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CONDITIONS AND STIPULATIONS <br />(Includes those in the American Title Association -Owner's Policy -Standard Form B-1960) <br />1. DEFINITION OF TERMS <br />The following terms when used in this <br />policy mean: <br />(a) "land": the land described, specific- <br />ally or by reference, in Schedule C and <br />improvements affixed thereto which by law <br />constitute real property; <br />(b) "public records": those records <br />which impart constructive notice of matters <br />relating to said land; <br />(c) "knowledge": actual knowledge, <br />not constructive knowledge or notice which <br />may be imputed to the Insured by reason of <br />any public records; <br />(d) "date": the effective date; <br />(e) "mortgage": mortgage, deed of <br />trust, trust deed, or other security instru- <br />ment; and <br />(f) "insured": the party or parties <br />herein designated as Insured, and if the <br />owner of the indebtedness secured by a <br />mortgage shown in Schedule B is named as <br />an Insured in Schedule A, the Insured shall <br />include (1) each successor in interest in <br />ownership of such indebtedness, (2) any <br />such owner who acquires the estate or in- <br />terest referred to in this policy by fore- <br />closure, trustee's sale, or other legal man- <br />ner in satisfaction of said indebtedness, and <br />(3) any federal agency or instrumentality <br />wluch is an insurer or guarantor under an <br />insurance contract or guaranty insuring or <br />guaranteeing said indebtedness, or any part <br />thereof, whether named as an insured herein <br />or not. <br />2. BENEFITS AFTER ACQUISITION OF TITLE <br />If an insured owner of the indebtedness <br />secured by a mortgage described in Sched- <br />ule B acquires said estate or interest, or any <br />part thereof, by foreclosure, trustee's sale, <br />or other legal manner in satisfaction of said <br />indebtedness, or any part thereof, or if a <br />federal agency or instrumentality acquires <br />said estate or interest, or any part thereof, <br />as a consequence of an insurance contract or <br />guaranty insuring or guaranteeing the in- <br />debtedness secured by a mortgage covered <br />by this policy, or any part thereof, this <br />policy shall continue in force in favor of <br />such Insured, agency or instrumentality, <br />subject to all of the conditions and stipula- <br />tions hereof. <br />3. EXCLUSIONS FROM THE COVERAGE OF <br />THIS POLICY <br />This policy does not insure against loss <br />or damage by reason of the following: <br />(a) Any law, ordinance or governmental <br />regulation (including but not limited to <br />building and zoning ordinances) restricting <br />or regulating or prohibiting the occupancy, <br />use or enjoyment of the land, of regulating <br />the character, dimensions, or location of any <br />improvement now or hereafter erected on <br />said land, or prohibiting a separation in <br />ownership or a reduction in the dimensions <br />or area of any lot or parcel of land. <br />(b) Governmental rights of police <br />power or eminent domain unless notice of <br />judicial action to exercise such rights ap- <br />pears in the public records at the date <br />hereof. <br />(c) Title to any property beyond the <br />lines of the land expressly described in <br />Schedule C, or title to streets, roads, ave- <br />nues, lanes, ways or waterways on which <br />such land abuts, or the right to maintain <br />therein vaults, tunnels, ramps or any other <br />structure or improvement; or any rights or <br />easements therein unless this policy spe- <br />cifically provides that such property, rights <br />or easements are insured, except that if the <br />land abuts upon one or more physically open <br />streets or highways this policy insures the <br />ordinary rights of abutting owners for access <br />to one of such streets or highways, unless <br />otherwise excepted or excluded herein. <br />(d) Defects, liens, encumbrances, ad- <br />verse claims against the title as insured or <br />other matters (1) created, suffered, assumed <br />or agreed to by the Insured; or (2) known <br />to the Insured either at the date of this <br />policy or at the date such Insured acquired <br />an estate or interest insured by this policy <br />and not shown by the public records, unless <br />disclosure thereof in writing by the Insured <br />shall have been made to the Company prior <br />to the date of this policy; or (3) resulting <br />in no loss to the Insured; or (4) attaching <br />or created subsequent to the date hereof. <br />(e) Loss or damage which would not <br />have been sustained if the Insured were a <br />purchaser or encumbrancer for value with- <br />out knowledge. <br />4. DEFENSE AND PROSECUTION OF ACTIONS <br />—NOTICE OF CLAIM TO BE GIVEN BY <br />THE INSURED <br />(a) The Company, at its own cost and <br />without undue delay shall provide (1) for <br />the defense of the Insured in all litigation <br />consisting of actions or proceedings com- <br />menced against the Insured, or defenses, <br />restraining orders, or injunctions interposed <br />against a foreclosure or sale of the indebted- <br />ness secured by a mortgage covered by this <br />policy or a sale of the estate or interest in <br />said land; or (2) for such action as may <br />be appropriate to establish the title of the <br />estate or interest or the lien of the mort- <br />gage as insured, which litigation or action <br />in any of such events is founded upon an <br />alleged defect, lien or encumbrance insured <br />against by this policy, and may pursue any <br />litigation to final determination in the court <br />of last resort. <br />(b) In case any such action or proceed- <br />ing shall be begun, or defense interposed, <br />or in case knowledge shall come to the In- <br />sured of any claim of title or interest which <br />is adverse to the title of the estate or interest <br />or lien of the mortgage as insured, or which <br />might cause loss or damage for which the <br />Company shall or may be liable by virtue of <br />this policy, or if the Insured shall in good <br />faith contract to sell the indebtedness se- <br />cured by a mortgage covered by this policy, <br />or, if an Insured in good faith leases or <br />contracts to sell, lease or mortgage the same, <br />or if the successful bidder at a foreclosure <br />sale under a mortgage covered by this policy <br />refuses to purchase and in any such event <br />the title to said estate or interest is rejected <br />as unmarketable, the Insured shall notify the <br />Company thereof in writing. If such notice <br />shall not be given to the Company within <br />ten days of the receipt of process or plead- <br />ings or if the Insured shall not, in writing, <br />promptly notify the Company of any defect, <br />lien or encumbrance insured against which <br />shall come to the knowledge of the Insured, <br />or if the Insured shall not, in writing, <br />promptly notify the Company of any such <br />rejection by reason of claimed unmarket- <br />ability of title, then all liability of the Com- <br />pany in regard to the subject matter of such <br />action, proceeding or matter shall cease and <br />terminate; provided, however, that failure to <br />notify shall in no case prejudice the claim, <br />of any Insured unless the Company shall be <br />actually prejudiced by such failure and then <br />only to the extent of such prejudice. <br />(c) The Company shall have the right <br />at its own cost to institute and prosecute <br />any action or proceeding or do any other <br />act which in its opinion may be necessary or <br />desirable to establish the title of the estate <br />or interest or the lien of the mortgage as <br />insured; and the Company may take any <br />appropriate action under the terms of this <br />policy whether or not it shall be liable there- <br />under and shall not thereby concede liability <br />or waive any provision of this policy. <br />(d) In all cases where this policy per- <br />mits or requires the Company to prosecute <br />or provide for the defense of any action or <br />proceeding, the Insured shall secure to it the <br />right to so prosecute or provide defense in <br />such action or proceeding, and all appeals <br />therein, and permit it to use, at its option, <br />the name of the Insured for such purpose. <br />Whenever requested by the Company the <br />Insured shall give the Company all assist- <br />ance in any such action or proceeding, in <br />effecting settlement, securing evidence, ob- <br />taining witnesses, or prosecuting or defend- <br />ing such action or proceeding, and the Com- <br />pany shall reimburse the Insured for any <br />expense so incurred. <br />5. NOTICE OF LOSS — LIMITATION OF <br />ACTION <br />In addition to the notices required under <br />paragraph 4(b), a statement in writing of <br />any loss or damage for which it is claimed <br />the Company is liable under this policy <br />shall be furnished to the Company within <br />sixty days after such loss or damage shall <br />have been determined and no right of action <br />shall accrue to the Insured under this policy <br />until thirty days after such statement shall <br />have been furnished, and no recovery shall <br />be had by the Insured under this policy <br />unless action shall be commenced thereon <br />within five years after expiration of said <br />thirty day period. Failure to furnish such <br />statement of loss or damage, or to com- <br />mence such action within the time herein - <br />before specified, shall be a conclusive bat <br />against maintenance by the Insured of any <br />action under this policy. <br />(Conditions and Stipulations Continued and Concluded on Last Page of This Policy) <br />