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5.2 Defaults Under Section 3.3(c); City's Rights and Remedies. If any Owner (a <br />"Defaulting Owner ") fails to pay when due any amount pursuant to Section 3.3(c) of this <br />Declaration, then in addition to any other remedy provided for in this Declaration and provided <br />by California law, City may demand by written notice (the "City Default Notice ") that the <br />default be cured. If the Defaulting Owner does not cure the default within thirty (30) days after <br />receipt of the City Default Notice, City shall have the right to institute legal action to collect the <br />amount(s) in default, together with the Late Charge and interest thereon at the rate equal to the <br />Default Interest Rate, from the date such sum(s) is /are due. City is considered as a "Creditor <br />Owner" for the purposes of Section 5.3. <br />5.3 Liens. <br />(a) Creation. Any Creditor Owner shall be entitled to a lien against the Lot <br />owned by a Defaulting Owner, which lien shall be created in accordance with this Section 5.3. <br />A lien authorized by this Section 5.3 shall be created by recording a written instrument (the <br />"Claim of Lien ") in the Official Records of Alameda County, California, which (i) references <br />this Declaration by recording number, (ii) alleges the specific default of this Declaration, <br />(iii) states the amount owed by the Defaulting Owner through the recording date of the Claim of <br />Lien, (iv) contains a legal description of the Lot of the Defaulting Owner, and (v) is executed and <br />acknowledged by the Creditor Owner. <br />(b) Amount. A lien created pursuant to this Section 5.3 shall include (i) the <br />amount stated in the Claim of Lien, (ii) all costs and expenses incurred in creating and <br />foreclosing such lien (including attorneys' fees), (iii) all amounts which become due from the <br />Defaulting Owner (or its successors or assigns) to the Creditor Owner after the date the Claim of <br />Lien is recorded, whether such amounts arise from a continuation of the default alleged in the <br />Claim of Lien or from some other default under this Declaration, and (iv) the Late Charge and <br />interest on all of the foregoing at the Default Interest Rate. <br />(c) Priority. The priority of a lien created pursuant to this Section 5.3 shall <br />be established solely by reference to the date the Claim of Lien is recorded; provided, that such <br />lien shall, in all instances, be subject to and junior to, and shall in no way impair or defeat the <br />lien or charge of any Mortgagee holding any Mortgage recorded prior to the date of the lien. <br />(d) Extinguishment. If a Defaulting Owner cures its default, and pays all <br />amounts secured by a lien created pursuant to this Section 5.3, the Creditor Owner shall record <br />an instrument sufficient in form and content to clear title to the Lot of the Defaulting Owner <br />from the Creditor Owner's lien. <br />(e) Notice of Lien. No action shall be brought to foreclose a lien or to <br />proceed under the power of sale pursuant to Section 5.3(0 until thirty (30) days after the date a <br />Claim of Lien is deposited in the United States mail, certified, postage prepaid, to the Defaulting <br />Owner of the Lot. <br />(f) Foreclosure Sale. Any lien may be enforced by sale by a Creditor Owner <br />after failure of the Defaulting Owner to make the payments specified in the Claim of Lien within <br />the thirty (30) day period pursuant to Section 5.3(e). Any such sale is to be conducted in <br />A -1 -6 <br />000299.0044\ 1093337.6 <br />