Resolution No. 86271
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RESOLUTION NO. 8627
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF A
COVENANT AND ENVIRONMENTAL RESTRICTION ON PROPERTY:
NOTICE OF KNOWN REMAINING SUBSURFACE STRUCTURES BY
AND BETWEEN THE CITY OF VERNON AND FILTROL
CORPORATION, A WHOLLY -OWNED SUBSIDIARY OF AKZO
NOBEL CHEMICALS INC.
WHEREAS, on June 30, 2004, the Board of Directors of the
Redevelopment Agency of the City of Vernon adopted Resolution No. RA-
242 approving and authorizing the execution of an Agreement to
jPurchase and Sell Real Estate and Escrow Instructions (the "Purchase
Agreement") with Filtrol Corporation ("Filtrol") for the purchase of
property located at 3250 East Washington Boulevard (the "Property");
and
WHEREAS, the Purchase Agreement provides in Section 9 that
Filtrol will record a deed restriction on the Property to restrict the
future use of the Property to uses permitted under the Property's
zoning designation; and
WHEREAS, escrow for the purchase of the Property is
scheduled to close on December 17, 2004; and
WHEREAS, portions of the Property and groundwater underlying
the Property contain hazardous materials and remediation of the
Property has addressed both radiological and non -radiological
contamination; and
WHEREAS, remediation activities since the 1970s have been
overseen by the City of Vernon's Environmental Health Department in
concert with various governmental agencies; and
WHEREAS, the Vernon Environmental Health Department formally
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issued a Certificate of Closure for the non -radiological remediation
activities by letter dated May 28, 2003; and
WHEREAS, because of the City's power to police and enforce
deed restrictions, the City of Vernon is determined to be the proper
signatory to any deed restriction on the Property; and
WHEREAS, in accordance with the Purchase Agreement, Filtrol
and the City of Vernon desire to enter into a Covenant and
Environmental Restriction on Property: Notice of Known Remaining
Subsurface Structures (the "Covenant") in order to facilitate the
remediation of past environmental contamination and to protect human
health and the environment by reducing the risk of exposure to
residual hazardous materials; and
WHEREAS, the City Administrator executed the Covenant on
behalf of the City of Vernon, subject to ratification by the City
Council, in order for the purchase transaction to close on or before
December 17, 2004; and
WHEREAS, the Finance Committee on December 14, 2004,
considered the recommendation of Bruce V. Malkenhorst, Director of
Finance, dated December 9, 2004, that the execution of the Covenant by
the City Administrator be ratified and that the City Administrator be
authorized to execute all documents necessary to implement and carry
out the terms and conditions of the Covenant.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
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SECTION 2: The City Council of the City of Vernon hereby
approves and ratifies the Covenant and Environmental Restriction on
Property: Notice of Known Remaining Subsurface Structures, that was
executed on December 9, 2004, a copy of which is attached hereto as
Exhibit A and incorporated by reference.
SECTION 3: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 15th day of December, 2004.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MA URG, q4ayor
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
8627, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday,
December 15, 2004, and thereafter was duly signed by the Mayor of the
City of Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
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EXHIBIT
Ll-
Recording Requested by and
When Recorded, Mail to:
Akzo Nobel Chemicals Inc.
525 West Van Buren Street
Chicago, Illinois 60607
Attention: General Counsel
. COVENANT AND ENVIRONMENTAL RESTRICTION
ON PROPERTY; NOTICE OF KNOWN REMAINING SUBSURFACE
STRUCTURES
3250 East Washington Boulevard
This Covenant and Environmental Restriction on Property and Notice of Subsurface
Structures ("Covenant") is made as of the 5th day of December, 2004 by Filtrol Corporation, a
Delaware corporation, a wholly -owned subsidiary of Akzo Nobel Chemicals Inc.,
("Covenantor"), who is the Owner of record of that certain property situated at 3250 East
Washington Boulevard, in the City of Vernon, County of Los Angeles, State of California, which
is more particularly described in Exhibit A attached hereto and incorporated herein by this
reference (such portion hereinafter referred to as the "Burdened Property'), for the benefit of the
Covenantor, the City of Vernon ("City"), and the Burdened Property, with reference to the
following facts:
A. Portions of the Burdened Property, and groundwater underlying the Burdened Property,
contain hazardous materials.
B. 'Prior Use, Contamination. and Status of the Burdened Property. The Burdened Property
consists of 3250 Bast Washington Boulevard in Vernon, California. The Burdened Property was
originally developed in 1922 to produce clay adsorbents for use in petroleum refining Through
the 1930s, the primary operation at the Burdened Property was the manufacturing of acid -leached
clays used for purifying cooking oils and petroleum products. From the early-1940s until the late
1960s, the Burdened Property was used for the production of thermal grading catalysts and fluid
cracking catalysts. In the late 1960s, facility operations were converted to the production of
zeolites. Zeolite production included the use of rare earth materials rich in L 1hanum. During
the late 1960s and 1970s, monazite sand and bastnasite ores were used as Lanthanum sources.
Both monazite and bastnasite contain radioactive Thorium in addition to Landianum. From 1957
through 1987, Hydrodesiffmization (HHDS) catalysts were also produced at the Property. HDS
operations involved compounding of alumina primarily with cobalt, nickel, and molybdenum
oxides. From 1951 tbrough 1975, herbicide seed coating and packaging operations were
Performed using Fenuron and Tordon. The Burdened Property was also the site of several
smaller chemical processing operations and limited pesticide processing activities.
