Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
01779 - FREDRICKS DEVELOPMENT CORP LEASE 60 ACRES SAN RAFAEL SUNRISE NORTE SUBLEASE CONSENT LOW COST HOUSING
DOC eei� 2oo4 a 0427341 Page i of 5 Recorded in official Records County of Riverside Gary L. RECORDING REQUESTED BY: Assessor Clerk & Recorder CITY OF PALM SPRINGS I IIIIII IIIIII IIII III�II IIII IIIIII IIII111 I111 IIII IIII AND WHEN RECORDED MAIL TO. _ _ -. - - City of Palm Springs P. O.Box 2743 M 5 D PAGE SIZE Oq PCOR NOCOR SMF MISC Palm Springs,CA 92263 �, Attn: City Clef1c A R L Coll LONG REFUND NCHG EXAM ii Y'd1-� Jorge Barcelo Sublease AGREEMENT #1779 Amend 1 Amendment to Lease Agreement 1779 R20787, 11-19-03 Title of Document THIS AREA F®IR RECORDETIV S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (S3 00 Additional Recording Fee Applies) G ARECORDER\RECORD REQ RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CITY OF PALM SPRINGS, CALIFORNIA 3200 East Tahquitz Canyon Way Palm Springs, California 92263 Attn: City Clerk Space Above[his Line Reserved for Use by Recorder AMENDMENT TO LEASE AGREEMENT THIS AMENDMENT TO THE LEASE AGREEMENT (herein Agreement), is made and entered into this 19'day of May, 2004,by and between the City of Palm Springs(herein City),a municipal corporation and charter city, as successor in real property interest to the Lessee, and Jorge Barcelo (herein "Sublessee"), and amends that certain Corporation Assignment of Leasehold Interest ("Sublease")originally dated August 2, 1983,as amended and assigned,between the Sublessee and Fredricks Development Corporation(herein"Lessee"), as follows: RECITALS WHEREAS, the City of Palm Springs approved that certain Lease Agreement No. 1779 with Fredricks Development Corporation, a California Corporation, dated March 1, 1982 for the development of 60 acres of land located at the northwest corner of Sunrise Way and San Rafael Drive, a memorandum of which was recorded on March 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder; and WHEREAS, the Parties made a Declaration of Covenants, Conditions and Restrictions ("Declaration") and subsequently recorded the Declaration on October 22, 1982 as Instrument No. 182722 of the Official Records of the Riverside County Recorder; and WHEREAS,on February 8, 1983,the City entered an Agreement Re Enforcement of Lease Number 1779 with the State of California Department of Housing and Community Development to facilitate the State making California Homeownership Assistance Program ("CHAP") loans to eligible households,recorded on February 15, 1983 as Instrument No. 28930 of the Official Record of the Riverside County Recorder; and WHEREAS, the parties entered an Amendment to Lease Agreement on February 23, 1983 as Instrument No. 37067 of the Official Record of the Riverside County Recorder, for the purpose of assisting the Lessee obtain Federal Housing Administration Insurance for the loans taken by purchasers which were to be secured by the lots into which the Property was to be subdivided and improvements constructed thereon; and WHEREAS Lessee subdivided and sold homes in the Tract, subject to the terns of a Corporation Assignment of Leasehold Interest executed by Lessee and individual Sublessees; and WHEREAS Lessee and original Sublessee entered a Corporation Assignment of Leasehold Interest recorded April 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder,for the property described in Attachment 1, Legal Description of the Property, subject to the terns and conditions indicated above; and WHEREAS Lessee Executed a Quitclaim Deed on December 12, 1991 terminating and cancelling the Lease Agreement by and between City and Lessee, as well as the Lessee's interest in the Covenants, Conditions and Restrictions (the "Declaration"); and 0 zr S 6�, � a � eOR1111111111111111111111111111111111111111111111111111111 WHEREAS,with the execution of the Quitclaim Deed,the City's real property interest has merged with the Lessee's interest for the purpose of the Subleases; and WHEREAS,the City of Palm Springs, as successor in interest to the Lessor named in the Sublease, approved a Consent to the Assignment of the Sublease on the property described in Attachment 1 to Jorge Barcelo executed on August 22, 2002. NOW THEREFORE,the Parties mutually desire to amend the Lease and Corporation Assignment of Leasehold Interest(Sublease)as follows: 1. Tenn. Article I of the Lease and Corporation Assignment of Leasehold Interest shall be amended to state: "The amended term of the leasehold estate will be sixty (60) years, commencing on January 1, 2004 and terminating at 12:01 a.m. Pacific Standard Time, on January 1, 2064." 2. Lease Otherwise Unaffected. Except as expressly set forth herein,the terms ofthe Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments, and the Lease and Sublease, as amended, shall remain in full force and effect and binding on all parties hereto. 3. The City Manager is authorized to execute this formal Amendment to Lease Agreement as required in accordance with the Resolutions approving same. IN WITNESS WHEREOF, the parties have executed and entered into this Amendment to Lease Agreement as of the date stated below. ATTEST: CITY OF PALM SPRINGS, a municipal corporation City Clerk " City Mane Patricia A. Sanders j David H. beady DATED tbiis day of ,j'; i2t'� -,-2004 L—,(,. ' t �i `Jor—geaBa�eia--� REVIEWED AND APPROVED Aleshire&Wynder, LLP r.j1i' U ire u LJU J'� By: avi&J. Aleshire, Esq. City Attorney II II I I II 0©2 e40 8¢0si4 GOA II111111111111111111I 3a£ S ATTACHMENT 1 TO AMENDMENT TO LEASE AGREEMENT LEGAL DESCRIPTION OF THE PROPERTY SAID PROPERTY LOCATED IN THE CITY OF PALM SPRINGS IN THE COUNTY OF RIVERSIDE, CALIFORNIA THE FOLLOWING DESCRIBED REAL PROPERTY: APN: 009-608-360 PARCEL 1:LOT NO. 53 OF TRACT NO. 17642-2 IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, CALIFORNIA,AS PER MAP ON FILE IN BOOK 124 PAGES 27 AND 28 OF MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PARCEL 2: NON-EXCLUSIVE EASEMENTS FOR ACCESS, INGRESS, EGRESS, USE, ENJOYMENT AND FOR OTHER PURPOSES OVER THE COMMON AREA ALL AS SHOWN, DESCRIBED AND LIMITED IN THE DECLARATION. COMMONLY KNOWN AS: 1561 E. TWIN STAR DRIVE, PALM SPRINGS, CA 92262 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIII ee,04, 08¢G'2OA STATE OF CALIFORNIA ) ss. COUNTY OF On bemire me, lGrJiiv� C �Fr)EKi�IS ` l�,/���e- , personally appeared known-to.-rne(or proved,to me on the basis of satisfactory evidence) to be the personfs) whose name(s)'i�/are subscribed to the within instrument and acknowledged to me tha(]VOshe/they executed the same inLhis/her/their authorized capacity(ies), and that by6is/her/their signature(g) on the instrument the-person(g) or the entity upon behalf of which the persons) acted, executed the instrument. Witness my hand and official seal. ELAINE L.WEOEKIN® !, CoSm isstonfta990t8 - 1. •-� .- .•,. s Notary t° lie-Collionia k [S�-iCLrL C.r : i, L=';t •t�=. j,�r C(. Riverside county Notary Public My C®rnm.Expires Feb 8,2007 , [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF ,(-z6- t;tCCx.=_� ) On/ ��l`I/, =Viz'..-���t'f beforeme, !°i,;l�o- . . ,�;,b xr!<'in; °0 �,personallyappeared �.�'( l G+-L,L:� �J c�' e r r ���-L/r�;,z,r•r,c c5; A� ..-!�'�,6 personally known to rile!(or-proved--to-me-on-thy-basis-of-satisfactor-y-evidence) to be the person(s),whose name•,(s) is/afa%subscribed to the within instrument and acknowledged to me that he/shefttiey`executed the same in his/herfflheir authorized capacity( es), and that by his/her/their) signature("s'))on the instrument the persoli(s,) or the entity upon behalf of which the person'(-) acted, executed the instrument. Witness my hand and official seal. r EL4iNE L.WEDEKIP OD (.61MY NotdSy FabBC-CalitoSnl.� `' ' � ��tiL/ , v` F ci ( 1 CryRiverside County Notary Public Comm.Expires Feb 8,2007 [SEAL] I IIIIII IIIIII IIII IIIIII I I I II II III II I I III 60405 of 5 e0R DOC a 2004—OZOO877 05/20/2004 08:00A Fee:NC Page 1 of 5 ' Recorded in Official Records County of Riverside Gary L. Orso RECORDING REQUESTED BY Assessor, County Clerk d Recorder AND WHEN RECORDED RETURN TO: III III I II I I II I III IIII III III CITY OF PALM SPRINGS,CALIFORNIA 3200 East Tahquitz Canyon Way Palm Springs, California 92263 ±Ad PAGE SIZE OA PGGR NOGOR SMF MISC Attn: City Clerk GOPV LONG REFUND WHO E% AMENDMENT TO LEASE AGREEMENT yC THIS AMENDMENT TO THE LEASE AGREEMENT(herein Agreement), is made and entered =J�` into this 14"dayof May,2004,by and between the City of Palm Springs herein City), µ y ty ( ty),a municipal corporation and charter city,as successor in real property interest to the Lessee,and Sheila Dolores Tolford and David Tolford, as Joint Tenants, (herein "Sublessee"), and amends that certain Corporation Assignment of Leasehold Interest ("Sublease") originally dated August 2, 1983, as amended and assigned, between the Sublessee and Fredricks Development Corporation (herein "Lessee"), as follows: RECITALS WHEREAS, the City of Palm Springs approved that certain Lease Agreement No. 1779 with Fredricks Development Corporation, a California Corporation, dated March 1, 1982 for the development of 60 acres of land located at the northwest corner of Sunrise Way and San Rafael Drive, a memorandum of which was recorded on March 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder; and WHEREAS, the Parties made a Declaration of Covenants, Conditions and Restrictions ("Declaration")and subsequently recorded the Declaration on October 22, 1982 as Instrument No. 182722 of the Official Records of the Riverside County Recorder; and WHEREAS,on February 8, 1983,the City entered an Agreement Re Enforcement of Lease Number 1779 with the State of California Department of Housing and Community Development to facilitate the State making California Homeownership Assistance Program ("CHAP") loans to eligible households, recorded on February 15, 1983 as Instrument No. 28930 of the Official Record of the Riverside County Recorder; and WHEREAS, the parties entered an Amendment to Lease Agreement on February 23, 1983 as Instrument No. 37067 of the Official Record of the Riverside County Recorder, for the purpose of assisting the Lessee obtain Federal Housing Administration Insurance for the loans taken by purchasers which were to be secured by the lots into which the Property was to be subdivided and improvements constructed thereon; and WHEREAS Lessee subdivided and sold homes in the Tract, subject to the terns of a Corporation Assignment of Leasehold Interest executed by Lessee and individual Sublessees; and WHEREAS Lessee and original Sublessee entered a Corporation Assignment of Leasehold Interest recorded April 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder,for the property described in Attachment 1,Legal Description of the Property, subject to the terms and conditions indicated above; and WHEREAS Lessee Executed a Quitclaim Deed on December 12, 1991 terminating and cancelling the Lease Agreement by and between City and Lessee, as well as the Lessee's interest in the Covenants, Conditions and Restrictions (the "Declaration"); and WHEREAS,with the execution of the Quitclaim Deed,the City's real property interest has merged with the Lessee's interest for the purpose of the Subleases; and NOW THEREFORE,the Parties mutually desire to amend the Lease and Corporation Assignment of Leasehold Interest(Sublease)as follows: 1. Tenn. Article I of the Lease and Corporation Assignment of Leasehold Interest shall be amended to state: "The amended term of the leasehold estate will be sixty (60) years, commencing on January 1, 2004 and terminating at 12:01 a.m. Pacific Standard Time, on January 1, 2064." 2. Lease Otherwise Unaffected. Except as expressly set forth herein,the terms ofthe Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments, and the Lease and Sublease, as amended, shall remain in full force and effect and binding on all parties hereto. 3. The City Manager is authorized to execute this formal Amendment to Lease Agreement as required in accordance with the Resolutions approving same. IN WITNESS WHEREOF, the parties have executed and entered into this Amendment to Lease Agreement as of the date stated below. ATTEST: CITY OF PALM SPRINGS, a municipal corporation City Clerk City Mana r� DATED this Z day of , 2004 Sheila Dolores Tolford REVIEWED AND APPROVED Aleshire& Wynder,LLP By: David Tolford / David JAMeshire,Esq. City Attorney IIIIIIIIIIII IIII IIIIII III IIIIIIII IIIII IIIIIIII IIIIIIII esre©t2a f�5 Dee ATTACHMENT 1 TO AMENDMENT TO LEASE AGREEMENT LEGAL DESCRIPTION OF THE PROPERTY SAID PROPERTY LOCATED IN THE CITY OF PALM SPRINGS IN THE COUNTY OF RIVERSIDE, CALIFORNIA THE FOLLOWING DESCRIBED REAL PROPERTY: APN: 009-608-311 PARCEL 1:LOT NO.4 OF TRACT NO. 17642-2 IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE,CALIFORNIA,AS PER MAP ON FILE IN BOOK 124 PAGES 27 AND 28 OF MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PARCEL 2: NON-EXCLUSIVE EASEMENTS FOR ACCESS, INGRESS, EGRESS, USE, ENJOYMENT AND FOR OTHER PURPOSES OVER THE COMMON AREA ALL AS SHOWN, DESCRIBED AND LIMITED IN THE DECLARATION. COMMONLY KNOWN AS: 3252 N. MICA DRIVE, PALM SPRINGS, CA 92262 IIIIII IIII I II III III II IIII IIII III IIIII III III RS 2��3e£30s 00R ,CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT u; f(, State of California JI (-; ss. )I $ County of 14' i•ll < L • G. � On GGG- ��61 beforeme, c Dale ' ////qq/ Nem ndTiee oll,ier le9 'Ja a ooe�No1e y{�11 ,JI do 1H is personally appeared 9�r:� r �1-'L�, GZ/YL/� a%l'�k1G>� Nam al S,gnerce) dl gj <: ❑ppersonally known to me V proved to me on the basis of satisfactory l evidence )I 1 )r" to be the person(s) whose name(s) is/are subscribed to the within instrument and ,ol I(,< acknowledged to me that he/she/they executed )I !( - the same in his/her/their authorized 'r r� «' MARINA KAHA9 -� Comm capacity(ies), and that by his/her/their a ,g1356429 � signature(s) on the instrument the person(s), or NOTARY Riverside County ANIA I�pl � .�. hay cumin, Exlde county � the entity upon behalf of which the persons) ,oil � Alvers )1 •,• plree May29,Ppoo" acted, executed the instrument. 'r�l ill it „{ WITNESS my hand and official seal t'+ SVr Signi ol Nol ryPubLc t� OPTIONAL )� c Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent )� I(; fraudulent removal and reattachment of this form to another document. �91 Description of Attached Document 10 o Title or Type of Document: )�6-�ZGQ� G� � 2� !?r(1�r7�� c.Jc�/, > It, jl I� Document Date: Jr —� Number of Pages: C' ip N tad Signer(s)Other Than Named Above: )t t� on o Capacity(ies) Claimed by Signer `°'I [rJ C )I Signer's Name: ❑ Individual Top of thumb here P Corporate Officer—Trtle(s):El )� ❑ Partner—❑ Limited OGenerali ,(I ❑ Attorney-in-Fact ,n Ili ❑ Trustee ',uI ❑ Guardian or Conservator 101 ❑ Other: c, Signer Is Representing: II ©1999 N91lonal Nolory Association•9350 De Solo Ave.,P.O.Box 2402•Chalswmth,CA 91313 2402•www nalionalnolaryor, Prod.No 5907 Remdor Call Toll Free 1-800 876 6627 II II I I I I II I I I III II II II 05l 004 of 5&?00F CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT - State of California I County of RivemidP On �i,a. 7E./ ��,>' � / _ 1-� � i before me, Elaine T. WPdPkind, Notar�r Public Date Name and Tile o10Hicer(e.g."Jane Doe,nrc,Public') personally appeared David H. Ready and Patricia A. .Gan(iPTR I� Name(s)of 5lgner(s) XXpersonally known tome to be the person(s) ' - - _ whose name(s)mare subscribed to the within instrument and acknowledged to me that (they executed the same in /their authorized capacity(ies), and that by )bjjEtAMVE L. KIND pt eh ted their signature(s)on the instrument the person(s), Co AN* #1J99b15 or the entity upon behalf of which the person(s) ac , Notary Mill.CawMja i executed the instrument'. fteame Count'09 My Comm.FxppyrybS.2007 WITNESS my hand and official seal. -C'_',G:%CiC.C:, i') v �(i-.tt'✓i_e"�_).e=v;i/• Signature of Notary Public Z /f h OPTIONAL r� Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent '�. fraudulent removal and reattachment of this form to another document. Description of Attached D 11 ocument Title or Type of Document: _ei° 'e .�,�t� �. Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) I Signer's Name: Signer's Name: °I ❑ Individual ❑ IndividualI, ❑ Corporate Officer ❑ Corporate Officer �I Title(s): Title(s): ?� ❑ Partner—❑ Limited ❑ General ❑ Partner—❑ Limited ❑ General ?� ❑ Attorney-in-Fact ❑ Attorney-in-Fact ❑ Trustee ' ❑ Trustee 'h ❑ Guardian or Conservator - ❑ Guardian or Conservator UMU119UUMIUMA Zh' ❑ Other: Top of thumb here El Other: Top of thumb here Signer Is Representing: Signer Is Representing: 8rl;Icl;'C"Ic .c�,rir�; ci; ;cis ici7gi; xi, - ti �ci: 7ci; ri; ;�irr; i3ri; r cc-aa O 1995 National Notary Association•8236 Rommel Ave.,PO Box 7184•Canoga Park,CA 91309-7184 Prod.No 5907 Reorder Call Tall-Free 1-800-876-6827 ��� �� II I I I I II II I I II 05 zD�5 0 58'00R DOC N 2004-0341ISS 05/07/2004 08:00A Fee:NC Page 7 of 5 Recorded in official Records County of Riverside Orso RECORDING REQUESTED BY Cary L.ClerkCounty corder AND WHEN RECORDED RETURN TO: Assessor,I IIII IIIIII Illllllllll III IIIII IN IN OF PALM SPRINGS, CALIFORNIA 3200 East Tahquitz Canyon Way Palm Springs, California 92263 M 5 U PAGE SRE DA PCOR NOCOR SMF MISC Attn: City Clerk a l�c�v���- L�YYJvv� t(y��� I;)-e�L. &OL), [C'A3L, tit A R L - COPY LONG REFUND NCHG EHAM AMENDMENT TO LEASE AGREEMENT THIS AMENYMENT TO THE LEASE AGREEMENT (herein Agreement),is made and entered into this 26 day of li t.* 2004, by and between the City of Palm Springs h (herein City), a municipal orporation and charter city, as successor in real property interest to the Lessee,and Maria Gomez and Edith Gomez, Single Women as Joint Tenants,(herein"Sublessee"), and amends that certain Corporation Assignment of Leasehold Interest("Sublease")originallydated August 2, 1983, as amended and assigned, between the Sublessee and Fredricks Development Corporation(herein"Lessee"), as follows: RECITALS WHEREAS, the City of Palm Springs approved that certain Lease Agreement No. 1779 with Fredricks Development Corporation, a California Corporation, dated March 1, 1982 for the development of 60 acres of land located at the northwest corner of Sunrise Way and San Rafael Drive, a memorandum of which was recorded on March 22, 1982 as Instrument No. 47803 of tb e Official Record of the Riverside County Recorder; and WHEREAS, the Parties made a Declaration of Covenants, Conditions and Restrictions ("Declaration") and subsequently recorded the Declaration on October 22, 1982 as Instrument No. 182722 of the Official Records of the Riverside County Recorder; and WHEREAS,on February 8, 1983,the City entered an Agreement Re Enforcement of Lease Number 1779 with the State of California Department of Housing and Community Development to facilitate the State making California Homeownership Assistance Program ("CHAP") loans to eligible households, recorded on February 15, 1983 as Instrument No. 28930 of the Official Record of the Riverside County Recorder; and WHEREAS, the parties entered an Amendment to Lease Agreement on February 23, 1983 as Instrument No. 37067 of the Official Record of the Riverside County Recorder, for the purpose of assisting the Lessee obtain Federal Housing Administration Insurance for the loans taken by purchasers which were to be secured by the lots into which the Property was to be subdivided and improvements constructed thereon; and WHEREAS Lessee subdivided and sold homes in the Tract, subject to the terms of a Corporation Assignment of Leasehold Interest executed by Lessee and individual Sublessees; and WHEREAS Lessee and original Sublessee entered a Corporation Assignment of Leasehold Interest recorded April 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder, for the property described in Attachment 1, Legal Description of the Property,subject to the terns and conditions indicated above; and WHEREAS Lessee Executed a Quitclaim Deed on December 12, 1991 terminating and cancelling the Lease Agreement by and between City and Lessee, as well as the Lessee's interest in the Covenants, Conditions and Restrictions (the "Declaration"); and WHEREAS,with the execution of the Quitclaim Deed,the City's real property interest has merged with the Lessee's interest for the purpose of the Subleases; and WHEREAS, the City of Palm Springs,as successor in interest to the Lessor mined in the Sublease, approved a Consent to the Assigmment of he Su lease on the property described in Attachment I to Maria Gomez and Edith Gomez on . NOW THEREFORE,the Parties mutually desire to amend the Lease and Corporation Assignment of Leasehold Interest(Sublease) as follows: 1. Term. Article I of the Lease and Corporation Assignment of Leasehold Interest shall be amended to state: "The amended tern of the leasehold estate will be sixty (60) years, commencing on January 1, 2004 and terminating at 12:01 a.m. Pacific Standard Time, on January 1, 2064." 2. Lease Otherwise Unaffected. Except as expressly set forth herein,the terms ofthe Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments, and the Lease and Sublease, as amended, shall remain in full force and effect and binding on all parties hereto. 3. The City Manager is authorized to execute this formal Amendment to Lease Agreement as required in accordance with the Resolutions approving same. IN WITNESS WHEREOF, the parties have executed and entered into this Amendment to Lease Agreement as of the date stated below. ATTEST: CITY OF PALM SPRINGS, a municipal corporation City Clerk City Manager'' DATED tbi� Aay of 2004 ? G Maria Gomez REVIEWED AND APPROVED Aleshire &Wynder, LLP By: Ith Gon ez Davi leshire, Esq. City Attorney APPH `VE � IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII Asre�2a£45e.9eeR ATTACHMENT 1 TO AMENDMENT TO LEASE AGREEMENT LEGAL DESCRIPTION OF THE PROPERTY SAID PROPERTY LOCATED IN THE CITY OF PALM SPRINGS IN THE COUNTY OF RIVERSIDE, CALIFORNIA THE FOLLOWING DESCRIBED REAL PROPERTY: APN: 009-608-345 PARCEL 1:LOT NO.38 OF TRACT NO. 17642-2 IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, CALIFORNIA,AS PER MAP ON FILE IN BOOK 124 PAGES 27 AND 28 OF MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PARCEL 2: NON-EXCLUSIVE EASEMENTS FOR ACCESS, INGRESS, EGRESS, USE, ENJOYMENT AND FOR OTHER PURPOSES OVER THE COMMON AREA ALL AS SHOWN, DESCRIBED AND LIMITED IN THE DECLARATION. COMMONLY KNOWN AS: 3293 N. MOUNTAIN SHADOW DRIVE, PALM SPRINGS, CA 92262 III III III I II II III IIIII IIIIII II IIIII III III a6r �J o£5e9Flaa 3 ALL-PURPOSE ACKNOWLEDGMENT �000c State of California SS. County of L 2��c�z. `L/� On a 60 before me, r�- (DATE) f tN TARP) 1 /� personally appeared I'd SIGNER(S) ❑ personally known to me OR - proved to me on the basis of satisfactory evidence to be the persolo) whose name is/ i ubscribed to the within instrument and acknowledged to me that he/she/ he'. executed _ _ the same in his/heiI their authorized %h JOAN D. 1:10MAT@NO capacity(ies)`-, and that by his/her tl ec y� Garnm.1�1A60020 �J NOTARY PUBLIC-CALIFORNIA U4 signature S)don the instrument the perso ,) Rivemide County My Comm ExpllesJen.6,2001) or the entity upon behalf of which the perso (s)Icted, executed the instrument. © WITNESS my hand and official seal. Woo / NO'� RY'S SIGNATURE W m ul m OPTIONAL IN ORMATION The information below is not required by law. However, it could prevent fraudulent attachment of this acknowl- edgment to an unauthorized document. CAPACITY CLAIMED BY SIGNER (PRINCIPAL) DESCRIPTION OF ATTACHED DOCUMENT ❑ INDIVIDUAL ❑ CORPORATE OFFICER TITLE OR TYPE OF DOCUMENT � TITLE(S) ❑ PARTNER(S) ❑ ATTORNEY-IN-FACT NUMBER OF PAGES ❑ TRUSTEE(S) ❑ GUARDIAN/CONSERVATOR DATE OF DOCUMENT ❑ OTHER: OTHER SIGNER IS REPRESENTING: RIGHT THUMBPRINT ) NAME OF PERSON(S)OR ENTITY(IES) `n OF E SIGNER o APA 5/99 VALLEY SIERRA, 800-362-3369 CALIFORNIA -. ALL-PURPOSE '` e'inn ACKNOWLEDGEMENT STATE OF CALIFORNIA ) COUNTY OF Riverside On y' -, - c V before ME, ELAINE L. WEDEKIND. Notary Ublic DATE NAME,TITLE OF OFFICER-E G..'JANE DOE,NOTARY PUBLIC- personally appeared,—DAVID H. READY, and PATRICIA A. SANDERS = personally known to )to be the person(q whose named is/are subscribed to the within instrument and acknowledged to me thabk%e1&*e/ they executed the same in lft$w/their authorized capacity ies , and that by fawbeetheir signature(s)on the instrument the person,or the entity upon behalf of which the person acted, executed the instrument. ELAINE L.WEDEKIND WITNESS my hand and official seal. _ Commission#1399015 i Notary Public-California Riverside County My Comm.Expires Feb B,2007 (SEAL) NOTARY PUBLIC SIGNATURE ` OPTIONAL INFORMATION TITLE OR TYPE OF DOCUMENT DATE OF DOCUMENT NUMBER OF PAGES _ SIGNER(S)OTHER THAN NAMED ABOVE 7 `1'I1111111I111V� Z© 13$ S £Elilt1311111111111111 It2© Jcea �, wa,�i�dl�lg IIQ °t ( By 2004-0354488 y� �v ,Y 05 12/2004 08:00A Fee:NC American Title COMpany Page 1 of 4 Recorded in Official Records County of Riverside RECORDING REQUESTED BY Gary L. Orso AND WREN RECORDED RETURN TO: Assessor, Country Clerk B Recorder CrfY OF PALM SPRINGS,CALIFORNIA II II I I II III I II I III IIII II III 3200 East Tahquitz Canyon Way Palm Springs, California 92263 I M s7 U i PAGE SIZE OA PCOR NOCOR SIdF MISG Attn: City Clerk Karen Joy Tabbah Sublease A R AGREEMENT #1779 Amend 1 AMENDMENT TO LEASE AGREEMENT R20787. 11-19703 THIS AMENDMENT TA THE LEASE AGREEMENT(herein Agreement), is made and entered ru into this ay of 2004, by and between the City of Palm Springs N (herein City), a municipal orporation and charter city, as successor in real property interest to the %19 Lessee,and Karen Joy Tabbah,an unmarried woman (herein"Sublessee"),and amends that certain MC M Corporation Assignment of Leasehold Interest ("Sublease") originally dated March 1, 1982, as amended and assigned, between the Sublessee and Fredricks Development Corporation (herein "Lessee"), as follows: RECITALS WHEREAS, the City of Palm Springs approved that certain Lease Agreement No. 1779 with Fredricks Development Corporation, a California Corporation, dated March 1, 1982 for the development of 60 acres of land located at the northwest comer of Sunrise Way and San Rafael Drive, a memorandum of which was recorded on March 22, 1982 as Instrument No. 47803 of foe Official Record of the Riverside County Recorder; and WHEREAS, the Parties made a Declaration of Covenants, Conditions and Restrictions ("Declaration") and subsequently recorded the Declaration on October 22, 1982 as Instrument No. 182722 of the Official Records of the Riverside County Recorder; and WHEREAS,on February 8, 1983,the City entered an Agreement Re Enforcement of Lease Number 1779 with the State of California Department of Housing and Community Development to facilitate the State making California Homeownership Assistance Program ("CHAP") loans to eligible households, recorded on February 15, 1983 as Instrument No. 28930 of the Official Record of the Riverside County Recorder; and WHEREAS, the parties entered an Amendment to Lease Agreement on February 23, 1983 as Instrument No. 37067 of the Official Record of the Riverside County Recorder, for the purpose of assisting the Lessee obtain Federal Housing Administration Insurance for the loans taken by purchasers which were to be secured by the lots into which the Property was to be subdivided and improvements constructed thereon; and WHEREAS Lessee subdivided and sold homes in the Tract, subject to the terms of a Corporation Assignment of Leasehold Interest executed by Lessee and individual Sublessees; and WHEREAS Lessee and original Sublessee entered a Corporation Assignment of Leasehold Interest recorded April 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder, for the property described in Attachment 1, Legal Description of the Property,subject to the terns and conditions indicated above; and WHEREAS Lessee Executed a Quitclaim Deed on December 12, 1991 terminating and cancelling the Lease Agreement by and between City and Lessee, as well as the Lessee's interest in the Covenants, Conditions and Restrictions (the"Declaration"); and WHEREAS,with the execution of the Quitclaim Deed,the City's real property interest has merged with the Lessee's interest for the purpose of the Subleases; and WHEREAS,the City of Palm Springs,as successor in interest to the Lessor named in the Sublease, approved a Consent to the Assignment of the Sublease on the property described in Attachment 1 to Karen Joy Tabbah on March 16, 2004. NOW THEREFORE,the Patties mutually desire to amend the Lease and Corporation Assignment of Leasehold Interest(Sublease) as follows: 1. Tenn. Article I of the Lease and Corporation Assignment of Leasehold Interest shall be amended to state: "The amended term of the leasehold estate will be sixty (60) years, commencing on January 1, 2004 and terminating at 12:01 a.m. Pacific Standard Time, on January 1,2064." 2. Lease Otherwise Unaffected. Except as expressly set forth herein,the terms of the Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments,and the Lease and Sublease,as amended, shall remain in full force and effect and binding on all parties hereto. 3. The City Manager is authorized to execute this formal Amendment to Lease Agreement as required in accordance with the Resolutions approving same. IN WITNESS WHEREOF, the parties have executed and entered into this Amendment to Lease Agreement as of the date stated below. ATTEST: CITY OF PALM SPRINGS, a municipal corporation Ali, erk City Mana DATED this '—day of kU004 REVIEWED AND APPROVED EOcnj y Tabbah Aleshire& Wynder, LLP By: Ili' av' J. Aleslure, Esq. City Attorney STATE OF CALIFORNIA ) N jss. COUNTY OFL/4G' rc( / On before me, p b personally appeared -- �i personally known to ( to be the persons) whose name 1 are subribed to the within instrument and acknowledged toe that he slei they execu ted the same in his /their authorized capacity(ies), and that by hi e their signatures on the instrument the person(aj or the entity upon behalf of which the person(s� acted, executed 1:he instrument. Witness my hand and official seal. ElAM t.WEDEKNID Commbgon#1399615, Nobry hlblic•CaMomW RW"We County My Comm.Expires Feb !,2007 Notary Public [SEAL] STATE OF CALIFORNIA ) -�, ) ss. COUNTY OF r V�r s I ) On (� oi^ I i I S- ?o C 9, before me, c1 V�l I, Y G h�t�5 personally appeared P 0-(^ av and Pa r,ci ' 4�'t . Scrnder personally known to me( mon t1 > f t' factuy '4eftee) to be the person whose name(q ' re subscribed to the within instrument and acknowledged to me that heJ�he a executed the same in hislhe the authorized capaci ies and that by e signatures on the instrument the person or the entity upon beha of which the perso s acted, executed the instrument. Witness my hand and official seal. JUOITH A.NICHOIS C; COMM.#1261786 rlf rjy "'. Notary Public-Calttornla y _ w , , RIVERSIDE COUNTY \•; , % My Cantu.Up.May 21,2004 N t ry Public [SEAL] ATTACHMENTI TO AMENDMENT TO LEASE AGREEMENT LEGAL DESCRIPTION OF THE PROPERTY SAID PROPERTY LOCATED IN THE CITY OF PALM SPRINGS IN THE COUNTY OF RIVERSIDE, CALIFORNIA THE FOLLOWING DESCRIBED REAL PROPERTY: APN: 009-608-348 PARCEL 1:LOT NO.41 OF TRACT NO. 17642-2IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, CALIFORNIA,AS PER MAP ON FILE IN BOOK 124 PAGES 27 AND 28 OF MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PARCEL 2: NON-EXCLUSIVE EASEMENTS FOR ACCESS, INGRESS, EGRESS, USE, ENJOYMENT AND FOR OTHER PURPOSES OVERTHE COMMON AREA ALL AS SHOWN, DESCRIBED AND LIMITED IN THE DECLARATION. COMMONLY KNOWN AS:3263 MOUNTAIN SHADOW DRIVE, PALM SPRINGS,CA 92262 F � { RECORDING REQUESTED BY: 2004--007 1 634 CHICAGO TITLE COMPANY DOC 83 Fee: 01 30/2004 08:00R Page 1 of 5 Recorded in Official Records County of Riverside Gary L. Or90 & Recorder sor. county Clerk AND WHEN RECORDED MAIL TO: Rssesllllulllllllit llllllllllllllullll it IIIIIIIIII CITY OF PALM SPRINGS CALIFORNIA 3200 EAST TAHQUITZ CANYON WAY PALM SPRINGS, CA. 92263 Mark E. Paige Sublease ORDER NO: 37089560-E75 AGREEMENT #1779 Amend 1 M 5 U PAGE SIZE DA PCOft NOCOR SMF MISC. APN: 009-608-349-7 TRA: 011-011 A R L COPY LONG REFUND I NCHG EXAM CIO ¢ AMENDMENT TO LEASE AGREEMENT TITLE OF DOCUMENT THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 ADDITIONAL RECORDING FEE APPLIES) M CHICAGO TITLE Coy"A"y RECORDING REQUESTED BY � AND WHEN RECORDED RETURN TO: M S U PAGE SIZE GA POOR NOcoR SMF MEG CITY OF PALM SPRINGS, CALIFORNIA 3200 East Tahquitz Canyon Way Palm Springs, California 92263 Attn: City Clerk ^ R eePv eN� REEUNO NGNG E M 3 -�L �' �'�'� Space Above this Line Reserved for Use by Recorder AMENDMENT TO LEASE AGREEMENT THIS AMENDMENT TO THE LEASE AGREEMENT (herein Agreement), is made and entered into this /3 day of 2004, by and between the City of Palm Springs (herein City), a municipa corporation and charter city, as successor in real property interest to the Lessee,and Mark E.Paige,a single man (herein"Sublessee"),and amends that certain Corporation Assignment of Leasehold Interest ("Sublease") originally dated March 1, 1982, as amended and assigned, between the Sublessee and Fredricks Development Corporation (herein "Lessee"), as follows: RECITALS WHEREAS, the City of Palm Springs approved that certain Lease Agreement No. 1779 with Fredricks Development Corporation, a California Corporation, dated March 1, 1982 for the development of 60 acres of land located at the northwest corner of Sunrise Way and San Rafael Drive, a memorandum of which was recorded on March 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder; and WHEREAS, the Parties made a Declaration of Covenants, Conditions and Restrictions ("Declaration") and subsequently recorded the Declaration on October 22, 1982 as Instrument No. 182722 of the Official Records of the Riverside County Recorder; and WHEREAS,on February 8, 1983,the City entered an Agreement Re Enforcement of LeaseNumber 1779 with the State of California Department of Housing and Community Development to facilitate the State making California Homeownership Assistance Program ("CHAP") loans to eligible households, recorded on February 15, 1983 as Instrument No. 28930 of the Official Record of the Riverside County Recorder; and WHEREAS, the parties entered an Amendment to Lease Agreement on February 23, 1983 as Instrument No. 37067 of the Official Record of the Riverside County Recorder, for the purpose of assisting the Lessee obtain Federal Housing Administration Insurance for the loans taken by purchasers which were to be secured by the lots into which the Property was to be subdivided and improvements constructed thereon; and WHEREAS Lessee subdivided and sold homes in the Tract, subject to the terms of a Corporation Assignment of Leasehold Interest executed by Lessee and individual Sublessees; and WHEREAS Lessee and original Sublessee entered a Corporation Assignment of Leasehold Interest recorded April 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder, for the property described in Attachment 1, Legal Description of the Property,subject to the terms and conditions indicated above; and WHEREAS Lessee Executed a Quitclaim Deed on December 12, 1991 terminating and cancelling the Lease Agreement by and between City and Lessee, as well as the Lessee's interest in the Covenants, Conditions and Restrictions (the"Declaration"); and { WHEREAS,with the execution of the Quitclaim Deed,the City's real property interest has merged with the Lessee's interest for the purpose of the Subleases; and WHEREAS,the City of Palm Springs,as successor in interest to the Lessor named in the Sublease, approved a Consent to the Assignment of the Sublease on the property described in Attachment 1 toMark Paige on April 13, 2001. NOW THEREFORE,the Parties mutually desire to amend the Lease and Corporation Assignment of Leasehold Interest(Sublease)as follows: 1. Tenn. Article I of the Lease and Corporation Assignment of Leasehold Interest shall be amended to state: "The amended term of the leasehold estate will be.s years, commencing on January 1, 2004 and terminating at 12:01 a.m. Pacific Standard Time, on January 1, 2059." 2. Lease Otherwise Unaffected. Except as expressly set forth herein,the tenus of the Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments, and the Lease and Sublease, as amended, shall remain in full force and effect and binding on all parties hereto. 3. The City Manager is authorized to execute this formal Amendment to Lease Agreement as required in accordance with the Resolutions approving same. IN WITNESS WHEREOF, the parties have executed and entered into this Amendment to Lease Agreement as of the date stated below. ATTEST: CITY OF PALM SPRINGS, a municipal corporation —city Clerk / fit anager DATED this_16 day of January, 2004 0 REVIEWED AND APPROVED Aleshire&Wynder, LLP a- :L' ,, •�,., !' By: David J. shire, Esq. City Attorney Mark E. TAM STATE OF CALIFORNIA ) ss. COUNTY OF ) On JCt0UkyU 13 , aoo4 , before me, LrY� Kb&gq PUWCpersonally appeared M(Xr1c . PQ i g e persertall3� knewfn-to FA@ (or prov6d to me on the basis of satisfactory evidence) to be the persona*whose namc(sjqs/6 s bscribed to the within instrument and acknowledged to me thaosl"+ey executed the same i hi authorized capacity{ies) and that by is signature(&) on the instrument the person(&}or the entity upon behalf of which the person(g) acted, executed the instrument. Witness my hand and official seal. CAME ROVNEY CommMibn¥1345457 � 1� -r' NalarY Public-California RWWnlae County MVCamm.Fwgna Mar 26,2 0 [SEAL] STATE OF CALIFORNIA ) q ) ss. COUNTY OF On /F befor mtlinl� k•Glees �a `� 1 0 6/ie, , personally appeared z person know o {er rove to:tl:p,YAAiq fif g--t gfivet Two) to be the persons _hose nun s&s/ re subscribed to the within instrument and acknowledged to me that he/she e/sh e xecuted the same in his/her eu authorized capacit g and that by his/her le signature on the instrument the person s&or the entity upon behalf of which the person& acted, executed the instrument. Witness my hand and official seal. EIAINE Lim Commwon N 13"015 Notary Public•CaM oM RNeaIW County Notary Public My Comm.Explrw Feb 5,2MM [SEAL] i Y ATTACHMENT 1 TO AMENDMENT TO LEASE AGREEMENT LEGAL DESCRIPTION OF THE PROPERTY SAID PROPERTY LOCATED IN THE CITY OF PALM SPRINGS IN THE COUNTY OF RIVERSIDE, CALIFORNIA THE FOLLOWING DESCRIBED REAL PROPERTY: APN: 009-608-349 PARCEL 1:LOT Ne OF TRACT NO. 17642-2 IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, CALIFORNIA, AS PER MAP ON FILE IN BOOK 124 PAGES 27 AND 28 OF MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PARCEL 2: NON-EXCLUSIVE EASEMENTS FOR ACCESS, INGRESS, EGRESS, USE, ENJOYMENT AND FOR OTHER PURPOSES OVERTHE COMMON AREA ALL AS SHOWN, DESCRIBED AND LIMITED IN THE DECLARATION. COMMONLY KNOWN AS:3253 N. Mt. Shadow Drive, PALM SPRINGS, CA 92262 HOC a 20OZ—SG2211 12/09/2003 08:00A Fee:22.00 Page 1 of 6 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder IIIIII IIIIII IIII IIII I IIII IIIII IIIII III IIIII I II III Lawyers Title Goa -- - Recording requested by LAWYERS TITLE COMPANY And when recorded mail to.i�i C. CITY OF PALM SPRINGS M S U PAGE 512E OFl POOR NOCOR SMF MISC. 3200 EAST TAHQUTIZ CANYON WAY PALM SPRINGS, CA 92263 ATTN:CITY CLERK A R L COPY LONG �NCHG 4054073-30 AMENDMENT TO LEASE AGREEMENT P Title of Document 1 T L Shammoth A. Hoyte Sublease AGREEMENT #1779 Amend 1 R20784, 11-19-03 THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) STC-SCSD 996a(Rev 8/97) A' RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CITY OF PALM SPRINGS, CALIFORNIA 3200 East Tahquitz Canyon Way Palm Springs, California 92263 Attn: City Clerk Space Above this Line Reserved for Use by Recorder AMENDMENT TO LEASE AGREEMENT THIS AMENMENT TO THE LEASE yAGREEMENT (herein Agreement), is made and entered into this ay of p 2003, by and between the City of Palm Springs (herein City), a municipal corporation and charter city, as successor in real property interest to the Lessee, and Shammoth A. Hoyte, Jr., a single man (herein"Sublessee'), and amends that certain Corporation Assignment of Leasehold Interest ("Sublease") originally dated August 21, 1984, as amended and assigned, between the Sublessee and Fredricks Development Corporation (herein "Lessee"), as follows: RECITALS WHEREAS, the City of Palm Springs approved that certain Lease Agreement No. 1779 with Fredricks Development Corporation, a California Corporation, dated March 1, 1982 for the development of 60 acres of land located at the northwest corner of Sunrise Way and San Rafael Drive, a memorandum of which was recorded on March 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder; and WHEREAS, the Parties made a Declaration of Covenants, Conditions and Restrictions ("Declaration") and subsequently recorded the Declaration on October 22, 1982 as Instrument No. 182722 of the Official Records of the Riverside County Recorder; and WHEREAS,on February 8, 1983,the City entered au Agreement Re Enforcement of Lease Number 1779 with the State of California Department of Housing and Community Development to facilitate the State making California Homeownership Assistance Program ("CHAP") loans to eligible households, recorded on February 15, 1983 as Instrument No. 28930 of the Official Record of the Riverside County Recorder; and WHEREAS, the parties entered an Amendment to Lease Agreement on February 23, 1983 as Instrument No. 37067 of the Official Record of the Riverside County Recorder, for the purpose of assisting the Lessee obtain Federal Housing Administration Insurance for the loans taken by purchasers which were to be secured by the lots into which the Property was to be subdivided and improvements constructed thereon; and WHEREAS Lessee subdivided and sold homes in the Tract, subject to the terms of a Corporation Assignment of Leasehold Interest executed by Lessee and individual Sublessees; and WHEREAS Lessee and original Sublessee entered a Corporation Assignment of Leasehold Interest recorded August 27, 1984 as Instrument No. 186533 of the Official Record of the Riverside County Recorder, for the property described in Attachment 1,Legal Description of the Property,subject to the terms and conditions indicated above; and WHEREAS Lessee Executed a Quitclaim Deed on December 12, 1991 terminating and cancelling the Lease Agreement by and between City and Lessee, as well as the Lessee's interest in the Covenants, Conditions and Restrictions (the "Declaration"); and WHEREAS,with the execution of the Quitclaim Deed,the City's real property interest has merged with the Lessee's interest for the purpose of the Subleases; and WHEREAS,the City of Palm Springs,as successor in interest to the Lessor named in the Sublease, approved a Consent to the Assignment of the Sublease on the property described in Attachment 1 to Shammoth A. Hoyte, Jr. on October 4, 2001. NOW THEREFORE,the Parties mutually desire to amend the Lease and Corporation Assignment of Leasehold Interest (Sublease) as follows: 1. Term.Article I of the Lease and Corporation Assignment of Leasehold Interest shall be amended to state: "The amended tern of the leasehold estate will be sixty (60) years,commencing on January 1,2004 and terminating at 12:01 a.m.Pacific Standard Time, on January 1, 2064." 2. Lease Otherwise Unaffected. Except as expressly set forth herein,the terns of the Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments,and the Lease and Sublease,as amended,shall remain in full force and effect and binding on all parties hereto. 3. The City Manager is authorized to execute this formal Amendment to Lease Agreement as required in accordance with the Resolutions approving same. IN WITNESS WHEREOF, the parties have executed and entered into this Amendment to Lease Agreement as of the date stated below. ATTEST: CITY OF PALM SPRINGS, a municipal corporation City Cler c City Manage DATED this StL day of December, 2003. REVIEWED AND APPROVED + `6f1TV (L Aleshire & Wynder, LLP °2 / By: uid . Aleshire, Esq. City Attorney Homeowner %' File No.: 4054073 EXHIBIT "A" Parcel 1: Lot 6 of Tract No. 17642-2, in the City of PALM SPRINGS, County of RIVERSIDE, State of California, as per map recorded in Book 124, page(s) 27 and 28, inclusive, of Miscellaneous Maps, in the office of the County Recorder of Riverside County. Parcel 2: Non-exclusive easements for access, ingress, egress, use, enjoyment and for other purposes over the common area, all as shown, described and limited in the Declaration. Page 3 of 8 ATTACHMENT TO AMENDMENT TO LEASE AGREEMENT LEGAL DESCRIPTION OF THE PROPERTY SAID PROPERTY LOCATED IN THE CITY OF PALM SPRINGS IN THE COUNTY OF RIVERSIDE, CALIFORNIA THE FOLLOWING DESCRIBED REAL PROPERTY: APN: 009-608-313-4 PARCEL 1:LOT NO.6 OF TRACT NO. 17642-2 IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, CALIFORNIA,AS PER MAP ON FILE IN BOOK 124 PAGES 27 AND 28 OF MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY. PARCEL 2: NON-EXCLUSIVE EASEMENTS FOR ACCESS, INGRESS, EGRESS, USE, ENJOYMENT AND FOR OTHER PURPOSES OVER THE COMMON AREA ALL AS SHOWN, DESCRIBED AND LIMITED IN THE DECLARATION. COMMONLY KNOWN AS: 3272 MICA DRIVE, PALM SPRINGS, CA 92262 4 f" i STATE OF CALIFORNIA ) ss. COUNTY OF (��V e rS 1 P ) IN of e v- �V Y� IIc On e L, 2 O O 3 before me, �� Nl. N 1 Can o 5 , personally appeared vl (4 . e a t via Pa C r i c l R• S n d c r s personally knowkmn me ame !meta�� sthesinstor the entity upon behalf of which the perso s acted, executed the hnstrument. Witness my hand and official seal. .,fz:..rs,-^ ^ , JUDITH A.NICHOLS V COMM.0'1261786 n Nr o. Notary Public-Callfornia Ice U T 1'eY6-Jn¢ n RIVER51DE COUNTY Not Public �4 My Comm,Exp.May 2'1,2004 y [SEAL] STATE OF CALIFORNIA ) ' ) ss. COUNTY OF I �ontel-e-( ) On JI n eccmheV (� «''303 ,before me, y(�'V ion r'i' (�'�D, KV,,wy Qj),,5 personally appeared -- personallykrown to-in,�-(ot-proved to me on the basis of satisfactory evidence) to be the persons)whose name(s)is/am subscribed to the within instrument and acknowledged to me that he/slue/4hey-executed the same in his/her/their authorized capacity(ies), and that by his/her-/their signature(g) on the instrument the person(g) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Z »»RAMON N. VALLEJO S �.. COMM.tf1357622 P '•k NOTARY PUBLIC EYCOCALIFORNIA P .I �, MON'rEREY COUNTY C 5,...».e...se.n.,MY»Co nE� kllwq 21.' Notary Public [SEAL] 'ra` Ci;jCjjGrj IT`! L GO, RECORDING REQUESTED BY AND r WHEN RECORDED MAIL TO: W ¢o z M ic n W T� yp Coachella Valley Housing Coalition a F $ Plaza 1, 45-701 Monroe Street, Suite G ® o s Indio CA 92201 51 M ¢ " i MAIL TAX STATEMENT TO: Same as above DOCUMENTARY TRANSFER TAX: None d �i����c�Jr•�L1 ��, QUITCLAIM DEED The purpose of this Quitclaim Deed is to evidence the cancellation and termination of the certain Lease Agreement entered into March 1, 1982, by and between the City of Palm Springs, Lessor, and Fredricks Development Corporation, a California corporation, Lessee, which Agreement was recorded March 22, 1982, as instrument No. 47803 of Official Records of Riverside County (the "Lease") . The purpose of this Quitclaim Deed is also to evidence the cancellation and termination of the covenants, conditions, and restrictions as set forth in the document recorded on October 22, 1982, as Instrument No. 182722, Official Records of Riverside County, and the covenants, conditions, and restrictions as set forth in the document recorded on February 28, 1983 , as Instrument No. 37066, Official Records of Riverside County (collectively the "CC&Rs") . The Grantors herein warrant that they are the successors in interest to Fredricks Development Corporation, a California corporation, and hereby relinquish any interest they may have in the Lease to the City of Palm Springs. The Grantors also relinquish any interest they may have in and under the CC&Rs. Dated: t '2— By: Its: By: Its Its: `=CTrNATTTRF.S MIIST RP A!