Page 1 of 23

PROPERTY INSPECTION REPORT

COTTON & CO. * 1-888-274-2161

Cotton and Co. LP

2226 Bauer Drive
Houston, TX 77080
281-831-0063
Inspected By: Jim LaRue TREC# 8663
Inspection Date: 4/11/2007
Client
Lisa Burton
Home
109 24th street
Houston, tx
Real Estate Agent
Ree Emberg

The inspection of the property listed above must be performed in compliance with the rules of the Texas Real Estate Commission(TREC).
The inspection is of conditions which are present and visible at the time of the inspection, and all of the equipment is operated in normal
modes. The inspector must indicate which items are in need of repair or are not functioning and will report on all applicable items
required by TREC rules. This report is intended to provide you with information concerning the condition of the property at the time of
inspection. Please read the report carefully. If any item is unclear, you should request the inspector to provide clarification. It is
recommended that you obtain as much history as is available concerning this property. This historical information may include relocation
companies, municipal inspection departments, lenders, insurers, and appraisers. You should attempt to determine whether repairs,
renovation, remodeling, additions or other such activities have taken place at this property. Property conditions change with time and use.
Since this report is provided for the specific benefit of the client(s), secondary readers of this information should hire a licensed inspector
to perform an inspection to meet their specific needs and to obtain current information concerning this property.

ADDITIONAL INFORMATION PROVIDED BY INSPECTOR:

No Termite

Promulgated by the Texas Real Estate Commission(TREC) P.O. Box 12188, Austin, TX 78711-2188, 1-800-250-8732 or (512)459-6544 (http:\\www.trec.state.tx.us). REI 7A-0
 Page 2 of 23

Report Identification 109 24th street Report# 041107-02

Additional pages may be attached to this report. Read them very carefully. This report may not be complete
without the attachments. If an item is present in this property but is not inspected, the "NI" column will be
checked and an explanation is necessary. Comments may be provided by the inspector whether or not an item is
deemed in need of repair.
NI=Not NP=Not R=Not Functioning or in Need of CR=Corrected on
I=Inspected
Inspected Present Repair Reinspection
I NI NP R CR Inspection Items
I. STRUCTURAL SYSTEMS / Other
A. GRADING and DRAINAGE
FOUNDATION: CONCRETE PIERS
METHOD USED TO OBSERVE CRAWLSPACE: COULD NOT
ACCESS, OBSTRUCTED
ROOF COVERING: COMPOSITION
ROOF STRUCTURE: STICK-BUILT, 2X4 RAFTERS, 2 X 6 RAFTERS
ROOF-TYPE: GABLE, HIP
VENTILATION: GABLE VENTS, PASSIVE
VIEWED ROOF COVERING FROM: GROUND, Ground via high
strength field glasses.
INSULATION: BLOWN, FIBERGLASS
R- VALUE: BELOW R-19
WALL STRUCTURE: WOOD, 2 X 4 WOOD, 2 X 6 WOOD, PLATFORM
FRAME
SIDING STYLE: SHIPLAP
SIDING MATERIAL: CEMENT-FIBER
FLOOR STRUCTURE: WOOD JOISTS, Hardwood Flooring, CERAMIC
TILE
EXTERIOR ENTRY DOORS: WOOD, Glass and Wood
WINDOW TYPES: AGED, SINGLE-HUNG, SINGLE PANE, Wood frame
WINDOW MANUFACTURER: UNKNOWN
NUMBER OF WOODSTOVES: NONE
CHIMNEY: N/A
APPURTENANCE: AGED
FENCING: 6" PICKET, WOOD FENCING
Comments: Functioning as intended.

B. FOUNDATIONS (If all crawlspace areas are not inspected, provide an

explanation. An opinion on performance is necessary)
Comments: The foundation appears to be functioning as intended, no
significant differential settling indicated. However due to limited access to the
under pinning of the residence no further evaluation could be made.

