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HomeMy WebLinkAbout2018-12-11; City Council; ; Execution of a Declaration of Restrictive Covenants for the Waters End Open Space Parcel~ CITY COUNCIL ~ Staff Report Meeting Date: To: From: Staff Contact: December 11, 2018 Mayor and City Council Scott Chadwick, City Manager Rosanne Humphrey, Sr. Program Manager Rosanne.Humphrey@carlsbadca.gov or 760-602-4689 CAReview ~ Subject: Execution of a Declaration of Restrictive Covenants for the Waters End Open Space Parcel. Recommended Action Adopt a Resolution authorizing execution of a Declaration of Restrictive Covenants for the Waters End Open Space Parcel, a portion of the Poinsettia Station Vernal Pool Preserve. Executive Summary The Poinsettia Station Vernal Pool Preserve (Preserve) consists of one parcel owned by the North County Transit District (NCTD), and another owned by Waters End Home Owner's Association. A Declaration of Restrictive Covenants (restrictive covenant), a type of conservation easement grant document, will permanently protect the sensitive habitat and species on the Waters End parcel. This restrictive covenant is being brought before the City Council for authorization per Government Code Section 37350. Discussion In 1994, the Preserve was established by NCTD within its right-of-way adjacent to the railroad tracks to mitigate the impacts resulting from construction of the Poinsettia Lane Commuter Rail Station (Exhibit 2). The impacted biological resources included vernal pool habitat and several vernal pool species protected by the California Endangered Species Act and Federal Endangered Species Act. As required by project permits, a conservation easement was placed over this mitigation area to permanently protect the Preserve. In 2004, John Lang Homes, the developer for the Waters End residential development located adjacent to Poinsettia Station, was required to conserve a 1.15-acre area adjacent to the NCTD- owned preserve to protect sensitive vernal pool and upland habitat. This mitigation area was added to the Preserve. However, a conservation easement was never recorded for the Waters End portion of the preserve, allowing for the long-term protection of this parcel. The City of Carlsbad's Habitat Management Plan (HMP) identified the Preserve as a special resource area because this location is critical to the conservation of several "narrow endemic" plant and fairy shrimp species. Narrow endemic species are highly restricted by their habitat requirements and geographic location. A restrictive covenant will permanently protect the Waters End parcel and contribute to the long-term sustainability of these vernal pool species. --- December 11, 2018 Item #8 Page 1 of 52 Fiscal Analysis The restrictive covenant will give the city a right to enter the property and conduct land management activities such as invasive species removal and biological monitoring, but does not obligate the city to any activities or responsibilities that require additional funding. Funding for management activities will be obtained from an existing non-wasting endowment account established by the Waters End developer. Next Steps After the Declaration of Restrictive Covenants is executed by the city, it will be forwarded to the San Diego County Recorder for recordation and a copy will be submitted to the current landowner. Environmental Evaluation (CEQA) The project is exempt from the California Environmental Quality Act (CEQA) per State CEQA Guidelines Section 15307 -Actions by regulatory agencies for protection of natural resources. Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the scheduled meeting date. Exhibits 1. City Council Resolution. 2. Site Map. December 11, 2018 Item #8 Page 2 of 52 RESOLUTION NO. 2018-210 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING EXECUTION OF A DECLARATION OF RESTRICTIVE COVENANTS FOR THE WATERS END OPEN SPACE PARCEL. Exhibit 1 WHEREAS, in 1994, the Poinsettia Station Vernal Pool Preserve (Preserve) was established by North County Transit District (NCTD) to mitigate impacts resulting from construction of the Poinsettia Lane Commuter Rail Station; and WHEREAS, in 2004, the Waters End Project, as a requirement of development, added a small open space parcel to the Preserve; and WHEREAS, the Preserve protects vernal pool habitat and species protected by the California and Federal Endangered Species Acts, and has been identified by the Habitat Management Plan (HMP) as a special resource area; and WHEREAS, it was determined that a conservation easement does not exist for the Waters End portion of the Preserve. 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 the Mayor is authorized and directed to execute a Declaration of Restrictive Covenants, which is attached hereto as Attachment A. 3. That this will protect the Waters End parcel by recording a Declaration of Restrictive Covenants for this parcel for the long-term sustainability of sensitive vernal pool species ofthe Preserve as identified in the HMP. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 11th day of December, 2018, by the following vote, to wit: AYES: NOES: ABSENT: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. None. None. December 11, 2018 Item #8 Page 3 of 52 RECORDING REQUESTED BY AND) WHEN RECORDED MAIL TO: ) City Clerk CITY OF CARLSBAD 1200 Carlsbad Village Drive Carlsbad, California 92008-1989 ) ) ) ) ) ATTACHMENT A Space above this line for Recorder's use Assessor's Parcel Number 214-610-58 --------------Project Number and Name CT 00-16, Waters End -------------- DECLARATION OF RESTRICTIVE COVENANTS This DECLARATION OF RESTRICTIVE COVENANTS ("Restrictive Covenant") is made this /0th day of ~20l~by WATERS END HOMEOWNERS ASSOCIATION, a California nonprofit mutual benefit corporation (hereinafter "Declarant"). RECITALS A. Declarant is the sole owner in fee simple of those portions of the Poinsettia Properties Specific Plan Project (the "Project") located in the City of Carlsbad, County of San Diego, State of California and as further·described in legal descriptions attached hereto as Exhibit "A" and depicted on Exhibit "B" and attached hereto and incorporated by this reference (the "Restricted Property"), which consists of approximately 1.15 acres. B. This Restrictive Covenai:it provides mitigation for certain impacts of the Project, pursuant to requirements of Condition No. 1 of City of Carlsbad Planning Commission Resolution No. 4157, dated December 3, 1997. This Restrictive Covenant is intended and shall be deemed to satisfy such requirement as to the Restricted Property. The amount of vernal pool and upland watershed habitat to be preserved within the Restricted Property is 1.15 acres. C. The Restricted Property possesses wildlife and habitat values of great importance to the People of the State of California and currently is and will remain in a Natural Condition as defined herein and is intended to be preserved in its natural, scenic, open condition to maintain its ecological, historical, visual and educational values ( collectively, "Conservation Values"). D. 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., the Fish and Wildlife Coordination Act, 16 USC, Section 661-666c and other applicable federal laws. CA 09/24/13 December 11, 2018 Item #8 Page 4 of 52 Assessor's Parcel Number: Project Number and Name: E. California Department of Fish and Wildlife ("CDFW") has jurisdiction, pursuant to 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. F. The City of Carlsbad ("City") is a municipal corporation with a Habitat Management Plan for Natural Communities in the City of Carlsbad ("HMP") adopted by its City Council in November 2004, with the overall goal of contributing to regional biodiversity and the viability ofrare, unique or sensitive biological resources throughout the City and the larger region while allowing public and private development to occur consistent with the Carlsbad General Plan and Growth Management Plan. COVENANTS, TERMS, CONDITIONS AND RESTRICTIONS NOW THEREFORE, Declarant hereby declares the Restricted Property shall be held, transferred, conveyed, leased, occupied or otherwise disposed of and used subject to the following restrictive covenants, which shall run with the land and be binding on Declarant' s heirs, successors in interest, administrators, assigns, lessees, or other occupiers and users of the Restricted Property or any portion of it. 1. Purpose. (a) The purpose of this Restrictive Covenant is to ensure the Restricted Property will be retained in perpetuity in a Natural Condition, defined below, and to prevent any use of the Restricted Property that will impair or interfere with the Conservation Values of the Restricted Property (the "Purpose"). Declarant intends that this Restrictive Covenant will confine the use of the Restricted Property 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 Restrictive Covenant. (b) The term "Natural Condition," as referenced in the preceding paragraph and other portions of this Restrictive Covenant, shall mean the condition of the Restricted Property as it exists at the time this Restrictive Covenant is executed, as well as future enhancements or changes to the Restricted Property that occur directly as a result of the following activities: (1) In-perpetuity maintenance ("Long-Term Maintenance, Management, and Monitoring"), that occurs on the Restricted Property as described in Section 8 herein; or (2) Activities described in Section 6 herein. (c) Declarant certifies to City, CDFW, and USFWS that, to Declarant's actual knowledge, there are no structures or other man-made improvements existing on the Restricted Property. The current Natural Condition is evidenced in part by the depiction of the Restricted Property attached on Exhibit "C", showing ( 1) a color aerial photograph of the Restricted Property at an appropriate scale taken as close in time as possible to the date this Restrictive Covenant is 2 CA 09/24/2013 December 11, 2018 Item #8 Page 5 of 52 Assessor's Parcel Number: Project Number and Name: executed; (2) an overlay of the Restricted Property boundaries on that aerial photograph; and (3) on-site color photographs showing all natural features of the Restricted Property. ( d) Notwithstanding anything set forth herein to the contrary, nothing in this Restrictive Covenant is intended nor shall be applied to in any way limit the use by existing easements as those rights are specifically set forth within Exhibit "D". ( e) If a controversy arises with respect to the Natural Condition of the Restricted Property, City, CDFW, and USFWS shall not be foreclosed from utilizing any and all other relevant documents, surveys, photographs or other evidence or information to assist in the resolution of the controversy. (f) The term "Land Manager" shall mean a qualified entity with knowledge of upland and vernal pool resources in the San Diego County area and expertise in the field of biology and long-term habitat management. The City will be the Land Manager for the Restricted Property, and may delegate land management duties to a qualified consultant. The City will not transfer Land Manager responsibility to another qualified entity without first consulting with the CDFW and USFWS. 