•YTTnTJT n^ —1 ( STATE OF California Ga COUNTY OF Orange 1 On December 12 , 1991 , before me, Barbara Luisi , personally appeared - JAMESD. WHITE & PATRICK M. KELLY personally known to me (or proved to me on the basis of satisfactory evidence) to be thee-person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that the / executed the same _ eia authorized capacity (ies) , and that by their signa- tu e (s) on the instrument the person (s) , or the entity upon behalf ,E which the personyac , , executed the instrument. WITNESS my and and seal. s,�n°; OFFCIAZP'N.-AC'ALUISI �n3'�Ni""NOTANY PUBLIC CALIFORNIA i 0 n ORANGE COUNTY � fAy Comm Expires June 39,1995 r�V'�'4p'GCJ'G dry LI, ijb/ TO Amy Hodgett FROM : Judith Sumich, City Celrk SUBJECT : Fredricks Development - Agr 1696 and 1779 Your memo in response to the agreement tickler concerning insurance for Agreement 1696, would suggest that the insurance requirement is not being met. The limits required are substantially higher than those shown in your memo. The portion of the lease is attached showing the required limits. Your comments about Agr 1779 caused me to look at the agreement, and I have attached several pages from it. The first is from the Amendment and Restatement of the CC&Rs approved by the City February 23, 1983 by Resolution 14223 (the Grantor being Fredricks) ; the second is from the Amendment to Lease Agreement (1779), approved the same date, and although it refers to amendment of Article XI, Section B, it actually amends Article X, Section B (Article XI had neither a Section A or a Section B) ; and the third are two pages from the original Agr 1779 referring to the completion of improvements by October 1. 1986. Your memo indicates that the "lease specified that unless the improvements were completed by October 1 , 1986, it would expire. " Where is that language in, the document? It appears from my reading, that the lease is in default, .and Article X comes into play. This documentation is further complicated by the fact that a separate Agreement (No. 1895) was executed and recorded to enforcement Agreement 1779. I do not have a record link between Fredricks and Presley. If the desire is to consider Agreements 1779 and 1895 expired, terminated, nullified, or of no effect, I think there are other steps that must be documented and recorded, and the City Attorney should be consulted for legal framework. JUDITH SUMICH City Clerk cc: Director Community Development City Manager. y �69G- �� 7 C- CITE' OF PALM SPRINGS MEMORANDUM - DATE : January 20, 1987 R E C E 1 V E_D To , . _ Judy Sumich _ !AN 2 0 1987 FROM : Amy Hodget CITY ri ARV SUBJECT : Sunrise Village Agreement #, 1696. Insurance 1 have been advised by Fredricks Development',;iCompany,, ;the current' ' leaseholders on the Sunrise Village project,- that their' insurance coverage includes property damage insurance of $37,800, and personal; property, insurance of $5,000, and liability insurance of $l million. .:' They,:wi'll be sending me a Certificate of -Insurance, which I will .forward `to you., ;._ _ Agreement # 1779, for the vacant land_ at San Rafael 'and Sunrise- hasexpi,red. The lease specified that unless the _. improvements were completed by October 1, 1986, it would expire. The improvements were not completed, and Presley Development Company _has informed us they- have no wish to continue the lease. We are currently looking .for a new developer for this site. AH AH/hd cc: John Mangione 'r CITY OF PALM SPRINGS 05f�lll?-1i.w�w '�,���ii�l """"`" rrd„�9IV rYy}.1�i'^4F iJ by Cl Vd>IT7ioY"IInIYoI'a�'y9tlYp7`I UnILI""li''V le dg)g1' �..(�, c h uY7o wIr u7.1 a Isl,j `w �' lei el.. 'i. I� 'p� au Ip ) nlflil'u.ha' jv_,I Isla U 4�ntlol rohii9l-i11 1 nr17 _�c'o°Rd,N.�CNr ,S di"1r���dyLaJl "7 tl4oL: ILs'�h+.._' --`NAME AND ADDRESS OF AGENCY ,... COMPANIES.A�FORDING COVCIFJICCS .. "6 QED S. ^W@r~`N ] o� (3,0. OF CA COMPANY LETTER S' '� COMPANY O r" LETTER U � � NAME AND ADBRESS OF INSURED "'" COMPANY LETTER COMPANY v`. ,rs R'"' if5e.✓A sI•;3" ^'D LETTER COMPANY LETTER r=r' This is to certify that policies of insurance listed below have been Issued to the Insured named above and are in force at this time Notwithstanding any requirement, term or condition of any contract or other document with respect to which this certificate may be issued or may pertain,the insurance afforded by the polmies described herein is subject to all the terms exclusions and conditions of such policies. LIMITS OF LIABILITY NTHOUSANDS(000) --, iCOMPANY TYPE O F I NSURANCE POLICY NUMBER POLICY - LETTEa EXPIRATION DATE EACH AGGREGATE OCCURRENCE CENERAL LIABILITY BODILYINJURY s COMPREHENSIVE FORM ❑ PREMISES—OPERATIONS PROPERTY DAMAGE ❑ CO AND LLAAPSOENHAZAARD ❑ UNDERGROUND HAZARD ❑ O OPERATIONS HAZARD D ❑ PROPER INJURY AND GONTRACTUAL INSURANCE l PROPERTY DAMAGE - ❑ BROAD FORM PROPERTY COMBINED DAMAGE ❑ INDEP CONTRACTORS PERSONAL INJURY PERSONAL INJURY AUTOMOBILE LIABILITY BODILY INJURY ' ❑ (EACH PERSON) COMPREHENSIVE FORM ❑ BODILY INJURY _ OWNED (EACH ACCIDENT) $ ❑ HIRED PROPERTY DAMAGE $ ❑ NOW OWNED BODILY INJURY AND .. PROPERTY DAMAGE COMBINED EXCESS LIABILITY 7"=! BODILY INJURY AND .. UMBRELLA FORM PROPERTY DAMAGE ❑ FORM THAN UMBRELLA FORM COM BIIJ ED WORKERS'COMPENSATION S5 0 4 9 0 - _ !: jAP 733 /'ib�.l816 STATUTORY _— and EMPLOYERS'LIABILITY "Jc^E'FO (EACH ACCIDENT), DESCRIPTION OF OPERATIONSILOCATIONSJVEHICLES u-%J—L QIPERc'•9� IONS i «. OaRcella8i®R: Should any of the above described policies be cancelled before the expiration date thereof, the Issuing company well endeavor to mail_',S-k—days written notice to the below named certificate holder, but failure to mail such notice shall Im- - pose no obligation or liability of any kind upon the company L NAME AND ADDRESS OF CERTIFICATE HOLDER / C DATE ISSUED ci2. CITY OF PALM SPRINGS =u— P. 0. BOX 1786 1 = PALM SPRINGS CA. 92262 Elf ,ACORD 2511]0) II + . i f o ifx0 rsYadzl ytN or _ tl.' a141c31�altil ia'e is NAME AND ADDRESS OF AGENCY Gm: COMPANIES Art=®c®ouNs coarsPAGss ° :c- -f .l S ;J,rI dL..,..o a :O 8J; f:S-,?._:Cr COM PANY 0 . "... '.3 ail.l i_. i—i:{:d �' ,�,L,.V10 LETTER P.,i AiMOGEt..ES, CA 1a'00:30 COMPANY LETTER > r.w. 1 NANIE AND ADDRESS OF INSURED .... uwul COMPANY LETTER .ru 1_. E _C *i f C_R' GDMPANY �l ; aETINiT a .^bt wWa.{{ LETTER COMPANY � LETTER This is to carry o that y holes contractor insurance disedocument below have been Issued to the Insured named above and are e forcehe this time IJolwrt d by[ e any requirement, term or condition of any he term e other document with respect to which this certificate maybe issued or may pertain,the Insurance afforded by the policies described �r herein is subject to all the terms exclusions and conditions of such policies LIMITS OF LIABILITY IN THOUSANDS(OOO) —ew ] l', COMPANY POLICY �Xh+. bIY it LETTER TYPE OF INSURANCE POLICY NUMBER EXPIRATION DATE EACH ep„�.. AGGREGATE ,y( OCCURRENCE «exw GENERAL LIABILITY BODILY INJURY $ rlrn ❑ COMPREHENSIVE FORM 'V'LLI-I ❑ PREMISES—OPERATIONS $ gy'�a ❑ PROPERTY DAMAGE EXPLOSION AND CO I-" COLLAPSE HAZARD I �' ❑ UNDERGROUND HAZARD (3 ❑ OPEERATIONS HAZARDD ,�, ❑ CONTRACTUAL INSURANCE BODILY INJURY AND ^ PROPERTY DAMAGE ❑ BDROAADD FORM PROPERTY COMBINED t ❑ w }. INDEP CONTRACTORS ❑ PERSONAL INJURY PERSONAL INJURY �... � - AUTOMOBILE LIABILITY BODILY INJURY $ (EACH PERSON) - — .wu .- - ❑ COMPREHENSIVE FORM BODILY❑ INJURY OWNED (EACH ACCIDENT) -- ❑ HIRED PROPERTY DAMAGE NON OWNED BODILY INJURY AND w,r,,, ❑ PROPERTY DAMAGE i•,"'- "�"'"" „� COMBINED EXCESS LIABILITY BODILY INJURY AND may' ❑ UMBRELLA FORM PROPERTY DAMAGE ❑ OTHER THAN UMBRELLA S S � FORM COMBINED +kMR=! 1} WORKERS'COMPENSATION r,..,.� STATUTORY and EMPLOYERS' LIABILITY '. $ C (EACHACCIDENT)�*'� OTHER i•,, "PI'r DESCRIPTION OF OPERATIONSILOCATIONSIVEHICLES It «'r ALL OPERATIONS OF TI3E NAMED INSURED 'z OaRcellation: Should any of the above described policies be cancelled before the expiration date thereof, the issuing coiTo'any will endeavor to mall 30 days written notice to the below named certificate holder,Ent fahl}-�f,p'y's�J;'m�.tl stltn no -tice shall im t.a.i ,ar pose no obligation or liability of any kind upon the company. - OF nrl'I`�r'tr"°` NAME AND ADDRESS OF CERTIFICATE HOLDER "3 J, /Z/8 4 DATE ISSUED n 0 T City of Palm Springs 1�f r P. 0. Box 1786 W Palm Springs, CA. ' YS AUTF{,ORIZ�D REPRESENTATIVE •`,�S:;yS ram." ACERB 25(t 797 4 L l,MF c'!,, i RA..a jl, R` blrl,77 !l I r,VS I, AP I P T l Fj-10,A III llr' I'It) In 5 1 i;I�j 7 1 irl Ur 1" 1 7-51;' Utj 10-1 It't1l E111L Uo r I,Sl I YF ,.j�d�0 t; o fr 141 1 r j o, II*: f YE. SJ C?B D 1-11 D I rl r I I N I I I I I 11A. L I I ai E I L NAML AND ADDRESS OF AGFN(-Y Z PAN E—zo Z-'1l1T-0O`iO4P G FRED S. JAMES & CO. 3435 WILSHIRE BLVD. a 27*h FLOOR coonPANY Fremont Indemnity Co. LOS ANGELES, CA. 90010 385.0545 L j NAME AND ADDRESS OF INSURED 1 1:11,irR PA19Y Fredricks Development Corp. rL,EI P-I P.O.Box 4138 FTTFA Santa Ana, California 92702 1— COrr At Y IF I TT7 I This is to celhBy that policies of lnsuranco fisted Him%,hav,,been issued to the lnsuradnemed abwe and ane in force at this time Itle-,witilstand!nl.@nyrequi[ement,torniorcciidition of arry call tractor o,he, document with Uesuccttowhich dhiscertificite may be Issued of rl,�, Eciern, he insurance afforded by the policir.sclesenlRed heroin is subject t,0all ths, Terms, nclusion5 and conditions Of Such Policies -Mcir-ai-ids COMPANY E POLICY NUMSER Fill ICY —A E LEIFER TYPE OF NSUYANC FXPIRAILON DATE 'CII -AGIGPECATE Oc 1111 � BODILY INJURY $ 5 5 ❑ COIAPIEI IENIDVE FORM ❑ PROJISFS—OPERAI IONS PROPEPTY DAMAGE r 5 ❑ F .PLOSION ADD COU AP9F ❑ UNDERGROUND DERGR(FUND A7ARD ❑ `[A)DUCTS,COWPLETEC OPLOATIONI, HAZARD D' 0 US AMID D❑ Y'RIPI�IITYRA`SAI'�E❑CONTRACTUAL INSURANCE BROAD FORM PROLFWY COMBIGIED 0AWGIF INPEPFLJOEPT CONTRACTORS ❑ PjRSONAL INJURY PERSONAL INLUPY E f j I l)11:1 W l.I I L G.11 L 11.0 2 Y BODILY VJU1IRY' ❑ COMPREHENSIVE FOkE` (EACH P[RSO L BODILY INJURY ❑ 0\%NED (EACH ACC BE ❑ HIRED PROPERTY 0ANACE _.___., ❑ NOR OWNED _- -____—_.___.__PROPERTY ODILY INJORY AND PROPERTY DAr11AGF COMBINED BODILY INJURY AND ❑ UMBRELLA LOW PROPERTY DAMAGE El OTHER THAN JMOREL LA CONIBINFD S[Al-JUDRY A WP 83 073849 1 1/1/84 Y2,000, �1111�CC DENT� DESCoff'11ON OF O-EP�AFIOF']S/LOCATIONSN,;IICLES Job: Tract 17642-2. N1W Corner San Rafael & Sunrise, Palm Springs, Ca. 11,I)OUld any Of the above clpscrii)0 uoIlclCs be rroloi- the c• pjratlon date'Llre(C.Ofr lI(B RFSOIFIE- CLOD- pally will xxkxxxxx) mall -10, dl"/Is �,,,i it[cr, :irlic, Lo the bolos,, named cei,6 L:Latc holdci, IXat Xkxxxx F-AP-DADOP,ESSOFCEPTIFI'ATEI,IOLDLR January 5, 19831 % City of Palm Springs WE ISSUED P.O.Box 1786 Palm Springs, California Oy AUTHORIZED qLPIRLSEN T I(,�11 Attn: Tom Lynch !,CORD 25(1 79) Frc-dricks Dcvel.opmenr_ Corporation WHEN RECORDED MAIL TO: Fredricks Development Corporation 18 Brook'hol.low Drive Amended Agr 1779, & Restmnt Santa Au;-A, California 92705 of CCRs with Fredricks Dev. AGREEMENT 1779 RESTATED Attention: Nancy M. H.ar.lan Res 14523, 2-23-83 AMENDMENT AND RESTATEMENT OF DECLARATION OF COVENANTS , CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS FOR SUNRISE NORTE TABLE OF CONTENTS Description Page Number Recitals 1 Declaration 2 Article One Definitions 2 Article Two Annexation of Additional Properties 6 Article Three Common Area - Permitted Use and Restrictions 7 Article Four Membership in Association 11 Article Five Voting Rights in Association 11 Article Six Jurisdiction of Association 12 Article Seven Covenant for Maintenance Assessment 15 Article Eight Collection of Assessments , Liens and 18 Power of Sale Article Nine Architectural and Landscape Committee 20 Article Ten. Maintenance and Repair Obligations 24 Article Eleven Use Restrictions 25 Article Twelve Damage , Destruction or Condemnation of 28 Common Area Article Thirteen Insurance 29 Article Fourteen Mortgagee Protection Clause 31. Article Fifteen Party Walls or Fences 33 Article Sixteen Association Action , Meetings and Liability 34 Article Seventeen Restrictions on Resale 36 Article Eighteen General Provisions 38 AMENDMENT AND RESTATEMENT OF DECLARATION OF COVENANTS , CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS FOR SUNRISE NORTE RIVERSIDE COUNTY THIS DECLARATION is made on the 14th day of February, 1982 , by FREDRICKS DEVELOPMENT CORPORATION, a California corporation, hereafter referred to as "Grantor" and the City of Palm Springs , hereafter referred to as "City" . Grantor and City hereby cancel , rescind and revoke the Declaration of Covenants , Conditions and Restrictions of Easements for Sunrise Norte made on October 8 , 1982 and recorded on October 22 , 1982 in Book 1982 , Page 182722 of the Official Records of the Riverside County Recorder ( "Original Declaration" ) and hereby amend and restate the terms of the Original Declaration. RECITALS A. City is the owner of real property located in the County of Riverside , State of California, described as follows : Lots 8 and 9 of Tract No. 17642-1 in the City of Palm Springs , County of Riverside , State of California, as shown on the Map recorded in Book 122 , pages 88 , 89 and 90 of Maps , in the Office of the Riverside County Recorder. B. Grantor has leased Lots 8 and 9 of Tract 17642-1 for a term of fifty ( 50 ) years. The term of the Lease is March 1 , 1982 , to 12:01 A.M. , Pacific Standard Time , on March 1 , 2032 . The Lease was recorded on March 22 , 1982 , in Book 1982 , page 47803 , in the Official Records of the Riverside County Recorder (the "Lease" ) . C. The Desert Water Agency is the owner of real property located in the County of Riverside , State of California, described as follows: Lots 2 and 3 of Tract 17642-1 in the City of Palm Springs, County of Riverside , State of California, as shown on the Map recorded in Book 122 , pages 88 , 89 and 90 of Maps, in the Office of the Riverside County Recorder. D. Grantor has leased Lot 2 of Tract 17642-1 from the Desert Water Agency for a term of ten ( 10 ) years. The term of the Lease is from May 1 , 1982 , to April 30 , 1992 . The Lease was recorded on July 21 , 1982 , as Instrument No. 124609 , in the Official Records of the Riverside County Recorder. The Desert Water Agency granted Grantor non-exclusive easement and right of way in, on, under, over and across Lot 3 . The easement was recorded on July 6 , 1982 , as Instrument No. 115172 , of the Official Records ofoe Riverside County Recorder. E. All of the real property described in Recitals A through D; that is , Lots 2 , 3 , 8 and 9 of Tract 17642-1 and Lots 4 , 5 , 6 , and 7 of Tract 17642-1 , as shown on the Subdivision Map recorded on November 18 , 1981 , in Book 122 , Pages 88 through 90 , inclusive , in the Office of the Riverside County Recorder, shall hereinafter be referred to as the "Subdivision" . F. City and Grantor have deemed it desirable for efficient preservation of the value , desirability and attractiveness of the Subdivision to create a corporation under the Non-profit Mutual Benefit Corporation Lava of the State of California , which shall be called the SUNRISE NORTE HOMEOWNERS ASSOCIATION ( "Associa- tion" ) . The Association will be formed for the purposes of and be delegated and assigned the powers of ( 1) acquiring , constructing , managing , owning , maintaining and administering the property of the Association for the private use of its members and authorized guests , ( 2) administering and enforcing these Covenants , Conditions and Restrictions and Reservation of Easements , the Articles of In- corporation, the By-Laws , the Rules and Regulations , and the Lease, and ( 3) collecting and disbursing assessments , lease payments and charges created in this Declaration and the Lease. DECLARATION City and Grantor hereby declare that until the termination of the Lease , the property is , and shall be , held , sold , conveyed , transferred , hypothecated , encumbered , leased , rented , used , oc- cupied and improved subject to the following limitations , cove- nants , conditions , restrictions , easements, liens , charges and equitable servitudes (all of which shall be collectively referred to as "Servitudes" ) . The Servitudes are declared in furtherance of a plan for the subdivision, improvement, protection, maintenance and use of the Subdivision and are established for the purpose of enhancing and perfecting the value , attractiveness and desirability of the Subdivision. The Servitudes shall run with the land and shall be binding upon all persons having or acquiring any right, title or interest in the Subdivision, or any portion of the Subdivision. The Servitudes shall be for the benefit of and enforceable by the Grantor and all persons having or acquiring any right, title or interest in the Subdivision, or any portion of the Subdivision. ARTICLE ONE DEFINITIONS Unless otherwise provided , the following words and phrases when used in this Declaration shall have the following meaning. Section 1 .01 "Annexable Area" shall mean all of Lots 4 , 5 , 6 , 7 , 8 and 9 of Tract 17642-1 , as shown on the Subdivision Map recorded on November 18 , 1981 , in Book 122 , Pages 88 to 90 , inclusive , in the Office of the Riverside County Recorder, except Phase One , which is defined herein. Section 1.02 "Architectural Committee" or "Committee" shall mean the architectural and landscape committee created pursuant to Article Nine of this Declaration. Section 1 .03 "Architectural Committee Rules" or "Committee Rules" shall mean and refer to the rules , regulations and guide- lines as adopted , amended and repealed from time to time by the Architectural Committee pursuant to Article Nine. Section 1. 04 "Articles" shall mean the Articles of Incorpor- ation of the Association filed , or to be filed , in the office of the Secretary of State of the State of California, as amended from time to time. Section 1 .05 "Assessment , Capital Improvement" shall mean a charge against each Owner and the Owner' s Lot , representing a por- tion of the cost to the Association for installation or construction of any Improvements on any portion of the Common Area which the Association may from time to time authorize , pursuant to the provisions of this Declaration. Section 1 .06 "Assessment , Common" shall mean the annual charge against each Owner and the Owner ' s Lot, representing each Owner' s proportionate share of the lease payment due under the Lease and representing a portion of the total of the ordinary costs of maintaining, improving , repairing , replacing , managing and operating the Association and the Common Area, which are to be paid uniformly by each Owner to the Association, as provided in this Declaration. Section 1 .07 "Assessment , Reconstruction" shall mean a charge against each Owner and the Owner' s Lot , representing a portion of the cost to the Association for reconstruction of any portion of the Improvements on the Common Area, pursuant to the provisions of this Declaration. Section 1 .08 "Association" shall mean SUNRISE NORTE HOME- OWNERS ASSOCIATION, a corporation formed under the Non-profit -2- Mutual Benefit Corporation Law of the State of California, its successors and assigns. Section_ 1 .09 "Beneficiary" shall mean a mortgagee under a mortgage or a beneficiary under a deed of trust, as the case may be, and the assignees of such mortgagee or beneficiary. Section 1.10 "Board" or "Board of Directors" shall mean the Board of Directors of the Association , elected in accordance with the By-Laws of the Association. Section 1 .11 "By-Laws" shall mean the By-Laws of the Associa- tion, as may be amended by the members of the Association from time to time. Section 1 .12 "City" shall mean the City of Palm Springs , State of Caliornia. Section 1 .13 "Close of Escrow" shall mean the date on which a deed or other such instrument conveying a Lot is recorded. Section 1 .14 "Common Area" shall mean all the real prop- erty and Improvements including , without limitation, landscape areas and private roadways , streets and walkways, which are at any time owned by the Association , or over which the Association has an easement, for the common use and enjoyment of all Owners , as further provided in Article Three of this Declaration. The Common Area to be conveyed to the Association prior to, or con- currently with , the first conveyance of a Lot to an Owner other than Grantor is the Grantor' s interest in the real property described as follows : Lots A through F, inclusive , and Lot 1 and the easements over roadways of Tract 17642-2 in the County of Riverside, State of California, as shown on the Subdivision Map recorded on March 29 , 1982 , in Book 124 , Pages 27 and 28 , inclusive , Maps , in the Office of the Riverside County Recorder , and Lots 2 and 3 of Tract 17642-1 , in the County of Riverside , State of California, as shown on the Sub- division Map recorded on :November 18 , 1981 , in Book 122 , pages 88 through 90 , inclusive , in the Office of the Riverside County Recorder. Section 1 .14(b) "Common Expenses" shall mean the actual and estimated costs of : maintenance , management, operation, repair and replacement of the Common ,Area ( including unpaid Special Assessments, Reconstruction Assessments and Capital Improvement Assessments) , including those costs not paid by the Owner responsible for payment; the costs of any commonly metered utilities and other commonly metered charges for the Properties; costs of management and administration of the Association including, but not limited to, compensation paid by the Association to managers , accountants , attorneys and other employees; the costs of all utilities , gardening , trash pick-up and other services benefiting the Common Area; costs of maintaining clustered mailboxes; the costs of fire, casualty and liability insurance, worker' s compensation insurance , and other insurance all covering the Properties ; the costs of bonding the members of the management body; taxes paid by the Association; amounts paid by the Association for discharge of any lien or encumbrance levied against the Properties, or portions thereof; and the costs of any other item or items designated by the Association for any reason whatsoever in connection with the Properties , for the benefit of all of the Owners . Section 1.15 "County" shall mean the County of Riverside, State of California. Section 1 .16 "Declaration" shall mean this instrument , as it may be amended from time to time. Section 1 .17 "Deed" shall mean Assignment of Leasehold In- terestt,Bill of Sale , Grant Deed or other instrument assigning a leasehold interest and/or transferring title to a manufactured unit. -3- Section 1 .18 "Deed of Trust" shall mean a mortgage or a deed of trust , as the case may be. Section 1 .19 "Dwelling Unit" shall mean a single-family de- tached manufactured residence located on a Lot designed and in- tended for use and occupancy as a residence by a single family. Section 1. 20 "First Mortgagee" shall mean the holder of a first mortgage or first deed of trust that is prior to or superior to all other mortgages or deeds of trust recorded on any Lot in the Subdivision, and it shall mean the California Homeownership Assistance Program as holder of an All Inclusive Deed of Trust recorded on any lot. Where the term "eligible First Mortgagee" is used in this Declaration or in the By-Laws , it shall mean those First Mortgagees who have filed a written request with the Association requesting notice of the actions set forth in the sections using that term and identifying the name and address of the First Mortgagee and the address of the Lot for which the First Mortgagee claims its right. Section 1 .21 "Grantor" shall mean Fredricks Development Corporation , a California corporation, its successors and assigns. Section 1 .22 "Improvement" shall mean any structure and any appurtenance of every type and ]rind including , but not limited to, buildings , outbuildings , walkways , sprinker pipes , garages , gaze- bos , barbecue pits , recreational facilities , roads , driveways, parking areas, fences, screening walls , retaining walls , stairs , decks , landscaping, antennae , hedges , windbreaks , plantings, planted trees and shrubs , poles and signs . Section 1. 23 "Leasehold Title" shall mean any interest in any Lot in the Subdivision taken under or pursuant to the Lease between Grantor and City including any amendments to the Lease recorded on or before the Close of Escrow for the sale or transfer of the first Lot in the Subdivision. Section 1 .24 "Lot" shall mean any residential lot or residen- tial parcel of land shown upon any recorded Subdivision map, Tract Map or Parcel map of the Subdivision , with the exception of the Common Area and areas dedicated to and accepted by any state or local public authority. Section 1 .25 "Manager" shall mean any person appointed by the Association under this Declaration as its agent and delegated cer- tain duties, powers or functions of the Association , as further provided in this Declaration and in the By-Laws. Section 1 .26 "Member" shall mean any person holding a member- ship in the Association, as provided in this Declaration. Section 1 .27 "Mortgage" shall mean any mortgage , deed of trust, all-inclusive trust deed or other conveyance of an interest in a Lot or other portion of the Properties to secure the perform- ance of an obligation, which will be reconveyed upon the completion of such performance. The term "Deed of Trust" or "Trust Deed" when used shall be synonymous with the term "Mortgage. " Section 1 .28 "Mortgagee" shall mean a person or entity to whom a Mortgage is made and shall include the beneficiary of a Deed of Trust; "Mortgagor" shall mean a person who mortgages his or her 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" and the term "Bene- ficiary" shall be synonymous with the term "Mortgagee" . Section 1 .29 "Notice and Hearing" shall mean written notice and a public hearing before a forum appointed by the Board , at which the Owner or Owners concerned shall have an opportunity to be heard in person, or by counsel at Owner' s expense , in the manner further provided in the By-Laws . For purposes of Article Nine , the forum shall be the Architectural Committee unless other- wise specified . Written notice shall be given by delivering it to the Owner personally fifteen ( 15 ) days before the hearing or by depositing it in the United States mail twenty ( 20 ) days before the hearing , registered , postage prepaid and addressed to the -4- Owner at the Owner' s Lot or at such other address as the Owner shall submit in writing to the Association. Section 1 .30 "Office of County Recorder" shall mean the Of- fice of the County Recorder for the County of Riverside , State of California. Section 1 .31 "Owner" or "Co-Owner" shall mean the Person or Persons , including Grantor, holding Leasehold Title of record to any Lot which is a part of the Subdivision, including sellers under executory contracts of sale but excluding those having such interest- merely as security for the performance of an obligation. Section 1. 32 "Owner' s Property" shall mean the Owner' s h leaseold interest in a Lot , the Dwelling Unit on Owner' s Lot and Improvements on Owner' s Lot, and the term shall include the real and personal property included in those definitions or any other personal property on Owner' s Lot belonging to Owner. it shall also mean fencing and landscaping including, without limita- tion , shrubs , trees , grass and other plantings . Section 1 .33 "Person" shall mean a natural individual , a corporation or any other entity with the legal right to hold title to real property. Section 1.34 "Phase of Development" shall mean a portion of the Subdivision for which a Final Subsion Public Report has been issued by the California Department of Real Estate. Section 1.35 "Phase One" shall mean Lots A-F and Lots 1 through 54 , inclusive , of Tract 17642-2 , as shown on the Subdivi- sion Map recorded on March 29 , 1982 , in Book 124 , Pages 27 and 28 , inclusive , of Maps , in the Office of the County Recorder, and Lots 2 and 3 of Tract 17642-1 , as shown on the Subdivision Map recorded on November 18 , 1981 , in Book 122 , Pages 88 to 90 , inclusive , in the Office of the Riverside County Recorder. Section 1 .36 "Public Report" shall mean the public report issued by the California Department of Real Estate. Section 1 .37 "Purchaser" or "Contract Purchaser" shall mean a person or persons buying or giving consideration for a Dwelling Unit and a leasehold interest in the Subdivision. Section 1. 38 "Record" ; "Recorded" ; "Filed" ; or "Recordation" shall mean, with respect to any document, the recordation or filing of such document in the Office of the County Recorder of the County of Riverside , State of California. Section 1.39 "Rules and Regulations" shall mean the rules and regulations adopted by the Board pursuant to this Declaration, as they may be amended from time to time. Section 1 .40 "Sale" , "Transfer" , "Sale or Transfer of Fee Interest" , "Fee Simple Title" shall mean an assignment of lease- hold interest and sale of the manufactured Dwelling Unit. Nothing in this Declaration shall be construed to allow any person to transfer, sell or obtain rights in or to the Subdivision or portion of the Subdivision greater than the rights of Grantor under the Lease . Section 1.41 "Servitudes" shall mean this Declaration and the Rules and Regulations of the Association, as amended from time to time. Section 1 .42 "Subdivision" shall mean all of the Phase One , together with such portion of the Annexable Area as defined in Section 1. 01, with respect to which a Notice of Addition of Territory may be recorded subjecting it to this Declaration and to the jurisdiction of the Association , as provided in this Declaration. Section 1 . 43 "Supplemental Declaration" shall mean any de- claration of covenants , conditions and restrictions and reservation -5- of easements or similar document supplementing this Declaration which may be recorded pursuant to Article Two of this Declaration. ARTICLE TWO ANNEXATION OF ADDITIONAL PROPERTIES Section 2 .01 Subdivision and Development by Grantor. Grantor intends to develop the Subdivision for residential use and , at Grantor' s option, to designate some of the areas for maintenance , recreational or other purposes for the benefit of the developed areas, in accordance with Grantor' s development plan. As each Phase of Development is annexed to the Subdivision, Grantor may, with respect to the annexation , record one or more Supplemental Declarations which will incorporate this Declaration by reference , designate the use classifications within the areas affected , and may supplement this Declaration with such additional covenants, conditions , restrictions and land uses as Grantor may deem appropriate for that Phase of Development. If Grantor elects to subject such areas to this Declaration, the provisions of any Supplemental Declaration shall not conflict with the provisions of this Declaration but may impose such further or more restrictive conditions , covenants , restrictions , land uses and limitations as Grantor may deem advisable , taking into account the particular requirements of each Phase of Development. This Declaration shall control , in the event of any conflict between any Supplemental Declaration and the provisions of this Declara- tion, although the documents shall be construed to be consistent- to the extent possible. As each Phase of Development is annexed to the Subdivision, control over the completed Common Area , if any, shall be transferred to the Association in accordance with the provisions of this Declaration. Section 2.02 Annexation. ( a) Grantor may, at any time or from time to time, add to the Subdivision, which is subject to this Declaration, all or any portion of the Annexable Area then leased by Grantor by re- cording a Notice of Addition of Territory with respect to the real property to be annexed ( "Added Territory" ) , provided that the Federal Housing Authority ( "FHA" ) determine that the annexation is in accord with the general plan heretofore approved by them. If any proposed annexation under this Section 2 . 02 shall not be effected prior to the third anniversary of the original issuance of the most recently issued Final Public Report for a Phase of Development of the Subdivision, then such annexation shall further require the vote or written consent of Members representing at least two-thirds ( 2/3rds) of the voting power -residing in Members other than Grantor and two-thirds ( 2/3rds) of the voting power of Class B or the voting power of the total Association if Class B no longer exists , pursuant to Section 5 .01. (b) Upon the recording of a Notice of Addition of Territory containing the provisions set forth in this Declaration (which notice may be contained within the Supplemental Declaration affecting any Added Territory) , the Servitudes contained in this Declaration shall apply to the Added Territory in the same manner as if it were originally subject to this Declaration and originally constituted a portion of the Subdivision; and thereafter the rights , privileges, duties and liabilities of the Owners , lessees and occupants of Lots within the Added Territory shall be the same as in the case of the Lots originally subject to this Declara- tion. No Notice of Addition of Territory shall have the direct effect of substantially increasing the Common Assessments provided for in this Declaration or substantially overburdening the Common Area amenities , unless an appropriate adjustment is made in the manner by which Common Assessments are computed with respect to the real property added by Notice of Addition of Territory. ( c) The Notice of Addition of Territory referred to in this Declaration shall contain at least the following provisions : ( i ) A reference to this Declaration, which -6- reference shall state the date of recordation and the book or books of the records of the County, and the page numbers where this Declaration is recorded; ( ii) A statement that the provisions of this Declaration shall apply to the Added Territory; ( iii) An exact description of the Added Territory; and ( iv) A description of the Common Area , if any, located in the Added Territory. (d) For so long as Grantor has the right to annex real prop- erty to the Subdivision without the approval of the Members re- presenting at least two-thirds ( 2/3rds ) of the voting power resid- ing in Members other than Grantor, each Notice of Addition of Territory relative to real property owned by Grantor may be signed only by Grantor. From and after the date on which any annexation shall require such approval , each Notice of Annexation must also be signed by at least two ( 2 ) officers of the Association certify- ing that the vote or written consent required by Section 2 .02(a) has been given. (e) Grantor and City may delete all or a portion of a Phase of Development from coverage of this Declaration and the jurisdiction of the Association, provided that: ( 1) a Notice of Deletion of Territory executed by the City and the Grantor is recorded in the Office of the County Recorder in the same manner as the applicable Notice of Addition of Territory was recorded, ( 2) Grantor has not exercised any Association vote with respect to any portion of that Phase of Development, ( 3 ) assessments have not yet commenced with respect to any portion of that Phase of Development, ( 4 ) no escrow has closed for any Lot in that Phase of Development for which a Final Subdivision Public Re- port is required , and ( 5 ) the Association has not made any expenditures or incurred any obligations with respect to any portion of that Phase of Development. If Grantor has not record- ed a Notice of Addition of Territory for all of the Annexable Area by October 1 , 1986 , the City may delete all or a portion of a Phase of Development by recording a Notice of Deletion of Territory executed by the City provided that requirements ( 2) through ( 4) above have been met. ARTICLE THREE COMMON AREA - PERMITTED USE AND RESTRICTIONS Section 3 .01 Owners ' Rights of Enjoyment. Every Owner and ; to the extent permitted by the Owner; the Owner' s family, guests , invitees , lessees, and contract purchasers who reside in the Owner' s Dwelling Unit, shall have a non-exclusive easement of ingress, egress , use and enjoyment in, to and over the Common Area which shall be appurtenant to and shall pass with Leasehold Title to every Lot, subject to the following provisions : ( a) The right of Grantor to annex additional Common Area and Annexable Area pursuant to the terms of Article Two of this Declaration. (b) The right of the Association to reasonably limit the number of guests using the Common Area. ( c) The right of the Association , acting through the Board , to establish uniform Rules and Regulations pertaining to the use of the Common Area including , but not limited to, the right and obligation of the Association to enforce all parking restrictions within the Common Area , as set forth in Section 3 .03 of this Declaration. ( d ) The right of the Association , in accordance with the Articles , By-Laws and this Declaration , with the vote or written assent- of a majority of the voting power residing in Members other -7- than Grantor pursuant to Article Five , Section 5 . 01 , to borrow money for the purpose of improving the Common Area and facilities and subject to the provisions of Article Fourteen of this Declara- tion, to mortgage, pledge , deed in trust, or hypothecate any or all of its interest in and to real or personal property as security for money borrowed or debts incurred . Notwithstanding the fore- going , the Board shall not incur aggregate expenditures for capital improvements to the Common Area in any fiscal year in excess of five percent (5% ) of the budgeted gross expenses of the Association for the fiscal year, except with the vote or written assent of a majority of the voting power of the Association residing in its Members other than Grantor pursuant to Article Five, Section 5 . 01. (e) Subject to the provisions of Article Fourteen of this Declaration , the right of the Association to dedicate , release, alienate or transfer its interest in and to the Common Area to any public agency, authority, utility or other Person pursuant to Section 6 .01(d) . ( f) The right of Grantor ( and its salesagents, representa- tives and customers) , to the non-exclusive use of the Common Area and any facilities of the Common Area , without cost; for sales , display, resale , leasing , access, ingress , egress , and exhibit purposes , which right Grantor hereby reserves , in order to dispose of the Lots as provided in this Declaration, until the Close of Escrow for the sale of all of the Lots in the Subdivision. Provided , however, that such use shall not unreasonably interfere with the rights of enjoyment of the Owners , as provided in this Declaration. (g) The right of the Board after Notice and Hearing pursuant to California Corporations Code , Section 7341 , and applicable pro- visions of the By-Laws , to suspend the voting rights and easements of use and enjoyment of any Member, and Persons deriving such rights and easements from that Member, for the facilities located on the Common Area, for violation of the provisions of this Declara- tion, the By-Laws , the Articles or Rules and Regulations , or for any period during which the payment of any Common or Capital Improvement Assessment against that Member and that Member' s Lot remains delinquent. It being understood that any suspension for either non-payment of any Assessment or breach of such Restrictions shall not constitute a waiver or discharge of the Member' s obliga- tion to pay Assessments , as provided in this Declaration. (h) The rights and reservations of Grantor as set forth in Section 3 .11. ( i) The right of the Association (by action of the Board ) to reconstruct , replace or refinish all or any part of any Improvement upon the Common Area , in accordance with the original design, finish or standard of construction of that Improvement or of the general Improvements within the Subdivision, as the case may be . If the re- construction, replacement or refinishing is not in accordance with the original design, finish or standard of construction, it can only be done with the vote or written consent of the Owners holding two- thirds ( 2/3rds) of the voting power of the Association. ( j ) The right of the Association to replace destroyed trees or other vegetation and plant trees , shrubs and ground cover upon any portion of the Common Area. (k) The right of the Association, acting through the Board , to reasonably restrict access to the Common Area. Section 3 .02 . Delegation of Use. Any Owner may delegate their right of enjoyment of the Common Area and facilities to the members of their family, tenants or contract purchasers who reside in their Dwelling Unit . All delegations shall be in accordance with the By-Laws and subject to reasonable regulation by the Board. The rights and duties of the Owner shall inure to, and bind any and all of , the Owner' s delegates including , without limitation, the rights and duties under this Article , Article Nine, Ten and Eleven. Provided , however, that the delegating Owner shall not be entitled to the use and enjoyment of the Common Area facilities during the term of any delegation to contract purchasers or tenants „ -s- Section 3 .03 Easements for Parking . Subject to Grantor' s reservation of Nights set forth in Article Two of this Declaration, temporary guest or -recreational parking shall be permitted within the Common Area only if there are clearly marked parking spaces in the Common Area and then only within spaces and areas clearly marked for this purpose. The Association, through its officers, committees and agents , may establish "parking" , "guest parking" and "no parking" areas within the Common Area, if any, in accord- ance with Section 22658 of the California Vehicle Code, or any similar statute , as well as to enforce those parking limitations by all means lawful for such enforcement on county streets , includ- ing the removal of any -violating vehicles by those so empowered. Section 3 . 04 Easements for Vehicular Traffic. In addition to the general easements for use of the Common Area reserved in this Declaration, there shall be , and Grantor hereby reserves and covenants for itself and all future Owners within the Properties, non-exclusive easements appurtenant for vehicular traffic over all streets within the Subdivision, subject to the parking pro- visions set forth in Section 3 .03 . Grantor reserves the right to grant similar easements to Owners of Lots in the Annexable Area pursuant to Article Two of this Declaration. Section 3 . 05 Easements for City and County Public Service Use . In addition to the forgoing easements over the Common Area , there shall be , and Grantor hereby reserves and covenants for itself and all future Owners within the Subdivision, easements for public services of the City and County including, but not limited to, the right of the police to enter upon any part of the Common Area for the purpose of enforcing the law. Section 3 .06 Waiver of Use . No Owner may exempt themself from personal liability for assessments duly levied by the Associa- tion, or release the Lot or other property owned by that Owner from the liens and charges of the Association or this Declaration by waiver of the use and enjoyment of the Common Area or by abandonment of that Owner' s Lot or any other property in the Subdivision. Section 3 . 