At the date hereof exceptions to coverage in addition to the Exceptions and Exclusions in said policy form would be as follows

Old Republic Title Company

314 Lytton Avenue, Palo Alto, CA 94301, 560-321-0510, Fax 650-321-2973

PRELIMINARY REPORT

Issued for the sole use of: Our Order No. 498361- JG

PENINSULA BETTER HOMES AND GARDENS

605 CAMBRIDGE AVENUE

MENLO PARK, California 94025

Attention: BOB WILLIAMS

When Replying Please Contact: Jacqueline Griffin

Property Address: 300 Sequoia Avenue, Palo Alto, CA 94306 - 1045

In response to the above referenced application for a policy of title insurance, OLD REPUBLIC 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 and Exhibit A attached. Copies of the Policy forms should be read. They are available from the office which issued this report.

Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in

Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you with

notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered.

It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land.

This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the

issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or..~9mmitment should be requested.

Dated as of January 26th, 2000 , at 7:30 A.M. OLD REPUBLIC TITLE COMPANY

The form of policy of title insurance contemplated by this report is: A Homeowner's Policy of Title Insurance (1998) i AND an ALTA Loan Policy -1970 (Rev, 1992) with ALTA Endorsement Form 1 Coverage, OR, an ALTA Loan Policy -1992 with ALTA Endorsement Form 1 Coverage. A specific request should be made if another form or additional coverage is desired. 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: PESLITA M. RASMUSSEN, as Trustee of the Peslita M. Rasmussen Living Trust dated December 7, 1994

The land referred to in this Report is situated in the County of Santa Clara, City of Palo Al to State of California, and is described as follows:

LOT 11, BLOCK E, as delineated upon that certain Map entitled "SOUTHGATE", filed for record in the Office of the Recorder of the County of Santa Clara, State of California, on February 23rd, 1923 in Book R of Maps, at Page 28 AND 29.

124-25-013

06014

nm/ap/bf

a 124-25-013

At the date hereof exceptions to coverage in addition to the Exceptions and Exclusions in said policy form would be as follows:

1. Taxes and assessments general and special for the fiscal year 2000-2001 a lien but not yet due or payable.

2. Covenants, Conditions and Restrictions, which do contain express provisions for forfeiture or reversion of title in the event of violation, but omitting any covenants or restrictions if any based upon racer color religion, sex, handicap, familial status, or national origin unless and only to the extent that said covenant (a) is exempt under Title 42, Section 3607 of the United States Code or

(b) relates to handicap but does not discriminate against handicapped persons, as provided in an instrument

Recorded: February 7thr 1923 in Book 8 of Official Records, Page 217

NOTE: Section 12956.1 of the Government Code provides the following: '1 If this

document contains any restriction based on race, color, religion sex, familial status, marital status, disability, national origin or ancestry, that restriction violates state and federal fair housing laws and is void. Any person holding an interest in this property may request that the county recorder remove the restrictive covenant language pursuant to subdivision (c) of Section 12956.1 of the Government Code. II

3. An easement affecting that portion of said land and for the purposes stated herein and incidental purposes as shown on the filed Map.

For: Public service easement

Affects: the Southeasterly 6 feet

4. Covenants, Conditions and Restrictions which do not contain express provisions for forfeiture or reversion of title in the event of violation, but omitting any covenants or restrictions if any, based upon race, color, religion, sexr handicap, familial status, or national origin unless and only to the extent that said covenant (a) is exempt under Title 42, Section 3607 of the United States Code or

(b) relates to handicap but does not discriminate against handicapped persons as provided in an instrument

Recorded: June 28thr 1923 in Book 13 of Official Records, Page 232

Said Covenants, Conditions and Restrictions provide that a violation thereof shall not defeat or render invalid the lien of any Mortgage or Deed of Trust made in good faith and for value. Liens and charges for upkeep and maintenance as provided in the above mentioned Covenants, Conditions and Restrictions if any where no notice thereof appears on record.

NOTE: Section 12956.1 of the Government Code provides the following: "If this document contains any restriction based on race, color, religion, sex, familial status, marital status, disability, national origin, or ancestry, that restriction violates state and federal fair housing laws and is void. Any person holding an interest in this property may request that the county recorder remove the restrictive covenant language pursuant to subdivision (c) of Section 12956.1 of the Government Code. II

5. Covenants, Conditions and Restrictions, which do contain express provisions for forfeiture or reversion of title in the event of violation, but omitting any covenants or restrictions if any, based upon race, color, religion, sex, handicap, familial status, or national origin unless and only to the extent that said covenant (a) is exempt under Title 42, Section 3607 of the United States Code or

(b) relates to handicap but does not discriminate against handicapped persons, as provided in an instrument

Recorded: October 13th, 1928 in Book 427 of Official Records, Page 321

NOTE: Section 12956.1 of the Government Code provides the following: "If this document contains any restriction based on race, color, religion, sex, familial status, marital status, disability, national origin, or ancestry, that restriction violates state and federal fair housing laws and is void. Any person holding an interest in this property may request that the county recorder remove the restrictive covenant language pursuant to subdivision (c) of Section 12956.1 of the Government Code."

6. The requirement that a Certification of Trustee be furnished in accordance with Probate Code Section 18100.5

7. The requirement that this company be provided with a suitable Owner's Affidavit -forms are available in our title department (the Company reserves the right to make additional exceptions and/or requirements upon review of the Owner's Affidavit) .

8. The requirement that this Company be provided with an opportunity to-inspect the land (the Company reserves the right to make additional exceptions and/or requirements upon completion of its inspection).

----------------------------- Informational Notes --------------------------------------

1. Taxes, general and Special, for the fiscal year 1999-2000 as follows: Assessor's Parcel No. : 124-25-013 Code No. : 06014

1st Installment: $349.63, Marked Paid

2nd Installment: $349.63, Marked Paid

The above installments include a property tax exemption of $7,000.00

2. The last recorded instrument (s) conveying record title to the premises is/are:

A deed executed by PESLITA M. RASMUSSEN to PESLITA M. RASMUSSEN, as Trustee of the Peslita M. Rasmussen Living Trust dated December 7, 1994, recorded April 11th,

1988 in Book K497 of Official Records, Page 1159

The last conveyance affecting said land recorded within the last two years, prior to the date of this Report are: NONE.

3. Upon sale or transfer, this property will be subject to the City of Palo Alto Conveyance Tax.

4. The mailing address of the vestee as shown in the records is: 300 Sequoia Avenue, Palo Alto, Ca. 94306