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EXCLUSIONS FROM COVERAGE <br />The following matters are expressly excluded from the coverage of <br />this policy and the Company will not pay loss or damage, costs, <br />attorneys' fees or expenses which arise by reason of: <br />1. (a) Any law, ordinance or governmental regulation (including <br />but not limited to building and zoning laws, ordinances, or reg- <br />ulations) restricting, regulating, prohibiting or relating to (i) the <br />occupancy, use, or enjoyment of the land; (ii) the character, <br />dimensions or location of any improvement now or hereafter <br />erected on the land; (iii) a separation in ownership or a change <br />in the dimensions or area of the land or any parcel of which the <br />land is or was a part; or (iv) environmental protection, or the <br />effect of any violation of these laws, ordinances or governmental <br />regulations, except to the extent that a notice of the enforcement <br />thereof or a notice of a defect, lien or encumbrance resulting <br />from a violation or alleged violation affecting the land has been <br />recorded in the public records at Date of Policy. <br />(b) Any governmental police power not excluded by (a) above, <br />except to the extent that a notice of the exercise thereof or a <br />notice of a defect, lien or encumbrance resulting from a viola- <br />tion or alleged violation affecting the land has been recorded in <br />the public records at Date of Policy. <br />2. Rights of eminent domain unless notice of the exercise thereof <br />has been recorded in the public records at Date of Policy, but <br />not excluding from coverage any taking which has occurred <br />prior to Date of Policy which would be binding on the rights of <br />a purchaser for value without knowledge. <br />1. Definition of Terms <br />3. Defects, liens, encumbrances, adverse claims, or other matters: <br />(a) whether or not recorded in the public records at Date of <br />Policy, but created, suffered, assumed or agreed to by the in- <br />sured claimant; <br />(b) not known to the Company, not recorded in the public <br />records at Date of Policy, but known 'to the insured claimant <br />and not disclosed in writing to the Company by the insured <br />claimant prior to the date the insured claimant became an in- <br />sured under this policy; <br />(c) resulting in no loss or damage to the insured claimant; <br />(d) attaching or created subsequent to Date of Policy; or <br />(e) resulting in loss or damage which would not have been <br />sustained if the insured claimant had paid value for the insured <br />mortgage or for the estate or interest insured by this policy. <br />4. Unenforceability of the lien of the insured mortgage because of <br />the inability or failure of the insured at Date of Policy, or the <br />inability or failure of any subsequent owner of the indebtedness, <br />to comply with the applicable doing business laws of the state <br />in which the land is situated. <br />Invalidity or unenforceability of the lien of the insured <br />mortgage, or claim thereof, which arises out of the transaction <br />evidenced by the insured mortgage and is based upon usury or <br />any consumer credit protection or truth in lending law. <br />CONDITIONS AND STIPULATIONS <br />The following terms when used in this policy mean: <br />(a) "insured": the insured named in Schedule A, and, subjectto any <br />rights or defenses the Company would have had against the named <br />insured, those who succeed to the interest of the named insured by <br />operation of law as distinguished from purchase including, but not <br />limited to, heirs, distributees, devisees, survivors, personal represen- <br />tatives, next of kin, or corporate orfiduciary successors. The term "in- <br />sured" also includes <br />(i) the owner of the indebtedness secured by the insured <br />mortgage and each successor in ownership of the indebtedness ex- <br />cept a successor who is an obligor under the provisions of Section <br />12(c) of these Conditions and Stipulations (reserving, however, all <br />rights and defenses as to any successor that the Company would have <br />had against any predecessor insured, unless the successor acquired <br />the indebtedness as a purchaser for value without knowledge of the <br />asserted defect, lien, encumbrance, adverse claim or other matter in- <br />sured against by this policy as affecting title to the estate or interest in <br />the land); <br />(ii) any governmental agency or governmental instrumental- <br />ity which is an insurer or guarantor under an insurance contract or <br />guaranty insuring or guaranteeing the indebtedness secured by the in- <br />sured mortgage, or any part thereof, whether named as an insured <br />herein or not; <br />(iii) the parties designated in Section 2(a) of these Conditions <br />and Stipulations. <br />(b) "insured claimant": an insured claiming loss or damage. <br />(c) "insured lender": the owner of an insured mortgage. <br />(d) "insured mortgage": a mortgage shown in Schedule B, the <br />owner of which is named as an insured in Schedule A. <br />(e) "knowledge" or "known": actual knowledge, not constructive <br />knowledge or notice which may be imputed to an insured by reason <br />of the public records as defined in this policy or any other records <br />which impart constructive notice of matters affecting the land. <br />(f) "land": the land described, or referred to in Schedule A, and im- <br />provements affixed thereto which by law constitute real property. The <br />term "land" does not include any property beyond the lines of the <br />area described or referred to in Schedule A, nor any right, title, in- <br />terest, estate or easement in abutting streets, roads, avenues, alleys, <br />lanes, ways or waterways, but nothing herein shall modify or limit the <br />extent to which a right of access to and from the land is insured by this <br />policy. <br />(g) "mortgage": mortgage, deed of trust, trust deed, or other secu- <br />rity instrument. <br />(h) "public records": records establishe( tate statutes at Date <br />of Policy for the purpose of nmparting con: notice of matters re - <br />to real property to purchasers for val ithout knowledge. <br />(i) "unmarketability of the title": an alleged or apparent matter af- <br />fecting the title to the land, not excluded or excepted from coverage, <br />which would entitle a purchaser of the estate or interest described in <br />Schedule A or the insured mortgage to be released from the obligation <br />to purchase by virtue of a contractual condition requiring the delivery <br />of marketable title. <br />2. Continuation of Insurance <br />(a) After Acquisition of Title by Insured Lender. If this policy in- <br />sures the owner of the indebtedness secured by the insured mortgage, <br />the coverage of this policy shall continue in force as of Date of Policy <br />in favor of (i) such insured lender who acquires all or any part of the <br />estate or interest in the land by foreclosure, trustee's sale, conveyance <br />in lieu of foreclosure, or other legal manner which discharges the lien <br />of the insured mortgage; (ii) a transferee of the estate or interest so <br />acquired from an insured corporation, provided the transferee is the <br />parent or wholly -owned subsidiary of the insured corporation, and <br />their corporate successors by operation of law and not by purchase, <br />subject to any rights or defenses the Company may have against any <br />predecessor insureds; and (iii) any governmental agency or gov- <br />ernmental instrumentality which acquires all or any part of the estate <br />or interest pursuant to a contract of insurance or guaranty insuring or <br />guaranteeing the indebtedness secured by the insured mortgage. <br />(b) After Conveyance of Title by an Insured. The coverage of <br />this policy shall continue in force as of Date of Policy in favor of an <br />insured only so long as the insured retains an estate or interest in the <br />land, or holds an indebtedness secured by a purchase money <br />mortgage given by a purchaser from the insured, or only so long as <br />the insured shall have liability by reason of covenants of warranty <br />made by the insured in any transfer or conveyance of the estate or in- <br />terest. This policy shall not continue in force in favor of any purchaser <br />from an insured of either (i) an estate or interest in the land, or (ii) an <br />indebtedness secured by a purchase money mortgage given to an <br />insured. <br />(c) Amount of Insurance: The amount of insurance after the acquisi- <br />tion or after the conveyance by an insured lender shall in neither <br />event exceed the least of: <br />(i) the amount of insurance stated in Schedule A; <br />(ii) the amount of the principal of the indebtedness secured <br />by the insured mortgage as of Date of Policy, interest thereon, ex- <br />penses of foreclosure, amounts advanced pursuant to the insured <br />mortgage to assure compliance with laws or to protect the lien of the <br />insured mortgage prior to the time of acquisition of the estate or in- <br />terest in the land and secured thereby and reasonable amounts ex- <br />pended to prevent deterioration of improvements, but reduced by the <br />amount of al I payments made; or <br />(iii) the amount paid by any governmental agency or gov- <br />ernmental instrument- "' "ie agency or instrumentality is the in- <br />sured claimant, in the ion of the estate or interest in satisfac- <br />tion of its insurance cc • guaranty. <br />