The Sea Ranch Restrictions Articles 4 and 5

Article IV.
Design Committee.

Section 4.01. Design Committee: Organization; Power of Appointment and Removal of Members.

There shall be a Design Committee, organized as follows:

(a) The Design Committee shall consist of three (3) members. At least one member shall be an architect who shall be designated the architect member. No other member shall be required to meet any qualification for a membership on the Design Committee.

(b) There shall also be three (3) alternate architect members of the Design Committee, any one of whom may be designated by the Design Committee to act in the place and stead of the architect member in the event of his absence or disability.

Each of said persons shall hold his office until such time as he has resigned or he has been removed or his successor has been appointed, as set forth herein.

(c) Except as provided in paragraph (d) below, the right from time to time to appoint and remove all members and alternate architect members of the Design Committee shall be, and is hereby reserved to and vested solely in Grantor.

(d) The right from time to time to appoint and remove members and alternate architect members of the Design Committee shall be reserved to and vested in the Association as follows:

(1) From and after twenty (20) years from the date first above written, the Association shall have the right to appoint and remove one member of the Design Committee, who shall be the member, other than the member designated the architect member, who, as of the date such right may be first exercised, is the most recently appointed member.

(2) From and after twenty-five (25) years from the date first above written, the Association shall have the right to appoint and remove the two members of the Design Committee not designated the architect member.

(3) The Association shall have the right to appoint and remove all members and alternate architect members of the Design Committee from and after thirty (30) years from the date first above written; provided, however, that if Grantor fails to exercise its rights under paragraph (c) above or records a declaration waiving such rights, the Association shall thereupon and thereafter have the right to appoint and remove all members and alternate architect members.

(e) Any member or alternate architect member of the Design Committee may at any time resign from the Design Committee upon written notice delivered to Grantor or to the Association, whichever then has the right to appoint and remove members.

Section 4.02. Design Committee: Duties.

It shall be the duty of the Design Committee to consider and act upon such proposals or plans from time to time submitted to it pursuant to sections 3.03, 3.07 and 3.09, to adopt Design Committee rules pursuant to section 4.04, and to perform such other duties from time to time delegated to it by The Sea Ranch Restrictions.

Section 4.03. Design Committee: Meetings; Action; Compensation; Expenses.

The Design Committee shall meet from time to time as necessary to properly perform its duties hereunder. The vote or written consent of any two (2) members shall constitute an act by the Design Committee unless the unanimous decision of its members is otherwise required by The Sea Ranch Restrictions; provided, however, approval of plans, drawings and specifications by the Design Committee pursuant to paragraph (d) of section 3.03 shall require the vote or written consent of the architect member and at least one other member The Design Committee shall keep and maintain a record of all action from time to time taken by the Design Committee at such meetings or otherwise. The architect member and the alternate architect members shall receive from the Association reasonable fees for professional services rendered. Unless authorized by the Association, the other members of the Design Committee shall not receive any compensation for services rendered. All members shall be entitled to reimbursement for reasonable expenses incurred by them in connection with the performance of any Design Committee function.

Section 4.04. Design Committee Rules.

The Design Committee may, from time to time and in its sole discretion, adopt, amend and repeal by unanimous vote, rules and regulations, to be known as “Design Committee Rules”, which, among other things, interpret or implement the provisions of sections 3.03, 3.07 and 3.09 and which list species of ground covers, shrubs and trees. A copy of the Design Committee Rules, as they may from time to time be adopted, amended, or repealed, certified by any member of the Design Committee, shall be recorded and shall thereupon have the same force and effect as if they were set forth in and were a part of The Sea Ranch Restrictions.

Section 4.05. Non-waiver.

The approval by the Design Committee of any plans, drawings or specifications for any work done or proposed, or in connection with any other matter requiring the approval of the Design Committee under The Sea Ranch Restrictions, shall not be deemed to constitute a waiver of any right to withhold approval as to any similar plan, drawing, specification or matter whenever subsequently or additionally submitted for approval.

Section 4.06. Estoppel Certificate.

