PROJC00666

• Contract/PO #: C150083
• Contractor Name: John Peroulis and Sons Partnership
• Contract Type: Loan
• Water District: 44
• County: Moffat
• Loan Projects - Doc Type: Contract Documents

EXCLUSIONS FROM COVERAGE

The following matters are expressly excluded from the coverage of this policy insurance is afforded herein as to assessments for street improve.
and the Company will not pay ioss or damage, costs, attorneys' fees or ments under construction or completed at Date of Policy); .or .
expenses which arise by reason of: (e) resulting In .Ioss or damage which would not have been sustained If the
1. (a) Any law, ordinance or governmental regulation (including but not limited Insured claimant had paid vaiue for the Insured mortgage. . . .
to buiiding and zoning laws. ordinances, or reguiations) restricting, 4. Unenforceability of the lien of the Insured mortgage because of the Inability
regulating, prohibiting or relating to (I) the occupancy, use. or enjoyment or failure of the insured at Date of Policy, or the inability or failure of any
of the land: (ii) the character, dimensions or location 01 any subsequent owner of the Indebtedness, to comply with applicable dOing
improvement now or hereafter erected on the land; (iii) a separation in business iaws of the state In which the land IS situated. .
ownership or a change in the dimensions or area of the land or any 5. Invalidity or unenforceabiiity of the lien of the insured mortgage, or claim
parcel of which the land is or was a part; or (iv) environmental thereof. which arises out of the transaction evidenced by the insured
protection. or the effect of any violation of these laws. ordinances or mortgage and is based upon usury or any consumer credit protection or
governmental regulations. except to the extent that a notice of the truth in lending law.
enforcement thereof. or a notice of a defect, lien or encumbrance 6. Any statutory lien for services. labor or materials (or the claim of priority
resulting from a violation or alleged vIolation affecting the land has been of any statutory lien for services, labor or materials over the lien of .the
recorded In the public records at Date of Policy. insured mortgage) arising from an improvement or work related to the land
(b) Any governmental police power not excluded by (a) above, except to which is contracted for and commenced subsequent to Date of Policy and
the extent that a notice of the exercise thereof or a notice of a defect. is not financed in whole or in part by proceeds of the indebtedness secured
lien or encumbrance resulting from a ViolatIOn or alleged violation by the insured mortgage which at Date of Policy the insured has advanced
affecting the land has been recorded in the public records at Date of or Is obligated to advance.
POhcy. . . .. 7. Any claim, which arises out of the transaction creating the interest of the
2. Rights of eminent domain unless notice of the exercise thereof has been mortgagee insured by this policy, by reason of the operation of federal
recorded in the public records at Date of Pohcy. but not excluding from bankruptcy. state insolvency. or similar creditors' rights laws, that is based
coverage any taking which has occurred pnorto Dateof PoliCY which would on:
be binding on the rights of a purchaser for value without knowledge. (i) the transaction creating the interest of the insured mortgagee being
3. Defects. liens. encumbrances, adverse claims or other matters: deemed a fraudulent conveyance or fraudulent transfer; or
(a) created. suffered, assumed or agreed to by the insured claimant; (ii) the subordination of the interest of the insured mortgagee as a result
(b) not known to the Compan'y' not recorded In the public records at Date of the application of the doctrine of equitable subordination; or .
of Policy. but known to the Insured claimant and not disclosed In wrrtlng (iii) the transaction creating the interest of the insured mortgagee being
to the Company by the Insured claimant pnor to the date the Insured deemed a preferential transfer except where the preferential transfer
claimant became an insured under this policy; results from the failure:
(c) resulting in no loss or damage to the insured claimant; (a) to timely record the instrument of transfer; or
(d) attaching or created subsequent to Date of PoliCY (except to the extent (b) of such recordation to impart notice to a purchaser for value or a
that this policy insures the priority of the lien of the insured mortgage judgment or lien creditor.
over any statutory lien for services, labor or material or the extent

