Date of Inspection: Termite Inspection Report Fee: $ TOTAL DUE: $ Escrow Number: Escrow Officer: NOTICE TO OWNER

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1 PREFERRED TERMITE SERVICES, INC KEATON LOOP, SUITE A SAN JOSE, CA PH# (408) FAX-(408) INVOICE Invoice Number: Invoice Date: 05/19/2010 Bill To: CHARLIE KING INTERO REAL ESTATE CK@CHARLIEKING.COM Address of Property Inspected: 1176 WESTWOOD DRIVE SAN JOSE, CA PH.# Invoice Description: Date of Inspection: 05/19/2010 Termite Inspection Report Fee: $ (Termite work not included.) Payments: $ 0.00 Date: N/A TOTAL DUE: $ Escrow Number: Escrow Officer: TERMS: Payment is due upon receipt of invoice or at the close of an open escrow account. Not to exceed 90 days. NOTICE TO OWNER Under the California Mechanics Lien Law any structural pest control company which contracts to do work for you, any contractor, subcontractor, laborer, supplier or other person who helps to improve your property, but is not paid for his or her work or supplies, has a right to enforce a claim against your property. This means that after a court hearing, your property could be sold by a court officer and the proceeds of the sale used to satisfy the indebtedness. This can happen even if you have paid your structural pest control company in full if the subcontractor, laborers or suppliers remain unpaid. To preserve their right to file a claim or lien against your property, certain claimants such as subcontractors or material suppliers are required to provide you with a document entitled "Preliminary Notice". Prime contractors and laborers for wages do not have to provide this notice. A Preliminary Notice is not a lien against your property. Its purpose is to notify you of persons who may have a right to file a lien against your property if they are not paid. Form xfrx_i2a -- 6/12/06

2 WOOD DESTROYING PESTS AND ORGANISMS INSPECTION REPORT BUILDING NO. STREET CITY ZIP Date of Inspection NUMBER OF PAGES 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 PREFERRED TERMITE SERVICES, INC KEATON LOOP, SUITE A SAN JOSE, CA PH# (408) FAX-(408) PR 3858 #: Ordered by: CHARLIE KING INTERO REAL ESTATE CK@CHARLIEKING.COM Property Owner and/or Party of Interest CHARLIE KING INTERO REAL ESTATE CK@CHARLIEKING.COM Report sent to: CHICAGO TITLE PH.# PH.# COMPLETE REPORT X LIMITED REPORT SUPPLEMENTAL REPORT REINSPECTION REPORT GENERAL DESCRIPTION: Inspection Tag Posted: This is a one story, single family residence. It was furnished at the time of inspection. Subarea. Other Tags Posted: An inspection has been made of the structure(s) on the diagram in accordance with the the Structural Pest Control Act. Detached porches, detached steps, detached decks and any other structures not on the diagram were not inspected. Subterranean Termites X Drywood Termites X Fungus/Dryrot X Other Findings Further Inspection X If any of the above boxes are checked, it indicates that there were visible problems in accessible areas. Read the report for details on checked items Key: 1 = Subterranean Termites 2 = Drywood Termites 3 = Fungus/Dryrot 4 = Other Findings 5 = Further Inspection 3D 3A 3B 2F 1A 1C 3B 4A 2E 4B 2D 1A 3C 1A 1B 1A 2C1A 2D 3D 2D Front of Structure Inspected By License No. RON MOBERG OPR 9750 Signature You are entitled to obtain copies of all reports and completion notices on this property report to the Structural Pest Control Board during the proceding two years. To obtain copies contact: Structural Pest Control Board, 2005 Evergreen Street, Suite 1500, Sacramento, Calfornia Questions or problems concerning the above report should be directed to the manager of the company. Unresolved questions or problems with services performed may be directed to the Structural Pest Control Board at (916) , (800) or (form t1a - 3/15/08) 43M-41 (Rev. 10/01)

