOTICE OF A DEFECT, LIEN OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. 2. RIGHTS OF EMINENT DOMAIN UNLESS NOTICE OF THE EXERCISE THEREOF HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT NOT EXCLUDING FROM COVERAGE ANY TAKING WHICH HAS OCCURRED PRIOR TO DATE OF POLICY WHICH WOULD BE BINDING ON THE RIGHTS OF A PURCHASER FOR VALUE WITHOUT KNOWLEDGE. 3. DEFECTS, LIENS. ENCUMBRANCES, ADVERSE CLAIMS OR OTHER MATTERS; A. WHETHER OR NOT RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT CREATED,SUFFERED, ASSUMED OR AGREED TO BY THE INSURED CLAIMANT; B. NOT KNOWN TO THE COMPANY, NOT RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT KNOWN TO THE INSURED CLAIMANT AND NOT DISCLOSED IN WRITING TO THE COMPANY BY THE INSURED CLAIMANT PRIOR TO THE DATE THE INSURED CLAIMANT BECAME AN INSURED UNDER THIS POLICY; C. RESULTING IN NO LOSS OR DAMAGE TO THE INSURED CLAIMANT; D ATTACHING OR CREATED SUBSEQUENT TO DATE OF POLICY; OR E. RESULTING IN LOSS OR DAMAGE WHICH WOULD NOT HAVE BEEN SUSTAINED IF THE INSURED CLAIMANT HAD PAID VALUE FOR THE INSURED MORTGAGE OR FOR THE ESTATE OR INTEREST INSURED BYTHIS POLICY. 4. UNENFORCEABILITY OF THE LIEN OF THE INSURED MORTGAGE BECAUSE OF THE INABILITY OR FAILURE OF THE INSURED AT DATE OF POLICY OR THE INABILITY OR FAILURE OF ANY SUBSEQUENT OWNER OF THE INDEBTEDNESS, TO COMPLY WITH THE APPLICABLE DOING BUSINESS LAWS OF THE STATE IN WHICH THE LAND IS SITUATED. S. INVALIDITY OR UNENFORCEABILITY OF THE LIEN OF THE INSURED MORTGAGE, OR CLAIM THEREOF, WHICH ARISES OUT OF THE TRANSACTION EVIDENCED BY THE INSURED MORTGAGE AND IS BASED UPON USURY OR ANY CONSUMER CREDIT PROTECTION OR TRUTH -IN -LENDING LAW. 6. ANY CLAIM, WHICH ARISES OUT OF THE TRANSACTION VESTING IN THE INSURED THE ESTATE OR INTEREST INSURED BY THIS POLICY OR THE TRANSACTION CREATING THE INTEREST OF THE INSURED LENDER, BY REASON OF THE OPERATION OF FEDERAL BANKRUPTCY, STATE INSOLVENCY OR SIMILAR CREDITORS' RIGHTS LAWS, EXCEPTIONS FROM COVERAGE -SCHEDULE B, PART I THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE (AND THE COMPANY WILL NOT PAY COSTS, ATTORNEYS' FEES OR EXPENSES) WHICH ARISE BY REASON OF: 1. TAXES OR ASSESSMENTS WHICH ARE NOT SHOWN AS EXISTING LIENS BY THE RECORDS OF ANY TAXING AUTHORITY THAT LEVIES TAXES OR ASSESSMENTS ON REAL PROPERTY OR BY THE PUBLIC RECORDS. PROCEEDINGS BY A PUBLIC AGENCY WHICH MAY RESULT IN TAXES OR ASSESSMENTS, OR NOTICES OF SUCH PROCEEDINGS, WHETHER OR NOT SHOWN BY THE RECORDS OF SUCH AGENCY OR BY THE PUBLIC RECORDS. 2. ANY FACTS, RIGHTS, INTEREST, OR CLAIMS WHICH ARE NOT SHOWN BY THE PUBLIC RECORDS BUT WHICH COULD BE ASCERTAINED BY AN INSPECTION OF THE LAND OR WHICH MAY BE ASSERTED BY PERSONS IN POSSESSION THEREOF. 3. EASEMENTS, LIENS OR ENCUMBRANCES, OR CLAIMS THEREOF, WHICH ARE NOT SHOWN BY THE PUBLIC RECORDS. 4. DISCREPANCIES, CONFLICTS IN BOUNDARY LINES, SHORTAGE IN AREA, ENCROACHMENTS, OR ANY OTHER FACTS WHICH A CORRECT SURVEY WOULD DISCLOSE, AND WHICH ARE NOT SHOWN BYTHE PUBLIC RECORDS. 6, (A) UNPATENTED MINING CLAIMS; (B) RESERVATIONS OR EXCEPTIONS IN PATENTS OR IN ACTS AUTHORIZING THE ISSUANCE THEREOF; (C) WATER RIGHTS; CLAIMS OR TITLETO WATER, WHETHER OR NOT THE MATTERS EXCEPTED UNDER (A), (B) OR (C) ARE SHOWN BY THE PUBLIC RECORDS. CALIFORNIA LAND TITLE ASSOCIATION HOMEOWNER'S POLICY OF TITLE INSURANCE (10122103) AMERICAN LAND TITLE ASSOCIATION HOMEOWNER'S POLICY OF TITLE INSURANCE (10122103) EXCLUSIONS IN ADDITION TO THE EXCEPTIONS IN SCHEDULE B. YOU ARE NOT INSURED AGAINST LOSS, COSTS, ATTORNEYS FEES, AND EXPENSES RESULTING FROM: 1. GOVERNMENTAL POLICE POWER, AND THE EXISTENCE OR VIOLATION OF ANY LAW OR GOVERNMENT REGULATION. THIS INCLUDES ORDINANCES, LAWS AND REGULATIONS CONCERNING: A. BUILDING B. ZONING C. LAND USE D. IMPROVEMENTS ON THE LAND E. LAND DIVISION F. ENVIRONMENTAL PROTECTION THIS EXCLUSION DOES NOT APPLY TO VIOLATIONS OR THE ENFORCEMENT OF THESE MATTERS IF NOTICE OF THE VIOLATION OR ENFORCEMENT APPEARS IN THE PUBLIC RECORDS AT THE POLICY DATE. THIS EXCLUSION DOES NOT LIMIT THE COVERAGE DESCRIBED IN COVERED RISK 14,16.16. 17 OR 24. 2. THE FAILURE OF YOUR EXISTING STRUCTURES, OR ANY PART OF THEM, TO BE CONSTRUCTED IN ACCORDANCE WITH APPLICABLE BUILDING CODES. THIS EXCLUSION DOES NOT APPLY TO VIOLATIONS OF BUILDING CODES IF NOTICE OF THE VIOLATION APPEARS IN THE PUBLIC RECORDS AT THE POLICY DATE. 3. THE RIGHT TO TAKE THE LAND BY CONDEMNING IT. UNLESS: A. A NOTICE OF EXERCISING THE RIGHTAPPEARS IN THE PUBLIC RECORDS ATTHE POLICY DATE: OR B. THE TAKING HAPPENED BEFORE THE POLICY DATE AND IS BINDING ON YOU IF YOU BOUGHT THE LAND WITHOUT KNOWING OF THE TAKING. 4. RISKS: A. THAT ARE CREATED. ALLOWED. OR AGREED TO BY YOU, WHETHER OR NOT THEY APPEAR IN THE PUBLIC RECORDS; B. THAT ARE KNOWN TO YOU AT THE POLICY DATE, BUT NOT TO US, UNLESS THEY APPEAR IN THE PUBLIC RECORDS AT THE POLICY DATE; C. THAT RESULT IN NO LOSS TO YOU; OR D. THAT FIRST OCCUR AFTER THE POLICY DATE- THIS DOES NOT LIMIT THE COVERAGE DESCRIBED IN COVERED RISK 7, 8D, 22,23.24 OR 25. 5. FAILURE TO PAY VALUE FOR YOUR TITLE. 6. LACKOFARIGHT: A. TO ANY LAND OUTSIDE THE AREA SPECIFICALLY DESCRIBED AND REFERRED TO IN PARAGRAPH 3 OF SCHEDULE A: AND S. IN STREETS, ALLEYS, OR WATERWAYS THAT TOUCH THE LAND. THIS EXCLUSION DOES NOT LIMIT THE COVERAGE DESCRIBED IN COVERED RISK 11 OR 16. 1 • • ORDER NO.27532493 YOUR INSURANCE FOR THE FOLLOWING COVERED RISKS IS LIMITED ON THE OWNER'S COVERAGE STATEMENTAS FOLLOWS; FOR COVERED RISK 14. 1S. 16 AND 18, YOUR DEDUCTIBLE AMOUNTAND OUR MAXIMUM DOLLAR LIMIT OF LIABILITY SHOWN IN SCHEDULE A. THE DEDUCTIBLE AMOUNTS AND MAXIMUM DOLLAR LIMITS SHOWN ON SCHEDULE A ARE AS FOLLOWS: Your Deductible Amunl Our Maldoum Dollar Unrit of Liability Covered Risk 14: 1% of Policy Amount or$2,500 $10,000 (whichever is less) Covered Risk lS: 1% of Policy Amount or S5,000 $25,000 (Whichever Is less) Covered Risk 16; 1% of Pollcy Aonunl or$5,000 $25,000 (whichever is less) Covered Risk 18: 1% of Pollcy Amount or32,600 $5.000 (whichever is less) AMERICAN LAND TITLE ASSOCIATION RESIDENTIAL TITLE INSURANCE POLICY (611187) EXCLUSIONS IN ADDITION TO THE EXCEPTIONS IN SCHEDULE B. YOU ARE NOT INSURED AGAINST LOSS, COSTS, ATTORNEYS' FEES, AND EXPENSES RESULTING FROM: 1. GOVERNMENTAL POLICE POWER, AND THE EXISTENCE OR VIOLATION OF ANY LAW OR GOVERNMENT REGULATION. THIS INCLUDES BUILDING AND ZONING ORDINANCES AND ALSO LAWS AND REGULATIONS CONCERNING: • LAND USE • IMPROVEMENTS ON THE LAND • LAND DIVISION • ENVIRONMENTAL PROTECTION THIS EXCLUSION DOES NOT APPLY TO VIOLATIONS OR THE ENFORCEMENT OF THESE MATTERS WHICH APPEAR IN THE PUBLIC RECORDS AT POLICY DATE. THIS EXCLUSION DOES NOT LIMIT THE ZONING COVERAGE DESCRIBED IN ITEMS 12 AND 13 OF COVERED TITLE RISKS. 2. THE RIGHT TO TAKE THE LAND BY CONDEMNING IT. UNLESS: • ANOTICE OF EXERCISING THE RIGHT APPEARS IN THE PUBLIC RECORDS ON THE POLICY DATE • THE TAKING HAPPENED PRIOR TO THE POLICY DATE AND IS BINDING ON YOU IF YOU BOUGHT THE LAND WITHOUT KNOWING OF THE TAKING 3. TITLE RISKS: • THAT ARE CREATED, ALLOWED, OR AGREED TOBY YOU • THATARE KNOWN TO YOU, BUT NOT TO US. ON THE POLICY DATE— UNLESS THEYAPPEARED IN THE PUBLIC RECORDS • THAT RESULT IN NO LOSS TO YOU • THAT FIRSTAFFECT YOUR TITLEAFTER THE POLICY DATE —THIS DOES NOT LIMIT THE LABOR AND MATERIAL LIEN COVERAGE IN ITEM S OF COVERED TITLE RISKS 4. FAILURE TO PAY VALUE FOR YOUR TITLE, S. LACK OF A RIGHT: TO ANY LAND OUTSIDE THE AREA SPECIFICALLY DESCRIBED AND REFERRED TO IN ITEM 3 OF SCHEDULE A OR IN STREETS, ALLEYS OR WATERWAYS THAT TOUCH YOUR LAND. THIS EXCLUSION DOES NOT LIMIT THE ACCESS COVERAGE IN ITEM S OF COVERED TITLE RISKS. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY (10117192) WITH ALTA ENDORSEMENT -FORM 1 COVERAGE EXCLUSIONS FROM COVERAGE THE FOLLOWING MATTERS ARE EXPRESSLY EXCLUDED FROM THE COVERAGE OF THIS POLICY AND THE COMPANY W ILL NOT PAY LOSS OR DAMAGE, COSTS, ATTORNEYS FEES OR EXPENSES WHICH ARISE BY REASON OF: 1. (A) ANY LAW. ORDINANCE OR GOVERNMENTAL REGULATION (INCLUDING BUT NOT LIMITED TO BUILDING AND ZONING LAWS, ORDINANCES, OR REGULATIONS) RESTRICTING, REGULATING, PROHIBITING OR RELATING TO (1) THE OCCUPANCY. USE OR ENJOYMENT OF THE LAND; (2) THE CHARACTER. DIMENSIONS OR LOCATION OF ANY IMPROVEMENT NOW OR HEREAFTER ERECTED ON THE LAND; (3) A SEPARATION IN OWNERSHIP OR A CHANGE IN THE DIMENSIONS OR AREA OF THE LAND OR ANY PARCEL OF WHICH THE LAND IS OR WAS A PART; OR (4) ENVIRONMENTAL PROTECTION, OR THE EFFECT OF ANY VIOLATION OF THESE LAWS, ORDINANCES OR GOVERNMENTAL REGULATIONS, EXCEPT TO THE EXTENT THAT A NOTICE OF THE ENFORCEMENT THEREOF OR A NOTICE OF A DEFECT, LIEN OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. (8) ANY GOVERNMENTAL POLICE POWER NOT EXCLUDED BY (A) ABOVE, EXCEPT TO THE EXTENT THAT A NOTICE OF THE EXERCISE THEREOF OR A NOTICE OF A DEFECT, LIEN OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. 2. RIGHTS OF EMINENT DOMAIN UNLESS NOTICE OF THE EXERCISE THEREOF HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. BUT NOT EXCLUDING FROM COVERAGE ANY TAKING WHICH HAS OCCURRED PRIOR TO DATE OF POLICY WHICH WOULD BE BINDING ON THE RIGHTS OF A PURCHASER FOR VALUE WITHOUT KNOWLEDGE. 3, DEFECTS, LIENS, ENCUMBRANCES. ADVERSE CLAIMS OR OTHER MATTERS: (A) CREATED,SUFFERED, ASSUMED OR AGREED TO BY THE INSURED CLAIMANT; (B) NOT KNOWN TO THE COMPANY, NOT RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT KNOWN TO THE INSURED CLAIMANT AND NOT DISCLOSED IN WRITING TO THE COMPANY BY THE INSURED CLAIMANT PRIOR TO THE DATE THE INSURED CLAIMANT BECAME AN INSURED UNDER THIS POLICY; (C) RESULTING IN NO LOSS OR DAMAGE TO THE INSURED CLAIMANT; (D) ATTACHING OR CREATED SUBSEQUENT TO DATE OF POLICY (EXCEPT TO THE EXTENT THAT THIS POLICY INSURED THE PRIORITY OF THE LIEN OF THE INSURED MORTGAGE OVER ANY STATUTORY LIEN FOR SERVICES, LABOR OR MATERIAL OR TO THE EXTENT INSURANCE IS AFFORDED HEREIN AS TO ASSESSMENTS FOR STREET IMPROVEMENTS UNDER CONSTRUCTION OR COMPLETED AT DATE OF POLICY); OR (E) RESULTING IN LOSS OR DAMAGE WHICH WOULD NOT HAVE BEEN SUSTAINED IF THE INSURED CLAIMANT HAD PAID VALUE FOR THE INSURED MORTGAGE. 4. UNENFORCEABILITY OF THE LIEN OF THE INSURED MORTGAGE BECAUSE OF THE INABILITY OR FAILURE OF THE INSURED AT DATE OF POLICY, OR THE INABILITY OR FAILURE OF ANY SUBSEQUENT OWNER OF THE INDEBTEDNESS, TO COMPLY WITH APPLICABLE DOING BUSINESS LAWS OF THE STATE IN WHICH THE LAND IS SITUATED. S. INVALIDITY OR UNENFORCEABILITY OF THE LIEN OF THE INSURED MORTGAGE, OR CLAIM THEREOF, WHICH ARISES OUT OF THE TRANSACTION EVIDENCED BY THE INSURED MORTGAGE AND IS BASED UPON USURY OR ANY CONSUMER CREDIT PROTECTION OR TRUTH -IN -LENDING LAW. S. ANY STATUTORY LIEN FOR SERVICES, LABOR OR MATERIALS (OR THE CLAIM OF PRIORITY OF ANY STATUTORY LIEN FOR SERVICES, LABOR OR MATERIALS OVER THE LIEN OF THE INSURED MORTGAGE) ARISING FROM AN IMPROVEMENT OR WORK RELATED TO THE LAND WHICH IS CONTRACTED FOR AND COMMENCED SUBSEQUENTTO DATE OF POLICY AND IS NOT FINANCED IN WHOLE OR IN PART BY PROCEEDS OF THE INDEBTEDNESS SECURED BY THE INSURED MORTGAGE WHICH AT DATE OF POLICY THE INSURED HAS ADVANCED OR IS OBLIGATED TO ADVANCE 7. ANY CLAIM, WHICH ARISES OUT OF THE TRANSACTION CREATING THE INTEREST OF THE MORTGAGEE INSURED BY THIS POLICY, BY REASON OF THE OPERATION OF FEDERAL BANKRUPTCY, STATE INSOLVENCY, OR SIMILAR CREDITORS' RIGHTS LAWS, THAT IS BASED ON: • • ORDER NO.27532493 (1) THE TRANSACTION CREATING THE INTEREST OF THE INSURED MORTGAGEE BEING DEEMED A FRAUDULENT CONVEYANCE OR FRAUDULENT TRANSFEROR (2) THE SUBORDINATION OF THE INTEREST OF THE INSURED MORTGAGEE AS A RESULT OF THE APPLICATION OF THE DOCTRINE OF EQUITABLE SUBORDINATION; OR (3) THE TRANSACTION CREATING THE INTEREST OF THE INSURED MORTGAGEE BEING DEEMED A PREFERENTIAL TRANSFER EXCEPT WHERE THE PREFERENTIAL TRANSFER RESULTS FROM THE FAILURE: (A)• TO TIMELY RECORD THE INSTRUMENT OF TRANSFEROR (8) OF SUCH RECORDATION TO IMPART NOTICE TO A PURCHASER FOR VALUE ORA JUDGMENT OR LIEN CREDITOR AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY (10117102) EXCLUSIONS FROM COVERAGE THE FOLLOWING MATTERS ARE EXPRESSLY EXCLUDED FROM THE COVERAGE OF THIS POLICY AND THE COMPANY WILL NOT PAY LOSS OR DAMAGE, COSTS, ATTORNEYS' FEES OR EXPENSES WHICH ARISE BY REASON OF: 1. (A) ANY LAW, ORDINANCE OR GOVERNMENTAL REGULATION (INCLUDING BUT NOT LIMITED TO BUILDING AND ZONING LAWS, ORDINANCES, OR REGULATIONS) RESTRICTING, REGULATING, PROHIBITING OR RELATING TO (1) THE OCCUPANCY, USE. OR ENJOYMENT OF THE LAND; (2) THE CHARACTER, DIMENSIONS OR LOCATION OF ANY IMPROVEMENT NOW OR HEREAFTER ERECTED ON THE LAND; (3) A SEPARATION IN OWNERSHIP OR A CHANGE IN THE DIMENSIONS OR AREA OF THE LAND OR ANY PARCEL OF WHICH THE LAND IS OR WAS A PART; OR (4) ENVIRONMENTAL PROTECTION, OR THE EFFECT OF ANY VIOLATION OF THESE LAWS, ORDINANCES OR GOVERNMENTAL REGULATIONS, EXCEPT TO THE EXTENT THAT A NOTICE OF THE ENFORCEMENT THEREOF OR A NOTICE OF A DEFECT, LIEN OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. (B) ANY GOVERNMENTAL POLICE POWER NOT EXCLUDED BY (A) ABOVE, EXCEPT TO THE EXTENT THAT A NOTICE OF THE EXERCISE THEREOF OR A NOTICE OF A DEFECT, LIEN OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. Z. RIGHTS OF EMINENT DOMAIN UNLESS NOTICE OF THE EXERCISE THEREOF HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT NOT EXCLUDING FROM COVERAGE ANY TAKING WHICH HAS OCCURRED PRIOR TO DATE OF POLICY WHICH WOULD BE BINDING ON THE RIGHTS OF A PURCHASER FOR VALUE WITHOUT KNOWLEDGE. 3. DEFECTS. LIENS. ENCUMBRANCES. ADVERSE CLAIMS OR OTHER MATTERS: (A) CREATED,SUFFERED, ASSUMED OR AGREED TO BY THE INSURED CLAIMANT; (B) NOT KNOWN TO THE COMPANY, NOT RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT KNOWN TO THE INSURED CLAIMANT AND NOT DISCLOSED IN WRITING TO THE COMPANY BY THE INSURED CLAIMANT PRIOR TO THE DATE THE INSURED CLAIMANT BECAME AN INSURED UNDER THIS POLICY; (C) RESULTING IN NO LOSS OR DAMAGE TO THE INSURED CLAIMANT; (D) ATTACHING OR CREATED SUBSEQUENT TO DATE OF POLICY; OR (E) RESULTING IN LOSS OR DAMAGE WHICH WOULD NOT HAVE BEEN SUSTAINED IF THE INSURED CLAIMANT HAD PAID VALUE FOR THE ESTATE OR INTEREST INSURED BY THIS POLICY. I. ANY CLAIM, WHICH ARISES OUT OF THE TRANSACTION VESTING IN THE INSURED THE ESTATE OR INTEREST INSURED BY THIS POLICY, BY REASON OF THE OPERATION OF FEDERAL BANKRUPTCY, STATE INSOLVENCY, OR SIMILAR CREDITORS' RIGHTS LAWS, THAT IS BASED ON: (1) THE TRANSACTION CREATING THE ESTATE OR INTEREST INSURED BY THIS POLICY BEING DEEMED A FRAUDULENT CONVEYANCE OR FRAUDULENT TRANSFEROR (2) THE TRANSACTION CREATING THE ESTATE OR INTEREST INSURED BY THIS POLICY BEING DEEMED A PREFERENTIAL TRANSFER EXCEPT WHERE THE PREFERENTIAL TRANSFER RESULTS FROM THE FAILURE: (A) TO TIMELY RECORD THE INSTRUMENT OF TRANSFEROR (8) OF SUCH RECORDATION TO IMPART NOTICE TO A PURCHASER FOR VALUE ORA JUDGMENT OR LIEN CREDITOR. ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (10/13101) EXCLUSIONS FROM COVERAGE THE FOLLOWING MATTERS ARE EXPRESSLY EXCLUDED FROM THE COVERAGE OF THIS POLICY AND THE COMPANY WILL NOT PAY LOSS OR DAMAGE, COSTS, ATTORNEYS' FEES OR EXPENSES WHICH ARISE BY REASON OF: 1. (A) ANY LAW. ORDINANCE OR GOVERNMENTAL REGULATION (INCLUDING OUT NOT LIMITED TO BUILDING AND ZONING LAWS, ORDINANCES, OR REGULATIONS) RESTRICTING, REGULATING, PROHIBITING OR RELATING TO (1) THE OCCUPANCY, USE, OR ENJOYMENT OF THE LAND; (11) THE CHARACTER DIMENSIONS OR LOCATION OF ANY IMPROVEMENT NOW OR HEREAFTER ERECTED ON THE LAND; (111)A SEPARATION IN OWNERSHIP ORA CHANGE IN THE DIMENSIONS OR AREAS OF THE LAND OR ANY PARCEL OF WHICH THE LAND IS OR WAS A PART; OR (IV) ENVIRONMENTAL PROTECTION, OR THE EFFECT OF ANY VIOLATION OF THESE LAWS, ORDINANCES OR GOVERNMENTAL REGULATIONS, EXCEPT TO THE EXTENT THAT S NOTICE OF THE ENFORCEMENT THEREOF OR A NOTICE OF A DEFECT, LIEN OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. THIS EXCLUSION DOES NOT LIMIT THE COVERAGE PROVIDED UNDER COVERED RISKS 12,13,14. AND 16 OF THIS POLICY. (8) ANY GOVERNMENTAL POLICE POWER NOT EXCLUDED BY (A) ABOVE, EXCEPT TO THE EXTENT THAT A NOTICE OF THE EXERCISE THEREOF OR A NOTICE OF A DEFECT, LIEN OR ENCUMBRANCE RESULTING FROM A VIOLATION OR ALLEGED VIOLATION AFFECTING THE LAND HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY. THIS EXCLUSION DOES NOT LIMIT THE COVERAGE PROVIDED UNDER COVERED RISKS 12,13,14, AND 16 OF THIS POLICY. 2. RIGHTS OF EMINENT DOMAIN UNLESS NOTICE OF THE EXERCISE THEREOF HAS BEEN RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT NOT EXCLUDING FROM COVERAGE ANY TAKING WHICH HAS OCCURRED PRIOR TO DATE OF POLICY WHICH WOULD BE BINDING ON THE RIGHTS OF A PURCHASER FOR VALUE WITHOUT KNOWLEDGE 3. DEFECTS. LIENS. ENCUMBRANCES, ADVERSE CLAIMS OR OTHER MATTERS: (A) CREATED. SUFFERED, ASSUMED OR AGREED TO BY THE INSURED CLAIMANT; (B) NOT KNOWN TO THE COMPANY, NOT RECORDED IN THE PUBLIC RECORDS AT DATE OF POLICY, BUT KNOWN TO THE INSURED CLAIMANT AND NOT DISCLOSED IN WRITING TO THE COMPANY BY THE INSURED CLAIMANT PRIOR TO THE DATE THE INSURED CLAIMANT BECAME AN INSURED UNDER THIS POLICY; (C) RESULTING IN NO LOSS OR DAMAGETO THE INSURED CLAIMANT; (D) ATTACHING OR CREATED SUBSEQUENT TO DATE OF POLICY (THIS PARAGRAPH DOES NOT LIMIT THE COVERAGE PROVIDED UNDER COVERED RISKS B. 1S. 16, 16, 20. 21, 22. 7.3. 24, 25 AND 26); OR (E) RESULTING IN LOSS OR DAMAGE WHICH WOULD NOT HAVE BEEN SUSTAINED IF THE INSURED CLAIMANT HAD PAID VALUE FOR THE INSURED MORTGAGE. 4. UNENFORCEABILITY OF THE UEN'OF THE INSURED MORTGAGE BECAUSE OF THE INABILITY OR FAILURE OF THE INSURED AT DATE OF POLICY, OR THE INABILITY OR FAILURE OF ANY SUBSEQUENT OWNER OF THE INDEBTEDNESS, TO COMPLY WITH APPLICABLE DOING BUSINESS LAWS OF THE STATE IN WHICH THE LAND IS SITUATED. 5. INVALIDITY OR UNENFORCEABILITY OF THE LIEN OF THE INSURED MORTGAGE, OR CLAIM THEREOF, WHICH ARISES OUT OF THE TRANSACTION EVIDENCED BY THE INSURED MORTGAGE AND IS BASED UPON USURY, EXCEPT AS PROVIDED IN COVERED RISK 27, OR ANY CONSUMER CREDIT PROTECTION OR TRUTH IN LENDING LAW. 6. REAL PROPERTY TAXES OR ASSESSMENTS OF ANY GOVERNMENTAL AUTHORITY WHICH BECOME A LIEN ON THE LAND SUBSEQUENT TO DATE OF POLICY. THIS EXCLUSION DOES NOT LIMIT THE COVERAGE PROVIDED UNDER COVERED RISKS 7, B(E) AND 28. 7. ANY CLAIM OF INVALIDITY, UNENFORCEABILITY OR LACK OF PRIORITY OF THE LIEN OF THE INSURED MORTGAGE AS TO ADVANCES OR MODIFICATIONS MADE AFTER THE INSURED HAS KNOWLEDGE THAT THE VESTEE SHOWN IN SCHEDULE A IS NO LONGER THE OWNER OF THE ESTATE OR INTEREST COVERED BY THIS POLICY. THIS EXCLUSION DOES NOT LIMIT THE COVERAGE PROVIDED IN COVERED RISK B. B. LACK OF PRIORITY OF THE LIEN OF THE INSURED MORTGAGE AS TO EACH AND EVERY ADVANCE MADE AFTER DATE OF POLICY, AND ALL INTEREST CHARGED THEREON, OVER LIENS, ENCUMBRANCES AND OTHER MATTERS AFFECTING THE TITLE, THE EXISTENCE OF WHICH ARE KNOWN TO THE INSURED AT: (A) THE TIME OF THE ADVANCE; OR (B) THE TIME A MODIFICATION IS MADE TO THE TERMS OF THE INSURED MORTGAGE WHICH CHANGES THE RATE OF INTEREST CHARGED, IF THE RATE OF INTEREST IS GREATER AS A RESULT OF THE MODIFICATION THAN IT WOULD HAVE BEEN BEFORE THE MODIFICATION. THIS EXCLUSION DOES NOT LIMIT THE COVERAGE PROVIDED IN COVERED RISK B. 8. THE FAILURE OF THE RESIDENTIAL STRUCTURE, OR ANY PORTION THEREOF TO HAVE BEEN CONSTRUCTED BEFORE, ON OR AFTER DATE OF POLICY IN ACCORDANCE WITH APPLICABLE BUILDING CODES. THIS EXCLUSION DOES NOTAPPLY TO VIOLATIONS OF BUILDING CODES IF NOTICE OF THE VIOLATION APPEARS IN THE PUBLIC RECORDS AT DATE OF POLICY. MARINERS ESCROW 1100 NEWPORT CENTER DR. SUM 200 / NEWPORT BEACI3 / CA i T 949.640.6040 1 F 949.721.8157 1 W W W..UARINERSESCROW.COM VESTING WORKSHEET RE: 2 Beacon Bay, Newport Beach, CA 92660 USA Escrow No.: 32083-BF NOTE: Please indicate your choice by checking the appropriate selection. Please fill in the blanks completely and print names exactly as they should appear on all documents and as you will be signing your name. PURSUANT TO THE ABOVE REFERENCED ESCROW, ESCROW HOLDER IS INSTRUCTED TO REFLECT MY NAME AND VESTING AS FOLLOWS: L'o HUSBANDS WIFE (Print Name Exactly as they should appear on documents) U1471)1 c- K 10 Ar2,0t C6)00C buK1"-49 A. As Joint Tenants B. As Community Property C. ❑ As Community Property with the Right of Survivorship D. ❑ As Tenants in Common Each As to an Undivided Interest — Percentage or Fraction (i.e., '/z or 50%) E. ❑ Other (Please specify) 2. ❑ DOMESTIC PARTNERS (Print Name Exactly as they should appear on documents) A. ❑ As Joint Tenants B. ❑ As Tenants in Common Each As to an Undivided Interest — Percentage or Fraction (i.e., %z or 50%) C. ❑ Other (Please specify) 3. ❑ MARRIED MAN - AS HIS SOLE AND SEPARATE PROPERTY ❑ MARRIED WOMAN - AS HER SOLE AND SEPARATE PROPERTY (Print Name Exactly as it should appear on documents) PLEASE INDICATE THE FULL NAME OF SPOUSE FOR PREPARATION OF A QUIT CLAIM DEED. 4. ❑ INDIVIDUAL (Print Name Exactly as it should appear on documents) A. ❑ A SINGLE MAN (never married) B. ❑ A SINGLE WOMAN (never married) C. ❑ A WIDOW (husband is deceased) D. ❑ A WIDOWER (wife is deceased) E. ❑ AN UNMARRIED MAN (divorced) E. ❑ AN UNMARRIED WOMAN (divorced) HOW YOU HOLD TITLE TO YOUR PROPERTY CAN HAVE SERIOUS TAX CONSEQUENCES. IT IS STRONGLY RECOMMENDED THAT YOU SEEK TAX AND/OR LEGAL COUNSEL WIHEN COMPLETING THIS FORM. Date: r7r// ! Z uz 7 BUYER(S); Patrick Ward COMPLETE, SIGN AND RETURN CERTIFIED TO 6E A TRUE AND CORVXQT COPY OF THE ORIGINAL MARINERS R9W..._" ® StreamLine -Vesting Worlcsheet Buyer/Borrower November 9, 2005 MARINERS ESCROW 1100 NEWPORT CENTER DIL SUITE 200 / NEWPORT BEACH / CA / 92660 / USA T 949.640.6040 1 P949,721.8157 WWW..MARINERSESCROW..COM ACKNOWLEDGEMENT ESCROW INSTRUCTIONS TO: Mariners Escrow Corporation Date: April 30, 2007 Escrow Officer: Brian Foxcroft Escrow Number: 32083-BF MARINERS ESCROW CORPORATION, IS LICENSED BY THE STATE OF CALIFORNIA DEPARTMENT OF CORPORATIONS, LICENSE NO.963-1009. ESCROW SUMMARY: Buyer to wire transfer into escrow the sum of Buyer will deposit prior to close of escrow Deed of Trust to Record 20,000.00 963,000.00 1,300,000.00 TOTAL CONSIDERATION: $ 2,283,000.00 The title is presently vested in John D. Eversoll and Jessie J. Eversoll, husband and wife as joint tenants, (hereinafter known as "Seller"). Patrick Ward and Carol Ward, (hereinafter known as Buyer) will hand Mariners Escrow Corporation, (hereinafter referred to as "Escrow Holder") an initial deposit of $20,000.00, via wire transfer and, prior to the close of escrow, will deposit the balance of cash down payment and any additional funds and instruments necessary to enable Escrow Holder to comply with these instructions, all of which Escrow Holder is instructed to use provided that on or before August 2, 2007, the closing date of escrow, Escrow Holder holds a CLTA/ALTA Homeowners Policy of Title Insurance with the usual title company's exceptions, with a liability of not less then $2,283,000.00, covering the property in the County of Orange, State of California, described as follows: A LEASE HOLD ESTATE IN AND TO: The Westerly 45 feet of Lot 2, and the Easterly 10 feet of Lot 1, as shown upon a record of Survey Map recorded in Book 9 Page(s) 42 and 43 of Record of Surveys, on file in the Office of the County Recorder of said county, together with certain portions of adjoining Lots I and H as shown upon said Map and as described more fully in said Lease. Complete Legal Description to be placed into Escrow. COMMONLY KNOWN AS: 2 Beacon Bay, Newport Beach, CA 92660, (NOT VERIFIED BY ESCROW HOLDER) SHOWING TITLE VESTED IN Patrick Ward and Carol Ward, Exact Vesting to be determined as per further instructions to be placed into escrow. SUBJECT TO: 1. General and Special County and City (if any) Taxes for the current fiscal year, not due or delinquent, including any special levies, payments for which are included therein and collected therewith. 2. Lien of Supplemental Taxes, if any, assessed pursuant to the provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code of the State of California. 3. Covenants, Conditions and Restrictions, reservations easements for public utilities, districts, water companies, alleys and streets, rights and rights of way of record, if any; also exceptions of oil, gas, minerals and hydrocarbons, and/or lease, if any, without the right of surface entry. 4. A new Conventional First Trust Deed to record, executed by Vestee herein, securing a Note for $1,300,000.00 in favor of a Lender of Buyer's choice. Buyer's execution of the loan documents shall be deemed approval of all terms and conditions contained therein. Escrow Holder is instructed to comply with all of the lender's requirements in connection with said new loan. CALIFORNIA RESIDENTIAL PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS: We, the undersigned have handed Escrow Holder an executed copy of the California Residential Purchase Agreement and Joint Escrow Instructions dated April 2, 2007 together with Addendum No. A, including the Wood Destroying Pest Inspection and Allocation of Cost Addendum, (collectively the "Agreement"). These Acknowledgement Escrow Instructions are executed for the sole purpose of enabling Escrow Holder to complete this transaction, and are not intended to amend, modify, supersede or in any way change that certain Agreement entered into by and between the parties hereto and dated prior to these Acknowledgement Escrow Instructions. We will execute additional instructions, documents and forms necessary to complete this transaction. Escrow Holder's general provisions are incorporated into these instructions. CERTIFIED TO BE A TRUE AND CORIj I COPY OF THE ORIGINAL MARINERS fig ATTACHED HE, AND MADE A PART HE, My Initials below represent my agreernent and acknowledgement oftheforegoing Pagel BUYERS INITIALS YD _a SELLERS INITIALS _ Page Y 0 Escrow No. 32083-BF INSTRUCTIONS TO ESCROW: The following paragraphs in the Agreement shall constitute instructions to Escrow Holder, and Escrow Holder shall have no duty nor liability with respect to all other provisions of said Agreement. In the event there is a conflict between these escrow instructions (or amendments hereto) and the Agreement, it is agreed that the Escrow Instructions will control as to the duties ofEscrowHolder. (1) Paragraphs 1, 2, 4, 12, 14E, 18, 19, 24, 25, 26, 28, 29, 32A, 33 and Paragraph D of the section title Real Estate Brokers on Page 8 of the Agreement, together with Paragraphs 1, 2, 3, 4, and 5 of Addendum No. A, and paragraphs A and B of the Wood Destroying Pest Inspection and Allocation of Cost Addendum. (i) It is hereby acknowledged that the "Date of Acceptance" occurred on April 3, 2007. (ii) Buyer has until May 3, 2007 to complete all property investigations and approve all reports and contingencies. (2) For clarification purposes: (i) With respect to Paragraph #4, item A(1), Pest Control, Escrow Holder is authorized and instructed to debit the Seller at the close of escrow for the termite report fee, if any. Escrow Holder is further instructed to debit the Seller for the Section one (1) items, per billing statement to be placed into escrow. Buyer to pay for Section two (2) items, if any. (ii) With respect to Paragraph #4, item B-3, Natural Hazard Disclosure Report, Escrow Holder is authorized and instructed to debit the Buyer at the close of escrow for the Zone Report, per billing statement to be placed in escrow. (iii) With respect to Paragraph #4, item D-1, Escrow Fee, Escrow Holder is authorized and instructed to debit Buyer at the close of escrow for bolls the Buyer and Seller's Escrow Fee(s). (iv) With respect to Paragraph #4, item D-2, Title Fee, Escrow Holder is authorized and instructed to debit Buyer at the close of escrow for both the Owner's and Lender's Policies of Title Insurance. (v) With respect to Paragraph #4, item E-2, City Transfer Tax or Transfer Fee, Escrow Holder is authorized and instructed to debit Buyer for the City Of Newport Beach Transfer Tax and/or Transfer Fee, if any. (vi) With respect to Paragraph #4, item E-3 and 4, Homeowners Association, Escrow Holder is authorized and instructed to debit Buyer at the close of escrow for the transfer fee. Escrow Holder is further instructed to debit the Buyer at the close of escrow for the document fees, if any. (vii) With respect to Paragraph #4, item E-5, One Year Home Warranty Plan, Escrow Holder is authorized and instructed to debit the Buyer the sam not to exceed $700.00, from Old Republic, with the following optional coverage: Roof, washer and dryer. (viii) With respect to Paragraph 2 of Addendum No. A to the Residential Purchase Agreement, the closing of this escrow is subject to Buyer's receipt, review and approval of the City of Newport Beach lease. (ix) With respect to Paragraph 3 of Addendum No. A to the Residential Purchase Agreement, the closing of this escrow is subject to the approval of the Buyer as the new Lessee by the City of Newport Beach. INSTRUCTIONS NOT INCLUDED IN THE AGREEMENT: TITLE ORDER: Escrow Holder is authorized and instructed to open the title order with Southland Title Company. RESIDENTIAL REPORT: Seller agrees to provide Buyer with a City of Newport Beach Residential Building Report. Escrow Holder's only concern is to order the Report, if requested, and to charge the account of Buyer for same, if a billing is presented into escrow for payment. EACH PARTY SIGNING THESE INSTRUCTIONS HAS READ THE GENERAL PROVISIONS AND ADDITIONAL ESCROW CONDITIONS ATTACHED HERETO AND MADE A PART HEREOF AND APPROVES, ACCEPTS AND AGREES TO BE BOUND THEREBY AS THOUGH SAID CONDITIONS, PROVISIONS AND INSTRUCTIONS APPEARED OVER THEIR SIGNATURES. CERTIFIED TO BE A TRUE AND CORRfT COPY OF THE ORIGINAL MARINERS 56R9WL___2, FURTHER INSTRUCTIONS ATTACHED HERETO AND MADE A PART HEREOF My Initials below represent my agreement and acknowledgement of the foregoing Buyer's Initials: P 0& Seller's Initials Page 34 Escrow No. 32083-BF The foregoing terms, provisions, conditions and instructions are hereby approved and accepted in their entirety and concurred with by me. The undersigned hereby agrees to pay on demand, charges for drawing, recording and notarizing documents, charges of title company, if any, charges of Lender institution, if any, and the Buyer's and/or Borrower's customary escrow fees, necessary to complete this escrow. I HAVE RECEIVED A COPY OF THESE INSTRUCTIONS. Buyer's Signature: Patrick Ward Carol Ward The foregoing terms, provisions, conditions and instructions are hereby approved and accepted in their entirety and concurred with by me. I will hand you necessary documents called for on my part to cause title to be shown as set out herein, which you are authorized to deliver when you bold or have caused to be applied to funds set forth herein within the time as herein provided. You are authorized to pay on my behalf, my recording fees, charges for evidence of title as called for whether or not this escrow is consummated, except those the buyer agreed to pay. You are hereby authorized to pay bonds, assessments, taxes, and any liens of record, including prepayment penalties, if any, to show title as called for. I HAVE RECEIVED A COPY OF THESE INSTRUCTIONS. Seller's Signature: John D. Eversoll Jessie J. Eversoll - - END OF INSTRUCTIONS - - CERTIFIED TO BE A TRUE ANU CORRAT COPY OF THE ORIGINAL MARINERS `SfiR�,� MARINERS ESCROW 1100 NEWPORT CENTER DR. SUITE 200 / NEWPORT BEACH / CA / 92660 / USA T 949.640.6040 1 F949.721.8157 WWW.MARINERSESCROW.COM INSTRUCTIONS TO PAY COMMISSION Date: April 30, 2007 Escrow No.: 32083-BF Escrow Officer: Brian Foxcroft RE: 2 Beacon Bay, Newport Beach, CA 92660 Upon close of escrow, from funds received and/or held by you on my behalf you are instructed to pay: Coldwell Banker Previews International a licensed real estate broker, the sum of $131,250.00 The employment of said broker(s) to effect the transaction of the above described property, described in said escrow is acknowledged by the undersigned, who has agreed to pay said sum to said broker(s) as a conmrission for services rendered pursuant to said employment. ASSIGNMENT OF REAL ESTATE BROKER'S COMMISSION: Buyer hereby irrevocably directs Escrow Holder to pay commission as set forth herein immediately upon the close of escrow, in cash from funds deposited into escrow by Buyer. No change or modification in this instruction shall be of any effect unless it is signed by the Buyer and by each of the undersigned Brokers. BUYER(S): M Patrick Ward Carol Ward Please mail payment to address below unless payment is called for on the day the above escrow is closed. Broker: Coldwell Banker Previews International License No.: Agent: Address: By: Telephone No.: Evan Corkett, Steve High and Debi Bibb 140 Newport Center Drive, Ste 100 Newport Beach, CA 92660 (949)640-3600 CERTIFIED TO BE A TRUE AND COR�T COPY OF THE ORIGINAL MARINERS Mariners Escrow Corporation • • Date: April 30, 2007 6 4 � It Escrow No. 32083-BF GENERAL PROVISIONS AND ADDITIONAL ESCROW CONDITIONS DEFINITIONS: "You" is defined as Mariners Escrow Corporation and any and all of its directors, officers, representatives, and agents. "Parties" is defined as Buyer and Seller collectively, who are involved in this escrow. 1. You are instructed to deposit all funds received by you with any state or national bank, state or federal savings bank, or state or federal savings and loan association, in a trust account in the name of Escrow Holder, without any liability for payment of interest. The funds may be withdrawn by you and disbursed according to the instructions of the parties. All deposits made by personal check, cashier's check, certified check or deposit other than cash or wire transfer are subject to clearance and payment by financial institution on which drawn. All disbursements are to be made by check of Escrow Holder from the trust account. Neither you nor any of your employees will identify any payee or guarantee signatures of any person or entity at any financial institution. Funds deposited into escrow in the form of a check, draft, or similar instrument will be identified as collected funds when the Escrow Holder's financial institution confirms that the funds are available fordisbursement. 2. Your duty as Escrow Holder, does not commence and escrow shall not be deemed opened until an Agreement and Joint Escrow Instructions signed by all parties is received by you. Until such mutually executed Agreement and Joint Escrow Instructions are received by Escrow Holder, either party may unilaterally revoke these instructions by written request delivered to you and may withdraw any funds, instructions, documents or items previously handed to you by said party. Any additional documents, instructions, and/or Amendments that may be necessary to complete this transaction may be executed in counterpart, each of which shall be deemed an original, regardless of the date of execution and delivery. All such counterparts together shall constitute the same document. 3. All proration and adjustments are to be made an the basis of a thirty (30) day month unless otherwise instructed in writing by all parties. Property Taxes are to be prorated based upon the latest available tax figures furnished by the Title Company. For proration purposes, the Buyer will have ownership of the real property, which is the subject of this escrow for the entire day, regardless of the hour of recording. The "close of escrow" with reference to prorations, adjustments and all purposes in this escrow shall be the day the instruments of conveyance are recorded or filed with the county recorder. 4. Any funds disbursed during or on the close of escrow will be issued jointly to the parties designated as payees unless you are instructed otherwise in writing by all designated payees. The funds representing loan and/or sale proceeds will be disbursed jointly to all persons who were the record owners of the real property, which is the subject of the escrow. All disbursements of funds and/or delivery of other documents or instruments concerning this escrow will be mailed to the entitled parties by regular first-class mail, postage prepaid, at their respective addresses shown on file. However, at your discretion, you may send funds and/or other instruments or documents by certified or registered mail, Federal Express, messenger or facsimile machine, in which case the party for whom the delivery was made agrees to pay the costs. The provisions of this paragraph include, but are not limited to, requests for demand statements, requests for beneficiary statements, requests for homeowners' association statements, or any other requests as you may deem necessary for the timely closing of this escrow. You are to instruct the county recorder to mail recorded documents to the entitled parties at their respective addresses. You are to instruct the title company to mail the title policy(s) to the Lender(s) or Buyer(s) as appropriate. 5. NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY CONTAINED IN THESE ESCROW INSTRUCTIONS OR SUPPLEMENTS OR AMENDMENTS, ESCROW HOLDER SHALL NOT BE RESPONSIBLE FOR THE SUFFICIENCY, VALIDITY OR CORRECTNESS OF ANY SIGNATURE OF ANY PRINCIPAL TO THIS ESCROW OR ANY THIRD PARTY TO THIS ESCROW, NOR FOR THE SUFFICIENCY OR CORRECTNESS AS TO FORM, MANNER OF EXECUTION OR VALIDITY OF ANY DOCUMENTS DEPOSITED IN THIS ESCROW, NOR AS TO THE IDENTITY, AUTHORITY, OR RIGHT OF ANY PERSONS EXECUTING THE SAME, EITHER AS TO DOCUMENTS OF RECORD OR THOSE HANDLED IN THIS ESCROW. SHOULD THE PARTIES DESIRE THAT YOU VERIFY THE SIGNATURES ON INSTRUCTIONS RECEIVED BY YOU, THE PARTY(IES) WITHOUT FURTHER INSTRUCTIONS AUTHORIZE THE PAYMENT OF ANY ESCROW FEE COMPUTED AT TWO TIMES YOUR REGULAR ESCROW FEE AND WILL DELIVER SEPARATE WRITTEN ESCROW INSTRUCTIONS SPECIFICALLY INSTRUCTION YOU TO DO SO. IF A LOAN ESCROW BORROWER AGREES TO PAY CHARGES FOR TITLE POLICY, SPECIAL MESSENGERS, EXPEDITED MAIL, OFFSET STATEMENTS BENEFICIARY STATEMENTS AND/OR DEMANDS, PREPARATION OF, NOTARIZING AND RECORDING OF DOCUMENTS NECESSARY AND ON HIS BEHALF, AND ESCROW FEE AN OTHER COSTS AS CHARGED. 6. You shall not be responsible for the following: (1) the sufficiency or correctness as to form, manner of execution or validity of any documents deposited in this escrow; (2) the identity, authority, or tight of any person executing the same, either as to documents of record or those handled in this escrow; or (3) the failure of any party to comply with any of the provisions of any agreement, contract or other instrument filed or deposited in this escrow or referred to in these escrow instructions. Your duties shall be limited to the safekeeping of money and documents received by you as Escrow Holder and for the disposition in compliance with the written instructions accepted by you in this escrow. You shall not be required to take any action regarding the collection, maturity, or apparent outlaw of any obligations deposited with you unless otherwise instructed in writing. 7. Where the assignment of any insurance policy from Seller to Buyer is concerned, Seller guarantees to you any insurance policy handed you in this escrow is a policy in force, the policy has not been hypothecated and that all necessary premiums have been paid. You are authorized to execute on behalf of the parties assignments of interest in any insurance policy (other than title insurance policies) called for in this escrow. You are authorized to transmit for assignment any insurance policy to the insurance agent requesting that the insurer consent to such assignment, to request that a loss payee clause or such other endorsements as my be required be issued and to forward such policy to the Lender(s) and entitled parly(in). You shall not be responsible for verifying the acceptance to the request for assignment and policy of insurance by the insurance company. The parties mutually agree that you will make no attempt to verify the receipt of the request for assignment and policy of insurance by the insurance company. The parties mutually agree that you will make no attempt to verify the receipt of the request for assignment by the issuing insurance company. All parties are placed on notice that if the insurance company should fail to receive the assignment, the issuing company may deny coverage for any loss suffered by Buyer. IT IS THE OBLIGATION OF THE INSURED OR THE INSURED'S REPRESENTATIVE TO VERIFY THE ISSUING COMPANY'S ACCEPTANCE OF THE ASSIGNMENT OF THE POLICY. 8. You are not to be held responsible in any way whatsoever for any personal property tax, which may be assessed against any former or present owner of the subject property described in these escrow instructions, nor for the corporation or license tax of any corporation as a former or present owner. 9. If it is necessary, proper or convenient for the consummation of this escrow, you are authorized to deposit or have deposited funds or documents, or both, handed you under these escrow instructions with any duly authorized sub -escrow agent, including, but not limited to, any bank, trust company, title insurance company, title company, savings and loan association, or licensed escrow agent, subject to your order at or before close of escrow in connection with closing this escrow. Any such deposit shall be deemed a deposit under the meaning of these escrow instructions. 10. The parties to this escrow have satisfied themselves outside of escrow that the transaction covered by this escrow is not in violation of the Subdivision Map Actor any law regulating the land division, zoning ordinances or building restrictions, which may affect the land or improvements that are the subject of this escrow. You, as Escrow Holder, are relieved of all responsibility and liability in connection with such laws, ordinances, restrictions or regulations and are not to be concerned with any of their enforcement. 11. Escrow Holder is only to be concerned with the terms of the Purchase Agreement and Joint Escrow Instructions as specifically directed to Escrow Holder and these additional Instructions and any Amendments thereto. You are not responsible for interpreting or acting on any provision of the Purchase Agreement and Joint Escrow Instructions, which is not set forth in the specific paragraphs directed to Escrow Holder. 12. You are not to be concerned with the giving of any disclosures required by federal or state law, including, but not limited to, Real Estate Settlement Procedures Act, Regulation Z — Truth -in -Lending, condition of the subject property or other warnings, or any other warranties, expressed or implied. 13. You are authorized to famish copies of any Purchase Agreement, Supplement or Amendment, a copy of any Escrow Instruction, Supplement or Amendment, Closing Statement, Preliminary Title Report, Notice of Cancellation, if any, or any other document in your possession to the Real Estate Broker(s), Real Estate Agent(s), Altomey(s), Lender(s), and/or Lender's Agent(s) involved in this transaction. Copies of such documents shall be famished to any other entity only upon the parties' oral or written request. You shall not incur any liability for delivery of said copies. 14. You shall make no physical inspection of the real property or personal property described in any instrument deposited in or which is the subject of this escrow. You have made no representations or warranties concerning any such real property or personal property and are not to be concerned with nor liable for the condition of real property or personal property. 15. The parties authorize the recordation of any instrument delivered through this escrow, if necessary or proper, for the issuance of the required policy of title insurance or for the closing of this escrow. Funds, instructions or instruments received in this escrow maybe delivered to, or deposited with any title insurance company or title company to comply with the terns and conditions of this escrow. 16. You are authorized to deduct from Seller's net proceeds or Buyer's net proceeds any amount which either Seller or Buyer may owe you in any other matter or transaction. You are authorized to charge, and the parties agree to pay additional escrow fees for extraordinary services not within the range of customary escrow pmocessing, including, but not limited to, the verification of signatories to escrow instructions. In the event Escrow Holder is required to place a stop payment on any escrow check issued to either Buyer or Seller, a $25.00 stop payment fee will be assessed. You are instructed to automatically deduct a $25.00 stop payment fee from the check should it be necessary to re -issue the check. 17. You are to use your usual document form or the usual forms of any title insurance company or title company and in our instructions insert dates and terns on the succeeding business day. 18. If the date by which Buyer's or Seller's performance are due shall be other than your regular business day, such performances shall be due on your next succeeding business day. ATTACHED HERETO AND MADE A PART HEREOF CERTIFIED TO BE A TRUE AND My initials below represent my agreement and acknowledgement of the fe Tj T COPY OF THE ORIGINAL ,) /�,/ � � Paget � BUYERS INITIALS V I/W SELLERS INITIALS _ _ MARINERS-- Mn�rinrdg Escrow Corporation Date: April 30,2007 Escrow No. 32083-BF 19. You shall conduct no lien or title search of personal property regarding the sale or transfer of any personal property through this escrow. Should the party(ies) desire that you conduct a lien or title search of personal property, the party(ies) requesting the same shall deliver separate and specific written escrowinstmetions to you along with an agreement to pay your additional fees. 20. You shall not be responsible in any way whatsoever nor are you to be concerned with any question of usury in any loan or encumbrance, whether new or of record, which may arise during the processing of Stis escrow. 21. The parties agree to deliver to you all documents, instruments, escrow instructions and fiords required to process and close this escrow in accordance with its term. 22. You are instructed to provide title to the subject real property in the condition identified in the escrow instructions by the parties. You are not responsible foi the contents or accuracy of any beneficiary demands and/or beneficiary statements delivered to you by the existing lienholders. You are not required to submit any such beneficiary statement and/or beneficiary demand to the parties for approval before the close of escrow unless expressly instructed to do so in writing. Should the parly(ies) desire to pre -approve any such beneficiary statement and/or beneficiary demand, the party(ies) requesting the same shall deliver separate and specific written escrow instructions to you. 23. You are not to be responsible in any way whatsoever nor to be concerned with the terms of any new loan or the content of any loan documents obtained by any party in connection with this escrow except to order such loan documents into the escrow file, transmit the loan documents to the Buyer for execution and transmit the executed loan documents to the Lender. The parties understand and agree that you are not involved nor concerned with the approval and/or processing of any loan or the contents and effect of loan documents prepared by a Lender. 24. The parties expressly indemnify and hold you harmless against third -party claims for any fees, costs or expenses where you have acted in good faith, with reasonable care and prudence and/or in compliance with these escrow instructions. 25. The parties agree that you have the responsibility of an escrow holder only and there are no other legal relationships established in the terms and conditions of the escrow instructions. In connection with this escrow; (1) you shall have no duty or responsibility of notifying any of the parties to this escrow of any sale, resale, loan, exchange or other transaction involving any of the subject real property or personal property; (2) you shall have no responsibility or duty to disclose any benefit, including, but not limited to financial gain, realized by any person, firm or corporation involving any of the subject real property or personal property; and (3) you shall have no responsibility or duty to disclose any profit realized by any person, firm or corporation including, but not limited to, any real estate broker, real estate sales agent and/or a party to any other escrow, in connection therewith, although such other transaction may be handled by you in this escrow or in another escrow transaction. If, however, you are instructed in writing by any party, Lender or other entitled person to disclose any sale, resale, loan, exchange or other transaction involving any of the subject real property or personal properly or any profit realized by any person, firm or corporation to any party to this escrow, you shall do so without incurring any liability to any party. You shall not be liable for any of your acts or omissions done in good faith nor for any claims, demands, losses or damages made or suffered by any party to this escrow, excepting such as may arise through or be caused by your willful neglect or gross misconduct. 26. Notwithstanding any other provisions in these escrow instructions and in addition to other fees and costs to which you may be entitled, the parties jointly and severally agree that if this escrow is not consummated within ninety (90) days of the date set for closing, you are instructed to, and without further instructions, withhold your escrow hold -open fee of $50.00 per month from the funds on deposit with you regardless of who deposited such funds. The parties, jointly and severally, further agree that if you are, for any reason, required to hold funds after close of escrow, you are instructed to, and without further instructions shall, withhold a hold -open fee of $50.00 per month from the funds on deposit with you regardless of who deposited such funds. The parties, jointly and severally, further agree that if you are, for any reason, required to hold funds after close of escrow, you are instructed to, and without further instructions shall, withhold a hold -open fee of $50.00 per month from the funds on deposit with you regardless of who deposited such funds. The parties irrevocably instruct you to automatically cancel this escrow file without further Instructions when all funds on deposit have been disbursed. 27. Your Escrow Holder agency shall terminate six (6) months following the date last set for close of escrow and shall be subject to earlier termination by receipt by you of mutually executed cancellation Instructions. If this escrow was not closed or cancelled within the described six (6) month period, you shall have no further obligations as Escrow Holder except to disburse funds and documents pursuant to written escrow instructions and to inteiplead or otherwise dispose of funds and documents in accordance with a validly issued and validly served order from a court of competentjurisdiction. If the conditions of this escrow have notbeen complied with at the expiration date in these escrow instructions, you are instructed to complete the conditions at the earliest possible date, unless Buyer or Seller have made written demand upon you for the return of the funds and/or instruments deposited by Buyer or Seller and/or for cancellation of this escrow. Should demands be made upon you, you may withhold and slop all further proceeding in this escrow without liability for interest on funds held or for damages until mutual cancellation instructions signed by all parties shall have been deposited with you. The parties, jointly and severally, agree that if this escrow cancels or is otherwise terminated and not closed, the parties shall pay for my costs and expenses, which you have incurred or have become obligated for under these escrow instructions, including, but not limited to, attorneys' fees, arbitration fees and costs and reasonable escrow fees for thezervices rendered by you. The parties agree that such costs and expenses shall be paid and deposited in escrow before any cancellation or other termination of this escrow is effective. The parties agree that said charges for expenses, costs and fees may be apportioned between Buyer and Seller in a manner which, in your sole discretion, you consider equitable, and that your decision will be binding any conclusive upon the parties. Upon receipt of mutual cancellation instructions or a final order or judgment of a court of competent jurisdiction with accompanying writs of execution, levies or gamishments, you are instructed to disburse the escrow funds and instruments in accordance with such cancellation instructions, order orjudgment and accompanying writ and this escrow shall, without further notice, be considered terminated and cancelled. 28. The parties shall cooperate with you in carrying out the escrow instructions they deposit with you and completing this escrow. The parties shall deposit into escrow, upon request, any additional funds, instruments, documents, instructions, authorizations, or other items that are reasonably necessary to enable you to comply with demands made on you by third parties, to secure policies of title insurance, or to otherwise carry out the terms of their instructions and close this escrow. If conflicting demands or notices are made or served upon you or any controversy arises between the parties or with my third person arising out of or relating to this escrow, you shall have the absolute right to withhold and stop all further proceedings in, and in performance of, this escrow until you receive written notification satisfactory to you of the settlement of the controversyby written agreement of the parties, or by the final order orjudgment of a court of competent jurisdiction. All of the parties to this escrow, jointly and severally, promise to pay promptly on demand, as well as to indemnify you and to hold you harmless from and against all administrative governmental investigation, audit and legal fees, litigation and interpleader costs, damages, judgments, attorneys' fees, arbitration costs and fees, expenses, obligations and liabilities of every kind (collectively "costs' which in good faith you may incur or suffer in connection with or arising out of this escrow, whether said costs arise during the performance of or subsequent to this escrow, directly or indirectly, and whether at trial, on appeal, in administrative action, or in an arbitration. You are given a lien upon all the rights, titles and interests of the parties and all escrow papers and other property and monies deposited into this escrow to protect your rights and to indemnify and reimburse you. If the parties do not pay any fees, costs or expenses due you under the escrow instructions or do not pay for costs and attorneys' fees incurred in any litigation, administrative action and/or arbitration, on demand, they each agree to pay a reasonable fee for any attorney services which may be required to collect such fees or expenses, whether attorneys' fees are incurred before trial, at trial, on appeal or in arbitration. 29. ALL NOTICES, DEMANDS AND INSTRUCTIONS MUST BE IN WRITING. No notice, demand, instruction, amendment, supplement or modification of the escrow Instructions shall be of any effect in this escrow until delivered in writing to you and mutually executed by all parties. AS SET FORTH ABOVE, YOU HAVE NO DUTY TO AND SHALL NOT VERIFY THE SIGNATURES OF ANY PARTIES OR NON-PARTIES UNLESS FURTHER WRITTEN ESCROW INSTRUCTIONS TO DO SO ARE RECEIVED AND THE ADDITIONAL ESCROW FEES ARE DEPOSITED. Any purported oral instruction, amendment, supplement, modification, notice or demand deposited with you by the parties or either of them shall be ineffective and invalid. You are to be concerned only with the directives expressly set forth in the escrow instructions, supplements and amendments thereto, and are not to be concerned with nor liable for items designated as "memorandum items" in the escrow instructions. 30. These escrow instructions maybe executed in counterparts, each of which shall be deemed an original regardless of the date of its execution and delivery. All such counterparts together shall constitute the same document. 31. If any check submitted to you is dishonored upon presentment for payment, you are authorized to notify all parties to the within escrow, their respective real estate broker(s) and real estate agent(s) and any other person or entity you deem in your sole discretion necessary to notify. 32. you are authorized to accept oral instructions from the parties' real estate broker(s), real estate agent(s), Lender(s) or Lender's agent(s) concerning the preparation of escrow instmclions, amendments or supplements. However, you are not to act upon any instruction so delivered until you have received the same in writing signed by all parties to this escrow. 33. In these escrow instructions, wherever the context so requires, the masculine gender includes the feminine and/or neuter and the singular number includes the plural. 34. The parties acknowledge and understand that you, as Escrow Holder, are not authorized to practice the law nor do you give financial advice. The parties are advised to seek legal and financial counsel and advice concerning the effect of these escrow instructions. The parties acknowledge that no representations are made by you about the legal sufficiency, legal consequences, financial effects or tax consequences of the within escrow transaction. 35. You are authorized to destroy or otherwise dispose of any and all documents, papers, escrow instructions, correspondence and records or other material constituting or pertaining to this escrow at any time after five (5) years from the date of. (1) the close of escrow; (2) the date of cancellation; or (3) the date of the last activity without liability and without further notice to the parties. 36. The parties agree to release you from any and all liability of any kind or nature and to indemnify you from any loss, damages, claims, judgments or costs of any kind or nature resulting from or related to the release or discharge of hazardous or toxic wastes on the subject property whether It occurred in the past or present or may occur in the future, which release or discharge is in violation of law, in excess of any state and/or federal standards, permit requirements and/or disclosure requirements ATTACHED HE, AND MADE A PART HEREOF My initials below represent my agreement and acknowledgement oftteforegoing Page 2 BUYERS INITIALS kjjoWSELLERS INITIALS MARII�( h Mariners Escrow Corporation Date: April 30, 2007 Escrow No. 32083-BF existing at this time or which may exist at a future time. The parties represent that they made their own assessment of the condition of the subject property and have not relied on any of your presentations in making the assessment. The parties are advised to seek independent legal and technical environmental expert advice in assessing the risks associated with potential hazardous or toxic wastes. 37. All parties to this transaction instruct Escrow Holder to accept signatures forwarded herein via facsimile (faxed signatures) to close escrow, with the original thereof signed to be forwarded to Escrow Holder directly upon such faxing. WE THE UNDERSIGNED WILL FORWARD THE ORIGINAL SIGNATURES VIA REGULAR MAIL, acknowledging the Corporate Commissioner of the State of California requests original signatures on all files. 38. The parties signatures on all escrow instructions and instruments pertaining to the within escrow indicates their unconditional acceptance and approval of same and you are entitled to rely on the parties execution. 39. Prior to the close of escrow, Grantee shall cause to be handed to Escrow Holder a fully completed and executed 'Preliminary Change of Ownership Report" pursuant to the requirements and in accordance with Section 480.3 of the Revenue and Taxation code, State of California. If Grantee so chooses, Grantee may clectnot to complete and execute said form prior to the close of escrow. In such event Grantee is aware that a $20.00 charge will be assessed by the County Recorder's Office and Escrow Holder will charge the account of Grantee accordingly. Said form will then be mailed directly to the Grantee after closing by the Assessor's office for completion outside of escrow. Escrow Holder's sole duty shall be the delivery of said form to the County Recorder at the time of recordation of transfer documents. 40. Buyer and Seller are aware that Mariners Escrow Corporation may incur certain expenses during the course of processing this escrow, which may be paid prior to the close of escrow. Such costs may include, but are not limited to, courier fees, overnight mail service, Homeowner's Association documents/transfer fees and City Building Reports, if applicable. 41. In the event you disburse more ibnds than are due, or for the benefit of any party other than who is entitled to receive said funds, whether by omission or by error of calculation, said receiving party hereby agrees to repay and/or reimburse Escrow Holder the amount of overpayment within five (5) days after written demand is made on said party. If repayment and/or reimbursement is not made, interest in the amount of 10% per annum shall commence on the sixth day after such written demand is made. If said party refuses or neglects to pay said funds and interest due thereon to Escrow Holder, legal proceedings to collect said funds with accrued interest will immediately ensue. The receiving party agrees to pay all charges, court costs, and attorney's fees that may be incurred. 