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HomeMy Public PortalAboutResolution - 05-34- 20051214 - Hall Purchase RESOLUTION 05-34 RESOLUTION OF THE BOARD OF DIRECTORS OF MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AUTHORIZING ACCEPTANCE OF PURCHASE AGREEMENT, AUTHORIZING GENERAL MANAGER OR OFFICER 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 (MONTE BELLO & SARATOGA GAP OPEN SPACE PRESERVES—LANDS OF HALL) The Board of Directors of Midpeninsula Regional Open Space District does resolve as follows: Section One. The Board of Directors of Midpeninsula Regional Open Space District does hereby accept the offer contained in that certain Purchase Agreement between E. Gerald Hall,Trustee of the Hall 1990 Family Trust A and 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 or the President of the Board of Directors or other appropriate officer is authorized to execute a Certificate of Acceptance on behalf of the District. Section Three. The General Manager of the District or the General Manager's designee shall cause to be given notice of acceptance to the seller and to extend escrow if necessary. The General Manager and appropriate no rY P General Counsel are further authorized to approve any technical revisions to the attached Agreement and other transactional documents which do not involve any material change to any term of the Agreement or other transactional documents,which are necessary or appropriate to the closing or implementation of this transaction. Section Four. The General Manager of the District is authorized to expend up to $5,000 to cover the cost of title insurance, escrow fees, and other miscellaneous costs related to this transaction. Section Five. It is intended, reasonably expected, and hereby authorized that the District's general fund will be reimbursed in the amount of$1,100,000 from the proceeds of the next long-term District note issue. This Section of this Resolution is adopted by the Board of Directors of Midpeninsula Regional Open Space District solely for purposes of establishing compliance with the requirements of Section 1.103-18 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 moneys 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. I RESOLUTION No. 05-34 PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional Open Space District on December 14, 2005, at a Regular Meeting thereof, by the following vote: AYES: J. Cyr, M. Davey, N. Hanko, L. Hassett, D. Little, K. Nitz, P. Siemens NOES: None ABSTAIN: None ABSENT: None ATTEST: APPROVED: Secr ary Preside Board of Directors Boar 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 Jerk I PURCHASE AGREEMENT This Purchase Agreement (hereinafter called "Agreement") is made and entered into by and between E. Gerald Hall, Trustee of the Hall 1990 Family Trust A (hereinafter 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 Ninety three and fifty five hundredths (93.55) acres, more or less, and commonly referred to as Santa Clara County Assessor's Parcel Number 351-16-014. Said property is further described in the Legal Description attached to Preliminary Report Number 55171024 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". 2. Purchase Price. The total purchase price ("Purchase Price") for the Property shall be One Million One Hundred Thousand Dollars ($1,100,000.00), which shall be paid in cash at the "Closing" as defined in Section 3 hereof. Purchase Agreement Page 2 3. Escrow. Promptly upon execution of this Agreement, in accordance with Section II herein, an escrow shall be opened at North American Title Company, 497 N. Santa Cruz Avenue, Los Gatos, CA 95030, (408) 3 54-4100 (Escrow number 55171024) 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 6, 2006 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 an executed and recordable Grant Deed, covering the Property as described in said Exhibit "A". 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; (ii) District's check payable to Escrow Holder in the amount of One Million Ninety nine Thousand Dollars ($1,099,000.00)which is the balance of the Purchase Price of One Million One Hundred Thousand Dollars as specified in Section 2. The balance of $1,000.00 is paid into escrow in accordance with Section 10 of this Agreement. E. Seller and District shall share (50150)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 Purchase Agreement Page 3 1,100,000 for the Property showing title to the Property vested in fee simple in District, subject only to: (i) current real property taxes, (ii)title exceptions 3, 4, 5, 6 and 7 as listed in Preliminary Report No. 55171024, and (iii) 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 farther 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. 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 full 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 of Seller. C. Leases or Occupancy of Premises. There exist no oral or written leases, licenses, 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, license, or rental agreement of the Property being acquired by District, including, but not limited to, claims for relocation benefits and/or payments pursuant to Purchase Agreement Page 4 California Government Code Section 7260 et seq. Seller understands and agrees that the provisions of this Section shall survive the close of escrow and recordation of any Grant Deed(s) D. 