PHASE I ENVIRONMENTAL ENGINEERING PHASE I REPORT 3264 PREPARED FOR: Mark Hopkins. Liberty Real Estate, LLC. 741 North State Road.

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1 PHASE I ENVIRONMENTAL ENGINEERING PHASE I REPORT 3264 PREPARED FOR: Mark Hopkins Liberty Real Estate, LLC 741 North State Road Salem, Utah May 25, 2012 SITE LOCATION Hawthorn Mobile Home Park Hawthorn Road Plymouth, Indiana Wilshire Court Noblesville, Indiana ,

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8 INDEX Section 1.0 Findings and Conclusions Page 3 Section 2.0 Proposal Page 5 Section 3.0 Users Responsibilities Page 10 Section 4.0 Record Review Page 12 Section 5.0 Site Reconnaissance Page 16 Section 6.0 Interviews Page 22 Section 7.0 Non-Scope Considerations Page 25 Section 8.0 Exceptions to or Deletions from ASTM Standard 1527 Page 26 Section 9.0 Appendices Page 28 Section 10.0 Professional Qualifications Page 29 2

9 SECTION 1.0 FINDINGS AND CONCLUSIONS 1.1 FINDINGS The following known or suspect environmental conditions have been identified. These include known or suspect recognized and historical recognized environmental conditions (REC), material and de minims conditions. No known or suspect environmental conditions have been identified. 1.2 PROFESSIONAL OPINION/COMMENTS(without warranty, express or implied) The following logic or reasoning has been used to determine if any of the issues listed in the Findings Section (1.1) will environmentally impact the subject site. The subject site was developed as agriculture in the early 1800 s. In 1965 a 22 lot mobile home park was constructed. It has remained a mobile home park. Apparently little has changed from the original as a 1974 aerial photograph (Section 9.2) shows the same layout as today. No sites were found within the required environmental record search radius that in PHASE I Environmental Engineering s opinion would environmentally affect the subject site. The limited nature of this report leaves the potential for hidden or unintentional omission of information. Some information is subjective, thus subject to error Additional Investigations Only provided when unable to determine whether or not a finding (See Section 1.1) is a REC. Not Applicable 3

10 1.3 CONCLUSIONS PHASE I Environmental Engineering has performed a phase one environmental site assessment in accordance with ASTM Practice E ( Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment process. ) for a site known as Hawthorn Mobile Home Park at Hawthorn Road in Plymouth, Indiana for Liberty Real Estate, LLC Any exceptions to, or deletions from, this practice are described in Section 8.0 of this report. This assessment has revealed no evidence of recognized environmental conditions ENVIRONMENTAL PROFESSIONAL STATEMENT I, declare that, to the best of my professional knowledge and belief, I meet the definition of Environmental professional as defined in # of 40 CFR 312 and I have the specific qualifications based on education, training, and experience to assess a property of the nature, history, and setting of the subject property. I have developed and performed the all appropriate inquiries in conformance with the standards and practices set forth in 40 CFR Part

11 SECTION 2.0 TERMS AND CONDITIONS 2.1 PURPOSE A phase I environmental site assessment of a parcel of commercial real estate with respect to the range of contaminants within the scope of the Comprehensive Environment Response Compensation and Liability Act (CERCLA) and petroleum products to conduct an inquiry consistent with Good Commercial and Customary Practice. The purpose of the Phase I ESA was to determine if recognized environmental conditions exist at the Site using an approach that is consistent with E Use of the approach presented in ASTM E is intended to constitute all appropriate inquiry for the purposes of the innocent landowner, bona fide prospective purchaser, and contiguous landowner defenses under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). 2.2 SCOPE This phase I site assessment conforms with ASTM Standard Practice E and the All Appropriate Inquiries Rule established by the United States EPA (40 CFR Part 312). The terms, conditions, and definitions of ASTM Standard Practice E are hereby made a part of this scope. [ASTM, 100 Barr Harbor Drive, West Conshohocken, Pennsylvania , (610) ]. The user responsibilities must be completed by the user (See Section 3). Client agrees to arrange for PHASE I Environmental Engineering personnel to have access to the site. The report will be limited to the subject site. Information will be used in preparing this report without extraordinary verification. 5