C. ROOF COVERING (If the roof is inaccessible, report the method used to
inspect)
Comments: Roof is overlay on cedar shake shingles. Functional -adequately
flashed and caulked, drip edge in place and chimney flashing secure.(Picture
1)
 Page 3 of 23

I NI NP R CR Inspection Items

C. Picture 1

D. ROOF STRUCTURE AND ATTIC (If the attic is inaccessible, report the
method used to inspect)
Comments:

z Pull Down Stairs is uninsulated..Repair as necessary.. (Picture 1)

z Gable vent area should have screening installed to help prevent un-
wanted pests. Repair as necessary.. (Picture 2)
z Garage roof has a noticeable deflection and is in need of additional
support. Repair as necessary..

D. Picture 1
 Page 4 of 23

I NI NP R CR Inspection Items

D. Picture 2

E. WALLS (interior and Exterior)

Comments:

z Exterior siding has several areas that have small openings that need to
be sealed. Repair as necessary..(Picture 1)
z Garage exterior siding is wood and starting to show evidence of minor
cubical rot in some areas. Repair as necessary..
z Evidence of prior termites noted in the rear wall of the garage. I
recommend that if this house is under contract that it be transferred as
part of the sale and that the property be inspected on a quarterly basis.

E. Picture 1

F. DOORS (Interior and Exterior)

Comments:

z All entry doors at to home are keyed from both sides. No fast exit is
possible.. Repair as necessary..(Picture 1)
z Closet door in the master bedroom is in need of adjustment at the
striker and latch. Door will not lock. Repair as necessary..(Picture 2)
 Page 5 of 23

I NI NP R CR Inspection Items

F. Picture 1 F. Picture 2

G. CEILING and FLOORS

Comments: Functioning as intended.

H. WINDOWS
Comments:

z Window sill in the bathroom next to the shower/tub area has moisture
damage due to it close proximity to this area. Recommend that this
area be cleaned and repainted. Repair as necessary..(Picture 1)

H. Picture 1
 Page 6 of 23

I NI NP R CR Inspection Items
I. OTHER
Comments: Tree limbs that are in contact with roof or hanging near roof
should be trimmed. Repair as necessary..

J. CABINETRY:
Comments: Some cabinet doors need magnets or hardware to stay shut. Some
cabinets are showing advanced age, have loosening joints, and loose
hardware.
 Page 7 of 23

Report Identification 109 24th street Report# 041107-02

NI=Not NP=Not R=Not Functioning or in Need of CR=Corrected on

I=Inspected
Inspected Present Repair Reinspection
I NI NP R CR Inspection Items
II. ELECTRICAL SYSTEMS
A. SERVICE ENTRANCE AND PANELS
ELECTRICAL CONDUCTORS: ABOVE GROUND
PANEL CAPACITY: 125 AMP
PANEL TYPE: CIRCUIT BREAKERS
BRANCH WIRE 15 and 20 AMP: COPPER
ELEC. PANEL MANUFACTURER: FEDERAL PACIFIC
Comments:

z You have a Federal Pacific panel which is legal, but there is a

possibility that the circuit breakers may not trip when shorted
possibly causing an electrical hazard. Opinions by licensed
electricians on this panel varies between safe and unsafe. I
recommend you consult a licensed electrician for an opinion and
correct if necessary. Repair as necessary..

B. BRANCH CIRCUITS-CONNECTED DEVICES AND FIXTURES

(Report as in need of repair the lack of ground fault circuit protection
where required.)
Comments:

z Ceiling fan has no separate control from lighting at wall in most

locations. Repair as necessary..(Picture 1)
z Light fixtures are missing covers in closets. Repair as necessary..
(Picture 2)
z Attic wires have open splices and junction box is missing a cover
plate. Repair as necessary..(Picture 3-4)

B. Picture 1
 Page 8 of 23

I NI NP R CR Inspection Items

B. Picture 2

B. Picture 3

B. Picture 4
 Page 9 of 23

Report Identification 109 24th street Report# 041107-02

NI=Not NP=Not R=Not Functioning or in Need of CR=Corrected on

I=Inspected
Inspected Present Repair Reinspection
I NI NP R CR Inspection Items
III. HEATING, VENTILATION, AND AIR CONDITIONING
SYSTEMS
A. HEATING EQUIPMENT
HEAT TYPE: FORCED AIR
ENERGY SOURCE: GAS
NUMBER OF HEAT SYSTEMS (excluding wood): ONE
HEAT SYSTEM BRAND: Ducane
COOLING EQUIPMENT TYPE: AIR CONDITIONER UNIT
COOLING EQUIPMENT ENERGY SOURCE: ELECTRICITY
NUMBER OF A/C UNITS: ONE
CENTRAL AIR MANUFACTURER: YORK
DUCTWORK: N/A
FILTER TYPE: DISPOSABLE
Comments: Functioning as intended.