42. All conditions of this escrow will be deemed to be satisfied or waived by Buyer upon Buyer's deposit into escrow of sufficient funds to close this escrow, and Buyer's deposit of said funds shall be deemed FscrowHolder's unconditional authorization to proceed with closing this escrow. We, joint and severally, acknowledge receipt of a complete copy of the within escrow instructions and by our signatures set forth below, acknowledge that we have read, understood and agreed to the same in their entirety. BUYER(S): ��v v Patrick Ward aro�� SELLER(S): John D. Eversoll Jessie J. Eversoll CERTIFIED TO BE A TRUE AND CORK T COPY OF THE ORIGINAL MARINERS Page 3 u 1 1 G( MARINERS ESCROW 1100 NEWPORT CENTER DR. SUITE 200 / NEWPORT BEACH / CA / 92660 / USA T949.640.6040 p949,721,8157 WWW.MARINERSESCROW.COM CAL-FIRPTA NOTICE AND DISCLOSURE Date: April 30, 2007 Property: 2 Beacon Bay, Newport Beach, CA 92660 Escrow No.: 32083-BF In accordance with the new law (AB 2065) (Chapter 02-488) Revised Revenue and Taxation Code Section 18662, a Buyer may be required to withhold an amount equal to 3 1/3% of the sales price, in the case of a disposition of California real property interest by either: A Seller who is an Individual or when the disbursement instructions authorized the proceeds to be sent to a financial intermediary of the Seller, OR, 2. A Seller is a Corporation, which has no permanent place of business in California. For failure to withhold, the Buyer may become subject to a penalty in an amount equal to the greater of Ten Percent (100/0) of the amount required to be withheld or Five Hundred Dollars ($500.00). However, notwithstanding any other provision included in the California statutes referenced above, no Buyer will be required to withhold any amount or be subject to penalty for failure to withhold if: The Total Consideration of California subject property is $100,000.00 or less, OR 2. The Seller executes a written certificate, under the penalty of perjury, certifying that the Seller is a Corporation with a permanent place of business in California, OR 3. The Seller, who is an Individual, executes a written certificate, under the penalty of perjury, to any of the following: a. Property is Seller's Principal Residence b. Seller is selling the property at a loss for California Income Tax purposes. c. Seller is selling the property as part of an Internal Revenue Code Section 1031 Exchange. d. Seller is selling the property because of an involuntary conversion and will replace the property within the provisions of Internal Revenue Code Section 1033. The new law does not contain language allowing for request for either a waiver of withholding or reduced withholding as previously allowed under CAL-FIRPTA. The undersigned parties acknowledge that the Escrow Holder is required to provide to Buyers written notification of California withholding requirements. This notification instructs Buyers to withhold 3 1/3% of the Total Consideration of the California real property herein, when CAL-FIRPTA is applicable. The Buyers hereby acknowledge that it is their responsibility to instruct the Escrow Holder to withhold 3 1/3% of the Total Consideration from the Sellers proceeds when CAL-FBRPTA is applicable. If either Buyer or Seller require any additional information, they are advised to contact the Franchise Tax Board at (916) 845-4900. SELLER IS SUBJECT TO PENALTY FOR I(NOWINGLY FILING A FRADULENT CERTIFICATE FOR THE PURPOSE OF AVOIDING THE WITHHOLDING REQUIREMENT. BUYS )- SELLER(S): Patrick Wazd v//IV / John D. Eversoll O-M&Omd Carol Ward Jessie J. Eversoll CERTIFIED TO BE A TRUE AND CORE;�CQT COPY OF THE ORIGINAL SQI� MARINERS _.. P MARINERS ESCROW 1100 NEWPORT CENTER DR. SUITE 2001 NEWPORT BEACH/ CA / 92660 / USA T 949.640.6040 1 P 949.721.8157 1 W W W.MARINE16ESCROW.COM Date: April30, 2007 Escrow No.: 32083-BF NOTICE TO ALL BUYERS AND SELLERS OF REAL ESTATE The Foreign Investment in Real Property Tax Act (FIRPTA) FOR YOUR INFORMATION..... BUYER'S RESPONSIBILITY TO WITHHOLD - Effective January 1, 1985, Internal Revenue Code 1445 requires all Buyers who purchase real property in the United States from foreign Sellers to withhold ten percent (10%) of the purchase price from the sale proceeds and to pay that amount to the Intemal Revenue Service (IRS) within ten (10) days of the date the escrow closes unless an exemption from withholding applies. IF THE BUYER FAILS TO WITHHOLD AND PAY THE CORRECT AMOUNT OF TAX ON A NON-EXEMPT SALE, THE BUYER WILL BE LIABLE TO THE INTERNAL REVENUE SERVICE FOR THE AMOUNT OF THE TAX OWED. WHO IS A FOREIGN SELLER? - In general, a foreign person is a non-resident alien individual, foreign corporation, foreign partnership, foreign trust or foreign estate, but not a resident alien individual. EXEMPTION CERTIFICATES: BUYER - The Internal Revenue Service has adopted temporary regulations, which provide that a Buyer will not be liable to the Intemal Revenue Service for the tax owed if he obtains from the Seller in duplicate a certificate of affidavit under penalties of perjury stating the Seller's United States taxpayer identification number or social security number and that the Seller is not a foreign person, unless the Buyer has knowledge that the affidavit is false. These regulations also provide that the Buyer must retain this affidavit until the end of the fifth taxable year following the taxable year in which the sale takes place and to make the affidavit available to the IRS when requested. FOREIGN SELLERS - Foreign Sellers should consult with an attorney familiar with FIRPTA before entering into any negotiations or contracts for the sale of their property. If you act promptly, you may be able to have the IRS: (1) determine your maximum tax liability; (2) reduce the amount which the Buyer must withhold; (3) issue a withholding certificate; (4) make an early refund of the amount withheld; (5) establish that not gain is recognized under pertinent provisions of the Intemal Revenue Code. NO WITHHOLDING REQUIRED IF: 1. The Buyer is purchasing the property for his use as a residence and the amount paid for the property is $300,000.00 or less; 2. Either Buyer or Seller obtains a "withholding certificate" from the Internal Revenue Service that: (1) the Seller is exempt from paying taxes on the gain; (2) the Seller has agreed with the IRS to pay the tax owed, or (3) the IRS has agreed to reduce the amount of withholding required to the amount stated in the certificate; 3. Gain on the sale is not recognized under certain provisions of the Intemal Revenue Code. BUYERS AND SELLERS ARE ADVISED TO SEEK THE ADVICE OF AN ATTORNEY ON THE QUESTION OF WHETHER ANY GAIN IS RECOGNIZED UNDER THE PROVISIONS OF THE INTERNAL REVENUE CODE AND AS TO THE PROCEDURE THAT MUST BE FOLLOWED IF THE BUYER DOES NOT WITHHOLD BASED ON THE FACT THAT NO GAIN IS RECOGNIZED. Neither Coldwell Banker Previews International or Caldwell Banker Previews International nor its agents are qualified to determine the rights and obligations of any particular individual under the Foreign Investment in Real Property Tax Act. If you have any questions regarding the applications of FIRPTA, your obligations under the act or whether you are a foreign person as defined in the act, please seek the advice of an attorney. Receipt of a c /py of this Noticce is hereby acknowledged. Date: BUYER(Sow" Patric JohnD. Eversoll Jessie J. Eversoll CERTIFIED TO BE A TRUE AND CORRnT COPY OF THE ORIGINAL P I AR IN S • l MARINERS ESCROW 1100 NEWPORT CENTER DR. SUITE 200 / NEWPORT BEACH / CA / 92660 / USA T 949.640.6040 1 F 949.721.8157 W W W.MAMNEMESCROW.COM Escrow Number: 32083-11F * * * IMPORTANT NOTICE * * * To avoid any delays at close of escrow, please be advised of the following: Date: April 30, 2007 1. CLOSING FUNDS: Escrow will contact Buyer regarding the balance of funds needed, representing balance of down payment and closing costs. If funds needed to close are LESS THAN $100,000.00, Buyer may deposit funds in the form of a CASHIER'S CHECK, drawn on a California Bank or a WIRE TRANSFER. If funds needed to close are $100,000.00 or GREATER, Buyer must deposit funds via WIRE TRANSFER. WIRE TRANSFER INSTRUCTIONS: WELLS FARGO BANK, N.A. Account No.0016307092 Newport Beach Branch Fed Routing No. 121000248 Account of Mariners Escrow Corporation REF: Escrow No. 32083-BF CASHIER'S CHECK: Payable to Mariners Escrow Corporation All other forms of funds such as drafts, escrow checks, money orders, association checks, bank/teller checks, money market checks and non -local checks, must be deposited in escrow in time to clear the account on which they are drawn, which may take up to 7 — 10 working days from date of deposit. 2. WHtE TRANSFER OF SELLER'S NET PROCEEDS: Seller hereby acknowledges that in the event Escrow Holder is instructed, in writing, to wire transfer net proceeds at the close of escrow, funds may not be received by Seller's bank until the business day following the close of escrow. Seller acknowledges that wire fee of $25.00 will be charged to Seller's account for each wire transfer requested by Seller. Seller acknowledges that funds will not be wire transferred until Escrow Holder is in receipt of all funds from the title company after the close of escrow. Seller acknowledges that if the close of escrow occurs in the afternoon, "special recording", funds will not be received by escrow until the following day. Therefore, funds may not be wired out until the business day following receipt of funds from the title company. 3. NOTARY: If there are any documents requiring a Notary Public acknowledgement/jurat at any time during this escrow, parties will be required to have VALID IDENTIFICATION. Acceptable identification is limited to a driver's license, military I.D., passport or State I.D. with photo. Name on I.D. must match name as shown on the document(s) to be notarized. 4. NON-ENGLISH SPEAKING BUYER: Any Buyer who is unable to read, write and speak the English language will be required to have a translator accompany him/her when signing loan documents at escrow. The translator must be of legal age and have the same form of identification as used by a Notary Public for identification. RECEIPT OF A COPY OF THIS NOTICE IS HEREBY ACKNOWLEDGED BY THE UNDERSIGNED. Patrick Ward/1/ O A&Ubd Carol Ward SELLER(S): John D. Eversoll Jessie J. Eversoll CERTIFIED TO BE A TRUE AND CORK T COPY YOOFaTHE ORIGINAL ,I., MARINERS ESCROW 1100 NEWPORT CENTER DR. SUITE 200 / NEWPOIIT BEACH/ CA / 92660 / USA T 949.640.6040 1 F949.721.a157 WWWMARINERSESCROW.COM Escrow Number: 32083-BF * * * PRIVACY NOTICE * * * To our Escrow Customers: Date: April 30, 2007 Mariners Escrow Corporation, has prepared this Privacy Act Notice to comply with the Gramm -Leach -Bliley Act, Public Law 106-102 and to inform you regarding its collection, storage and use of information that you and others give it during the processing of your escrow transaction. The information in this Privacy Act Notice applies to Escrow Holder's current and former clients. We collect non-public information about you from the following sources: 1. Information we receive from you on applications or other forms; 2. Information about your transactions with us, our affiliates, or others involved in the processing of your transaction; and 3. Information we receive from a consumer -reporting agency. We do not disclose any non-public personal information about our customers or former customers to anyone, except as permitted by law. We restrict access to non-public information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with Federal and State regulations to guard your non-public personal information. I/WE HAVE READ AND RECEIVED A COPY OF THIS NOTIFICATION AS OF THE DATE BELOW: Date: SELLER(S): John D, Eversoll BIIYEIje / Patrick Ward Jessie J. Eversoll CERTIFIED TO BE A TRUE AND :nRR T COPY OF THE ORIGINAL tI b City Manager's Office City of Newport Beach Recorded in Official Records, County of Orange -P.O. Box 1768 Tom Daly, Clerk -Recorder Newport Beach, CA 92658-8915 1 11111111111114.00 2003001191997 03:28pm 09/29/03 117 92 Al2 5 1 0.00 0.00 0.00 0.00 8.00 0.00 0.00 0.00 �I THIS SPACE FOR RECORDERS USE ONLY J LESSOR'S CONSENT AND AGREEMENT Loan No:0078546694 Recitals Borrower, referred to in this Agreement as "Lessee" and as more particularly described in Exhibit A, has applied for a loan from Washington Mutual Bank, FA ("Lender) to be secured by leased property, as such property is more particularly described in Exhibit A ("Property"). Lessee currently holds or will acquire upon consummation of the pending transaction, a leasehold interest under the lease described in Exhibit A ("Lease") in which the undersigned ("Lessor") is the lessor. Agreement The information on Exhibit A is incorporated herein by reference. 2. The property is subject to the Lease described in Exhibit A. The lease documents described in Exhibit A constitute the entire agreement of Lessee and Lessor regarding the Property. The lease is in full force and effect and unmodified. All rents and other charges due have been paid, there are no other defaults and the Lease is in good standing. Lessor has no knowledge of any facts which now or after the passage of time or the giving notice, or both, would constitute a default under the Lease. The payments required under the Lease are set forth in Exhibit A. Payments and notices to Lessor are deliverable as set forth in Exhibit A. Lessor has no claims outstanding against Lessee in connection with the Property. Loan No: 0078546694 3. Lessor consents to the granting of a security interest in Lessee's interest in the lease to Lender. Lessor agrees to send concurrently to Lender copies of any notices sent to Lessee pertaining to Lessee's default or Lessor's intent to terminate the Lease or any part thereof by certified U.S. mail. No modification or termination of the Lease agreed upon by Lessee shall be effective without the express written consent of Lender. Notice will be provided to Lender by certified mail at the following address: Washington Mutual Bank, Collection Support MS: N010201, 9451 Corbin Ave., Northridge, CA 91324, referencing the Loan Number set forth on Exhibit A or at such other address given to the undersigned by Lender, at the same time as the notices are sent to Lessee. 4. Should the Lease be terminated for any reason prior to expiration of its stated term, Lessor shall, upon written request by Lender to Lessor made within sixty (60) days after such termination, enter into a new lease ("New Lessee") with Lender as the Lessee. The New Lease shall have a term equal to the remainder to the stated term of the Lease has it not been terminated prior to the end its stated term. The New Lease shall have the same covenants, conditions and agreements (except for any requirements which have been satisfied by Lessee prior to termination) as are contained in the lease. Lessor shall be required to enter into the New Lease only if Lender has remedied and cured all monetary defaults under the lease and has cured or has commenced and is diligently pursing completion of the cure of all non -monetary defaults of Lessee susceptible to sure any party other than by the original Lessee. 5. This consent and agreement shall not operate to change or supercede the terms & conditions of the lease in the event of a conflict, the terms of the lease shall prevail. wo-,�elcvl zf_� Lessor 2 Loan No:0078546694 STATE OF CALIFORNIA COUNTY OF D b-r an R===, IQ On . k �-y 3 before��c personally appeared �- ✓lJ,�--r�`; personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he she\they executed the same in is her\their authorized capacity (i), and that by is/ er/their signature(/con the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal Signature L Notary Public in and for the State of CATHY FISHER Commission#1341009 3 Notary Public - California g Orange County NyComm EVhesFeb21,2006 3 Y 1. 2. 3. N F Ch 7 P EXHIBIT A — LESSOR'S CONSENT AND AGREEMENT Loan No. 0078546694 Unit No. Borrower's (Lessee) Name: John and Jessie Eversoll, Trustees of the Eversoll Family Trust Property Address: 2 Beacon Bay, Newport Beach, CA 92660 Property's Legal Description (if a metes & bounds attach legal): See Attached Developer/Condo Homeowners Assoc. (Lessor) Name: Beacon Bay Lease (including all amendments and dates): See Attached Borrower (Lessee's) Current Monthly Lease Payment Payments are current (circle eithe Yes r No). $1,495.83 Deliver notices and payments to Lessor at: City Manager's Office, City of Newport Beach, P.O. Box 1768, Newport Beach, CA 92658-8915 8. Term of Lease: 50 Years; commenced on Expires on July 1, 2044 June 30, 1994; If applicable: Pursuant to the Lease, Lessee has the right, at its option, to renew the term of the Lease for N/A consecutive renewal terms of N/A years each. 12 ATTACHMENT TO EXHIBIT A — LESSOR'S CONSENT AND AGREEMENT Property Description The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys in the Office of the County Recorder, County of Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. W �<, USAAirbill „ 0 808569258938 From lease print and press hard) Dam p!�////e•••n��do/fskdEzAcccuntNumharSende Nomars.Sl rr le, Phone Phone) I Company Address �� C�)V �GG/�nL�rT ^ ' /,- / papthloogm 5urte/aoo City 9: C4"Cr ��r� ��S G"' state ZIP ©Your Internal Billing Reference lnfarmebon ICreating mat ge therein.. Win pp,.r.a amok.) 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Delivery ❑ 4TV Sunday Delivery IAndaa.for Fed PdomyenmghE IAveileElnlar FadFx vetltele lo, F.da •wh,^eeaNdng.v,m.NgMrwnslropmapm,^cYavwY,n.aaaondxmry. s"SURVICE INolane,a.wd, FdE.rnimnagw e^d FsrUM•Y.*) Pnarnygvemigghtand MaVOvamigbtorm Ad Ex 2gtYenryl ONDMON;pEObeeEOVMNEMODMMDFWeIMseemntwex04rEkmemk S.MceCundfm Oedared VnlugendlMUCIU4bilkY—ByudngduA]rbA equal unto a smtNmonnm. YsurnpMtorecavorhomus for enybssHGWeskandeLA Release Signature S,qnEaaWMvm•d••hvrcywlhwrel4nnngatln+im',.• you agree to the tonics condNons In our current Samoa Guide or U S. %tensions package.laR orsolo;keemsq pmfkathmey's fee; cos. and ohedomss Goverment Steven Guide. Both are available on request. SEE BACK OF of damage, whether drone. incfdentM, ctracgaemat a=.1, and u hand to the sENOMSCOPYOFTHISA1BBILLPoGINFOkMATIDNANDADOmONALTEWAS, greelorof5100 orNg deelaradvalus hmeannatsx<eodeetuel documented loss The We wOl Who responssibleforarry claim in excess orsmDperpockego whether medmumdeclared value for ary FedEx Loneraml FedEx Pakk S500. Fedaml Esprou Yauragnemre eutlmdmt Federal Expnesk tlelrverthnaAlp memwMomobVhngaeineNm end..mo.toindemmtY Ne resuhollos;demaAa,ardaley,namdoMery mndofrmry, ormnmfortnauory they.upmyourrequostaMvANaamefmPntlon;tohuMaAtrersponodanthorpospeML and hold hamlets Federal Express from any resulting cleMs mdoGjmdadamahBhorvalue,payaneddNenaleharye,Mddoc=entrur Sao the FedBr Service Guido fnfurthar dolalls 322 ae leo Ca11�1�-Go•FegiExe (6DD)463.3339 The in` aim INusx World On Time re %-Us 12:63pm From-WAMU • 206 377 T-641 P.001/006 F-791 ®Washington Mutual LEASEHOLD ELIGIBILITY MEMO DATE: September 8, 2003 TO: Liam Brannigan— Fax # 949-631-4873 FROM: Jim Knapp - Leasehold Specialist— Specialized Reviews RE: Customer Name: John & Jessie Eversoll Lease Name: Beacon Bay Loan No: 007854669-4 THIS yXMO NEEDS TO PLACED ON THE TOP OF THE DOCUMENTS ON THEPGHT IIANDSIDE OF THE LOAN FILE BEFORE BEING SENT TO CLOSING/FUNDING The above mentioned leasehold was reviewed and is ELIGIBLE for finanoing. Below is a listing of items that must be presented or actions that must be taken in order to process this transaction. A l future request Will require at minimum the form 3151. copy of the preliminary title report and borrowers loan application including the loan number. 1. Term Eligible for 30 year loan. (Lease Expires 6/2012044) Must be a First Deed of Trust Only. 2. CLOSING The lessor's consent form needs to be fully completed by the bank including the Exhibit A, before having it signed. The City of Newport Beach will sign the revised Lessor's Consent and Agreement Form, per Robin Clauson Asst. City Attorney. Please send the lessors consent form to the attention of Shirley Obonty (949- 644-3131) at the City ofNewport Beach, P.O. Box 1768, 3300 Newport Blvd. Newport Beach, CA 92658- 8915 for signing. 3. Documents Use of all system -generated forms is required, except for estoppel form. All leasehold loans require the following forms, 885, 32809 & 32802 (Beacon Bay) to be recorded with the deed of trust for loan to fund. Note: Use the attached Lessor's Consent & Agreement Form 32802 (Rev 4-00) Beacon Bay. The revised Bequest for Notice form 32803 is located on the M: drive at UettersUending\rgsidettt You now can type into it and then print it from the system. Please call me if you have any fiuther questions at (206) 461-8695 or Fax (206) 377-3375. t Saved As: BEACONBAX, DISK 4 n lY TcJtia•- --� >+la°ashington'Mutual Bryan Klein —� Senior Personal Financial Representative >• 1.— , i ,% 196 E 17th Street phone 949.631.8801 FCCA1388 fax 949.631.4873 d Costa Mesa, CA 92627 24 hr. 800.788.7000 4 CITY OF NEWPORT BEACH Office of the City Manager (949)644-3002 May 8, 2003 Ms. Lori R. Wurzel United American Title 26 Corporate Plaza, Ste. 290 Newport Beach, CA 92660 Subject: 2 Beacon Bay Escrow No. 53004086-LW Dear Ms. Wurzel: Enclosed please find an executed Lessor's Consent and Agreement for the above - referenced property. I made a few minor changes to the document that I wanted you to be aware of: 1) Inserted the City Manager's Office as the address the recorded document should be sent to; 2) Changed the signature line to read "LESSOR" and removed Shirley Oborny because our City Manager is the one who signs this document; 3) Page 4 had an incorrect lease date and term of lease so I replaced the entire page with corrected information. If you have any questions, please call me. so Enclosures City Hall • 3300 Newport Boulevard • Newport Beach, California 92663-3884 www.citynewport-beach.ca.us 4 United a Company 0 26 Corporate Plaza, Suite 290, Newport Beach, CA 92660 Phone: (949) 644.7533 • Fax: (949) 644.6893 May 7, 2003 City of Newport Beach 3300 Newport Blvd. Main Lobby Newport Beach, CA 92658 Attn: Shirley Oberny Re: Escrow No.: 53004086-LW Property Address: 2 Beacon Bay, Newport Beach, CA 92660 Dear Shirley: Pursuant to our conversation yesterday, enclosed you will find the Lessor's Consent and Agreement for Washington Mutual for the Eversoll's property located at 2 Beacon Bay. Please executed the same and have it notarized. I will send a messenger to pick it up upon your telephone call. Thank you for your assistance in.this matter. Sincerely, S Lo i R. Wurzel Escrow Officer/Manager 3 • 45 , RECORDING REQUESTED BY .Y, UNITED TITLE COMPANY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY MANAGER'S OFFICE 3P.0. BOX 1768 NEWPORT BEACH, CA 92658-8915 3 D' cDl� o.S3 5 Recorded in Official Records, County of Orange Tom Daly, Clerk -Recorder 200300053610104:30pm 05/09/03 103 91 C34 Al2 5 0.00 0.00 0.00 0.00 8,00 0.00 0.00 0.00 �-� THIS SPACE FOR RECORDER'S USE ONLY , LESSOR'S CONSENT AND AGREEMENT Loan No.: 0079603379 Recitals Borrower, referred to in this Agreement as "Lessee" and as more particularly described in Exhibit A, has applied for a loan from ❑ Washington Mutual Bank ❑ Washington Mutual Bank fsb ® Washington Mutual Bank, FA ("Lender") to be secured by leased property, as such property is more particularly described in Exhibit A ("Property"). Lessee currently holds or will acquire upon consummation of the pending transaction, a leasehold interest under the lease described in Exhibit A ("Lease") in which the undersigned ("Lessor") is the lessor. Agreement 1. The information on Exhibit A is incorporated herein by reference. 2. The Property is subject to the Lease described in Exhibit A. The lease documents described in Exhibit A constitute the entire agreement of Lessee and Lessor regarding the Property. The Lease is in full force and effect and unmodified. All rents and other charges due have been paid, there are no defaults and the Lease is in good standing. Lessor has no knowledge of any facts which now or after the passage of time or the giving of notice, or both, would constitute a default under the Lease. The payments required under the Lease are set forth in Exhibit A. Payments and notices to Lessor are deliverable as set forth in Exhibit A. Lessor has no claims outstanding against Lessee in connection with the Property. Page 1 of 4 32802 (REV 4.00) DEACON DAY Loan No. 007 6603379 3. Lessor consents to the granting of a security interest in Lessee's interest in the Lease to Lender. Lessor agrees to send concurrently to Lender copies of any notices sent to Lessee pertaining to Lessee's default or Lessor's intent to terminate the Lease or any part thereof by certified U.S. mail. No modification or termination of the Lease agreed upon by Lessee shall be effective without the express written consent of Lender. Notice will be provided to Lender by certified mail at the following address: Washington Mutual Bank, Collection Support MS: N010201, 9451 Corbin Ave, Northridge, CA 91324, referencing the Loan Number set forth on Exhibit A or at such other address given to the undersigned by Lender, at the same time as the notices are sent to Lessee. 4. Should the Lease be terminated for any reason prior to expiration of its stated term, Lessor shall, upon written request by Lender to Lessor made within sixty (60) days after such termination, enter into a new lease ("New Lease") with Lender as the lessee. The New Lease shall have a term equal to the remainder of the stated term of the Lease had it not been terminated prior to the end of its stated term. The New Lease shall have the same covenants, conditions and agreements (except for any requirements which have been satisfied by Lessee prior to termination) as are contained in the Lease. Lessor shall be required to enter into the New Lease only if Lender has remedied and cured all monetary defaults under the Lease and has cured or has commenced and is diligently pursuing completion of the cure of all nonmonetary defaults of Lessee susceptible to cure by any party other than by the original Lessee. 5. This consent & agreement shall not operate to change or supercede the terms & conditions of the lease and in the event of a conflict, the terms of the lease shall prevail. te• LESSOR Page 2 of 4 32802 (RRV 4-00) BEACON RAY STATE OF ss. COUNTY OF On I° ` Q03 , before n A? OUe t e basis of satisfactory evidence) to be the 9within instrument and acknowle ged t, hi /her/their authorized capacity(Ks) and instrument the person( or the entity upon the instrument. WITNESS my hand and official seal. Loan No. 0079603379 ie, VQWI I. OFOW� , personally appeared personally known to me (o proved to me on person( hose name( is re subscribed to me that-,h she/they executed the same in that by is er/their signature{ on the behalf of w ich the person() acted, executed Signature C7x,- "'U ' i . ` Vov � Notary Public in and for the State of I (hv- LEILANI I. BROWN Commission # 13M673 z Notary Public- Califomia Orange County my Comm, Expires Jan 25, 2008 Page 3 of 4 32802 (REV 4.00) BFACON BAY 1 EXHIBIT A — LESSOR'S CONSENT AND AGREEMENT Loan No. 0079603379 Unit No. Borrower's (Lessee) Name: John D. Eversoll and Jessie J. Eversoll, trustees of The Eversoll Family Trust dated 12/9/75. 2. Property Address: 2 Beacon Bay, Newport Beach, CA 92660 3. Property's Legal Description (if a metes & bounds attach legal): 13 F: See Attached Developer/Condo Homeowners Assoc. (Lessor) Name: Beacon Bay Lease (including all amendments and dates): See Attached 6. Borrower (Lessee's) Current Monthly Lease Payment: Payments are current (circle eithe Yes r No). $1,495.83 7. Deliver notices and payments to Lessor at: City Manager's Office, City of Newport Beach, P.O. Box 1768, Newport Beach, CA 92658-8915 8. Term of Lease: 50 Years; commenced on Expires on July 1, 2044 June 31, 1994 If applicable: Pursuant to the Lease, Lessee has the right, at its option, to renew the term of the Lease for N/A consecutive renewal terms of N/A years each. 0 ' 11 09 ORDER NO 30307605-35 4• EXHIBIT "A" THE WESTERLY 45 FEET OF LOT 2, AND THE EASTERLY 10 FEET OF LOT 1, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN UPON A RECORD OF SURVEY MAP RECORDED IN BOOK 9 PAGES 42 AND 43 RECORD OF SURVEYS, ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH CERTAIN PORTIONS OF ADJOINING LOTS I AND H AS SHOWN UPON SAID MAP AND AS DESCRIBED MORE FULLY IN SAID LEASE. RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY MANAGER'S CITY OF NEWPORT P.O. BOX 1768 NEWPORT BEACH, OFFICE BEACH CA 92658-8915 Fay TNe SPAOI FOR RICOPOel7 UN VA' LESSOR-S CONSENT AND AGREEMENT Loan No.: Recitals Borrower, referred to in this Agreement as "Lessee" and as mars particularly described in Exhibit A, has applied for a loan from ❑ Washington Mutual Bank ❑ Washington Mutual Bank fsb ❑ Washington Mutual Bank, FA ('Lender") to be secured by leased property, as such property is more particularly described in Exhibit A transaction, a Lessee currently holds or will acquire upon consummation of the pending leasehold interest under the lease described in Exhibit A I"Lease") in which the undersigned ("Lessor") la the lessor. Agreement �. The Informa'tlon on Exhibit A is Incorporated herein by reference. 2. The Property is subject to the Lease described in Exhibit A. The lease documents described in Exhibit A constitute the entire agreement of Lessee and Lessor regarding the Property. The Lease is in full force and effect and unmodified. All rents and other charges due have been paid, there are no defaults and the Lease is in good standing. Lessor has no knowledge of any facts which now or after the passage of time or the giving of notice, or both, would constitute a default under the Lease. The payments required under the Lease are set forth in Exhibit A. Payments and notices to Lessor are deliverable as set forth in Exhibit A. Lessor has no Clalms outstanding against Lessee in connection with the property. W4i4LV r741rACONSAY Page t of 4 7. 'A 7AO-I P-W-0l a-IAM 1C7—U i VIVA: 11 1AA7 %'I)A Loan No. 3. Lessor consents tc the granting of a security interest In Lessee's interest In the Lease to Lender. Lessor agrees to send concurrently to Lender copies of any notices sent to Lessee pertaining to Lessee's default or Lessor's intent to terminate the Leave or any part thereof by certified U.S. mall. No modification or termination of the Lease agreed Upon by Lessee shall be effectivo without the express written consent of Lender. Notice Willi be provided to Lender by ort MSceN010201,rtified 1 at 9451e Corbirn'nMutual Avs,dress: WashingtNorthridge, CA n 91324, Bank, Collection Supp referencing the Loan Number set forth on Exhiblt A or at such other address given tot e undersigned by Lender, at the same time as the notices are sent to Lessee. 4. Should the Lease be terminated for any reason prior to expiration of its stated term, Lessor shall, upon written request by Lender to Lessor made within sixty (601 days after such termination, enter into a new lease l°New Lease") with Lender as the lessee. The New Lease shall have a term equal to the remainder of the stated term of the Now Lease shall Lease had it not been terminated prior to the end of its stated term. Threquire ments which have the same fledcovenants,bLessee prior to termination) as are contained ept for in the Lease. Lessor have been satisfied by shall be required to enter into the New Lease only it Lender has remedied and cured all monetary defaults under the Lease and has cured 6r has commenced and is dillgentiy pursuing completion of heby cure rhe orof all'nonmonetary defaults of Lessee susceptible to cure by any parry other g, This consent &agreement shall not operate to change or supercede the terms & conditions of the lease and in the =4;Lgessor of the lease shall prevail. Page 2of4 £ 'd LL 18 'ON Z01-L£8-6b6 MJ M080S3 3H1 Wyzo:1I 100b '0£ '100 Loan No, �� STATE OF GS.LTo � � •tn �f•11 III as. OF Vr COUNTY --- ate' .- p �` `e-� , perso Ily appeared 1�'v 0 J �j before me, personalty own to me to be the personikw ose name is re subscribed xo whhin hb Instrument fnstrument and acknowledged to rTl i he she/they exte��uted the same in his herbs e� aut he Shr signature e entity ltupl4i behalf and aof w l chethealper onl acted, on texecuted the t e pe l) instrument. WITNESS my hand and official seal. ' i Signature Notary Public in and for�%heaxe of Page 3 of 4 771o20LL"�1frACWi MY CATHY FISHER Commission # 11743V aotory Public -Colifomia L118 'ON Z0L-LSS-06-N8I3—MODS3-3H1 NVZO:II loot OP100 1. 2. 3. EXHIBIT A - TO LESSOR'S CONSENT AND AGREEMENT Loon No. J Unit No. Borrower's ILessee) Name: property Address: property's Legal Descriptlon (if a metes & bounds attach legal, q, Developer/Condo Homeowners As�s_oe• (Lessor) ; Name'. 7,<\ 5. Lease lincluding all amendments and dates): g, Borrower (Lessee's) Current Monthly Lease Payment: I Payments are 5 current (circle either Yes or No), - ^ Af. r A 7. Deliver notices and payments to Lessor at• i �l�S Ieat+ g Years; commenced on e 8. Term of Lease: �� expires on V' applicable.- Pursu nt o the Lease, Lessee has the right, at its opt to renew the term of the If app years each. Lease for consecutive renewal terms of INU t PV 6001 aPACM MV Page 4 of 4 4 'd LL 18 'ON 10L—L68-06—WH13 MODS3 3H1 WUbO:II [OWOP100 DER NO,: 9124207.12 EXHIBIT "A" THE WESTERLY 45 FEET OF LOT 2, AND THE EASTERLY 10 FEET OF LOT 1, AS SHOWN UPON A RECORD OF SURVEY MAP RECORDED IN BOOK 9, PAGES 42 AND 43 RECORD OF SURVEYS, ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH CERTAIN PORTIONS OF ADJOINING LOTS I AND H AS SHOWN UPON SAID MAP AND AS DESCRIBED MORE FULLY IN SAID LEASE. L 'd LLl8'ON _ _ 601—L£8-06—Wald MOD83 3Hl WV60:11 100b'0£'1�0 • 0ER NO.: 9124207.lz SCHEDULE A E ESTATE OR COVERED BY THISTE ESTIS' IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO ORT A FEE 2. TITLE TO SAID ESTATE OR INTEROST AT THE DATE HEREOF IS VESTED IN: A LEASEHOLD AS CREATED BY THAT CERTAIN LEASE DATED JUNE 31, 1994. EXECUTED BY THE CITY OF NEWPORT BEACH, A CHARTERED MUNICIPAL CORPORATION, AS LESSOR, AND JOHN D. EVERSOLL AND JESSIE J. EVERSOLL, TRUSTEES OF THE EVERSOLL FAMILY TRUST DATED 12-9-75, AS LESSEE, AS REFERENCED IN THE DOCUMENT ENTITLED "MEMORANDUM OF LEASE,- WHICH WAS RECORDED DECEMBER 7,1994 AS INSTRUMENT PROVISIONS SCONOTAI EIAL RECORDS, FOR THE D IN SAID DOCUMENT,TERM AND AND N SAIDON AND SUBJECT TO ALL THE LEASE. 3. THE COUNTY OF REFERRED -qlM , CITY OF NEWPOR BEACH, AND OIS DESCRIBED AS IN THE STATE OF L OLWSIZ SEE EXHIBIT 'A" ATTACHED HERETO AND MADE A PART HEREOF. Z 'd M8 'ON 10L-L68-06-'lAM—MOVS3-3 H1 TOTAL P.02 NdD:Z 100Z'S 'AON --THE— — EscRoW FIRM 254331 Cabot Road, Suite 204 Laguna Hills • CA 92653 (949) 470-4088 FAX (949) 837--7492 DATE. PAGE 1 OF FAX TO- COMPAP 'FAX NUI ROBBYN BELEZZOULI IF ALL PAGES HAVE NOT BEEN RECEIVED, PLEASE CALL (949) 4TO-49OU PLEASE NOTE: IN THE EVENT ANY OF THESE PAGES REQUIRE AN ORIGINAL SIGNATURE, PLEASE XEROX THE fAX TRANSMITTAL PAGE(S) AND SIGN ON THE PHOTO COPY AND RETURN TO US WITH THE ORIGINAL. CONf/DFNTIAWY NOTICE THE INFORMATION CONTAINED IN THIS FACSIMILE IS LEGALLY PRIVILEGED AND CONFIDENTIAL INFORMATION INTENDED ONLY FOR THE USE of 'THE INDIVIDUAL OR ENTITY NOT-THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFlEDA THAT ANY DISSEMINATION DISTRIBUTION MED ABOVF� IF THE READER OF IE R Copy OF THIS FACSIMILE IS STRICTLY PROHIBITED. IFYOU HAVE RECEIVED THIS FACSIMILE IN ERROR, PLEASE E ORIGINAL ACSIMILE To IMMEDIATELY NOTIFY US BYT TELEPHONE DSRETESPOSTAtSERVI Ef THANKYOU,USgTTHE ABOVE ADDRESS . VIA THE M8 'ON Z01—M-06—WAMODS3 3Hl WdWZ 1006'S 'AON • City Managers Office • 3300 Newport Blvd. Newport Beach, CA 92660-7916 949-644-3002 FAX TRANSMITTAL FAX 949-644-3008 Date: To: knhk 1 ASV �-, Fax: 23 7 — 7 yq% From: Total Phone: 2 FAX TRANSMITTAL City Managers Office • 3300 Newport Blvd. Newport Beach, CA 92660-7916 949-644-3002 FAX 949-644-3008 Date: Id --3 0 -01 a To: din i� � _ Fax: 633 —6,51D From: Total Phone: 9 Roo ply. auc -�L a4"d AA w&k- 1"P,U i� e rax bc6 46 e a f qq9- 6 yy- 0 • �'P?Nf Z-, �qq� 2. ' TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF 1S VESTED IN., A LEASEHOLD AS CREATED BY THAT CERTAIN LEASE DATED EXECUTED BY THE CITY OF NEWPORT BEACH. A CHARTERED MUNICIPAL CORPORATION, AS LESSOR, AND JOHN D, EVERSOLL AND JESSIE J. EVERSOLL, TRUSTEES OF THE EVERSOLL FAMILY TRUST DATED 12-9.75, AS LESSEE, AS REFERENCED IN THE DOCUMENT ENTITLED "MEMORANDUM OF LEASE," WHICH WAS RECORDED7SAIDLEASE AS INSTRUMENT NO. a8W698'H2@ OFFICIAL RECORDS, FOR THE TERM ANUBJECT TO ALL THE ' PROVISIONS CONTAINED IN SAID DOCUMENT, AND �p15Iq».... ber'7, lgRu 9 'd LLIB'ON l6bL-LR-6b6-NHI3 AO0S3 3Hl Nvlo:ll 100b'OS UO IIIIESCROW FIRM III 25431 Cabot Road, Sulte 204 Laguna Hills • CA 92653 !i (949) 470-4088 IIIlII AX (949) 837-7492 DATE: I PAGE 1 OF U.-KOlm COMPANY: 'FAX NUMBER: FROM: ROBBYN BELEZZOULI IF AU. PAGES HAVE NOT BEEN RECEIVED, PLEASE CALL (049) 470-4088 PLEASE NOTE IN THE EVENT ANY OFTHESE PAGES REQUIRE AN ORIGINAL SIGNATURE, PLEASE XEROX THE FAX TRANSMITTAL PAGE(W AND SIGN ON THE PHOTO COPY AND RETURN TO US WITH THE ORIGINAL. ' CONFIDENTIATlTY NOTICE THE INFORMATION CONTAINED IN THIS FACSIMILE IS LEGALLY PRIVILEGED AND CONFIDENTIAL INFORMATION INTENDEO ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY NAMED ABOVE IF THE READER OF THIS MESSAGE IS NOTTHE INTENDED RECIPIENT. YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPY OF THIS FACSIMILE IS STRICTLY PROHIBITED. IFYOU HAVE RECEIVED THIS FACSIMILE IN ERROR, PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE AND RETURN THE ORIGINAL FACSIMILE TO US ATTHE ABOVE ADDRESS . VIA THE UNITEOSTATES POSTAL SERVICE, THANK YOU. 1 'd LLH'ON Z0L—LR-06—W J—AODS3 3H1 WVZO:11 1006 'OS '100 Oborny, Shirley From: Carney, Seanne Sent: Tuesday, October 30, 2001 5:13 PM To: Oborny, Shirley Subject: RE: 2 Beacon Bay they currently only owe for their november bill which is due on nov 1 and delinquent on nov 15. BUSINESS NUMBER BB-0002-0 TOTAL DUE 1495.83 BUSINESS NAME EVERSOLL, JOHN D SERVICE ADDRESS 2 BEACON BAY APT NEWPORT BEACH, CA ZIP 92660 BILLING ADDRESS 2 BEACON BAY CYCLE L TAX N PENALTY Y PROPERTY ID 050-221-06 NEWPORT BEACH, CA UNAPPLIED CREDIT 0.00 92663 EXPIRES 10/19/2001 SERVICE TITLE BILL REF DATE BILLED PAID DATE PAID BB-100 LEASES 2001-11 10/19/01 1495.83 0.00 BB-100 LEASES 2001-10 09/20/01 1495.83 1495.83 10/11/01 BB-100 LEASES 2001-09 08/20/01 1495.83 1495.83 09/12/01 BB-100 LEASES 2001-08 07/19/01 1495.83 1495.83 08/08/01 -----Original Message ----- From: Oborny, Shirley Sent: Tuesday, October 30, 2001 10:24 AM To: Carney, Seanne Subject: 2 Beacon Bay The Eversoll's are refinancing their home loan. Please let me know if they are current on their monthly land lease payments. Thanks. Shirley Oborny City Manager's Office City of Newport Beach 949-644-3002 1 .0 FAX COVER SHEET DATE: December 2, 1996 NO. OF PAGES: 2 and Cover TO: Baraa Sarakby LOCATION: BUSINESS PHONE: FAX NUMBER: 644-97-2+ a/s 8 FROM: Peggy Ducey Assistant to City Manager (Marion) LOCATION: NEWPORT BEACH CITY HALL BUSINESS PHONE: _(714) 644-3002 FAX NUMBER: (714) 644-3020 COMMENTS: Per the request of Mr. John Eversoll, Beacon Bay Lot 2. I 1p,96 (WE01 is+dl FATCO • liscon0ltfm necM., my AND WMN M1.�EOdy� �i-tolf1�A 'M: coy=IN M/VDH"OM asm.+.+se� O+u1M+rs �RY�al1. CA Yy� TEL:714 44077J DM N %-0701474 07-MC-199* 114*0 Att J.' 4na MI'ny Raw m umM, iemtMeM an fury f, fYY4 (Cq'ItoilflMpeMt PM"h 1Df i�mq M ae �li�p �rl,Mstm��b h��w�iidf sy mtle��YMP e! e..qn lutly s rd� Mid Ilc� sAii „�nsw m !� Gy d N..prf Mr.e, CeMEr d Om110s. eM� A C3lertrt (yy'RW frtt�,d�chd slest■c j414 dlM �11I pA�AsrGrYfy d dvpu sad Celtanis M WITNE89 WI4IIEOF,d1e p4{i! ftnnaeeaedMe Nenmtrprn A l4w4 pdb dr. *SAW l LEWSI: C"QFKKWPONTDEACH ey YAM MONO IrA ve.�ee��.irorn� t t,,nop i P. 001 Nee9-5 GoAIS ff s� 1 �i�'CLUDE `D, 00 V6 jar ar E09 NOLLISIf1DO8 1IOdNO I9;£Z Nf1S 96-10-030 T".,. ' .nJy, ••t>' 4Uf1YC0) IB•a2 FATOO' TGL 414 d{ vvs r. ons DOC 0 94-0701519 07—DEC-1994 11058 AM plemOltO "tat"m O tY I Agcw" to midat limb ANO WHIN Ntc Noto Awry" IW. lb H Onet. ,.tr. Wil"a c lfdo� t, AmirnN tae A. 1nuA. 0inlr � Pee 1 ff I Fans s 5100 No" Omell,CA 2"M fat0 O.W nau INymwaavmmor,nr Vats two neowatll. Mam.vdand lwr AIrsOmemr maR CCoUt" OP CAAM trirrwEaa ny h. eanddtlW a.t . , . a. HtYR WrrWinmtrtded~ r1 atpcey3&WLpllq ttnka0.!{Ytt 7 1 I 1 6r—,D5 0i/M'd £09 NOI.LISIf160d iiano Z9:£d NfIS 96-10-030 a POR SEC. 35,T6S. R. /0. W P . o w. <>. ekkTRACT be Y 92 0 9• ' ® Al m ��?�- U54 M. • z5e' �vr•p szz•. B 8.W k° O V y4/1 O fe• 56 w±. 4 2 NO ize• K 18 k.._O.. 42 57 s F SUR EY e c 15 6 a 'c< yr o - pppy L076P , K 17 SO ® N 0 I6 i O % O 18 ,s 5/ O o ~• 23 7 m 4 O/ Sa O 45 ~ o46 y v y 14 -4 y. O v ' 22 � ' LOT 'H" 222 srREEr 1- a WATER LINE AS PER AERIAL PNOTO IS47 �• Ary / A ®°0 5 H 12 1 B • 7s . ¢o' 50-22 N THIS MAP WAS PREPARED FOR ORANGE COUNTY ASSESSOR DEPT. PURPOSES ONLY a THE ASSESSOR MAKES NO GUARANTEEAS TO ITS R OTHER USES. NOR OT TO BE REPRODUCED.UMES LIABILITY XL Filun IS RESER. COPYRIGHT ORANGE COUNTY ASSESSORI9 U.S. /37 V S. 2W L/NE MARCH /949 OJ 02 TR. NO.2172 M.M.66-47 R.S. 9-42,43 NOTE — ASSESSOR'S BLOCK B ASSESSOR'S MAP R. S. /3- 42 PARCEL NUMBERS BOOK 50 PAGE 22 WEST SIDE ADD. _ BEACON BAY SHOWN /N CIRCLES COUNTY OF ORANGE O - SO• g0' g0� an- © QF1@2 I2/o/t Mpo mom -- - . S _^.(T r'H � .. •� •�j fy ' � / �+ O � t - ��cr a - G % So � 3 0•0 J� - Q' .��`°" -` ' r ,`� - j,�(iJC�"., . •= q V` ^' 0to � � y y ` � 9y ,yam • - - '' '' -' IZVO 'J.••-�" r'`';tk "5,;f : i : is i ^ % ll\� I v O ? V + -.ir '•'-::Lay, ;J*_.. .•'�). y*- '4. O t I _ _ _. __ j tV �_-.;��..•; t eft *i,-=i' _, 'N I � O -- -- - - - LOT 41 A N - ;Y' 45 4s - -4- 03 50 t�"�`t `:a r':'•a.',S,L s;, �y;•`'-r�' .. _ _ - __ �i V • V • _ `- 1. v -: \..�:. - ` yrr. 4' - - Ln rv- `pis-'-"T;_:s'r�'•a' - `�Ss'`-r<�', `�`'' C() 11+ `- _ _ - - -:,� �--�a Iry r<_ »1n � > "� � _. �J \ r . ' v � � � ` ::' -_ .Y'�'; � .'q-: � '~ - _a : � ^�i-:T..'' .�'-•s . o 47 go 03 0 45 \ 4j 1 RECORDED AT THE REQUE9_ JF CHICAGO TITLE COMFY RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 LEA .... ii • i•. M i.: .. Iw RacordM in Official Records of Orame County, calif or•.;ia fount' Rec or:ier ?;se 1 of 7 c25i ii.Oe MEMORANDUM OF LEASE (/ 71-1p 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 PAUL A. RAMSEY and FLORENCE PATRICIA RAMSEY, husband and wife, herein called "Lessee", to witness that: as °mot' proper' Lessor hereby leases to Lessee, commencing on April 26, 1994, and ending on July 1, 2006, on the terms and conditions set forth in that certain lease by and between the parties hereto dated April 26, 1994, 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: D A portion of Lot 3 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. as more particularly described in Exhibit A attached hereto and made a part hereof. EXECUTED on19LY, at Newport Beach, Orange County, California. AP PRO D AS TO FORM: CITY ATTORN EY LESSOR CITY OF NEWPORT Paul A. Ramsey, Lessee J Florence Patricia Ramsey, Lessee EXHIBIT A The WESTERLY 45 FEET of Lot 3 and the EASTERLY 10 FEET of Lot 2, in the CITY OF Newport Beach, COUNTY OF ORANGE, STATE OF CALIFORNIA, as shown upon a Record of Survey Map RECORDED in BOOR 9, Pages 42 and 43 Record of Surveys, on file IN THE OFFICE OF THE COUNTY RECORDER, ORANGE COUNTY, CALIFORNIA, together with certain portions of adjoining Lots I and H as shown upon said Map and as DESCRIBED more fully hereinafter. TRANSMISSION REPORT . TIME : DEC 02 '96 •:20 TEL NUMBER : 0 NAME NBR FILE DRTE TIME DURATION PGS TO DEPT NBR MODE STATUS 066 F.2 DEC.02 16:19 01/03 3 714 640 6295 EC OK - _ -�� __ _ ' _ �J ��e� . l __)3 1 -_�� 1 J �^ � �y�Y-�_�j 1��/l� � �� Ct/��. '�a '�Lf/�- ��— — S � z • O� SEW PO�i CITY OF NEWPORT BEACH u i CqC, FO FN�P December 18,1997 Mr. Thomas Capehart 1225 South Grand Avenue Pasadena, CA 91105 Dear Mr. Capehart: As we discussed over the phone, there is currently a conflict between the legal descriptions for #1 and #2 Beacon Bay. The current legal description for 1 Beacon Bay reads: Lot 1 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California. The current legal description for 2.Beacon Bay reads: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with the southeasterly 10.00 feet of Lot i as all are shown on said map. I have attached a parcel map that indicates the 10 foot encroachment, designated by the broken property line on Lot 1. Neither legal description includes Lots H and I either, which you have an interest in. As written now, both you and Mr. Eversoll would not be able to sell or refinance your property without correcting this conflict. The new legal descriptions need to read- 1 Beacon Bay: y4'2 Lot 1 as shown on the map filed in Book 9, Pages 42 of Record of Surveys in the Office of the County Recorder, City Hall • 3300 Newport Boulevard • Newport Beach, California 92663-3884 County of Orange, State of California, together with Lot H and I as shown on said map. Except the southeasterly 10.00 feet of said Lot 1. 2 Beacon Bay: The northwesterly 45.0Q feet of Lot 2 as shown on the map filed in Book 9, Pages &ioNecord of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. These changes can be made by recording the attached "correction page/statement". Could you please sign the correction page and have it notarized, and send it back to me in the enclosed envelope? I'm sorry for any inconvenience this may cause for you. Please call me at (714) 644-3002 if you have any questions. Sincerely, P Peggy Duc Assistant to the City Manager cc: Mr. Eversoll __74 BEACON BAY NEW ADDRESS FOR #2 Mr. John D. Eversoll Unit 3-C 631 North Wilxox Avenue Los Angeles, CA 90004 ,.17..:., ,r ., CRY OF NEWPORT OEACH MEMORANDUM: FroM ROBERT L. WYNN, CITY MANAGER TED ICRAMP, DATA PROCESSING SUPERVISOR DECEMBER 4 81 TO.................................................................... .. '. ......................, 18........ RE - BEACON BAY MONTHLY LEASE PAYMENT EFFECTIVE JANUARY 1, 1982 LESSEE - MR. AND MRS. JOHN D. EVERSOLL LOT 2 -• BEACON BAY, NEWPORT BEACH CALIF. MONTHLY PAYMENT $706.66 PLEASE MAIL STATEMENTS TO: Reply wanted ❑ Reply not necessary ❑ No.& .,�j MR. A14D MRS. JOHN D. EVERSOLL 2266 Century Hill . LOS Angeles, Calif. ,90067 4 By................................................................ 1W 0 0 CITY OF NEWPORT 13EACH (714) 640-2151 December 3, 1981 Mr. and Mrs. John D. Eversoll 2266 Century Hill Los Angeles, California 90067 Dear Mr. and Mrs. Eversoll: Enclosed you will find one fully executed copy of your Agreement to Lease regarding Beacon Bay Lot No. 2. We have retained one copy for our official files. Please be advised that effective on January 1, 1982, your monthly lease payment will be in the amount of $706.66. S' c/e'rely, r p Q ROBERT L . P7YNN City Manager Enclosure City Hall 0 3300 Newport Boulevard, Newport Beach, California 92663 BEACON BAY LEASE THIS BEACON BAY LEASE ("Lease") is entered into as of the 154hday of February, 2013 ("Effective Date"), by and between the City of Newport Beach, a California municipal corporation, tideland's trustee, and charter city ("Lessor" or "City") and SALLY FLETCHER, Trustee of the Family Bypass Trust under The Douglas and Sally Fletcher Revocable Trust ("Lessee"). Lessor and Lessee are sometimes individually referred to herein as "Party" and collectively as the "Parties." RECITALS A. Lessor by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978, as amended ("Beacon Bay Bill"), holds the right, title, and interest to certain tidelands and uplands commonly known as Beacon Bay and generally depicted in Exhibit "A" attached hereto and incorporated by reference. B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and specifically authorizes the lease of the property for residential purposes subject to certain express statutory conditions. C. As required by the Beacon Bay Bill, the consideration to be received by the City for the residential leases is the fair market rental value of such lots as finished subdivided lots with streets constructed and all utilities installed. D. On November 3, 1987, a majority of the electors in the City approved a measure authorizing the City Council to enter into residential leases in Beacon Bay for a period not to exceed fifty (50) years. E. On November 3, 1992, a majority of the electors in the City approved Measure M authorizing the City Council to lease tidelands and waterfront property consistent with the provisions of state law. F. The City Council, pursuant to the authority conferred by the electors and the Beacon Bay Bill, leased out the residential lots within Beacon Bay for fifty (50) year terms. G. The current residential leases are set to expire on July 1, 2044, which is preventing certain persons with existing leases within Beacon Bay from obtaining a traditional thirty (30) year mortgage. H. Lessor and Lessee desire a new residential lease for Beacon Bay with a new fifty (50) year term and new provisions that are reflective of current conditions. I. City has determined this Lease is consistent with the Beacon Bay Bill, the City's Charter, General Plan, Zoning Ordinances, and all other applicable state and local laws. J., The California State Lands Commission reviewed the form of this Lease and the range of consideration to be received by the City and determined that the Lease is in conformance with the provisions in the Beacon Bay Bill. 1. AGREEMENT TO LEASE 1.1 Lease. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor hereby leases to Lessee the real property commonly known as Beacon Bay Lot 2, ("Property") which is more particularly described in Exhibit "B", and generally depicted on Exhibit "A", each attached hereto and incorporated by reference herein. If Lessee is a Limited Liability Corporation ("LLC") Lessee shall provide Lessor with the name of its majority share holder at the time of execution of this Lease. The LLC may not change its majority shareholder without the prior written consent of the City's City Manager or his/her designee. If approved, a change of the majority shareholder triggers a re -appraisal of the Property and an adjustment of Base Rent pursuant to the re -appraisal process in Section 3.6(b). 1.2 Reservation of Mineral Rights. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Property and the right to grant and transfer the same, together with all necessary and convenient rights to explore for, develop, produce and extract and take the same, subject to the express limitation that any and all operations shall be carried on at levels below the depth of five hundred feet (500') from the surface of the land by means of wells, derricks and other equipment from surface locations on adjoining or neighboring land, and subject further to all restrictions and regulations concerning the drilling for, and production of, oil, gas, minerals, petroleum and other hydrocarbon substances specified in the City's Charter and Municipal Code. 1.3 Net Lease. This Lease is a net lease, pursuant to which Lessor has no obligation with respect to the payment of taxes, insurance, the cost of maintenance, utilities and repairs or other costs or obligations associated with the Property, except as expressly stated herein. 1.4 Termination of Prior Lease(s). Lessee affirmatively represents that: (a) the persons executing this Lease have a hundred percent (100%) of all interests in any prior lease(s) covering the Property; and (b) have authority to execute this Lease and be bound by the terms herein. Upon the execution of this Lease, any lease(s) between the City and the Lessee or any other party covering the Property shall automatically terminate and be of no further effect. Lessee shall execute and record any document(s) that may be required by City to evidence the termination of any prior lease(s) covering the Property. City shall owe no compensation to Lessee or any other party for the termination of a lease under this section. Lessee shall indemnify and hold the City harmless from any and all liability, loss, expense, damage, or claims which may arise directly or indirectly from or in connection with any allegation that the representations made is this section are false. PJ 2. TERM OF LEASE 2.1 Fixed Term. The term of this Lease shall be for a fixed period of fifty (50) years commencing as of February Ir_✓' , 2013 ("Commencement Date") and terminating on February jam, 2063. The total term may not exceed fifty (50) years pursuant to the Beacon Bay Bill. 2.2 Options. Upon the written request of Lessee and in the sole and absolute discretion of City, this Lease may be terminated and a new lease (with the most current terms approved by the City and/or State Lands Commission) executed with a term not to exceed fifty (50) years pursuant to the payment of the "Option Fee" by Lessee for each year the term is extended. The new lease's term shall be the cumulative total of the purchased years under this section and the remaining years in this Lease (Le., if ten (10) years and one (1) month remain in this Lease and five (5) years are purchased under this section the new lease shall be for a term of fifteen (15) years and one (1) month). The Option Fee shall be calculated pursuant to a specified percentage, as provided in Exhibit "C" attached hereto and incorporated by reference, of the fair market value of the Property as determined by an appraisal, multiplied by the number of years that are purchased by the Lessee (i.e., for illustrative purposes, if the specified percentage is one percent (1%) and the appraised Property value is one hundred dollars ($100) and Lessee desires to extend the term five (5) years, Lessee would owe the City five dollars ($5) [$1 x 5 years= $5]). The Option Fee shall be paid to City by Lessee at the time of execution of the new lease. The Property appraisal shall be conducted after the City's approval of the written request submitted by Lessee. The City's approval of the written request shall be valid for six (6) months or some other time period as may be agreed upon by the parties. Lessor shall submit three (3) California licensed appraisers to Lessee; Lessee shall select one (1) appraiser from the three (3) submitted appraisers to appraise the Property. Lessee shall pay all costs associated with the appraiser and the appraisal. For purposes of the Option Fee calculation, in no event shall the appraised fair market value be less than the Property value used to determine Base Rent (as defined in Section 3.2) in Sections 3.1 and 3.2 of the then effective Lease. Because there will be no sale of the Property, the Base Rent for the new lease shall be calculated pursuant to Section 3.6(b), notwithstanding the appraisal requirement in Section 3.6(b), the parties may rely upon the appraisal conducted pursuant to this section to calculate the Base Rent. 2.3 Holdover. This Lease shall terminate and become null and void without further notice upon the expiration of the term of this Lease. Any holding over by Lessee after the expiration of the term shall not constitute a renewal or extension and shall not give Lessee any rights in or to the Property or any part thereof except as expressly provided in this Lease. Any holding over after the expiration of the term with the consent of Lessor shall be construed to be a tenancy from month -to -month on the same terms and conditions set forth in this Lease insofar as such terms and conditions can be applicable to a month -to -month tenancy, except that the rental for each month or any portion thereof during such holdover period shall be an amount equal to one hundred fifty percent (150%) of one -twelfth (1/12) of the annual rental for the most recent year paid. The month -to -month tenancy may be terminated by Lessee or Lessor upon thirty (30) calendar days' prior written notice to the other. 3. RENT & TRANSFERABILITY , 3.1 Rent Calculation. Annual rent for the Property shall be calculated at the rate of two and half percent (2.5%) of the total of all consideration paid for the Property or the appraised value of the Property, including any improvements or structures, but excluding any consideration paid for the transfer of personal property in connection with such transaction. The annual rent .shall be adjusted from time -to -time pursuant to Section 3.3. The rent calculation provided in this section shall serve as the basis for the Base Rent (defined below) in Section 3.2. 3.2 Base Rent. Lessee agrees to pay Lessor rent for the use and occupancy of the Property, in twelve (12) equal monthly installments on the first day of each month ("Base Rent"). Said sums shall be paid in lawful money of the United States of America. If the Commencement Date is other than the first day of a month, rent during any partial month at the beginning and at the end of the lease term will be prorated. Base Rent hereunder will be Five Thousand Seven Hundred Seventy Dollars and 83/100 ($5,770.83) for an annual total of Sixty -Nine Thousand Two Hundred Fifty Dollars and no/100 ($69,250.00). Base Rent due hereunder will be subject to the rent adjustment provisions of Section 3.3 below. Lessee shall send said rent to the mailing address or send an electronic fund transfer via the web address provided in Section 3.5. Lessee shall be responsible for any delays in the mode of sending the rent payment to Lessor. (a) Base Rent shall be due on the first day of each month. If said rent is received later than the fifteenth (15rh) day of the month, there shall be a delinquency charge equal to five percent (5%) of the month's Base Rent due. (b) Each monthly installment of Base Rent shall bear interest if not paid promptly on or before the date it becomes delinquent at the rate of five percent (5%) per annum from the date it becomes delinquent until it is paid by Lessee to Lessor. This interest charge shall be in addition to the delinquency charge set forth in Section 3.2(a). 3.3 Rent Adjustments. Monthly Base Rent may be adjusted on July 1st of each Lease Year (the term "Lease Year" as used herein refers to successive twelve (12) month periods, commencing with the Commencement Date of this Lease) to reflect increases or decreases in the cost of living as indicated by the Consumer Price Index described below. Monthly Base Rent may be adjusted if the Consumer Price Index for the Los Angeles — Orange County - Riverside Area, All Urban Consumers, All Items ("Index"), as published by the United States Department of Labor, Bureau of Labor Statistics ("Bureau"), increases or decreases over the Base Period Index. The initial "Base Period Index" shall be the Index for the calendar month which is four (4) months prior to the month of the Commencement Date (thus, October, 2012, which equals 240.111). The initial Base Period Index shall be compared with the Index for the same calendar month for each subsequent Lease Year ("Comparison Index"). The M Comparison Index used for a given year's adjustment calculation will become the Base Period Index for purposes of the next annual rent adjustment calculation. If the Comparison Index is higher or lower than the Base Period Index, then Base Rent for the next Lease Year shall be increased or decreased by the amount of such percentage change. Should the Bureau discontinue the publication of the above Index, or publish same less frequently, or alter same in some other manner, then the Parties shall adopt a substitute Index or substitute procedure which reasonably reflects and monitors consumer prices. Notwithstanding the Index adjustments described above, if Lessor, in its sole and absolute discretion, believes that notwithstanding such adjustments, monthly Base Rent, as adjusted, does not accurately reflect the fair market rental value of the Property, Lessor may elect to further adjust monthly Base Rent at the commencement of the thirtieth (30th) Lease Year. Lessor will provide notice to Lessee not earlier than six (6) months nor later than three (3) months prior to the expiration of the twenty-ninth (29th) Lease Year of Lessor's election to further adjust monthly Base Rent. Within fifteen (15) days thereafter, Lessor and Lessee will attempt to agree upon an adjustment in Base Rent. If Lessor and Lessee are unable to agree, the Property will be appraised to determine its fair market rental value. Lessor shall submit three (3) California licensed appraisers to Lessee; Lessee shall select one (1) appraiser from the three (3) submitted appraisers to appraise the Property. Lessor shall pay all costs associated with the appraiser and the appraisal. The fair market rental value determined by the appraiser will constitute monthly Base Rent for the thirtieth (301h) Lease Year and each successive year remaining on the Lease; provided, however, that in no event will monthly Base Rent so determined be less than that otherwise payable through the annual Index adjustments described above. 3.4 Additional Rent. All other payments from Lessee described in this Lease, whether to Lessor or third parties (i.e., for the payment of taxes, utilities, insurance, maintenance and the like) constitute "Additional Rent." Included within Additional Rent is any service charge incurred by City when processing the Rent (e.g., credit card transaction fee, etc.), such service charged shall be passed onto Lessee without any additional mark-up by the City. All references in this Lease to "Rent" include Base Rent and Additional Rent. 3.5 Place for Payment of Rent. All Rent that becomes due and payable under this Lease shall be paid to Lessor in person or by United States mail, at the Cashier's Office located at 3300 Newport Boulevard, Newport Beach, California 92658, or electronically at www.newr)ortbeachca.gov, or at any other place or places that Lessor may designate by written notice to Lessee. 3.6 Calculation of Base Rent for Leases Without Corresponding Sale. (a) Through January 1, 2015, Lessor will allow current lessees within Beacon Bay to voluntarily terminate their prior lease (that had an effective date of July 1, 1994 and an expiration date of July 1, 2044) and enter into this Lease., No transfers from the prior lease to this Lease are allowed after January 1, 2015. If a current lessee 5 terminates their prior lease and enters into this Lease prior to January 1, 2015 or if Lessee purchases additional years pursuant to Section 2.2, there will not be a sale price to calculate Base Rent. (b) The Base Rent shall be calculated at the rate of two and half percent (2.5%) of the appraised fair market value of the Property including any improvements or structures, but excluding any personal property. Lessor shall submit three (3) California licensed appraisers to Lessee; Lessee shall select one (1) appraiser from the three (3) submitted appraisers to appraise the Property. Lessee shall pay all costs associated with the appraiser and the appraisal. In no event shall the Base Rent be less than the dollar amount received by the Lessor under the former lease. The annual Base Rent shall be adjusted from time -to -time pursuant to Section 3.3. 3.7 Prohibition Against Transfer or Assignment. With the exception of the transfer and assignment provisions in Section 7 and Section 3.8, this Lease may not be transferred or assigned by Lessee. Any attempt to transfer or assign this Lease shall be an event of default subject to the remedies provided in Section 13.2. Any purported assignment or transfer in violation of this section shall be null and void. 3.8 Exempt Transfers or Assignments. Notwithstanding the prohibition against transfer and assignment provided in Section 3.7, the Lease may be transferred by Lessee if: (a) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (b) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (c) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (d) the transfer is to an inter vivos trust, living trust, or other similar estate planning arrangement of Lessee and the sole beneficiaries are the Lessee, the Lessee's spouse, or a tenant as contemplated in Section 3.8(b); or (e) the transfer is to a LLC; provided at the time of transfer the Lessee is the majority share holder of the LLC. The LLC may not change its majority shareholder without the prior written consent of the City's City Manager or his/her designee. If approved, a change of the majority shareholder triggers a re -appraisal of the Property and an adjustment of Base Rent pursuant to the re -appraisal process in Section 3.6(b). In the event of any transfer under this Section 3.8 the Lease term shall be for the remaining years existing on the Lease prior to the transfer (i.e., the term shall not be extended due to the transfer). N. 4. LESSOR'S TITLE Lessor covenants, represents and warrants that Lessee, its guests and permitted successors and assigns shall peaceably and quietly have, hold and enjoy the sole and exclusive use and enjoyment of the Property, or any part thereof, for the full term of this Lease and as the same may be extended as provided herein. This covenant. and warranty of quiet enjoyment shall only apply to Lessor and those claiming or acting by, through or under Lessor. 5. USE AND CONDITION OF PROPERTY 5.1 Use of Property. The Property shall be used solely for residential purposes consistent with the City's Zoning and Municipal Code. Lessee may demolish, construct, remodel, reconstruct and maintain structures on the Property for residential purposes so long as the structures and construction are authorized by appropriate City permits and fully comply with all City ordinances, resolutions, regulations, policies, and plans. Lessee shall also obtain permission to construct and/or maintain structures from the Beacon Bay Community Association, California Coastal Commission, and any other private or governmental agency if required by law. Nothing in this section shall be interpreted as a pre -approval of any permit or other approval required for the use of the Property. 5.2 Maintenance of Improvements. Lessor shall not be required to make any changes, alterations, additions, improvements, or repairs in on or about all or part of the Property. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain, the Property, including, without limitation, all structures, facilities, walks, curbs, parkways and other improvements, in good order and repair and in a clean, safe, sanitary and orderly condition. Lessee shall cause to be constructed, maintained and repaired all utilities, pipes, walls, sewers, drains, and other improvements on the Property to the extent required by law or as necessary to maintain the improvement in good order and repair and safe and sanitary condition. 5.3 Compliance with Laws. Lessee shall make, or cause to be made, any additions, alterations or repairs to any structure or improvement on. the Property which may be required by, and Lessee shall otherwise observe and comply with, any law, statute, ordinance, plan, resolution or policy applicable to the Property. Lessee shall indemnify, defend and hold Lessor 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 Lease. All repairs, additions, and alterations to the structures or improvements on the Property shall conform to all applicable laws, ordinances, regulations, plans, policies and resolutions and all work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. 