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b EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1 . (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i ) the occupancy, use, or enjoyment of the land ; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land ; (iii ) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv ) environmental protection , or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy . (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy . 2 . Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy , but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge . 3 . Defects, liens, encumbrances, adverse claims or other matters : (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy ; ( c) resulting in no loss or damage to the insured claimant; ( d ) attaching or created subsequent to Date of Policy ; or ( e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy . 4 . Any claim , which arises out of the transaction vesting in the insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on : ( a) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or (b) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure : (i) to timely record the instrument of transfer; or (ii) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. CONDITIONS AND STIPULATIONS 1 . Definition of Terms This policy shall not continue in force in favor of any purchaser from the The following terns when used in this policy mean : insured of either ( i) all estate or interest in the land, or ( ii) all indebtedness (a) " insured " : the insured named in Schedule A, and, subject to any secured by a purchase money mortgage given to the insured . rights or defenses the Company would have had against the named insured , 3 . Notice of Claim To Be Given by Insured Claimant those who succeed to the interest of the named insured by operation of law The insured shall notify the Company promptly in writing ( i) in case of as distinguished from purchase including, but not limited to, heirs, any litigation as set forth in Section 4(a) below, (ii ) in case knowledge distributees, devisees, survivors, personal representatives, next of kin, or shall come to an insured hereunder of any claim of title or interest which corporate or fiduciary successors is adverse to the title to the estate or interest, as insured, and which might ( b) " insured claimant" : an insured claiming loss or damage . cause loss or damage for which the Company may be liable by virtue of ( c) " knowledge " or " known " : actual knowledge, not constructive this policy, or ( iii) if title to the estate or interest, as insured, is rejected as knowledge or notice which may be imputed to an insured by reason of the unmarketable . If prompt notice shall not be given to the Company, then as public records as defined in this policy or any other records which impart to the insured all liability of the Company shall terminate with regard to constructive notice of matters affecting the land . the matter or matters for which prompt notice is required ; provided , (d) " land " : the land described or referred to in Schedule A , and however, that failure to notify the Company shall in no case prejudice the improvements affixed thereto which by law constitute real property The term rights of any insured under this policy unless the Company shall be " land " does not include any property beyond the lines of the area described prejudiced by the failure and then only to the extent of the prejudice . or referred to in Schedule A. or any right, title, interest, estate or easement in 4 . Defense and Prosecution of Actions ; Duty of Insured Claimant abutting streets, roads, avenues, alleys, lanes, ways or waterways, but To Cooperate nothing herein shall modify or limit the extent to which a right of access to (a) Upon written request by the insured and subject to the options and from the land is insured by this policy . contained in Section 6 of these Conditions and Stipulations, the (e) " mortgage " : mortgage, deed of trust, trust deed, or other security Company, at its own cost and without unreasonable delay, shall provide instrument for the defense of an insured in litigation in which any third party asserts a (f) " public records " : records established under state statutes at date of claim adverse to the title or interest as insured , but only as to those stated Policy for the purpose of imparting constructive notice of matters relating to causes of action alleging a defect, lien or encumbrance or other matter real property to purchasers for value and without knowledge . With respect to insured against by this policy . The Company shall have the right to select Section I (a)( iv) of the Exclusions from Coverage, " public records " shall also counsel of its choice (subject to the right of the insured to object for include environmental protection liens filed in the records of the clerk of the reasonable cause) to represent the insured as to those stated causes of United States district court for the district in which the land is located . action and shall not be liable for and will not pay the fees of any other (g) " unmarketability of the title " : an alleged or apparent matter affecting counsel . The Company will not pay any fees, costs or expenses incurred the title to the land , not excluded or excepted from coverage, which would by the insured in the defense of those causes of action which allege entitle a purchaser of the estate or interest described in Schedule A to be matters not insured against by this policy . released from the obligation to purchase by virtue of a contractual condition (b) The Company shall have the right, at its own cost, to institute and requiring the delivery of marketable title . prosecute any action or proceeding or to do any other act which in its 2 . Continuation of Insurance After Conveyance of Title opinion may be necessary or desirable to establish the title to the estate or The coverage of this policy shall continue in force as of Date of Policy in interest, as insured, or to prevent or reduce loss or damage to the insured . favor of an insured only so long as the insured retains an estate or interest in The Company may take any appropriate action under the terms of this the land , or holds an indebtedness secured by a purchase money mortgage policy , whether or not it shall be liable hereunder, and shall not thereby given by a purchaser from the insured , or only so long as the insured shall concede liability or waive any provision of this policy . If the Company have liability by reason of covenants of warranty made by the insured in any shall exercise its rights under this paragraph , it shall do so diligently . transfer or conveyance of the estate or interest.