Remediation at the Burdened Property has addressed both radiological and non -radiological
contamination. Non -radiological remedial activities have been overseen by the City of Vernon
("City")- Radiological remediation activities have been overseen by the City in conceit with the
nocssvI-55M.1idms sf-#3osis-,9-dcW„ rioaac
California Department of Health Services, Radiologic Health Branch C CRHB') and the County
of Los Angeles Department of Health Services, Radiation Management Group.
Remediation activities at the Burdened Property date back to the 1970s. - Recent demolition and
remediation activities, however, were conducted between 2000 and 2002 pursuant to SECOR
International Inc.'s Draft Final Remedial Action Plan, Filtrol Corporation Facility, 3200 East
Washington Boulevard, Vernon, California, dated September 11, 1998 and subsequent clarifying
addenda. The demolition and remediation activities are reported in separate reports by Aman
Environmental Construction (Final Demolition Report for Filirol Corporation Facility, 3250 East
Washington Blvd, Vernon, California, December 20, 2002), SECOR (Final Chemical Remediation
Report, Filtroi Corporation, 3250 East Washington Boulevard, Vernon, California, January 8,
2003) and Solutient Technologies, Inc. (Final Radiological Closure Report, Filtrol "Poppies"
Site, 3250 East Washington Boulevard, Vernon, California, February 7, 2003), respectively.
Investigation at the Burdened Property included deep soil borings and soil sampling adjacent to
pits, shaft cesspools and dry wells. Soil samples were also collected below above grade and
underground storage tanks, sumps, slabs, etc., for analysis of potential chemicals of concern.
ern.
Remedial excavation of potentially hazardous materials was performed, beginning with orVow-
chlorine pesticides and heavy metals, and followed by excavation of pdralem hydrocarbons.
Excavations were performed as necessary until laboratory results confirmed that cleanup goals
were achieved.
Final site cleanup goals for non -radiological contaminants in soil at the Burdened Property were
established as follows:
Total Petroleum Hydrocarbons (TPH)
C4-C12 500 mg/kg
12-C22 1,000 mg/kg
C22 10,000 mg/kg
Aromatic Volatile Organics
Benzene 0.165 mg/kg
Toluene 9 mg/kg
Ethyibenzene 34 mg/kg
Xylenes 93 mg/kg
Lead 250 mg/kg
Mercury 23 mg/kg
DDT, DDE, DDD 20 mg/kg (with a cap)
5.6 mg/kg (without a cap)
pH 3.5-11.5
Thorium-232 5 picoCunes per gram (pCi/g) above background
Uranium-238 3 pCi/g above background
Approximately 9,326 tons of impacted soil was removed from the Burdened Property and r
shipped off -site for disposal during the radiological remediation activities. In addition,
approximately 58,164 tons of non -radiological contaminated soil was sent for off -site disposal
and/or treatment. Of this, approximately 24,166 tons were sent to landfills and 33,998 tons of
hydrocarbon contaminated soils were sent to American Remedial Technologies (ART) or to TPS
technologies for thermal treatment. All of the soil treated at ART and TPS was returned to the
site for use as backfill. Remedial excavations and confirmation data were inspected and reviewed
by the City.
Confirmation sampling data collected from the bottom of remedial excavations and from fill
materials demonstrate that the intent of the RAP was fulfilled and that all remedial objectives
were achieved at the Burdened Property_ The City formally issued a Certificate of Closure for
the non -radiological remediation activities by letter dated May 28, 2003. Sire City and the
CRHB approved all radiological remediation activities by letters dated February 2, 2004 and
December 4, 2003,. respectively.
Some volatile organic compounds (VOCs) were detected in soils and groundwater near the
Bremrtag West property. Investigations and sample results on both the Brenutag West and
Burdened Property- indicate that the chlorinated VOCs were the result of releases on the Brenntag
West property. Rmmediation of chlorinated VOCs, other than what was required to mitigate
chemical releases from the Burdened Property was not conducted as part of the RAP.
C. Exposure Pathways. The contaminants addressed in this Covenant are present in soil and
groundwater at and beneath portions of the Burdened Property. Without the mitigation measures
which have been performed on the Burdened Property, and those described in this Covenant,
exposure to residual contaminants at the Burdened Property could take place via in place contact
resulting in dermal exposure and ingestion, and inhalation of vapors or dust. The risk ofpubiic
exposure to the contaminants has been substantially lessened by the remediation and controls
described herein.
D. Adjacent Land Uses and Population Potentially Affected. The Burdened Property is used
for industrial uses, consistent with curmt zoning requirements, and is adjacent to cornmerewl,
industrial, nixed -use land uses.
E. Full and voluntary disclosure to the City and to applicable environmental regulatory
agencies ("Agencies") of the presence of hazardous materials on the Burdened Property has been
made and extensive sampling and remediation of the Burdened Property has been conducted.
F. Covenantor desires and intends that in order to benefit the parties hereto, and to protect
the present and future public health and safety, the Burdened Property shall be used in such a
manner as to avoid potential harm to persons or property that may result from hazardous .
materials that may have been deposited at or migrated to portions of the Burdened Property.
. ARTICLE I
GENERAL PROVISIONS
1.1 Provisions to Run with the Land. This Covenant sets forth protective provisions,
covenants, conditions and restrictions (collectively referred to as "Restrictions") upon and subject
to which the Burdened Property and every portion thereof shall be improved, held, used,
occupied, leased, sold, hypothecated, encumbered, and/or conveyed. The restrictions set forth in
Article III. are reasonably necessary to protect present and future human health and safety or the
environment as a result of the presence on the land of hazardous materials. Each and all of the
Restrictions shall run with the land, and pass with each and every portion of the Burdened
Property, and shall apply to, inure to the benefit of, and bind the respective successors in interest
thereof, for the benefit of the City and all Owners and Occupants. Each and all of the
Restrictions are imposed upon the entire Burdened Property unless expressly stated as applicable
to a specific portion of the Burdened Property. Each and all of the Restrictions run with the land
pursuant to section 1471 of the Civil Code. Each and all of the Restrictions are enforceable by
the City.