5.4 As Is Condition of Property. Lessee expressly accepts the Property "as is" and acknowledges that Lessor has made no representations or warranties as to the suitability of the Property or any construction or improvement. Lessee shall conduct all 7 tests necessary to determine the suitability of the Property for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. Lessee expressly acknowledges that Lessor shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Property or adjacent property. Lessee expressly acknowledges that, while the legislature of the State of California has purportedly removed the public trust restrictions on use of the Property pursuant to the Beacon Bay Bill, the Property may constitute filled tidelands, and Lessor has made -no representation or warranty relative to the validity of the Beacon Bay Bill or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. Notwithstanding the foregoing, in the event of any challenge to the right and power of Lessor to .lease the Property for the purposes provided in this Lease, Lessor agrees, at its sole cost and expense, to use all reasonable efforts to resist and defend against such challenge and to seek a ruling or judgment affirming and upholding the right and power of Lessor to lease the Property for the purposes provided in this Lease. 5.5 Tidelands Grant. The Property may be located on land that is the subject of a Tidelands Grant from the State of California to the City. Lessee shall not take any action that would cause the City to be in violation of any provisions of that Tidelands Grant. If the Property is located upon tidelands and the State of California terminates, or modifies the Tidelands Grant to prohibit the uses contemplated under this Lease, this Lease shall terminate as a result and the Parties shall be released from all liabilities and obligations under this Lease and Lessor shall owe no compensation to Lessee. 6. TAXES AND UTILITIES 6.1 Lessee to Pay Taxes. In addition to the Base Rent required to be paid under this Lease, Lessee shall pay any and all real and personal property taxes, including possessory interest tax (California Revenue and Taxation Code § 107.6), assessments, and other charges of any description levied or assessed during the term of this Lease by any governmental agency or entity on or against the Property, any portion of or interest in the Property, or any improvements on the Property. 6.2 Proration of Taxes. In the event that this Lease commences, terminates or expires during a tax year, Lessee shall pay the taxes for the period of such year during which this Lease was in effect. 6.3 Payment Before Delinguencv. Any and all taxes and assessments and installments of taxes and assessments required to be paid by Lessee under this Lease shall be paid when due and the official and original receipt for the payment of such tax, assessment, or installment shall be given to Lessor upon request. 6.4 Contest of Tax. Lessee shall have the right to contest, oppose, or object to the amount or validity of any tax, assessment, or other charge levied on or assessed against the Property or any part thereof; provided, however, that the contest, opposition or objection must be filed before the tax, assessment or other charge at which it is directed becomes delinquent and written notice of the contest, opposition or objection N must be given to Lessor at least twenty (20) days before the date the tax, assessment, or other charge becomes delinquent. Furthermore, no such contest, opposition or objection shall be continued or maintained after the date the tax, assessment, or other charge at which it is directed becomes delinquent unless Lessee has: (a) Paid such tax, assessment, or other charge under protest prior to its becoming delinquent; or (b) Obtained and maintained a stay of all proceedings for enforcement and collection of the tax, assessment, or other charge by posting such bond or other matter required by law for such a stay; or (c) Delivered to Lessor a good and sufficient undertaking in an amount reasonably specified by Lessor and issued by a bonding corporation authorized to issue undertakings in California conditioned on the payment by Lessee of the tax, assessment or other charge together with any fines, interest, penalties, costs and expenses that may have accrued or been imposed thereon within thirty (30) days after final determination of Lessee's contest, opposition or objection to such tax, assessment or other charge. 6.5 Tax Returns and Statements. Lessee shall, as between Lessor and Lessee, have the duty of attending to, preparing, making, and filing any statement, return, report, or other instrument required or permitted by law in connection with the determination, equalization, reduction or payment of any taxes, assessments or other charges that are or may be levied on or assessed against the Property, any portion or interest in the Property, or any improvements on the Property. 6.6 Tax Hold -Harmless Clause. Lessee shall indemnify and hold Lessor and the property of Lessor, including the Property and any improvements now or hereafter located thereon, free and harmless from any liability, loss, or damage resulting from any taxes, assessments, or other charges required by this Lease to be paid by Lessee and from all interests, penalties, and other sums imposed thereon and from any sales or other proceedings to enforce collection of any such taxes, assessments, or other charges. 6.7 Utilities. Lessee shall contract in its own name and fully and promptly pay for all water, gas, heat, light, power, telephone service, and other public utilities of every kind furnished to the Property throughout the term hereof, and all other costs and expenses of every kind whatsoever of or in connection with the use, operation, and maintenance of the Property and all activities conducted thereon, and Lessor shall have no responsibility of any kind for any thereof. In the event that it is necessary for Lessor to provide any of the foregoing utilities to Lessee on a pass through basis, Lessee shall provide a separate meter for the Property and shall reimburse Lessor for Lessee's usage of such utility service within ten (10) days of Lessor's invoice to Lessee. Furthermore, Lessee shall be solely responsible for the cost and expense of any upgrade, modification or other utility installation which is required as a result of Lessee's use of the Property. s 6.8 Payment by Lessor. Should Lessee -fail to pay within the time specified in this Lease any taxes, assessments, or other charges required by this Lease to be paid by Lessee, Lessor may, upon ten (10) days prior written notice and demand to Lessee, pay, discharge or adjust such tax, assessment, or other charge for the benefit of Lessee. In such event, Lessee shall promptly on written demand of Lessor reimburse Lessor for the full amount paid by Lessor in paying, discharging or adjusting such tax, assessment or other charge, together with interest thereon at the rate of ten percent (10%) per annum from the date of payment by Lessor until the date of repayment by Lessee. Where no time within which any charge required by this Lease to be paid by Lessee is specified in this Lease, such charge must be paid by Lessee before it becomes delinquent. 7. ENCUMBERANCES 7.1 Right to Encumber. Lessee may encumber this Lease by deed of trust, mortgage, or similar instrument, in favor of any bona fide lender ("Lender" or "Mortgagee") in a bona fide loan transaction for any purpose without the consent of Lessor. To determine whether a loan is a bona fide lending transaction, and not an arrangement for transfer of the possession or title to the Property to the putative lender, Lessee and the Lender agree to provide Lessor with all documentation executed between Lessee and the Lender concerning the loan upon request of Lessor. Neither Lessee nor Lessor shall have the power to encumber Lessor's interest in the Property. Any encumbrance shall be subject to all covenants, conditions and restrictions in this Lease and to all rights and interests of Lessor except as otherwise expressly provided in this Lease. Lessee shall give Lessor prior written notice of any encumbrance. 7.2 Notice to Lender. Lessor shall have no obligation to give any Lender any written notice pursuant to this Lease unless the Lender has given Lessor written notice of its name, address, and nature of encumbrance ("Complying Lender(s)"). Lessor shall give all Complying Lenders a copy of any written notice of default, notice of termination or other notice which may affect Lessee's rights under this Lease. Notice shall be deemed given by Lessor to Lender five (5) days following deposit in the United States mail, certified and return receipt requested, postage prepaid, and sent to Complying Lender at the address furnished in writing by Complying Lender. Failure by Complying Lender to actually receive notice shall not affect Lessor's compliance with this section provided notice was deposited in the United States mail. 7.3 Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this Lease by mutual agreement without providing prior written notice to the Lender. 7.4 Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on this Lease and the leasehold estate created hereby shall have the right, during the term of the Lease, to: (a) perform any act required of Lessee pursuant to this Lease; 10 (b) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor. Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults requiring the payment or expenditure of money by Lessee. 7.5 Right of Lender to Cure Default. Lessor shall give written notice of any default or breach .of this Lease by Lessee to Complying Lenders and afford Complying Lenders the opportunity, after notice, to: , (a) cure the breach or default within ten (10) days after expiration of the time period granted to Lessee for curing the default if the default can be cured by payment of money; (b) cure the breach or default within thirty (30) days after expiration of the time period granted to Lessee for curing the default when the breach or default can be cured within that period of time; or (c) cure the breach or default in a reasonable time when something other than money is required to cure the breach or default and cannot be performed within thirty (30) days after expiration of the time period granted to Lessee for curing the default, provided the acts necessary to cure the breach are commenced within thirty (30) days and thereafter diligently pursued to completion by Complying Lender. 7.6 Foreclosure in Lieu of Cure. Complying Lender may forestall termination of this Lease for a default or breach by Lessee by commencing foreclosure proceedings subject to strict compliance with the following: (a) proceedings are commenced within thirty (30) days after the later of (i) expiration of the time period, granted to Lessee for curing the default, or (ii) service on Complying Lender of the notice describing the breach or default; (b) the proceedings are diligently pursued to completion in the manner authorized by law; and (c) Complying Lender performs all of the terms, covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until the proceedings are complete or are discharged by redemption, satisfaction, payment or conveyance of this Lease to Complying Lender. 7.7 New Lease. Notwithstanding any other provision of this Lease, should this Lease terminate or be terminated because of any default or breach by Lessee, Lessor shall enter into a new lease with Lender as lessee provided: 11 (a) the written request for the new lease is served on Lessor by Lender within thirty (30) days after the termination of this Lease. (b) the new lease contains the same terms and conditions as this Lease except for those which have already been fulfilled or are no longer applicable. (c) on execution of the new lease by Lessor, Lender shall pay any and all sums that would be due upon execution of the new lease, but for its termination, and shall fully remedy, or agree in writing to remedy, any other default or breach committed by Lessee that can reasonably be remedied by Lender. (d) Lender shall, upon execution of the new lease, pay all reasonable costs and expenses (including attorney's fees) incurred in terminating this Lease, recovering possession of the Property from Lessee, in preparing the new lease. (e) The new lease with Lender shall be for the remainder of the term existing in the prior Lease (i.e., if twenty-five (25) years remain on the Lease at the time of termination/breach the new lease shall be for a term of twenty-five (25) years). 7.8 Miscellaneous. The following provisions shall apply to Lessee and any Lender: (a) Any Lender shall be liable to perform the obligations of the Lessee under this Lease only so long as the Lender holds title to this Lease; and (b) Lessee shall, within ten (10) days after the recordation of any trust deed or other security instrument, record, at Lessee's sole expense, Lessor's written request for a copy of any notice of default and/or notice of sale under any deed of trust as provided by state law. 8. RESTORATION AND ENVIRONMENTAL MATTERS 8.1 Restoration of the Property. Should any improvements on the Property be damaged or destroyed by fire or other casualty or any cause whatsoever, Lessee, will cause the commencement of reconstruction to the damaged or destroyed improvements within ninety (90) days, or such other time period as may be mutually agreed upon by the Parties, after such damage and destruction and will thereafter cause such reconstruction to be diligently prosecuted to completion. 8.2 Environmental Matters. (a) Definitions. The following terms will be defined as follows: (i) Environmental Law. "Environmental Law" shall include all federal, state, and local environmental, health, and safety laws, statutes, ordinances, regulations, rules, judgments, orders, and notice requirements, which were in effect as of the date of closing, which regulate or relate to (a) the protection or clean-up of the 12 environment; (b) the use, treatment, storage, transportation, handling or disposal of hazardous, toxic or otherwise dangerous substances, wastes or materials; (c) the quality of the air and the discharge of airborne wastes, gases, particles, or other emissions; (d) the preservation or protection of waterways, groundwater, or drinking water; (e) the health and safety of persons or property; or (6) impose liability with respect to any of the foregoing, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) [42 USCS §§ 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (RCRA) (42 USCS §§ 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) [33 USCS §§ 1251 et seq.]; the Toxic Substances Control Act (TSCA) [15 USCS §§ 2601 et seq.]; the Hazardous Materials Transportation Act (HMTA) [49 USCS §§ 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USCS §§ 136 et seq.]; the Superfund Amendments and Reauthorization Act [42 USCS §§ 6901 et seq.]; the Clean Air Act [42 USCS §§ 7401 et seq.]; the Safe Drinking Water Act [42 USCS §§ 300f et seq.]; the Solid Waste Disposal Act [42 USCS §§ 6901 et seq.]; the.Surface Mining Control and Reclamation Act [30 USCS §§ 1201 et seq.]; the Emergency Planning and Community Right to Know Act [42 USCS §§ 11001 et seq.]; the Occupational Safety and Health Act [29 USCS §§ 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C §§ 25280 et seq.]; the California Hazardous Substances Account Act [H & S C §§ 25300 et seq.]; the California Hazardous Waste Control Act [H & S C §§ 25100 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C §§ 24249.5 et seq.]; the Porter -Cologne Water Quality Act [Water C §§ 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above. (ii) Hazardous Materials. "Hazardous Materials" shall include any substance which falls within the definition of hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, or pollutant or contaminant, under any Environmental Law. (b) Lessee's Obligations. Lessee will not use, occupy, or permit any portion of the Property to be used or occupied in violation of any Environmental Law or to store any Hazardous Material. (c) Environmental Indemnity. Lessee shall indemnify, defend, and hold Lessor and Lessor's, City Council, officers, appointees, volunteers, employees, agents, successors and assigns free and harmless from and against all Damages (as defined below) that may at any time be imposed upon, incurred by, or asserted or awarded against Lessor or any of them in connection with or arising from any breach of Lessee's obligations hereunder or out of any violation by Lessee of any Environmental Law; or resulting in the imposition of any -lien or claim for the recovery of any costs for environmental cleanup or other response costs relating to the release or threatened release of Hazardous Materials due to the construction of any improvements on the Property or the use or misuse of the Property by the Lessee. The term "Damages" shall mean all liabilities, demands, claims, actions or causes of action, regulatory, legislative or judicial proceedings, assessments, levies, losses, fines, penalties, damages, costs and expenses, in each case as awarded by a court or arbitrator, including, without 13 limitation: (i) reasonable attorneys', accountants', investigators', and experts' fees and expenses sustained or incurred in connection with the defense or investigation of any such liability, and (ii) costs and expenses incurred to bring the Property into compliance with Environmental Laws. The term "Damages" also includes, expressly, those Damages that arise as a result of strict liability, whether arising under Environmental Laws and regulations or otherwise. Lessee's obligations hereunder will survive the expiration or sooner termination of this Lease. 9. INDEMNITY 9.1 Indemnity Agreement. In addition to the Environmental Indemnity, provided above, except to the extent caused by the sole negligence and/or willful misconduct of the Lessor, Lessee shall defend, indemnify and hold Lessor and Lessor's City Council, officers, appointees, volunteers, employees, agents, successors and assigns free and harmless from any and all liability, claims, loss, damages, or expenses resulting from Lessee's occupation and use of the Property, specifically including, without limitation, any liability, claim, loss, damage, or expense arising by reason of: (a) The death or injury of any person, including any person who is a guest or invitee of Lessee, or by reason of the damage to or destruction of any property, including property owned by Lessee or by any person who is a guest or invitee of Lessee, from any cause whatever while such person or property is in or on the Property or in any way connected with the Property or with any of the improvements or personal property on the Property; (b) The death or injury of any person, including any person who is a guest or invitee of Lessee, or by reason of the damage to or destruction of any property, including property owned by Lessee or any person who is a guest or invitee of Lessee, caused or allegedly caused by either (i) the condition of the Property, or improvements on the Property, or (ii) some act or omission on the Property by Lessee or any person in, on, or about the Property with or without the permission and consent of Lessee; (c) Any work performed on the Property or material furnished to the Property at the request of Lessee or any person or entity acting for or on behalf of Lessee; or (d) Lessee's failure to comply with any material legal or other requirement validly imposed on Lessee or the Property by a governmental agency or authority having jurisdiction over the Property. 10. CONDEMNATION 10.1 Definitions of Terms (a) The term "total taking" as used in this Lease shall mean the taking of the entire Property under the power of eminent domain or the taking"of so much of the Property as to prevent or substantially impair the use thereof by Lessee for residential purposes. 14 (b) The term "partial taking" shall mean the taking of only a portion of the Property which does not constitute a total taking as defined above. (c) The term "taking" shall include a voluntary conveyance by Lessor to an agency, authority or public utility under threat of a taking under the power of eminent domain in lieu of formal proceedings. (d) The term "date of taking" shall be the date upon which title to the Property or portion thereof passes to and vests in the condemner. 10.2 Effect of Taking. If, during the term hereof, there shall be a total taking or partial taking under the power of eminent domain, then the leasehold estate of the Lessee in and to the Property or the portion thereof taken shall cease and terminate as of the date of taking of said Property. If this Lease is so terminated in whole or in part, all Rent and other charges payable by Lessee to Lessor hereunder and attributable to the Property or portion thereof taken shall be paid by Lessee up to the date of taking by the condemner, and the Parties shall thereupon be released from all further liability in relation thereto. 10.3 Allocation of Award for Total Taking. All compensation and damages awarded for the total taking of the Property and Lessee's leasehold interest therein shall be allocated as follows: (a) The Lessor shall be entitled to an amount equal to the sum of the following: (i) The fair market value of the Property as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such fair market value by the factor for the present worth of one dollar ($1.00) at five percent (5%) per annum compound interest for the number of years remaining from the date of taking to the date of the expiration of the term of this Lease; and (ii) The present worth of Rent due during the period from the date of taking to the date of the expiration of the term of this Lease, computed by multiplying the annual rent then payable by the factor for the present worth of one dollar ($1.00) per annum at five percent (5%) per annum compound interest (Inwood Coefficient) for the number of years in such period. (b) The Lessee and the Mortgagee, if any shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinafter provided. Lessee and Mortgagee may decide between themselves how an award will be divided between them. In the event of any dispute between the Lessee and Mortgagee as to the division of an award the City may satisfy its responsibilities under this Lease by transferring any money due under this section to 15 Lessee. Lessee shall indemnify City from any and all claims or actions brought by Mortgagee or any other party for any award under this section. 10.4 Allocation of Award for Partial Taking. All compensation and damages awarded for the taking of a portion of the Property shall be allocated and divided as follows: (a) The Lessor shall be entitled to an amount equal to the sum of the following: (i) The proportionate reduction of the fair market value of the Property as improved (exclusive of the dwelling and appurtenances to such dwelling) as of the date of taking, discounted by multiplying such proportionate reduction in fair market value by the factor for the present worth of one dollar ($1.00) at five percent (5%) per annum compound interest for the number of years remaining from the date of taking to the date of expiration of the term of this Lease; and (ii) The present worth of the amount by which the Rent is reduced computed by multiplying the amount by which the annual Rent is reduced by the factor for the present worth of one dollar ($1.00) per annum at five percent (5%) per annum compound interest (Inwood Coefficient) for the number of years remaining from the date of taking to the date of expiration of the term of this Lease. (b) The Lessee and the Mortgagee, if any shall be entitled to the amount remaining of the total award after deducting therefrom the sums to be paid to Lessor as hereinabove provided. Lessee and Mortgagee may decide between themselves how an award will be divided between them. In the event of any dispute between the Lessee and Mortgagee as to the division of an award the City may satisfy its responsibilities under this Lease by transferring any money due under this section to Lessee. Lessee shall indemnify City from any and all claims or action& brought by Mortgagee or any other party for any award under this section. 10.5 Reduction of Rent on Partial Taking. In the event of a partial taking, the Rent payable by Lessee hereunder shall be adjusted from the date of taking to the date of the expiration of the term of this Lease. Such rental adjustment will be made by reducing the Base Rent payable by Lessee in the ratio that the Fair Market Rental Value of the Property at the date of taking bears to the Fair Market Rental Value of the Property immediately thereafter. 11. BEACON BAY COMMUNITY ASSOCIATION 11.1 Membership in Association. Asa material part of the consideration of this Lease, and as an express condition to the continuance of any of the rights of Lessee pursuant to this Lease, Lessee agrees to become, and during the term of this Lease to remain, a member in good standing of the Beacon Bay Community Association ("Association"). 16 11.2 Compliance with Rules and Regulations. Lessee agrees to abide by the articles of incorporation, bylaws, covenants, conditions and restrictions and any amendment thereto ("CC&Rs") attached hereto as Exhibit "D" and incorporated herein by reference, and all rules and regulations of the Association, and to pay to the Association, before delinquency, all valid dues, fees, assessments and other charges properly levied or assessed by the Association. Lessee's failure to comply with the provisions of Section 11.1 or 11.2 shall constitute a material breach of this Lease. 11.3 Use of Common Area. Lessee shall have the right to use the streets, beaches, walkways, tennis courts, docks, piers, and common landscaped areas in Beacon Bay (as depicted on Exhibit "A") and which are leased to the Association by Lessor in consideration of the maintenance thereof by such Association and Rent to be paid by individual Lessees under their respective leases. 11.4 Maintenance of Infrastructure. Lessor has no obligation to install, improve, repair, or maintain streets, curbs, gutters, water lines, sewer lines, drainage facilities, street lighting or other facilities used by the residents of Beacon Bay (Infrastructure). Lessor reserves the right to maintain streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for a pro rata share of such costs, and to collect such costs from Lessee in the form of Rent over the remaining term of this Lease. Subject to a public health, safety, and welfare finding, Lessor reserves the right to commence improvements to the streets, curbs, gutters, water lines, sewer lines', drainage facilities, street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay. If Lessor constructs any improvements Lessor has the right to assess Lessee for a pro rata share of such costs, and to collect such costs from Lessee in the form of Rent over the remaining term of this Lease. 11.5 Lessor Maintenance of Common Areas. If the Association, after receiving prior written notice from Lessor, fails or ceases to maintain community facilities, Lessor may, at its option and without obligation, assume the obligations of the Association to maintain, repair, install or improve community facilities. In such event, Lessee shall pay a pro rata share of Lessor's reasonable expenses in maintaining and operating the community facilities, including a reasonable management fee or the fee charged by a management agent. Lessee's pro rata share shall be determined by dividing Lessor's costs by the number of residential lots within Beacon Bay (currently seventy-two (72) lots). Lessee's pro rata share of the annual costs incurred by Lessor shall be paid within thirty (30) days after written notice of the amount due, and any failure to pay shall constitute a material breach of this Lease. The costs of maintaining and operating community facilities shall be determined annually and solely from the financial records of Lessor. 12. INSURANCE 12.1 General Conditions. All insurance required to be carried pursuant to this Lease shall be obtained from reputable carriers licensed to conduct business in the 17 State of California. Each policy required to be carried pursuant to this Lease shall name Lessee and Lessor as additional named insureds, and shall provide that the policy may not be surrendered, cancelled or terminated, or coverage reduced, without less than twenty (20) days prior written notice to Lessor. 12.2 Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and improvements on the Property against loss or damage by fire or other risk for residential structures. The insurance shall provide coverage to one hundred percent (100%) of the full insurable replacement value of all improvements on the Property, with the loss payable to Lessee and Lessor unless this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance shall be paid to Lessor. 12.3 Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain during the term of this Lease, a broad form comprehensive coverage policy of public liability insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way related to, the condition, for Lessee's use and occupation, of the Property in amounts not less than: (a) $1,000,000 per occurrence for injury to or death of, one (1) person; (b) $1,000,000 for damage to or destruction of property. These dollar amounts may be adjusted by Lessor with no less than ninety (90) days prior written notice to Lessee. 12.4 Primary Insurance Coverage. Lessee's insurance coverage shall be primary insurance and/or primary source of recovery as respects to City, its elected' or appointed officers, agents, officials, employees and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Lessee's use and occupation of Property. Any insurance or self-insurance maintained by City, its officers, officials, employees and volunteers shall be excess of the Lessee's insurance and shall not contribute with it. 13. DEFAULT 13.1 Events of Default. The occurrence of any one (1) or more of the following events shall constitute a material default and breach of this Lease by Lessee: (a) The maintenance of the Property in violation of any applicable provisions of the City's Municipal Code and Zoning Code, State Law, Federal Law, and/or the Association's CC&Rs; (b) The failure by Lessee to make any payment of Rent when due if the failure continues for three (3) days after written notice has been given to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to 9.1 applicable unlawful detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this paragraph; (c) The failure by Lessee to perform any of the provisions of this Lease and any Exhibits attached hereto to be performed by Lessee, if the failure to perform continues for a period of thirty (30) days after written notice thereof has been given to Lessee. If the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be in default if Lessee commences the cure within said thirty (30) day period and thereafter diligently prosecutes the cure to completion; or (d) The making by Lessee of any general assignment, or general arrangement for the benefit of creditors; the filing by or against Lessee of a petition to have Lessee adjudged a bankrupt or a petition for reorganization or arrangement of any law relating to bankruptcy unless the same is dismissed within sixty (60) days; the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Property or of Lessee's interest in the Lease, where possession is not restored to Lessee within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Property or of Lessee's interest in the Lease, where such seizure is not discharged within thirty (30) days. Notices given under this paragraph shall specify the alleged default and the applicable Lease provisions, and shall demand that Lessee perform the provisions of this Lease or pay the rent that is in arrears, as the case may be, within the applicable period of time. No such notice shall be deemed a forfeiture or a termination of this Lease unless Lessor so elects in the notice. 13.2 Lessor's Remedies. In the event of any default by Lessee as defined in this Lease, Lessor may, in addition to any rights or remedies permitted by law, do the following: (a) Terminate Lessee's right to possession of the Property by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Property to Lessor. In such event,. Lessor shall be entitled to recover from Lessee all amounts to which Lessor is entitled pursuant to Section 1951.2 of the California Civil Code, or any other provision of law, including, without limitation, the following: (i) The worth at the time of award of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount.of the loss that Lessee proves could be reasonably avoided: and (ii) Any other amount necessary to compensate Lessor for all detriment proximately caused by Lessee's failure to perform obligations pursuant to this Lease or which in the ordinary course of things would be likely to result from the breach, including, without limitation, the cost of recovering possession, expenses of reletting (including necessary repair, renovation and alteration, and any other reasonable costs. 19 The "worth at the time of award" of all rental amounts -other than that referred to in clause (i) above shall be computed by allowing interest at the rate of five percent (5%) per annum `from the date amounts accrue to Lessor. The worth at the time of award of the amount referred to in clause (i) shall be computed by discounting such amount at one (1) percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (b) Without terminating or affecting the forfeiture of this Lease or, in the absence of express written notice of Lessor's election to do so, relieving Lessee of any obligation pursuant to this Lease, Lessor may, but need not, relet all or a portion of the Property at any time, or from time -to -time, and on such terms and conditions as Lessor, at its sole discretion, deems appropriate. Whether or not the Property is relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Property. Lessee shall make such payments at the time specified in the Lease and Lessor need not wait until termination of the Lease to recover sums due by legal action. If Lessor relets all or a portion of the Property, the reletting shall not relieve Lessee of any obligation pursuant to this Lease; provided, however, Lessor shall apply the Rent or other proceeds actually collected by virtue of the reletting against amounts due from Lessee. Lessor may execute any agreement reletting all or a portion of the Property and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: Property; (i) Have accepted any surrender by Lessee of this Lease or the (ii) Have terminated this Lease; or (iii) Have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (c) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amounts specified in this Lease. 13.3 Default By Lessor. Lessor shall not be in default under this Lease unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligation. If the nature of Lessor's obligation is such that more than thirty (30) days are required for performance, then Lessor shall not be in default if Lessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. Alternatively, Lessor may in its sole and absolute discretion decide not to cure a default and instead elect to terminate this Lease. In the event of termination under this section Lessor shall owe no compensation to Lessee. 20 (a) No Damages. The parties acknowledge that Lessor would not have entered into this Lease if it were to be liable in damages under, or with respect to, this Lease or any of the matters referred to in this Lease. Accordingly, Lessee covenants on behalf of itself and its successors and assigns, not to sue Lessor (either in its capacity as lessor in this Lease or in its capacity as the City of Newport Beach) for damages or monetary relief for any breach of this Lease by Lessor or arising out of or connected with any dispute, controversy, or issue between Lessor and Lessee regarding this Lease or any of the matters referred to in this Lease -or any future amendments or enactments thereto, or any land use permits or approvals sought in connection with the Property, the parties agreeing that declaratory and injunctive relief, mandate, and specific performance shall be Lessee's sole and exclusive judicial remedies. 13.4 Stay of Obligations. Neither Party shall be under any obligation to perform or comply with its obligations pursuant to this Lease after the date of any default by the other Party. 13.5 Determination of Rental Value. In any action or unlawful detainer commenced by Lessor, the reasonable rental value of the Property shall be deemed to be the amount of Rent and/or additional monies due (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless Lessee shall prove to the contrary by competent evidence. 13.6 Waiver of Rights. The failure or delay of either Party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other Party. Lessor's acceptance of any Rent shall not be considered a waiver of any preexisting breach of default by Lessee other than the failure to pay the particular Rent accepted regardless of Lessor's knowledge of the preexisting breach of default at the time Rent is accepted. 13.7 Waiver of Right of Redemption. Lessee waives any right of redemption or relief from forfeiture pursuant to California Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to any existing or future statutory or decisional law in the event Lessee is evicted or Lessor takes possession of the Property by reason of Lessee's default. 14. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION 14.1 Surrender of Property. Upon the expiration or termination of this Lease. Lessee agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Property. Lessor, at its sole discretion, may record a document evidencing the expiration or termination of the leasehold interest. Lessee waives any right to receive relocation assistance or similar form of payment from Lessor. 21 14.2 Removal of Improvements. Upon the expiration of the term of this Lease, and on condition that Lessee is not then in default of any of the provisions of this Lease, Lessee shall have the right to remove from the Property all buildings and improvements built or installed on the Property. Removal of any building or improvement shall be at the sole cost and expense of Lessee and removal must be complete no later than ninety (90) days after expiration of the term of this Lease. Lessee shall' fill all excavations and remove all foundations, debris and other parts of the buildings or improvements remaining after removal and surrender possession of the Property to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this paragraph they shall become the property of Lessor without the payment of any consideration to Lessee. 15. NO ATTORNEYS' FEES Should either Party be required to employ counsel to enforce the terms, conditions and covenants of this Lease, the prevailing Party shall not be entitled to attorneys' fees. 16. REMEDIES CUMULATIVE The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be construed as cumulative and no one (1) of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one (1) or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other. 17. NO WAIVER No delay or omission of either Party to exercise any right or power arising from any omission, neglect or default of the other Party shall impair any such right or power or shall be construed as a waiver of any such omission, neglect or default on the part of the other Party or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Lease shall be construed as a waiver of any succeeding breach of the same or of any of the terms, covenants, agreements, restrictions or conditions of this Lease. 18. COMPLIANCE WITH LAWS Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California. County of Orange, City of Newport Beach, or any other governmental body or agency having lawful jurisdiction over the Property. 19. NOTICES Any notice or notices provided for by this Lease or by law, to be given or served by Lessee, may be given or served by mail, registered or certified, with postage prepaid, on the City of Newport Beach, addressed to the City Manager and City Clerk, 3300 Newport Boulevard, P.O. Box 1768. Newport Beach. California 92659-1768. or at such 22 other address as may be hereafter furnished to Lessee in writing. If notice is intended to be served by Lessor on Lessee, it may be served either (a) By delivering a copy to the Lessee personally; or (b) By depositing the notice in the United States Mail, registered or certified, with postage prepaid, to the Property or business address furnished, by Lessee; or (c) If the Lessee is absent from the Property by leaving a copy with some person of suitable age and discretion who may be occupying the Property; or (d) If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Property and also sending a copy through the mail addressed to the Lessee at the Property. Such service upon Lessor or Lessee shall be deemed complete upon the earlier of (i) actual delivery, or (ii) the expiration of seventy-two (72) hours from and after the deposit in the United States mail of such notice, demand or communication. 20. SEVERABILITY If any term or provision of this Lease shall, to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 21. MISCELLANEOUS 21.1 Representations. Lessee agrees that no representations as to the Property have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agrees and acknowledges that this document contains the entire agreement of the Parties, that• there are no verbal agreements, representations, warranties or other understandings affecting this Lease, and Lessor and Lessee, as a material part of the consideration of this Lease, waives all claims against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. 21.2 Inurement. Each and all of the covenants, conditions and agreements herein contained shall, in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors and administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of the Property or any part thereof in any manner whatsoever. 21.3 Joint Several Liability. If Lessee consists of more than one (1) person, the covenants, obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants, obligations and liabilities of such persons. 23 21.4 Captions. The section and paragraph captions used in this Lease are for the convenience of the Parties and shall not be considered in the construction or interpretation of any provision. 21.5 Gender. In this Lease, the masculine gender includes the feminine and neuter and the singular number includes the plural whenever the context so requires. 21.6 Governing Law and Venue. This Lease, and all matters relating to this Lease, shall be governed by the laws of the State of California in force at the time any need for interpretation of this Lease or any decision or holding concerning this Lease arises. Venue for any legal action between the parties shall be in Orange County, California or, if appropriate, the nearest federal district court having jurisdiction over the Property. 21.7 Time of Essence. Time is expressly declared to be of the essence in this Lease. 21.8 Memorandum of Lease. Pursuant to California Government Code Section 37393 the Parties shall execute, acknowledge and Lessor may record at any time following the date hereof, a memorandum of this Lease, in the same form as that attached hereto as Exhibit "E" and incorporated herein by reference. [SIGNATURES ON NEXT PAGE] 24 IN WITNESS WHEREOF, the Parties have caused this Lease to be executed on the dates written below. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY By: tar Aaron Harp City Attorney ATTEST: a I : 13 Date: : BY Leilani I. Brown City Clerk 16 _Ivwo� CITY OF NEWPORT BEACH, A California municipal corporation Date: -> ! i- r� David'Ki City Manager LESSEE Date: By: J�-�/✓�� Sally Fletcher 4— Trustee, The Family Bypass Trust under The Douglas and Sally Fletcher Revocable Trust Attachments: Exhibit "A" — Depiction of Beacon Bay Exhibit"'B" — Legal Description of Property Exhibit "C" — Option Fee Percentages Exhibit "D" — CC&Rs Exhibit "E" — Memorandum of Lease [END OF SIGNATURES] 25 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA } } S.S. COUNTY OF ORANGE } On d-1-A019 beforeme, L.R. Walin a Notary Public in and for said state, personally appeared he� _ . who proved to me on the basis of satisfactory evidence to be the persons) whose name(s) is/ace subscribed to the within instrument and acknowledged to me thatlte/she/they executed the same in his/her/tlicir authorized capacity(4"), and that by k Wher/their signature(s) on the instrument the person(&•), or the entity upon behalf of which the persons) acted, executed the instrument. I certify under PENALTY of PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal, Signature LAC-0i0JL---. ,.. L. R. waUN "" COMM. #1862353 Notary Public -California ORANGE COUNTY M Comm. Ex Au uet 23, 2019 This area for official notarial seal. EXHIBIT "A" DEPICTION OF BEACON BAY See Attached 26 cSq ( 5791 9 - \ ry z \ Beacon Bay Lease Area N 14kS,OEOB 733 9J A C 2 740 �O 735 $ 6p0 1 734 ° P 54 m m m m m m 7Z7 716 55 47 12 HARBOR ISLAND DR 1� P ?? 47 m m m } 561/2 41 56 48 35 29 70> 776 0 421/2 23 69 70 c 57 49 42 36 30 24 F p 68 58 p 43 50 25 _ " m 37 31 25 12 67 ti 44 �^ 59 a 51 x o 38 =C 32 26 i 66 - 60 '¢ 52 45 w 39 N 33112 0 27 7y SS d 33 27112 85 15 / 61 r 46112 m 40 3412 28 64112 45 34 2812 64 3} 3. BEACON BAY 33I 34 36 6 7 8 9 10 11 12 13 14 15 16 17 18 18 20 72722 62 163 10 IiWI'Uli f t 21f ]/30f0 Beacon Bey_LueeNu D.W EXHIBIT "B" LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Newport Beach, County of Orange, California, described as follows: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of'Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. MI EXHIBIT "C" OPTION FEE PERCENTAGES LENGTH OF EXTENSION % OF FAIR MARKET VALUE OF (YEARS) PROPERTY PER YEAR OF EXTENSION 1-5 0.10% 6 - 10 0.15% 11 - 50 0.25% EXHIBIT "D" CC&Rs See Attached 2 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Clerk City of Newport Beach 3300 Newport Boulevard P. Or BOX 1768 Newport Beach, CA 92658=8915 D-2246 Recorded in Official Records, Orange County Tom Daly, Clerk -Recorder I�pp IIII NO FEE *$ R 0 0 0 5 0 5 6 0 8 9$ 201200046439010:26 am 08/14/12 210 403 A17 36 0.00 U0 0.00 0.00106.00 0.00.0.00 0.00 THIS SPACE Exempt Recording Request per Government Code 27383 fi Irf AMENDED AND RESTATED (1� DECLARATION FOR Atr A 00l V A TTnl%T TABLE OF CONTENTS Page ARTICLEI DEFINITIONS ........................... ............................. .............................................. I ..... 2 Section 1.01 "Architectural Commlttee"................. .................... .............................. 4...... 2 Section1.02 "Articles".....................................................................................................2 Section 1.03 "Assessments.".............................................................................................2 Section1.04 "Association" ..................................... :......................................................... 3 Section1.05 "Board"........................................................................................................3 Section1.06 "Bylaws",,, ....... I ..... I ...... I .............................................................................. 3 Section1.07 "City"..........................................................................................................3 Section1.08 "Common Area"..........................................................................................3 Section1.09 "Common Expenses"....................................................................................3 Section1.10 "Covered Property"......................................................................................4 Section1.11 "D'eclarant"..................................................................................................4 Section1.12 "Declaration"...............................................................................................4 Section1.13 "Development"............................................................................................4 Section, 1,14 "Exhibit"...................................................................................................4 Section1.15 "Governing Instruments".............................................................................4 Section1.16 "Lessee".......................................................................................................4 Section1.17 "Manager"....................................................................................................4 Section1.18 "Member"...................................................................................................4 Section1.19 "Mortgage"..................................................................................................4 Section1.20 "Mortgagee"......................................................................:..........................4 Section1.21 "Mortgagor".......................................................................I.........................5 Section1.22 "Person".......................................................................................................5 Section1.23 "Residence"..................................................................................................5 Section 1.24 "Residential Lot".........................................................................................5 Section 1.25 "Rules and Regulations"..............................................................................5 Section1.26 "Setback" ................... .................................... ..... ...... ..... I .... I ................... I .... 5 Section1.27 "Subdivision Map.........................................................................................5 ARTICLEII THE PROPERTY.......................................................................................................5 Section 2.01 Property Subject to Declaration...................................................................5 Section 2.02 Use and Enjoyment of Common Area.........................................................5 Section2.03 Maintenance by Members............................................................................7 Section 2.04 Prohibition Against Severance of Elements of Residence ...........................7 ARTICLE III THE ASSOCIATION...............................................................................................7 Section 3.01 Organization of the Association...................................................................7 Section3.02 Membership.................................................................................................8 Section3.03 Transfer........................................................................................................8 Section3.04 Classes of Membership................................................................................8 Section3.05 Voting Rights...............................................................................................8 Section 3.06 Approval of Members..................................................................................9 Section 3.07 Membership Meetings.................................................................................9 3/1/12 10120A N114293 vl Section 3,08 General Powers and Authority.....................................................................9 Section 3.0,9 Duties of the Association...........................................................................10 Section 3.10 Board of Directors................................................................................13 Section 3.11 Inspection of Books and Records..............................................................1-3 Section 3.12 Resolution of Disputes............................................................... . .........13 ARTICLE IV ASSESSMENTS AND COLLECTION PROCEDURES......................................14 Section4.01 Covenant to Pay.........................................................................................14 Section4.02 Purpose of Assessments.............................................................................14 Section4.03 Assessment Period.....................................................................................14 Section 4.04 Regular Assessments.................................................................................14 Section4.05 Special Assessments..................................................................................14 Section 4.06 Limitations on Assessments.......................................................................14 Section4.07 Late Charges..............................................................................................15 Section 4.08 Enforcement of Assessments and Late Charges........................................16 Section 4.09 Statement Regarding Assessments .................. .:........................................ 17 Section4.10 Reserves.....................................................................................................17 ARTICLE V USE RESTRICTIONS AND COVENANTS..........................................................17 Section5.01 General Restrictions on Use.......................................................................17' Section5.02 Damage Liability.......................................................................................18, Section 5.03 Equitable Servitudes..................................................................................18 ARTICLE VI ARCHITECTURAL AND DESIGN CONTROL..................................................19 Section 6,01 Architectural and Design Approval...........................................................19 Section 6.02 Architectural Committee............................................................................19 Section6.03 Procedural Rules and Fees.........................................................................19 Section 6.04 The Board of Directors..............................................................................19 Section 6.05 No Power to Modify Setback Requirements.............................................19 Section 6.06 Nonliability for Approval of Plans............................................................19 ARTICLEVII INSURANCE........................................................................................................20 Section 7.01 Fire and Casualty Insurance.......................................................................20 Section 7.02 General Liability and Individual Liability Insurance.................................20 Section 7.03 Other Association Insurance......................................................................20 Section7.04 Trustee for Policies....................................................................................20 Section7.05 Individual Insurance...................................................................................20 Section7.06 Insurance Premiums...................................................................................21 Section7.07 Additional Provisions.................................................................................21 ARTICLE VIII DAMAGE OR DESTRUCTION.........................................................................21 Section8.01 Duty to Restore and Replace ......................................................................21 Section 8.02 Proceeds Justifying Automatic Restoration and Repair .............................21 Section 8.03 Approval by Members of Special Assessment for Certain Restorations and Repairs............................................................................21 Section 8.04 Ordering Reconstruction or Repair............................................................22 Section 8.05 Election Not to Rebuild.............................................................................22 Section 8.06 Minor Restoration and Repair Work..........................................................22 311/12 10120.4 #114293 A 11 ARTICLEIXEMINENT DOMAIN.............................................................................................23 Section9.01 Sale to Condemning Authority ..................................................................23 Section 9.02 Distribution of Sales Proceeds...................................................................23 Section 9.03 Taking and Condemnation Awards...........................................................23 ARTICLE X RIGHTS OF MORTGAGEES..................................................................................23 Section10.01 Warranty ..................................................................................................23 Section 10.02 Subordination.............................................................................................23 Section 10.03 Notice of Default........................................................................................24 Section 10.04 Unpaid Assessments..................................................................................24 Section 10;05 Mortgagee Approval of Material Amendments.........................................24 Section 10.06 Mortgagee Approval' of Other Actions......................................................24 Section10.07 Liens........................................................................................................25 Section10.08 Priority .......................................................................................................25 Section10.09 Reserve Fund.............................................................................................25 Section10.10 Management...............................................................................................25' Section 10.11 Right to Inspect Books and Records..........................................................25 Section 10.12 Right to Furnish Mortgage Information.....................................................25 ARTICLEXI AMENDMENTS...................................................................................................25 Section l l.01 Amendments by Members.........................................................................25 Section 11.02 Amendments Pursuant to Court Order.......................................................26 ARTICLE XII GENERAL PROVISIONS....................................................................................26 Section12.01 Term........................................................................................................26 Section12.02 Enforcement...............................................................................................26 Section12.03 Cumulative Remedies................................................................................27 Section 12.04 Nonwaiver of Remedies.............................................................................27 Section 12.05 Attorneys' Fees..........................................................................................27 Section12.06 Severability ................................................................................................27 Section12.07 Binding...................................................................................................27 Section12.08 Interpretation..............................................................................................27 Section 12.09 Effect of Declaration..................................................................................27 Section 12.10 Limitation of Liability ................................................................................27 Section 12.11 Nonliability of Officials.............................................................................27 Scction12.12 Fair Housing.. ............................................................................................. 27 Section12.13 Subleases....................................................................................................28 Section12.14 Notices.......................................................................................................28 Section 12.15 Numbers and Headings..............................................................................28 EXHIBITS Exhibit A Legal Description Exhibit B Common Area Legal Description MUM 10120A In 14293 v1 111 AMENDED AND RESTATED DECLARATION FOR BEACON BAY COMMUNITY ASSOCIATION, A PLANNED DEVELOPMENT THIS DECLARATION is made as of February 28, 2012, by the City of Newport Beach. ("Declarant"), a chartered municipal corporation, having been approved and adopted by Beacon Bay Community Association, a California non-profit mutual benefit corporation. RECITALS A. This Declaration amends and restates the Declaration of Covenants, Conditions and Restrictions imposed upon the Covered Property, as hereinafter defined, on or about September 24, 1979 and has been approved by the Members of Beacon Bay Community Association, a California non-profit corporation (the "Association"), in accordance with the provisions of that Declaration. B. The City of Newport Beach, referred to herein as Declarant, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978 (the "Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly known as Beacon Bay, more particularly described in Exhibit "A" attachedto and made part ofthis Declaration. C. Beacon Bay has been divided into individual residential lots, commonly known as 1 through and including 69 Bcacon Bay and 101, 107 and 115 Harbor Island Drive, Newport Beach (the "Residential Lots"). Within Beacon Bay are certain streets, walkways, beaches, common landscaped areas and tennis courts, identified as Lots A through J and Lot 62 (the "Common Area"). Both the Residential Lots and the Common Area are shown on Exhibit `B," attached to and made part of 'this Declaration. D. Declarant has leased the Residential Lots to the respective members of the Association and the Common Area to the Association until July 1, 2044. The leasehold interests in the Residential Lots and in the Common Area are together referred to herein as the Covered Property. E. This Declaration is imposed by Declarant, with the approval of the Association, upon the Covered Property, a planned development subject to the provisions of the Davis - Stirling Common Interest Development Act contained in Division II, pt. 4, Title 6 of the California Civil Code. F. In furtherance of this intent, Declarant hereby declares that all of the Covered Property shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied, and improved subject to the declarations, limitations, covenants, conditions, restrictions, reservations, rights, and easements set forth in this Declaration, as this Declaration may be amended from time to time, all of which are declared and agreed to be in furtherance of a general plan established for the purpose of enhancing and perfecting the value, desirability, and attractiveness of the Covered Property. All covenants and restrictions set forth in this Declaration shall constitute covenants running with the land and enforceable equitable servitudes upon the Covered Property, and shall be binding on and for the benefit of all of the Covered Property and all parties having or 3/1/12 10120.4 0114293 Y1 acquiring any, right, title, or interest in all or any part of the Covered Property, including the heirs, executors, administrators, and assigns of these parties and all subsequent Lessees of all or any part of any Residential Lot within the Development. G. 