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HomeMy WebLinkAbout2004-11-09; City Council; Resolution 2004-3571 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2004-357 A RESOULTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AN AGREEMENT FOR THE PURCHASE OF A CONSERVATION EASEMENT, “MEMORANDUM OF UNDERSTANDING,” AND A LETTER FROM THE UNITED STATES FISH AND WILDLIFE SERVICE REGARDING MITIGATION CREDITS FOR THE CITY’S CARLSBAD CITY GOLF COURSE PROJECT WHEREAS, the City Council of the City of Carlsbad, California, formally approved in December, 2003 proceeding with the development of the proposed Carlsbad City Golf Course Project, hereafter referred to as the “Project;” and WHEREAS, permits and entitlements for the Project issued to the City of Carlsbad, hereafter referred to as the “City,” by interested Federal and State Resource Agencies require the acquisition and dedication of a conservation easement over off-site lands, hereafter referred to as “lands,” containing specified resources as compensatory mitigation for impacts to specified habitat and species to occur by the development of the Project by City; and WHEREAS, said off-site lands have been identified by City and approved by the interested State and Federal Resource Agencies as suitable and acceptable compensatory mitigation lands for impacts to be caused by development of the Project by City; and WHEREAS, a purchase agreement and associated documents and exhibits for City to acquire a conservation easement over said lands has been prepared and are hereby presented for the City Council’s review and action; and WHEREAS, City and the California Department of Fish and Game have prepared for the City Council’s review and action a “Memorandum of Understanding” regarding the application and use of said acquired lands and the conservation easement to be acquired by City; and WHEREAS, the United States Fish and Wildlife Service has delivered to City a letter dated September 8, 2004 addressing their position regarding the City’s potential use of mitigation credits generated by the City’s acquisition of said conservation easement. 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That a purchase agreement, and the associated documents and exhibits attached thereto, are hereby approved by the City Council and the Mayor is hereby authorized to execute said agreement. Following the execution of said agreement by the Mayor, the City Clerk is directed to return the signed agreement, and all associated documents and exhibits thereto, to the City Attorneys Office for processing via escrow of said agreement. The City Clerk is further directed to forward copies of the signed agreement, and the associated documents and exhibits, to the Planning and Recreation Departments for their files. 3. That a “Memorandum of Understanding” between the City and the California Department of Fish and Game as well as the acknowledgment letter dated September 8, 2004 from the United States Fish and Wildlife Service are hereby approved and the Mayor is authorized to execute said Memorandum. Following the Mayor’s execution of said Memorandum, the City Clerk is directed to forward the signed Memorandum to the City Attorneys Office for Mer processing. The City Clerk is further directed to forward copies of the signed Memorandum to the Planning and Recreation Departments for their files. 4. That funds in the amount of $1,393,200 from the Golf Course Enterprise Fund are hereby approved and the Finance Director is authorized to appropriate said funds and disburse Ill Ill lN Ill Ill Ill -2- 1 2 3 4 5 6 7 8 9 '10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to the escrow account in coordination with the filing of documents into escrow by the City Attorneys Office. PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council held on the 9th day of tjovember , 2004 by the following vote, to wit: AYES: Council Members Lewis, Finnila, Hall and Packard. NOES: None ABSENT: Council Member Kulc ATTEST 1 LORRAINE h@N OOD, City klerk (SEAL) ' & -3 - 5- EXHIBIT 2 PURCHASE AGREEMENT FOR CONSERVATION EASEMENT (City of Carlsbad HCP Offsite) THIS PURCHASE AGREEMENT FOR CONSERVATION EASE MEN^ (“Agreement”) is made and effective as of the date and between the parties shown in Section 1 * below, and with reference to the terms and conditions set forth herein. 1. set forth below. Basic Terms. The following terms shall have the meanings in this Agreement as 1.1 Effective Date: ,2004. 1.2 RECM: REAL ESTATE COLLATERAL MANAGEMENT COMPANY, a Delaware corporation (“RECM’). 1.3 Buver: CITY OF CARLSBAD, a California municipal corporation (“Buyer”). 1.4 Conservation Easement; Conservation Land; Conservation Easement Deed: As used herein, “Conservation Easement” shall mean that certain fifty-one and 75/100* (5 1.75) acre habitat conservation easement to be granted to the State of California acting by and through its Department of Fish and Game as more particularly described in the “Conservation Easement Deed”, a copy of which is attached hereto as Exhibit “A” and incorporated herein as though fklly set forth. As used herein, the term “Conservation Land” shall be that certain real property located in the County of San Diego, State of California as more particularly described on Exhibit “B” attached hereto and incorporated herein as though hlly set forth. The Conservation Easement affects and burdens a portion of the Conservation Land, which Conservation Easement is more particularly described in the Conservation Easement Deed. 1.5 Purchase Price: One Million Three Hundred Ninety-Three Thousand Two Hundred Dollars ($1,393,200.00) calculated at $27,000 per acre for 51.6 acres. (Note: The purchase is based on 5 1.6 acres; the actual easement covers 5 1.75 acres.) (a) Deposit: $10,000.00 1.6 Closing: Closing shall occur on payment of the Purchase Price and delivery of the Conservation Easement Deed to Buyer, which in no event shall be later than November 1,2004. 1.7 Notices: To RECM: Real Estate Collateral Management Company Attn: Mr. Fred Arbuckle c/o Morrow Development, Inc. 1903 Wright Place Suite 180 Carlsbad, CA 92008 RECM Conservation Easement Purchase Agreement 278 17-711 828363.2 1 8/20104 , With a copy to: Ronald W. Rouse, Esq. Luce, Forward, Hamilton & Scripps 11988 El Camino Real, Suite 200 San Diego, CA 92 130 To Buyer: City of Carlsbad Attn: Mr. John Cahill 1635 Faraday Avenue Carlsbad, CA 92008 With a copy to: Jane Mobaldi, Esq. City Attorney’s Office City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 2. Purchase. RECM is the owner of the Conservation Land, and hereby agrees to grant the Conservation Easement to the State of California for the benefit of Buyer, and Buyer agrees to purchase from RECM, the Conservation Easement upon the terms and conditions contained in this Agreement. 