1.2 Concurrence of Owners and Lessees Presumed. All purchasers, lessees, or possessors of
any portion of the Burdened Property shall be deemed by their purchase, leasing, or possession of
such Burdened Property, to be in accord with the foregoing and to agree for and among
themselves; their heirs, successors, and assignees, and the agents, employees, and lessees of such
owners, heirs, successors, and assignees, that the Restrictions as herein established must be
adhered to for the benefit of the City and the Owners and Occupants of the Burdened Property
and that the interest of the Owners and Occupants of the Burdened Property shall be subject to
the Restrictions contained herein.
1.3 Incorporation into Deeds and Leases. Covenantor desires that the Restrictions set out
herein shall be incorporated in and attached to each and all deeds and leases of any portion of the
Burdened Property. Recordation of this Covenant shall be deemed binding on all Owners and
Occupants, regardless of whether a copy of this Covenant and Agreement has been attached to or
incorporated into any given deed or lease.
1.4 Purpose. It is the purpose of this instrument to convey to the City real property rights,
which will run with the land, to facilitate the remediation of past environmental contamination
and to protect human health and the environment by reducing the risk of exposure to residual .
hazardous materials.
ARTICLE II
DEFINITIONS
2.1 Cam. "City" shall mean the City of Vernon.
. 2.2 hgR�vements. "improvements" shall mean all buildings, roads, driveways, regradings,
and paved parking areas, constructed or placed upon'any portion of the Burdened Property.
. 2.3 QgWants. "Occupants" shall mean Owners and those persons entitled by ownership,
leasehold, or other legal relationship to the exclusive right to use and/or occupy all or any portion
of the Burdened Property.
. 2A Owner or Owners. "Owner" or "Owners" shall mean the person, persons, entity or
entities, who, at the applicable time, hold title to all or any portion of the Burdened Property.
. ARTICLE III
DEVELOPMENT, USE AND CONVEYANCE OF THE BURDENED PROPERTY
3.1 Restrictions on Development and Use. Owner promises to restrict the use of the
Burdened Property as follows:
a. . Use of the Burdened Property shall be restricted by this Covenant to industrial
use, consistent with the zoning designation of the Burdened Property on the date this Covenant is
recorded;
b. No residence for human habitation, hospitals, schools for persons under 2I years
of age, day care centers for children or day care centers for Senior Citizens, shall be permitted on
the Burdened Property;
C. All uses and development of the Burdened Property shall preserve the integrity of
any remedial measures taken at the Burdened Property, unless otherwise expressly permitted in
writing by the City or other appropriate Agency.
. d. No Owners or Occupants of the Burdened Property or any portion thereof shall
drill, bore, or otherwise construct or use a well on the Property for domestic or potable use;
e. The Owner shall notify the City of each of the following: (1) The type, cause,
location and date of any disturbance to any remedial measures taken or installed whim could
affect the ability of such remedial measures or monitoring system to perform their respective
fiinctions and (2) the type and date of repair of such disturbance. Notification to the City shall be
made by registered mail within teas (10) working days of both the discovery of such disturbance
and the completion of repairs.
3.2 Enforcement. Failure of an Owner or Occupant to comply with any of the restrictions, as
set forth in paragraph 3.1,shall. be grounds for the City, by reason of this Covenant, to have the
authority to require that the Owner modify or remove any Improvements constructed in violation
of that paragraph The City shall be entitled to pursue all remedies that it may have, whether at
law or in equity, including the use of administrative and/or civil penalties. Violation of the
Covenant shall be grounds for the City to file civil actions against the Owner as provided by law.
3.3 Notice in A.W ments.. After the date of recordation hereof, all Owners and Occupants
shall execute a written instrument which shall accompany all purchase agreements or leases
relating to -the property. Any such instrument shall contain the following statement:
The land described herein contains certain hazardous materials in soils
and in the ground water under the property, and is subject to a deed
restriction dated as of , 2004, and recorded on
, 2004, in the Official Records of Los Angeles County,
California, as Document No. , which Covenant and Restriction
imposes certain covenants, conditions, and restrictions on usage of the
Property described herein. This statement is not a declaration that a hazard
exists.
. ARTICLE IV
VARIANCE AND TERMINATION
. 4.1 Variance. Any Owner or, with the Owner's consent, any Occupant of the Burdened
Property or any portion thereof may apply to the City for a written variance from the provisions
of this Covenant. The City may grant such application only upon a determination by its
Department of Health (or its successor agency) that the proposed variance is consistent with
environmental conditions at the Burdened Property, including any residual Hazardous Materials,
and would not create a material risk to human health or the environment.
. 4.2 Termination. Any Owner or, with the Owner's consent, any Occupant of the Burdened
Property or any portion thereof may apply to the City for a termination of the Restrictions as they
apply to all or any portion of the Burdened Property. The City may grant such application only
upon a determination by its Department of Health (or its successor agency) that the termination
and any proposed future use is consistent with environmental conditions at the Burdened
Property, including any residual Hazardous Materials, and would not create a material risk to
human health or the environment.
. 4.3 Term. Unless terminated in accordance with paragraph 4.2 above, by law or otherwise,
this Covenant shall continue in effect in perpetuity.