07 Title to the Common Area. Grantor hereby covenants for itself, its successors and assigns , that it will convey to the Association Leasehold Title in and to the Common Area described in Article One , Section 1 .14 , of this Declaration, free and clear of any and all encumbrances and liens , but subject to reservations, easements , covenants , and conditions then of record including those set forth in this Declaration. That conveyance shall be made prior to Close of Escrow for the sale of the first Lot to a purchaser from Grantor pursuant to a Final Public Report covering Phase One. As each Phase of Development in the Properties is developed , Grantor covenants for itself, its successors and assigns that it will similarly convey or cause to be conveyed , a Leasehold Title or by easement, any Common Area designated as such in any Notice of Addition of Territory for such Phase of Development. Section 3 . 08 Drainage and Utility Easements . Notwithstand- ing anything in this Declaration, express or implied , to the contrary, this Declaration shall be subject to all easements granted by Grantor for the installation and maintenance of util- ities and drainage facilities that are necessary for the develop- ment of the Subdivision. In addition, Grantor hereby reserves the right to grant additional easements and rights of way over the Subdivision (excluding those Lots Grantor has already then assigned or conveyed to a Purchaser) to third parties , utility companies and public agencies for the purpose of constructing , erecting , operating or maintaining lines , cables , wires , conduits , or other devices for electricity, cable television, power, telephone and other purposes; public sewers , storm water drains and pipes; water systems; sprinkling systems; water, heating and gas lines or pipes; and any similar public or quasi-public improvements or facilities. Each purchaser, in accepting an instrument transfer- ring a leasehold interest in and to a Lot, expressly consents to such easements , as necessary, for the proper development of the Subdivision until close of escrow for the sale of the last -9- Lot in the Subdivision or five ( 5 ) years from the Close of Escrow for the first Lot sold in the Subdivision, whichever occurs first. Section 3 .09 Landscape Easement . An easement is hereby re- served to the Association, its contractors and agents , to enter those portions of Lots contiguous to the Common Area and not enclosed by fences for the purpose of maintaining , replacing and restoring exterior landscaping . Such landscaping activity shall include , by way of illustration and not of limitation, the mowing of lawns , irrigating , tree and shrub trimming and pruning , seasonal planting and such other landscaping activities within the Prop- erties as the Assocation shall determine is necessary from time to time. Section 3 .10 Minor Encroachments. If any portion of the Common Area encroaches on any Lot or if any portion of a Dwelling Unit encroaches on the Common Area due to the unwillful placement, setting, shifting or construction of an Improvement, a valid easement exists for such encroachment and for the maintenance of it as long as it remains, and , all Lots and the Common Area are made subject to such easement. Section 3 .11 Grantor' s Rights and Reservations . Grantor or its successors or assigns intends, but shall not be obligated to undertake the work of constructing Dwelling Units and developing all of the Lots included within the Properties. The completion of that work and sale , rental and other disposal of Dwelling Units is essential to the establishment and welfare of the Properties as a first-class residential community. As used in this Article and its subparagraphs , the words " its successors or assigns" specifically do not include purchasers of Lots improved with completed Dwelling Units. In order that such work may be completed and the Properties be established as a fully occupied residential community as rapidly as possible , no Owner nor the Association shall do anything to interfere with , and nothing in this Declaration shall be understood or construed to: (a) Prevent Grantor, its successors or assigns, or its or their contractors or subcontractors, from doing on any Lot owned by them whatever they determine to be necessaary or advisable in connection with the completion of such work, including without limitation the alteration of construction plans and designs as Grantor deems advisable in the course of development; or ( b) Prevent Grantor, its successors or assigns, or its or their representatives, from erecting , constructing and maintaining on any portion of the Properties owned or controlled by Grantor or its successors or assigns or its or their contractors or sub- contractors , such structures as may be reasonably necessary for the conduct of its or their business of completing such work and establishing the Properties as a residential community and disposing of the same by sale , lease or otherwise; or ( c) Prevent Grantor, its successors or assigns , or its or their contractors or subcontractors, from conducting on any Lot- , or any portion thereof, owned or controlled by Grantor, or its successors or assigns, its or their business of developing , sub- dividing , grading and constructing Dwelling Units and other Improvements in the Properties as a residential community and of disposing of Dwelling Units thereon by sale, lease or other- wise; or (d) Prevent Grantor , its successors or assigns or its or their contractors or subcontractors , from maintaining such sign or signs on any portion of the Properties owned or controlled by any of them as may be necessary in connection with the sale, lease or other marketing of Lots and Dwelling Units in the Properties; or ( e) Prevent Grantor, at any time prior to acquisition of title to a Lot by a purchaser from Grantor, to establish on that Lot additional licenses , reservations and rights-of-way to itself, to utility companies , or to others as may from time to time be reasonably necessary to the proper development and disposal of the Properties . -10- W Grantor, in the exercise of its -rights under this Article, shall not unreasonably interfere with the use of the Common Area by any other Owner. ARTICLE FOUR MEMBERSHIP IN ASSOCIATION Section 4.01 Organization. The Association is organized as a California corporation under the California Non-Profit Mutual Benefit Corporation Law. The Association is charged with the duties and vested with the powers prescribed by law and set forth in the Articles, By-Laws and this Declaration. Neither the Articles nor By-Laws shall , for any reason, be amended or otherwise changed so as to be inconsistent with this Declaration. If the provisions conflict and cannot be reconciled, the provi- sions of this Declaration shall control . In the event that there should exist any ambiguity in any provision of the Articles or By-Laws , then such provision shall be construed , to the extent possible , so that the provision shall be consistent with the provisions of this Declaration. Section 4 .02 Membership. Every Owner of a Lot shall be a Member of the Association. P4emberships in the Association shall not be assignable , except to the Person to which Leasehold Title to the Lot has been transferred , and every membership in the Association shall be appurtenant to , and may not be separated from, the Leasehold Title of the Lot. Ownership of a Lot shall be the sole qualification for membership in the Association. Section 4 .03 Transfer. The Association membership held by any Owner of a Lot shall not be transferred , pledged or alienated in any way, except upon the sale or encumbrance of such Owner' s Lot , and then only to the purchaser or Mortgagee of the Lot. Any attempt to make a prohibited transfer is void and will not be reflecteed upon the books and records of the Association. A Class A Member who has sold his Lot to a contract purchaser under an agreement to purchase shall be entitled to delegate to the contract purchaser his membership rights in the Association. The delegation shall be in writing and shall be delivered to the Board before the contract purchaser may vote. However, the contract seller shall remain liable for all charges and assessments attributable to his Lot until Leasehold Title to the Lot sold is transferred . In the event the Owner of any Lot should fail or refuse to transfer the membership registered in his name to the purchaser of the Lot upon transfer of Leasehold Title , the Board of Directors shall have the right to record the transfer upon the books of the Association. ARTICLE FIVE VOTING RIGHTS IN ASSOCIATION Section 5 . 01 Classes of Voting Membership. The Association shall have two ( 2) classes of voting membership as follows: Class A Class A Members shall be all Owners (with the exception of the Grantor for so long as there exists a Class B membership) . Class A Members shall be entitled to one ( 1) vote for each Lot, subject to assessment. Grantor shall become a Class A Member with regard to Lots held by Grantor upon conversion of Grantor' s Class B Membership, as provided below. When more than one Person holds an interest in any Lot, all such Persons shall be Members. The vote for such Lot shall be exercised in accordance with Article Five , Section 5 . 02 , of this Declaration, and in no event shall more than one ( 1 ) Class A vote be cast with respect to any Lot. Class B The Class B Member shall be the Grantor and Grantor shall be entitled to three ( 3 ) votes for each Lot owned by Grantor and subject to assessment. The Class B membership shall forever cease to exist and be converted to Class A membership on the happening of the following events , whichever occurs earliest: -11- ( a) When the total votes outstanding in the Class A membership equal the total votes outstanding in the Class B membership; or (b) The second anniversary of the orig- inal issuance of the most recent Final Public Sub- division Report for a Phase of Development of the Subdivision; or (c) The fourth ( 4th) anniversary of the original issuance of the Final Subdivision Public Report for Phase One . All voting rights shall be subject to the restrictions and limita- tions provided in this Declaration and in the Articles and By-Laws of the Association. Provided , that, no voting rights attributable to any Lot shall not vest until assessments against the Lot have been levied by the Association. As long as there exists Class B votes , any provisions (except 2792 . 4 ) which requires the vote or written assent of a prescribed percentage of the voting power residing in Members other than Grantor shall be read to also require , in addition to the prescribed percentage of Class A voting power, the same prescribed percentage of Class B voting power, or if the Class B voting power ceases to exist and Grantor still retains Class A voting power, then any provision which re- quires a prescribed percentage vote of Members other than Grantor shall be read to also require the same prescribed percentage of the total voting power of the Association. Section 5.02 Vote Distribution. Class A Members shall be entitled to one ( 1) vote for each Lot in which they hold the in- terest required for membership. When more than one Person holds such interest or interests in any Lot ( "Co-Owner" ) , all the Co-Owners shall be Members and may attend any meetings of the Association, but only one Co-Owner shall be entitled to exercise the vote to which the Lot is entitled . The Co-Owners may from time to time all designate in writing one of their number to vote . Fractional votes shall not be allowed , and the Class A vote for each Lot shall be exercised , if at all , as a unit. Where no voting Co-Owner is designated or if such designation has been revoked , the vote for the Lot shall be exercised as the majority of the Co-Owners of the Lot mutually agree . Unless the Board receives a written objection from a Co-Owner, it shall be presumed that the corresponding voting Co-Owner is acting with the consent of his or her Co-Owners. No vote shall be cast for any Lot where the majority of the Co-Owners present in person or by proxy and representing the Lot cannot agree to the vote or other action. The non-voting Co-Owner or Co-Owners shall be jointly and severally responsible for all of the obligations imposed upon the jointly-owned Lot and shall be entitled to all other benefits of ownership. All agreements and determina- tions lawfully made by the Association in accordance with the voting percentages established in this Declaration or in the By-Laws shall be deemed to be binding on all Owners and Co-Owners , their successors and assigns. All voting rights shall be subject to all of the Restrictions and the further limitatitons provided in the Articles and By-Laws. ARTICLE SIX JURISDICTION OF ASSOCIATION Section 6 .01 Powers and Duties. The Association, acting through the Board , shall also .have : ( a) Assessments. The power and duty to levy assessments on the Owners of Lots within the Subdivision and to enforce pay- ments of those assessments in accordance with the provisions of Article Eight of this Declaration. (b) Repair and Maintenance of Property. The power and duty to paint, plant, maintain and repair in a neat and attractive condition, in accordance with standards adopted by the Board , all -12- • s of the Common Area and to pay for utilities , gardening service and other necessary utility or other services for the Common Area. To provide and maintain street, address , directional and identification signs or markings as the Board deems necessary. Notwithstanding the foregoing , the Association shall have no responsibility to provide the services referred to in this para- graph with respect to any Improvement which is accepted for maintenance by any state , local or municipal government, agency or entity. Such responsibility shall be that of the Owner con- cerned , as provided in this Declaration , or the responsibility of the applicable agency or entity. (c) Utility Services. The power and duty to obtain, for the benefit of the Common Area , all commonly-metered water, gas and electric services , and may (within the discretion of the Board) provide for all refuse collection and cable or master television service ( if any) , as deemed necessary. (d) Easements_ and Rights-of-Way. The power, but not the duty, to grant and convey easements , rights-of-way, parcels or strips of land , in, on, over and under any portion of the Common Area to any Person for the purpose of constructing , erecting , operating or maintaining on and under the Common Area : ( 1) roads , streets, walks , driveways , parkways and park areas; ( 2) underground lines, cables , wires , conduits , or other devices for the transmission of electricity, lighting , heating , power, sewer, television, telephone and other similar purposes; ( 3 ) sprinkling systems, water, heating and gas lines or pipes; and ( 4 ) any similar public or quasi-public Improvements or facilities . Provided , that as long as Grantor may exercise a Class B vote, the Association shall not have the power to grant or convey those rights or interests without the consent of Grantor, which shall not be unreasonably withheld . (e) Manager. The power, but not the duty, to employ or contract with a professional Manager to perform all or any part of the duties and responsibilities of the Association and the power to delegate its powers to committees, officers and employees . Any such management agreement, or any other agreement providing for services by Grantor to the Association, shall be for a term not in excess of one (1) year, subject to cancellation by the Association for cause at any time upon not less than thirty ( 30 ) days written notice, and without cause ( and without penalty or payment of a termination fee) at any time upon not less than ninety ( 90 ) days written notice. ( f) Rights of Entry and Enforcement. After Notice and Hear- ing, pursuant to the procedural .requirements of Section 7341 of the California Corporations Code and Article Fourteen of the By- Laws (as they now exist or may hereafter from time to time be amended ) , without being liable to any Owner , the power, but not the duty, to enter upon any Lot and Dwelling Unit for the purpose of enforcing , by peaceful means , the provisions of this Declaration, or for the purpose of maintaining or repairing any such area if for any reason whatsoever the Owner fails to maintain or repair any such area, as is required by this Declaration, the Articles , By-Laws or Rules and Regulations of the Association. The cost of any such maintenance and repair which is the responsibility of the Owner shall be due and payable by the Owner immediately upon receiving a notice or demand stating the amount due. Unless there exists an emergency, there shall be no entry into a Dwelling Unit without the prior consent of the Owner. (g) Enforcement by _the Association. Notwithstanding the foregoing , the Association in its own name and on its own behalf, or on behalf of any Owner who consents , can commence and maintain actions, whether at law or in equity for damages , equitable or other relief to enforce all of the terms and conditions of these By-Laws , the Articles, the Declaration, the Rules and Regulations of the Association; the Association can bring the matter to arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association and pursue any other remedies provided for in this Declaration or the By-Laws. Arbitration shall be held in the City in which the Subdivision is located or -13- • i as close to the Subdivision as practical . The Board can bring legal and/or equitable actions without complying with the internal remedies of the Association, including those set forth in this Article , if the Board reasonably believes that time is of the essence or that proceeding with the internal remedies would be unproductive. Every Owner, Owner' s Delegate or person acquiring a Leasehold Title , an interest in a Leasehold Title by acceptance of their interest, agree to be bound by the provisions of this Article , the Articles , By-Laws , Declaration, Rules and Regulations of the Association, any Court decision enforcing the provisions of the foregoing or any decision of any arbitrator rendered pursuant to this Article to enforce the foregoing. (h) Damages , Expenses_ and Sanctions. If a legal or equitable action is brought pursuant to this Article , the prevailing party shall be entitled to recover actual expenses and costs incurred in the action or arbitration, including, but not limited to, actual attorney' s fees , in addition to taxable costs, damages , equitable or other relief. The fee payable to the Arbitration Association to initiate the arbitration shall be paid by the party initiating the arbitration, provided , however, that the costs of the arbitration and expenses of the parties including , but not limited to, actual attorney' s fees , shall ultimately be borne as determined by the arbitration under the Commercial Arbitration Rules. If the Association is the prevailing party, then the Association shall be entitled to recover the monetary sanactions imposed pur- suant to this Article unless the Court or arbitrator determines that the amount is wholly unreasonable and arbitrary, in which case the Court or arbitrator shall determine a reasonable monetary sanction. ( i ) Other Services. The power and duty to maintain the integrity of the Common Area and provide such other services (such as fire prevention services) as may be necessary or proper to carry out the Association' s obligations and business under the terms of this Declaration in order to enhance the enjoyment- of the Members of the Common Area or to facilitate the use of the Common Area by all Members . ( j ) Legal and Accounting Services . The power, but not the duty, and if deemed appropriate by the Board , to retain and pay for legal and accounting services necessary or proper in the operation of the Common Area, enforcement of this Declaration, the Servitudes, performance of any other duties of the Association or enforcement of the rights of the Association. (k) Construction on Common Area . The power, but not the duty, by action of the Board , to construct new Improvements or additions to the Common Area , or demolish existing Improvements , in accordance with the provisions of this Declaration. ( 1 ) Maintenance of Other Areas . The power to the extent deemed advisable by the Board , and with the consent of Grantor ( for so long as Grantor may exercise a Class B vote) , but not the duty, to maintain and repair landscaped easements , parkways, and community indentification signs identifying the Subdivision which are not maintained by governmental entities. (m) Legal Actions . The power, but not the duty, to institute legal or equitable actions for damages or other relief as the real party in interest for any injury to or concerning the Common Area. Section 6 .02 Rules and Regulations, The Board may adopt such Rules and Regulations , as it deems proper, for the use and occupancy of the Common Area and the Subdivision. A copy of the Rules and Regulations, as they may from time to time be adopted , amended or repealed , shall be posted in a conspicuous place in the Common Area and may be mailed or otherwise delivered to each Owner. Upon such mailing , delivery or posting , the Rules and Regulations shall have the same force and effect as if they were set forth and were a part of the Servitudes. Provided , the -14- Rules and Regulations shall. be enforceable only to the extent that they are consistent with this Declaration, the Articles and the By-Laws . The Rules and Regulations may not be used to amend any of those documents. In addition , if any Owner has actual knowledge of any given Rules and Regulations , those Rules and Regulations shall be enforceable against the Owner as though notice of such rules and regulations had been given pursuant to this Section. ARTICLE SEVEN COVENANT FOR MAINTENANCE ASSESSMENTS Section 7. 01 Creation of the Lien and Personal Obligation of Assessments. Grantor, for each Lot owned within the Subdivision ( sub3ec� --t�to the provision of Article Seven, Section 7 .08 ) hereby covenants , and each Owner of any Lot by acceptance of a deed , whether or not it shall be so expressed in such deed , is deemed to covenant and agree to pay to the Association annual Common Assessments, Reconstruction Assessments and Capital Improvement Assessments . The assessments shall be established and collected as provided in this Declaration and by law . The assessments , together with interest, costs and actual atttorney' s fees for collection, shall be a charge on the Lot and shall be a continuing lien upon the Lot against which the assessment is made. Each assessment, together with interest, costs and actual attorneys ' fees , shall also be the personal obligation of the Person who was the Owner of the property assessed at the time when the Assessment fell due. Subject to the provisions of this Declaration protecting First Mortgagees , the personal obligation for the delinquent assessments shall not pass to the successors-in-title of such Owner unless expressly assumed by them. The Board of Directors shall establish no fewer than two ( 2 ) separate accounts which shall include: ( 1 ) an Operating Fund for current expenses of the Association, and ( 2) a Common Area Reserve Fund for contingencies and for replacements, painting and repairs (which would reasonably be expected to recur) to the Common Area. The Board of Directors shall not commingle any amounts deposited into the Operating Fund and Common Area Reserve Fund with one another. Section 7.02 Purpose of Common Assessments. The Assessments levied by the Association shall be used exclusively to promote the common health, safety, benefit, recreation and welfare of the Owners, for the improvement and maintenance of the Common Area, as provided in this Declaration. However, disbursements from the Common Area Reserve Fund shall be made by the Board of Directors only for the specific purposes specified in this Article Seven. Disbursements from the Operating Fund shall be made by the Board of Directors for such purposes as are necessary for the discharge of its responsibilities for the common benefit of all of the Owners , including those purposes for which disburse- ments from the Common Area Reserve Fund are to be used . The Operat- ing Fund and Common Area Reserve Fund may both be used to the extent necessary to make payments due to the City under the Lease for the Common Area and for the Lots. Nothing in this Declaration shall be construed in such a way as to permit the Association to use any Assessments to abate any nuisance or annoyance emanating from outside the boundaries of the Properties. Nothing contained herein shall limit, preclude or impair the establishment of additional Association Maintenance Funds by the Association, so long as the amounts deposited into any such Fund are set aside and used for specified purposes authorized by this Declaration. Common Assessments shall include , and the Association shall acquire and pay for out of the applicable funds derived from the Annual Assessments, the following , which shall be shared equally by all Owners : ( a) Water, electrical , lighting and other necessary utility services for the Common Area. ( b) Maintenance and repair of private streets ( if any) and parking areas ( if any) lying within the Common Area. -15- i . � _ � . �_ � � , �� � (c) Landscape planting and maintenance by the Association of all landscaping and planted areas within the Common Area including irrigation and lighting, (d ) Fire and casualty insurance with extended coverage , as provided in this Declaration, covering the full insurable replace- ment cost of the Common Area facilities. (e) Liability insurance , as provided in this Declaration, insuring the Association against any liability to the public or to any Owner, their invitees or tenants incident to their occupa- tion and use of the Common Area, with limits of liability to be set by the Board of Directors of the Association. The limits and coverage shall be reviewed at least annually by the Associa- tion and increased or decreased in its discretion. Errors and omissions and directors and officers liability insurance as deemed necessary by the Board , pursuant to Article Thirteen. ( f) Worker' s compensation insurance to the extent necessary to comply with any applicable laws , medical payments insurance , liquor liability insurance and any other insurance deemed necessary by the Board, pursuant to Article Thirteen. (g ) Standard fidelity bonds covering all Members of the Board and other employees of the Association as and in an amount determined by the Board, pursuant to Article Thirteen. (h) Painting , maintenance , repair and replacement of all buildings, fencing , equipment and landscaping in, on and of the Common Area, as the Board shall determine is necessary and proper. ( i ) Any other material , supplies , furniture , labor, services , maintenance , repairs, structural alterations , insurance, taxes or assessments which the Association is required to secure or pay for pursuant to the terms of this Declaration or by law or which , in the opinion of the Board , shall be necessary or proper for the operation and maintenance of the Common Area or for the enforcement of these Servitudes. Section 7. 03 Damage to Common Area by Owners. The forego- ing maintenance , repairs or replacements within the Common Area arising out of, or caused by, the willful or negligent act of an Owner, an Owner' s family, guests or invitees shall be done at that Owner' s expense; or, after Notice and Hearing , a Special Assessment shall be made by the Board against that Owner and that Owner' s Lot. Section 7.04 Basis of Maximum Common Assessment. Common Assessments shall include a pro rata share of the payments due to the City under the Lease. Until the first day of the fiscal year immediately following the first Close of Escrow for the sale of a Lot in the Properties to an Owner, the maximum Common Assess- ment (excluding Lease Payments) under this Article shall be determined in accordance with the budget of the Association as filed with the California Department of Real Estate for the Subdivision. The first Common Assessment shall be adjusted according to the number of months remaining in the initial fiscal year. If the Board of Directors determines that the initial maxi- mum Common Assessment (excluding Lease Payments ) is insufficient to meet the Common Expenses of the Association during the remainder of the Association' s initial fiscal year , the Board of Directors may, by majority vote , increase that Common Assessment (excluding Lease Payments) above the maximum Common Assessment (excluding Lease Payments) for such year reflected in the initial budget of the Association by the percentage ( but not more than ten percent ( l00-) ) by which the U. S. Bureau of Labor Statistics , Los Angeles - Long Beach - Anaheim Area, Consumer Price Index for all Urban Consumers (the "Index" ) as of the date of Board approval of the increase has increased over the level of the Index as of the date Common Assessments commenced hereunder for Phase I. Any proposed increase in the Common Assessment (excluding Lease -16- Payments) in excess of ten percent ( 100 ) shall be subject to approval by a majority of the voting power of the Association. (a) Commencing on the first day of the fiscal year next following the first Close of Escrow for the sale of a Lot, the maximum Common Assessment (excluding Lease Payments) for any fiscal year may be increased by the Board above the maximum Common Assessment (excluding Lease Payments) for the previous fiscal year, without a vote of the Membership and effective no sooner than the first day of each fiscal year, in an amount no more than the percentage (but not more than twenty percent ( 200 ) ) by which the Index has increased as of the first day of such fiscal year over the level of the Index as of the first day of the immediately preceding fiscal year of the Association. Any increase in the maximum Common Assessment (excluding Lease Payments) which exceeds the maximum increase authorized in this subsection (a) shall require the vote or written consent of a majority of the voting power of the Association residing in Members other than Grantor pursuant to Article Five, Section 5 . 01 . (b) Except as provided in this Section, the Board of Directors may not fix a Common Assessment: for any fiscal year at an amount which exceeds the maximum authorized for such fiscal year. Section 7 . 05 C_apital _Impr.ovement and Reconstruction Assess- ments. In addition to the Common Assessments authorized above , the Board may levy, in any assessment year, a Capital Improvement Assessment or Reconstruction Assessment applicable to that year only for the purpose of defraying , in whole or in part, the cost of any construction, reconstruction, repair or replacement of a Capital Improvement or other such addition upon the Common Area, including related fixtures and personal property. Whenever any Assessment will cause the aggregate Capital Improvement Assessments in any fiscal year to exceed five percent ( 5% ) of the budgeted gross expenses of the Association for that fiscal year, the Assessment shall not be made without the vote or written assent of a majority of the voting power residing in Members other than Grantor and a majority of the total voting power of the Association or of the Class B voting power pursuant to Section 5 .01. Section 7.06 Notice and Quorum for Any Action Authorized Under Sections 7 .04 and 7.05 Written notice of any meeting called for the purpose of taking any action by the Members authorized under Sections 7 .04 and 7 .05 shall be sent to all Members not less than thirty ( 30 ) days , nor more than sixty ( 60 ) days in advance of the meeting. The quorum and adjournment provisions of Article 16 , Section 16 .06 shall apply, except that the quorum for the first meeting shall be sixty percent ( 60%) and the quorum for the adjournment meeting shall be thirty percent (30%) . Members who do not attend the meeting may attend by proxy. Section 7.07 Uniform Rate of Assessment. Common Assessments , Reconstruction Assessments and Capital Improvement Assessments provided for in this Article must be fixed at a uniform rate for all Lots within the Subdivision. All installments of Common Assessments shall be collected in advance on a regular basis by the Board at such frequency as the Board shall determine from time to time . Section 7 .08 Date of Commencement of Common Assessments. The annual Common Assessments shall commence as to all Lots in a Phase of Development on the first day of the month following Close of Escrow for the conveyance of the first Lot (other than Common Area) in such Phase of Development for which a Final Subdivision Public Report is required. The first annual Common Assessment shall be adjusted according to the number of months remaining in the fiscal year, as set forth in the By-Laws. The Board shall fix the amount of the Common Assessment against each Lot at least thirty (30 ) days in advance of each Common Assessment period. Written notice of any change in the amount of any annual Common Assessment shall be sent to every Owner, not less than thirty ( 30 ) days prior to the effective date of such change. -17- The due dates shall be established by the Board of Directors . Section 7 . 09 Financial Statements. Financial statements for the Association shall be regularly prepared and distributed to all Members regardless of the number of Members or the amount of assets of the Association as follows : (a) A pro forma operating statement ( budget) for each fiscal year shall be distributed not less than sixty ( 60 ) days before the beginning of the fiscal year. (b) A balance sheet--as of an accounting date which is the last day of the month closest in time to six ( 6) months from the date of closing of the first sale of an interest in the Sub- division--and an operating statement for the period from the date of the first closing to the said accounting date , shall be distributed within sixty ( 60 ) days after the accounting date. This operating statement shall include a schedule of assessments re- ceived and receivable identified by the number of the Subdivision interest and the name of the Person assessed. (c ) An annual report consisting of the following shall be distributed within one hundred twenty ( 120 ) days after the close of the fiscal year. ( i ) A balance sheet as of the end of the fiscal year. ( ii) An operating ( income) statement for the fiscal year. ( iii) A statement of changes in financial position for the fiscal year. ( iv) Any information required to be reported under Section 8322 of the Corporations Code. (d) The annual report referred to in (c) above shall include audited financial statements prepared by an independent certified public accountant. (e) Any Owner may at any time and at the Owner' s expense cause an audit or inspection to be made of the books and records of the Association, provided that the audit or inspection is made during normal working hours and without unnecessary interference with the operations of the Manager or the Association. ARTICLE EIGHT COLLECTION OF ASSESSMENTS, LIENS, POWER OF SALE Section 8 .01 Right to Enforce. The right to collect and enforce assessments zs to zn the Board acting for and on behalf of the Association. The Board or its authorized representative, including any Manager, can enforce the obligations of the Owners to pay assessments provided for in this Declaration by commencement and maintenance of a suit at law or in equity, or the Board may foreclose by judicial proceedings or through the exercise of the power of sale pursuant to Section 8 .07 to enforce the lien rights created. Suit to recover a money judgment for unpaid assessments, together with all other amounts described in this Declaration, shall be maintainable without foreclosing or waiving the lien rights. if more than one person owns a Lot, the liability for all assessments against that Lot shall be joint and several . No Owner may waive or otherwise escape liability for the assessments by non-use of the Common Area or abandonment of Owner' s Lot. Section 8 .02 Late Charges and Interest, if any assessment or any installment of any assessment is not paid within ten (10 ) days after its due date , the installment or assessment, together with all amounts accelerated or late charges , shall bear interest at the rate of ten percent ( 100 ) per annum. Section 8 .03 Notice to Owner. Any notice required to be given to Owner under this Declaratfon may be given by delivering •-18- 0 a copy of that Notice to the Owner personally or mailing the notice by United States registered mail , postage prepaid , to the Owner at the address for the Owner' s Lot and to the address given to the Association by the Owner ( if any) or the last known address other than Owner' s Lot ( if any) . If Owner does not reside on Owner' s Lot and does not give the Association notice of an address to which notices may be sent, then notice will be presumed received by Owner if mailed to Owner' s Lot address . Section 8 .04 Costs , Expenses , Damages and Attorneys Fees. The Association shall be entitled to add to any assessment or to make a special assessment for all expenses incurred by the Associa- tion in collecting assessments , enforcing liens or enforcing the provisions of this Declaration, the Articles and By-Laws. Expenses shall include actual expenses including , but not limited to, attor- ney' s fees, trustee ' s fees , sheriff ' s or marshal 's fees , process service fees , recording fees , expert fees, costs of publication and costs of sale. Additionally, :if any legal proceeding is brought, the Association shall be entitled to taxable costs, damages, injunctive or other equitable relief. If , in order to protect its rights , the Association advances payments to the first Mortgagee of Owner' s Lot; taxes and assessments affecting Owner' s Lot; charges , liens or encumbrances „ with interest, which appear prior or superior to the Association' s Assessment Lien, the Association shall be entitled to recover those amounts in a legal action or by sale of the property. Section 8 . 05 Notice of Delinquency and Demand for Payment. If any installment or assessment is not paid within ten (10) days of its due date , the Board , or its authorized representative , before recording an assessment lien shall send a Notice of Delin- quency and Demand for Payment to the Owner and to any first Mortgagee of Owner' s Lot which has requested a copy of the notice . The notice shall state: ( 1 ) the amount of assessment or installment then due including costs, attorney' s fees , late charges and inter- est, and ( 2 ) that if the amount due is not paid within fifteen (15 ) calendar days, a Notice of Assessment Lien creating a lien on the property will be recorded , and the Owner' s Lot wil be sold . The Notice of Delinquency and Demand for Payment shall be delivered to the Owner or any member of Owner' s family who is living on the Lot , or mailed to the Owner, as specified above. Section 8 . 06 Notice of Assessment. At any time after fif- teen ( 15 ) calendar days have elapsed since the mailing or personal delivery of the Notice of Delinquency and Demand for Payment , if the Owner has not paid all amounts due , including , but without limitation, Assessments which became due after the Notice of Delin- quency and Demand for Payment, late charges, interest and expenses; the Board , or its authorized representative , may record a Notice of Assessment Lien with the County Recorder and deposit a copy of the Notice of Assessment Lien in the United States mail , certified or registered , postage prepaid , to the Owner of the Lot addressed , as provided in Section 8 . 03 . If necessary, the Board , or its authorized representative, may record an extension of that Notice Lien. The Notice of Assessment Lien must recite a good and sufficient legal description of the Lot, the record Owner or reputed Owner, the amount claimed (which may, at the Association' s option, include interest on the unpaid assessment at ten percent ( 10% ) , plus reasonable attorney' s fees and expenses of collection in connection with the debt secured by the lien) and the name and address of the Association. The Notice of Assessment shall be signed and acknowledged by an officer of the Association, and the lien shall be prior to any Declaration of Homestead recorded after the date on which this Declaration is recorded. The lien shall continue until fully paid or otherwise satisfied. Section 8 .07 Power of Sale . If the Owner fails to pay the lien in accordance with its terms , the lien may be enforced by sale of the Owner' s Lot and interest in the Subdivision. The Board or its authorized representative can 'record a Notice of Default and conduct a sale of the Lot in accordance with the provisions of Sections 2924 , et seq. , of the Civil Code of the State of California, or in accordance with any similar statute hereafter -19- i • enacted applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. For purposes of those sections of the Civil Code or any law applicable to the exercise of powers of sale , the use of the term, "trustee , " "mortgagee" or "beneficiary" shall be equated with and mean the Board or its authorized representative. The Board may appoint any officer or director of the Association, the Association' s attorneys or any title insurance company authorized to do business in California as its authorized representative or trustee for purposes of conducting the sale. The authorized representative of the Association shall have all of the powers of a trustee under a Deed of Trust for purposes of the sale . The Association, through duly-authorized agents , shall have the power to bid on the Lot at the foreclosure sale , and to acquire and hold, lease , mortgage and convey the Lot. For purposes of bidding at the foreclosure sale , the Associa- tion, or its authorized representative , shall be entitled to offset its bid , or "credit" bid , the amount owing to the Associa- tion pursuant to this Declaration including , but not limited to, amounts advanced for taxes , assessments , liens and encumbrances , costs, expenses, fees for conducting the sale , attorney' s fees , late charges , interest and assessments due as of the date of the sale. Section 8 . 08 Curing the Default. If the Owner timely pays the amount due under the Notice of Assessment or Notice of Default, any additional assessments which become due during the Owner' s de- fault, any additional expenses incurred by the Association, and a fee which shall be determined by the Board , but not to exceed Fifty Dollars ( $50 .00 ) , to cover the cost of preparing and recording a release; the Association shall execute and record a Notice of Satisfaction and Release of Assessment Lien. Section 8 . 09 Certificate of Amounts Due . The Association , upon twenty ( 20 ) days written request from the Owner and payment of a reasonable fee to be determined by the Board, shall deliver to the Owner a Certificate, executed and acknowledged by two members of the Board , stating whether or not, to the knowledge of the Association, the Owner is in default under the provisions of this Declaration and the dates to which installments of assessments (regular or special) have been paid on Owner' s Lot. The Certificate shall be conclusive upon the Association, as of the date of execu- tion, in favor of all persons who rely upon it in good faith. Provided , the conclusiveness and reliance shall not extend to any default, not involving the payment of assessments , of which the signer had no actual knowledge . Section 8 . 10 Cumulative Remedies. The assessment liens and the ritghts o foreclosure and sale shall be in addition to, and not in substitution for, all other -rights and remedies which the Association and its assigns may have under this Declaration, at law or in equity, including a suit to recover a money judgment for unpaid assessments . Section 8 .11 Lender Protection. Notwithstanding all other provisions of this Declaration, no lien created under this Article shall defeat or render invalid the rights of any First Mortgagee or the Beneficiary under any recorded First Deed of Trust (meaning any Deed of Trust with first priority over other Deeds of Trust) upon a Lot made in good faith and for value. Provided that after such Beneficiary, Mortgagee or ,some other Person obtains title to the Lot by judicial foreclosure or by means of the powers set forth in such Mortgage or Deed of Trust, the Lot shall remain subject to the Declaration and the payment of all installments of assessments accruing subsequent- to the date the Beneficiary or other Person obtains title. ARTICLE NINE ARCHITECTURAL AND LANDSCAPE COMMITTEE Section 9 .01 Composition of Committee; Appointment of Mem- bers , The Architectural Committee shall originally consist of --20- three (3 ) members. ( a) Grantor may appoint the original members and all replace- ments until the first anniversary of the issuance of the original Public Report for Phase One. (b) After the first anniversary of the original Public Report for Phase One , Grantor shall have the right to appoint two ( 2) members and their replacements and the Board may appoint one ( 1 ) member and replacements for that member until: ( i ) close of escrow has occurred on ninety percent ( 90%) of all the Lots in the Subdivision; ( ii) the fifth anniversary of the issuance of the original Public Report for Phase One; whichever occurs first; ( c) After the occurrence of the first of the events set forth in subsection (b) , the Board shall have the power to appoint all of the members of the Committee and to increase the number of members on the Committee to a maximum of five ( 5 ) members; (d ) Members appointed to the Committee by the Board shall be from the membership of the Association. Grantor' s appointees need not be members of the Association. Section 9 .02 Architectural and Landscape Approval . Except for the interiors of Dwelling Units , no building , fence, wall , sign , structure , exterior addition, alteration, modification, decoration, redecoration, painting , drainage facility, landscap- ing or planting may be commenced or maintained on any Lot, except by Grantor, until adequate plans, specifications , materials and information ( "Plans" ) are submitted , in writing , to the Commitee by the Owner or the Owner' s authorized representative ( "Applicant" ) and approved , in writing , by the Committee. The Application sub- mitted to the Committee shall include the Applicant' s name and an address where notice may be mailed to the Applicant. If the Committee decides that the Plans are inadequate to allow it to make a decision, the Committee may request new or additional Plans . Section 9 .03 Rules , Guidelines and Procedures. The Committee may from time to time , in its sole discretion, adopt, amend and repeal Committee Rules (as defined in Section 1 . 