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20-0603_JAMBOREE HOUSING CORPORATION_Preliminary Title ReportOrder Number: NCS-1014148-SA1 Page Number: 1 First American Title Insurance Company First American Title Insurance Company National Commercial Services 18500 Von Karman Ave, Suite 600 Irvine, CA 92612 June 03, 2020 Roger Kinoshita Jamboree Housing Corporation 17701 Cowan Avenue , Suite 200 Irvine , CA 92614-6840 Phone: (949)468-2304x145 Fax: (949)854-7378 Customer Reference: Paseo Adelanto Title Officer: Ryan Achterberg Phone: (949)885-2488 Fax No.: E-Mail: rachterberg@firstam.com Buyer: Owner: City Of San Juan Capistrano Property: 32400 Paseo Adelanto, San Juan Capistrano, CA PRELIMINARY REPORT In response to the above referenced application for a policy of title insurance, this company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbr ance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set f orth in Exhibit A attached. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insure d as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set fort h in Exhibit A. Copies of the policy forms should be read. They are available from the office which issued this report. Order Number: NCS-1014148-SA1 Page Number: 2 First American Title Insurance Company Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a pol icy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a polic y of title insurance, a Binder or Commitment should be requested. Order Number: NCS-1014148-SA1 Page Number: 3 First American Title Insurance Company Dated as of May 27, 2020 at 7:30 A.M. The form of Policy of title insurance contemplated by this report is: To Be Determined A specific request should be made if another form or additional coverage is desired. Title to said estate or interest at the date hereof is vested in: City of San Juan Capistrano, a municipal corporation duly organized and existing under the Constitution and laws of the State of California The estate or interest in the land hereinafter described or referred to covered by this Report is: Fee Simple The Land referred to herein is described as follows: (See attached Legal Description) At the date hereof exceptions to coverage in addition to the printed Exceptions and Exclusions in said policy form would be as follows: 1. General and special taxes and assessments for the fiscal year 2020-2021, a lien not yet due or payable. 2. General and special taxes and assessments for the fiscal year 2019-2020 are exempt. If the exempt status is terminated an additional tax may be levied. A.P. No.: 668-101-23. 3. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code. 4. An easement for public utility and incidental purposes, recorded October 05, 1972 as Instrument No. 5162 in Book 10360, Page 201 of Official Records. In Favor of: The Pacific Telephone and Telegraph Company, a corporation Affects: As described therein 5. An easement to erect, construct, change the size of, improve, reconstruct, relocate, repair, maintain, use facilities consisting of underground facilities, appurtenances for the transmission and distribution of electricity and incidental purposes, recorded November 06, 1981 as Instrument No. 7648 in Book 14283, Page 1005 of Official Records. In Favor of: San Diego Gas & Electric Company, a corporation Affects: As described therein 6. The fact that the land lies within the boundaries of the Community Redevelopment Project Area, as disclosed by the document recorded July 13, 1983 as Instrument No. 83-301250 of Official Records. Order Number: NCS-1014148-SA1 Page Number: 4 First American Title Insurance Company 7. The fact that the land lies within the boundaries of the Central Redevelopment Project Area, as disclosed by the document recorded July 17, 1985 as Instrument No. 85-263429 of Official Records. 8. The terms and provisions contained in the document entitled "Memorandum of Wireless Communications Site License Agreement" recorded November 30, 2017 as Instrument No. 2017000517078 of Official Records. 9. Any facts, rights, interests or claims which would be disclosed by a correct ALTA/NSPS survey. 10. Rights of parties in possession. 11. Prior to the issuance of any policy of title insurance, the Company will require: Prior to closing, the Company must confirm whether the county recording office in which the Land is located changed its access policies due to the COVID-19 outbreak. If recording has been restricted, specific underwriting approval is required: and , additional requirements or exceptions may be made. Order Number: NCS-1014148-SA1 Page Number: 5 First American Title Insurance Company INFORMATIONAL NOTES ALERT - CA Senate Bill 2 imposes an additional fee of $75 up to $225 at the time of recording on certain transactions effective January 1, 2018. Please contact your First American Title representative for more information on how this may affect your closi ng. 1. According to the latest available equalized assessment roll in the office of the county tax assessor, there is located on the land a Commercial Structure known as 32400 Paseo Adelanto, San Juan Capistrano, California. 2. According to the public records, there has been no conveyance of the land within a period of twenty- four months prior to the date of this report, except as follows: None 3. This preliminary report/commitment was prepared based upon an application for a policy of title insurance that identified land by street address or assessor's parcel number only. It is the responsibility of the applicant to determine whether the land referred to herein is in fact the land that is to be described in the policy or policies to be issued. 