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STIPULATIONS
<br />Scope of 1. This policy does not insure against, and the Company
<br />Coverage will not be liable for loss or damage created by or arising
<br />out of any of the following:
<br />(a) defects, liens, claims, encumbrances, or other matters which result in
<br />no pecuniary loss to the insured; (b) defects, liens, encumbrances, or
<br />other matters created or occurring subsequent to the date hereof; (c) de-
<br />fects, liens, encumbrances, or other matters created or suffered by the in-
<br />sured claiming such loss or damage; or (d) defects, liens, claims, encum-
<br />brances, or other matters existing at the date of this polity and known to
<br />the insured claiming such loss or damage, either at the date of this policy
<br />or at the date such insured claimant acquired an estate or interest insured
<br />by this policy, unless such defect, lien, claim, encumbrance or other
<br />matter shall have been disclosed to the Company in writing prior to the
<br />issuance of this polity or appeared at the date of this polity on the public
<br />records. Any rights or defenses of the Company against a named insured
<br />shall be equally available against any person or corporation who shall
<br />become an insured hereunder as successor of such named insured.
<br />Defense of 2. The Company at its own cost shall defend the insured
<br />Actions in all litigation consisting of actions or proceedings
<br />against the insured, or defenses, restraining orders, or
<br />injunctions interposed against a foreclosure or sale of said land in satis-
<br />faction of any indebtedness, the owner of which is insured by this policy,
<br />which litigation is founded upon a defect, lien, encumbrance, or other
<br />matter insured against by this polity, and may pursue such litigation to
<br />final determination in the court of last resort. In case any such litigation
<br />shall become known to any insured, or in case knowledge shall come to
<br />any insured of any claim of title or interest which is adverse to the title
<br />as insured or which might cause loss or damage for which the Company
<br />shall or may be liable by virtue of this polity, such insured shall notify
<br />the Company thereof in writing. If such notice shall not be given to the
<br />Company at least two days before the appearance day in any such litiga-
<br />tion, or if such insured shall not, in writing, promptly
<br />Notice of actions notify the Company of any defect, lien, encumbrance, or
<br />or Claims to be other matter insured against, or- of any such adverse
<br />Given by the claim, which shall come to the knowledge of such in -
<br />Insured sured, in respect to which loss or damage is apprehended,
<br />then all liability of the Company as to each insured hav-
<br />ing such knowledge shall cease and terminate; provided, however, that
<br />failure to so notify the Company shall in no case prejudice the claim of
<br />any insured unless the Company shall be actually prejudiced by such
<br />failure. The Company shall have the right to institute and prosecute any
<br />action or proceeding or do any other act which, in its opinion, may be
<br />necessary or desirable to establish the title, or any insured lien or charge,
<br />as insured. In all cases where this policy permits or requires the Company
<br />to prosecute or defend any action or proceeding, the insured shall secure
<br />to it in writing the right to so prosecute or defend such action or pro-
<br />ceeding, and all appeals therein, and permit it to use, at its option, the
<br />name of the insured for such purpose. Whenever requested by the Com-
<br />pany the insured shall assist the Company in any such action or proceed-
<br />ing, in effecting settlement, securing evidence, obtaining witnesses, prose-
<br />cuting or defending such action or proceeding, to such extent and in
<br />such manner as is deemed desirable by the Company, and the Company
<br />shall reimburse the insured for any expense so incurred. The Company
<br />shall be subrogated to and be entitled to all costs and attorneys' fees in-
<br />curred or expended by the Company, which may be recoverable by the
<br />insured in any litigation carried on by the Company on behalf of the
<br />insured. The word "knowledge" in this paragraph means actual knowl-
<br />edge, and does not refer to constructive knowledge or notice which may
<br />be imputed by the public records.
<br />Notice of 3. A statement in writing of any loss or damage for
<br />Loss which it is claimed the Company is liable under this
<br />policy shall be furnished to the Company within sixty,
<br />days after such loss or damage shall have been ascertained. No action or
<br />proceeding for the recovery of any such loss or damage
<br />Limitation shall be instituted dr maintained against the Company
<br />of Action until after full compliance by the insured with ill the
<br />conditions imposed on the insured by this policy, nor
<br />unless commenced within twelve months after receipt by the Company of
<br />such written statement.
<br />Option to Pay, 4. The Company reserves the option to pay, settle, or
<br />Settle or compromise for, or in the name of, the insured, any claim
<br />Compromise insured against or to pay this policy in full at any time,
<br />Claims and payment or tender of payment of the full amount of
<br />this policy, together with all accrued costs which the
<br />Company is obligated hereunder to pay, shall terminate all liability of
<br />the Company hereunder; including all obligations of the Company with
<br />respect to any litigation pending and subsequent costs thereof.