ARTICLE V
NOTICE OF KNOWN REMAINING SUBSURFACE STRUCTURES
S.1 Demolition and remediation activities have identified certain subsurface structures
beneath the Burdened Property. Known remaining subsurface structures are shown on Exhibit B,
which is incorporated herein by this reference. Significantly, Exhibit B does not show all
remaining subsurface structures, only those subsurface structures specifically and actually known
to Covenantor, defined as and limited to the knowledge of those employees of Covenantor
actually participating in day -today remediation activities. It is possible that subsurface
structures, other than those shown on Exhibit B, exist and remain beneath the Burdened Property.
ARTICLE VI
MISCELLANEOUS
6.1 No Dedication Intended. Nothing set forth herein shall be construed to be a gift or
dedication, or offer of a gift or dedication, of the Burdened Property or any portion thereof to the
general public.
. 6.2 Notices. Whenever any person gives or serves any notice, demand, or other
communication with respect to this Covenant, each such notice, demand, or other communication
shall be in writing and shall be deemed effective (1) when delivered, if personally delivered to
the person being served or official of a government agency being served, or (2) three (3) business
days after deposit in the mail if mailed by United States mail, postage paid certified, retain
receipt requested:
If To: "Covenantor"
Filtrol Corporation
c/o Akzo-Nobel Chemicals, Inc.
525 West Van Buren Street
Chicago, Illinois 60607
Attention: General Counsel
If To: "City"
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
Attention: City Attorney
6.3 Partial Invalidity. If any portion of the Restrictions or terms set forth herein is determined
to be invalid for any reason, the remaining portion shall remain in full force and effect as if such
portion had not been included herein.
. 6.4 Article Headings. Headings at the beginning of each numbered article of this Covenant
are solely for the convenience of the parties and are not a part of the Covenant.
6.5- Recordation. This instrument shall be executed by the Covenantor and by the Executive
Officer of the City. This instrument shall be recorded by the Covenantor in the County"of Los
Angeles within ten (10) days of the date of execution.
6.6 References. All references to Code sections include successor provisions.
6.7 Construction. Any general rule of construction to the contrary notwithstanding, this
instrument shall be liberally construed in favor of the Covenant to effect the purpose of this
instrument and the policy and purpose of the Water Code. If any provision of this instrument is
found to be ambiguous, an interpretation consistent with the propose of this instrument that
would render the provision valid shall be favored over any interpretation that would render it
invalid.
IN WITNESS WHEREOF, the parties execute this Covenant as of the date set forth above.
COVENANTOR: Filtrol Corporation, a Delaware corporation, a wholly -owned subsidiary of
Akzo Nobel Chemicals Inc.,
By. —
Title:
Date:
CITY: City of Vernon
Y•
Title:
City Administrator
Date:
December
9, 2004
STATE OF CALIFORNIA
COUNTY OF
On , 20_ before me, the undersigned a Notary Public in and for said state,
personally appeared [Covenantor], personally known to me or proved to me on the basis of
satisfactory evidence to be the person who executed the within instrument.
WITNESS my hand and official seal.
Notary Public in and for said
County and State
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On December 9, 2004, before me, the undersigned a Notary Public in and for said state,
personally appeared Bruce V. Malkenhorst, City Administrator of -the City of Vernon, personally
known to me or proved to me on the basis of satisfactory evidence to be the person who executed
the within instrument.
aWIESIS my hand and official seal.
04
blic in and for said
County and State
G` ARK MOLLEDA
ram.. commusbn # 1480313
"OfY Pub4c _ CoWorrpa
Los Aroma County
MY Comm. Expires qp 2. 201
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
File No: 09500076
All that certain real property situated in the County of Los Angeles, State of
California, described as follows:
All that certain real property situated in the County of Los Angeles, State of California,
described as follows:
Parcel 1
Lots 7 through 12, inclusive, of Tract No. 9432, in the City of Vernon, county of Los Angeles,
state of California, as shown on a map recorded in book 181, page 43 of Maps; and portions
of Lots 5 and 6 of said Tract; and a portion of Rancho San Antonio, in said city, as per map
filed in book 1, page 389 of Patents; and a portion of Lot 10 of Licensed Surveyor's Map, in
said city, as shown on a map filed in book 26, page 5 of Records of Survey, all on file in the
office of the county recorder, described as follows: .
Beginning at the most southerly corner of said Lot 9, thence westerly along the northerly line
of the A.T. & S.F. R.R. Right -Of -Way, 100 feet wide, as shown on said Tract, North 67° 52'
4T' West 967.50 feet to the southwesterly terminus of that certain course shown as North 650
56' 20" East 503.64 feet on said Tract, said course shown on said Tract as a portion of the
southeasterly line of the Martinez Tract, in said county, per map recorded in book 55, page 24
of Miscellaneous Records, in the office of the county recorder, thence along said line, North
650 56' 20" East 503.64 feet to the westerly corner of Lot 1 of said Tract No. 9432; thence
along the southwesterly line of said Lot 1 and its southeasterly prolongation, South 26' 46'
25" East 359.79 feet to the northwesterly line of Lot 10 of said Licensed Surveyor's Map, a
portion of said northwesterly line also being the northwesterly line of the 40.00 foot strip of
land marked "Not A Part" as shown on said Tract No. 9432; thence along said line, North 63°
13' 35"East 405.50 feet to the southwesterly. line of Washington Boulevard, 80.00 feet wide,
as shown on a map filed in book 56, page 2 of Records of Survey in the office of the county
recorder; thence South 640 40' 31" East 73.25 feet to the northwesterly corner of the deed to
the county of Los Angeles, recorded April 21, 1966 as Instrument No. 3330 in book D3279
page 270 of Official Records in the office of the county recorder, thence along southwesterly
lines of said deed, the following two courses:
1.) South 600 57' 36" East 154.32 feet:
2.) South 64' 40' 3 1 " East 172.06 feeet to the southeasterly line of Lot 5 of said Tract No.