03 ) interpreting and implementing the provisions of this Article . The Committee , upon approval of the Board , may adopt , amend or repeal rules and procedures allowing the Committee to employ experts as consultants if the Committee needs assistance because of the complexity or details of the Plans . The cost of the consultants shall be paid by the Association from Common Assessments or from fees paid by the Applicant. The Committee may require as much detail in the Plans as it deems necessary to make its determination including , but not limited to, floor plans , site plans , drainage plans , elevation drawings, structural design and descriptions or samples of exterior material and color. The Committee Rules shall estab- lish guidelines for the degree and sophistication of the Plans and detail based on the type of Improvement. Further the Commit- tee Rules may require that, for particular works of improvements, the Plans be prepared by an architect, engineer, landscape designer or landscape architect at the sole expense of the Appli- cant. The Committee , upon approval of the Board , may also adopt, amend or repeal Committee Rules requiring a fee for each applica- tion. The Committee Rules may provide that the amount of the fee shall be uniform or that it be determined in any other reason- able manner, such as by the cost of construction, alterations or additions contemplated or the expenses incurred by the Committee including, but not limited to, consulting fees , clerical assist- ance and administrative costs . Section 9 .04 Duties of the Architectural Committee . It shall be the duty of the Committee to consider and act upon any and all proposals or Plans submitted to it pursuant to this Declaration; to insure that Improvements constructed in the -21- r � • Subdivision, by anyone other than Grantor, conform to Plans approved by the Committee; to report to the Board any violations of this Article and recommend action to remedy the violation; and to perform other duties assigned to it from time to time by the Board. Section 9 . 05 Standards for Approval . Approval or disap- proval of Plans shall be based on aesthetic considerations and the overall benefit or detriment to surrounding Lots , the Common Area and the Subdivision. Factors to be considered include, but are not limited to, whether the improvements will affect the beauty, wholesomeness, attractiveness , use and enjoyment of the Common Area; are in conformity and harmony with surrounding structures , the Common Area and the Subdivision; could cause a maintenance or other burden on the Association or other Owners; will affect the natural view and aesthetic beauty of surrounding structures , the Common Area and the Subdivision; and conform to the purpose , general plans and intent of this Declaration. The Committee shall take into consideration the aesthetic aspects of the architectural design, placement of buildings , landscaping , color schemes, exterior finishes and materials , and similar features . Section 9 .06 Approval Upon Conditions , Completion. The Com- mittee may condition its approval of Plans for any Improvement ( 1) on such changes as it deems appropriate , ( 2) upon the agreement by the Applicant to grant appropriate easements to the Association for the maintenance of the Improvement, or ( 3 ) upon the agreement of the Applicant to reimburse the Association for the cost of mainten- ance , or all three . When granting approval for an Improvement, the Committee may also specify a reasonable time within which the Improvement must be completed . If the Applicant fails to complete the Improvement within the time specified by the Committee, the Committee may grant an extension of time for good cause . Section 9 . 07 Submittal for Approval , Resubmittals , Failure to Approve or Disapprove. Plans shall not be considered submitted unless they are in writing and signed by the Applicant, contain an address for notification of the Applicant, and any fees required by the Committee have been paid. The Plans shall be submitted to the Committee in care of Grantor at 18 Brookhollow Drive , Santa Ana, California 92705 , until the Board has the authority to appoint all of the members pursuant to Section 9 .01(c ) . From that time on , they shall be submitted to the Committee at the address for the Association or at an address specified in the Committee Rules. Upon the submission of Plans or upon the submit- tal of additional items requested by the Committee , the Committee shall give the Applicant a dated receipt signed by a member of the Committee. Decisions of the Committee and the supporting reasons shall be transmitted by the Committee to the Applicant at the address set forth in the application for approval within forty-five ( 45 ) days after receipt by the Committee of all Plans required by the Committee . Any application submitted pursuant to this Section shall be deemed approved , unless written disapproval or a request for additional information or materials is sent to the Applicant within forty-five ( 45 ) days after the date of the last receipt for the application or additional information. A disapproval or request shall be deemed sent when it is deposited in the U.S. mail , postage prepaid , registered or certified , addressed to the Applicant at the address included in the application. If no address is included in the Application, it shall not be deemed submitted for purposes of this section. Section 9 .08 Meetings , Compensation. The Committee shall meet from time to time as necessary to perform its duties. The vote or written consent of a majority of the members shall con- stitute the act of the Committee unless the unanimous decision of the Committee is required by any provision of this Declaration, the Committee Rules , Articles or By-Laws of the Association. The Committee shall keep and maintain a written record of all action taken by it. Members of the Committee shall not receive any compensation for services rendered . However, the members •-22- Y shall be reimbursed by the Association for expenses incurred by them in the performance of their duties. Section 9 .09 No Liability Absent Bad Faith , Willful f4iscon- duct or Fraud. The Grantor, Association, Board , Architectural Committee and members, agents ; employees and representatives of the Association, Board and Architectural Committee shall not be liable to the Association or its members , any Owner, prospective Owner, Applicant, Owner affected by Committee ' s actions or any other party for any loss , damage or injury of any kind whatsoever arising out of or in any way connected with the performance of the Committee' s duties or exercise of the Committee' s powers or rights under this Declaration including , but not limited to, liability for mistake of judgment, negligence , or failure to act. Every Applicant agrees, by submission of Plans , that they will not bring any action or suit against Declarant, the Associa- tion, the Committee or any of their members. Provided , this Section shall not bar recovery for bad faith, willful misconduct or fraud. The Committee shall approve or disapprove the Plans solely on the standards and aesthetic considerations set forth in Section 9 . 05 and this Article generally. The Committtee shall not be respons- ible for reviewing , nor shall its approval of any Plans be deemed approved from the standpoint of structural safety or integrity or conformance with Building , Health, Safety or other Codes or regulations . Section 9.10 Notice of Completion, Inspection. After re- ceiving approval from the Committee , the Owner shall complete the Improvement with due diligence . Upon completion, the Applicant shall give written notice of completion to the Committee. Within sixty ( 60) days after Notice of Completion from the Owner, the Committee or its authorized representative may inspect the Im- provement to determine if the Improvement complies with the approved Plans. If for any reason the Committee fails to notify the owner of non-compliance within sixty ( 60 ) days after receipt of the written notice of completion from the Owner, the Improvement shall be deemed to be in accordance with the approved Plans . Section 9 . 11 Enforcement,_ Violations , Non-Compliance._ The Committee shall send a written Notice of Non-Compliance to the Board and to the Owner if any of the following occur: (a) The Committee fails to receive a written Notice of Completion from the Owner within the time specified when the Plans were approved ( including any extensions) . (b) No time limit was specified and the Owner fails to give the Committee written Notice of Completion with a reasonable time. (c ) After inspection of the Improvement, the Committee finds that the Improvement is not in substantial compliance with the Plans. (d ) The Committee reasonably believes that an Improvement was done without the Committee ' s approval. The Notice of Non-Compliance shall specify whether the non-compli- ance is based on failure to give the Committee written notice of completion within the specified period of time or within a reason- able time , failure to substantially comply with the Plans , or failure to obtain approval from the Committee for the Improvement. After affording the Owner Notice and Hearing , the Board shall deter- mine whether the Improvement is complete , substantially complies with the Plans or was done without approval of the Committee , and the nature and extent of any non-compliance or non-completion and give written notice of its ruling to the Owner. The Owner shall remedy the non-compliance or complete the Improvement to the Board ' s reasonable satisfaction or remove the Improvement within forty-five (45) calendar days from the date the Board mailed the notice of ruling. The Board , at its option, may peacefully remove the non- •-23- complying Improvement or otherwise peacefully remedy the non-compli- ance. Additionally, the Board may bring an action at law or in equity to enforce the provisions of this Article . The Owner shall reimburse the Association, upon demand , for all expenses incurred in connection with removing or remedying the non-complying Improve- ment including , without limitation, attorney' s fees. If the expenses are not promptly repaid by the Owner to the Association, the Board may levy a fine or monetary penalty, suspend the Owner' s rights and privileges and/or take any other action authorized in this Declaration or the By-Laws for the enforcement of this Declaration, the By-Laws , the Rules and Regulations of the Assoc- iation and to collect the amounts due to the Association, in addition to all other rights and remedies which the Association may have at law, in equity. If the Board determines that it is reasonable to extend the forty-five (45 ) day period , it may do so, in writing , without waiving any of its rights under this Article. Section 9 .12 Good Faith Purchasers and Encumbrances. Not- withstanding anything to the contrary contained in this Article , after the expiration of one ( 1) year from the date of issuance of a building permit by municipal or other governmental authority for any Improvement, the Improvement shall , for the benefit of pur- chasers and encumbrancers , in good faith and for value , be deemed to be in compliance with all provisions of this Article, unless the purchaser or encumbrancer has actual notice of the non-compli- ance or non-completion, or unless legal proceedings shall have been instituted to enforce compliance or completion and notice of that action has been recorded in the Office of the County Recorder. ARTICLE TEN MAINTENANCE AND REPAIR OBLIGATIONS Section 10 . 01 Maintenance Obligations of Owners. Subject to the duty of the Association to provide fo _r maintenance , as provided in Section 10 .02 of this Declaration, it shall be the duty of each Owner, at his sole cost and expense, subject to the provisions of this Declaration regarding Architectural Committee approval , to maintain, repair, trim, replace and restore Owner' s Property in a neat, sanitary and attractive condition. Within ninety ( 90 ) days after Notice from the Architectural Committee , the Owner shall complete the landscaping of the Lot in accordance with the standards adopted by the Architectural Committee. In the event that any Owner fails to landscape his Lot or the Owner' s Property falls into disrepair, is not maintained , creates a dangerous, obstructive , unsafe , unsightly or unattractive con- dition, or otherwise violates this Declaration, the Board shall have the right to seek any remedies at law or in equity which it may have , and the right, but not the duty, after Notice and Hearing , to enter upon Owner' s Lot to make repairs or to perform maintenance. The cost of any repairs, maintenance or remedies in law or in equity shall be charged to Owner. If the Owner fails to pay the costs , the Association may impose a fine or monetary penalty, suspend the Owner' s rights and privileges and/or take any other action authorized by this Declaration, the By-Laws , at law or in equity, to enforce this Declaration, the By-Laws , all the Rules and Regulations of the Association and to collect the amounts due to the Association. Section 10 .02 Maintenance Obligations of Association. The Association shall have the full power and duty to maintain or pro- vide for the maintenance of all of the Common Area and all Improve- ments on the Common Area, including private streets , sewers , com- monly-metered utilities , storm drains and parking areas , in good order and -repair. The Association shall also be responsible for the maintenance and replacement of trees , shrubs , vegetation, irrigation systems, private storm drain systems , private street lighting facilities , mailboxes , fencing , and other landscaping Improvements located on the Common Area. All of the foregoing obligations of the Association shall be discharged when and in -24- such manner as the Board determines appropriate . Section 10 . 03 Damage and Destruction Affecting Dwelling Units-.-Duty to Rebuild ._ If all or any portion of any Owner' s Property is damaged or destroyed by fire or other casualty, it shall be the duty of the Owner of the Dwelling Unit to rebuild , repair or reconstruct the Dwelling Unit. The rebuilding, repair- ing or reconstructing of any Dwelling Unit shall be done in accordance with Article Nine. ARTICLE ELEVEN USE RESTRICTIONS All real property, Lots, Dwelling Units , Improvements and Com- mon Areas within the Subdivision shall be held , used and enjoyed subject to the foregoing limitations and restrictions : Section 11.01 Residential Purposes. Each Lot shall be used for single-family residential purposes only. Provided , however, that Lots owned by Grantor, its successors or assigns, other than purchasers of individual Lots , may be used as models , sales offices and construction offices for the purpose of developing and selling the Lots in the Subdivision until all of the Lots in the Subdivision are sold by Grantor, its successors or assigns. Section 11 . 02 Business or Commercial Activity. No part of the Subdivision shall ever be used , caused to be used, allowed to be used or authorized in any way to be used , directly or indirectly, for any business , commercial , manufacturing, mercantile , storage, vending or other such non-residential purposes. The provisions of this Section shall not preclude professional and administrative occupations , if there is no external evidence of these occupations , the occupations are in conformance with all applicable government- al ordinances , and are merely incidental to the use of the Dwelling Unit as a residential home. Nothing in this Section shall prevent an Owner from leasing or renting his Dwelling Unit. However, any lease or rental agreement shall be in writing; provide that the tenants shall abide by and be subject to all provisions of this Declaration, the Articles , By-Laws and the Association Rules; and must specify that failure to abide by such provisions shall he a default under the lease or rental agreement. Also, no Owner shall rent, lease or let Owner' s Property for transient or hotel purposes or for periods of less than thirty ( 30) days or for time share purposes. Section 11.03 Nuisances. No noxious or offensive activity shall be conducted on, in or upon any Lot, the Common Area or the Subdivision. Nothing may be done within the Subdivision which is an annoyance, nuisance , or interferes with the quiet enjoyment of any other Owner. Without limiting the generality of the foregoing provisions , loud noises or noxious odors; exterior speakers , horns , whistles , bells or other sound devices (other than security devices used exclusively for security purposes ) ; noisy or smokey vehicles; large power equipment or large power tools; unlicensed off-road motor vehicles; devices or equipment which may unreasonably interfere with television or radio recep- tion of any Owner shall be considered annoyances and nuisances and shall not be located , used or placed anywhere within the Subdivision. The Board of Directors shall have the right, upon Notice and Hearing, to determine , in accordance with the By-Laws , whether any noise , odor, interference or activity constitutes a nuisance , annoyance or interferes with the quiet enjoyment of any Owner. The Board shall also have the right, upon Notice and Hearing , in accordance with the By-Laws to grant temporary and limited exemptions from this provision upon application of an Owner for good cause , including, but not limited to, exemptions for the use of large equipment or tools to construct, rebuild or repair a Dwelling Unit or Improvement. The Board may grant the temporary exemption with whatever restrictions as to days , hours, etc. , the Board deems reasonable . -25- Section 11 .04 Signs . No sign, poster , display, billboard , or other advertising device of any kind shall be shown or displayed from any Lot or the Common Area to the public view, without the prior written consent of the Architectural Committee. One sign not larger than two ( 2) square feet, in accordance with the City' s sign ordinance , advertising the Dwelling Unit for sale or rent may be placed on the Owner' s Lot without approval of the Architectural Committee. Section 11 . 05 Parking and Vehicular Restrictions . No Owner shall park, store or keep on any Lot or the Common Area ( including the streets) any large commercial-type vehicle including, but not limited to , any dump, cement mixer, oil , gas , or delivery true]-,; any bus, trailer, trailer coach, camp trailer, boat, aircraft, mobile home , inoperable vehicle or any other similar vehicle, mobile or otherwise , in any unenclosed space , so as to be visible from any- where in the Subdivision. No Owner shall park, store , or keep on any Lot or the Common Area ( including the streets) any recrea- tional vehicle ( including , but not limited to, any camper unit, house car or motor home ) in any unenclosed space if, upon Notice and Hearing, the Board determines that it creates an annoyance or nuisance. No Owner of a Lot shall conduct repairs or restora- tions of any motor vehicle , boat, trailer , aircraft or other vehicle on any portion of any Lot unless in an enclosed area, or an area not visible from other Lots or on the Common Area. Garage doors shall remain closed except for reasonable periods while the garages are being used and garages shall be used for garage purposes only and shall not be converted for living , recreational or other uses. Vehicles owned , operated or within the control of any Owner shall be parked in the garage of the Owner, to the extent space is available. Each Owner, to the extent necessary, shall ensure that the Owner' s garage is main- tained so as to be capable of accommodating one ( 1 ) full-sized automobile . Section 11 .06 Animal Restrictions. No insects , reptiles , poultry or animals of any kind shall be raised , bred , or kept on any Lot or the Common Area, except usual and ordinary domestic dogs , cats , fish, birds and other household pets. The Association, in accordance with the By-Laws , may provide rules and regulations concerning the raising , breeding or keeping of household pets , including specific limitations on the number, kind and quality of pets and other restrictions to prevent the pets from becoming or being an annoyance or nuisance to other Owners. The Associa- tion, acting through the Board of Directors, shall have the right to prohibit the keeping of any animal which constitutes , in the opinion of the Board , a nuisance to any other Owner. Animals belonging to Owners , occupants or their licensees , tenants or invitees within the Subdivision must be either kept within an enclosure , an enclosed yard or on a leash being held by a person capable of controlling the animal. Furthermore, any Owner shall be absolutely liable to each and all remaining Owners , their families, guests, tenants and invitees , for any unreasonable noise or damage to person or property caused by any animals brought or kept in the Subdivision by an Owner, Owner' s delegates or guests. It shall be the absolute duty and responsibility of each such Owner to clean up after such animals which have used any portion of the Common Area or any other Owner' s Lot. Section 11 .07 Trash, Fires , Rubbish , Etc. No rubbish , trash or garbage or other waste material shall be kept upon any Lot or Common Area, except in sanitary containers . Trash contain- ers, garbage and refuse shall be kept out of view of neighboring Lots , except that they shall be placed in designated areas on the scheduled day for trash pickup. There shall be no exterior fires whatsoever except barbeque fires contained within appropriate receptacles and fire pits in the enclosed yards designed in such a manner that they do not create a fire hazard . No lumber, grass , shrub or tree clippings, plant waste, metals , bulk material , scrap, refuse or trash shall be kept, stored or allowed to accum- ulate on any portion of the Subdivision except within an enclosed -26- structure appropriately screened from view. No plants or seeds infected with noxious insects or plant diseases shall be brought upon, grown or maintained within the Subdivision. All service yards, service areas and clotheslines shall be enclosed or fenced in such a manner that they will not be visible from any neighboring property or street. Section 11 .08 Privies , Lavatories , Sewers, Etc. No privy shall be erected, maintained or used upon any portion of the Subdivision, however, a temporary privy may be permitted during the course of construction of a Dwelling Unit or Improvement. Any lavatory, toilet, or water closet which shall be erected , maintain- ed or used shall be enclosed and located within a building per- mitted under this Declaration to be erected in the Subdivision, shall be properly connected with the sewer system and shall be constructed and operated so that no offensive odor shall arise or otherwise escape. Section 11 .09 Restricted Use of Recreational Vehicles , Tem- porary Structures, Etc. No boat, truck, trailer, camper, recrea- tional vehicle , tent or temporary structure shall be used as a living area while located in the Subdivision subject to this Declaration. However, trailers or temporary structures for use incidental to the initial construction of Improvements in the Subdivision may be maintained , but shall be promptly removed upon completion of the construction. Section 11 .10 Association Control . Nothing shall be altered or constructed in or removed from the Common Area except upon the written consent of the Association. All patio, other outdoor furniture, sculpture, fountains or other yard decorations , placed by an owner in an area visible to the outside , shall either be in accordance with criteria established by the Architectural Committee or approved in writing by the Architectural Committee as to color, design and condition. Section 11 .11 Drilling. No oil drilling, oil development operations , oil refining, quarrying or mining operations of any kind shall be permitted upon or in any Lot. No oil wells , tanks , tunnels or mineral excavations or shafts shall be permitted upon the surface of any Lot or within five hundred fifty feet ( 550 ' ) below the surface of of the Subdivision. No derrick or other structure designed for use in boring for water, oil or natural gas shall be erected , maintained or permitted upon any Lot. Section 11.12 Further Subdivision. No Owner shall further partition or subdivide his Lot. Provided , however, that this Sec- tion shall not be construed to limit the right of an Owner ( 1) to rent or lease all or any portion of his Lot; ( 2) to sell his Lot; or ( 3 ) to transfer or sell any Lot to more than one person to be held by them as tenants-in-common, joint tenants, tenants by the entirety or as community property. The occupancy of a Lot by any Person pursuant to any lease or rental agreement shall be subject in all respects to the provisions of this Declara- tion and the By-Laws of the Association , and any failure by the lessee of such Lot to comply with the terms of this Declaration or the By-Laws of the Association shall constitute a default under the lease and a violation of this Declaration by the lessee and the Owner. Section 11 .13 Drainage and Slope Areas. There shall be no interference with the established drainage pattern over any Lot within the Subdivision, unless an adequate alternative provision is made for proper drainage and approved by City engineers. For the purposes of this Section, "established" drainage is defined as the drainage which exists at the time that such Lot is conveyed to a purchaser from Grantor, which may include drainage from the Common Area over any Lot or Lots in the Subdivison. Slope areas within any Lot shall be maintained continuously by the Owner in a neat, orderly and safe condition and in such a manner as to enhance their appearance , maintain established slope ratios , pre- vent erosion and sliding problems and to facilitate the orderly discharge of water through drainage systems established by Grantor. No structure , planting or other material shall be placed or per- -27- mitted to remain or other activities undertaken on any Property which might damage or interfere with established slope ratios, create erosion or sliding problems , or interfere with established drainage functions or facilities. Section 11 .14 Water Supply Systems . No individual water supply, sewage disposal system or water softener system shall be permitted on any Lot in the Subdivision unless such system is designed , located , constructed and equipped in accordance with the requirements, standards and recommendations of the applicable water district , the County Health Department, the Architectural Committee , and all other applicable governmental authorities . Section 11. 15 Outside Installations. No radio station, CB or shortwave operators of any kind shall operate from any Lot or Dwelling Unit unless approved by the Architectural Committee. No projections of any type shall be placed or permitted to remain above the roof of any building within the Subdivision, except one or more chimneys and vent stacks . No fence or wall shall be erected, altered or maintained on any Lot in the Subdivision, except with the prior approval of the Architectural Committee. Section 11. 16 Violation of Use Restrictions. In the event that any owner violates any of the provisions of this Article or otherwise violates this Declaration , the Board shall have the right to seek any remedies, at law or in equity, which it may have , and the right, but not the duty, after Notice and Hearing, to enter upon Owner' s Lot to make repairs , perform maintenance or correct the violation. The cost of any repairs , maintenance, corrections , remedies or actions , in law or in equity, shall be charged to Owner. If the owner fails to pay these costs, the Board may levy a fine or monetary penalty, suspend the Owner' s rights and privileges and/or take any action authorized by this Declaration, the By-Laws , at law or in equity, to enforce the terms of this Declaration, the By-Laws , and the Rules and Regula- tions of the Association and to collect the amounts due to the Association. ARTICLE TWELVE DAMAGE, DESTRUCTION OR CONDEMNATION OF COMMON AREA Section 12 .01 Damage to , destruction of or condemnation of all or any portion of the Common Area shall be handled in the following manner: ( a) If the Common Area or any portion of the Common Area is damaged or destroyed and the insurance proceeds are sufficient to effect total restoration, then the Association shall cause the Com- mon Area to be repaired and reconstructed substantially as it previously existed . The Board shall deposit any excess insurance proceeds in the Operating Fund and/or Reserve Fund . (b) If the insurance proceeds are within Twenty Thousand Dol- lars ( $20 ,000 .00 ) or less of being sufficient to effect total restoration to the Common Area , then the Association shall cause the Common Area to be repaired and reconstructed substantially as it previously existed , and the difference between the insurance proceeds available and the actual costs of reconstruction shall be levied as a Reconstruction Assessment equally against each of the Lot Owners , in accordance with the provisions of Article Seven, Section 7 .05 , of this Declaration. (c) If the insurance proceeds are insufficient by more than Twenty Thousand Dollars ( $20 ,000 .00 ) to effect total restoration to the Common Area, then by written consent or vote of a majority of the voting power residing in Members other than Grantor and a majority of the total voting power of the Association or of the Class B voting power pursuant to Section 5.01, the Members shall determine whether (1 ) to rebuild and restore the Common Area in substantially the same manner as existed prior to damage and to raise the necessary funds over the insurance proceeds by levying uniform Reconstruction Assessments against all Lots, ( 2) to -28- 0 rebuild and restore the Common Area in a way which utilizes all available insurance proceeds and , if necessary, an additional amount not in excess of Twenty Thousand Dollars ( $20 ,000 .00 ) , which shall be assessable uniformly to all Owners, or ( 3) subject to the provisions of this Article , to not rebuild or repair and have the Common Area cleared and landscaped for com- munity park use . After the cost of clearing and landscaping the Common Area for community park use , the Board shall deposit the remaining proceeds in the Operating Fund and/or Reserve Fund . Provided , however, that the insurance funds or a Reconstruction Assessment shall be used , if necessary, to rebuild , reconstruct or provide adequate vehicular and pedestrian rights-of-way in the Common Area so that the Owners shall have legal access to their Lots. (d) Each Member shall be liable to the Association for any damage to the Common Area not fully reimbursed to the Association by insurance proceeds which may be sustained by reason of negligent or willful misconduct of the Owner, Owner' s delegate, relatives , tenants , invitees or guests , both minor and adult. The Association reserves the right, acting through the Board , after Notice and Hearing, to (1 ) determine whether any claim shall be made upon the insurance maintained by the Association and ( 2) charge the Owner with the increase , if any, in the insurance premium directly attributable to the damage caused by such Owner or the persons for whom the Owner is liable . In the case of joint ownership of a Lot, the liability of the Owners shall be joint and several , except to the extent- that the Association has previously contracted in writing with the joint Owners to the contrary. After Notice and Hearing , the cost of correcting the damage , to the extent not reimbursed to the Association by insurance , shall be charged to the Owner. If the Owner fails to pay the amounts charged to the Owner, the Association may levy a fine or monetary penalty, suspend the Owner' s rights and privileges , and/or take any other action authorized by this Declaration, the By-Laws , at law or in equity, to enforce the terms of this Declaration, the By-Laws and the Rules and Regulations of the Association and to collect the amounts due to the Association. (e) If at any time all or any portion of the Common Area, or any interst in the Common Area, is taken for any public or quasi- public use , under any statute , by right of eminent domain or by private purchase in lieu of eminent domain, the award in condemna- tion shall be paid to the Association. The Board shall deposit any such award , payable to the Association, in the Operating Fund and/or Reserve Fund . No Member shall be entitled to parti- cipate as a party, or otherwise , in any proceedings relating to such condemnation. The Association shall have the exclusive right to participate in such proceedings and shall , in its name alone, represent the interests of all Members . ARTICLE THIRTEEN INSURANCE Section 13 . 01 Casualty Insurance. The Association shall keep all buildings, Improvements and fixtures of the Common Area insured against loss or damage by fire for the full insurance replacement cost and may obtain insurance against such other hazards and casualties as the Association may deem desirable. The Association may also insure any other property, whether real or personal , owned by the Association against loss or damage by fire and such other hazards as the Association may deem desirable , with the Association as the owner and beneficiary of such insurance. The insurance coverage with respect to the Common Area shall be written in the name of , and the proceeds shall be payable to, the Association. Insurance proceeds shall be used by the Associa- tion for repair or replacement of the Property for which the in- surance was carried , as provided in Article Twelve . Section 13 .02 Liability Insurance. The Association shall obtain and maintain comprehensive public liability insurance , including medical payments and malicious mischief , insuring for -29- bodily injury, death and property damage arising from the activi- ties of the Association or with respect to the Association; any Manager; the Grantor; and the Owners or Owner' s delegates and their respective family members, guests , invitees; and the agents and employees of each against any liability for bodily injury, death and property damage arising from the activities of the Association or with respect: to the ownership or use of the Common Area. The insurance shall include , if obtainable, a cross-liability or severability of interest endorsement insuring each insured against liability to each other insured . The limits of such insurance shall not be less than One Million Dollars ( $1 ,000 ,000 .00 ) , covering all claims for death, personal injury and property damage arising out of a single occurrence. Such insurance shall include coverage against water damage liability, liability for non-owned and hired automobiles , liability for property of others and any other liability or risk customarily covered with respect to a Subdivison similar in construction, location and use. Section 13 .03 Other Insurance, The Board also shall pur- chase and maintain worker' s compensation insurance, to the extent that it is required by law, for all employees or uninsured con- tractors of the Association. The Board shall also purchase and maintain fidelity bonds or insurance sufficient to meet the requirements of any institutional First Mortgagee . The fidelity bonds or insurance shall be in an amount not less than one hundred fifty percent ( 150%) of each year' s estimated annual operating expenses and reserves and shall contain an endorsement of coverage of any person who may serve without compensation. The Board may also obtain errors and omissions insurance, indemnity bonds, fidelity bonds and other insurance , as it deems advisable , insuring the Board , officers of the Association, members of any committees of the Board or Association, and any Manager against liability for any act or omission in carrying out their obligations under this Declaration, the Articles and the By-Laws , or resulting from their membership on the Board , officership in the Association or membership on any committee of the Board or the Association. Section 13 .04 Waiver of Subrogation. All policies of physi- cal damage insurance maintained by the Association shall provide , if reasonably possible, for waiver of : ( 1 ) any defense based on coinsurance; ( 2 ) any right of setoff , counterclaim, apportionment, proration or contribution by reason of other insurance not carried by the Association; ( 3 ) any invalidity, adverse effect or defense on account of any breach of warranty or condition caused by the Association, any Owner or any tenant of any Owner, or arising from any act, neglect, or omission of any named insured or the respective agents , contractors and employees of any insured; ( 4) any rights of the insurer to repair, rebuild or replace, and , (5 ) in the event any Improvement is not repaired , rebuilt or replaced following loss , any right to pay under the insurance an amount less than the replacement value of the Improvements insured or the fair market value of the Improvements. As to each policy of insurance maintained by the Association which will not be voided or impaired thereby, the Association hereby waives and releases all claims against the Board , the Owners , any Manager, Grantor , and the agents and employees of each of the foregoing , with respect to any loss covered by such insurance, whether or not caused by negligence of or breach of any agreement by those Persons , but only to the extent that insurance proceeds are received in compensation for such loss. Section 13 . 05 Insurance Required by Certain Mortgage Associ- ations. Notwithstanding any other provision in this Declaration, the Association shall continuously maintain in effect such casu- alty flood and liability insurance and a fidelity bond meeting the insurance requirements under the Lease and meeting the require- ments for planned unit developments established by the Federal National Mortgage Association ( "FNMA" ) , the Government National Mortgage Association ( "GNMA" ) , and The Mortgage Corporation ( "TMC" ) , so long as any of them is a Mortgagee or an Owner of a Lot in the Subdivision, except to the extent such coverage is not avail- able or has been waived in writing by the FNMA, GNMA and TMC, as applicable. -30- Section 13 .06 Insurance Premiums and Review. The premiums for insurance obtained by the Association or Board pursuant to this Article are included in the Common Assessments made against the Owners. All insurance policies shall be reviewed at least annually by the Board and the limits increased in its discretion. Section 13 .07 Insurance Obligations of Owners. Each Owner shall insure the Owner' s Property against loss or damage by fire or by any other casualty, under the standard form of extended endorsement now in use in the State of California or under such other insurance as may be required by any Mortgagee of the Dwelling Unit . All such insurance shall be in an amount as near as practic- able to the full replacement value of the Dwelling Unit, without deduction for depreciation or co-insurance . Each Owner shall , within thirty (30 ) days after recordation of the conveyance of his Lot from Grantor and thereafter at least ten ( 10 ) days prior to the expiration , termination, cancellation or modification of any existing policy, furnish to the Association duplicate copies of policies or certificates of the insurance certified by the insurance company or by its duly authorized agent, showing that insurance is currently in force. All the policies shall contain a provision that the policies shall not be cancelled or terminated except upon at least ten ( 10 ) days' written notice to the Associa- tion and to each first Mortgagee which has requested notice . Each Owner shall notify the Association of the existence or non- existence of an assignment of the insurance maintained by Owner upon the sale of the Owner' s Lot. Section 13 .08 Duty to _Use Due Diligence in Repair or Recon- struction. The Owner of any damaged Lot or Dwelling Unit shall be obligated to proceed with all due diligence to reconstruct or repair, and the responsible party shall commence reconstruction within three ( 3 ) months after the damage occurs and complete reconstruction within nine ( 9 ) months after damage occurs, unless prevented by causes beyond their reasonable control . If the Common Area is destroyed or damaged and the Member vote under Article Twelve is not to reconstruct , then the Association shall use the same due diligence to clear and landscape the Common Area for community park use . ARTICLE FOURTEEN MORTGAGEE PROTECTION CLAUSE Section 14. 01 Notwithstanding any and all provisions of this Declaration to the contrary, in order to induce The Federal Home Loan Mortgage Corporation ( "FHLMC" ) , the Government National Mortgage Association ( "GNMA" ) and the Federal National Mortgage Association ( "FNMA" ) to participate in the financing of the sale of Lots within the Subdivision, the following provisions are added to this Declaration (and to the extent these added provisions conflict with any other provisions of this Declaration, these added provisions shall control ) : ( a) Each holder, insurer , and guarantor of a First Mortgage encumbering any Lot, at its written request, is entitled to written notification from the Association of any default by the Mortgagor of the Lot in the performance of the Mortgagor' s obligations under this Declaration, the Articles or the By-Laws , if default is not cured within thirty ( 30 ) days after the Associa- tion learns of the default. (b) Each owner, including every first Mortgagee of a Mortgage encumbering any Lot which obtains title to the Lot pursuant to the remedies provided in the Mortgage , or by foreclosure of the Mort- gage , or by deed (or assignment) in lieu of foreclosure , shall be exempt from any "right of first refusal" . ( c) Each first Mortgagee of a Mortgage encumbering any Lot which obtains title to the Lot pursuant to the remedies provided in the Mortgage , or by foreclosure of the Mortgage, shall take title to the Lot free and clear of any claims or unpaid assessments --31- or charges against the Lot which accrued prior to the acquisition of title to the Lot by the Mortgagee. This clause shall not apply to any person who obtains title by a deed in lieu of foreclosure. (d ) Unless at least fifty-one percent ( 51a) of eligible First Mortgagees (based upon one vote for each Mortgage owned ) or Owners of Lots that are not mortgaged (other than Grantor) have given their prior written approval , neither the Association nor the Owner shall : ( i) subject to California Non-Profit Mutual Benefit Corporation law to the contrary; by act or omission, seek to abandon, partition , alienate , subdivide , release , hypothecate , encumber, sell or transfer the Common Area and the improvements on the Common Area which are owned by the Association. The granting of easements for public utilities or for other public purposes consistent with the in- tended use of such property by the Association, as provided in this Declaration, shall not be deemed a transfer within the meaning of this clause; ( ii) change the method of determining the obligations , assessments or other charges which may be levied against an Owner or Lot, or the method of allocating distributions of insurance proceeds or condemnation awards; ( iii ) by act or omission, waive or abandon any scheme of regulations or enforcement of reg- ulations pertaining to the architectural design of the exterior appearance of the Dwelling Units, the maintenance of the exterior walls or common fences and driveways or the upkeep of lawns and plantings in the Subdivison; ( iv) fail to maintain Fire and Extended Coverage on insurable Common Area property on a replacement cost basis in an amount as near as possible to one hundred percent ( 1000 ) of the insurance value (based on current replacement cost) ; (v) use hazard insurance proceeds for losses to any Common Area property for other than the repair, replacement or reconstruction of such Improvements. (vi) amend those provisions of this Declaration, the Articles or the By-Laws which provide for rights or remedies to First Mortgages . (e) All holders, insurers and guarantors of First Mortgages, upon written request, shall have the right to (1 ) examine the books and records of the Association during normal business hours , ( 2) require from the Association the submission of any audited annual financial reports and other financial data prepared by the Association, ( 3 ) receive written notice of all meetings of the Members , and ( 4 ) designate in writing a representative to attend all such meetings. ( f) All holders , insurers and guarantors of First Mortgages who have filed a written request for such notice with the Board shall be given thirty ( 30 ) days ' written notice prior to ( 1) any abandonment or termination of the Association, ( 2) the effective date of any proposed , material amendment to this Declaration, the Articles or By-Laws and ( 3 ) prior to the effective date of any termination of any agreement for professional management of the Subdivision following a decision of the Owners to assume self-management of the Subdivision. The holders , insurers and guarantors of First Mortgages shall be given immediate notice following any damage to the Common Area whenever the cost of reconstruction exceeds Ten Thousand Dollars ( $10 ,000 .00 ) , and as soon as the Board learns of any threatened condemnation proceeding or proposed public acquisition of any portion of the Subdivision. -32- . i • (g) First Mortgagees may, jointly or singly, pay taxes or other charges which are in default and which may, or have , become a charge against any Common Area facilities and may pay any over- due premiums on hazard insurance policies , or secure new hazard insurance coverage on the lapse of a policy, for the Common Area , and first Mortgagees making such payments shall be owed immediate reimbursement for those payments from the Association. (h) The Common Area Reserve Fund described in Article Seven of this Declaration must be funded by regular scheduled monthly, quarterly, semi-annual or annual payments rather than by large Assessments. ( i) The Board shall secure and cause to be maintained in force at all times a fidelity bond for any Person handling funds of the Association, including, but not limited to, employees of any pro- fessional Manager. ( j ) Any breach of, or amendment to, the covenants , conditions or restrictions contained in this Declaration, the Articles or By- Laws shall not affect or impair the lien or charge of any First Mortgage or Deed of Trust made in good faith and for value on any Lot or the Improvements on any Lot. Provided, however, that any subsequent Owner of the Property shall be bound by the covenants, conditions and restrictions , whether the Owner' s title was acquired by foreclosure in a trustee' s sale or otherwise. (k) When a professional management has been previously re- quired by a holder , insurer or guarantor of a First Mortgage , any decision to establish self-management by the Association shall require the approval of sixty-seven percent ( 670) of the voting power of the Association and the holders of fifty-one percent ( 51% ) of the eligible First Mortgages of Lots in the Subdivision. ( 1 ) All intended Improvements in any Phase of Development other than Phase One shall be consistent with the Improvements in Phase One in terms of quality of construction. In addition to the foregoing , the Board may enter into such con- tracts or agreements on behalf of the Association as are required in order to satisfy the guidelines of FHLMC, FNMA or GNMA or any similar entity, so as to allow for the purchase, insurance or guaranty, as the case may be , by such entities of First Mortgages encumbering Lots with Dwelling Units . Each Owner hereby agrees that it will benefit the Association and the membership of the Association, as a class of potential Mortgage borrowers and potential sellers of their Dwelling Units , if such agencies approve the Subdivision as a qualifying subdivision under their respective policies , rules and regulations , as adopted from time to time. Mortgagees are hereby authorized to furnish information to the Board concerning the status of any Mortgage encumbering a Lot . The provisions of this Article may not be amended without the prior written approval of at least seventy-five percent ( 75e ) of all First Mortgagees of Lots in the Subdivision. ARTICLE FIFTEEN PARTY WALLS OR FENCES Section 15. 