2.1 Purchase Price. The Purchase Price to be paid by Buyer to REEM for the Conservation Easement is set forth in Section 1.5 above. 2.2 Payment of Purchase Price. The Purchase Price for the Property shall be paid by Buyer to RECM as follows: (a) Deposit. Buyer’s check to RECM in the amount of the Deposit shall be paid concurrently with execution of this Agreement. Except as otherwise provided in Section 3.1, the Deposit shall be non-refundable to Buyer and retained by RECM pursuant to Section 4, but shall be credited toward the Purchase Price. (b) Balance of Pavment. On or before the Closing, Buyer shall pay to RECM the Balance of the Purchase Price in cash, or cash equivalent acceptable to RECM. 2.3 Deliverv of Conservation Easement. At the Closing, RECM shall deliver to Buyer the Conservation Easement duly signed and acknowledged. 3. Additional Covenants. 3.1 Buyer to Obtain All Apencv Approvals. It is the sole responsibility of Buyer to obtain approval and authorization from the California Department of Fish and Game and U.S. Fish and Wildlife Service (collectively the “Agencies”) that the Conservation Easement and Conservation Easement Deed are acceptable to the Agencies for purposes of the offsite habitat mitigation obligations of the City of Carlsbad. Such approval and authorization of the Agencies shall be evidenced by their execution of a Memorandum of Understanding or other RECM Conservation Easement Purchase Agreement 278 17-711828363.2 2 8/20/04 I written approval acceptable to the Buyer. The Agencies’ approval shall be a condition precedent to Buyer’s obligation to perform under this Agreement; if the Agencies’ approval is not obtained, Buyer shall be refknded its Deposit. 3.2 RECM and Buyer Cooperation. RECM and Buyer shall cooperate with one another in connection with the Buyer’s efforts to obtain its approvals from Agencies, provided it shall be at no additional liability, cost or expense to RECM. 3.3 RECM’s Habitat Conservation Program. RECM and Buyer are parties to that certain “Implementation Agreement Regarding the City of Carlsbad/Fieldstone/La Costa Associates Habitat Conservation PladOn-Going Multi-Species Plan” dated June 7, 1995 by and between the Agencies and RECM by subsequent assignment and assumption (the “HCP”) and pursuant to which the Conservation Land was acquired by RECM as the Agencies’ approved offsite habitat lands as required in the HCP. Pursuant to the HCP, the form of the Conservation Easement Deed has been established and previously approved in prior conservation easement conveyances under the HCP. Buyer understands, acknowledges and hereby consents to the conveyance of fee title of the Conservation Land by RECM to the Center for Natural Lands Management (“CNLM”), which is the approved Conservation Land manager under the HCP, and understands that other conservation easements may be granted over other portions of the Conservation Land pursuant to the HCP. RECM will be responsible for fimding the cost of the endowment for maintenance and management purposes to CNLM attributable to the Conservation Easement to be granted herein. Said endowment funding and title transfer to CNLM shall occur at and when determined by RECM, and Buyer shall not interfere, directly or indirectly in such transfer, the amount or timing of the endowment hding, or any other matter regarding the HCP. 3.4 Buver’s Inspections. Buyer, and its designated agents, may enter on the Property at any time prior to the Closing Date to conduct further reasonable and customary inspections regarding the Conservation Easement Land. Buyer agrees to repair any damage to the Conservation Easement Land caused by Buyer, its agents or independent contractors and further agrees to indemnify, defend and hold RECM, and its agents, employees, owners and Morrow Development, Inc. (collectively “Affiliates”) harmless from and against any costs, expenses, losses, attorneys’ fees and liabilities (including, without limitation, claims of mechanics’ liens) incurred or sustained by RECM or its Affiliates as a result of the conduct of Buyer, its agents, or independent contractors under this provision. The covenants contained herein shall survive the Closing or earlier termination of this Agreement. Buyer shall be solely liable and responsible for all costs for its additional studies or inspections. 4. Licluidated Damages. IN THE EVENT BUYER FAILS TO COMPLETE THE PURCHASE OF THE CONSERVATION EASEMENT AS HEREIN PROVIDED FOR ANY REASON OTHER THAN AN ONGOING RECM DEFAULT OR BUYER’S INABILITY TO OBTAIN AGENCIES’ APPROVALS PURSUANT TO SECTION 3.1, IT IS AGREED THAT THE DEPOSIT HELD BY RECM SHALL BE RETAINED BY RECM AS NONREFUNDABLE LIQUIDATED DAMAGES AND NOT AS A PENALTY. IT IS AGREED THAT SAID AMOUNTS CONSTITUTE A REASONABLE ESTIMATE OF THE DAMAGES TO RECM PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671 ET SEQ. BUYER AND RECM AGREE THAT IT WOULD BE IMPOSSIBLE OR RECM Conservation Easement Purchase Agreement 2781 7-711828363.2 3 8/20104 8 *. IMPRACTICAL TO PRESENTLY PREDICT WHAT MONETARY DAMAGES RECM WOULD SUFFER IN SUCH EVENT. BUYER DESIRES TO LIMIT THE MONETARY DWGES FOR WHICH IT MIGHT BE LIABLE HEREUNDER AND BUYER AND RECM DESIRE TO AVOID THE COSTS AND DELAYS THEY WOULD INCUR IF A LAWSUIT WERE COMMENCE T LAW OR IN EQUITY TO COLLECT DAMAGES, OBTAIN SPECIFIC , OR ANY OTHER RELIEF. , RECM: (Initials) 5. Warranties; Covenants. 5.1 RECM’s Warranties. RECM represents and warrants to Buyer that: (a)RECM is the owner of and has full right, power and authority to grant the Conservation Easement as provided herein; and (b) to the best of RECM’s actual knowledge, no claims or legal action, have been commenced, threatened or are pending affecting the Conservation Easement or Conservation Land. 5.2 Buyer’s Warranties. Buyer represents and warrants to RECM that: (a) Buyer has full right, power and authority to purchase the conservation Easement as provided herein and to carry out Buyer’s obligations hereunder; (b) Buyer’s performance hereunder and the transaction contemplated hereby have been duly authorized by the City Council of Buyer and no remaining action or third party action is required to make this Agreement binding upon Buyer; and (c) Buyer intends using the Conservation Easement exclusively to satisfy habitat mitigation obligations for public projects of the City of Carlsbad consistent with the HCP and the City’s pending Habitat Management Program (‘“MP). 