PRE-ANNEXATION AGREEMENT. by and among. THE CITY OF YORBA LINDA a California Municipal Corporation, and

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1 PRE-ANNEXATION AGREEMENT by and among THE CITY OF YORBA LINDA a California Municipal Corporation, and YORBA LINDA ESTATES, LLC, an Arizona Limited Liability Company and YORBA LINDA ESTATES NORTH, LLC, an Arizona Limited Liability Company and OC 33, LLC an Arizona Limited Liability Company, [Dated as of November 17, 2015 for reference purposes only]

2 ARTICLE 1. PARTIES AND EFFECTIVE DATE 1.1 Parties. This Pre-Annexation Agreement ("Agreement") is entered into by and among (i) The City of Yorba Linda (the "City"), a California municipal corporation; (ii) Yorba Linda Estates, LLC, a Arizona corporation; and (iii) Yorba Linda Estates North, LLC, a Arizona limited liability company ( YLEN ); and (iv) OC 33, LLC, an Arizona limited liability company (Yorba Linda Estates, LLC, OC 33, LLC, and Yorba Linda Estates North, LLC are collectively referred to herein as the Company ). The City and the Company are sometimes referred to herein individually as a "Party" and collectively as the "Parties." This Agreement is dated as of November 17, 2015, for reference purposes only and will not become effective until the "Effective Date" defined in Section 1.2 below. 1.2 Effective Date. This Agreement will not become effective until the date ("Effective Date") on which all the following have occurred: (i) this Agreement has been approved by the Company, executed by its legally authorized officers, and delivered to the City; (ii) this Agreement has been approved by the City Council and executed by the Mayor, pursuant to authority delegated by the City Council. ARTICLE 2. RECITALS 2.1 The Company owns 310 acres, the legal description of which is attached hereto as Exhibit A (the Fee Property ) and holds an option on an additional 159 acres of land currently owned by the Nicholas Long Family Trust through YLEN, the legal description of which is attached hereto as Exhibit B, (the Option Property ). The Fee Property and Option Property is collectively referred to as the Property and is located in an unincorporated area of Orange County California (the County ) within the City's sphere of influence.. The Company is seeking to develop the Property through a Specific Plan and Vesting Tentative Tract Map through the County into a subdivision named Esperanza Hills (alternatively referred to herein as Esperanza Hills or the Project ).

3 2.2 Annexation of the Property by the City (the "Annexation") is contemplated by the Parties upon the terms and conditions set forth in this Agreement. The Parties anticipate annexation proceedings will be commenced by the Local Agency Formation Commission ("LAFCO") after execution and adoption of this Agreement by the Parties as set forth above. 2.3 The Parties understand that annexation of the Property as contemplated in this Agreement is essential to the plan for providing services required by LAFCO in its consideration of the annexation application. 2.4 The Company desires that the phased development and annexation of the Property occurs in a manner that preserves the vested rights and entitlements that the Company has or will receive through the County as set forth in the Company s current entitlement applications. In addition, the Company also desires that the later and future phases of the Project, which are contingent upon the timely processing of applications for development approvals and the timely issuance of permits and approvals, proceed as contemplated and planned through the current entitlement applications with the County. The Company further desires to prevent annexation from affecting, altering or changing the limitations, reservations and exceptions to authority it has or will receive through its entitlement applications with the County. 2.5 The Company filed an application for annexation with LAFCO in February, 2013 ( Annexation Application ) for annexation of the Property upon terms set forth in the Annexation Application. LAFCO placed the Annexation Application on hold pending the receipt of a pre-annexation agreement between the City and the Company. 2.6 The Property is adjacent to land currently owned by the Amos Travis Trusts or the Richards Family Trusts, known as Orange County Assessor s parcel numbers , , and which land lies between land already within the boundaries of the City and the Property (the Cielo Vista