When thirty (30) days after written demand therefor is delivered to the Design Committee by any Owner, and upon payment therewith to the Association of a reasonable fee from time to time to be fixed by the Association, the Design Committee shall record an estoppel certificate executed by any two of its members, certifying with respect to any lot of said Owner, that as of the date thereof either

(a) all improvements and other work made or done upon or within said lot by the Owner, or otherwise, comply with The Sea Ranch Restrictions, or

(b) such improvements and/or work do not so comply, in which event the certificate shall also

(1) identify the non-complying improvements and/or work and

(2) set forth with particularity the cause or causes for such non-compliance.

Any purchaser from the Owner, or mortgagee or other encumbrancer shall be entitled to rely on said certificate with respect to the matters therein set forth, such matters being conclusive as between the Association, Grantor and all Owners and such purchaser, mortgagee or other encumbrancer.

Section 4.07. Liability.

Neither the Design Committee nor any member thereof shall be liable to the Association or to any Owner or Project Committee for any damage, loss or prejudice suffered or claimed on account of

(a) the approval of any plans, drawings and specifications, whether or not defective,

(b) the construction or performance of any work, whether or not pursuant to approved plans, drawings and specifications,

(c) the development, or manner of development of any property within The Sea Ranch, or

(d) the execution and filing of an estoppel certificate pursuant to section 4.06, whether or not the facts therein are correct; provided, however, that such member has, with the actual knowledge possessed by him, acted in good faith.

Without in any way limiting the generality of the foregoing, the Design Committee, or any member thereof, may, but is not required to, consult with or hear the Association or any Owner with respect to any plans, drawings or specifications, or any other proposal submitted to the Design Committee.

Article V.
The Sea Ranch Association.

Section 5.01. Organization.

(a) The Association is a nonprofit membership corporation charged with the duties and empowered with the rights set forth herein. It was created by the Articles and its affairs shall be governed by the Articles and By-Laws.

(b) In the event that the Association as a corporate entity is dissolved, a nonprofit, unincorporated association shall forthwith and without further action or notice be formed and succeed to all rights and obligations of the Association hereunder Said unincorporated association shall be known as Del Mar Ranch Association and its affairs shall be governed by the laws of the State of California and, to the extent not inconsistent therewith, by the Articles and By-Laws, respectively, as if they were created for the purpose of governing the affairs of an unincorporated association.

Section 5.02. Membership.

(a) Each Owner, by virtue of being an Owner and for so long as he is an Owner, shall be a member of the Association or in the event of its dissolution, a member of the unincorporated association succeeding to the Association, as provided for in paragraph (b) of section 5.01.

(b) The rights, duties, privileges and obligations of an Owner as a member of the Association or its succeeding unincorporated association shall be those set forth in, and shall be exercised and imposed in accordance with, the provisions of The Sea Ranch Restrictions, the Articles and By-Laws.

(c) In the event of the dissolution of the Association and the formation of an unincorporated association, as provided for in paragraph (b) of section 5.01, each member of the unincorporated association shall have an equal, underlying beneficial interest in all of the Association’s property transferred to or for the account or benefit of said unincorporated association in direct proportion to the number of lots owned by such member; provided, however, that there shall be no judicial partition of such property, or any part thereof, nor shall any such member or other person acquiring any interest in said property, or any part thereof, seek any such judicial partition.

Section 5.03. Voting Rights.

Each Owner shall be entitled to one vote for each lot owned by such Owner on all matters properly submitted for vote to the membership of the Association; provided, however, that every Owner entitled to vote at any election of the members of the Board may cumulate his votes and give any one or more candidates a number of votes equal to the number of lots owned by the Owner multiplied by the number of directors to be elected. The right to vote may not be severed or separated from any lot, and any sale, transfer or conveyance of any lot to a new Owner shall operate to transfer the appurtenant vote without the requirement of any express reference thereto.

Section 5.04. Duties and Obligations of the Association.

