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HomeMy Public PortalAboutResolution - 04-47- 20041215 - Hayes Purchase 1 RESOLUTION NO. 04-47 RESOLUTION OF THE BOARD OF DIRECTORS OF MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AUTHORIZING ACCEPTANCE OF PURCHASE AGREEMENT, AUTHORIZING OFFICER OR THE GENERAL MANAGER TO EXECUTE CERTIFICATE OF ACCEPTANCE OF GRANT TO DISTRICT, AND AUTHORIZING GENERAL MANAGER TO EXECUTE ANY AND ALL OTHER DOCUMENTS NECESSARY OR APPROPRIATE TO CLOSING OF THE TRANSACTION (EL SERENO OPEN SPACE PRESERVE- LANDS OF HAYES) The Board of Directors of the Midpeninsula Regional Open Space District does resolve as follows: Section One. The Board of Directors of the Midpeninsula Regional Open Space District does hereby accept the offer contained in that certain Purchase Agreement between E. Phil Hayes& Barbara Jean Hayes, husband and wife as Trustees under the Revocable Trust Agreement dated June 20, 1996 between E. Phil Hayes & Barbara Jean Hayes as Trustors& Trustees and the Midpeninsula Regional Open Space District, a copy of which is attached hereto and by reference made a part hereof, and authorizes the President, or appropriate officers, to execute the Agreement on behalf of the District. Section Two. The General Manager, President of the Board of Directors, or other appropriate officer is authorized to execute a Certificate of Acceptance ance for the Grant Deed on behalf of the District. Section Three. The General Manager of the District shall cause to be given appropriate notice of acceptance to the seller. The General Manager is further authorized to execute any and all other documents in escrow necessary or appropriate to the closing of the transaction. Section Four. The General Manager of the District is authorized to expend up to $55,000 to cover the cost of title insurance, escrow fees, decking repairs and other miscellaneous costs related to this transaction. Section Five. The General Manager and General Counsel are further authorized to approve any technical revisions to the attached Agreement and related documents that do not involve any material change to any term of the Agreement or documents as are necessary or appropriate to the closing or implementation of this transaction. Section Six. It is intended, reasonably expected, and hereby authorized that the District's general fund will be reimbursed in the amount of$950,000.00 from the proceeds of the next long-term District note issue. This Section of this Resolution is adopted by the Board of Directors of the Midpeninsula Regional Open Space District solely for purposes of establishing compliance with the requirements of Section I.103-18 of the Treasury Regulations. The reimbursement of this payment expenditure is consistent with the District's budgetary and financial circumstances. There are no funds or sources of monies of the District that have been, or are reasonably expected to be, reserved or allocated on a long-term basis, or otherwise set aside to pay the costs of this open space land-acquisition project which are to be paid or reimbursed out of proceeds of indebtedness to be issued by the District. The Board of Directors hereby declares the District's official intent to use proceeds of indebtedness to reimburse itself for this open space land acquisition project expenditure. RESOLUTION No. 04-47 PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional Open Space District on December 15, 2004, at a Special Meeting thereof, by the following vote: AYES: J. Cyr, M. Davey, N. Hanko, P. Siemens NOES: L. Hassett, D. Little, K. Nitz ABSTAIN: None ABSENT: None ATTEST: APPROVED: S etretary President Board of Directors Board of Directors I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify that the above is a true and correct copy of a resolution duly adopted by the Board of Directors of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly held and called on the above day. Di 0* Clerk Purchase Agreement—Hayes Page I of 12 PURCHASE AGREEMENT This Agreement is made and entered into by and between E. Phil Hayes&Barbara Jean Hayes, husband and wife as Trustees under the Revocable Trust Agreement dated June 20, 1996 between E. Phil Hayes&Barbara Jean Hayes as Trustors&Trustees, called "Seller" and the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT a Public District formed pursuant to Article 3 of Chapter 3 of Division 5 of the California Public Resources Code, hereinafter called "District." RECITALS WHEREAS, Seller is the owner of certain real property which has open space and recreational value, located within an unincorporated area of the County of Santa Clara, and being more particularly described within the body of this Agreement; and WHEREAS, District was formed by voter initiative to solicit and receive conveyances of real property by purchase, exchange, gift, or bargain purchase for public park, recreation, scenic and open space purposes; and WHEREAS, District desires to purchase said property for open space preservation and as part of the ecological, recreational, and aesthetic resources of the midpeninsula area; and WHEREAS, Seller wishes to sell and convey the entirety of said property to District, and District wishes to purchase said property upon the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises and covenants herein contained,the parties hereto agree as follows: 1. Purchase and Sale. Seller agrees to sell to District and District agrees to purchase from Seller, Seller's real property located within an unincorporated area of the County of Santa Clara, State of California, containing approximately One and fifty-two hundredths (1.52) acres, more or less, and commonly referred to as Santa Clara County Assessor's Parcel Number 510-27- 007. Said property is fin-ther described in the Legal Description attached to the updated Preliminary Report, dated November 30, 2004,Number 56007-51170993-SKT from North American Title Company. A copy of said Preliminary Report is attached hereto as Exhibit "A" and incorporated herein by this reference. Said property is to be conveyed together with any easements, rights of way, or rights of use which may be appurtenant or attributable to the aforesaid lands, and any and all improvements attached or affixed thereto. All of said real property and appurtenances shall hereinafter be called the "Subject Property" or the "Property". Purchase Agreement—Hayes Page 2 of 12 2. Purchase Price. The total purchase price ("Purchase Price") for the Property shall be Nine Hundred Fifty Thousand and no Dollars ($950,000.00), which shall be paid in cash at the "Closing" as defined in Section 3 hereof. 3. Escrow. Promptly upon execution of this Agreement, in accordance with Section 11 herein, an escrow shall be opened at North American Title Company, 497 N. Santa Cruz Avenue, Los Gatos, CA, 95030 (408) 399-4100 (Escrow number 56007-51170993-SKT ) or other title company acceptable to District and Seller(hereinafter "Escrow Holder")through which the purchase and sale of the Property shall be consummated. A fully executed,copy of this Agreement shall be deposited with Escrow Holder to serve as escrow instructions to Escrow Holder, provided that the parties shall execute such additional supplementary or customary escrow instructions as Escrow Holder may reasonably require. This Agreement may be amended or supplemented by explicit additional escrow instructions signed by the parties, but the printed portion of such escrow instructions shall not supersede any inconsistent provisions contained herein. Escrow Holder is hereby appointed and instructed to deliver, pursuant to the terms of this Agreement,the documents and monies to be deposited into the escrow as herein provided, with the following terms and conditions to apply to said escrow: A. The time provided for in the escrow for the close thereof shall be on or before January 18,2005, provided however, that the parties may, by written agreement, extend the time for Closing. The term "Closing" as used herein shall be deemed to be the date when Escrow Holder causes the Grant Deed (as defined below) to be recorded in the Office of the County Recorder of Santa Clara County. B. Seller and District shall, during the escrow period, execute any and all documents and perform any and all acts reasonably necessary or appropriate to consummate the purchase and sale pursuant to the terms of this Agreement. C. Seller shall deposit into the escrow on or before the Closing: (i) an executed and recordable Grant Deed, covering the Property as described in said Exhibit "A"; and (ii) evidence reasonably satisfactory to District of the full satisfaction and discharge of all taxes, liens and assessments of whatever kind, nature or origin, including but not limited to, claims of the Montgomery Highlands Homeowners Association. D. District shall deposit into the escrow, on or before the Closing: (i) The required Certificate of Acceptance for the Grant Deed, duly executed by District and to be dated as of the Closing; and (ii) District's check payable to Escrow Holder in the amount of Nine Hundred Forty Thousand and no Dollars($940,000.00) which is the balance of the Purchase Price I t ,zG/ Purchase Agreement—Hayes Page 3 of 12 of$950,000.00 as specified in Section 2. The balance of$10,000.00 is paid into escrow in accordance with Section 12 of this Agreement. E. Seller shall pay the escrow fees, the CLTA Standard Policy of Title Insurance, if required by District, and all recording costs and fees. All other costs or expenses not otherwise provided for in this Agreement shall be apportioned or allocated between District and Seller in the manner customary in Santa Clara County. All current property taxes on