3 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 NOTES, CAUTIONS AND DISCLAIMERS IF LOCAL BUILDING CODES REQUIRE PERMITS OR ADDITIONAL WORK WHICH IS NOT OUTLINED IN THIS REPORT, A CHANGE WORK ORDER WILL BE ISSUED. THE CHANGE ORDER WILL INCLUDE THE CITY REQUIREMENTS AND AN ADDITIONAL COST ESTIMATE TO PERFORM THE WORK. NOTE : OUR BID FOR TILE IS BASED ON STANDARD GRADE TILE / VINYL. ALL UPGRADES WILL BE AT ADDITIONAL COST. THIS WOOD DESTROYING PESTS & ORGANISMS REPORT DOES NOT INCLUDE MOLD OR ANY MOLD LIKE CONDITIONS. NO REFERENCE WILL BE MADE TO MOLD OR MOLD LIKE CONDITION. MOLD IS NOT A WOOD DESTROYING ORGANISM AND IS OUTSIDE THE SCOPE OF THIS REPORT AS DEFINED BY THE STRUCTURAL PEST CONTROL ACT. IF YOU WISH YOUR PROPERTY TO BE INSPECTED FOR MOLD OR MOLD LIKE CONDITIONS, PLEASE CONTACT THE APPROPRIATE MOLD PROFESSIONAL. MINIMUM CHARGE FOR REPAIRS PERFORMED BY THIS COMPANY IS $ IF REQUESTED BY THE PERSON ORDERING AN ORIGINAL REPORT, A REINSPECTION OF THE STRUCTURE WILL BE PERFORMED IF AN ESTIMATE OR BID FOR MAKING REPAIRS WAS GIVEN WITH THE ORIGINAL INSPECTION REPORT, OR THEREAFTER. THIS COMPANY WILL REINSPECT REPAIRS DONE BY OTHERS WITHIN FOUR MONTHS OF THE ORIGINAL INSPECTION. A CHARGE, IF ANY, CAN BE NO GREATER THAN THE ORIGINAL INSPECTION FEE FOR EACH REINSPECTION. THE REINSPECTION MUST BE DONE WITHIN TEN (10) WORKING DAYS OF REQUEST. THE REINSPECTION IS A VISUAL INSPECTION AND IF INSPECTION OF CONCEALED AREAS IS DESIRED, INSPECTION OF WORK IN PROGRESS WILL BE NECESSARY. ANY GUARANTEES MUST BE RECEIVED FROM PARTIES PERFORMING REPAIRS. AUTHORITY CITED: SECTION 8525 BUSINESS AND PROFESSIONS CODE. REFERENCE: SECTION 8516, BUSINESS AND PROFESSIONS CODE. NOTICE: REPORTS ON THIS STRUCTURE PREPARED BY VARIOUS REGISTERED COMPANIES SHOULD LIST THE SAME FINDINGS (i.e. TERMITE INFESTATIONS, TERMITE DAMAGE, FUNGUS DAMAGE, ECT.). HOWEVER, RECOMMENDATIONS TO CORRECT THESE FINDINGS MAY VARY FROM COMPANY TO COMPANY. YOU HAVE A RIGHT TO SEEK A SECOND OPINION FROM ANOTHER COMPANY. THE PEST CONTROL INDUSTRY RECOGNIZES A STRUCTURE TO HAVE CERTAIN AREAS BOTH INACCESSIBLE AND NOT INSPECTED. THESE AREAS INCLUDE BUT ARE NOT LIMITED TO: INACCESSIBLE AND\OR INSULATED ATTICS OR PORTIONS THEREOF, ATTICS WITH LESS THAN 18" CLEAR CRAWL SPACE, THE INTERIOR OF HOLLOW WALLS; THE CRAWL SPACE UNDERNEATH A DECK LESS THAN 12"; COVERED CEILINGS; SPACES BETWEEN A FLOOR OR PORCH DECK AND THE CEILING BELOW; AREAS WHERE THERE IS NO ACCESS WITHOUT DEFACING OR TEARING LUMBER, MASONRY, OR FINISHED WORK; AREAS UNDERNEATH, BEHIND OR BELOW APPLIANCES OR BENEATH FLOOR COVERINGS OR FURNISHINGS OR STORAGE, LOCKED AREAS, AND AREAS REQUIRING AN EXTENSION LADDER; AREAS WHERE ENCUMBRANCES, STORAGE, CONDITIONS, OR LOCKS MAKE INSPECTION IMPRACTICAL; AND AREAS OR TIMBERS AROUND EAVES THAT WOULD REQUIRE USE OF AN EXTENSION LADDER. SLAB FLOOR CONSTRUCTION HAS BECOME MORE PREVALENT IN RECENT YEARS. FLOOR COVERING MAY CONCEAL CRACKS IN THE SLAB THAT WILL ALLOW INFESTATIONS TO ENTER. INFESTATIONS MAY BE CONCEALED BY PLASTER, SHEETROCK OR OTHER WALL COVERINGS SO THAT A DILIGENT INSPECTION MAY NOT UNCOVER THE TRUE CONDITION. THE ROOF WAS NOT INSPECTED DUE TO LACK OF ACCESSIBILITY, QUALIFICATION AND LICENSING. THESE AREAS ARE NOT PRACTICAL TO INSPECT BECAUSE OF HEALTH HAZARDS, DAMAGE, OBSTRUCTION OR INCONVENIENCE AND UNLESS SPECIFIED OR DESCRIBED IN THIS WOOD DESTROYING PESTS AND ORGANISMS INSPECTION REPORT. THIS COMPANY SHALL EXERCISE DUE CARE DURING INSPECTIONS AND TREATMENTS BUT ASSUMES NO LIABILITY FOR ANY DAMAGE TO TILES, SLATES, SHINGLES OR OTHER ROOFING MATERIALS, INCLUDING PATIO COVERS, ALUMINUM AWNINGS, SOLAR