B. COOLING EQUIPMENT
Comments: Ambient air test was performed by using thermometers on air
handler of Air conditioner to determine if the difference in temperatures of
the supply and return air are between 14 degrees and 22 degrees which
indicates unit is cooling as intended. The supply air temperature on your
system read 44 degrees, and the return air temperature was 62 degrees. This
indicates range in temperature drop is normal.

C. DUCTS AND VENTS

Comments:

z Vent is loose at the ceiling in the dining room. Repair as necessary..

(Picture 1)
z Plenum has some areas that tape has started to loosen and air is
blowing into the attic. I recommend that this area be resealed with
A/C aluminum tape as needed. (Picture 2)
 Page 10 of 23

I NI NP R CR Inspection Items
C. Picture 1

C. Picture 2
 Page 11 of 23

Report Identification 109 24th street Report# 041107-02

NI=Not NP=Not R=Not Functioning or in Need of CR=Corrected on

I=Inspected
Inspected Present Repair Reinspection
I NI NP R CR Inspection Items
IV. PLUMBING SYSTEM
A. WATER SUPPLY SYSTEM AND FIXTURES
WATER SOURCE: PUBLIC
PLUMBING SUPPLY: GALVANIZED (OLD)
DISTRIBUTION: GALVANIZED
PLUMBING WASTE: CAST IRON (OLD)
WASHER DRAIN SIZE: 2" DIAMETER
WATER HEATER POWER SOURCE: GAS (QUICK RECOVERY)
MANUFACTURER: RHEEM
CAPACITY: 40 Gallon
Comments:

z Pull stop for hall sink is not engaging the stopper. Repair as
necessary..(Picture 1)
z Exposed water piping in master closet. (Picture 2)
z Plumbing fixtures need to be sealed at escussions and walls. Repair
as necessary..(Picture 3)

A. Picture 1
 Page 12 of 23

I NI NP R CR Inspection Items

A. Picture 2

A. Picture 3

B. DRAINS, WASTES, VENTS

Comments: Note: In addition, even though a test of lavatories, tubs, and
toilets did not reveal any slow drains, this does not preclude the potential
for blockages in the main routing to the sewer. Examination of this piping
is beyond the scope of a typical property inspection.

C. WATER HEATER EQUIPMENT (Report as in need of repair those

conditions specifically listed as recognized hazards by TREC Rules)
Comments:

z Missing bonding wire at unit between gas pipe and water pipe.
Repair as needed..
z Water heater does not have foam insulation on supply/discharge
leads. Recommend repair as necessary. (Picture 1)
 Page 13 of 23

I NI NP R CR Inspection Items

C. Picture 1

D. Gas Lines
Comments:

z Un-capped gas valve in the living room area. Repair as necessary..

(Picture 1)

D. Picture 1
 Page 14 of 23

Report Identification 109 24th street Report# 041107-02

NI=Not NP=Not R=Not Functioning or in Need of CR=Corrected on

I=Inspected
Inspected Present Repair Reinspection
I NI NP R CR Inspection Items
V. APPLIANCES
A. DISHWASHER
DISHWASHER: KENMORE
DISPOSER: IN SINK ERATOR
EXHAUST/RANGE: VENTED, NUTONE
RANGE/OVEN: GAS OVEN, GAS COOKTOP, TAPPAN
BUILT-IN MICROWAVE: NONE
TRASH COMPACTORS: NONE
EXHAUST FAN TYPES: NONE
DRYER POWER SOURCE: 22O ELECTRIC
DRYER VENT: UNKNOWN
REFRIGERATOR: KENMORE
INSTANT HOT WATER DISPENSER: None
DRYER: KENMORE
WASHING MACHINE: KENMORE
Comments: Functioning as intended.

B. FOOD WASTE DISPOSER

Comments: Functioning as intended.