9432:
Thence along the southeasterly line of Lots 5 through 9, inclusive, South 60' 30' 50" West
510.46 feet to the point of beginning.
Parcel IA:
An easement for road purposes over a strip of land 40 feet wide, the Northwesterly line of
which is the Southeasterly line and the Northeasterly and Southeasterly prolongation thereof
File No: 09500076
of said Parcel 1 which has a bearing of South 63°14' 20" West said easement to terminate in
the Southwesterly line of Downey Road and in the said Northeasterly line of the right of the
way, 100 feet in width.
EXCEPT that portion included in lot 12 of Tract No. 9432, as per map recorded in book 181
pages 42 and 43 of Maps in the office of the County Recorder of said County.
FIGURE OF KNOWN REMAINING SUBSURFACE STRUCTURES
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SUPPORTING
DOCUMENTS
Commonwealth Land Title Company
655 North Central Avenue, Suite 2200
Glendale, California 91203
(818) 552-7000
Issuing Policies Of
Commonwealth Land Title
Cox, Castle & Nicholson
2049 Century Park East #2800
Los Angeles, Ca. 90067
Attn: Tina A. Legg-Bellossi
Our No: 1211413-27
Title Officer:
Douglas Abernathy, Ext. 6415
AMENDED AND UPDATED PRELIMINARY REPORT
Dated as of September 24, 2003 at 7:30 A.M.
In response to the above referenced application for a policy of title insurance, Commonwealth Land
Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof,
a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter
set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance
not shown or referred to as an Exception below or not excluded from coverage pursuant to the
printed Schedules, Conditions and Stipulations, of said policy forms.
The printed Exceptions and Exclusions from the coverage of said Policy or Policies are set forth in
Exhibit A attached. Copies of the Policy forms should be read. They are available from the office
which issued this report.
This report (and any supplements or amendments hereto) is issued solely for the purpose of
facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is
desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or
Commitment should be requested.
Please read the exceptions shown or referred to below and the exceptions and exclusions set
forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide
you with notice of matters which are not covered under the terms of the title insurance policy
and should be carefully considered.
It is important to note that this preliminary report is not a written representation as to the
condition of title and may not list all liens, defects, and encumbrances affecting title to the
land.
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 2
NOTICE
08/22/02
California Assembly Bill 512 ("AB 512") became effective on January 1, 1990. Under AB
512, all title companies may only make funds available for monetary disbursal in accordance
with the following rules:
1.Same Day Availability. Disbursement on the date of deposit is allowed only when funds
are deposited to Commonwealth Land Title Company 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.
2.Next Day Availability. If funds are deposited to Commonwealth Land Title Company 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 drawn against an FDIC insured bank).
3.2-7 Banking Days 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 2-7 banking 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 Insurers.
PLEASE NOTE THE FOLLOWING INSTRUCTIONS FOR INCOMING WIRE
TRANSFERS OF PAYOFF FUNDS:
Union Bank of California
1980 Saturn Street
Monterey Park, CA 91755
Account No.9100650018
ABA Number122-000-496
Acct Name: Commonwealth Land Title Company
WIRE MUST REFERENCE COMMONWEALTH LAND TITLE ORDER NUMBER AND
TITLE OFFICER.
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 3
SCHEDULE A
The form of policy of title insurance contemplated by this report is:
CLTA Standard Coverage Policy-1990
08/22/02
The estate or interest in the land hereinafter described or referred to covered by this report is:
A FEE as to Parcel 1, 2, 3, 4, 5, 6 and 7;
AN EASEMENT more fully described below as to Parcel 2-A, 3-A and 4-A
Title to said estate or interest at the date hereof is vested in:
Filtrol Corporation, a Delaware corporation
The land referred to in this Report is situated in the State of California, County of Los Angeles, and
is described as follows:
SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 4
EXHIBIT "A"
PARCEL 1:
08/22/02
That certain 40 foot strip of land, in the City of Vernon, County of Los Angeles, State of
California, as shown on the map of tract 9432, as per map recorded in Book 181 Pages 42
and 43 of Maps, in the office of the County Recorder.of said County, marked "not a part of
this tract" described as follows:
Beginning at the Easterly terminus of that certain curve in the Northerly line of Lot 12 of
said Tract, having a radius of 296.44 feet and a length of 253.01 feet; thence Northwesterly
along the radial line of said curve, as shown on said map to the Southwesterly prolongation
of the Southeasterly line of Lot 2 of said tract; thence Northeasterly along said Southwesterly
prolongation and the Southeasterly line of lots 2, 3 and 4 of said tract to the Southeasterly
comer of said lot 4; thence Southeasterly to the Northeasterly corner of lot 5 of said tract;
thence Southwesterly along the Northwesterly lines of lots 5, 6, 7, 8, 10, 11 and 12 to an
angle point in the Northwesterly line of said lot 12, as shown on the map of said tract; thence
Northwesterly along a Northeasterly line of lot 12 to the point of beginning.
EXCEPT that portion described in the deed W.H. Compstock, as receiver of United States
Building and Loan Association of Los Angeles, a corporation recorded February 14, 1933 as
Instrument No. 311 in Book 12018 Page 192. Official Records.
Also except that portion described in the deed to May Loretta O'Donnell, a married woman
recorded July 25, 1947 as Instrument No. 1939 Official. Records.