5.3 Commissions. The parties mutually warrant and covenant that no brokerage commission shall be due or payable on account of this transaction, and each party shall indemnify and hold the other harmless from the claims for any commission or finder’s fee arising out of the actions of the indemnifylng party, including costs, claims, expenses of litigation and reasonable attorney’s fees. 5.4 As-Is Purchase; Buver Relying on Own Analvsis. For all purposes herein, Buyer represents it is relying solely on its own investigations, evaluations, studies and independent professional advice in connection with the subject matter of this transaction and subject to receiving approval from the Agencies as provided in Section 3.1, has satisfied itself of the benefits to Buyer of completing this transaction under the HCP and HMP. Buyer hereby assumes the full risk of loss and liability at Closing for the transaction contemplated herein, and except as expressly represented h this Agreement, is not relying on any statements (written or oral), documents, reports, information or other communication from RECM, or its Affiliates, in this transaction. Further, Buyer has had and will have the opportunity to investigate the condition of the Conservation Land and that portion thereof constituting the Conservation Easement, and is accepting same in its present condition, without warranty or representation from RECM, or any of its Affiliates, of any kind whatsoever. Buyer’s payment of the Purchase Price as provided herein shall constitute Buyer’s irrevocable and absolute satisfaction with the Conservation Easement and the transaction contemplated herein. RECM Conservation Easement Purchase Agreement 27a17-7/1a28363.2 4 a/201a4 5.5 Limitation on Use/Resale of Conservation Easement. Pursuant to the HCP, RECM acquired excess offsite habitat conservation property (the “Excess Offsite Property”) for the benefit of the City’s HCP and HMP obligations and programs. The Conservation Easement is a portion of the RECM acquired Excess Offsite Property. Pursuant to letters of understanding between Buyer and RECM, RECM is to be repaid its acquisition and . habitat management costs for the Excess Offsite Property pursuant to the City’s HMP program or from the sale to third parties of conservation easement credits from the Excess Offsite Property. Notwithstanding Buyer’s purchase of the Conservation Easement, RECM still holds additional Excess Offsite Property. Therefore, until RECM is able to sell or dispose of its remaining Excess Offsite Property, the City shall not resell, or market its 51.75 acres of Conservation Easement acres or credits, directly or indirectly, to any landowner or for the benefit of any project, other than Buyer’s own public projects within the City of Carlsbad. 6. General Provisions. 6.1 No Possession. Buyer shall have no right of possession or control of the Conservation Easement or Conservation Land, or any part thereof. 6.2 Successors and Assigns. This Agreement, and all rights and obligations of Buyer and RECM hereunder, shall be binding upon the parties hereto, and any respective successors-in-interest of the Conservation Land, but shall not be otherwise assignable by either Party. 6.3 Notice. All notices called for herein shall be in writing and shall be delivered to RECM and Buyer at the addresses set forth in Section 1.17 above by personal delivery, commercial messenger, or U.S. Mail, first class, postage prepaid, return receipt requested. Any notice shall be deemed received on the date of delivery, or if mailed, upon the second (2nd) U.S. Mail delivery day following mailing. 6.4 Interpretation. This Agreement shall be construed as a whole and in accordance with its fair meaning, the captions being for the convenience of the parties only and not intended to describe or define the provisions in the portions of the Agreement to which they pertain. Both parties acknowledge that they understand the terms and conditions of this Agreement and they execute the Agreement freely. Neither party shall deny the enforceability of any provision of this Agreement on the basis that it did not have legal counsel or that it did not understand a term or condition of this Agreement. Both parties to this Agreement acknowledge that they have been represented by counsel andor advisors of their own choice and that neither party shall be deemed to have primary responsibility for drafting this Agreement. 6.5 Survival. Each of the covenants, agreements, warranties, and representations contained herein shall survive the Closing and the delivery of the Conservation Easement Deed. 6.6 Countemarts. This Agreement may be executed in counterparts andor duplicate originals, all of which when taken together shall be deemed fully executed originals. RECM Conservation Easement Purchase Agreement 2781 7-711 828363.2 5 8120104 6.7 Waiver. No waiver by either party of any default, breach or any other term set forth herein shall constitute a waiver of any other default, breach or term whether of the same or any other covenant or condition. , 6.8 Entire Ameement. This Agreement contains the entire agreement between Buyer and RECM respecting the Conservation Easement. This Agreement supersedes and replaces any and all previous discussions, negotiations, and writings between Buyer and RECM, or their agents, respecting the Conservation Easement. Any agreement or representation respecting the Conservation Easement or the duties of either Buyer or RECM in relation thereto not expressly set forth in this Agreement is null and void. This Agreement may not be modified except by a written agreement signed by both Buyer and RECM. 6.9 Certificate of Non-Foreign Status. Prior to the Closing, RECM shall execute and deliver to Buyer a Certificate of Non-Foreign Status and similar State of California equivalent, certifying that RECM is a non-foreign person for purposes of the Internal Revenue Code and California law. 6.10 Remedies Cumulative. All rights and remedies of the parties hereto contained in this Agreement shall be construed and held to be cumulative. 6.11 Severabilitv. In the event that any phrase, clause, sentence, paragraph, section, article or other portion of 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 portions of this Agreement shall not be effected thereby and shall remain in full force and effect to the fullest extent permissible by law. 6.12 Time is of the Essence. Time is of the essence of each and every provision of this Agreement. IN WITNESS WHEREOF, the parties have jointly and severally executed this Agreement effective as of the date first above written. RECM: BUYER: REAL ESTATE COLLATERAL MANAGEMENT COMPANY, a Delaware corporation By: Name: Fred R. Schimel Its: Vice President APPROVED AS TO FORM: .,....I. _..... Ronald R. Ball, City Attorney RECM Conservation Easement Purchase Agreement 27817-711 828363.2 6 8/20/04 .... _......