C. RANGE HOOD
Comments: Functioning as intended.

D. RANGES/OVENS/COOKTOPS
Comments: Functioning as intended.

E. MICROWAVE COOKING EQUIPMENT

Comments: Functioning as intended.

F. BATHROOM EXHAUST FANS AND/OR HEATERS

Comments: Functioning as intended.

G. DOOR BELL AND CHIMES

Comments: Functioning as intended.

H. CLOTHES DRYER
Comments: Functioning as intended.

I. WASHING MACHINE
Comments: Functioning as intended.

Prepared Using HomeGauge http://www.homegauge.com SHGI (c) 2000-2004 : Licensed To Cotton and Co. LP
 Page 15 of 23

Date: 4/11/2007 Time: 12:48 PM Report ID: 041107-02

Property: Customer: Real Estate Professional:
109 24th street Lisa Burton Ree Emberg
Houston, tx

Homes more than 5 years old may have areas that are not current in code requirements. This is not a new home
and this home cannot be expected to meet current code standards. While this inspection makes every effort to
point out safety issues, it does not inspect for code. It is common that homes of any age will have had repairs
performed and some repairs may not be in a workmanlike manner. Some areas may appear less than standard.
This inspection looks for items that are not functioning as intended. It does not grade the repair. It is sometimes
common to see old plumbing or mixed materials. Sometimes water signs in crawlspaces or basements could be
years old from a problem that no longer exists. Or, it may still need further attention and repair. Determining this
can be difficult in a lived in home. Sometimes homes have signs of damage to wood from wood eating insects.
Having this is typical and fairly common. If the home inspection reveals signs of damage you should have a pest
control company inspect further for activity and possible hidden damage. The home inspection does not look for
possible manufacturer re-calls on components that could be in this home. Always consider hiring the appropriate
expert for any repairs or further inspection.

Client Is Present: Age Of Home: Radon Test:

Yes Over 25 Years No

Water Test: Weather: Temperature:

No Clear Over 60

Rain in last 3 days:

No
 Page 16 of 23

General Summary

Cotton and Co. LP

2226 Bauer Drive

Houston, TX 77080
281-831-0063
Customer
Lisa Burton
Property Address
109 24th street
Houston, tx

STRUCTURAL SYSTEMS / Other

C. ROOF COVERING (If the roof is inaccessible, report the method used to inspect)
Inspected
Roof is overlay on cedar shake shingles. Functional -adequately flashed and caulked, drip edge in place
and chimney flashing secure.(Picture 1)
D. ROOF STRUCTURE AND ATTIC (If the attic is inaccessible, report the method used to inspect)
Inspected, Not Functioning or in Need of Repair
z Pull Down Stairs is uninsulated..Repair as necessary.. (Picture 1)
z Gable vent area should have screening installed to help prevent un-wanted pests. Repair as
necessary.. (Picture 2)
z Garage roof has a noticeable deflection and is in need of additional support. Repair as necessary..

E. WALLS (interior and Exterior)

Inspected, Not Functioning or in Need of Repair
z Exterior siding has several areas that have small openings that need to be sealed. Repair as
necessary..(Picture 1)
z Garage exterior siding is wood and starting to show evidence of minor cubical rot in some areas.
Repair as necessary..
z Evidence of prior termites noted in the rear wall of the garage. I recommend that if this house is
under contract that it be transferred as part of the sale and that the property be inspected on a
quarterly basis.
F. DOORS (Interior and Exterior)
Inspected, Not Functioning or in Need of Repair
z All entry doors at to home are keyed from both sides. No fast exit is possible.. Repair as necessary..
(Picture 1)
z Closet door in the master bedroom is in need of adjustment at the striker and latch. Door will not
 Page 17 of 23

lock. Repair as necessary..(Picture 2)

H. WINDOWS
Inspected, Not Functioning or in Need of Repair
z Window sill in the bathroom next to the shower/tub area has moisture damage due to it close
proximity to this area. Recommend that this area be cleaned and repainted. Repair as necessary..
(Picture 1)