4 Property ). With the exception of the remainder parcel owned by the Richards Family Trusts under Assessor Parcel Number , the Cielo Vista Property is being processed by North County BRS Project, LLC, a Delaware limited liability company, within the County of Orange under Planning Application for approval of a General Plan Amendment, Zoning Change, Area Plan and Environmental Impact Report. 2.7 The City desires any and all pre-annexation and post-annexation development to occur harmoniously and without disruption or discord to the City and its existing communities and inhabitants and without detriment to the City's infrastructure and/or City service providers. The City further desires to be assured that Company will continue to process its current application for annexation under the terms and conditions of this Agreement. NOW, THEREFORE, in consideration for the promises and mutual covenants set forth herein, the receipt and adequacy of which is hereby acknowledged, the Parties agree as follows: ARTICLE 3. TERMS 3.1 City Obligations In accordance with applicable legal requirements and procedures, the City shall timely process encroachment permits, license agreements, or other legally cognizable documents to the extent necessary for the connection of Esperanza Hills streets to City streets and the construction of future roads as required to connect the Project as currently entitled through the County through its approval of the Esperanza Hills Specific Plan (the Specific Plan ) In accordance with applicable legal requirements and procedures, the City shall timely process all applications for construction of the roads within its jurisdiction contemplated by Access Options 2B and 2 Modified to

5 both San Antonio Road (the Main Access Road ) and Stonehaven Drive (the Stonehaven Road ) and attendant landscaping, signage, striping, and monumentation for Esperanza Hills as set forth in the Specific Plan (collectively, the Roads ) The City shall timely process and consider applications for prezoning of the Property in accordance with applicable legal requirements and procedures. The Parties understand that annexation of the Property cannot be finalized until the Property is prezoned. Company irrevocably agrees to consent to prezoning approved by the City so long as it is consistent with the Specific Plan Upon completion of the prezoning for the Property, the City hereby irrevocably consents to the annexation of the Property pursuant to the terms of this Agreement and shall cooperate in the annexation process for the Property and use its best efforts to prosecute the Annexation Application through LAFCO upon the terms set forth in this Agreement In compliance with applicable legal requirements and procedures, the City shall grant a license, encroachment permit or other legal authorization to the Company for the construction of the Main Access Road and trails across City-owned land near San Antonio Road identified as Lots A and H of Tract 9813 ( City Property ) in exchange for consideration of the sum of One Million Dollars ($1,000,000) which shall be paid to the City at the earliest of: i) issuance of grading permits by the County for any portion of Esperanza Hills; ii) issuance of a grading permit by the City of Yorba Linda for the construction of any of the Roads; or iii) July 1, If LAFCO has not approved annexation by the date established for the $1,000,000 payment, then the payment may be delayed until LAFCO approves the annexation subject to the terms of the Specific Plan and this Agreement and the City has issued a permit or other legal authorization to construct the Main Access Road over City Property. If LAFCO denies the annexation or such annexation is set aside for any reason, then the City at its discretion is no longer required to provide access over the City Property for any

6 reason. The location of the Main Access Road and trails shall be located on the City Property in a location mutually agreeable to both the City and Company generally consistent with the Specific Plan. In the event that the Main Access Road is constructed from San Antonio Road, the City shall name the road Esperanza Hills Parkway. Company shall be responsible for all costs pertaining to the construction of the Main Access Road and trails on the City Property. The Main Access Road shall comply with applicable requirements for such roadways within the City and comply with the City s requirements for construction of roadways and trails by developers. For example, Company shall prepare and design public improvements plans for the Main Access Road and trails that are submitted by Company for review by City. Company shall provide bonding for the construction of the Main Access Road and trails and obtain necessary encroachment permits and any other necessary entitlements. In addition to the $1,000,000 payment, Company shall be required to pay all standard City permitting, processing and inspection fees to City. Upon completion, the City may accept the roadway that is on the City Property into the City street system and all rights of Company in the City Property shall cease other than Company s ongoing maintenance obligations referenced herein If Option 2B and the Main Access Road are constructed, Company shall design and construct the traffic control device at the intersection of San Antonio and the Main Access Road no later than nine (9) months after the commencement of construction of the Project and prior to use (including use by construction equipment) of the Main Access Road. Company shall be responsible for all costs for the design, construction and installation of the traffic control device and it shall be designed, permitted, constructed, and inspected in accordance with all applicable requirements. Company shall be required to pay all standard City permitting, processing and inspection fees to the City Company shall design and construct the traffic control device with lane extensions as set forth on the Specific Plan and Environmental Impact Report at the intersection of Yorba Linda Boulevard and Via Del Agua no later than