-. - ....... *. .....,... ......... ....... .. RECORDING REQUESTED BY: Department of Fish and Game 1416 Ninth Street, 12th Floor Sacramento, CA 95814 MAIL TO: Department of Fish and Game 1416 Ninth Street, 12th Floor Sacramento, Ca 95814 EXHIBIT “A” 1 1 1 1 1 1 Space Above Line for Recorder’s Use Only No DOCUMENTARY TRANSFER TAX DUE California Revenue & Taxation Code 0 1 1922 Presented for Acceptance by California Department of Fish and Game CONSERVATION EASEMENT DEED (City of Carlsbad) THIS CONSERVATION EASEMENT DEED (the “Deed”) is made by REAL ESTATE COLLATERAL MANAGEMENT COMPANY, a Delaware corporation (“Grantor”), in favor of THE STATE OF CALIFORNIA (“Grantee”), acting by and through its Department of Fish and Game, a subdivision of the California Resources Agency, (“DFG”) with reference to the following facts: RECITALS A. Grantor is the sole owner in fee simple of certain real property in the County of San Diego, State of California, consisting of approximately 5 1.75 acres as more particularly described in Exhibit “A” and depicted on Exhibit “B”, attached hereto and incorporated by this reference (collectively the “Conserved Habitat Lands”); and B. The Conserved Habitat Lands possesses wildlife and native habitat values (collectively, “Conservation Values”) of great importance to Grantor and the people of the State of California; and C. The Conserved Habitat Lands includes coastal sage scrub and other natural habitats suitable to the California gnatcatcher, (Polioptila californica californica) and other sensitive species; and EXHIBIT “A” Page 1 of 12 D. The Department of Fish and Game has jurisdiction, pursuant to the Fish and Game Code Section 1802, over the conservation, protection, and management of fish, wildlife, native plants and the habitat necessary for biologically sustainable populations of those species, and the Department of Fish and Game is authorized to hold easements for these purposes pursuant to Civil Code Section 815.3, Fish and Game Code Section 1348, and other provisions of California law; and E. The United States Fish and Wildlife Service (USFWS) has jurisdiction over the conservation, protection, restoration, enhancement and management of fish, wildlife and native plants and the habitats on which they depend under the Endangered Species Act, 16 U.S.C. section 1531 et seq. (ESA), the Fish and Wildlife Coordination Act, 16 U.S.C. section 661-666c and other applicable Federal laws; and F. The Conserved Habitat Lands were designated for acquisition habitat conservation purposes pursuant to that certain “Implementation Agreement Regarding the City of Carlsbad/Fieldstone/a Costa Associates Habitat Conservation PldOn-Going Multi-Species Plan dated June 7, 1995” (the “Implementation Agreement”) by Grantor’s predecessor in title, the Fieldstone Company, in connection with the development of the Villages of La Costa Project in the County of San Diego, California (the “Project”) and Grantor desires to assure Grantee and the USFWS that Grantor, and its successors, will hold the Conserved Habitat Lands conveyed hereby for the conservation purposes as required in the Implementation Agreement in accordance with and subject to the terns and conditions of this Deed; and G. The City of Carlsbad offers this Conservation Easement pursuant to (i) the City’s obligations pursuant to that certain Habitat Conservation PldOnrroinp; Multi-SDecies Plan for ProDerties in the Southeast Quadrant of the Citv of Carlsbad and Addenda and the related Implementation Agreement among Fieldstoneka Costa Associates Limited Partnership, the City of Carlsbad, the United States Fish and Wildlife Service and Grantee dated June 7, 1995 (“Implementation Agreement”) and (ii) the City’s obligations under the City’s adopted Habitat Management Plan (“Hh4F’”); and H. Grantor intends to convey to Grantee, pursuant to this Deed, the right to preserve and protect the conservation values of the Conserved Habitat Lands in perpetuity; and I. Grantee agrees by accepting this grant to honor the intentions of Grantor stated herein and to preserve and to protect in perpetuity the Conservation Values of the Conserved Habitat Lands in accordance with the terms of this Deed for the benefit of this generation and the generations to come. COVENANTS, TERMS, CONDITIONS AND RESTRICTIONS In consideration of the above recitals and the mutual covenants, terms, conditions, and restrictions contained herein, and pursuant to California law, including Civil Code Section 8 15, et seq., Grantor hereby grants and conveys to Grantee a conservation easement in perpetuity over the Conserved Habitat Lands of the nature and character and to the extent hereinafter set forth (“Conservation Easement”). EXHIBIT “A” Page 2 of 12 /3 1. Purpose. The purpose of this Conservation Easement is to assure the Conserved Habitat Lands will be preserved in a natural condition in perpetuity and to prevent any use of the Conserved Habitat Lands that will materially impair or interfere with the conservation values of the Conserved Habitat Lands. Grantor intends that this Conservation Easement will confine the use of the Conserved Habitat Lands to such activities, including without limitation, those involving the preservation and enhancement of native species and their habitat in a manner consistent with the habitat conservation purposes of this Conservation Easement 2. Rkhts of Grantee. To accomplish the purposes of this Conservation Easement, Grantor hereby grants and conveys the following rights to Grantee, and USFWS as a third party beneficiary of this Conservation Easement, by this Deed: (a) To preserve and protect in perpetuity the Conservation Values of the Conserved Habitat Lands in accordance with this Conservation Easement and the Implementation Agreement; (b) To enter upon the Conserved Habitat Lands at reasonable times in order to monitor Grantor’s compliance with and to otherwise enforce the terms of this Conservation Easement. In addition, Grantee, the USFWS or their designees may enter the Conserved Habitat Lands for research and interpretive purposes, subject to Grantor’s approval, which approval shall not be withheld unreasonably; (c) To prevent any activity on or use of the Conserved Habitat Lands that is inconsistent with the purposes of this Conservation Easement and to require the restoration of such areas or features of the Conserved Habitat Lands that may be damaged by any act, failure to act, or any use by Grantor that is inconsistent with the purposes of this Conservation Easement; (d) All mineral, air and water rights necessary to protect and to sustain the biological resources of the Conserved Habitat Lands; (e) All present and fbture development rights, except that Grantor retains such rights as are necessary to conduct activities for the Project development as provided for in the Implementation Agreement and this Deed; and (f) To enforce by means including, without limitation, injunctive relief, the terms and conditions of this Conservation Easement. 