PARCEL 2:
That portion of the Rancho San Antonio, in the City of Vernon, County of Los Angeles,
State of California, as per map filed in Book 1 Page 389 of patents described as follows:
Beginning at the intersection of the Northeasterly line of the right of way of the Atchison,
Topeka and Santa Fe Railway Company, 100 feet wide, as described in the deed recorded in
Book 359 Page 288 of Deeds, records of said County, with the Northwesterly line of the land
described in the deed to Mary Loretto O'Donnell, recorded in Book 1779 Page 93 of Deeds;
thence North 65' 58' 20" East along said Northwesterly line 503.64 feet; thence South 26'
45' 40" East 359.49 feet; thence South 63' 14' 20" West 135.85 feet, more or less, to the
Southerly line of the right of way 17 feet wide, as described in the deed to the Atchison,
Topeka and Santa Fe Railway Company recorded in Book 2574 Page 295 of Official Records
of said County; thence Westerly along said Southerly line to said Northeasterly line of the
right of way 100 feet, in width; thence North 61 52' 40" West along said Northeasterly line
to the point of beginning.
CLTA Preliminary Report Form (Rev. 1-1-95)
t�
1211413
Page 6
PARCEL 4:
08/22/02
Lots 9 and 10 of Tract No. 9432, in the City of Vernon, County of Los Angeles, State of
California, as per map recorded in Book 181 Pages 42 and 43 of Maps, in the office of the
County Recorder of said County.
PARCEL 4A:
A perpetual easement and right of way to pass and re -pass to and from lot 10 of
Tract No. 9432, to and from Downey Road, a public Highway in the County of Los Angeles
along over, upon and across that certain piece or parcel of land, described as follows: to -wit:
Beginning at the intersection of the Easterly prolongation of the Northerly line of lot 5 of
Tract No. 9432 with the Easterly line of Downey Road; thence South 631 13' 35" West
763.15 feet to a point; thence North 261 46' 25" West 40 feet to a point; thence North 63'
13' 35" East 763.95 feet to a point in the line of Downey Road; thence Southerly along said
Westerly line of said Downey Road 40.01 feet to the point of beginning.
EXCEPT that portion included within the lines of the land described in the deed to W.H.
Comstock, as receiver of United States Building and Loan Association of Los Angeles, a
corporation; recorded February 14, 1933 as Instrument No. 311 in Book 12018 Page 192
Official Records.
PARCEL 5:
All those portion of Lots 5 to 8, inclusive, of Tract No. 9432, in the City of Vernon, County
of Los Angeles, State of California, as per map recorded in Book 181 Pages 42 and 43 of
Maps, in the office of the County Recorder of said County, bounded and described as
follows: to -wit:
Beginning at the Southeast comer of said lot 5; thence North 25' 37' 00" West along the
Northeasterly line thereof 112.04 feet; thence North 64' 29' 30" West along a line, the
prolongation of which intersects the Northwesterly line of said lot 5 at a point distant 134.23
feet Southwesterly from the Northeast corner of said lot 5, a distance of 120.65 feet to the
true point of beginning; thence from said true point of beginning North 64' 29' 30" West
92.56 feet to a point in the Northwesterly line of said lot 5, distant Southwesterly thereon
134.23 feet from the Northeast corner of said lot 5; thence South 630 13' 35" West along the
Northwesterly lines of lots 5 to 8 inclusive 307.25 feet to the Northwest corner of said lot 8,
92.94 feet to a point distant thereon 208.10 feet Northwesterly from the Southwest corner of
said lot 8; thence feet Northwesterly from the Southwest corner of said lot 8; thence North
600 07' 20" East 355.73 feet to the true point of beginning.
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413 08/22/02
Page 7
EXCEPT that portion of lot 6 lying within that portion of Washington Blvd as described in
that certain deed in favor of the County of Los Angeles, recorded April 21, 1966 as
Instrument No. 3330 Official Records.
PARCEL 6:
All those portions of lots 5 to 8 inclusive of Tract No. 9432, in the City of Vernon, County
of Los Angeles, State of California, as per map recorded in Book 181 Pages 42 and 43 of
Maps, in the office of the County Recorder of said County, described as follows: to -wit:
Beginning at the most Southerly corner of said lot 8; thence from said point of beginning
North 32153' 00" West along the Southwesterly line of said lot 8, 208.10 feet; thence North
60' 07' 20" East 355.73 feet to a point distant North 64' 29' 50" West 120.65 feet from the
Southeasterly terminus of a line which extended Northwesterly from a point in the
Northeasterly line of said lot 5, distant thereon 112.04 feet Northwesterly from the Southeast
corner of said lot 5 to a point in the Northwesterly line of said lot 5, distant thereon 134.23
feet Southwesterly from the Northeast corner of said lot 5; thence South 640 29' 30" East
120.65 feet to a point in the Northeasterly line of said lot 5; thence South 250 37' 00" East
along said Northeasterly line of lot 5, 112.04 feet to the Southeast corner thereof; thence
South 60' 30' 50" West along the Southeasterly line of said lots 5 to 8 inclusive 404.28 feet
to the point of beginning.
EXCEPT that portion of lots 5 and 6 lying within that portion of Washington Blvd., as
described in that certain deed in favor of the County of Los Angeles recorded April 21, 1966
as Instrument No. 3330 Official Records.
PARCEL 7:
That portion of the Rancho San Antonio, in the City of Vernon, County of Los Angeles,
State of California, as per map recorded in Book 1 Page 389 of patents
described as follows:
Beginning at the most Easterly corner of that certain tract of land described in Book 8578
Page 258, Official Records of Los Angeles County, and running thence South 26' 45' 40"
East on the Southeasterly prolongation of the Northeasterly line of said tract a distance of
28.50 feet to the Southerly line of a certain easement 17 feet wide as described in deed to the
Atchison, Topeka & Santa Fe Railway Company and recorded in Book 2574 Page 295
Official Records of said County; thence South 63' 14' 20" West on said Southerly line a
distance of 8.63 feet to the beginning of a tangent curve concave to the Northeast and having
a radius of 296.44 feet; thence on said curve and on said Southerly line of said easement to
the A.T. & S.F. Railway Co. to a point on the Southerly line of said tract of land described
in Book 8578 Page 258 Official Records; thence North 63' 14' 20" East a distance of 135.85
feet more or less to the place of beginning.