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 liens 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. 6. 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. 7. 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) The Property does not contain any Hazardous Waste or underground storage tanks; (ii) Seller and the Property are in compliance with all applicable federal, state and local laws, statutes, ordinances, orders, guidelines, rules and regulations pertaining to Hazardous Waste or underground storage tanks; (iii) At the time Seller acquired the Property, Seller did not know and had no reason to know that any Hazardous Waste was present, used, manufactured, handled, generated, stored,treated, discharged, buried or disposed of on, under or about the Property, or had been transported to or from the Property; f � Purchase Agreement Page 5 (iv) Seller has not undertaken,permitted, authorized or suffered, and will not undertake,permit, authorize or suffer the presence, use, manufacture, handling, generation, storage, treatment, discharge, release, burial or disposal on, under or about the Property of any Hazardous Waste, or the transportation to or from the Property, of any Hazardous Waste; (v) There is no pending or, to Seller's knowledge, threatened litigation or proceedings before any administrative agency in which any person or entity alleges the presence, release, threat of release, placement on, under or about the Property, or the use, manufacture, handling, generation, storage, treatment, discharge, burial or disposal on, under or about the Property, or the transportation to or from the Property, of any Hazardous Waste; (vi) Seller has not received any notice and has no knowledge or reason to know that any governmental authority or any employee or agent thereof has determined, or threatens 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, discharge, burial or disposal on, under or about the Property, or the transportation to or from the Property, of any Hazardous Waste; (vii) There have been no communications or agreements with any governmental authority or agency(federal, state or local) or any private entity, including, but not limited to, any prior owners of the Property, relating in any way to the presence, release,threat of release, placement on, under or about the Property, or the use, manufacture, handling, generation, storage, treatment, discharge, burial or disposal on, under or about the Property, or the transportation to or from the Property, of any Hazardous Waste. C. Indemnity. Seller shall indemnify, defend and hold harmless District from and against any legal or administrative proceedings brought against District, and all claims, liabilities losses, damages, and costs, foreseen and unforeseen, including without limitation, attorney, engineering and other professional or expert fees, directly or indirectly arising from any breach of the warranties or representations contained herein, or arising from related to or connected with the existence of any Hazardous Waste of any kind on or in the property, except when any Hazardous Waste contamination was caused solely by District. Seller shall be solely and completely responsible for responding to and complying with any administrative notice, order, request, or demand, or any third party claim or demand relating to potential or actual Hazardous Waste contamination on or in the Property, including any and all costs of remediation and cleanup, except when such contamination was caused solely by District. In addition to any remedies provided in this subsection, in the event Hazardous Waste is found to exist on the property, District may exercise its right to bring an action against Seller to recover any cleanup, repair or remediation costs from Seller and/or any other person or persons determined to have responsibility for the presence of Hazardous Waste on the Property. 8. 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 t t i Purchase Agreement Page 6 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. Seiler 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. 9. 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 unreasonablywithheld or delayed and further provided that District Y 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. 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, or arbitrator, in the case of arbitration, 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, or arbitrator in the case of arbitration, 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 I Purchase Agreement Page 7 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. 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. F. 