3. Prohibited Uses. Any activity on or use of the Conserved Habitat Lands inconsistent with the habitat conservation purposes of this Conservation Easement and not specifically reserved as a right of Grantor is prohibited. Without limiting the generality of the foregoing, the following uses by Grantor and Grantor’s agents are expressly prohibited unless specifically provided for in this Deed, the Implementation Agreement or any approved management plan(s) for the Conserved Habitat Lands; (a) Unseasonal watering, use of herbicides, rodenticides, or weed abatement activities, incompatible fire protection activities and any and all other uses which may adversely affect the purposes of this Conservation Easement; EXHIBIT “A” Page 3 of 12 (b) Use of off-road vehicles except in the execution of management duties; (c) Grazing or surface entry for exploration or extraction of minerals; (d) Erecting of any building, billboard, sign excepting. signs designating the boundaries and purpose of the Conserved Habitat Lands; (e) Depositing of soil, trash, ashes, garbage, waste, bio-solids or any ’ other material; (f) Excavating, dredging or removing of loam, gravel, soil, rock, sand or other material; (g) Otherwise altering the general topography of the Conserved Habitat Lands, including building of roads; (h) Removing, destroying, or cutting of trees, shrubs or other vegetation, except as required by federal, state or local law or by governmental order for (1) fire breaks, (2) maintenance of existing foot trails or roads, (3) prevention or treatment of disease or (4) for the implementation of the approved management plan. 4. Grantor’s Duties. Grantor shall undertake all reasonable actions to prevent the unlawful entry and trespass by persons whose activities may degrade or harm the conservation values of the Conserved Habitat Lands. 5. Reservations and Exceptions. Notwithstanding any other provisions of this Deed, Grantor has reserved and there is excepted from the grant, transfer, assignment and conveyance of the Conservation Easement hereunder the right of Grantor, or its successors and assigns, agents or contractors, and public agencies, the right of access and easements for the purpose of planning, constructing, grading, operating, maintaining, replacing or reconstructing public or private sewer, water, utility, basins, drainage and all other public and private utilities over, under or across the Conserved Habitat Lands necessary or required for the orderly development of Grantor’s “Project and Plan Activities” described in Section 1V.G. of the Implementation Agreement provided any disturbed habitat is reasonably restored or mitigated, and are not otherwise inconsistent with the purpose of this Conservation Easement and the Implementation Agreement. Further reserving and excepting from this Deed, the reversion of fee title to Grantor on the occurrence of the condition subsequent that (i) the Conserved Habitat Lands is used for any purpose other than wildlife conservation purposes as provided in Section V.A.1. of the Implementation Agreement or (ii) the Implementation Agreement and associated HCP/OMSP is judicially invalidated, but in such event, excluding from such reversion of fee title to any Conserved Habitat Lands, an area equitably proportionate to the extent of any permanent habitat “take” under the Implementation Agreement and HCP/OMSP. 6. Grantee’s Remedies. USFWS as a third party beneficiary of this Conservation Easement shall have the same rights and remedies as Grantee under this section. If Grantee EXHIBIT “A” Page 4 of 12 determines that Grantor is in violation of the terms of this Conservation Easement or that a violation is threatened, Grantee shall give written notice to Grantor of such violation and demand in writing the cure of such violation. Grantor shall not be deemed in default until such written notice is given. If Grantor fails to cure the violation within fifteen (1 5) days after receipt of said written notice and demand from Grantee, or said cure reasonably requires more than fifteen (1 5) days to complete ‘and Grantor fails to begin the cure within the fifteen (15) day period or fails to continue diligently to complete the cure, and if Grantor fails to notify Grantee within fifteen (1 5) days after receipt of Grantee’s written notice of violation that Grantor disputes Grantee’s determination of violation (hereinafter, Grantor’s “notice of dispute”), Grantee may bring an action at law or in equity in a court of competent jurisdiction to enforce compliance by Grantor with the terms of this Conservation Easement, to recover any damages to which Grantee may be entitled for violation by Grantor of the terms of this Conservation Easement, to enjoin the violation, ex parte as necessary, by temporary or permanent injunction without the necessity of proving either actual damages or the inadequacy of otherwise available legal remedies, or for other equitable relief, including, but not limited to, the restoration of the Conserved Habitat Lands to the condition in which it existed prior to any such violation or injury. Grantee may apply any damages recovered to the cost of undertaking any corrective action on the Conserved Habitat Lands. 6.1 The Grantor will maintain an insurance policy in a form reasonably approved by the Legal Advisor to Grantee with a minimum of $2 million of coverage per incident. If a court of competent jurisdiction determines that the Grantor has violated any term of this Conservation Easement, Grantor and Grantee agree that: Insurance. (a) policy and only to the dollar limits of that policy; liability for damages is limited to acts or omissions covered by that (b) fhds from the endowment which was created to manage the Conserved Habitat Lands cannot be used to pay damages awarded as part of the judgment; (c) funds from the endowment which was created to manage the Conserved Habitat Lands cannot be used to restore the Conserved Habitat Lands to the condition in which it existed prior to the violation; and (d) at its discretion, Grantee may agree to accept fee title to the Conserved Habitat Lands and management responsibility of the Conserved Habitat Lands. If this occurs, Grantee will receive any funds which remain in the endowment and any other funds specified for the Conserved Habitat Lands. Grantee’s acceptance of the Conserved Habitat Lands is subject to approval by the Department of General Services. 