2. Declarant's Duties. Declarant, its successors and assigns shall: (a) Undertake all reasonable actions to prevent the unlawful entry and trespass by persons whom Declarant knows are not entitled to access the Restricted Property and whose activities Declarant knows or reasonably suspects would be inconsistent with the Conservation Values and would violate the permitted uses of the Restricted Property set forth in this Restrictive Covenant; and (b) Comply with the terms of this Restrictive Covenant and cooperate with City, CDFW, and USFWS in the protection of the Conservation Values; and ( c) Repair and restore damage to the Restrictive Property directly or indirectly caused by Declarant, Declarant's guests, representatives or agents; provided, however, Declarant, its successors or assigns shall not engage in any repair or restoration work in the Restricted Property without first consulting with City, CDFW, and USFWS pursuant to Section 8; and ( d) Obtain any applicable governmental permits and approvals for any activity or use conducted by Declarant, Declarant' s guests, representatives or agents that are permitted by this Restrictive Covenant, and any activity or use shall be undertaken in accordance with all applicable federal, state, local and administrative agency statutes, ordinances, rules, regulations, orders or requirements; 3. Land Manager's Duties (a) Undertake all reasonable actions to prevent the unlawful entry and trespass by persons whom Land Manager knows are not entitled to access the Restricted Property and whose activities Land Manager knows or reasonably suspects would be inconsistent with the 3 CA 09/24/2013 December 11, 2018 Item #8 Page 6 of 52 Assessor's Parcel Number: Project Number and Name: Conservation Values and would violate the permitted uses of the Restricted Property set forth in this Restrictive Covenant; and (b) Post and maintain signage in or adjacent to the boundary areas of the Restricted Property as described in Section 6(d); and ( c) Comply with the terms of this Restrictive Covenant and cooperate with City, CDFW and USFWS in the protection of the Conservation Values; and ( d) Repair and restore damage to the Restrictive Property directly or indirectly caused by Land Manager, Land Manager's guests, representatives or agents and third parties; provided, however, Land Manager, its successors or assigns shall not engage in any repair or restoration work in the Restricted Property without first consulting with City, CDFW, and USFWS pursuant to Section 8; and ( e) Obtain any applicable governmental permits and approvals for any activity or use conducted by Land Manager, Land Manager's guests, representatives or agents that are permitted by this Restrictive Covenant, and any activity or use shall be undertaken in accordance with all applicable federal, state, local and administrative agency statutes, ordinances, rules, regulations, orders or requirements; (f) Perform in-perpetuity Long-Term Maintenance, Management, and Monitoring set forth in Section 8 below; and (g) Perform an annual compliance inspection of the Restricted Property, prepare an inspection report and make reports available to City, CDFW, and USFWS, upon request. 4. Prohibited Uses. Any activity on or use of the Restricted Property inconsistent with the Purpose of this Restrictive Covenant and not reserved as set forth in Section 2 and Section 3 hereof is prohibited. Without limiting the generality of the foregoing, the following uses by Declarant, and its respective guests, agents, assigns, employees, representatives, successors are expressly prohibited, except as otherwise provided herein or unless specifically provided for in Section 5 and Section 6 and any easements and reservations of rights recorded in the chain of title to the Restricted Property at the time of this conveyance (as set forth in Exhibit D hereto): (a) Supplemental watering except for habitat enhancement activities described m Section 6(b ); (b) Use of herbicides, pesticides, rodenticides, biocides, fertilizers, or other agricultural chemicals or weed abatement activities, except weed abatement activities necessary to control or remove invasive, exotic plant species conducted by a herbicide applicator licensed to work within habitat preserve areas and appropriate for use in or adjacent to vernal pools; ( c) Incompatible fire protection activities, except the fire prevention activities set forth in Section 6(f); 4 CA 09/24/2013 December 11, 2018 Item #8 Page 7 of 52 Assessor's Parcel Number: Project Number and Name: ( d) Use of off-road vehicles and use of any other motorized vehicles except on existing roadways and as necessary to restore native plant communities consistent with Section 6. ( e) Livestock grazing or other agricultural activity of any kind; (f) Recreational activities including, but not limited to, horseback riding, biking, hunting or fishing; (g) Residential, commercial, retail, institutional, or industrial uses; (h) Any legal or de facto division, subdivision or portioning of the Restricted Property, except transfers in accordance with Section 19 below; (i) Construction, reconstruction or placement of any building or other improvement, billboard, or signs except signs permitted in Section 3(a) and Section 6( d); G) Depositing, dumping or accumulating soil, trash, ashes, refuse, waste, bio-solids or any other material; (k) Planting, introduction or dispersal of non-native or exotic plant or animal species; (I) Filling, dumping, excavating, draining, dredging, mining, drilling, removing or exploring for or extraction of minerals, loam, gravel, soil, rock, sand or other material on or below the surface of the Restricted Property; (m) Altering the general topography of the Restricted Property, including but not limited to building of roads, trails, and flood control work; (n) Removing, destroying, or cutting of trees, shrubs or other vegetation, except as necessary for (1) emergency fire protection as required by fire safety officials as set forth in Section 6(f), (2) controlling invasive native or non-native plants which threaten the integrity of the habitat, (3) preventing or treating disease, or ( 4) activities described in Section 2, Section 3, Section 5, or Section 6; ( o) Manipulating, impounding or altering any natural watercourse, body of water or water circulation on the Restricted Property, and activities or uses detrimental to water quality, including but not limited to degradation or pollution of any surface or sub-surface waters; and (p) Fuel modification zones ( defined as a strip of mowed land or the planting of vegetation possessing low combustibility for purposes of fire suppression). 5. Declarant's Reserved Rights. (a) Declarant reserves to itself, to the Land Manager, and to its personal representatives, heirs, successors, and assigns, all rights accruing from its ownership of the Restricted Property, including the right to engage in or to permit or invite others to engage in all uses of the Restricted Property that are consistent with the Purpose of this Restrictive Covenant, including the permitted activities in Section 6. 5 CA 09/24/2013 December 11, 2018 Item #8 Page 8 of 52 Assessor's Parcel Number: Project Number and Name: (b) Declarant reserves the right to enforce by means, including, without limitation, injunctive relief, the terms and conditions of this Restrictive Covenant. 6. Land Manager's Reserved Rights. (a) Access. Reasonable access through the Restricted Property to adjacent land over existing roads, or to perform obligations or other activities permitted by this Restrictive Covenant. In addition, police and other public safety organizations and their personnel may enter the Restricted Property to address any legitimate public health or safety matter. (b) Habitat Enhancement Activities. Enhancement of native plant communities, including the right to plant trees and shrubs of the same type as currently existing on the Restricted Property, so long as such activities do not harm the vernal pool or upland habitat types onsite. For purposes of preventing erosion and reestablishing native vegetation, the Land Manager shall have the right to revegetate areas that may be damaged by the permitted activities under this Section 6, naturally occurring events or by the acts of persons wrongfully damaging the Natural Condition of the Restricted Property. Prior to any habitat enhancement activities, Land Manager shall submit detailed plans to City, CDFW, and USFWS for review and approval. Habitat enhancement activities shall not be in direct or potential conflict with the preservation of the Natural Condition of the Restricted Property or the Purpose of this Restrictive Covenant and shall be performed in compliance with all applicable laws, regulations, permitting requirements and Management Plan. ( c) Vegetation, Debris, and Exotic Species Removal. Removal or trimming of vegetation downed or damaged due to natural disaster, removal of man-made debris, removal of parasitic vegetation (as it relates to the health of the host plant) and removal of non-native or invasive plant or animal species. Vegetation, debris, and invasive plant species removal shall not be in direct or potential conflict with the preservation of the Natural Condition of the Restricted Property or the Purpose of this Restrictive Covenant and shall be performed in compliance with all applicable laws, regulations, and permitting requirements. ( d) Erection and Maintenance of Informative Signage. Erection and maintenance of signage and other notification features saying "Natural Area Open Space," "Protected Natural Area," or similar descriptions that inf01m persons of the nature and restrictions on the Restricted Property. The erection and maintenance of informative signage shall not