CLTA Preliminary Report Form (Rev. 1-1-95)
y � �
1211413
Page 8
SCHEDULE B
08/22/02
At the date hereof Exceptions to coverage in addition to the printed exceptions and exclusions in said
policy form would be as follows:
1.1.1 Property taxes, including general and special taxes, personal property taxes, if any,
and any assessments collected with taxes, to be levied for the fiscal year 2003 - 2004 which
are a lien not yet payable.
1.1.2 Property taxes, including general and special taxes, personal property taxes, if any,
and any assessments collected with taxes, for the fiscal year 2002-2003
1st Installment:
Penalty:
2nd Installment:
Penalty (including cost):
Exemption:
Code Area:
Assessment No.:
$22,268.89 Open
$2,226.89
$22,268.89 Open
$2,236.89
$None
10716
5169-023-011
1.1.3 Property taxes, including general and special taxes, personal property taxes, if any,
and any assessments collected with taxes, for the fiscal year 2002-2003
1st Installment:
Penalty:
2nd Installment:
Penalty (including cost):
Code Area:
Assessment No.:
$788.27 Open
$78.83
$788.25 Open
$88.83
10716
5169-023-020
1.1.4 Supplemental or escaped assessments of property taxes, if any, assessed pursuant to
the Revenue and Taxation Code of the State of California.
2 An easement for the purpose shown below and rights incidental thereto as set forth in
a document
Purpose: a road
Recorded: June 16, 1928 as Instrument No. 760 in Book 8578 Page 258 Official
Records
Affects: parcel 2-A, 3-A and 4-A
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 9 .
08/22/02
3 An easement for the purpose shown below and rights incidental thereto as set forth in
a document
Purpose: a road
Recorded: in Book 13539 Page 163 Official Records
Affects: parcels 2-A 3-A and 4-A
4 An unrecorded lease with certain terms, covenants, conditions and provisions set
forth therein.
Lessor: not shown
Lessee: Hyvis Oils Inc, of California
Disclosed by: a Memorandum of lease
Recorded: May 4, 1938 in Book 15744 Page 194 Official Records
The present ownership of the leasehold created by said lease and other matters affecting the
interest of the lessee are not shown herein.
Said matter affects:parcel 3
5 An easement for the purpose shown below and rights incidental thereto as set forth in
a document
Granted to: Southern California Gas Company, a corporation
Purpose: pipe lines
Recorded: in Book 15950 Page 343 Official Records
Affects: parcels 1, 2-A, 3-A and 4-A
6 An easement for the purpose shown below and rights incidental thereto as set forth in
a document
Granted to: Southern California Gas Company, a corporation
Purpose: pipe lines
Recorded: September 14, 1938 as Instrument No. 866 in Book 16076 Page 44
Official Records
Affects: a portion of parcel 4 as set forth therein
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 10
08/22/02
7 An easement for the purpose shown below and rights incidental thereto as set forth in
a document
Granted to: The City of Vernon
Purpose: public road and highway
Recorded: in Book 19841 Page 205 Official Records and in Book 19829 Page 263
Official Records
Affects: parcel 1, 2-A, 3-A, 4-A and other property as therein set forth
8 An easement for the purpose shown below and rights incidental thereto as set forth in
a document
Granted to: The City of Vernon
Purpose: public road and highway
Recorded: February 20, 1943 as Instrument No. 844 in Book 19728 Page 342
Official Records
Affects: portions of parcels 5 and 6 lying within Washington Blvd 80 feet wide,
as set forth therein
9 An easement for the purpose shown below and rights incidental thereto as set forth in
a document
Purpose: a road
Recorded: April 29, 1943 as Instrument No. 496 in Book 19998 Page 36 Official
Records
Affects: parcels 1, 2-A, 3-A and 4-A
10 The effect of easement
Dated: not shown
Executed by: Pennzoil Company a Delaware Corporation and Harshaw/Filtrol
partnership, a Delaware Corporation
Recorded: August 5, 1986 as Instrument/File No. 86-1001816 Official Records
Reference is made to said document for full particulars.
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 11
11 The effect of agreement
08/22/02
Dated: October 1, 1965
Executed by: Filtrol corporation, Cleo's Incorporated, Russell & Russell Inc. and
Max Slipich Sewer Co.
Recorded: January 8, 1999 as Instrument/File No. 99-0029800 Official Records
Reference is made to said document for full particulars.
12 The fact that the ownership of said land does not include rights of access to or from
the street or highway abutting said land, such rights having been relinquished by the map of
said Tract.
Affects:parcel 7
13 A claim of mechanic's lien
Amount: $3,432.03
Claimant: Terra Movers Inc.
Recorded: February 20, 2003 as Instrument/File No. 03-0499442,
Official Records
14 A claim of mechanic's lien
Amount: $46, 900.00
Claimant: Asbestos Services, inc„ a California corporation
Recorded: August 22, 2003 as Instrument/File No. 03-2444025,
Official Records
15 The Company will require that the attached "Owner's Information Statement" be
completed by the owner of the estate described or referred to in Schedule A immediately
prior to the close of this transaction and be returned to us.
The purpose of the Owner's Information Statement is to provide the Company with certain
information that cannot necessarily be ascertained by making a physical inspection of the
land.