6.2 Cooperation. If Grantor provides Grantee with a notice of dispute, as provided herein, Grantee shall meet and confer with Grantor at a mutually agreeable place and time, not to exceed thirty (30) days from Grantee’s receipt of the notice of dispute. Grantee shall consider all relevant information concerning the disputed violation provided by Grantor and shall determine whether a violation has in fact occurred and, if so, whether Grantee’s notice of violation and demand for cure are appropriate in light of the violation. Grantee agrees to consider the following principles in making its determination: EXHIBIT “A” Page 5 of 12 (a) Management activities shall be chosen for their long-term benefits to the Conserved Habitat Lands’ conservation values rather than for short-term benefits; (b) Management activities that benefit habitat protection shall be chosen in favor of management activities designed to benefit individual species, except where State or Federally listed species are at issue; (c) Habitat maintenance is of primary importance in protecting the long-term conservation values of the Conserved Habitat Lands; (d) Management activities shall be chosen according to the following order of preference: (i) preventative actions shall be taken to avoid additional impact; (ii) natural restoration shall be used if appropriate, based on the magnitude of the impact, the impacts on listed or sensitive species, and the estimated time for recovery to occur; (iii) active restoration shall be required only where there are severe, long-term impacts to the Conserved Habitat Lands’ Conservation Values, or where highly sensitive species are impacted; (e) If, and for so long as, Grantor is a non-profit entity organized for conservation purposes, Grantee shall consider the cost of management activities and the resources available to Grantor’s successor. 6.3 Emergencies. If Grantee, in its sole discretion, determines that circumstances require immediate action to prevent or mitigate significant damage to the Conservation Values of the Conserved Habitat Lands, Grantee may pursue its remedies under this paragraph without prior notice to Grantor or without waiting for the period provided for cure, or notice of dispute, to expire. Grantee’s rights under this paragraph apply equally to actual or threatened violations of the terms of this Conservation Easement. Grantor agrees that Grantee’s remedies at law for any violation of the terms of this Conservation Easement are inadequate and that Grantee shall be entitled to the injunctive relief describe in this section, both prohibitive and mandatory, in addition to such other relief to which Grantee may be entitled, including specific performance of the terms of this Conservation Easement, without the necessity of proving either actual damages or the inadequacy of otherwise available legal remedies. Grantee’s remedies described in this section shall be cumulative and shall be in addition to all remedies now or hereafter existing at law or in equity, including but not limited to, the remedies set forth in Civil Code Section 815, et seq., inclusive. If a court of competent jurisdiction determines that the Grantor has violated any term of this easement, Grantor and Grantee agree that: (a) liability for damages is limited to acts or omissions covered by the insurance policy identified in paragraph 6.1 and only to the dollar limits of that policy; EXHIBIT “A” Page 6 of 12 (b) funds fiom the endowment which was created to manage the Conserved Habitat Lands cannot be used to pay damages awarded as part of the judgment; (c) funds from the endowment which was created to manage the Conserved Habitat Lands cannot be used to restore the Conserved Habitat Lands to the condition in which it existed prior to the violation; and (d) at its discretion, Grantee may agree to accept fee title to the Conserved Habitat Lands and management responsibility of the Conserved Habitat Lands. If this occurs, Grantee will receive any hds which remain in the endowment and any other funds specified for the Conserved Habitat Lands. Grantee’s acceptance of the Conserved Habitat Lands is subject to approval by the Department of General Services. 6.4 Conflictinn Notices. If Grantor receives inconsistent or conflicting notices of violation from Grantee and from the USFWS, acting in its capacity as a third party beneficiary, Grantor shall notify Grantee and USFWS within fifteen (15) days of such receipt of the inconsistency or conflict. Grantor shall not be deemed in default or be required to take any action until such time as Grantee and the USFWS provide a joint written notice of violation. Joint notices of violation shall be treated the same as individual notices of violation under this Section 6. Specified time limits concerning notices of violation, and notices of dispute, shall be calculated from the date Grantor receives a joint notice of violation. 7. Convevance “As-Is”. Notwithstanding anyhng to the contrary contained herein, it is understood between the parties that the easement rights conveyed by this Deed are expressly subject to all matters of record as of the date of this Deed and are conveyed in an “AS IS” condition, “with all faults” as of such date. 8. Access. This Conservation Easement does not convey a general right of access to the public. 9. Costs and Liabilities. Grantor retains all responsibilities and shall bear all costs and liabilities of any kind including transfer costs, costs of title and documentation review, and costs related to the ownership, operation, upkeep, and maintenance of the Conserved Habitat Lands. 9.1 Taxes. Grantor or subsequent transferees shall pay before delinquency all taxes, assessments, fees, and charges of whatever description levied on or assessed against the Conserved Habitat Lands by competent authority (collectively “taxes”), including any taxes imposed upon, or incurred as a result of, this Conservation Easement, and shall furnish Grantee and USFWS with satisfactory evidence of payment upon request. 