be in direct or potential conflict with the preservation of the Natural Condition of the Restricted Property or the Purpose of this Restrictive Covenant and shall be performed in compliance with all applicable laws, regulations, and permitting requirements. (e) No Interference with Development of Adjoining Property. Notwithstanding anything set forth herein to the contrary, nothing in this Restrictive Covenant is intended nor shall be applied to in any way limit Declarant or any of Declarant' s successors and assigns from (1) constructing, placing, installing, and/or erecting any improvements upon the portions of the Project not constituting the Restricted Property, (2) installing and/or maintaining the subsurface infrastructure improvements, utility lines, landscaping (including irrigation and runoff), landscape mitigation, and/or similar non-structural improvements upon portions of the Project not within the Restricted Property, and/or (3) developing adjoining property for any purposes, except as limited by any local, state or federal permit requirements for such development and provided that for all of the above clauses (1 ), (2), and (3) neither such activity nor any effect resulting from such activity 6 CA 09/24/2013 December 11, 2018 Item #8 Page 9 of 52 Assessor's Parcel Number: Project Number and Name: amounts to a use of the Restricted Property, or has an impact upon the Restricted Property, that is prohibited by Section 3 above. (f) Fire Protection. The right, in an emergency situation only, to maintain firebreaks ( defined as a strip of plowed or cleared land made to check the spread of a fire), trim or remove brush, otherwise perform preventative measures required by the fire department to protect structures and other improvements from encroaching fire. All other brush management activities shall be limited to areas outside the Restricted Property. 7. Access. This Restrictive Covenant does not convey a general right of access to the public or a general right of access to the Restricted Property. In accordance with Section 6(d), Land Manager shall install and maintain signage at all likely points of entry informing persons of the nature and restrictions on the Restricted Property. This Restrictive Covenant will allow for access to the Restricted Property by City, CDFW, USFWS and third-party easement holders of record at the time of this conveyance at locations designated in easements and reservations of rights recorded in the chain of title to the Restricted Property at the time of this conveyance, as set forth in Exhibit D. 8. Long-Term Maintenance, Management, and Monitoring. In addition to the other terms contained herein, Land Manager shall be responsible for the maintenance/repair of the Restricted Property in perpetuity to the extent that annual funding is available pursuant to Section 9. Such long-term maintenance shall consist of the following activities: (a) regular site inspections, (b) annual removal, by hand, of trash or man-made debris, ( c) annual maintenance of signage and other notification features or similar descriptions that inform persons of the nature and restrictions on the Restricted Property pursuant to Section 3(b), and ( d) habitat enhancement, including invasive species removal. Land Manager shall prepare an annual management report documenting activities performed under subsections (a) through (d) above, and shall make reports available to City/CDFW /USFWS upon request. Land Manager will repair the Restricted Property damaged by any activities prohibited by Section 4, herein. Declarant will fund repair that is a result of damage pursuant to Section 2( c ), and Land Manager will fund repair that is a result of damage pursuant to Section 3(d). IfDeclarant is deemed liable for the costs of restoration, Declarant shall be provided with a written statement identifying the basis for such liability and a copy of the Restoration Plan prior to implementation of that plan. Land Manager will prepare a Restoration Plan and oversee/monitor such restoration activities. Prior to implementation, a draft Restoration Plan will be submitted to City/CDFW /USFWS for review and approval. Upon completion of repair as specified in the City/CDFW /USFWS-approved Restoration Plan, Land Manager shall prepare and submit a detailed monitoring report to City/CDFW /USFWS within thirty (30) days of completion of repair. If Declarant is deemed liable for the costs of restoration, Land Manager shall submit to Declarant an itemized accounting of the costs incurred, including a copy of all invoices, receipts or other available supporting documentation. Declarant shall have a period of ninety (90) days to submit payment. 7 CA 09/24/2013 December 11, 2018 Item #8 Page 10 of 52 Assessor's Parcel Number: Project Number and Name: 9. Endowment The City established an endowment fund with the San Diego Foundation to be held in trust, invested and the interest disbursed therefrom to provide funds for the perpetual management, maintenance, and monitoring of the Property as required under this Restrictive Covenant. City, CDFW, and USFWS shall be third party beneficiaries of the Fund Agreement for the Poinsettia Station Vernal Pool Preserve with the right to review and approve any amendments. 10. City, CDFW, USFWS Rights. To accomplish the Purpose of this Restrictive Covenant, Declarant hereby grants and conveys the following rights to City, CDFW, and USFWS (but without obligation of the City, CDFW, and USFWS): (a) A non-exclusive easement on and over the Restricted Property to preserve and protect the Conservation Values of the Restricted Property; and (b) A non-exclusive easement on and over the Restricted Property to enter upon the Restricted Property to monitor Declarant' s compliance with and to otherwise enforce the terms of this Restrictive Covenant; and ( c) A non-exclusive easement on and over the Restricted Property to prevent any activity on or use of the Restricted Property that is inconsistent with the Purpose of this Restrictive Covenant and to require the restoration of such areas or features of the Restricted Property that may be damaged by any act, failure to act, or any use that is inconsistent with the Purpose of this Restrictive Covenant; and ( d) All present and future development rights allocated, implied, reserved or inherent in the Restricted Property; such rights are hereby terminated and extinguished, and may not be used on or transferred to any portion of the Restricted Property; and ( e) The right to enforce by means, including, without limitation, injunctive relief, the terms and conditions of this Restrictive Covenant. 11. Enforcement. (a) Right to Enforce. Declarant, its successors and assigns, grant to City, CDFW, and USFWS, Department of Justice, and the State Attorney General, a discretionary right to enforce these restrictive covenants in a judicial or administrative action against any person(s) or other entity(ies) violating or attempting to violate these restrictive covenants; provided, however, that no violation of these restrictive covenants shall result in a forfeiture or reversion of title. (b) Notice. (1) If City, CDFW, and USFWS, determines Declarant is in violation of the terms of this Restrictive Covenant or that a violation is threatened, City/CDFW /USFWS may demand the cure of such violation. In such a case, City/CDFW/USFWS shall issue a written notice to Declarant (hereinafter "Notice 8 CA 09/24/2013 December 11, 2018 Item #8 Page 11 of 52 Assessor's Parcel Number: Project Number and Name: of Violation") informing Declarant of the violation and demanding cure of such violation. A Notice of Violation shall be sent by courier or overnight delivery. (2) Declarant shall cure the noticed violation within fifteen (15) days ofreceipt of said written notice from City, CDFW, and/or USFWS. If said cure reasonably requires more than fifteen (15) days, Declarant shall, within the fifteen (15) day period submit to City/CDFW /USFWS for review and approval a plan and time schedule to diligently complete a cure. Declarant shall complete such cure in accordance with the approved plan. If Declarant disputes the Notice of Violation, it shall issue a written notice of such dispute (hereinafter "Notice of Dispute") to the City/CDFW/USFWS within fifteen (15) days of receipt of written Notice of Violation. The Notice of Dispute shall be sent by courier or overnight delivery. (3) If Declarant fails to cure the noticed violation(s) within the time period(s) described in Section 11 (b )(2) above, or Section 11 ( c) below, City/CDFW /USFWS may bring an action at law or in equity in a court of competent jurisdiction to enforce compliance by Declarant with the terms of this Restrictive Covenant. In such action, the City/CDFW /USFWS may (i) recover any damages to which they may be entitled for violation by Declarant of the terms of this Restrictive Covenant, (ii) enjoin the violation, ex parte if necessary, by temporary or permanent injunction without the necessity of proving either actual damages or the inadequacy of otherwise available legal remedies, or (iii) pursue other equitable relief, including, but not limited to, the restoration of the Restricted Property to the condition in which it existed prior to any such violation or injury. City/CDFW /USFWS may apply any damages recovered to the cost of undertaking any corrective action on the Restricted Property. (4) If Declarant provides City/CDFW/USFWS with a Notice of Dispute, as provided herein, City/CDFW /USFWS shall meet and confer with Declarant at a mutually agreeable place and time, not to exceed thirty (30) days from the date that City/CDFW /USFWS receives the Notice of Dispute. City/CDFW /USFWS shall consider all relevant information concerning the disputed violation provided by Declarant and shall determine whether a violation has in fact occurred and, if so, whether the Notice of Violation and demand for cure issued by City/CDFW/USFWS is appropriate in light of the violation. ( 5) If, after reviewing Declarant' s Notice of Dispute, conferring with Declarant, and considering all relevant information related to the violation, City/CDFW /USFWS determines that a violation has occurred, City/CDFW /USFWS shall give Declarant notice of such determination in writing. Upon receipt of such determination, Declarant shall have fifteen (15) days to cure the violation. If said cure reasonably requires more than fifteen (15) days, Declarant shall, within the fifteen (15) day period submit to City/CDFW/USFWS for