4 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 HEATING, PLANTS, SHRUBBERY OR PAINT DURING ANY TYPE OF TREATMENT. IN THE PERFORMANCE OF CORRECTIVE MEASURES, IT MAY BE NECESSARY TO DRILL INTO CONCEALED AREAS AND/OR TO CUT OR REMOVE PLANTS. THE TERMITE EXTERMINATOR WILL NOT BE LIABLE FOR PLUMBING, HEATING, ELECTRICAL, GAS LINES AND EQUIPMENT IN OR UNDER A SLAB, NOR TO PLANTS WHICH MAY BE DAMAGED DURING TREATMENTS AND/OR REPAIRS. GUARANTEE POLICY: THIS GUARANTEE EXCLUDES STRUCTURES WITH SUB SLAB HEATING\AIR CONDITIONING SYSTEMS, PLENUM CONSTRUCTION WITH AIR CONDITIONING AND HEATING DUCT IN USE, A WELL OR CISTERN WITHIN FIFTY FEET AND AREAS THAT ARE INACCESSIBLE FOR TREATMENT. ADDITIONAL EXCLUSIONS INCLUDE STRUCTURES WITH DAMAGE TO OR FROM EXCESSIVE MOISTURE, INADEQUATE CONSTRUCTION, AREAS OF INACCESSIBILITY, DETERIORATING MATERIALS, MASONRY FAILURE, GRADE ALTERATION, PIPES AND CONDUITS BENEATH CONCRETE SLAB, FURNISHINGS OR CONTENTS, ETC. NO GUARANTEE WILL BE ISSUED FOR ANY WORK THAT IS A SECONDARY RECOMMENDATION OR WORK COMPLETED BY OTHERS. GUARANTEED FOR THIRTY DAYS ARE ANY PLUMBING, GROUTING, CAULKING AND RESETTING OF COMMODES, SINKS OR ENCLOSURES. ALL OTHER WORK PERFORMED BY THIS COMPANY SHALL BE GUARANTEED FOR THE DURATION OF ONE YEAR. THIS WOOD DESTROYING PESTS AND ORGANISMS INSPECTION REPORT DOES NOT INCLUDE WORK WHICH REQUIRES CONTACT WITH MATERIALS CONTAINING ASBESTOS. TERMITE INSPECTORS HAVE NO EXPERTISE OR LICENSE IN ASBESTOS ANALYSIS. ASBESTOS IS A NATURAL OCCURRING MINERAL FIBER USED EXTENSIVELY IN CONSTRUCTION PRIOR TO THE OWNER, EMPLOYEE OR CONTRACTOR MUST DETERMINE THE ASBESTOS STATUS PRIOR TO THE COMMENCEMENT OF WORK ON A PROJECT. OCCUPANTS AND EMPLOYEES MUST BE PROTECTED FROM ASBESTOS FIBER RELEASE. SHOULD ASBESTOS BE OBSERVED DURING ANY CONSTRUCTION OR DEMOLITION, WORK MUST STOP. THE OWNER SHALL OBTAIN THE SERVICES OF AN ASBESTOS ABATEMENT CONTRACTOR TO EVALUATE THE SITUATION, PROVIDE THE NECESSARY SERVICES AND CERTIFY THE AREA SAFE BEFORE WORK MAY RESUME. ASBESTOS STATEMENT REF: AB2040, SB2572 AND GENERAL INDUSTRY SAFETY ORDER NUMBER NOTICE: THE CHARGE FOR SERVICE THAT THIS COMPANY SUBCONTRACTS TO ANOTHER PERSON OR ENTITY MAY INCLUDE THE COMPANY'S CHARGES FOR ARRANGING AND ADMINISTERING SUCH SERVICES THAT ARE IN ADDITION TO THE DIRECT COSTS ASSOCIATED WITH PAYING THE SUBCONTRACTOR. WE SUBCONTRACT TO COST LESS FUMIGATION, 844 EARLE, SAN JOSE, CA (408) , DISCOUNT FUMIGATION, 260 CIMINO AVENUE, SAN JOSE,CA (408) , DRISKELL FUMIGATION, INC. 834 JURY COURT, SUITE A, SAN JOSE, CA (408) , GORDONS FLOOR COVERING, 2949 AULIN DRIVE, SAN JOSE, CA 95125, CONSTRUCTION DYNAMICS, 648 THORNTON WAY, SAN JOSE CA (408) "NOTICE: The charge for service that this company subcontracts to another registered company may include the company's charges for arranging and administering such services that are in addition to the direct costs associated with paying the subcontractor. You may accept Preferred Termite Services bid or you may contract directly with another registered company licensed to perform the work. If you choose to contract directly with another registered company, Preferred Termite Services will not in any way be responsible for any act or omission in the performance of work that you directly contract with another to perform." THE OWNER OF THIS STRUCTURE HAS CERTAIN OBLIGATIONS REGARDING MAINTENANCE AND PERTAINING TO THE DETERRENCE OF WOOD DESTROYING ORGANISMS. MAINTENANCE PROCEDURES INCLUDE; BUT ARE NOT LIMITED TO: REASONABLE CLEANING, UPKEEP OF ROOFS, GUTTERS AND DOWNSPOUTS; PAINTING AND SEALING OF EXPOSED SURFACES; CAULKING ABOUT DOORS AND WINDOWS OR GROUTING ABOUT COMMODES, TUB AND SHOWER ENCLOSURES; STORING MATERIALS ONE FOOT AWAY THE STRUCTURE'S FOUNDATIONS; PROVIDING ADEQUATE VENTILATION, MAINTAINING PROPER DRAINAGE AWAY FROM STRUCTURE (INCLUDING SPRINKLER SYSTEMS); KEEPING SOIL LEVELS BELOW THE TOP OF FOUNDATIONS AND PROHIBITING EARTH CONTACT WITH WOOD COMPONENTS OF THE STRUCTURE(S).

5 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 THE EXTERIOR SURFACE OF THE ROOF WAS NOT INSPECTED. IF YOU WANT THE WATER TIGHTNESS OF THE ROOF DETERMINED, YOU SHOULD CONTACT A ROOFING CONTRACTOR WHO IS LICENSED BY THE CONTRACTORS' STATE LICENSE BOARD. THIS COMPANY IS NOT RESPONSIBLE FOR DAMAGE FOUND DURING THE COURSE OF REPAIRS NOR DAMAGE IN AREAS THAT WERE INACCESSIBLE AT THE TIME OF INSPECTION. WORK COMPLETED BY PREFERRED TERMITE SERVICES, INC. DOES NOT INCLUDE PAINTING, TEXTURING AND/OR SANDING. OWNER TO PAINT, TEXTURE OR SAND AS DESIRED. SECTIONED REPORTING THIS IS A SEPARATED REPORT WHICH IS DEFINED AS SECTION I OR SECTION II CONDITIONS EVIDENT ON THE DATE OF THIS INSPECTION. SECTION I CONTAINS ITEMS WHERE THERE IS EVIDENCE OF ACTIVE INFESTATION, INFECTION OR CONDITIONS THAT HAVE RESULTED IN OR FROM INFESTATION OR INFECTION. SECTION II ITEMS ARE CONDITIONS DEEMED LIKELY TO LEAD TO INFESTATION OR INFECTION BUT WHERE NO VISIBLE EVIDENCE OF SUCH WAS FOUND. FURTHER INSPECTION ITEMS ARE DEFINED AS RECOMMENDATIONS TO INSPECT AREA(S) WHICH DURING THE ORIGINAL INSPECTION DID NOT ALLOW THE INSPECTOR ACCESS TO COMPLETE HIS INSPECTION AND CANNOT BE DEFINED AS SECTION I OR SECTION II. 1. SUBTERRANEAN TERMITES ITEM NO. 1A 1A SUBTERRANEAN TERMITES WERE NOTED IN VARIOUS LOCATIONS. SEE 1A ON DIAGRAM. (Cost $ ) 1A TREAT THE SOIL AT ALL PROBABLE ACCESSIBLE ENTRY POINTS WITH A REGISTERED TERMITICIDE AND REMOVE AND DISPOSE OF CELLULOSE DEBRIS. CELLULOSE DEBRIS WHICH CANNOT BE REMOVED WILL BE TREATED. OUR PROPOSED TREATMENT MAY INCLUDE, BUT IS NOT LIMITED TO THE FOLLOWING METHODS OF TREATMENTS: TRENCHING AND/OR ROD INJECTING THE SOIL ADJACENT TO ALL ACCESSIBLE FOUNDATION WALLS/SLABS AND PIERS, DRILLING THROUGH ALL CONCRETE SLABS, VENEERS, CONCRETE, BRICK AND TILE PORCHES ADJACENT TO FOUNDATIONS AND PERIMETER COLD JOINTS (SPACING HOLESAPPROXIMATELY 12" APART). INJECTING BELOW/BEHIND DRILLED AREAS WITH A REGISTERED TERMITICIDE. ALL DRILL HOLES WOULD BE PATCHED WITH CONCRETE UPON COMPLETION. SCRAPE DOWN/REMOVE ALL ACCESSIBLE EVIDENCE (SHELTER/EXPLORATORY TUBES AND SWARMERS) UPON COMPLETION. PREFERRED TERMITE ASSUMES NO LIABILITY FOR ANY DAMAGE TO ANY PLUMBING LINES, GAS LINES OR ELECTRICAL LINES WHICH COULD BE CONCEALED BELOW THE SLABS TO BE DRILLED. ALTHOUGH PREFERRED TERMITE SERVICES USES CAUTION, WE ASSUME NO LIABILITY FOR BROKEN AND/OR CHIPPED BRICKS, TILES, ETC. DUE TO DRILLING. PLEASE REMOVE STORED ITEMS (IF APPLICABLE) 3 FEET AWAY FROM INTERIOR WALLS IN GARAGE PRIOR TO TREATMENT.

6 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 ITEM NO. 1B 1B (Cost $ ) FINDING (SECTION 1) SUBTERRANEAN TERMITE DAMAGE WAS NOTED TO SUBFLOOR. SEE 1B ON DIAGRAM. RECOMMENDATION FROM SUBSTRUCTURE, REMOVE AND REPLACE DAMAGED SUBFLOOR. SUBFLOOR WHICH IS SLIGHTLY DAMAGED WILL BE REINFORCED. IF REPAIR CAN NOT BE COMPLETED FROM SUBSTRUCTURE, A SUPPLEMENTAL REPORT WILL BE ISSUED WITH FURTHER RECOMMENDATIONS AND COSTS. WE ASSUME NO LIABILITY FOR LOOSE OR DAMAGED FINISHED FLOORING. ITEM NO. 1C 1C (Cost $ ) SUBTERRANEAN TERMITE DAMAGE WAS NOTED TO WOOD SIDING. SEE 1C ON DIAGRAM. REMOVE SIDING TO INSPECT FRAMING FOR DAMAGE AND ISSUE A SUPPLEMENTAL REPORT WITH FINDINGS, RECOMMENDATIONS AND COSTS. PRICE IS FOR FURTHER INSPECTION ONLY. 2. DRYWOOD TERMITES ITEM NO. (Cost $ ) EVIDENCE OF DRYWOOD TERMITES WERE NOTED TO WOOD FRAMING IN SUBSTRUCTURE, INTERIOR, METER BOX AND ROOF OVERHANG. SEE ON THE DIAGRAM. FUMIGATE THE STRUCTURE WITH A FUMIGANT LETHAL TO DRYWOOD TERMITES. SEE THE OCCUPANTS FUMIGATION NOTICE FOR FURTHER DETAILS. THIS COMPANY IS NOT RESPONSIBLE FOR DELAYS OR SCHEDULE CHANGES DUE TO INCLEMENT WEATHER OR OTHER AGENCIES, NOR IS IT RESPONSIBLE FOR DAMAGE TO ROOF OR PLANTS AS A RESULT OF THE FUMIGATION. REFER TO THE OCCUPANT'S FUMIGATION NOTICE/PREPARATION SHEET (SENT SEPARATELY) FOR ADDITIONAL INFORMATION. NOTICE: PRICE FOR FUMIGATION DOES NOT INCLUDE PREPARING THE STRUCTURE BEFORE FUMIGATION. IF REQUESTED, A LIST OF PROFESSIONAL PREP COMPANIES WILL BE PROVIDED. INSTRUCTIONS FOR PREPARING STRUCTURE PRIOR TO FUMIGATION WILL BE GIVEN UPON REQUEST SHOULD YOU WISH TO PREP STRUCTURE YOURSELF. ITEM NO. 2B 2B (Cost $ ) DRYWOOD TERMITE PELLETS WERE NOTED AS INDICATED BY ON THE DIAGRAM. REMOVE OR COVER PELLETS IN VISIBLE AND ACCESSIBLE AREAS. IT IS COMMON FOR ADDITIONAL PELLETS TO SIFT DOWN OVER A PERIOD OF TIME DUE TO NORMAL HOUSEHOLD VIBRATIONS. THIS ESTIMATE IS TO COVER THE PELLETS ONE TIME ONLY.