the Property shall be pro-rated through escrow between District and Seller as of the Closing based upon the latest available tax information using the customary escrow procedures. F. Seller shall cause North American Title Company, or other title company acceptable to District and Seller, to be prepared and committed to deliver to District, a CLTA Standard Policy of Title Insurance, dated as of the Closing, insuring District in the amount of $950,000.00 for the Property showing title to the Property vested in fee simple in District, subject only to: (i) title exceptions 3, 4, 5, 6, 7, 8 and 10 of Exhibit A; and (ii) such additional title exceptions as may be approved in writing by District prior to the Closing as determined by District in its sole and absolute discretion. G. Escrow Holder shall, when all required funds and instruments have been deposited into the escrow by the appropriate parties and when all other conditions to Closing have been fulfilled, cause the Grant Deed and attendant Certificate of Acceptance to be recorded in the Office of the County Recorder of Santa Clara County. Upon the Closing, Escrow Holder shall cause to be delivered to District the original of the policy of title insurance required herein, and to Seller Escrow Holder's check for the full purchase price of the Subject Property(less Seller's portion of the expenses described in Section 3.E.), and to District or Seller, as the case may be, all other documents or instruments which are to be delivered to them. In the event the escrow terminates as provided herein, Escrow Holder shall return all monies, documents or other things of value deposited in the escrow to the party depositing the same. 4. Rights and Liabilities of the Parties in the Event of Termination. In the event this Agreement is terminated and escrow is canceled for any reason, all parties shall be excused from any further obligations hereunder, except as otherwise provided herein. Upon any such termination of escrow, all parties hereto shall be Jointly and severally liable to Escrow Holder for payment of its title and escrow cancellation charges(subject to rights of subrogation against any party whose fault may have caused such termination of escrow), and each party expressly reserves any other rights and remedies which it may have against any other party by reason of a wrongful termination or failure to close escrow. 5. Leases or Occupancy of Premises. Seller warrants that there exist no oral or written leases or rental agreements affecting all or any portion of the Subject Property. Seller further warrants and agrees to hold District free and harmless and to reimburse District for any and all costs, liability, loss, damage or expense, including costs for legal services, occasioned by reason of any such lease or rental agreement of the Property being acquired by District, including, but not limited to, claims for relocation benefits and/or payments pursuant to California Purchase Agreement—Hayes Page 4 of 12 Government Code Section 7260 et seq. Seller understands and agrees that the provisions of this paragraph shall survive the close of escrow and recordation of any Grant Deed. 6. Seller's Representations and Warranties. For the purpose of consummating the sale and purchase of the Property in accordance herewith, Seller makes the following representations and warranties to District, which shall survive close of escrow, each of which is material and is being relied upon by District. A. Authority. Seller has the RW right, power and authority to enter into this Agreement and to perform the transactions contemplated hereunder. B. Valid and Binding Agreements. This Agreement and all other documents delivered by Seller to District now or at the Closing have been or will be duly authorized and executed and delivered by Seller and are legal, valid and binding obligations of Seller sufficient to convey to District the Subject Property described therein, and are enforceable in accordance with their respective terms and do not violate any provisions of any agreement to which Seller is a party or by which Seller may be bound or any articles, bylaws or corporate resolutions or partnership requirements of Seller. C. Good Title. Seller has and at the Closing date shall have good, marketable and indefeasible fee simple title to the Subject Property and the interests therein to be conveyed to District hereunder, free and clear of all hens and encumbrances of any type whatsoever and free and clear of any recorded or unrecorded option rights or purchase rights or any other right, title or interest held by any third party except for the exceptions permitted under the express terms hereof and Seller shall forever indemnify and defend District from and against any claims made by any third party which are based upon any inaccuracy in the foregoing representations, including, without limitation, any claims, demands, hens or assessments of the Montgomery Highlands Homeowners Association. 7. Integrity of Property. Except as otherwise provided herein or by express written permission granted by District, Seller shall not, between the time of Seller's execution hereof and the close of escrow, cause or allow any physical changes on the Property. Such changes shall include but not be limited to grading, excavating or other earthmoving activities, cutting or removing trees, shrubs, brush or other vegetation, and damaging or demolition of improvements or structures on the Property. 8. As-Is Purchase and Sale. This sale is made without representation or warranty by Seller, except as expressly set forth in this Agreement. Seller has provided District with copies of all reports and documents in its possession regarding the improvements,physical, geologic and environmental condition of the Property("Disclosure Documents") known to Seller for District's inspection and review. District acknowledges that Seller has delivered to District the reports and documents listed in this Section, and that this list does not relieve Seller of its obligation to provide District with all Disclosure Documents known to it. Seller does not represent or warrant the accuracy of any information in the following reports, and is presenting them to the District Purchase Agreement—Hayes Page 5 of 12 merely as part of the Seller's disclosure of reports Seller has in its possession as described above. The Disclosure Documents are as follows: Property Real Estate Transfer Disclosure Statement District represents, warrants, acknowledges and agrees that it has had fiffl and ample opportunity prior to the execution of this Agreement to investigate the Property, including but not limited to the physical condition thereof,the presence, absence or condition of improvements thereon, the suitability of the Property for any purpose,the compliance of the Property for any purpose, the compliance of the Property with applicable laws, the condition of the soil, water, vegetation, any water courses or bodies of water in, on or adjacent to the Property, and the surroundings of the Property, and that District shall purchase the Property AS-IS WITH ALL FAULTS. Except as expressly set forth in this Agreement, Seller expressly disclaims any representations or warranties concerning any of the foregoing matters. District represents and warrants to Seller that District has made visual inspections of the Property and such geologic, soils and other tests as District deems appropriate, and that District accepts the condition of the Property as set forth above. 9. Hazardous Waste. A. Definitions. The term"Hazardous Waste," as used herein, means any substance, material or other thing regulated by or pursuant to any federal, state or local environmental law by reason of its potential for harm to human health or the environment because of its flammability, toxicity, reactivity, corrosiveness or carcinogenicity. The term "Hazardous Waste" also includes without limitation, polychlorinated biphenyls, benzene, asbestos, petroleum, petroleum by-products, gas, gas liquids and lead. The term "Environmental Law" as used herein includes, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980(42 U.S.C. Section 9601 et seq.) and the Resource Conservation and Recovery Act(42 U.S.C. Section 6901 et seq.) B. Representations and Warranties. For the purpose of consummating the sale and purchase of the Property, Seller makes the following representations and warranties to District, which shall survive close of escrow, each of which is material and is being relied upon by District: (i) To Seller's knowledge the Property does not contain and has not previously contained any Hazardous Waste or underground storage tanks, and no Hazardous Waste has been or is being used, manufactured, handled, generated, stored, treated, discharged, present, buried or disposed of on, under or about the Property, or transported to or from the Property, nor has Seller undertaken, permitted, authorized or suffered any of the foregoing; (h) Seller has not received any notice and Seller has no knowledge that any private person or governmental authority or administrative agency or any employee or agent thereof has determined, alleged or commenced or threatened to commence any litigation, or other proceedings, to determine that there is a presence, release, threat of release,placement on, under or about the Property, or the use, manufacture, handling, generation, storage, treatment, Purchase Agreement—Hayes Page 6 of 12 discharge, burial or disposal on, under or about the Property, or the transportation to or from the Property, of any Hazardous Waste, nor has Seller received any communication from any such person or governmental agency or authority concerning any such matters. C. Indemnity. Seller shall indemnify, defend and hold harmless District from and against and all claims, liabilities, losses, damages, and costs incurred or suffered by District, including without limitation, attorney, engineering and other professional or expert fees, to the extent arising from any breach of the warranties or representations contained herein, including, without Imitation, any claims, demands, liens or assessments of the Montgomery Highlands Homeowners Association. 