4. Should this report be used to facilitate your transaction, we must be provided with the following prior to the issuance of the policy: A. WITH RESPECT TO A CORPORATION: 1. A certificate of good standing of recent date issued by the Secretary of State of the corporation's state of domicile. 2. A certificate copy of a resolution of the Board of Directors authorizing the contemplated transaction and designating which corporate officers shall have the power to execute on behalf of the corporation. 3. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. 4. Requirements which the Company may impose following its review of the above material and other information which the Company may require. B. WITH RESPECT TO A CALIFORNIA LIMITED PARTNERSHIP: 1. A certified copy of the certificate of limited partnership (form LP-1) and any amendments thereto (form LP-2) to be recorded in the public records; 2. A full copy of the partnership agreement and any amendments; 3. Satisfactory evidence of the consent of a majority in interest of the limited partners to the contemplated transaction; 4. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. 5. Requirements which the Company may impose following its review of the above material and other information which the Company may require. C. WITH RESPECT TO A FOREIGN LIMITED PARTNERSHIP: 1. A certified copy of the application for registration, foreign limited partnership (form LP-5) and any amendments thereto (form LP-6) to be recorded in the public records; 2. A full copy of the partnership agreement and any amendment; 3. Satisfactory evidence of the consent of a majority in interest of the limited partners to the contemplated transaction; 4. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. Order Number: NCS-1014148-SA1 Page Number: 6 First American Title Insurance Company 5. Requirements which the Company may impose following its review of the above material and other information which the Company may require. D. WITH RESPECT TO A GENERAL PARTNERSHIP: 1. A certified copy of a statement of partnership authority pursuant to Section 16303 of the California Corporation Code (form GP-I), executed by at least two partners, and a certified copy of any amendments to such statement (form GP-7), to be recorded in the public records; 2. A full copy of the partnership agreement and any amendments; 3. Requirements which the Company may impose following its review of the above material required herein and other information which the Company may require. E. WITH RESPECT TO A LIMITED LIABILITY COMPANY: 1. A copy of its operating agreement and any amendments thereto; 2. If it is a California limited liability company, a certified copy of its articles of organization (LLC-1) and any certificate of correction (LLC-11), certificate of amendment (LLC-2), or restatement of articles of organization (LLC-10) to be recorded in the public records; 3. If it is a foreign limited liability company, a certified copy of its application for registration (LLC-5) to be recorded in the public records; 4. With respect to any deed, deed of trust, lease, subordination agreement or other document or instrument executed by such limited liability company and presented for recordation by the Company or upon which the Company is asked to rely, such document or instrument must be executed in accordance with one of the following, as appropriate: (i) If the limited liability company properly operates through officers appointed or elected pursuant to the terms of a written operating agreement, such documents must be executed by at least two duly elected or appointed officers, as follows: the chairman of the board, the president or any vice president, and any secretary, assistant secretary, the chief financial officer or any assistant treasurer; (ii) If the limited liability company properly operates through a manager or managers identified in the articles of organization and/or duly elected pursuant to the terms of a written operating agreement, such document must be executed by at least two such managers or by one manager if the limited liability company properly operates with the existence of only one manager. 5. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. 6. Requirements which the Company may impose following its review of the above material and other information which the Company may require. F. WITH RESPECT TO A TRUST: 1. A certification pursuant to Section 18100.5 of the California Probate Code in a form satisfactory to the Company. 2. Copies of those excerpts from the original trust documents and amendments thereto which designate the trustee and confer upon the trustee the power to act in the pending transaction. 3. Other requirements which the Company may impose following its review of the material require herein and other information which the Company may require. G. WITH RESPECT TO INDIVIDUALS: 1. A statement of information. The map attached, if any, may or may not be a survey of the land depicted hereon. First American Title Insurance Company expressly disclaims any liability for loss or damage which may result from reliance on this map except to the extent coverage for such loss or damage is expressly provided by the terms and provisions of the title insurance policy, if any, to which this map is attached. *****To obtain wire instructions for deposit of funds to your escrow file please contact your Escrow Officer.