16 Any rights, interests or claims of parties in possession of the land not shown by the
public records.
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 12
08/22/02
17 The Company will require a certified copy of the Resolution of the Board of Directors
of the following corporation authorizing the transaction for which this Preliminary Report
was ordered.
Corporation: Filtrol corporation, a Delaware Corporation and W.H. Comstock as
receiver of United States Building and Loan Association of Los
Angeles, a corporation
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
Page 13
08/22/02
Note No. 17.1 The changes which the Company will make for next day messenger services (i.e.
Federal Express, UPS, DHL, Airborne; Express Mail, etc.) are $15.00 per letter, standard overnight
service, and $25.00 for larger size packages and/or priority delivery services. Such charges include
the cost of such messenger service and the Company's expenses for arranging such messenger service
and its overhead and profit. Special messenger services will be billed at the cost of such services.
There will be no additional charge for pick-up or delivery of packages via the Company's regularly
scheduled messenger runs.
Note No. 17.2 The charge for a policy of title insurance, when issued through this title order, will be
based on the basic (not short-term) title insurance rate.
Note No. 17.3 There are no conveyances affecting said land recorded within six (6) months of the
date of this report.
Plat/enclosed/LM
CLTA Preliminary Report Form (Rev. 1-1-95)
1211413
08/22/02
Page 14
Exhibit A (Rev. 10/17/98)
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 the rights of a
purchaser for value without knowledge.
3. Defects, liens, encumbrances, adverse claims or other matters:
(a)whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the
insured claimant;
(b)not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and
not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became
an insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e)resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured
mortgage or for the estate or interest insured by this policy.
4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or
the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in
which the land is situated.
5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction
evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law.
6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the
transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar
creditors'rights laws.
1211413
08/22/02
Page 15
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:
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 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 (6/2/98)
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 d. improvements on Land
b. zoning e. Land division
C. Land use 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.
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. 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.
1211413
08/22/02
Page 16
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.
This Exclusion does not limit the coverage described in Covered Risk I I or 18.
1211413
08/22/02
Page 17
DEDUCTIBLES
Your Deductible Amount Our Maximum Dollar Limit of Liability
Covered Risk 14: 1 % of Policy Amount or $2,500.00 (whichever is less) $10,000.00
Covered Risk 15: 1 % of Policy Amount or $5,000.00 (whichever is less) $25,000.00
Covered Risk 16: 1 % of Policy Amount or $5,000.00 (whichever is less) $25,000.00
Covered Risk 18: 1 % of Policy Amount or $2,500.00 (whichever is less) $ 5,000.00
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
* improvements on the land
* land division
* 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 to the Policy Date and is binding on you if you bought the land without knowing
of the taking
3. Title Risks:
* that are created, allowed, or agreed to by you
* that are known to you, but not to us, on the Policy Date -- unless they appeared in the public records
* that result in no loss to you
* that first affect your title after the Policy Date -- this does not limit the labor and material lien coverage in
Item 8 of Covered Title Risks
4. Failure to pay value for your title.
5. Lack of a right:
1211413
08/22/02
Page 18
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.
1211413
08/22/02
Page 19
AMERICAN LAND TITLE ASSOCIATION LOAN POLICY (10-17-92) WITH ALTA ENDORSEMENT -FORM 1
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; (ii) the
character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change
in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of
any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a
notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the
public records at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise
thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded
in the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy,
but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a
purchaser for value without knowledge.
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 to 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 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 or any consumer credit protection or truth in lending law.
1211413
08/22/02
Page 20
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 or 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 judgement 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:
. 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.
AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY (10-17-92)
and
1211413
08/22/02
Page 21
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 on the land; (iii) a separation in ownership or a
change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the
effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement
thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded
in the public records at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise
thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded
in the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy,
but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a
purchaser for value without knowledge.
3. Defects, liens, encumbrances, adverse claims or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant;
(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured
claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an
insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e)resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or
interest insured by this policy.
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 laws, that is based on:
(0the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent
transfer, or
(ii)the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where
the preferential transfer results from the failure:
(a) to timely record the instrument of transfer; or
(b) of such recordation to impart notice to a purchaser for value or a judgement or lien creditor.
1211413
08/22/02
Page 22
The above policy forms may be issued to afford either Standard Coverage or Extended Coverage. hi addition to the above
Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage Policy will also include the following General
Instructions:
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 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.
1211413
08/22/02
Page 23
This Affidavit when fully completed is to be issued and notarized before returning to enable
Title Company to insure the presently pending transaction.
AFFIDAVIT
affirm(s) as follows:
1. I/We am/are the person(s) who make, executed, and delivered the deed dated
to ,Grantee,
which was recorded , as Instrument No.
Official Records, conveying the following described property:
2. A. Consideration in the Amount of $ was paid for this
conveyance; or
B. Other
3. That possession of said premises has been surrendered to the grantee.
4. A. When I/We signed and delivered the deed to grantee, I/We
understood the effect of the deed, knew that I/We was/were signing,
and signed it freely, voluntarily and without being under any duress; or
B. Other
5. This Affidavit is made for the protection and benefit or the grantee, the
grantee's successors and assigns, and all other parties hereafter dealing with
or who may acquire an interest in the above -described property, and for the
purpose of inducing
("Title Company") to insure title to the above -described property, I/We know
that Title Company will rely on this Affidavit and that for my/our assurances
Title Company would not insure the property.
6. I/We acknowledge I/We have read the foregoing and fully indemnity and hold Title
Company harmless against liability occasioned by Title Company's reliance on the
statements I/We have, made in this Affidavit.
Dated: , 20
CLTA Preliminary Report Form (Rev. 1-1-95)
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