The Association shall have the obligations and duties, subject to The Sea Ranch Restrictions, to do and perform each and every of the following for the benefit of the Owners and for the maintenance and improvement of The Sea Ranch:

(a) The Association shall accept as part of The Sea Ranch, all property annexed to The Sea Ranch pursuant to section 2.02 and shall accept all Owners as members of the Association.

(b) The Association shall accept title to all common area and restricted common area from time to time conveyed to it pursuant to section 9.05.

(c) Notwithstanding anything to the contrary contained in paragraph (b) of section 5.01, immediately prior to any dissolution of the Association as a corporate entity the Association shall convey all real property vested in it to Title Insurance and Trust Company or to its successor, or to any other independent corporate trustee, to hold such real property in trust for the benefit of the unincorporated association formed pursuant to said paragraph (b) and for the benefit of the Owners.

(d) The Association shall maintain, or provide for the maintenance of, common area, restricted common area, recreational facilities and restricted private area and all improvements of whatever kind and for whatever purpose from time to time located thereon in good order and repair; provided, however, that notwithstanding the foregoing, the Association shall have no obligation to maintain in good order and repair any improvement constructed upon common area, restricted common area, or restricted private area by any Owner or Project Committee pursuant to section 3.07. Roads shall be maintained in a condition of repair at least equal to that of comparable roads of the County of Sonoma.

(e) The Association shall enter upon and maintain, or provide for the maintenance of, any private area or project area which is not maintained by the Owner or Project Committee thereof in accordance with the requirements of sections 3.02 and 3.08, respectively.

(f) To the extent not assessed to or paid by the Owners, the Association shall pay all real property taxes and assessments levied upon any portion of common area or restricted common area or upon any recreational facility.

(g) Unless provided by a municipal, county or other governmental body and unless the cost thereof is assessed, directly or indirectly, against the Owners by such body, the Association shall contract for, employ, or otherwise provide police and refuse disposal services.

(h) The Association shall obtain and maintain in force the following policies of insurance:

(1) fire and extended coverage insurance on all improvements owned by the Association and from time to time located upon or within any common area, restricted common area, or recreational facility, the amount of such insurance to be not less than ninety percent (90%) of the aggregate full insurable value, meaning actual replacement value (exclusive of the cost of excavations, foundations and footings), of such improvements as from time to time determined by the Association;

(2) bodily injury liability insurance with limits of not less than Two Hundred Thousand Dollars ($200,000) per person and One Million Dollars ($1,000,000) per occurrence insuring against any and all liability with respect to The Sea Ranch or any portion thereof, or arising out of the maintenance or use thereof; and

(3) property damage liability insurance with a deductible of not more than One Thousand Five Hundred Dollars ($1,500) and a limit of not less than Five Hundred Thousand Dollars ($500,000) per accident.

The policy or policies of insurance referred to in subparagraphs (2) and (3) above shall name as insureds

(aa) the Association, the Board, the Design Committee, and their representatives, members and employees, and

(bb) with respect to any liability arising out of the maintenance and use of common area, restricted common area or any recreational facility, the Owners.

Such policy or policies shall protect each of the insureds as if each were separately insured under separate policies; provided, however, that such policy or policies shall not require the insured or insurers to pay any amount in excess of the maximum limits stated therein. Each and every policy of insurance obtained by the Association, whether or not required to be obtained pursuant to the provisions of The Sea Ranch Restrictions, shall expressly waive any and all rights of subrogation against Grantor, its representatives and employees, and any Owner.

(i) The Association shall accept and act upon applications submitted to it for the development of public and private recreational facilities.

(j) The Association shall from time to time make, establish, promulgate, amend and repeal The Sea Ranch Rules, as provided for in section 5.06.

(k) To the extent provided for in section 4.01, the Association shall exercise its rights to appoint and remove members of the Design Committee to insure that at all reasonable times there is available a duly constituted and appointed Design Committee.

(l) The Association shall take such action, whether or not expressly authorized by The Sea Ranch Restrictions, as may reasonably be necessary to enforce the restrictions, limitations, covenants, and conditions of The Sea Ranch Restrictions, The Sea Ranch Rules and the Design Committee Rules.

