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<br />.STIPULATIONS
<br />Scope of 1. This policy does not insure against, and the
<br />Coverage Company will not be liable for loss or damage
<br />created by or arising out of any of the following:
<br />(a) defects, liens, claims, encumbrances, or other matters which re-
<br />sult in no pecuniary loss to the insured; (b) defects, liens, encum-
<br />brances, or other, matters created or occurring subsequent to the date
<br />hereof; (c) defects, liens, encumbrances, or other matters created or
<br />suffered by the insured claiming such loss or damage; or (d) defects,
<br />liens, claims, encumbrances, or other matters existing at the date of
<br />this policy and known to the insured claiming such loss or damage,
<br />either at the date of this polity or at the date such insured claimant
<br />acquired an estate or interest insured by this policy, unless such de-
<br />fect, lien, claim, encumbrance or other matter shall have been dis-
<br />closed to the Company in writing prior to the issuance of this policy
<br />or appeared at the date of this polity on the public records. Any
<br />rights or defenses of the Company against a named insured shall be
<br />equally available against any person or corporation who shall become
<br />an insured hereunder as successor of such named insured.
<br />Defense of 2. The Company at its own cost shall defend the
<br />Actions insured in all litigation consisting of actions or
<br />proceedings against the insured, or defenses, re-
<br />straining orders, or injunctions interposed against a foreclosure or
<br />sale of said land in satisfaction of any indebtedness, the owner of
<br />which is insured by this policy, which litigation is founded upon a
<br />defect, lien, encumbrance, or other matter insured against by this
<br />policy, and may pursue such litigation to final determination in the
<br />court of last resort. In case any such litigation shall become known to
<br />any insured, or in case knowledge shall come to any insured of any
<br />claim of title or interest which is adverse to the title as insured or
<br />which might eause loss or damage for which the Company shall or
<br />may be liable by virtue of this policy, such insured shall notify the
<br />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 liti-
<br />gation, or if such insured shall not, in writing,
<br />Notice of Actions notif the Company of an defect, lien
<br />or Claims to he promptly Y P Y Y
<br />Given by the encumbrance, or other matter insured against, or
<br />Insured of any such adverse claim, which shall come to
<br />the knowledge of such insured, in respect to
<br />which loss or damage is apprehended, then all
<br />liability of the Company as to each insured having such knowledge
<br />shall cease and terminate; provided, however, that failure to so notify
<br />the Company shall in no case prejudice the claim of any insured un-
<br />less the Company shall be actually prejudiced by such failure. The
<br />Company shall have the right to institute and prosecute any action or
<br />proceeding or do any other act which, in its opinion, may be necessary
<br />or desirable to establish the title, or any insured lien or charge, as in-
<br />sured. In all cases where this policy permits or requires the Company
<br />to prosecute or defend any action or proceeding, the insured shall
<br />secure to it in writing the right to so prosecute or defend such action
<br />or proceeding, and all appeals therein, and permit it to use, at its
<br />option, the name of the insured for such purpose. Whenever re-
<br />quested by the Company the insured shall assist the Company in any
<br />such action or proceeding, in effecting settlement, securing evidence,
<br />obtaining witnesses, prosecuting or defending such action or proceed-
<br />ing, to such extent and in such manner as is deemed desirable by the
<br />Company, and the Company shall reimburse the insured for any ex-
<br />pense so incurred. The Company shall be subrogated to and be en-
<br />titled to all costs and attorneys' fees incurred or expended by the
<br />Company, which may be recoverable by the insured in any litigation
<br />carried on by the Company on behalf of the insured. The word
<br />"knowledge" in this paragraph means actual knowledge, and does
<br />not refer to constructive knowledge or notice which may be imputed
<br />by the public records.
<br />Notice of 3. A statement in writing of any loss or damage
<br />Loss for which it is claimed the Company is liable
<br />under this policy shall be furnished to the Com-
<br />pany within sixty days after such loss or damage shall have been ascer-
<br />tained. No action or proceeding for the recovery of any such loss or
<br />damage shall be instituted or maintained against
<br />Limitation the Company until after full compliance b the
<br />of Action P Y P Y
<br />insured with all the conditions imposed on the
<br />insured by this policy, nor unless commenced
<br />within twelve months after receipt by the Company of such written
<br />statement.
<br />option to Pay, 4. The Company reserves the option to pay, set -
<br />settle or tle, or compromise for, or in the name of, the in -
<br />Compromise sured, any claim insured against or to pay this
<br />Claims policy in full at any time, and payment or tender
<br />of payment of the full amount of this policy, to-
<br />gether with all accrued costs which the Company is obligated here-
<br />under to pay, shall terminate all liability of the Company hereunder,
<br />including all obligations of the company with respect to any litiga-
<br />tion pending and subsequent costs thereof.