<br />Subrogation 5. Whenever the Company shall have settled a claim
<br />Upon Payment under this policy, it shall be subrogated to and be en -
<br />or Settlement titled to all rights, securities, and remedies which the
<br />insured would have had against any person or property
<br />in respect to such claim, had this policy not been issued. If the pay-
<br />ment does not cover the loss of the insured, the Company shall be sub-
<br />rogated to such rights, securities, and remedies in the proportion which
<br />said payment bears to the amount of said loss. In either event the in-
<br />sured shall transfer, or cause to be _transferred, to the Company such
<br />rights, securities, and remedies, and shall permit the Company to use
<br />the name of the insured in any transaction or litigation involving such
<br />rights, securities, or remedies.
<br />Option to Pay 6. The Company has the right and option, in case any
<br />Insured owner loss is claimed under this policy by an insured owner of
<br />of Indebtedness an indebtedness secured by mortgage or deed of trust, to
<br />and Become pay such insured the indebtedness of the mortgagor or
<br />Owner of trustor under said mortgage or deed of trust, together
<br />Security with all costs which the Company is obligated 4iere-
<br />under to pay, in which case the Company shall become
<br />the owner of, and such insured shall at once assign and transfer to the
<br />Company, said mortgage or deed of trust and. the indebtedness thereby
<br />secured, and such payment shall terminate all liability under this policy
<br />to such insured.
<br />Payment of Loss 7. The Company will pay, in addition to any loss in -
<br />and costs of sured against by this policy, all costs imposed upon the
<br />Litigation insured in litigation carried on by the Company for the
<br />insured, and in litigation carried on by the insured with
<br />the written authorization of the Company, but not otherwise. The liability
<br />of the Company under this policy shall in no case exceed, in all, the
<br />actual loss of the insured and costs which the Company is obligated
<br />hereunder to pay, and in no case shall such total lia-
<br />Indorsement of bility exceed the amount of this polity and said costs.
<br />Payment on Policy All payments under this policy shall reduce the amount
<br />of the insurance pro tanto, and payment of loss or dam-
<br />age to an insured owner of indebtedness shall reduce to that extent the
<br />liability of the Company to the insured owner of said land. No payment
<br />may be demanded by any insured without producing this policy for in-
<br />dorsement of such payment.
<br />Manner of S. Loss under this polity shall be payable, first, to any
<br />Payment of Loss insured owner of indebtedness secured by mortgage or
<br />to Insured deed of trust shown in Schedule B, in order of priority
<br />therein shown, and if such ownership vests in more than
<br />one, payment shall be made ratably as their respective interests may ap-
<br />pear, and thereafter, any loss shall be payable to the other insured, and if
<br />more than one, then to such insured ratably as their respective interests
<br />may appear. If there be no such insured owner of indebtedness, any loss
<br />shall be payable to the insured, and if more than one, to such insured
<br />ratably as their respective interests may appear.
<br />Definition 9. The following terms when used in this polity mean:
<br />of Terms (a) "named insured": the persons and corporations
<br />named as insured in Schedule A of this policy;
<br />(b) "the insured": such named insured together with (1) each suc-
<br />cessor in ownership of any indebtedness secured by any mortgage or
<br />deed of trust shown in Schedule B, the owner of which indebtedness is
<br />named herein as an insured, (2) any such owner or successor in owner-
<br />ship of any such indebtedness who acquires the land described in Sched-
<br />ule A or any part thereof, by lawful means in satisfaction of said in-
<br />debtedness or any part thereof, (3) any governmental agency or instru-
<br />mentality acquiring said land under an insurance contract or guarantee
<br />insuring or guaranteeing said indebtedness or any part thereof, and (4)
<br />any person or corporation deriving an estate or interest in said land as an
<br />heir or devisee of a named insured or by reason of the dissolution, mer-
<br />ger, or consolidation of. a corporate named insured;
<br />(c) 'land": the land described specifically or by reference in Schedule
<br />A and improvements affixed thereto which by law constitute real prop-
<br />erty;
<br />(d) "date": the exact day, hour and minute specified in Schedule A
<br />as "Policy Date" (unless the context clearly requires a different mean-
<br />ing) ;
<br />(e) "taxing agency": the State and each county, city and county, City
<br />and district in which said land or some part thereof is situated that levies
<br />taxes or assessments on real property;
<br />(f) "public records": those public records which, under the recording
<br />laws, impart constructive notice of matters relating to said land.
<br />Written
<br />10. No provision or condition of this policy can be
<br />Indorsement
<br />waived or changed except by writing endorsed hereon or
<br />Required to
<br />Change Policy
<br />attached hereto signed by the President, a Vice-Presi-
<br />dent, the Secretary, or an Assistant Secretary of each of
<br />the companies.
<br />Notices
<br />11. All notices required to be given the Company and
<br />Where Sent
<br />any statement in writing required to be furnished the
<br />Company shall be addressed to it at the office which
<br />issued this policy.
<br />Fee Defined 12. The fee specified in Schedule A is the total fee for
<br />title search and examination, title insurance and escrow.
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