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: Gerald Hall 320 Bush Street Mt. View, CA 94041 Telephone: (650) 969-6480 District: Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022 Attn: L. Craig Britton, General Manager Telephone: (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 party as aforesaid, t P Purchase Agreement Page 8 designate a different mailing address or a different person to which such notices or demands are g g 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. G. 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. H. 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. I. 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. J. Entire Agreement. This Agreement is intended by the parties to be the final 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. K. Time of Essence. Time is of the essence of each provision of this Agreement in which time is an element. L. 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. M. Assignment. Except as expressly permitted herein, neither party to this Agreement shall assign its rights or obligations under this Agreement to any third party without the prior written approval of the other party. N. 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. R R Purchase Agreement Page 9 O. 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 i by law, on the successors and permitted assigns of the parties hereto. P. 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. Q. Cations. 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. R. 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. S. 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 i SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. 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. i Purchase Agreement Page 10 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. i SELLER INITIAL DISTRICT INITIAL 10. Acceptance. Provided that this Agreement is executed by Seller and delivered to District on or before November 15, 2005, District shall have until midnight December 14, 2005 to accept and execute this Agreement, and during said period this instrument shall constitute an 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, District has paid into escrow and Seller acknowledges receipt of the sum of One Thousand Dollars and No/100 ($1,000.00), which shall be applied to the Purchase Price as set forth in Section 2 hereof. 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. /// 1// I Purchase Agreement Page 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed b their duly authorized officers to be effective y y e ec e as of the date of final execution by District in accordance with the terms hereof. 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 SPACE DISTRICT APPROVED AND ACCEPTED: President, arCf of Directors L. erald Hall, Trustee of the Hall 1990 Family Trust A Date Date ATTEST: District Date: l aLIy ACCEPTED FOR RECOMMENDATION C •c� Michael C. Williams, Real Property Manager APPROVED AS TO FORM: Susan M. chectman, General Counsel REC MENDE FOR APPROVAL: L. Craig Britton, General anager CORTH DIRECT ALL INQUIRIES TO: EXHIBIT A MERICAN Escrow Officer: Susan K. Trovato ATITLE Telephone No.: (408) 399-4100 COMPANY Our No.: 56007-55171024-SKT Escrow No.: 56007-55171024 Mid-Peninsula Open Space District Attn: Mike Williams 330 Distel Circle Los Altos CA 94022-1404 Property Address: 15601 Stevens Canyon Road Cupertino, CA 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 September 20, 2005 Pam Thompson/tw/ca at 07:30 am Title Officer 497 N. Santa Cruz Avenue, Los Gatos, CA 95030 Phone: (408)399-4100 Fax: (408) 354-3212 The form of policy of title insurance contemplated by this report is: 1990-CLTA Owner's Standard 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. Gerald Hall, Trustee of the Hall 1990 Family Trust A I I I I Page 2 Order No.: 56007-55171024-SKT I I t , DESCRIPTION: The land referred to herein is situated in the State of California, County of Santa Clara, Unincorporated Area, and is described as follows: I I� ALL THAT LOT, PARCEL OR PIECE OF LAND IN THE STATE OF CALIFORNIA, BEING A PART OF THE SOUTHWEST QUARTER OF SECTION 32T7SR2W MOUNT DIABLO BASE AND MERIDIAN,AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF THE SOUTHWEST QUARTER OF SAID SECTION 32; THENCE NORTHERLY ALONG THE EASTERLY BOUNDARY OF THE SAID SW 1/4 OF SAID SECTION 32 TO THE NORTHEAST CORNER OF THE SW 1/4 OF SAID SECTION 32; THENCE WESTERLY ALONG THE NORTHERLY BOUNDARY OF THE SW 1/4 OF SECTION 32 WHICH POINT ALSO BEARS EAST A DISTANCE OF 1718.1 FEET FROM THE N.W. CORNER OF THE SW 1/4 OF SAID SECTION 32 (WHICH POINT ALSO BEARS EAST 50.00 FEET FROM THE POINT FORMED BY THE INTERSECTION OF THE NORTH BOUNDARY OF THE SW 1/4 OF SAID SECTION 32 WITH THE CENTER LINE OF A RIGHT OF WAY ACROSS THE SW 1/4 OF SAID SECTION 32 GRANTED THE PACIFIC GAS AND ELECTRIC COMPANY AND RECORDED IN VOL. 35 OF OFFICIAL RECORDS AT PAGE 563 SANTA CLARA COUNTY RECORDS);THENCE S. 261 30'W. 2954.6 FEET MORE OR LESS TO A POINT IN THE SOUTH BOUNDARY OF THE SW 1/4 OF SAID SECTION 32, WHICH POINT BEARS EASTERLY A DISTANCE OF 400 FEET MEASURED ALONG THE SOUTH BOUNDARY OF THE SW 1/4 OF THE SAID SECTION 32; THENCE EASTERLY ALONG THE SOUTH BOUNDARY OF THE SAID SECTION 32 TO THE POINT OF BEGINNING. SAVINGS AND EXCEPTING THEREFROM THAT CERTAIN REAL PROPERTY HERETOFORE CONVEYED TO CHAMBERS