7 nine (9) months after the commencement of construction for the Project. Company shall be responsible for all costs for the design, construction and installation of the traffic control device with lane extensions and it shall be designed, permitted, constructed, and inspected in accordance with all applicable requirements. Company shall be required to pay all standard City permitting, processing and inspection fees to the City To the extent that the City has the legal authority to impose reimbursement obligations, the Company shall be entitled to partial reimbursement from third parties for the expenses of construction of the traffic control devices at Via Del Agua and Yorba Linda Boulevard and San Antonio and Esperanza Hills Parkway in the event that any future developments occur within the City or its sphere of influence and such developments require the use of Esperanza Hills Parkway or would have required the installation of the traffic control devices at Via Del Agua and Yorba Linda Boulevard as set forth in the traffic studies submitted as part of the Esperanza Hills EIR, or as mutually agreed between the Company and any adjoining property owners The Company agrees that the trails installation and maintenance plan as generally described in the Specific Plan will conform to the City s requirements and that all such trails will provide connections consistent with City planning documents and the Specific Plan, and further agree that the trails will be open to the public during the time periods allowed pursuant to City codes and regulations for such trails, and will be maintained at the sole expense of the Esperanza Hills Homeowner s Association ( HOA ) in the future The City agrees that it shall cooperate with the Company to secure access over the land owned by the Travis Ranch Trusts (the Travis Ranch Property ) as necessary to construct the Main Access Road. This cooperation shall include, but not be limited to the following:

8 Consenting to agreements entered into between the Company and the owners of the Travis Ranch Trusts for the conveyance of property or an easement necessary to construct the Main Access Road Take such steps as necessary to secure the land necessary for the Main Access Road to construct a public road over the Travis Ranch Trust property through eminent domain at the sole expense of the Company. The costs of eminent domain, including all legal costs and condemnation costs shall be the sole responsibility of the Company Making a written request to the County that the County include, as a condition of approval for the Cielo Vista project currently before the County, PA , that Cielo Vista shall dedicate sufficient land to the City for the Esperanza Hills Main Access Road for use as a public road Including, as a term of any pre-annexation entered into between the City and the Travis Ranch Trusts, that property necessary for construction of a private road over the Travis Ranch Trusts property for the Esperanza Hills Main Access Road is dedicated to the City This Agreement only binds the City as to the current Project. If there are any substantial changes to the Project including alternative access routes not currently approved as part of the Project, then the City reserves any and all rights.

9 3.2 Company Obligations The Company shall continue to diligently pursue the approval of the Annexation Application the Company filed with LAFCO for the annexation of the Property into the City The Company shall provide notice of not less than sixty (60) days notice to the City prior to commencement of mass grading for Planning Area 1 of Esperanza Hills The Company hereby irrevocably consents to the annexation of the Property pursuant to the terms of this Agreement and the Annexation Application submitted pursuant to Section The Company covenants for itself, its agents, employees, contractors, heirs, successors and assigns who obtain title to the Property or portions or parcels thereof ("Successors"), to diligently pursue annexation of the Property to the City consistent with the terms of this Agreement. The Company and its Successors shall cooperate in every reasonable way with the requests of the City, LAFCO or any other public agency in any proceeding to annex the Property to the City. Said cooperation shall include, but not be limited to, the filing of all necessary applications, petitions, plans, drawings, and any other documentation or information required by the City, LAFCO or any public agency at Company's sole cost and expense The Company shall design and construct the Roads to City standards at its sole expense. The Roads shall be permitted by the City through its normal approval requirements, including, where applicable, through the Planning Commission and City Council The Company shall annex Esperanza Hills into the City of Yorba Linda Library District no later than the annexation of the Property into the City. In compliance with applicable legal requirements, the Company shall annex