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 continue to delegate and assign 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 created and referred to and to perform such other acts as shall generally benefit the Covered Property to the Beacon Bay Community Association, a California nonprofit corporation. H. The Association and the respective owners of the Residential Lots have held title to their leasehold interests in the Covered Property, and shall continue to hold title to their leasehold interests in the Covered Property subject to the protective covenants, conditions and restrictions hereafter set forth. NOTICE OF AIRPORT IN VICINITY This property is presently located in the vicinity of an airport, within what is known as an airport influence area. For that reason, the property may be subject to some of the annoyances or inconveniences associated with proximity to airport operations (for example, noise, vibration, or odors). Individual sensitivities to those annoyances can vary from person to person. You may wish to consider what airport annoyances, if any, are associated with the property before you complete your purchase and determine whether they are acceptable to you. ARTICLE I DEFINITIONS Section 1.01 "Architectural Committee" means.the committee or committees provided for in the Article entitled "Architectural Control". Section 1.02 "Articles" means the Articles of Incorporation of Beacon Bay Community Association and any amendments to the Articles that are filed in the Office of the Secretary of State of the State of California. Section L03 "Assessments." The following meanings shall be given to the Assessments hereinafter defined: "Regular Assessment" means the amount which is to be paid by each Member of the Association for Common Expenses. "Special Assessment" means a charge against a particular Member and his Residential Lot, directly attributable to the Member, to reimburse the Association for costs incurred in bringing the Member and his Residential Lot into compliance with the provisions of this Declaration, the Articles, Bylaws or Association Rules, or any other charge designated as a 3/1/12 10120A C 14293 v1 Special Assessment, together with attorneys' fees and other charges payable, plus interest thereon as provided for in this Declaration. Section 1.04 "Association" means Beacon Bay Community Association, a California nonprofit mutual benefit corporation. Section LOS "Board" means the Board of Directors of the Association. Section 1.06 "Bylaws" means the Bylaws of the Association and any amendments to the Bylaws that are or shall be adopted by the Board and approved by the.Members. Section 1.07 "City" means the City of Newport Beach, a municipal corporation of the State of California. Section 1.08 "Common Area" means those portions of the Development leased by the Association for the common use and enjoyment of -the Members, This Common Area includes all streets, beaches, walkways, tennis courts, docks, piers, storage areas and common landscaped areas within the Covered Property and, includes without limitation, Lots A through 7,, inclusive, as shown on the Subdivision Map. Section 1.09 "Common Expenses" means the actual and estimated costs of. (a) maintenance, management, operation, repair and replacement of the Common Area, and all other areas on the Covered Property which are maintained by the Association; (b) maintenance by the Association of areas within the public right-of-way of public streets in the vicinity of the Covered Property as provided in this Declaration or pursuant to agreements with the City; (c) costs of management and administration of the Association, including, but not limited to compensation paid by the Association to managers, accountants, attorneys and employees; (d) the costs of utilities, gardening and other services which generally benefit and enhance the value and desirability of the Residential Lot; (e) the costs of fire, casualty, liability, workmen's compensation and other insurance covering the Common Area; (f) the costs of any other insurance obtained by the Association; (g) reasonable reserves deemed appropriate by the Board; (h) the costs of bonding of the members of the Board, and any professional managing agent or any other person handling the funds of the Association; (i) taxes paid by the Association; 3/1/12 10120.4 #114293 Y1 0) 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 Common Area, or the costs of any other item or items designated by this Declaration, the Articles,, Bylaws or Association Rules, or in furtherance of the purposes of the Association or in discharge of any duties- or powers of the Association. Scotion 1.10 "Covered Property" means the leasehold interests in the Residential Lots ,and in the Common Area, as such terms, are defined in the Recitals. Section 1.11 "Declarant" means the City of Newport Beach, the fee Lessor of the Covered Property, its successors and assigns. Section 1.12 "Declaration" means this Declaration and, any amendments,thereto. Section 1.13 "Development!'means the Beacon Bay subdivision. Section 1.14 `Exhibit" means those documents so designated herein and attached hereto and each of such Exhibits is by this reference incorporated, in this Declaration. Section 1.15 "Governing Instruments" means this Declaration, the Articles and Bylaws of the Association, and any Rules and Regulations of the Association. Section 1.16 "Lessee" means the holder or holders of record of the leasehold interest in a Residential Lot created by and arising out of a lease with Declarant. "Lessee" shall not include any, persons or entities who hold an, interest in a Residential Lot merely as security .for performance of an obligation. Section 1.17 "Manager" means any person or entity appointed by the Board to manage the Development. Section 1.18 "Member" means every person or entity entitled to membership in the Association as provided in this Declaration. Section 1.19 "Mortgage" means a mortgage or deed of trust encumbering a Residential Lot within the Development. "First Mortgage" means a mortgage that has,priority over all other mortgages encumbering the same Residential Lot within the Development. Section 1.20 "Mortgagee" means a Person to whom a Mortgage is made and includes the beneficiary of a deed of trust and, any guarantor or insurer of a mortgage, "Institutional, Mortgagee" means a mortgagee that is a financial intermediary or depository, such as a bank, savings and loan, or mortgage company, that is chartered under federal or state law and that lends money on the security of real property or invests in such loans, or any insurance company or governmental agency or instrumentality, including the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), and the Government 3/1/12 10120.4 t1114293 vl, 4 National Mortgage Association (GNMA). "First Mortgagee" means a Mortgagee that has priority over all other mortgages or holders of mortgages encumbering the same Residential Lot or other portion of the Development. The term "Beneficiary" shall be synonymous with the term "Mortgagee." Section 1.21 "Mortgagor" means a Person who mortgages his, her, or its Residential Lot to another (i.e., the maker of a mortgage), and shall include the trustor of a deed of trust. The term "Trustor" shall be synonymous with the term "Mortgagor." Section 1.22 "Person" means a natural individual, a corporation, or any other entity with the legal right to hold title to�real property. Section 1.23 "Residence" means the residential dwelling unit Including garages„ structures and other improvements on a Residential Lot. Section 1.24 "Residential Lot" means a numbered lot shown on the Subdivision Map not including any Common Area, but including the residential dwelling unit together with garages, structures and other improvements on the same lot or parcel. Beacon Bay has been divided into individual residential lots, commonly known as 1 through and including 69 Beacon Bay and 101, 107 and 115 Harbor Island Drive, Newport Beach (the "Residential Lots"). Section 1.25 "Rules and Regulations" means ,any Rules and Regulations for Beacon Bay Community Association regulating the use of the Common Area and adopted by the Association pursuant to Section 3,08(b) of this Declaration. Section 1.26 "Setback" means those internal distances from the property line of each Residential Lot as shown on Exhibit II. Section 1.27 "Subdivision Map" means the Record of Survey Map of Beacon Bay Subdivision recorded in Book 9, Pages 42 and 43, Records of Survey, on file in the Office of the County Recorder, Orange County, California. ARTICLE II THE PROPERTY Section 2.01 Property Subiect to Declaration All of the Covered Property shall be subjectio this Declaration. Section 2.02 Use and Enjoyment of Common Area. The following provisions govern the use and enjoyment of the Common Area: (a) The Common Area shall be used solely and exclusively for vehicular ingress and egress and parking, boat storage and launching, pedestrian walkway purposes, recreational uses for Beacon Bay residents, and the property designated as Lot "62" shall be used exclusively for tennis court and park purposes and for construction and maintenance of an office and meeting facilities for Lessee in connection with the maintenance and operation of the homeowners' association in Beacon Bay. The property designated as beach property hereunder shall be used exclusively for beach purposes. 3/1/12 10120.4 4114293 vl 5 (b) Subject to the provisions of this Declaration and the provisions of the Common Area Lease between the Declarant and the Association (the "Common Area Lease"), there is an easement for ingress, egress, and support through the Common Area appurtenant to each Residential Lot. These easements shall pass with title to the Residential Lot. (c) The Members' easements over, and rights of use and enjoyment of, the Common Area shall be subject to the restrictions set forth in the Common Area Lease and in the Governing Instruments, including the following: (1) The right of the Association to adopt and enforce Rules and' Regulations for the use of the Common Area. (2) The right of the Association to reasonably limit the number of guests and tenants using the Common Area while allowing for open public access to the tidelands around Beacon Bay. (3) The right of the Association to assign or otherwise control the use of any unassigned parking spaces within the Common Area; provided, however, the Association shall position any signs that limit parking and beach access to Members and their guests in a manner that does not discourage visitor and public use of the tidelands around.Beacon Bay (4) The right of the Association to suspend the right of any Member, and the Persons deriving rights from any Member, to use and enjoy the Common Area for any period during which the Member is delinquent in the payment of any assessment. (5) The right of the Association to cause the construction of additional improvements in the Common Area, or to cause the alteration or removal of existing improvements in the Common Area. (6) The right of the Association to join with the Declarant in the grant or conveyance of easements, licenses, or rights -of --way in, on, or over the Common Area. (7) The rights of Declarant as described in this Declaration and in the Common Area Lease. (8) The right of the Association to reasonably restrict access to maintenance facilities or areas, landscaped areas, and similar areas of the Development. (9) The right of the Board to approve any proposed alteration or modification to the Common Area or any Residence. (d) The Association may join with the Declarant in granting to third parties easements in, on, and over the Common Area for the purpose of constructing, installing, or maintaining necessary utilities and services, and each Member expressly consents to these easements. However, no such easement can be granted if it would interfere with Member's use, occupancy, or enjoyment of his or her Residence. (e) A Member who has sold his or her Residence to a contract purchaser or who has leased the Residence shall be entitled to delegate his or her rights to use and enjoy the 311112 10120.4 #114293 v1 Common Area to any contract purchaser or subtenant who resides in the Member's Residence, subject to reasonable regulation by the Board, If the Member makes such a delegation of rights, the Member and the Member's family, guests, employees, and invitees shall not be entitled to use and enjoy the Common Area for so long as the delegation -remains effective. (f) Each Member shall be liable to the Association for any damage to the Common Area or to Association -owned property, to the extent that the damage is not covered by insurance, if the damage is sustained because of the negligence, willful misconduct, or unauthorized or improper installment or maintenance of any improvement by the.Member or the Member's family, guests, sub -tenants, contract purchasers or invitees. In the case of joint ownership of a Residence, the liability of the co -owners shall be joint and several, unless the co - owners and the Association have agreed in writing to an alternative allocation of liability, (g) Nothing in this Declaration shall limit Declarant's right to use any properties held in trust by Declarant (including tidelands) for the purposes of establishing, maintaining, and operating, mitigation bank locations for Edlgrass (zoostera marina) or projects that are intended to enhance the water quality or ecosystem of Newport Bay without infringing on or limiting Beacon Bay residents' ability to operate and maintain legal and permitted residential piers. (h) The Association may not encumber the Common Area except to finance improvements thereon. Section 2.03 Maintenance by Members. Except as the Association shall be obligated to maintain and repair as provided in this Declaration, every Member shall: (a) maintain all portions of the exterior of his Residence, including without limitation, the walls, fences and roof of such Residence in good condition and repair; and (b) install and thereafter maintain in attractive condition yard landscaping of his Residential Lot in accordance with the provisions of this Article. Section 2.04 Prohibition Against Severance of Elements of Residence, Any conveyance, judicial sale, or other voluntary or involuntary transfer of the Member's entire estate shall also include the Member's Membership interest in the Association, as provided in Section 3.02 of this Declaration. Any transfer that attempts to sever those component interests shall be void. ARTICLE III THE ASSOCIATION Section 3.01 Organization of the Association. The Association is incorporated under the name of Beacon Bay Community Association, as a nonprofit corporation organized under the California Nonprofit Mutual Benefit Corporation Law. The Association is charged with the duties and invested with the powers prescribed by law and set forth in this Declaration, the Articles of Incorporation, the Bylaws and the Common Area Lease. 3/1/12 10120A. 8114293 vt 7 Section 3.02 Membership. Every Lessee shall be a Member but there shall be only one Membership and one Voting Member per Residence. The term and provisions set forth in this Declaration, which are binding upon all Members are not exclusive, as Members 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 shall be appurtenant to and may not be separated from the interest of such Member in any Residential Lot. Ownership of a leasehold interest in a Residential Lot 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 3.03 Transfer. The Membership held by any Member 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 Member. Section 3.04 Classes of Membership. The Association shall have one (1) class of voting membership. Section 3.05 Voting Rights. All voting rights of the Members shall be subject to the following restrictions, limitations, and requirements: (a) Except as provided in this Article, on each matter submitted to a vote of the Members, one vote may be cast for each Residential Lot owned. The Member entitled to cast the vote with respect to a Residential Lot is referred to herein as the Voting Member. (b) Fractional votes shall not be. allowed. When there is more than one record Lessee of a Residential Lot ("co -Lessees), all of the co -Lessees shall be Members, but -only one of them shall be entitled to cast the single vote attributable to the Residential Lot. Co -Lessees should designate in writing one of their number to vote. If no such designation is made or if it is revoked, the co -Lessees shall decide among themselves, by majority vote, how the vote associated with that Residential Lot is to be cast and which of them is the Voting Member as to that vote. Unless the Board receives a written objection in advance from a co -Lessee, it shall be conclusively presumed that the voting co -Lessee is acting with the consent of his or her co - Lessees and is the Voting Member of that Residential Lot. No vote shall be cast for a Residential Lot on a particular matter if a majority of the co -Lessees present in person or by proxy cannot agree on avote. (c) Except as provided in Section 3.05 of the Bylaws governing the removal of directors, any provision of this Declaration, the Articles, or the Bylaws that requires the approval of a specified percentage of the voting power of the Association shall require the vote or written consent of the Voting Members representing the specified percentage of the total voting power of the Association. ' (d) The Board shall fix, in advance, a record date or dates for the purpose of determining the Members entitled to notice of and to vote at any meeting of Members. The record date for notice of a meeting shall not be more than 90 or less than 10 days before the date 3/1112 10120A H114293 VI 8 of the meeting, The record date for voting shall not be more than 60 days before the date of the meeting or before the date on which the first written ballot is mailed or solicited. The Board may also fix, in advance, a record date for the purpose of determining, the Members entitled to exercise any rights in connection with any other action. Any such date shall not be more than 60 days prior to the action. (e) Every Member entitled to vote at any election of the Directors in which more than two Directors are to be elected may cumulate the Member's votes and give one candidate a number of votes equal to the number of Directors to be elected multiplied by the number of votes to which the Member is entitled, or distribute the Members votes on the same principle among as many candidates as the Member thinks fit. No Member shall be entitled to cumulate votes for a candidate or candidates unless more than two Directors are to be elected. (f) All voting rights shall be subject to the restrictions and limitations provided herein and in the Articles, Bylaws and Association Rules. Section 3.06 Approval of Members. Unless elsewhere otherwise specifically provided in this Declaration or the Bylaws, any provision of this Declaration or the Bylaws which requires the vote or written assent of the voting power of the Association shall be deemed satisfied by the following: (a) The vote in person or by proxy of the specified percentage of the Voting Members present at a meeting duly called and noticed pursuant to the provisions of the Bylaws dealing with annual or special meetings of the Members at which a quorum is present as determined in accordance with Section 2.08 of the Bylaws. (b) Written consents signed by the specified percentage of Voting Members as provided in the Bylaws. Section 3.07 Membership Meetings. Article II of the Bylaws governing meetings of the Members is hereby incorporated by reference. Section 3.08 General Powers and Authority. The Association shall have all the powers of a nonprofit mutual benefit corporation organized under the California Nonprofit Mutual Benefit Corporation Law, subject to any limitations set forth in this Declaration or in the Articles and Bylaws of the Association. It may perform all acts that may be necessary for or incidental to the performance of the obligations and duties unposed upon it by this Declaration or the other Governing Instruments. Its powers shall include, but are not limited to, the following: (a) The Association shall have the power to establish, fix, levy, collect, and enforce, and shall enforce, the payment of assessments against the Members in accordance with the procedures set out in Article IV of this Declaration, (b) The Association shall have the power to adopt reasonable Rules and Regulations governing the use of the Common Area and its facilities, and of any other Association property. These Rules and Regulations may include, but are not limited to: reasonable restrictions on use by the Members and their family, guests, employees, tenants, and invitees; rules of conduct; and the setting of seasonable fees for the use of recreational facilities. A copy of the current Rules and Regulations, if any, shall be given to each Member and shall be 3/1/12 10120A #114293 vl 9 posted at conspicuous places -in the Common Area, If any provision of the Rules and Regulations conflicts with any provision of this Declaration, the Articles, or the Bylaws, the Declaration, Articles, or Bylaws shall control to the extent of the inconsistency. (c) The Association shall have the right to institute, defend, settle, or intervene in litigation, arbitration, mediation, or administrative proceedings in its own name as the real party in interest and without joining with it the Members, in matters pertaining to the following: and Regulations. (1) Enforcement of this Declaration, the Articles, Bylaws, and Rules (2) Damage to the -Common Area. (d) In addition to the general power of enforcement described above, the Association may discipline its Members for violation of any of the provisions of the Governing Instruments or Rules and Regulations by suspending the violator's voting rights and privileges for use of the Common Area, or by imposing monetary penalties, subject to the following limitations: (1) The accused Member shall be given notice and an opportunity to be heard with regard to the alleged violation in accordance with the provisions of Corporations Code Section 7341 and Civil Code Section 1363(b). (2) Any suspension of a Member's association privileges shall not exceed thirty (30) days for each violation. (3) If the Association imposes a monetary penalty, the Board shall distribute to each Member, by personal delivery or first-class mail, a schedule of the monetary penalties that may be assessed for those violations. (4) Except as provided in Article IV of'this Declaration, relating to foreclosure for failure to pay assessments, or as a result of the judgment of a court or a decision arising out of arbitration, the Association shall in no way abridge the right of any Member to the full use and enjoyment of his or her Residence. (e) The Association, acting through the Board, shall have the power to delegate its authority, duties, and responsibilities to its officers, employees, committees, or agents, including a professional management agent. The term of any agreement with a manager for the furnishing of maintenance, repair, and related services shall not exceed one year, renewable by agreement of the parties for successive one-year periods. Such an agreement shall be terminable by either party (1) for cause on 30 days' written notice, and (2) without cause or the payment of a termination fee on 90 days' written notice, Section 3.09 Duties of the Association. In addition to the duties delegated to the Association or its agents and employees elsewhere in these Governing Instruments, the Association shall be responsible for the following: 311112 10120.4 Ilk 14293 vl 10 (a) The Association,. acting through the Board, shall operate; maintain, repair, and replace the Common Area, its improvements including all landscaping within the Common Area; or contract for the performance of that work, subject to the provisions of Article VIII of this Declaration relating to destruction of improvements, Article IX of this Declaration pertaining to eminent domain, and Section 2.02(f) of this Declaration relating to damage caused by Members. The foregoing areas and improvements shall be kept in a clean, sanitary, and attractive condition. The Association shall also have the exclusive right and duty to acquire and maintain any furnishings and equipment for the Common Area that it determines are necessary, and proper. As a general rule, maintenance costs shall be included in the regular assessments. (b) The Association shall use the maintenance fund described in Section 4.02 of this Declaration to; among other things, acquire and pay for the following: (1) Water, sewer, trash, electrical, gas, and other necessary utility service for the Common Area; (2) The insurance policies described in Article VII of this -Declaration; (3) The services of any personnel that the Board determines are necessary or proper for the operation of the Common Area; and (4) Legal and accounting services necessary or proper in the operation of the Common Area or the enforcement of this Declaration. (c) The Association shall prepare a,pro forma operating budget for each fiscal year, and shall distribute a copy of the budget to each Member not less than 45 and not more than 60 days before the beginning of the fiscal year. As an alternative to the foregoing distribution of the budget, the Association may elect to do all of the following in the manner required by statute: distribute a summary of the budget to each Member, make the budget available for inspection at a designated location, and provide copies of the budget to Members on request and at the expense of the Association. The budget shall contain at least the following: (1) The estimated revenue and expenses on an accrual basis; (2) A summary (printed in bold type) of the Association's reserves that is based on the most recent review or study conducted pursuant to Civil Code Section 1365.5. This summary shall include the following: (i) the current estimated replacement cost, estimated remaining life, and estimated useful life of each major component that the Association is obligated to maintain (hereafter referred to as the "major components"); (ii) the current estimate,_. _ as of the end of the fiscal year for which the study is prepared, of the amount of cash reserves necessary to repair, replace, restore, or maintain the major components; (iii) the current amount, as of the end of the fiscal year for which the study is prepared, of accumulated cash reserves actually set aside to repair, replace, restore, or maintain the major components;. and (iv) the percentage that the amount described in (iii), above, is of the amount determined for purposes of (ii), above (that is, the percentage obtained by dividing the amount described in (iii), above, by the amount described in (ii), above). 3n112 10120.4 NI14293 vl 11 (3) A statement as to whether the Board has determined or anticipates that the levy of one or more special assessments will be required to repair, replace, or restore any major component or to provide adequate reserves for such work. (4) A general statement addressing the procedures used for the calculation and establishment of reserves to defray the future repair, replacement, or additions to the major components. (d) Within 120 days after the close of each fiscal year, the Association shall prepare and distribute to the Members an annual report consisting of the following: (1) A balance sheet as of the end of the fiscal year. (2) An -operating (income) statement for the fiscal year. (3) A statement of changes in financial position for the fiscal year. (4) For any fiscal year in which the gross income to the Association exceeds $75,000, a copy of the review of the annual report prepared in accordance with generally accepted accounting principles by a licensee of the California State Board of Accountancy. If this report is not prepared by an independent accountant, it shall be accompanied by the, certificate of an authorized officer of the Association that the statement was prepared without independent audit or review fromthe books and records of the Association. (e) Within 60 days before the beginning of each fiscal year, the Association shall prepare and distribute to the Members a statement describing the Association's policies and practices in enforcing lien rights or other legal remedies for default in payment of assessments against Members. (f) Each year, the Association must provide the Owners with a summary of the provisions of Civil Code Sections 1369,510 through 1369.590. These statutes require that alternative dispute resolution be pursued before a civil action may be filed in connection with certain disputes related to enforcement of the governing documents, the Davis -Stirling Common Interest Development Act (Civ. Code § 1350 et seq.), or the Nonprofit Mutual Benefit Corporation Law (Corp. Code § 7110 et seq.). The required summary must include a specific reference to Civil Code Sections 1369.510 through 1369, 590, and the statutory language set forth in Civil Code Section 1369.590(a). This summary must be provided either (1) at the time the pro forma operating budget described in Section 3.09(c) of this Declaration is distributed, or (2) in the manner specified in Corporations Code Section 5016. (g) The Association shall provide any Member with the following documents within 10 days of the mailing or delivery of a written request therefor: (1) A copy of the Governing Instruments. (2) A copy of the most recent financial statement distributed pursuant to Section 3.09(d) of this Declaration. 3/1/12 ID120.4 N 114293 v1 12 (3) A written statement from an authorized representative of the Association. specifying (i) the.amount of any assessments levied on the Member's Residence that are unpaid on the date of the statement; and (ii) the amount of late charges, interest, and costs of collection that, as of the date of the statement, are or may be made a lien on the Member's Residential Lot pursuant to Section 4.08 of this Declaration. The Association may charge the Member a reasonable fee to cover its cost to prepare and reproduce those requested items. (h) The Association shall pay all real and personal property taxes and assessments levied against it, its personal property and the Common Area. Section 3.10 Board of Directors. The affairs of the Association shall be managed and its rights, duties and obligations performed by an elected Board of Directors, as provided in Article III of the Bylaws, which is hereby incorporated by reference. Section 3.11 Inspection of Books and Records. Article XI of the Bylaws, governing the duty of the Association to maintain certain books and records and the rights of Members and Directors to obtain and inspect those books and records, is hereby incorporated by reference. Section 3.12 Resolution of Disputes. As required by Civil Code Section 1363.820(a), the Association shall offer a fair, reasonable, and expeditious procedure for resolving any dispute between the Association and a member involving their rights, duties, or liabilities under the Davis -Stirling Common Interest Development Act (Civil Code, Section 135Q et seq.), the Nonprofit Mutual Benefit Corporation Law (Corporations Code Section 7110 et seq.), or under the Association's governing documents. This dispute resolution procedure is supplementary to the alternative dispute resolution procedure prescribed by Civil Code Section 1369.510 et seq, as a prerequisite to commencing civil action. The dispute resolution procedure shall consist of the following; (a) Either parry may initiate the procedure by making a written request to the other party to meet and confer in an effort to resolve the dispute. If the request is by the Association, the member may refuse to participate. If the request is by a member, however, the Association may not refuse to participate. (b) Within 5 days of the written request, the Board of Directors shall designate a member of the Board to meet and confer with the other party. (c) Within 10 days of the Board member's designation, the parties shall meet at a mutually convenient time and place, explain their positions to each other, and confer in good faith in an effort to resolve the dispute. (d) If the parties reach agreement on a, resolution of the dispute, that resolution shall be memorialized in writing and signed by the parties with the Board designee signing on behalf of the Association. (e) An agreement reached by the parties is binding on them and may be judicially enforced provided the agreement is consistent with the authority granted by the Board of Directors to its designee, and further provided the agreement is not in conflict with law or the Association's governing documents. 3I1112 10120.4 4114293 v1 13 (f) A member of the Association may not be charged a fee to participate in the dispute resolution procedure. ARTICLE IV ASSESSMENTS AND COLLECTION PROCEDURES Section 4.01 Covenant to Pay. Each Member is deemed to covenant and agree to pay to the Association the regular and special assessments levied pursuant to the provisions of this Declaration. A regular or special assessment and any late charges, reasonable costs of collection, and interest, as assessed in accordance with the provisions of this Article, shall be a debt of the Member at the time the assessment or other sums are levied. The Member may not waive or otherwise escape liability for these assessments by nonuse of the Common Area or abandonment of the Member's Residence. Section 4.02 Purpose of Assessments. The assessments levied by the Association shall be used exclusively to defray Common Expenses and to discharge any other obligations. of the Association under this Declaration. Subject to Section 4.10, all assessment payments shall be put into a maintenance fund to be used for the foregoing purposes. Section 4.03 Assessment Period. The -fiscal year for the Association shall commence June 1 and end May 31, unless the Board decides otherwise. The regular assessment period shall commence on June i and terminate on May 31 of each year. Section 4.04 Regular Assessments. Within 60 days prior to the beginning of each fiscal year of the Association, the Board shall estimate the net charges to be paid during that year, including a reasonable provision for contingencies and replacements, with adjustments made for any expected income and surplus from the prior year's fund. The estimated cash requirement shall be assessed and allocated in an equal amount for each Residential Lot. Each Member is obligated to pay assessments to the Board in equal monthly installments,on or before the first day of each month unless the Board adopts an alternative method for payment. Section 4.05 Special Assessments. If the Board determines that the amount to be collected from regular assessments will be inadequate to defray the common expenses for the year due to the cost of any construction, unexpected repairs or replacements of capital improvements upon the Common Area, or any other reason, it shall make a special assessment for the additional amount needed. Special assessments shall be levied and collected in the same manner as regular assessments, except the method of payment shall be as determined by the Board. Section 4.06 Limitations on Assessments. The Board shall comply with the following requirements governing the imposition and amounts of assessments: (a) For any fiscal year, the Board may impose a regular assessment per Residential Lot that is as much as 20 percent greater than the regular assessment for the preceding fiscal year, provided (1) the Board has distributed the pro forma operating budget described in Section 3.09(c) for the current fiscal year or (2) the increase is approved by Voting 311/12 10120A k 114293 v1 14 Members constituting a majority of the votes ata meeting or in an election of the Association conducted in accordance with Corporations Code Sections 7510-7527 and 7613 . (b) The Board may impose, for any fiscal year, a regular assessment per Residential Lot that is more than 20 percent greater than the regular assessment for the preceding fiscal year, or may levy special assessments that in the aggregate exceed 5 percent of the budgeted gross expenses of the Association for'that fiscal year, provided the increase or levy is approved by Voting Members constituting a majority of the votes of the Association and casting a majority of the votes at a meeting or election of the Association conducted in accordance with Corporations Code Sections, 7510-7527 and 7613 . (c) Thew Board may, without complying with the foregoing requirements, make an assessment increase that is necessary for an emergency situation. An, emergency situation is an extraordinary expense that is: (1) Required by a court order. (2), Necessary to repair or maintain the Common Area or any part of it for which the Association is responsible when a threat to personal safety in the Development is discovered. (3) Necessary to repair or maintain the Common Area or any part of it for which the Association is responsible that could not have been reasonably foreseen by the Board in preparing and distributing the pro forma operating budget pursuant to Section 3.09(c). Before the Board may impose or collect an assessment in the type of emergency situation described in (3) above, it shall pass a resolution containing written findings as to the necessity of the extraordinary expense and why the expense was not or could not have been reasonably foreseen in the budgeting process, and shall distribute the resolution to the Members with the notice of assessment. (d) The Board shall notify the Members in writing of any increase in the amount of a regular or special assessment. The Board shall provide this notice by first-class mail not less than 30 or more than 60 days prior to the due date of the increased assessment. Section 4.07 Late Charges. Late charges may be levied by the Association against a Member for the delinquent payment of regular or special assessments. An assessment is delinquent 15 days after its due date. I£ an assessment is delinquent the Association may recover all of the following from the Member: (a) Reasonable costs incurred in collecting the delinquent assessment, including reasonable attorneys' fees. (b) A late charge not exceeding ten (10) percent of the delinquent assessment or $10, whichever is greater. (c) Interest on the foregoing sums, at an annual percentage rate of ten (10) percent, commencing 30 days after the assessment becomes due. 3/1/I2 10120.4 0114293 vl 15 No late charge may be imposed more than once for the delinquency of the same payment. However, the imposition of a late charge on any delinquent payment shall not eliminate or supersede charges imposed on prior delinquent payments. Scction 4.08 Enforcement of Assessments and Late Charges. At least 30 days before the Association can place a lien on a Residence for a past due debt for a regular or special assessment, the Association must notify the Member by certified.mail of the following! (a) A general description of the Association's collection and, lien enforcement procedures. (b) The method of calculation. of the amount due. (c) A statement that the Member has the right to inspect the Association records. (d) A statement informing the Member that the Member's Residence may be subject to foreclosure and sale without court action. (e) An itemized statement of the charges owed by the Member, including items on the statement that indicate the amount of any delinquent assessments, the fees and reasonable costs of collection, reasonable attorney's fees, and any late charges and interest. (f) A statement that the Member will not be liable to pay the charges, interest, and costs of collection, if it is determined the assessment was paid on time. (g) The Member's right to request a meeting with the Board if the Member disputes the debt. A Member may dispute the debt by submitting to the Board a written explanation within 15 days of the mailing of the Association's notice. The Board must respond to a Member's timely explanation within 15 days of the mailing of the Member's explanation. A Member also may submit a written request to meet with the Board to discuss a payment plan for the debt. The request must be mailed within 15 days of the mailing of the Board's notice. The Board must then meet with the Member in executive session within 45 days of the mailing of the Member's request. If there is no regularly scheduled Board meeting within that time period, the Board may designate a committee of one or more members to meet with the Member. Any partial payments made toward the debt will first be applied to the assessments owed, and only after the principal owed is paid in full will the payments be applied to the fees and costs of collection, attorneys' fees, late charges, or interest. When a Member makes a payment, the Member may request a receipt and the Association shall provide it. The receipt shall indicate the date of payment and the person who received it. The Association shall provide a mailing address for overnight payment of assessments. 3/1/12 10120.4 #114203 v1 16 A debt for a delinquent regular or special assessment and any late charges, reasonable fees and costs of collection, reasonable attorneys' fees, and interest shall become a lien on the Residence when a notice of delinquent assessment is duly recorded and mailed as provided in Section 1367.1 of the California Civil Code. Except as provided below regarding debts arising from delinquent assessments when the debt arose on or after January 1, 2006, and the delinquent amount is less than $1,800; any such lien may be enforced in any manner permitted by law, including judicial foreclosure or nonjudicial foreclosure. Any nonjudicial foreclosure shall be conducted by the trustee named in the notice of delinquent assessment or by a trustee substituted pursuant to Section 2934a of the California Civil Code, in accordance with the provisions of Sections 2924, 2924b, and 2924c of' the California Civil Code. If the sums specified in themotice of delinquent assessment are paidbefore the completion of any judicial or nonjudicial foreclosure, the Association shall record a notice of satisfaction and release of the lien. On receipt of a written request by the Member, the Association shall also record a notice of rescission of any declaration of default and demand for sale. In accordance with Section 1367.4 of the California Civil Code, a lien securing a debt arising from a delinquent regular or special assessment when the debt arose on or after January 1, 2006, and the delinquent amount is less than $1,800, excluding accelerated assessments, late charges, fees and costs of collection, attorney's fees, and interest, shall not be enforced by judicial or nonjudicial foreclosure unless and until either (1) the debt equals or exceeds $1,800,excluding accelerated assessments, late charges, fees and costs of collection, attorney's fees, and interest, or (2) the debt secured by the lien is more than 12 months delinquent. Section 4.09 Statement Regarding Assessments. The Association shall provide any Member, upon written request, with a statement specifying (1) the amounts of the Association's current regular and special assessments and fees, and (2) the amounts of any delinquent assessments and related late charges, interest, and costs levied against the Member's Residential Lot, as provided in Section 4.08 of this Declaration. Section 4.10 Reserves. All amounts collected as reserves shall be deposited by the Association in a separate bank account to be held in trust for the purposes for which they are collected and are to be segregated from and not commingled with any other funds of the Association. ARTICLE V USE RESTRICTIONS AND COVENANTS Section 5.01 General Restrictions on Use. In exercising the right to occupy or use a Residence, Residential Lot or the Common Area and its improvements, the Member and the Member's family, guests, employees, tenants, and invitees shall not do any of the following: (a) Attempt to further subdivide a Residential Lot without obtaining the prior approval of the Association and the Declarant. 3/1/12 10120.4 HI I4293 vl 17 (b) Occupy or use a Residential Lot, or permit all or any part of a Residential Lot to be occupied or used, for any purpose other than as a private residence. Nothing in this Declaration shall prevent a Member from leasing or renting out his or her Residence, provided that it is not for transient or hotel purposes, is for a period of at least 60 days, and is subjectto the Governing Instruments. (c) Permit anything to obstruct the Common Area or store anything inthe Common Area without the prior consent of the Board, except as otherwise provided in the - Governing Instruments. (d) Perform any act or keep anything on or in any Residential Lot or in the Common Area that will increase the rate of insurance on the Common Area without the Board's prior written consent. Further, no Member shall, permit anything to be done or kept in his or her Residential Lot or in the Common Area that would result in the cancellation of insurance on any Residence or Exclusive Use Common Area or on any part of the Common Area or that would violate any law. (e) Display any sign to the public view on or from any Residential Lot or the. Common Area without the prior written consent of the Board,, except a sign advertising the property for sale, lease, or exchange, or advertising directions to the property, as provided in Section 712 of the California Civil Code and display any sign that discourages visitor and public use of the tidelands around Beacon Bay (f) Raise, breed, or keep animals, livestock, or poultry of any kind on a Residence or in the Common Area, except dogs, cats, or other household pets, which may be kept on Residences, subject to the Rules and Regulations. (g) Engage in any noxious or offensive activity in any part of the Development. (h) Alter or modify the exterior of any Residence without first obtaining the written consent of the Architectural Control Committee. (i) Alter, construct, or remove anything on or from the Common Area, except upon the written consent of the Board. Section 5.02 Damage Liability. Each Member shall be liable to the Association for all damage to the Common Area or other Association property that is sustained by reason of the negligence or willful misconduct of that Member or his or her family; guests, employees, tenants, and invitees to, the extent that the damage is not covered by the casualty insurance obtained and maintained by the Association pursuant to Section 7.01 of this Declaration. Section 5.03 Equitable Servitudes. The covenants and restrictions set forth in this Declaration shall be enforceable equitable servitudes and shall inure to the benefit of and bind all - Members. These servitudes may be enforced in accordance with the provisions of Section 12.02 of Article XII. 3/1/12 10120.4 8114293 v I 19 ARTICLE VI ARCHITECTURAL AND DESIGN CONTROL Section 6.01 Architectural and Design Approval. No building, addition,, wall,, fence, or alteration shall be begun, constructed, maintained, or permitted to remain on any Residential Lot, or on the Common Area, until complete plans and specifications of the proposed work have been submitted to the Architectural Committee and approved by the Board as to harmony of external design and location in relation to surrounding structures and topography. The Architectural Committee shall review the plans and specifications, to determine whether they are, compatible with the aforementioned standards and, if they are not, shall require that changes be, made before recommending approval to the Board. Section 6,02 Architectural Committee. The Architectural Committee shallconsist of not less than three nor more than five members, as fixed by the Board from time to time. (a) The Board shall have the right to appoint all members of the Committee. (b) Members appointed to the Committee shall be Members of the Association. (c) The term of the appointees shall be one year. Notwithstanding the foregoing, all members of the Committee shall serve at the will of the Board, and may be removed by the Board at any time with or without cause. (d) The Committee shall meet as often as it deems necessary to properly carry out the obligations imposed on it, unless otherwise directed by the Board. Section 6.03 Procedural Rules and Fees. The Board may establish reasonable procedural rules and assess a fee in connection with review of plans and spegificatious including, without limitation, the number of sets of plans to be submitted. In the event the Board fails to approve or disapprove such plans and specifications within thirty (30) days after the same have been properly submitted in accordance with any rules regarding such submission adopted by the Board, such plans and specifications will be deemed approved. Section 6.04 The Board of Directors. After the Architectural Committee has completed its review of plans and specifications submitted under this Article, the Architectural Committee shall submit such plans and specifications, together with its recommendation as to approval or disapproval, to the Board for approval or disapproval by the Board. Thereafter, the Board shall take any actions it deems necessary, in accordance with the provisions of this Declaration. Section 6.05 No Power to Modify Setback Requirements. Nothing in this Declaration or in the Association's Articles, Bylaws or Rules shall be construed or amended to allow the Board to modify or eliminate the Setback requirements shown on the Beacon Bay Subdivision Survey Map, and any attempt to do so shall have no effect. Section 6.06 Nonliability for Approval of Plans. Plans and specifications shall be approved by the Board as to style, exterior sign, appearance and location, and are not approved for engineering design or for compliance with zoning and building ordinances, and by approving 3/I/12 10120.4 If 114293 vl 19 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 VII INSURANCIa Section 7.01 Fire and Casualty, Dance. The Association shall obtain and maintain a policy or policies of fire and casualty insurance with an extended coverage endorsement for the full insurable replacement value of the improvements in the Common Area. The amount of coverage shall, be determined by the Board. This insurance shall be maintained for the benefit of the Association, the Members, and their Mortgagees, as their interests may appear as named insured, subject, however, to,any loss payment -requirements set forth in this.Declaration. Section 7.02 General Liability and Individual Liability Insurance. The Association shall obtain and maintain one or more policies of insurance that must include coverage for (1) general liability of the Association and (2) individualliability of Officers and Directors of the Association for negligent acts or omissions in that capacity. Both of the above types of coverage shall not be less than $1,000,000 covering all claims for death, personal injury, and property damage arising out of a single occurrence. The limits and coverage shall be reviewed at least annually by the Board and increased in its discretion. Section 7.03 Other Association Insurance. The Association shall purchase and maintain workers' compensation insurance to the extent necessary to comply with any applicable laws. The Association also shall purchase and maintain fidelity bond coverage that names the Association as an obligee, for any person or entity handling funds of the Association, whether or not such persons or entities are compensated for their services. This coverage shall be in an amount that is at least equal to the estimated maximum of funds, including reserve funds, in the custody of the Association or the Manager at any given time during the term of each bond. However, the aggregate amount of these bonds must not be less than 150 percent of each year's estimated amoral operating expenses and reserves. The Association also may purchase and maintain a blanket policy of flood insurance, and demolition insurance in an amount that is sufficient to cover any demolition that occurs following the total or partial destruction of the Development and a decision not to rebuild. Section 7.04 Trustee for Policies. The Association, acting through its Board, is hereby appointed and shall be deemed trustee of the interests of all named insureds under all insurance policies purchased and maintained by the Association. All insurance proceeds under any of those policies shall be paid to the Board as trustee. The Board shall use the proceeds for any of the purposes specified in Article VIII of this Declaration. The Board also is authorized to negotiate loss settlements with the appropriate insurance carriers, to compromise and settle any claim or enforce any claim by any lawful action, and to execute loss claim forms and release forms in connection with such settlements. Section 7.05 Individual Insurance. Each Member shall provide fire and casualty insurance for the improvements on his or her Residence. A Member may separately insure his or her personal property, and may obtain and maintain personal liability and property damage 311/12 10120.4 11114293 v 1 20 liability insurance for his or her Residence, provided that the insurance contains a waiver of subrogation rights by the carrier as to the Association, Declarant, and the institutional First Mortgagees of the Member's Residential Lot. Section 7.06 Insurance Premiums. Insurance premiums for any insurance coverage obtained by the Association shall be included in the regular assessments. That portion of the regular assessments necessary for the required insurance premiums shall be used solely for the payment of the premiums when due. Section 7.07 Additional Provisions. The Association shall file a copy of each of the above insurance policies with Declarant. Except for workers compensation insurance, all of the above insurance policies shall include Declarant and its elected officials, officers, agents, representatives and employees as additional insureds. Except for worker's compensationinsurance,.all policies shall be endorsed to state that coverage shall not be canceled by the insurer except after thirty (30) days' prior written notice to Declarant. The Assocaition shall give Declarant prompt and timely notice of claim made or suit instituted againt the Associaton. The Association shall grant to Declarant, on behalf of the insurer providing general liability insurance to the Association, a waiver of any right of subrogation which any, such insurer may acquire against Declarant by virtue of the payment of any loss under such insurance. KV1% V31L DAMAGE OR DESTRUCTION Section 8.01 Duty to Restore and Replace. If any of the improvements in the Common Area are destroyed or damaged, the Association shall restore and replace the improvements, using the proceeds of insurance maintained pursuant to Article VII of this Declaration, subject to the provisions of this Article. Section 8.02 Proceeds Justifvinsr Automatic Restoration and Repair. If the proceeds of any insurance maintained pursuant to Article VII of this Declaration for reconstruction or repair of the Common Area are equal to at least eighty-five (85) percent of the estimated cost of restoration and repair, the Board shall use the insurance proceeds for that purpose, shall levy a special assessment to provide the necessary additional funds, and shall have the improvements promptly rebuilt, unless the Members by the vote or written consent of not less than seventy-five (75) percent of the total voting power of the Association object to the restoration or repair work within sixty (60) days of the damage or destruction. Section 8.03 Approval by Members of Special Assessment for Certain Restorations and Repairs. I£ the proceeds of any insurance maintained pursuant to Article VII of this Declaration for reconstruction or repair of the Property are less than eighty-five (85) percent of the estimated cost of restoration and repair, any restoration and repair work must be authorized by the vote or written consent of Members representing at least seventy-five (75) percent of the total voting power of the Association. This authorization must be given within ninety (90) days of the damage or destruction and must authorize the Board to levy a special assessment to provide the necessary funds over and above the amount of any insurance proceeds available for the work. 311/12 10120A 4114293 vl 21 Section 8.04 Ordering Reconstruction or Repair. If reconstruction or repair work is to take place pursuant to this Article, the Board shall take the following -steps: (a) Prepare the necessary documents, including an executed and acknowledged certificate stating that damage has occurred, describing it, identifying the improvement suffering the damage, the name of any insurer against whom claim is made, and the name of any insurance trustee, stating (if applicable) that the consent described in Section 8.03 has been obtained, and reciting that the certificate is recorded pursuant to this paragraph. That declaration shall be recorded with the Recorder of Orange County within ninety (90) days from the date of the damage or destruction. (b) Should the Association elect to -replace rather than repair the improvement suffering the damage, obtain the approval of Declarant of the architectural plans of the proposed improvement. (c) Obtain firm bids (including the obligation to obtain a performance bond) from two or more responsible contractors to rebuild the Common Area in accordance with its original plans and specifications and, as soon as possible thereafter, call a special meeting of the voting Members to consider the bids. If the Board fails to do so within 60 days after the casualty occurs, any Member may obtain the bids and call and conduct the special meeting in the manner required by this paragraph. At the meeting, Members representing at least 67 percent of the total voting power may elect to reject all of the bids and thus not to rebuild, or Members representing at least 51 percent of the total voting power may elect to reject all bids requiring amounts exceeding the available insurance proceeds by more than $25,000. Failure to reject all bids shall authorize the Board to accept the unrejected bid it considers most favorable. Failure to call the special meeting or to repair the casualty damage within 12 months from the date the damage occurred shall be deemed for all purposes to be. a decision not to rebuild. (d) If a bid is accepted, let the contract to the successful bidder and distribute the insurance proceeds to the contractor as required by the contract. (e) Levy a special assessment to make up any deficiency between the total insurance proceeds and the contract price for the repair or rebuilding, with the assessment and all insurance proceeds, whether or not subject to liens of mortgagees, to be used solely for the rebuilding. This assessment shall be apportioned, equally to each Residential Lot. If any Member fails to pay the special assessment within 15 days after it is levied, the Board shall enforce the assessment in the manner described in Section 4,08 of this Declaration. Section 8.05 Election Not to Rebuild. Upon an election not to rebuild, the Board, as soon as reasonably possible and as agent for the Members, shall execute and record a. certificate stating that the Association shall not rebuild. The net proceeds shall then be distributed to the owners of the Residential Lots equally. Section 8.06 Minor Restoration and Repair Work. The Association shall order restoration or repair work without complying with the other provisions of this Article whenever the estimated cost of the work does not exceed Twenty-five Thousand Dollars ($25,000). If insurance proceeds are unavailable or insufficient, the Association shall levy a special 3/1/12 10120A #114293 v1 22 assessment for the cost of the work. The Assessment shallbe- levied in the manner described in Section 4.05 of this Declaration. ARTICLE IX EMINENT DOMAIN Section 9.01 Sale to Condemning Authority. If a governmental agency proposes to condemn all or a portion of the Common Area, the Association, with the approval of the Declarant, may sell all or any portion of its interest in the Common Area to the condemning authority if seventy-five (75) percent of the voting power of the Associations and sixty (60) percent of all institutional First Mortgagees approve the sale in advance. Any such sale shall be made by the Association in the capacity of attorney -in -fact for the Members, acting under an irrevocable power of attorney which each Member grants to the Association. The sales price shall be any amount deemed reasonable by the Board. Section 9.02 Distribution of Sales Proceeds. That portion of proceeds of a sale conducted pursuant to Section 9.01 which constitutes compensation for the condemnation of all or any portion of the improvements constructed by the Association on the Common Area and any and all compensation for the termination or diminution of the Association's interest in the Common Area Lease shall be distributed among the Members and their respective Mortgagees, as their interests may appear, and the balance of such proceeds shall be paid to the Declarant, Section 9.03 Taking and Condemnation Awards. If there is a taking by a governmental agency of all or any portion of the Common Area, the condemnation award shall be distributed to among the Declarant, the Members and their respective Mortgagees in accordance with the court judgment, if any such judgment exists. In all other cases, the proceeds shall be distributed as set forth in Section 9.02 above. ARTICLE X RIGHTS OF MORTGAGEES Section 10.01 Warranty. The Association hereby warrants that Mortgagees of Residential Lots in the Development shall be entitled to the rights and guaranties set forth in this Article. No amendment of this Article shall affect the rights of the holder of any Mortgage recorded prior to the recordation of the amendment who does not join in the execution of the amendment. Scction 10.02 Subordination. Notwithstanding any other provision of this Declaration, liens created under Section 4.08 of this Declaration upon any Residential Lot shall be subject and subordinate to, and shall not affect the rights of the holder of, the indebtedness secured by any recorded First Mortgage upon such an interest made in good faith and for value, provided that any transfer of a Residential Lot as the result of a foreclosure or exercise of a power of sale shall not relieve the new Member from liability for assessments that become due after the transfer. Such a transfer shall extinguish the lien of assessments that were due and payable prior to the transfer of the Residential Lot. 3/1/12 10120.4 N 114293 vl 23 Section 10.03 Notice of Default, A First Mortgagee, upon request, shall be entitled to written notification from the Association of any default in the performance by the Mortgagor of any obligation under the Association's Governing Instruments that is not cured within 60 days. Section 10:04 Unpaid Assessments. Any First Mortgagee who obtains• title to a Residential Lot pursuant to the remedies provided in the Mortgage or foreclosure of the Mortgage shall not be liable for the Residential Lot's unpaid assessments that accrue prior to the acquisition of title to the Residential Lot by the Mortgagee. Section 10.05 Mortgagee Approval of Material Amendments: Notwithstanding Article XI of this Declaration, any, amendments governing any of the following shall require the prior written approval of at least 51 percent of the First Mortgagees and at least 67 percent of the total voting power of the Members: (a) Rights to use the Common Area; (b) Members' interests in the Common Area; and (c) Any provisions. expressly benefiting First Mortgagees or insurers or governmental guarantors of First Mortgages. Notwithstanding the foregoing, any First Mortgagee who receives a written request from the Board to approve a proposed amendment or amendments requiring consent under this Section who does not deliver a negative response to the Board within 30 days of the receipt of the request shall be deemed to have approved the proposed amendment or amendments. Section 10.06 Mortgagee Approval of Other Actions. Unless at least 67 percent of the First Mortgagees (based upon one vote for each First Mortgage owned), or 67 percent of the total voting power of the Members, have given their prior written approval, the Association shall not be entitled to: (a) Change the pro rata interest or obligations of any individual Residential Lot for either of the following purposes: (1) Levying assessments or charges, or allocating distributions of hazard insurance proceeds or condemnation awards; or (2) Determining the pro rata interest of each Member in the Common Area and the improvements thereon. (b) By act or omission, seek to abandon, partition, subdivide, encumber, sell, or transfer the Common Area (the granting of easements for public utilities or for other public purposes consistent with the intended use of the Common Area shall not be deemed a transfer within themeaning of this clause); (c) Use hazard insurance proceeds for losses to the Common Area for other than the repair, replacement, or reconstruction of that property, except as provided by statute in case of substantial loss to the Common Area, 3/1112 10120.4 11114293 v1 24 Section 10.07 Liens. All taxes, assessments, and charges that maybecome liens prior to the First Mortgage under local law, shall relate only to the individual Residential Lot and not to the Development as a whole. Section 10.08 Priori . No provision of the Governing Instruments gives any Member, or any other party, priority over any -rights of the First Mortgagee of the Residential Lot pursuant to its. Mortgage in the case of a distribution to the Member of insurance proceeds or condemnation awards for losses to, or a taking of, all or a portion of the Common Area. Section 10.09 Reserve Fund. Association assessments shall be large enough to provide for an adequate reserve fund for maintenance, repairs, and replacement of those common elements that must be replaced on a periodic basis. The reserve fund shall be funded by the regular assessments rather than by special assessments. Section 10,1.0 Management. Any agreement for professional management of the Development shall not exceed three years and shall provide that either party may terminate the agreement, with or without cause and without the imposition of a termination fee, on 90 days written notice. Section 10.11 Right to Inspect Books and Records. Institutional First Mortgagees, upon written request, shall have the right to (1) examine the books and records of the Association during normal business hours; and (2) require the submission of any financial data furnished to the Members by the Association. Section 10,12 Right to Furnish Mortgage Information. Each Member hereby authorizes the First Mortgagee of a First Mortgage on the Member's Residential Lot to furnish information to the Board concerning the status of the First Mortgage and the loan that it secures. ARTICLE XI AMENDMENTS Section 11.01 Amendments by Members. Subject to the other provisions of this Declaration, this Declaration may be amended as follows: (a) Any amendment or modification of the Articles hereof entitled "Covenant for Maintenance Assessments," "Nonpayment of Assessments," "Architectural Control," and "Repair and Maintenance," or of this Section shall require the affirmative vote or written approval of not less than sixty percent (60%) of the of the voting power of the Association. (b) Any amendment or modification of any Article other than those specified in subparagraph (a) above shall require the affirmative vote or written approval of a majority of the voting power of the Association. (c) An amendment or modification that requires the vote and written assent of the of the voting power of the Association as hereinabove provided shall be effective when executed by the President and Secretary of the Association who shall certify that the amendment or modification has been approved as hereinabove provided, and when recorded in the Official 3/1/12 10120A fl 114293 v l 25 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. Section 11.02 Amendments Pursuant to Court Order. If this Declaration requires a proposed amendment to be approved by the affirmative vote of a specified percentage (exceeding 50 percent) of the voting power of the Association, and more than 50 percent but less than the required supermajority of the voting power of the Association approve the amendment, the Association or any Member may petition the Superior Court of Orange County, California, subject to the requirements, limitations, and exceptions set forth in Civil Code Section 1356 , for an order reducing the percentage of the affirmative votes necessary for the amendment or approving the amendment. If such an order is issued, the amendment shall be acknowledged by any person designated by the Association for that purpose or, if no such designation is made, by the President of the Association, and that person shall have the amendment and the court order recorded in Orange County, California. Upon recordation, the amended provision or provisions of this Declaration shall have the same force and effect as if the amendment were adopted in compliance with every requirement imposed by this Declaration and the other governing documents. Within a reasonable time after recordation, the Association shall mail a copy of the amendment and a statement regarding the amendment to each Member. ARTICLE XII' GENERAL PROVISIONS Section 12.01 Term. The provisions of this Declaration shall continue in effect for a term of twenty-five (25) years from the date of execution. Thereafter, it shall be automatically extended for successive periods of ten (10) years, until the membership of the Association decides to terminate it. Section 12.02 Enforcement. The Association, or any Member, shall have the right to enforce by proceedings at law or in equity, all restrictions, conditions, covenants and reservations, now or hereafter imposed by the provisions of this Declaration or any amendment thereto, including the right to prevent the violation of such restrictions, conditions, covenants, or reservations and the right to recover damages or other dues for such violation. The Association or any Member 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 Member who otherwise has standing shall have the right to undertake such enforcement. With respect to Assessment Liens, the Association shall have the exclusive right to the enforcement thereof. 