BY DEED DATED JUNE 13, 1925 (SEE 178 OFFICIAL RECORDS PAGE 20, OF SANTA CLARA COUNTY.) APN: 351-16-014 I I I I I Page 3 Order No.: 56007-55171024-SKT . . . . � At the date hereof exceptions to coverage in addition to the printed exceptions and exclusions i contained in said policy form would be as follows: � | 1. General and Special Property Taxes, and any assessments collected with taxes, including uUUb/ � | assessments,for the fiscal year 20O5-2OUG. Total Amount: $1.719.88 First Installment: $859.94 (]pen | b Second Installment: �85&S4C�pen | *" ' Land: $E4/413l0 | Improvements: $45.535.00 � Code Area: 85-002 � | Parcel Number 351-16-014 � � 2. The Lien of Supplemental Taxes, if any, assessed pursuant to the provisions of Chapter 3.5 | (commencing with Section 75\ofth� ��avenumundToxaUon (�od�ofth� Sbab�mf�g|Ubrnia� � ' | 3. Rights and Easements for Navigation and Fishery which may exist over that portion of said land � lying beneath the waters cf Stevens Creek. / � 4. Rights of the public, county and/or city in that portion lying within the street as it now exists: ' Stevens Canyon Road | 5. An easement affecting the portion of said land and for the purpose stated herein,and incidental | purposes. | |n Favor of: Standard Electric Co. / No representation io made ombz the present ownership of said easement. � Purpose: Electrical transmission lines and poles; ingress and � egress | Recorded: June 27. 1906 � Book: 3U9ofDeeds � Page: 172 Affects: Portion of said land, aa described therein Subject to the terms, provisions and conditions contained therein. G. An easement affecting the portion of said land and for the purpose stated herein, and incidental purposes. � |n Favor of: Everett and Ruth Co|denwood No representation in made asto the present ownership of said easement. Purpose: Access Road Recorded: September 12. 1Q44 Instrument No.: 321178 � Book: 1220 � Page: 141 � Affects: The exact location and extent ofsaid easement hxnot | disclosed of record | �Pane 4 Order No.: 56007-55171024'ShT | � | Subject to the terms, provisions and conditions contained therein. 7. Covenants, Conditions and Restrictions imposed by a Land Conservation Contract executed pursuant to Section 51200 et seq. of the California Government Code. Dated: December 11, 1970 Executed By: Barbara S. Hall, et al and the County of Santa Clara Recorded: February 25, 1971 Instrument No.: 3959896 Book: 9233 Page: 114 8. A Notice of Special Tax Lien authorized to be imposed within the Community Facilities District shown below,which has now been officially formed. District: Santa Clara County Library District Joint Powers Authority Community Facilities District No. 2005-1 Recorded: June 24, 2005 Instrument No.: 18438576 Note 1: Said document contains the following recital: For further information concerning the current and estimated future tax liability of owners or purchasers of real property subject to this special tax lien, interested persons should contact the fiscal agent of the Santa Clara County Library District Joint Powers Authority, 14600 Winchester Blvd., Los Gatos, CA 95032, Telephone Number(408)293-2326 ext. 3004. Note 2: Any amounts due thereunder are payable with and included in the General and Special Taxes for the current fiscal year. 9. 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 t as set forth. 10. This report is incomplete. We will require a Statement of Information from the parties indicated below, five (5)days prior to closing, in order to complete this report, based on the effect of 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. Gerald Hall 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. Page 5 Order No.: 56007-55171024-SKT INFORMATIONAL NOTES: A. There is located on said land a Rural Residental known as 15601 Stevens Canyon Road, Cupertino, 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. 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 dispersal 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 InfQrmation, 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. 56007-55171024 Routing No.: 121137522 Branch/County No.: 560-07 Attn: Susan K. Trovato ACH FUNDS-Automatic Clearing House North American Title Company will not accept funds in the form of ACH transfers. E. 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 6 Order No.: 56007-55171024-SKT GOOD FUNDS LAW i' 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). i 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 IS NOT A RESIDENT OF CALIFORNIA. TITLE BILLINGS WILL BE ADJUSTED TO REFLECT SUCH ADDITIONAL FEES WHEN APPLICABLE. IRS FORM 1099 BEFORE THE TRANSACTION CONTEMPLATED BY THIS REPORT CAN BE CLOSED, THE SELLER/BORROWER III 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 Under California Law Rev&Tax Code 18662 a 1 2003: U ) State Withholding & Reporting for closings after January ( 0 buyer may be required to withhold and deliver to the Franchise Tax Board (FTB)an amount equal to 3.33l0 of the sales 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 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: (1) the Real Property was the seller's principal residence (as defined