10 Esperanza Hills into the City s Street Lighting and Landscaping Maintenance District The Company shall cause the Esperanza Hills HOA to assume responsibility and sole expense for maintenance of the landscaping currently maintained by the City located between the Property and Stonehaven Drive. Company shall be responsible for all modifications necessary to be completed to the irrigation system and landscaping to make it separate from the areas to remain under the City s control and maintenance and responsible for all costs related thereto, even if such modifications necessarily occur offsite from the area between the Property and Stonehaven Drive. Company, and eventually HOA, also shall take over as account holder for utilities associated with these landscaped areas The Company shall cause the Esperanza Hills HOA to assume responsibility and sole expense for maintenance of the Roads to a standard similar to other roadways within the City. If County retains control of the storm drain system, then maintenance responsibilities shall be determined by the County, but the sole responsibility of such maintenance shall be the responsibility of the Company or the HOA, and not the City The Company shall post subdivision completion bonds (the Bonds ) as required by the County prior to issuance of a grading permit, and shall agree that the City may either be named as a beneficiary under the Bonds, or may be named as a party who could make demand on the County to enforce the Bonds in the event of default by the Company. Furthermore, the Company shall post separate bonds for all work performed by Company and its agents on the City Property Upon the approval of annexation by LAFCO as provided herein and delivery of a right to extend the Main Access Road across the Travis Ranch Property if such right is not secured through private agreement between the

11 Company and the Travis Ranch Trusts or through the County entitlement process for Planning Application , the Company shall contribute the sum of Five Million Dollars ($5,000,000) (the Public Benefit Contribution ) to the City as agreed reimbursement for annexation into the City. Subject to the satisfaction of the contingencies set forth in this paragraph, the Public Benefit Contribution shall be paid to the City at the earliest of: i) issuance of grading permits by the County for any portion of the Project; or ii) or December 31, In the event Option 2B and the Main Access Road over the City Property is not authorized by the City, disallowed by a Court of competent jurisdiction, or otherwise abandoned by the Parties, then the total amount of the Company s Public Benefit Contribution shall increase to the sum of Six Million Dollars ($6,000,000), provided that the Company obtains access for the Main Access Road as provided in Option 2 Modified of the Specific Plan Payment of City Fees and Costs. Company shall pay City all of City s costs and expenses pertaining to the annexation of the Property. Company shall pay all City processing, permitting and other fees for work that is performed by the City pertaining to any aspect of the Project including but not limited to work performed on the City Property. Company shall pay all of City s attorney s fees, consultant costs (including but not limited to environmental consultants and CEQA consultants) and other reasonable costs related to the City s actions pertaining to the Project from the Effective Date of this Agreement. Company shall bear all City costs of the processing of the annexation proceedings to be conducted by LAFCO. Company further agrees to pay the cost of the City s processing of all prezoning actions and other regulatory activities pertaining to the Project Indemnity. Company agrees to indemnify, defend, and hold harmless City and its elected and appointed boards, commissions, officers, agents, and employees from and against any and all actions, suits, claims, liabilities, losses, damages, penalties, obligations, and expenses (including but not limited to attorneys fees and costs) which may arise, directly or indirectly, from the