***** Order Number: NCS-1014148-SA1 Page Number: 7 First American Title Insurance Company LEGAL DESCRIPTION Real property in the City of San Juan Capistrano, County of Orange, State of California, described as follows: THAT PORTION OF LOT 60 OF TRACT NO. 103, IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 11, PAGES 29 TO 33 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF LOT 59 OF SAID TRACT NO. 103; THENCE NORTH 87° 55' 30" WEST ALONG THE SOUTHERLY LINE OF SAID LOT 59 AND THE WESTERLY PROLONGATION THEREOF, 392.00 FEET; THENCE SOUTH 2° 04' 30" WEST 555.53 FEET; THENCE SOUTH 87° 55' 30" EAST 380.00 FEET TO AN INTERSECTION WITH THE WESTERLY LINE OF THE RIGHT OF WAY OF THE ATCHISON, TOPEKA AND SANTA FE RAILWAY RIGHT OF WAY, AS SHOWN ON SAID MAP: THENCE NORTHERLY ALONG SAID WESTERLY LINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM, THAT PORTION INCLUDED WITHIN THE LAND DESCRIBED IN DEED TO OYHARZABAL AND OTHERS, RECORDED JUNE 16, 1970 IN BOOK 9318, PAGE 861 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY. ALSO EXCEPTING THEREFROM THAT PORTION OF SAID LAND CONVEYED TO THE ORANGE COUNTY FLOOD CONTROL DISTRICT AS SET FORTH AND DESCRIBED IN THAT CERTAIN DOCUMENT RECORDED JULY 28, 2011 AS INSTRUMENT NO. 2011000368777 OF OFFICIAL RECORDS. APN: 668-101-23 Order Number: NCS-1014148-SA1 Page Number: 8 First American Title Insurance Company The First American Corporation First American Title Company Privacy Policy We Are Committed to Safeguarding Customer Information In order to better serve your needs now and in the future, we may ask you to provide us with certain information. We understand that you may be concerned about what we will do with such information - particularly any personal or financial information. We agree that you have a right to know how we will utilize the personal information you provide to us. Therefore, together with our parent company, The First American Corporation, we have adopted this Privacy Policy to govern the use and handling of your personal information. Applicability This Privacy Policy governs our use of the information which you provide to us. It does not govern the manner in which we may use information we have obtained from any other source, such as information obtained from a public record or from another person or entity. First American has also adopted broader guidelines that govern our use of personal information regardless of its source. First American calls these guidelines its Fair Information Values, a copy of which can be found on our website at www.firstam.com. Types of Information Depending upon which of our services you are utilizing, the types of nonpublic personal information that we may collect include: • Information we receive from you on applications, forms and in other communications to us, whether in writing, in person, by telephone or any other means; • Information about your transactions with us, our affiliated companies, or others; and • Information we receive from a consumer reporting agency. Use of Information We request information from you for our own legitimate business purposes and not for the benefit of any nonaffiliated party. Therefore, we will not release your information to nonaffiliated parties except: (1) as necessary for us to provide the product or service you have requested of us; or (2) as permitted by law. We may, however, store such information indefinitely, including the period after which any customer relationship has ceased. Such information may be used for any internal purpose, such as quality control efforts or customer analysis. We may also provide all of the types of nonpublic personal information listed above to one or more of our affiliated companies. Such affiliated companies include financial service providers, such as title insurers, property and casualty insurers, and trust and investment advisory companies, or companies involved in real estate services, such as appraisal companies, home warranty companies, and escrow companies. Furthermore, we may also provide all the information we collect, as described above, to companies that perform marketing services on our behalf, on behalf of our affiliated companies, or to other financial institutions with whom we or our affiliated companies have joint marketing agreements. Former Customers Even if you are no longer our customer, our Privacy Policy will continue to apply to you. Confidentiality and Security We will use our best efforts to ensure that no unauthorized parties have access to any of your information. We restrict access to nonpublic personal information about you to those individuals and entities who need to know that information to provide products or services to you. We will use our best efforts to train and oversee our employees and agents to ensure that your information will be handled responsibly and in accordance with this Privacy Policy and First American's Fair Information Values. We currently maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. Order Number: NCS-1014148-SA1 Page Number: 9 First American Title Insurance Company CLTA/ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE (02-03-10) EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning: (a) building; (d) improvements on the Land; (b) zoning; (e) land division; and (c) land use; (f) environmental protection. This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15. 3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17. 4. Risks: (a) that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; (b) that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; (c) that result in no loss to You; or (d) that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28. 5. Failure to pay value for Your Title. 6. Lack of a right: (a) to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and (b) in streets, alleys, or waterways that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 21. 7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federa l bankruptcy, state insolvency, or similar creditors' rights laws. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows: For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. Your Deductible Amount Our Maximum Dollar Limit of Liability Covered Risk 16: 1% of Policy Amount or $2,500.00 (whichever is less) $10,000.00 Covered Risk 18: 1% of Policy Amount or $5,000.00 (whichever is less) $25,000.00 Covered Risk 19: 1% of Policy Amount or $5,000.00 (whichever is less) $25,000.00 Covered Risk 21: 1% of Policy Amount or $2,500.00 (whichever is less) $5,000.00 ALTA RESIDENTIAL TITLE INSURANCE POLICY (6-1-87) EXCLUSIONS In addition to the Exceptions in Schedule B, you are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of any law or government regulation. This includes building and zoning ordinances and also laws and regulations concerning: (a) and use (b) improvements on the land (c) and division (d) environmental protection This exclusion does not apply to violations or the enforcement of these matters which appear in the public records at Policy Date. This exclusion does not limit the zoning coverage described in Items 12 and 13 of Covered Title Risks. 2. The right to take the land by condemning it, unless: (a) a notice of exercising the right appears in the public records on the Policy Date (b) the taking happened prior to the Policy Date and is binding on you if you bought the land without knowing of the taking 3. Title Risks: (a) that are created, allowed, or agreed to by you (b) that are known to you, but not to us, on the Policy Date -- unless they appeared in the public records Order Number: NCS-1014148-SA1 Page Number: 10 First American Title Insurance Company (c) that result in no loss to you (d) that first affect your title after the Policy Date -- this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks 4. Failure to pay value for your title. 5. Lack of a right: (a) to any land outside the area specifically described and referred to in Item 3 of Schedule A OR (b) in streets, alleys, or waterways that touch your land This exclusion does not limit the access coverage in Item 5 of Covered Title Risks. 2006 ALTA LOAN POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, c osts, attorneys' fees, or expenses that arise by reason of: 1. a. Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulat ing, prohibiting, or relating to i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement erected on the Land; iii. the subdivision of land; or iv. environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. b. Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 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 th is policy; c. resulting in no loss or damage to the Insured Claimant; d. attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13, or 14); or e. resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value f or the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applica ble doing-business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth -in-lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is a. a fraudulent conveyance or fraudulent transfer, or b. a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that ari se by reason of: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspecti on of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) wate r rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. Order Number: NCS-1014148-SA1 Page Number: 11 First American Title Insurance Company 6. Any lien or right to a lien for services, labor or material not shown by the public records. 2006 ALTA OWNER'S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, c osts, attorneys' fees, or expenses that arise by reason of: 1. a. Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement erected on the Land; iii. the subdivision of land; or iv. environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. b.Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 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 th is policy; c. resulting in no loss or damage to the Insured Claimant; d. attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or e. resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as shown in Schedule A, is a. a fraudulent conveyance or fraudulent transfer; or b. a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Publ ic Records that vests Title as shown in Schedule A. The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage poli cy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that ari se by reason of: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspecti on of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) wate r rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. Order Number: NCS-1014148-SA1 Page Number: 12 First American Title Insurance Company ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (07-26-10) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, c osts, attorneys' fees, or expenses that arise by reason of: 1. a. Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement erected on the Land; iii. the subdivision of land; or iv. environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. b. Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 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 th is policy; c. resulting in no loss or damage to the Insured Claimant; d. attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or e. resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applica ble doing-business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evi denced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth -in-lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26. 6. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modificat ions made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11(b) or 25. 8. The failure of the residential structure, or any portion of it, to have been c onstructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6. 9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is a. a fraudulent conveyance or fraudulent transfer, or b. a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy.