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HomeMy WebLinkAboutCT 92-07; Saddleview and Helix Community Conservancy; 2007-0253568; EasementDOC# 2007-0253568 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Carlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, California 92008 ^7299 6\9 APR 16, 2007 1:40 PM OFFICIAL RECORDS SAN DIE60 rOI INTY RECORDER'S OFFICE GREGORYJ SMITH COUNTY RECORDER FEES 0 00 OC NA PAGES 51 2007-0253568 Space Above Line for Recorder's Use Only CONSERVATION EASEMENT DEED (Including Third-Party Beneficiary) This transfer is exempt from Documentary)/fa JiTransfer Tax pursuant to Section 11922 r of the Revenue and Taxation Code CT 92-07 - EMERALD POINTE ESTATES APN 212-250-16-00 THIS CONSERVATION EASEMENT DEED is made this 18th day of May, 2006, by SADDLEVIEW, LLC,_a ^Delaware limited liability company ("Grantor") and HELIX COMMUNITY CONSERVANCY, INC., a California nonprofit public benefit corporation ("Conservator"), in favor of THE CITY OF CARLSBAD, a California municipal corporation ("Grantee"), with reference to the following facts: RECITALS A. Grantor is the sole owner in fee simple of certain real property commonly known as Lot 16 of the development commonly known as Emerald Pointe Estates ("Development") in the City of Carlsbad, County of San Diego, State of California, more particularly described in Exhibit "A" and depicted on Exhibit "B" attached hereto and incorporated herein by this reference, consisting of approximately 10.1 acres (the "Property"); B. Grantee has adopted a Habitat Management Plan for the conservation, protection, and management of native plants and to preserve the habitat necessary for biologically sustainable populations of certain species thereof ("Habitat Management Plan"); C. In accordance with the Habitat Management Plan, the Property is and will remain in a Natural Condition as defined herein and is intended to be conserved, managed, and preserved in its natural, scenic, open condition to maintain its ecological, biological, historical, visual and educational values (collectively, "Conservation Values") of great importance to the Grantee and the People of the State of California; D. The Property provides a high quality linkage to habitat corridors identified in the City of Carlsbad's Habitat Management Plan; -1- 7300 E. Grantor intends to transfer fee title to the Property to Conservator, a conservation entity, subject to an irrevocable offer of dedication ("IOD") of fee title to Grantee. Upon transfer to Conservator and for so long as Conservator owns the Property, Conservator will take on all of the obligations and duties of the Grantor related to the conservation, protection, monitoring and management of the Conservation Values of the Property, including the fiduciary duty to manage endowment funds that have been set aside to preserve the Conservation Values of the Property under this Conservation Easement Deed. F. Grantee may, in the future, accept the IOD and thereafter either retain the Conservator as the conservation entity or otherwise transfer fee title to the Property to another conservation entity ("Replacement Conservation Entity") designated by Grantee. Upon such acceptance by Grantee or Replacement Conservation Entity, Grantee or Replacement Conservation Entity (as applicable) will take on all of the obligations and duties of the Grantor related to the conservation, protection, monitoring and management of the Conservation Values of the Property, including the fiduciary duty to manage endowment funds that have been set aside to preserve the Conservation Values of the Property under this Conservation Easement Deed; G. Grantee is authorized to hold conservation easements pursuant to Civil Code Section 815.3. Specifically, Grantee is a governmental entity identified in Civil Code Section 815.3(b) and otherwise authorized to acquire and hold title to real property. H. The California Department of Fish and Game ("CDFG") has jurisdiction, pursuant to Fish and Game Code Section 1802, over the conservation, protection, and management offish, wildlife, native plants and the habitat necessary for biologically sustainable populations of those species and also has permitting jurisdiction pursuant to Fish and Game Code Section 1600 et seq with respect to any activity which may substantially divert or obstruct the natural flow of, or substantially change or use any material from the bed, channel, or bank of any river, stream, or lake, or deposit or dispose of debris, waste, or other material containing crumbled, flaked, or ground pavement where it may pass into any river, stream, or lake. CDFG 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. I. 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 within they depend under the Federal Endangered Species Act, 16 U:S.C. Section 1531 etseq , the fish and Wildlife Coordination Act 16U.S.C., Sections 66l-666c and other applicable federal laws; J. The California Coastal Commission ("CCC") has jurisdiction over the Property pursuant to the California Coastal Act of 1976, California Public Resources Code Section 30000 et seq.; K. CDFG, USFWS and CCC are each a third party beneficiary under this Conservation Easement Deed and are hereinafter collectively referred to as "Third Party Beneficiaries". L. This Conservation Easement Deed provides mitigation for certain impacts of the development of Emerald Pointe Estates, located in the City of Carlsbad, County of San Diego, State -2- 7301 of California (the "Project"), pursuant to requirements of the Mitigated Negative Declaration (MND) and Addendum and associated Mitigation Monitoring and Reporting Program for the Project, certified by the City of Carlsbad by and Planning Commission Resolution Nos. 5643, 5644, 5645, 5646,5647, 5648, and 5649 on June 16,2004. This Conservation Easement is intended and shall be deemed to satisfy such requirement as to the Property. L. Grantee agrees by accepting this grant to honor the intentions of Grantor stated herein to preserve and protect in perpetuity the Conservation Values of the Property in accordance with the terms of this Conservation Easement. M. Grantor intends to transfer fee title to the Property to Conservator pursuant to Section 12 herein and to transfer all Endowment Funds pursuant to Section 4 herein (collectively, the "Transfer"). Upon the Transfer, Conservator will assume certain responsibilities of Grantor as set forth herein. COVENANTS. TERMS, CONDITIONS AND RESTRICTIONS For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and pursuant to California law, including Civil Code Section 815, et seq., Grantor hereby voluntarily grants and conveys to Grantee a conservation easement in perpetuity over the Property. 1. Purpose. (a) The purpose of this Conservation Easement is to ensure the Property will be retained forever in a Natural Condition, as defined herein, and to prevent any use of the Property that will impair or interfere with the Conservation Values of the Property. Grantor intends that this Conservation Easement will confine the use of the 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 Conservation Easement. (b) . The term "Natural Condition," as referenced in the preceding paragraph and other portions of this Conservation Easement, shall mean the condition of the Property, substantially as it exists at the time this Conservation Easement is executed, subject to natural occurrences, as well as future enhancements or changes to the Property that occur directly as a result of the following activities: (1) Enhancement activities, including implementation, maintenance, and monitoring activities for a five-year period, will take place pursuant to that certain Mitigation Plan (the "Mitigation Plan") incorporated herein by reference, attached as Exhibit "C" hereto, and the complete text of which is on file in the City of Carlsbad Planning Department, resulting from compensatory mitigation measures required by adoption of Planning commission Resolution No. 5647 (Condition No. 29 requiring the dedication of easement of lots 15 and 16), adoption of the MND and Addendum (Condition No. 1 in both requiring the re vegetation of 0.5 acre of habitat previously disturbed by farming), and Grantee's Habitat Management Plan; -3- (2) In-perpetuity maintenance ("Long-Term Maintenance"), that occurs on the Property as described in Sections 4 and 5 herein; or (3) Activities described in Sections 4, 5, 6, and 7 herein. (c) Grantor certifies to the Grantee, that to the Grantor's actual knowledge, there are no structures or improvements existing on the Property at the time this grant is executed other than utilities, Existing Landscaping (defined below), roads and trails. Grantor further certifies to the Grantee that to the Grantor's actual knowledge, there are no previously granted easements existing on the Property that interfere or conflict with the Purpose of this Conservation Easement as evidenced by the Title Report attached as Exhibit "D." Grantor and Grantee acknowledge that the Property is or will be subject to the IOD. Grantor has delivered evidence of the Natural Condition to Grantee consisting of (1) an aerial photograph of the Property at an appropriate scale taken as close in time as possible to the date this Conservation Easement is executed; and (2) an overlay of the Property boundaries on such aerial photograph. (d) If a controversy arises with respect to the Natural Condition of the Property, neither party shall be foreclosed from utilizing any and all relevant documents, surveys, photographs or other evidence or information to assist in the resolution of the controversy, including the baseline documentation to be prepared by Helix Community Conservancy in connection with its Property Analysis Record (PAR) for Emerald Pointe Estates, City of Carlsbad ("PAR"). 2. Grantee's Rights. To accomplish the purposes of this Conservation Easement, Grantor hereby grants and conveys the following rights to Grantee and to Third Party Beneficiaries as third party beneficiaries of this Conservation Easement: (a) To preserve and protect the Conservation Values of the Property; (b) To enter upon the Property at reasonable times in order to monitor Grantor's compliance with and to otherwise enforce the terms of this Conservation Easement, and for scientific research and interpretive purposes by Grantee or its designees and Third Party Beneficiaries or their designees, provided that neither Grantee nor Third Party Beneficiaries shall unreasonably interfere with Grantor's authorized use and quiet enjoyment of the Property; (c) To prevent any activity on or use of the Property that is inconsistent with the purposes of this Conservation Easement and to require the restoration of such areas or features of the Property that may be damaged by any act, failure to act, or any use that is inconsistent with the purposes of this Conservation Easement; and (d) Should Grantee elect to accept the IOD, Grantee shall have the right to replace Conservator as the conservation entity and transfer fee title to the Replacement Conservation Entity as designated by Grantee. In the event Conservator is replaced by the Replacement Conservation Entity, Conservator shall be relieved of any further obligations under this Conservation Easement Deed and that certain Agreement for Management and Transfer of Real Property executed concurrently with this Conservation Easement Deed (the "Management Agreement") and Conservator shall convey the Endowment Funds then held by Conservator to the Replacement Conservation Entity. -4- 7303 3. Prohibited Uses. Any activity on or use of the Property inconsistent with the purposes of this Conservation Easement is prohibited. Without limiting the generality of the foregoing, the following uses on the Property by Grantor, Grantor's agents, Grantee, Grantee's agents, Conservator, Conservator's agents and third parties, are expressly prohibited, except as otherwise required or permitted pursuant to this Conservation Easement or unless specifically provided for in the Mitigation Plan or in any easement or reservation of rights recorded in the chain of title to the Property at the time of this conveyance (as set forth on the Title Report attached as Exhibit "D" hereto): (a) Except within the Landscape Easement Area and for the extermination of invasive exotic species; watering; use of fertilizers, pesticides, biocides, herbicides or other agricultural chemicals; and weed abatement activities; (b) Incompatible fire protection activities and any and all other activities and uses which may adversely affect the purposes of this Conservation Easement; (c) Use of off-road vehicles and use of any other motorized vehicles except on existing roadways; (d) Grazing or other agricultural activity of any kind; (e) Recreational activities including, but not limited to, horseback riding, biking, hunting or fishing; (f) Commercial or industrial uses; (g) Any legal or de facto division, subdivision or partitioning of the Property, except for the actions contemplated by the Recitals hereinabove and transfers in accordance with Section 12 below; (h) Construction, reconstruction or placement of any building, billboard or sign, or any other structure or improvement of any kind, except those signs specifically allowed under Section 4 and Section 7(d); (i) Depositing or accumulation of soil, trash, ashes, refuse, waste, bio-solids or any other materials; (j) Planting, introduction or dispersal of non-native or exotic plant or animal species; (k) Filling, dumping, excavating, draining, dredging, mining, drilling, removing or exploring for or extraction of minerals, loam, soil, sands, gravel, rocks or other material on or below the surface of the Property; (1) Altering the surface or general topography of the Property, including building ofroads; -5- 7304 (m) Removing, destroying, or cutting of trees, shrubs or other vegetation, except as required for (1) emergency fire breaks as set forth in Section 7(f), (2) prevention or treatment of disease, (3) control of invasive species which threaten the integrity of the habitat (4) required mitigation programs and/or (5) within the Landscape Easement Area; and (n) Manipulating, impounding or altering any natural water course, body of water or water circulation on the Property, except for emergency flood control, and activities or uses detrimental to water quality, including but not limited to degradation or pollution of any surface or sub-surface waters. 