7 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 ITEM NO. 2C 2C (Cost $ ) DRYWOOD TERMITE DAMAGE WAS NOTED TO WINDOW SILL. SEE 2C ON DIAGRAM. REPLACE SILL. ITEM NO. 2D 2D (Cost $ ) DRYWOOD TERMITE DAMAGE WAS NOTED TO RAFTER TAIL(S). SEE 2D ON DIAGRAM FOR LOCATION OF FINDING. REPAIR OR REPLACE, AS NECESSARY. OWNER TO PAINT. NOTE :IF REPAIR REQUIRES REMOVAL OF ROOF COVERING AND/OR GUTTERS, OWNER IS TO CONTACT ROOFER AND/OR OTHER TRADESMAN FOR REPAIR AT ADDITIONAL COST. ITEM NO. 2E 2E (Cost $ ) DRYWOOD TERMITE DAMAGE WAS NOTED TO PLYWOOD AT SOFFIT. SEE 2E ON DIAGRAM. REPLACE DAMAGED PLYWOOD. IF ADDITIONAL DAMAGE IS FOUND DURING REPAIRS, A SUPPLEMENTAL REPORT WILL BE ISSUED WITH FURTHER RECOMMENDATIONS. ITEM NO. 2F 2F (Cost $ ) DRYWOOD TERMITE DAMAGE WAS NOTED TO FASCIA. SEE 2F ON DIAGRAM. RECOMMENDATION. REMOVE AND REPLACE DAMAGED PORTION OF FASCIA. (NOTE) IF REPAIR REQUIRES REMOVAL OF GUTTERS, ROOFING OR OTHER ATTACHED ITEMS TO FACILITATE REPAIRS OWNER IS TO HAVE OTHERS REINSTALL, REPAIR OR REPLACE IF NECESSARY REMOVED ITEMS AT ADDITIONAL COSTS.

8 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 3. FUNGUS OR DRYROT ITEM NO. 3A 3A (Cost $ ) FUNGUS DAMAGE WAS FOUND TO ROOF EAVE. PLEASE SEE 3A ON DIAGRAM FOR LOCATION OF FINDING. CUT BACK / REMOVE ROOF COVERING AS NECESSARY - CUT OUT AND REPLACE DAMAGED ROOF EAVE. IF DAMAGE EXTENDS TO RAFTERS, RAFTER BLOCKING OR OTHER WOOD FRAMING, A SUPPLEMENTAL REPORT WILL BE ISSUED WITH FURTHER COSTS FOR REPAIR. IF DAMAGE EXTENDS BEYOND THE APPROXIMATE TOTAL FOOTAGE GIVEN IN THE FINDING, A SUPPLEMENTAL REPORT WILL BE ISSUED WITH COSTS FOR ADDITIONAL REPAIR OF DAMAGED ROOF EAVE. OWNERS TO ENGAGE A ROOFER TO REPAIR OR REPLACE ROOF COVERING, AS NECESSARY, IMMEDIATELY AFTER THESE STRUCTURAL REPAIRS ARE COMPLETED SEPARATE FROM THIS CONTRACT AND AT ADDITIONAL COST. ITEM NO. 3B 3B (Cost $ ) FUNGUS DAMAGE WAS NOTED TO RAFTER TAIL(S). SEE 3B ON DIAGRAM FOR LOCATION OF FINDING. REPAIR OR REPLACE, AS NECESSARY. OWNER TO PAINT. NOTE :IF REPAIR REQUIRES REMOVAL OF ROOF COVERING AND/OR GUTTERS, OWNER IS TO CONTACT ROOFER AND/OR OTHER TRADESMAN FOR REPAIR AT ADDITIONAL COST. ITEM NO. 3C 3C (Cost $ ) SURFACE FUNGUS WAS NOTED TO SUBFLOOR BENEATH HALL BATH IN SUBSTRUCTURE. SEE 3C ON DIAGRAM. WIRE BRUSH INFECTED WOOD AND TREAT WOOD WITH FUNGICIDE. ITEM NO. 3D 3D (Cost $ ) FUNGUS DAMAGE WAS NOTED TO FASCIA. SEE 3D ON DIAGRAM. RECOMMENDATION. REMOVE AND REPLACE DAMAGED PORTION OF FASCIA. (NOTE) IF REPAIR REQUIRES REMOVAL OF GUTTERS, ROOFING OR OTHER ATTACHED ITEMS TO FACILITATE REPAIRS OWNER IS TO HAVE OTHERS REINSTALL, REPAIR OR REPLACE IF NECESSARY REMOVED ITEMS AT ADDITIONAL COSTS.

