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CONDITIONS AND STIPUI ATIONS
<br />1. Definition of Terms
<br />The following terms when used in this policy mean:
<br />(a) "land": the land described, specifically or by reference, in Schedule
<br />A andd improvements affixed thereto which by law constitute real property;
<br />(b) "public records": those records which impart constructive notice of
<br />matters relating to said land-
<br />(c) "knowledge". actual knowledge, not constructive knowledge or notice
<br />which may be imputed to the Insured by reason of any public records;
<br />(d) "date": the effective date;
<br />(e) "mortgage": mortgage, deed of trust, trust deed, or other security
<br />instrument; and
<br />(f) insured": the party or parties named as Insured, and if the owner of
<br />the indebtedness secured by a mortgage shown in Schedule B is named as an
<br />Insured in Schedule A, the Insured shall include (1) each successor in interest
<br />in ownership of such indebtedness, (2) any such owner who acquires the estate
<br />or interest referred to in this policy by foreclosure, trustee's sale, or other legal
<br />manner in satisfaction of said indebtedness, and (3) any federal agency or
<br />instrumentality which is an insurer or guarantor under an insurance contract
<br />or guaranty insuring or guaranteeing said indebtedness, or any part thereof,
<br />whether named as an insured herein or not, subject otherwise to the provisions
<br />hereof.
<br />2. Benefits after Acquisition or Title
<br />If an insured owner of the indebtedness secured by a mortgage described
<br />in Schedule B acquires said estate or interest, or any part thereof, by fore-
<br />closure, trustee's sale, or other legal manner in satisfaction of said indebtedness,
<br />or any part thereof, or if a federal agency or instrumentality acquires said
<br />estate or interest, or any part thereof, as a consequence of an insurance con-
<br />tract or guaranty insuring or guaranteeing the indebtedness secured by a mort-
<br />gage covered by this policy, or any part thereof, this policy shall continue in
<br />force in favor of such Insured, agency or instrumentality, subject to all of the
<br />conditions and stipulations hereof.
<br />3. Exclusions from the Coverage of this Policy
<br />This policy does not insure against loss or damage by reason of the following:
<br />(a) Any law, ordinance or governmental regulation (including but not
<br />limited to building and zoning ordinances) restricting or regulating or pro-
<br />hibiting the occupancy, use or enjoyment of the land, or regulating the
<br />character, dimensions, or location of any improvement now or hereafter
<br />erected on said land, or prohibiting a separation in ownership or a reduction
<br />in the dimensions or area of any lot or parcel of land.
<br />(b) Governmental rights of police power or eminent domain unless notice
<br />of the exercise of such rights appears in the public records at the date hereof.
<br />(c) Title to any property beyond the lines of the land expressly described
<br />in Schedule A, or title to streets, roads, avenues, lanes, ways or waterways
<br />on which such land abuts, or the right to maintain therein vaults, tunnels,
<br />ramps or any other structure or improvement; or any rights or easements
<br />therein unless this policy specifically provides that such property, rights or
<br />easements are insured, except that if the land abuts upon one or more
<br />physically open streets or highways this policy insures the ordinary rights of
<br />abutting owners for access to one of such streets or highways, unless otherwise
<br />gxcepted or excluded herein.
<br />(d) Defects, liens, encumbrances, adverse claims against the title as
<br />insured or other matters (1) created, suffered, assumed or agreed to by the
<br />Insured claiming loss or damage; or (2) known to the Insured Claimant
<br />either at the date of this policy or at the date such Insured Claimant acquired
<br />an estate or interest insured by this policy and not shown by the public
<br />records, unless disclosure thereof in writing by the Insured shall have been
<br />made to the Company prior to the date of thi$ policy; or (3) resulting in no
<br />loss to the Insured Claimant; or (4) attaching or created subsequent to the
<br />date hereof.
<br />(e) Loss or damage which would not have been sustained if the Insured
<br />were a purchaser or encumbrancer for value without knowledge.
<br />(f) Consumer credit protection, truth in lending or similar law.
<br />4. Defense and Prosecution of Actions —Notice of Claim to be Given by the
<br />Insured
<br />(a) The Company, at its own cost and without undue delay shall provide
<br />(1) for the defense of the Insured in all litigation consisting of actions or
<br />proceedings commenced against the Insured, or defenses, restraining orders,
<br />or injunctions interposed against a foreclosure or sale of the mortgage and
<br />indebtedness covered by this policy or a sale of the estate or interest in said
<br />land; or (2) for such action as may be appropriate to establish the title of the
<br />estate or interest or the lien of the mortgage as insured, which litigation or
<br />action in any of such events is founded upon an alleged defect, lien or en-
<br />cumbrance insured against by this policy, and may pursue any litigation to
<br />final determination in the court of last resort.