4. Grantor's Duties. To accomplish the purpose of this Conservation Easement as described in Section 1 hereof, Grantor, its successors and assigns, but not Conservator except as expressly assumed by Conservator, shall be responsible for the following duties as set forth in Subsection (a) herein. Following the Transfer, Grantor shall be responsible for the duties as set forth in Subsection (b) herein. Following Grantor's completion of its obligations under Mitigation Plan, Grantor shall be released from its obligations under this Conservation Easement, with those exceptions set forth in Subsection (c) herein. (a) Duties. (1) Undertake all reasonable actions to prevent the unlawful entry and trespass by persons whose activities may degrade or harm the Conservation Values of the Property. (2) Undertake all necessary actions to perfect Grantee's rights under the IOD, should Grantee elect to accept it; and (3) Comply with the terms of this Conservation Easement and cooperate with Grantee in the protection of the Conservation Values; and (4) Repair and restore damage to the Conservation Easement directly caused by Grantor, Grantor's guests, representatives, employees or agents, and third parties; and (5) Undertake revegetation, maintenance and monitoring of coastal sage scrub mitigation area ("CSS Mitigation Area") pursuant to the Mitigation Plan until issuance of final approval from Grantee confirming that Grantor has successfully completed revegetation, maintenance and monitoring of CSS Mitigation Area pursuant to the Mitigation Plan; and (6) Install and maintain signs as set forth in Section 7 below (only in the event the Transfer fails to occur); and (7) Enter into the Management Agreement with Conservator that provides for the long-term maintenance of the Property; and (8) Agree that the terms of the Management Agreement, as in effect from time to time, shall prevail over any inconsistent provisions contained in this Section; and -6- 7305 (9) Obtain Grantee's approval of any modifications or amendment to the Management Agreement, to the PAR incorporated therein and to any budget pertaining to long-term maintenance; and (10) Obtain any applicable governmental permits and approvals for any activity or use permitted by this Conservation Easement, 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; and (11) Prepare a monitoring and maintenance report when oversight activities are performed; and (12) Be responsible in-perpetuity, for the ongoing, long-term maintenance of the Property, except for portions to be maintained by Grantee or by any other person or entity, if any. The long-term maintenance responsibilities may be performed by a third party pursuant to the Management Agreement. Such long-term maintenance shall consist of the activities described in the PAR, including but not limited to the following activities: (A) periodic surveys of covered species; (B) regular updating of habitat mapping; (C) revegetation and enhancement when necessary, but only after consultation with Grantee; (D) reviews of habitat mapping, to discern and report on trends; (E) quarterly site assessments and debris removal; (F) quarterly site visits to monitor for potential unauthorized activities; (G) inspect open-space preserve signs and replace them as necessary; (H) document all field visits; (I) weeding as necessary within the San Diego thorn mint area; (J) annual reports to Grantee, based on site assessments, field logs and survey results. (13) Set aside, hold, invest and disburse endowment funds for preservation of the Conservation Values of the Property (together with all interest and other income thereon, the "Endowment Funds") in trust solely for the purposes of preserving the Conservation Values of the Property under this Conservation Easement in perpetuity. Grantee -7- 7306 shall have the right to review and approve the terms of the endowment agreement, and shall be a third party beneficiary of that agreement with the right to review and approve any amendments; and (14) Have a fiduciary duty to ensure that the Endowment Funds held in trust for the Property are properly managed. The following principles of fiduciary duty shall apply: (A) There shall be no commingling of the Endowment Funds with non-endowment funds. Funds may be pooled with other endowment funds for investment management purposes only. (B) Grantor shall have a duty of loyalty and shall not use the Endowment Funds for its own personal benefit. (C) Grantor shall act as a prudent investor of the Endowment Funds. (D) Grantor shall not delegate the responsibility for managing the funds to a third party without Grantee's prior written approval. Grantor may delegate authority to invest the funds with Grantor's oversight. Grantor shall act with prudence when delegating authority and in the selection of agents. (E) Grantor shall have an annual audit of the Endowment Funds performed by a licensed CPA. Grantor shall submit the auditor's written report to Grantee upon completion. (b) Post-Transfer Duties. Following the Transfer, but before Grantor's completion of its requirements under the Mitigation Plan, Grantor shall be responsible for the following duties: (1) Undertake all reasonable actions to prevent the unlawful entry and trespass by persons onto the CSS Mitigation Area whose activities may degrade or harm the Conservation Values of the CSS Mitigation Area; and (2) Comply with the terms of this Conservation Easement to the extent such compliance is not otherwise required of Conservator and cooperate with Grantee in the protection of the Conservation Values; and (3) Repair and restore damage to the Conservation Easement directly caused by Grantor, Grantor's guests, representatives, employees or agents, and third parties; and (4) Undertake revegetation, maintenance and monitoring of the CSS Mitigation Area pursuant to the Mitigation Plan until issuance of final approval from Grantee confirming that Grantor has successfully completed revegetation, maintenance and monitoring of CSS Mitigation Area pursuant to the Mitigation Plan; and 7307 (5) Install and maintain signs as necessary for the CSS Mitigation Area; and (6) Agree that the terms of the Management Agreement, as in effect from time to time, shall prevail over any inconsistent provisions contained in this Section; and (7) Obtain Grantee's approval of any modifications or amendment to the Management Agreement, to the PAR incorporated therein and to any budget pertaining to long-term maintenance; and (8) Obtain any applicable governmental permits and approvals for any activity or use permitted by this Conservation Easement, 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; and (9) Prepare any monitoring and maintenance reports as required under the Mitigation Plan as to the CSS Mitigation Area. (c) Duties Following Completion of Mitigation Plan and Release. Upon Grantor's completion of its requirements under the Mitigation Plan, Grantor shall be released from all duties and obligations under this Conservation Easement Deed; provided that in no event shall Grantor be released from (i) any breaches by Grantor under this Conservation Easement Deed, (ii) any breach of any warranty made by Grantor under Sections 15(i) and 15(j) of this Conservation Easement Deed and (iii) any indemnity obligation of Grantor under Section 10.2 of this Conservation Easement Deed. 5. Conservator's Duties. Prior to the Transfer, Conservator, its successors and assigns shall have no duties or obligations under this Conservation Easement. Following the Transfer, Conservator, its successors and assigns shall be responsible for the following duties as set forth in Subsection (a) herein in order to accomplish the Purpose of this Conservation Easement as described in Section 1. Following Grantor's completion of its obligations under Mitigation Plan, Conservator, its successors and assigns shall be responsible for the duties as set forth in Subsection (b) herein in order to accomplish the Purpose of this Conservation Easement as described in Section 1. (a) Post-Transfer Duties: Following the Transfer and Grantor's compliance with the conditions set forth in the Management Agreement, Conservator shall be responsible for the following duties: (1) Undertake all reasonable actions to prevent the unlawful entry and trespass by persons whose activities may degrade or harm the Conservation Values of the Property;and (2) Undertake all necessary actions to perfect Grantee's rights under the IOD, should Grantee elect to accept it; and -9- 7308 (3) Comply with the terms of this Conservation Easement to the extent such compliance is not otherwise required of Grantor and cooperate with Grantee in the protection of the Conservation Values; and (4) Repair and restore damage to the Conservation Easement, but not to the CSS Mitigation Area, or enforce the repair and restoration by another responsible party; and (5) Install and maintain signs as set forth in Section 1 below, but not to the CSS Mitigation Area; and (6) Agree that the terms of the Management Agreement, as in effect from time to time, shall prevail over any inconsistent provisions contained in this Section; and (7) Obtain Grantee's approval of any modifications or amendment to the Management Agreement, to the PAR incorporated therein and to any budget pertaining to long-term maintenance; and (8) Obtain any applicable governmental permits and approvals for any activity or use permitted by this Conservation Easement, 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; and (9) Prepare a monitoring and maintenance report when oversight activities are performed; and (10) Be responsible in-perpetuity, for the ongoing, long-term maintenance of the Property, except for the CSS Mitigation Area and portions to be maintained by Grantee or by any other person or entity, if any. Such long-term maintenance shall consist of the activities described in the PAR, including but not limited to the following activities: (A) periodic surveys of covered species; (B) regular updating of habitat mapping; (C) revegetation and enhancement when necessary, but only after consultation with Grantee; (D) reviews of habitat mapping, to discern and report on trends; (E) quarterly site assessments and debris removal; (F) quarterly site visits to monitor for potential unauthorized activities; (G) inspect open-space preserve signs and replace them as necessary; -10- 7309 (H) document all field visits; (I) annual reports to Grantee, based on site assessments, field logs and survey results. (11) Hold, invest and disburse the Endowment Funds in trust solely for the purposes of preserving the Conservation Values of the Property under this Conservation Easement in perpetuity. Grantee shall be notified of the name of the manager(s) of the Endowment Funds and shall be provided annual reports of such funds; and (12) Have a fiduciary duty to provide that the Endowment Funds that are held in trust for the Property are properly managed. The following principles of fiduciary duty shall apply: (A) There shall be no commingling of the Endowment Funds with non-endowment funds. Funds may be pooled with other endowment funds for investment management purposes only. (B) Conservator shall have a duty of loyalty and shall not use