9 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 4. OTHER FINDINGS ITEM NO. 4A PORTION OF THE SUB-AREA IS INACCESSIBLE FOR THOROUGH INSPECTION AS IT APPEARS TO BE WOOD OVER SLAB CONSTRUCTION. NO INDICATIONS OF ADVERSE CONDITIONS WERE FOUND, HOWEVER, WE ASSUME NO RESPONSIBILITY FOR INACCESSIBLE AREAS. SEE 4A ON DIAGRAM FOR LOCATION OF FINDING. ITEM NO. 4B ROOF OVERHANG IS INACCESSIBLE DUE TO PATIO ROOM. WE ASSUME NO LIABILITY FOR INACCESSIBLE AREAS. ITEM NO. 4C 4C (Section 2) FINDING: (SECTION 2) WATER STAINS WERE FOUND TO UNDERSIDE OF ROOF DECKING INDICATING POSSIBLE ROOF LEAKAGE. INTERESTED PARTIES ARE ADVISED TO CONSULT A ROOFING FIRM CONCERNING GENERAL CONDITION OF ROOF COVERINGS AND/OR REPAIRS TO ROOF. COMMENTS AND OTHER INFORMATION CALIFORNIA STATE LAW REQUIRES THAT YOU BE GIVEN THE FOLLOWING INFORMATION: "CAUTION-- PESTICIDES ARE TOXIC CHEMICALS". STRUCTURAL PEST CONTROL COMPANIES ARE REGISTERED AND REGULATED BY THE STRUCTURAL PEST CONTROL BOARD, AND APPLY PESTICIDES WHICH ARE REGISTERED AND APPROVED FOR USE BY THE CALIFORNIA DEPARTMENT OF PESTICIDE REGULATION AND THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY. REGISTRATION IS GRANTED WHEN THE STATE FINDS THAT, BASED ON EXISTING SCIENTIFIC EVIDENCE, THERE ARE NO APPRECIABLE RISKS IF PROPER USE CONDITIONS ARE FOLLOWED OR THAT THE RISKS ARE OUTWEIGHED BY THE BENEFITS. THE DEGREE OF RISK DEPENDS UPON THE DEGREE OF EXPOSURE, SO EXPOSURE SHOULD BE MINIMIZED." "IF WITHIN TWENTY-FOUR HOURS FOLLOWING APPLICATION YOU EXPERIENCE SYMPTOMS SIMILAR TO COMMON SEASONAL ILLNESS COMPARABLE TO THE FLU, CONTACT YOUR PHYSICIAN OR POISON CONTROL CENTER AT: [(415) ] ALAMEDA [(415) ] SAN FRANCISCO AND YOUR PEST CONTROL OPERATOR IMMEDIATELY. FOR ADDITIONAL INFORMATION CONTACT ANY OF THE FOLLOWING: PREFERRED TERMITE SERVICES, INC. (408) ; FOR HEALTH QUESTIONS --THE COUNTY HEALTH DEPARTMENT; FOR APPLICATION INFORMATION -- THE COUNTY AGRICULTURAL DEPARTMENT; AND FOR REGULATORY INFORMATION -- THE STRUCTURAL PEST CONTROL BOARD, (916) , 2005 EVERGREEN STREET, STE #1500, SACRAMENTO, CALIFORNIA IF WE HAVE RECOMMENDED THE USE OF A FUNGICIDE WE WILL USE: * TIM-BOR - disodium octaborate tetrahydrate...98% * COPPER NAPTHENATE - (A/I) Copper Napthenate: 20% - Inert Ingredients: 80% IF WE HAVE RECOMMENDED THE TREATMENT OF SUBTERRANEAN TERMITES WE WILL USE: * PREMISE- imidacloprid,1[(6-chloro-3-pyridinyl)methyl]-n-nitro-2-imidazolidinimine. * INVADER - propoxur (cas# ): 1% - Inert Ingredients: 99% * CB D-FOAM - Deltamethrin.06% IF WE HAVE RECOMMENDED THE TREATMENT OF DRYWOOD TERMITES WE WILL USE: * TIM-BOR - disodium octaborate tetrahydrate...98% * INVADER - propoxur (cas# ): 1% - Inert Ingredients: 99% * CB D-FOAM - Deltamethrin.06% FOR FURTHER INFORMATION CONTACT ANY OF THE FOLLOWING: COUNTY CO. POISON HEALTH AGRICULTURAL CONTROL CITY DEPARTMENTS: COMMSR.: CENTER:

10 1176 WESTWOOD DRIVE SAN JOSE /19/ of 9 San Francisco -(415) (415) (800) San Mateo - (650) (650) (800) Santa Clara - (408) (408) (800) Contra Costa - (925) (925) (800) Alameda - (510) (510) (800) Santa Cruz- (831) (831) (800)

11 Work Authorization Prepared by PREFERRED TERMITE SERVICES, INC. ADDRESS OF PROPERTY INSPECTED BUILDING NO. STREET CITY ZIP COUNTY CODE Page 1 of 3 pages DATE OF INSPECTION 1176 WESTWOOD DRIVE SAN JOSE /19/2010 Ordered by: CHARLIE KING INTERO REAL ESTATE CK@CHARLIEKING.COM Property Owner and/or Party of Interest CHARLIE KING INTERO REAL ESTATE CK@CHARLIEKING.COM Report sent to: CHICAGO TITLE An inspection has been made of the structure(s) on the diagram in accordance with the the Structural Pest Control Act. Detached porches, detached steps, detached decks and any other structures not on the diagram were not inspected. If diagram is not displayed here, please see the report. 3D 3A 3B 2F 1A 1C 3B 4A 2E 4B 2D 1A 3C 1A 1B 1A 2C1A 2D 3D 2D Front of Structure