9.2 Hold Harmless. Grantor shall hold harmless, indemnify, and defend Grantee and its, directors, officers, employees, agents, contractors, and representatives (collectively “Indemnified Parties”) from and against all liabilities, penalties, costs, losses, damages, expenses, causes of action, claims, demands, or judgments, including without limitation, reasonable attorneys’ fees, arising from or in any way connected with: injury to or the death of any person, or physical damages to any Conserved Habitat Lands, resulting from any act, omission, condition, or other matter related to or occurring on or about the Conserved EXHIBIT “A” Page 7 of 12 *-Habitat Lands, regardless of cause, unless due to the negligence of any of the indemnified parties. 9.3 Condemnation. The purposes of the Conservation Easement are presumed to be the best and most necessary public use as defined at Code of Civil Procedure Section 1240.680 notwithstanding of Code of Civil Procedure Sections 1240.690 and 1240.700. 9.4 Acts Beyond Grantor’s Control. Nothing contained in this Grant shall be construed to entitle Grantee or DFG to require Grantor to restore or remedy any injury to or change in the Conserved Habitat Lands resulting from causes beyond Grantor’s control, including, without limitation, fire, flood, storm, and earth movement, or actions by third parties, or from any prudent action taken by Grantor under emergency conditions to prevent, abate, or mitigate significant injury to the Conserved Habitat Lands resulting from such causes. 10. Assignment. This Conservation Easement is transferable as provided in sections 10 and 11, but Grantee may assign its rights and obligations under this Conservation Easement only to an entity or organization authorized to acquire and hold conservation easements pursuant to Civil Code Section 815.3 and only with the prior written approval of USFWS. Grantee shall require the assignee to record the assignment in the county where the Conserved Habitat Lands is located. 1 1. Subseauent Transfers. The covenants, conditions, and restrictions contained in this Deed are intended to run with the land and to bind all future owners of any interest in the Conserved Habitat Lands. Grantor agrees to incorporate by reference the terms of this Conservation Easement in any deed or other legal instrument by which Grantor divests itself of any interest in all or a portion of the Conserved Habitat Lands, including, without limitation, a leasehold interest. Grantor agrees to give written notice to Grantee and the USFWS of the intent to transfer of any interest at least forty-five (45) days prior to the date of such transfer. Any subsequent transferee shall be deemed to have assumed the obligations of this Conservation Easement and to have accepted the restrictions contained herein. The failure of Grantor or Grantee to perform any act provided in this section shall not impair the validity of this Conservation Easement or limit its enforceability in any way. Grantor shall not grant additional easements or other interests in the Conserved Habitat Lands without the prior written authorization of Grantee and USFWS, which consent shall not be unreasonably withheld. 12. Notices. All notices, demands, requests, consents, approvals, or communications from one party to another shall be personally, delivered or sent by facsimile to the persons set forth below or shall be deemed given five (5)days after deposit in the United States mail, certified and postage prepaid, return receipt requested, and addressed as follows, or at such other address as any Party may from time to time specifj to the other parties in writing: To Grantor: Real Estate Collateral Management Company c/o Mr. Fred Arbuckle, President Morrow Development, Inc. 1903 Wright Place, Suite 180 Carlsbad, CA 92008 FAX: (760) 929-2705 EXHIBIT “A” Page 8 of 12 To Grantee: Also: Regional Manager Department of Fish and Game 330 Golden Shore, Suite 50 Long Beach, CA 90802 FAX: General Counsel Department of Fish and Game Legal Affairs Division 1416 Ninth Street, 12th Floor Sacramento, California 958 14-2090 With a copy to: Field Supervisor United States Fish and Wildlife Service 2730 Loker Avenue Carlsbad, California 92008 Fax No. (760) 43 1-9440 The parties agree to accept facsimile signed documents and agree to rely upon such documents as if they bore original signatures. Each party agrees to provide to the other parties, within seventy-two (72) hours after transmission of a facsimile, documents which bear the original signatures. 13. Extinguishment. This Conservation Easement may not be extinguished or abandoned by Grantor and Grantee without the prior written consent of USFWS. If the USFWS consent is provided, this Conservation Easement may be extinguished or abandoned by Grantor and Grantee by mutual written agreement upon the request of either party only after the requesting party acquires and records a perpetual conservation easement in the name of the State of California at an alternative location, which provides conservation values that satisfy the specific mitigation purposes of this Conservation Easement as stated in Paragraph F. 14. Amendment. This Conservation Easement may be amended by Grantor, Grantee and USFWS by mutual written agreement. Any such amendment shall be consistent with the purposes of this conservation Easement and the Implementation Agreement, and, except as provided in Section 13, shall not affect its perpetual duration. Any such amendment shall be recorded in the official records of San Diego County, State of California. 15. Recordation. Grantee shall promptly record this instrument in the official records of San Diego County, California and immediately noti@ the Grantee and USFWS through the mailing of a conformed copy of the recorded easement. 