the Endowment Funds for its own personal benefit. (C) Conservator shall act as a prudent investor of the Endowment Funds. (D) Conservator shall not delegate the responsibility for managing the funds to a third party without notice to Grantee. Conservator may delegate authority to invest the funds with Conservator's oversight. Conservator shall act with prudence when delegating authority and in the selection of agents. (E) Conservator shall have an annual audit of the Endowment Funds performed by a licensed CPA. Conservator shall submit the auditor's written report to Grantee upon completion. (b) Duties Following Grantor's Completion of the Mitigation Plan. Upon Grantor's completion of its requirements under the Mitigation Plan, Conservator shall be responsible for the following duties: (1) Undertake all reasonable actions to prevent the unlawful entry and trespass by persons whose activities may degrade or harm the Conservation Values of the Property; and (2) Undertake all necessary actions to perfect Grantee's rights under the IOD, should Grantee elect to accept it; and (3) Comply with the terms of this Conservation Easement and cooperate with Grantee in the protection of the Conservation Values; and -11- 7310 (4) Repair and restore damage to the Conservation Easement or enforce the repair and restoration by another responsible party; and (5) Install and maintain signs as set forth in Section 7 below; and (6) Agree that the terms of the Management Agreement, as in effect from time to time, shall prevail over any inconsistent provisions contained in this Section; and (7) Obtain Grantee's approval of any modifications or amendment to the Management Agreement, to the PAR incorporated therein and to any budget pertaining to long-term maintenance; and (8) Obtain any applicable governmental permits and approvals for any activity or use permitted by this Conservation Easement, 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; and (9) Prepare a monitoring and maintenance report when oversight activities are performed; and (10) Be responsible in-perpetuity, for the ongoing, long-term maintenance of the Property, except for portions to be maintained by Grantee or by any other person or entity, if any. Such long-term maintenance shall consist of the activities described in the PAR, including but not limited to the following activities: (A) periodic surveys of covered species; (B) regular updating of habitat mapping; (C) revegetation and enhancement when necessary, but only after consultation with Grantee; (D) reviews of habitat mapping, to discern and report on trends; (E) quarterly site assessments and debris removal; (F) quarterly site visits to monitor for potential unauthorized activities; (G) inspect open-space preserve signs and replace them as necessary; (H) document all field visits; (I) weeding as necessary within the San Diego thorn mint area; -12- 7311 (J) annual reports to Grantee, based on site assessments, field logs and survey results. (11) Hold, invest and disburse the Endowment Funds in trust solely for the purposes of preserving the Conservation Values of the Property under this Conservation Easement in perpetuity. Grantee shall be notified of the name of the manager(s) of the Endowment Funds and shall be provided annual reports of such funds; and (12) Have a fiduciary duty to provide that the Endowment Funds that are held in trust for the Property are properly managed. The following principles of fiduciary duty shall apply: (A) There shall be no commingling of the Endowment Funds with non-endowment funds. Funds may be pooled with other endowment funds for investment management purposes only. (B) Conservator shall have a duty of loyalty and shall not use the Endowment Funds for its own personal benefit. (C) Conservator shall act as a prudent investor of the Endowment Funds. (D) Conservator shall not delegate the responsibility for managing the funds to a third party without notice to Grantee. Conservator may delegate authority to invest the funds with Conservator's oversight. Conservator shall act with prudence when delegating authority and in the selection of agents. (E) Conservator shall have an annual audit of the Endowment Funds performed by a licensed CPA. Conservator shall submit the auditor's written report to Grantee upon completion. 6. Grantee's Duties. To accomplish the Purpose of this Conservation Easement as described in Section 1, Grantee, its successors and assigns shall: (a) Prevent any activity on or use that is inconsistent with the Purpose of this Conservation Easement; (b) Perform routine compliance inspections of the Property to the extent it determines that staff and funding are available and make reports available to the Third Party Beneficiaries upon request. 7. Reserved Rights. Grantor reserves to itself, and to its corporate successors and assigns, and to the benefit of Conservator following Grantor's transfer of title to the Property to Conservator, all rights accruing from its ownership of the Property, including the right to engage in or to permit or invite others to engage in all uses of the Property that are consistent with the purposes of this Conservation Easement. Grantor reserves all of those rights not expressly -13- 7312 prohibited by this Conservation Easement. Those rights must be exercised in a manner consistent with the Conservation Values of the Property and the intent of this Conservation Easement. Upon the Transfer and upon Grantor's completion of its obligations under the Mitigation Plan, all Grantor's rights and obligations as reserved by this Section 7, with the exception of Subsections (e) and (f), shall transfer to Conservator. Such obligations include, but are not limited to the following: (a) Access. Reasonable access through the Property to perform obligations or other activities permitted by this Conservation Easement or that are required under the Mitigation Plan. Following the transfer of the Property, Grantor shall retain the right of reasonable access through the Property to perform obligations under the Mitigation Plan, with such right of access being deemed transferred to the person or entity, if any, who succeeds to and assumes the obligations of Grantor, under the Mitigation Plan. If the Property is conveyed to the Conservator, such conveyance shall include a grant of rights of reasonable access to the Property from a public road through the adjacent property of Saddleview, LLC. (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 Property, so long as such activities do not harm the habitat types identified in the Mitigation Plan. For purposes of preventing erosion and reestablishing native vegetation, the Grantor shall have the right to revegetate areas that may be damaged by the permitted activities under this Section 7, naturally occurring events or by the acts of persons wrongfully damaging the Natural Condition of the Property. Prior to commencing the Compensatory Mitigation, the Grantor shall have submitted detailed plans to the Grantee for review and written approval, which approval shall not be unreasonably withheld, conditioned or delayed, provided, however, that such approval shall be deemed to have been given by Grantee if it fails to respond to a request therefor on or prior to the date that is sixty (60) days after receipt of request therefor. It shall be reasonable for Grantee to withhold consent of such activities that are in direct or potential conflict with the preservation of the Natural Condition of the Property. (c) Repair and Remediation of Damage or Refuse. Removal or trimming of vegetation downed or damaged due to natural disaster, removal of man-made debris, removal of parasitic (as it relates to the health of the host plant) and non-native or exotic plant or animal species. Prior to any such repair and remediation work, the Grantor shall first consult with the Grantee. (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 inform persons of the nature and restrictions on the Property. (e) Easement for Landscape Easement Area. Grantor hereby reserves for itself, and its successors and assigns for the benefit of the fee owner lot 15 as depicted in Exhibit "B" ("Lot 15"), a non-exclusive easement in perpetuity for access to perform landscape maintenance to existing landscaping ("Existing Landscaping") along Cobblestone Drive and Cobblestone Road within the area depicted on Exhibit "E" attached hereto and incorporated herein by this reference ("Landscape Easement Area"). In connection with Grantor's entry upon the -14- 7313 Landscape Easement Area, Grantor, and any agents, contractors or subcontractors performing work on behalf of Grantor, shall maintain insurance pursuant to the provisions in Section 10.4 herein, except that such insurance shall also name Conservator as an additional insured. Grantor further agrees to indemnify Conservator pursuant to the provision of Section 10.2 herein for Claims arising from Grantor's entry onto, and all activities conducted by Grantor, its employees, agents, contractors and subcontractors within, the Landscape Easement Area. Grantor hereby warrants to Conservator that (i) the Existing Landscaping was implemented based on prior requirements of the City, (ii) none of the Third Party Beneficiaries have required that the entire Property consist of non-native vegetation and (iii) Grantor agrees to indemnify Conservator in perpetuity from any claims by the Third Party Beneficiaries or the City that the Existing Landscaping within the Landscape Maintenance Area violates this Conservation Easement Deed or any other permits issued to Grantor or written agreement between Grantor and the City or the Third Party Beneficiaries, such obligation of indemnification to run with the land and benefit Lot 16 and burden Lot 15. Such indemnity shall include all costs of any work mandated by the City or any Third Party Beneficiary to bring such areas into compliance with prior mapping, should any such requirement be made, together with reasonable management and administrative costs and attorneys fees of Conservator related thereto. Furthermore, prior to transfer of Lot 15 to the homeowners association established for the benefit of the Development ("HOA"), but in no event later than six months from the effective date of this Conservation Easement Deed, Grantor will provide to Conservator written documentation of the unqualified assumption by the HOA of the indemnity obligations of Grantor provided herein. (f) No Interference with Development of Adjoining Property. Notwithstanding anything set forth herein to the contrary, nothing in this Conservation Easement is intended nor shall be applied to in any way limit Grantor or any of Grantor's successors and assigns from (1) constructing, placing, installing, and/or erecting any improvements upon the portions of the Project not constituting the Property, (2) installing and/or maintaining the landscaping (including irrigation and runoff), landscape mitigation, and/or similar non-structural improvements within the Project, 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 amounts to a use of the Property, or has an impact upon the Property, that is prohibited by Section 3 above, or otherwise has a negative impact on the Property. (g) Fire Protection. The right, in an emergency situation only, to maintain firebreaks, 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 Property. 8. Remedies. 8.1 Third Party Beneficiaries shall have the same rights as Grantee under this Section to enforce the terms of this Conservation Easement. 