12 2.3 RELIANCE This report and any opinion expressed are for the sole use of the parties named in Section 1.3. Unnamed parties may not rely on any information contained in this report. This report is valid for 180 days from the date of the report unless substantial changes occur on the site within the 180 day period. The user will indemnify and hold harmless PHASE I Environmental Engineering from 3rd party claims based on fault or negligence of the client. 2.4 ELIMINATION OF UNCERTAINTY, TIME & COST LIMITATIONS No environmental site assessment can wholly eliminate uncertainty. Appropriate inquiry does not mean an exhaustive investigation of a property. There is a point at which the cost of information obtained and the time required to obtain it outweigh the usefulness of the information and, in fact, may be a material detriment to the orderly completion of transactions. Furthermore, the level of investigation is related to the degree of uncertainty that is acceptable to the user. Client acknowledges professional judgment and interpretation are inherent in the process and uncertainty is inevitable. Additional investigation may be able to reduce the uncertainty but it can never be eliminated. Phase I Environmental Site Assessments must be evaluated based on the reasonableness of judgments made at the time and under the circumstances in which they were made. Time limitations placed on PHASE I Environmental Engineering by client may limit information contained in the report. 6

13 2.5 DEFINITIONS Recognized Environmental Conditions are the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, groundwater, or surface water of the property. The term includes hazardous substances or petroleum products even under conditions in compliance with laws. The term is not intended to include de minims conditions that generally do not present a material risk of harm to public health or the environment and that generally would not be the subject of an enforcement action if brought to the attention of appropriate governmental agencies Business Environmental Risk - a risk which can have a material environmental or environmentally-driven impact on the business associated with the current or planned use of a parcel of commercial real estate, not necessarily limited to those environmental issues required to be investigated in this practice. Consideration of business environmental risk issues may involve addressing one or more non-scope considerations, some of which are identified in Section 13 of ASTM Data Failure The historical research is complete when either: (1) the objectives in through are achieved; or (2) data failure is encountered. Data failure occurs when all of the standard historical sources that are reasonable ascertainable and likely to be useful have been reviewed and yet the objectives have not been met. Data failure is not uncommon in trying to identify the use of the property at five year intervals back to first use or 1940 (whichever is earlier). Notwithstanding a data failure, standard historical sources may be excluded if: (1) the sources are not reasonable ascertainable, or (2) if past experience indicates 7

14 that the sources are not likely to be sufficiently useful, accurate, or complete in terms of satisfying the objectives. Other historical sources specified in may be used to satisfy the objectives, but are not required to comply with this practice. If data failure is encountered, the report shall document the failure and, if any of the standard historical sources were excluded, give the reasons for their exclusion. If the data failure represents a significant data gap, the report shall comment on the impact of the data gap on the ability of the environmental professional to identify recognized environmental conditions (ASTM E Section 12.7). 2.6 AFFECT OF PHASE ONE ASSESSMENT The Client acknowledges that the results of the assessment may have an impact on the value of the real estate inspected, and/or economic consequences related to the cost of environmental studies and clean-up activities. Such factors are acknowledged to be inherent in the assessment process and are not attributable to PHASE I Environmental Engineering in the conduct of its responsibilities pursuant to any agreement resulting from this proposal associated with findings, reports or other information resulting from the phase I environmental site survey. 2.7 GOVERNMENTAL RECORDS Various Federal, State, or Local Governmental Records shall be reviewed and the results of this review included in the reports. PHASE I Environmental Engineering will make its report, findings, opinion, and conclusions in part based on the information available from governmental records at the time of the review. Client agrees that PHASE I Environmental Engineering is not responsible for findings, opinions, conclusions, or summaries based on governmental information that is incomplete, inaccurate, effectively 8

15 unavailable, or that has not been officially released to the public at the time of the review. 2.8 REASONABLE TIME AND COST Information that can be obtained within 20 calendar days of the request at no more than nominal cost or within the time restrictions of the client will be in the report. 9

16 SECTION 3.0 USERS RESPONSIBILITIES 3.1 OBJECTIVE Tasks that are nontechnical or information the user must provide (if available) that is material identifying the possibility of recognized environmental conditions in connection with the subject property and surrounding areas. Section 3.2 must be completed by the user or provided to PHASE I Environmental Engineering. Failure to provide this information could result in a determination that all appropriate inquiry is not complete. According to the User, this Phase I ESA was performed to satisfy All Appropriate Inquiry (AAI) and to qualify for all available CERLCA landowner liability defenses that may be applicable. 3.2 TITLE RECORDS AND DISCLOSURES Review Title and Judicial Records for Environmental Liens No environmental liens were found in the IDEM Institutional Controls ( Review Title for Activity and Use Limitations No activity and use limitations were found in the IDEM Institutional Controls ( Disclose Specialized Knowledge/Experience The client, Liberty Real Estate, LLC disclosed no specialized knowledge or experience. 10