in IRC 121); (ii)the Real property was last used as seller's principal residence without regard to time period;(III)the Real Property is or will be exchanged for property of like kind(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; (iv)the Real Property has been compulsorily or involuntarily converted (as defined in IRC 1033) and the seller intends to acquire property similar or related in service or use as to be eligible for nonrecognition of gain for California income tax purposes under IRC 1033; or (v) the Real Property sale will result in loss of California income tax purposes. Seller 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. Page 7 I' Order No.: 56007-55171024-SKT O r r,C E O F C 0 U N i Y A S S F S S 0 R S A N T A C L A R A C O U N T Y, C A 1.1 F 0 R N I A _ ru• •rs -R in 351 16 32 18 TO BOOeK � _ MIDPENINSMA REGIONAL 36t) ry. 13 OPEN SPACE DISTRICT W L It1000, ;,. .. Iz.fir.• 1, . i • ^� a 37 iCAC 10R.[ r Y, .2 911.93 AC. Aau•. ' '17t�o a Sob jTT.• a+ -; STEVENS CREEK W CC I `I COUNTY PARS: _ �� I?,lf'F u14',-.. y , NAl MIDPENINSULA n TT.y I f �) cc pEMN AL OPEN M.LY ••� SPACE DISTRICT °' = CD A 61.ee7 AL aN C . OUNTY co NNSULA RECIONAK 93 SS AC Acne, Ao+aA. rpprA.: 1\ I� �K SPACE DISTRICT,. OWNER �,FE 27 tt �3 ESTATE �� SANTA r�3 /^\ ,COZY OF I ICPENINSUL. CLARA \Y / ] yk ^ SANTA CLAAAI MEGIONAL OPEN —i—rTiiiii SPACE DiSTIMT T1+1 AC. I PP /B SANTA CLARA CO L r7ul Ac. �v STEVENS CREEK O jam' + 'OUNTY PARK CL Y.sm�Au •' •xr Is- Y x auod" u T 169+ .Aff:� :.I 8: -9 t W Il000 ' -A, MIOPENINSULA RECIONAL OPEN SPACE DISTRICT t BOODK C * A,kO CL L. -ti9LbXN NF, as C wP— U11 S. ^+T Q� EI JM aYN,rGW--MM 371 O O 1 UT U1 J O N "The Information on this plat Is provided for your convenience as a guide to the general location of the subject property. Cn Cn The accuracy of this plat 15 not guaranteed,nor Is It a part of any policy,report or guarantee to which It may be attached" .. . ,' ` . ` . . , � 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. | ' 1. Ongoing Construction � The Title Company will require, as a minimum, the following prior to insuring: � | A. Valid Notice of Completion verified by inspection and expiration of 60 days from recordation of said notice or; � |' B. Approved � � ' � ! of lien rights from the general contractor. � | C. The Title Company may also require proof of payment ofsubcontractors, indemnity and financial statement � from the general contractor, a copy of the contract and the with-holding of a sum of money,to cover the contract until the mechanics lien period has expired,with which to pay filed mechanics liens, or other assurances bzbm determined onm case by case basis. 1I' Bankruptcy The Title Company will require, as a minimum, the following prior to insuring: � A. The bankruptcy case be closed or, � B. An order from the bankruptcy court verifying the transaction,with a demand placed into escrow by the trustee. | C. Escrow may not close until 15 days have elapsed from the order and the file has been checked bo verify that there are no objections bz said order. � |lU' Abstracts mf Judgment, Liens, Tax Liens � The Title Company will require, ena minimum,the following prior toinsuring: � A. Proof that the buyer/seller is not the same party oaon the recorded liens. | B. This is accomplished by the buyer/seller/borrower completely filling out and signing a statement of | information. | C. The items are to paid off in escrow. | D. The items are brbe subordinated bo the new transaction. | | � IV. Community Property � California is o community property state: | � 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 if a final | � decree ia issued and recorded in the county.DID YOU KNO / � ' Any of the following situations could cause a substantial delay in close of escrow. The earlier wa are made aware cf | � potential problems, the earlier the issues can be dealt with to ensure a smooth and timely close of your transaction. ° Are your principals trying ho accomplish a tax deferred exchange? |f so, have they chosen mnintermediary � and who iait? ! * Will any of the principals be using a Power ofAttorney? � � ° Are any of the vested owners deceased orin any way incapacitated? | * Do all of the principals who will be signing have a current photo I.D. or Driver's License? � ° Are the sellers of this transaction residents ofCalifornia? � ~ Has there been a change in marital status of any of the vested owners or will we be adding anyone to title, i.e. 00-oi8nerm. additional insured, eto.7 � |s the pmope�ycu�enUyvested ino�ustorvviU the new buye�bornowervestin �boot? ° Are any of the trustees of the trust deceased orincapacitated? ° Will this transaction involve o short sale? * Will there bee new entity formed, i.e. partnership, corporation? ' ° Will all of the principals be available to sign or will we be Federal Expressing documents to another state/country? If so,where? If you have any other information which may be useful to us, please contact your escrow officer as soon as possible. Our goal ioho make your transaction oo easy and trouble-free aopossible. VVe appreciate your business and hope that you find North American