8.2 Violation of the Conservation Easement In the event that any party or its employees, agents, contractors or invitees is in violation of the terms of this Conservation Easement or that a violation is threatened, a non-violating -15- 7314 party and/or agency shall give written notice to the violating party (hereinafter "Notice of Violation") informing the violating party of the actual or threatened violations and demanding in writing the cure of such violation. A copy of the Notice of Violation shall be sent to all of the parties and agencies listed under Section 13 of this Conservation Easement. The violating party shall cure the noticed violation within thirty (30) days of receipt of said written Notice of Violation. If said cure, reasonably requires more than thirty (30) days, the violating party shall begin cure within the thirty (30) day period and work diligently to complete such cure. If the violating party disputes the Notice of Violation, it shall issue a written notice of such dispute (hereinafter "Notice of Dispute" and as further provided for below) to the appropriate party and/or agency within thirty (30) days of receipt of written Notice of Violation. If the violating party fails to cure the violation within the time period(s) described in the paragraph above or Section 8.2(a) below, the non-violating party and/or agency may bring an action at law or in equity in a court of competent jurisdiction to enforce compliance by the violating party with the terms of this Conservation Easement, to recover any damages to which the non- violating party may be entitled for violation by the violating party of the terms of this Conservation Easement or for any injury to the Conservation Values of the Property, to enjoin the violation, ex parte as necessary, by temporary or permanent injunction without the necessity of proving either actual damages or the inadequacy of otherwise available legal remedies, or for other equitable relief, including, but not limited to, the restoration of the Property to the condition in which it existed prior to any such violation or injury. Without limiting the liability of the violating party therefor, the non- violating party may apply any damages recovered to the cost of undertaking any corrective action on the Property. The rights of the non-violating party under this Section apply equally to actual or threatened violations of the terms of this Conservation Easement. The violating party agrees that the non-violating party's remedies at law for any violation of the terms of this Conservation Easement are inadequate and that the non-violating party shall be entitled to the injunctive relief described in this Section, both prohibitive and mandatory, in addition to such other relief to which the non- violating party may be entitled, including specific performance of the terms of this Conservation Easement, without the necessity of proving either actual damages or the inadequacy of otherwise available legal remedies. The remedies of the non-violating party described in this Section shall be cumulative and shall be in addition to all remedies now or hereafter existing at law or in equity, including but not limited to, the remedies set forth in Civil Code Section 815, etseq , inclusive. The failure of the non-violating party to discover a violation or to take immediate legal action shall not bar such party from taking such action at a later time. (a) Notice of Dispute If the violating party provides the non-violating party and/or agency with a Notice of Dispute, as provided herein, the non-violating party and/or agency shall meet and confer with the violating party at a mutually agreeable place and time, not to exceed thirty (30) days from the date that the non-violating party and/or agency receive the Notice of Dispute. The non-violating party and/or agency shall consider all relevant information concerning the disputed violation provided by the violating party and shall determine whether a violation has in fact occurred and, if so, whether -16- 7315 the Notice of Violation and demand for cure issued by the non-violating party and/or agency is appropriate in light of the violation. If, after reviewing the violating party's Notice of Dispute, conferring with the violating party, and considering all relevant information related to the violation, the non-violating party and/or agency determine that a violation has occurred, the non-violating party and/or agency shall give the violating party notice of such determination in writing. Upon receipt of such determination, the violating party shall have fifteen (15) days to cure the violation. If said cure reasonably requires more than fifteen (15) days, the violating party shall begin cure within the fifteen (15) day period and work diligently to complete such cure. (b) Permissible Immediate Action In. the event that circumstances require immediate action to prevent or mitigate damage to the Conservation Values of the Property, the party seeking enforcement may immediately pursue its remedies under this Section without waiting for the period provided for cure to expire, after giving the violating party at least twenty four (24) hour written notice before pursuing such remedies. The written notice pursuant to this paragraph may be transmitted to the violating parting by facsimile and shall be copied to all other parties and agencies listed in Section 13 of this Conservation Easement. If at any time in the future Grantor or any subsequent transferee uses or threatens to use the Property for purposes inconsistent with this Conservation Easement then, notwithstanding Civil Code Section 815.7, the California Attorney General or any entity or individual with a justiciable interest in the preservation of this Conservation Easement has standing as interested parties in any proceeding affecting this Conservation Easement. 8.3 Costs of Enforcement. Subject to the provisions below for Conservator Violation, any costs incurred by a party or agency, where it is the prevailing party, in enforcing the terms of this Conservation Easement against another party, including, but not limited to, costs of suit and attorneys' and experts' fees, and any costs of restoration necessitated by the other party's negligence or breach of this Conservation Easement shall be borne by the non- prevailing party. 8.4 Discretion. Enforcement of the terms of this Conservation Easement by the parties shall be at its discretion, and any forbearance by a party to exercise its rights under this Conservation Easement in the event of any breach of any term of this Conservation Easement by another party shall not be deemed or construed to be a waiver by the non-breaching party of such term or of any subsequent breach of the same or any other term of this Conservation Easement or of any of the rights of the non-breaching party (or any rights of Third Party Beneficiaries) under this Conservation Easement. No delay or omission by the non- breaching party in the exercise of any right or remedy upon any breach by another party shall impair such right or remedy or be construed as a waiver. 8.5 Acts Beyond Grantor's Control. Nothing contained in this Conservation Easement shall be construed to entitle Grantee or Third Party Beneficiaries to bring any action against Grantor, its successor's and assigns, including Conservator (collectively, "Grantor -17- 1316 Parties"), for any injury to or change in the Property resulting from (i) any natural cause beyond Grantor Parties' control, including, without limitation, fire not caused by Grantor Parties, flood, storm, and earth movement, or any prudent action taken by Grantor Parties under emergency conditions to prevent, abate, or mitigate significant injury to the Property resulting from such causes; or (ii) acts by Grantee or Third Party Beneficiaries and their employees, directors, officers, agents, contractors, or representatives. 8.6 Department of Fish and Game Right of Enforcement. All rights and remedies conveyed to Grantee under this Conservation Easement Deed shall extend to and are enforceable by Third Party Beneficiaries. 8.7 Conservator Violation. Following the valid transfer of the underlying fee title interest in the Property from Grantor to the Conservator, if a court of competent jurisdiction determines that the Conservator, as a successor to Grantor, has violated any term of this Conservation Easement: (a) Liability for damages shall be limited to acts or omissions covered by the Insurance Policy described in Section 10.4 to the coverage limits of the policy, except as described in Section 8.7(c); (b) Endowment Funds set aside for the management of the Property shall not be used to pay any damages; (c) If a violation arises from an intentional act by the Conservator, it shall be liable for the full extent of damages resulting from the violation, even if beyond the limits of any insurance policy; (d) In lieu of monetary damages, Grantee may agree to accept fee title to and management responsibility of the Property, or direct fee title and management responsibility to a new Grantor, which shall be a public agency or non-profit corporation eligible to hold Conservation Easements under Civil Code Section 815.3. Prior to accepting fee title and management responsibility, Grantee shall assign this Conservation Easement to a willing third party beneficiary to this Conservation Easement Deed pursuant to the terms of Section 12 of this Conservation Easement. (e) This Section shall be applicable only to the Conservator, its agents, contractors, employees and its successors, non-profit entities, if any, and shall not be interpreted to apply to an assignee of the Conservator without the prior approval of Grantee. (f) Nothing in this Section shall be interpreted to impose any liability on Saddleview, LLC. 9. Access. This Conservation Easement does not convey a general right of access to the public or a general right of access to the Property. In accordance with Section 7(d), Grantor and/or Conservator, according to the allocation of duties as set forth in Sections 4 and 5, and their respective successors or assigns shall install and maintain signage at all likely points of entry informing persons of the nature and restrictions on the Property. This Conservation -18- 1311 Easement will allow for access to the Property by 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 Property at the time of this conveyance. 10. Costs and Liabilities. Prior to the Transfer, Grantor shall retain all responsibilities and shall bear all costs and liabilities of any kind relating to the ownership, operation, upkeep and maintenance of the Property. Following the Transfer, but before Grantor's completion of its requirements under the Mitigation Plan, Grantor shall be individually and severally responsible for all costs and expenses and shall be solely liable for the performance of the enumerated duties and obligations of Grantor as provided in this Conservation Easement Deed and Conservator shall be individually and severally responsible for all costs and expenses and shall be solely liable for the performance of the enumerated duties and obligations of Conservator as provided in this Conservation Easement Deed. Following the Transfer and Grantor's completion of its requirements under the Mitigation Plan, Conservator shall bear all costs and liabilities of any kind relating to the ownership, operation, upkeep and maintenance of the Property. Grantor and Conservator agree that neither Grantee nor Third Party Beneficiaries shall have any duty or responsibility for the operation or maintenance of the Property, the monitoring of hazardous conditions thereon, or the protection of Grantor Parties, the public or any third parties from risks relating to conditions on the Property. Grantor or Conservator and their respective successors and assigns, individually and severally, shall remain solely responsible for obtaining any applicable governmental permits and approvals for any activity or use of such party permitted by this Conservation Easement Deed, 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. 10.1 Taxes; No Liens. Grantor prior to'the Transfer and Conservator after the Transfer, to the extent the Property is subject to taxes, shall pay before delinquency all taxes, assessments, fees, and charges of whatever description levied on or assessed against the Property by competent authority (collectively "Taxes"), including any Taxes imposed upon, or incurred as a result of, this Conservation Easement, and shall furnish Grantee and Third Party Beneficiaries with satisfactory evidence of payment upon request. Prior to the Transfer, Grantor shall keep Grantee's interest in the Property free from any liens, including those arising out of any obligations incurred by Grantor or any labor or materials furnished or alleged to have been furnished to or for Grantor at or for use on the Property. Following the Transfer, Conservator shall keep Grantee's interest in the Property free from any liens arising out of any obligations incurred by Conservator for any labor or materials furnished or alleged to have been furnished to or for Conservator at or for use on the Property. Grantor hereby agrees to indemnify Conservator for any liens placed against the Property prior to the Transfer and thereafter for any liens placed against the Property as a result of Grantor's breach of any of Grantor's obligations under the Mitigation Plan, or resulting from any activity on the Property prior to the Transfer. 