10. Waiver of Relocation Benefits and Statutory Compensation. Seller and District understand and agree that Seller may be entitled to receive certain relocation benefits and the fair market value of the Property described in Exhibit "A", as provided for by the Federal Uniform Relocation Assistance and Real Property Acquisition Act of 1970 (Public Law 91-646), the Uniform Relocation Act Amendments of 1987 (Public Law 100-17, Title IV of the Surface Transportation and Uniform Relocation Assistance Act of 1987 (101 Statutes, 246-256) (42 U.S.C. '4601 et seq.), and the California Relocation Assistance Act, Government Code Section 7260 et seq. Seller hereby waives any and all existing and/or future claims or rights Seller may have to any relocation assistance, benefits,procedures, or policies as provided in said laws or regulations - adopted there under and to any other compensation, except as provided in this Agreement. Seller has been advised as to the extent and availability of such benefits, procedures, notice periods, and assistance, and freely and knowingly waives such claims, rights and notice periods except as set forth in this Agreement, including the fair market value of said Property, as provided for by said Federal Law and any similar California Law. 11. Miscellaneous Provisions. A. Access for Investigations. From the date Seller delivers an executed copy of this Purchase Agreement to District and until the Closing, District and District's agents, lender, contractors, engineers, consultants, employees, subcontractors and other representatives(the "District Parties") may, upon the giving of reasonable advance written notice to Seller, enter upon the Property for the purpose of inspecting,testing and evaluating the same; provided, however, that District may not perform any work on the Property without Seller's prior written consent, which shall not be unreasonably withheld or delayed and further provided that District shall give Seller at least 24 hours' prior notice of each proposed entry by District. District shall indemnify, protect, defend and hold Seller free and harmless from and against any and all claims, actions, causes of action, suits, proceedings, costs, expenses(including, without limitation, reasonable attorneys' fees and costs), liabilities, damages, and liens caused by the activities of District Parties while upon the Property prior to the Closing;provided, however, the foregoing indemnity shall not cover or include any claims, damages or liens resulting from District's discovery of any Hazardous Waste or other pre-existing adverse conditions pursuant to its inspections, testing or evaluation. District's inspections shall be at District's sole expense. District shall repair any damage to the Property that may be caused by the District Parties while on the Property performing its inspections. —A Purchase Agreement—Hayes Page 7 of 12 B. Choice of Law. The internal laws of the State of California, regardless of any choice of law principles, shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties. C. Attorneys'Fees. If either party hereto incurs any expense, including reasonable attorneys' fees, in connection with any action, proceeding or arbitration instituted by reason of any default or alleged default of the other party hereunder, the party prevailing in such action or proceeding shall be entitled to recover from the other party reasonable expenses and attorneys' fees in the amount determined by the Court, whether or not such action, proceeding or arbitration goes to final judgment. In the event of a settlement or final Judgment in which neither party is awarded all of the relief prayed for, the prevailing party as determined by the Court shall be entitled to recover from the other party reasonable expenses and attorneys' fees. D. Amendment and Waiver. The parties hereto may by mutual written agreement amend this Agreement in any respect. Any party hereto may in writing: (i)extend the time for the performance of any of the obligations of the other party; (ii)waive any inaccuracies in representations and warranties made by the other party contained in this Agreement or in any documents delivered pursuant hereto; (iii)waive compliance by the other party with any of the covenants contained in this Agreement or the performance of any obligations of the other party; or(iv) waive the fulfillment of any condition that is precedent to the performance by such party of any of its obligations under this Agreement. The General Manager is authorized to agree to an extension of the time for the performance of any obligations on the part of District or Seller pursuant to this Agreement, and to take any actions and execute any documents necessary or appropriate to closing escrow and completing this conveyance, including execution of any documents which may allow Seller to accomplish a tax deferred exchange of property as permitted by law; provided, however that the District shall not take title to any third party property other than the Subject Property. Any agreement on the part of any party for any such amendment, extension or waiver must be in writing. E. Tax-Deferred Exchange. If Seller desires to effect a tax-deferred exchange pursuant to Internal Revenue Code Section 1031, then District shall cooperate with Seller to effect such exchange, provided that: (i)the date for the Close of Escrow set forth in this Agreement shall not be delayed; (ii) District shall incur no additional expense or liability by reason of such cooperation; (iii) District shall not be required to acquire title to any property in order to effect such exchange; and(iv) Seller shall indemnify and hold District harmless from and against all costs, damages, claims, actions, causes of action, liabilities and expenses (including the reasonable attorneys'fees of counsel chosen by District), arising out of or related to District's participation in such exchange. District hereby disclaims any responsibility for the qualification of the transactions contemplated by this Agreement as a tax-deferred exchange under Internal Revenue Code Section 1031, as amended, and Seller agrees that District shall not be liable for any tax liability, interest or penalties arising thereunder by virtue of District's cooperation in the consummation of any such exchange or attempted exchange. Purchase Agreement—Hayes Page 8 of 12 F. Rights Cumulative. Each and all of the various rights, powers and remedies of the parties shall be considered to be cumulative with and in addition to any other rights,powers and remedies which the parties may have at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise or partial exercise of any right, power or remedy shall neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party. G. Notices. Whenever any party hereto desires or is required to give any notice, demand, or request with respect to this Agreement (or any Exhibit hereto), each such communication shall be in writing and shall be deemed to have been validly served, given or delivered at the time stated below if deposited in the United States mail, registered or certified and return receipt requested, with proper postage prepaid, or if delivered by Federal Express or other private messenger, courier or other delivery service or sent by facsimile transmission by telex, telecopy, telegraph or cable or other similar electronic medium, addressed as indicated as follows: Seller: Phil &Barbara Hayes 4000 N. Rodeo Gulch Road Soquel, CA 95073 (831)479-3636 District: Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022 Attn: L. Craig Britton, General Manager (650) 691-1200 FAX: (650) 691-0485 If sent by telegraph, facsimile copy or cable, a confirmed copy of such telegraphic, facsimile or cabled notice shall promptly be sent by mail(in the manner provided above) to the addressee. Service of any such communication made only by mail shall be deemed complete on the date of actual delivery as indicated by the addressee's registry or certification receipt or at the expiration of the third (3rd) business day after the date of mailing, whichever is earlier in time. Either party hereto may from time to time, by notice in writing served upon the other as aforesaid, designate a different mailing address or a different person to which such notices or demands are thereafter to be addressed or delivered. Nothing contained in this Agreement shall excuse either party from giving oral notice to the other when prompt notification is appropriate, but any oral notice given shall not satisfy the requirement of written notice as provided in this Section. H. Severability. If any of the provisions of this Agreement are held to be void or unenforceable by or as a result of a determination of any court of competent jurisdiction, the decision of which is binding upon the parties, the parties agree that such determination shall not result in the nullity or unenforceability of the remaining portions of this Agreement. The parties further agree to replace such void or unenforceable provisions which will achieve,to the extent possible, the economic, business and other purposes of the void or unenforceable provisions. Purchase Agreement—Hayes Page 9 of 12 I. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed as an original, and when executed, separately or together, shall constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument. J. Waiver. No waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement. t ' intended b the parties to be the final K. Entire Agreement. This Agreement �s y expression of their agreement; it embodies the entire agreement and understanding between the parties hereto; it constitutes a complete and exclusive statement of the terms and conditions thereof; and it supersedes any and all prior correspondence, conversations, negotiations, agreements or understandings relating to the same subject matter. f the essence of each provision of this L. Time of Essence. Time is o s Agreement in which time is an element. M. Survival of Covenants. All covenants of District or Seller which are expressly intended hereunder to be performed in whole or in part after the Closing, and all representations and warranties by either party to the other, shall survive the Closing and be binding upon and inure to the benefit of the respective parties hereto and their respective heirs, successors and permitted assigns. N. Assi gnment.ient. Except as expressly permitted herein, party th is Agreement shall assign its rights or obligations under this Agreement to any third party without the prior written approval of the other party. O. Further Documents and Acts. Each of the parties hereto agrees to execute and deliver such further documents and perform such other acts as may be reasonably necessary or appropriate to consummate and carry into effect the transactions described and contemplated under this Agreement. I P. Binding on Successors and Assigns. This Agreement and all of its terms, conditions and covenants are intended to be fully effective and binding, to the extent permitted by law, on the successors and permitted assigns of the parties hereto. Q. Broker's Commission. District shall not be responsible for any real estate commission or other related costs or fees in this transaction. Seller agrees to and does hereby indemnify and hold District harmless from and against any and all costs, liabilities, losses, damages, claims, causes of action or proceedings which may result from any broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of Seller in connection with this transaction. �zV, f Purchase Agreement—Hayes Page 10 of 12 R. Captions. Captions are provided herein for convenience only and they form no part of this Agreement and are not to serve as a basis for interpretation or construction of this Agreement, nor as evidence of the intention of the parties hereto. S. Pronoun References. In this Agreement, if it be appropriate, the use of the singular shall include the plural, and the plural shall include the singular, and the use of any gender shall include all other genders as appropriate. T. Arbitration of Disputes. If a dispute arises out of or relates to this Agreement or the performance or breach thereof,the parties agree first to participate in non- binding mediation in order to resolve their dispute. If the parties are unable to resolve their dispute through mediation, or if there is any remaining unresolved controversy or claim subsequent to mediation, any remaining unresolved controversy or claim shall be settled by binding arbitration. The parties shall jointly select one arbitrator who shall be a retired or former judge of the Superior Court of California. The arbitration shall be conducted in accordance with the rules set forth in California Code of Civil Procedure Sections 1280 et. seq. including the right of discovery. Hearings shall be held in Santa Clara County, California. If the parties are unable to agree upon an arbitrator, the arbitration shall be conducted by Judicial Arbitration and Mediation Services, Inc. in accordance with the rules thereof If arbitration is required to resolve a dispute, it shall in all cases be final and binding. NOTICE. BY INITIALING IN THE SPACE BELOW, YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING FROM THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW,YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO APPEAL UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE"ARBITRATION OF DISPUTES" PROVISION. III IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION,YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING FROM THE MATTER INCLUDED IN THE "ARBITRATION OF DISPUTES PROVISION TO NEUTRAL ARBITRATION. SELLER INITIAL . . DISTRICT INITIAL 12. Acceptance. Provided that this Agreement is executed by Seller and delivered to District on or before December 14, 2004, District shall have until midnight December 15, 2004 to acc ept t and execute this Agreement, and during said Period this instrument shall constitute an Purchase Agreement—Hayes Page 11 of 12 irrevocable offer by Seller to sell and convey the Property to District for the consideration and under the terms and conditions herein set forth. Said offer shall remain irrevocable during this period without the necessity of execution and acceptance of this Purchase Agreement by District. As consideration for said irrevocable offer and in anticipation of execution hereof by the District, District has paid into escrow and Seller acknowledges receipt of the sum of Ten Thousand Dollars and No/100 ($10,000.00), which shall be applied to the Purchase Price as set forth in Section 2 hereof. In the event this Agreement is not accepted and executed by the District, said sum of Ten Thousand Dollars and No/100 ($10,000.00) shall be returned to the District. Provided that this Agreement is accepted by District, this transaction shall close as soon as practicable in accordance with the terms and conditions set forth herein. /// /// HI HI /I/ IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers to be effective as of the date of final execution by District in accordance with the terms hereof. DISTRICT: SELLER: MIDPENINSULA REGIONAL OPEN E. Phil Hayes & Barbara Jean Hayes, SPACE DISTRICT husband and wife as Trustees under the Revocable Trust Agreement dated June 20, 1996 between E. Phil Hayes & Barbara Jean Hayes as Trustors & Trustees ACCEPTED FOR RECOMMENDATION �-" A�- 9s T.CvsT�� (Name) rvvj" C uD Date: Michael C. Williams, Real Property Manager (Name) APPROVED AS TO FORM: Date: --2��o� Purchase Agreement—Hayes Page 12 of 12 Susan M. Schectman, General Counsel RECO ED FOR APPROVAL: L. Craig Britton, General Manager APPROVED AND ACCEPTED: i1/4a President Board of Directors ATTEST: District C Date: 0 (FI II l • i �1NORTH AMERICAN DIRECT ALL INQUIRIES TO: IMMICOMPAW IME Escrow Officer: Susan K. Trovato Telephone No.: (408)399-4100 Our No.: 56007-51170993-SKT Mid-Peninsula Open Space District Attn: Mike Williams 330 Distel Circle Los Altos CA 94022-1404 Property Address: 16075 Overlook Drive Los Gatos, CA Update No. 1 Preliminary Report IN RESPONSE TO THE ABOVE REFERENCED APPLICATION FOR A POLICY OF TITLE INSURANCE, North American Title Company, Inc. 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 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 EXCLUSION FROM THE COVERAGE OF SAID POLICY OR POLICIES ARE SET FORTH ON THE ATTACHED COVER, 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 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 TITLE AND MAY NOT LIST ALL LIENS, DEFECTS, AND ENCUMBRANCES AFFECTING TITLE TO THE LAND. THIS REPORT (AND ANY SUPPLEMENTS OR AMENDMENTS THERETO) 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. Dated as of November 30,2004 Pam Thompson/tw/ep at 07:30 am Title Officer EXHIBIT A 497 N. Santa Cruz Avenue, Los Gatos, CA 95030 Phone No.: (408)399-4100 Fax No.: (408)354-3212 The form of policy of title insurance contemplated by this report is: 1998-ALTA/CLTA Homeowner's Coverage The estate or interest in the land hereinafter described or referred to covered by this report is: A fee Title to said estate or interest at the date hereof is vested in: E. Phil Hayes and Barbara Jean Hayes, husband and wife as Trustees under Revocable Trust Agreement dated June 20, 1996 between E. Phil Hayes and Barbara Jean Hayes as Trustors and Trustees i Page 2 Order No.: 56007-51170993-SKT Description: The land referred to herein is situated in the State of California, County of Santa Clara, Unincorporated Area, and Is described as follows: PARCEL ONE: PORTION OF SECTION 18, TOWNSHIP 8 SOUTH, RANGE I WEST, M.D.B. & M., DESCRIBED AS FOLLOWS: BEGINNING AT AN IRON PIPE IN THE CENTER LINE OF A 60.00 FOOT EASEMENT KNOWN AS OVERLOOK DRIVE AT THE SOUTHWESTERLY CORNER OF THE CERTAIN 1.89 ACRE TRACT OF LAND DESCRIBED IN THE DEED TO MARK COX,A WIDOWER, RECORDED SEPTEMBER 2, 1949, BOOK 1841 OFFICIAL RECORDS, PAGE 429;THENCE FROM SAID POINT OF BEGINNING ALONG SAID CENTERLINE OF OVERLOOK DRIVE S. 9' 51'W., 150.00 FEET TO AN IRON PIPE AND S. 0- 36-W., 147.20 FEET TO AN IRON PIPE;THENCE S. 89*40' E., 218.62 FEET TO AN IRON PIPE IN THE CENTERLINE OF A 60.00 FOOT EASEMENT KNOWN AS LITTLEBROOK DRIVE;THENCE ALONG SAID LAST NAMED CENTERLINE N.6*48'30-E., 117.40 FEET TO AN IRON PIPE AND N.2- 18' E., 179.65 FEET TO AN IRON PIPE AT THE SOUTHEASTERLY CORNER OF SAID 1.89 ACRE TRACT;THENCE N. 89* 57'W.,ALONG THE SOUTHERLY LINE OF SAID 1.89 ACRE TRACT, 212.59 FEET TO THE POINT OF BEGINNING. PARCEL TWO: AN EASEMENT FOR INGRESS AND EGRESS OVER A PORTION OF SECTION 18, TOWNSHIP 8 SOUTH, RANGE 1 WEST, M.D.B. & M.,AND A PORTION OF LOT 41, MAP NO.2 OF THE W.S. CLAYTON, J.R. CHACE, E. SHILLINGSBURG AND J. P. DORRANCE SUBDIVISION OF PART OF THE GLEN UNA RANCH, FILED FEBRUARY 9, 1921 BOOK P OF MAPS PAGE 53, SANTA CLARA COUNTY RECORDS, BEING A STRIP OF LAND 60 FEET WIDE,THE CENTERLINE OF WHICH IS DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF OVERLOOK DRIVE WITH THE CENTERLINE OF BAINTER AVENUE, AS SHOWN ON MAP OF RECORD OF SURVEY OF A PORTION OF SECTION 18,TOWNSHIP 8 SOUTH, RANGE I WEST, M.D.B. & M. FILED MARCH 14, 1947, BOOK 14 OF MAPS, PAGE 4, SANTA CLARA COUNTY RECORDS,THENCE FROM SAID POINT OF BEGINNING S. 36-28'30-W.,ALONG SAID CENTERLINE OF OVERLOOK DRIVE, 191.00 FEET;THENCE ON A CURVE TO THE LEFT WITH A RADIUS OF 127.84 FEET THROUGH AN ANGLE OF 50* 17' FOR A DISTANCE OF 112.20 FEET;THENCE S. 13*48'30"W.,90.96 FEET;THENCE S. 38-45' E., 121.20 FEET; THENCE S. 9* 14'E., 97.10 FEET;THENCE S. 17' 10'W., 126.58 FEET; THENCE S. 550 34' E., 128.69 FEET; THENCE S. 2*48'E., 116.53 FEET;THENCE S. 190 59' E., 178.20 FEET; THENCE S.47'30'W., 160.12 FEET;THENCE S. 34*47'W., 155.70 FEET;THENCE S. 9- 51'W., 234.40 FEET TO AN IRON PIPE;THENCE S. 0*36'W., 147.20 FEET TO AN IRON PIPE AT THE TERMINUS OF SAID EASEMENT. (THE EFFECT, IF ANY, OF A QUITCLAIM DEED FOR THE HEREINABOVE DESCRIBED EASEMENT TO MIDPENINSULA REGIONAL OPEN SPACE DISTRICT, RECORDED DECEMBER 21, 2000, INSTRUMENT NO. 15502689) PARCEL THREE: AN EASEMENT FOR INGRESS AND EGRESS OVER A PORTION OF SECTION 18, TOWNSHIP 8 SOUTH, RANGE 1 WEST, M.D.B. & M., BEING A STRIP OF LAND 60 FEET WIDE,THE CENTERLINE OF WHICH IS DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEASTERLY CORNER OF PARCEL ONE ABOVE DESCRIBED IN THE CENTERLINE OF LITTLEBROOK DRIVE,AS SHOWN ON MAP OF RECORD OF SURVEY A Page 3 Order No.: 56007-51170993-SKT PORTION OF SECT. 18 T. 8 S. R. I W., M.D.B. & M., FILED JULY 20, 1949, BOOK 23 OF MAPS, PAGE 31, SANTA CLARA COUNTY RECORDS, THENCE FROM SAID POINT OF BEGINNING ALONG SAID CENTERLINE OF LITTLEBROOK DRIVE, N. 6-48'30-E., 117.40 FEET TO AN IRON PIPE; N. 20 18' E., 179.65 FEET TO AN IRON PIPE; N. 9*59'W., 71.73 FEET THENCE ON A CURVE TO THE RIGHT WITH A RADIUS OF 152.28 FEET THROUGH AN ANGLE OF 21*02'FOR A DISTANCE OF 55.90 FEET;THENCE CONTINUING ON A CURVE TO THE RIGHT WITH A RADIUS OF 75 FEET THROUGH AN ANGLE OF 590 38'FOR A DISTANCE OF 78.06 FEET; RUNNING THENCE N. 700 41, E.,41.67 FEET;THENCE ON A CURVE TO THE LEFT WITH A RADIUS OF 100 FEET THROUGH AN ANGLE OF 39* 17' FOR A DISTANCE OF 68.56 FEET;THENCE N. 31* 24'E., 136.15 FEET TO AN IRON PIPE; THENCE ON A CURVE TO THE LEFT WITH A RADIUS OF 60 FEET THROUGH AN ANGLE OF 1320 57'30"FOR A DISTANCE OF 139.23 FEET TO AN IRON PIPE; THENCE S. 78'26' 30-W., 58.43 FEET TO AN IRON PIPE;THENCE ON A CURVE TO THE RIGHT WITH A RADIUS OF 66.82 FEET THROUGH AN ANGLE OF 940 35'FOR A DISTANCE OF 110.30 FEET TO AN IRON PIPE; THENCE N. 60 58'30-W., 106.35 FEET TO AN IRON PIPE AND N. 62-08'30-W., 170.22 FEET TO AN IRON PIPE SET AT THE POINT OF INTERSECTION OF SAID CENTERLINE OF LITTLEBROOK DRIVE IN THE CENTERLINE OF OVERLOOK DRIVE, AS SHOWN ON SAID RECORD OF SURVEY MAP ABOVE REFERRED TO. APN: 510-27-007 ill III Page 4 Order No.: 56007-51170993-SKT At the date hereof exceptions to coverage in addition to the printed exceptions and exclusions contained In said policy form would be as follows: 1 General and Special Property Taxes, and any assessments collected with taxes, including utility assessments,for the fiscal year 2004-2005. Total Amount: $1,010.92 First Installment: $505.46 Due Second Installment: $505.46 Payable Land: $34,432.00 Improvements: $46,133.00 Code Area: 60-022 Parcel Number: 510-27-007 2. The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions of Chapter 3.5 (commencing with Section 75)of the Revenue and Taxation Code of the State of California. 3. Rights of the public, county and/or city in that portion lying within the street as it now exists: Overlook Drive and Little Brook Drive. 4. Terms, Covenants, Conditions and Provisions contained in an instrument Entitled: Agreement Executed By: San Jose Water Works And Between: H.B. Finch Recorded: March 26, 1920 Book: 506 Page: 379 Reference is made to said document for full particulars. 5. An easement affecting the portion of said land and for the purpose stated herein, and incidental purposes. In Favor of: Mark Cox, a widower No representation is made as to the present ownership of said easement. Purpose: Ingress and egress Recorded: September 2, 1949 Instrument No.: 591588 Book: 1841 Page: 479 Affects: A portion of land described in said document Page 5 Order No.: 56007-51170993-SKT / G. An easement affecting the portion of said land and for the purpose stated herein, and incidental purposes. | |n Favor of: PooifioGas and Electric Company, aCalifornia � corporation No representation io made aotm the present ownership of said easement. | Purpose: To construct, install, inspect, maintain, replace, remove � and use facilities Recorded: January 3. 1085 Instrument No.: 8284173 Book: J1GO Page: 392 Affects: Portion of said land ' 7. An easement affecting theportion of said land and for the purpose stated herein, and incidental purposes. � |n Favor of: San Jose Water Company,o California corporation Nm representation |m made osto the present ownership of said easement. � | Purpose: The provision mf domestic water service Recorded: December 22. 2OOQ Instrument No.: 15504383 Affects: A portion of the premises | Subject bo the terms, provisionsendoonditionncontminedthmren. 8. An easement affecting the portion of said land and for the purpose stated herein, and incidental purposes. ' | |n Favor of: San Jose Water Works,a California corporation � No representation im made mmbm the present ownership of said easement. ! � Purpose: Ingress and egress and the right and privilege in � excavating for and laying pipe|inem � Recorded: December 23. 2ODO � Instrument No.: 15505094 | Affects: A portion of the premises Subject to the terms, provisions and conditions contained therein. � ! � | � � � � | ' � � � � Page Order No.: 56007-51170093-SNT 9. A Deed of Trust to secure an indebtedness in the amount shown below and any other obligations secured thereby. Amount: $260,800.00 Dated: July 3, 2003 Trustor: E. Phil Hayes and Barbara Jean Hayes, husband and wife, as Trustees under Revocable Trust Agreement dated June 20, 1996, Between E. Phil Hayes and Barbara Jean Hayes, as Trustors and Trustees Trustee: Executive Trustee Services, Inc. Beneficiary: GMAC Mortgage Corporation DBA Ditech.com Recorded: July 25,2003 Instrument No.: 17220614 Loan No: 000654644614 Beneficiary Mailing Address: 3200 Park Center Dr., Suite 150, Costa Mesa, CA 92626 10. The effect, if any, of any discrepancies in the legal description, or any other matters, as disclosed by record of survey filed October 25, 2004, in Book 777 of Maps at Page 3,which include the following: The encroachment of the house and wood deck onto Overlook Drive 11. Any invalidity or defect in the title of the vestees in the event such trust is invalid or fails to confer sufficient powers in the trustees, or in the event there is a lack of compliance with the terms and provisions of the trust instrument. This company will require a Certification of Trust(pursuant to California Probate Code Section 18100.5)from the current trustee(s)stating said trust is in full force and effect and there have been no changes except as set forth. 12. This report is incomplete. We will require a Statement of Information from the parties indicated below ,five 5 to closing, report,in order to complete this based on the effect of � 1 days Y prior 9 documents, proceedings, liens, decrees,or other matters which do not specifically describe said land, but which if any do exist, may affect the title or impose liens or encumbrances thereon. Seller/Owner: E. Phil Haves & Barbara Jean Hayes The Statement of Information is necessary to complete the search and examination of title under this order. Any title search includes matters that are indexed by name only, and having a completed Statement of Information assists the Company in the elimination of certain matters which appear to involve the parties, but in fact affect another party with the same or similar name. Be assured that the Statement of Information is essential and will be kept strictly confidential to this file. i Page 7 Order No.: 56007-51170993-SKT INFORMATIONAL NOTES: A. There is located on said land a single family dwelling known as 16075 Overlook Drive, Los Gatos, CA. B. There are no conveyances affecting said land recorded within twenty-four (24) months of the date of this report. C. This charge for a policy of title insurance, if issued through this title order, will be based on the basic insurance rate. D. Note: Effective March 1, 1979 there will be an additional $10.00 fee for recording a deed with a legal description other than an entire lot in a recorded final map. If there are any questions, please call your Escrow Officer or Title Officer. E. Pursuant to Section 12413.1 of the insurance code funds deposited in escrow must be held for the following time periods before they can be disbursed: 1 Cash or wired funds—available for immediate disbursal after deposit in bank or confirmation of receipt in account. Bear in mind that Cash will be accepted from customers only under special circumstances,as individually approved by management. 2. Cashier checks,certified checks, tellers checks—next day available funds. 3. All other checks must be held in accordance with regulation CC adopted by the Federal Reserve Board of Governors before they must be disbursed. 