01 General Rules of Law to Apply. Each wall or fence which is built as a part of the riginal construction of the Dwelling Units upon the Lots and placed on the dividing line between the Lots shall constitute a party wall , and , to the extent not in- consistent with the provisions of this Article , the general rules of law regarding party walls and liability for property damage due to negligence or willful acts or omissions shall apply to those party walls. Section 15. 02 Sharing of Repair and Maintenance. The cost of reasonable repair and maintenance of a party wall shall be shared equally by the Owners of the Lots connected by such party -33- walls . The cost of normal repair and maintenance of party walls between any Lot and the Common Area shall be shared equally be- tween the Lot Owner and the Association, except that the Associa- tion shall pay for maintenance and repair to party walls which are damaged or destroyed due to use of the Common Area. If the Association pays for repairs caused by an individual , the Associa- tion may impose a Special Assessment, as provided in this Declara- tion. Section 15 .03 Destruction by Fire or Other Casualty. If a party wall is destroyed or damaged by fire or other casualty, any Owner whose Lot is affected may restore it, and the other Owner whose Lot is connected by the party wall shall contribute equally to the cost of restoration without prejudice , however, to the right of any such Owner to call for a larger contribution from the other under any rule of law regarding liability for negligent or willful acts or omissions. Section 15. 04 Right to Contribution Runs With Land . The right of any Owner to contribution from any other Owner under this Article shall be appurtenant to the land and shall pass to such Owner' s successors in title. Section 15 .05 Arbitration. Any dispute which arises con- cerning a party wall or the provisions of this Article shall be submitted to , and determined by, arbitration. Each party shall choose one arbitrator, and those arbitrators shall choose one additional arbitrator. The decision shall be by a majority of all the arbitrators, in accordance with the American Arbitration Association Commercial Rules of Arbitration. ARTICLE SIXTEEN ASSOCIATION ACTION, MEETINGS AND LIABILITY Section 16 .01 Association Action, Board , Officers , Members' Approval . Except as to matters requiring the approval of Members , as set forth in this Declaration, the Articles or the By-Laws , the affairs of the Association shall be conducted by the Board and such officers as the Board may elect or appoint. The initial Board shall be appointed by the incorporators or their successors and shall hold office until the first annual meeting , at which time a new Board shall be elected in accordance with the By-Laws . Section 16 .02 Personal Liability. No member of the Board , any committee of the Association, any officer of the Association, the Grantor, or the Manager, if any, shall be personally liable to any Owner or to any other party, including the Association, for any damage , loss or prejudice suffered or claimed on the account- of any act, omission, error or negligence of the Associa- tion, the Board , the manager, if any, or any other representative or employee of the Association , the Grantor or the Architectual Committee , or any other committee , or any officer of the Associa- tion, or the Grantor, provided that such person has , upon the basis of such information as may be possessed by him or her, acted in good faith without willful or intentional misconduct. Section 16 . 03 Annual Meetings of the Association. Regular meetings of Members of the Association shall be held not less frequently than once each calendar year at a time and place pre- scribed by the By-Laws . The first meeting of the Association, whether a regular or special meeting , shall be held within forty- five (45) days after the Close of Escrow for fifty-one percent (510 ) of the Lots authorized for sale under the first public report for the Subdivision, but in no event, shall the meeting be held later than six ( 6 ) months after the Close of Escrow for the sale of the first Lot in the Subdivision. Section 16 . 04 Special Meetings of the Association. A special meeting of the Members he Association be promptly called by the Board upon: (a) The resolution for such a meeting adopted by a majority -34- of a quorum of the Board . (b) Receipt of a written request for a special meeting signed by Members representing at least Five percent ( 5%) of the total voting power of the Association. Section 16 .05 Notice and Place of Meetings . Notice of all Owners ' meetings , annual or special , shall be given by regular mail or telegram and shall be given not less than ten ( 10 ) days, nor more than thirty (30 ) days , prior to the time of said meeting and shall set forth the place, date and hour of the meeting and the nature of the business to be undertaken. All meetings shall be held within the Subdivision or as close as practicable at a reasonable place selected by the Board. Section 16 .06 Quorum and Adjournment. The presence at any meeting in person or by proxy of Owners entitled to cast more than thirty-four percent (34% ) of the total voting power of the Associa- tion shall constitute a quorum. If any meeting cannot be held because a quorum is not present-. , the Owners present, either in person or by proxy, may as otherwise provided by law, adjourn the meeting to a time not less than five ( 5 ) days , nor more than thirty ( 30 ) days , from the time the original meeting was called , pro- vided that the quorum requirement for such an adjournment vote shall be no less than twenty-five percent ( 2501- ) of the total voting power of the Association. If a time and place for the adjourned meet- ing is not fixed by those in attendance at the original meeting or if for any reason a new date is fixed for the adjourned meet- ing after adjournment, notice of the time and place of the ad- journed meeting shall be given to Members in the manner pre- scribed for the regular meetings. Any action which may be taken by the vote of Members at a regular or special meeting , except the election of governing body members where cumulative voting is a requirement, may be taken without a meeting if done in compliance with the provisions of Section 7513 of the Corporations Code . Section 16 .07 Special Provision for Enforcement of Certain Bonded Obligations. In the event ( 1 ) the Common Area Improvements located in the Subdivision are not completed prior to the issuance of a Final Subdivision Public Report for the Subdivision by the California Department of Real Estate ( "DRE" ) , and ( 2) the Associa- tion is obligee under a bond or other arrangement ( "Bond" ) required by the DRE to secure performance of the commitment of Grantor to complete the Improvements , the following provisions of this Section will be applicable : ( a) The Board shall consider and vote on the question of approval by the Association to enforce the obligations under the Bond , with respect to any such Improvement for which a Notice of Completion has not been filed , within sixty ( 60 ) days after the completion date specified for that Improvement in the Planned Construction Statement appended to the Bond. If the Association has given an extension in writing for the completion of any Common Area Improvement, the Board shall be directed to consider and vote on the aforesaid questions , if a Notice of Completion has not been filed, within thirty ( 30 ) days after the expiration of the extension. (b) A special meeting of Members, for the purpose of voting to override a decision by the Board not to initiate action to enforce the obligations under the Bond or on the failure of the Board to consider and vote on the question, shall be held no fewer than thirty-five (35) days, nor more than forty-five ( 45) days, after receipt by the Board of a petition for such a meeting signed by Members representing five percent ( 5% ) of the total voting power of the Association. A vote by Members of the Associa- tion other than Grantor shall be taken at the special meeting . A vote of a majority of the voting power of the Association residing in Members other than Grantor to take action to enforce the obligations under the Bond shall be deemed to be the decision of the Association, and the Board shall thereafter implement this decision by initiating and pursuing appropriate action in the name of the Association. -35- Section 16 .08 Enforcement. The Servitudes , the Articles , the By-Laws , the Lease, and the Rules and Regulations may be enforced by the Association as follows : ( a) Breach of any of the Servitudes contained in this Declaration , the By-Laws or Rules and Regulations of the Associa- tion and the continuation of any such breach may be enjoined , abated or remedied by appropriate legal or equitable proceedings by the Grantor, the City, any Owner or the Association or the successors-in-interest of the Association. Any judgment rendered in any action or proceeding shall include a sum for attorney' s fees in an amount as the Court may deem reasonable , in favor of the prevailing party , as well as the amount of any delinquent payment, interest, costs of collection and Court costs. (b) The result of every act or omission whereby any of the Servitudes contained in this Declaration, or the provisions of the By-Laws or Rules and Regulations of the Association are violated in whole or in part is hereby declared to be and con- stitutes a nuisance , and every remedy allowed by law or equity against a nuisance , either public or private, shall be applicable against every such result and may be exercised by any Owner , by the Association or its successors-in-interest. ( c) The remedies provided in this Declaration for breach of the Servitudes contained in this Declaration or provisions in the By-Laws or Rules and Regulations of the Association shall be cumulative, and none of such remedies shall be exclusive. (d) The failure of the Association to enforce any of the Servitudes contained in this Declaration, By-Laws , or Rules and Regulations shall not constitute a waiver of the right to enforce the Servitudes , By-Laws, or Rules and Regulations. (e) If any Member, his family, guest or any licensee , lessee, or invitee violates the Servitudes , By-Laws , or Rules and Regula- tions of the Association, the Board may, in addition to the other remedies available , after Notice and Hearing , levy a fine or monetary penalty against the Owner for each violation and may suspend or condition such Member' s rights and privileges to vote and to use any portion of the Common Area. Any such suspension or conditional suspension shall be for a period of not more than thirty ( 30) days for any non-continuing infraction. In the case of a continuing infraction ( including non-payment of any assessment after the same becomes delinquent) , the suspension or conditional suspension, may be imposed for as long as the violation continues . Additionally, the Board may take any action authorized by this Declaration, the By-Laws , at law or in equity, to enforce the terms of this Declaration, the By-Laws , and the Rules and Regulations of the Association and to collect any amounts due to the Association including , but not limited to, fines and monetary penalties levied by the Board. ARTICLE SEVENTEEN RESTRICTIONS ON RESALE The Subdivision is part of a housing project approved by the City and leased to Grantor pursuant to a General Plan and program of the City to support the California State Housing objective of encouraging cities and counties to achieve plans to enable develop- ers to create housing at a price that is affordable to low and moderate income purchasers. Additionally, the City' s objective is to control the resale price of the housing so that it will con- tinue to be affordable by low and moderate income purchasers for use as a residence . To accomplish these goals, the Subdivision shall be subject to the following additional Servitudes , which shall be enforceable by the City: Section 17. 01 Verification of Sales Price Prior to Sale. Before any Owner, other than Grantor, may sell or otherwise trans- fer Owner' s Lot_, Owner must submit the proposed sales price to the -36- City, the original purchase price and date of purchase; the cost and nature of any capital improvements and the date the improve- ments were completed or the expenditure made; an itemization of all items included in the proposed sales price under Section 17 .02(d) ; the address of the Owner where notice of approval or disapproval shall be sent; and the name and address of the escrowholder, if any. This submittal shall be in the form of a letter (or other form devised by the City) from the Owner to the City addressed to: City of Palm Springs , Attention: Housing Administrator, P.O. Box 1786 , Palm Springs , California 92263 , deposited in the United States mail registered or certified , return receipt request- ed, postage prepaid, with a copy to the escrowholder, if any, and a copy to any lender financing the proposed sale. The City shall have thirty ( 30 ) calendar days from the date the submittal is deposited in the United States mail or personally delivered to the City to approve or disapprove the proposed sales price and to inform the seller of the Maximum Allowable Sales Price calculated pursuant to Section 17 .02. If the City fails to submit written disapproval to the Owner and escrowholder, if any, within the thirty (30 ) days , the proposed sales price shall be deemed approved . If the City disapproves the proposed sales price , the Owner shall have a right to a hearing before the City Council or some other body appointed by the Council to resolve disputes under this Article. Section 17.02 Maximum Allowable Sales Price . An Owner may not sell , assign or otherwise transfer the Owner' s Lot for a price higher than the Maximum Allowable Sales Price, which is defined as the total of the following: (a) The original purchase price of the Lot, including all closing costs; (b) The cost of any capital improvements installed by Owner pursuant to a building permit required by ordinance and issued by the City, or such other improvements which would qualify as capital improvements as distinguished from maintenance items under the Internal Revenue Code and Regulations; (c) An additional amount computed pursuant to subsections 17 . 02( a) and 17 .02( b) reflecting any cost of living increase. This additional amount is to be calculated by reference to the Consumer Price Index for Urban Wage and Clerical Workers (base year 1967=100) for the Los Angeles-Long Beach-Anaheim, California, Metropolitan Area published by the United States Department of Labor, Bureau of Labor Statistics ( "Index" ) , as follows: ( i ) The Purchase Index shall mean the last index published prior to the recording of the assignment or other transfer document by which the owner acquired the Lot. The Capital Improve- ment Index shall mean the last index published prior to the date of completion of the capital improve- ment or the date of the expenditure for the capital improvement was made . The Resale Index shall mean the last index published prior to the date of the verification by the City as required in Section 17 .01, or if Section 17.01 is violated and no verification is obtained , the Resale Index shall be the last- index published prior to the date an assignment or other transfer document is recorded transferring the Lot to the purchaser. ( ii ) The original purchase price shall be multiplied by a fraction, the numerator of which shall be the Resale Index and the denominator of which shall be the Purchase Index. ( iii) The cost of any capital improvement shall be multiplied by a fraction, the numerator of which shall be the Resale Index and the denom- inator of which shall be the Capital Improvement Index. -37-- ( iv) Notwithstanding the above provisions , if the resulting percentage calculated under Sec- tions 17 .02( ii) and ( iii ) are greater than nine percent ( 9%) and less than twelve percent ( 12%) per annum, the percentage which is multiplied times the original purchase price or capital improvement shall be nine percent ( 90 ) . If the resulting percentage is greater than twelve per- cent (12%) , the percentage used shall be three- fourths ( 3/4) or seventy-five percent ( 750) of the resulting percentage . (d ) The selling costs shall include , without limitation, sales commissions , escrow costs , title companny charges , termite repairs , loan pre-payment penalties , finance charges , and other costs or charges directly related to the sale of the Lot. (e) I£ the Index is changed so that the base year differs from that used on March 1 , 1982 , the Indices shall be converted in accordance with the conversion factor published by the United States Department of Labor Bureau Statistics . If the Index is discontinued or revised , such other govenment index or computation with which it is replaced shall be used in order to obtain sub- stantially the same results as would have been obtained if the Index had not been discontinued or revised. Section 17 .03 Mortgage Protection Clause. The Servitudes contained in this Article shall not affect or otherwise defeat any mortgage or deed of trust made in good faith without knowledge that the Maximum Allowable Sales Price provisions of this Article have been violated . Section 17 .04 Decline in Cost of Living. None of the pro- visions of this Article shall apply if the Purchase Index is greater than the Resale Index . Section 17.05 Provisions May be Waived . The Servitudes con- tained in this Article are for the sole benefit of the City and may be waived by the City, in whole or in part , at any time , by recording a waiver executed by the City specifying the portion to be waived . ARTICLE EIGHTEEN GENERAL PROVISIONS Section 18 .01 Enforcement . This Declaration, the Articles of Incorporation and the By-Laws may be enforced by the Association as follows : ( a) Breach of any of the provisions contained in the Declara- tion or the By-Laws and the continuation of any such breach may be enjoined , abated or remedied by appropriate legal proceedings by any Owner, including Grantor, by the Association or the successors- in-interest of the Association. Any judgment rendered in any action or proceeding pursuant hereto shall include a sum for attorneys' fees in an amount as the Court may deem reasonable , in favor of the prevailing party, as well as the amount of any delinquent payment, interest thereon, costs of collection and Court costs . (b) The result of every act or omission whereby any of the provisions contained in this Declaration or the By-Laws are violated, in whole or in part, is hereby declared to be and constitutes a nuisance , and every remedy allowed by law or equity against a nuisance , either public or private , shall be applicable against every such result and may be exercised by any Owner, by the Assoc- iation or its successors-in-interest. (c) The remedies herein provided for breach of the pro- visions contained in this Declaration or in the By-Laws shall be deemed cumulative and none of such remedies shall be deemed exclusive . -38- (d ) The failure of the Association to enforce any of the provisions contained in this Declaration or in the By-Laws shall not constitute a waiver of the right to enforce the same thereafter. (e) Any breach or amendments of the provisions contained in this Declaration or in the By-Laws shall not affect or impair the lien or charge of any First Mortgage or Deed of Trust made in good faith and for value on any Lot or the Improvements thereon, provided that any subsequent Owner of such Property shall be bound by such provision of the Declaration, Articles and By-Laws , whether such Owner's title was acquired by foreclosure in a trustee' s sale or otherwise . ( f) If any Owner, his family, guest, licensee , lessee or invitee violates any such provisions , the Board may impose a reasonable fine or monetary penalty upon such owner for each violation and may suspend the voting privileges and use of Common Area of such Owner, as further provided in the By-Laws. Such fine or monetary penalty shall be collectible in the manner provided in the By-Laws , but the Board shall give Owner Notice and Hearing before invoking any fine, monetary penalty or suspension. Section 18 .02 Severability. Invalidation of any one of the Servitudes contained in this Declaration by judgment or Court order shall in no way affect any other provisions which shall remain in full force and effect. Section 18 . 03 Term. The Servitudes of this Declaration shall run with and bind the Subdivision and shall inure to the benefit of, and be enforceable by, the Association or the Owner of any land subject to this Declaration, their respective legal rep- resentatives , heirs , successors and assigns, for a term of fifty ( 50 ) years from the date this Declaration is recorded , after which time the Servitudes shall be automatically extended for successive periods of ten (10 ) years , unless within six ( 6 ) months of such termination date , a declaration of termination is adopted pursuant to Section 18 .05 and is recorded. Section 18 . 04 Interpretation. The provisions of this Dec- laration shall be liberally construed to effectuate its purpose of creating a uniform plan for the development of a residential community and for the maintenance of the Common Area. 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. Unless the context requires a contrary construction , the singular shall include the plural and the plural the singular; and the masculine , feminine and neuter. Section 18 .05 Termination and Amendment. Notice of the subject matter of a proposed amendment to, or termination of this Declaration in reasonably detailed form shall be included in the notice of any meeting of the Association at which a proposed amendment or termination is to be considered. A resolution adopting a proposed amendment or termination may be proposed by an Owner at a meeting of Members of the Association. The reso- lution shall be adopted by the vote, in person or by proxy, or written consent of Members representing not less than seventy- five percent ( 750 ) of the voting power residing in Members other than Grantor pursuant to Article Five, Section 5 .01; pro- vided that the specified percentage of the voting power of the Association necessary to amend a specified Section or provision of this Declaration shall not be less than the percentage of the affirmative votes prescribed for action to be taken under that Section or provision. A copy of each amendment shall be certified by at least two ( 2) officers of the Association and the amendment shall be effective when the Certificate of Amendment is recorded . Notwithstanding any other provision of this Declaration, Article Seventeen cannot be amended , terminated , modified , changed , revoked or removed without the prior written consent of the City. Not- withstanding the foregoing , termination of this Declaration, to be effective , must be approved in writing by the record holders of sixty-seven percent ( 67%) of the eligible First Mortgages on all of the Lots in the Subdivision at the time of such termination -•39- based upon one (1) vote for each First Mortgage owned. Amendment of this Declaration, to be effective , must be approved in writing by the record holders of fifty-one percent (51%) of the eligible First Mortgagees on all of the Lots in the Subdivision at the time of such amendment based upon one ( 1 ) vote for each mortgage owned , if the amendment concerns the following: (a) Any amendment which affects or purports to affect the validity of priority of Mortgages or the rights or protection granted to holders , insurers and guarantors of First Mortgages , as provided in Articles VII , VIII , XII , XIV and XVIII hereof. (b) Any amendment which would necessitate a Mortgagee after it has acquired a Lot through foreclosure to pay more than its proportionate share of any unpaid assessment or assessments accruing after such foreclosure. (c) Any amendment which would or could result in a Mortgage being cancelled by forfeiture , or in the individual Lot not being separately assessed for tax purposes . (d ) Any amendment relating to the insurance provisions as set out in Article XIII hereof , or to the application of in- surance proceeds as set out in Article XII hereof, or to the disposition of any money received in any taking under condemnation proceedings. (e ) Any amendment which would or could result in termination or abandonment of the Subdivision or partition or split of a Lot , in any manner inconsistent with the provisions of this Declaration. ( f ) Any amendment which would subject any Owner to a right of first refusal or other such restrictions in favor of the Association, if such Owner exercises his right to sell , transfer or otherwise convey his Lot. (g) Any amendment concerning: ( i) voting rights; ( ii) rights to use the Common Area; ( iii) responsibility for maintenance , repair and replacement of the Common Area or Association Maintenance Areas; ( iv) leasing of Lots; (v) establishment of self-management by the Association where professional management has been required by any holder, insurer or guarantor of a First Mortgage; (vi ) annexation or deannexation of Property to or from the Subdivision. Notwithstanding the foregoing , if a First Mortgagee who receives a written request from the Board to approve a proposed termination, amendment or amendments to the Declaration does not deliver a negative response to the Board within thirty ( 30 ) days of the mailing of such request by the :Board , such First Mortgagee shall be deemed to have approved the proposed termination, amendment or amendments. A certificate, signed and sworn to by at least ( 2 ) officers of the Association that the requisite number of Owners have either voted for or consented in writing to any termination or amendment adopted as provided above , when recorded , shall be conclusive evidence of that fact . The Association shall maintain in its files the record of all such votes or written consents for a period of at least four ( 4 ) years. The certificate reflecting any termination or amendment which requires the written consent of any of the record holders of First Mortgages shall include a •-40- certification that the requisite approval of such First Mortgagees has been obtained. Until the first Close of Escrow for the sale of a Lot in the Subdivision, Grantor shall have the right to terminate or modify this Declaration by recordation of a supple- ment hereto setting forth such termination or modification. Any supplement , amendment or termination to this Declaration must be signed by at least two ( 2 ) officers of the Association indicating that the requisite approvals have been obtained , and such amendment or supplement must be recorded in the Office of the County Recorder for the County in which the Subdivision is located. Section 18 .06 No Public Right or Dedication. Nothing con- tained in this Declaration shall be deemed to be a gift or dedi- cation of all or any part of the Subdivision to the public or for any public use. Section 18.07 Constructive Notice and Acceptance . Every person who owns , occupies or acquires any right;title, estate or interest in or to any Lot or other portion of the Subdivision does , and shall be , conclusively deemed to have consented and agreed to every limitation, restriction, easement, reservation, condition and covenant contained herein, whether or not any reference to these restrictions is contained in the instrument by which such person acquired an interest in the Subdivision, or any portion thereof. Section 18 . 08 Reservation of Easements . Reciprocal , non-ex- clusive easements are hereby reserved for the benefit of adjoining Lot owners for the control , maintenance and repair of the utili- ties of adjoining Lot Owners. Grantor and City expressly reserve, for the benefit of all of the real property in the Subdivision and the Owners , reciprocal , non-exclusive easements of access , ingress and egress over all Lots and over the Common Area for the purposes and enjoyment of the Lots in accordance with this Declaration including, without limitation, for maintenance and repair of utility services; for drainage over, across and upon adjacent Lots; for water resulting from the normal use of adjoin- ing Lots; and for maintenance and repair of any Dwelling Unit. Section 18.09 Notices . Unless otherwise specifically pro- vided in this Declaration , any Notice permitted or required by this Declaration shall be in writing and given either personally or by mail. If given by mail , the Notice shall be deemed deliver- ed when it is deposited in the United States mail , first-class , postage prepaid , addressed as follows : (a) To an Owner or Owners . Addressed to the Owner at the Owner' s Lot , or if the Owner notifies the Association in writing that the Owner wishes Notices to go to a different address , then to that address. if any Owner sells a Lot, the new Owner shall immediately notify the Association. Until the Association is notified in writing , Notices will be deemed properly given in accordance with, and to, the former Owner. (b) To the Association: In care of Grantor at 18 Brook- hollow Drive , Santa Ana, California 92705 , until the Board has the authority to appoint all of the Members pursuant to Section 9 .01( c) . From that time on, they shall_ be submitted to the Board at the address for the Association. ( c) To Any Other Person. At an address submitted in writing to the Association, at the last known address of the Person or as provided by law. Section 18 .10 No Representations or Warranties . No repre- sentations or warranties of any kind , express or implied , have been given or made by Grantor or its agents or employees in connection with the Subdivision, or any portion of the Subdivision, or any Improvement, its physical condition, zoning , compliance with applicable laws, fitness or intended use , or in connection with the Subdivision, sale , operation, maintenance, cost of main- tenance , taxes or regulation as a planned development, except as specifically and expressly set forth in this Declaration and except as may be filed by Grantor from time to time with the • 41- i • � • M California Department of Real Estate or with any other govern- mental authority. Section 18 .11 FHA/VA Approval . As long as there is a Class B membership, the following actions will require the prior approval of the Federal Housing Administration or the Veterans Administration: annexation of additional properties , dedication of common area, and amendment of this declaration of covenants and restrictions and reservations of easements. Grantor has executed this Declaration on the date first written above . FREDRICKS DEVELOPMENT CORPORATION By WADE CABLE, President By DAMES D. WHIT , Secretary STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On February 22 1983 , before me , the undersigned , a Notary Public in and for said County and State, personally appear- ed Wade Cable_ and James D. _White _ , personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons who executed the within instrument as President and Secretary, on behalf of Fredricks Development Corporation, the corporation therein named , and acknowledged to me that such corporation executed the within instrument- pursuant to its By-Laws or a resolution of its Board of Directors. WITNESS my hand and official seal OFFICIAL SEAL __ NOTARYPUBLIC CALIFORNIA hH NO dry Public in and for said—'-- a(,L i;.{ � PRINCIPAL OFFICE IN t+� �:'3 .�\,f, d'dy ORANGE COUNTY rq County and State ;,;`,;a. 1 I N w Ply Caminlsslon [xp Dec.2 198s'(>a CITY OF PALM SPRINGS, CALIFORNIA A' r' By NORMAN KING, City Manager ATTEST: CAT, By ��ity Clerk STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On �� �_ `� 1983 , before me , the undersigned , a Notary Public in and for said County and State, personally appear- ed �W�` and �0D&Lj Sun, /C /� . personally b known to me (or proved to me on the asis of satisfactory evidence) to be the persons who executed the within instrument as City Manager and City Clerk, on behalf of the CITY OF PALM SPRINGS, --42- and acknowledged to me that such persons executed the within instrument on behalf of the City of Palm Springs. WITNESS my hand and official seal . � / U I - ,0 . /fir AA-ez-,=&- - Notary Public in and for said County and State +r � ""`��` 'R s r,. OFFICTZ AFC G d OLIVE 5 MARSHAL;. NOTARY PUBLIC - CnUFL;RpII; 'ia „ �"Y'✓� C.;y cc nim��e��; ^s 1i96iTV�, !„�i3E Recording requested by and when recorded return to : FREDRICKS DEVELOPMENT CORPORATION 18 Brookhollow Drive Santa Ana , California 92705 Attention : Nancy M. Harlan AMENDMENT TO LEASE AGREEMENT THIS AMENDMENT TO LEASE AGREEMENT (hereinafter referred to as the "Amendment" ) is entered into this o2 - n� day of February 1983 , by and between THE CITY OF PALM SPRINGS , a Munici- pal corporation (hereinafter referred to as the "Lessor" ) and FREDRICKS DEVELOPMENT CORPORATION , a California corporation (here- inafter referred to as the "Lessee" ) . R E C I T A L S : A. On March 1 , 1982 , Lessor and Lessee entered into a Lease Agreement (hereinafter referred to as the "Lease" ) where- by Lessor leased to Lessee that certain real property (herein- after referred to as the "Property" ) in the City of Palm Springs , County of Riverside , State of California, more particularly de- scribed on Exhibit "A" attached hereto and incorporated herein by this reference. The Lease was recorded on March 22 , 1982 , in Book 1982 , Pages 47803 et seq. , of the Official Records of Riverside County, California. B . Lessee desires to obtain Federal Housing Administra- tion Insurance (hereinafter referred to as "FHA Insurance" ) for the loans taken by purchasers which are to be secured by the lots into which the Property will be subdivided and the improve- ments constructed thereon . In order to obtain FHA Insurance , it is necessary that the terms and provisions of the Lease be amended herein in order to to conform the Lease to the demands of the staff of the U . S . Department of Housing and Urban Develop- ment as to said Department ' s policy on leasehold properties . NOW , THEREFORE , for and in consideration of the fore- going Recitals , and the mutual covenants set forth hereinbelow , and for valuable consideration , receipt of which is hereby acknow- ledged by both parties , Lessor and Lessee agree as follows : 1 . Addition of Recital E . On Page 1 of the Lease , the following wording is hereby added in its entirety as Recital E of the Recitals : 4 , E . The real property more fully described below, plus all improvements now constructed or to be constructed thereon are hereinafter collectively referred to as the "Premises" . 2 . Amendment of Article IV , Section B . On Page 4 of the Lease , the second line of Article IV, Section B , the word "of" is hereby deleted and in its place is substituted the word "or" . 3 . Addition of Article IV , Section F . On Page 6 of the Lease , the following provision is added in its entirety as Article IV, Section F : "F . No Merger of Fee and Leasehold Estates . So long as any of the debt secured by an encumbrance on the fee simple title and/or the leasehold or subleasehold estate of a lot into which the Property is divided shall remain unpaid , unless the encumbrancer shall otherwise consent in writing , the fee simple title and the leasehold and/or subleasehold estate shall not merge , but shall always be kept separate and distinct , notwithstanding the union of such estates either in the Lessor or the Lessee under the Lease , or in a third party , by purchase or otherwise . " 4 . Amendment of Article VII , Section E . On Pages 12 and 13 of the Lease , Article VII , Section E is hereby stricken in its entirety and amended to read as follows : "E . Notwithstanding anything to the contrary contained elsewhere in this Lease , the lease payments on lots which are financed and/or secured by a Federal Home Administration (FHA ) - insured loan and/or mortgage shall be restricted as follows : The initial lease payment for a lot shall be Seven- teen Dollars ($17 . 00 ) per month. This lease payment shall not be increased for three ( 3 ) years . After the third year , the lease payment may be increased annually on the anniver- sary date of the Assignment of the Lease by no more than two percent ( 2%) of the original FHA site value estimate : i . e . , One Hundred Dollars ( $100 . 00 ) per year or Eight Dol- lars and Thirty-three Cents ( $8 . 33 ) per month ; provided , however , the maximum annual rental permitted under this Lease during the term of an FHA - insured loan and/or mort- gage shall not exceed a sum equal to twelve percent ( 12%) of the original FHA site value estimate , i . e . , -Six Hundred -2- Dollars ( $600 . 00 ) per year or Fifty Dollars ( $50 . 00 ) per month. The City shall take these restrictions into account when computing the total lease payments under the Lease . " 5 . Amendment of Article XI , Section B . On Pages 19 and 20 of the Lease , Article XI , Section B is hereby stricken in its entirety and amended to read as follows : "B . Upon the happening of any of the contingen- cies recited in Subsection "A" above , Lessor shall give written notice to Lessee and to Encumbrancer to correct or cure such default, failure to perform or breach and if , within one hundred twenty ( 120 ) days ( or such further time as may be necessary to replace Lessee) from date of such notice , the default, failure to perform or breach complained of shall not have been corrected in a manner satisfactory to the Lessor , then and in such event , Lessor shall have the right , at once and without further notice to Lessee , to take necessary action to replace Lessee and , provided further , that upon the happening of any one of the contin- gencies enumerated in Subsection "A" above , this Agreement shall be deemed to be breached by Lessee and such legal act divesting Lessee of its rights under this Agreement shall be denied, set aside , vacated or terminated in the Lessee ' s favor. Upon the happening of said latter events , the breach shall be deemed cured as if there had been no breach occasioned by the happening of said contingencies ; provided , however , that Lessee shall , within ten ( 10 ) days after the final denial , vacating or setting aside of such legal act, pay or discharge any and all sums of money which may have become due in the interim under this Agreement and shall then remain unpaid and shall likewise fully per- form and discharge all other obligations which may have accrued and become payable in the interim. " 6 . Amendment of Article XII . On Page 20 of the Lease , on the fourth line of the first paragraph of Article XII , the word "Lessee" is hereby deleted and in its place is substituted the word "Lessor" . 7 . Amendment of Article XIII . On Page 21 of the Lease , in the first sentence of the third paragraph of Article XIII , the word "Grantor" is hereby deleted and in its place is substituted the word "Lessee" . 8 . Amendment of Article XIII . On Page 22 of the Lease , in the sixth sentence of the fourth paragraph of Article XIII , the words "Modular Unit" are hereby deleted and in their place are substituted the words "manufactured unit" . 9 . Amendment of Article XIII . On Page 22 of the Lease , in the fifth sentence , sixth sentence , eighth sentence and ninth sentence of the fourth paragraph of Article XIII , all references to the words "Fredricks" or "Fredricks '" are hereby deleted and in each of their places is inserted, as applicable , the word "Lessee" or "Lessee ' s" . 10 . Addition of Article XVI , Section E . On Page 24 of the Lease , the following wording is added in its entirety as Section E to Article XVI : "E . For the purposes of this Article XVI , the word "Premises" shall not include the interior of a residen- tial dwelling unit. " 11 . Amendment of Article XVIII , Section U. On Page 29 of the Lease , in Article XVIII , Section U , all references to the word "Fredricks" are hereby deleted and in each of their places is inserted the word "Lessee" . 12 . Lease Otherwise Unaffected. Except as expressly set forth herein, the terms of the Lease , as amended shall re- main unaffected and unimpaired by reason of the foregoing amend- ments , and the Lease , as amended , shall remain in full force and effect and binding upon all parties hereto . IN WITNESS WHEREOF , the parties hereto have made and executed this Amendment on the day and year first above written. "LESSOR" ATTEST : CITY OF PALM SPRINGS , CALIFORNIA C_,7CITY CLERK CITY MANAGER" RECEIVED AND APPROVED :'';"\ "LESSEE" FREDRICKS DEVELOPMENT CORPORATION , a California corporation p BY : r>a"'i—`2'✓?� \J` BY : t s : STATE OF CALIFORNIA ) ss . COUNTY OF ORANGE ) On February 22 1983 , before me , the undersigned , a Notary Public in and for said State , personally appeared Wade Cable and James D. White , personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons who executed the within instrument as President and Secretary , on behalf of FREDRICKS DEVELOPMENT CORPORATION , the corporation therein named, and ac- knowledged to me that such corporation executed the within instru- ment pursuant to its by-laws or a resolution of its board of directors . WITNESS my hand and official seal . OFFICIAL SEAL A w �LJ o r� nC)RIS M. FOV�ILEFt , NOTARY PUBLIC-CALIFORNIA � PRINCIPAL OFFICE IN SI NATURE OF NOTARY PUBLIC :v',�Ie"s)if, ORANGE COUNTY F my Commisslon Dec.2. 