12 acts, omissions, or operations of Company s or Company s agents, contractors, subcontractors, agents, or employees pursuant to this Agreement. City shall provide Company with notice of the pendency of any such action and request that Company defend such action. If Company fails to do so, City may defend the action and Company shall pay the cost thereof. City has already been made a party to the lawsuit Protect Our Homes and Hills et al. v. County of Orange et al., OCSC Case No ( Protect Our Homes ). Company shall pay all of City s liabilities, losses, damages, penalties, obligations, costs and expenses (including attorney s fees and costs) in the Protect Our Homes case and any other actions pertaining to the Project or the City Property, including but not limited to City costs and fees for the defense of the action from its commencement on July 2, Additionally, the Company agrees to indemnify, defend, and hold harmless City and its elected and appointed boards, commissions, officers, agents, and employees from and against any and all actions, suits, claims, liabilities, losses, damages, penalties, obligations, and expenses (including but not limited to attorneys fees and costs) which may arise, directly or indirectly, from the portion of the Main Access Road on the Travis Ranch Property and actions by the City pertaining to the Main Access Road on the Travis Ranch Property including but not limited to claims for inverse condemnation. Company shall be responsible for any and all costs, fees, and other expenses, if any, pertaining to the potential acquisition and maintenance of the portion of the Main Access Road on the Travis Ranch Property. This indemnity section shall be a burden on the Fee Property and run with the land. 3.3 Agreement Not to Challenge or Support Challenge. The Parties shall not file lawsuits or to directly or indirectly support litigation filed by others, either as a party, through financial contributions, providing staff support, or by failing to aggressively defend such litigation, that challenges the adequacy of the Esperanza Hills Final EIR or any addenda to that EIR, the approval by the County for the General Plan Update, approval of the Specific Plan or approval of the Vesting Tentative Tract Map for the Project, or any other entitlements received in connection with the Project through the County or the City. The section only

13 pertains to the Project as entitled and any substantial changes to the Project or new projects are not covered by this Section. ARTICLE 4. ANNEXATION 4.1 Defined Terms. For purposes of this Section 4, the following terms shall have the meaning set forth below: "Fully Improved means, in relation to a Unit, that the County has issued a certificate of occupancy for the single family residence (or similar evidence that the structure has received all inspections and fully complies with all laws such that there is no further unmet condition to occupancy) for such Unit. Specific Plan Planning Area 1 shall have the meaning set forth in the Specific Plan Planning Area 2 shall have the meaning set forth in the Unit means with respect to a single family residence, the legal lot or parcel and the residential housing unit located thereon. 4.2 Timing. Upon issuance of a Certificate of Occupancy for a Fully Improved Unit by the County, the Unit shall be automatically annexed into the City. Upon the recordation of the deed transferring ownership of the last Fully Improved Unit in Planning Area 1 to a single family residence purchaser, the balance of the Property in Planning Area 1 shall automatically be annexed into the City. Upon the recordation of the deed transferring ownership of the last Fully Improved Unit in Planning Area 2 to a single family residence purchaser, the balance of the Property in Planning Area 2 shall automatically be annexed into the City.

14 ARTICLE 5. DAMAGES 5.1 Remedies. Subject to the limitations herein, in the event of a breach of the Agreement, the non-breaching party may at its option institute legal action to cure, correct, or remedy such breach, enjoin any threatened or attempted violation, or enforce the terms of this Agreement by specific performance. In the event of any breach of this Agreement, the non-breaching party shall have the right to pursue against the breaching party, any and all remedies that are available at law or at equity for breach of a contractual obligation, provided however, that in no event shall Company have the right to sue City or any City officials, employees, contractors or agents for damages or monetary relief arising out of City s default of its obligations set forth in this Agreement, the Parties agreeing that declaratory and injunctive relief, mandate, and specific performance shall be Company s sole and exclusive judicial remedy. The prevailing party in any such litigation shall be entitled to its attorney s fees and costs. ARTICLE 6. GENERAL PROVISIONS 6.1 Duration. If not sooner annexed, the un-annexed portion of the Property shall be annexed into the City on the tenth (10th) anniversary of the Effective Date and this Agreement shall be terminated. 6.2 Attorneys' Fees. In the event that any Party brings any legal action to interpret or enforce any provision of this Agreement, the prevailing Party in that action shall be entitled to receive, in addition to all other available relief, costs of litigation and reasonable attorneys' fees, including expert witness fees, costs and fees incurred on appeal and in enforcing any judgment which may be rendered on the underlying action. 6.3 No Third Party Beneficiaries. Except as provided by Section 6.13, the City and the Company expressly acknowledge that they do not intend, by their execution of this Agreement, to benefit any person or entities not signatory to this