review and approval a plan and time schedule to diligently complete a cure. Declarant shall complete such cure in accordance with the approved plan. (c) Immediate Action. IfCity/CDFW/USFWS, in its reasonable discretion, determines that circumstances require immediate action to prevent or mitigate significant damage to the 9 CA 09/24/2013 December 11, 2018 Item #8 Page 12 of 52 Assessor's Parcel Number: Project Number and Name: Conservation Values of the Restricted Property, City/CDFW/USFWS may immediately pursue all available remedies, including injunctive relief, available pursuant to both this Restrictive Covenant and state and federal law after giving Declarant at least twenty four (24) hours' written notice before pursuing such remedies. So long as such twenty four (24) hours' notice is given, City/CDFW /USFWS may immediately pursue all available remedies without waiting for the expiration of the time periods provided for cure or Notice of Dispute as described in Section ll(a)(2). The written notice pursuant to this paragraph may be transmitted to Declarant by facsimile. The rights of City/CDFW /USFWS under this paragraph apply equally to actual or threatened violations of the terms of this Restrictive Covenant. Declarant agrees that the remedies at law for City/CDFW /USFWS for any violation of the terms of this Restrictive Covenant are inadequate and that City/CDFW /USFWS shall be entitled to the injunctive relief described in this section, both prohibitive and mandatory, in addition to such other relief to which City/CDFW /USFWS may be entitled, including specific performance of the terms of this Restrictive Covenant, without the necessity of proving either actual damages or the inadequacy of otherwise available legal remedies. The remedies described in this Section ll(c) shall be cumulative and shall be in addition to all remedies now or hereafter existing at law or in equity. ( d) Costs of Enforcement. Any costs incurred by City/CDFW /USFWS in enforcing the terms of this Restrictive Covenant against Declarant including, but not limited to, costs of suit and, any costs of restoration necessitated by Declarant' s violation or negligence under the terms of this Restrictive Covenant shall be borne by Declarant, subject to California Civil Code section 815. ( e) Enforcement Discretion. Enforcement of the terms of this Restrictive Covenant shall be at the discretion of City/CDFW /USFWS. Any forbearance by City/CDFW /USFWS to exercise rights under this Restrictive Covenant in the event of any breach of any term of this Restrictive Covenant by Declarant shall not be deemed or construed to be a waiver by City/CDFW /USFWS of such term or of any subsequent breach of the same or any other term of this Restrictive Covenant or of any of the rights of City/CDFW /USFWS under this Restrictive Covenant. No delay or omission by City/CDFW /USFWS in the exercise of any right or remedy upon any breach by Declarant shall impair such right or remedy or be construed as a waiver. (f) Acts Beyond Declarant's Control. Nothing contained in this Restrictive Covenant shall be construed to entitle City/CDFW /USFWS to bring any action against Declarant for any injury to or change in the Restricted Property resulting from: (1) Any natural cause beyond Declarant' s control, including without limitation, fire, flood, storm, and earth movement; or (2) Any prudent action taken by Declarant under emergency conditions to prevent, abate, or mitigate significant injury to persons and/or the Restricted Property resulting from such causes. 12. Limitations on Liabilities. Declarant agrees City, CDFW, and USFWS shall not have any duty or responsibility for the operation, upkeep, or maintenance of the Restricted Property, the monitoring of hazardous conditions thereon, or the protection of Declarant, the public or any third parties from risks relating 10 CA 09/24/2013 December 11, 2018 Item #8 Page 13 of 52 Assessor's Parcel Number: Project Nwnber and Name: to conditions on the Restricted Property. Declarant, its successor or assign, and Land Manager and its successor or assign remain solely responsible for obtaining any applicable governmental permits and approvals for any activity or use permitted by this Restrictive Covenant, and any activity or use shall be undertaken in accordance with all applicable federal, state, local and administrative agency statutes, ordinances, rules, regulations, orders and requirements. 13. Taxes. Declarant, its successors or assigns shall pay before delinquency all taxes, assessments, fees, and charges of whatever description levied on or assessed against the Restricted Property by competent authority, including any taxes imposed upon, or incurred as a result of, this Restrictive Covenant, and agrees to furnish City, CDFW, and USFWS with satisfactory evidence of payment upon request. 14. No Hazardous Materials Liability. (a) Declarant represents and warrants that it has no knowledge of any release or threatened release of Hazardous Materials (defined below) in, on, under, about or affecting the Restricted Property. (b) Despite any contrary provision of this Restrictive Covenant, the parties do not intend this Restrictive Covenant to be, and this Restrictive Covenant shall not be, construed such that it creates in or gives City, CDFW, and USFWS any of the following: (1) The obligations or liabilities of an "owner" or "operator," as those terms are defined and used in Environmental Laws (defined below), including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.; hereinafter, "CERCLA"); or (2) The obligations or liabilities of a person described in 42 U.S.C. Section 9607(a)(3) or (4); or (3) The obligations of a responsible person under any applicable Environmental Laws; or (4) The right to investigate and remediate any Hazardous Materials associated with the Restricted Property; or (5) Any control over Declarant's ability to investigate, remove, remediate or otherwise clean up any Hazardous Materials associated with the Restricted Property. (c) The term "Hazardous Materials" includes, without limitation, (a) material that is flammable, explosive or radioactive; (b) petroleum products, including by-products and fractions thereof; and ( c) hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in CERCLA, the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); the Hazardous Materials Transportation Act (49 U.S.C. Section 5101 et seq.); the Hazardous Waste Control Law (California Health & Safety Code Section 25100 et seq.); the 11 CA 09/24/2013 December 11, 2018 Item #8 Page 14 of 52 Assessor's Parcel Number: Project Number and Name: Hazardous Substance Account Act (California Health & Safety Code Section 25300 et seq.), and in the regulations adopted and publications promulgated pursuant to them, or any other applicable federal, state or local laws, ordinances, rules, regulations or orders now in effect or enacted after the date of this Restrictive Covenant. ( d) The term "Environmental Laws" includes, without limitation, any federal, state, local or administrative agency statute, ordinance, rule, regulation, order or requirement relating to pollution, protection of human health or safety, the environment or Hazardous Materials. Declarant represents, warrants and covenants to City, CDFW, and USFWS that activities upon and use of the Restricted Property by Declarant, its agents, employees, invitees and contractors will comply with all Environmental Laws. 15. Additional Easements. Declarant shall not grant any additional easements, rights of way or other interests in the surface or subsurface of the Restricted Property ( other than a security interest that is subordinate to this Restrictive Covenant), or grant or otherwise abandon or relinquish any water rights relating to the Restricted Property, without first obtaining the written consent of City, CDFW, and USFWS. City, CDFW, and USFWS may withhold such consent if it determines that the proposed interest or transfer is inconsistent with the Purpose of this Restrictive Covenant or will impair or interfere with the Conservation Values of the Restricted Property. This Section shall not prohibit transfer of a fee or leasehold interest in the Restricted Property that is subject to this Restrictive Covenant and complies with Section 19 below. Declarant, its successors and assigns shall record any additional easements or other interests in the Restricted Property approved by the City, CDFW, and USFWS, in the official records of San Diego County, California and provide a copy of the recorded document to the City, CDFW, and USFWS. 16. Hold Harmless. Declarant shall hold harmless, protect and indemnify City and its, officials, directors, employees, agents, contractors, and representatives and the heirs, personal representatives, successors and assigns of each of them (each a "City Indemnified Party" and, collectively, "City's Indemnified Parties") from and against any and all liabilities, penalties, costs, losses, damages, expenses (including, without limitation, reasonable attorneys' fees and experts' fees), causes of action, claims, demands, orders, liens or judgments ( each a "Claim" and, collectively, "Claims"), arising from or in any way connected with: injury to or the death of any person, or physical damage to any property, resulting from any act, omission, condition, or other matter related to or occurring on or about the Restricted Property, regardless of cause, except for any Claim arising from the sole negligence or willful misconduct of the Land Manager (including its agents, assigns, contractors and employees) or any of the City's Indemnified Parties. If any action or proceeding is brought against any of City's Indemnified Parties by reason of any such Claim, Declarant shall, at the election of and upon written notice from any of the City's Indemnified Parties defend such action or proceeding with counsel reasonably acceptable to the Declarant and City's Indemnified Parties, or reimburse the party for all charges reasonably incurred for services, including attorneys' fees, in defending the action or proceeding. 17. Amendment. 12 CA 09/24/2013 December 11, 2018 Item #8 Page 15 of 52 Assessor's Parcel Number: Project Number and Name: Declarant may amend this Restrictive Covenant only after written concurrence by City, CDFW, and USFWS. Any such amendment shall be consistent with the Purpose of this Restrictive Covenant and shall not affect its perpetual duration. Declarant shall record any amendments to this Restrictive Covenant approved by City, CDFW, and USFWS in the official records of San Diego County, California, and shall provide a copy of the recorded document to City, CDFW, and USFWS. 