12 Work Authorization Prepared by PREFERRED TERMITE SERVICES, INC. Page 2 of 3 pages ADDRESS OF PROPERTY INSPECTED BUILDING NO. STREET CITY ZIP COUNTY CODE DATE OF INSPECTION 1176 WESTWOOD DRIVE SAN JOSE /19/2010 Section 1 1A = P 1B = P 1C = P = P 2B = P 2C = P 2D = P 2E = P 2F = P 3A = P 3B = P 3C = P 3D = P Section 1 Totals Total using primary recs $ Section 2 4C = Roofer P Section 2 Totals Total using primary recs $ 0.00 Cost of all Primary Recommendations $ Damage found in Inaccessible Areas may require a Supplemental report and/or Work Authorization, or may require amendments to this Work Authorization. NOTICE TO OWNER Under the California Mechanics Lien Law any structural pest control company which contracts to do work for you, any contractor, subcontractor, laborer, supplier or other person who helps to improve your property, but is not paid for his or her work or supplies, has a right to enforce a claim against your property. This means that after a court hearing, your property could be sold by a court officer and the proceeds of the sale used to satisfy the indebtedness. This can happen even if you have paid your structural pest control company in full if the subcontractor, laborers or suppliers remain unpaid. To preserve their right to file a claim or lien against your property, certain claimants such as subcontractors or material suppliers are required to provide you with a document entitled "Preliminary Notice". Prime contractors and laborers for wages do not have to provide this notice. A Preliminary Notice is not a lien against your property. Its purpose is to notify you of persons who may have a right to file a lien against your property if they are not paid.

13 Work Authorization Prepared by PREFERRED TERMITE SERVICES, INC. ADDRESS OF PROPERTY INSPECTED Page 3 of 3 pages BUILDING NO. STREET CITY ZIP COUNTY CODE DATE OF INSPECTION 1176 WESTWOOD DRIVE SAN JOSE /19/2010 Cost of all Primary Recommendations $ Damage found in Inaccessible Areas may require a Supplemental report and/or Work Authorization, or may require amendments to this Work Authorization. 1. If further inspection is recommended, if additional work is required by any government agency, or if additional damage is discovered while performing the repairs, this company reserves the right to increase prices. 2 In the event that legal action is necessary to enforce the terms of this contract, reasonable attorney's fees may be awarded to the prevailing party. 3. PREFERRED TERMITE SERVICES will use due caution and diligence in their operations but assume no responsibility for matching existing colors and styles, or for incidental damage to roof coverings, T.V. antennas, solar panels, rain gutters, plant life, or paint. 4. This report is limited to the accessible areas shown on the diagram. Please refer to the report for the areas not inspected. 5. If this contract is to be paid out of escrow impound the buyers and sellers agree to provide PREFERRED TERMITE SERVICES with all escrow billing information required to collect the amount due. The persons signing this contract are responsible for payment, and if the escrow does not close within 90 days after the date of completion of the work agree to pay in full the amount specified in this work authorization agreement. 6. If this agreement includes a charge for opening an area for further inspection, it is for opening the area only and does not include making additional repairs, if needed, nor does it include replacing removed or damaged floor coverings, wall coverings, or painted exposed surfaces unless specifically stated. 7.Warranty : subterranean termites ( one year in areas treated only ), local treatment for drywood termites ( one year in areas treated only ), local treatment for wood boring beetles ( one year in areas treated only ), local treatment for carpenter ants ( one year in areas treated only ), all fumigations ( two years ). warranty is from date of completion and applies to work performed by PREFERRED TERMITE SERVICES. This company is authorized to perform items: Cost of work authorized: $ X X OWNER or OWNER's AGENT: DATE: PREFERRED TERMITE SERVICES, INC. BY: ESCROW CO: ESCROW NO: