Policy of Title Insurance by Stewart Title Guaranty Company

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EXCLUSIONS FROM COVERAGE • The following matters ore 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,regulat- ing,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 o 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 Dote of Policy,but not excluding from coverage any taking which hos 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 Dote of Policy; or • (e) resulting in loss or damage which would not have been sustained if the insured claimant had value paid 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. S. 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 or 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 lows. cry . CONDITIONS CONDITIONS AND STIPULATIONS %I.!.:,,,,,, , 1. DEFINITION OF TERMS. The following terms when used in this policy mean: manner which discharges the lien of the insured mortgage; (ii) a transferee of (o) "insured":the insured named in Schedule A,and,subject to any rights the estate or interest so acquired from an insured corporation, provided the or defenses the Company would have hod against the named insured, those transferee is the parent or whollyowned subsidiary of the insured corporation. who succeed to the interest of the named insured by operation of law as distin- and their corporate successors by operation of law and not by purchase,subject guished from purchase including,but not limited to,heirs,distributees,devisees, to any rights or defenses the Company may have against any predecessor survivors, personal representatives,next of kin,or corporate or fiduciary succes- insureds; and (iii) any governmental agency or governmental instrumentality son. The term "insured"also includes which acquires all or any part of the estate or interest pursuant to a contract of (i) the owner of the indebtedness secured by the insured mortgage insurance or guaranty insuring or guaranteeing the indebtedness secured by the and eact, successor in ownership of the indebtedness except a successor who is insured mortgage. an obligor under the provisions of Section 12(c)of these Conditions and Stipula- (b) After Conveyance of Title by on Insured. The coverage of this policy ns (reserving, however, all rights and'defenses as to any successor that the shall continue in force as of Date of Policy in favor of on insured only so long as impanv would have had against any predecessor insured,unless the successor the insured retains an estate or interest in the land, or holds an indebtedness acquired the indebtedness as a purchaser for value without knowledge of the secured by a purchase money mortgage given by a purchaser from the insured, asserted defect, lien, encumbrance, adverse claim or other matter insured or only so long as the insured shall have liability by reason of covenants of against by this policy as affecting title to the estate or interest in the land); warranty made by the insured in any transfer or conveyance of the estate or (ii) any governmental agency or governmental instrumentality which is ' interest.This policy shall not continue in force in favor of any purchaser from an an insurer or guarantor under an insurance contract or guaranty insuring or insured of either (i) an estate or interest in the land, or (ii) an indebtedness guaranteeing the indebtedness secured by the insured mortgage, or any part secured by_o purchase money mortgage given to an insured. thereof, whether named os an insured herein or not; (c) Amount of Insurance.The amount of insurance after the acquisition or (iii) the parties designated in Section 2(a) of these Conditions and after the conveyance by an insured lender shall in neither event exceed the Stipulations. least of: (b) "insured claimant": an insured claiming loss or damage. (i) The amount of insurance stated in Schedule A; (c) "insured lender":the owner of an insured mortgage. (ii) The amount of the principal of the indebtedness secured by the (d) "insured mortgage": a mortgage shown in Schedule B, the owner of insured mortgage os of Date of Policy,interest thereon,expenses of foreclosure, which is named as an insured in Schedule A. amounts advanced pursuant to the insured mortgage to assure compliance with (e) "knowledge" or "known": actual knowledge, not constructive knowl- lows or to protect the lien of the insured mortgage prior to the time of acquisi- edge or notice which may be imputed to an insured by reason of the public tion of the estate or interest in the land and secured thereby and reasonable records as defined in this policy or any other records which impart constructive amounts expended to prevent deterioration of improvements, but reduced by notice of matters affecting the land. the amount of all payments mode;or (f) "land":the land described or referred to in Schedule A,and improve- (iii) The amount paid by any governmental agency or governmental ments affixed thereto which by low constitute real property. The term 'land" instrumentality, if the agency or the instrumentality is the insured claimant, in .does not include any property beyond the lines of the area described or the acquisition of the estate or interest in satisfaction of its insurance contract or referred to in Schedule A, nor any right,title, interest, estate or easement in guaranty. . abutting streets, roads, avenues,alleys, lanes,ways or waterways, but nothing 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. herein shall modify or limit the extent to which o right of access to and from the An insured shall noti the Company promptly in writing(i)in case of any land is insured by this policy. litigation as set forth in a) below, (ii) in case knowledge shall come to an (g) "mortgage": mortgage, deed of trust, trust deed, or other security insured hereunder of any c aim of title or interest which is adverse to the title to • instrument. the estate or interest or the lien of the insured mortgage,as insured,and which (h) "public records": records established under state statutes at Date of might cause loss or damage for which the Company may be liable by virtue of Policy for the purpose of imparting constructive notice of matters relating to real this policy, or (iii) if title to the estate or interest or the lien of the insured property to purchasers for value and without knowledge. mortgage,as insured,is rejected as unmarketable.If prompt notice shall not be (i "unmarketabiliy of the title":an alleged or apparent matter affecting .given to the Company,then as to that insured all liability of the Company shall the tine to the land, not excluded or excepted from coverage, which would terminate with regard to the matter or matters for which prompt notice is entitle a purchaser of the estate or interest described.in Schedule A or the required;provided,however,that failure to notify the Company shall in no case ared mortgage to be released from the obligation to purchase by virtue of a prejudice the rights of any insured under this policy unless the Company shell be .rtractual condition requiring the delivery of marketable title. prejudiced by the failure and then only to the extent of the Prejudice. 2. CONTINUATION OF INSURANCE. 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED (a) After Acquisition of Title by Insured Lender.If this policy insures the CLAIMANT TO COOPERATE. owner of the indebtedness secured by the insured mortgage, the coverage of (a) Upon written request by an insured and subject to the options this policy shall continue in force as of Date of Policy in favor of(i)such insured contained in Section 6 of these Conditions and Stipulations,the Company,at its lender who acquires all or any part of the estate or interest in the land by own cost and without unreasonable delay,shall provide for the defense of such foreclosure, trustee's sale, conveyance in lieu os foreclosure, or other legal insured in litigation in which any third party asserts a claim adverse to the title or interest as insured, but only as to those stated causes of action alleging o