17 3.2.4 Disclose Actual Knowledge Commonly Known The client, Liberty Real Estate, LLC disclosed no actual knowledge commonly known about the property Purchase price to Value of Property The client, Liberty Real Estate, LLC must determine the value to purchase price as it was not disclosed to PHASE I Environmental Engineering Disclose Commonly Known or Reasonable Ascertainable Information The client, Liberty Real Estate, LLC disclosed no commonly known or reasonable ascertainable information. 11

18 SECTION 4.0 RECORD REVIEW 4.1 OBJECTIVE The purpose of the records review is to obtain and review records that will help identify recognized environmental conditions in connection with the property. 4.2 CERCLIS The Comprehensive Environmental Response, Compensation and Liability Information System (CERCLIS) list of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was passed in 1980 to establish, among other things, a system to identify and clean up sites contaminated with hazardous material. The CERCLIS list is used to identify sites with potentially severe problems. The highest rated sites are put on what is known as The National Priority List (NPL). A review of U.S. Environmental Protection Agency (EPA) by PHASE I Environmental Engineering records provided via dated May, 2012 show the following: Subject Site - Not Listed Federal NPL Sites within 1.0 mile - None Federal Delisted NPL Sites within 0.5 mile - None Federal CERCLIS Sites within 0.5 mile - None Federal CERCLIS NFRAP Sites within 0.5 mile - None 12

19 4.3 IDEM HAZARDOUS SITES The Indiana Department of Environmental Management maintains a list of sites known as the Commissioners Bulletin that are scored and ranked according to estimated threat to the general health and safety of the population of Indiana. A review of dated May, 2012 reveals the following: State NPL Equivalent within 1.0 mile - None 4.4 RCRA Resource Conservation and Recovery Act was enacted to keep track of hazardous material from generation or manufacture to disposal. Firms generating waste material defined as hazardous above specified levels are required to register. Facilities that treat, store, or dispose of hazardous waste are categorized separately as TSD facilities and have additional requirements. The records provided on the May, 2012 show the following: Subject Site Not Listed RCRA TSD Sites within 0.5 mile - None RCRA Generators for adjoining property - None CORRACTS TSD Sites within 1.0 mile None 4.5 ERNS The Emergency Response Notification System is a national computer database system that is used to store information on the sudden and/or accidental release of hazardous substances, including petroleum. The ERNS reporting system contains preliminary information on specific releases. including the spill location, the substance released, and responsible party. The site was reviewed on www. in.gov/idem on May 25,

20 4.5.1 Subject Site - Not Listed 4.6 IDEM - UNDERGROUND STORAGE TANKS Indiana Department of Environmental Management records a list of Underground Storage Tanks (UST) and also a list of Leaking Underground Storage Tanks (LUST). A review of computerized records provided by on May 25, 2012 and/or visual review show the following: Subject Site Not Listed UST Sites for adjoining properties None LUST Sites within 0.5 mile - None Low priority sites have soil contamination limited to the site. Medium priority sites have soil and water contamination located on the site. High priority sites have soil and/or water contamination that has migrated off site. 4.7 IDEM - LISTED SITES The State of Indiana lists the following on the Landfills (Permitted Solid Waste Facilities) within 0.5 mile - None IDEM Engineering controls for site only See Section Institutional Control Sites for site only See Section Voluntary Remediation Program sites within 0.5 mile - None Brownfield Sites within 0.5 mile - None 4.8 PHYSICAL SETTING SOURCES The United States Geological Survey publishes 7.5 Minute Topographical Maps. These maps show surface and other features. The map showing the subject site was reviewed. (See Section 9.0, Figure 1) 14

21 4.8.1 Subject Site Elevation is approximately 840 feet above sea level Drainage is to the east The surface Topography is level. 4.9 HISTORICAL INFORMATION Uses of the Property All obvious uses of the property shall be identified from the present back to the property s first developed use, or back to 1940, which ever is earlier. This requires reviewing only as many of the Standard Historical Sources (as defined in ASTM E Section thru ) as necessary and both reasonable ascertainable and likely to be useful. Interviews, City Directories, Sanborn Maps, aerial photographs and other documents may be used to obtain information. The property was developed as agriculture in the early 1800 s. It became a mobile home park in 1965 according to records in the Marshall County auditors office. It has remained a mobile home park Data Gap Yes, Standard Historical Sources from the 1700 s through the early 1900 s are either nonexistent, not practically ascertainable, or unlikely to be useful. It is PHASE I Environmental Engineering s professional opinion that lack of this data will not materially affect the conclusion of this report Historical uses of properties in surrounding area The area was primarily agriculture. The information was obtained from the aerial photographs Historical Recognized Environmental Conditions None Material Threats to the Property - None 15

22 SECTION 5.0 SITE RECONNAISSANCE 5.1 OBJECTIVE The objective of the site reconnaissance is to obtain information indicating the likelihood of identifying recognized environmental conditions in connection with the property. The site reconnaissance was conducted on May 24, 2012 by William M. Reid. 5.2 OBSERVATIONS (visually and physically) Exterior Property Periphery - The entire periphery of the subject site was observed by walking the perimeter and driving the streets. No hazardous material or petroleum products were noted on the subject site or adjacent property All Structures Periphery The outside of the buildings were observed. No hazardous waste, or other environmental problems were noted From Roads (on and off property) The subject site was observed from Hawthorn Road and U.S Methodology Grid/Pattern Used The entire site was observed by walking the site and driving the adjacent streets. 16

23 5.2.3 Limitations Adjacent Buildings/snow/etceteras The mobile homes were not entered. 5.3 GENERAL SITE SETTING General Use of the Property Observed Current - Commercial (Mobile Home Park) Past Same See Section 4.0 for historical background Adjacent Property and Uses North: Current U..S. 30 then Agriculture Past U.S 30 then Airport with information from aerial photographs East: Current Agriculture Past Same or similar with information from aerial photographs South: Current Residential Past Same or similar with information obtained from aerial photographs West: Current Hawthorn Road then Agriculture/Residential Past Same or similar with information obtained from aerial photographs 17

24 5.3.3 General Use of the Surrounding Area Observed Current Residential/Agriculture Past Same or similar with information from aerial photographs Geology/Hydrogeologic/Hydrologic/Topographic Soils - The soil map (Soil Associations of Indiana) indicates Oshtemo-Fox soil that is level, well drained loamy soils on sandy and gravelly outwash deposits Bedrock is about 200 feet below the surface according to the Department of Natural Resources, Geological Survey, Misc. Map Gradient (underground water flow) is estimated to be to the northwest based on the proximity of the Yellow River which is the dominant hydrological feature in the area General Description of Structures and/or Property There are twenty homes and two empty lots General Description of Operations The site is used for a residential mobile home park Roads/Parking Areas These areas are paved with stone Potable Water Supply (Interviews with owners, occupants, or visual observation) Well - There is one well located on the site. 18

25 City - The site is not served by city water Sewage Disposal System (Interviews with owners, occupants, or visual observation) Type - The site is served by a septic system Age It was improved about four years ago. 5.4 INTERIOR AND EXTERIOR OBSERVATIONS Hazardous Substances/Petroleum Products Products and Quantity on Site Present There are no hazardous substances or petroleum products on site Past Unknown Date Gap - Yes, however lack of this information will not materially affect the conclusion of this report Storage Conditions Present Not Applicable Past Unknown Data Gap Yes, however lack of this information will not materially affect the conclusion of this report Unregistered Storage Tanks (UST/AST) There are no known tanks on site Odors - No odors were noted. 19

26 5.4.4 Pools of Liquid (Standing Surface Water) - None of these were noted Drums (5 gallon or larger) None ` Hazardous Substances/Petroleum Products (Unidentified Uses) - None Unidentified Substance Containers - None Polychlorinated Biphenyl (PCB) Equipment - There are four pole mounted electric transformers on the subject site. No leakage was observed. If any leakage occurs, the utility owning the transformers should be contacted as transformers may contain PCB s Prior Usage None is known De minims Conditions Interior Not Applicable Exterior - None were noted. 5.5 INTERIOR OBSERVATIONS Heating/Cooling Gas is used for heating the buildings and electricity is used to cool them Stains/Corrosion Not Applicable Drains/Sumps Not Applicable 20

27 5.6 EXTERIOR OBSERVATIONS Pits/Ponds/Lagoons Site No pits, ponds, or lagoons are located on the property Adjacent Property None were noted Stained Soil/Pavement No stains were noted that would appear to cause an enforcement action by EPA or IDEM in the opinion of PHASE I Environmental Engineering Stressed Vegetation The site was reviewed during the growing season, and no areas of stressed vegetation were noted Solid Waste (Fill/Trash) There is a dumpster on site for household waste Waste Water/Drains Storm Water - The storm water is removed by surface drainage to the east. Process Water Not Applicable 21

28 SECTION 6.0 INTERVIEWS 6.1 OBJECTIVE The objective of interviews with the owner/occupants and government officials is to obtain information indicating recognized environmental conditions in connection with the property CURRENT OWNER When The interview was held on May 24, Identify The owner, Betty Jankowski, was interviewed Statement The property has been used as a mobile home park for at least fifty years. The well and septic system have been updated. 6.3 OCCUPANT/MANAGER When See Section Identify Statement 22

29 6.4 PAST OWNERS/OPERATORS/OCCUPANTS When No interview was held Identify Statement Data Gap Yes, however lack of this interview will not materially affect the conclusion of this report. 6.5 MAINTENANCE MANAGER When See Section Identify Statement 6.6 NEIGHBORS When No interview was held Identify Statement Data Gap - Yes, however lack of this interview will not materially affect the conclusion of this report. 6.7 HELPFUL DOCUMENTS The property owner, key site manager, or user has been asked to provide the following documents or information if pertinent and available Previous Site Assessment None are known Environmental Compliance Audits None are available Environmental Permits/Licenses None are presently needed UST/AST Registration No registration is required at this time. 23

30 6.7.5 Underground Injection systems - None are known Material Safety Data Sheets (MSDS) - These are not on site Superfund Amendments and Reauthorization Act (SARA) None Safety/ Spills Plans None are currently in effect Hydrogeologic Reports - None are known Violations/Legal Action/Past/Current (Environmental) None are known Hazardous waste generator notices/reports None are known Geotechnical Studies - None are available Risk Assessments - None are known Recorded Activity and Use Limitations (AUL s) None are known. 6.8 INTERVIEWS WITH STATE/LOCAL OFFICIALS Fire/Health Department The Marshall County Health Department was contacted on May 24, 2012 and was asked to provide any information in their files on the subject site. They had no records of any significant environmental problems on the site. 24

31 SECTION 7.0 NON-SCOPE CONSIDERATIONS 7.1 OBJECTIVE The purpose of non-scope consideration is to list those issues outside the scope of ASTM Practice 1527 into which the user has requested inquiry None 25

32 SECTION 8.0 EXCEPTIONS TO OR DELETIONS FROM ASTM STANDARD PURPOSE The purpose of this section is to list any exception or deletions from ASTM Standard as required by the Standard Record Review - Sites listed in governmental records that are within the distance requirements but have a barrier that would intercept or contain any contamination migration to the subject site are not listed CORRECTS TSD sites within 1.0 mile TSD sites listed as requiring corrective action are listed. Sites which have clean closures, do not require corrective action or a determination has not been made as to corrective action (listed as pending) are not listed in Section IDEM Underground Storage Tanks and Subject Site and Adjoining Property - These were reviewed by searching the IDEM computerized files and by visual observation Hazardous Substances/Petroleum Products/Drums/Containers - Small quantities of maintenance items, cleaning materials, and/or 26

33 repair items that may contain hazardous material or petroleum products and are not listed in the Findings Section The following are not part of this report. Any lead based paint on site. Potential leakage from petroleum transmission pipelines Subsidence or drainage from unknown underground structures. Wetlands Mold and any mold related issues Asbestos Any issues not specifically included in the scope of ASTM practice E or requested by the client as noted in Section 7.0 of this report. 27

34 SECTION 9.0 APPENDIX OBJECTIVE This section contains supportive documents Site Location Map Site Map View of Site 28

35 SECTION 10.0 PROFESSIONAL QUALIFICATIONS WILLIAM M. REID Education Background *** Purdue University - B.S. in Civil Engineering Major - Environmental Engineering Professional Background *** Registered Professional Engineer (Indiana) *** Member American Society of Civil Engineers *** Member American Society of Testing and Materials (ASTM) *** Member ASTM Subcommittee on Environmental Assessments For Commercial Real Estate *** Registered Real Estate Broker (Indiana) *** IDEM Certified Asbestos Inspector *** Former IDEM Certified Lead Inspector/Assessor *** Former Indiana Professional Licensing Agency Certified Environmental Instructor Current Occupation *** President, PHASE I Environmental Engineering - A professional engineering firm that conducts phase one environmental site assessments and performs project management for testing and remediation. Previous Experience *** Officer of a $50 million corporation responsible for environmental cleanup of sites in three states. 29