Section 5.05. Powers and Authority of the Association.

The Association shall have all of the powers set forth in the Articles, together with its general powers as a nonprofit corporation, subject only to the limitations upon the exercise of such powers as are expressly set forth in the Articles, the By-Laws and in The Sea Ranch Restrictions, to do any and all lawful things which may be authorized, required or permitted to be done by the Association under and by virtue of The Sea Ranch Restrictions and to do and perform any and all acts which may be necessary or proper for or incidental to the exercise of any of the express powers of the Association or for the peace, health, comfort, safety and/or general welfare of the Owners and Guests of The Sea Ranch. Without in any way limiting the generality of the foregoing:

(a) The Association shall have the power and authority at any time, and from time to time, and without liability to any Owner or Project Committee, to enter upon any private area or project area for the purpose of enforcing any and all of the provisions of sections 3.02, 3.03, 3.08 and 3.09, or for the purpose of maintaining and repairing any such area if for any reason whatsoever the Owner thereof or the Project Committee of the project involved fails to maintain and repair such area as required by paragraph (d) of section 3.02 and paragraph (d) of section 3.08, respectively. The Association shall also have the power and authority from time to time, in its own name, on its own behalf or on behalf of any Owner or Owners who consent thereto, to commence and maintain actions and suits to restrain and enjoin any breach or threatened breach of The Sea Ranch Restrictions and to enforce, by mandatory injunction or otherwise, all of the provisions The Sea Ranch Restrictions.

(b) In fulfilling any of its obligations or duties under The Sea Ranch Restrictions, including, without limitations, its obligations or duties for the maintenance, repair, operation or administration of common area, restricted common area, recreational facilities, restricted private area and, to the extent necessitated by the failure of the Owners thereof, private area and project area, the Association shall have the power and authority

(1) to contract and pay for, or otherwise provide for, the maintenance, restoration and repair of all improvements of whatever kind and for whatever purpose from time to time located upon common area, restricted common area or within any recreational facility;

(2) to obtain, maintain and pay for such insurance policies or bonds, whether or not required by section 5.04, as the Association shall deem to be appropriate for the protection or benefit of The Sea Ranch, the Association, the members of the Board, the members of the Design Committee, Owners or Guests, including, but without limitation, war risk insurance, boiler insurance, workmen’s compensation insurance, malicious mischief insurance, automobile non-ownership insurance, and performance and fidelity bonds;

(3) to contract and pay for, or otherwise provide for, such utility services, including, but without limitation, water, sewer, garbage, electrical, telephone and gas services, as may from time to time be required;

(4) to contract and pay for, or otherwise provide for, the services of architects, engineers, attorneys and certified public accountants and such other professional and non-professional services as the Association deems necessary;

(5) to contract and pay for, or otherwise provide for, fire, police and such other protection services as the Association shall from time to time deem necessary for the benefit of The Sea Ranch, any property located within The Sea Ranch, Owners and Guests;

(6) to contract and pay for, or otherwise provide for, such materials, supplies, furniture, equipment and labor as and to the extent the Association deems necessary; and

(7) to pay and to discharge any and all liens from time to time placed or imposed upon any common area, restricted common area or recreational facility on account of any work done or performed by the Association in the fulfillment of any of its obligations and duties of maintenance, repair, operation or administration.

(c) In fulfilling any of its obligations, or in exercising any of its rights, to construct improvements or other work upon any common area, restricted common area or restricted private area, or in connection with the development of any recreational facility pursuant to Article VII, the Association shall have the right, power and authority

(1) to contract and pay for, or otherwise provide for, the construction of such improvements or other work upon such terms and conditions as the Association shall deem appropriate;

(2) to obtain, maintain and pay for such insurance policies or bonds, in addition to those obtained by the Association pursuant to subparagraph (2) of paragraph (b) above, as the Association may deem appropriate for the protection or benefit of the Association, the members of the Board, the members of the Design Committee, Owners and Guests, including, but without limitation, builder’s risk insurance, additional comprehensive liability insurance, workmen’s compensation insurance and performance and fidelity bonds;

(3) to contract and pay for, or otherwise provide for, the services of architects, engineers, attorneys and certified public accountants and other professional and non-professional services; and

(4) to pay and discharge any and all liens arising out of the construction of any such improvement.