18. Recordation. Declarant, its successor or assign shall promptly record this instrument in the official records of San Diego County, California, and provide a copy of the recorded document to City, CDFW, and USFWS. 19. Assignment and Subsequent Transfers. (a) Declarant agrees to incorporate the terms of this Restrictive Covenant in any deed or other legal instrument by which Declarant divests itself of any interest in all or a portion of the Restricted Property. Declarant, its successor or assign agrees to (i) incorporate by reference to the title of and the recording information for this Restrictive Covenant in any deed or other legal instrument by which each divests itself of any interest in all or a portion of the Restricted Property, including, without limitation, a leasehold interest and (ii) give actual notice to any such transferee or lessee of the existence of this Restrictive Covenant. Declarant, its successor or assign agrees to give written notice to City, CDFW, and USFWS of the intent to transfer any interest in the Restricted Property at least thirty (30) days prior to the date of such transfer. Any subsequent transferee shall be deemed to have assumed the obligations of this Restrictive Covenant and to have accepted the restrictions contained herein. The failure of Declarant, its successor or assign to perform any act provided in this Section shall not impair the validity of this Restrictive Covenant or limit its enforceability in any way. (b) From and after the date of any transfer of all or any portion of the Restricted Property by Declarant and each transfer thereafter, (i) the transferee shall be deemed to have assumed all of the obligations of Declarant as to the portion transferred, as set forth in this Restrictive Covenant, (ii) the transferee shall be deemed to have accepted the restrictions contained herein as to the portion transferred, (iii) the transferor, as applicable, shall have no further obligations hereunder except for the obligations set forth above in this paragraph and pursuant to Section 26, and (iv) all references to Declarant in this Restrictive Covenant shall thereafter be deemed to refer to such transferee. 20. Notices. Except as otherwise specified herein, any notice, demand, request, consent, approval, or communication that either party desires or is required to give to the other shall be in writing and be served personally or sent by first class mail, postage prepaid, addressed as follows: 13 CA 09/24/2013 December 11, 2018 Item #8 Page 16 of 52 To Declarant: To: Waters End Home Owners Association 2131 Las Palmas Dr. Ste A Carlsbad, CA 92011 City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008 Assessor's Parcel Number: Project Number and Name: California Dept. of Fish and Wildlife, Region 5 3883 Ruffin Road San Diego, CA 92123 US Fish and Wildlife Service 2177 Salk Avenue, Suite 250 Carlsbad, CA 92008 FAX 760-431-5902 or to such other address as either party shall designate by written notice to the other. Notice shall be deemed effective upon delivery in the case of personal delivery or, in the case of delivery by first class mail, five (5) days after deposit into the United States mail. 21. Controlling Law. The laws of the United States and the State of California shall govern the interpretation and performance of this Restrictive Covenant. 22. Liberal Construction. Any general rule of construction to the contrary notwithstanding, this Restrictive Covenant shall be liberally construed in favor of the deed to effect the purpose of this Restrictive Covenant and the policy and purpose California 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 Restrictive Covenant that would render the provision valid shall be favored over any interpretation that would render it invalid. 23. Severability. If a court of competent jurisdiction voids or invalidates on its face any provision of this Restrictive Covenant, such action shall not affect the remainder of this Restrictive Covenant. If a court of competent jurisdiction voids or invalidates the application of any provision of this Restrictive Covenant to a person or circumstance, such action shall not affect the application of the provision to other persons or circumstances. 14 CA 09/24/2013 December 11, 2018 Item #8 Page 17 of 52 Assessor's Parcel Number: Project Number and Name: 24.. No Forfeiture. Nothing contained herein will result in a forfeiture or reversion of Declarant's title in any respect. 25. Successors. The covenants, terms, conditions, and restrictions of this Restrictive Covenant 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 Restricted Property. 26. Termination of Rights and Obligations. A party's rights and obligations under this Restrictive Covenant terminate upon transfer of the party's interest in the Restrictive Covenant or Restricted Property, except that liability for acts or omissions occurring prior to transfer shall survive transfer. 27. 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. 28. City, CDFW, and USFWS, Benefited Parties Except for Section 255, the terms of this Restrictive Covenant are for the benefit of the City, CDFW, and USFWS only and are not for the benefit of any other parties. IN WITNESS WHEREOF Declarant has executed this Restrictive Covenant the day and year first above written. "Declarant" By:~te~N~A-~ai-~--:-: ~~-~-~-C/~. _!du; __ ,,.,,.__: _____ _ Title: ·pt E(S/.Q..enj- Date: I 1,/VJ/; g· . By:_~~~J-~~~~'-k-1-"-,0't~k~·· ----- Name: ·---;?,d' ___ ____,,,_( '---c"t """"'--------.....:.:::~------ Title: __ i;~0__,,,,c:__c\.~S.-"'-'-0~f._l' ________ _ Date: I l /1-q J /{3 _ ______,__,{~4--'L ~---- 16 CA 09/24/20 I 3 December 11, 2018 Item #8 Page 18 of 52 Assessor's Parcel Number: Project Number and Name: CITY OF CARLSBAD APPROVED AS TO FORM: CELIA A. BREWER, City Attorney Bya~~1 •-0 4 _) 2\:ssistant City Attorney 16 CA 09/24/2013 December 11, 2018 Item #8 Page 19 of 52 Assessor's Parcel Number: Project Number and Name: EXHIBIT A -LEGAL DESCRIPTION 17 CA 02/04/13 December 11, 2018 Item #8 Page 20 of 52 EXHIBIT "A" LEGAL DESCRIPTION VESTING: WATERS END HOMEOWNERS ASSOCIATION APN: 214-610-58 CONSERVATION EASEMENT THAT PORTION OF LOT 227 OF CARLSBAD TRACT CT 00-16, WATERS END, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14407, RECORDED JUNE 19, 2002 AS FILE NO. 2002-0519005 IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHWESTERLY CORNER OF SAID LOT 227; THENCE ALONG THE WESTERLY LINE OF SAID LOT 227 NORTH 20°27'52" WEST 267.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID WESTERLY LINE NORTH 27°57'29" EAST 52.36 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE WESTERLY, HAVING A RADIUS OF 1035.00 FEET, A RADIAL LINE TO WHICH BEARS NORTH 69°44'16" WEST; THENCE NORTHERLY ALONG SAID NON-TANGENT CURVE THROUGH A CENTRAL ANGLE OF 7°04'26" AN ARC LENGTH OF 127.78 FEET TO THE BEGINNING OF A COMPOUND CURVE CONCAVE WESTERLY, HAVING A RADIUS OF 400.00 FEET; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 12°24'39" AN ARC LENGTH OF 86.64 FEET TO THE BEGINNING OF A COMPOUND CURVE CONCAVE WESTERLY, HAVING A RADIUS OF 30.00 FEET; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 19°45'24" AN ARC LENGTH OF 10.34 FEET; THENCE TANGENT TO SAID CURVE NORTH 18°58'45" WEST 3.89 FEET; THENCE SOUTH 73°20'24" WEST 4.70 FEET; THENCE NORTH 22°04'07" WEST 10.76 FEET; THENCE NORTH 69°17'22" EAST 5.13 FEET TO THE BEGINNING OF A NON- TANGENT CURVE CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 125.00 FEET, A RADIAL LINE TO WHICH BEARS NORTH 63°32'25" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 16°49'32" AN ARC LENGTH OF 36.71 FEET TO THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 1275.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 °41 '43" AN ARC LENGTH OF 260.25 FEET TO THE BEGINNING OF A COMPOUND CURVE CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 200.00 FEET; December 11, 2018 Item #8 Page 21 of 52 THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 °02'27" AN ARC LENGTH OF 38.54 FEET TO SAID WESTERLY LINE OF LOT 227; THENCE ALONG SAID WESTERLY LINE OF LOT 227 SOUTH 20°27'52" EAST 531.13 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING 1.15 ACRES MORE OR LESS. ATTACHED HERETO AND MADE A PART HEREOF IS A PLAT LABELED EXHIBIT 'B'. THIS REAL PROPERTY DESCRIPTION HAS BEEN PREPARED BY ME, OR UNDER MY DIRECTION, IN CONFORMANCE WITH THE PROFESSIONAL LAND SURVEYORS ACT. MICHAEL SCHLUMPBERGER, LS 7790 December 11, 2018 Item #8 Page 22 of 52 Assessor's Parcel Number: Project Number and Name: EXHIBIT B -PLAT MAP 18 CA 02/04/13 December 11, 2018 Item #8 Page 23 of 52 Assessor's Parcel Number: Project Number and Name: EXHIBIT C-CURRENT NATURAL CONDITION REPORT 19 CA 02/04/13 December 11, 2018 Item #8 Page 26 of 52 Assessor's Parcel Number: Project Number and Name: EXHIBIT D-PRELIMINARY TITLE REPORT 20 CA 02/04/13 December 11, 2018 Item #8 Page 29 of 52 Dated as of April 11, 2018 at 7:30 A.M. The form of Policy of title insurance contemplated by this report is: To Be Determined Order Number: DIV-5683078 Page Number: 2 A specific request should be made if another form or additional coverage is desired. Title to said estate or interest at the date hereof is vested in: Waters End Homeowners Association, a California nonprofit mutual benefit corporation The estate or interest in the land hereinafter described or referred to covered by this Report is: A fee as to Parcel(s) 1, an easement as to Parcel(s) 2, 3 and 4. The Land referred to herein is described as follows: (See attached Legal Description) At the date hereof exceptions to coverage in addition to the printed Exceptions and Exclusions in said policy form would be as follows: 1. General and special taxes and assessments for the fiscal year 2018-2019, a lien not yet due or payable. 2. General and special taxes and assessments for the fiscal year 2017-2018. First Installment: $0.00, NO TAX DUE Penalty: $0.00 Second Installment: $0.00, NO TAX DUE Penalty: $0.00 Tax Rate Area: 09027 A. P. No.: 214-610-58-00 The County Tax Collector could not verify the amounts shown above at this time. Please verify the amounts with the County Tax Collector prior to the close of the contemplated transaction. 