15 Agreement. Except as provided by Section 6.13, no person or entity not a signatory to this Agreement will have any rights or causes of action against the City or the Company, or any combination thereof, arising out of or due to the City's or the Company's entry into this Agreement. 6.4 Governing Law. This Agreement shall be interpreted and enforced in accordance with the provisions of California law, without regard to conflicts of laws provisions. Any litigation shall be held in a court of competent jurisdiction located in Orange County, California. 6.6 Notice. Unless otherwise permitted by this Agreement, all notices to be given shall be in writing and may be made by personal delivery, certified mail, postage prepaid and return receipt requested. Mailed notices shall be addressed to the Parties at the addresses listed below, but each party may change the address by written notice in accordance with this paragraph. Receipt will be deemed made as follows: notices delivered personally will be deemed communicated as of actual receipt; mailed notices will be deemed communicated on receipt or rejection. If to the City: City of Yorba Linda c/o City Manager 4845 Casa Loma Ave. Yorba Linda, CA With a Copy to: Todd Litfin Rutan & Tucker, LLP 611 Anton Blvd., 14 th Floor Costa Mesa, CA If to the Company: Yorba Linda Estates, LLC 7114 E. Stetson Drive #350 Scottsdale, AZ 85251

16 With a Copy to: Douglas Wymore Wedge Partners, LLC 7114 E. Stetson #350 Scottsdale, AZ Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall constitute an original. 6.8 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements, either written or oral, express or implied. 6.9 Further Acts. The parties agree to execute such additional documents and to take such further actions as are reasonably necessary to accomplish the objectives and intent of this Agreement Waiver. The failure of any Party to insist upon strict compliance with any provision of this Agreement or to exercise any right or privilege provided herein, or any Party's waiver of any breach hereunder unless in writing, shall not relieve any other Party of any of obligations hereunder, whether of the same or similar type. The foregoing shall be true whether the waiving Party's actions are intentional or unintentional Authorization to Execute. The signatories to this Agreement warrant that they have been lawfully authorized by their respective Parties to execute this Agreement on their behalf. Upon request, the Company shall deliver to the City copies of all applicable bylaws, resolutions or other documents evidencing the signatories' legal authority to execute this Agreement on behalf of the respective Parties Binding On Heirs, Successors and Assigns. The benefits and obligations described herein will inure to the benefit of and be binding upon the

17 Company and any assignee or successor in interest of the Company to the Property, the City and its respective heirs, successors, grantees, transferees and permissible assigns Recordation. A memorandum of this Agreement shall be recorded as an encumbrance against the Fee Property within ten days of the last signature required by this Agreement and a memorandum of this Agreement shall be recorded as an encumbrance against the Option Property at such time as fee title to the Option Property is acquired by the Company Warranties and Representations. The Company represents and warrants to the City that the Company is the legal title holder and owner of record of the Fee Property, has a valid and enforceable option to acquire the Option Property, and has due authority to enter into this Agreement. Furthermore, the individuals signing this Agreement on behalf of Company are authorized to sign on each respective entities behalf Severability. If any provision or clause of this Agreement or any application of it to any person, firm, organization, partnership or corporation is held invalid, such invalidity shall not affect other provisions of this Agreement which can be given effect without the invalid provision or application. To this end, the provisions of this Agreement are declared to be severable Compliance with other Rules and Regulations. The Company and its Successors shall comply with all other applicable rules and regulations of the City, the County and all other public agencies having jurisdiction over the Property. This Agreement does not abrogate, limit or modify any other of the City's rights which are provided by common law, statute, ordinance or regulation Lack Of Annexation. In the event that the Property is not annexed into the City, the Parties are not bound by the obligations of this Agreement and the Parties retain any of their respective pre-existing rights pertaining to the Project, the Property and the City Property.