<br />Subrogation 5. Whenever the Company shall have settled a
<br />Upon Payment claim under this policy, it shall be subrogated to
<br />or settlement and be entitled to all rights, securities, and reme-
<br />dies which the insured would have had against
<br />any person or property in respect to such claim, had this polity not
<br />been issued. If the payment does not cover the loss of the insured,
<br />the Company shall be subrogated to such rights, securities, and reme-
<br />dies in the proportion which said payment bears to the amount of said
<br />loss. In either event the insured shall transfer, or cause to be trans-
<br />ferred, to the Company such rights, securities, and remedies, and shall
<br />permit the Company to use the name of the insured in any transaction
<br />or litigation involving such rights, securities, or remedies.
<br />6. The Company has the right and option, in
<br />Option to Pay case an loss is claimed under this policy b an
<br />Insured Owner Y P Y Y
<br />of Indebtedness insured owner of an indebtedness secured by
<br />and Become mortgage or deed of trust, to pay such insured
<br />Owner of the indebtedness of the mortgagor or trustor un-
<br />security
<br />der said mortgage or deed of trust, together with
<br />all costs which the Company is obligated here-
<br />under to pay, in which case the Company shall become the owner of,
<br />and such insured shall at once assign and transfer to the Company,
<br />said mortgage or deed of trust and the indebtedness thereby secured,
<br />and such payment shall terminate all liability under this policy to
<br />such insured.
<br />Payment of Loss 7. The Company will pay, in addition to any
<br />and costs of loss insured against by this policy, all costs im-
<br />Litigation posed upon the insured in litigation carried on
<br />by the Company for the insured, and in litiga-
<br />tion carried on by the insured with the written authorization of the
<br />Company, but not otherwise. The liability of the Company under this
<br />policy shall in no case exceed, in all, the actual loss of the insured
<br />and costs which the Company is obligated here -
<br />Indorsement of under to pay, and in no case shall such total lia-
<br />Payment on Policy
<br />bility exceed the amount of this policy and said
<br />costs. All payments under this policy shall re-
<br />duce the amount of the insurance pro tanto, and payment of loss or
<br />damage to an insured owner of indebtedness shall reduce to that ex-
<br />tent the liability of the Company to the insured owner of said land.
<br />No payment may be demanded by any insured without producing this
<br />policy for indorsement of such payment.
<br />8. Loss under this policy shall be payable, first,
<br />PMannerPayment
<br />to an insured owner of indebtedness secured b
<br />Payment of Lass Y Y
<br />to Insured mortgage or deed of trust shown in Schedule
<br />B, in order of priority therein shown, and if
<br />such ownership vests in more than one, payment shall be made ratably
<br />as their respective interests may appear, and thereafter any loss shall
<br />be payable to the other insured, and if more than one, then to such
<br />insured ratably as their respective interests may appear. If there be no
<br />such insured owner of indebtedness, any loss shall be payable to the
<br />insured, and if more than one, to such insured ratably as their respec-
<br />tive interests may appear.
<br />Definition 9• The following terms when used in this policy
<br />of Terms mean:
<br />(a) "named insured": the persons and cor-
<br />porations named as insured in Schedule A of this policy;
<br />(b) "the insured": such named insured together with ( 1 ) each
<br />successor in ownership of any indebtedness secured by any mortgage
<br />or deed of trust shown in Schedule B, the owner of which indebted-
<br />ness is named herein as an insured, (2) any such owner or successor
<br />in ownership of any such indebtedness who acquires the land de-
<br />scribed in Schedule A or any part thereof, by lawful means in satis-
<br />faction of said indeEi!dness or any part thereof, (3) any govern-
<br />mental agency or instrumentality acquiring said land under an insur-
<br />ance contract or guarantee insuring or guaranteeing said indebted-
<br />ness or any part thereof, and (4) any person or corporation deriving
<br />an estate or interest in said land as an heir or devisee of a named
<br />insured or by reason of the dissolution, merger, or consolidation of
<br />a corporate named insured;
<br />(c) "land": the land described specifically or by reference in
<br />Schedule A and improvements affixed thereto which by law consti-
<br />tute real property;
<br />(d) "date": the exact day, hour and minute specified as Policy date
<br />in Schedule A (unless the context clearly requires a different
<br />meaning) ;
<br />(e) "taxing agency": the State and each county, city and county,
<br />city and district in which said land or some part thereof is situated
<br />that levies taxes or assessments on real property ;
<br />(f) "public records": those public records which, under the re-
<br />cording laws, impart constructive notice of matters relating to said
<br />land.
<br />10. No provision or condition of this policy can
<br />Written be waived or changed except b writing indorsed
<br />Indorsement g P Y g
<br />Required to hereon or attached hereto signed by the Presi-
<br />change Policy dent, a Vice -President, the Secretary, or an As-
<br />sistant Secretary of the Company.
<br />Notices 11. All notices required to be given the Com-
<br />where sent pany and any statement in writing required to
<br />be furnished the Company shall be addressed to
<br />it at its office at 148 Montgomery Street, San Francisco 4, California.
<br />
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