ELECTRICAL SYSTEMS
A. SERVICE ENTRANCE AND PANELS
Inspected, Not Functioning or in Need of Repair
z You have a Federal Pacific panel which is legal, but there is a possibility that the circuit breakers
may not trip when shorted possibly causing an electrical hazard. Opinions by licensed electricians
on this panel varies between safe and unsafe. I recommend you consult a licensed electrician for an
opinion and correct if necessary. Repair as necessary..
B. BRANCH CIRCUITS-CONNECTED DEVICES AND FIXTURES (Report as in need of repair the
lack of ground fault circuit protection where required.)
Inspected, Not Functioning or in Need of Repair
z Ceiling fan has no separate control from lighting at wall in most locations. Repair as necessary..
(Picture 1)
z Light fixtures are missing covers in closets. Repair as necessary..(Picture 2)
z Attic wires have open splices and junction box is missing a cover plate. Repair as necessary..
(Picture 3-4)

HEATING, VENTILATION, AND AIR CONDITIONING SYSTEMS

C. DUCTS AND VENTS
Inspected, Not Functioning or in Need of Repair
z Vent is loose at the ceiling in the dining room. Repair as necessary..(Picture 1)
z Plenum has some areas that tape has started to loosen and air is blowing into the attic. I recommend
that this area be resealed with A/C aluminum tape as needed. (Picture 2)

PLUMBING SYSTEM
A. WATER SUPPLY SYSTEM AND FIXTURES
Inspected, Not Functioning or in Need of Repair
z Pull stop for hall sink is not engaging the stopper. Repair as necessary..(Picture 1)
z Exposed water piping in master closet. (Picture 2)
z Plumbing fixtures need to be sealed at escussions and walls. Repair as necessary..(Picture 3)

C. WATER HEATER EQUIPMENT (Report as in need of repair those conditions specifically listed as
recognized hazards by TREC Rules)
Inspected, Not Functioning or in Need of Repair
z Missing bonding wire at unit between gas pipe and water pipe. Repair as needed..
z Water heater does not have foam insulation on supply/discharge leads. Recommend repair as
necessary. (Picture 1)
D. Gas Lines
Inspected, Not Functioning or in Need of Repair
z Un-capped gas valve in the living room area. Repair as necessary..(Picture 1)
 Page 18 of 23

Prepared Using HomeGauge http://www.homegauge.com SHGI (c) 2000-2004 : Licensed To Cotton and Co. LP
 Page 19 of 23

Cotton and Co. LP

Jim LaRue TREC# 8663
2226 Bauer Drive
Houston, TX 77080
281-831-0063
 Page 20 of 23

INVOICE

Cotton and Co. LP Activity Date: 4/11/2007

2226 Bauer Drive Report ID: 041107-02
Houston, TX 77080
281-831-0063
By: Jim LaRue TREC# 8663

Customer Info: Location:

Lisa Burton 109 24th street
Houston, tx

Customer's Representative:
Ree Emberg

Fees:
Service Price Amount Sub-Total
up to 1800 Sq. Ft. 215.00 1 215.00
Pier& Beam 85.00 1 85.00
Rewards Discount - A Courtesy from your Realty
-25.00 1 -25.00
Prtofessional

Tax $0.00
Total Price $275.00

Payment Method:Check
Payment Status:Paid At Time Of Inspection
Note:
 Page 21 of 23

INSPECTION AGREEMENT

AGREEMENT

The parties agree to the following: in consideration for the fee received,
Cotton & Company is providing (at the request of the client) a real estate inspector to perform an inspection on the property
located as herein described.

The cursory limited visual inspection pertains solely to items listed on the inspection report that are readily accessible at the
time of inspection. The inspection to be done under this agreement is only an attempt to identify items in need of immediate
repair or specific recognized hazards as defined by T.R.E.C. The presence of Client(s) has been requested and encouraged
during the inspection and shall be at Client(s) own risk. This inspection is supplemental to any real estate transfer or seller's
Disclosure Statement and shall not be used as a substitute for such disclosure statement(s).

The Client(s) agree that the Texas Real Estate Commission (including any reporting departures made by Cotton & Company)
defines the scope of the inspection to be provided. A copy of the Standards has been made available to you in our supplemental
package and on the T.R.E.C. website at www.trec.state.tx.us. These are the agreed Standards of Practice for the performance of
this inspection.