CONDITIONS AND STIPULATIONS

1. DEFINITIONS OF TERMS.
The following terms when Llsed in this policy mean:
(a) "insured'; the insured named in Schedule A. The term
'insured" also includes:
(i) the owner 01 !ne indebtedness secured by the insured
mortgage and each successor in ownership ot the indebtedness except
a successor who is an obligor under the proviSions 01 Section 12(c) 01
!nese Conditions and Stipulations (reserving, however, ail rights and
rlelenses as to afly successor that tlTe Company would have hac agamsl
aflypredecessorinsured,unlesslhesuccessoracquiredtheindebtedness
as a purchaser lor value without knowledge of the asserted defecl, hen,
encumbrance, adverse claim or other mailer insured against by lhisp ollcy
as affecting litleto the eslateor inlerest In the land):
(iil any govemmentalagency or governmental inslrumentallty
which is an insurer or guarantof underan1nsurance contract 01 guaranty
insuring or guaranteeing the indebtedness secured by the insured
mOrlgage, or any part thereot, whether named as an insuredherelnorn ot;
(iii) lhepartiesdesignatedinSeclion2{a)0ItheseConditfonsand
Stipulations.
(b) 'insured claimant': an insured claiming loss or damage.
(c) 'knowledge' or 'known": actual kI1owledge, not constructive
knowledge or notice which may be imputed to an insured by reason of
the public records as delined in this policy or aIlY other records which
impart constructive notice of matters affecting the land.
(d) 'land": the land described or referred to in Schedule A,and
improvements affixed therelo which by law constilute real property. The
lerm "Iand'does not include any property beyond the Hnes 01 the area
described or referred 10 in Schedule A, nor any righi, title,interesl.estate
or easemenl in abutting streets, roads, avenues, alleys, lanes, ways or
waterways, but nothing herein shall m,od!fy or limit th~ exte~lto which a
right 01 access lo and lromttle land lS. IOSUred by trnspohcy,
(ej 'mortgage": mortgage, deed 01 tfUSt. tfUSt ~eed, or other
securityinstrumenl.
(Q "public records": raco,rds e~tablished un~er s~te slatutes at
Date 01 Policy tor the purpose ollmpartmg constructlve,notlceo/matters
relating 10 real property to purchasers for value and Without knowledge,
With respect to Seclion 1(a)(Iv)?ttheExclusionsF~om~overa,ge, "public
records' shall also include el1vlrovmenlal protectIOn liens filed '~ the
records 01 the cierk oi the United States district court tor the distnct in
which the land is iocaled, '
, (g) 'unmarketability 01 the lille": an alleged or apparent matter
....lettlng the)itle to me land, not excluded or exc~pted trom co~erag~,
which would entitle a purchaser of the estate or mterest descfl~ed, In
Schedule A or Ille insured morlgage 10 be released lrom the obllgallon
to purchase by virtue ofa conlractual condition requirlngthedeii very 01
marketable title.

or desirable to estabilshthe titie to the estate or interest or the lien of the
insured mortgage, as insured. If the Company is prejudiced by the failure
01 the insured to furnish the required cooperation, the Company's
obUgations to the inS\lfe~ unool the po\ic~ shall tBlmina\e, including any
liabiiity orobiigatlon to delend,prosecute, or conlinueany htigat lon, with
regard to the matter or matters requiring such cooperation.