3/1/12 101204 0114293 vl 26 Section 12.03 Cumulative Remedies. All rights, options and remedies of Declarant, the Association, or the Members under this Declaration are cumulative, and no one of them shall be, exclusive of any other, and Declarant, the Association, and the Members shall have the right to pursue any one or all of such rights, options and remedies or any other remedy or relief which may be provided by law, whether or not stated in this Declaration. Section 12.04 Nonwaiver.of Remedies. Each remedy provided for in this Declaration is, separate, distinct, and nonexclusive. Failure to exercise a particular remedy shall not be construed as a waiver of the remedy. - Section 12.05 Attorneys' Fees. In any action to enforce this Declaration, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs. Section 12.06 Severability. The provisions of this Declaration shall be deemed independent and severable, and the invalidity or partial invalidity or unenforceability of any one provision shall not affect the validity or enforceability of any other provision. Section 12.07 Bindin . This Declaration, as well as any.amendment to it and any valid action or directive made pursuant to it, shall be binding on the Declarant and the Members and their heirs, grantees, tenants, successors, and assigns. Section 12.08 Interpretation. The provisions of this Declaration shall be liberally construed and interpreted to effectuate its purpose of creating a uniform plan for the operation of a planned development. Failure to enforce any provision of this Declaration shall not constitute a waiver of the right to enforce that provision or any other provision of this Declaration. Section 12.09 Effect of Declaration. This Declaration is made for the purpose set forth in the Recitals to this Declaration and Declarant makes no warranties or representations, express or implied as to the binding effect or enforceability of all or any portion of this Declaration, or as to the compliance of any of these Provisions with public laws, ordinances and regulations applicable thereto. Section 12.10 Limitation of Liability. The liability of any Member for performance of any of the provisions of this Declaration shall terminate upon sale, transfer, assignment, or other divestment of the Member's entire interest in his or her Residential Lot with respect to obligations arising from and after the date of the divestment. Section 12.11 Nonliability of Officials. To the fullest extent pemutted by law, neither the Board, the Architectural Committee, and other committees of the Association or any member of such Board or committee shall be liable to any Member or the Association for any damage, loss or prejudice suffered or claimed on account of any decision, approval or disapproval of plans or specifications (whether or not defective), course of action, act, omission, error, negligence or the like made in good faith within which such Board, committees or persons reasonably believed to be the scope of their duties. -Section 12.12 Fair Housing. Neither Declarant nor any Member shall, either directly or indirectly, forbid the conveyance, encumbrance, renting, leasing, or occupancy of the Member's Residence or Residential Lot to any person on the basis of race, color, sex, religion, ancestry, or national origin. 3/1/12 10120.4 0114293 v1 27 Section 12.13 Subleases. Any agreement for the subleasing or rental of a Residence or Residential Lot (hereinafter in this Section referred to as a "sublease") shall provide that the terms of such sublease shall be subject in all respects to the provisions of this Declaration, the Articles, the Bylaws and the Association Rules. Said sublease shall further provide that any, failure by the sublessee thereunder to comply with the terms of the foregoing documents shall be a default under the sublease. All subleases shall be in writing, Any Member who shall sublease his Residence or Residential Lot shall be responsible for assuring compliance by such Member's sublessee with this Declaration, the Articles, the Bylaws and the Association Rules. Section 12,14 Notices. Any notice to be given hereunder shall be in writing and, may be delivered as follows: (a) Notice to a Member shall be deemed to have been properly delivered when delivered to the Member's Residence, or placed in first class United States mail, postage prepaid, to the most recent address furnished by such Member 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 Member'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 joint owners of a Residence any such notice may be delivered or sent to any one of the joint owners on behalf of all joint owners and shall be deemed delivery on all such joint owners. (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 Associationdeclaring under penalty of perjury that a notice has been mailed to any Member or Members, 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 12.15 Numbers and Headings. As used in this Declaration, the singular shall include the plural, unless the context requires the contrary. The headings are not a part of this Declaration, and shall not affect the interpretation of any provision. Executed on 71101 12 at Newport Beach, Orange, California. DECLARANT CITY OF NEWPORT BEACH, a California chartered municipal c raHe;t By: Nancy G er, Mayor 3w12 10120.4 #114293 vl 28 Acknowledgment STATE OF CALIFORNIA DI ss r COUNTY OF ORANGE ) On NU(U ` befo me, L, t-M u-F4 a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose namcM is/�I;4 subscribed to the within instrument, and acknowledged to me that she/t*y executed the same in A/her/tly* authorized capacity(k), and that by11!3lher/*r signatureq)zon the instrument the person(s), or the entity upon behalf of which the person(,s� acted, executed -the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. N P lic 311112 10120.4 11114293 v1 29 C. HANHIS Commission # 184018Q Notary Public • California Orange County M Comm. Ea IresMar12.2013t EXHIBIT A LEGAL DESCRIPTION A parcel of land situated in the projected Northwest quarter of Section 35, Township 6 South, Range 10 West, 8.13.6, & M., Orange County, California, more particularly described as follows, to-y0t: Beginning at the U.S. Bulkhead station No. 200, as shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California", approved May 2"6, 1936, by the Secretary of War and on file In the office of the United States District Engineer at Los Angles, California; running thence West along the U.S. Bulkhead line 147.50 feet to U.S. Station No. 137, thence North 39° 48' West along said Bulkhead line 636.53 feet; thence North 230 57' 30" East 126.34 feet to an angle point In the ordinary high tide 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 39° 48' East along said ordinary high tide line 334.47 feet to the most Westerly comer of that certain parcel of land conveyed to the City of Newport Beach by the Irvine Company, as described in deed recorded September 25u', 1929, in Book 30$, page 375 of Official Records of Orange County, California; thence North 230 57' 30" East along the Northwesterly line of said parcel of land 317.57 feet; thence South 710 54' East along the Northerly line of said parcel of land 290.24; then South 850 43' 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 U.S. Govt. Bulkhead line between U.S. Stations Nos. 101 and 200; thence West along said Bulkhead line 784.25 feet to the point of beginning containing approximately twelve (12) acres. 311/12 10120.4 #114293 Y1 A-1 COMMON AREA LEGAL DESCRIPTION Lots 62 and A through J as shown on that certain record of Survey filed in the Official Records of the County of Orange, State of Califomla, as Instrument Number 5383 on February 28, 1939 covering a portion of the projected Northwest one -quarter (1i4) of section 35, Township 6 South, Range 1b West, S.B.B.M. 3/1112 10120.4 #114293 vi B-1 Beacon Bay 54' 0. �• � � � � 1 tp-� !• � N � t 55 ,.'- HARBOR I•SLiNDOR y 55' u -''47 ..1" ..a 41 56 uz, .• 48; _ 35 29 ' 57 - n i 49. 42 12 . • • -. . , •_ ... - 36 a 30 - 24 ' 56...:.. • 50 S . ..\^ : ,-.. 3 •31 68 __ .. ,; 37, - .26 • 25 irz . 67 51 44...:.-. -' 36' rc 32 26 0 66 • 52 5 _ 39 0 12• 27 3 66 V2 46 3 34 28 64 • '53 •ice'. .. 40 34in' w • 28u2 to BEACON BAY' wr n .9 10 \11; 12 13 N 14 `75• i6 .1T •;18 .;19 .20 21 22. 82 133 � 4YaeltAmFcw ' ._--_-_-_-__.__.._______________ _---_-_-__- YOil.rAm a. EXHIBIT "E" Recording Requested By and When Recorded Return To: City of Newport Beach 3300 Newport Beach Blvd. P.O. Box 1768 Newport Beach, California 92658-8915 Attn: City Clerk (Exempt From Recording Fees Pursuant to Government Code § 27383) (SPACE ABOVE THIS LINE FOR RECORDER'S USE) MEMORANDUM OF LEASE THIS LEASE is made and entered into between the City of Newport Beach, a California municipal corporation and charter city ("Lessor") and SALLY FLETCHER, Trustee of the Family Bypass Trust under The Douglas and Sally Fletcher Revocable Trust ("Lessee"). Lessor hereby leases to Lessee that real property located in the City of Newport Beach, County of Orange, California, described in Exhibit "1" attached hereto ("Property"). The term of the Lease is Fifty (50) years, commencing February 15 , 2013, and ending February 15, 2063. This Lease is subject to the terms, conditions and provisions of an unrecorded lease between the parties dated February l5 , 2013, which is incorporated herein by reference. Unless extended by a recorded amendment or supplement hereto, this Memorandum of Lease will automatically terminate as of February L, 2063. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY CITY OF NEWPORT BEACH, A California municipal corporation Date::1,31a By:—,4i2�G I� ��.rl By:c—� Aaron Harp �,� David City Attorney City Manager LESSEE Date: By: Sally Fletcher Trustee, The Family Bypass Trust under The Douglas and Sally Fletcher Revocable Trust CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA } } S.S. COUNTY OF ORANGE } On a2-1-kel93 beforeme, L.R. walin a Notary Public in and for said state, personally appeared Sail Fle,i-C p. who proved to me on the basis of satisfactory evidence to be the person(e) whose name(,&) is/sre subscribed to the within instrument and acknowledged to me that WsheAhay executed the same in his/her/their authorized capacity(aes), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(&) acted, executed the instrument. I certify under PENALTY of PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. �� Signature � A'Wo'� L. R. WAUN COMM. #1662353 Notary Publlo - Calllornla ORANGE COUNTY My Comm. Exp Au ust 23,2013 This area for official notarial seal. CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT STATE OF CALIFORNIA) COUNTY OF ORANGE ) On February 13, 2013 before me, M Locey, Notary Public, personally appeared David Kiff who 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 he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (SEAL) Notary Public in and for said Stat OPTIONAL INFORMATION Title or Type of Document: Memorandum of Lease — Fletcher Revocable Trust GE M.LOCEY Commission N 1864451 Notary Public - California s = Orange County M Comm. Ex Tres Oct 7, 2013 EXHIBIT"I" LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Newport Beach, County of Orange, California, described as follows: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. -i- CHASE :i RECEIVED tui[ APR 17 PR j U� April 16, 2012 OFFICE OF VIA OVERNIGHT COURIER - FED EX #7934 5942 7691 THE CITY CLERK City of Newport Beach CRY OF NEWPORT 8EXH 3300 Newport Blvd. Newport Beach, California 92663 Attn: City Clerk Re: Lease dated August 2, 1007 (the "Lease") by and between The City of Newport Beach (the "City") and Patrick and Carol Ward ("Tenants") pertaining to Beacon Bay Lot 2 a/k/a 2 Beacon Bay, Newport Beach, California 92663 (the "Property"). Dear City Clerk: Pursuant to Section 5(B) of the above -referenced Lease you are hereby notified that JPMorgan Chase Bank, N.A. ("Chase") has an encumbrance on Tenants' right, title and interest under the Lease, the Property and any improvements thereon pursuant to that certain Deed of Trust executed by Tenants in favor of Commonwealth Title, as trustee, for the benefit of Chase, as lender, recorded August 2, 2007 at Doc. No. 2007000484300 in the Official Records of Orange County, California, as modified by that certain Loan Modification Agreement by and between Tenants and Chase, recorded August 24, 2011 at Document No. 2011000417627, aforesaid records. Copies of said Deed of Trust and Loan Modification Agreement are attached hereto. Pursuant to Section 5(B) of the Lease, please provide Chase with a copy of any and all notices provided to Tenants at the following address: JPMorgan Chase Bank, NA Attn: HOA Correspondence Mailbox: LA4-5555 700 Kansas Lane Monroe, LA 71203 In the meantime, if you have any questions, please do not hesitate to let me know. Sincerely, JPMORGAN f.HASE BANK, N.A. By: V-X>" % Name: / s ic. Its: r ap fro s c cc: Kyle Rowen, Esq. (e-mail) Sabina Sosunova, Esq. (e-mail) Robert Chubb, Esq. (e-mail) CITY OF NEWPORT BEACH ADMINISTRATIVE SERVICES G S 3300 NEWPORT BLVD.. , cq�MO0.H�P P.O. BOX 1768, NEWPORT BEACH, CA 92658-8915 RECEIVED BY: CLAUDIA TODAY'S DATE: 01/03/12 UB UTILITY BILLING CHECK $83,704.53 REF NUM: 1037 CASH RECEIPT RECEIPT NUMBER: 02000154893 PAYOR: CLAREMONT BUS PARK REGISTER DATE: 01/03/12 TIME: 08:40 1951300-03 $83,704.53 ------------------- TOTAL DUE: $83,704.53 $83,704.53 ME CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY Aaron C. Harp, •City Attorney 151SGV-03 November 23, 2011 WA Cerffled U.S Mail, Return Recefpf Requesfed JP Morgan Chase Bank, N.A. JP Morgan Chase National Corporate Services, Inc. Land Transactions c(o C T Corporation System LA4-4557 . 818 W Seventh Street 780 Kansas -Lane Los Angeles, CA 9001T Monroe, LA 11203 -RE: Chase Loan No.1236207754 (Ward); 2 Beacon Bay, Newport Beach, CA Notice of Default To Whom it May Concern: It has come to our attention that JP Morgan Chase Bank, N.A. holds a security interest for Improvements located on the properly at 2 Beacon Bay, Newport Beach, CA 92660, APN # 988- 88-369 (the "Property). This letter serves as legal notice that unless you take prompt action, you may lose your security Interest In the leasehold estate at the Property, as well as improvements on the Property. Attached please find a copy of the Stipulated Judgment entered into between the City of Newport Beach CLessors' or the "City') and your borrowers, Patrick and carol Ward rLessees'), executed on August 1, 2011. Lessees hold the ground -lease for the, Property which is owned by the•Ctty (the "Lease!). (A copy of.'said Lease. is enclosed herein for„ your convenience.) Please be advised that Lessees are currently In default on the Lease due non-payment of rent in the amount of approximately $83,704.53. The Stipulated 'Judgment includes a payment plan, through which all amounts due under the -Lease ' must be paid to the.City by November -1, 2011. Under the- terms of the Stipulated Judgment, ifall amounts due to the City are not paidby November 1, 2011, the Citywill file a legal action to regain possession of the Property, and Lessees will surrender the Property. Moreover, the Stipulated Judgment also calls for the Lessees to pay. on a timely basis all further rental and utility payments that come due. (A copy of the Stipulated Judgment -is enclosed herein for your convenience.) Because -Lessees have failed 'to, pay all *amounts required *under the Lease and Stipulated Judgment, they are -in default of the Lease and in violation of the Stipulated Judgment The City . •wilt be filing a legal action to obtain possession of the property in the near future, unles%li5quired amounts are paid in full to the City within thirty,(30) days of the date of this letter. rrHH JAN 0 3 2012 CITY OF NEWPORT BEACH 3300 Newport Boulevard - Post Office Box 1766 - Newport Beach, •California 92658-8915 Telephone: (949) 644-3131 • Fax: (949) 644-3139 • www.newportbeachca.gov Customer lnformation Account Number 1951300 - I Customer Name WARD, CAROL Service Address 2 BEACON BAY Pending Payment] 0.00 t ti i History Post'Date TrensactionDate iType 'Description Amount Balance 05/25/11 06/25/11 COMMENT METERS ROLLED 0.00 54791.77, 05/25/11 05/25/11 COMMENT BILLINGAGED 0.00 54791.77 05117/11 05/17/11 COMMENT BILL PRINTED 0.00 54791.77 05/17/11 05/17111 BILLED STANDARD BILLING 4828.16 54791.77 04/14/11 04114/11 COMMENT BILLPRINTED 0.00 49963.61 04/14/11 04114/11 BILLED STANDARD BILLING 4816.92 49963.61 03/16/11 03/16/11 BILLED STANDARD BILLING 4808.49 45146.69 02/16/11 02/16/11 BILLED STANDARD BILLING 4806.02 40338.20 01/18/11 01118/11 BILLED STANDARD BILLING 4844.27 35532.18 12/16/10 12/16/10 BILLED I STANDARD BILLING 4777.97 30687.91 11/17/10 i 10114110 11/17/10 r r 10114110 BILLED BILLED STANDARD BILLING PAYMENT STANDARD BILLING 4808.67 i t 1 4816.22 25909.94 r 33101.37 09/16/10 09/16/10 BILLED STANDARD BILLING 4821.32 28285.15 08/20/10 08/20110 PAYMENT PAYMENT 18800.00 23463.83 08/18/10 08118/10 BILLED STANDARD BILLING 4818.77 33463.83 07/15/10 07115/10 BILLED STANDARD BILLING 4831.52 28645.06 06/16110 06/16/10 BILLED STANDARD BILLING 4828.97 23813.54 05/18/10 05/18/10 BILLED STANDARD BILLING 4823.87 18984.57 05/03/10 05/05110 PAYMENT PAYMENT 10000.00 14160.70 04/15/10 04115110 BILLED STANDARD BILLING 4836.62 24160.70 03/18/10 03118/10 BILLED STANDARD BILLING 4806.02 19324.08 03/11/10 03/12/10 PAYMENT PAYMENT 480B.57 14518.06 02/17/10 02/17110 BILLED STANDARD BILLING 4808.57 19326.63 01/14/10 01114110 BILLED STANDARD BILLING 4791.56 14518.06 01/04/10 01/06/10 PAYMENT IPAYMENT 9512.50 9726.50 12/15/09 12115109 BILLED STANDARD BILLING 4808.57 19239.00 11117109 11117/09 BILLED STANDARD BILLING 4803.71 14430.43 11/10109 11112/09 PAYMENT 1PAYMENT 9730.32 9626.72 10/14109 10114/09 BILLED STANDARD BILLING 4823.08 19357.04 09116109 09/16109 BILLED STANDARD BILLING 4803.64 14533.96 08113/09 08/13/09 BILLED STANDARD BILLING 4840.10 9730.32 08/12/09 08/13/09 PAYMENT PAYMENT 9877.16 4890.22 nil nnlnn !1'linninn 1 nnl A \ IT Illl I IM1 1! A 4 l(ll IA IT I'l!'f('=m 7n nn 1 A7l`-1 nn ■ Complete items 1, 2, and 3. Also complete A. Signature Item 4 If Restricted Delivery Is desired. ❑ Agent X ■ Print your name and address on the reverse ❑ Addressee so that we can return the card to you. R. Received by (Printed Name) C. Date of Delivery IN Attach this card to the back of the malipiece, or on the front if space permits. D. Is delivery address different from item 1? ❑ Yes 1. Article Addressed to: If YES, enter deliveryaddress below: ❑ No (O10 �OVACL&fie, Onve. (kn� ,A j Ma, CA I W'Certiffed Mall ❑ FXpress Mail ❑Registered ®'Return Receipt for Merchandise ❑ Insured Mail ❑ C.O.D. 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. ArticlaNumber ?001 0320 0000 ?830 0339 _ (Piansfer from service?abe1J PS Form 3811, February 2004 Domestic Return Receipt 102595-02-M-1540 UNITED STATES POSTAL SERVICE Mall II I SPmPostRINo 010Patd • Sender: Please print your name, address, and ZIP+4 in this box • Shirley Oborny City Managers Office City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658-8915 CITY HALL Office of the City Manager 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California 92658, RETURN SERVICE REQUESTED UIIInIIIIIVIIAIIIVIIII�IflIIN PATRICK AND 1010 SANDCA CORONA DEL Ot WARD 'DRIVE ..CA 92625 NIBS YE 927 CE 1 ss 1OJ 15l1 RETURN TO SENDER NOT DELIVERABLE AS ADDRESSED UNAilLE TO -FORWARD SC c 92$599915E68 "k yb77-- 00796-10- 0 CITY OF NEWPORT BEACH Office of the City Manager (949)644-3000 October 11, 2010 VIA FIRST CLASS US MAIL AND -- CERTIFIED MAIL NO. 70010320=00007830`0087"-� — --� Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward (CERTIFIED MAIL NO. 7001 0320 0000 7830 0339) 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: As you are aware, the rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County, of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is. $23,463.83, which represents the amounts past due for the months of May 2010 through September 2010. On October 10, 2010, the rent for October 2010 will also be delinquent bringing the total amount due and delinquent to $28,286.15. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by November 15, 2010, will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 9 www.citynewport-beach.ca.us ' Mr.and Mrs. Ward October 11, 2010 Page: 2 Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8916, Phone (949) 644-3121. The Cashier is available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, please contact my assistant, Shirley Oborny, at (949) 644-3000. Sincerely, � cam DAVID A. KIFF City Manager cc: Lease File Office of the City Attorney Carol Ward (CERTIFIED MAIL 7001.0320 0000 7830 0322) 1001 Dove St., Ste. 200 Newport Beach, CA 92660 UNITED STATES POSTAL SERVICE ") (I' ( UertnSiNo CrtOPaid • Sender Please print your name, address, and ZIP+4 in this boz r Shirley Oborny City Managers Office j City of Newport Beach P.O. Box 1768 j Newport Beach, CA 92658-8915 IL III I all h Ili I aid, I, 11, I I L is IIqI pill Is )a, ul, Ili b li rill t i Complete Items 1, 2, and 3. Also complete A. Rem 4tf Restricted Delivery Is desired. X ■ Pdntyour name and address on the reverse so that we cqp. return the card to you. g, ■ Attach this card to the back oLthe mall lece, or on thetront R space perm D. 1. Article Addressed to: pa ��ek bra-Wjod (��,� TIM 3 Bent Date of Delivery Is delivery address ddfmritfmm item 17 ❑Yes 41YES, enter delivery address below ❑ No n S gm Type f Certified Map 09,4prMMSH ❑Registered OlUtum RecelptforMerchmldise ❑ insured Map ❑ G.O.D. 4. Restricted Deliveyt Pare Fee) ❑ Yes a 7001/0320 0000 ?830 0087 ' PS Form 3811, February 2004 Domestic Return Receipt 102595-oz-6ta640 UNITED STATES POSTAL SERVICE II II I Permitass Mail PostiNo. G10Paid • Sender: Please print your name, address, and ZIP+4 in this box Shirley Oborny City Managers Office City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658-8915 1,1811J,1„1111)„i„ dL1 SENDER: COMPLETE THIS SECTION COMPLETE THIS SECTION ON DELIVERY ■ Complete items 1, 2, and 3. Also complete item 4 ItRestricted Delivery is desired. ■ Print your name and address on the reverse soihat we can return the card to you. ■ Attach this card to the back of the mallplece, or on the front if space permits. A Signature X ❑Agent ❑ Addressee B. Received by (p ) C, to of Wary D I /� ! D, Isderwyaddre ;dMeremtfrotn Neml It YES, eMerdelivery address below. ❑No + i 1. Article Addressed to: ''yppp� �� i�o I�teiwo (a"rd , k nop Man bias CA�d'ceturted ❑RalstaredReturn n Insured KWC.O.D.4. Raeeiptfor idetohertdise Restricted Deliveyf (Extra Fee) n Yes la V 2 (rM afw nbar (Iiansferfrwn service le(»II ( 7D01 0320 DODO 7830 E 032P Ps Form 3811, February 2004 Domestic ReturnRecerpt 102595-02M-150 a CITY OF NEWPORT BEACH Office.of the City Manager (949) 644-3000 October 11, 2010 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 7001 0320 0000 7830 0087 Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward (CERTIFIED MAIL NO. 7001 0320 0000 7830 0339) 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: As you are aware, the rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $23,463.83, which represents the amounts past due for the months of May 2010 through September 2010. On October 10, 20110, the rent for October 2010 will also be delinquent bringing the total amount due and delinquent to $28,286.16. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by November 15, 2010, will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach.ca.us t P G IM Postage $ K1 W" ' �` COMM Fee Poaunirk p Return Recolpt Fee Here M (lindorsomont Rogtrlmd) O Restricted Delivery FOD O (Endomen ent RequhM ,$ 0 Total Posage A FOOs fu MO Sent To a v�cic.a'...._aroL_�l1ar ................. C3 O Sfroet, No; orPo SoxOK Na........� � ►.]Cx`-%�-..----_........--.»-....- c�y,smro,tipw aw[ l]l� I RL M _� ,g.. .r f a C_r �" I, eta L t'`z °—JI 1 . 1» tl» 1 M M Postage S _ , aG �` NOW Fee PoslmaM p Rotum Receipt Foe Here C3 (Endoratlirianl Roqui(K fleslr(ctod OelNery Fee G (ErMoraomgnt Required) rU Total Postage S Faoe I ,$ M p GSeynt, STo V o.o....1?. ra ShofN: C3 orPoB.9N. M1 `- -+••__----- A. 11.JA tf 0 A MO c- M _ .� M } 0 �:3 rt7 Postage" M e0 Cediged Feu r Rotum Receipt r,2 0 (Endomeinent Roqulrad) Fee G (Endorsome�t Roquirrod) M — FU M c s Postmark Here Mr.and Mrs. Ward October 11, 2010 Page: 2 Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8916, Phone (949) 644-3121. The Cashier is available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, please contact my assistant, Shirley Oborny, at (949) 644-3000. Sincerely, DAVID A. KIFF City Manager cc: Lease File Office of the City Attorney Carol Ward (CERTIFIED MAIL 7001 0320 0000 7830 0322) 1001 Dove St., Ste. 200 Newport Beach, CA 92660 Utility Billing V8.3 DATE: 10/07/2010 CITY OF NEWPORT BEACH PAGE SUNDER, 1 MODULE : hiatTUn TINS: 16:01,32 CUSTOMER HISTORY REPORT ACCOUNT NUMBER 1951300-03 CUSTOMER NAME WARD, CAROL SERVICE MURDER 2 BEACON BAY TRANSACTION DATE POST DATE TYPE DESCRIPTION AMOUNT __LL �LT BALANCE 1 A u O9/16/2010 0B%2U/ZOSO--08 09/16/2010 BILLED STANDARD BILLING 4 821.32 n 7r'-�"-'Y3Tba: Sl q i Np/1� ��Q/ 1(��]/„1 �(UNe 6v �WQ.S 111i4yY (J "_ -0B%10/76i0 fbJ2bTb—BfYMENT` 08 /18 2U 1�`BFLL6U STARENT STANOAl2C'B1GLiNG�-`""'�-""4, — " War, BiB'.}7-"1;4 4; 83Y%5`lAY 08�"4+ +-OC 1A1 V11• LT;BDSTf XD'ARD'�BYLLYNG'-"" 06 16 2030 O6 16 201U 0 10 2010 SICCED BILLEDSTAUDA- STANDARD 6ii LiHfi BILLYNG 8'13.81 TAN �5/ .1 1 0 1 OS/,DS/'ln]n n5 Q,g 4 ? -70 VQh/ I 0�15 2010 04 1 2010 B LED DA,AD ILy�Tl- °.936w6�J.6A..TD- lB D uDA40 BILLING 9.006.02 08 7 19,324.08 �Q^ 14 �18 O6I d a/a ........... 02/11/2010 / 1/ 0 U2/17/2010 YM N BILLED ENT BTANDAM BILLING 4, 808. 57'(f)4Y(y� V , 19,a�o.o3 OS/19 /2010 O1/14/2010 BILLED STANDARD BILLING 4,791.56.rlb 14,518.06 O1/06/2010 O1/04/2010 PAYMENT PAYMENT 9, 512.50 4, 80857JO" 9, 726.50 19,239.00 12/15/2009 12/15/2009 BILLED STANDARD BILLING 21/27/2009 11/17/2009 BILLED STANDARD BILLING 4,003:72 14,430.43 11/12/2009 11/10/2009 PAYMENT PAYMENT 9,730.32 9,626.72 10/14/2009 10/14/2009 BILLED STANDARD BILLING 4,023.08 19,357.04 09/16/2009 09/16/2009 BILLED STANDARD BILLING 4,803,64 14,533.96 08/23/2009 08/13/2009 BILLED STANDARD BILLING 4,840.20 9,730.32 08/13/2009 08/12/2009 PAYMENT PAYMENT 9,877.16 72.00 4,890.22 14,767.38 07/22/2009 07/22/2009 POST ANT BILLING AMOUNT POSTED 07/14/2009 07/14/2009 BILLED STANDARD BILLING 4,810.22 14,695.38 1611812009 06/18/2009 BILLED STANDARD BILLING 4,808.50 9,877.16 O6/16/2009 06/15/2009 PAYMENT PAYMENT 14,268.75 5,068.66 05/14/2009 OS/14/2009 BILLED STANDARD BILLING 9,818.32 19, 137.41 OS/05/2009 05/05/2009 POST ANT BILLING AMOUNT POSTED 66.00 14,519.19 04/16/2009 04/16/2009 BILLED STANDARD BILLING 4,789.06 14,453.19 9,664.13 O3/17/2009 03/27/2009 POST ANT BILLING AMOUNT POSTED 69.00 4,798.78 9,595.13 03/17/2009 03/17/2009 BILLED STANDARD BILLING 4,794.02 4,796.35 03/12/2009 03/11/2009 PAYMENT PAYMENT 4,796.35 9,590.37 02/18/2009 O1/15/2009 02/18/2009 01/15/2009 BILLED BILLED STANDARD BILLING STANDARD BILLING 4,793.92 4,794.02 O1/07/2009 01/06/2009 PAYMENT PAYMENT 4,803.54 4,803.64 0.10 4,803.64 12/17/2008 12/17/2008 BILLED STANDARD BILLING 4,008.50 0.00 12/10/2000 12/09/2008 PAYMENT PAYNENT 4,800.50 4,808.50 11/18/2008 11/18/2008 BILLED STANDARD BILLING 4,808 SO 0.00 12/10/2008 11/07/2008 PAYMENT PAYMENT 4,808.50 4,808.50 10/16/2008 10/16/2008 BILLED STANDARD BILLING 4,882.36 0.00 30/08/2008 09/IS/2008 10/07/2008 09/15/2008 PAYMENT BILLED PAYMENT STANDARD BILLING 4,813.36 4,882.36 09/00/2008 09/05/2008 PAYMENT PAYMENT 4,874.20 69.00 08/26/2000 O0/26/2000 POST AMT BILLING AMOUNT POSTED 69.00 4,943.20 08/24/2008 08/14/2008 BILLED STANDARD BILLING 4,784.20 4,874.20 90.00 a 8/12/2008 08/12/2008 POST NIT BILLING AMOUNT POSTED 90.00 00/07/2006 08/06/2008 PAYMENT PAYMENT 4,882.36 0.00 07/16/2008 07/16/2008 BILLED STANDARD BILLING 4,813.36 4,882.36 69.00 07/09/2008 07/08/2008 PAYMENT PAYMENT 4,711.49 69.00 4,860.49 06/24/2008 POST T MT06/24/2008 BILLING AND= POSTED 4,791.49 4,791.49 06/18/2008 06/18/2008 BILLED STANDARD BILLING 0.00 O6/06/2008 06/05/2008 PAYMENT PAYMENT 4,791.49 4,791.49 4,791.49 05/15/2008 05/15/2008 BILLED STANDARD BILLING 4,802.21 0.00 05/09/2008 05/08/2008 PAYMENT PAYMENT 4,802.21 4,801.21 04/16/2008 04 /16/2008 BILLED STANDARD BILLING 4,789.06 0.00 04/20/2000 04/09/2008 PAYMENT PAYMENT 4, 789.06 4,789.06 03/17/2000 03 /17/2008 BILLED STANDARD BILLING 4,786.63 D.00 03/07/2008 03/06/2008 PAYMENT PAYMENT Utility Billing V8.3 DATE, 08/16/2010 TIME: 16.47:29 ACCOUNT NUMBER 1951300-03 CUSTOMER NAME HARD, CAROL SERVICE ADDRESS 2 BEACON BAY TRANSACTION DATE POST DATE TYPE CITY OF NENPORT BEACH CUSTOMER HISTORY REPORT DESCRIPTION AMOUNT STANDARB BILLING•- -: LL-- •4,9]1.52� $T9NDARD BILLING 44,82 STANDARD BILLING• -• - (-� ,i 4,823.87 PA rt-i .. . Qn �. - W6 U 10., 8x8.828, BALANCE BILLED STANDARD BILLING : a,eun.m ir,aa .aa BILLED STANDARD BILLING 4,603.71 14,430.43 PAYMENT PAYMENT 9730.32 9,626.72 BILLED STANDARD BILLING 4:823.08 19,357.04 BILLED STANDARD BILLING 4,603.64 14,533.96 BILLED STANDARD BILLING 4,840.10 9,730.32 PAYMENT PAYMENT 9,877.26 4,890.22 POST ANT BILLING MOM POSTED 12.00 14,767.38 BILLED STANDARD BILLING 4,818.22 14,695.36 BILLED STANDARD BILLING 4,808.50 9,877.16 PAYMENT PAYMENT 14,268.75 5,068.66 BILLED STANDARD BILLING 4,818.22 19,337.41 POST AMT BILLING AMOUNT POSTED 66.00 14,519.19 BILLED STANDARD BILLING 4,789.06 14,453.19 POST NIT BILLING AMOUNT POSTED 69.00 9,664.13 BILLED STANDARD BILLING 4,798.78 91595.13 PAYMENT PAYMENT 4,794.02 4,796.35 BILLED STANDARD BILLING 4796.35 9,590.37 BILLED STANDARD BILLING 4:793.92 4,794.02 PAYMENT PAYMENT 4,003.54 0.10 BILLED STANDARD BILLING 4,803.64 41803.64 PAYMENT PAYMENT 4, BU8.50 0.00 BILLED STANDARD BILLING 4,808.50 4,808.50 PAYMENT PAYMENT 4,808.50 0.00 BILLED STANDARD BILLING 4,008.50 41808.50 PAYMENT PAYMENT 4002.36 0.00 BILLED STANDARD BILLING 4:813.36 4,882.36 PAYMENT PAYMENT 4,874.20 69.00 POST NIT BILLING AMOUNT POSTED 69.00 4,943.20 BILLED STANDARD BILLING 4,704.20 4,874.20 POST NIT BILLING AMOUNT POSTED 90.00 90.00 PAYMENT PAYMENT 4,002.36 0.00 BILLED STANDARD BILLING 4,813.36 4,882:36 PAYMENT PAYMENT 4,791.49 69.00 POST ANT BILLING AMOUNT POSTED 69.00 4,860.49 BILLED STANDARD BILLING 4,791.49 4,791.49 PAYMENT PAYMENT 4791.49 0.00 BILLED STANDARD BILLING 4:791.49 4,791.49 PAYMENT PAYMENT 4,801.21 0.00 BILLED STANDARD BILLING 4,601.21 4,801.21 PAYMENT PAYMENT 4,789.06 0.00 BILLED STANDARD BILLING 4,789.06 4,789.06 PAYMENT BILLED PAYMENT STANDARD BILLING 4766.63 4:786.63 0.00 4,786.63 PAYMENT PAYMENT 4,786.63 0.00 BILLED STANDARD BILLING 4,786.63 4,786,63 PAGE NUMBER, 1 MODULE , hi0t5un A=WN-raw 1951300 -r aslwed Nave IVIARD,MUL Smm,Addau 12BEACONPAY 02/22/10 COMMENT SILUNGAGED 02ABAB COMMENT BILLPRINTED GM7A0 BILLED STANDARD BILLING 01/14/10 COMMENT BILL POINTED 01114MO BILLED STANDARD BILLING O110GAO PAYMENT PAYMENT 12ASIM BILLED STANDARD BILLING 11A7A79 BILLED STANDARD BILLING lIA2109 PAYMENT PAYMENT lW14M BILLED STANDARD BILLING 09AGM BILLED STANDARD BILLING WA3/09 BILLED STANDARD BILLING OM30 PAYMENT PAYMENT O71=9 POSTAMT BIWNG AMOUNT POSTED 07/14/09 BILLED STANDARD BILLING 06AOM BILLED STANDARD BILLING DUISM9 PAYMENT PAYMENT OSA4109 BILLED STANDARD BILLING O'.Amm POSTAMT BILLING AMOUNT POSTED 04ASM BILLED STANDARD BILLING 03A7/09 POSTAMT BILLING AMOUNT POSTED 03A71M BILLED STANDARD BILLING 03A2A33 PAYMENT PAYMENT 02/lem BILLED STANDARD BILLING OIAS/09 BILLED STANDARD BILLING 01107109 PAYMENT PAYMENT 12/17/08 BILLED STANDARD BILUNG 12110M PAYMENT PAYMENT 11ASA18 BILLED STANDARD BILLING IIAOA38 PAYMENT PAYMENT 10Aam BILLED STANDARD BILLING 101" PAYMENT PAYMENT 09A5/OB BILLED STANDARD BILLING LAB PAYMENT PAYMENT Wf26/08 POSTAMT BILLING AMOUNT POSTED 0811448 BILLED STANDARD BILLING ORAVOS POSTAMT BILLING AMOUNT POSTED 08N7/OB PAYMENT PAYMENT O7AG/09 BILLED STANDARD BILLING 07MAIB PAYMENT PAYMENT OS/24/OB POST AMT BILLING AMOUNT POSTED 06ARM BILLED STANDARDBILLING _ WORM u---PAYMENT --PAYMENT I A), 0k2S cTRr1 �L1-�M�1/10.r<<1. G00 19320.63 0.00 ISM63 �Y1 r1Qr. 48M 57 1SM63 'A 11 BOB F46 14518.06 13 4791.56 14510061241 I Z ews7 1 97 0004�7t�11— 10'M11 7An Z--��ty Z480371 14430.43 10, II SUS.72' s�q �,873832 p�,?lkfd ♦j'„1T0 g82d08 19357.04 1) QCi 48S1.G4 1453196 141414 sepP A9840.10 973G32 $ 9877.16 �Bqt � 476730 �i AK 7200 1476730 481822 1469538 4BR50 8877.18 14268.75 506866 481R22 19337.41 moo 14SIR19 47MOS 1445319 GROO 966413 47A.78 95SS13 479402 479535 47SS35 959037 479392 473402 4BD354 0.10 480364 480364 48M 50 0.00 4E00.50 450350 400950 B00 40M50 4808.50 4CM36 0.00 491336 488236 487420 6900 6%00 494320 478420 487420 moo SHO 4MZ36 0.W 48133S 480236 4791.49 6900 moo 4860.49 4791.49 479149 —_ 4791.49 _ � BOB ■ Complete Items 1, 2, and 3. Also complete Item 4 If Restricted Delivery Is desired. ■ Print your name and address on the reverse so thatwe can return the card.to you. ■ Attach this card to the back of the maflplece, or on the front if space permits. 1. Article Addressed to: (�a-Ev°��k � Carol lt)ard O.10Nclsf(e give COrwa del N�a�, CA qM'S A. Signature X B. Received by (Printed Name) ❑ Agent C. Date of Delivery I D. Is delivery address different from item 17 ❑Yes If YES, enter delivery address below: ❑ No 3. Service type 1 D(Certitled Mail ❑ Ex press Mail ❑ Registered �Retum,Reoelpt for Merchandise 1 ❑ Insured Mail ❑ C.O.D.- , 1 4. Restricted Delivery? OExtra Fee) - El yes 2. Article Number 7001 0320 0000 9971 7901 i (transfer from serv/ce!aheq PS Form 3811, February 2004 _„�„p�ny Recelpt First -Class Mail Postaga & Fees Paid USPS Permit No. G-10 • Sender. Please print your name, address, and ZIP+4 In this box • Shirley Oborny City Managers Office City of Newport Beach P.O. Box 1768 Newport Beach, CA 9: ■ Complete Items 1, 2, and 3. Also complete Item 4If Restricted belivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front If space permits. 1. Article Addressed to: Wr�ck,� Carol Ward 2 seac'DV) Bqj� 8w8A, 01/61 A. Signature X B. ReGelved by(PdntedName) Agent C. Date of Delivery I D. Is delivery address differentfrom Itemd? ❑ Yes If YES, enter delivery address below: E3 No S. Service Type i $� Certified Mail ❑ Express Mail ❑Registered Return Receipt for Merchandise ❑ Insured Mail ❑ C.O.D. , 4. }restricted Delivery? (Extra Fee) ❑ Yes I 2. Article Number ___ _f1 /001 0320 0000 9971 7918 UNITED STATES POSTAL SERVICE First -Class Mail Postage & Feos Paid USPS Permit No. G-10 • Sendet; Please print your name, address, and ZIP+4 in this box Shirley Oborny City Managers Office City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658-8915 l R Postage S Er Certified Fee Q' Postmark Return Receipt Fee Here b (Endorsement Required) t3 Restricted Delivery Fee O (Endorsement Required) O O Total Postage &Fees Sent To ,$ru .JnryI 7...O............ YYw(w..................... Street t. No.; xNa. �1. �yy�� OSteet C3 ..............................1-!�LM.4!!r) ary, Bmte, ZfPw -....... .........-............---... 9 0 r �PS Form 3800.r iIMIMP 1011111 L ry OF L U a Postage S r- Q. Certified Fee tT Return Receipt Fee CO (Endorsement Required) CORestricted Delivery Fee O (Endorsement Required) 0 0 Total Postage &Feea $ ru Sant To M C3 Sfreef,, L Nn.; ----. �O. orPOBovrNo O O C/N Siriie, ZIPi4 --. -n!I 'LI KW r r Postmark Here rl Postage $ Qom., Certified Fee Postmark D" Return Receipt Fee (Endorsement Required) Here O t7 O Restricted Delivery Fee (Endorsement Required) O d Total Postage BLFoea ,$ ru to Sent To , pa YIGkq'Camit �AIQj':Gl-----••-------••-------••-- a Streot Apt No; Sch�1II. or PO Box No. 1 � �0..._V.�4C- o 0 ciry,'State,zlP+aj madej Ol..lr.... 'a .1.-.VC:-......... �a�a1J i' CITY HALL Office of the City Manager 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California 92658 RETURN SERVICE RMESTED 4 7001 0320 0000 9971 7918 PATRICK AND CAROL WARD 2 BEACON BAY NEWPORT BEACH, CA 9266CI ist I ICE_--�-�� 2nd NOTICE RETURNED — 3 o N UNIT 0 UI 00 3� r N 00 �Q m N min rn o,A w o O �EWaoRT CITY HALL o`` a Office of the City Manager i 3300 Newport Boulevard IS ��oa�" P.O. Box 1768 Newport Beach, California 92658 _7001 RETURN SERVICE REQUESTED 0320 0000 9971 7901 2nd NG7g@ PATRICKAND CAROL WARD ` 1010 SANDCASTLE DRIVE CORONA DEL MAR, CA 92625 33�2588@9915 NIXIE 927 SE 1 96 0412311Q RETURN TO SENDER UNCLAIMED UNABLE TO FORWARD DO: 92658e9156D *0400-07191-23-41 IIII111111bil)))I1III))III1)I)I ill)) I Jill) 111I41 J) 1 111111 11 CITY OF NEWPORT BEACH Office of the City Manager (949)644-3000 March 17, 2010 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 70010320 0000 9971 7918 Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE - 2 BEACON BAY Dear Mr. and Mrs. Ward: It has come to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $14, 618, 006, which represents the amounts past due for the months December 09, January, February and March 2010. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by April 30, 2010, will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach.ca.us Mr.and Mrs. Ward March 17, 2010 Page: 2 Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8915, Phone (949) 644-3121. The Cashier is available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, please contact my assistant, Shirley Oborny, at (949) 644-3002. Sincerely, D ID A. KIFF City Manager cc: Lease File Office of the City Attorney Carol Ward 1001 Dove St.. Ste. 200 Newpc CITY OF NEWPORT BEACH Office of the City Manager (949)644-3000 March 17, 2010 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 7001 0320-0000-9971 7918 Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: It has come to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $14, 618, 006, which represents the amounts past due for the months December 09, January, February and March 2010. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by April 30, 2010, will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach-ca.us Mr.and Mrs. Ward March 17, 2010 Page: 2 Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8915, Phone (949) 644-3121. The Cashier is available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, please contact my assistant, Shirley Oborny, at (949) 644-3002. Sincerely, D ID A. KIFF City Manager cc: Lease File Office of the City Attorney Carol Ward 1001 Dove St., Ste. 200 Newport Beach, CA 92660 .w. CITY OF NEWPORT BEACH Office of the City Manager (949)644-3000 March 17, 2010 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 7001 0320 0000 9971 7918 Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: ti It has come to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $14, 518, 006, which represents the amounts past due for the months December 09, January, February and March 2010. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by April 30, 2010, will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach.ca.us Mr. and Mrs. Ward March 17, 2010 Page: 2 Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8916, Phone (949) 644-3121. The Cashier is available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, please contact my assistant, Shirley Oborny, at (949) 644-3002. Sincerely, D ID A. KIFF City Manager cc: Lease File Office of the City Attorney Carol Ward 1001 Dove St., Ste. 200 Newport Beach, CA 92660 Utility Billing V8.0 DATE: 01/26/2010 CITY OF NEWPORT BEACH TIME: 09:30:35 CUSTOMER HISTORY REPORT ACCOUNT NUMBER 1951300-03 CUSTOMER NAME WARD, CAROL SERVICE ADDRESS 2 BEACON BAY TRANSACTION DATE POST DATE TYPE DESCRIPTION AMOUNT BALANCE 01/14/2010 01/14/2010 BILLED STANDARD BILLING 1 ^1 4, 791. 56 k6 14,518.06 01/06/2010 01/04/2010 PAYMENT PAYMENT 001�/NDd 9,512.50 917.26.50 12/15/2009 12/15/2009 BILLED pkiel STANDARD BILLING 4,808.57�IV, 19,239.00 11/17/2009 11/17/2009 BILLED STANDARD BILLING 4,803.71 0- 14,430.43 11/12/2009 11/10/2009 PAYMENT PAYMENT �� T9y730.32 9,626.72 10/14/2009 10/14/2009 BILLED STANDARD BILLING 4,823.08 19, 357.04 09/16/2009 09/16/2009 BILLED ��d STANDARD BILLING 4,803.64 14,533.96 08/13/2009 08/13/2009 BILLED STANDARD BILLING 4,840.10 9,730.32 08/13/2009 09/12/2009 PAYMENT PAYMENT 9,877.16 4,890.22 07/22/2009 07/22/2009 POST AMT BILLING AMOUNT POSTED 72.00 14,767.38 07/14/2009 07/14/2009 BILLED STANDARD BILLING 4,818.22 14,695.38 06/18/2009 06/18/2009 BILLED STANDARD BILLING 4,808.50 9,877.16 06/16/2009 06/15/2009 PAYMENT PAYMENT 14,268.75 5,068.66 05/14/2009 05/14/2009 BILLED STANDARD BILLING 4,818.22 19,337.41 05/05/2009 05/05/2009 POST ANT BILLING AMOUNT POSTED 66.00 14,519.19 04/16/2009 04/16/2009 BILLED STANDARD BILLING 4,789.06 14,453.19 03/17/2009 03/17/2009 POST AMT BILLING AMOUNT POSTED 69.00 9,664.13 03/17/2009 03/17/2009 BILLED STANDARD BILLING 4,798.78 9,595.13 03/12/2009 03/11/2009 PAYMENT PAYMENT 4,794.02 4,796.35 02/18/2009 02/18/2009 BILLED STANDARD BILLING 4,796.35 9,590.37 01/15/2009 01/15/2009 BILLED STANDARD BILLING 4,793.92 4,794.02 01/07/2009 01/06/2009 PAYMENT PAYMENT 4,803.54 0.10 12/17/2008 12/17/2008 BILLED STANDARD BILLING 4,803.64 4,803.64 12/10/2008 12/09/2008 PAYMENT PAYMENT 4,808.50 0.00 11/18/2008 11/18/2008 BILLED STANDARD BILLING 4,808.50 4,808.50 11/10/2008 11/07/2008 PAYMENT PAYMENT 4,808.50 0.00 10/16/2008 10/16/2008 BILLED STANDARD BILLING 4,808.50 4,808.50 10/08/2008 10/07/2008 PAYMENT PAYMENT 4,882.36 0.00 09/15/2008 09/15/2008' BILLED STANDARD BILLING 4,813.36 4,882.36 09/08/2008 09/05/2008 PAYMENT PAYMENT 4,874.20 69.00 08/26/2008 08/26/2008 POST AMY BILLING AMOUNT POSTED 69.00 4,943.20 08/14/2008 08/14/2008 BILLED STANDARD BILLING 4,784.20 4,874.20 08/12/2008 08/12/2008 POST AMT BILLING AMOUNT POSTED 90.00 90.00 08/07/2008 08/06/2008 PAYMENT PAYMENT 4,882.36 0.00 07/16/2008 07/16/2008 BILLED STANDARD BILLING 4,813.36 4,882.36 07/09/2008 07/08/2006 PAYMENT PAYMENT 4,791.49 69.00 06/24/2008 06/24/2008 POST AMT BILLING AMOUNT POSTED 69.00 4,860.49 06/18/2008 06/18/2008 BILLED STANDARD BILLING 4,791.49 4,791.49 06/06/2008 06/05/2008 PAYMENT PAYMENT 4,791.49 0.00 05/15/2008 05/15/2008 BILLED STANDARD BILLING 4,791.49 4,791.49 05/09/2008 05/08/2008 PAYMENT PAYMENT 4,801.21 0.00 04/16/2008 04/26/2008 BILLED STANDARD BILLING 4,801.21 4,801.21 04/10/2008 04/09/2008 PAYMENT PAYMENT 4,789.06 0.00 03/17/2008 03/17/2008 BILLED STANDARD BILLING 4,789.06 4,789.06 03/07/2008 03/06/2008 PAYMENT PAYMENT 4,786.63 0.00 02/14/2008 02/14/2008 BILLED STANDARD BILLING 4,786.63 4,786.63 02/12/2008 02/11/2008 PAYMENT PAYMENT 4,786.63 0.00 01/17/2008 01/17/2008 BILLED STANDARD BILLING 4,786.63 4,786.63 01/15/2008 01/14/2008 PAYMENT PAYMENT 4,789.06 0.00 12/18/2007 12/18/2007 BILLED STANDARD BILLING 4,789.06 4,789.06 12/14/2007 12/13/2007 PAYMENT PAYMENT 4,789.06 0.00 11/15/2007 21/15/2007 BILLED STANDARD BILLING 4,789.06 4.789.06 11/08/2007 11/07/2007 PAYMENT PAYMENT 4,793.92 0.00 10/17/2007 10/17/2007 BILLED STANDARD BILLING 4,793.92 4,793.92 10/12/2007 10/11/2007 PAYMENT PAYMENT 4,791.49 0.00 09/18/2007 09/18/2007 BILLED STANDARD BILLING 4,791.49 4,791.49 PAGE NUMBER: 1 MODULE : histfun 4t 1 CutlomeMNaimdlon __ - _ __ _ Ac=KNvd-, 19513D0 F73, - Cu0omwN6mo ARD•CAflOL R I ServiwAddeu JZBEACON 1 124109 COMMENT SILUNGAGED GDO 1443043 11/17/09 COMMENT BILLPRINTED 0.00 1448G43 IIA71M BILLED DLIING4130171' PAYMENT *C^^��1� "�tl' PAYMENT/09 970A0 11112/09 COMMENT BILLPRINTED 1935704 10/14/09 BILLED STANDARD BILUNG ^4823.08117Va 1935704 03AGO BILLED STANDARD BILLING 480164 Ot+`. 145319G DBA3/09 OV13/09 BILLED PAYMENT STANDARD BILUNG PAYMENT U,Y �t� 4840.10<vpP �7200 973G32 07/22/09 POSTAMT BILUNG MOUNT POSED 14767.38 G7/1449 BILLED STANDARD BILUNG 481B22 (�Lq� 146M38 OS/19A9 BILLED STANDARD BILUNG 40150 fU 9977.16 OGAem PAYMENT PAYMENT 142GR75 5OGB66 05A4/09 BILLED STANDARD WILLING 4811122 19337.41 05/050 POSTAMT BIWNG AMOUNT POSTED 66DO 14519.19 04ASA19 BILLED STANDARD BIWNG 478B06 1445119 03/17/09 POSTAMT BILLING AMOUNT POSTED 69.00 966413 03/17109 BILLED STANDARD BILUNG 478B78 959S73 D3/12/09 PAYMENT PAYMENT 473402 47SR35 02/18119 BILLED STANDARD BILUNG 47SR35 959137 01/15/09 BILLED STANDARD BILLING 47S1S2 479402 01/07/09 PAYMENT PAYMENT 480154 0.10 12117/08 BILLED STANDARD BILUNG 4B0164 4B0164 12A1OMB PAYMENT PAYMENT 4BM50 Goo 11/18108 BILLED STANDARD WILLING 4BM50 480150 11/IDAB PAYMENT PAYMENT 4808.50 0.00 10ASM BILLED STANDARD BILUNG 4DX50 480050 lama PAYMENT PAYMENT 488236 0.00 09ASO BILLED STANDARD BILUNG 481136 488236 09108100 PAYMENT PAYMENT 487420 G9.00 000/08 POSTAMT BILUNG AMOUNT POSTED 6B00 494G20 0114/08 BILLED STANDARD BILUNG 478420 487420 OGAMB POSTAMT BILUNG AMOUNT POSTED 90.00 90.00 00/07/03 PAYMENT PAYMENT 488236 100 07ASM BILLED STANDARD BILUNG 481G36 488236 WORM PAYMENT PAYMENT 4791,49 GBOO OGQ4/08 POSTAMT BILUNG AMOUNT POSTED 6B00 4860.49 OSAOM BILLED STANDARD WILLING 4791.49 4791.49 D6A1GA78 PAYMENT PAYMENT 47SI49 GDO 05/15/00 BILLED STANDARD BIWNG 4791.49 479149 OSIDSM PAYMENT PAYMENT 4801,21 BOB 04AS48 BILLED STANDARD BILLING 4801.21 4801.21 D4AO/W PAYMENT PAYMENT 478906 BOB 0 AMB BILLED STANDARD BILLING 478B06 47BROB I' U OK i i, 419 Back A Rd Ovq CITY OF NEWPORT BEACH November 11, 2009 Patrick Ward c/o Metro Group 1001 Dove Street Newport Beach, CA 92660 Re: Lease payments for 2 Beacon Bay Dear Mr. Ward: This letter serves to confirm the contents of the phone conversation of November 3, 2009, between you and my assistant, Shirley Oborny, in which you stated that you will pay two months of the lease payments delinquent for the property at 2 Beacon Bay, in the amount of $9,730.32, and will pay the balance of delinquent lease payments in December 2009. On Monday, November 9, 2009, you made a payment in the amount of $9,730.32 for the months of er an ber-2009. Thank you for this payment, and for your assurance that the r aii'nnder oft epaaft due balance will be paid next month. If the remainder of any delinquent5leease payments is not paid on or before January 1, 2010, the City may be required to pursue alternate remedies, including the issuance of a Three -Day Pay or Quit Notice and subsequent unlawful detainer action. Sincerely, I David A. Kiff 4 City Manager City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach.ca.us Utility Billing V8.0 DATE: 10/29/2009 CITY OF NEWPORT BEACH TIME: 16:53:07 CUSTOMER HISTORY REPORT ACCOUNT NUMBER 1951300-03 CUSTOMER NAME WARD, CAROL SERVICE ADDRESS 2 BEACON BAY TRANSACTION DATE POST DATE TYPE DESCRIPTION AMOUNT BALANCE 10/14/2009 10/14/2009 BILLED STANDARD BILLING 4,823.08 Nov, 3.9,357.04 09/16/2009 09/16/2009 BILLED STANDARD BILLING 4,803.64 QtV, 14533.96 08/13/2009 08/13/2009 BILLED STANDARD BILLING 4,840.IOSQ9+ 9:730.32 08/13/2009 08/12/2009 PAYMENT -t y PAYMENT �OV`Q �v�11 9,877.16 4,896.22 07/22/2009 07/22/2009 POST AMT BILLING AMOUNT POSTED 72.00 14,767.38 07/14/2009 07/14/2009 BILLED STANDARD BILLING 4, 818. 22�F 14,695.,38 06/18/2009 06/16/2009 06/18/2009 06/15/2009 BILLED PAYMENT STANDARD BILLING 11 PAYMENT (XI�Q 1,f ;f` �, 14, 808. 75A1o'l'Se 9,877.16 05/14/2009 05/14/2009 BILLED STANDARD BILLING SS ` AVtj 4,818.,22731AKe 19,337.41 05/05/2009 05/05/2009 POST AMT BILLING AMOUNT POSTED n^ 66.00 14,519.19 04/16/2009 04/16/2009 BILLED STANDARD BILLING 1•\ 1 4,789.06 naaA 14,453.19 03/17/2009 03/17/2009 POST AMT BILLING AMOUNT POSTED 69.00 9,664.13 03/17/2009 03/17/2009 BILLED STANDARD BILLING 4:798.781 1t 9,595.13 03/12/2009 03/11/2009 PAYMENT PAYMENT rr 4794.02 m(x4-414,796.35 02/18/2009 02/18/2009 BILLED STANDARD BILLING 4,796.35frr-16h 9,590.37 01/15/2009 01/15/2009 BILLED STANDARD BILLING 4,793.92Y2.6 4,794.02 01/07/2009 01/06/2009 PAYMENT PAYMENT 4,803.54 0.10 12/17/2008 12/17/2008 BILLED STANDARD BILLING 4,803.64 4,803.64 12/10/2008 12/09/2008 PAYMENT PAYMENT 4,808.50 0.00 11/18/2008 11/18/2008 BILLED STANDARD BILLING 4,808.50 4,808.50 11/10/2008 11/07/2008 PAYMENT PAYMENT 4,808.50 0.00 10/16/2008 10/16/2008 BILLED STANDARD BILLING 4,808.50 4,808.50 10/08/200B 10/07/2008 PAYMENT PAYMENT - 4,882.36 0.00 09/15/2008 09/15/2008 BILLED STANDARD BILLING 4,813.36 4,882.36 09/08/2008 09/OS/2008 PAYMENT PAYMENT 4,874.20 69.00 08/26/2008 08/26/2008 POST AMT BILLING AMOUNT POSTED 69.00 4,943.20 08/14/2008 08/14/2008 BILLED STANDARD BILLING 4,784.20 4,874.20 08/12/2008 08/12/2008 POST AMT BILLING AMOUNT POSTED 90.00 90.00 08/07/2008 08/06/2008 PAYMENT PAYMENT 4,882.36 0.00 07/16/2008 07/16/2008 BILLED STANDARD BILLING 4,823.36 4,882.36 07/09/2008 07/08/2008 PAYMENT PAYMENT 4,791.49 69.00 06/24/2008 06/24/2008 POST AMT BILLING AMOUNT POSTED 69.00 4,860.49 06/18/2008 06/18/2008 BILLED STANDARD BILLING 4,791.49 4,791.49 06/06/2008 06/05/2008 PAYMENT PAYMENT 4,791.49 0.00 05/15/2008 05/15/2008 BILLED STANDARD BILLING 4,791.49 4,791.49 05/09/2008 05/08/2008 PAYMENT PAYMENT 4,801.21 0.00 04/16/2008 04/16/2008 BILLED STANDARD BILLING 4,801.21 4,801.21 04/10/2008 04/09/2008 PAYMENT PAYMENT 4,789.06 0.00 03/17/2008 03/17/2008 BILLED STANDARD BILLING 4,789.06 4,789.06 03/07/2008 03/06/2008 PAYMENT PAYMENT 4,786.63 0.00 02/14/2008 02/14/2008 BILLED STANDARD BILLING 4,786.63 4.786.63 02/12/2008 02/11/2008 PAYMENT PAYMENT 4,786.63 0.00 01/17/2008 01/17/2008 BILLED STANDARD BILLING 4,786.63 4,786.63 01/15/2008 01/14/2008 PAYMENT PAYMENT 4,789.06 0.00 12/18/2007 12/18/2007 BILLED STANDARD BILLING 4,789.09 4,789.06 12/14/2007 12/13/2007 PAYMENT PAYMENT 4,789.06 0.00 11/15/2007 11/15/2007 BILLED STANDARD BILLING 4,789.06 4,789.06 11/08/2007 11/07/2007 PAYMENT PAYMENT 4,793.92 0.00 10/17/2007 10/17/2007 BILLED STANDARD BILLING 4,793.92 4,793.92 10/12/2007 10/11/2007 PAYMENT PAYMENT 4,791.49 0.00 09/18/2007 09/18/2007 BILLED STANDARD BILLING 4,791.49 4,791.49 09/07/2007 09/06/2007 PAYMENT PAYMENT 4,797.05 0.00 08/15/2007 00/15/2007 BILLED STANDARD BILLING 4,762.05 4,797.05 08/08/2007 08/07/2007 PAYMENT PAYMENT 4,756.25 35.00 08/07/2007 08/07/2007 ADJ BILL AUGUST 2007 RENT 4,756.25 4,791.25 07/18/2007 07/18/2007 POST AMT BILLING AMOUNT POSTED 35.00 35.00 PAGE NUMBER: 1 MODULE : histEun > (t-q-nq R ( 4 Oborny, Shirley From: Rieff, Kim Sent: Thursday, November 05, 2009 4:29 PM To: Oborny, Shirley Subject: Phone Message Shirley, Pat Ward called. He asked if you could call him tomorrow. His phone number is (949) 833-2238. He also said he would be in Monday. 2Um Pj ff, MayorMssistant Mayor's Office/City Manager's Office City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 (949)644-3004 (949) 644-3008 (fax) $ SENDER: ■ Complete Items 1 andror2 for additional services, M • Complete Item`e a, 40, and 4b, 4 • Print your name and address on the reverse of this forth so that we sere return this Card to yyOU. ■ Attach this form to the front of the maliplece, or on the back If specs does not perm. • waleit'Return Rece/pt Requested'on the mellplece below the article number. a The Return Recelpt WIN show to whom the article was delivered and the date denvemd. 3. Argcle Addressed to: 4a. Article �r��dyyyyyl ��°(A'�►''� �eaCh �,2660 ��//E"p .LYLRsIum a �I IN L_ I also wish to receive the following services (for an extra fee): 1. ❑ Addressee's Addresy 2. ❑ Restricted Delivery Consult postmaster for fee. f3Ceruged ❑ Insured r9 rtn w STATES POSTAL SERVICE Amt-Class Mall Postage 3 Fees Pald USPS Pormh No. 0.10 • Print your name, address, and ZIP Code In this box • Jk i t-tif� D(gorny, , Cr e ri 5 ou'cc. Ci4v Orr mf-oTOr�eaGt 3aoo Ue-c por-6 Btvd. UeLcq>or'E V coc t r C*1 9,2663 • Complete Items 1, 2, and 3. Also complete Item 4If Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card.to you. ■ Attach this card to the back of the mailplece, or on the front if space permits. 1. Article Addressed to; �W tb k 6mA bya Woad 10(0 zav>Ae kte Drive Cmvkct (44 Mar, CA I ga c026 2. Article Number —7Q� 1 (ffonsferfrom service faba0 I A. Signature X B. Received by (Printed Name) ❑ Agent c. Date of Delivery I D. is delivery address dlfferentfiom item 17 El Yes If YES, enter delivery address below. ❑ No 3. Se Ice Type Rf certified Mall ❑ Registered ❑ Insured Mail 4. Restricted Delivery? Receipt ❑�, /Express Mail NI Retum Receipt forMerchandise ❑ G.O.D. 1 (Extra Fee) E Yes I 9OR3 102595-02-M-1640 I UNITE) STATES POSTAL SERVICE First -Class Mail Postage USPS &Fees Paid Parmit No. G40 • Sender. Please print your name, address, and ZIP+41n this box • Sk;r(ey 060m J' ct-& tqCrs O iGG $,Je(b -6 -Beaetx- 3300 Keca or� BWc( ttlec0�or� Deack t CA- ?Z663 CITY HALL Office of the City Manager 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California 92658-8915�7001 0320 0000 7829 6540�^� RETURN SERVICE REQUESTED Patrick and Carol Ward 2 Beacon Bay Newport Bea 3 00 Mreo o q oN� 0 0 3 �t NN� m o� rn o a-i NINME 927 BE 1 01 10129109 RETURN TO SENDER UNCLAIMED UNABLE TO FORWARD DC: 92659$91sse *2077-00929-29-22 <C�EWPORT o e u m COK q</Fovt � CITY HALL Office00 Newport Boulevard ty Manager P.O. Box 1768 Newport Beach, California92658-8915 7001.0320 0000 9971 8083 _ RETURN SERVICE REQUESTED Patrick and rol Ward 1010 sa castle Drive Corona,fiel I T7SXXF 9`.27 56 1 p:L 1QJ05� RETURN TO SENDER NOT oEUNA22 EBT0 AsRWARpESSED mc: 9265eeStI56fl +k2077-0t3'diF7-05- �_"a.��,iE�s�i3m�l�3s CITY OF NEWPORT BEACH z \q</ Fn RNP September 30, 2009 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 7001 0320 0000 7829 6540 Patrick and Carol Ward 2 Beacon Bay - Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: It has come to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $9,730.32, which represents the amounts past due for the months August through September 2009. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by October 30, 2009 will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8916, Phone (949) 644-3121. The Cashier is City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach.ca.us Mr.and Mrs. Ward September 30, 2009 Page: 2 available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, I can be reached at (949) 644-3131. Sincerely, CITY MANAGER'S OFFICE --2 1 Davi Kiff City Manager cc: Lease File Office of the City A++^rnaw Carol Ward 1001 Dove St., S Newport Beach, i CITY OF NEWPORT BEACH September 30, 2009 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 7001 0320 0000 7829 6540 Patrick and Carol Ward 2 Beacon Bay - - - Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE = 2 BEACON BAY Dear Mr. and Mrs. Ward: It has come'to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. , It is the City's policy pursuant to the terms of your lease outlined in Section 14:(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $9.730.32, which represents the amounts past due for the months August through September 2009. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by October 30, 2009 will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of,Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8915, Phone (949) 644-3121. The Cashier is City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 • www.citynewport-beach.ca.us Mr.and Mrs. Ward September 30, 2009 Page: 2 available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, I can be reached at (949) 644-3131. Sincerely, CITY MAIN Davi Kiff City Mana cc: Lea Offi Car 10C Nei Oborny, Shirley I L fM 1 ULl MU From: Wolcott, Cathy aj&, ` Sent: Tuesday, November 03, 2009 4:02 PM /y(,(�j�/ To: Oborny, Shirley Cc: Kiff, Dave Subject: RE: 2 Beacon Bay - payment arrangements Forjust a few months, with probably payment in full in December, I'd be okay with accepting the two -month partial ,payment if it's okay with Dave K. However, we should send a letter from the CMO stating the understanding you have with Mr. Ward ("This letter serves to confirm the contents of our phone conversation of November 3, 2009, in which you stated that you will pay two months of the lease payments delinquent for the property at 2 Beacon Bay, in the amount of $ , and wQ.pay the balance of delinquent lease payments on or before December_ 2009. If delinquent lease payments are not paid on or before that date, the City may be required to pursue alternate remedies, including the issuance of a Three -Day Pay or Quit Notice and subsequent unlawful detainer action." Or words to that effect. If you can draft the first version, based on wording above, I can tweak it. Thanks - Cathy From: Oborny, Shirley Sent: Tuesday, November 03, 2009 1:18 PM To: Wolcott, Cathy Cc: Kiff, Dave Subject: 2 Beacon Bay - payment arrangements I spoke with Mr. Ward today. He's three, soon to be four months behind on his lease payments. He would like to pay two payments this Friday or Monday. He said he's supposed to be getting a large commission (I think he's a realtor) in December and then he'd be able to pay up what's due. How should I proceed? 5kirley 06omy Cit'ii Manager's Office 33oo Newport blvd. Newport ]each, CA 92663 9+t-054+-3002 9+9-6+r-3008 fax R CITY OF NEWPORT BEACH `/i, oaNj September 30, 2009 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO, 7001 0320 0000 7829 6540 Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: It has come to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $9,730.32, which represents the amounts past due for the months August through September 2009. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by October 30, 2009 will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8915, Phone (949) 644-3121. The Cashier is City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 0 www.citynewport-beach.ca.us o - Po:lage E a t'' CortMed Fee Posbnark Ir C Rolum Receipt Foe H010 t7 (Endomemont Roqulmd) Re j O (PEntloraooment floqulrod) Total Postage &Fees $ QSent7o ..- QV�4 _ V w ... ......... .._... -.. ........-..---...... or , ML Na.r - 00 l Dove St ; �}e , 200-._ - A WPoBox No. ................... . ...............................--------- 9ai��o O (dry, 0 w ,f— er^�' 1 `' tl. . a m a Pmtago E [� Cr Codified Foo Postman, D' tm Roldm Rxelpl Foe (Endomomont RgquW Here O O Roeldoted Dolivory Foo (Endomdmunt Roqulmd) O Total Postage 4 Fees $ m Sot To , C.........-W.._a.... a ...............�c�l<..a Sfree4MLNo. ; "POBoXNo,C�.lUld .......... G -airy §fnto.7JP .................._.--.......-.- ....-........ COfoncade� Mar CR a z5 E �■ 0F17-1CIAL USE 0'ru Postage E a r- Comgod Fee � Pwimork ppa�um Retel t Fee Hero 0 (End breombnt Requlrod) t G Restricted Dolivory Fee (pntlwoemant Roqulracq N pTotal Postage & Fees /s s$ WWI QGorPO ApLNo.,- - ^- orPo Bar No, Cdy S te. GPad ....Rea.............................. A- 9Z6610 Mr. and Mrs. Ward September30, 2009 Page: 2 available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, I can be reached at (949) 644-3131. Sincerely, CITY MANAGER'S OFFICE 1 Davi Kiff City Manager cc: Lease File Office of the City Attorney Carol Ward 1001 Dove St., Ste. 200 Newport Beach, CA 92660 IL <� r e CITY OF NEWPORT BEACH C- nPz September 30, 2009 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 7001 0320 0000 7829 6540 Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: It has come to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $9,730.32, which represents the amounts past due for the months August through September 2009. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by October 30, 2009 will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8915, Phone (949) 644-3121. The Cashier is City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 0 www.city.newport-beach.ca.us Mr,and Mrs. Ward September 30, 2009 Page: 2 available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p:m, Thank you for your prompt attention to resolving this issue. Should you have any questions, I can be reached at (949) 644-3131. Sincerely, CITY MANAGER'S OFFICE 1C Davi Kiff City Manager cc: Lease File Office of the City Attorney Carol Ward 1001 Dove St., Ste. 200 Newport Beach, CA 92660 n V CITY OF NEWPORT BEACH r u September 30, 2009 VIA FIRST CLASS US MAIL AND CERTIFIED MAIL NO. 7001 0320 0000 7829 6540 Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Drive Corona del Mar, CA 92625 RE: FINAL NOTICE TO PAY RENT BEACON BAY LEASE — 2 BEACON BAY Dear Mr. and Mrs. Ward: It has come to our attention that rent due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA is delinquent. You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which was recorded with the County of Orange as Document No. 2007000484299. It is the City's policy pursuant to the terms of your lease outlined in Section 14(A)(2), to proceed with the issuance of a 3-Day Notice to Pay or Quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and water bills due on your account is $9,730.32, which represents the amounts past due for the months August through September 2009. Please make immediate arrangements to pay this amount in full. Failure to pay all past due rent amounts by October 30, 2009 will result in further action by the City including, but not limited to, referral of this matter to the City Attorney's Office, the service a 3-Day Notice to Pay or Quit, commencement of legal proceedings against you, and termination of your lease. Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300 Newport Blvd., Newport Beach, CA 92658-8915, Phone (949) 644-3121. The Cashier is City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658-8915 9 www.citynewport-beach.ca.us ./ Mr.and Mrs. Ward September30, 2009 Page: 2 available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. Thank you for your prompt attention to resolving this issue. Should you have any questions, I can be reached at (949) 644-3131. Sincerely, CITY MANAGER'S OFFICE Davi Kiff City Manager cc: Lease File Office of the City Attorney Carol Ward 1001 Dove St., Ste. 200 Newport Beach, CA 92660 CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY David R. Hunt, City Attorney May 21, 2009 'VIA CERTIFIED MAIL AND FIRST CLASS MAIL Patrick and Carol Ward 2 Beacon Bay Newport Beach, CA 92660 Patrick and Carol Ward 1010 Sandcastle Dr. Corona del Mar, CA 92625 RE: FINAL NOTICE PAST DUE RENT BEACON BAY LEASE — LOT 2 A09-00140 Dear Mr. and Mrs. Ward: The City Manager's Office has brought it to our attention that rents due for the real property commonly known as 2 Beacon Bay, Newport Beach, CA are seriously delinquent.' You are in breach of the terms of your Lease which commenced on August 2, 2007, a Memorandum of Lease of which is recorded with the County of Orange as Document No. 2007000484299. It is the City of Newport Beach's policy pursuant to the terms of your lease outlined In Section 14(A)(2), to proceed with the Issuance of a three-day notice to pay or quit the premises and commence an unlawful detainer action when rents become past due. As of this date the total rent and late fees due on your account Is $14,453.19, which represents the amounts past due for the months of March thru May, 2009. Please make immediate arrangements to pay this amount. Failure to pay all past due amounts by Tuesday, May 29th, 2009 will result in further action by the City including, but not limited to, the service a three-day notice to pay or quit, commencement of legal proceedings against you and termination of your lease. Payments must be made by cash or check, payable to The City of Newport Beach and must be delivered to: The City of Newport Beach Cashier at 3300. Newport Blvd., Newport Beach, CA 92658.6915, Phone (949) 644.3121. The Cashier Is available to receive payment Monday through Friday, between the hours of 7:30 a.m. and 5:00 p.m. 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658-8915 Telephone: (949) 644-3131 • Fax: (949) 644-3139 • www.eity.newport-beach.ca.us 4 Mr. and Mrs. Ward Date: May 29, 2009 Page: 2 Thank you for your prompt attention to resolving this issue. Should you have any questions, I can be reached at (949) 644-3131. Very Truly Yours, OFFICE OF THE CITY ATTORNEY /'\ 1-. . David R. Hunt City Attorney DRH:ksp oo: Carol Ward 1001 Dove St., Suite 200 Newport Beach, CA 92660 I 'v Mr. and Mrs. Ward Date: May 29, 2009 Page: 3 Boo: Shirley Oborney, City Manager's Office 2 3 4 5 6 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 M- CATHERINE M. WOLCOTT (SBN 169679) DEPUTY CITY ATTORNEY CITY OF NEWPORT BEACH 3300 Newport Blvd. Newport Beach, California 92663 Telephone: 949/644-3131 Facsimile: 949/644-3139 Attorney for Plaintiff, City of Newport Beach, a Municipal Corporation IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, HARBOR JUSTICE CENTER LAGUNA HILLS City of Newport Beach, a municipal corporation Plaintiff, VS. Patrick Ward, and Carol Ward, and DOES 1-10, inclusive, Case No. STIPULATION FOR ENTRY OF JUDGMENT AND ORDER THEREON Trial date: no date set Defendants. This conditional Stipulation is for entry of judgment in an action for unlawful detainer filed on . It is agreed and understood by the parties to this action that Plaintiff, City of Newport Beach, a municipal corporation, ("Plaintiff") will file the unlawful detainer action should the conditions in this Stipulation not be fulfilled, and that judgment will be entered based on the terms of this Stipulation. Plaintiff and Defendants, Patrick and Carol Ward, husband and wife, as joint tenants, and Does 1 through 10, ("Defendants") (collectively, "the Parties"), hereby agree to resolve this matter and enter this Stipulated Judgment as follows: 1. WHEREAS, Defendants are joint tenants under a Lease Agreement dated August 2, 2007 ("Lease") with Plaintiff for the ground lease of 2 Beacon Bay, Newport Beach, California 92663 ("Premises"). -1- STIPULATION FOR ENTRY OF JUDGMENT 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 W 2. WHEREAS, under the terns of the Lease, Defendants are obligated to pay $4,756.25 per month rent to Plaintiff. 3. WHEREAS, Defendants are in default of material terms of the Lease due to nonpayment of rents past due. The Parties hereby agree and acknowledge that as of the date of execution of this Stipulation, Defendants owe Plaintiff the sum of $63,644.79 for rents past due. In addition, the Parties hereby agree and acknowledge that as of the date of execution of this Stipulation, Defendants have failed to pay monthly fees charged by the Plaintiffs for water and garbage collection services provided to the Premises, in the amount of $783.63. The Parties agree and hereby acknowledge that the total amount owed to Plaintiff by Defendants through August 1, 2011 is $64,428.42. , 4. WHEREAS, the Parties wish to resolve this matter, and agree to enter and be bound by the terms of this Stipulation. 5. WHEREAS, the Parties agree and stipulate that: a. Defendants may retain possession of the Premises subject to adherence to the payment plan and other terms contained within this Stipulation. b. On or before 90 days from the date of execution of this Stipulation ("the Payment Period"), Defendants shall pay Plaintiffs $64,428.42, which represents the entire amount past due on the date of execution of this Stipulation. c. During the Payment Period, Defendants shall pay all further rental and utility payments due under the Lease on a timely basis. d. In consideration of the agreements herein and provided Defendants comply with each and every term, Plaintiff agrees to forgo filing this unlawful detainer action provided the Defendants, and each of them, make all required payments set forth herein within the Payment Period. e. Should Defendants fail to make any and all payments when due as set forth herein, Plaintiff and Defendants agree and stipulate that judgment shall enter for Plaintiff and against Defendants as follows: -2- STIPULATION FOR ENTRY OF JUDGMENT I 2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i. IT IS ADJUDGED AND DECREED that Plaintiff shall recover possession of the Premises located at 2 Beacon Bay, Newport Beach, California, 92663, from Defendants. The clerk of this Court is directed to issue a writ of possession directing the Orange County Sheriff to take all legal steps necessary to remove Defendants from the Premises. ii. IT IS FURTHER ADJUDGED AND DECREED that Plaintiff recover from Defendants the following monetary relief: 1. Damages in the amount of $64,428.42, which constitutes the amount owed for unpaid rents and utility fees on the date of execution of this Stipulation, plus any monthly rent and utility payments due under the Lease which are not paid in a timely manner as set forth herein, less any payments actually made by Defendants through the date of the default on this Stipulation. 2. Costs of $ [according to memorandum of costs to be filed after entry of judgment.] 3. Attorneys fees of $ [to be fixed by motion after entry of judgment.] f. Such entitlement shall be by ex parte application, with twenty-four (24) hours prior fax/telephonic notice to Defendants. Defendants waive all rights to a noticed motion or right to a hearing on entry of such judgment. 6. A true and correct copy of the Lease between Defendants and Plaintiff is attached hereto as Exhibit `A' and incorporated herein by this reference. 7. This Stipulation may be executed in counter parts as circumstances require; facsimile signatures shall be deemed to be originals pursuant to California Rule of Court 2007 (d). Upon execution of this Stipulation, the same may be filed with the Court. In the event of default in the performance of this Stipulation, and upon Plaintiff's ex-parte application, judgment shall enter as authorized herein. Upon full and complete compliance with the terms of this Stipulation, this matter shall be -3- STIPULATION FOR ENTRY OF JUDGMENT 2 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 dismissed, with prejudice. 8. This Stipulation represents the full and complete understanding of every kind or nature whatsoever between the Parties, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 9. Defendants, and each of them, acknowledge they have been informed of their right to consult with legal counsel of their own choosing and have either availed themselves of that right or have proceeded to execute this Stipulation freely and voluntarily without seeking advice of counsel. 8. With the exception of the foregoing, the Lease between the parties remains in full force and effect. IT IS SO STIPULATED: DATED: Plaintiff, City of Newport Beach, a municipal corporation By: Dave Kiff, City Manager DATED: la "o�o Patrick Ward, a married man, as join enant DATED: Car'o-fWard, a m ime w man, as joint tenant APPROVED AS TO FORM AND CON ENT: DATED: 142t= ✓ OFFICE OF THE CITY ATTOFPEY David R. Hunt, City Attorney IT IS SO ORDERED. Dated: JUDGE OF THE SUPERIOR COURT STIPULATION FOR ENTRY OF JUDGMENT LEASE THIS LEASE is made and entered into as of the Zoi dayof 2007, b and between the CITY Y OF NEWPORT BEACH, a Charter City and municipal corporation essor'% and PATRICK AND CAROL WARD Husband and Wife as Joint Tenants, ("Lessee"), regarding the real property commonly referred to.as Beacon Bay Lot 2. 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 §1, 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. NB1.187371MOW4194 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 2 (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 saline, subject to the express Ilmitation 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 33(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 ride lender acting in the capacity of a lender or an infer 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 Fifty-seven thousand seventy-five and 0/100s ($57.075.00), payable at the rate of Four thousand seven hundred fifty-six and 25/100s ($4,756.25) permonth. Lessee shall also pay, if applicable, deferred rent in the sum of N/A upon execution of this Lease. Rent shall be adjusted every seven (7) years after the date of transfer in accordance with the provisions of Paragraph 33(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 3.13(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.6(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of the Actual Sales Value determined as of the date of the transfer in accordance with the provisions of paragraph 3.A(l). Thereafter, rent shall be adjusted every seven years after the date of the transfer in accordance with the provisions of paragraph 33(4). (c) In the event of any transfer of this Lease to a Subsequent Lessee in a transaction other than an arm's length assignment of this Lease, and sale of the Improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.B(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). (2) Execution After the Effective Date. In the event this Lease Is first executed after the Effective Date, rent shall be determined and paid as follows: (a) Current Lessee/Within Five Years After Effective Date: In the event this Lease is executed by the Current Lessee within five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to initial Rent plus a sum calculated by multiplying the difference between Initial Rent and Average Actual Sales Value Rent by a fraction equal to the number of months between the Effective Date and Execution Date, divided by sixty. The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee, rent shall remain as specified in this subparagraph, notwithstanding the provisions of Paragraph 3.13(4). (b) Current Lessee/More Than Five Years After Effective Date: in the event this Lease is executed by the Current Lessee more than five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Average Actual Sales Value Rent calculated as of the date of execution in accordance with the provisions of Paragraph 3.A(2). The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease, Thereafter, rent shall be adjusted every seven (7) years after the date of execution in accordance with the provisions of Paragraph 3.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(l). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.13(4). (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.B(4). (3) Exempt Transfers. The provisions of Paragraph 3.6 regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.13(I)(a), 3.B(2)(a) and 3.B(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current- or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage increase or decrease, if any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (i) the Execution Date, or (li) 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 33(2)(c), and thereafter as provided in Paragraph 33(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 3.B(3). (5) Installment Payments/Grace Period. Lessee shall pay rent in equal monthly installments, in advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (15th) day of the month for which the payment is made ("Grace Period") . If a rent payment, or any portion thereof, is received by Lessor after expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to the City of Newport Beach and sent, or delivered, to the Finance Director at the address specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or currency to the United States as at the time of payment is legal tender for public and private debts. 'Lessor and Lessee agree that late charges specified in this paragraph represent a fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 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 El 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 (1) the stated consideration for the transfer, or (ii) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.13 shall be conducted by an MAI appraiser licensed to conduct business•in the State of California and experienced in residential appraisals in Southern California. C. Exempt Transfer Information. Lessor's consent is not required for the "exempt transfers" !referenced in Paragraph 3.B(3); provided, however, Lessee shall furnish Lessor with copies of all documents used to effect any exempt transfer. D. Audit of Subleases. It is the intent of the parties that transfers referred to in Section 3.B(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 not, 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 ride 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 br 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 df 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 ANDRAINTENANCE. 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 soli 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 Indiv)dual 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, 10 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. 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 rate share of the annual costs incurred by Lessor shall be paid within thirty (30) days after written notice of the amount due, and any failure to pay shall constitute a material breach of this Lease. The costs of maintaining and operating community facilities shall be determined annually and solely from the financial records of Lessor. 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit E attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 12. INDEMNIFICATION. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim or suit, arising out of, or in any way related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. 11 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 12 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 (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 award of the amount referred to in clause (i) shall be computed by discounting such amount at one percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) Without terminating or affecting the forfeiture of this Lease or, in the absence of express written notice of Lessor's election to do so, relieving Lessee of any obligation pursuant to this Lease, Lessor may, but need not, relet all or a portion of the Premises at any time, or from time to time, and on such terms and conditions as Lessor, at its sole discretion, deems appropriate. Whether or not the Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. Lessee shall make such payments at the time specified in the Lease and Lessor need not wait until termination of the Lease to recover sums due by legal action. If Lessor relets all or a portion of the Premises, the reletting shall not relieve Lessee of any obligation pursuant to this Lease; provided, however, Lessor shall apply the rent or other proceeds actually collected by virtue of the reletting against amounts due from Lessee. Lessor may execute any agreement reletting all or a portion of the leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless i Lessor has given Lessee express written notice of Lessor's election to do so. (3)I Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amount specified in Paragraph 14.6(1). 13 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 obiigation 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. 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 rembval must be complete no later than ninety (90) days after expiration of the term of this Lease. Lessee shall fill all excavations and remove all foundations, debris and other parts of the buildings or Improvements remaining after removal and surrender possession of the Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.13, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shalt 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, 14 (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. 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 15 Lesse§ 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 parry 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. iE.7�CITi7_1PT_�71 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 mall, 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 uponLessor or Lessee shall be deemed complete upon the earlier of (i) actual delivery, or (ii) the expiration of seventy-two (72) hours from and after the deposit in the United States mail of such notice, demand or communication. 22. HOLDING OVER. This Lease shall terminate and become null and void without further notice upon the expiration of the term of this Lease. Any holding over by Lessee after expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The parties agree this Lease cannot be renewed, extended, or in any manner modified except in a writing signed by all parties. However, if Lessee, or anyone claiming under Lessee, shall remain in possession of the Premises after expiration of the term of this Lease without any agreement in writing between the parties and Lessor accepts rent from Lessee, then Lessee shall be deemed a tenant from month -to -month subject to the provisions of this Lease insofar as they may be applicable to a month -to -month tendency. The month -to -month tendency may be terminated by Lessor or Lessee 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 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. ATTEST: APPROVED AS TO FORM: CITY ATTORREY LESSOR: CITY OF NEWPORT BEACH, By: (A,_ CZ Title: VY MANAGER LESSEES: k*/ m��e PATRICK WARD ri / /i�1 �ilulI CAIkOL WARD 18 NOTARY PA GE STATE OF CALIFOM UA } } S.S. COUNTY tOF CVM-V-LT } / - On ! p "� before me,"&, a A KC r 9— a Notary Public personally, 7a-�raC:IL t1�LCw'ci C��4 CcL�� 1��- appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of vihicch the person(s) acted, executed the instrument. WITNESS Signature STATE OF CALIFOPMA } } S.S. COUNTY OF } BRIAN J. FOXCROFT 9 . ' NOTARY PUBLIC - CALIFORNIA m 6n COMMISSION # 1575857 'c ORANGE COUNTY My Comm. Exp, May S. 2009 On before me, a Notary Public , personally appeared ,personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument WITNESS my hand and official seal. Signature BVt � fo PI�OM�NTD.Ci' � zLT1 ,� t �' �. `��•• �G�i,�,'�° ^mow 39 LoT .0 10 .41 5c. 3 ny \'^ _ }, zs \ .os' A �o,n =_ ' Ci 26 -moo t� ,�� •� M1 IX 90 1/ G —1 '•+ ' ,v Ate• C� '" . C A _ , -•�, '� is 1°0 0� ., o a i Sty 5 L Y� Y ne •i _n ^v J - ` (il Z.?^j-- S7• a _p b tR�O +°'� C� 'All ll f ov O �' 3 R. rs _ 58 i ;a i i s1 Q¢a GE •0.1 t� �• 1S "`•~g 7J "y'C. d N '�� •e.. 5� .� � � 666t1e�,9�,y` t''i.d�T �fi God vpciy�05,�ryi< �P .� PI�� c�°�, D .� c R�=f°ao1 P G V✓�''4 p*as! L� i \ ,� �ID'S 91° 1 �5/ a� .4mr• a� .� °7•-p9-r,. �1 +'A� �j0 �l f� °r' %IV Prep V.W. yri.�0 IG °Lb� 1501• - .L rt ° ":,.,. , ..e mil/"-•er'�. [� c� V.S;aazo - m c A AIAP OF BEACON BAY , EXHIBIT B Beacon Bay Lot 2 described as follows: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. SUTS4ARY OF SALIENT FACTS AND CONCLUSIONS - continued SUM YL-6aY OF VALUE INDICATIONS: Existing (1st year) Unencumbered, FairMarket 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 13 $1,200,000 $43,320 $12,506.85 $22,270.00 C $1,031,000 $37,560 $16,625.04 S22,480.00 1 $947,000 $34,200 $9,020.80 $15,030.00 2 $1,131,000 $41,640 $8,925.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 S31,560.00 4 $1,318,000 $49,120 $10,458.96 $21,260.00 5 $1,341,000 S50,120 $20,012.04 $28,840.00 6 $1,396,000 $51,690 $25,000.00 $34,260.00 7 S1,210,000 $44,800 S24,999.96 $31,970.00 8 $1,177,000 $43,480 $43,750.00 $43,490.00 9 $1,298,000 $47,S40 $42,500.0-4 $44,350,00 10 S1,342,000 $49,600 $24,999.96 $33,540.00 11 $1,122,000 $41,280 S9,020.52 $17,020.00 u 12 S1,100,000 $40,400 S14,250.00 $22,190.00 13 $1,100,000 $40,400 $23,625.00 $29,450.00 14 S1,243,000 $45,640 $10,312.56 S19,690.00 15 $1,265,000 $46,520 $10,836,47 $20,240.00 16 $1,067,000 S39,080 S8,508.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 $21,750.00 18 $1,067,000 S39,080 $8,508.48 $16,480.00 19 $1,243,0004 $45,640 $10,020.02 $19,500.00 20 S1,147,000 $42,320 $8,727.84 $17,910.00 21 $1,058,000 $38,760 S20,224.50 $26,660.00 22 $1,036,000 $37,980 $41,250.00 $37,990.00 ES 1 S1,037,000 S37,880 S28,749.96 $31,920.00 ES 2 S1,037,000 S37,880 $24,625.00 $29,220.00 Subtotals: $31,563,000 S1,160,640 $519,983.08 $705,220.00 Exhibit C - Page 1 STjjS,L RY OF SALIENT FACTS AND CONCLUSIONS - continued Existln (lstyear) 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 5501,000 $15,237 $6,125.04 $8,897.00 25 5509,000 $15,537 $3,399.12 $6,977.00 26 $511,000 $15,612 $3,417.72 $6,942.00 27 $519,000 $15,912 $3,43644 $7,102.00 M $542,000 $16,775 $4,137.72 . $7,785.00 29 $518,000 $15,650 $15,375.00 515,470.00 30 $510,000 $15,462 53,551.16 $7,102.00 31 $517,000 515,725 $8,750.00 $10,515.00 32 $520,000 $15,837 53,588 48 $7,217.00 33 5528,000 $16,137 $3,607.09 $7,307.00 34 $589,000 $18,200 $4,454.64 $8,490.00 35 5559,OD0 $17,000 53,776.28 57,780.00 36 $548,000 $16,662 $3,795.00 $7,672.00 37 5517,000 515,725 $14,625.00 $15,005.00 38 5520,000 515,837 $3,790.36 $7,967.00 39 $528,000 $16,137 59,125.04 $11,557.00 40 $588,000 518,162 $11,133.60 $13,572.00 a1 $513,000 $15,500 53,719.64 $7,300.00 42 $549,000 $16,662 $3,795.00 $7,672.00 43 $556,000 $16,962 $11,250.00 $13,232.00 44 5558,000 $17,037 $3,832.20 $7,787.00 45 5565,000 $17,300 $4,056.94 57,990.00 46 $588,000 $18,162 $4,454.64 $8,492.00 47 5539,000 $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 5523,000 $15,950 $3,569.76 57,240.00 51 $520,ODO 515,837 $3,780.36 $7,857.00 52 $528,000 $16,137 $12,750.00 $13,927.00 53 5588,000 $18,162 54,479.00 $8,492.00 54 $530,000 $15,997 $3,344.99 $7,227.00 55 $559,000 $17,075 $10,625.04 $12,865.00 56 $567,000 $17,375 53,603.96 $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 $16,025 510,125.00 $12,175.00 60 $533,000 516,325 $3,533.98 $7,315.00 Exhibit C - Page 2 SUAS2ARY OF a FACTS AND CONCLUSIONS - continued Existing (1st year) Unencumbered Fair Market Contact Effective �t No. Fee Lot Valud Rental Value Rent Net Rent it Lots - continued 61 $598,000 $19,162 $4,436.16 58,482.00 S 3 $474,000 $14,225 $9,750.04 $10,325.00 S 4 $467,000 513,962 $3,021.96 $6,322.00 35 5470,000 $14,075 $10,000.08 $11,415.00 .S 6 $468,000 $14,000 $2,982.96 $6,310.00 S 7 5461,000 $13,737 $2,966.04 $6,057.00 S 8 5471,000 513,925 53,118.08 $6,435.00 tal Int.: 523,796,000 5724,637 5254,617.16 $397,807.00 tat W.F.: $31,563,000 $1,160,640 $519,983.09 5705,220.00 Totals: $55,349,000 $1,895,277 5774,600.24 $1,103,027.00 Exhibit C - Page 3 Dis ribudon of Rents and Tax Advantage between Tidelands and Uplands* (1st year) Proportionate Propordonate Annual Amom Tidelands Effective TO % Rent Rent of PV of Tax Tax Lot 140. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage 'Fterfront Lots A $31,940.00 100% 0% $31,940 $0 $0 $0 ••B $22,270.00 100% 0% $22,270 $0 $930 $930 C S22,480.00 10090 0% $22,480 $0 S1,410 $1,410 1 $15,030.00 100% 070 S15,030 $0 $2,080 $2,080 2 $17,950.00 100% 096 $17,050 $0 $2,260 $2,260 3 $31,560.00 10090 090 $31,560 $0 .$560 $560 4 $21,260.00 10090 0910 $21,260 $0 $2,610 $2,610 5 $28,840.00 IDO% 0% S28,840 $0 $1,620 $1,620 6 $34,260.00 100% 0% $34,260 $0 $0 $0 7 $31,970.00 9590 5% $30,276 $1,594 $0 $0 8 $43,490.00 50% 50TO S21,740 $21,740 $0 $0 9 $44,350.00 5% 9550 $2,217 $42,132 $0 $0 10 S33,540.00 0% 100% $0 S33,540 $0 $0 11 $17,020.00 090 100% $0 $17,020 $3,200 $0 12 $22,190.00 0% 10DJ% $0 $22,190 $1,130 $0 i3 S29,450.00 0% 100% $0 $29,450 $0 SO v 14 $19,690.00 0% 10D% $0 $19,690 S2,880 $0 15 $20,240.00 20% 80% S4,048 $16,192 $2,980 S596 16 $16,490.00 95TO 5% $15,656 $824 $2,640 $2,509 17 $21,750.60 100% 09C $21,750 $0 $2,420 $2;420 18 $16,490.00 1009r 0% S16,480 $0 $2,640 $2,640 19 $19,500.00 100% 0%n $19,560 $0 $2,880 $2,980 20 $17,910.00 100% 0% $17,910 $0 $2,470 $2,470 21 $26,660.00 100% 0% $26,660 $0 $0 SO 22 $37,880.00 100% 0% S37;880 $0 $0 $0 ES 1 $31,920.00 10090 070 S31,920 $0 $0 $0 ES 2 $29,220.00 10090 09 S29,220 $0 $0 $0 51a•�rfront subtotal; $705,220.00 S500,848 $204,372 $34,710 5;24,984 Beacon Bad 616194 - Page 1 Exhibit D - Page 1 Lot No. :tenor Lots 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 u (1st year) Effective Net Rent $6,297.00 $8,897.00 $6,977.00 $6,942.00 $7,102.00 $7,785.00 $15,470.00 $7,102.00• $10,515.00 $7,217.00 $7,307.00 $8,490.00 $7,780.00 $7,672.00 $15,005.00 S7,967.00 Sll,557.00 $13,572.00 $7,300.00 $7,672.00 S13,23i2.00 $7,787.00 $7,990.00 $8,492.00 $7,365.00 S9,305.00- $7,197.00 S7,240.00 $7,857.00 $13,927.00 $8,492.00 $7,227.00 $12,965.00 $7,915.00 S7,427.DD $10,007.00 $12,173.00 $7,315.00 )udon of Rents and Tax Advantage between Tidelands and Uplands* Proportionate Proportionate Annual pMom Tidelands 60 1/10 Rent Rent of PV of Tax Tax Tidelands Uplands Tidelands Uplands Advantage Advantage 0% 1001,10 $0 $6,297 $550 SO 0010 100010 $0 $8,897 $390 $0 5% 95% S349 $6,628 $630 $31 9990 1% $61873 $69 $710 $703 100% 0% $7,102 s0 $660 $660 100% 090 $7,785 $0 $740 $740 0% 10070 $0 $15,470 $0 $0 0% 100% SO S7,102 $580 $0 309o' 700o $3,154 $1,361 $660 $198 100,0 0% $7,217 $0 $620 $620 1000/0 0% $7,307 $0 $650 $650 10090 0% $8,490 $0 $730 $730 090 IOD00 $0 S7,780 $580 $0 0% 10090 $0 $7,672 $590 $0 5% 95% $750 $14,255 $D SO 9M 1% S7,S87 $SO SO $0 10D% 05ra S11,557 $0 $0 $0 100% 05; $33,572 $0 $0 $0 0% 100% SO $7,300 $510 $0 0% 10090 $0 S7,672 S590 $0 0&70 10090 $0 $13,232 $0 $0 070 IOD% $4 $7,787 $630 $0 15% 85% $1,198 $6,792 $660 $99 0% 10090 SO $8,492 $720 $0 0% 100% $0 $7,365 $610 $0 00/0 100% s0 $9,305 5600 $0 09b 10070 $0 $7,197 $620 $0 0% 10090 $0 $7,240 $6350 $0 0% 10070 $0 $7,857 $110 $0 0% IOD% SO $13,927 $0 $0 00/10 100% SO $9,492 S730 $0 090 100% $0 $7,227 $500 $0 09a 10090 $0 $12,865 $0 $0 070 100% SO 57,915 $470 $0 0% 10050 $0 $7,427 $700 $0 0% 10090 SO $1M07 $0 $0 0179, IOD90 $0 $12,175 $0 $0 0% ID090 SO $7,315 $650 $0 Beacon Bay 616/94 • Page 2 Exhibit D - Page 2 (1st year) Effective Lot No. Net Rent e; or Lots - continued 61 $8,482.00 ES 3 $10,325.00 SS 4 $6,322.00 ES 5 $11,415.00 ES 6 $6,310.00 ES 7 $6,057.00 ES 8 $6,455.00 terior Lots ;,total: $397,907.00 ii "Watwfront S705,220.00 sdTotal: $1,103,027.00 of Total: 100% u . of Rents and Tax Advanta,e between Tidelands and Uplands* Tidelands Uplands i 0% 140% 100%O 0% 10050 0% 85% 15% 0% 100% 0% 100% 0% 100% Proportionate Pr000«onate Annual Amort. Tidelands Rent Rent of PV of Tax Tar; Tidelands Uplands Advanta.ae Advantage $0 $8,492 $720 $10,325 $0 S320 $6,322 $0 $500 S9,703 $1,712 $0 $0 $6,310 $500 $0 $6,057 S650 $0 $6,455 S410 S109,592 $288,215 $19,930 $500,848 S204,372 $34,710 S610,440 $492,587 $54,640 5590 4590 100% :ffective Net Rents consider tax alvanta;e. Discount rate for present value of annual Tanta$e is 6%. Rate for axnordzaon of advanta.ge is 7 %o. Pent and advanta8e ;ures are from 10/8/93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. 1 $0 $320 $500 $0 $0 SO SO $5,251 S24,984 55% Beacon Bay 616/94 • Pa;e 3 Exhibit D - Page 3 Article T 1 - 2 3 - 4 5 6 — 7 — 8 — 9 — 10- 11- 12- 13- 14- 15- 16— 1 3 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICsTIONS BEACON BAY COWMUNITY ASSOCIATION Table or Contents ITIONS Architectural Committee Articles and Bylaws Assessments Association Association Rules Board City Common Expenses Common Area Covered Property Declarant Exhibit Member Lessee Residence Setback RSHIP Membership Transfer Voting Rights Classes of Voting Membership Approval of.Members FOR MAINTENANCE ASSESSMENTS Creation of the Lien and Personal Obligation of Assessments Purpose of Assessments Regular Assessments Uniform Assessment Special Assessments No Offsets Reserves YMENT OF ASSESSMENTS Delinquency Notice of Lien Foreclosure Sale Za r 2 2 2 2 3 3 3 3 3 a e 4 e d e d 5 5 5 5 5 5 5 3 6 6 6 6 b 7 7 0 (i) Exhibit E 2 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CATHERINE M. WOLCOTT (SBN 169679) DEPUTY CITY ATTORNEY CITY OF NEWPORT BEACH 3300 Newport Blvd. Newport Beach, California 92663 Telephone: 949/644-3131 Facsimile: 949/644-3139 Attorney for Plaintiff, City of Newport Beach, a Municipal Corporation IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, HARBOR JUSTICE CENTER LAGUNA HILLS City of Newport Beach, a municipal corporation Plaintiff, VS. Patrick Ward, and Carol Ward, and DOES 1- 10, inclusive, Defendants. Case No. STIPULATION FOR ENTRY OF JUDGMENT AND ORDER THEREON Trial date: no date set This conditional Stipulation is for entry of judgment in an action for unlawful detainer filed on . It is agreed and understood by the parties to this action that Plaintiff, City of Newport Beach, a municipal corporation, ("Plaintiff') will file the unlawful detainer action should the conditions in this Stipulation not be fulfilled, and that judgment will be entered based on the terms of this Stipulation. Plaintiff and Defendants, Patrick and Carol Ward, husband and wife, as joint tenants, and Does 1 through 10, ("Defendants") (collectively, "the Parties"), hereby agree to resolve this matter and enter this Stipulated Judgment as follows: 1. WHEREAS, Defendants are joint tenants under a Lease Agreement dated August 2, 2007 ("Lease") with Plaintiff for the ground lease of 2 Beacon Bay, Newport Beach, California 92663 ("Premises"). -1- STIPULATION FOR ENTRY OF JUDGMENT PA 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. WHEREAS, under the terms of the Lease, Defendants are obligated to pay $4,756.25 per month rent to Plaintiff. 3. WHEREAS, Defendants are in default of material terms of the Lease due to nonpayment of rents past due. The Parties hereby agree and acknowledge that as of the date of execution of this Stipulation, Defendants owe Plaintiff the sum of $63,644.79 for rents past due. In addition, the Parties hereby agree and acknowledge that as of the date of execution of this Stipulation, Defendants have failed to pay monthly fees charged by the Plaintiffs for water and garbage collection services provided to the Premises, in the amount of $783.63. The Parties agree and hereby acknowledge that the total amount owed to Plaintiff by Defendants through August 1, 2011 is $64,428.42. 4. WHEREAS, the Parties wish to resolve this matter, and agree to enter and be bound by the terms of this Stipulation. WHEREAS, the Parties agree and stipulate that: a. Defendants may retain possession of the Premises subject to adherence to the payment plan and other terms contained within this Stipulation. b. On or before 90 days from the date of execution of this Stipulation ("the Payment Period"), Defendants shall pay Plaintiffs $64,428.42, which represents the entire amount past due on the date of execution of this Stipulation. c. During the Payment Period, Defendants shall pay all further rental and utility payments due under the Lease on a timely basis. d. In consideration of the agreements herein and provided Defendants comply with each and every term, Plaintiff agrees to forgo filing this unlawful detainer action provided the Defendants, and each of them, make all required payments set forth herein within the Payment Period. e. Should Defendants fail to make any and all payments when due as set forth herein, Plaintiff and Defendants agree and stipulate that judgment shall enter for Plaintiff and against Defendants as follows: IPM TION FOR ENTRY OF JUDGMENT 12 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 9.1 i. IT IS ADJUDGED AND DECREED that Plaintiff shall recover possession of the Premises located at 2 Beacon Bay, Newport Beach, California, 92663, from Defendants. The clerk of this Court is directed to issue a writ of possession directing the Orange County Sheriff to take all legal' steps necessary to remove Defendants from the Premises. ii. IT IS FURTHER ADJUDGED AND DECREED that Plaintiff recover from Defendants the following monetary relief: 1. Damages in the amount of $64,428.42, which constitutes the amount owed for unpaid rents and utility fees on the date of execution of this Stipulation, plus any monthly rent and utility payments due under the Lease which are not paid in a timely manner as set forth herein, less any payments actually made by Defendants through the date of the default on this Stipulation. 2. Costs of $ [according to memorandum of costs to be filed after entry of judgment.] 3. Attorneys fees of $ [to be fixed by motion after entry of judgment.] f. Such entitlement shall be by ex parte application, with twenty-four (24) hours prior fax/telephonic notice to Defendants. Defendants waive all rights to a noticed motion or right to a hearing on entry of such judgment. 6. A true and correct copy of the Lease between Defendants and Plaintiff is attached hereto as Exhibit `A' and incorporated herein by this reference. 7. This Stipulation may be executed in counter parts as circumstances.require; facsimile signatures shall be deemed to be originals pursuant to California Rule of Court 2.305(d). Upon execution of this Stipulation, the same may be filed with the Court. In the event of default in the performance of this Stipulation, and upon Plaintiff s ex-parte application, judgment shall enter as authorized herein. Upon full and complete compliance with the terms of this Stipulation, this matter shall be -3- STIPULATION FOR ENTRY OF JUDGMENT 2 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 dismissed, with prejudice. 8. This Stipulation represents the full and complete understanding of every kind or nature whatsoever between the Parties, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 9. Defendants, and each of them, acknowledge they have been informed of their right to consult with legal counsel of their own choosing and have either availed themselves of that right or have proceeded to execute this Stipulation freely and voluntarily without seeking advice of counsel. 8. With the exception of the foregoing, the Lease between the parties remains in full force and effect. IT IS SO STIPULATED: DATED: DATED: DATED: Plaintiff, City of Newport Beach, a municipal corporation By: Dave Kill, City Manager Patrick Ward, a married man, as joInt tenant 0J14aa)1-y11/' Carol ar , a married woman, as joint tenant APPROVED AS TO FORM AND CONTENT: DATED: l �� OFFICE OF THE CITY ATTORNEY David R. Hunt, City Attorney IT IS SO ORDERED. Dated: �10 JUDGE OF THE SUPERIOR COURT STIPULATION FOR ENTRY OF JUDGMENT LEASE THIS LEASE is made and entered into as of the &I day of .�, 2007, by and between the CITY OF NEWPORT BEACH, a Charter City and municipal corporation essor'% and PATRICK AND CAROL WARD Husband and Wife as Joint Tenants, ("Lessee"), regarding the real property commonly referred to as Beacon Bay Lot 2. 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 rebeived 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 Flan and Zoning Ordinance of the City of Newport Beach, and of all other applicable state and local laws. NB7-187371.V20524194 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 2 (the "Leased Land"), which is more particularly described in Exhibit B, and generally depicted on Exhibit A, each attached hereto and incorporated' by reference, subject to the limitations on use specified in Section 6. As used in this Lease, the term 'Premises" shall refer to the Leased Land and any improvements constructed thereon. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Leased Land and the right to grant and transfer the same, together with all necessary and convenient rights to explore for, develop, produce and extract and take the same, subject to the express limitation that any and all operations for the exploration, development, production, extraction and taking of any such substance shall be carried on at levels below the depth of five hundred feet (500') from the surface of the land by means of wells, derricks and other equipment from surface locations on adjoining or neighboring land, and subject further to all restrictions and regulations concerning the drilling for, and production of, oil, gas, minerals, petroleum and other hydrocarbon substances specified in the Newport Beach City Charter or the Newport Beach Municipal Code. 2. TERM. The term of this Lease shall commence on the Execution Date, but in no event prior to the Effective Date, and shall expire on the date fifty (50) years following the Effective Date, unless earlier terminated as provided in this Lease. 3. RENTAL, A. Definitions. For the purposes of this Lease, the following terms shall be defined as specified in this paragraph. In certain cases, the definition of the term contains operative language that affects the rights of the parties: (1) "Actual Sales Value" shall mean the total of all consideration paid for the non-exempt transfer of this Lease or the Pre-existing Lease, including the improvements on the Leased Land, from the Current Lessee, or Subsequent Lessee, to another person, excluding any consideration paid for the transfer of personal property in connection with such transaction. (2) "Average Actual Sales Value Rent"shall mean two and one-half percent (2.5 %) of the mean of the Actual Sales Value of the non-exempt transfer of a similarly situated (waterfront or interior) Beacon Bay parcels as specified in this subparagraph. Average Actual Sales Value Rent shall be the mean of the Actual Sales Value of the three similarly situated parcels most recently transferred. Exempt transfers, as defined in Paragraph 3.B(3), shall not be used to calculate Average Actual Sales Value rent. (3) "CPI" shall mean the Consumer Price Index - Los Angeles -Anaheim -Riverside Area, All Urban Consumers, All Items, published by the United States Department of Labor, Bureau of Labor Statistics (1982-1984=100). If the 1982-1984 base of said Consumer Price Index should hereafter be changed, then the new base shall be converted to the 1982-1984 base and the base as so converted shall be used. In the event that the Consumer Price Index, as now compiled and published, shall cease to be published, then the successor index shall be used provided that an appropriate conversion from the old index to the new index can feasibly be made. If such conversion cannot be made, or if no such index is published, then another index most nearly comparable thereto recognized as authoritative shall be substituted by agreement. 2 (4) "Current Lessee" shall mean the person or persons who, as of April 1, 1994 (the "Cut-off Date"), was or were the Lessee under the Pre-existing Lease. (5) Deferred Rent shall mean the total rent that a Current Lessee would have paid had this Lease been executed on the Effective Date, through and including the date on which this Lease was first executed, less the rent actually paid pursuant to the Pre- existing Lease, together with interest at the rate of eight percent (8%) per annum calculated on the balance due at the end of each Lease Year or portion thereof. (6) "Effective Date" shall mean July 1, 1994. (7) "Execution Date" shall mean the date when this Lease is executed by Lessee. (8) 'Initial Rent" shall mean the effective net rent for the Leased Land as determined by the appraisal of George Hamilton Jones, with due consideration to the leasehold advantage created by the Pre-existing Lease, all as shown on Exhibit C attached hereto and incorporated herein by reference. (9) "Person" shall mean any natural person or natural person(s) and does not include any corporation, association, or business entity in any form except a financial institution or other bona fide lender acting in the capacity of a lender or an inter vivos or living trust. (10) "Pre-existing Lease" shall mean the Lease for the Leased Land which was effective on January 1, 1988, and would, absent this Lease, expire on July 1, 2006. (11) "Transferred" shall mean any sale, assignment, sublease or other transaction, other than an exempt transfer as defined in Paragraph 3.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 Fifty-seven thousand seventy-five and 0/100s ($57.075.00), payable at the rate of Four thousand seven hundred fifty-six and 25/100s ($4.756.25) peCmonth. Lessee shall also pay, if applicable, deferred rent in the sum of N/A upon execution of this Lease. Rent shall be adjusted every seven (7) years after the date of transfer in accordance with the provisions of Paragraph 3.B(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: 3 (1) Execution Before Effective Date. In the event this Lease is executed by the Lessee on or before the Effective Date, Rent shall be paid as follows: (a) Current Lessee: Current Lessee shall pay annual rent equal to Initial Rent as specified in Exhibit C. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee (other than an exempt transfer as set forth in Paragraph 3.B(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.B(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (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 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). (2) Execution After the Effective Date. In the event this Lease is first executed after the Effective Date, rent shall be determined and paid as follows: (a) Current Lessee/Within Five Years After Effective Date: In the event this Lease is executed by the Current Lessee within five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to initial Rent plus a sum calculated by multiplying the difference between Initial Rent and Average Actual Sales Value Rent by a fraction equal to the number of months between the Effective Date and Execution Date, divided by sixty. The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee, rent shall remain as specified in this subparagraph, notwithstanding the provisions of Paragraph 3.6(4). (b) Current Lessee/More Than Five Years After Effective Date: In the event this Lease is executed by the Current Lessee more than five (5) years after the Effective Date, the Current Lessee shall pay annual rent equal to Average Actual Sales Value Rent calculated as of the date of execution in accordance with the provisions of Paragraph 3.A(2). The Current Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. Thereafter, rent shall be adjusted every seven (7) years after the date of execution in accordance with the provisions of Paragraph 3.13(4). (c) Subsequent Lessee: In the event the Current Lessee transfers the Pre- existing Lease to a Subsequent Lessee who wishes to sign this Lease after the Cut-off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (2.5%) of Actual Sales Value determined as of the date of execution and in accordance with Paragraph 3.A(1). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.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 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.13(4). (3) Exempt Transfers. The provisions of Paragraph 3.13 regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or,joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, howeVer, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.13(I)(a), 3.13(2)(a) and 3.13(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current- or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage Increase or decrease, If any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. in no event shall rent be Increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (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 party, the rent shall be adjusted as provided in Paragraph 3.13(2)(c), and thereafter as provided in Paragraph 3,13(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 113(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 (151h) 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 estimateW 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 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 43 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" ireferenced 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 33 (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 (li) 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 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 iieu 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 iMAINTENANCE. 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, i tall 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, 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, 10 street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for a pro rats 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 rats 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 rate share of the annual costs incurred by Lessor shall be paid within thirty (30) days after written notice of the amount due, and any failure to pay shall constitute a material breach of this Lease. The costs of maintaining and operating community facilities shall be determined annually and solely from the financial records of Lessor. 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit E attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 12. INDEMNIFICATION. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim or suit, arising out of, or in any way related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. 11 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 anyway 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 12 4L •anoge paugep se 6ul�el le;ol a elnlllsuoo lou seop yolym saslwajd ayl 10 Aluo UOipod a 10 6ul�lel eq4 ueaw Heys „6uNe; leWed„ ujjeI eqj (Z) •sesodjnd leguepisaj ay; jol aassaq Aq loajegj asn ay; nedwl Allegue;sgns jo ;uanajd o; se pue-1paseaq ay; 10 yonw os to 6ui� el ay; jo ulewop ;ueulwe to jemod ay; japun sesiujajd eAlue ay; to 6ul�e4 ay; ueaw Heys gi, uoiloaS sly; ui pesn se „5uhiej le;o;„ ujjal eqi W ! -swaal to suolIluldaa V 'NIVWO41N3NIW3 'gL •uol;ejaplsuoo.Aue to lueujAed ay; Jnoy;lm jossaq to Aliedojd ay; ; awooaq Heys Aegl '8.9 i, ydej6ejed sly; ul papinojd awl; ay; ulyllM panoujaj;OU We sluaujanojdwl pue s6ulpllnq ay; Jo AUe Juana ay; ul •uol;lpuoO Aliepjo pue ueap a ul jossaq of seslujajd ; ayl to uolssassod japuejjns pue lenowaj J94e 6ululewaj Sluaujanojdwi jo s6ulpllnq ayl to sped i jaylo pue suciep 'suogepunol lie 9n0w9j pue suollene0xa He II3 Ileys aassa-1 •aseaq sly; to wiel ayl to uol;ejldxa j948 step (06) Aleulu ueyl aslel ou a;aldwoo aq lsnw lenowaj pue aassaq 10 esuedxe pue;soo egos eqj le eq lleyS luaujanojdwl jo 6ulpllnq Aue 10 lenoujay •pueq paseaq eql uo pallelsui jo;Hnq s;uaujanojdwl pue s6ulpllnq He pueq paseaq ay; w04 anowaj o; ly6u ay; aney I lleys aassaq 'aseaq slyl 10 Suolslnojd ay;10 Aue 10 linelep ui uay; Jou sl aassaq ley; uolllpuoo uo pue 'aseaq sly; 10 wiel ay; to uollemcixe ay; uodn s;uaujanojdwl ;o lenowaM 8 •luawAed;o wjol jel pls Jo aOue;slsse uopeOOlaj 9AIG09j of JgBU �(ue SanleM aassaq *4SWeJul ployaseal eql 10 uogeulwjej jo uollelidxe ay; 6ulouapins Juaujnoop a pjooei !ew 'uollajoslp egos s;l Je 'jossaq •pueq paseaq j ay; 'aslMjaylo jo le6al 'lsaluoo ;noyllm a;e0en o; Saaa6e pue '10 uolssassod Janllap Algeeoeed of saaj6e aassaq 'aseal slyl to uolleupial jo uogejldxe eqj uodn •saslwajd to japueiinS v 'NOI.LVNIW2131 NO N011721IdX3 NOdn NOISS3SSOd d0 213oNmalnS 'BL ginepap s,eassaq to uoseei Aq sespeid ayl to uolssassod sale; jossaq aO pa;Olna sl aassaq Juana ayl ul Mel leuolslOap jo tiolnlels ejnlnl jo 6upixe Aue of;uensjnd JO/pue 6L1,1, pUe bLi,i, suol;oeS ejnpa0ojd I1n1010 apo0 of luensjnd ejnllaljol wojl lailej jo uolldwepaj lo;y6ij Aue sanleM aassaq •uoildwepoN 1o;y6la to janleM O •paldaooe si Juej awi; eqj le Jlnelap to yoeelq 6ui;sixaejd ay; to a6pelmop s jossaq 10 sselpjebei paldaooe Juej jelnoilled eqj Aed of ejnpe; eqj uegj jeglo aassaq Aq llnelap 10 yoeejq 6uilslxawd AUe 10 janleM a paieplsuoo aq Jou Heys ;uej Aue to aoueld000e s,jossaq ,A;jed jay;o ay; Aq Jlnelep Aue jo Apewaj jo ly6lj yons to janleM a se penjlsuoo aq lou Heys Apewaj jo Jy6u Aue asicuexe of Alied jeglla to Aelep jo ajnllel ayl 's4y6i2 10 janleM d •90uapin9 lualedwoo Aq Alej;uoo ayl of anojd Heys eassagpossaq ssalun 'jaulelep Inlmelun ay;10 poped ayl jot (sluewssesse jo sexes to luewAed eqj jo sluewanojdwi ein;onjlsejlul to slsoo jol ;uewesjngwlej se yons) Juej leuolllppe pue luej 10 Junowe eq; aq of paLueep eq lleys pueq paseaq ayl to amen le;uaj algeuoseaj ayJ 'jossaq Aq peouawwoo jaule;ap lnlmeiun jo uoiloe Aus ul •onleA lelual{ 10 uol;euiwj64a0 •3 ,Aljed jay;o ay; (g;lnelap Aue 10 a;ep ay; jape aseaq sly; of Juensjnd suolle6llgo sli yllm Aldwoo jo wjoped of uol;e6ilgo Aue japun aq Heys AIM jayjjeN 'suoi;e6llgO 10 Re;S O •uopaldwoo o; awes eqj salnoesojd Allue011ip Je4e9jew Hue poped Aep (pS) Aljlyl yons ulylim eouewjoped seouawwoo jossaq lI llnelep ul aq Jou Heys jossaq uay; 'a0ueujjoljad jot peimbei eje sAep (OS) AIjly; uey; ajow Jey; yons sl uol1e6llgo s,jossaq to ein;eu ayl 11 'u011e61lgo yons wjoped of panel sey jossaq ulejegm 6ui4oeds jossaq o; aassaq Aq aoilou uagljm jaUe SAep (OS) Aljlyl ueyl Jejel Juana Ou ul;nq lawn algeuoseaj a uly;lm jossaq 10 pajlnbaj suollebilgo wjoped of sllel jossaq ssalun llnelap ui aq Jou lleys jossaq jossaq A9 linelaa '0 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 (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 award of the amount referred to in clause (i) shall be computed by discounting such amount at one percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) Without terminating or affecting the forfeiture of this Lease or, in the absence of express written notice of Lessor's election to do so, relieving Lessee of any obligation pursuant to this Lease, Lessor may, but need not, relet all or a portion of the Premises at any time, or from time to time, and on such terms and conditions as Lessor, at its sole discretion, deems appropriate. Whether or not the Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. Lessee shall make such payments at the time specified in the Lease and Lessor need not wait until termination of the Lease to recover sums due by legal action. If Lessor relets all or a portion of the Premises, the reletting shall not relieve Lessee of any obligation pursuant to this Lease; provided, however, Lessor shall apply the rent or other proceeds actually collected by virtue of the reletting against amounts due from Lessee, Lessor may execute any agreement reletting all or a portion of the leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (3)1 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.B(1). 13 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 hot 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. F. Determination of Rental Value. In any action or unlawful detainer commenced by Lessor, the reasonable rental value of the Leased Land shall be deemed to be the amount of rent and additional rent (such as reimbursement for costs of Infrastructure improvements or the payment of taxes or assessments) for the period of the unlawful detainer, unless Lessor/Lessee shall prove to the contrary by competent evidence, F, Waiver of Rights. The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any default by the other party, Lessor's acceptance of any rent shall not be considered a waiver of any preexisting breach of default by Lessee other than the failure to pay the particular rent accepted regardless of Lessor's knowledge of the preexisting breach of default at the time rent is accepted, G. Waiver of Right of Redemption. Lessee waives any right of redemption or relief from forfeiture pursuant to Code of Civil Procedure Sections 1174 and 1179 and/or pursuant to any existing or future statutory or decisional law in the event Lessee is evicted or Lessor takes possession of the Premises by reason of Lessee's default. 15. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION. A. Surrender of Premises. Upon the expiration or termination of this Lease, Lessee agrees to peaceably deliver possession of, and agrees to vacate without contest, legal or otherwise, the Leased Land. Lessor, at its sole discretion, may record a document evidencing the expiration or termination of the leasehold interest. Lessee waives any right to receive relocation assistance or similar form of payment. B. Removal of Improvements. Upon the expiration of the term of this Lease, and on condition that Lessee is not then in default of any of the provisions of this Lease, Lessee shall have the right to remove from the Leased Land all buildings and improvements built or installed on the Leased Land. Removal of any building or improvement shall be at the sole cost and expense of Lessee and removal must be complete no later than ninety (90) days after expiration of the term of this Lease. Lessee shall Hill all excavations and remove all foundations, debris and other parts of the buildings or improvements remaining after removal and surrender possession of the Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.13, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shall mean the taking of the entire Premises under the power of eminent domain or the taking of so much of the Leased Land as to prevent or substantially Impair the use thereof by Lessee for the residential purposes. (2) The term "partial taking" shall mean the taking of a portion only of the Premises which does not constitute a total taking as defined above. 14 (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. 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 Lesseei 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 15 Lesseb in the ratio that the Fair Market Rental Value of the Premises at the date of taking bears to the Fair Market Rental Value of the Premises Immediately thereafter. 17. ATTORNEYS' FEES, Should either party be required to employ counsel to enforce the terms, conditions and covenants of this Lease, the prevailing party shall recover all reasonable attorneys' fees and charges (and court costs if applicable) incurred therein, whether or not court proceedings were commenced. 18. REMEDIES CUMULATIVE. The rights, powers, elections and remedies of the Lessor or Lessee contained in this Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's or Lessee's rights to exercise any other. 19. NO WAIVER. No delay or omission of either party to exercise any right or power arising from any omission, neglect or default of the other party shall impair any such right or power or shall be construed as a waiver of any such omission, neglect or default on the part of the other party or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Lease shall be construed as a waiver of any succeeding breach of the same or of any of the terms, covenants, agreements, restrictions or conditions of this Lease. 20. COMPLIANCE WITH LAWS. Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of Orange, City of Newport Beach, or any other governmental body or agency having lawful jurisdiction over the Leased Land, 21. NOTICES. Any notice or notices provided for by this Lease or by law, to be given or served by Lessee, may be given or served by mall, registered or certified, with postage prepaid, on the City of Newport Beach, addressed to the Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659-1768, or at such other address as may be hereafter furnished to Lessee in writing. If notice is intended to be served by Lessor on Lessee, it may be served either: A. By delivering a copy to the Lessee personally; or B. By depositing the Notice in the United States Mail, registered or certified, with postage prepaid, to the residence or business address furnished by Lessee; or C. If the Lessee is absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land; or D. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Premises and also sending a copy through the mail addressed to the Lessee. Such service upon Lessor or Lessee shall be deemed complete upon the earlier of (i) actual delivery, or (ii) the expiration of seventy-two (72) hours from and after the deposit in the United States mail of such notice, demand or communication. 22. HOLDING OVER. This Lease shall terminate and become null and void without further notice upon the expiration of the term of this Lease. Any holding over by Lessee after expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The 16 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 Lessee 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 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. ATTEST: APPROVED AS TO FORM: 1 CITY ATTOR EY LESSOR: CITY OF NEWPORT BEACH, By: (�4 - Title: kjCr MANAGER LESSEES; O)A)04�e - PATRICK WARD 18 !VOTARY PAGE STATE OF CALIFORNIA } /� } S.S. COUNTY OF On rj� —+Jo' , before me, &, iL,\ Z XC fl�iT a NotaryPublic personally 7q—kvaC.IL \G�L[w'ci C�H Cc�� vtiL��cir appeared' personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of ti'ch the person(s) acted, executed the instrument. WITNESS Signature STATE OF CALIFORNIA } ) S.S. COUNTY OF } BRIAN J. FOXCROFT NOTARY PUBLIC • CALIFORNIA v, m COMMISSION # 1575667 2 ORANGE COUNTY My Comm. Exp. May 3, 2009 On before me, a Notary Public personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose pame(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 yz M x s MAP OF BEACON BAY Oa�v. EXHIBIT B Beacon Bay Lot 2 described as follows: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. SUIsS4ARY OF SALIENT FACTS A\rD CONCLUSIONS - continued SUMMARY OF VALUE INDICATIONS: Existing (Istyear) Unencumberedi Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Water Front Lots A S1,330,000 $48,520 $23,125.08 S31,940.00 B S112001000 $43,320 $12,506.85 $22,270.00 C S1,031,000 $37,560 $16,625.04 S22,480.00 1 S947,000 $34,200 S8,020.80 $15,030.00 2 $1,131,000 $41,640 $8,825.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 S34,560.00 4 S1,318,000 S49,120 S10,458.96 S21,260.00 5 S1,341,000 $50,120 520,012.04 $28,840.00 6 $1,386,000 $51,690 S25,000.00 $34,260.00 7 S1,210,000 $44,800 $24,999.96 $31,870.00 8 S1,177,000 $43,480 $43,750.00 $43,480.00 9 $1,298,000 $47,840 $42,500.04 $44,350,00 10 S1,342,000 $49,600 $24,999.96 $33,540.00 11 $1,122,000 $41,280 $9,020.52 $17,020.00 l2 $1,100,000 $40,400 $14,250.00 $22,190.00 13 $1,100,000 $40,400 S23,625.00 $29,450.00 14 $1,243,000 $45,640 $10,312.56 S19,690.00 15 $1,265,000 $46,520 $10,936.47 $20,240.00 16 S1,067,000 S39,080 $8,508.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 S21,750.00 18 $1,067,000 S39,080 $8,508.48 $16,480.00 19 $1,243,000 S45,640 S101020.02 $19,500,00 20 S1,147,000 $42,320 $8,727.84 $17,910.00 21 $1,058,000 $39,760 520,224.50 $26,660.00 22 $1,036,000 $37,890 $41,250.00 S37,880.00 ES I S1,037,000 $37,890 $28,749.96 $31,920.00 ES 2 $1,037,000 S37,880 $24,625.00 $29,220.00 Subtotals: $31,563,000 S1,160,640 $519,983.09 $705,220.00 Exhibit C - Page 1 SL?,ZR.RY OF SALIENT FACTS A_>�D CONCLUSIONS -continued Exisdn.a (lstyear) 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 5501,000 515,237 $6,125.Os 58,897.00 25 $509,000 $15,537 $3,359.12 $6,977.00 26 $511,000 515,612 $3,417.72 $6,942.00 27 $519,000 $15,912 $3,436.44 $7,102.00 28 $542,000 $16,775 $4,137.72 $7,785.00 29 $518,000 $15,650 $15,375.00 515,470.00 30 $510,000 $15,462 53,551.16 $7,102.00 31 $517,000 515,725 $8,750.00 $10,515.00 32 $520,000 $15,837 $3,588 48 $7,217.00 33 $528,000 516,137 $3,607.09 $7,307.00 34 $589,000 $18,200 $4,454.64 $9,490.00 35 5559,000 $17,000 $3,776.29 $7,780.00 36 $548,000 $16,662 53,795.00 $7,672.00 37 $517,000 $I5,725 $14,625.00 $15,005.00 38 $520,000 $15,937 53,780.36 $7,967.00 39 $528,000 $16,137 59,125.04 511,557.00 40 5588,000 $18,162 $11,133.60 $13,572.00 41 $513,000 $15,500 a'3,719.64 $7,300.00 42 $549,000 $16,662 53,795.00 $7,672.00 43 $556,000 516,962 $11,250.00 $13,232.00 44 $558,000 $17,037 $3,832.20 $7,787.00 45 5565,000 $17,300 $4,056.94 $7,990.00 46 $588,000 518,162 54,454.64 $3,492.00 47 $539,000 $16,475 $3,459.36 $7,365.00 48 5551,000 $16,775 $6,240.96 $9,305.00 49 5520,000 $15,837 53,551.16 $7,197.00 50 $523,000 $15,950 53,569.76 $7,240.00 51 $520,000 515,837 $3,780.36 $7,857.00 52 $528,000 $16,137 512,750.00 $13,927.00 53 5588,000 $19,162 $4,479.00 $9,492.00 54 $530,000 $15,997 $3,344.98 $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 $546,000 516,737 53,551.16 $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 $3,533.98 $7,315.00 Exhibit C - Page 2 SUMNLARY OF a u FACTS AND CONCLUSIONS - continued Unencumbered Fair Market t No. Fee Lot va1ud Rental value rr Lots - continued 61 $588,000 S 3 $474,000 S 4 $467,0D0 S 5 5470,000 S 6 $468,000 S 7 $461,ODD >$ 8 $471,000 $18,162 $14,225 $13,962 $14,075 $14,000 513,737 513,925 talInU 523,786,000 5724,637 tal W.F.: $31,563,000 51,160,640 Existing Conract Rent $4,436.16 $8,750.04 $3,021.96 $10,00D.08 $2,992.96 $2,966.04 53,118.08 5254,617.16 $519,983.05 (1st year) Effective Net Rent 58,482.00 $10,325.00 $6,322.00 $11,415.00 $6,310.00 . 56,057.00 $6,455.00 $397,907.00 5705,220.00 Totals: $55,349,000 51,885,277 5774,600.24 $1,103,027.00 Exhibit C - Page 3 of Rents and Tax Advantage between Tidelands and Uplands* (Istyear) Proportonate Proportionate Annual Amort. Tidelands Effective % TO Rent Rent of PV of Tax Tax Net Rent Tidelands Uplands r Tidelands Uplands Advantage Advantage $31,940.00 1005ro 09io $31,940 $0 $0 $0 $22,270.00 100TO 0% $22,270 $0 $930 $930 $22,480.00 100% 070 $22,480 $0 $1,410 $1,410 $15,030.00 10D50 0% $15,030 $0 $2,080 $2,080 $17,950.00 10070 0% $17,950 $0 $2,260 $2,260 $31,560.00 I00% 0170 $31,560 $0 .