(d) The Association shall have the power and authority from time to time to grant and convey to any third party such easements, rights of way, parcels or strips of land, in, on, over or under any common area, restricted common area or recreational facility, for the purpose of constructing, erecting, operating and maintaining thereon, therein and thereunder,

(1) public roads, streets, walks, driveways, parkways, and park areas,

(2) poles, wires, and conduits for the transmission of electricity for lighting, heating, power, telephone, television and other purposes and for the necessary attachments in connection therewith, and

(3) public and private sewers, storm water drains, land drains and pipe, water systems, sprinkling systems, water, heating and gas lines or pipes and any and all equipment in connection with the foregoing.

(e) The Association may, from time to time, employ the services of a manager to manage the affairs of the Association and, to the extent not inconsistent with the laws of the State of California and upon such conditions as are otherwise deemed advisable by the Association, the Association may delegate to the manager any of its powers under The Sea Ranch Restrictions.

(f) The Association may, from time to time and upon such terms and conditions as it may deem appropriate, agree with the Project Committee of any project to manage the affairs of such Project Committee.

(g) The Association shall have the right from time to time to pay, compromise or contest any and all taxes and assessments levied against all or any part of any common area, restricted common area or recreational facility or upon any personal property belonging to the Association; provided, however, that prior to the sale or other disposition of any property to satisfy the payment of any such tax or assessment, the Association shall pay and discharge the lien imposed with respect to such property.

Section 5.06. The Sea Ranch Rules.

(a) The Association may, from time to time and subject to the provisions of The Sea Ranch Restrictions, adopt, amend, and repeal rules and regulations, to be known as “The Sea Ranch Rules”, governing, among other things,

(1) the use of common area, restricted common area, and recreational facilities;

(2) the use of roads;

(3) the collection and disposal of refuse;

(4) the burning of open fires; and

(5) the maintenance of animals within The Sea Ranch.

(b) With respect to subparagraph (a) (1) above, The Sea Ranch Rules may, without limitation and to the extent deemed necessary by the Association in order to preserve the benefits of The Sea Ranch for all Owners, their families, invitees, licensees and lessees, and for Guests, restrict and/or govern the use of common area, restricted common area and recreational facilities by any Guest, by any Owner, by the family of such Owner, or by any invitee, licensee or lessee of such Owner; provided, however, that with respect to use of common area and public recreational facilities, The Sea Ranch Rules may not discriminate between Guests, Owners, and the families and lessees of Owners.

(c) With respect to subparagraph (a) (2) above, The Sea Ranch Rules may, without limitation, provide for

(1) parking restrictions and limitations;

(2) maximum speeds for vehicular travel;

(3) the time or times when commercial vehicles may be permitted to use the roads; and

(4) the type or types of vehicles other than conventionally equipped passenger automobiles which may be permitted to use the roads.

(d) A copy of The Sea Ranch Rules, as they may from time to time be adopted, amended or repealed, certified by the Secretary or any Assistant Secretary of the Association, shall be recorded and duplicate copies thereof shall be delivered to each Owner and each participating facility. Upon such recordation and delivery The Sea Ranch Rules shall have the same force and effect as if they were set forth in and were a part of The Sea Ranch Restrictions.

Section 5.07. Liability of Members of Board.

No member of the Board shall be personally liable to any Owner, Guest, Project Committee, participating facility, or to any other person, including Grantor, for any error or omission of the Association, its representatives and employees, the Design Committee or the manager; provided, however, that such member has, with the actual knowledge possessed by him, acted in good faith.

Section 5.08. Exclusive Powers of the Association.

The Association, through the Board and its duly authorized representatives, shall have the exclusive right to exercise the powers and authority referred to in paragraphs (b) through (g), inclusive, of section 5.05.

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