5. PROOF OF LOSS OR DAMAGE.
In add\t\onto afldaf\B1 the flotices leQuiretl under Set:1.ion3 0\ these
Conditions and Stipulations have been provided the Company, a proolol
loss or damage signed and sworn to by the insured claimant shall be
furnished to the Company wilhin 90 days after the insured claimant shall
ascertain the facts giving rise to the loss or damage, The proof 01 los sor
damage shail describe the delect in',or lien or encumOranceon th etille,
or other matter insured <l.\}Cl\ns\ by thIS policy which constitutes the basis
of loss or damage and shall state, to the extent possible, the basis 01
calculating the amount 01 the loss or damage. It the Company is prejudiced
by the laiiure 01 the insured claimant to provide the required proof 01 loss
or damage, lhe Company's obligations to the insured under the policy sha If
terminate, including any liability or obligation to detend, prosecule, or
contln\le any I\t\ga\\on, with regard \0 the mattBl OJ matters requiring such
prootollossordamage.
In addition, the insured claimanl may reasonabiy be required to
submit to examination under oath by any authorized repres.enlatlve otthe
Company and shall produce lor examination, inspection and copying, al
such reasonable times and places as ma~ be designateo by any authorIzed
represenlative of the Company, all records, books, ledgers, checks,
correspondence and memoranda, whether bearing a date before or after
Dale of Policy, which reasonably pertain to the loss or damage. Further,
il requested by any authorized representative of the Company, the insured
claimant shall grant its permission, in writing, tor any authorized
representative of the Company to examine, inspect and copy ail records,
books, iedgels, checks, cOHespondeoce and memoranda in the custody
or control olathirdparty,whichreasonablypertaintothe loss or damage.
AIJ intormatJon designated as cOl1tidenllal by the insured claimant provided
to the Company pursuant to this Section shall not be disclosed to others
unless, in the reasonable judgment 01 lhe Company, it \s necessary mlhe
adminislrationoltheciaim. FaHure 01 the insured claimant to submit lor
examination under oath, produce other rea.sonably reques!ed inlormation
or grant permission to secure reasonably necessary Informationtrom lhird
parties as required in this paragraph, unless prohibited by law or
governmenlal regulation, shall lerminate any Iiabilily ot the Company under
this policy as 10 that claim.
6. OPTIONS TO PAY OR OTHERWISE SElTI.E CLAIMS:
TERMINATION OF LIABILITY.
In caseofa ciaim under this policy, the Company shail have the

9. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION
OF LIABILITY.
(a) All payments under this policy, except payments made for
costs, attorneys' fees and expenses, shall reduce the amount 01 the
insurance pro lanto. HoweVer, any payments made prior to the aCQuisl tion
of title to the eslate or Interest as provided in Section 2(a) of these
Conditions and Slipulationsshall not reduce pro lanto the amount of the
\nsuranceal1croedundelt\1\sPD\\cyexeepttolheextentlhallhepayments
reduce the amount 01 the indebtedness secured by the insured mortga ge.
(b) Payment in part by any person of the principal 01 the
indebtedness, or any other obligation secured by the Insured mortga ge,
or any voiuntary partial sallsfactlonorrelease of lhe insured mortga ge,
to the extent of the payment. satislaclion or release,shaU reduce \he
amountollnsuranceprotanlo. Theamounl 01 insurance may thereafter
be increased by accruing Inlerest and advances made to protectlhe I ien
01 the insured mortgage and secured thereby, with interest thereon,
proVided in no event shall the amounlol insurance be grealer lhan the
amount 01 insurance stated in Schedule A.
(e) Payment in full Oyany person or the vOluntary satlslaction or
reJease 01 the insured mOrlgage shall lerminateall liabilltyofth eCompany
except as provided in Section2(a) of these Conditions and Stipuiations.

10. LIABILITY NONCUMULATIVE.
lithe iosured acquires title mthe estate 01 \nIBles\ insalis1action
01 the indeblednesssecured bYlhe illsured morlgage, or any partthereo I.
it is expressly underslood that the amount ot insurance under this policy
shall be reduced b~ any amount the Company may pay under an~ policy
insuring a mOrlgagetowhichexceplionis lakeninScheduleBorlowh ich
the insured hasagreed,aS5umed,ortakensubjecl, or which is hereafte r
executed by an insured and which is a charge or lien on the estate or
interest described or relerred to in Schedule A, and the amount so paid
shall be deemed a paymeflt under this poiiCy.

11. PAYMENT OF LOSS.
(a) No payment shall be made without plOducing Ihis policy for
endorsement 01 the payment unless the policy has been lost ordestro yed,
in which case proof of loss or destruction shall be furnished to lhe
satisfaction 01 the Company.
(b) When liability and the extenl 01 loss or damage has been
delinitely fixed in accordance with these Conditlonsafld Stipulation s,the
loss or damage shall be pJyablewithin 30 days thereafter.
12. SUBROGATION UPIlN PAYMENT OR SEmEMENT.
{a} The Company's Right of Subrogation.
Whenever the Company shall have setlledaoo pakla claim under
'''iR ~~n.", R" .i_.., .. ......~R.".~ .1.." "..' '. ,I.. "._.... " ,