<br />(b) In case any such action or proceeding shall be begun, or defense
<br />interposed, or in case knowledge shall come to the Insured of any claim of
<br />title or interest which is adverse to the title of the estate or interest or lien of
<br />the mortgage as insured, or which might cause loss or damage for which the
<br />Company shall or may be liable by virtue of this policy, or if the Insured shall
<br />in.good faith contract to sell the indebtedness secured by a mortgage covered
<br />by this policy, or, if an Insured in good faith leases or contracts to sell, lease
<br />or mortgage the same, or if the successful bidder at a foreclosure sale under
<br />a mortgage covered by this policy refuses to purchase and in any such event
<br />the title to said estate or interest is rejected as unmarketable, the Insured
<br />shall notify the Company thereof in writing. If such notice shall not be given
<br />to the Company within ten days of the receipt of process or pleadings or if
<br />the Insured shall not, in writing, promptly notify the Company of any defect,
<br />lien or encumbrance insured against which shall come to the knowledge of
<br />the Insured, or if the Insured shall not, in writing, promptly notify the Com-
<br />pany of any such rejection by reason of claimed unmarketability of title, then
<br />all liability of the Company in regard to the subject matter of such action,
<br />proceeding or matter shall cease and terminate; provided, however, that failure
<br />to notify shall in no case prejudice the claim of any Insured unless the Com-
<br />pany shall be actually prejudiced by such failure and then only to the extent
<br />of such prejudice.
<br />(c) The Company shall have the riglit at its own cost to institute and
<br />prosecute any action or proceeding or do any other act which in its opinion
<br />may be necessary or desirable to establish the title of the estate or interest
<br />or the lien of the mortgage as insured; and the Company may take any ap-
<br />propriate action under the terms of this policy whether or not it shall be
<br />liable thereunder and shall not thereby concede liability or waive any pro-
<br />vision of this policy.
<br />(d) In all cases where this policy permits or requires the Company to
<br />prosecute or provide for the defense of any action or proceeding, the Insured
<br />shall secure to it the right to so prosecute or provide defense in such action or
<br />proceeding, 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 Company
<br />the Insured shall give the Company all reasonable aid in any such action or
<br />proceeding, in effecting settlement, securing evidence, obtaining witnesses, or
<br />prosecuting or defending such action or proceeding, and the Company shall
<br />reimburse the Insured for any expense so incurred.
<br />5. Notice of Loss —Limitation of Action
<br />In addition to the notices required under paragraph 4(b), a statement in
<br />writing of any loss or damage for which it is claimed the Company is liable
<br />under this policy shall be furnished to the Company within sixty days after
<br />such loss or damage shall have been determined and no right of action shall
<br />accrue to the Insured under this policy until thirty days after such statement
<br />shall have been furnished, and no recovery shall be had by the Insured under
<br />this policy unless action shall be commenced thereon within five years after
<br />expiration of said thirty day period. Failure to furnish such statement of
<br />loss or damage, or to commence such action within the time hereinbefore
<br />specified, shall be a conclusive bar against maintenance by the Insured of any
<br />action under this policy.
<br />6. Option to Pay, Settle or Compromise Claims
<br />The Company shall have the option to pay or settle or compromise for
<br />or in the name of the Insured any claim insured against or to pay the full
<br />amount of this policy, or, in case loss is claimed under this policy by the
<br />owner of the indebtedness secured by a mortgage covered by this policy, the
<br />Company shall have the option to purchase said indebtedness; such purchase,
<br />payment or tender of payment of the full amount of this policy, together with
<br />all costs, attorneys' fees and expenses which the Company is obligated here-
<br />under to pay, shall terminate all liability of the Company hereunder. In the
<br />event, after notice of claim has been given to the Company by the Insured,
<br />the Company offers to purchase said indebtedness, the owner of such indebted-
<br />ness shall transfer and assign said indebtedness and the mortgage securing
<br />the same to the Company upon payment of the purchase price.
<br />7. Payment of Loss
<br />(a) The liability of the Company under this policy shall in no case exceed,
<br />in all, the actual loss of the Insured and costs and attorneys' fees which the
<br />Company may be obligated hereunder to pay.
<br />(b) The Company will pay, in addition to any loss insured against by
<br />this policy, all costs imposed upon the Insured in litigation carried on by the
<br />Company for the Inured, and all costs and attorneys' fees in litigation carried
<br />on by the Insured with the written authorization of the Company.