16. Estomel Certificates. Upon request by Grantor, DFG shall within fifteen (15) days execute and deliver to Grantor any document, including an estoppel certificate, which certifies Grantor’s compliance with any obligation of Grantor contained in this Deed and otherwise evidences the status of this Grant as may be requested by Grantor. EXHIBIT “A” Page 9 of 12 17. General Provisions. (a) Controlling Law. The interpretation and performance of this Conservation Easement shall be governed by the laws of the State of California and applicable federal law. Any subsequent amendment or repeal of federal or state law or order which authorizes this Deed shall not affect the rights conveyed to the Grantee or its successors or assigns. (b) Liberal Construction. Any general rule of construction to the contrary notwithstanding, this Conservation Easement shall be liberally construed to effect the purpose of this Implementation Agreement, Conservation Easement, and the policy and purpose Civil Code Section 815, et seq. If any provision in this instrument is found to be ambiguous, an interpretation consistent with the purposes of this Conservation Easement that would render the provision valid shall be favored over any interpretation that would render it invalid. (c) Severability. If a court of competent jurisdiction voids or invalidates on its face any provision of this Deed, such action shall not affect the remainder of this Conservation Easement Deed. If a court of competent jurisdiction voids or invalidates the application of any provision of this Deed to a person or circumstance, such action shall not affect the application of the provision to other persons or circumstances. (d) Entire Agreement. This instrument sets forth the entire agreement of the parties with respect to the Conservation Easement and supersedes all prior discussions, negotiations, understandings, or agreements relating to the Conservation Easement all of which are merged herein. No alteration or variation of this instrument shall be valid or binding unless contained in an amendment in accordance with Section 14. This Deed is intended to implement the Implementation Agreement and is consistent therewith. (e) No Forfeiture. Nothing contained herein will result in a forfeiture or reversion of Grantor’s title in any respect. (f) Successors. The covenants, terms, conditions, and restrictions of this Deed shall be binding upon, and inure to the benefit of, the parties hereto and their respective personal representatives, heirs, successors, and assigns and shall continue as a servitude running in perpetuity with the Conserved Habitat Lands. The covenants hereunder benefitting Grantee shall also benefit USFWS. (g) Termination of Rights and Obligations. A party’s rights and obligations under this Conservation Easement shall terminate only upon transfer of the party’s interest in the Conservation Easement or Conserved Habitat Lands (respectively), except that liability for acts or omissions occurring prior to transfer shall survive transfer. (h) Captions The captions in this instrument have been inserted solely for convenience of reference and are not a part of this instrument and shall have no effect upon construction or interpretation. (i) Counterparts. The parties may execute this instrument in two or more counterparts, which shall, in the aggregate, be signed by Grantor and Grantee; each EXHIBIT “A” Page 10 of 12 counterpart shall be deemed an original instrument as against any party who has signed it. In the event of any disparity between the counterparts produced, the recorded counterpart shall be r controlling. (i) Exhibits. All Exhibitsreferred to in this Deed are attached and incorporated herein by reference. (k) Federal or State Amromiations. The duty of USFWS and CDFG to carry out their respective obligations under this Easement shall be subject to the availability of appropriated funds. IN WITNESS WHEREOF, Grantor has caused this Conservation Easement Deed to be executed ,2004. GRANTOR: REAL ESTATE COLLATERAL MANAGEMENT COMPANY, a Delaware corporation By: Fred R. Schimel Its: Vice-president EXHIBIT “A” Page 11 of 12 CERTIFICATE OF ACCEPTANCE This is to Certzfi that the interest in real property conveyed by the Conservation Easement Deed by Real Estate Collateral Management Company, dated ,2004 to the State of California, Grantee, acting by and through its Department of Fish and Game (the “Department”), a governmental agency (under Government Code $2728 l), is hereby accepted by the undersigned officer on behalf of the Department, pursuant to authority conferred by resolution of the California Fish and Game Commission. GRANTEE: STATE OF CALIFORNIA, by and through, DEPARTMENT OF FISH AND GAME By: Title: Authorized Representative Date: Approved as to Form: ANN S. MALCOLM, Deputy General Counsel CALIFORNIA DEPARTMENT OF FISH AND GAME EXHIBIT “A” Page 12 of 12 23 THE STATE OF 1 1 COUNTY OF 1 On , 2004, before me, (name of Notary Public), a Notary Public in and for said State, duly commissioned and sworn, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity(ies), and that by his signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. ~~ Notary Public in and for State of My commission expires: (NOTARIAL SEAL) EXHIBIT "A" LEGAL DESCRIPTION PARCEL E PORTIONS OF APN: 284941-19 AND APN: 264-111-08 BEING A PORTION OF LOT 6 AND LOT 8 OF SECTION 3 TOGETHER WITH A PORTION OF LOT 1 OF SECTION 10 AND A PORTION OF THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 10, BOTH IN TOWNSHIP 13 SOUTH, RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION 3, SAID CORNER BEING THE NORTHWEST CORNER OF SAID SECTION 10; THENCE EASTERLY ALONG THE COMMON LINE OF SAID SECTION 3 AND SECTION 10, SOUTH 89'06'31" EAST (NORTH 89'06'16" WEST FER RECORD OF SURVEY NO. 15225, HEREIN AFTER REFERENCED AS ROS 15225)' 929.73 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID COMMON LINE, NORTH 00'53'29* EAST, 783.73 FEET; THENCE SOUTH 44'24' 59' EAST (NORTH 44'24'44' WEST PER ROS 15225), 919.74 FEET; THENCE NORTH 07"42'36' EAST (NORTH 07'42'51" EAST PER ROS 15225), 111.37 FEET; THENCE SOUTH 77'54'29" EAST (NORTH 77'54'14" WEST PER ROS 15225), 1077.73 FEET; THENCE SOUTH 01'04'57" WEST (NORTH 01'05'12" EAST PER ROS 15225)' 38.12 FEET; THENCE SOUTH 89'12'00' EAST (NORTH 89"06'16" WEST PER ROS 15225)' 191.09 FEET; THENCE SOUTH 77'54'29" EAST (NORTH 77'54'14" WEST PER ROS 15225)' 276.61 FEET; THENCE SOUTH 88'17'02" EAST (NORTH 88'16'47" WEST PER ROS 15225), 825.18 FEET; THENCE SOUTH 00'07'30' EAST (NORTH 00'07'15'' WEST PER ROS 15225), 755.35 FEET; THENCE SOUTH 62'38'37'WEST (NORTH 62'3852" EAST PER ROS 15225)' 558.49 FEET; THENCE NORTH 89'02'52" WEST (NORTH 89'02'37" WEST PER ROS 15225)' 599.05 FEET; THENCE SOUTH 06'59'39" EAST (NORTH 06'59'24' WEST PER ROS 15225) I 50.48 FEET; THENCE NORTH 89'0252' WEST (NORTH 89'02'37" WEST PER ROS 15225), 205.23 FEET; THENCE NORTH 89'00'14 WEST (NORTH 89'00'04" WEST PER ROS 15225), 239.15 FEET; THENCE NORTH 30'25'00' WEST (NORTH 30"24'45" WEST PER ROS 15225)' 493.18 FEET; THENCE NORTH 01 '31'51' WEST (NORTH 01'31'36" WEST PER ROS 15225), 712.85 FEET; THENCE NORTH 89'06'31" WEST (NORTH 89'06'16" WEST PER ROS 15225)' 1210.16 FEETTOTHE TRUE POINT OF BEGINNING. CONTAINING 51.75 ACRES, MORE OR LESS. EXHIBIT 'A' TO CONSERVATION EASEMENT DEED EXHIBIT “B” PLOT MAP r--- I r--- L- L e---- EXHIBIT ‘B’ TO CONSERVATION EASEMENT DEED