18 THE CITY OF YORBA LINDA, a California municipal corporation By: Mayor Attest: City Clerk APPROVED AS TO LEGAL FORM: City Attorney YORBA LINDA ESTATES, LLC, a Arizona limited liability company By: Wedge Partners, LLC, a Arizona limited liability company, its managing member By Douglas Wymore Its Manager YORBA LINDA ESTATES NORTH, LLC, a Arizona limited liability company By: Wedge Partners, LLC, a Arizona limited liability company,

19 its managing member By Douglas Wymore Its Manager OC 33, LLC, an Arizona limited liability company By: Douglas G. Wymore Its: Manager

20 EXHIBIT A FEE PROPERTY EXHIBIT A FEE PROPERTY Parcel 1: THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF YORBA LINDA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 2, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 121 PAGES 16 AND 17 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM, ALL OIL, OIL RIGHTS, NATURAL GAS RIGHTS, MINERAL RIGHTS AND OTHER HYDROCARBON SUBSTANCES BY WHATEVER NAME KNOWN, TOGETHER WITH APPURTENANT RIGHTS THERETO, WITHOUT, HOWEVER, ANY RIGHTS TO ENTER UPON THE SURFACE OF SAID LAND NOR ANY PORTION OF THE SUBSURFACE LYING ABOVE A DEPTH OF 500 FEET, AS EXCEPTED OR RESERVED IN INSTRUMENTS OF RECORD. Parcel 2: ALL OF THAT CERTAIN REAL PROPERTY IN THE RANCHO CANON DE SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING THAT PORTION OF THE CARRILLO RANCH PROPERTY, AS SHOWN ON THE MAP FILED IN BOOK 37, PAGE 33, OF RECORD OF SURVEYS, RECORDS OF SAID COUNTY, LYING NORTHERLY OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT THE POINT ON THE EASTERLY LINE OF SAID CARRILLO RANCHO PROPERTY DISTANT NORTH WEST, FEET FROM THE INTERSECTION OF SAID EASTERLY LINE WITH THE CENTERLINE OF THE CAJON CANAL OF THE ANAHEIM UNION WATER COMPANY, AS SHOWN ON SAID MAP; THENCE NORTH WEST, FEET TO THE POINT ON THE WESTERLY LINE OF SAID CARRILLO RANCH PROPERTY DISTANT NORTH WEST, FEET FROM THE NORTHERLY LINE OF THAT ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY S FOOT STRIP OF LAND AS SHOWN ON SAID MAP. EXCEPTING THEREFROM AN UNDIVIDED 3/4 INTEREST IN AND TO ALL OIL AND OIL RIGHTS IN, ON AND APPURTENANT TO SAID LAND, AS RESERVED IN DOCUMENT RECORDED MAY 26, 1958 IN BOOK 4297, PAGE 93, OF OFFICIAL RECORDS.

21 EXHIBIT B OPTION PROPERTY THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF YORBA LINDA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 1: THE NORTH HALF OF THE SOUTHWEST QUARTER AND GOVERNMENT LOTS 3 AND 4 OF SECTION 17, TOWNSHIP 3 SOUTH, RANGE 8 WEST, SAN BERNARDINO BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT FILED IN THE DISTRICT LAND OFFICE, JULY 20, 1896.

22 STATE OF CALIFORNIA ) )ss. County of ) On this day of, 2015, before me,, personally appeared, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacities, as the authorized representative of the City of Yorba Linda, and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public My Commission Expires: STATE OF ) )ss. County of ) On this day of, 2015, before me,, personally appeared Douglas Wymore, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity as the Manager of Wedge Partners, LLC, in its capacity as the Managing Member of Yorba Linda Estates, LLC, and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public My Commission Expires:

23 STATE OF ) )ss. County of ) On this day of, 2015, before me,, personally appeared Douglas Wymore, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity as the Manager of Wedge Partners, LLC, in its capacity as the Managing Member of Yorba Linda Estates North, LLC, and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public My Commission Expires: STATE OF ) )ss. County of ) On this day of, 2015, before me,, personally appeared Douglas G. Wymore, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity as the Manager of OC 33, LLC, and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public My Commission Expires: