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a No. A-3002 - <br />A Standard Coverage Policy Form <br />Co -Insurance <br />1. SCOPE OF COVERAGE <br />This policy does not insure against, and the Companies <br />will not be liable for loss or damage created by or <br />arising out of any of the following: (a) defects, liens, <br />claims, encumbrances, or other matters which result <br />in no pecuniary loss to the insured; (b) defects, liens, <br />encumbrances, or other matters created or occurring <br />subsequent to the date hereof; (c) defects, liens, <br />encumbrances, or other matters created or suffered by <br />the insured claiming such loss or damage; or (d) <br />defects, liens, claims, encumbrances, or other matters <br />existing at the date of this policy and known to the <br />insured claiming such loss or damage, either at the <br />date of this policy or at the date such insured claim- <br />ant acquired an estate or interest insured by this policy, <br />unless such defect, lien, claim, encumbrance or other <br />matter shall have been disclosed to the Companies in <br />writing prior to the issuance of this policy or appeared <br />at the date of this policy on the public records. Any <br />rights or defenses of the Companies against a named <br />insured shall be equally available against any person <br />or corporation who shall become an insured hereunder <br />as successor of such named insured. <br />2. DEFENSE OF ACTIONS. NOTICE OF ACTIONS <br />OR CLAIMS TO BE GIVEN BY THE INSURED <br />The Companies at their own cost shall defend the <br />insured in all litigation consisting of actions or pro. <br />ceedings against the insured, or defenses, restraining <br />orders, or injunctions interposed against a foreclosure <br />or sale of said land in satisfaction of any indebtedness, <br />the owner of which is insured by this policy, which <br />litigation is founded upon a defect, lien, encumbrance, <br />or other matter insured against by this policy, and may <br />pursue such litigation to final determination in the <br />court of last resort. In case any such litigation shall <br />become known to any insured, or in case knowledge <br />shall come to any insured of any claim of title or <br />interest which is adverse to the title as insured or <br />which might cause loss or damage for which the <br />Companies shall or may be liable by virtue of this <br />policy, such insured shall notify the Companies thereof <br />in writing. If such notice shall not be given to the <br />Companies at least two days before the appearance day <br />in any such litigation, or if such insured shall not, in <br />writing, promptly notify the Companies of any defect, <br />lien, encumbrance, or other matter insured against, or <br />of any such adverse claim which shall come to the <br />knowledge of such insured, in respect to which loss <br />or damage is apprehended, then all liability of the <br />Companies as to each insured having such knowledge <br />shall cease and terminate; provided, however, that <br />failure to so notify the Companies shall in no case <br />prejudice the claim of any insured unless the Com- <br />panies shall be actually prejudiced by such failure. <br />The Companies shall have the right to institute and <br />prosecute any action or proceeding or do any other act <br />which, in their opinion, may be necessary or desirable <br />to establish the title, or any insured lien or charge, as <br />insured. In all cases where this policy permits or <br />requires the Companies to prosecute or defend any <br />action or proceeding, the insured shall secure to them <br />in writing the right to so prosecute or defend such <br />action or proceeding, and all appeals therein, and per- <br />mit them to use, at their option, the name of the <br />insured for such purpose. Whenever requested by the <br />Companies the insured shall assist the Companies in <br />any such action or proceeding, in effecting settlement, <br />securing evidence, obtaining witnesses, prosecuting or <br />defending such action or proceeding, to such extent <br />and in such manner as is deemed desirable by the Com- <br />panies, and the Companies shall reimburse the insured <br />for any expense so incurred. The Companies shall be <br />subrogated to and be entitled to all costs and attorneys' <br />fees incurred or expended by the Companies, which <br />may be recoverable by the insured in any litigation <br />STIPULATIONS <br />carried on by the Companies on behalf of the insured. <br />The word "knowledge" in this paragraph means actual <br />knowledge, and does not refer to constructive knowl- <br />edge or notice which may be imputed by the public <br />records. <br />3. NOTICE OF LOSS. LIMITATION OF ACTION <br />A statement in writing of any loss or damage for which <br />it is claimed the Companies are liable under this <br />policy shall be furnished to the Companies within <br />sixty days after such loss or damage shall have been <br />ascertained. No action or proceeding for the recovery <br />of any such loss or damage shall be instituted or main. <br />tained against the Companies until after full compli- <br />ance by the insured with all the conditions imposed on <br />the insured by this policy, nor unless commenced <br />within twelve months after receipt by the Companies <br />of such written statement. <br />4. OPTION TO PAY, SETTLE, OR COMPROMISE <br />CLAIMS <br />The Companies reserve the option to pay, settle, or <br />compromise for, or in the name of, the insured, any <br />claim insured against or to pay this policy in full at <br />any time, and payment or tender of payment of the <br />full amount of this policy, together with all accrued <br />costs which the Companies are obligated hereunder to <br />pay, shall terminate all liability of the Companies <br />hereunder, including all obligations of the Companies <br />with respect to any litigation pending and subsequent <br />costs thereof. <br />5 SUBROGATION UPON PAYMENT OR SETTLE- <br />MENT <br />Whenever the Companies shall have settled a claim <br />under this policy, they shall be subrogated to and be <br />entitled to all rights, securities, and remedies which <br />the insured would have had against any person or <br />property in respect to such claim, had this policy not <br />been issued. If the payment does not cover the loss <br />of the insured, the Companies shall be subrogated to <br />such rights, securities, and remedies in the proportion <br />which said payment bears to the amount of said loss. <br />In either event the insured shall transfer, or cause to <br />be transferred, to the Companies such rights, securi- <br />ties, and remedies, and shall permit the Companies to <br />use the name of the insured in any transaction or <br />litigation involving such rights, securities, or remedies. <br />6. OPTION TO PAY INSURED OWNER OF IN- <br />DEBTEDNESS AND BECOME OWNER OF <br />SECURITY <br />The Companies have the right and option, in case any <br />loss is claimed under this policy by an insured owner <br />of an indebtedness secured by mortgage or deed of <br />trust, to pay such insured the indebtedness of the <br />mortgagor or trustor under said mortgage or deed of <br />trust, together with all costs which the Companies are <br />obligated hereunder to pay, in which case the Com- <br />panies shall become the owner of, and such insured <br />shall at once assign and transfer to the Companies <br />said mortgage or deed of trust and the indebtedness <br />thereby secured, and such payment shall terminate all <br />liability under this policy to such insured. <br />7. PAYMENT OF LOSS AND COSTS OF LITIGA- <br />TION. INDORSEMENT OF PAYMENT ON <br />POLICY <br />The Companies will pay, in addition to any loss insured <br />against by this policy, all costs imposed upon the in- <br />sured in litigation carried on by the Companies for the <br />insured, and in litigation carried on by the insured <br />with the written authorization of the Companies, but <br />not otherwise. The liability of the Companies under <br />this policy shall in no case exceed, in all, the actual <br />loss of the insured and costs which the Companies are <br />obligated hereunder to pay, and in no case shall such <br />total liability exceed the amount of this policy and <br />said costs. All payments under this policy shall reduce <br />the amount of the insurance pro tanto, and payment of <br />loss or damage to an insured owner of indebtedness <br />shall reduce, to that extent, the liability of the Com- <br />panies to the insured owner of said land. No payment <br />may be demanded by any insured without producing <br />this policy for indorsement of such payment. <br />S. MANNER OF PAYMENT OF LOSS TO INSURED <br />Loss under this policy shall be payable, first, to any <br />insured owner of indebtedness secured by mortgage or <br />deed of trust shown in Schedule B, in order of priority <br />therein shown, and if such ownership vests in more <br />than one, payment shall be made ratably as their <br />respective interests may appear, and thereafter any <br />loss shall be payable to the other insured, and if more <br />than one, then to such insured ratably as their respec- <br />tive interests may appear. If there be no such insured <br />owner of indebtedness, any loss shall be payable to <br />the insured, and if more than one, to such insured <br />ratably as their respective interests may appear. <br />9. DEFINITION OF TERMS <br />The following terms when used in this policy mean: <br />(a) "named insured": the persons and corporations <br />named as insured in Schedule A of this policy; (b) <br />"the insured": such named insured together with (1) <br />each successor in ownership of any indebtedness <br />secured by any mortgage or deed of trust shown in <br />Schedule B, the owner of which indebtedness is <br />named herein as an insured, (2) any such owner or <br />successor in ownership of any such indebtedness who <br />acquires the land described in Schedule A or any <br />part thereof, by lawful means in satisfaction of said <br />indebtedness or any part thereof, (3) any governmental <br />agency or instrumentality acquiring said land under <br />an insurance contract or guarantee insuring or guar- <br />anteeing said indebtedness or any part thereof, and <br />(4) any person or corporation deriving an estate or <br />interest in said land as an heir or devisee of a named <br />insured or by reason of the dissolution, merger, or <br />consolidation of a corporate named insured; (c) <br />"land": the land described specifically or by reference <br />in Schedule A and improvements affixed thereto which <br />by law constitute real property; (d) "date": the <br />exact day, hour and minute specified in Schedule A <br />as "Policy Date" (unless the context clearly requires <br />a different meaning); (e) "taxing agency": the State <br />and each county, city and county, city and district <br />in which said land or some part thereof is situated <br />that levies taxes or assessments on real property; (f) <br />"public records": those public records which, under <br />the recording laws, impart constructive notice of mat- <br />ters relating to said land. <br />10. WRITTEN INDORSEMENT REQUIRED TO <br />CHANGE POLICY <br />No provision or condition of this policy can be waived <br />or changed except by writing indorsed hereon or an <br />cached hereto signed by the President, a Vice Presi- <br />dent, the Secretary, or an Assistant Secretary of the <br />Companies. <br />11. NOTICES, WHERE SENT <br />All notices required to be given the Companies, and <br />any statement in writing required to be furnished the <br />Companies, shall be addressed to them at 360 - 14th <br />Street, Oakland, California. <br />12. FEE <br />The fee specified in Schedule A is the total charge for <br />Title Insurance including charges for Title Search and <br />Examination. <br />