10.2 Hold Harmless and Indemnity. Until such time that Grantor shall transfer title to the Property to Conservator and satisfy its obligations under the Mitigation Plan, and thereafter as to the breaches of any warranties and representations of Grantor herein, Grantor shall hold harmless, protect and indemnify (i) Grantee and its directors, officers, employees, agents, contractors, and representatives and the heirs, personal representatives, successors and -19- 1318 assigns of each of them (each a "Grantee Indemnified Party" and, collectively, "Grantee's Indemnified Parties"); (ii) Conservator and its directors, officers, employees, agents, contractors, and representatives and the heirs, personal representatives, successors and assigns of each of them (each a "Conservator Indemnified Party" and, collectively, "Conservator's Indemnified Parties") and (iii) Third Party Beneficiaries and their directors, officers, employees, agents, contractors, and representatives and the heirs, personal representatives, successors and assigns of each of them (each a "Third Party Beneficiaries Indemnified Party" and, collectively, "Third Party Beneficiaries' 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: (1) 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 Property, regardless of cause, except that (a) this indemnification shall be inapplicable to (i) Grantee's Indemnified Parties with respect to any Claim due solely to the negligence of Grantee's Indemnified Parties; (ii) Conservator's Indemnified Parties with respect to any Claim due solely to the negligence of Conservator's Indemnified Parties and (iii) Third Party Beneficiaries' Indemnified Parties with respect to any Claim due solely to the negligence of Third Party Beneficiaries' Indemnified Parties, and (b) this indemnification shall be inapplicable to any Claim arising from use or maintenance of any portion of the Property to be maintained by Grantee or other governmental entity; (2) the obligations specified in Sections 4, 10, and 10.1; and (3) the existence or administration of this Conservation Easement. If any action or proceeding is brought against any of the Third Party Beneficiaries Indemnified Parties by reason of any such Claim, Grantor shall, at the election of and upon written notice from Third Party Beneficiaries, defend such action or proceeding by counsel reasonably acceptable to the Third Party Beneficiaries Indemnified Party or reimburse Third Party Beneficiaries for all charges incurred for services of the Attorney General in defending the action or proceeding. 10.3 Condemnation. The purposes of the Conservation Easement are presumed to be the best and most necessary public use as defined at Code of Civil Procedure Section 1240.680 notwithstanding Code of Civil Procedure Sections 1240.690 and 1240.700. Nevertheless, if the Property is taken, in whole or in part, by exercise of the power of eminent domain, Grantor and Grantee shall be entitled to compensation in accordance with applicable law. 10.4 Insurance. Upon the transfer of the fee title interest in the Property from Grantor to the Conservator, the Conservator shall establish and maintain a policy of Commercial General Liability Insurance, in a form reasonably approved by Grantee, with an initial minimum coverage of Two Million Dollars ($2,000,000) per occurrence. The insurance shall be for legal liability arising out of bodily injury and tangible property damage, including tangible property damage to the Property. The policy shall include an endorsement naming Grantee as additional insured, which policy shall provide primary coverage for Grantee in the event of any claim against Grantee that is covered by the policy. The policy shall be the source of payment for any liability claims against the Conservator under this Conservation Easement paid after judgment or settlement, if the claims were covered by the policy. Not more frequently than once every -20- 7319 five (5) years, Grantee may require the minimum coverage to be increased to an amount that would be maintained by a prudent property owner of similar property in San Diego County. 11. Assignment. This Conservation Easement is transferable by Grantee, but Grantee may assign its rights and obligations under this Conservation Easement only to an entity or organization authorized to acquire and hold conservation easements pursuant to Civil Code Section 815.3 (or any successor provision then applicable). Grantee shall require the assignee to record the assignment in the county where the Property is located. 12. Subsequent Transfers. Conservator agrees to accept fee title to the Property from Grantor, provided that title is as represented in the Title Report attached as Exhibit "D", and conditioned upon Grantor's funding of the endowment and Grantee's rejection of the IOD, and shall assume certain obligations under this Conservation Easement as provided herein. Grantor agrees to incorporate the terms of this Conservation Easement in any deed or other legal instrument by which Grantor divests itself of any interest in all or any portion of the Property, including, without limitation, a leasehold interest. Grantor further agrees to give written notice to Grantee and Third Party Beneficiaries of Grantor's intent to transfer any interest in the Property, at least thirty (30) days prior to the date of such transfer. Grantee or Third Party Beneficiaries shall have the right to prevent subsequent transfers in which prospective subsequent claimants or transferees are not given notice of the covenants, terms, conditions and restrictions of this Conservation Easement. The failure of Grantor, Grantee or Third Party Beneficiaries to perform any act provided in this Section shall not impair the validity of this Conservation Easement or limit its enforceability in any way. It is the intention of the parties that, following the Transfer, the obligations of Conservator shall only be those obligations specifically designated as such herein and in the Management Agreement and not those identified as the obligations of Grantor. 13. Notices. Any notice, demand, request, consent, approval, or communication that any party desires or is required to give to the other parties shall be in writing and be served personally or sent by recognized overnight courier that guarantees next-day delivery or by first class mail, postage fully prepaid, addressed as follows: To Grantor: Saddleview, LLC 2710 Loker Ave W, Suite 350 Carlsbad, California 92008 Attn: William Rheinschild Facsimile: (760)918-6798 To Conservator: Helix Community Conservancy 8130 La Mesa Boulevard, #705 La Mesa, CA 91941-6437 Attention: Ellen M. Darnell Telephone: (619)523-2003 Facsimile: (619)462-0552 -21- 7320 With a copy to: To Grantee: To CDFG: With a copy to: To: USFSW To: CCC William L. Fischbeck Fischbeck and Oberndorfer, ape 5464 Grossmont Center Dr., Ste. 300 La Mesa, CA 91942 Telephone: (619) 464-1200 Facsimile: (619) 464-6471 City of Carlsbad Carlsbad City Clerk's Office 1200 Carlsbad Village Drive Carlsbad, California 92008 Facsimile: (760)720-6917 Department of Fish and Game South Coast Region 4949 Viewridge Avenue San Diego, CA 92123 Attn: Regional Manager Facsimile: (858) 467-4299 Department of Fish and Game Office of the General Counsel 1416 Ninth Street, 12th Floor Sacramento, California 95814-2090 Attn: General Counsel Facsimile: (916)653-3673 United States Fish and Wildlife Service Carlsbad Fish and Wildlife Office 6010 Hidden Valley Road Carlsbad, California 92011 Attn: Facsimile: (760)431-5002 California Coastal Commission San Diego Coast District Office 7575 metropolitan Drive, Suite 103 San Diego, California 92108-4421 Attn: District Manager Facsimile: (619)767-2384 or to such other address as Grantor, Grantee, CDFG, USFWS OR CCC may designate by written notice to the other parties. Notice shall be deemed effective upon delivery in the case of personal delivery or delivery by overnight courier or, in the case of delivery by first class mail, five (5) days after deposit into the United States mail. -22- 1321 14. Amendment. This Conservation Easement may be amended by Grantor, Grantee and Conservator, and any successors and assigns.. Any such amendment shall be consistent with the purposes of this Conservation Easement and shall not affect its perpetual duration. Any such amendment shall be recorded in the official records of San Diego County, State of California. 15. General Provisions. (a) Controlling Law. The interpretation and performance of this Conservation Easement shall be governed by the laws of the State of California, disregarding the conflicts of law principles of such state. (b) Liberal Construction. Any general rule of construction to the contrary notwithstanding, this Conservation Easement shall be liberally construed to effect the purposes of this Conservation Easement and the policy and purpose of Civil Code Section 815, et seq. If any provision in this instrument is found to be ambiguous, an interpretation consistent with the purposes of this Conservation Easement that would render the provision valid shall be favored over any interpretation that would render it invalid. (c) Severabilitv. If a court of competent jurisdiction voids or invalidates on its face any provision of this Conservation Easement Deed, such action shall not affect the remainder of this Conservation Easement Deed. If a court of competent jurisdiction voids or invalidates the application of any provision of this Conservation Easement Deed to a person or circumstance, such action shall not affect the application of the provision to other persons or circumstances. (d) Entire Agreement. This instrument sets forth the entire agreement of the parties with respect to the Conservation Easement and supersedes all prior discussions, negotiations, understandings, or agreements relating to the Conservation Easement. No alteration or variation of this instrument shall be valid or binding unless contained in an amendment in accordance with Section 14. (e) No Forfeiture. Nothing contained herein will result in a forfeiture or reversion of Grantor's title in any respect. (f) Successors. The covenants, terms, conditions, and restrictions of this Conservation Easement Deed shall be binding upon, and inure to the benefit of, the parties hereto and their respective personal representatives, heirs, successors, and assigns and shall constitute a servitude running in perpetuity with the Property. (g) Termination of Rights and Obligations. A party's rights and obligations under this Conservation Easement terminate upon transfer of the party's interest in the Conservation Easement or Property, except that liability for acts or omissions occurring prior to transfer shall survive transfer. (h) Captions. The captions in this instrument have been inserted solely for convenience of reference and are not a part of this instrument and shall have no effect upon its construction or interpretation. -23- 1322 (i) No Hazardous Materials Liability. Grantor 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 Property. Without limiting the obligations of Grantor under Section 10.2, Grantor agrees to indemnify, protect and hold harmless the Grantee's Indemnified Parties and the Third Party Beneficiaries' Indemnified Parties (defined in Section 10.2) against any and all Claims (defined in Section 10.2) arising from any Hazardous Materials deposited by Grantor, except that (I) this indemnification shall be inapplicable to the Grantee's Indemnified Parties with respect to any Hazardous Materials placed, disposed or released by Grantee's Indemnified Parties and (II) this indemnification shall be inapplicable to the Third Party Beneficiaries' Indemnified Parties with respect to any Hazardous Materials placed, disposed or released by Third Party Beneficiaries' Indemnified Parties. If any action or proceeding is brought against any of the Third Party Beneficiaries Indemnified Parties by reason of any such Claim, Grantor shall, at the election of and upon written notice from Third Party Beneficiaries, defend such action or proceeding by counsel reasonably acceptable to the Third Party Beneficiaries Indemnified Party or reimburse Third Party Beneficiaries for all charges incurred for services of the California Attorney General in defending the action or proceeding. Despite any contrary provision of this Conservation Easement Deed, the parties do not intend this Conservation Easement to be, and this Conservation Easement shall not be, construed such that it creates in or gives to Grantee or Third Party Beneficiaries 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 Property; or (5) Any control over Grantor's ability to investigate, remove, remediate or otherwise clean up any Hazardous Materials associated with the Property. 