The cursory limited inspection is intended to reduce risk but will not eliminate risk, therefore the inspection to be done will not
identify all repairs needed or potential hazards whether in accessible or inaccessible areas. When inspection of any system or
component is limited or designated as not inspected due to inaccessibility or for any other reason, the client(s) must understand
that conditions affecting the structure, systems, or components may be present and go unreported. All findings should be
considered partial or incomplete until further evaluated by a qualified repair person prior to closing.

Since this inspection is based upon visual observations made on one day, during a limited time period, Cotton & Company
cannot be responsible for any condition affecting any system or component that is intermittent in function and may not be
detectable during the inspection. No warranties or guarantees are expressed or implied.

The inspector will not light pilot lights, activate the main water supply, gas or electric systems, energize electrical circuits
which are off or otherwise operate any component other than user controls. The written inspection report provided by Cotton &
Company will contain the opinions of the inspector. These opinions would not be applicable to future changing conditions.
Although code compliance and engineering evaluation are specifically excluded from the inspection, some codes may be used
as a reference and bias for the opinion of the inspector. The inspection services provided are further defined and limited by the
report and any attached addenda.

General Statements and Agreements that apply to Home Inspections

What we do:

1. The inspection report provided by Cotton & Co will contain the good faith opinions of the inspector regarding the observable
need of any repairs, replacements, or further evaluation by specialists of the items inspected. The report will not include and
should not be interpreted to indicate any opinion regarding compliance with codes, ordinances, statues, or restrictions; nor the
insurability, efficiency, durability, life expectancy and future performance of any particular item inspected.

2. The purpose of our reports is to inform our clients whether or not the items inspected are functioning as intended, or is in need
of repair or further evaluation.

3. We perform our inspection/evaluations from physical observation only. In other words we can only inspect and report on those
items and defects that are observable by ordinary senses without dismantling portions of the property or appurtenances, or
removal of any items (such as clothing or furniture) to facilitate inspection.

4. If you have any questions about our report, we will be happy to explain our observations.

--------------------------------------------------------------------------------

What we do not do:

1. We do not make guarantees, nor offer warranties or representations, insure future performance or the condition of any item.
 Page 22 of 23

2. We will not make observations of any item that is not physically visible during the course of an inspection. For example, we do
not move furniture, rugs, clothing, paintings or wall furnishing, appliances or other furnishings. We do not uncover buried pipes or
electrical distribution circuits. We cannot see or make observations regarding items covered by wall coverings, furniture, flooring,
or enclosed wall spaces. Past repairs/remodeling may hide evidence of prior damages or defects.

3. We do not inspect for compliance with building codes, soil analysis, adequacy of design, capacity, termite infestation including
but not limited to potentially toxic strains of mold (including stachybotrys, aspergillus, and penicillium). We do not check for
funguses or spores, including but not limited to, any substance, vapor, or gas produced by or arising out of any funguses or spores
or any material, product, building component, building, or structure that contains, harbors, nurtures, or acts as a medium for any
funguses or spores. Funguses include, but are not limited to, any reproductive body produced by or arising out of any funguses. We
also do not check for HVAC efficiency and size, property value, flood plain location, pollution, environmental issues such as lead
paint , asbestos, etc., or habitability.

4. Out inspectors are not allowed to change or alter these written provisions in any way.

5. We do not hold ourselves out to be specialists or professional engineers for any particular items or systems. We are a general
quality assurance and real estate inspection firm. If we report any item as nonfunctional or in need of repair, you are urged to
acquire a second opinion from a specialist for the item(s) cited. We do not perform repairs or provide binding estimates of costs to
repair any item.

Before completion of any contractual agreements on the property inspected, Client(s) agree to obtain second opinions or cost
estimates by appropriate specialist on items where performance may be reported as questionable, in need of repair or unsafe. It
is specifically understood and agreed that Cotton & Company are bound only by the terms and conditions of this agreement and
have not relied on any other representations, oral or otherwise. Any conditions requiring repair, replacement, or servicing
should be by professionals in appropriate trades before closing. Client(s) give permission to Cotton & Company to discuss
report findings with Realtors, owners, repair persons and other interested persons.