4. Drafts must be collected before they may be disbursed. North American Title Company will not be responsible for accruals of interest or other charges resulting from compliance with the disbursement restrictions imposed by state law. For Your Information, Our Wire Instructions Are: Wire To: Credit The Account of: Comerica Bank North American Title Company 333 W. Santa Clara Street Bank Account No.: 1892518109 San Jose, CA 95113 Escrow No.: 56007-51170993-SKT Routing No.: 121137522 Branch/County No.: 560-07 Attn: Susan K.Trovato Important note regarding wiring funds: • ACH Funds—Automatic Clearing House North American Title Company will not accept funds in the form of ACH transfers. F. North American Title Company, Inc's charges for recording the transaction documents include charges for services performed by North American Title Company, Inc., in addition to an estimate of payments to be made to governmental agencies. Page 8 Order No.: 56007-51170993-SKT GOOD FUNDS LAW CALIFORNIA ASSEMBLY BILL 512 ("AB512") IS EFFECTIVE ON JANUARY 1, 1990. UNDER AB512, NORTH AMERICAN TITLE COMPANY, INC. ("NORTH AMERICAN TITLE COMPANY, INC.") MAY ONLY MAKE FUNDS AVAILABLE FOR MONETARY DISPERSAL IN ACCORDANCE WITH THE FOLLOWING RULES: SAME DAY AVAILABILITY - DISBURSEMENT ON THE DATE OF DEPOSIT IS ALLOWED ONLY WHEN FUNDS ARE DEPOSITED TO NORTH AMERICAN TITLE COMPANY ("NORTH AMERICAN TITLE COMPANY, INC.") IN CASH OR BY ELECTRONIC TRANSFER (WIRE). BEAR IN MIND THAT CASH WILL BE ACCEPTED FROM CUSTOMERS ONLY UNDER SPECIAL CIRCUMSTANCES AS INDIVIDUALLY APPROVED BY MANAGEMENT. ' NEXT DAY AVAILABILITY - IF FUNDS ARE DEPOSITED TO NORTH AMERICAN TITLE COMPANY, INC. BY CASHIER'S CHECKS, CERTIFIED CHECKS, OR TELLER'S CHECKS, DISBURSEMENT MAY BE ON THE NEXT BUSINESS DAY FOLLOWING DEPOSIT. A 'TELLER'S CHECK" IS ONE DRAWN BY AN INSURED FINANCIAL INSTITUTION AGAINST ANOTHER INSURED FINANCIAL INSTITUTION (E.G., A SAVINGS AND LOAN FUNDING WITH A CHECK AGAINST A FDIC INSURED BANK). ` 2-5 DAY AVAILABILITY (REGULATION CC). IF THE DEPOSIT IS MADE BY CHECKS OTHER THAN THOSE DESCRIBED IN PARAGRAPHS 1 AND 2 ABOVE, DISBURSEMENT MAY OCCUR ON THE DAY WHEN FUNDS MUST BE MADE AVAILABLE TO DEPOSITORS UNDER FEDERAL RESERVE REGULATION CC. THIS REQUIRES A"HOLD"ON SOME CHECKS OF 2-5 DAYS OR LONGER IN SOME INSTANCES. PERSONAL CHECKS, DRAFTS, PRIVATE CORPORATION AND COMPANY CHECKS, AND FUNDING CHECKS FROM MORTGAGE COMPANIES THAT ARE NOT TELLER'S CHECKS ARE AMONG THOSE CHECKS SUBJECT TO SUCH HOLDS. (FOR FURTHER DETAILS,CONSULT CHAPTER 598,STATUTES OF 1989.) NOTE: THE ABOVE GUIDELINES ARE IN CONFORMITY WITH THOSE ISSUED BY THE DEPARTMENT OF INSURANCE FOR ALL CALIFORNIA TITLE INSURANCE AND CALIFORNIA TITLE COMPANIES. PRELIMINARY CHANGE OF OWNERSHIP REPORT NOTE: ON OR AFTER JULY 1, 1985, THE COUNTY RECORDER'S OFFICE WILL CHARGE, IN ADDITION TO THE REGULAR CHARGES, AN EXTRA $20.00 RECORDING FEE, UNLESS A DOCUMENT EVIDENCING A CHANGE OF OWNERSHIP IS ACCOMPANIED BY A PRELIMINARY CHANGE OF OWNERSHIP REPORT. IN LIEU OF SAID REPORT, SIGNED BY THE TRANSFEREE,THE RECORDER WILL ACCEPT AN AFFIDAVIT THAT THE TRANSFEREE RESIDENT OF CALIFORNIA. TITLE BILLINGS WILL BE ADJUSTED TO REFLECT SUCH ADDITIONAL FEES IS NOT A RE � WHEN APP LICABLE. IRS FORM 1099 BEFORE THE TRANS ACTION CONTEM PLATED BY THIS REPORT CAN BE CLOSED THE SELLER/BORROW ER MUST FURNISH A TAXPAYER IDENTIFICATION NUMBER TO US SO THAT WE CAN FILE AN IRS FORM 1099,OR ITS EQUIVALENT, WITH THE INTERNAL REVENUE SERVICE. THIS PROCEDURE IS REQUIRED BY SECTION 6045 OF THE INTERNAL REVENUE SERVICE. NOTICE OF A WITHHOLDING REQUIREMENT State Withholding & Reporting for closings after January 1,2003: Under California Law (Rev&Tax Code 18662) a buyer may be required to withhold and deliver to the Franchise Tax Board (FTB) an amount equal to 3.33%of the sates price In the case of disposition of California real property interest("Real Property")by either. 1)a seller who Is an individual or when the disbursement instructions authorize the proceeds to be sent to a financial intermediary of seller,or 2)a corporate seller that has no permanent place of business in California. Buyer may be subject to a penalty (equal ual to the greater of 10% of the amount required to be withheld or $500) for failing to withhold and transmit the funds to FTB in the time required by law. Buyer is not required to withhold any amount and will not be subject to penalty for failure to withhold if: a)the sale price of the Real Property does not exceed $100,000; b)the seller executes a written certificate under penalty of perjury certifying that the seller Is a corporation with a permanent place of business in California;or c)the seller,who Is an individual,executes a written certificate under penalty of perjury certifying one of the following: (i) the Real Property was the seller's principal residence (as defined in IRC 121); (11) the Real Property is or will be exchanged for property of likekind (as defined in IRC 1031) and that the seller Intends to acquire property similar or related in service or use so as to be eligible for nonrecognition of gain for California income tax purposes under IRC 1031; (111) the Real Property has been compulsorily or involuntarily converted (as defined In IRC 1033) and the seller intends to acquire property similar in service or use as to be eligible for nonrecognition of gain for California income tax purposes under r related 9 o g IRC 1033; or (iv) the Real Property sale will result in loss of California income tax purposes. Seiler is subject to penalties for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding laws. FTB may grant reduced withholding and waivers from withholding on a case-by-case basis for corporations or other entities. For additional information regarding California withholding,contact the Franchise Tax Board at(toll free) 888-792- 4900),or by e-mail at urws@ftb.ca.gov or visit their website at www.ftb.ca.gov. I Page 9 Order No.: 56007-51170993-SKT Y M rn Cn O T O LI7 0 Z L � O m IL a � 0 0 ur>� LEGffidD BASIS Of BEARDIOS RuffluNas RECORD OF SURVEY „Ywtt ut —..� M K•rw a°uM wl1 teals W M a°ynar y,,,mn�°a rn]]wuwu� u 1 u]eiY i aam' •..Ko„fwsuw ut ---- „n a.,,,,,w un rum as w.•r a,�ao��w,�,,,) BEING A SURREY OF THE WESTERLY LINE OF ��saa _'---- ,v,"""'1°'a v aer,'nu ra"1P"""w•` THAT PARCEL OF LAND DESCRIBED IN THAT °/e1M o.M u w]1O rm]]]I•Y]•,f•a N.]•.,.6Y•town YNw O wryr I.a w•) aaM lML n ai:••t aaa°+•.w,m o CERTAIN GRANT DEED RECORDED FEBRUARY .�w.raar•,mo-r..o �']]0T O1nr °�°1° aau 1DOM 19, 2002 AS DOCUMENT NO. 16114502. SANTA CLARA COUNTY RECORDS AND LYING IN THE UNINCORPORATED AREA OF THE QUITCLAIM DPi'D ` COUNTY OF SANTA CLARA Lwow u K GRANT DEED I STATE OF CALIFORNIA loot"a iswn•) (R� SCALE: 1• w 30' OCTOBER, 2004 CONSISTING OF I SHEET J- — _----- -- 7 VIER i ARIGHT Oylolal nDW-4��i'�n 1 [gw _ 1 ar.r -________-__ __.__�_�� T-��_�- r,.no owo�•wa•r ( ID]a.n Y M y ——— OVERLOOK "" �' w a aerw ` O Lwr•nn I DRfVB U{ QUM-LAN DELD v 7. G) K �w� : �_ ,w w r� COUNTY SURVEYOR'S STATEMENT � t/t La \ m«n.wiw ca 5 GRAM DEED GRANT DEED QR rw O WAaa "aO �m R .0 ss]rt �•� �5 SURVEYOR'S STATEMEM vo1 ea.cn _ loot a rx]xo]) g I ,au,a a Ili ' GRANT DEED 1 .�$ m�nwa.w \/ -- - 6 l oc°�v+m> eMa w•a.'O1iu`ww`a�..iw.w a•,.., +,a ad �-11r' •Y94 W efT I I YR Oata F]Fw 9 I,,iM w u�QJ-.Wjf • M -I '-t , M rwar] „eO1� REC'ORDER'S STATEMENT Q _�------------ - -LL[YJ[ (]v)y� L _ _ •.�— ]an.s w> -lop" rl - -- ,' -."-tip___- TTL6 BROOK . a',wm DANE ,c.ffot 2>I74 NOTES: a •]enrwua swr s+oa•K w mr re KV Wl woo. GRANT DEED GRANT DEED (oa.n ifa.rral A04120 APN 510-27-007 GRID NO I2}1h5) $1EET 1 OF 1 j gp�2879 DEC—e5-2004 19-43 NORTH AMERICAN TITLE P.01i01 R.O.M 757/J9 w it QIt ♦M�T74. �+. s .. lk nt (S n i L o I _07- � A V TOTAL P.01 Page 11 Order No.: 56007-51170993-SKT � � NATCO NOTES: | DON'T DELA Y YOUR CLOSE OF ESCROWI IF ANY OF THE FOLLOWING ITEMS AFFECT YOUR / TRANSACTION,PLEASE NOTIFY YOUR ESCROW OFFICER AS SOON AS POSSIBLE. V' Ongoing Construction The Title Company will require,mma minimum, the following prior hminsuring: | A. Valid Notice of Completion verified by inspection and expiration of GD days from � recordation of said notice or; B. Approved Indemnities from 8ornnwec/SeUar, approved financial statement not over one year old and m waiver of lien rights from the general contractor. � 1. The Title Company may also require proof mf payment cfsubcontractors, indemnity and � financial statement from the general oonbactor, a copy ofthe omnhmut and the with- holding of o sum of money, to cover the contract until the mechanics lien period has expired,with which to pay filed mechanics liens, or other assurances to be determined on a case by case basis. � UA' Bankruptcy The Title Company will require, aoo minimum, the following prior boinsuring: A. The bankruptcy case be closed or, B. An order from the bankruptcy court verifying the transaction, with m demand placed into escrow bythe bootee. � 1. Escrow may not close until 15 days have elapsed from the order and the file has been � � checked tm verify that there are no objections bz said order. � I18' Abstracts of Judgment, Liens,Tax Liens The Title Company will require, as a minimum, the following prior to insuring: | � A. Proof that the buyer/seller|o not the same party 000n the recorded liens. | i. This is accomplished by the buyer/seUer/bornower completely filling out and signing o � statement ofinformation. � B. The items are bm paid off inescrow. / � C. The items are tobm subordinated hm the new transaction. | | � IV. Community Property California is mnommunkvprop�dysbatm' � ^ . � � A. A quitclaim from one spouse to another must specifically quitclaim any community � � . � � property interest. � B. An interlocutory decree of divorce specifically granting the property to one spouse is � sufficient ifo final decree hs issued and recorded hm the county. � � � Any ofthe followingaitumhonmcou|dcauoaasubmtmntiddeloyinnlomemfemcnnw The earlier vve are made aware of potential problems, the earlier the issues can be dealt with to ensure o smooth and timely close of your transaction. � Are your principals trying to accomplish a tax deferred exchange? If mo, have they chosen an intermediary and who is it? ° Will any of the principals be using m Power ofAttorney? Are any of the vested owners deceased orin any way incapacitated? ° []o all of the phndpa|ovvhovviUbamigninQ have soumont photo |.O. or[3dver"aLicense? � � Are the sellers of this transaction residents of California? � ° Has there been a change in marital status of any of the vested owners or will we be adding anyone ho � title, iaco-n|gnena.additional insured, ehc.? ° Is the property currently vested in a trust or will the new buyer/borrower vest in a trust? | ° Are any nf the trustees of the trust deceased orincapacitated? ° Will this transaction involve a short sale? ° Will there bea new entity formed, ie. partnership, corporation? ° Will all of the pdndpe|w be available to sign or will we be Federal Expressing documents to another state/country? If so,where? |f you have any other|nfnmnatimnwhich may ba useful to us, please contact your escrow officer os soon em � possible. Our goal ietm make your transaction ao easy and trouble-free as possible. VVe appreciate your � business and hope that you find North American Title Company your company of choice for all of your title escrow needs. NOTICE«3FOPPORTUNITY T0 EARN INTEREST DEPOSIT INSTRUCTIONS/AUTHORIZATIONS North American Title Company, Inc. ("NorthAmehcan]believes that it is in the best interest of our customers to provide to each depositing party notice of an opportunity to oonm interest on all deposited funds through e special account agone of North | American's depository banks. � North American has received or will be receiving funds deposited by you or your lender to be used on your behalf with regard to a transaction involving real estate in the State of California. It is important that North American have the appropriate instructions/authorizations for the handling oY these deposited funds. PLEASE READ THE FOLLOWING CAREFULLY: | 1. You have the opportunity bo earn interest onthe funds you deposit with uothrough a special account arrangement North � American has established with one cf its depository banks. The current interest rate for these accounts will fluctuate periodically with market conditions and may change prior to or during the time your account is open. No such opportunity bz earn interest on the funds deposited byo lender io available, except aa described below. 2. If you elect to earn interest through this special account arrangement, North American will charge you an additional fee � mf *45.00 for the establishment and maintenance of the account. This fee compensates North American for the costs � associated with opening the interest bearing account, preparing correspondence/documentation, transferring funds, maintaining appropriate records for audit/reconciliation purposes and filing of any required tax withholding statements. It im important that you consider this cost/m your decision because the cost may exceed the interest you earn � Example: A regular savings deposit of$1,000.00 at an average interest rate of 3.0%*per annum for a 30-day period: | Deposit x Rate + Annual x Days = Total Interest Earned $1.000.00 X .03 + 360 u 30 = $2.50 *Please note that this interest naba io only an example and North American does not guaranty the availability oyany | | specific rate. . 3. |f you elect to earn interest but would like 10 have your funds invested in another bank and/or another type of interest- bearing amzount, p|oam000ntectyourNodhAmehoanoffica. Thaadd|dona|feeforthesetypeoofe000untavWUvory. butviUbm mignitJcmntly greater than$4£00. � 4. If you choose not to have your funds deposited In an interest-bearing accoun you do not need to sign or return ! this form, but your funds will be held in a North American general escrow trust account. A general escrow trust account is. restricted and protected against claims by third parties or creditors of North American. North American will receive certain financial benefits from the depository institution as a result of maintaining the general escrow trust account. Some or all of these benefits may be considered interest due you under California Insurance Code §12413.5. You may segregate your funds in a separate interest-bearing account and receive the benefits therefrom, but will be required to pay North American an additional fee for this service (as described in paragraphs 2 and 3 above). Alternatively. you may leave your funds in the aeneral escrow trust account and authorize North American to keep the benerits it receives from the depository bank. 5. ff you elect to have your funds earn interest in an interest-bearing account using North American's depository bank, you MUST sign and return to North American this form and a W-9 form that you ran request from your North American representative. Please be advised that you will be responsible for reporting all earnings to the applicable taxing authorities. Also, North American cannot deposit the funds in the specified account until good funds have been received into North American's general escrow account and all the properly completed forms have been returned to North American. Unless and until North American receives all the required forms, North American will not establish such account and all funds will remain on � deposit in North American's general escrow account. | | � Unless you specify in writing that the interest-bearing account be established at a specific financial institution, North American � WiUopen the interest-bearing account with a federally or state chartered financial institution of its choosing. } INTEREST:ELECTION TO EARN ) I HEREBY AUTHORIZE AND DIRECT NORTH AMsmoAN TO OPEN AN INTEREST-BEARING ACCOUNT AT NORTH AMERICAN's DEPOSITORY � � BANK AND rp CHARGE THE ADDITIONAL FEE FOR THIS SERVICE. � � SIGNATURE: � DATE: SIGNATURE: � DATE: ' 6. Funds deposited by a lender are ordinarily deposited to escrow one to two days prior to closing. You should be aware that your lender may begin charging interest on your loan from the date loan funds are deposited into North American's escrow trust account. Should the loan funds,if any,deposited by your lender � cf more than 5 business days from the dob» of deposit bo and including the date of closing of the transaction, North American } egraaa that itwill credit you an interest equivalent based on the amount cfloan funds dmpomiied, the period of time prior to | p\podng that those funds remained in the aacnzw trust account, and a per dinm maba calculated by using the perennum current � � market interest rate. � � � Private Policy Notice (as of July 1, 2001) We at the North American Title family of companies take your privacy very seriously. We do not share your private information with anyone except as necessary to complete your real property, title insurance and escrow transaction. OUR PRIVACY POLICIES AND PRACTICES I Information we collect and sources from which we collect it: We collect nonpublic personal information about you from the following sources: 0 Information we receive from you on applications or other forms. * Information about your transactions with us, our affiliates or others. 0 Information from non-affiliated third parties relating to your transaction. "Nonpublic personal information" is nonpublic information about you that we obtain in connection with providing a product or service to you. 2. What information we disclose and to whom we disclose it: We do not disclose any nonpublic personal information about you to either our affiliates or non-affiliates without your express consent, except as permitted or required by law. We may disclose the nonpublic personal information we collect, as described above, to persons or companies that perform services on our behalf regarding your transaction.' "Our affiliates" are companies with which we share common ownership and which offer real property, title insurance, or escrow services. 3. Our security procedures: We restrict access to your nonpublic personal information and only allow disclosures to persons and companies as permitted or required by law to assist in providing products or services to you. We maintain physical, electronic, and procedural safeguards to protect your nonpublic personal information. 4. Your right to access your personal information: You have the right to review your personal information that we record about you. If you wish to review that information, please contact your local North American Title office and give us a reasonable time to make that information available to you. If you believe any information is incorrect, notify us, and if we agree, we will correct it. If we disagree, we will advise you in writing why we disagree. 5. Customer acknowledgment: Your receipt of a copy of the preliminary report, commitment, your policy of insurance, or escrow documents accompanied by this Notice will constitute your acknowledgment of receipt of this Privacy Notice. 'North American Title may also share your information with an insurance institution, credit reporting agency, insurance regulatory authority, law enforcement, other governmental authority, actuary, or other research organization for purposes of detecting or preventing fraud,crimes,or misrepresentations in connection with an insurance or real estate transaction, resolving claims or service disputes, investigating suspected illegal or unlawful activities,or for conducting actuarial or research studies. EXHIBIT A(Rev.02-04-02) CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY—1990,EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage,costs,attorneys' fees or expenses which arise by reason of., 1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character,dimensions or location of any improvement now or hereafter erected on the land;(iii)a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part;or(iv)environmental protection,or the effect of any violation of these laws,ordinances or governmental regulations,except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by(a)above,except to the extent that a notice of the exercise thereof or notice of a defect,lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on he rights of a purchaser for value without knowledge. 