Title Company your company of choice for all of your title and escrow needs. � / | / � ! NOTICE/JFOPPORTUNITY TO EARN INTEREST DEPOSIT � INSTRUCTIONWAUTHORIZATIONS North American Title Company, Inc. ("NorthAmoricmn^)believes that hisin the best interest cf our customers 0o provide to each depositing party notice of an opportunity to aom interest on all deposited funds through a special account at one of North American's depository � � banks. North American has received or will be receiving funds deposited by you m your lender to be used on your behalf with regard tom nonsooUnn involving real estate in the Stale of California. It in important that North American have the appropriate instructions/authorizations for the handling of these deposited funds. PLEASE READ THE FOLLOWING CAREFULLY: 1. You have the opportunity to earn interest on the funds you deposit with us through a special account arrangement North American has established with one of its depository banks. The ounan1 interest rate for these accounts will fluctuate periodically with market | conditions and may change prior bonr during the time your account ieopen. No such opportunity to earn interest on the funds deposited by � a lender io available,except am described below. � / 2' K �youe|� tooamintemm1thnmughtbioopaoia/auoount arrangement, North American will charge you an additional fee of$45.00 horth establishment and maintenance of the account. This fee compensates North American for the costs associated with opening the � � interest bearing account, preparing correspondence/documentation,ouumentabon. transferring fundo, maintaining appropriate records for audit/reconciliation purposes and filing of any required tax withholding statements. �/m �mpmr*nm� ���tymm o�mmb����� �m���n�muv � ~~ | | decision because the cost may exceed the interest you earn. | | Example: A regular savings deposit of$1.UUO.00ctan average interest rate cf3.O96~per annum for m3O'doyperiod: / / Deposit x Rate + Annual x Dao = Total Interest Earned � | $1,000.00 x .03 + 360 x 30 = $3.50 ' / *Please note that this interest rate is only an example and North American does not guaranty the ava ilability of any specific rate. | | / | 3. If you elect to earn interest but would like to have your funds invested in another bank and/or another type of interest-bearing | | eocount, please contact your North American office. The additional fee for these types of accounts will vary, but will be significantly | greater than$45.00. | 4. If Wu choose not to have your funds &posited in an interest-bearing accoun , you do not need to sign or return thisform, | . but your '~'~~will be ''~~ in ~ 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 m 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 | 0herefrom, but will be required to pay North American an additional fee for this service (as described in paragraphs 2 and 3mbuve), AlternativelI& yQu may leave ygur funds in the general escrow trust account and authorize North American to keqp the benefits it receives from the deposito1y banA. 5. ff y -Qur funds earn Interest in an interest-bearing accoun using North American's depository bank, you Qu elect to have y MUS sign and return to North American this form and a W-9 form that you can 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 uz 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 will open the � interest-bearing account with a federally or state chartered financial institution of its choosing. ELECTION TO EARN INTEREST: � | osncsx ^vronnos AND mmsn, Nverx AMEmCAN TO AMemvxw'o Dsponnvnr BANK AND TO CHARGE THE ADDITIONAL FEE FOR THIS SERVICE. SIGNATURE: DATE: SIGNATURE: E: 8. Funds deposited by o lender are ordinarily deposited to eacnmv one to two days prior to closing. You shouldbe 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 deposited by your lender remain on deposit in the escrow tm�� account for a period nf more than � from the date 'deposit to and including the date of closing of the tmnuonUon' North American agrees that it will credit � equivalent based on the amount of loan funds deposited, the period of time prior to dosing that those funds remained in the escrow trust � account,and a per them rate calculated by using the per annum 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 1. Information we collect and sources from which we collect it: We collect nonpublic personal information about you from the following sources: • Information we receive from you on applications or other forms. • Information about your transactions with us, our affiliates or others. • 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. r -, of � r r ► I 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 insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness,to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage,or claim thereof,which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim,which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender,by reason of the operation of federal bankruptcy,state insolvency or similar creditors'rights law. EXCEPTIONS FROM COVERAGE-SCHEDULE B,PART I 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: 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 (f)environmental protection This Exclusion does not apply to violations or the enforcement of these matters if notice of the violation or enforcement appears in the Public Records at the Policy Date. This Exclusion does not limit the coverage described in Covered Risk 14,15,16, 17 or 24. 