3. The lien of special tax assessed pursuant to Chapter 2.5 commencing with Section 53311 of the California Government Code for Community Facilities District No. 3, as disclosed by Notice of Special Tax Lien recorded April 26, 1994 as Instrument No. 1994-0277976 of Official Records. Document(s) declaring modifications thereof recorded July 27, 1995 as Instrument No. 1995- 0322359 of Official Records. First American Title Page 2 of 17 December 11, 2018 Item #8 Page 31 of 52 Order Number: DIV-5683078 Page Number: 3 4. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code. 5. An easement for public utilities together with ingress and egress and incidental purposes, recorded October 25, 1941 in Book 1269, Page 3 of Official Records. In Favor of: The Pacific Telephone and Telegraph Company Affects: A portion of said land 6. An easement for public utilities together with ingress and egress and incidental purposes, recorded March 29, 1954 in Book 5186, Page 560 of Official Records. In Favor of: The Pacific Telephone and Telegraph Company Affects: A portion of said land 7. An easement for storm drains and incidental purposes, recorded June 10, 1974 as Instrument No. 74-152824 of Official Records. In Favor of: The City of Carlsbad Affects: A portion of said land 8. The terms and provisions contained in the document entitled Agreement Between Developer-Owner and the City of Carlsbad for the Payment of a Public Facilities Fee for Outside the Boundaries or Community Facilities District No. 1, executed by and between HSL/BP/Michan LP., a California limited partnership and City of Carlsbad, a municipal corporation, recorded October 18, 1995, as Instrument No. 1995-0469812 of Official Records. 9. The terms and provisions contained in the document entitled Agreement Between Developer-Owner and the City of Carlsbad for the Payment of a Public Facilities Fee for Inside the Boundaries or Community Facilities District No. 1, executed by and between HSL/BP/Michan LP., a California limited partnership and City of Carlsbad, a municipal corporation, recorded July 12, 1996, as Instrument No. 1996-0351884 of Official Records. 10. The terms and provisions contained in the document entitled Memorandum of Post Closing Agreement, executed by and between HSL/BP/Michan LP., a California limited partnership and Magellan Property Corporation, an Arizona corporation, recorded February 12, 1998, as Instrument No. 1998-0075725 of Official Records. Document(s) declaring modifications thereof recorded April 14, 1999 as Instrument No. 1999- 0251344 of Official Records. 11. The terms and provisions contained in the document entitled Agreement Between Owner, Developer and the City of Carlsbad for an Uncontrolled Stockpile, executed by and between Poinsettia Housing Associates, a California limited partnership, Bridge Housing-Southern California, a California nonprofit public benefit corporation and City of Carlsbad, a municipal corporation, recorded July 13, 1999, as Instrument No. 1999-0484246 of Official Records. 12. The terms and provisions contained in the document entitled "Notice of Restriction on Real Property" recorded December 13, 1999 as Instrument No. 1999-0807486 of Official Records. 13. The terms and provisions contained in the document entitled Agreement Between Owner, Developer and the City of Carlsbad for an Uncontrolled Stockpile (Coastal Zone), executed by and between Arst American Title Page 3 of 17 December 11, 2018 Item #8 Page 32 of 52 Order Number: DIV-5683078 Page Number: 4 HSL/BP/Michan, LP., a California limited partnership and City of Carlsbad, a municipal corporation, recorded May 18, 2000, as Instrument No. 2000-0259142 of Official Records. 14. The terms and provisions contained in the document entitled Reimbursement Agreement (Sewer Lift Station), executed by and between WL Homes LLC, a Delaware limited liability company, dba John Laing Homes and HSL/BP/Michan, LP., a California limited partnership, as to an undivided 25.12% interest; Strata/Poinsettia, a California general partnership, as to an undivided 25% interest; Benchmark Pacific Poinsettia, LP., a California limited partnership, as to an undivided 18.25% interest; HSL Properties, Inc., a California corporation, as to an undivided 17.88% interest and Strata Equity Corporation, a California corporation as to an undivided 13.75% interest, recorded July 31, 2001, as Instrument No. 2001-0534380 of Official Records. 15. An option in favor of OBSLP Carlsbad LLC, a Delaware limited liability company as contained in or disclosed by a document recorded July 31, 2001 as Instrument No. 2001 -0534382 of Official Records. 16. The terms and provisions contained in the document entitled Notice of Restriction on Real Property, executed by and between OBSLP Carlsbad LLC, a Delaware limited liability company and City of Carlsbad, recorded May 2, 2002, as Instrument No. 2002-0375802 of Official Records. 17. The terms and provisions contained in the document entitled "Notice Concerning Proximity of the Existing Transportation Corridors, Notice Concerning Aircraft Environmental Impacts, Notice Concerning Railroad Environmental Impacts, Notice Concerning Proximity to the Proposed Commuter Rail Transit Station and Notice Concerning Odor Environmental Impacts" recorded May 2, 2002 as Instrument No. 2002-0375804 of Official Records. 18. An easement shown or dedicated on the Map as referred to in the legal description For: Public pedestrian trail and vehicular access, sewer, drainage and conservation easement and incidental purposes. 19. Abutter's rights of ingress and egress to or from Embarcadero Way, Avenida Encinas and Poinsettia Lane, except at access openings on Embarcadero Way and Avenida Encinas, have been dedicated or relinquished on the filed Map. 20. The fact that there is a "Buffer Limits as Described by EI.R. issued July 1997 (Verbal Pool Watershed) and an Additional Buffer Limits by Wildlife Agency (Verbal Pool Watershed) affecting all of said land, as stated and shown on Map No. 14407. First American Title Page 4 of 17 December 11, 2018 Item #8 Page 33 of 52 Order Number: DIV-5683078 Page Number: 5 21. Recitals as shown on Map No. 14407, which, among other things states: A) "Building permits will not be issued for this project unless the local agency providing water and sewer services to the project provides written certification to the City that adequate water services and sewer facilities, respectively, area available to the project at the time of the application for building permit, and that water and sewer capacity and facilities will continue to be available until the time of occupancy." B) "No development or improvements, including but not limited to fences, walls, decks, storage buildings pools, spas, stairways and landscaping shall occur within the open space lots, except as shown on the approved site development plans." C) "Developer shall execute and record a city standard subdivision improvement agreement to install and secure with appropriate security as provided by law, public improvements shown on the tentative map and as indicated below. These improvements include, but are not limited to, paving, base, striping, signing, sidewalks, handicap ramps, curbs and gutters, medians, grading, clearing and grubbing, under grounding or relocating of utilities, sewer, potable and reclaimed water, fire hydrants, street lights, and retaining walls to city standards and to the satisfaction of the city engineer." Cl. On-site street improvements. C2. Avenida Encinas frontage improvements. C3. Install a driveway and paved asphalt/concrete (A/C) access to the proposed lift station and existing 72" storm drain, located within the North County Transit District (NCTD) right-of-way. C4. Poinsettia Lane frontage improvements: Developer shall either construct the Poinsettia Lane frontage of way; improvements; or, if the City constructs the Poinsettia Lane frontage improvements, as a capital improvement project, then the developer shall cash-out their proportionate share of the improvements, to the satisfaction of the city engineer. The developer's proportionate share shall include, but not be limited to: Concrete sidewalk, concrete curb and gutter, base and paving of the "outside" lane (adjacent to the curb and gutter), one-half of a full improved raised median, parkway landscaping, public utilities, and street light standards. First American Title Page 5 of 17 December 11, 2018 Item #8 Page 34 of 52 Order Number: DIV-5683078 Page Number: 6 22. Recitals as shown on Map No. 14407, which, among other things states: A) "All improvements are privately owned and are to be privately maintained with the exception of the following: 1) Public sewer located within the 'General Utility and access easement'. 2) Public potable & reclaimed water located within the 'General Utility and access easement.' 3) Building permits will not be issued for development of the subject property unless the appropriate agency determines that sewer and water facilities are available." B) "No structure, fence, wall, tree, shrub, sign, or other object over 30 inches above the street level may be placed or permitted to encroach within the area identified as a sight distance corridor." C) "Geotechnical Caution: The owner of this property on behalf of itself and all of its successors in interest has agreed to hold harmless and indemnify the City of Carlsbad from any action that may arise through any geological failure, ground water seepage or land subsidence and subsequent damage that may occur on, or adjacent to, this subdivision due to its construction, operation or maintenance." "A copy of the soils report prepared for this development is on file in the office of the city engineer." D) "No structure, fence, wall, tree, shrub, sign, or other object over 30 inches above the street level may be placed or permitted to encroach within the area identified as a sight distance corridor in accordance with the city standard public street-design criteria, Section 8.B.3. The underlying property owner shall maintain this condition. In addition, and landscaping (EG., tree) canopy which is within or which may encroach into such area, shall be maintained so that said canopy is at least six (6') above the ground within the sight distance corridor." 23. Covenants, conditions, restrictions, easements, assessments, liens, charges, terms and provisions in the document recorded September 30, 2002 as Instrument No. 2002-0838221 of Official Records, which provide that a violation thereof shall not defeat or render invalid the lien of any first mortgage or deed of trust made in good faith and for value, but deleting any covenant, condition, or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, sexual orientation, familial status, disability, handicap, national origin, genetic information, gender, gender identity, gender expression, source of income (as defined in California Government Code§ 12955(p)) or ancestry, to the extent such covenants, conditions or restrictions violation 42 U.S.C. § 3604(c) or California Government Code § 12955. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. Note: You may wish to contact the homeowners association referred to in the above document for information regarding assessments, transfer requirements or other matters. A declaration of annexation recorded April 30, 2003 as Instrument No. 03-503048 of Official Records, but deleting any covenant, condition, or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, sexual orientation, familial status, disability, handicap, national origin, genetic information, gender, gender identity, gender expression, source of income (as defined in California Government Code § 12955(p )) or ancestry, to the extent such covenants, conditions or restrictions violation 42 U.S.C. § 3604(c) or California Government Code§ 12955. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. 24. An easement for public utilities and incidental purposes, recorded November 7, 2002 as Instrument No. 2002-0995566 of Official Records. In Favor of: San Diego Gas & Electric Company Affects: A portion of said land First American Title Page 6 of 17 December 11, 2018 Item #8 Page 35 of 52 Order Number: DIV-5683078 Page Number: 7 25. An easement for public utilities and incidental purposes, recorded January 17, 2003 as Instrument No. 2003-0063426 of Official Records. In Favor of: Pacific Bell Telephone Company Affects: A portion of said land The location of the easement cannot be determined from record information. 26. The terms and provisions contained in the document entitled Agreement for Reimbursement of Costs for the Construction of Recycled Water Pipeline Improvements within Poinsettia Properties Planning Areas 2, 3, and 4 Carlsbad Tract CT 00-16 (Waters End), executed by and between Carlsbad Municipal Water District, a public agency organized under the Municipal Water District Act of 1911, and a Subsidiary District of the City of Carlsbad and OBSLP Carlsbad, LLC and WL Homes, LLC, recorded February 25, 2003, as Instrument No. 2003-0210327 of Official Records. 27. An easement for railroad right-of-way and incidental purposes, recorded August 8, 2003 as Instrument No. 2003-0957819 of Official Records. In Favor of: North San Diego County Transit Development Board Affects: A portion of said land 28. Easements, Covenants and Conditions contained in the deed from WL Homes LLC, a Delaware limited liability company, as Grantor, to Waters End Homeowners Association, a California nonprofit mutual benefit corporation, as Grantee, recorded March 5, 2004 as Instrument No. 2004-0179911 of Official Records. Reference being made to the document for full particulars, but deleting any covenant, condition, or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, sexual orientation, familial status, disability, handicap, national origin, genetic information, gender, gender identity, gender expression, source of income (as defined in California Government Code§ 12955(p)) or ancestry, to the extent such covenants, conditions or restrictions violation 42 U.S.C. § 3604(c) or California Government Code§ 12955. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. 29. Any easements and/or servitudes affecting easement parcel(s) 2, 3 and 4 herein described. 30. Water rights, claims or title to water, whether or not shown by the public records. 31. Rights of parties in possession. Prior to the issuance of any policy of title insurance, the Company will require: 32. With respect to Waters End Homeowners Association, a corporation: a. A certificate of good standing of recent date issued by the Secretary of State of the corporation's state of domicile. b. A certified copy of a resolution of the Board of Directors authorizing the contemplated transaction and designating which corporate officers shall have the power to execute on behalf of the corporation. c. Other requirements which the Company may impose following its review of the material required herein and other information which the Company may require. First American Title Page 7 of 17 December 11, 2018 Item #8 Page 36 of 52 INFORMATIONAL NOTES Order Number: DIV-5683078 Page Number: 8 Note: The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than the certain dollar amount set forth in any applicable arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. If you desire to review the terms of the policy, including any arbitration clause that may be included, contact the office that issued this Commitment or Report to obtain a sample of the policy jacket for the policy that is to be issued in connection with your transaction. 1. The property covered by this report is vacant land. 2. According to the public records, there has been no conveyance of the land within a period of twenty- four months prior to the date of this report, except as follows: None 3. We find no open deeds of trust. Escrow please confirm before closing. The map attached, if any, may or may not be a survey of the land depicted hereon. First American expressly disclaims any liability for loss or damage which may result from reliance on this map except to the extent coverage for such loss or damage is expressly provided by the terms and provisions of the title insurance policy, if any, to which this map is attached. First American Title Page 8 of 17 December 11, 2018 Item #8 Page 37 of 52 LEGAL DESCRIPTION Order Number: DIV-5683078 Page Number: 9 Real property in the City of Carlsbad, County of San Diego, State of California, described as follows: PARCEL 1: LOT 227 OF CARLSBAD TRACT CT 00-16, IN THE CITY OF CARLSBAD, COUNTY OF SAN, DIEGO, STATE OF CALIFORNIA, ACCORDING TO A MAP THEREOF NO.14407, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON JUNE 19, 2002. EXCEPTING THEREFROM ALL REMAINING OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS, NATURAL GAS RIGHTS AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN, GEOTHERMAL STEAM AND ALL PRODUCTS DERIVED FROM ANY OF THE FOREGOING, THAT MAY BE WITHIN OR UNDER THE PARCEL OF PROPERTY HEREINABOVE DESCRIBED, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING, EXPLORING AND OPERATING THEREFOR AND STORING IN AND REMOVING THE SAME FROM SAID PROPERTY OR ANY OTHER PROPERTY, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM PROPERTIES OTHER THAN THOSE HEREINABOVE DESCRIBED, OIL OR GAS WELLS, TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF THE PROPERTY HEREINABOVE DESCRIBED, AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND THE EXTERIOR LIMITS THEREOF, AND TO REDRILL, RETUNNEL, EQUIP, MAINTAIN, REPAIR, DEEPEN AND OPERATE ANY SUCH WELLS OR MINES WITHOUT, HOWEVER, THE RIGHT TO DRILL, MINE, STORE, EXPLORE, OR OPERATE THROUGH THE SURFACE OR THE UPPER 500 FEET OF THE SUBSURFACE OF SAID PROPERTY, AS RESERVED BY WL HOMES, INC., A DELAWARE LIMITED LIABILITY COMPANY, IN A GRANT DEED RECORDED MARCH 5, 2004 AS INSTRUMENT NO. 2004-0179911, OF OFFICIAL RECORDS. PARCEL 2: A NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS, AND ACCESS, GENERAL STREET USAGE, DRAINAGE, AND UTILITY PURPOSES IN, ON, OVER, UNDER, ACROSS AND THROUGH THAT PORTION OF LOT 250 OF MAP OF CARLSBAD TRACT CT 00-16, POINSETTIA PROPERTIES, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14407, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 19, 2002, DESCRIBED AND/OR DEPICTED IN THE DECLARATION. PARCEL 3: NONEXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ACCESS, MAINTENANCE, REPAIR, DRAINAGE, ENCROACHMENT, SUPPORT OR OTHER PURPOSES, ALL AS DESCRIBED AND/OR DEPICTED IN THE "DECLARATION OF COVENANTS, CONDffiONS AND RESTRICTIONS, AND RESERVATION OF EASEMENTS FOR WATERS END" RECORDED ON SEPTEMBER 30, 2002, AS INSTRUMENT NO. 2002- 0838221, AND THE "NOTICE OF ANNEXATION FOR PHASE 4 OF WATERS END" RECORDED ON APRIL 30, 2003, AS INSTRUMENT NO. 03-503048, BOTH IN THE OFFICIAL RECORDS OF SAN DIEGO COUNTY, CALIFORNIA, TOGETHER WITH ANY AMENDMENTS, MODIFICATIONS AND/OR RE-RECORDATIONS THEREOF (COLLECTIVELY THE "DECLARATION"). PARCEL 4: A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR INGRESS AND EGRESS AS DESCRIBED IN RECIPROCAL EASEMENT AND MAINTENANCE AGREEMENT RECORDED MAY 31, 2007 AS INSTRUMENT NO. 2007-369208 OF OFFICIAL RECORDS. APN: 214-610-58-00 First American Title Page 9 of 17 December 11, 2018 Item #8 Page 38 of 52 NOTICE Order Number: DIV-5683078 Page Number: 11 Section 12413.1 of the California Insurance Code, effective January 1, 1990, requires that any title insurance company, underwritten title company, or controlled escrow company handling funds in an escrow or sub- escrow capacity, wait a specified number of days after depositing funds, before recording any documents in connection with the transaction or disbursing funds. This statute allows for funds deposited by wire transfer to be disbursed the same day as deposit. In the case of cashier's checks or certified checks, funds may be disbursed the next day after deposit. In order to avoid unnecessary delays of three to seven days, or more, please use wire transfer, cashier's checks, or certified checks whenever possible. Rrst American Title Page 11 of 17 December 11, 2018 Item #8 Page 40 of 52 EXHIBIT A Order Number: DIV-5683078 Page Number: 12 LIST OF PRINTED EXCEPTIONS AND EXCLUSIONS (BY POLICY TYPE) CL TA STANDARD COVERAGE POLICY -1990 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; ( d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws. EXCEPTIONS FROM COVERAGE -SCHEDULE B, PART I This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public, records. 2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. CLTA/ ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE (12-02-13) EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning: a. building; b. zoning; c. land use; First American Title Page 12 of 17 December 11, 2018 Item #8 Page 41 of 52 Order Number: DIV-5683078 Page Number: 13 d. improvements on the Land; e. land division; and f. environmental protection. This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15. 3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17. 4. Risks: a. that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b. that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; c. that result in no loss to You; or d. that first occur after the Policy Date -this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28. 5. Failure to pay value for Your Title. 6. Lack of a right: a. to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b. in streets, alleys, or waterways that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 21. 7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or similar creditors' rights laws. 8. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 9. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows: For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. The deductible amounts and maximum dollar limits shown on Schedule A are as follows: Covered Risk 16: Covered Risk 18: Covered Risk 19: Covered Risk 21: Your Deductible Amount 1 % of Policy Amount Shown in Schedule A or $2,500 (whichever is less) 1 % of Policy Amount Shown in Schedule A or $5,000 (whichever is less) 1 % of Policy Amount Shown in Schedule A or $5,000 (whichever is less) 1 % of Policy Amount Shown in Schedule A or $2,500 (whichever is less) 2006 ALTA LOAN POLICY (06-17-06) EXCLUSIONS FROM COVERAGE Our Maximum Dollar Limit of Liability $10,000 $25,000 $25,000 $5,000 The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; First American Title Page 13 of 17 December 11, 2018 Item #8 Page 42 of 52 (c) resulting in no loss or damage to the Insured Claimant; Order Number: DIV-5683078 Page Number: 14 (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13, or 14); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk ll(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE [Except as provided in Schedule B -Part II,[ t[ or T]his policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of: [PART I [The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. PART II In addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage:] 2006 ALTA OWNER'S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion l(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion l(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; Arst American Title Page 14 of 17 December 11, 2018 Item #8 Page 43 of 52 (c) resulting in no loss or damage to the Insured Claimant; Order Number: DIV-5683078 Page Number: 15 (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 or 10); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of: [The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the Public Records. 7. [Variable exceptions such as taxes, easements, CC&R's, etc. shown here.] ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (07-26-10) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26. 6. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the Arst American Title Page 15 of 17 December 11, 2018 Item #8 Page 44 of 52 Order Number: DIV-5683078 Page Number: 16 Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk ll(b) or 25. 8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6. 9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy. 1 o. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 11. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. Arst American Title Page 16 of 17 December 11, 2018 Item #8 Page 45 of 52 ~ I First American Title ~,_ ""<-Lt# Privacy Information We Are Committed to Safeguarding Customer Information Order Number: DIV-5683078 Page Number: 17 In order to better serve your needs now and in the future, we may ask you to provide us with certain information. We understand that you may be concerned about what we will do with such information -particularly any personal or financial information. We agree that you have a right to know how we will utilize the personal information you provide to us. Therefore, together with our subsidiaries we have adopted this Privacy Policy to govern the use and handling of your personal information. Applicability This Privacy Policy governs our use of the information that you provide to us. It does not govern the manner in which we may use information we have obtained from any other source, such as information obtained from a public record or from another person or entity. First American has also adopted broader guidelines that govern our use of personal information regardless of its source. First American calls these guidelines its Fair Information Values. Types of Information Depending upon which of our services you are utilizing, the types of nonpublic personal information that we may collect include: • Information we receive from you on applications, forms and in other communications to us, whether in writing, in person, by telephone or any other means; • Information about your transactions with us, our affiliated companies, or others; and • Information we receive from a consumer reporting agency. Use of Information We request information from you for our own legitimate business purposes and not for the benefit of any nonaffiliated party. Therefore, we will not release your information to nonaffiliated parties except: (1) as necessary for us to provide the product or service you have requested of us; or (2) as permitted by law. We may, however, store such information indefinitely, including the period after which any customer relationship has ceased. Such information may be used for any internal purpose, such as quality control efforts or customer analysis. We may also provide all of the types of nonpublic personal information listed above to one or more of our affiliated companies. Such affiliated companies include financial service providers, such as title insurers, property and casualty insurers, and trust and investment advisory companies, or companies involved in real estate services, such as appraisal companies, home warranty companies and escrow companies. Furthermore, we may also provide all the information we collect, as described above, to companies that perform marketing services on our behalf, on behalf of our affiliated companies or to other financial institutions with whom we or our affiliated companies have joint marketing agreements. Former Customers Even if you are no longer our customer, our Privacy Policy will continue to apply to you. Confidentiality and Security We will use our best efforts to ensure that no unauthorized parties have access to any of your information. We restrict access to nonpublic personal information about you to those individuals and entities who need to know that information to provide products or services to you. We will use our best efforts to train and oversee our employees and agents to ensure that your information will be handled responsibly and in accordance with this Privacy Policy and First American's Fair Information Values. We currently maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. Information Obtained Through Our Web Site first American Financial Corporation is sensitive to privacy issues on the Internet. We believe it is important you know how we treat the information about you we receive on the Internet. In general, you can visit First American or its affiliates' Web sites on the World Wide Web without telling us who you are or revealing any information about yourself. Our Web servers collect the domain names, not the e-mail addresses, of visitors. This information is aggregated to measure the number of visits, average time spent on the site, pages viewed and similar information. First American uses this information to measure the use of our site and to develop ideas to improve the content of our site. There are times, however, when we may need information from you, such as your name and email address. When information is needed, we will use our best efforts to let you know at the time of collection how we will use the personal information. Usually, the personal information we collect is used only by us to respond to your inquiry, process an order or allow you to access specific account/profile information. If you choose to share any personal information with us, we will only use it in accordance with the policies outlined above. Business Relationships First American Financial Corporation's site and its affiliates' sites may contain links to other Web sites. While we try to link only to sites that share our high standards and respect for privacy, we are not responsible for the content or the privacy practices employed by other sites. Cookies Some of First American's Web sites may make use of "cookie" technology to measure site activity and to customize information to your personal tastes. A cookie is an element of data that a Web site can send to your browser, which may then store the cookie on your hard drive. FirstAm.com uses stored cookies. The goal of this technology is to better serve you when visiting our site, save you time when you are here and to provide you with a more meaningful and productive Web site experience. Fair Information Values Fairness We consider consumer expectations about their privacy in all our businesses. We only offer products and services that assure a favorable balance between consumer benefits and consumer privacy. Public Record We believe that an open public record creates significant value for society, enhances consumer choice and creates consumer opportunity. We actively support an open public record and emphasize its importance and contribution to our economy. Use We believe we should behave responsibly when we use information about a consumer in our business. We will obey the laws governing the collection, use and dissemination of data. Accuracy We will take reasonable steps to help assure the accuracy of the data we collect, use and disseminate. Where possible, we will take reasonable steps to correct inaccurate information. When, as with the public record, we cannot correct inaccurate information, we will take all reasonable steps to assist consumers in identifying the source of the erroneous data so that the consumer can secure the required corrections. Education We endeavor to educate the users of our products and services, our employees and others in our industry about the importance of consumer privacy. We will instruct our employees on our fair information values and on the responsible collection and use of data. We will encourage others in our industry to collect and use information in a responsible manner. Security We will maintain appropriate facilities and systems to protect against unauthorized access to and corruption of the data we maintain. Form SO-PRIVACY (9/1/10) Page 1 of 1 First American Title Page 17 of 17 Privacy Information (2001-2010 First American Financial Corporation) December 11, 2018 Item #8 Page 46 of 52