19fl4fiA r�` '",'x'_�„ Yam-` ( SEAL ) STATE OF CALIFORNIA ) ss . COUNTY OF 'X ) On �r'� 1983 , before me , the undersigned , a Notary Public in and for said State , personally appeared eCt-% IA M ra10 , known to me to be the City Manager , and -) 0-pI y¢ �',) fy e mpg known to me to be the City Clerk of the CITY OF PALM SPRINGS , and known to me to be the persons who executed the within instrument on behalf of the CITY OF PALM SPRINGS and acknowledged to me that the CITY OF PALM SPRINGS executed the within instrument pursuant to a resolution of the City Counsel . WITNESS my hand and official seal . „ OFFICIAL SFAT OLIVE S MARSHALL NOTARY PUBLIC - CALIFORNIA SIGNATURE OF NOTARY PUBLIC f RIVERSIDE COUNTY h1y comm. expires !4)N dl1, 19II6 ( SEAL ) RESOLUTION NO. -14523 OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN AMENDMENT TO THE LEASE AGREEMENT WITH FREDRICKS DEVELOPMENT CORPORATION FOR APPROXIMATELY 60 ACRES OF LAND LOCATED ON THE NORTHWEST CORNER OF SUNRISE WAY AND SAN RAFAEL DRIVE . WHEREAS the City Council approved Lease Agreement No. 1779 with Fredricks Development Corporation for 60 acres of property on the northwest corner of Sunrise Way and San Rafael Drive; and WHEREAS Fredricks Development Corporation has requested an amendment to the existing lease for purposes of obtaining an allocation of HUD subsidized mortgage assistance to assist home purchases; and WHEREAS HUD requires changes to the existing lease arrangements to consider Fredricks Development Corporation applications for FHA insurance on the property; and WHEREAS the requested changes aid in facilitating the use of HUD assistance programs on the property , NOW THEREFORE BE IT RESOLVED that the City Council of the City of Palm Springs approves amendment to the lease agreement with Fredricks Development Corporation for property in Lot 8 and 9 of Tract No . 17642-1 . ADOPTED this 23rd day of February 1983 . AYES : Councilmembers Doyle, Foster, Ortner-Kubler and Mayor pro-tem Maryanov NOES : None ABSENT: Mayor Bogert ATTEST: CITY OF PALM SPRINGS , CALIFORNIA By s/J. Sumich s/Norman R. King City Clerk City Manager REVIEWED & APPROVED RECORDING REQUESTED BY:• 10 WHEN RECORDED, MAIL TO: FREDRICKS DEVELOPMENT CORPORATION 9 a 2 18 Brookhollow Drive Santa Ana, California 92705 Attn: Nancy M. Harlan AMENDMENT TO LEASE AGREEMENT THIS AMENDMENT TO LEASE AGREEMENT (hereinafter referred to as the "Amendment" ) is entered into this 0 Q day of 1982 , by and between THE CITY OF PALM SPRINGS , a Municipalc or- poration (hereinafter referred to as the "Lessor" ) and FREDRICKS DEVELOPMENT CORPORATION, a California corporation (hereinafter referred to as the "Lessee" ) . RECITALS A. On March 1 , 1982 , Lessor and Lessee entered into a Lease Agreement (hereinafter referred to as the "Lease" ) whereby Lessor leased to Lessee that certain real property (hereinafter referred to as the "Property" ) in the City of Palm Springs , County of Riverside , State of California, more particularly de- scribed on Exhibit "A" attached hereto and incorporated herein by this reference. The Lease was recorded on March 22 , 1982 , in Book 1982 , Page 47803 , of the Official Records of the River- side County Recorder. B . Lessee is developing the Property with single-family manufactured housing. C. Lessee desires to obtain Federal Housing Administration Insurance (hereinafter referred to as "FHA Insurance" ) for the loans taken by purchasers which are to be secured by the lots into which the Property will be subdivided and the improvements constructed theeon. In order to obtain FHA Insurance , it is necessary that the terms and provisions of the Lease conform to the guidelines set forth in the United States Department of Housing and Urban Development Policy Statement on leasehold properties (hereinafter referred to as the "Policy Statement" ) , specifically HUD Handbook 4010 .1 CHG, dated September, 1981. D. In order to conform the Lease to the provisions of the Policy Statement, Lessor and Lessee desire to amend the Lease as set forth in this Amendment. NOW, THEREFORE, for and in consideration of the foregoing Recitals , and the mutual covenants set- forth hereinbelow, and for valuable consideration, receipt of which is hereby acknowl- edged by both parties , Lessor and Lessee agree as follows : 1 . Amendment of Article VII , Subsection E. Article VII , Subsection E , at pages 12 and 13 of the Lease , is hereby stricken in its entirety and amended to read as follows: "E. Notwithstanding anything to the contrary con- tained elsewhere in this Lease, the lease payments on lots which are financed and/or secured by a Federal Home Adminis- tration (FHA) - insured loan and/or mortgage shall be restricted as follows: The initial lease payment for a lot shall be Seventeen Dollars ( $17 . 00 ) per month. This lease payment shall not be increased for three ( 3 ) years . After the third year, the lease payment may be increased annually on the anniversary date of the Assignment of the Lease by no more than two percent ( 20 ) of the original FHA site value estimate: i .e. , One Hundred Dollars ( $100 .00 ) per year or Eight Dollars and Thirty-three Cents ( $8 .33 ) per month; provided, however, the maximum annual rental permitted under this Lease during the term of an FHA - insured loan • and/or mortgage shall not: exceed a sum equal to twelve percent ( 12% ) of the original FHA site value estimate, i.e. , Six Hundred Dollar: ( $600 .00 ) per year or Fifty Dollars ( $50 .00 ) per month. The City shall take these restrictions into account when computing the total lease payments due under the Lease, 2 . Amendment of Article XI , Subsection B. Article XI , Subsection B, at pages 19 and 20 of the Lease, is hereby stricken in its entirety and amended to read as follows : "B. Upon the happening of any of the contingencies recited in subsection "A" above, Lessor shall give written notice to Lessee and to Encumbrancer to correct or cure such default , failure to perform or breach and if , within one hundred twenty ( 120 ) days (or such further time as may be necessary to replace Lessee) from date of such notice , the default , failure to perform or breach complained of shall not have been corrected in a manner satisfactory to the Lessor, then and in such event, Lessor shall have the right, at once and without further notice to Lessee , to take necessary action to replace Lessee and , provided further, that upon the happening of any one of the con- tingencies enumerated in subsection "A" above, this Agreement shall be deemed to be breached by Lessee and such breach shall constitute a continuing breach unless such legal act divesting Lessee of its rights under this Agreement shall be denied , set aside, vacated or terminated in the Lessee ' s favor. Upon the happening of said latter events, the breach shall be deemed cured as if there had been no breach occasioned by the happening of said con- tingencies; provided, however, that Lessee shall , within ten ( 10 ) days after the final denial , vacating or setting aside of such legal act, pay or discharge any and all sums of money which may have become due in the interim under this Agreement and shall the remain unpaid and shall likewise fully perform and discharge all other obligations which may have accrued and become payable in the interim. " 3 . Addition of Article IV, Subsection F. The following provision is added in its entirety to the Lease as Article IV, Section F: "F. No Merger of Fee and Leasehold Estates . So long as any of the debt secured by an encumbrance on the fee simple title and/or the leasehold or subleasehold estate of a lot into which the Property is divided shall remain unpaid, unless the encumbrancer shall otherwise consent in writing, the fee simple title and the leasehold and/or subleasehold estate shall not merge , but shall always be kept separate and distinct, notwithstanding the union of such estates either in the Lessor or the Lessee under the Lease , or in a third party, by purchase or otherwise. " kk 4 . Lease Otherwise Unaffected . Except as expressly set (J forth herein, the terms of the Lease shall remain unaffected ' and unimpaired by reason of the foregoing amendments , and the Lease, as amended , shall remain in full force and effect and binding upon all the parties hereto. a IN WITNESS WHEREOF, the parties hereto have made and (j executed this Amendment on the day and year first above written. "LESSOR" ATTEST: CITY OF PALMM SS�PRINGS , CALIFORNIA By: By: ���oj/ CA Clerk City,Manager lllll RECEIVV���//////ED AND APPROVED it 9 a 3 -2- i 0 9 a 4 "LESSEE" FREDRICKS DEVELOPMENT CORPORATION, a Californ)"a corporation T^ADE CABLE Its : President By: L. H.L. GOTH Its: Vice President STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On Auaustj0 , 1982 , before me , the undersigned , a Notary Public in and for said State, personally appeared WAD1a_CLBi , known to me to be the _p,�nt , and u_T.- GC-U , known to me to be the Vic,P 2Ee_idant of FREDRICKS DEVELOPMENT CORPORATION, the corporation that executed the within instrument and known to me to be the persons 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 By-Laws or a resolution of its Board of Directors. WITNESS mlI and and - fficial seal. OFFICIAL SEAL ULef KATHLYN STROPLE N ar P 11C In and for said NOTARY PUBLIC - CALIFORNIA County and State COUNTY MY comm.ORGEexpires MAR 29, 1983 STATE OF CALIFORNIA ) ss COUNTY OF ) On 1982 , before me , the undersigned , a Notary Public in and for said State, personally appeared _NJ 110 M 14 le, ArZAI& , known to me to be the City Manager, and �-rL/-jI7-H known to me to be the City Clerk of the CITY OF PALM SPRINGS , and known to me to be the persons who executed the within instrument on behalf of the CITY OF PALM SPRINGS and acknowledged to me that the CITY OF PALM SPRINGS executed the within instrument pursuant to a resolution of the City Counsel, WITNESS mj/y��hand and official seal /® C C/ ( 2 _ OFFICIAL�SEAT Notary Public in and for said y O'IV ESMAPSHALL County and State I m NOTARY PUBLIC• ;A :OR NIA RIV CS;U' CUUNiY My Comm. expires lUN 30, 1986 -3- RESOLUTION NO. 14361 OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN AMENDMENT TO THE LEASE AGREEMENT WITH FREDRICKS DEVELOPMENT CORPORATION FOR APPROXIMATELY 60 ACRES OF LAND LOCATED ON THE NORTHWEST CORNER OF SUNRISE WAY AND SAN RAFAEL DRIVE. WHEREAS the City Council approved Lease Agreement No. 1779 with Fredricks Development Corporation for 60 acres of property on the northwest corner of Sunrise Way and San Rafael Drive; and WHEREAS Fredricks Development Corporation has requested an amendment to the existing lease for purposes of obtaining an allocation of HUD subsidized mortgage assistance to assist home purchases; and WHEREAS HUD requires changes to the existing lease arrangements to consider Fredricks Development Corporation applications for FHA insurance on the property; and WHEREAS the requested changes aid in facilitating the use of HUD assistance programs on the property, NOW THEREFORE BE IT RESOLVED that the City Council of the City of Palm Springs approves amendment to the lease agreement with Fredricks Development Corporation for property in Lot 8 and 9 of Tract No. 17642-1 . ADOPTED this lst day of September . 1982. AYES: Councilmembers Doyle, Foster, Maryanov, Ortner & Mayor Bogert NOES: None ABSENT: None ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By s/J. Sumich s/Norman R. King City Clerk City Manager REVIE!IED & APPROVED 9b Fredricks Dev Corp-Substituted lease 60 acres low cost hsng. 0 LEASE AGREEMENT `AGREEMENT #1779 Res 1418_3, 3_-17-82 THIS LEASE, made and entered into this 1st day of March; 1982 , by and between. the CITY OF PALM SPRINGS , a Municipal corporation , hereinafter referred to as LESSOR, and FREDRICKS DEVELOPMENT CORPORATION, a California corporation, hereinafter referred to as LESSEE. RECITALS A. Lessor owns certain - property located in the City of Palm Springs, County of Riverside , State of California, more fully described below, and B. Lessor wishes to enter into the lease of the property in the interest of furthering and carrying out its public purpose; and C. Lessee and Lessor intend that the Lessee will construct a single-family home development of manufactured housing upon the leased premises and shall assign its rights under this Lease in and to the Common Area to a Homeowners Association and shall assign all of its right, title and interest under this Lease in and to the individual lots to the purchasers of the. manufactured units. D. Pursuant to the Construction Development Agreement be- tween Lessor and Lessee, the manufactured units shall be priced so as to be affordable by low-moderate income persons. NOW, THEREFORE, in consideration of the rents, covenants and agreements contained herein and other valuable considerations, Lessor hereby rents and leases to Lessee, and Lessee hires , leases and takes from Lessor on the terms and conditions herein- after set forth, the tract of land in the City of Palm Springs , County of Riverside , State of California, ,consisting of sixty (60) acres more or less , more particularly described as follows : Lots 8 and 9 of Tract 17642-1, - as shown on the Map recorded on November 18 ,. 1982 , in Book 122 , Pages 88 , 89 and 90 , in the Office of the Riverside County Recorder. ARTICLE I - TERM The term of the leasehold estate will be fifty ( 50 ) years , commenc- ing on March 1 , 1982 , and terminating at 12 :01 A.M. , Pacific Standard Time , on March 1 , 2032 „ 0 • ARTICLE II - IMPROVEMENTS/DESCRIPTION OF CONCESSION- Lessor hereby grants Lessee the right and privilege to construct single-family housing, including condominiums , planned development district, manufactured housing and other "for sale" units for the benefit of low and moderate income persons in accordance with plans and specifications approved by Lessor. However, no part of the Premises may be used -for any purpose tending to injure the reputation thereof, unreasonably disturb either the neighborhood or occupants of the neighboring property, or constitute a nuisance. Lessee and all persons using or occupying any part of the Premises will comply with all relevant public laws, ordinances and regula- tions. Assignees shall be subject to, and shall abide by, the restrictions and duties contained in the Declaration. Lessee shall have the right to assign all of its right, title, duty and interest under this Lease in and to the Common Area to the Homeowners Association pursuant to the Declaration. Lessee shall also have the right to assign all of its right, title , duty and interest in and to the individual lots to the purchasers of the manufactured units. Lessee may provide other services inci- dental to those which are normally provided by and for such a development. ARTICLE III - CONSTRUCTION OF IMPROVEMENTS BY LESSEE A. General Specification. Lessee shall, without cost to Lessor and within the time periods prescribed herein, commence and complete construction of a single-family housing develop- ment. The design of the development shall be approved by the Lessor. Lessor' s approval shall not be unreasonably withheld. B. Submission of Plans and Specifications. Lessee shall sub- mit to Lessor for approval final plans and specifications for a manufactured housing development, including support facilities , parking facilities , and landscaping plans. Les- see' s plans and specifications for building shall be subject to such approvals by Lessor as are currently required by -2- • • applicable statutes and ordinances. Such approval shall not be unreasonably withheld . It is specifically understood and agreed by Lessee, however, that the improvements , as allowed hereinabove, shall be a manufactured housing develop- ment which may be constructed in phases. C. Mechanics Liens; Notice of Completion; Notice of Non-Respon- sibility. 1 . Lessee agrees to hold Lessor harmless from and against any and all claims by mechanics, materialmen or suppli- ers, which may result from the completion of the con- struction, finishing , decorating , equipment or fixtur- ization of improvements made by Lessee. Lessee further agrees to furnish Les-sor, upon completion of construc- tion, certificates of completion satisfactory to Lessor. Such certificates shall show that all costs of construc- tion have been paid and that no liens shall attach to the realty. 2. Prior to the commencement of construction of any improve- ments on the leased property, or any repair or alteration thereto, the Lessee shall give Lessor not less than thirty ( 30 ) days ' advance notice, in writing, of inten- tion to begin said activity in order that non-respons- ibility notices may be posted and recorded , as provided by State and local laws. The Lessor or its representa- tives will have the right to go upon the Premises and to post and keep posted thereon notices of non-responsibil- ity. A. Construction Schedule/Default. 1. Within ninety (90 ) days following final approval of the plans and specifications for the improvements by Lessor, Lessee shall 'commence construction, which construction shall be completed by. october 1 , 1986 , plus the aggregate of any extensions granted by Lessor from the date of commencement of construction. 2. If Lessee fails to complete improvements , development and construction within the time period as specified -3- hereinabove , the Lessor may at its sole option require that the guaranteed minimum rentals payable under this Lease increase in an amount equal to twenty-five percent (25%) , beginning the month following that month in which said construction was to be completed. This increase shall remain in full force and effect from its effective date and until the contemplated improve- ments are completed. ARTICLE IV - ENCUMBRANCE A. Leasehold May Be Encumbered . This 'Lease, or any right here- to or interest herein of any of the improvements on the leased premises, may be encumbered with the written approval of Lessor. No such encumbrance or any addition thereto or extension thereof shall be valid without said approval provided , however, Lessor shall consent in writing to any encumbrance the proceeds of which are limited to use for development or improvement of the leased property, or any encumbrance securing financing through mortgage revenue bonds. Either prior to or concurrent with the recordation of the encumbrance instrument, Lessee will cause a fully conformed copy thereof to be delivered to the Lessor together with a written notice containing the name and post office address of the mortgagee, trustee , beneficiary or other holder of the beneficial interest in the encumbrance instru- ment. ( Encumbrancer) . , B. Encumbrance Confined to Leasehold . Encumbrance must be con- fined to the leasehold interest of Lessee of the subleasehold interest of a sublessee and shall not jeopardize in any way the Lessor' s interest in the land. Lessee agrees to furnish as requested any financial statements or analyses pertinent to the encumbrance that Lessor may deem necessary to justify the amount, purpose and terms of said encumbrance . C. Notice of Default.- In the event of default by the Lessee of the terms of an approved encumbrance , the encumbrancer may exercise any rights provided in such approved encumbrance, -4- provided that before any sale of the leasehold , whether by - power of sale or foreclosure, the encumbrancer shall give Lessor notice of the same character and duration as is required to be given to Lessee by such encumbrancer and/or by the laws of the State of California. Any notice of default shall comply with the provisions of Section 2924 ( c) of the Civil Code of. the State of California. D. Sale Under Encumbrance. If any sale -Under the approved encumbrance occurs , whether by power of sale or foreclosure , the purchaser at such sale shall succeed to all of the rights, title and interest of the Lessee in the leasehold estate covered by said approved encumbrance. It is further agreed that, if the purchaser at such sale is- the encum- brancer, the encumbrancer may sell and assign the leasehold interest without any further consent, provided that the assignee shall be bound by all 'the terms and conditions of this Lease. If the encumbrancer is the purchaser, it shall be required to perform this Lease only so long as it retains title thereto. If a sale under the approved encum- brance occurs , and the purchaser is a party other than the encumbrancer, said purchaser, as successor-in-interest to the Lessee, shall be bound by all the terms and conditions of this Lease. E. obligation of Encumbrancer Under Lease. Lessor agrees that it will not, pursuant to the right granted in Article XI of this Agreement below, require encumbrancer to take necessary action to replace Lessee because of any default or breach hereunder on the part of Lessee if the encumbrancer under the trust deed , within ninety (90 ) days after service of written notice on the encumbrancer by Lessor of its inten- tion to exercise its powers under Article XI of this Agreement for such default or breach, shall: 1. Cure such default or breach if the same can be cured by the payment or. expenditure of money provided to be paid under the terms of this Lease; provided , however, that for the purpose of the foregoing , the 'encumbrancer -5- shall not be required to pay money to cure the bank- ruptcy or insolvency of Lessee; or 2. Arrange for replacement of Lessee with a new Lessee who agrees to be bound and comply with the terms and conditions of this Agreement; or 3. If such default is not so curable, cause the trustee under the trust deed to commence and thereafter dili- gently to pursue to completion steps and proceedings for judicial foreclosure , the exercise of the power of sale under and pursuant to the trust deed in the manner provided by law, or accept from Lessee an assign- ment in-lieu of foreclosure, and keep and perform all of the covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until such time as said Leasehold shall be sold upon exercise of power of sale pursuant . to the trust deed , or be released or reconveyed thereunder, or be sold upon Judicial foreclosure or be transferred by deed in-lieu of foreclosure. ARTICLE V - TITLE TO IMPROVEMENTS Title to all fixed improvements made to and placed upon the premises shall be the property of the Lessee subject to security rights of any encumbrancer but shall vest in Lessor at the end of the term of this Lease Agreement. The manufactured units ' furniture , furnishings and other personal property will not become the property of Lessor at the end of the term of this Lease. Provided, that the manufactured units may not be removed until the end of the term of this Agreement. ARTICLE VI - OBLIGATIONS OF LESSEE A. Lessee, its employees, agents or servants and its assignees , shall at all times comply with the laws and regulations of the United States of America, the. State of California and all applicable ordinances , codes and regulations of the City of Palm Springs , as they now exist or as they may hereafter -6- i be lawfully amended . Violations thereof by Lessee, its agents , servants or employees, or revocation of permits or licenses required in the performance of this Agreement, shall constitute a breach of this Agreement by Lessee. Upon such breach, Lessor may take necessary action to replace Lessee. At its own cost, Lessee will make , or cause to be made, any repair or alteration to the Premises which may be required in order- to comply with the foregoing. Lessee will indemnify and save Lessor harmless from any penalty, damage or charge imposed for the violation of these covenants whether caused by Lessee' s neglect, omission or willful act of any person on the Premises by license or invitation of Lessee or holding or occupying any part of the Premises by right of Lessee. If any abatement order is issued against Lessor or otherwise subjects Lessor to criminal or civil penalties or liability, Lessee will comply with the order and will hold Lessor harmless from any such penalties and liability. B. Lessee will pay when due, or cause to be paid , as required or permitted, all taxes which may be levied against Lessee ' s property or operations under this Lease, including all prop- erty, sales, use, business activities or other taxes, assess- ments, rates and other governmental charges ( impositions) applicable to the Premises or to any personal property situated thereon, in addition to rent, including (but not limited to) assessments for public improvements or benefits which will for any period subsequent to the execution of this Lease and prior to termination, become due and payable , laid, assessed , levied or imposed upon, or become due and payable and a Lien upon the Premises. Any imposition for a fiscal period of the taxing authority, which includes a portion of the Lease term but expires after the termination of this Lease, will be apportioned between -7- the parties , whether or not the imposition is paid, assessed , levied , imposed and payable or has become a lien upon the Premises . Any tax assessed on the rental paid by Lessee to Lessor shall not be the Lessee' s responsibility. Lessee specifically acknowledges that the leasehold interest grant- ed herein may be subject to possessory interest taxes, as defined in the California Revenue and Taxation Code. Lessee will .furnish Lessor with official receipts or other evidence satisfactory to Lessor that the imposition has been paid, within sixty ( 60 ) days of receipt of Lessor' s written request. C. Lessee shall provide , in accordance' with the Palm Springs Municipal Code , a complete and proper area for the adequate sanitary handling and disposal , of all trash, garbage and other refuse of the development. It is agreed that the piling of boxes, cartons , barrels or other similar items in an unsightly or unsafe manner on or about the Premises is prohibited. D. Lessee shall pay, in addition to rent, all other costs connected with the use of the Premises , facilities, or the rights and privileges granted herein. Lessee agrees , at its own expense, to cause the Premises and improve- ments , including automobile parking facilities and land- scaping to be maintained in a first class , presentable condition and agrees to supply a landscape maintenance plan to assure that the building and grounds continue to present an attractive appearance. E. Lessee will not suffer or permit to be maintained upon the outside of any improvements located on the Premises any billboards or advertising -signs except those which have the specific prior approval of Lessor. It is agreed , however, that Lessee may maintain on the Premises , or on the outside of the management or sales office erected on the Premises , its name on neatly painted , electrical or other illuminated sign or signs which conform to all ordinances -8- • or regulations of the City of Palm Springs relating to signs. The size and type of any sign or signs must have the prior written approval of Lessor, which approval shall not be unreasonably withheld . . Provided , that until the development is complete , all of the lot leases assigned and the manufactured units sold , Lessee may maintain a sales office in the Common Area and may place signs on the Premises for the purpose of sales activities. F. Lessee will provide and regulate parking for automobiles of Lessee' s tenants, guests , visitors, employees and sup- pliers , in accordance with requirements currently imposed by the City of Palm Springs. G. Lessee is prohibited from offering ,, selling, assigning or subleasing any single-family home for the purpose of time- share or other interval ownership. In no event shall Lessee sublet any of the above-described Premises for periods of less than thirty ( 30 ) days occupancy. Lessee covenants and agrees that it will insert a provision in all its assignments for any of the above-described Premises to provide that assignees and all other successors- in-interest are bound by the provisions of this Lease , recite recording information concerning this Lease, and provide the name and address of Lessee or the Homeowners Association where any assignee or successor-in-interest may obtain a copy of this Lease. Lessee further covenants and agrees that all its assignments will provide that in no event shall the assignee or any other successor-in- interest sublet any of the above-described Premises for periods of less than thirty ( 30 ) days' occupancy and that all such subleasing be subject to approval by the Lessor. I. Upon the commencement of the Development Phase, Lessee assumes the risk of the following matters : the quality and characteristics of the soil and its geology, waters on and underground , drainage , manner of construction, condition, and state of repair of any existing improvements; the ownership of all improvements; and the nature;. provisions -9- .:f '• ' and effect of all health, fire , zoning , building , subdivision and all other use and occupancy laws, ordinances and appli- cable regulations . J. Lessee will pay, or cause to be paid , all charges payable by Lessee for water, sewer, heat, . gas, power or electrical current, telephone , cable television, and all other utility services delivered to the Premises. ARTICLE VII - RENTAL A. All rents payable by Lessee to Lessor pursuant to the Lease shall be paid by the 15th day of the month following the month during which such .rent accrues. B. Rent during the first two ( 2) years .following the effective date of this Lease ( as defined in Article I , B. ) shall be on a graduated scale, starting at Two Hundred Forty Dollars ($240 .00 ) for the first month, then increasing One Hundred Twenty Dollars ( $120 .00 ) per month for the second through twelfth month , to a total. of One Thousand Five Hundred Sixty ($1,560 .00 ) for the twelfth month. Rental for the thirteenth month shall be One Thousand Six Hundred Twenty Dollars ($1,620 .00 ) per month , then increasing One Hundred Eighty Dollars ( $180 .00 ) per month for the fourteenth through twenty-fourth months , to a total _ of Three Thousand Six Hundred Dollars ( $3 ,600 .00 ) for the twenty-fourth month. The foregoing schedule notwithstanding , in the ,event that escrows shall have closed on ninety percent (90%) of the single-family homes prior to the twenty-fourth month , the scheduled rents shall accelerate to Three Thousand Six Hundred Dollars ( $3 ,600 .00 ) per month starting on the 1st day of the following month.. C. Beginning with the third year following the effective date of this Lease, rental shall be computed as follows: 1. The base rent shall be the sum of Three Thousand Dollars ( $3 ,000 .00 ) per month. 2. The base rent shall be adjusted annually, on the -10- anniversary of the effective date of this Lease, commenc- ing with the second such anniversary, to reflect in- creases in the Consumer Price Index, according to the formula stated below. 3. The Consumer Price Index referred to herein is the index published by the U.S. Department of Labor for the Los Angeles-Long Beach-Anaheim Metropolitan Area, All Urban Consumers , All Items , 1967=100 . If for any reason there is any change in the method of calculation or formulation of said index, or if such index shall no longer be published , then another index generally rec- ognized as authoritative shall be substituted . In any event, the base used by any new index shall .be reconcil- ed to the above referred 1967 index. 4. The starting index shall be the published index figure for the month of September, 1981 , to wit: 279 .3 . S. The closing index shall be the published index figure for the second month preceding the anniversary of such effective date , to which the rent is to be adjusted. 6. The formula for computation of rent is as follows: (a) Subtract the starting index from the closing index. The resulting figure is the index point difference. (b) Divide the index point difference by the starting index. The resulting figure is the percentage change in the . Consumer Price Index, expressed in decimal figures, for the period from the approval date of this Lease to the particular anniversary being used as a measure. (c) Divide the percentage change by the number of the anniversary used as closing date. The resulting figure is the average annual percentage change since the approval date of the Lease. (d) If the average annual percentage change is nine percent ( 9% ) or less, multiply the base rent by the percentage change determined in (b) above. -11- i • The resulting figure is the rental increase , over the base rent, for the following year. (e) If the average annual percentage change is twelve percent (12%) or more , multiply the percentage change by .75 , then multiply that figure by the base rent to determine the rental increase , over the base rent, for the following year. (f) If the average annual percentage change is be- tween nine percent (9%) and twelve percent (12% ) , multiply the number of the anniversary by .09 , then multiply that figure by the base rent. The resulting figure is the rental increase, over the base ' rent, for the following year. 7 . In no event shall the monthly rental for the twenty-fifth month or any succeeding months of this Lease be less than Three Thousand Dollars ( $3 ,000 .00 ) per month. D. The rent shall be abated during any period that: 1. .Lessor fails to deliver possession to Lessee by reason of a court order or otherwise; 2. Recording of Lessee' s construction loan is enjoined by court order due to a question of validity of the Lease; 3. Issuance of a building permit to Lessee is enjoined by court order or is revoked by court order due to a question of validity of the Lease; 4. The City fails or refuses to issue the necessary build- ing, sale or occupancy permits. - 5. Construction is enjoined by court order due to a question of validity of the Lease or is halted or interfered with by the City. E. Notwithstanding anything to the contrary contained else- where in this Lease , the lease payments on lots which are financed and/or secured by a federally insured loan and/or mortgage shall be restricted as follows: The initial lease payment for a lot shall be Thirty-three Dollars ( $33 .00 ) per month. This lease payment shall not be -12- increased for three ( 3) years. After the third year, the lease payment may be increased by two percent ( 2% ) per year ( i .e. ) , Seven Dollars and Ninety-two Cents ( $7 .92) per year or Sixty-six Cents ( $ .66 ) per month on the anniversary date of the Assignment of the Lease. Provided, that the lease payments shall not be increased during the entire term of the loan by more than a total of twelve percent ( 12% ) ( i.e. ) , Forty-seven Dollars and Fifty-two Cents ( $47 .52) per year or Three Dollars and Ninety-six Cents ( $3 .96 ) per month. Thus, the lease payments for a lot financed and/or secured by a federally-insured loan and/or mortgage , over the term of the loan, may not be increased so that they exceed Four Hundred Forty-three Dollars and Eighty-six Cents ( $443 .86 ) per year or Thirtysix Dollars and Ninety-six Cents ( $36 .96 ) per month. The Citv shall take these restrictions into account when computing the total lease payments due under the Lease. ARTICLE VIII - INSURANCE/INDEMNIFICATION A. Liability of Lessor. Indemnification. Lessee will indem- nify, defend and hold Lessor harmless from loss, damage or liability arising from any accident or occurrence causing injury to any person or property due: 1. to the use of the Premises by Lessee or any of its agents , contractors, servants, employees or licensees; or 2. to the condition of the Premises; and 3. to any failure of Lessee to comply with any of the re- quirements or provisions of this Lease. Liability Insurance. During the entire term of this Agree- ment, Lessee agrees to procure and maintain public liability insurance at its sole expense , to protect against loss from liability imposed by law for damages on account of bodily injury, g g_ y j y, inclUdin death therefrom suffered or alle ed to be suffered by any person or persons whomsoever, arising out of, or in connection with, the use of the Premises during the term of this Lease, resulting directly -13- or indirectly from any act or activities of the Lessor or Lessee , or any person acting for the Lessor, or Lessee under its control or direction. Such public liabilitv and property damage insurance shall also provide for and indem- nify the Lessor against any and all legal expense and other costs attendant to defending such claims. The public liability and property damage insurance shall be maintained in full force and effect throughout the term of this Lease and any extension thereof in the following minimum limits : Bodily Injury $500 ,000 each person $1,000 ,000 each occurrence $1 ,000 ,000 aggregate products & completed operations Property Damage $500 ,000 each occurrence $500 ,000 aggregate A combined single limit policy with aggregate limits in the amount of one Million Dollars ( $1 ,000 ,000 ) will be consider- ed to be the required minimum limits. All of such insurance shall be primary and non-contributory, shall name the City of Palm Springs as an additional insured , and shall provide for non-cancellation except upon thirty ( 30 ) days prior written notice to Lessor. To evidence the issuance of said insurance, Lessee will obtain and furnish to Lessor a certificate of insurance issued by the insuring company or companies. All insurance companies will be licensed to do business in the State of California. If Lessee fails to pay for or maintain liability insurance , Lessor may procure the insurance on Lessee' s behalf. Any premium or cost paid by. Lessor will be reim- bursed to it by Lessee upon demand. If the operation under' this Agreement results in an increas- ed or decreased risk in the reasonable . opinion of the City Manager, the Lessee agrees that the minimum limits herein- above designated shall be changed accordingly upon request -14- by the City Manager. Lessee agrees that provisions of this paragraph as to main- tenance of insurance shall not be construed as limiting in any way the extent to which the Lessee may be held respons- ible for the payment of damages to persons or property resulting from Lessee' s activities , or the activities of any person or persons for which Lessee is otherwise respons- ible. B. Worker' s Compensation Insurance. The Lessee shall procure and maintain, at its sole expense , Worker' s Compensation Insurance in such amounts as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Lessee and the Lessor against any loss, claims or damages arising from any injuries or occupational diseases happening to any worker employed by the Lessee in the course of carrying out the terms of this Lease. C. Fire and Extended Coverage Insurance. Lessee also agrees to procure and maintain, at its sole expense, during the term of this Lease and .any extension thereof, a policy of fire, extended coverage and vandalism insurance on all permanent property of Lessee' s of any insurable nature located upon the leased Premises. Said policy shall be in an amount sufficient to cover at least ninety percent (90a) of the replacement costs of said property. Lessee agrees to:pay the premium for such insurance and shall require that any insurance proceeds resulting from a loss under said policy are payable jointly to Lessor and Lessee , and said proceeds shall constitute a trust fund to be reinvest- ed in rebuilding or repairing the damaged property or said proceeds may be disposed of as specified in paragraph following, entitled "Waste , Damage or Destruction" hereof; provided , however, that within the period during which there is in existence a mortgage upon the leasehold , then, and for that period , all policies of fire insurance , extended -15- coverage and vandalism shall be made payable jointly to the mortgagee or beneficiary, the named insured , and Lessor and shall be disposed of jointly by the parties for the following purpose: 1. As a trust fund to be retained by said mortgagee or beneficiary and applied in reduction of the debt se- cured by such mortgage with the excess remaining after full payment of said debt to be paid over to Lessee and Lessor to pay for reconstruction, repair or replace- ment of the damaged or destroyed improvements, or in progress payments as the work is performed. The balance of said proceeds shall be paid to Lessee. Provided further, however, nothing herein shall prevent Lessee , at its option and with the approval of said mortgagee or beneficiary, from filing a faithful per- formance bond in favor of said mortgagee or beneficiary and Lessor in an amount equivalent to said insurance proceeds in lieu of surrendering said insurance proceeds to said mortgagee or beneficiary and Lessor. 2. In the event that this Lease is terminated , by an agree- ment between Lessor and Lessee and said improvements are not reconstructed, repaired or replaced , the insur- ance proceeds shall be jointly retained by Lessor and said mortgagee or beneficiary to the extent necessary to first discharge the. debt secured by said mortgage or deed of trust and then to restore the premises in a neat and clean condition. Said mortgagee or beneficiary shall hold the balance of said proceeds for Lessor and Lessee as their interest may appear. D. Waste, Damage or Destruction. Lessee agrees to not commit or suffer to be committed any waste , injury or any public or private nuisance , to keep the Premises clean and clear of refuse and obstructions , and to dispose of all garbage, trash and rubbish in a manner satisfactory to Lessor. If the leased Premises shall be damaged by any cause which -16- puts the Premises into a condition which is not decent , safe, healthy and sanitary, Lessee agrees to make , or cause to be made , full repair of said damage and to restore the Premises to the conditions which existed prior to said damage , or Lessee agrees to clear and remove from the leased Premises all debris resulting from said damage, and rebuild the Premises in accordance with plans and specifi- cations previously submitted to Lessor and approved in writing in order to replace in kind and scope the operation which existed prior to such damage. Lessee agrees that preliminary steps toward performing repairs, restoration or replacement of the Premises shall be commenced by Lessee within thirty ( 30 ) days of the date the damage was incurred , and the required repairs, restoration or replacement shall be completed within a reasonable time thereafter. Lessor may determine an equitable 'period that said Premises are untenable by reason of such damage. E. Evidence of Insurance. A certificate of insurance, or an appropriate insurance binder, evidencing the above insurance coverage with a company acceptable to the Lessor' s Risk Management Officer shall be submitted to Lessor prior to execution of this Lease on behalf of Lessor. F. Notice to Lessor, Insurance Coverage Change. The terms of the insurance policy or policies issued to provide the above insurance coverage shall provide that said insurance may nGt be amended or cancelled 'by the carrier, for non-payment of premiums or otherwise , without thirty ( 30 ) days prior written notice of amendment or cancellation to Lessor. In the event the said insurance is cancelled , the Lessee shall, prior to the cancellation date, submit to Lessor' s City Clerk new evidence of insurance in the amount hereto- fore established . Provided , that upon transfer of the Common Area in Phase I to the Association, the provisions of the Declaration of Covenants , Conditions and Restritions shall supercede and replace this Article. -17- ARTICLE IX - TERMINATION BY LESSEE In addition to all other remedies available to the Lessee , this Agreement shall be subject to cancellation by the Lessee with the written consent of Lessor should any one or more of the following events occur: A. The issuance by any court of competent jurisdiction of a permanent injunction in any way preventing the use of the leased Premises for the purpose hereinafter enumerated . B. The breach by the Lessor of any of the terms, covenants or conditions of this Agreement to be kept, performed and observed by the Lessor,, and the failure of the Lessor to remedy, or to commence action to remedy such breach for a period of thirty ( 30 ) days after written notice from the Lessee of the existence of such breach. C. The assumption by the United States Government, or the State of California, or any authorized agency of same , of the op- eration, control or use of these facilities . in such a manner as to substantially restrict the Lessee. from conducting its operation if such restrictions be continued for a period of six ( 6 ) months or more. ARTICLE X - TERMINATION BY LESSOR A. If this Lease is terminated under Article I , A, Lessee will deliver copies of all architectural and engineering plans , drawings and specifications , soil reports, surveys, title reports and all similar or like materials covering or relat- ed to the Premises in the possession or control of Lessee without cost or warranty of any sort to Lessor. B. Remedies for any breach or default which occurs prior to termination will survive the termination. ARTICLE XI -• REMEDIES OF LESSOR A. In addition to all other remedies available to the Lessor, and subject to the provisions of Article III , D, hereof, this Agreement hereby grants Lessor the option to take necessary action to replace Lessee should any one or more -18- of the following occur: 1 . If Lessee shall be divested of its rights , powers and privileges under this Agreement by operation of law. 2. If Lessee shall default in, or fail to make, any payments at the time and in the amounts as required of it under this Agreement. 