1. 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. PP Y 9 2. The right to take th e Land b condemning it unless: 9 Y 9 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. ( ) 9 P P 3. Risks: (a) that are created,allowed,or agreed to by You,whether or not they appear in the Public Records; O 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 4 or 25.Failure to a value Risk 7 8.d 22 23 2 e for Your 4. That first occur after the PolicyDate-this does not limit the coverage described in Covered Ris pay, Title. 5. 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 6. Water rights,or claims to water,or title 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(6/1/87)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 in.p!ovements 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. 1. The right to take the land by condemning it,unless: I (a) a notice of exercising the right appears in the public records on the Policy Date (b) the taking happened prior the Policy Date and is binding on you if you bought the land without knowing of the taking 2. Title risks: i (a) a notice of exercising the right appears in the public records on the Policy Date (b) that are created,allowed,or agreed to by you (c) that are known to you,but not to us,on the Policy Date-unless they appeared in the public records (d) that result in no loss to you (e) that first affect your title after the Policy Date-this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks 3. Failure to pay value for your title. 4. Lack of a right: (a) to any land outside the area specifically described and referred to in Item 3 of Schedule A,or (b) 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(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;(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 or the effect of an violation of these laws, ordinances or governmental regulations, except to the extent was a art; or iv environmental protection, y 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 lien for services,labor or material or the extent insurance is afforded herein as to assessments for street improvements under construction or completed at Date of Policy);or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage. 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. the mortgagee insured by this policy, by reason of the operation of federal 7. Any claim, which arises out of the transaction creating the interest of 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: i 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 I by the records of such agency or by the public records. records but which could be ascertained b an inspection of the land or by making r claims which are not shown b the public Y 9 2. An facts rights,interests o Y Y inquiry of persons in possession thereof, f which are not shown b the public records. 3. Easements,liens or encumbrances,or claims thereof, Y P 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 i water,whether or not the matters excepted under(a),(b)or(c)are shown by the public records . AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY(10117/92)-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 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 fromcoverage 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 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 i 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: EXCLUSIONS 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 i 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. (b) Any governmental police power not excluded by(a)above,except to the extent that a notice of the exercise thereof or a notice of a defect,lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. This exclusion does not limit the coverage provided under Covered Risks 12,13, 14 and 16 of this policy. 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 (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. 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 I in e land is situated. subsequent owner of the indebtedness,to comply with applicable doing business laws o f the state in which th t of the transaction evidenced b the Insured i hereof,which arises out Mortgage r Mortgage,or claim t f the lien of the InsuredY 5. Invalidity or unenforceability o itprotection or truth in lending law. v' Covered Risk 27 or an y consumer credit n su exce t as ro provided in G 9 and is based upon u Y P �Y. P P ri which become a lien on the land subsequent to Date of Policy,This exclusion does 6. Real property taxes or assessments of any governmental authority q Y not limit the coverage provided under Covered Risks 7,8(e)and 26. I 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 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 Date of Policy