The Client(s) agree to notify Cotton & Company in writing of any complaints or items in question within 14 days of discovery
and allow Cotton & Company access to the property to evaluate these items before corrective action is taken. Life threatening
situations should be addressed immediately. In other than life threatening situations, Client(s) failure to permit Cotton &
Company to re-inspect the item at issue shall mean the client(s) has waived any claim against Cotton & Company for breach of
this Agreement and/or any error or omissions claim that results.

Dispute Resolution: Upon written request by either party that is submitted according to the applicable rules for arbitration, any
claim, demand or cause of action, which arises out of or, is related to this Agreement, (collectively "Claims") shall be resolved
by binding arbitration in the County of Harris, Texas, in accordance with (1) the Federal Arbitration Act; (ii) the Code of
Procedure ("code") of the National Arbitration Forum ("administrator" or "NAF") and (iii) this Agreement, which shall control
any consistency between it and the law and be in writing setting forth the finding of fact and law and the reasons supporting the
decision. Such decision shall be final and binding upon the parties, subject to the right of the appeal described below. Judgment
upon any arbitration award may be entered in any court having jurisdiction. The arbitrator has exclusive authority to resolve
any dispute relating to the applicability or enforceability of the Agreement. Either party shall have the right to appeal to the
appropriate court any errors of law including a limited number of depositions (including the production of documents) by
mutual agreement or as permitted by the arbitrator.

Certificate of Merit: The client shall make no claim of professional negligence unless the client has first provided me with a
written certification executed by an independent Texas Professional Engineer currently practicing in the area of house
inspections in the Greater Houston Area for home buyers. The certification shall: a)contain the name and license number of the
certifier; b)specify what research the certifier has performed to discover the standard of care, c)specify the acts or omissions
that the certifier contends are not in conformance with the standard of care for a registered structural engineer performing
professional services under similar circumstances; and d)state in detail the basis for the certifier’s opinion that such acts or
omissions do not conform to the standard of care. This certificate shall be provided to me not less than thirty (30) days prior to
the presentation of any claim, or the institution of any arbitration or legal proceeding. This certificate of merit clause will take
precedence over any existing state law in force at the time of the claim or demand for arbitration.

Insurance: Insurance to pay undiscovered repairs and unsafe conditions is not carried Cotton & Company. Some error in the
inspection process is inevitable; however Cotton & Company provides a standard of care substantially better than the industry
average. If there are concerns raised by the inspection, you should have comprehensive inspection(s) by an appropriately rated
and licensed engineer, specialist, or repair contractor conducted.

Client(s) agrees that in the event any portion of the contract, report or addenda is ruled inadmissible as evidence that the
remainder of all aforementioned documents, or any portion therefore, shall remain admissible as evidence.

Changes to this contract are not accepted without specific written approval of Cotton & Company.
 Page 23 of 23

Entire Agreement: This Agreement and no other implied, or verbal pronouncements by Cotton & Company or the client(s) shall
be relied upon.

Third Party Indemnification: This inspection and the report are not intended for the use or benefit of anyone other than the
Client(s). No third party shall have any right arising from the inspection or the report. In consideration for Cotton & Company
furnishing the report, Client(s) shall indemnify and hold Cotton & Company harmless from any claims, demands or costs as a
result of any third party demand or claim arising out of the inspection or report.

Hold Harmless Agreement: CLIENT agress t hold any and all real estate agents involved in the purchase of the property to be
inspected harmlessand keep them exonerated from all loss, damage, liability or expense occassioned or claimed by reasons of
acts or neglects of INSPECTOR or his employees or visitors or independent contractors engaged or paid by INSPECTOR for
the purpose of inspecting subject home.

_________________________________________________________________________________________________________________

CLIENT ACKNOWLEDGES HAVING READ THIS CONTRACT, AND WILL READ THE REPORT AND ALL
ATTACHMENTS BEFORE PURCHASING THE PROPERTY. FURTHER, THAT CLIENT UNDERSTANDS THE
TERMS AND CONDITIONS AND AGREES TO BE BOUND BY THESE TERMS AND CONDITIONS AND TO PAY
INSPECTION FEES AS AGREED AT THE TIME OF INSPECTION. THE FINAL REPORT WILL NOT BE RELEASED
UNTIL PAYMENT IS RECEIVED BY COTTON & COMPANY. Payment of fees indicates acceptance of these provisions.