3. If Lessee shall fail in a material and substantial way to perform, keep and observe all of the covenants and conditions contained in this Agreement to be performed , kept and observed by it. 4. If the Lessee shall fail in a material and substantial way to abide by all applicable laws, ordinances and rules .and regulations of the United States , State of California or the City of Palm Springs. B. Upon the happening of any of the contingencies recited in subsection "A" above , Lessor shall give written notice to Lessee and to Encumbrancer to correct or cure such default, failure to perform, or breach and if, within ninety (90 ) days from date of such notice, the default, failure to perform or breach complained of shall not have been corrected in a manner satisfactory to the Lessor, then and in such event , Lessor shall have the right, at once and without further notice to Lessee, to take necessary action to replace Lessee and, provided further, that upon the happening of any one of the contingencies enumerated in subsectinn "A" above, this Agreement shall be deemed to be breached by. Lessee and such breach shall constitute a continuing breach unless such legal act divesting Lessee of its rights under this Agreement shall be denied, set aside, vacated or terminated in the Lessee' s favor within forty-five ( 45 ) days from the happening of the contingency. Upon the happening of said latter events, the breach shall be deemed cured as if there had been no breach occasioned by the happening of said contingencies, provided that Lessee shall within ten (10 ) days after the final denial , vacating or setting aside of such legal act, pay or discharge any and -19- all sums of money which may have become due under this Agree- ment in the interim and shall then remain unpaid and shall likewise fully perform and discharge all other obligations which may have accrued and become payable in the interim. ARTICLE XII - CONDEMNATION If the leased premises shall be taken by any agency possessing the power of eminent domain, any award of compensation shall be divided between Lessor and Lessee , or anyone claiming under Lessee, in such manner that Lessee shall first receive the full value allocated to the land , and to any improvements placed thereon by the expense of Lessor, and Lessee, or those claiming under Lessee shall then receive any remaining portion of such award allocated to the value of improvements placed upon such land by Lessee or those claiming under Lessee. If such taking shall be of the entire Premises , or so much thereof that the continued use as a development for the single-family resi- dences shall be impossible or impractical , then this Lease shall terminate , and Lessee shall be relieved of any further obligation for payment of rent thereunder. If such taking shall be of only a part of the leased Premises, so that continued use or maintenance of the residential facilities is feasible upon the remainder , then this Lease shall continue in full force and effect, except that any rents shall be abated on the same basis as they are paid under the Declaration of Covenants , Conditions and Restrictions. ARTICLE XIII - ASSIGNMENT The privileges contained herein are exclusive . Until construction of the improvements on the Common Area or 'lot' to be assigned are completed, the Lessee agrees that it will not assign the same or any portion thereof or any improvements thereon including , but not limited to, building or facilities constructed on the Premises without the express consent. of the Lessor in writing. Any pur- ported assignment without the consent of the Lessor shall be void. Lessor will not be arbitrary in granting its "permission , -20- i but, as such judgment may effect Lessor' s right to approve 'assign- ment, the Lessor shall be the sole judge as to the reliability, capability, character and desirability of Lessee and prospective Lessees involved. Thereafter, all of Lessee' s obligations , duties , rights , title and interest under this Lease in and to the completed Common Area and lot may be freely assigned by Lessee and its assignees and other successors-in-interest subject to the other terms of this Lease and the Declaration of Covenants , Conditions and Restrictions . After the assignment of the lots by Grantor, any subsequent assign- ment or transfer must be approved in writing by the City on the transfer document which is to be recorded . The City' s approval shall not be unreasonably withheld. However, the City may refuse to approve the sale or transfer if the City has not approved the sales price as required by the Declaration of Covenants , Conditions and Restrictions. If any transfer occurs without the City' s con- sent and the transferor receives an amount in excess of the Maximum Allowable Sales Price, the City and/or the transferee shall have the right, in addition to any other rights or remedies available to the City and/or the transferee, to receive from the transferor all amounts received by the transferor in excess of the Maximum Allowable Sales Price. If the City and/or the trans- feree is required to institute legal proceedings or arbitration to collect those monies , the prevailing party shall be entitled to recover all expenses and costs incurred in the action including , without limitation, attorney' s fees, in addition to damages, taxable costs and injunctive or other relief. On or before the close of escrow. for the sale of the first manu- factured unit in each phase ( "first unit transfer" ) , Lessee shall assign all of its right, title and interest under the Lease to the Common. Area in that phase to the Association. As each phase of the development is annexed , Lessee will assign the Common Area in that phase of development to the Association. -21- The lease payments for the Premises will be apportioned between the phases on the basis of area; and upon the first unit transfer in each phase , the lease payments for that phase will be divided equally between the lots in that phase. The Association will be charged with collecting the lease payments as an assessment, in addition to 'the maintenance assessment. Fredricks will, as required by law, pay the - assessments on the lots until units for the lots are sold and will pay the lease payments on the phases which have not been annexed. As each Modular Unit is sold, Fredricks will assign all of its right, title and interest under the Lease in and to the lot for that manufactured unit to the purchaser of the manufactured unit. The assignments will be subject to the Declaration and an assumption of Lessee' s duties and obligations under this Lease for the portion of the Premises assigned. When development is completed and Fredricks' rights and obligations under this Lease have been fully assigned to the Homeowners Association and to the purchasers of the manufactured units , all of Fredricks' obligations and liabilities with respect to the Premises , this Lease and the City shall terminate. ARTICLE XIV - RIGHT OF INSPECTION The City Manager and/or his duly authorized representatives shall have at any and all times , the full and unrestricted right to enter the Premises for the purpose of inspecting such Premises and of doing any and all things with reference thereto which the Lessor is obligated or authorized to do as set forth herein or in the exercise of the Lessor' s police power. Nothing in this section implies any duty of Lessor to do any work which Lessee may be required to perform. The performance by Lessor - will neither constitute a waiver of Lessee' s default in failing to perform the work, nor affect the obligations of Lessee under this Lease. Nothing in this section shall be construed to give the Lessor any right to enter a residential dwelling unit that the Lessor does not -22- • s otherwise have. ARTICLE XV - HOLDING OVER In the event Lessee shall hold over and remain in possession of the Premises herein leased after expiration of this Agreement such holding over shall not be deemed to operate as a renewal or extension of this Agreement, but shall only create a tenancy from month-to-month which may be terminated at any time by the . Lessor. ARTICLE XVI - MAINTENANCE - ALTERATIONS AND REPAIRS A. Lessee shall at all times keep the Premises and all fixtures, equipment and personal property in a •clean and orderly condi- tion and appearance. B. Lessee shall repair, replace , rebuild and paint all or any part of the Premises which . may be damaged or destroyed by the acts or omissions of Lessee, sublessees or by those of its officers, employees, guests , invitees or of other persons on or at the Premises with consent of Lessee. C. Lessee shall take such care of the Premises and all parts thereof at all times during the term of this Agreement. The Premises and all parts thereof shall include, but not be limited to, such of the following as are or may be located or installed in or on the Premises during the term of this Agreement: Fencing , the exterior and interior of the build- ing walls , the exterior and interior and operating mechanism of and attachments to windows and skylights , screens , roofs , foundations, steel work, columns; the exterior and interior and operating mechanism of and attachments to doors , parti- tions, floors, ceilings; inside and outside paving and unpaved areas , landscaping ; glass of every kind , and the utility, mechanical , electrical and other systems. D. Lessee shall make frequent periodic inspections and as the necessity arises , regardless of the causes therefor, shall perform all necessary preventative maintenance , including , but not limited to, painting ; make all necessary repairs and -23- replacements; and do all. necessary rebuilding with respect ; .:". to the Premises and all parts thereof ( including any total destruction) . All such maintenance, repairs and replacement shall be of quality equal to the original in materials and workmanship. All exterior paint colors shall be subject to the prior approval of Lessor. ARTICLE XVII - ARBITRATION A. Any controversy or claim arising out of or relating to this Agreement or the breach thereof , shall be settled by resort to arbitration upon the demand of either party hereto. Judgment upon the award rendered by the arbitrator may be entered in any Court having jursidction thereof. B. The parties each agree to request that an award be made within thirty (30 ) days after the close of the hearings. The provi- sions of Title 9 (Arbitration) of Part 3 of the California Code of Civil Procedure are hereby expressly waived by both parties . Should either party be dissatisfied with the award , it may seek a trial de novo provided that said trial de novo subject to California Code of Civil Procedure , Sections 1141.20 , 1141 .21 , 1141.22 , 1141 .23 , 1141 . 24 , 1141.25 , 1141.26 , 1141. 27 and 1141 .28 . C. Arbitration shall take place at the offices provided by the Riverside Superior Court, Indio Branch, Indio, California. D. Discovery under the provisions of the California Code of Civil Procedure shall be available to the parties until thirty (30 ) days prior to the arbitration hearing, except that depositions shall be be taken unless both parties consent thereto at the time any such deposition is requested. E. The arbitration may proceed in the absence of any party who, after due notice fails to obtain an adjournment. F. This arbitration clause shall survive the recession of the agreement. -24- ARTICLE XVIII - GENERAL PROVISIONS A. Notices to Lessor provided for in this Agreement shall be sufficient if sent by registered mail, postage prepaid , ad- dressed to the City Clerk, P.O. Box 1786 , Palm Springs , California 92263 ; and notices to the Lessee if sent by registered mail, postage prepaid, addressed to Fredricks Development Corporation, 18 Brookhollow Drive , Santa Ana, California 92705 ; or, after assignment to the address for the Homeowners Association as designated in writing or the lot address or addresses as the parties may designate to each other from time to time. B. The Lessee represents that it has carefully reviewed the terms and conditions of this Agreement, and is familiar with such terms and conditions and agrees faithfully to comply with the same to the extent to which said terms and conditions apply to its activities as authorized and required by this instrument. C. The term Lessor as used in this Agreement means the City of Palm Springs and where Agreement speaks of approval and consent by the Lessor, such approval is understood to be manifested by an official act of the City of Palm Springs, unless otherwise expressly stated in this Agreement. D. If either party shall be delayed or prevented from the per- formance of any act required by this Lease by reasons of Acts of God, strikes , lock-outs, or other causes , without fault and beyond the control of the party required to perform such obligations ( financial ability excluded) , per- formance of such act shall be excused for the period of the delay provided , however, nothing in this Section shall excuse Lessee from the prompt payment of any rental or other charge required of Lessee except as may be expressly provided elsewhere in this Lease. E. Lessor warrants that Lessee will lawfully and quietly hold , occupy and enjoy the Premises during the term of this Lease without obstruction by Lessor or any person claiming under Lessor upon satisfaction of the covenants , conditions and -25- terms of this Lease to be performed by Lessee. F. Except as otherwise expressly set forth , Lessor has made no warranty or representation to Lessee with respect to the Premises. G. Lessee waives any claim against Lessor for damages which may arise if its use and occupancy of the Premises is prohibited or substantially impaired by reason of : 1. the passage or adoption of any law, ordinance, rule or regulation of federal , state , county of municipal govern- ment relating to any such use, or occupancy; or 2. any act of any governmental or other public authority other than the City. of Palm Springs and its agents; or 3. .any order or judgment of a Court of competent jurisdic- tion. H. Nothing herein contained will be deemed or construed by the parties, or by any third party, as creating the relationship of principal and agent or of partnership or of joint venture , between the parties hereto, it being understood and agreed that neither the method of computation of rent nor any other provision contained herein, nor any of the acts of the parties herein, will be deemed to create any relationship between the parties other than the relationship of landlord and tenant. I. If a party of this Lease becomes a party to litigation which results, wholly or in part, from acts of any other party, or which concerns the terms of this Lease or the .rights and duties of the parties under it, the party prevailing will be entitled to a reasonable sum for attorney' s fees as costs, and not as damages , in addition to such other relief as may be granted. A party not entitled to recover his costs shall not recover attorney' s fees. No sum for attorney' s fees will be counted in calculating the amount of a judgment for purpose of deter- mining whether a party is entitled to recover his costs or attorney' s fees. J . Upon at least twenty ( 20 ) days' prior written request, either -26- party will execute, acknowledge and deliver to the other, a statement in writing: i. certifying that this Lease is unmodified and in full force and effect ( or if there has been any modification thereof, that the same is in full force and effect, as modified, and stating the modification or modifications) ; 2. the dates to which the rent and other charges have been paid; 3. that no notice has been given to the party executing such statement of any default which has not been cured , except as to defaults specified in said statement; 4. if relevant, that no default on the part of any tenant, assignee , licensee or concessionaire exists , or, if any such default exists , specifying the nature and period of existence thereof and what action Lessee is taking or proposes to take with respect thereto; and 5. such other information with respect to the Premises or any part thereof as from time to time may reasonably be requested. Any statement delivered pursuant to this section may be relied upon by any prospective assignees, subtenant, mortgagee or beneficiary under .the deed of trust of a leasehold estate or any prospective purchaser of the estate of Lessor and any title insurer insuring the interest or interests of any of the foregoing• classes of persons . K. The captions of the sections of this Lease are for convenience only and will not be considered or referred to in resolving questions of interpretation or construction. L. The various rights, options, elections, powers and remedies of Lessor contained in this Lease will be construed as cumulative, and no one of them exclusive of any others or of any other legal or equitable remedy which Lessor might otherwise have in the event of breach or default in the terms hereof, and the exercise of one right or remedy by -27- Lessor will not in any way impair its right to any other right or remedy until all obligations imposed upon Lessee have been fully performed . M. No failure by Lessor to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a breach thereof , and no acceptance of full or partial rent during the continuance of any such breach, will constitute a waiver of any such breach or of any such term. No waiver of any breach will affect or alter this Lease, which will continue in full force and effect, or the right of Lessor with respect to any other existing or subsequent breach. N. It is understood and agreed that all of the provisions of this. Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate provision thereof. O. Each and all of the covenants and obligations of this Lease will be binding upon and inure to the benefit of the parties hereto, as the case may require , and except as herein other- wise specifically provided , as well , their respective heirs, devisees, legatees , executors , administrators , successors and assigns, subject at all times, nevertheless , to all agreements and restrictions herein contained with respect to assignment of Lessee' s interest in this Lease. P. In any action between the parties seeking enforcement of any of the terms and provisions of this Agreement or in connec- tion with the Premises, the prevailing party in such action shall be awarded , in addition to damages, injunctive or other relief , its reasonable costs and expenses , not limited to taxable costs and reasonable attorney' s fees. Q. This Agreement may be executed in any number of counterparts , each of which shall be an original but all of which shall constitute one ,and the same instrument. R. The term "Lessee" as used in this Agreement refers to the original Lessee mentioned on page 1 of this Agreement, any assignee of the original Lessee , or any successor Lessee who shall become Lessee under. this Agreement by virtue of re- -28- placement of the original Lessee. S. ' The headings of this Agreement are for purposes of reference only and shall not limit or define the meaning of the pro- visions of this Agreement. T. If any paragraph, section, sentence , clause or phrase con- tained in this Agreement shall become illegal , null or void or against public policy for any reason, or shall be held by any Court of competent jurisdiction to be illegal , nu11 or void or against public policy, the remaining paragraphs , sections , sentences , clauses or phrases contained in this Agreement shall not be affected. U. If Fredricks has not completed development of all phases of the PUD on or before October 1 , 1986 , Fredricks will reassign its rights under the Lease for all phases of the PDD that Fredricks has not begun to develop and the lease payments will be reduced by the amount of lease payments apportioned to those phases pursuant to this Agreement. • V. Waiver by a party of any -right under this Agreement shall not be deemed a waiver of any other right or any right upon sub- sequent breach. Failure to pursue any right under this Agreement shall not be deemed -a waiver of that right. ARTICLE XVIV - NON-DISCRIMINATION A. The Lessee, for himself , his personal representatives , successors-in-interest, and assigns , as a part of the con- sideration hereof, does hereby covenant and agree that (1) no person on the grounds of race, color, national origin, religion, sex , marital status or other improperly discriminatory grounds, shall be excluded from participation, denied the benefits of, or be otherwise subjected to discri- mination in the use of said facilities; ( 2) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race , color, national origin, religion , marital status or sex shall be excluded from participation in, denied the benefits of , or otherwise be subjected to discrimination. -29- B. There is hereby reserved to the Lessor, its successors and assigns, for the use and benefit of the public , a right of flight for the passage of aircraft in the airspace over 300 feet above the surface of the Premises herein leased , together with the right to cause in such airspace and in any adjoining airspace, such noise, vibrations, fumes, dust, fuel particles , and all other effects as may be caused by the operation of aircraft landing at, taking off from or operating at, on or near the Palm Springs Municipal Airport, or navigating or flying through such air space. In addition to any other covenants or indemnities contained in this Agreement, Lessee covenants and agrees to indemnify, defend and hold Lessor harmless of, and from any and all claims , demands , expense or causes of action made or brought by Lessee or by any sublessee, tenant or other person claiming under Lessee based upon or arising out of the exercise of the rights reserved in this paragraph. ATTEST: CITY OF PALM SPRINGS , CALIFORNIA By �� ✓' ,,,, I % n� ( / City Clerk City /Manager LESSOR REVIEWED & APPROVED: FREDRICKS DEVELOPMENT CORPORATION, a Cali/fo i co -po a r , Peter Del Franco,V ce President ,APPROVED BY THE CITY COUNC7l By / E U;- BYRES. NO. /(-/1J2 )1171,f o,7ames I)'. White , Secretary -30- STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On lj gl/ /,2 /1gYA , before me , the undersigned, a Notary Public in and for saki State, personally appeared PETER DEL FRANCO, known to me to be the Vice-President, and JAMES D. WHITE , known to me to be the Secretary, of the corporation that executed the within instrument and known to me to be the persons 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 By-laws or a resolution of its Board of Directors . WIT /E »{y hand a d official seal . (� >> OFFICIAL SEAL i f` d y' `s. KATHLYN STROPLE `, Notary_PL�E31ic in and for said NOTARYPUBLIC - CALIFORNIA I County and State ORANGE COUNTY My comm. expires MAR 29, 1983 STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On , 1982 , before me , the undersigned , a Notary Public in and for the State personally appeared known to me to be the City Manager, and , known to me to be the City Clerk of the CITY OF PALM SPRINGS , and known to me to be the persons who executed the within instrument on behalf of the CITY OF PALM SPRINGS and acknowledged to me that the CITY OF PALM SPRINGS executed the within instrument pursuant to a resolution of the City Council . WITNESS my hand and official seal. Notary Public in and for said County and State • 31- 1 RESOLUTION NO. 14183 OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A SUBSTITUTED SEPARATE LEASE WITH FREDRICKS DEVELOPMENT CORPORATION CONSOLIDATING PRIOR CHANGES FOR APPROXIMATELY 60 ACRES OF LAND LOCATED ON THE NORTHWEST CORNER OF SUNRISE WAY AND SAN RAFAEL DRIVE. WHEREAS the City Council approved Lease Agreement No. 1696 with AFCOM PARTNERS, LTD. ;and WHEREAS the City Council approved Resolution 13975, which acknowledged the participation of Fredricks Development Corporation in the AFCOM affordable housing venture; and WHEREAS the City Council has approved certain letter commitments from AFCOM and Fredricks Development Corporation insuring certain understanding for completion of the housing project; and WHEREAS the City Council approved Resolution 14061, which assigned parts of the Lease into a mobile home park portion and a manufactured single family subdivision portion between AFCOM Mobile Home Parks, LTD. , a limited partnership and Fredricks Development Corporation respectively; and WHEREAS the City Council has approved Amendment No. 1 and Amendment No. 2 to Lease Agreement No. 1696 with AFCOM Partners, LTD. ; and WHEREAS Fredricks has requested a substituted separate Lease Agreement incorporating all prior changes in order to provide a more orderly document to proceed with development, NOW THEREFORE BE IT RESOLVED that the City Council of the City of Palm Springs approves a certain lease agreement dated March 1, 1982 between the City of Palm Springs and Fredricks Development Corporation for property in Lot 8 and Lot 9 of Tract No. 17642-1. ADOPTED this 17th day of March 1982. AYES: Councilmembers Field, Ortner, Rose and Mayor Doyle NOES: None ABSENT: None ATTEST: CITY WOFIM SPRINGS, CALIFORNIA By .��� City Clerk City M nager REVIEWED & APPROVED: WP 4 b I it ll I., ,I J ID IFF F, 11- I I I I 1.. .11 L I I I I I I E 1 il l I I Ic I I I I I t L,z I l li Ill 11!- IIIIA ",".I _."I"III Ei 11 1 1 01 IOL. 1 I I H'L- .I, 1.1 i.�] i_.FU i.-T T Try- I.o,I IT I! l-1 Z L R,Z I I NAME rro DDREAS OF AGENCY FRED S. JAMES & CO. 3435 WILSHIRE BLVD. 0 27th FLOOR Fremont Indemnity Co. LOS ANGELES, CA. 90010 385-0545 —I1,11111P, ETTER ly I NPME AND AbDPESS OF nlsuRED C,k1l AN, Fredricks Development Co. 18 Brookhollow Drive R Santa Ana, California 92705 l CCL"PAIEF I h I S I S 10 C 2 rj I hr that E0 111 12 5 011 IT,j F i iI ce 1,�,cc c,"Yl o,j have c.UE bean lssueJ.otheIIlsb.ed I E 1), 1 7 nave find T,-III Foj cc aF thiS Iliac Not,.%thstarldin.,any racjwrernanZ,Y&r no or midDion The oFsurance,afforded by the policies dosciihcJ herein is ouvDict to all the terms,agdo3lons and conditions of such Policies. COMPANY TYPE OF IINFSUR�JICIF POLICY NUMBER I F EP IA P I'A'111 01'FY DATI HIED AGGREGATE OCCURRENCE GEIF!,2;J1_ U.".1-lLITY 00011 Y INJURY gIF 11-OMPIPFICIEMSIVE FORM FRFMISES-OPLRAT IONS PROPERN(DAMAGE FXPI-091ON AND LULLAPSF HAZARD t El UNDERGROUND HAZARD PPUDLJFTS/COMM FIELD OPERATIONS HAZARD ROD][Y INJURY AND CONTRACTUAL NaJRANCI PROPERTY DAMAGE S F BROAD PROPERTY LOMRINED IDAMAGr ITO PM El )EFIFNDENI WNTRAJ OR, LiPERSONAL IT],URY PERSONAL INJURY YL4 E".Ljr HJD I- I l J I-IG'_I 1)F 3 C D I Lf IN JSU l�� (EACH I AT N U $ BODILY INJURY S 0 (EACH ACCIDENT) 0 I I I RED PROPERTY DAMAGE $ 600 LY IN]E TPY AND NOTILOWNED PROPERTY) ROPERTY DAMAGE II COMBINED BODILY INJURY ADD ❑ UMBRELLA FOOD% PROPCRlYDAMlGE OTHER THAN UMBRELLA COMBINER, FORM STATUTORY A WP 82 073849 l/l/83 L,CIIET1�11l" 1 - 2,000, Lj'- r,,,,cc,Dlnl� II II OF SCARIPTION-OF OPFP,,",11011]-S/1-OCATInIlISIIJEHII;I ES Should any Air the abc, j I (he expHEalion COTS chereci, III ssuin,_ cow- e Alesc-lber, pollcl�, bA. cancelled I pFnv will endeavor to I __10- Dl�E wnLLCIU rotice to the I named cell holder, lim failure to Wall luch ,iu[Fci:,siiall DI zIh',aticli- or UaLOIt, of Any land LIPOLI the company. EIAMF AND ADDRESS OF C F R I IFICA I F HOI PER 'I E ISSUED 1/19/82 City of Palm Springs P.O.Box 1786 AF Palm Springs, California AILTH01317ED RrP07[N1A�VE ___kttT1I Lynch_._____ — / ,JCOCD 25(1'�') I ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIMITED Hamilton, Bermuda CERTIFICATE OF INSURANCE The undersigned hereby certify that the following described insurance is in force at this date with Associated Electric & Gas Insurance Services Limited. NAME OF INSURED: Pacific Lighting Corporation and its Non-Utility Related Subsidiaries Fredricks Development: Corporation, 18 Brookhollow.Dr. , Santa Ana, GA PRINCIPAL ADDRESS: 810 South Flower Street Los Angeles, California 90017 POLICY NUMBER: 191A POLICY PERIOD: 12:01 A.M. FROM: September 1, 1981 TO: September 1, 1984 LIMIT OF LIABILITY: $is,000,000. DESCRIPTION OF COVERAGE: Excess Liability above the following retentions: $ 100,000. any one occurrence -- General Liability $ 100,000. any one occurrence -- Automobile Liability $ 100,000. any one occurrence -- Workers' Compensation $ 100,000. any one occurrence -- Employers' Liability and Employers' Liability for Occupational Disease $ 10,000,000, any one occurrence -- Aircraft Liability Annual aggregate of $500,000 applicable Additional Interest Insured: CITY OF PALM SPRINGS As Respects: AFCOM - 1600 San Rafael, NW Corner of San Rafael & Sunrise Job No. 8107.01 This document is furnished to you as a matter of information only. The issuance of this document does not make the person or organization to whom it is issued an additional assured, nor does it modify in any manner the contracts of insurance between the Insured and the Insurers. Any amendment, change or extension of such contracts can only be effected by specific endorsement attached thereto. Should the above mentioned contract of insurance be cancelled, assigned or changed during the above named policy period in such manner as to affect this document, we will §t;# to give notice to the holder of this document._ * 30 days *If time limitation on notice is necessary. DATED: September 15 , 1981 ISSUED TO: CITY OF PALM SPRINGS ADDRESS: P. 0. Box 1786, pnlm Springs- CA Attn: Tom Lynch ASSOCIATED COMPANY MANAGEMENT OF EBASCO LIMITED BY: At Hamilton, Bermuda AEGIS 2 81 rt6dtI&A bev CotP - lease �pprox 60 acres @ San Rafael & unrise Way-low cost housing AGREEMENT #1779 (Orig 11-18-81 LEASE AGREEMENT Res 14061, 11-18-81 THIS LEASE, made and entered into this lr�_L day of 1 , 1981 by and between the CITY OF PALM SPRINGS, CALIFORNIA, a Municipal Corporation, hereinafter referred to as LESSOR, and FREDRICKS DEVELOPMENT CORPORATION, a California limited partnership, hereinafter referred to as LESSEE. RECITALS A. Lessor owns the property described in detail in Exhibit "A" , attached hereto and made a part hereof, located in the City of Palm Springs, County of Riverside, State of California, and B. Lessor wishes to enter into the lease of said property in the interest of furthering and carrying out its public purpose; and C. Lessor and Lessee have executed a Declaration of Covenants, Conditions and Restrictions and Reservation of Easements ("Declaration" ) of even date which shall restrict the use of the real property for the term of this Lease. D. Lessee and Lessor intend that the Lessee will construct a single-family home development of manufactured housing upon the leased premises and shall assign its rights under this Lease in and to the Common Area to a Homeowners Association pursuant to the Declaration and shall assign all of its right, title and interest under this Lease in and to the individual lots to the purchasers of the manufactured units. E. Pursuant to the Construction Development Agreement between Lessor and Lessee, the manufactured units shall be priced so as to be affordable by low-moderate income persons. NOW, THEREFORE, in consideration of the rents, covenants and agreements contained herein and other valuable considerations, Lessor hereby rents and leases to Lessee, and Lessee hires, leases and takes from Lessor on the terms and conditions hereinafter set forth, the tract of land in the City of Palm Springs, County of Riverside, State of California, consisting of sixty (60) acres, more or less, more particularly described in Exhibit "A" . 1 . ARTICLE I - TERM The term of the leasehold estate will be fifty (50) years , commencing as set forth in Section "A" below, and ending at 12:01 a.m. Pacific Coast Time on the 50th calendar anniversary of the commencement date. A. Commencement. The Lease will commence when the following conditions or events have been satisfied or have occurred: 1 . Title Insurance. (a) Issuance by a title insurer reasonably acceptable to Lessee, on or before January 1 , 1981 , of an extended coverage ALTA leasehold policy of title insurance, in favor of Lessee, in an amount of not less than Three Hundred Sixty Thousand Dollars ($360,000) insuring to Lessee that title to the leasehold estate created hereunder is vested in Lessee, subject only to covenants, restrictions, easements and other matters acceptable to Lessee, as hereinafter provided. (b) The premium for the title insurance policy will be paid by Lessee. (c) Lessee will cause the title insurer to prepare and issue a preliminary title report covering the Premises promptly following execution of this Lease. (d) Lessee will notify Lessor in writing of any objections to the state of title within fifteen (15) days following Lessee's receipt of the preliminary title report and copies of all relevant underlying documents. Lessee will be considered to have approved the title with respect to any matter to which no objection has been raised. (e) Lessor will endeavor in good faith to remove, or cause to be removed, from the title any matter objected to by Lessee. If Lessor is unable to remove or cause to be removed the objectional matters from title to the Premises within ninety (90) calendar days after the notice of objection, Lessee may terminate this Lease within sixty (60) days after Lessor's failure to remove the objections. If Lessee does not terminate the Lease, it will be deemed to have accepted the preliminary title report notwithstanding its prior objections. 2. 2. Building Permits. The issuance by Lessor and any other govern- mental agency with jurisdiction over Lessee's proposed develop- ment of all building and other permits required for the con- struction of approximately three hundred forty-one (341 ) manu- factured housing units (Planned Development District) . B. Effective Date. If the commencement, as defined in Paragragh "A." above, is on or before the 15th day of the month, the effective date of this Lease shall be the lst day of that month. If the commence- ment, as so defined, is on or after the sixteenth day of the month, the effective date of this Lease shall be the first day of the next following month. Upon the commencement of this Lease, the parties shall execute a written Memorandum of Lease setting forth the actual date of commencement and actual date of termination and record the Memorandum of Lease with the Riverside County Recorder and at that time record the Declaration. ARTICLE II - IMPROVEMENTS/DESCRIPTION OF CONCESSION Lessor hereby grants Lessee the right and privilege to construct single-family housing, including condominiums, planned development district, manufactured housing and other "for sale" units for the benefit of low and moderate income persons in accordance with plans and specifications approved by Lessor. However, no part of the Premises may be used for any purpose tending to injure the reputation thereof, unreasonably disturb either the neighborhood or occupants of the neighboring property, or constitute a nuisance. Lessee and all persons, using_ or_occu,pying any part of the Premises will comply with all relevant public laws, ordinances and regulations. Assignees shall be subject to, and shall abide by, the restrictions and duties contained in the Declaration. Lessee shall have the right to assign all of its right, title, duty and interest under this Lease in and to the Common Area to the Homeowners Associ- ation pursuant to the Declaration. Lessee shall also have the right to assign all of its right, title, duty and interest in and to the individual lots to the purchasers of the manufactured units. Lessee may provide other services incidental to those which are normally provided by and for such a development. 3. • ARTICLE III - CONSTRUCTION OF IMPROVEMENTS BY LESSEE A. General Specification. Lessee shall , without cost to Lessor and within the time periods prescribed herein, commence and complete construction of a single-family housing development. The design of the development shall be approved by the Lessor. Lessor's approval shall not be unreasonably withheld. B. Submission of Plans and Specifications. Lessee shall submit to Lessor for approval final plans and specifications for a manufactured housing development, including support facilities, parking facilities, and landscaping plans. Lessee' s plans and specifications for building shall be subject to such approvals by Lessor as are currently required by applicable statutes and ordinances. Such approval shall not be unreasonably withheld. It is specifically understood and agreed by Lessee, however, that the improvements, as allowed hereinabove, shall be a manufactured housing development which may be constructed in phases. C. Mechanics Liens; Notice of Completion; Notice of Non-responsibility. 1 . Lessee agrees to hold Lessor harmless from and against any and all claims by mechanics, materialmen or suppliers , which may result from the completion of the construction, finishing, decorating, equipment or fixturization of improvements made by Lessee. Lessee further agrees to furnish Lessor, upon completion of construction, certificates of completion satisfactory to Lessor. Such certificates shall show that all costs of con- struction have been paid and that no liens shall attach to the realty. 2. Prior to the commencement of construction of any improvements on the leased property, or any repair or alteration thereto, the Lessee shall give Lessor not less than thirty (30) days ' advance notice, in writing, of intention to begin said activity in order that non-responsibility notices may be posted and recorded, as provided by State and local laws. The Lessor or its representatives will have the right to go upon the Premises and to post and keep posted thereon notices of non-responsibility. 4 D. Construction Schedule/Default 1 . Within ninety (90) days following final approval of the plans and specifications for the improvements by Lessor, Lessee shall commence construction, which construction shall be completed by October 1 , 1986 plus the aggregate of any extensions granted by Lessor from the date of commencement of construction. 2. If Lessee fails to complete improvements, development, and construction within the time period as specified hereinabove, the Lessor may at its sole option require that the guaranteed minimum rentals payable under this Lease increase in an amount equal to twenty-five percent (25%) , beginning the month following that month in which said construction was to be completed. This increase shall remain in full force and effect from its effective date and until the contemplated improvements are completed. ARTICLE IV - ENCUMBRANCE A. Leasehold May Be Encumbered. This Lease, or any right hereto or interest herein or any of the improvements on the leased premises , may be encumbered with the written approval of Lessor. No such encumbrance or any addition thereto or extension thereof shall be valid without said approval provided, however, Lessor shall consent in writing to any encumbrance the proceeds of which are limited to use for development or improvement of the leased property, or any encumbrance securing financing through mortgage revenue bonds. Either prior to or concurrent with the recordation of the encum- brance instrument, Lessee will cause a fully conformed copy thereof to be delivered to the Lessor together with a written notice con- taining the name and post office address of the mortgagee, trustee, beneficiary or other holder of the beneficial interest in the encum- brance instrument (Encumbrancer) . B. Encumbrance Confined to Leasehold. Encumbrance must be confined to the leasehold interest of Lessee or the subleasehold interest of a sublessee and shall not jeopardize in any way the Lessor's interest in the land. Lessee agrees to furnish as requested any financial statements or analyses pertinent to the encumbrance that Lessor may deem necessary to justify the amount, purpose and terms of said encumbrance. 5. C. Notice of Default. In the event of default by the Lessee of the terms of an approved encumbrance, the encumbrancer may exercise any rights provided in such approved encumbrance, provided that before any sale of the leasehold, whether by power of sale or foreclosure, the encumbrancer shall give Lessor notice of the same character and duration as is required to be given to Lessee by such encumbrancer and/or by the laws of the State of California. Any notice of default shall comply with the provisions of Section 2924(c) of the Civil Code of the State of California. D. Sale Under Encumbrance. If any sale under the approved encumbrance occurs, whether by power of sale or foreclosure, the purchaser at such sale shall succeed to all of the rights, title and interest of the Lessee in the leasehold estate covered by said approved encum- brance. It is further agreed that, if the purchaser at such sale is the encumbrancer, the encumbrancer may sell and assign the leasehold interest without any further consent provided that the assignee shall be bound by all the terms and conditions of this Lease. If the encumbrancer is the purchaser, it shall be required to perform this Lease only so long as it retains title thereto. If a sale under the approved encumbrance occurs, and the purchaser is a party other than the encumbrancer, said purchaser, as successor in interest to the Lessee, shall be bound by all the terms and conditions of this Lease. E. Obligation of Encumbrancer Under Lease. Lessor agrees that it will not, pursuant to the right granted in Article X of this Agreement, below, require encumbrancer to take necessary action to replace Lessee because of any default or breach hereunder on the part of Lessee if the encumbrancer under the trust deed, within ninety (90) days after service of written notice on the encumbrancer by Lessor of its intention to exercise its powers under Article X of this Agreement for such default or breach, shall : 1 . Cure such default or breach if the same can be cured by the payment or expenditure of money provided to be paid under the terms of this Lease; provided, however, that for the pur- pose of the foregoing, the encumbrancer shall not be required to pay money to cure the bankruptcy or insolvency of Lessee; or 6. 2. Arrange for replacement of Lessee with a new Lessee who agrees to be bound by and comply with the terms and conditions of this Agreement; or 3. If such default or breach is not so curable, cause the trustee under the trust deed to commence and thereafter dili- gently to pursue to completion steps and proceedings for judicial foreclosure, the exercise of the power of sale under and pursuant to the trust deed in the manner provided by law, or accept from Lessee an assignment in-lieu of foreclosure, and keep and perform all of the covenants and conditions of this Lease requiring the payment or expenditure of money by Lessee until such time as said Leasehold shall be sold upon exercise of power of sale pursuant to the trust deed, or be released or reconveyed thereunder, or be sold upon judicial foreclosure or be transferred by deed in-lieu of foreclosure. ARTICLE VI - TITLE TO IMPROVEMENTS Title to all fixed improvements made to and placed upon the premises shall be the property of the Lessee subject to security rights of any encumbrancer but shall vest in Lessor at the end of the term of this Lease Agreement. The manufactured units' furniture, furnishings, and other personal property will not be become the property of Lessor at the end of the term of this Lease. Provided, that the manufactured units may not be removed until the end of the term of this Agreement. ARTICLE VI - OBLIGATIONS OF LESSEE A. Lessee, its employees, agents or servants and its assignees, shall at all times comply with the laws and regulations of the United States of America, the State of California and all applicable ordi- nances, codes and regulations of the City of Palm Springs, as they now exist or as they may hereafter be lawfully amended. Violations thereof by Lessee, its agents, servants or employees, or revocation of permits or licenses required in the performance of this Agree- ment, shall constitute a breach of this Agreement by Lessee. Upon such breach, Lessor may take necessary action to replace Lessee. 7. At its own cost, Lessee will make, or cause to be made, any repair or alteration to the Premises which may be required in order to comply with the foregoing. Lessee will indemnify and save Lessor harmless from any penalty, damage or charge imposed for the vio- lation of these covenants whether caused by Lessee's neglect, omission or willful act of any person on the Premises by license or invitation of Lessee or holding or occupying any part of the Premises by right of Lessee. If any abatement order is issued against Lessor or otherwise subjects Lessor to criminal or civil penalties or liability, Lessee will comply with the order and will hold Lessor harmless from any such penalties and liability. B. Lessee will pay when due, or cause to be paid, as required or permitted, all taxes which may be levied against Lessee's property or operations under this Lease, including all property, sales , use, business activities or other taxes, assessments, rates and other governmental charges (impositions) applicable to the Premises or to any personal property situated thereon, in addition to rent, in- cluding (but not limited to) assessments for public improvements or benefits which will for any period subsequent to the execution of this Lease and prior to termination, become due and payable, laid, assessed, levied or imposed upon, or become due and payable and a lien upon the Premises. Any imposition for a fiscal period of the taxing authority which includes a portion of the Lease term but expires after the termi- nation of this Lease, will be apportioned between the parties , whether or not the imposition is paid, assessed, levied, imposed and payable or has become a lien upon the Premises. Any tax assessed on the rental paid by Lessee to Lessor shall not be the Lessee's responsibility. Lessee specifically acknowledges that the leasehold interest granted herein may be subject to possessory interest taxes, as defined in the California Revenue and Taxation Code. 8. i • Lessee will furnish Lessor with official receipts or other evidence satisfactory to Lessor that the imposition has been paid, within sixty (60) days of receipt of Lessor's written request. C. Lessee shall provide in accordance with the Palm Springs Municipal Code, a complete and proper area for the adequate sanitary handling and disposal , of all trash, garbage and other refuse of the develop- ment. It is agreed that the piling of boxes, cartons , barrels or other similar items in an unsightly or unsafe manner on or about the Premises is prohibited. D. Lessee shall pay, in addition to rent, all other costs connected with the use of the Premises, facilities, or the rights and privileges granted herein. Lessee agrees, at its own expense, to cause the Premises and improvements, including automobile parking facilities and landscaping to be maintained in a first class, presentable condition and agrees to supply a landscape maintenance plan to assure that the building and grounds continue to present an attractive appearance. E. Lessee will not suffer or permit to be maintained upon the outside of any improvements located on the Premises any billboards or adver- tising signs except those which have the specific prior approval of Lessor. It is agreed, however, that Lessee may maintain on the Premises, or on the outside of the management or sales office erected on the Premises, its name on neatly painted, electrical or other illuminated sign or signs which conform to all ordinance or regu- lations of the City of Palm Springs relating to signs. The size and type of any sign or signs must have the prior written approval of Lessor, which approval shall not be unreasonably withheld. Pro- vided, that until the development is complete, all of the lot leases assigned and the manufactured units sold, Lessee may maintain a sales office in the Common Area and may place signs on the Premises for the purpose of sales activities. 9. F. Lessee will provide and regulate parking for automobiles of Lessee's tenants, guests, visitors, employees and suppliers, in accordance with requirements currently imposed by the City of Palm Springs . G. Lessee is prohibited from offering, selling, assigning or subleasing any single-family home for the purpose of time-share or other interval ownership. In no event shall Lessee sublet any of the above described Premises for periods of less than thirty (30) days occupancy. Lessee covenants and agrees that it will insert a provision in all its assignments for any of the above-described Premises to provide that assignees and all other successors-in-interest are bound by the provisions of the Lease, recite recording information concerning this Lease, and provide the name and address of Lessee or the Home- owners Association where any assignee or successor-in-interest may obtain a copy of this Lease. Lessee further covenants and agrees that all its assignments will provide that in no event shall the assignee or any other successor-in-interest sublet any of the above- described Premises for periods of less than thirty (30) days ' occupancy and that all such subleasing be subject to approval by the Lessor. H. Upon the commencement of the Development Phase, Lessee assumes the risk of the following matters: the quality and characteristics of the soil and its geology, waters on and underground, drainage, manner of construction, condition, and state of repair of any existing improvements, the ownership of all improvements, and the nature, provisions and effect of all health, fire, zoning, building, subdivision and all other use and occupancy laws, ordinances and applicable regulations. I. Lessee will pay, or cause to be paid, all charges payable by Lessee for water, sewer, heat, gas, power or electrical current, telephone, cable television, and all other utility services delivered to the Premises. 10. ARTICLE VII - RENTAL A. All rents payable by Lessee to Lessor pursuant to the Lease shall be paid by the 15th day of the month following the month during which such rent accrues. B. Rent during the first two years following the effective date of this Lease (as defined in Article I, B. ) shall be on a graduated scale, starting at Two Hundred Forty Dollars ($240) for the first month, then increasing One Hundred Twenty Dollars ($120) per month for the second through twelfth month, to a total of One Thousand Five Hundred Sixty Dollars ($1 ,560) for the twelfth month. Rental for the thirteenth month shall be One Thousand Six Hundred Twenty Dollars ($1 ,620) per month, then increasing One Hundred Eighty Dollars ($180) per month for the fourteenth through twenty-fourth months , to a total of Three Thousand Six Hundred Dollars ($3,600) for the twenty-fourth month. The foregoing schedule notwithstanding, in the event that escrows shall have closed on ninety percent (90%) of the single-family homes prior to the twenty-fourth month, the scheduled rents shall acceler- ate to Three Thousand Six Hundred Dollars ($3,600) per month starting on the 1st day of the following month. C. Beginning with the third year following the effective date of this Lease, rental shall be computed as follows : 1 ) The base rent shall be the sum of Three Thousand Dollars ($3,000) per month. 2) The base rent shall be adjusted annually, on the anniversary of the effective date of this Lease, commencing with the second such anniversary, to reflect increases in the Consumer Price Index, according to the formula stated below. 3) The Consumer Price Index referred to herein is the index published by the U.S. Department of Labor for the Los Angeles- Long Beach-Anaheim Metropolitan Area, All Urban Consumers , All Items, 1967=100. If for any reason there is any change in the method of calculation or formulation of said index, or if such 11 . index shall no longer be published, then another index generally recognized as authoritative shall be substituted. In any event, the base used by any new index shall be reconciled to the above referred 1967 index. 4) The starting index shall be the published index figure for the month of September, 1981 , to wit: 279.3. 5) The closing index shall be the published index figure for the second month preceding the anniversary of such effective date, to which the rent is to be adjusted. 6) The formula for computation of rent is as follows : a) Subtract the starting index from the closing index. The resulting figure is the index point difference. b) Divide the index point difference by the starting index. The resulting figure is the percentage change in the Consumer Price :Index, expressed in decimal figures, for the period from the approval date of this Lease to the particular anniversary being used as a measure. c) Divide the percentage change by the number of the anni- versary used as closing date. The resulting figure is the average annual percentage change since the approval date of the Lease. d) If the average annual percentage change is nine percent or less, multiply the base rent by the percentage change determined in b) above. The resulting figure is the rental increase, over the base rent, for the following year. e) If the average annual percentage change is 12% or more, multiply the percentage change by .75, then multiply that figure by the base rent to determine the rental increase, over the base rent, for the following year. f) If the average annual percentage change is between nine percent (9%) and twelve percent (12%) , multiply the number of the anniversary by .09, then multiply that figure by the base rent. The resulting figure is the rental increase, over the base rent, for the following year. 12. 7) In no event shall the monthly rental for the twenty-fifth month or any succeeding months of this Lease be less than Three Thousand Dollars ($3,000) per month. D. The rent shall be abated during any period that: 1 ) Lessor fails to deliver possession to Lessee by reason of a court order or otherwise; 2) Recording of Lessee' s construction loan is enjoined by court order due to a question of validity of the Lease; 3) Issuance of a building permit to Lessee is enjoined by court order or is revoked by court order due to a question of validity of the Lease; 4) The City fails or refuses to issue the necessary building, sale or occupancy permits. 5) Construction is enjoined by court order due to a question of validity of the Lease or is halted or interfered with by the City. ARTICLE VII - INSURANCE/INDEMNIFICATION A. Liability of Lessor. Indemnification. Lessee will indemnify, defend and hold Lessor harmless from loss, damage or liability arising from any accident or occurrence causing injury to any person or property due: 1 ) to the use of the Premises by Lessee or any of its agents, contractors, servants, employees or licensees ; or 2) to the condition of the Premises; and 3) to any failure of Lessee to comply with any of the requirements or provisions of this Lease. Liability Insurance - During the entire term of this Agreement, Lessee agrees to procure and maintain public liability insurance at its sole expense, to protect against loss from liability imposed by law for damages on account of bodily injury, including death there- from, suffered or alleged to be suffered by any person or persons whomsoever, arising out of, or in connection with, the use of the Premises during the term of this Lease, resulting directly or indirectly from any act or activities of the Lessor or Lessee, or any person acting for the Lessor, or Lessee or under its control or direction. 13. Such public liability and property damage insurance shall also provide for and indemnify the Lessor against any and all legal expense and other costs attendant to defending claims The public liability and property damage insurance shall be maintained in full force and effect throughout the term of this Lease and any extension thereof in the following minimum limits : Bodily Injury $500,000 each person $1 ,000,000 each occurrence $1 ,000,000 aggregate products & completed operations Property Damage $500,000 each occurrence $500,000 aggregate A combined single limit policy with aggregate limits in the amount of One Million Dollars ($1 ,000,000) will be considered to be the required minimum limits. All of such insurance shall be primary and non-contributory, shall name the City of Palm Springs as an addi- tional insured, and shall provide for non-cancellation except upon thirty (30) days prior written notice to Lessor. To evidence the issuance of said insurance, Lessee will obtain and furnish to Lessor a certificate of insurance issued by the insuring company or companies. All insurance companies will be licensed to do business in the State of California. If Lessee fails to pay for or maintain liability insurance, Lessor may procure the insurance on Lessee's behalf. Any premium or cost paid by Lessor will be reim- bursed to it by Lessee upon demand. If the operation under this Agreement results in an increased or decreased risk in the reasonable opinion of the City Manager, the Lessee agrees that the minimum limits hereinabove designated shall be changed accordingly upon request by the City Manager. Lessee agrees that provisions of this paragraph as to maintenance of insurance shall not be construed as limiting in any way the extent to which the Lessee may be held responsible for the payment of damages to persons or property resulting from Lessee's activities, or the activities of any person or persons for which Lessee is 14. otherwise responsible. B. Worker's Compensation Insurance - The Lessee shall procure and maintain, at its sole expense, Worker' s Compensation Insurance in such amounts as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Lessee and the Lessor against any loss , claims, or damage arising from any injuries or occupational diseases hap- pening to any worker employed by the Lessee in the course of carrying out the terms of this Lease. C. Fire & Extended Coverage Insurance - Lessee also agrees to procure and maintain, at its sole expense, during the term of this Lease and any extension thereof, a policy of fire, extended coverage and vandalism insurance on all permanent property of Lessee's of any insurable nature located upon the leased Premises. Said policy shall be in an amount sufficient to cover at least ninety percent (90%) of the replacement costs of said property. Lessee agrees to pay the premium for such insurance and shall require that any insurance proceeds resulting from a loss under said policy are payable jointly to Lessor and Lessee and said proceeds shall con- stitute a trust fund to be reinvested in rebuilding or repairing the damaged property or said proceeds may be disposed of as specified in paragraph following, entitled "Waste, Damage or Destruction," hereof; provided, however, that within the period during which there is in existence a mortgage upon the leasehold, then and for that period all policies of fire insurance, extended coverage and vandalism shall be made payable jointly to the mortgagee or beneficiary, the named insured, and Lessor and shall be disposed of jointly by the parties for the following purpose: 1 . As a trust fund to be retained by said mortgagee or beneficiary and applied in reduction of the debt secured by such mortgage with the excess remaining after full payment of said debt to be paid over to Lessee and Lessor to pay for reconstruction, repair, or replace- 15. ment of the damaged or destroyed improvements, or in progress pay- ments as the work is performed. The balance of said proceeds shall be paid to Lessee. Provided further, however, nothing herein shall prevent Lessee, at its option and with the approval of said mortgagee or beneficiary, from filing a faithful performance bond in favor of said mortgagee or beneficiary and Lessor in an amount equivalent to said insurance proceeds in-lieu of surrendering said insurance proceeds to said mortgagee or beneficiary and Lessor. 2. In the event that this Lease is terminated, by an agreement between Lessor and Lessee and said improvements are not recon- structed, repaired, or replaced, the insurance proceeds shall be jointly retained by Lessor and said mortgagee or beneficiary to the extent necessary to first discharge the debt secured by said mortgage or deed of trust and then to restore the premises in a neat and clean condition. Said mortgagee or beneficiary shall hold the balance of said proceeds for Lessor and Lessee as their interest may appear. D. Waste, Damage, or Destruction - Lessee agrees to not commit or suffer to be committed any waste, injury or any public or private nuisance, to keep the Premises clean and clear of refuse and ob- structions, and to dispose of all garbage, trash and rubbish in a manner satisfactory to Lessor. If the leased Premises shall be damaged by any cause which puts the Premises into a condition which is not decent, safe, healthy and sanitary, Lessee agrees to make, or cause to be made, full repair of said damage and to restore the Premises to the conditions which existed prior to said damage, or Lessee agrees to clear and remove from the leased Premises all debris resulting from said damage, and rebuild the Premises in accordance with plans and specifications previously submitted to Lessor and approved in writing in order to replace in kind and scope the operation which existed prior to such damage. Lessee agrees that preliminary steps toward performing repairs , restoration or replacement of the Premises shall be commenced by Lessee within 16. thirty (30) days of the date the damage was incurred, and the re- quired repairs, restoration or replacement shall be completed within a reasonable time thereafter. Lessor may determine an equitable period that said Premises are untenable by reason of such damage. E. Evidence of Insurance - A certificate of insurance, or an appro- priate insurance binder, evidencing the above insurance coverage with a company acceptable to the Lessor' s Risk Management Officer shall be submitted to Lessor prior to execution of this Lease on behalf of Lessor. F. Notice to Lessor, Insurance Coverage Change - The terms of the insurance policy or policies issued to provide the above insurance coverage shall provide that said insurance may not be amended or cancelled by the carrier, for non-payment of premiums or otherwise, without thirty (30) days prior written notice of amendment or can- cellation to Lessor. In the event the said insurance is cancelled, the Lessee shall , prior to the cancellation date, submit to Lessor's City Clerk new evidence of insurance in the amount heretofore established. Provided, that upon transfer of the Common Area in Phase I to the Association, the provisions of the Declaration of Covenants, Conditions and Restrictions shall supercede and replace this Article. ARTICLE VIII - TERMINATION BY LESSEE In addition to all other remedies available to the Lessee, this Agreement shall be subject to cancellation by the Lessee with the written consent of Lessor should any one or more of the following events occur: A. The issuance by any court of competent jurisdiction of a permanent injunction in any way preventing the use of the leased premises for the purpose hereinafter enumerated. B. The breach by the Lessor of any of the terms, covenants or conditions of this Agreement to be kept, performed and observed by the Lessor, and the failure of the Lessor to remedy, or to commence action to remedy such breach for a period of thirty (30) days after written notice from the Lessee of the existence of such breach. 17. i • C. The assumption by the United States Government, or the State of California, or any authorized agency of same, of the operation, control or use of these facilities in such a manner as to substan- tially restrict the Lessee from conducting its operation if such restrictions be continued for a period of six (6) months or more. ARTICLE IX - TERMINATION BY LESSOR A. If this Lease is terminated under Article I, A, Lessee will deliver copies of all architectural and engineering plans, drawings and specifications, soil reports, surveys , title reports and all similar or like materials covering or related to the Premises in the pos- session or control of Lessee without cost or warranty of any sort to Lessor. B. Remedies for any breach or default which occurs prior to termination will survive the termination. ARTICLE X - REMEDIES OF LESSOR A. In addition to all other remedies available to the Lessor, and subject to the provisions of III D. hereof, this Agreement hereby grants Lessor the option to take necessary action to replace Lessee should any one or more of the following occur: 1 . If Lessee shall be divested of its rights, powers and privileges under this Agreement by operation of law. 2. If the Lessee shall default in, or fail to make, any payments at the time and in the amounts as required of it under this Agreement. 3. If Lessee shall fail in a material and substantial way to perform, keep and observe all of the covenants and conditions contained in this Agreement to be performed, kept and observed by it. 4. If the Lessee shall fail in a material and substantial way to abide by all applicable laws, ordinances and rules and regulations of the United States, State of California or the City of Palm Springs. 18. B. Upon the happening of any of the contingencies recited in subsection "A" above, Lessor shall give written notice to Lessee and to encum- brancer to correct or cure such default, failure to perform, or breach and if, within ninety (90) days from date of such notice, the default, failure to perform, or breach complained of shall not have been corrected in a manner satisfactory to the Lessor, then and in such event, Lessor shall have the right, at once and without further notice to Lessee, to take necessary action to replace Lessee and, provided further, that upon the happening of any one of the con- tingencies enumerated in subsection "A" above, this Agreement shall be deemed to be breached by Lessee and such breach shall constitute a continuing breach unless such legal act divesting Lessee of its rights under this Agreement shall be denied, set aside, vacated or terminated in the Lessee's favor within forty-five (45) days from the happening of the contingency. Upon the happening of said latter events, the breach shall be deemed cured as if there had been no breach occasioned by the happening of said contingencies, provided that Lessee shall within ten (10) days after the final denial , vacating or setting aside of such legal act, pay or discharge any and all sums of money which may have become due under this Agreement in the interim and shall then remain unpaid and shall likewise fully perform and discharge all other obligations which may have accrued and become payable in the interim. ARTICLE XI - CONDEMNATION If the leased premises shall be taken by any agency possessing the power of eminent domain, any award of compensation shall be divided between Lessor and Lessee, or anyone claiming under Lessee, in such manner that Lessee shall first receive the full value allocated to the land, and to any improvements placed thereon by the expense of Lessor, and Lessee, or those claiming under Lessee shall then receive any remaining portion of such award allocated to the value of improvements placed upon such land by Lessee or those claiming under Lessee. 19. If such taking shall be of the entire Premises, or so much thereof that the continued use as a development for the single-family residences shall be impossible or impractical , then this Lease shall terminate, and Lessee shall be relieved of any further obligation for payment of rent thereunder. If such taking shall be of only a part of the leased Premises, so that continued use or maintenance of the residential facilities is feasible upon the remainder, then this Lease shall continue in full force and effect, except that any rents shall be abated on the same basis as they are paid under the Declaration of Covenants, Conditions and Restrictions. ARTICLE XII - ASSIGNMENT The privileges contained herein are exclusive. Until construction of the improvements on the Common Area or lot to be assigned are completed, the Lessee agrees that it will not assign the same or any portion thereof or any improvements thereon including, but not limited to, building or facilities constructed on the Premises without the express consent of the Lessor in writing. Any purported assignment without the consent of the Lessor shall be void. Lessor will not be arbitrary in granting its permission, but, as such judgment may effect Lessor's right to approve assignment, the Lessor shall be the sale judge as to the reliability, capability, character and desirability of Lessee and prospective Lessees involved. Thereafter, all of Lessee's obligations, duties, rights, title and interest under this Lease in and to the completed Common Area and lot may be freely assigned by Lessee and its assignees and other successors-in-interest subject to the other terms of this Lease and the Declaration of Covenants , Conditions and Restrictions. On or before the close of escrow for the sale of the first manufactured unit in each phase ("first unit transfer") , Lessee shall assign all of its right, title and interest under the Lease to the Common Area in that phase to the Association. As each pahse of the development is annexed, Lessee will assign the Common Area in that phase of development to the Association. The lease payments for the Premises will be apportioned between the phases on the basis of area; and upon the first unit transfer in each phase, the lease payments for that phase will be divided equally between the lots in that phase. The Association will be charged with collecting the lease payments as an assessment, in addition to the maintenance assessment. Fredricks will , as required by law, pay the assessments on the lots until units for the lots are 20, sold and will pay the lease payments on the phases which have not been annexed. As each manufactured unit is sold, Fredricks will assign all of its right, title and interest under the Lease in and to the lot for that manufactured unit to the purchaser of the manufactured unit. The assignments will be subject to the Declaration and an assumption of Lessee's duties and obli- gations under this Lease for the portion of the Premises assigned. When development is completed and Fredricks ' rights and obligations under this Lease have been fully assigned to the Homeowners Association and to the pur- chasers of the manufactured units, all of Fredricks' obligations and liabilities with respect to the Premises, this Lease and the City shall terminate. ARTICLE XIII - RIGHT OF INSPECTION The City Manager and/or his duly authorized representatives shall have at any and all times, the full and unrestricted right to enter the Premises for the purpose of inspecting such Premises and of doing any and all things with reference thereto which the Lessor is obligated or authorized to do as set forth herein or in the exercise of the Lessor's police power. Nothing in this section implies any duty of Lessor to do any work which Lessee may be required to perform. The performance by Lessor will neither constitute a waiver of Lessee' s default in failing to perform the work, nor affect the obligations of Lessee under this Lease. Nothing in this section shall be construed to give the Lessor any right to enter a residential dwelling unit that the Lessor does not otherwise have. ARTICLE XIV - HOLDING OVER In the event Lessee shall hold over and remain in possession of the premises herein leased after expiration of this Agreement such holding over shall not be deemed to operate as a renewal or extension of this Agreement, but shall only create a tenancy from month-to-month which may be terminated at any time by the Lessor. 21 . ARTICLE XV - MAINTENANCE - ALTERATIONS AND REPAIRS A. Lessee shall at all times keep the Premises and all fixtures , equipment and personal property in a clean and orderly condition and appearance. B. Lessee shall repair, replace, rebuild and paint all or any part of the Premises which may be damaged or destroyed by the acts or omissions of Lessee, sublessees or by those of its officers, employees, guests, invitees or of other persons on or at the Premises with consent of Lessee. C. Lessee shall take such care of the premises and all parts thereof that at all times during the term of this Agreement. The Premises and all parts thereof shall include, but not be limited to, such of the following as are or may be located or installed in or on the Premises during the term of this Agreement: Fencing, the exterior and interior of the building walls, the exterior and interior and operating mechanism of and attachments to windows and skylights , screens, roofs, foundations, steel work, columns; the exterior and interior and operating mechanism of and attachments to doors, par- titions, floors, ceilings; inside and outside paving and unpaved areas, landscaping, glass of every kind, and the utility, mechanical , electrical and other systems. D. Lessee shall make frequent periodic inspections and as the necessity arises, regardless of the causes therefore, shall perform all nec- essary preventive maintenance, including, but not limited to, painting; make all necessary repairs and replacements ; and do all necessary rebuilding with respect to the premises and all parts thereof (including any total destruction) . All such maintenance, repairs and replacement shall be of quality equal to the original in materials and workmanship. All exterior paint colors shall be subject to the prior approval of Lessor. 22. ARTICLE XVI - GENERAL PROVISIONS A. Notices to Lessor provided for in this Agreement shall be sufficient if sent by registered mail , postage prepaid, addressed to the City Clerk, P.O. Box 1786, Palm Springs, California 92263, and notices to the Lessee if sent by registered mail , postage prepaid, addressed to Fredricks Development Corporation, 18 Brookhollow Drive, Santa Ana, California 92705; or, after assignment to the address for the Homeowners Association as designated in writing or the lot address or addresses as the parties may designate to each other from time to time. B. The Lessee represents that it has carefully reviewed the terms and conditions of this Agreement, and is familiar with such terms and conditions and agrees faithfully to comply with the same to the extent to which said terms and conditions apply to its activities as authorized and required by this instrument. C. The term Lessor as used in this Agreement means the City of Palm Springs and where Agreement speaks of approval and consent by the Lessor, such approval is understood to be manifested by an official act of the City of Palm Springs, unless otherwise expressly stated in this Agreement. D. If either party shall be delayed or prevented from the performance of any act required by this Lease by reasons of Acts of God, strikes , lock-outs, or other causes, without fault and beyond the control of the party required to perform such obligations (financial ability excluded) , performance of such act shall be excused for the period of the delay provided, however, nothing in this Section shall excuse Lessee from the prompt payment of any rental or other charge re- quired of Lessee except as may be expressly provided elsewhere in this Lease. E. Lessor warrants that Lessee will lawfully and quietly hold, occupy and enjoy the Premises during the term of this Lease without ob- struction by Lessor or any person claiming under Lessor upon satis- faction of the covenants, conditions and terms of this Lease to be performed by Lessee. 23. F. Except as otherwise expressly set forth, Lessor has made no warranty or representation to Lessee with respect to the Premises. G. Lessee waives any claim against Lessor for damages which may arise if its use and occupancy of the Premises is prohibited or substantially impaired by reason of: (1 ) the passage or adoption of any law, ordinance, rule or regu- lation of federal , state, county or municipal government relating to any such use or occupancy; or (2) any act of any governmental or other public authority other than the City of Palm Springs and its agents; or (3) any order or judgment of a Court of competent jurisdiction. H. Nothing herein contained will be deemed or construed by the parties hereto, or by any third party, as creating the relationship of principal and agent or of partnership or of joint venture, between the parties hereto, it being understood and agreed that neither the method of computation of rent nor any other provision contained herein, nor any of the acts of the parties herein, will be deemed to create any relationship between the parties other than the relation- ship of landlord and tenant. I. If a party of this Lease becomes a party to litigation which results , wholly or in part, from acts of any other party, or which concerns the terms of this Lease or the rights and duties of the parties under it, the party prevailing will be entitled to a reasonable sum for attorney's fees as costs, and not as damages, in addition to such other relief as may be granted. A party not entitled to recover his costs shall not recover attor- ney' s fees. No sum for attorney' s fees will be counted in calcu- lating the amount of a judgment for purpose of determining whether a party is entitled to recover his costs or attorney's fees. J. Upon at least twenty (20) days ' prior written request, either party will execute, acknowledge and deliver to the other, a statement in writing: 24. • • 1 . certifying that this Lease is unmodified and in full force and effect (or if there has been any modification thereof, that the same is in full force and effect, as modified, and stating the modification or modifications) ; 2. the dates to which the rent and other charges have been paid; 3. that no notice has been given to the party executing such statement of any default which has not been cured, except as to defaults specified in said statement; 4. if relevant, that no default on the part of any tenant, assignee, licensee or concessionaire exists, or, if any such default exists, specifying the nature and period of existence thereof and what action Lessee is taking or proposes to take with respect thereto; and 5. such other information with respect to the Premises or any part thereof as from time to time may reasonably be requested. Any statement delivered pursuant to this section may be relied upon by any prospective assignees, subtenant, mortgagee or beneficiary under the deed of trust of a leasehold estate or any prospective purchaser of the estate of Lessor and any title insurer insuring the interest or interests of any of the fore- going classes of persons. K. The captions of the sections of this Lease are for convenience only and will not be considered or referred to in resolving questions of interpretation or construction. L. The various rights, options, elections, powers and remedies of Lessor contained in this Lease will be construed as cumulative, and no one of them exclusive of any others or of any other legal or equitable remedy which Lessor might otherwise have in the event of breach or default in the terms hereof, and the exercise of one right or remedy by Lessor will not in any wise impair its right to any other right or remedy until all obligations imposed upon Lessee have been fully performed. 25. M. No failure by Lessor to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a breach thereof, and no acceptance of full or partial rent during the continuance of any such breach, will constitute a waiver of any such breach or of any such term. No waiver of any breach will affect or alter this Lease, which will continue in full force and effect, or the right of Lessor with respect to any other exist- ing or subsequent breach. N. It is understood and agreed that all of the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate provision thereof. 0. Each and all of the covenants and obligations of this Lease will be binding upon and inure to the benefit of the parties hereto, as the case may require and, except as herein otherwise specifically pro- vided, as well , their respective heirs, devisees, legatees, executors , administrators, successors and assigns, subject at all times , never- theless, to all agreements and restrictions herein contained with respect to assignment of Lessee' s interest in this Lease. P. In any action between the parties seeking enforcement of any of the terms and provisions of this Agreement or in connection with the Premises, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, not limited to taxable costs and reasonable attorney's fees. Q. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which shall constitute one and the same instrument. R. The term "Lessee" as used in this Agreement refers to the original Lessee mentioned on page 1 of this Agreement, any assignee of the original Lessee, or any successor Lessee who shall become Lessee under this Agreement by virtue of replacement of the original Lessee. S. The headings of this Agreement are for purposes of reference only and shall not limit or define the meaning of the provisions of this Agreement. 26. T. If any paragraph, section, sentence, clause or phrase contained in this Agreement shall become illegal , null or void or against public policy for any reason, or shall be held by any Court of competent jurisdiction to be illegal , null or void or against public policy, the remaining paragraphs, sections, sentences, clauses or phrases contained in this Agreement shall not be affected. U. If Fredricks has not completed development of all phases of the POD on or before October 1 , 1986, Fredricks will reassign its rights under the Lease for all phases of the PDD that Fredricks has not begun to develop and the lease payments will be reduced by the amount of lease payments apportioned to those phases pursuant to this Agreement. V. Waiver by a party of any right under this Agreement shall not be deemed a waiver of any other right or any right upon subsequent breach. Failure to pursue any right under this Agreement shall not be deemed a waiver of that right. ARTICLE XVII - NON-DISCRIMINATION A. The Lessee, for himself, his personal representatives, successors- in-interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree that (1 ) no person on the grounds of race, color, national origin, religion, sex, marital status or other improperly discriminatory grounds, shall be excluded from partici- pation, denied the benefits of, or be otherwise subjected to dis- crimination in the use of said facilities; (2) that in the con- struction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, national origin, religion, marital status or sex shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination. 27. 1 B. There is hereby reserved to the Lessor, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace over 300 feet above the surface of the Premises herein leased, together with the right to cause in such airspace and in any adjoining airspace, such noise, vibrations, fumes, dust, fuel particles, and all other effects as may be caused by the operation of aircraft landing at, taking off from or operating at, on or near the Palm Springs Municipal Airport, or navigating or flying through such air space. In addition to any other covenants or indemnities contained in this Agreement, Lessee covenants and agrees to indemnify, defend and hold Lessor harmless of and from any and all claims, demands, expense or causes of action made or brought by Lessee or by any sublessee, tenant or other person claiming under Lessee based upon or arising out of the exercise of the rights reserved in this paragraph. ATTEST: _ � s CITY OF PAL SPRINGSCAIFORNIA By L ,' City Clerk City Manger LESSOR REVIEWED & APPROVED:_ FREDRICKS DEVELOPMENT CORPORATION, A Califo fi cor o a ion, By ✓�— Wade . Ca 5�le�,Executive Vice President By 'I mes D. White, Vice President STATE OF CALIFORNIA !' UItlWI Itl COUNTY OF Orange � A December 1, 1981 N f 0 On before me, the undersigned, a Notary Public in and for o said State, personally appeared Wade Cable known to me to be the President, and James D. White u known to me to be the Secretary of the corporation that executed the within instrument, E and known to me to be the Q persons who executed the within instrument on behalf of the corporation therein named, and a, oknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of`o P Y- rOFFICiAL SEAL n � directors. "F'�.5, DORIS fvi. FOV^ILER NOTARY PUBLIC�CALIFORNIA p..,- -:nF 1,• PRINCIPAL OFFICE IN o WITNESS my hand and official seal. �u7,fyv ORANGE COUNTY Com mission Exp. Dec.2, 19i'4 Signature � l'✓ c' Doris M. Fowler Name(Typed or Printed) (This area for official notarial seal) • N DESCRIPTION OF LOT 7 The following is a description of Lot 7, of Tract No. 17642-1, an unrecorded tract , in the City of Palm Springs , County of Riverside , State of California. Being a portion of the southwest quarter of section 35 , township 3 south, range 4 east , San Bernardino meridian , described as follows: Commencing at the southeast corner of said section 35, marked by a city standard well monument and being also the center- line intersection of San Rafael Drive and Sunrise Way; thence north 0°15 ' 14" east , 940 .97 feet , along said center- line of Sunrise Way; thence north 89°44 ' 46" west , 50.00 feet , to the True Point of Beginning; thence south 0°15114" west , 15 .00 feet ; thence north 89°46 ' 28" west , 310.00 feet ; thence south 0°15 ' 14" west , 355. 00 feet ; thence north 89°46128" west , 370 .00 feet ; thence north 0°15114" east , i 370. 00 feet ; thence south 89°46 ' 28" east , 680. 00 feet , to the True Point of Beginning. DESCRIPTION OF LOT 8 The following is a description of Lot 8 , of Tract No. 17642-1, an unrecorded tract , in the City of Palm Springs , County of Riverside , State of California: Being a portion of the southwest quarter of section 35 , township 3 south , range 4 east , San Bernardino meridian , described as follows: Commencing at the southeast corner of said section 35, marked by a city standard well monument and being also the centerline intersection of San Rafael Drive and Sunrise Way; thence north 89°46 ' 28" west , 197. 98 feet , along said centerline of San Rafael Drive; thence north 0013132" east , 44 .00 feet , to the True Point of Beginning. Thence north 89°46 ' 28" west , 635.99 feet , to a point of cusp and beginning of a curve , concave northwesterly and having a radius of 25 . 00 feet ; thence northeasterly along said curve , through a central angle of 89°58 ' 1811 , a distance of 39.26 feet ; thence north 0°15 ' 14" east , 117 .01 feet ; thence north 89°46128" west , 90 . 00 feet ; thence north 0015 ' 14" east , 755.00 feet ; thence south 89°46 ' 28" east , 169.00 feet ; thence south 0015 ' 14" west , 370 .00 feet ; thence south 89046 ' 28" east , 370.00 feet ; thence north 0°15 ' 14" east 355. 00 feet ; thence south 89°46 ' 28" east , 170. 00 feet ; thence south 0015 ' 14" west , 110.00 feet ; thence south 89°46 ' 28" east , 140.00 feet ; thence south 0°15 ' 14" west , 612 .00 feet ; thence north 89°46128" west , 115 .00 feet ; thence north 57009141" west , 10.75 feet , to the beginning of a non-tangent curve , con- cave northwesterly and having a radius 121 . 00 feet , a radial line through said point bears south 57°09141" east ; thence southwesterly along said curve,through a central angle of 22°18 ' 36" , a distance of 47 . 12 feet ; thence south 34°51' 05" east , 14 .63 feet ; thence south 0015 ' 14" west , 120.00 feet , to the True Point of Beginning. DESCRIPTION OF LOT 9 The following is a description of lot 9 of Tract No . 17642-1 , an unrecorded tract in the City of Palm Springs , County of Riverside , State of California: Being a portion of the southwest quarter of section 35 , township 3 south, range 4 east , San Bernardino meridian , described as follows: Commencing at the southeast corner of said section 35, marked by a city standard monument and being also the centerline intersection of San Rafael Drive and Sunrise Way; thence north 0°15 ' 14" east , 940 . 97 feet , along said centerline of Sun- rise Way; thence north 89°44146" west , 50. 00 feet , to the True Point of Beginning; thence north 89°46 ' 28" west , 849. 00 feet; thence north 0015114" east , 570. 00 feet ; thence north 89046128" west , 1133. 00 feet ; thence north 0°15 ' 14" east , 532 .00 feet ; thence south 89°46 ' 28" east , 1062 .00 feet ; thence south 0°15' 14" west , 125. 53 feet , to the beginning of a non-tangent curve, concave southwesterly and having a radius of 320.98 feet , a radial line through said point bears north 27026116" east ; thence southeasterly along said curve , through a central angle of 1205411611 , a distance of 72 .29 feet , to the beginning of a reverse curve, concave northerly and having a radius of 25.00 feet ; thence easterly along said curve , through a cental angle of 82°10 ' 45" , a distance of 35. 86 feet , to the beginning of a reverse curve, concave southeasterly and having a radius of 291.00 feet ; thence northerly along said curve, through a central angle of 8'01 ' 5111 , a distance of 40. 79 feet ; thence north 0°15 ' 14" east , 139.84 feet ; thence south 89°46 ' 28" east , 650.00 feet ; thence south 0°15 ' 14" west , 100 .00 feet ; thence south 37°12116" west , 15 .43 feet , to the beginning of a non- tangent curve , concave southwesterly and having a radius of 111.00 feet , a radial line through said point bears north 0 �r► DESCRIPTION OF LOT 9 PAGE 2 37012 ' 16" east ; thence southeasterly along said curve, through a central angle of 17°55 ' 28" , a distance of 34. 73 feet ; thence north 55°07 ' 44" east , 12 . 49 feet ; tkience south 89°46 ' 28" east , 120.00 feet ; thence south 0°15 ' 14" west , 972 .00 feet , to the True Point of Beginning. RESOLUTION NO. 14061 OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING CHANGES TO THE EXISTING AFCOM LEASE ARRANGEMENTS FOR APPROXIMATELY 100 ACRES OF LAND LOCATED ON THE NORTHWEST CORNER OF SUNRISE AND SAN RAFAEL WHEREAS the City Council approved Amendment No. 1 to Lease Agreement No. 1696 with AFCOM PARTNERS, LTD. ; and WHEREAS the City Council approved Resolution No. 13975, which acknowl- edged the participation of Fredricks Development Corporation in the AFCOM affordable housing venture; and WHEREAS the City Council approved certain letter commitments from AFCOM and Fredricks Development Corporation insuring certain under- standing for completion of the housing project; and WHEREAS the City agreed to negotiate cooperatively and reasonably with AF(OM and Fredricks Development Corporation to make modifications to the l-ease Agreement or other documents as necessary to secure Fredricks Development Corporation' s position in the venture; and WHEREAS AFCOM and Fredricks require changes in the Lease Agreement to proceed with the development, NOW THEREFORE BE IT RESOLVED by the City Council of the City o' Palm Springs, as follows: Section 1 . The assignment of the existing lease with AFCOM PARTNERS, LTD. , a limited partnership, to AFCOM MOBILE HOME PARK, LTD. , a California Corporation is here- by approved. Section 2. The assignment of the leasehold interest in a portion of the property by AFCOM MOBILE HOME PARK, .TD. , to Fredricks Development Corper,ition is hereby approved. Section 3. The separate substituted lease agreement with Fredricks Development Corporation for the development of a manufactured housing subdivision on the portion of the leased premises assigned to Fredricks Development Corporation is hereby approved. I, { J Resolution 14061 Section 4. The Construction and Development Agree- ment between and among AFCOM, a Califor- nia Corporation, Fredricks Development Corporation and the City of Palm Springs is hereby approved . Adopted this 1,9th day of November 1981 AYES: Councilmembers Beirich, Field, Ortner, Rose and Mayor Doyle. NOES: None ABSENT: None ATTEST: CITY OF PALM SPRINGS, CALIFORNIA BY� L� /� zi �i City Clerk City Maiiaget REVIEWED AND APPROVED