<br />(c) No claim for damages shall arise or be maintainable under this policy
<br />(1) if the Company, after having received notice of an alleged defect, lien or
<br />encumbrance not excepted or excluded herein removes such defect, lien or
<br />encumbrance within a reasonable time after receipt of such notice, or (2) for
<br />liability voluntarily assumed by the Insured in settling any claim or suit
<br />without written consent of the Company, or (3) in the event the title is re-
<br />jected as unmarketable because of a defect, lien or encumbrance not excepted
<br />or excluded in this policy, until there has been a final determination by a
<br />court of competent jurisdiction sustaining such rejection.
<br />(d) All payments under this policy, except payments made for costs,
<br />attorneys' fees and expenses, shall reduce the amount of the insurance pro
<br />tanto and no payment shall be made without producing this policy for endorse-
<br />ment of such payment unless the policy be lost or destroyed, in which case
<br />proof of such loss or destruction shall be furnished to the satisfaction of the
<br />Company; provided, however, if the owner of an indebtedness secured by a
<br />mortgage shown in Schedule B is an Insured herein then such payments shall
<br />not reduce pro tanto the amount of the insurance afforded hereunder as to
<br />such Insured, except to the extent that such payments reduce the amount of
<br />the indebtedness secured by such mortgage. Payment in full by any person
<br />or voluntary satisfaction or release by the Insured of a mortgage covered by
<br />this policy shall terminate all liability of the Company to the insured owner of
<br />the indebtedness secured by such mortgage, except as provided in paragraph
<br />2 hereof.
<br />(e) When liability has been definitely fixed in accordance with the con-
<br />ditions of this policy the loss or damage shall be payable within thirty days
<br />thereafter.
<br />8. Liability Noncumulative
<br />It is expressly understood that the amount of this policy is reduced by any
<br />amount the Company may pay under any policy insuring the validity or
<br />priority of any mortgage shown or referred to in Schedule B hereof or any
<br />mortgage hereafter executed by the Insured which is a charge or lien on the
<br />estate or interest described or referred to in Schedule A, and the amount so
<br />paid shall be deemed a payment to the Insured under this policy. The pro-
<br />visions of this paragraph numbered 8 shall not apply to an Insured owner of
<br />an indebtedness secured by a mortgage shown in Schedule B unless such
<br />Insured acquires title to said estate or interest in satisfaction of said indebted-
<br />ness or any part thereof.
<br />9. Subrogation upon Payment or Settlement:
<br />Whenever the Company shall have settled a claim under this policy, all
<br />right of subrogation shall vest in the Company unaffected by any act of the
<br />Insured, and it shall be subrogated to and be entitled to all rights and
<br />remedies which the Insured would have had against any person or property
<br />in respect to such claim had this policy not been issued. If the payment does
<br />not cover the loss of the Insured, the Company shall be subrogated to such
<br />rights and remedies in the proportion which said payment bears to the amount
<br />of said loss. If loss should result from any act of the Insured such act shall
<br />not void this policy, but the Company, in that event, shall be required to pay
<br />only that part of any losses insured against hereunder which shall exceed the
<br />amount, if any, lost to the Company by reason of the impairment of the right
<br />of subrogation. The Insured, if requested by the Company, shall transfer to
<br />the Company all rights and remedies against any person or property necessary
<br />in order to perfect such right of subrogation, and shall permit the Company
<br />to use the name of the Insured in any transaction or litigation involving such
<br />rights or remedies.
<br />If the Insured is the owner of the indebtedness secured by a mortgage
<br />covered by this policy, such Insured may release or substitute the personal
<br />liability of any debtor or guarantor, or extend or otherwise modify the terms
<br />of payment, or release a portion of the estate or interest from the lien of the
<br />mortgage, or release any collateral security for the indebtedness, provided such
<br />act does not result in any loss of priority of the lien of the mortgage.
<br />10. Policy Entire Contract
<br />Any action or actions or rights of action that the Insured may have or
<br />may bring against the Company arising out of the status of the lien of the
<br />mortgage covered by this policy or the title of the estate or interest insured
<br />herein must be based on the provisions of this policy,
<br />No provision or condition of this policy can be waived or changed except
<br />by writing endorsed hereon or attached hereto signed by the President, a
<br />Vice President, the Secretary, an Assistant Secretary or other validating officer
<br />of the Company.
<br />11. Notices, Where Sent
<br />All notices required to be given the Company and any statement in writing
<br />required to be furnished the Company shall be addressed to Home Office of
<br />Louisville Title Insurance Company, 223 South Fifth Street, Louisville 1,
<br />Kentucky.
<br />12. THE PREMIUM SPECIFIED ON THE FIRST PAGE OF THIS POLICY
<br />IS THE ENTIRE CHARGE FOR TITLE SEARCH, TITLE EXAMINATION
<br />AND TITLE INSURANCE.
<br />FORM 302-4 STANDARD COVERAGE POLICY FORM — 1963 (AMENDED 1969) %1
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