$560 $560 $21,260.00 10070 0% $21,260 $0 $2,610 $2,610 $28,840.00 100% 0% $28,840 $0 $1,620 $1,620 $34,260.00 IOD% 0% $34,260 $0 $0 $0 $31,870.00 a5TO 55r, $30,276 $1,594 $0 $0 $43,48100 50% 50% $21,740 $21,740 $0 $0 $44,350.00 5% 95% $2,217 $42,132 $0 $0 $33,540.00 0% iDD% $0 $33,540 $0 $0 $17,020.00 0% 100% $0 $17,020 $3,200 $0 $22,190.00 0% IMro $0 $22,190 $1,130 $0 $29,450.00 0% 100% $0 $29,450 $0 $0 v $19,690.00 0% 10050 $0 $19,640 $2,580 $0 $20,240.00 20% 80% $4,048 $16,192 $2,980 $596 $16,480.00 95% 5% $15,656 $824 $2,640 $2,508 $21,7i0.00 100% 0% $21,750 $0 $2,420 $2,420 $16,480.00 100% 070 $16,480 $0 $2,640 $2,640 $19,500.00 100% 0% $19,560 $0 $2,880 $2,890 $17,910.00 10070 070 $17,010 $0 $2,470 $2,470 $26,660.00 1DD% 0% $26,660 $0 $0 $0 $37,880.00 10090 0% $37;880 $0 $0 $0 $31,920.00 10050 090 $31,920 $0 $0 $0 $29,220.00 100% 0% $29,220 $0 $0 $0 $705,220.00 1 $500,848 $204,372 $34,710 $24,994 Beacon B2;, 616l94 - Page 1 Exhibit D - Page 1 Dis� ibution of Rents and Tax Advantage between Tidelands and Uplands* (istyear) Proportionate Proportionate Annual Amort. Tidelands Effective ro 95 Rent Rent of PV of Tax Tax Lot No, Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage iterlor Lots .' 23 $6,297.00 09; 10D9b $0 $6,297 $550 $0 24 $8,897.00 0% loo95 $0 $8,897 $390 $0 25 $6,977.00 5% 95% $349 $6,628 $630 $31 26 $6,942.00 9995 1% $6,873 $69 $710 $703 27 $7,102.00 lOO90 00/0 $7,102 $0 $660 $660 28 $7,785.00 100% 0% $7,785 $0 $740 $740 29 $15,470.00 095 10095 $0 $15,470 $0 $0 30 $7,102.00• I 09a 1009b $0 $7,102 $580 $0 31 $•10,515.00 300o 70% $3,154 $7,361 $660 $198 32 $7,217.00 1009b 0%0 $7,217 $0 $620 $620 33 $7,307.00 100% 0% $7,307 $0 $650 $650 34 $8,490.00 100% 090 $8,490 $0 $730 $730 35 $7,780,00 Oda IOD90 $0 $7,780 $580 $0 36 $7,672.00 MCI 100% $0 $7,672 $590 $0 37 $15,005.00 5% 95% $750 $14,255 $0 $0 38 V,967.00 99% 1% $7,887 $80 $0 $0 39 u $11,557.00 1009b 05o $11,557 $0 $0 $0 40 $13,572.00 10090 07, $13,572 $0 $0 $0 41 $7,300.00 Oro 1000/0 $0 $7,300 $510 $0 42 $7,672.00 0% 1009b $0 $7,672 $590 $0 43 $13,232.00 09b 100% $0 $13,232 $0 $0 44 $7,787.00 040 1OD9b s0 $7,787 $630 $0 45 $7,990.00 15% 85,70 $1,198 $6,792 $660 $99 46 $8,492.00 090 10,70 $0 $8,492 $720 $0 47 $7,365.00 090 1W90 $0 $7,365 $610 $0 48 $9,305.00• 0% 1009b $0 $9,305 $600 $0 49 $7,197.00 090 100% $0 $7,197 $620 $0 50 $7,240.00 0%0 lOD90 $0 $7,240 $630 $0 51 $7,857.00 090 1OD90 $0 $7,857 $110 $0 52 $13,927.00 070 1OD977 $0 $13,927 $0 $0 53 $9,492.00 090 lOD% $0 $8,492 $730 $0 54 $7,227.00 Oro 100,70 $0 $7,227 $500 $0 55 $12,965.00 090 100% $0 $12,965 $0 $0 56 $7,915.00 095 100% $0 57,915 $470 $0 57 $7,427.00 09'0 100% $0 $7,427 $700 $0 58 $10,007.00 01% 100% $0 $10,007 $0 $0 59 $12,175.00 090 100% s0 $12,175 $0 $0 60 $7,315.00 090 100% $0 $7,315 $650 $0 Beacon Bay N6194 - Page 2 �I i Exhibit D -Page 2 of Rents and Fax Advantage between Tidelands and Uplands* (Istyear) Proportionate Proporrionate AnnualAnort. Tidelands Effective % % Rent Rent of PV of Tax Tag; Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage terio, Lou -continued t 61 $8,482.00 0%a IOD% $0 $8,482 $720 s0 ES 3 $10,325.00 10070 0% $10,325 $0 $320 $320 7--S 4 $6,322.00 10017o 0% $6,322 $0 $500 $500 ES 5 $11,415.00 85% 15% $9,703 $1,712 $0 $0 =—S 6 $6,310.00 090 100% s0 $6,310 $500 $0 n 7 $6,057.00 0% 100% s0 $6,057 •$650 s0 ES 8 $6,455.00 090 100% s0 $6,455 $410 $0 terior Lots • ibtotai: $397,807.00 $109,592 $298,215 $19,930 $5,251 ii Waterfront $705,220.00 $500,848 $204,372 $34,710 $24,984 znd Total: $1,103,027.00 $610,4a0 $492,587 $54,640 $30,235 of Total: 10O% 5590 45010 100% 55% w :"ective Net Rents consider tax ac .vantage is 65o. Rate for argortizai ;ores are from 10/8/93 appraisal. rage. Discount rate for present value of annual of advantage is 75o. Rent and advantage 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 616194 • Page 3 Exhibit D - Page 3 Article I IV 1 — 2 — 4 — 5 — 6 — 7 8 — 9 — 10- 12- 13- 14- 15- 16— 2 3 4 5 — 5 — 3 DEC LARkTIO?4 OF COLBNANTS, CONDITIONS AIM RESTRICTIONS BEACON BAY C04MUNITY ASSOCIATION Table of Contents ITIONS Architectural Committee Articles and Bylaws Assessments Association Association Rules Board City Common Expenses Common Area Covered Property Declarant Exhibit Member Lessee Residence Setback RSHIP Membership Transfer Voting Rights Classes of Voting Membership Approval oz.Members NT FOR MAINTENANCE ASSESSMENTS Creation of the Lien and Personal Obligation of Assessments Purpose of Assessments Regular Assessments Uniform Assessment Special Assessments No Offsets Reserves YMENT OF ASSESSMENTS Delinquency Notice of Lien Foreclosure Sale e E 2 2 2 3 3 3 3 3 a a a a a a a 5 5 0 a 5 5 5 9 6 6 6 6 6 6 7 7 7 8 8 (i) Exhibit E' 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CATHERME M. WOLCOTT (SBN 169679) DEPUTY CITY ATTORNEY CITY OF NEWPORT BEACH 3300 Newport Blvd. Newport Beach, California 92663 Telephone: 949/644-3131 Facsimile: 949/644-3139 Attorney for Plaintiff, City of Newport Beach, a Municipal Corporation IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, HARBOR JUSTICE CENTER LAGUNA HILLS City of Newport Beach, a municipal corporation Plaintiff, VS. Case No. ORDER FOR JUDGMENT (UNLAWFUL DETAINER) Patrick Ward, and Trial date: no date set Carol Ward, and DOES 1- 10, inclusive, Defendants. The Court conducted a hearing on 2011, at as attorney for plaintiff, and Appearing were as attorney for defendant. A Stipulated Judgment agreed to and executed by all parties has been submitted to the Court, and the Court has reviewed and adopted the Stipulated Judgment. A copy of the Stipulated Judgment is attached as Exhibit A. The Court finds that Plaintiff has established that Defendants committed unlawful detainer by breaching material conditions of their lease with Plaintiff through failure to pay rents due under the lease. Plaintiff is entitled to monetary and non -monetary damages as set forth in the Stipulated Judgment, and as stated herein. IT IS THEREFORE ORDERED AND ADJUDGED AS FOLLOWS: BE ORDER FOR JUDGMENT (UNLAWFUL DETAINER) n 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 E 27 RM 1. That Plaintiffshall recover possession of the premises located at 2 Beacon Bay, Newport Beach, California, 92663, from Defendants. The clerk of this Court is directed to issue a writ of possession directing the Orange County Sheriff to take all legal steps necessary to remove Defendants from the Premises. 2. That Plaintiff recover from Defendants the following monetary relief: a. Damages in the amount of $64,428.42, which constitutes the amount owed for unpaid rents and utility fees on the date of execution of this Stipulation, plus any monthly rent and utility payments due under the Lease which are not paid in a timely manner as set forth herein, less any payments actually made by Defendants through the date of the default on this Stipulation. b. Plaintiffs are the prevailing parties in this action and may recover their costs of suit from Defendants pursuant to the timely filing of a memorandum of costs and motion for reasonable attorneys' fees. DATED: DATED: DATED: Plaintiff, City of Newport Beach, a municipal corporation By: Dave KiffCity Manager Patrick Ward, a married man,.as joint tenant arol Ward, a married w man, as joint tenant APPROVED AS TO FORM AND CONTENT: DATED: OFFICE OF THE CITY ATIORNEY David R. Hunt, City Attorney -2- ORDER FOR JUDGMENT (UNLAWFUL DETAINER) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IT IS SO ORDERED. Dated: JUDGE OF THE SUPERIOR COURT -3- ORDER FOR JUDGMENT (UNLA DETAINER) 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CATHERINE M. WOLCOTT (SBN 169679) DEPUTY CITY ATTORNEY CITY OF NEWPORT BEACH 3300 Newport Blvd. Newport Beach, California 92663 Telephone: 949/644-3131 Facsimile: 949/644-313 9 Attorney for Plaintiff, City of Newport Beach, a Municipal Corporation IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, HARBOR JUSTICE CENTER LAGUNA HILLS City of Newport Beach, a municipal corporation Plaintiff, VS. Patrick Ward, and Carol Ward, and DOES 1-10, inclusive, Defendants. Case No. ORDER FOR JUDGMENT (UNLAWFUL DETAINER) Trial date: no date set The Court conducted a hearing on , 2011, at . Appearing were as attorney for plaintiff, and as attorney for defendant. A Stipulated Judgment agreed to and executed by all parties has been submitted, to the Court, and the Court has reviewed and adopted the Stipulated Judgment. A copy of the Stipulated Judgment is attached as Exhibit A. The Court finds that Plaintiff has established that Defendants committed unlawful detainer by breaching material conditions of their lease with Plaintiff through failure to pay rents due under the lease. Plaintiff is entitled to monetary and non -monetary damages as set forth in the Stipulated Judgment, and as stated herein. IT IS THEREFORE ORDERED AND ADJUDGED AS FOLLOWS: -1- ORDER FOR JUDGMENT (UNLAWFUL DETAINER) 2 112 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. That Plaintiff shall recover possession of the premises located at 2 Beacon Bay, Newport Beach, California, 92663, from Defendants. The clerk of this Court is directed to issue a writ of possession directing the Orange County Sheriff to take all legal steps necessary to remove Defendants from the Premises. 2. That Plaintiff recover from Defendants the following monetary relief: a. Damages in the amount of $64,428.42, which constitutes the amount owed for unpaid rents and utility fees on the date of execution of this Stipulation, plus any monthly rent and utility payments due under the Lease which are not paid in a timely manner as set forth herein, less any payments actually made by Defendants through the date of the default on this Stipulation. b. Plaintiffs are the prevailing parties in this action and may recover their costs of suit from Defendants pursuant to the timely filing of a memorandum of costs and motion for reasonable attorneys' fees. DATED: Plaintiff, City of Newport Beach, a municipal corporation By: Dave Kiff, City Manager DATED: i V /va., Patti Ward, as married mean, as joint tenant DATED:/ Carol Ward, a married woman, as joint tenant APPROVED AS TO FORM AND CONTENT: DATED: (/'t)t� OFFICE OF THE CITY ATZORNEY David R. Hunt, City Attorney -2- ORDER FOR JUDGMENT (UNLAWFUL DETAINER) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IT IS SO ORDERED. Dated: JUDGE OF THE SUPERIOR COURT -3- ORDER FOR JUDGMENT (UNLAWFUL DETAINER) CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY TO: David Kiff, City Manager CC: Glen Everroad, Revenue Manager Dennis Danner, Administrative Services Director FROM: David R. Hunt, City Attorney Catherine Wolcott, Deputy City Attorney RE: Standard Operating Procedure Beacon Bay Leases: Delinquent Rents DATE: September 22, 2009 Beacon Bay is held in public trust for the people of the State of California. State legislation modified public trust restrictions for the historic tidelands in Beacon Bay. "The Beacon Bay Bill" (Chapter 74, Statutes of 1978) and Senate Bill 573 (Chapter 317, Statutes of 1997) allows for the residential lots of Beacon Bay, located within state tidelands to be leased for residential purposes until June 27, 2043. Today, 72 lots are leased for residential purposes in Beacon Bay and rents collected from Beacon Bay Leases generate over $1 million dollars in annual revenues. As owner of the property, the City is the steward of a public trust, and state law requires the City to maximize its returns or be subject to a charge of making a gift of public funds. Therefore, the timely collection of rent due on such properties is imperative. INTRODUCTION: STANDARD OPERATING PROCEDURE The City Manager's Office currently maintains all lease files for the Beacon Bay lots. The terms and conditions of the standard Beacon Bay Lot Lease Agreements provide for rent payable to the City in equal monthly installments, in advance, due on or before the 1st day of the month and delinquent after 5:00 p.m. the 15th day of the month (Lease § 3(B)(5))• City billing statements are sent to the leaseholder on or around the 19th of each month. The statements include the amounts due for all City accounts; including rent, recycle services, sewer service and/or water service. Currently, the only written notice to Lessees is in the form of these billing statements. The City may charge delinquent accounts 4% a month as late fees for rent not paid by the 15th of the month. Current City billing practices do not include the 4% late charge addition to the billing statements; a procedure adjustment is required to correct this billing issue at the Administrative Services Department level. 4 ~, D,, .a s A4 G.%Clvu^r.f. CA� a'.Ob PA4 Oava's olio, ' SOP: Delinquent Beacon Bay Rents Date: September 22, 2009 Page: 2 Going forward, the City's standard operating procedure for handling delinquent Beacon Bay Lease rents shall be to, in the following order: 1) Issue "Final Notice to Pay" letter on the 16th of the month to all delinquent Beacon Bay Lease accounts for the outstanding rent balance only, if full rent payment is not made within 30 days of service of letter, 2) Serve a "3-Day Notice to Pay or Quit" if full rent payment is not made within three days of service, 3) The Office of the City Attorney shall file an Unlawful Detainer action with the Orange County Superior Court. II. BACKGROUND: PROCEDURE AND SERVICE A. Monthly Delinquent Accounts Report On the 16th day of each Month, the Revenue Manager, or his designee, shall furnish to the City Manager, or his designee, the "Delinquent Accounts" report for Beacon Bay Leases. B. Final Notice to Pay Letter On the 16th of the month, or as soon after as possible, the City Manager, or his designee, shall issue the "Final Notice to Pay" letter to all delinquent Beacon Bay accounts, in the attached format (attached as Exhibit A). The letter shall be issued via regular first class mail and certified mail return receipt requested, to the Lessee on or around the 16th of the Month. The letter shall also be carbon copied to any "Complying Lender" (defined in Section 5.13), anv known lender, and any known sublessee of the property, and the Office of the City Attornev. Please review files carefully to see if there is any indication that a lender may be involved. Lenders generally have the ability and incentive to pay when the Lessee cannot. The City must make all reasonable efforts to ensure delivery of all Notices issued to the Lessee and Lender. The Final Notice to Pay letter shall be sent to all known addresses for the Lessee and Lender, including the residence address(es), business address(es) and/or mailing address(es) provided to the City on the Lease, or as otherwise provided for by way of change of address notices or as found on the City's Master ID system. The City Manager's Office shall retain a copy of all letters sent to the Lessee and Lender in addition to any returned letters in the corresponding Lease file. The Final Notice to Pay letter shall state that the Lessee has 30 days to pay all past due rents or a "3-Day Notice to Pay or Quit" shall be issued. The attached form letter shall be completed for the Final Notice to Pay letter with the names, addresses, lot/ lease information and the total outstanding rent balance. The City Manager's designee shall calendar out 30 days from the date of mailing the Final Notice letter and then obtain an updated Delinquent Accounts report for Beacon Bay Leases from the Revenue Manager. The Final Notice to Pay letter may also separately list water/utility amounts past due, and late fees, although subsequent 3-Day Notices may only demand rent amounts owed. The City Manager, or his designee, shall field the Lessee/ Lender/ Tenant calls related to the service of the final notice to pay letter. SOP: Delinquent Beacon Bay Rents Date: September 22, 2009 Page: 3 If the account is not paid in full within 30 days, move on to the "Preparing the 3-Day Notice to Pay or Quit" step below. • If Lease account is paid in full, no further action needed. If the Lease account is partially paid within 30 days, the City may move on to preparing the 3-Day Notices to Pay or Quit on the unpaid past due rent amounts, or it may discuss payment plan options with the Lessee, at the City Managers discretion. C. Preparing the 3-Day Notice to Pay or Quit After the 30 days have expired on the Final Notice to Pay letter, prepare a "3-Day Notice to Pay or Quit." Use the attached form provided by the Office of the City Attorney (Exhibit B). Complete the highlighted portions on the form including the name, all known addresses, lot number, Lease effective date and the amounts owed for unpaid rent only. In an unlawful detainer action, the court will not proceed if the 3-Day Notice demands an amount higher than rent due. Route or hand deliver the completed 3-Day Notice to Pay or Quit, along with the Lease file, including the following documents, to the Office of the City Attorney for approval as to form: 1. Routing Slip; 2. Current Lease; 3. Recorded Memorandum of Lease; 4. Billing statements for months owing; 5. Final Notice to Pay letter; 6. Customer History report; and 7. All documentation provided to City between Lessee and Lender. The Office of the City Attorney will respond with the signed "Approval as to .Form" or provide comments for corrections within 10 days of receipt of the completed 3-Day Notice and appropriate backup documentation. Please use the attached routing slip for all 3-Day Notices and supporting documentation (Exhibit C). The routing slip, along with all supporting documents, may be sent via e-mail in pdf format or the original file may be hand delivered/ sent via inter -office mail to the Office of the City Attorney Paralegal. Please clearly note on the Routing Slip when sending original files to ensure they are Properly returned. D. Service of 3-Day Notice to Pay or Quit The Office of the City Attorney will notify the City Manager, or his designee, when the 3- Day Notice to Pay or Quit is approved as to form. The City Manager's Office shall then arrange for personal service of the 3-Day Notice upon the Lessee and, if applicable, the Tenant(s). The Lender, if applicable, shall be copied on all Notices sent to the Lessee via US Mail and overnight delivery. (Note: if the lender has commenced foreclosure proceedings, it may have current right of possession of the property and should be SOP: Delinquent Beacon Bay Rents Date: September 22, 2009 Page: 4 separately served in addition to receiving a copy of the Lessee's 3-Day Notice through US Mail and overnight delivery.) Any sublessees with current right of possession of the property must also be served with a separate 3-Day Notice to Pay or Quit. It is not sufficient to simply name the Lessee and serve a copy of the Lessee's 3-Day Notice on the sublessee. Under the Code of Civil Procedure, all reasonable efforts must be made to personally serve a Lessee/ Tenant with a 3-Day Notice to Pay or Quit. This is critical to the City's case if an unlawful detainer action is filed. The City shall contract with a Registered Process Server to personally serve the Lessee and any know Sublessees. The current authorized process server service is: Micro Quick Ph: (714) 542-2200 2031 E. 1st Street, Suite A9 Santa Ana, CA, 92701 The City Managers Office shall contact the service to arrange for pick up of the original, signed 3-Day Notice. Provide the service with all known addresses for the Lessee. The Process Server will arrive personally to pick up the original document(s). Provide the Process Server with instructions to make all efforts to personally serve the Lessee that day or the next day. If known, provide the Process Server with a physical description of the Lessee. You may also inform the Server that if, after all reasonable efforts are made, personal service cannot be achieved, substitute service or posting at the address(es) provided is acceptable. Request that the Process Server fax you a signed and completed proof of service the same day service is completed (proof of service form attached as Exhibit D). E-mail a pdf copy or route a hard copy of the completed and signed proof of service along with the completed and signed 3-Day Notice to Pay or Quit to the Office of the City Attorney's Paralegal. Should substitute service or posting be required, the City Manager's Office shall, via overnight delivery, send a copy of the 3-Day Notice to Pay or Quit to the address(es) where personal service was attempted. The staff member who sends the copies shall complete a proof of service for the file and forward a copy to the Office of the City Attorney (sample and form attached as Exhibit E). Should any questions arise, please call the Office of the City Attorney. Once the 3-Day Notice is served, the Office of the City Attorney will handle all phone calls or inquiries related to the Notice. DISCUSSION: POLICY ISSUES A. Acceptance of Partial Payments If the City accepts partial payment of amounts due, its ability to proceed with the Unlawful Detainer action is affected. The City shall allow the acceptance of Partial Payments after issuance of a 3-Day Notice to Pay or Quit at the sole approval of the City Manager or his designee. The City Manager's Office shall notify the Cashier upon y SOP: Delinquent Beacon Bay Rents Date: September 22, 2009 Page: 5 the issuance of a 3-Day Notice to Pay or .Quit and shall immediately contact the City Manager designee if a partial payment is tendered to the City after the issuance of a 3- Day Notice. B. Payment Plans When appropriate, the City Manager or his designee may choose to enter a payment plan with the Lessee rather than proceed with the Unlawful Detainer. This requires a separate written agreement between the City and the Lessee. If a payment plan is contemplated, staff should contact the Office of the City Attorney for further assistance. ATTACHMENTS: Exhibit A: Exhibit B: Exhibit C: Exhibit D: Exhibit E: Template: Final Notice to Pay Letter Template: 3-Day Notice to Pay or Quit Template: 3-Day Notice Routing Slip Form: Proof of Service Sample: Completed Proof of Service Oborny, Shirley From: Patrick Ward [pward@metrogroupfinance.com] Sent: Wednesday, August 03, 2011 9:28 AM To: Oborny, Shirley Subject: RE: Lender Info. Shirley, Below is the loan innformation Chase Home Finance PA Box 78420 Phoenix, AZ 85062-8420 Loan # 1236207754 Patrick Ward From: Oborny, Shirley fmailto:soborny(cbnewportbeachca.00vl Sent: Wednesday, August 03, 2011 8:49 AM To: Patrick Ward Subject: Lender Info. Good morning Patrick. Can you please provide us with your mortgage lender information. Thank you. cfkplv 0610 Executive Assistant to the City Manager City Manager's Office City of Newport. Beach 3300 Newport Blvd. Newport Beach, CA 92663 949-644-3001 949-644-3020 (fax) sobornv@newoortbeachca.gov Oborny, Shirley To: Patrick Ward Subject: FW: File: A09-00458 Beacon Bay Leases: 2 Beacon Bay (Ward) CyAutold: 2166569 CycomPath: C:\cycomsgi\ CyMatterld: 2027911 CyMultiRecMemos: N CyStaffld: CW Hello Mr. Ward. The City Attorney's office is asking if you and Carol would be available to come in and sign the agreement on Friday (preferred) or Monday. Please let me know ASAP. Thank you. Shirley From: Wolcott, Cathy Sent: Wednesday, July 27, 20115:54 PM To: Oborny, Shirley Cc: Smith, Dana Subject: File: A09-00458 Beacon Bay Leases: 2 Beacon Bay (Ward) The Ward's draft stipulated judgment has been submitted to David for approval. Could you please contact the Wards, and ask whether they will be available to sign either this Friday, July 29 or Monday, August 1? Friday Would be preferred. Both Carol and Patrick Ward's signatures are required, since they hold the lease in joint tenancy. Many thanks, Catherine Wolcott Deputy City Attorney City of Newport Beach (949)644-3131 cwolcott(@newportbeachca.gov Oborny, Shirley From: Wolcott, Cathy Sent: Thursday, July21, 2011 5:51 PM To: Oborny, Shirley; Mulvihill, Leonie Subject: RE: 2 Beacon Bay - Patrick Ward Hi Shirley, Yes, I'm supposed to be working on this, and I have some detailed instructions from David on what he wants in it. I've been buried in Morningside PRAR's and staff report for the past couple weeks, so I haven't gotten it done yet. I'll check in next week, as this is a high priority item. CMW From: Oborny, Shirley Sent: Thursday, July 21, 20114:25 PM To: Mulvihill, Leonle Cc: Wolcott, Cathy Subject: FW: 2 Beacon Bay - Patrick Ward Leonie, Dana asked me to check with you about having an agreement drawn up in David's absence. I'm copying Cathy Wolcott on this since she has been involved in Beacon Bay late payments. The lessee agreed to pay the entire back -owed rent within 90 days of the date of the agreement or the City would put a lien on his property. Dana can provide more info. as to what she and David talked about. Please advise — thank you. Slirrey From: Oborny, Shirley Sent: Tuesday, July 05, 2011 5:05 PM To: Hunt, David Subject: RE: 2 Beacon Bay - Patrick Ward On July 10 (the deadline for the July 2011 lease payment), they will owe $59,603.07. 1 believe Dana and he agreed that it would all become due and payable 90 days from the date of the agreement. << OLE Object: Picture (Device Independent Bitmap) >> S(irrey From: Hunt, David Sent: Tuesday, July 05, 2011 10:22 AM To: Oborny, Shirley Subject: RE: 2 Beacon Bay - Patrick Ward Yes please. From: Oborny, Shirley Sent: Tuesday, July 05, 2011 8:11 AM To: Hunt, David Subject: RE: 2 Beacon Bay - Patrick Ward Let me know if you need an updated amount due. Slirfey From: Hunt, David Sent: Friday, July 01, 2011 10:29 AM To: Oborny, Shirley Subject: RE: 2 Beacon Bay - Patrick Ward Shirley, Thank you for asking. We will have it next week, probably by no later than Thursday. To be candid I forgot. That should not happen, but it did. David From: Oborny, Shirley Sent: Thursday, June 30, 20112:40 PM To: Hunt, David Subject: 2 Beacon Bay - Patrick Ward Hi David. I realize you have a lot on your plate. I need to give Dana an update on the agreement that needs to be created between the City and Mr. Ward that addresses his promise to pay his back - owed rent in 90 days. Please advise. Thank you. Executive Assistant to the City Manager City Manager's Office City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 949-644-3001 949-644-3020 (fax) soborny@newoortbeachca.eov LEASE THIS LEASE is made and entered into as of the r)n dayof 2007, b and between the CITY OF NEWPORT BEACH, aCharter City and municipal cororation ' essor"), and PATRICK AND CAROL WARD Husband and Wife as Joint Tenants, ("Lessee"), regarding the real property commonly referred to as Beacon Bay Lot 2. 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. NB1-187371.V20524194 0 • 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 2 (the "Leased Land"), which is more particularly described in Exhibit B, and generally depicted on Exhibit A, each attached hereto and incorporated by reference, subject to the limitations on use specified in Section 6. As used in this Lease, the term 'Premises" shall refer to the Leased Land and any improvements constructed thereon. Lessor expressly reserves all oil, oil rights, gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in and under the Leased Land and the right to grant and transfer the same, together with all necessary and convenient rights to explore for, develop, produce and extract and take the same, subject to the express limitation that any and all operations for the exploration, development, production, extraction and taking of any such substance shall be carried on at levels below the depth of five hundred feet (500') from the surface of the land by means of wells, derricks and other equipment from surface locations on adjoining or neighboring land, and subject further to all restrictions and regulations concerning the drilling for, and production of, oil, gas, minerals, petroleum and other hydrocarbon substances specified in the Newport Beach City Charter or the Newport Beach Municipal Code. 2. TERM. The term of this Lease shall commence on the Execution Date, but in no event prior to the Effective Date, and shall expire on the date fifty (50) years following the Effective Date, unless earlier terminated as provided in this Lease. 3. RENTAL. A. Definitions. For the purposes of this Lease, the following terms shall be defined as specified in this paragraph. In certain cases, the definition of the term contains operative language that affects the rights of the parties: (1) "Actual Sales Value" shall mean the total of all consideration paid for the non-exempt transfer of this Lease or the Pre-existing Lease, including the improvements on the Leased Land, from the Current Lessee, or Subsequent Lessee, to another person, excluding any consideration paid for the transfer of personal property in connection with such transaction. (2) Average Actual Sales Value Rent" shall mean two and one-half percent (2.5 %) of the mean of the Actual Sales Value of the non-exempt transfer of a similarly situated (waterfront or interior) Beacon Bay parcels as specified in this subparagraph. Average Actual Sales Value Rent shall be the mean of the Actual Sales Value of the three similarly situated parcels most recently transferred. Exempt transfers, as defined in Paragraph 3.13(3), shall not be used to calculate Average Actual Sales Value rent. (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 3.13(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 Fifty-seven thousand seventy-five and 0/100s ($57,075.00), payable at the rate of Four thousand seven hundred fifty-six and 25/100s 4 756.25) per month. Lessee shall also pay, if applicable, deferred rent in the sum of N/A upon execution of this Lease. Rent shall be adjusted every seven (7) years after the date of transfer in accordance with the provisions of Paragraph 3.B(4). Annual rent, deferred rent, and periodic adjustments are based upon the following: (1) Execution Before Effective Date. In the event this Lease is executed by the Lessee on or before the Effective Date, Rent shall be paid as follows: (a) Current Lessee: Current Lessee shall pay annual rent equal to Initial Rent as specified in Exhibit C. Thereafter, so long as there has been no transfer of this Lease by the Current Lessee (other than an exempt transfer as set forth in Paragraph 3.B(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.B(4). (b) In the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (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 3.13(4). (d) Subsequent Lessee: In the event of any transfer of this Lease to a Subsequent Lessee who wished to sign this Lease after the Cut-off Date in a transaction other than an arm's length assignment of this Lease, and sale of the improvements on the Leased Land, if any, such as a gift or transfer by inheritance other than an exempt transfer under Paragraph 3.13(3), the Subsequent Lessee shall pay annual rent equal to the Average Actual Sales Value Rent calculated as of the date of the transfer in accordance with the provisions of Paragraph 3.A(2). The Subsequent Lessee shall also pay all Deferred Rent concurrent with the execution of this Lease. The annual rent shall be adjusted every seven (7) years following the Execution Date in accordance with the provisions of Paragraph 3.B(4). (3) Exempt Transfers. The provisions of Paragraph 33 regarding transfers shall not operate to increase rent if: (a) Lessee is assigning an interest in this Lease to a trustee under a deed of trust for the benefit of a lender; (b) the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; (c) the transfer of an interest in this Lease is between or among tenants in common or joint tenants in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; (d) the transfer or assignment is by a bona fide lender acquiring title by foreclosure or deed in lieu of foreclosure of a trust deed; or (e) the transfer is a sublease of the premises for three years or less; provided, however, that in determining the term of a sublease, any options or rights to renew or extend the sublease shall be considered part of the term whether or not exercised; (f) the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse; (g) the transfer is to an inter vivos trust, living trust or other similar estate planning arrangement of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee if the beneficiary of such trust or other arrangement is other than the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously; or (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant in common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective interests in this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 3.6(I)(a), 3.B(2)(a) and 3.6(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current or Subsequent Lessee, rent shall be adjusted to reflect any increase or decrease in the cost of living, which adjustment shall be determined as set forth hereinafter. • 0 The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage increase or decrease, if any, in the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (i) the Execution Date, or (ii) the last rental adjustment date. Lessor shall endeavor to notify Lessee of rental adjustments at least forty-five (45) days prior to the end of each seventh (7th) lease year, provided, however, failure of Lessor to give forty-five (45) days' notice does not relieve Lessee from the obligation to pay increased rent or the right to pay less rent in the event of a decrease in the CPI; and, provided further, that Lessee shall have no obligation to pay rent increases which apply to any period greater than ninety (90) days prior to the receipt by Lessee of Lessor's notice of an increase in rent. (b) in the event Lessee is two or more persons owning the leasehold estate created hereby as tenants in common or joint tenants, and less than all of such persons transfer their interest in this Lease to a person other than to an existing tenant in common or joint tenant, the rent adjustment shall be prorated to reflect the percentage interest being transferred to a third party. For example, if two persons are the Lessee as tenants in common as to equal one-half interests, and one of such persons transfers his/her 50% interest to a third party, the rent shall be adjusted as provided in Paragraph 33(2)(c), and thereafter as provided in Paragraph 33(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest in this Lease to such third party shall not be exempt under subparagraph 3.B(3). (5) Installment Payments/Grace Period. Lessee shall pay rent in equal monthly installments, in advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (15th) day of the month for which the payment is made ("Grace Period") . If a rent payment, or any portion thereof, is received by Lessor after expiration of the Grace Period, Lessee shall pay Lessor a late payment charge equal to four percent (4%) of each late payment, or portion thereof. Rent payments shall be payable to the City of Newport Beach and sent, or delivered, to the Finance Director at the address specified for service of notices. Rent shall be payable by Lessee to Lessor in such coin or currency to the United States as at the time of payment is legal tender for public and private debts. Lessor and Lessee agree that late charges specified in this paragraph represent a fair and reasonable estimate of the cost Lessor will incur by reason of any late payment by Lessee. Any late or missed payment of rent constitutes a default pursuant to paragraph 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 thereon as of the date of transfer. Any such appraisal shall be completed not later than thirty (30) days after receipt by Lessor of the aforementioned information from the Lessee. If the value determined by the appraiser commissioned by Lessor exceeds the stated total consideration to be paid based on the information received from the Lessee by more than ten percent (10%), Lessor shall so notify the Lessee and provide Lessee with a full copy of such appraisal report, and said value shall be deemed the Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments unless within fifteen (15) days after receiving such notice and the report the Lessee notifies Lessor that Lessee elects to cause an appraisal of the fair market value of this Lease and improvements thereon as of the date of transfer to be conducted by an independent appraiser. In such event, 'Lessee cause such appraisal to be completed no later than thirty (30) days after the notice to Lessor and shall provide Lessor with a full copy of the appraisal upon completion. The Actual Sales Value for purposes of calculating Average Actual Sales Value Rent and rental payments shall be the greater of (i) the stated consideration for the transfer, or (ii) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.6 shall be conducted by an MAI appraiser licensed to conduct business in the State of California and experienced in residential appraisals in Southern California. C. Exempt Transfer Information. Lessor's consent is not required for the "exempt transfers" referenced in Paragraph 3.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 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, (i) be an event of default by the Lessee under this Lease, or (ii) permit Lessor to treat such sublease as a transfer of this Lease subject to the provisions of Section 3.B. 5. ENCUMBRANCES. A. Right to Encumber. Lessee may encumber this Lease by deed of trust, mortgage, or similar instrument, in favor of any bona fide lender ("Lender") in a bona fide loan transaction for any purpose without the consent of Lessor. To determine whether a loan is a bona fide lending transaction, and not an arrangement for transfer of the possession or title to the Premises to the putative lender, Lessee and the lender agree to provide Lessor with all documentation executed between Lessee and the lender concerning the loan upon request of Lessor. Neither Lessee nor Lessor shall have the power to encumber Lessor's interest in the Leased Land. Any encumbrance shall be subject to all covenants, conditions and restrictions in this Lease and to all rights and interests of Lessor except as otherwise expressly provided in this Lease. Lessee shall give Lessor prior written notice of any encumbrance. B. Notice to Lender. Lessor shall have no obligation to give any Lender any written notice pursuant to this Lease unless the Lender has given Lessor written notice of its name, address, and nature of encumbrance ("Complying Lender") . Lessor shall give all Complying Lenders a copy of any written notice of default, notice of termination or other notice which may affect Lessee's rights under this Lease. Notice shall be deemed given by Lessor to Lender five (5) days following deposit in the United States mail, certified and return receipt requested, postage prepaid, and sent to Lender at the address furnished in writing by Lender. C. Modification. Lessor and Lessee agree that they will not modify, surrender or cancel this Lease by mutual agreement without the prior written consent of Lender. D. Rights of Lender. Any Lender holding or the beneficiary of a security interest or lien on this Lease and the leasehold estate created hereby shall have the right, during the term of the Lease, to: (1) perform any act required of Lessee pursuant to this Lease; (2) transfer this Lease to the purchaser at any foreclosure sale, the assignee in the event of an assignment in lieu of foreclosure, or to acquire the interest of Lessee pursuant to foreclosure or assignment and thereafter transfer this Lease to the Lender's successor. Lender shall have no right to transfer this Lease unless and until Lender has cured all defaults requiring the payment or expenditure of money by Lessee. E. Right of Lender to Cure Default. Lessor shall give written notice of any default or breach of this Lease by Lessee to Lender and afford Lender the opportunity, after notice, to: (1) cure the breach or default within ten (10) days after expiration of the time period granted to Lessee for curing the default if the default can be cured by payment of money, (2) cure the breach or default within thirty (30) days after expiration of the time period granted to Lessee for curing the default when the breach or default can be cured within that period of time; or (3) cure the breach or default in a reasonable time when something other than money is required to cure the breach or default and cannot be performed within thirty (30) days after expiration of the time period granted to Lessee for curing the default, provided the acts necessary to cure the breach are commenced within thirty (30) days and thereafter diligently pursued to completion by Lender. • 0 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, 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, 10 0 street lighting, telephone and electricity lines and other Infrastructure facilities in Beacon Bay at its initial cost and to assess Lessee for a pro reta 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 rate share of the annual costs incurred by Lessor shall be paid within thirty (30) days after written notice of the amount due, and any failure to pay shall constitute a material breach of this Lease. The costs of maintaining and operating community facilities shall be determined annually and solely from the financial records of Lessor. 11. COVENANTS, CONDITIONS AND RESTRICTIONS. Lessee agrees to abide and be bound by all covenants, conditions, restrictions and reservations as contained in Exhibit E attached hereto and incorporated herein by this reference. Said covenants, conditions and restrictions shall run with the Leased Land and shall be binding on Lessee and Lessee's successors in interest. 12. INDEMNIFICATION. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities and demands of any nature whatsoever, including reasonable attorneys' fees, regardless of the merit or outcome of any such claim or suit, arising out of, or in any way related, to the condition of the Premises, or the use or possession of the Premises by Lessee, or Lessee's employees, agents, representatives, guests or invitees, as well as any activity, work or things which may be permitted or suffered by Lessee in or on the Premises. Lessee shall indemnify, defend and hold harmless Lessor, its City Council, Boards and Commissions, officers, agents, servants and employees from and against any and all actions, causes of action, obligations, costs, damages, losses, claims, liabilities, and demands of any nature whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the use or possession of the Premises by Lessee or from any activity, work or things which may be permitted or suffered by Lessee in or about the Premises. Without limiting the generality of the foregoing, Lessee hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. 11 0 0 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 12 11 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 (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 award of the amount referred to in clause (i) shall be computed by discounting such amount at one percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (2) Without terminating or affecting the forfeiture of this Lease or, in the absence of express written notice of Lessor's election to do so, relieving Lessee of any obligation pursuant to this Lease, Lessor may, but need not, relet all or a portion of the Premises at any time, or from time to time, and on such terms and conditions as Lessor, at its sole discretion, deems appropriate. Whether or not the Premises are relet, Lessee shall pay all amounts required by this Lease up to the date that Lessor terminates Lessee's right to possession of the Premises. Lessee shall make such payments at the time specified in the Lease and Lessor need not wait until termination of the Lease to recover sums due by legal action. If Lessor relets all or a portion of the Premises, the reletting shall not relieve Lessee of any obligation pursuant to this Lease; provided, however, Lessor shall apply the rent or other proceeds actually collected by virtue of the reletting against amounts due from Lessee. Lessor may execute any agreement reletting all or a portion of the leased premises and Lessee shall have no right to collect any proceeds due Lessor by virtue of any reletting. Lessor shall not, by any reentry or reletting or other act, be deemed to: (a) Have accepted any surrender by Lessee of this Lease or the leased premises; (b) have terminated this Lease; or (c) have relieved Lessee of any obligation pursuant to this Lease unless Lessor has given Lessee express written notice of Lessor's election to do so. (3) Lessor may terminate this Lease by express written notice to Lessee of its election to do so. The termination shall not relieve Lessee of any obligation which has accrued prior to the date of termination. In the event of termination, Lessor shall be entitled to recover the amount specified in Paragraph 14.13(1). 13 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. B. Removal of Improvements. Upon the expiration of the term of this Lease, and on condition that Lessee is not then in default of any of the provisions of this Lease, Lessee shall have the right to remove from the Leased Land all buildings and improvements built or installed on the Leased Land. Removal of any building or improvement shall be at the sole cost and expense of Lessee and removal must be complete no later than ninety (90) days after expiration of the term of this Lease. Lessee shall fill all excavations and remove all foundations, debris and other parts of the buildings or improvements remaining after removal and surrender possession of the Premises to Lessor in a clean and orderly condition. In the event any of the buildings and improvements are not removed within the time provided in this Paragraph 15.13, they shall become the property of Lessor without the payment of any consideration. 16. EMINENT DOMAIN. A. Definitions of Terms. (1) The term "total taking" as used in this Section 16 shall mean the taking of the entire Premises under the power of eminent domain or the taking of so much of the Leased Land as to prevent or substantially impair the use thereof by Lessee for the residential purposes. (2) The term "partial taking" shall mean the taking of a portion only of the Premises which does not constitute a total taking as defined above. 14 (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. 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 16 0 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 parry shall impair any such right or power or shall be construed as a waiver of any such omission, neglect or default on the part of the other party or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Lease shall be construed as a waiver of any succeeding breach of the same or of any of the terms, covenants, agreements, restrictions or conditions of this Lease. 20, COMPLIANCE WITH LAWS. Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of Orange, City of Newport Beach, or any other governmental body or agency having lawful jurisdiction over the Leased Land. 21, NOTICES. Any notice or notices provided for by this Lease or by law, to be given or served by Lessee, may be given or served by mail, registered or certified, with postage prepaid, on the City of Newport Beach, addressed to the Mayor, City Manager, or City Clerk, 3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659-1768, or at such other address as may be hereafter furnished to Lessee in writing. If notice is intended to be served by Lessor on Lessee, it may be served either: A. By delivering a copy to the Lessee personally; or B. By depositing the Notice in the United States Mail, registered or certified, with postage prepaid, to the residence or business address furnished by Lessee; or C. If the Lessee is absent from the Leased Land by leaving a copy with some person of suitable age and discretion who may be occupying the Leased Land; or D. If no one can be found, then by affixing a copy of the notice in a conspicuous place on the Premises and also sending a copy through the mail addressed to the Lessee. Such service upon Lessor or Lessee shall be deemed complete upon the earlier of (i) actual delivery, or (ii) the expiration of seventy-two (72) hours from and after the deposit in the United States mail of such notice, demand or communication. 22. HOLDING OVER. This Lease shall terminate and become null and void without further notice upon the expiration of the term of this Lease. Any holding over by Lessee after expiration of the term shall not constitute a renewal of this Lease or give Lessee any rights in or to the Premises except as expressly provided in this Section. The 16 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 Lessee 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 against the other for recision, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease B. Inurement. Each and all of the covenants, conditions and agreements herein contained shall,' in accordance with the context, inure to the benefit of Lessor and Lessee and apply to and bind Lessor and Lessee, as the case may be, their respective heirs, legatees, devisees, executors and administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said Leased Land or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting. C. Joint Several Liability. If Lessee consists of more than one person, the covenants, obligations and liabilities of Lessee pursuant to this Lease shall be the joint and several covenants, obligations and liabilities of such persons. D. Captions. The section and paragraph captions used in this Lease are for the convenience of the parties and shall not be considered in the construction or interpretation of any provision. E. Gender. In this Lease, the masculine gender includes the feminine and neuter and the singular number includes the plural whenever the context so requires. 17 IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first above written. LESSOR: CITY OF NEWPORT BEACH, By: E R Title: CI' Y MANAGER ATTEST: � y///� Its /� " V�"1 O O r 'CITY CLERK Pn u = eK Gcicoax�P APPROVED AS TO FORM: CITY ATTOR EY LESSEES: PATRICK WARD ddm2& CAROL WARD ie NOTARY PAGE STATE OF CALIFORNIA } �,, ) S.S. COUNTY OF C- Za , T } On ~j � p before me,�^ ^ o Z a Nota v Public personally 7a—�C.IL tf'-1&V'CL (:"--'L4 Cr.L-a�l \i.la--c appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of vAkch the person(s) acted, executed the instrument. WITNESS Signature STATE OF CALIFORNIA } } S.S. COUNTY OF } BRIAN J. FOXCROFT NOTARY PUBLIC - CALIFORNIA rn ,� COMMISSION # 1575867 a"`r-r�i'S "' ORANGE COUNTY My Comm. Exp May 3, 2009 On before me, a Notary public personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/tbeir 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 \ . 'o �a - 39 for c P'Efc � p0. to 9pp�� `f 2O F 30 / a JL 20 i9t.r ° qq j3�M �, �5a .�3 S�A� ��_ aA �cr 1y .-rr�,�>* ,,•• -0� Ad )d• 31 90 o y Z ! + ' .x �-- Eb -� h3 .n v<"•� hp g.s n" ''d qi QiFi Glspl - cx A ^-o —� Sh ' "�, � 49 ~_','. 6o- b, -w nse,r �4)'� �a'+ 1�6 t1, �p J5• ' 7 \ _. s .c ,, e • i1 f ' 1 ,; , I D , hri _ `:'- a°'ais a'i�a0 P ,U �Lp \ e b "w �'•'in �`c' .,c..e OC,. �° �b=�� - 5i 'a�0 .s A�° .a E�pO� _ i P �2 fp51 It { i rRop�,°'� J, L' i P aFt � $ / .s. tpRof aP6 f � op �I,V I .Gf F E t V V OpiS� C 20 a "e as s• �� t1 p�Fy t . �' -P�a °tP �� 4E �i.5 ULy- o ':-. ,+)' "° q L.. / VX //S.200 rr i 6 .d � I — S U.S. /-77 MAP OF BEACON BAY EXHIBIT B Beacon Bay Lot 2 described as follows: The northwesterly 45.00 feet of Lot 9, Pages 42 and 43 of Record of Surveys, County of Orange, State of California, southeasterly 10.00 feet of Lot 1 as all are 2 as shown on the map filed in Book in the Office of the County Recorder, together with Lot H and I and the shown on said map. SUTNhARY OF SALIENT FACTS ANTD CO? CLUSIONS -continued SUMMARY OF VALUE INDICATIONS: Existing (1st year) Unencumberedi 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 g $1,200,000 $43,320 $12,506.85 $22,270.00 C $1,031,000 $37,560 $16,625.04 $22,490.00 1 $947,000 $34,2DD $8,020.80 $15,030.00 2 $1,131,000 $41,640 $8,925.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 $31,560.00 4 $1,318,000 $49,120 $10,459.96 $21,260.00 5 $1,341,000 $50,120 $20,012.04 $28,840.00 6 $1,386,000 $51,690 $25,OOD.00 $34,260.00 7 $1,210,000 $44,800 $24,999.96 $31,870.00 8 $1,177,000 $43,40 $43,750.00 $a3,480.00 9 $1,298,000 $47,840 $42,500.04 $44,350.00 10 $1,342,000 $49,600 $24,999.96 $33,540.00 it $1,122,000 $41,280 $9,020.52 $17,020.00 v 12 $1.100,000 $40,400 $14,250.OD $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 $8,509.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 $21,750.00 18 $1,067,000 $30,080 $9,509.49 $16,490.00 19 $1,243,OD0 $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 $37,980 $41,250.00 $37,990.00 ES 1 $1:037,000 $37,890 $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 SL-.M2-,,L4RY OF SALIENT FACTS AND CONCLUSIONS - continued Exisdn.a (lstyear) Unencumbered Fair Market Contract Effective Lot No. Fee Lot Value Rental Value Rent Net Rent Interior Lots r 23 $478,OD0 $14,487 $2,782.32 $6,297.00 24 $501,000 $15,237 $6,125,04 $8,897.00 25 $509,000 $15,537 $3,399.12 $6,977.00 26 $511,000 $15,612 $3,417.72 $6,942.00 27 $519,00D $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 $510,00D $15,462 $3,551.16 $7,102.00 31 $517,000 $15,725 $8,750.00 $10,515.00 32 $520,000 $15,937 $3,585 a8 $7,217.00 33 $528,000 $16,137 $3,607.08 $7,307.00 34 $589,000 $18,200 $4,454.64 $8,490.00 35 $559,000 $17,000 $3,776.28 $7,780.00 36 $5,18,000 $16,662 $3,795.00 $7,672.00 37 $517,000 $15,725 $14,625.00 $15,005.00 38 $520,000 $15,837 $3,780.36 $7,967.00 v 39 $528,000 $16,137 $9,125.04 $11,557.00 40 $588,000 $18,162 $11,133.60 $13,572.00 41 $513,000 $15,500 $3,719.64 $7,300.00 42 $548,000 $16,662 $3,795.00 $7,672.00 43 $556,000 $16,962 $11,250.00 $13,232.00 44 $558,000 $17,037 $3,832.20 $7,797.00 45 $565,000 $17,300 $4,056.84 $7,990.00 46 $598,000 $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,OD0 $15,837 $3,551.16 $7,197.00 50 $523,0D0 $15,950 $3,569.76 $7,240.00 51 $520,OD0 $15,837 $3,780.36 $7,857.00 52 $528,000 $16,137 $12,750.00 $13,927.00 53 $588,000 $19,162 $4,479.00 $8,492.00 54 $530,000 $15,987 $3,344.99 $7,227.00 55 $559,000 $17,075 $10,625.D4 $12,865.00 56 $567,000 $17,375 $3,603.96 $7,915.00 57 $546,OD0 $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 0 0 SUNiM1ARY OF SALIENT FACTS AND CONCLUSIONS - continued Existir.8 (1st year) Unencumbered Farr Market Contract Effective Lot No. Fee Lot Valud Rental Value Rent Net Rent interior Lots - continued 61 S588,OD0 $18,162 $4,436.16 $8,482.00 ES 3 $474,000 $14,225 $8,750.04 $10,325.00 ES 4 $467,OD0 513,962 $3,021.96 $6,322.00 ES 5 5470,000 $14,075 - $10,000.08 $11,415.00 ES 6 5468,000 $14,000 $2,982.96 $6,310.D0 ES 7 5461,ODO 513,737 $2,966.04 $6,057.00 ES 8 5471,OOD $13,925 53,118.08 $6,455.00 Subtotal 1nt.: 523,786,000 5724,637 5254,617.16 $397,907.00 Subtotal R'.F.: $31,563,000 $1,160,640 5519,983.08 5705,220AD Distribution of Rents and Tax Advantage between Tidelands and Uplands* (lstyear) Proportionate Proportionate AnnualAmort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage ' aterfront Lots A $31,940.00 100% 070 $31,940 $0 $0 $0 ,B $22,270.00 100% 0% $22,270 $0 $930 $930 C $22,480.00 100% O% $22,480 $0 $1,410 $1,410 1 $15,030.00 lOD% 0% $15,030 $0 $2,080 $2,080 2 $17,950.00 100% 090 $17,950 $0 $2,260 $2,260 3 $31,560.00 10070 0% $31,560 $0 ,$560 $560 4 $21,260.00 100% 0% $21,260 $0 $2,610 $2,610 5 $28,840.00 1DO% 0% $29,840 $0 $1,620 $1,620 6 $34,260.00 100% 0% $34,260 $0 $0 $0 7 $31,870.00 95% 55r, $30,276 $1,594 $0 $0 8 $43,480.00 50% 50% $21,740 $21,740 $o $0 9 $44,350.00 5% 955ro $2,217 $42,132 $0 $0 10 $33,540.00 090 100% $0 $33,5410 $0 $0 11 $17,020.00 O% 10090 $0 $17,020 $3,200 $0 12 $22,190.00 0% 10090 $0 $22,190 $1,130 $0 13 $29,450.00 0% 100% $0 $20,450 $0 $0 14 v $19,690.00 0% 10050 $0 $19,690 $2,880 $0 15 $20,240.00 201/0 80% $4,048 $16,192 $2,980 $596 16 $16,490.00 95% 5% $15,656 $824 $2,640 $2,508 17 $21,750.60 10090 0% $21,750 $0 $2,420 $2,420 18 $16,480.00 10090 0% $16,49-0 $0 $2,640 $2,640 19 $19,500.00 100% 0% $19,500 $0 $2,880 $2,880 20 $17,910.00 100% 070 $17,910 $0 $2,470 $2,470 21 $26,660.00 10090 070 $26,660 $0 $0 $0 22 $37,980.00 10090 05ro $37,890 $0 $0 $0 ES 1 $31,920.00 10090 090 $31,920 $0 $0 $0 ES 2 $29,220.00 10090 0 $29,220 $0 $0 $0 Vamrftont :ubtotat: $705,220.OD $500,848 $204,372 $34,710 $24,984 Beacon Sac 616194 - Page 1 Exhibit D -Page 1 Distribution of Rents and Tax Advantage between Tidelands and Uplands* (Is tyear) Propo-tionate Propoftionate Annual Anort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage ,mrior Lots 23 $6,297.00 0% 100% $0 $6,297 $550 $0 24 $8,897.00 0% 100% $0 $9,897 $390 $0 25 $6,977.00 5% 95%a $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. 090 100% $0 $7,102 $580 $0 31 $10,515.00 30% 70% $3,154 $7,361 $660 $198 32 $7,217.00 100% 060 $7,217 $0 $620 $620 33 $7,307.00 10090 0170 $7,307 $0 $650 $650 34 $8,490.00 100%a 0% $8,490 $o $730 $730 35 $7,780.00 090 100910 $0 $7,780 $590 $0 36 $7,672.00 00/0 100% $0 $7,672 $590 $0 37 $15,005.00 5% 95% $750 $14,255 $0 $0 38 $7,967.00 99TO 1% $7,887 $90 $0 $0 39 $11,557.00 10090 o% $11,557 $0 $0 $0 40 $13,572.00 10090 0% $13,572 $0 $o $0 41 $7,300.00 0% 100% $0 $7,300 $510 $0 42 $7,672.00 0% ]00% $0 $7,672 $590 $0 43 $13,252.00 0% 100910 $o $13,232 $0 $0 44 $7,787.00 0% 100% $0 $7,787 $630 $0 45 $7,990.00 15% 8590 $1,198 $6,792 $660 $99 46 $8,492.00 070 100% $0 $8,492 $720 $0 47 $7,365.00 05ro 100% $0 $7,365 $610 $0 48 $9,305.00- 070 IM90 $0 $9,305 $600 $0 49 $7,197.00 090 100% $o $7,197 $620 $0 50 $7,240.00 090 100% $o $7,240 $630 $0 51 $7,857.00 0% 100% $0 $7,957 $110 $0 52 $13,927.00 090 100% $0 $13,927 $0 $0 53 $8,492.00 090 100% $0 $8,492 $730 $0 54 $7,227.00 090 100% $0 $7,227 $500 $0 55 $12,865.00 0% 1001TO $0 $12,965 $0 $0 56 $7,915.00 090 100% $0 $7,915 $470 $0 57 $7,427.00 09ro 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 09ro 10090 $o $7,315 $660 $0 Beacon Bay 616194 - Page 2 Exhibit D -Page 2 Distribution of Rents and Tax Advantage between Tidelands and Uplands* (Ist year) Effective Lot No. Net Rent :erior Lots - continued 61 $8,482.00 ES 3 $10,325.00 ES 4 $6,322.00 ES 5 $11,415.00 ES 6 $6,310.00 ES 7 $6,057.00 ES 8 $6,455.00 terior Lots IStotal: $397,907.00 51IW2terfronC S705,220.00 -and Total: $1,103,027.00 of Total: 100c u TO % Tidelands Uplands 0% 100% 100,70 050 100% OTO 85% 15% 0% 100% 0% IODTO 0% 100% Proportiona*m Proporionate Annual Anon. Tidelands Pent Rent of PV of Tax Tax Tidelands Uplands Advantage Advantage SO $8,482 $720 $10,325 $0 $320 $6,322 $0 $500 $9,703 $1,712 $0 $0 $6,310 $500 SO $6,057 •$650 $0 $6,455 $410 S109,592 $288,215 $19,930 S500,848 $204,372 $34,710 S610,4d0 $492,597 $54,640 55% 45% 1000/0 :if ecdve Net Rents consider tax advantage. Discount rate for present value of annual Vantage is 6%. Rate for urtordzation of advantage is 79o. Rent and advantage ;ores are from 10/9193 appraisal. Lou 3, 7, and 2I have been adjusted for new contract rent real estate taxes. $0 $320 $500 $0 $0 $0 $0 $5,251 S24,984 S30,235 55% Beacon Bay 6/6/94 - Page 3 Exhibit D - Page 3 DECLARATION Or co-V ANTS, CONDITIONS AND, RESTRICTIONS BEACON BAY COHMUNITY ASSCrIATION Table of Contents Article Page I DEFINITIONS 2 1 - Architectural Committee 2 2 2 - Articles and Bylaws 2 3 - Assessments 3 g - Association 3 5 - Association Rules 3 6 - Board 3 7 - City 3 8 - Common Expenses a 9 - Common Area a 10- Covered Property 4 3.1- Declarant 12- Exhibit n 13- Member c 1e- Lessee a 15- Residence 16- Setback ' 5 II MEMBERSHIP 1 - Membership 5 5 2 - Transfer 5 3 - voting Rights 5 ? - classes of voting Membership 5 5 - Approval of.Members III COVENANT FOR MAINTENANCE ASSESSMENTS 6 1 - f Creation of the Lien and Personal Obligation of Assessments 6 6 2 - Purpose of Assessments 6 3 - Regular P.ssessments 6 4 - Uniform Assessment 6 5 - Special Assessments 6 6 - No Offsets 7 7 - Reserves Iv NOiPAYMENT OF ASSESSMENTS 7 1 - -Delinquency 7 8 - Notice of Lien 8 3 - Foreclosure Sale (i) Exhibit E /✓ y ANDAMERICA SOUTHL• ,<D TITLE This Document s electronically recorded by SouthffWd Title Company_B RECORDING REQUESTED BY AND WHEN RECORDED RETURITO: City Manager's Office City of Newport Beach 3300 Newpbrt Boulevard Newport Beach, CA 92663 Recorded in official Records, Orange County Tom Daly, Clerk -Recorder 38.00 2007000484299 0319pm 08/02/07 213 33 M11 5 0.00 0.00 0.00 20.0012.00 0.00 0.00 0.00 a �53a 43 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 Patrick Ward and Carol Ward, Husband and Wife as Joint Tenants, herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on � Q-D-7 and ending on July 1, 2044, on the terms and conditions set forth in that certain lease by and between the parties hereto dated 7 `S 1' 07 _, 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: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record"of •Surveys, in the Office of the County Recorder, County of Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. S,— e , f EXECUTED on "3 " 01 , 2007, at Newport Beach, Orange County, California. LESSOR THE CITY OF NEWPORT BEACH COp *CI ANAGER: Homer Bludau ATTEST: ao� %Ft n o� DAVID A. KIFF FOR CIT RI Lessee: Patrick Ward APP ED AS TO FORM: 0(/�jx,vz� CIT ATTORNEY Lessee: Carol Ward NOTARY PAGE STATE OF CALIFORNIA } } S.S. COUNTY OFOta -n'` - } On n before me, vti ,��t� X C a Notary Public personally ctv'1e1e VJa.rcJ a✓Lci CC�-r4 V-(Ard- appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in Iris/her/their authorized cap (ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which ibeerson(s) acted, execute,& a instrument. WITNESS my Signature STATE OF CALIFORNIA } 1 BRIAN J. FOXCROFi 1 NOTARY PUBLIC • CALIFORNIA Ig 5 COMMISSION M 1676887 y + OflANOE COUNTY My Comm. Exp. May 3, 2009 } S.S. COUNTY OF D(An�WJ ) On 3) , before me, ✓ ' tom, l ( f V�a Notary Public personally C7 Y �/{ A _ Y' personally own tome � e to be the person(s} whose names) is/ate subscribed to the within instrument and acknowledged to me that he/sheAlier executed the same in his/her�W authorized capacity4e6), and that by his/herftheir signatureH on the instrument the person(6), or the entity upon behalf of which the persona}acted, executed the instrument. WITNESS my hand d officiall seal. �Nti l /� ' r11tvCOMM-80nion2s. NeW N1./ROWN Signature �C CanrtM�Non # 16M77 �V hulk • CoWomk Monge County 201 ILLEGIBLE NOTARY SEAL DECLARATION GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT WHICH THIS STATEMENT ISATTACHED, READS AS FOLLOWS: NAME OF NOTARY: �� A-yll �-J— 9 iC C� COUNTY WHERE BOND IS FILED: 0 DATE COMMISSION Y13 / PLACE OF EXECUTION OF THIS DECLARATION: Irvine. California 0 COMMISSION NUMBER:. I AUTHORIZED MANUFACTURES CODE: SOUTHLAND TITLE RON FNZtAND0 ILLEGIBLE NOTARY SEAL DECLARATION GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT WHICH THIS STATEMENT IS ATTACHED, READS AS FOLLOWS: NAME OF NOTARY: ze zTz ✓y �/ � _ /?eo �� COUNTY WHERE BOND IS FILED: ©4 ' - DATE COMMISSION L/oj3 l PLACE OF EXECUTION OF THIS DECLARATION: Irvine. California S/Z /e COMMISSION NUMBER: - / 6 5 1 c/� i AUTHORIZED MANUFACTURES CODE: tiYV ly-4 SOUTHLAND TITLE 0 0 Parcel 1: EXHIBIT "A" ORDER NO. 27532493 The Westerly 45 feet of Lot 2, and the Easterly 10 feet of Lot 1, in the City of Newport Beach, County of Orange, State of California, as shown upon a Record of Survey map recorded in Book 9 Pages.42 and 43 of Record of Surveys, on file in the Office of the County Recorder of said County, together with certain portions of adjoining Lots I and H as shown upon said map and as more fully in said lease. Parcel 2: That Portion of Lot "I" Fronting the Westerly 45 Feet of Lot 1 and the Easterly 10 feet of Lot 1 and Extending Southward To The U.S. Bulkhead Line. Parcel 3: That Portion of Lot "H" Fronting The Westerly 45 Feet of Lot 2 and the Easterly 10 Feet of Lot 1, Being that portion bounded by the prolongation of the West and East Lines of the Westerly 45 Feet of Lot 2 and the Easterly 10 Feet of Lot 1 Northward to the Boundary of Beacon Bay Subdivision. LANDAMERICA SOUTHLAN TITLE RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 This DocumentMs electronically recorded by South�d Title Company_B Recorded in Official Records, orange County Tom Daly, Clerk -Recorder 18.0 0 2007006484298 03:19pm 08/02/07 213 33 T03 5 0.00 0.00 0.00 0.0012.00 0.00 0.00 0.00 a�S3%I'a3 TERMINATION OF LEASEHOLD This agreement, is made this S?" -day of . V 2007, by and between the CITY OF NEWPORT BEACH, hereinafter call d "Lessor", and JOHN D. EVERSOLL and JESSIE J. EVERSOLL, Trustees of the Eversoll Family Trust dated 12/9/75, hereinafter called "Lessee". RECITALS A. Lessor and Lessee executed a lease on June 31, 1994, and subsequently recorded December 7, 1994, by the County Recorder of Orange County, California as Instrument No. 94-0701519. By the terms of the lease, the following described property was leased to Lessee until July 1, 2044. The northwesterly 45.00 fee of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with the southeasterly 10.00 feet of Lot 1 of said Record of Survey. S--?.e— �� h 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. I AGREEMENT Lessee agrees to terminate the lease and vacate the premises as described herein above as of 8' i - 07 , and Lessor agrees to accept such termination and the premises, and Lessor and Lessee agree to discharge and release each other from all obligations under the lease as of said date. Executed at Newport Beach, California, on the day and year first above written. CITY OF NEWPORT BEACH BY:J�.