3. Defects,liens,encumbrances,adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy,but created,suffered,assumed or agreed to by the Insured claimant; (b) not known to the Company,not recorded in the public records at Date of Policy,but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy, (c) resulting in no loss or damage to the insured claimant (d) attaching or created subsequent to Date of Policy,or (e) resulting In loss or damage which would not have been sustained If the insured claimant had paid value for the in mortgage or for the estate or Interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the Inability or failure of the Insured at Date of Policy,or the inability or failure of any subsequent owner of the indebtedness,to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof,which arises out of the transaction evidenced by the Insured mortgage and is based upon usury or any consumer credit protection or truth In lending law. 6. Any claim,which arises out of the transaction vesting in the Insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights law. EXCEPTIONS FROM COVERAGE-SCHEDULE B,PART I This policy does not insure against loss or damage(and the Company will not pay costs,attorneys'fees or expenses)which arise by reason Of. 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments,or notices of such proceedings,whether or not shown by the records of such agency or by the public records. 2. Any facts,rights,interest or claims which are not shown by the public records but which could be ascertained by an inspection of the land 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, claims or title to water,whether or not the matters excepted under(a),(b),or(c)are shown by the public records. CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE(6/2198)/ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE(10/17/98) EXCLUSIONS In addition to the Exceptions in Schedule B,You are not insured against loss,costs,attorneys'fees,and expenses resulting from: 1. Governmental police power,and the existence or violation of any law or government regulation. This includes ordinances,laws and regulations concerning: (a) building (c) land use (e) land division (b) zoning (d) Improvements on land M 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. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not apply to violations of building codes if notice of the violation appears in the Public Records at the Policy Date. 3. 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, 4. 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. 5. Failure to pay value for Your Title. 6. Lack of a right (a) to any Land outside the area specifically described and referred to in paragraph 3 of Schedule A:and (b) in streets,alleys,or waterways that touch the Land. 7. Water rights,or claims to water,or Ube on,in,or under the land,whether or not the matters are disclosed by public records. This Exclusion does not limit the coverage described in Covered Risk 11 or 18. AMERICAN LAND TITLE ASSOCIATION RESIDENTIAL TITLE INSURANCE POLICY(611187)EXCLUSIONS In addition to the Exceptions in Schedule B,you are not insured against loss,costs,attorneys'fees,and expenses resulting from: 1. Governmental police power,and the existence or violation of 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 Title Risks. 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 the Policy Date and is binding on you If you bought the land without knowing of the taking. 3. Title risks: • a notice of exercising the right appears in the public records on the Policy Date • 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 Utle 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. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY(10117192)WFTH ALTA ENDORSEMENT FORM I COVERAGE AND AMERICAN LAND TITLE ASSOCIATION LEASEHOLD LOAN POLICY(10/17/92)WITH ALTA 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; (it) 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 the 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(except to the extent that this policy insures the priority of the lien of the Insured mortgage over any statutory Den 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. 4. Unenforceability of the lien of the mortgage because of the inability or failure of the insured at Date of Policy,or the inability or failure of any subsequent owner of the Indebtedness,to comply with the applicable"doing business'laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage,or claim thereof,which arises out of the transaction evidenced by the Insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any 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. 7. Any claim, 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. The above policy forms may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage,the Exceptions from Coverage in a Standard Coverage policy will also include the following General Exceptions: 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 notices of such proceedings,whether or not shown by the records of such agency or by the public records. 2. Any fads,rights,interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making inquiry of persons in possession thereof. 3. Easements,liens or encumbrances,or claims thereof,which are not shown by the public records. 4. Discrepancies, conflicts in bounds lines shortage in area p boundary g encroachments, or any other fads which a correct survey would � disclose and which are not shown by the public c records. 5. (a) Unpatented mining claims;(b)reservations or exceptions in patents or in Acts authorizing the issuance thereof;(c)water rights, claims or title to water,whether or not the matters excepted under a b or c are sh own by the public re axds. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY(10/17/92)AND AMERICAN LAND TITLE ASSOCIATION LEASEHOLD OWNER'S POLICY(10/17/92)-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 an 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 notice eo or a no ce of a defect lien or encumbrance ce brance resulting from m a violati on or alle ged 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 the 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 of the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or creating 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. 4. Any claim,which arises out of the transaction vesting in the insured the estate or interest insured by this policy, by reason of the i operation of federal bankruptcy,state insolvency or similar creditors'rights law 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 or transfer,or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. The above policy forms may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage,the Exceptions from Coverage in a Standard Coverage Policy will also include the following General Instructions: I I - • 1 1 40 EXCLUSIONS FROM COVERAGE This policy does not insure against loss or damage(and the Company will not pay costs,attomeys'fees or expenses)which arise by reason of I Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments,or notices of such Proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts,rights,interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making inquiry of 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,claims or title to water,whether or not the matters excepted under(a),(b)or(c)are shown by the public records. ALTA 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 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 areas 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 does not limit the coverage provided under Covered Risks 12, 13,14 and 16 of this policy. (c) 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. 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 the 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 of the insured claimant became an Insured under this policy-, (c) resulting in no loss or damage to the insured claimant, (d) attaching or creating 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 M 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. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of the Insured at Date of Policy,or the inability or failure of any subsequent owner of the indebtedness,to comply with applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the Insured Mortgage,or claim thereof,which arises out of the transaction evidenced by the Insured Mortgage and is based upon usury,except as provided in Covered Risk 27,or any consumer credit protection or truth in lending law, 6. 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. 7. Any claim 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 exclusion does not limit the coverage provided in Covered Risk 8. 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 the 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 exclusion does not limit the coverage provided in Covered Risk 8. 9. The failure of the residential structure,or any portion thereof to have been constructed before,on or after Date of Policy In accordan6e 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 Date of Policy.