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 Hazardous Materials Transportation Act (49 U.S.C. Section 6901 etseq.); the Hazardous Waste Control Law (California Health & Safety Code Section 25100 etseq.); the Hazardous Substance Account Act (California Health & Safety Code Section 25300 etseq ), 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 Conservation Easement Deed. -24- 1323 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. Grantor represents, warrants and covenants to Grantee and Third Party Beneficiaries that, to Grantor's actual knowledge, Grantor's activities upon and use of the Property will comply with all Environmental Laws. (j) Warranty. Grantor represents and warrants, to Grantor's actual knowledge, that there are no outstanding mortgages, liens, encumbrances or other interests in the Property which have not been expressly subordinated to this Conservation Easement Deed, and that the Property is not subject to any other conservation easement. (k) Conveyance "As-Is." Notwithstanding anything to the contrary contained herein, it is understood between the parties that the easement rights conveyed by this Conservation Easement are expressly subject to all matters of record as of the date of this Conservation Easement is executed and are conveyed in an "AS IS" condition, "with all faults" as of such date. (1) Additional Easements. Other than as shown in the IOD, Grantor shall not grant any additional easements, rights of way or other interests in the Property (other than a security interest that is subordinate to this Conservation Easement Deed), or grant or otherwise abandon or relinquish any water agreement relating to the Property, without first obtaining the written consent of Grantee and Third Party Beneficiaries, which shall not be unreasonably withheld. It shall be reasonable for Grantee or Third Party Beneficiaries to withhold such consent if it determines that the proposed interest or transfer is inconsistent with the purposes of this Conservation Easement or will impair or interfere with the Conservation Values of the Property. This Section 15(1) shall not prohibit transfer of a fee or leasehold interest in the Property that is subject to this Conservation Easement Deed and complies with Section 12. (m) Counterparts. The parties may execute this instrument in any number of counterparts, which shall, in the aggregate, be signed by all of the parties; each counterpart shall be deemed an original instrument as against any party who has signed it. In the event of any disparity between the counterparts produced, the recorded counterpart shall be controlling. (n) Exhibits. All Exhibits referred to in this Conservation Easement are attached and incorporated herein by reference. (o) Recordation. Grantor shall promptly record this instrument in the official records of San Diego County, California and immediately notify the Grantee through the mailing of a conformed copy of the recorded easement. - (p) Estoppel Certificate. Upon request, Grantee shall within fifteen (15) days execute and deliver to Grantor, its successors and assigns any document, including an estoppel certificate, which certifies compliance with any obligation of Grantor, its successors and assigns contained in this Conservation Easement and otherwise evidences the status of this Conservation Easement as may be requested by Grantor, its successors and assigns. -25- IN WITNESS WHEREOF Grantor and Grantee have executed this Conservation Easement Deed as of the day and year first above written. GRANTOR: SADDLEVIEW, LLC, a Delaware limited liability company By: RWR III, LLC, a Delaware limited liability company Its Member By: )on MacLean, Member CONSERVATOR: HELIX COMMUNITY CONSERVANCY, INC., a Californiajionprofit public benefit corporation By: Name: Its:curK <->-€- APPROVED AS TO FORM: Ronald R. Ball, City Attorney -26- 1325 STATE OF CALIFORNIA COUNTY OF j SS. On before me, personally appeared personally known to me (or preved to me on the-basis of salisfaCloiy evfebnee) to the person(*) whose name(s) is/a*e subscribed to the within instrument and acknowledged to me that he/she/they- executed the same in his/her/their authorized capacity(ies}, and that by his/hef/thetr signature(-s-) on the instrument the person^, or the entity upon behalf of which the person{-s) acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA COUNTY OF On JSS. before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to the person(p) whose name($(is/!aF@-subscribed to the within instrument and acknowledged to me that he^e^they executed the same in his^OTihetr authorized capacity(ies-), and that by his^er/jth€ir-signature(£) on the instrument the person(^), or the entity upon behalf of which the person(£) acted, executed the instrument. WITNESS my hand and official seal. Signature STAGEY IHAYER Commission #1510988 Notary Public - California San Diego County My Comm, Expires Sep 2,2008j -28- Exhibit A Legal Description of Property ALL OF LOT 16 OF CITY OF CARLSBAD TRACT NO. 02-07, EMERALD POINTE ESTATES, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 15222 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY, nooomhPT- ?? . 2005 THE HEREINABOVE DESCRIBED PARCEL OF LAND CONTAINS 10.096 ACRE MORE OR LESS. DAVID W. AMBLER L.S^ 7322 HUNSAKER & ASSOCIATES SAN DIEGO, INC. 7326 EXHIBIT "A" Exhibit B Map of Property 7327 XS. AN EASEMENT FOR PUBLIC UTILITIES AND vA/ INCIDENTAL PURPOSES IN FAVOR OF SAN DIEGO GAS AND ELECTRIC COMPANY RECORDED AUGUST 14, 1957 IN BOOK 6706, PAGE 514 OF OFFICIAL RECORDS. SHEET 1 OF 1 200 400 J L SCALE 1"=200' 600 ABUA HBDlONDA MAP NO. B23Lor a HUNSAKER & ASSOCIATES SAN O I f C G, INC FIANN1NC 10179 HucfrtAtns foeel Sin Dvfa, Ca 92121 EXHIBIT "B" 7328 Exhibit C Mitigation Plan [See Attached] EXHIBIT "C" 7329 COASTAL SAGE SCRUB HABITAT REVEGETATION, MITIGATION AND MONITORING PLAN for the EMERALD POINTE ESTATES PROJECT CARLSBAD, CALIFORNIA Prepared/or: RWR Homes, Inc. 2710 Loker Avenue West, Suite 350 Carlsbad, California 92010 Contact: Klaus Mendenhall Tel: (760) 918-6797 Prepared by: & ASSOCIATES, INC. 605 Third Street Encinitas, California 92024 Contact: John Minchin Tel: (760) 479-4279 February 2006 7330 Coastal Sage Scrub Habitat Revegetation, Mitigation and Monitoring Plan for the Emerald Pointe Estates Project TABLE OF CONTENTS Section Page No. 1.0 INTRODUCTION 1 2.0 HABITAT GOALS & LIMITATIONS 4 2.1 Time Lapse 4 2.2 Cost Estimate and Financing 5 3.0 FINAL PERFORMANCE STANDARDS 5 3.1 Rationale for Expecting Success 5 3.2 Target Functions 6 3.3 Performance Standards 6 3.3.1 Coastal Sage Scrub Revegetation Areas 7 4.0 EXISTING SITE CONDITIONS 8 4.1 Existing Biological Functions and Values 10 5.0 IMPLEMENTATION PLAN 10 5.1 Soil Testing, Preparation, and Initial Weed Control 12 5.2 Planting Palette 12 5.3 Final Revegetation Plans (Construction Documents) 14 5.4 Planting Techniques 14 5.5 Seed Application 16 5.6 Irrigation System & Schedule 16 5.7 Erosion Control and BMP Measures 17 5.8 Preliminary Schedule 17 6.0 FIVE-YEAR MAINTENANCE PLAN 18 6.1 120-Day Plant Establishment Maintenance Period 19 6.2 Five-Year Maintenance Period 19 6.3 Irrigation 19 6.4 Pest Management 20 6.5 Soil Fertility Management 21 6.6 Trash Removal 21 6.7 Access Control 21 &. ASSOCIATES, INC. 4817-01 February 2006 Coastal Sage Scrub Habitat Revegetation, Mitigation and 7331 Monitoring Plan for the Emerald Pointe Estates Project TABLE OF CONTENTS (Continue^ Section Page No. 7.0 MONITORING PROGRAM 21 7.1 Qualitative Monitoring 22 7.2 Quantitative Monitoring 22 7.3 Reporting 22 8.0 COMPLETION OF FIVE-YEAR PROGRAM 23 8.1 Notification of Completion 23 8.2 Contingency Measures 23 8.3 Long-Term Management 23 9.0 REFERENCES 24 APPENDICES A. Biological Resources Reports LIST OF FIGURES Figure 1 Regional Map 2 Figure 2 Vicinity Map 3 Figure 3 Aerial Photo Reference Map 9 Figure 4 Biological Resources Map 11 Figure 5 Conceptual Revegetation Plan 15 LIST OF TABLES Table 1 Impacts And Mitigation Requirements 4 Table 2 Coastal Sage Scrub Restoration Container Plant Palette 13 Table 3 Coastal Sage Scrub Revegetation Seed Mix 13 Table 4 Mitigation Schedule* 18 4817-01 February 2006 n EXHIBIT D Order Number: 2065220 (11) Page Number: 1 M q Q A AMENDED 11-23-05 First American Title Company Brendon Farrelly RWR Homes, Inc., San Diego Division 2710 Loker Avenue West, Suite 350 Carlsbad, CA 92008-6609 Phone: (760)918-6797 Fax: (760)918-6798 411 Ivy Street San Diego, CA 92101 Customer Reference: Order Number: Emerald Pt. (Lot 16) 2065220(11) Title Officer: Phone: Fax No.: E-Mail: Owner: Roy Provence (619)231-4652 (619)231-4647 rprovence@firstam.com Saddleview, LLC PRELIMINARY REPORT In response to the above referenced application for a policy of title Insurance, this company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms. The printed Exceptions and Exclusions from the coverage of said Policy or Policies are set forth in Exhibit A attached. Copies of the Policy forms should be read. They are available from the office which issued this report Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of tttte and may not list all liens, defects, and encumbrances affecting title to the land. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the Issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. First American Title Order Number: 2065220 (11) Page Number: 2 7333 Dated as of November 16, 2005 at 7:30 A.M. The form of Policy of title insurance contemplated by this report is: To Be Determined 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: Saddleview, LLC, a Delaware limited liability company The estate or interest in the land hereinafter described or referred to covered by this Report is: A fee. 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: General and special taxes and assessments for the fiscal year 2005-2006. First Installment: $924.37, PAID Penalty: $92.44 Second Installment: $924.37, PAID Penalty: $102.44 Tax Rate Area: 09163 A. P. No.: 212-040-50-00 2. Supplemental taxes for the year 2005-2006 assessed pursuant to Chapter 3.5 commencing wit Section 75 of the California Revenue and Taxation Code. First Installment: $32,418.54, PAID Penalty: $3,241.85 Second Installment: $32,418.54, PAID Penally: $3,251.85 Tax Rate Area: 09163 A. P. No.: 859-174-32-45 3. Supplemental taxes for the year 2005-2006 assessed pursuant to Chapter 3.5 commencing wit Section 75 of the California Revenue and Taxation Code. First Installment: $5,530.98, PAID Penalty: $553.10 First American Title Order Number: 2065220 (11) 7334 Page Number: 3 Second Installment: $5,530.98, PAID Penalty: $563.10 Tax Rate Area: 09163 A. P. No.: 849-174-32-54 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 and incidental purposes, recorded August 14,1957 in Book 6706, Page 514 of Official Records. In Favor of: San Diego Gas and Electric Company Affects: A portion of said land 6. The terms and provisions contained in the document entitled "Agreement between Landowners to Completion of Street, Sewer, Water, Utility and Storm Drain Improvements" recorded July 26, 1988 as Instrument No. 88-363663 of Official Records. The terms and provisions contained in the document entitled "Agreement between Landlords to Completion of Street, Sewer, Water, Utility and Storm Drain Improvements" recorded November 22,1988 as Instrument No. 88-601024 of Official Records. The terms and provisions contained in the document entitled "Addendum to Agreement" recorded May 19,1997 as Instrument No. 97-0231547 of Official Records. 8. The fact that said land lies within Community Facilities District No. 1, as disclosed by Notice of Special Tax Lien recorded May 20,1991 as Instrument No. 91-0236959 and January 16,1996 as Instrument No. 1996-0020168, both of Official Records. 9. The fact that said land lies within the Amended Annexation Map No. 8 to boundaries of Community Facilities District No. 3, as disclosed by instrument recorded November 13, 2003 as File No. 03-1369961 of Official Records. An Amendment to Notice of Special Tax Lien, recorded November 26, 2003 as Instrument No. 03-1418263 of Official Records. 10. The terms and provisions contained in the document entitled "Affordable Housing Agreement" recorded September 30, 2005 as Instrument no. 2005-0850617 of Official Records. 11. A deed of trust to secure an original indebtedness of $12,417,000.00 recorded October 14, 2005 as instrument no. 2005-0891672 of Official Records. Dated: October 6, 2005 Trustor: Saddleview, LLC, a Delaware limited liability company -\ Trustee: Alliance Bank, a California corporation Beneficiary: Alliance Bank The above deed of trust states that it is a construction deed of trust. First American Title 7335 Order Number: 2065220 (11) Page Number: 4 A document entitled "Assignment of Rents" recorded October 14, 2005 as instrument no. 2005- 0891673 of Official Records, as additional security for the payment of trie indebtedness secured by the deed of trust 12. A financing statement recorded October 14, 2005 as instrument no. 2005-0891674 of Official Records. Debtor: Saddleview, LLC, a Delaware limited liability company Secured party: Alliance Bank 13. An easement shown or dedicated on the Map as referred to in the legal description For: Open space and incidental purposes. According to the Proposed Map in possession of the Company, said easement has not been accepted or rejected. Upon recording of the Map, said easement must be accepted or rejected. 14. Abutter's rights of ingress and egress to or from Cobblestone Drive, adjacent thereto have been dedicated or relinquished on trie filed Map. 15. Abutter's rights of ingress and egress to or from Cobblestone Road, adjacent thereto have been dedicated or relinquished on the filed Map. 16. Any and all offers of dedication, conditions, restrictions, easements, fenceUne/boundary discrepancies, notes and/or provisions shown or disclosed by the filed or recorded map referred to in the legal description. 17. Any easements, covenants or other matters which are to be created by the filing of the record map of City of Carlsbad Tract No. 02-07 Emerald Pointe Estates in the Office of the County Recorder of San Diego County. 18. The legal description in this report is based upon a proposed final map, under process with the City of Carlsbad and may be revised, depending on the requirement of the City of Carlsbad or for other reasons. Prior to the issuance of any policy of title insurance, the Company will require: 19. With respect to Saddleview, LLC, a limited liability company: a. A copy of its operating agreement and any amendments thereto; b. If it is a California limited liability company, that a certified copy of its articles of organization (LLC-1) and any certificate of correction (LLC-11), certificate of amendment (LLC-2), or restatement of articles of organization (LLC-10) be recorded in the public records; c. If it is a foreign limited liability company, that a certified copy of its application for registration (LLC-5) be recorded in the public records; d. With respect to any deed, deed of trust, lease, subordination agreement or other document or instrument executed by such limited liability company and presented for recordation by the Company or upon which the Company is asked to rely, that such document or instrument be executed in accordance with one of the following, as appropriate: (i) If the limited liability company properly operates through officers appointed or elected pursuant to the terms of a written operating agreement, such document must be executed by at least two duly elected or appointed officers, as follows: the chairman of the board, the president First American TKfe Order Number: 2065220 (11) Page Number: 5 or any vice president, and any secretary, assistant secretary, the chief financial officer or any assistant treasurer; (ii) If the limited liability company properly operates through a manager or managers Identified in the articles of organization and/or duly elected pursuant to the terms of a written operating agreement, such document must be executed by at least two such managers or by one manager if the limited liability company properly operates with the existence of only one manager, e. Other requirements which the Company may impose following its review of the material required herein and other information which the Company may require. 7336 First American We Order Number: 2065220 (11) Page Number: 6 7337 INFORMATIONAL NOTES 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 We Order Number: 2065220 (11) Page Number: 7 7338 LEGAL DESCRIPTION Real property in the City of Carlsbad, County of San Diego, State of California, described as follows: PARCEL A: LOT 16 OF CITY OF CARLSBAD TRACT NO. 02-07 EMERALD POINTE ESTATES, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. , FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, PARCEL B: THAT PORTION OF EASEMENTS FOR ROADWAY AND UTILITY PURPOSES OVER THOSE CERTAIN STRIPS OF LAND DESIGNATED AS "60 FOOT EASEMENT AND 66 FOOT EASEMENT RESERVED FOR ROADWAY AND UTILITY PURPOSES", AS SHOWN ON SAID RECORD OF SURVEY MAP NO. 5715 LYING WITHIN PARCEL 1 OF PARCEL MAP NO. 15661, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 5, 1989 AS INSTRUMENT NO. 89-239677 OF OFFICIAL RECORDS. PARCEL C: A TEMPORARY EASEMENT FOR PEDESTRIAN AND VEHICULAR ACCESS, INGRESS AND EGRESS AS CONTAINED IN DOCUMENT RECORDED MAY 1, 1996 AS RLE NO. 1996-0218757 OF OFFICIAL RECORDS BEING A PORTION OF PARCEL 1 OF PARCEL MAP NO. 15661, IN THE CTTY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 5, 1989 AS RLE/PAGE NO. 89-239677 OF OFFICIAL RECORDS, THAT PORTION BEING A PORTION OF THE EASEMENTS FOR ROADWAY AND UTILITY PURPOSES OVER THOSE CERTAIN STRIPS OF LAND DESIGNATED AS "60 FOOT EASEMENT AND 66.00 FOOT EASEMENT RESERVED FOR ROADWAY AND UTILITY PURPOSES", AS SHOWN ON RECORD OF SURVEY MAP NO. 5715, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 19, 1960 BEING A PORTION OF LOT "G" OF THE RANCHO AGUA HEDIONDA, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 823, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER 16, 1896, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHERLY CORNER OF SAID PARCEL 1 OF PARCEL MAP NO. 15661, SAID POINT BBNG THE INTERSECTION OF CENTER LINE OF LAUREL TREE LANE AND THE NORTHERLY LINE OF DESCRIPTION NO. 4 OF SAID RECORD OF SURVEY MAP NO. 5715 SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE ALONG SAID CENTER LINE OF LAUREL TREE LANE, SOUTHWESTERLY SOUTH 13 DEGREES 35'23" WEST 5.03 FEET TO THE BEGINNING OF A CURVE, CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 570.00 FEET; THENCE SOUTHWESTERLY AND SOUTHEASTERLY ALONG SAID CURVE 845.02 FEET THROUGH A CENTRAL ANGLE OF 84 DEGREES 56'26"; THENCE TANGENT TO SAID CURVE SOUTH 71 DEGREES 21'03" EAST 301.37 FEET; THENCE LEAVING SAID CENTER LINE OF LAUREL TREE LANE, NORTHWESTERLY NORTH 83 DEGREES 33'13" WEST 123.22 FEET; THENCE NORTHWESTERLY NORTH 71 DEGREES 21'10" WEST 179.75 FEET TO THE BEGINNING OF A CURVE, CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 595.00 FEET; THENCE ALONG SAID CURVE 871.55 FEET THROUGH A CENTRAL ANGLE OF 84 DEGREES 56'26"; THENCE First American Title Order Number: 2065220 (11) Page Number: 8 7339 NORTHEASTERLY NORTH 71 DEGREES 35'38" EAST 29.37 FEET TO THE TRUE POINT OF BEGINNING APN: A PORTION OF 212-040-50-00 First American Title Order Number: 2065220 (11) Page Number: 9 7340 NOTICE 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-escrov 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 disbursec the same day as deposit. In the case of cashier's checks or certified checks, funds may be disbursed the next d< 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. If you have any questions about the effect of this new law, please contact your local First American Office for more details. First American Title Order Number: 2065220 (11) Page Number: 10 7341 EXHIBIT A LIST OF PRINTED EXCEPTIONS AND EXCLUSIONS (BY POLICY TYPE) 1. CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY - 1990 SCHEDULE B EXCEPTIONS FROM COVERAGE 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 notice 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, which are 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, daims or titie to water, whether or not the matters excepted under (a), (b), or (c) are shown by the public records. 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 buSding and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (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 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. 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 toss or damage which would not have been sustained if the Insured claimant had paid value far the Insured mortgage or for the estate or Interest insured by this policy. 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 applicable "doing business" laws of the state in which the land is situated. Invalidity or unenforceabiity of the lien of the insured mortgage, or daim 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. Any daim, which arises out of the transaction vesting In the insured the estate or interest Insured by their 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. 2. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY FORM B • 1970 SCHEDULE OF EXCLUSIONS FROM COVERAGE Any law, ordinance or governmental regulation (including but not limited to building and zoning ordinances) restricting or regulating or prohibiting the occupancy, use or enjoyment of the land, or regulating the character, dimensions or location of any improvement now or hereafter erected on the land, or prohibiting a separation in ownership or a reduction in the dimensions of area of the land, or the effect of any violation of any such law, ordinance or governmental regulation. Rights of eminent domain or governmental rights of police power unless notice of the exercise of such rights appears in the public records at Date of Policy. Defects, liens, encumbrances, adverse daims, or other matters (a) created, suffered, assumed or agreed to by the insured daimant; (b) not known to the Company and not shown by the public records but known to the insured daimant either at Date of Policy or at the date such daimant acquired an estate or Interest insured by this policy and not disclosed in writing by the insured daimant to the Company prior to the date such insured claimant became an insured hereunder; (c) resulting in no loss or damage to the insured daimant; (d) attaching or First American Title Order Number: 2065220 (11) ' Page Number: 11 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 estate or interest insured by this policy. 3. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY FORM B - 1970 WITH REGIONAL EXCEPTIONS When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth in paragraph 2 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B This policy does not insure against loss or damage by reason of the matters shown in parts one and two following: Part One 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. 2. Any facts, rights, interests, or claims which are not shown by the public records but which coufd be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements, claims of easement or encumbrances which are 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 public records. 5. Unpatented mining claims; reservations or exceptions in patents or In Acts authorizing the issuance thereof; water rights, claims or title to water. 6. Any lien, or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records. 4. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1970 WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE SCHEDULE OF EXCLUSIONS FROM COVERAGE 1 Any law, ordinance or governmental regulation (including but not limited to building and zoning ordinances) restricting or regulating or prohibiting the occupancy, use or enjoyment of the land, or regulating the character, dimensions or location of any Improvement now or hereafter erected on the land, or prohibiting a separation in ownership or a reduction in the dimensions or area of the land, or the effect of any violation of any such law ordinance or governmental regulation. 2 Rights of eminent domain or governmental rights of police power unless notice of the exercise of such rights appears in the public records at Date of Policy. 3 Defects, liens, encumbrances, adverse daims, or other matters (a) created, suffered, assumed or agreed to by the Insured claimant, (b) not known to the Company and not shown by the public records but known to the insured claimant either at Date of Policy or at the date such claimant acquired an estate or interest insured by this policy or acquired the insured mortgage and not disclosed in writing by the insured claimant to the Company prior to the date such insured claimant became an insured hereunder, (c) resulting in no toss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent insurance Is afforded herein as to any statutory lien for labor or material or to the extent insurance is afforded herein as to assessments for street improvements under construction or completed at Date of Policy). 4. Unenforceability of the lien of the insured mortgage because of failure of the insured at Date of Policy or of any subsequent owner of the indebtedness to comply with applicable "doing business" laws of the state in which the land is situated. 5. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1970 WITH REGIONAL EXCEPTIONS When the American Land Title Association Lenders Policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy, the exclusions set forth in paragraph 4 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B This policy does not insure against loss or damage by reason of the matters shown in parts one and two following: Part One 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. 2. Any facts, rights, interests, or daims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements, claims of easement or encumbrances which are 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 public records. 5. Unpatented mining claims; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, daims or title to water. 6 Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records. First American Title Order Number: 2065220 (11) Page Number: 12 6. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1992 WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE 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 and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (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 exduded by (a) above, except to the extent that a notice of the exercise 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. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not exduding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser tor value without knowledge. 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 daimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disdosed in writing to the Company by the insured daimant prior to the date the insured claimant became an Insured under this policy; (c) resulting in no loss or damage to the insured daimant; (d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured mortgage over any statutory lien for services, labor or material or the extent insurance is afforded herein as to assessments for street improvements under construction or completed at 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. 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. Invalidity or Unenforceability of the lien of the insured mortgage, or daim 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. Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the insured mortgage) arising from an improvement or work related to the land which is contracted for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance. Any daim, which arises out of the transaction creating the interest of the mortgagee insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the interest of the Insured mortgagee being deemed a fraudulent conveyance or fraudulent transfer; or (Ii) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine of equitable subordination; or (iii) the transaction creating the interest of the insured mortgagee being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer; or (b) of such recordation to Impart notice to a purchaser for value or a judgment or lien creditor. 7. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY - 1992 WITH REGIONAL EXCEPTIONS When the American Land Title Assodation policy Is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth In paragraph 6 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B 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. 2. Any facts, rights, Interests, or dalms which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements, claims of easement or encumbrances which are 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 public records. 5. Unpatented mining claims; reservations or exceptions In patents or in Acts authorizing the Issuance thereof; water rights, dalms or title to water. 6. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records. 8. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY- 1992 First American Title Order Number: 2065220 (11) 7344 Page Number: 13 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: I (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (!) 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 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. 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) 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 estate or interest insured by this policy. Any daim, which arises out of the transaction vesting in the insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or (ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer; or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. 9. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY - 1992 WITH REGIONAL EXCEPTIONS When the American Land Tide Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth in paragraph 8 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B 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; Part One: 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. 2. Any facts, rights, interests, or daims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof, 3. Easements, daims of easement or encumbrances which are 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 disdose, and which are not shown by public records. 5. Unpatented mining daims; reservations or exceptions in patients or In Acts authorizing the Issuance thereof; water rights, daims or title to water. 6. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records. 10. AMERICAN LAND TITLE ASSOCIATION RESIDENTIAL TITLE INSURANCE POLICY -1987 EXCLUSIONS In addition to the Exceptions hi Schedule B, you are not insured against toss, costs, attorneys' fees and expenses resulting from: 1. Governmental police power, and the existence or violation of any law or government regulation. This includes building and zoning ordinances and also laws and regulations concerning: * land use * land division * improvements on the land * environmental protection This exclusion does not apply to violations or the enforcement of these matters which appear In the public records at Policy Date. This exclusion does not limit the zoning coverage described in items 12 and 13 of Covered Tide Risks. First American Title Order Number: 2065220 (11) Page Number: 14 2. The right to take the land by condemning it, unless: * a notice of exercising the right appears in the public records on the Policy Date * the taking happened prior to the Policy Date and is binding on you if you bought the land without knowing of the taking. 3. Title Risks: * that are created, allowed, or agreed to by you * that are known to you, but not to us, on the Policy Date - unless they appeared in the public records * that result in no loss to you * that first affect your title after the Policy Date - this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks 4. Failure to pay value for your title. 5. Lack of a right: * to any land outside the area specifically described and referred to In Item 3 of Schedule A, or * in streets, alleys, or waterways that touch your land This exclusion does not limit the access coverage in Item 5 of Covered Title Risks. 11. EAGLE PROTECTION OWNER'S POLICY CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE - 1998 ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE - 1998 Covered Risks 14 (Subdivision Law Violation). 15 (Building Permit). 16 (Zoning) and 18 (Encroachment of boundary walls or fences) are subject to Deductible Amounts and Maximum Dollar Limits of Liability EXCLUSIONS In addition to the Exceptions in Schedule B, you are not insured against loss, costs, attorneys' fees, and expenses resulting from: Governmental police power, and the existence or violation of any law or government regulation. This includes ordinances, laws and regulations concerning: a. building b. zoning c. land use d. improvements on the land e. land division f. environmental protection This exclusion does not apply to violations or the enforcement of these matters if notice of the violation or enforcement appears in the Public Records at the Policy Date. This exclusion does not limit the coverage described in Covered Risk 14,15,16,17 or 24. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not apply to violations of building codes if notice of the violation appears in the Public Records at the Policy Date. The right to take the Land by condemning it. unless: a. a notice of exercising the right appears in the Public Records at the Policy Date; or b. the taking happened before the Policy Date and is binding on You if You bought the Land without Knowing of the taking. Risks: a. that are created, allowed, or agreed to by You, whether or not they appear in the Public Records; b. that are Known to You at the Policy Date, but not to Us, unless they appear 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.d, 22,23,24 or 25. Failure to pay value for Your Title. 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 18. 12. SECOND GENERATION EAGLE LOAN POLICY AMERICAN LAND TITLE ASSOCIATION EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (10/13/01) 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 bidding and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to 0) the occupancy, use, or enjoyment of the Land; (it) the character, dimensions or location of any improvement now or hereafter erected on the Land; 09) 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. This exclusion First American We Order Number: 2065220 (11) Page Number: 15 * does not limit the coverage provided under Covered Risks 12,13,14 and 16 of this policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise 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. This exclusion does not limit the coverage provided under Covered Risks 12,13,14 and 16 of this policy. 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. Defects, liens, encumbrances, adverse daims 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 art Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (this paragraph does not limit the coverage provided under Covered Risks 8,16,18, 19, 20, 21, 22, 23, 24, 25 and 26); or (e) resulting in loss or damage which would not have been sustained If the Insured Claimant had paid value for the Insured Mortgage. 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 applicable doing business laws of the state in which the Land is situated. Invalidity or unenforceability of the lien of the Insured Mortgage, or daim thereof, which arises out of the transaction evidenced by the Insured Mortgage and is based upon usury, except as provided in Covered Risk 27, or any consumer credit protection or truth in lending law. Real property taxes or assessments of any governmental authority which become a lien on the Land subsequent to Date of Policy. This exclusion does not limit the coverage provided under Covered Risks 7,8 (e) and 26. Any daim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to advances or modifications made after the 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 exdusion does not limit the coverage provided in Covered Risk 8. Lack of priority of the lien of the Insured Mortgage as to each and every advance made after Date of Policy, and all interest charged thereon, over liens, encumbrances and other matters affecting title, the existence of which are Known to the Insured at: (a) The time of the advance; or (b) The time a modification is made to the terms of the Insured Mortgage which changes the rate of interest charged, if the rate of interest is greater as a result of the modification than It would have been before the modification. This exdusion does not limit the coverage provided in Covered Risk 8. The failure of the residential structure, or any portion thereof to have been constructed before, on or after Date of Policy In accordance with applicable building codes. This exdusion does not apply to violations of building codes if notice of the violation appears in the Public Records at Date of Policy. SCHEDULE B This policy does not insure against toss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: The following existing statutes, reference to which are made part of the ALTA 8.1 Environmental Protection Lien Endorsement incorporated into this Policy following item 28 of Covered Risks: NONE. 13. SECOND GENERATION EAGLE LOAN POLICY AMERICAN LAND TITLE ASSOCIATION EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (10/13/01) WITO REGIONAL EXCEPTIONS When the American Land Title Association loan policy with EAGLE Protection Added Is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exdusions set forth in paragraph 12 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B 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: Part One: 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. 2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements, daims of easement or encumbrances which are 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 disdose, and which are not shown by public records. 5. Unpatented mining daims; reservations or exceptions in patents or in acts authorizing the issuance thereof; water rights, daims or trtie to water. 6. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records. Part Two: First American TJtfe The following existing statutes, reference to which are made part of the ALTA 8.1 Environmental Protection ben Endorsement incorporated into this Policy following item 28 of Covered Risks. None 7347 First American Title EXHIBIT E 7348 Depiction of Landscape Easment Area 1349 CERTIFICATION FOR ACCEPTANCE OF DEED This is to certify that the interest in real property conveyed by the GRANT DEED OF EASEMENT dated October 5. 2006. from Saddleview. LLC (Grantor), and Helix Community Conservancy. Inc. (Conservator), to the City of Carlsbad, California, a municipal corporation, is hereby accepted by the City Council of the City of Carlsbad, California, pursuant to Ordinance No. NS-422, adopted on September 16, 1997, and the grantee consents to the recordation thereof by its duly authorized officer. DATED: October 5. 2006 istant City Clerk