�c,_ Lessor: By i Lesoe: JoLhn D. versoll, tee BY: c Les4.eissieaTl ersc I, ust NOTARY PAGE STATE OF CALIFORNIA } S.S. COUNTY OF CNCC Ky., �-' }� On / be�o re me, a Notary Public personally h 'tJ'�Uer t (A jeSS e j EV 4 vso l •ahrP�'- ner "�., . y+ftGmm to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that.he&Wthey executed the same in hi,,Aer/their authorized capacity(ies), and that by hieAier/their signature(s) on the insttwnem the person(s), or the entity upon behalf of which the person(s) acted; executed the instrument. WITNESS my hand and official seal. [� +.+►+-+�+� MICHELLE PAGE SignaturF tOQo 7 Commission # 1433296 Notary Publlo • Calitomia '.a Orange County My Comm. ExplresAug2. 2007 STATE OF CALIFORNIA pp�� COUNTY F lJl }}� � p� On �l " " , before me, `'a �( 4` a Notary Public personally Gt Y ilV1 C lilf — appea*ed , personally known to me ( a - " M hagis of °a"°f ^'^^`^`"""�3) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that he/sve� executed the same in his/herFHseir authorized capacity(4es), and that by his/her%eir signature(sj on the instrument the person(e� or the entity upon behalf of which the person(s--acted, executed the instrument. WITNESS my han d officiXaI tEts _a CamrtYiYon a/ 1633477 Signature _ �J�' �AubMe•Cdltanye y � attp6 County MYCorrNn. aplrN•kxt2b, 201 0 • ILLEGIBLE NOTARY SEAL DECLARATION GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT WHICH THIS STATEMENT IS ATTACHED, READS AS FOLLOWS: NAME OF NOTARY: COUNTY WHERE BOND IS FILED: DATE COMMISSION EXPIRES: PLACE OF EXECUTION OF THIS DECLARATION: Irvine, California COMMISSION NUMBER: AUTHORIZED MANUFACTURES CODE: SOUTHLAND I -Mom ILLEGIBLE NOTARY SEAL DECLARATION GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT WHICH THIS STATEMENT IS ATTACHED, READS AS FOLLOWS: NAME OF NOTARY: COUNTY WHERE BOND IS FILED: m(Y,CA!�4J DATE COMMISSION EXPIRES: ti_ � � ZZ% PLACE OF EXECUTION OF THIS DECLARATION: Irvine, California COMMISSION NUMBER: g AUTHORIZED MANUFACTURES CODE: A �� RON FERNANDO EXHIBIT "A" Parcel 1: ORDER NO. 27532493 The Westerly 45 feet of Lot 2, and the Easterly 10 feet of Lot 1, in the City of Newport Beach, County of Orange, State of California, as shown upon a Record of Survey map recorded in Book 9 Pages 42 and 43 of Record of Surveys, on file in the Office of the County Recorder of said County, together with certain portions of adjoining Lots I and 11-1 as shown upon said map and as more fully in said lease. Parcel 2: That Portion of Lot "I" Fronting the Westerly 45 Feet of Lot 1 and the Easterly 10 feet of Lot 1 and Extending Southward To The U.S. Bulkhead Line. Parcel 3: That Portion of Lot "H" Fronting The Westerly 45 Feet of Lot 2 and the Easterly 10 Feet of Lot 1, Being that portion bounded by the prolongation of the West and East Lines of the Westerly 45 Feet of Lot 2 and the Easterly 10 Feet of Lot 1 Northward to the Boundary of Beacon Bay Subdivision. LEASE Copy f� THIS LEASE is made and entered Into as of theL"day of 1994, by and between the CITY O NEWPORT BEAC , a Charter City and m icipal corporation ("Lessor"), and Onyl�. �vevSoll ScSic - EvQYSo1\ ("Lessee"), regarding the real propertydommoniy referred to as Beacon Bay Lot Z TY trees k1'e �veY5o1\ �Avn \y RECITALS \Z_q-75 A. The City of Newport Beach, by virtue of a 1978 legislative grant found in Chapter 74 of the Stathtes of 1978 (the "Beacon Bay Bill"), holds the right, title and interest to certain tidelands and uplands commonly known as Beacon Bay and generally described in Exhibit A attached hereto and incorporated by reference. B. The Beacon Bay Bill frees the "Westerly portion" of the filled tidelands from the public trust and specifically authorizes the lease of the property for residential purposes subject to certain express statutory conditions. C. Beacon Bay, including the "Westerly Portion" thereof, has been divided into individual lots, with each lot leased by the City for residential purposes until December 31, 2005. D. On November 3, 1987, a majority of electors of the City approved a measure which authorized the City Council to enter into new leases of residential lots in Beacon Bay for a period not to exceed fifty (50) years. E. On November 3, 1992, a majority of electors of the City approved Measure M which authorized the City Council to lease tidelands and waterfront property consistent with the provisions of state law. F. The City Council, pursuant to the authority conferred by the electors, entered into negotiations with current lessees and the parties have agreed on the terms and conditions of a new lease with a fifty (50) year term, provision for adjustments in lease payments to reflect changes in the value of Beacon Bay leaseholds, and a recalculation of lease payments in the event of a transfer of the Lease by the Current Lessee or any Subsequent Lessee (as defined herein). G. Lessee acknowledges that the terms and conditions of this Lease may result in Lessee paying substantially more or less than another Lessee for similar property depending upon the date this Lease is executed, the date of any subsequent transfer, and the consideration paid for transfers of similarly situated property. H. Lessee acknowledges that accurate and complete reporting to the City of all, consideration paid for the transfer of this Lease is vitally important to the City in that failure to fully report all consideration could materially reduce the amount of rent received by the City from other Beacon Bay Lessees. I. Lessor and Lessee acknowledge that the City has agreed to a fifty (50) year term and limited lease payment Increases in consideration of provisions which require payment of rent approximating fair market rental value, without regard to any advantage maintained by Current Lessees, upon transfer by Current Lessees and payment of deferred rent in the event the Lease is not signed on or before the Effective Date (as defined herein). J. The California State Lands Commission has reviewed the form of this Lease and determined that it is in conformance with the provisions of relevant statutes, rules and regulations, including, without limitation, the Beacon Bay Bill. NB1-187371.V2 1 05/24/94 K. YGeral he �t this Lease Is consistent with provisions of the Beacon Bay Bill, the n7Zonin Ordinance of the City of Newport Beach, and of all other applicable state Chaner, Plaita 9 Y 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 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 opwative 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 RenV shall mean two and one-half percent (211M) 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 NO-187771.V2 Z 05/21194 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. r: (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. tvth4 to 4VtjsLAd tiros payable at the rate ofyo WuA ,tt�iwf t ftd hikt lip" t'/. ($ 149 also pay, if applicable, deferred rent in the sum of ($ ) upon execution of this Lease. Rent shall - sha seven (7) years after the date of transfer in accordance with t Annual rent, deferred rent, and periodic adjustments are based u($1l , month. Lessee shall no circle one) be adjusted every e provisions of Paragraph 3.13(4). upon the following: NB1-187371.V2 05/24/94 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.B(3), rent shall remain as specified in this subparagraph notwithstanding the provisions of Paragraph 3.B(4). (b) in the event of any transfer of this Lease to a Subsequent Lessee, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (21/2%) of the Actual Sales Value determined as of the date of the trgnsfer 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). (o) 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 SubsequentLessee 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 afterthe 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 SubsequentLesseewho wishes to sign this Lease after the Cut- NO1-187771.Y2 4 05/24/94 „ off Date, the Subsequent Lessee shall pay annual rent equal to two and one-half percent (21/2%) of Actual Sales Value determined as of the date of execution and in accordance with Paragraph 3.A(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 (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 -.Vhether 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 NBI-187371.V2 ” 05/24/94 (h) the transfer is to a guardian or custodian of Lessee appointed due to the physical or mental incapacity of Lessee; provided, however, that the provisions of Paragraph 3.0 shall apply upon the death of such Lessee unless the transferee is the surviving spouse or a tenant In common or joint tenant in ownership of the leasehold estate created by this Lease, and such tenants in common or joint tenants first acquired their respective Interests In this Lease simultaneously. (4) Rent Adjustments. (a) Except as provided in Paragraphs 33(1)(a), 33(2)(a) and 3.B(3), on the seventh (7th) anniversary of the Execution Date of this Lease, or the seventh (7th) anniversary of the date of any transfer of this Lease by any Current or Subsequent Lessee, rent shall be adjusted to reflect any Increase or decrease In the cost of living, which adjustment shall be determined as set forth hereinafter. The most recently published CPI figure shall be determined as of the date ninety (90) days prior to the adjustment date, and rent payable during the ensuing seven (7) year period shall be determined by increasing or decreasing the then current rent by a percentage equal to the percentage Increase or decrease, if any, In the CPI as of the Execution Date, or the date of the most recent rental adjustment, or the date of any transfer of this Lease by any Current or Subsequent Lessee, whichever is later. In no event shall rent be increased or decreased by a sum greater than forty percent (40%) of the rent paid by Lessee as of the later of (I) the Execution Date, or (11) 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 3.8(2)(c), and thereafteruas provided in Paragraph 33(4)(a), and the resultant rental increase multiplied by the percentage transferred (50%) to determine the rental increase; provided, however, that any subsequent transfer of an interest In this Lease to such third party shall not be exempt under subparagraph 3.B(3). (5) Installment Payments/Grace Period. Lessee shall pay rent In equal monthly Installments, In advance, with payment due on or before the first day of the month for which rent is paid. Rent shall be prorated during any month when a transaction which Increases rent becomes effective other than the first day of that month. No late payment charge applies to payments received by Lessor on or before 5:00 P.M. on the fifteenth (151h) 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 N01-107371.V2 6 06/24/94 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); h (3) Lessee shall execute a "Termination of Leasehold Interest" for recordation; and (4) The proposed transferee shall execute a new lease and execute a "Memorandum of Lease" for recordation, which lease shall be identical to this Lease and have a term equal to the remaining term of this Lease at the time of the transfer. B. Transfer Information. The parties to any non-exempt transfer of this Lease shall provide Lessor with all information relevant to a determination of the total consideration paid for the transfer, as well as all documents which are relevant to the total consideration paid for the transfer. Lessee and the proposed transferee shall provide this information not later than forty-five (45) days prior to the proposed effective date of the transfer of this Lease. Lessor shall have the right, at its sole discretion, to commission an appraisal of the fair market value of this Lease and improvements NB1-107371.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 {han 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 (11) the average of the two appraisals. Any appraisal commissioned by Lessor or Lessee under this Paragraph 4.8 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 3.8(3)(e) shall only be exempt from the further provisions of Paragraph 3,B (in respect of rental adjustments) if such subleases are not substantially equivalent to, do not have substantially the same economic effect as, or are Intended to disguise, a transfer by the then Lessee of all or substantially all of his/her Interest in this Lease to the putative sublessee. Lessor shall at all times have the right, upon written request to the Lessee, to receive copies of all written agreements, and to be advised In full of all oral agreements, between the Lessee and any sublessee of the Leased Land. Any purported sublease of the premises which is determined to be substantially equivalent to, or have substantially the same economic effect as, or Is intended to disguise, a transfer by the 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 have4he 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 N91-187371.V2 8 06/24/94 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: 0 ` (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. NBl-187311.V2 y 05/24/94 G. New Lease. Notwithstanding any other provision of this Lease, should this Lease terminate or be terminated because of any default or breach by Lessee, Lessor shall enter into a new lease with Lender as lessee provided: (1) the written request for the new lease Is served on Lessor by Lender within thirty (30) days after the termination of this Lease. (2) the new lease contains the same terms and conditions as this Lease except for those which have already been fulfilled or are no longer applicable. (3) on execution of the new lease by Lessor, Lender shall pay any and all sums that would be due Upon execution of the new lease, but for Its termination,and shall fully remedy, or agree in writing to remedy, any other default or breach committed by Lessee that can reasonably be remedied by Lender. (4) Lender shall, Upon execution of the new lease, pay all reasonable costs and expenses (including attorney's fees) incurred in terminating this Lease, recovering possession of the premises from Lessee, in -preparing the new lease. H. Miscellaneous. The following provisions shall apply to Lessor, Lessee and any Lender: (1) Any Lender shall be liable to perform the obligations of the Lessee Under this Lease only so long as the Lender holds title to this Lease; (2) Lessee shall, within ten (10) days after the recordation of any trust deed or other security Instrument, record, at Lessee's sole expense, Lessor's written request for a copy of any notice of default and/or notice of sale under any deed of trust as provided by state law. 6. USE AND MAINTENANCE. A. Use of Leased Land. The Leased Land shall be solely for residential purposes. Lessee may demolish, construct, remodel, reconstruct and maintain structures on the Leased Land for residential purposes so long as the structures and construction are authorized by appropriate City permit and fully comply with all City ordinances, resolutions, regulations, policies, and plans. Lessee shall also obtain permission to construct and/or maintain structures from the California Coastal Commission and any other state agency if required by law. B. , Maintenance of Improvements. Lessor shall not be required to 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 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 Nat-197371.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 NO3-187371.V2 11 05/24/94 a pro rata share of such costs, and to collect such costs from Lessee in the form of rent over the remaining term of this Lease. 10. COMMUNITY ASSOCIATION. A. Membership in Association. As a material partof 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 Indemnity, 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 sui4 arising out of, or in anylway 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 N01-187371.V2 12 05/24/94 persons in or about the Premises from any cause except for damage or injury resulting from the negligence or willful, fraudulent or criminal conduct by Lessor and/or Its officers, employees, agents and representatives, and Lessee hereby waives all claims in respect thereof against Lessor. 13. INSURANCE. A. General Conditions. All insurance required to be carried pursuant to this Section 13 shall be obtained from reputable carriers licensed to conduct business In the State of California. Each policy required to be carried pursuant to this Section 13 shall name Lessee and Lessor as additional named Insureds, and shall provide that the policy may not be surrendered, cancelled or terminated, or coverage reduced, without not less than twenty (20) days prior written notice to Lessor. B. Fire Insurance. Lessee shall, during the term of this Lease, insure all structures and Improvements on the Leased Land against loss or damage by fire or other risk for residential structures. The insurance shall provide coverage to at least ninety percent (90%) of the full insurable replacement value of all improvements on the Leased Land, with the loss payable to Lessee unless this Lease is terminated by Lessor for default of Lessee in which case the proceeds of insurance shall be paid to Lessor. C. Liability Insurance. Lessee shall, at Lessee's sole cost and expense, procure and maintain during the term of this Lease, a broad form comprehensive coverage policy of public liability insurance which insures Lessee and Lessor against any loss or liability caused by, or in any way related to, the condition, for Lessee's use and occupation, of the premises in amounts not less than: (1) $500,000 per occurrence for injury to, or death of, one person; (2) $100,000 for damage to or destruction of property. 14. DEFAULT. A. Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: NB1-187371.V2 (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.sequired 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; 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 reorganlzation 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 restored4o 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 imthe 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 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 afthe 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 eai-107371.v2 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 143(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. 1s. 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 N81-187371.V2 15 06/24/94 termination of the leasehold Interest. Lessee waives any right to receive relocation assistance or similar form of payment. B. Removal of improvements. Upon the expiration of the term of this Lease, and on condition that Lessee Is not then In default of any of the provisions of this Lease, Lessee shall have the right to remove from the Leased Land all buildings and improvements built or Installed on the Leased Land. Removal of any building or Improvement shall be at the sole cost and expense of Lessee and removal must be complete no later thamninery (90) days after expiration of the term of this Lease. Lessee shall fill all excavations and remove ail -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.B, 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. :a 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 N01407371.Y2 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. NBl-387371.V2 17 OB/24/94 19. NO WAIVER. No delay or omission of either party to exercise any right or power arising from any omission, neglect or default of the other party shall impair any such right or power or shall be construed as a waiver of any such omission, neglect or default on the part of the other party or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Lease shall be construed as a waiver of any succeeding breach of the same or of any of the terms, covenants, agreements, restrictions or conditions of this Lease. 20. COMPLIANCE WITH LAWS, Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of Orange, City of Newport Beach, or any other governmental body or agency having lawful jurisdiction over the Leased Land. 21. NOTICES. Any notice or notices provided for by this Lease or by law, to be given or served by Lessee, may be given or served by mail, registered or certified, with postage prepaid, on the City of Newport Beach, addressed to the Mayor, City Manager, or City Clerk, '3300 Newport Boulevard, P.O. Box 1768, Newport Beach, California 92659.1768, or at such other address as maybe hereafter furnished wLessee 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 (li) 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, 'rhe month -to -month tendency may be terminated by Lessor or Lessor upon thirty (30) days' prior written notice to the other. N81ae737I.v2 16 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. NB1-187371.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: ITT TTORNEY LESSOR: CITY OF NEWPORT BEACH, By. Title: MAYOR LESSEE: N01-107371.Y2 20 06/24/94 so 4o P�OMoNTD �Y BAi� / cl It�E �� a' q, s�E 5 bb��b 39 LOT is .D ate, •,, ` �'�: �D :24 ° o � z 32 x1 s 9�P BZ 3�/ �41 �w� .I�i' ems. 3� 14 18 °,c• �° _ 1 i s. r; 1 L1 O7_:`.' O •rse .tee. .wr.v" :+ ., dl rp e� $. / M 33 � h, 95 16 f eoa'11 .�� `a !p a me ° cIIp� j7 �O ,rrri :. e. J ` s J• 0 ` 1� f� �ood �� \ ,�: , • A aw cD �• . b� �. , ¢Is 1 ° sip SL �_, $ e ,� •` to 'L .:a e Cam. s:t0 vY,� � 31 ' aP0 `s d6 so 6�� ^\5p �2 �p521�'L ` 1 Y� Y.. 1ne u• c*a e- , � 6 .__ � J o'a� 5Z ` o� nROOd a,r. � J�pditt � 00'1�p� S\h S. 19 u• A w 6 N Y 54 �`V - a ^ 666 1 V �0 g� V lS •(� �/' 9 . u mac•""�''r. b . gi. $ '�' py � 61 ,,"0 a �• �� ,,`' "e; �v"�� pP�� eE R ='� / UL� w �` B E• �• d' a 9 L• t-tl rn 3 ` 00 / ,• G° a/37 NEAP OF BEACON BAY VON Beacon Bay Lot 2 described as follows: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California, together with the southeasterly 10.00 feet of Lot 1 of said Record of Survey. SUNIMARY OF SALIENT FACTS AND CONCLUSIONS - continued v 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 $947,000 $34,200 $8,020.80 $15,030.00 2 $1,131,000 $41,640 $8,825.40 $17,950.00 3 $1,263,000 $46,920 $24,250.08 $31,560.00 4 $1,318,000 $49,120 $10,458.96 $21,260.00 5 $1,341,000 $50,120 $20,012.04 $28,840.00 6 $1,386,000 $51,680 $25,000.00 $34,260.00 7 $1,210,000 $44,800 $24,999.96 $31,870.00 8 $1,177,000 $43,480 $43,750.00 $43,480.00 9 $1,298,000 $47,840 $42,500.04 $44,350.00 10 $1,342,000 $49,600 $24,999.96 $33,540.00 11 $1,122,000 $41,280 $9,020.52 $17,020.00 12 $1,100,000 $40,400 $14,250.00 $22,190.00 13 $1,100,000 $40,400 $23,625.00 $29,450.00 14 $1,243,000 $45,640 $10,312.56 $19,690.00 15 $1,265,000 $46,520 $10,836.47 $20,240.00 16 $1,067,000 $39,080 $8,508.48 $16,480.00 17 $1,067,000 $39,080 $16,250.04 $21,750.00 18 $1,067,000 $39,080 $8,508.48 $16,480.00 19 $1,243,000 $45,640 $10,020.02 $19,500.00 20 $1,147,000 $42,320 $8,727.84 $17,910.00 21 $1,058,000 $38,760 $20,224.50 $26,660.00 22 $1,036,000 $37,880 $41,250.00 $37,880.00 ES 1 $1,037,000 $37,880 $28,749.96 $31,920.00 ES 2 $1,037,000 $37,880 $24,625.00 $29,220.00 Subtotals: $31,563,000 $1,160,640 $519,983.08 $705,220.00 Exhibit C - Page L7 0 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued a Lot No. Interior Lots 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Unencumbered Fair Market Fee Lot Value Rental Value Existing (Istyear) Contract Effective Rent Net Rent $478,000 $14,487 $2,782.32 $6,297.00 $501,000 $15,257 $6,125.04 $8,897.00 $509,000 $15,537 $3,399.12 $6,977.00 $511,000 $15,612 $3,417.72 $6,942.00 $519,000 $15,912 $3,436.44 $7,102.00 $542,000 $16,775 $4,137.72 $7,785.00 $518,000 $15,650 $15,375.00 $15,470.00 $510,000 $15,462 $3,551.16 $7,102.00 $517,000 $15,725 $8,750.00 $10,515.00 $520,000 $15,837 $3,588.48 $7,217.00 $528,000 $16,137 $3,607.08 $7,307.00 $589,000 $18,200 $4,454.64 $8,490.00 $559,000 $17,000 $3,776.28 $7,780.00 $548,000 $16,662 $3,795.00 $7,672.00 $517,000 $15,725 $14,625.00 $15,005.00 $520,000 $15,837 $3,780.36 $7,967.00 $528,000 $16,137 $9,125.04 $11,557.00 $588,000 $18,162 $11,133.60 $13,572.00 $513,000 $15,500 $3,719.64 $7,300.00 $548,000 $16,662 $3,795.00 $7,672.00 $556,000 $16,962 $11,250.00 $13,232.00 $558,000 $17,037 $3,832.20 $7,787.00 $565,000 $17,300 $4,056.84 $7,990.00 $588,000 $18,162 $4,454.64 $8,492.00 $539,000 $16,475 $3,459.36 $7,365.00 $551,000 $16,775 $6,249.96 $9,305.00 $520,000 $15,837 $3,551.16 $7,197.00 $523,000 $15,950 $3,569.76 $7,240.00 $520,000 $15,837 $3,780.36 $7,857.00 $528,000 $16,137 $12,750.00 $13,927.00 $588,000 $18,162 $4,479.00 $8,492.00 $530,000 $15,987 $3,344.88 $7,227.00 $559,000 $17,075 $10,625.04 $12,865.00 $567;000 $17,375 $1,603.96 $7,915.00 $546,000 $16,737 $3,551.16 $7,427.00 $528,000 $16,137 $6,750.00 $10,007.00 $525,000 $16,025 $10,125.00 $12,175.00 $533,000 $16,325 $3,533.88 $7,315.00 Exhibit C - Paae 2 SUMMARY OF SALIENT FACTS AND CONCLUSIONS - continued Unencumbered FairMarket Lot No. Fee Lot Value Rental Value Interior Lots - continued 61 $588,000 $18,162 ES 3 $474,000 $14,225 ES 4 $467,000 $13,962 ES 5 $470,000 $14,075 ES 6 $468,000 $14,000 ES 7 $461,000 $13,737 ES 8 $471,000 $13,925 SubtotalInt.: $23,786,000 $724,637 Subtotal W.F.: $31,563,000 $1,160,640 Grand Totals: $55,349,000 $1,885,277 Existing (lstyear) Contract Effective Rent Net Rent $4,436.16 $8,482.00 $8,750.04 $10,325.00 $3,021.96 $6,322.00 $10,000.08 $11,415.00 $2,982.96 $6,310.00 $2,966.04 $6,057.00 $3,118.08 $6,455.00 $254,617.16 $397,807.00 $519,983.08 $705,220.00 $774,600.24 $1,103,027.00 Exhibit C - Paae 3' 1 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% 0% $22,270 $0 $930 $930 C $22,480.00 100% 0% $22,480 $0 $1,410 $1,410 1 $15,030.00 100% 0% $15,030 $0 $2,080 $2,086 2 $17,950.00 100% 0% $17,950 $0 $2,260 $2,260 3 $31,560.00 100% 0% $31,560 $0 $560 $560 4 $21,260.00 100% 0% $21,260 $0 $2,610 $2,610 5 $28,840.00 100% 0% $28,840 $0 $1,620 $1,620 6 $34,260.00 100% 0% $34,260 $0 $0 $0 7 $31,870.00 95% 5% $30,276 $1,594 $0 $0 8 $43,480.00 50% 50% $21,740 $21,740 $0 $0 9 $44,350.00 5% 95% $2,217 $42,132 $0 $0 10 $33,540.00 0% 100% $0 $33,540 $0 $0 11 $17,020.00 090 100% $0 $17,020 $3,200 $0 12 $22,190.00 0% 100% $0 $22,190 $1,130 $0 13 $29,450.00 0% 100% $0 $29,450 $0 $0 v 14 : $19,690.00 0% 100% $0 $19,690 $2,880 $0 15 $20,240.00 20% 80% $4,048 $16,192 $2,980 $596 16 $16,480.00 95% 5% $15,656 $824 $2,640 $2,508 17 $21,750.00 100% 090 $21,750 $0 $2,420 $2,420 18 $16,480.00 100% 0% $16,480 $0 $2,640 $2,640 19 $19,500.00 10090 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 616194 - Page 1 �vhGh:f A Y Distribution Ants and Tax Advantage between Tidelands an plands' 1. (Istyear) Proportionate Proportionate Annual Amort. Tidelands Effective % % Rent Rent of PV of Tax Tax Lot No. Net Rent Tidelands Uplands Tidelands Uplands Advantage Advantage Interior Lots 23 $6,297.00 0% 100% $0 $6,297 $550 $0 24 $8,897.00 090 100% $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 10070 0% $7,102 $0 $660 $660 28 $7,785.00 100% 0% $7,785 $0 $740 $740 29 $15,470.00 017o 100% $0 $15,470 $0 $0 30 $7,102.00 0% 10017o $0 $7,102 $580 $0 31 $10,515.00 30% 7070 $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% 017o $8,490 $0 $730 $730 35 $7,780.00 0% 100% $0 $7,780 $580 $0 36 $7,672.00 0% 100% $0 $7,672 $590 $0 37 $15,005.00 5% 95% $750 $14,255 $0 $0 38 $7,967.00 99% 1% $7,887 $80 $0 $0 39 u $11,557.00 100% 0% $11,557 $0 $0 $0 40 $13,572.00 10090 0% $13,572 $0 $0 $0 41 $7,300.00 0170 100% $0 $7,300 $510 $0 42 $7,672.00 0% 100% $0 $7,672 $590 $0 43 $13,232.00 090 100% $0 $13,232 $0 $0 44 $7,787.00 0% 10070 $0 $7,787 $630 $0 45 $7,990.00 15% 85% $1,199 $6,792 $660 $99 46 $8,492.00 00/0 100% $0 $8,492 $720 $0 47 $7,365.00 0% 100% $0 $7,365 $610 $0 48 $9,305.00 070 100% $0 $9,305 $600 $0 49 $7,197.00 0% 100% $0 $7,197 $620 $0 50 $7,240.00 070 100% $0 $7,240 $630 $0 51 $7,857.00 070 100% $0 $7,857 $110 $0 52 $13,927.00 0% 1001/0 $0 $13,927 $0 $0 53 $8,492.00 0% 100% $0 $8,492 $730 $0 54 $7,227.00 090 100% $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 W6194 -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% 090 $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 $6,057.00 090 10070 $0 $6,057 $650 $0 ES 8 $6,455.00 0% 100% $0 $6,455 $410 $0 'nterior Lots iubtotal: $397,807.00 $109,592 $288,215 $19,930 $5,251 kdd Waterfront: $705,220.00 $500,848 $204,372 $34,710 $24,984 .;rand Total: $1,103,027.00 $610,440 $492,587 $54,640 $30,235 S of Total: 100% 55% 45% 100% 55% .v Effective Net Rents consider tax advantage. Discount rate for present value of annual dvantage is 6%. Rate for amortization of advantage is 717b. Rent and advantage igures are from 1018l93 appraisal. Lots 3, 7, and 21 have been adjusted for new contract rent real estate taxes. Beacon Bay 616194 - Page 3 Exhihit n DOC # 94-0701519 07—DEC-1994 11:58 M RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Recorded in Official Records City Manager's Office of Orange County, California City of Newport Beach Lee A. Branch, County Recorder 3300 Newport Boulevard Pase I of 1 Fees: $ 5.00 Newport Beach, CA 92663 $ Tax: $ 0.00 MEMORANDUM OF LEASE This MEMORANDUM OF LEASE is entered into between THE CITY OF NEWPORT BEACH, a as of the L� ?) day of June 1994, by and chartered municipal corporation ("Lessor"), and ("Lessee"), to witness that Tvvsteesoi }he EOersollraYwt\ \r�I51 Lesggr and Lessee executed a lease dlted . `AVny Y'1 \ , 191A a memorandum of which was recorded on rUr6n 2 19A as Instrument No. M- 001%120 in the Official Records of Orange County. By said lease, the Real Property described below was leased to Lessee until July 1, 2006. The parties agree to terminate said lease as of the Commencement Date set forth below, and to discharge and release each other from all obligations under said lease as of said date (other than delinquent rent or other charges, if any, owed by Lessee pursuant to said lease as of the termination). Lessor hereby leases to Lessee, commencing on July 1, 1994 (the "commencement Date"), and ending on July 1, 2044, on the terms and conditions set forth in that certain lease by and between the parties hereto executed concurrently herewith, all the terms and conditions of which are made a part hereof as though fully set forth herein, those certain premises in the City of Newport Beach, County of Orange, State of California (the "Real Property"), described as follows: The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with the southeasterly 10.00 feet of Lot 1 of said Record of Survey. IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease as of the date first about written. LESSOR: CITY OF NEWPORT BEACH STATE OF CALIFORNIA COUNTY OF ORANGE On June 23 , 1994, before me, D 0Y%%'ca 5. k«t- , a Notary Public in and for said State, personally appeared .TokH D. Everson , Sessi e S Everson , personally known to me (or proved to me on the basis of satisfactory evidence) to be the persoW® hose names ' are subscribed to the within Instrument and acknowledged to me that the executed the same in hfsfherlhe r authorized capacit gs , and that by hiaf rAffiEsignatureQs on the instrument the personig), or the entity upon behalf of which the person .&&acted, executed the instrument. WITNESS my hand and official seal. . Monica S. Kutz 1 Il lJ,{(.�Q �. (�i (Seal) V Comm N103469 ; Signature ) Q C NOTAlORANG IC LINTYCALIFORNIA" ORANGE COUNTY O � Comm Ea'IresJan 13, 1lBS � STATE OF CALIFORNIA COUNTY OF ORANGE Scp� mlve� y'1O t41 I!Q ry. �Nt•;b On Jar1e t`i , 1994, before me, , a Notary Public in and for said State, personally appeared CW ML9 5. I&YAd ' , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(e) whose name(.&�'islare subscribed to the within instrument and acknowledged to me that hP sheithey executed the same in &YheNfhefr authorized capacity(", and that by 1Sherkheir signatureM on the instrument the person(.&), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature L eal) U Monica S. Kautz Comm #1013469 ci NOTARY PUOLIC CALIFORNIA� ORANGE COUNTY Q Comm EX.Ifas Jan 13 lf,18 i RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO. City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 IN, - Recorded•in th,gCounty of Orange, California Gary L. Granville, Clerk/Recorder IIIIIIIIIIIIIIIIIIII�IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIJill Jill 13.00 19970018829 09:36am 01/14/97 005 12017556 12 22 M11 3 7.00 6.00 0.00 0.00 0.00 0.00 MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE is made and entered into by and between THE CITY OF NEWPORT BEACH, a chartered municipal corporation, herein called "Lessor", and John D. Eversoll and Jessie J. Eversoll, Trustees of the Eversoll Family Trust dated 12- I " 9-75, herein called "Lessee", to witness that: Lessor hereby leases to Lessee, commencing on December 20, 1996 and ending on I July 1, 2044, on the terms an conditions set forth in that certain lease by and between the parties hereto dated JUG• aa, /9 1� , 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: This Memorandum of Lease is to amend Property Description only. The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the Office of the County Recorder, County of Orange, State of California, together with Lot H and I and the southeasterly 10.00 feet of Lot 1 as all are shown on said map. 9 EXECUTED on a 199,0, at Newport Beach, Orange County, California. LESSOR CITY CLERK APBROVED AS TO FORM: THE CITY OF NEWPORT BEACH / 4::� CITY ANA - Kevin J. Murphy 0 0 State of California County of Orange On before me, Monica S. Kutz, Notary Public, personally appeared Jo Y) f) k-r�'61l Band �l . Ebasd ❑ personally known to me - OR - proved to me on the basis of satisfactory evidence to be the persor (s whose name sj ' are subscribed to the within instrument an acknowledged to me that 4efe#te�f he executed the same in hisM he 3 authorized capacity Dl and that by 4 e' signatur sn the instrument the perso orthe enti� upon behalf of which the person acted, executed the instrument. Monica 0 Comm #1013469 59 NOTARY RANGEC UNTY CALIFORNIA WITNESS m hand and official seal. ORANGECOUNTY n Y Comm Esp"' Jen. 13, 1993 CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT _ Individual Corporate Officer _ Limited Partner _ General Partner _ Attorney -in -Fact Trustee(s) _ Guardian/Conservator Other: Signer is Representing: Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above y , 4 State of California County of Orange On Z:janlJzn �%before me, Monica S. Kutz Notary Public, personally appeared personally known to me - OR - ❑ Monica S6Kut�z Comm *1013469 NOTARY PUBLIC CALIRORNIA� ORANGE COUNTY n Comm Ewpires Jan 13, 1898 proved to me on the basis of satisfactory evidence to be the persons} whose name(s)i�su/ars- subscribed to the within • instrument and acknowledged to me that 17/she><t"} executed the same in y&-/he#twr authorized capacity(le4, and that by isler/#heir signatures) on the instrument the person #, orthe entity upon behalf of which the personN acted, executed the instrument. WITNESS my hand and official seal. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT _ Individual _ Corporate Officer Limited Partner _ General Partner _ Attorney -in -Fact Trustee(s) Guardian/Conservator Other: Signer is Representing: Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above STATE OF CALIFORNIA, Orange as. COUNTY of N. 88-098120 On this 24th day of January , in the year 1988 , 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 W d a io , known to me to be the City Clerk of the City of Newport Beach and known to me o 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 NOTARY PRINCPUBLIIPAL •FICEINRNIA AORANE OFFICE IN ORANGE COUNTY Notary Po I in and for said State. My Commission Exp. Apr. 5, 1989 STATE OF CALIFORNIA Orange SS. COUNTY OF 9 On this 1Jth day of February In the year 19 $8, before me, the undersigned, a Notary Public in and for said State, personally appeared John D. Eversoll and Jessie J. Eversoll , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person_ whose names OFFICIAL SEAL A rP subscribed to the within instrument, and acknowledged to me that t hey— '; DOROTHY L. PALEN executed It. • "QBs " NOTARY PUBLIC • CALIFORNIA PRINCIPAL ORANGE COUNTY WITNESS my hand and official seal. ORANGE COUNTY My CINNInWon Exp. Apr. 5,19S9 ACKNDNotary Pub c n and for said State. @198ZW OLCOTTS, INC. oral— ICOCI Form 239CA—flay. 5 82 Do ,th ©18B2WelCOTiS, INC. IO��ce class e�7) y L. Palen ►t . 88-098I It .. IV E, FA R, RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Manager's Office City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Attn: Kenneth J. Delino $7.00 C2 NO OWNERSHIP STATEMENT $20.00 RECORDING REQUESTED BY COMMONWEALTH LAND TITLE CO RECORDED IN OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA -205PM MAR-2'88 • UNTY RECORDER MEMORANDUM OF LEASE S khc_-r— 6i0. v�f qr S O 7 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 D. EVERSOLL and JESSIE J. EVERSOLL, Trustees of the- Eversoll Family Trust dated 12-9A75 herein called "Lessee," to witness that: Lessor hereby leases to Lessee for a term of eighteen (18) years commencing on January 1, 1988, and ending on July 1, 2006, on the terms and conditions set forth in that certain lease by and between the parties hereto dated January 1, 1988, all the terms and conditions of which lease are made a part hereof as though fully set forth herein, all those certain premises fn the County of -Orange, State of`C`alif6rnia. The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Page+ —and 43 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California, together with the southeasterly 10.00 feet of Lot 1 of said Record of Survey. EXECUTED on February 17 1988 , Newport Beach, Orange County, Ca i ornia. AS -TO FORM: rney LESSOR The City of Newport Beach w • 4 r'r r 7 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 741 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 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 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. ADOPTED this llthday of May , 1981. ATTEST: City Clerk 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. City Clerk i; . 0 AGREEMENT TO LEASE THIS AGREEMENT TO LEASE, made and entered into on the3lst day of December, 1981, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter "City," and MR. AND MRS. JOHN D. EVERSOLL , 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 "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 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. 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 a 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 1st day of each month thereafter through the 1st day of December, 1987, a sum determined by subtracting from the fair market rental value of $9!273.70 (annualized) on January 1, 1982 (tnie-"ff�Cfive�Tf�"),, 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. f 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 11 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 K 1J 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, 1987 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 4 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. 5 IN WITNESS WHEREOF, the parties have caused this Agree- ment to Lease to be executed on the date first above written. CITY OF NEWPORT BEACH 0 ATTEST: .i��'P' S." ..� . APPROVED AS TO FORM: 4ity Attorn y Sublessee 5-4-81 11 " E 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 - eyed municipal corporation, hereinafter "Lessor", and after "Lessee." RECITALS herein - A. Lessor holds title to and is the owner of certain harbor frontage and tidelands, together with certain uplands abutting thereon known as Beacon Bay and more particularly described in Exhibit 111" attached hereto and made a part hereof by this reference. B. Carroll B. Beek, Barton Beek, Joseph Allan Beek, Jr., and Seymour Beek jointly hold a Master Lease to said proper- ty, dated January 9, 1950, which Master Lease expires on December 31, 1987. C. The "Westerly Portion" of the Beacon Bay property has been divided into individual lots and subleased for residen- tial purposes. D. All of said subleases expire on the same date as the Master Lease, to wit: December 31, 1987. E. Lessor believes it to be in the best interest and welfare of said Lessor (1) that the portion of Beacon Bay which is currently leased for residential purposes remain residential in character, and (2) to enter into new subleases with the sub- 1 lessees under the terms, conditions and for the consideration as hereinafter set forth. F. It is the judgment of Lessor that the leasing of the property hereinafter described is consistent with the trust purposes imposed upon such portions of the leased lands which may constitute tidelands as authorized by Chapter 74, Statutes of 1978. G. It is further the judgment of City that in entering into this Lease in the future, City is acting pursuant to its proprietary powers. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, Lessor and Lessee hereby agree as follows: 1. DESCRIPTION OF LEASED 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 REN AL. As base rental, Lessee agrees to pay to Lessor the sum off 4 - L ARS, ($ 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: K% 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 (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 (iii) 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 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 2 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 0 (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. G] 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 T_g 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 _ ,*D 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 �% 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 ��'. • 0 (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 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 .I.8. 1.. 0 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 M " 0 4 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. ATTEST: WANDA E. RAGGIO City Clerk APP OVED AS TO FORM: 36XVf4t City Attorney CITY OF NEWPORT BEACH BY Mayor 13 4-21-81 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 23057'30" East 126.34 feet to an angle point in the ordinary high tide line of the Pacific Ocean in Newport Bay, as described in 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. \XI `"� I�. LErfKp - 1,•, W +.V!•: J_RS All D STAf A]DRC SSES• IF TA E SAI¢E; S40"t.'YV5 ___ 3 AAA .% *C \—:FI CA7!DN LL:TEA SHC H>t THUS '-- J is-C_T A .RE SS or 0:°F EAE:.. TVAN LOT NO. IS T.'VS -J --— !EMOTES CETCACY• LInfS P• J }: Ai n0T1 ; De CtIC VT:JTY CASEM C:ITS, _ : A•J At E O➢CN SPACE LCTS. Sr DA,:Y 015:'.::CES ARC 5' VN:ESS SHOWN OTHERWISE. Sh - i .II 5; _•I� 57 LOT H ISLA,Vp p R/VE �•------5 85'43'E. -E• 35 -+�L-------- I I ---------- I E-----+----''\ 29 I IL-- I r_------ w — -, ------- I _ 36 -- ' I i r--- ni I---------- 25 ^I �11 m ,.12 _.. ng C I •5/ 32 �„ 4! c i iz• I \ I I; yl' ,�1 39 1 O 33 ''i •.•;•:y '•-'• �1. 40 - 1 L - - - - - - L� jl .34 Lam-- Ir-------- .,_,: '! . 3g i'l I�. I a� •I I ------- _ L_____ it BAY I I� I Io ., r, ./ ' I I 1 r__ _ i I , , I II- II I I ,; I_ I .ylTl —r_ 7 II 12II;ID'14 IL 16 17ris (I: 2 __Ji11L L_ __ __s.•.1�•If_ ___2__!' OT T. VeSr U.S. nUL n'1rF..AD L?"I.' N - ^—^— U.S. 7IFRI/CA0 LINE f— �_•_---�•— 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. S[ALC ,n r[CT 3 } P9 ?>�nrl ln,Atiac-••,T.0 4G p:�.,Cs••s EXHIBIT 442" The northwesterly 45.00 feet of Lot 2 as shown on the map filed in Book 9, Pages 42 and 43 of Record of Surveys, in the office of the County Recorder, County of Orange, State of California, together with the southeasterly 10.00 feet of Lot 1 of said Record of Survey. EXHIBIT "3'" DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS BEACON BAY COMMUNITY ASSOCIATION Table of Contents Article Page I DEFINITIONS 2 1 - Architectural Committee 2 2 - Articles and Bylaws 2 3 - Assessments 2 4 - Association 3 5 - Association Rules 3 6 - Board 3 7 - City 3 8 - Common Expenses 3 9 - Common Area 4 10- Covered Property 4 11- Declarant 4 12- Exhibit 4 13- Member 4 14- Lessee 4 15- Residence 4 16- Setback 5 II MEMBERSHIP 5 1 - Membership 5 2 - Transfer 5 3 - Voting Rights 5 4 - Classes of Voting Membership 5 5 - Approval of Members 5 III COVENANT FOR MAINTENANCE ASSESSMENTS 6 1 - Creation of the Lien and Personal Obligation of Assessments 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) 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 DECLARATION OP 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 Du::suant to the assessment and charges hereinafter created and referred to and to perform such -other acts as shall generally benef•i.t the Covered Property to the Beacon Bay Community 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 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. Beacon Bay 9/20/79 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. a 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 r� (i) taxes paid by the Association; (j) amounts paid by the Association for discharge of any lien or encumbrance levied against the Common Area or portions thereof; •(k) costs incurred by the Architectural Committee or other committee established by the Board; and (1) other expenses incurred by the Association for any reason whatsoever in connection with the Commo: Area, or the costs of any other item or items designated ,,y this Declaration, the Articles, Bylaws or Association Rules, or in f urtheranbe of the purposes of the. Association or in the discharge of any duties or powers of the Association. Section 9. "Common Area'.' shall mean all streets, beaches, walkways, tennis courts, docks, piers, and common landscaped areas, including but not limited to Lots A through J inclusive as shown on Exhibit ":I". Section 10. "Covered Property" shall mean and refer to all 1 property described on Exhibit "I". Section 11. "Declarant" shall mean and refer to the City of P:er;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." Section 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 ^e lot shown on the Record of Survey Map of Beacon Bay subdivision recorded in Book 9, pages 42 and 43, Records of Survey, on file in the Office of the County Rec rc�er, Orange County, California; provided, however, "Re�_ide:,ce" shall not include any Common Area. "Residence" shall include the residential dwelling unit Beacon bay 9/20 /79 4 Rev. 9/?.4/79 together with garages, structures and other improvements on the same lot or parcel. Section 16. "Setback” shall mean and refer to those internal distances from the property line of each lot as shown on Exhibit "II". ARTICLE II MEMBERSHIP Section 1 - Membership. Every Lessee shall be a Member but there shall be only -one Membership per Residence. The term and provisions set forth in this Declaration, which are binding. upon -all Lessees are not exclusive, as Lessees shall, -in addition, be subject to the terms and provisions of the Articles, Bylaws and Association Rules to the extent the provisions thereof are not in conflict with this Declaration.- Membership of Lessees shall be appurtenant to and may not be separated from the interest of such Lessee in any Residence. Ownership of a Residence shall be the sole qualification for membership; provided, however, a 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 Lessed 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. ecti hall - Classes of Votin e one (1) class of ship. The Association embership. Section - Approval of Members Unless elsewhere , of r:;ise specifically provided in this Declaration or the Byl_•ws, any provision of 'this Declaration or the Bylaws Beacon any 9/20/79 5 Rev. 9/24/79 which requires the vote power of the Association following: or written assent of the voting shall be deemed satisfied by the (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. Section 1 - ARTICLE III COVENANT FOR MAINTENANCE ASSESSMENTS Lien ati 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. Secticn 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 6 Rev. 9/24/79 r 3c� L Section G - No offsets. All Assessments shall be payable in the amount specified by the Assessment and no offsets against such amount shall be permitted for any reason, including, without limitation, a claim that (i) the Association is not properly exercising its duties and powers as provided in this Declaration; or (ii) a Member has made and elects to make no use of the Common Areas, Section 7 - Reserves. The Regular Assessments may include reasonable amounts as determined by the Board collected as reserves for the future periodic maintenance, repair or replacement of all or a portion of the Common Area, or any other purpose as determined by the Board. All amounts collected as reserves, whether pursuant to this Section or otherwise, shall be deposited by the Board in a separate bank account to be held in trust for the purposes for which they are collected and are to be segregated from and not commingled with any other funds of the Association. Such reserves shall be deemed a contribution to the capital account of the Association by the Member. ARTICLE IV NONPAYMENT OF ASSESSMENTS Section 1 - Delinquency. Any assessment provided for in this Declaration which is not paid when due shall be delinquent on said date (the "delinquency date"). If any such Assessment is not paid within ten (10) days after delivery of notice of such delinquency from the Association, a late charge as established by the Board shall be levied and the Assessment shall bear interest from the delinquency date at the rate of ten percent (10%) per annum. The Association may at its option, and without R' 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 such. 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 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 entitle3 "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 createu by anything set forth in this Declaration shall Beacon Bay 9/20/79 8 Rev. 9/24/79 not operate to affect or impair the lien of such Mortgage; and (2) the foreclosure of the lien of said Mortgage, or the sale under a power of sale included in such Mortgage (such events being hereinafter referred to as "Events of Foreclosure") shall not operate to affect or impair the lien hereof, except that any persons who obtain an interest through any of the Events of Foreclosure, and the successors in interest, shall take title free of the lien hereof or any personal obligation for said charges as shall have accrued up to the time of any of the Events of Foreclosure, but subject to the lien hereof for all said charges that shall accrue subsequent to the Events of Foreclosure. Section 5 - Curing of Default. Upon the timely payment or other satisfaction of: (a) all delinquent Assessments specified in the notice of claim of lien, (b) all other Assessments which have become due and payable with respect to the Residence as to which such notice of claim of lien was recorded, and (c) interest, late charges, attorneys' fees and other costs of collection pursuant to this Declaration and the notice of claim of lien which have accrued, officers of the Association or any other persons designated by the Board are hereby authorized to file or record, as the case may be, an appropriate release of such notice, upon payment by the defaulting Lessee of a fee, to be determined by the Association, but not to exceed Fifty Dollars ($50.00) to cover the costs of preparing and filing or recording such release. ARTICLE V ARCHITECTURAL CONTROL Section 1 - ApAointment of Architectural Committee_. The Architectural Committee shall consist of not less than three (3) nor more than five (5) persons as fixed from time to time by resolution of the Board. The Board shall have the right to appoint the members of the 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 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 - AQproval and Conformity of Plans. No building, fence wa11 or other structure shall be commenced, erected or maintained upon the Covered Property, nor shall there be any addition to or change to the exterior of any Residence, structure or other improvement except in compliance with plans and specifications therefor which have been submitted to and approved by the Architectural Committee as to harmony of external design and location in relation to surrounding structures and topography. Section 4 - Nonliabilitv 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 elsewhere provided for herein, and without limiting the generality thereof, the Association shall have the specific duties and powers specified in this Article. Section 2 - GE Association tt obligation to: the Association. The shall have the duty and (a) enforce the provisions of this Declaration, the Articles, Bylaws, and Association Rules, by appropriate means and carry out the obligations of the Association hereunder; (b) maintain and otherwise manage the Common Area; (c) pay any real and personal property taxes and other charges'assessed to or payable by the Association; and. (d) obtain and continue in effect during the term of of the lease, in its own name a comprehensive policy of public liability insurance proving coverage for the common area, and a policy of fire and casualty insurance with coverage as the Board deems appropriate. Section 3 - General Powers of the Association. The Association through the Board shall have the power but not the obligation to: (a) employ a manager or other persons and contract with, independent contractors or managing agents to perform all or any part of the duties and responsibilities of the Association; (b) borrow money as may be needed in connection with the discharge of the Association's powers and duties; and (c) establish and maintain a working capital and 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 4- Association Rules. The Board shall have the po4,-2r tc adopt, amend, and repeal such rules and regaaa_.ons as it deems reasonable (the "Association Rule:";. In the event of any conflict between any such ASSOC'--.on Rules and any other provisions of this or the Articles or Bylaws, the provisions of the ;: iati.on Rules shall he deemed to be superseded by the pry• _;sion3 of this Declaration, the Articles or the Bylaws -c the extent of any such conflict. Beacon 9/20/75 v Il. Rev. 9/24/79 5/4/81 ' •1 •, • Y �• • • n � - ation ARTICLE VII REPAIR AND MAINTENANCE Mai . 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 - Repair and Maintenance by Lessee. Except as the Association shall be obligated to maintain and repair as may be provided in this Declaration, every Lessee shall: (a) maintain all portions of the exterior of his Residence, including without limitation, the walls, fences and roof of such Residence in good condition and repair; and (b) install and thereafter maintain in attractive condition yard landscaping in accordance with the provisions of this Article. Section 3 - Maintenance of Public Utilities. Nothing contained herein shall require or obligate the Association to maintain, replace or restore the underground facilities or public utilities which are located within easements in the Common Area owned by such public utilities. However, the Association shall take such steps as are necessary or convenient to ensure that such facilities are properly maintained, replaced or restored by such public utilities. ARTICLE VIII USE RESTRICTIONS Section 1 - Commercial Use. No part of a Residence shall be 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. 9/2.4/79 .31, ' ' 0 (a) The right of the Association of guests of Members and to limit the Area by persons not in possession of owning a portion of the interest in a for membership. to limit the number use of the Common a Residence, but Residence required (b) The right of the Association to establish reasonable rules and regulations pertaining to the use of the Common Area. Section 2 - Delegation of Use. Any Member may delegate his right of enjoyment to the Common Areas to the members of his family or his tenants -who reside on his Residence, or to his guests, subject to the rules and regulations adopted by the Board. In the event and for so long as a Lessee delegates said rights of enjoyment to his tenants, said Lessee shall not be entitled to said rights unless both he and the tenant reside on the Residence in separate dwelling units which conform to all applicable municipal laws and regulations. Section 3 - Waiver of Use. No member may exempt himself from personal liability for assessments duly levied by the Association, or release the Residence owned by him from the liens, charges and other provisions of this Declaration, the Articles, Bylaws and Association Rules, by waiver of the use and enjoyment of the Common Area, or the abandonment of his Residence. 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 Bav 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 context 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 ?q 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 acceptance 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 0 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 (600) 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 OF NEWPORT BEACH, a chartered municipal corporation By: City Clerk APPROVED AS TO FORM: City Attorney Mayor Beacon Bay 9/20/79 18 Rev. 9/24/79 4z- u STATE OF ss. COUNTY OF On , 19 , before me the undersigned, a SE -ate, Notary Public in and for said Ste, 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 19 Notary Public Rev. 9/24/79 032381 U ROAD HARBOR 1SLAH --- 6D -i ------' Q--- F 56 F O f 0 57 = .4 I Q 5B O '�� //mac •Y�\\ �� \ (11�.--ll I J Irk z.O W I (Z3 60 —i J ----- J i / V AJ 7 1 1 B 11 4 1 vo sf� __LJ L--- 1 L--- J L___J s H] W _ LEGEND useH. ��—lusax :OT NUMBERS AND STREET ADDRESSES, IF THE SAME; - STA.13-! I ISTA.2o0 ARE SHOWN THUS ---3 PARCEL IDEN. IFICATION LETTER SHOWN 7HUS --- r �- STREET An; 75S If DIFFERENT THAN LOT NO. IS SHOWN TI{US ---O ------- )EhOTES SETBACK LINES. U.E. OCNJTS PUOLIC UTILITY EASEMENTS. i 1 /✓OYES i .JT3 A-J A' E OPEN SPACE LOTS. S•CEYASi. SE BACK D,STAHCES ARE S' UNLESS SHOWN OTHERWISE. 47 43--- U O J 49 - 1p 50 Q L__----- Q --- r�- 51 � I zz I'' S2 I I 53 NH LOT 42 -O.1 1 43 10- 1 B 44 1 4S ^ u4 "� HARBOR /BLAND OR/VE --35 oL------- F- � 36 - w L_---_ a �O 37 J 3; O N. r 39 r----- r 40 BAY 24 F -----y i r----=-- Lr "g IF 2, J , }- 'r I LL ___--__� '-' ___ ____ - .:.---=ti----- . r--------� O !i 3I !y L iII D ..- - ---- 25fff o I i i L_________! r _____•___J i K.• i r ':�-'-• ,S : I �. 33 3 27 I i' : i�.:: 4 :a•' - - ! _ -___ 1 i t I'i ; n I III III I I I IIr III I 1 ' I I'1 jil i t 6' 15. Li I Li i I .I I III I I a. 1, 1 I I I I .r. -'--I R16.. I Li -41-- 4s—� S:y-;- ! I I I I 1,1 III I I �' I'I i�l I1I1: J' J I 5.:1 I I I Li' 1 � s.Ii 4`- L ;:I- �.: i•r -aJi= 101 14I I15 iIi16III17;IIISIit I19 .—J L__J L__JIL___J I L___ J L___JL___J, L__-J IL --- J IL__. LOT 2 U.S..DULKHEAD LING f r--- -,---- fir,- ,fir 20 21 .: U.S. PIERI/CAP LINE EXHIBIT "I" AND EXHIBIT "ix" FOR THE DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS, SCAL°I.FEc- BACON BAY COMMUNITY ASSOCIATION SKETCH SHOWING SETBACK LINES WIT14IN LOTS 1-62 OF RS.9/42643, - PARCELS A,B E C OF R.S.13/42 AND LOTS 1-8 OF EASTSIDE ADDITION TOf `•._:; ,�---,R}};ioa-F.„e •-..-.::o BEACON BAY PER BOOK 2, PAGE 30 OF OFFICIAL MAPS.-!!{..=--:1L ... , EXHIBIT "D tt (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 - $735 (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 1%/Mo. Base Adjusted Less Date 1/1/81 Compunding Rent Rental $ 735 [ A X ( 1-f + $ Change ange ) ( C X f ) 1 _ R Ovet $ 62. 7/81 7 1.072135 x 18,400 = 19,727.29 - 735 = 18,992 x 0.4876140 + (793.76 x 0.512386) = 9,667.62 - 12/81 12 1.126825 x 18,400 = 20,733.58 - 735 = 19,998 x 0.4876140 + (793.76 x 0.512386) = 10,158.30 + 5.08 1/82 13 1.138093 x 18,400 = 20,940.92 - 735 = 20.206 x 0.537849 + (793.76 x 0.462151) = 11,234.57 + 16.21 7/82 19 1.208109 x 18,400 = 22,229.20 - 735 = 21,494 x 0.537849 + (793.76 x 0.462151) = 11,927.47 + 23.38 12182 24 1.269735 x 18,400 = 23,363.11 - 735 = 22,628 x 0.537849 + (793.76 x 0.462151) = 12.537.35 + 29.68 1/83 25 1.282432 x 18,400 = 23,596.75 - 735 = 22,862 x 0.593991 + (793.76 x 0.406009) = 13,901.95 + 43.80 12183 36 1.430769 x 18,400 = 26,326.15 - 735 = 25,591 x 0.593991 + (793.76 x 0.406009) = 15,523.18 + 60.57 1/84 37 1.445076 x 18,400 26,589.41 - 735 = 25,854 x 0.656898 + (793.76 _x 0.343102) = 17,256.04 + 78.49 12184 48 1.612226 x 18,400 = 29,664.96 - 735 = 28,930 x 0.656898 + (793.76 x 0.343102) = 19,276.37 + 99.39 1/85 49 1.628348 x 18,400 = 29,961.61 - 735 = 29,227 x 0.727591 + (1,292.52 x 0.272409) = 21,617.11 + 123.60 12/85 60 1.816697 x 18,400 = 33,427.22 - 735 = 32,692 x 0.727591 + (1,292.52 x 0.272409) = 24.138.69 + 149.69 1/86 61 1.834864 x 18,400 = 33,761.49 - 735 = 33,026 x 0.807296 + (1,292.52 x 0.192704) = 26,911.23 + 178.36 12186 72 2.047099 x 18,400 = 37,666.63 - 735 = 36,932 x 0.807296 + (1,292.52 x 0.192704) - 30,063.83 + 210.97 1187 73 2.067570 x 18,400 = 38,043.29 - 735 = 37,308 x 0.897495 + (1,292.52 x 0.302505) = 33,616.50 + 247.72 12187 84 2.306723 x 18,400 = 42,443.70 - 735 = 41,709 x 0.897495 + (1,292.52 x 0.102505) = 37,565.84 + 288.57 1188 85 2.329790 x 18,400 42,868.14 - 900 = 41.968 x - - - = 41,968.14 + 334.10 0 EXHIBIT "Dn (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 Annualizing Factor Adjustment New Months Factor 0 - Time Lease From It/Mo. Base Adjusted Date 111/81 Compounding Rent Rental 7/81 7 1.072135 x 7,750 = 8,309.05 - 12/81 12 1.126825 x 7,750 = 8,732.89 - 1/82 13 1.13B093 x 7,750 = 8,820.22 - 7/82 19 1.208109 x 7,750 = 9,362.84 - 12/82 24 1.269735 x 7,750 = 9,840.44 - 1/83 25 1.282432 x 7,750 = 9,938.85 - 12/83 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 - 1/86 61 1.834864 x 7,750 = 14,220.19 - 12/86 72 2.047099 x 7,750 = 15,865.02 - 1/87 73 2.057570 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 - EXAMPLE: INTERIOR PARCEL: LOT 32 Less % Change S 735 jA X (1-f) + ( C X f ) 1 = R Over $3,860.98 735 = 7,574 x 0.4876140 + (327.42 x 0.512386) = 3.860.98 735. = 7,998 x 0.4876140 + (327.42 x 0.512386) = 4,067.65 + 5.35 735 = 8,085 x 0.537849 + (327.42 x 0.462151) • = 4.499.95 + 16.55 735 = 8,628 x 0.537849 + (327.42 x 0.462151) = 4,791.79 +24.11 735 = 9,105 x 0.537849 + (327.42 x 0.462151) = 5,048.67 + 30.76 735 = 9,204 x 0.593991 + (327.42 x 0.406009) = 5,599.94 + 45.04 735 = 10.353 x 0.593991 + (327.42 x 0.406009) = 6,282.80 + 62.73 735 = 10,464 x 0.656898 + (327.42 x 0.343102) = 6,986.34 + 80.95 735 = 11,760 x 0.656898 + (327.42 x 0.343102) = 7,837.30 +102.99 73S = 11,885 x 0.727591 + (533.15 x 0.272409) - 8,792.44 + 127.73 735 = 13,344 x 0.727591 + (533.15 x 0.272409) = 9,854.50 + 155.23 735 = 13,485 x 0.807296 + (533.15 x 0.192704) = 10,989.28 +184.62 735 = 15,130 x 0.807296 + (533.15 x 0.192704) = 12,317.14 + 219.02 735 = 15,289 x 0.897495 + (533.15 x 0.102505) = 13,776.16 + 256.80 735 = 17,142 x 0.897495 + (533.15 x 0.102505) = 15,439.60 + 299.89 900 = 17,156 x - - - = 17,155.87 + 344.34 101 C' (�//1//J�✓///'11/�// V / 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 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 "2" 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 1st day of each month thereafter through the 1st day of December, 1987, a sum determined by subtracting from the fair market rental value of ,3� (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.