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HomeMy WebLinkAboutLoan Policy No. 5011300-1677452e, Insured OC Public Facilities Company, for 4801 West Ten Rd., Efland, NC I AMER,C, Loan Policy of Title Insurance 'O�WZ-70 FirstAmerican Title" ISSUED BY First American Title Insurance Company Loan Policy POLICY NUMBER 5011300-1677452e Any notice of claim and any other notice or statement in writing required to be given to the Company under this policy must be given to the Company at the address shown in Section 17 of the Conditions. COVERED RISKS SUBJECT TO THE EXCLUSIONS FROM COVERAGE,THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B,AND THE CONDITIONS,FIRST AMERICAN TITLE INSURANCE COMPANY,a Nebraska corporation(the"Company")insures as of Date of Policy and,to the extent stated in Covered Risks 11, 13,and 14,after Date of Policy,against loss or damage,not exceeding the Amount of Insurance,sustained or incurred by the Insured by reason of: 1. Title being vested other than as stated in Schedule A. 2. Any defect in or lien or encumbrance on the Title.This Covered Risk includes but is not limited to insurance against loss from (a) A defect in the Title caused by (i) forgery,fraud,undue influence,duress,incompetency,incapacity,or impersonation; (ii) failure of any person or Entity to have authorized a transfer or conveyance; (iii) a document affecting Title not properly created,executed,witnessed,sealed,acknowledged,notarized,or delivered; (iv) failure to perform those acts necessary to create a document by electronic means authorized by law; (v) a document executed under a falsified,expired,or otherwise invalid power of attorney; (vi) a document not properly filed,recorded,or indexed in the Public Records including failure to perform those acts by electronic means authorized by law;or (vii) a defective judicial or administrative proceeding. (b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable,but unpaid. (c) 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.The term"encroachment"includes encroachments of existing improvements located on the Land onto adjoining land,and encroachments onto the Land of existing improvements located on adjoining land. 3. Unmarketable Title. 4. No right of access to and from the Land. (Covered Risks Continued on Page 2) In Witness Whereof,First American Title Insurance Company has caused its corporate name to be hereunto affixed by its authorized officers as of Date of Policy shown in Schedule A. First American Title Insurance Company For Reference: A-16—al�111�44 File#: 201500290CAF Loan#: n/a Dennis J.Gilmore Issued By: President Investors Title Commercial Agency, LLC A D 121 North Columbia Street F7 Chapel Hill, NC 27515 Jeffrey S.Robinson Secretary (This Policy is valid only when Schedules A and B are attached) This Jacket was created electronically and constitutes an original document Copyright 2006-2008 American Land Title Association.All rights reserved.The use of this form is restricted to ALTA licensees and ALTA members in good standing as of the date of use All other uses are prohibited. Reprinted under license from the American Land Title Association. Form 5011300(7-1-14) Page 1 of 6 ALTA Loan Policy of Title Insurance(6-17-06) + e Policy#: 5011300-1677452e COVERED RISKS(Continued) 5. The violation or enforcement of any law,ordinance,permit,or governmental regulation(including those relating to building and zoning restricting,regulating,prohibiting,or relating to (a) the occupancy,use,or enjoyment of the Land; (b) the character,dimensions,or location of any improvement erected on the Land; (c) the subdivision of land;or (d) environmental protection if a notice,describing any part of the Land,is recorded in the Public Records setting forth the violation or intention to enforce,but only to the extent of the violation or enforcement referred to in that notice. 6. An enforcement action based on the exercise of a governmental police power not covered by Covered Risk 5 if a notice of the enforcement action,describing any part of the Land,is recorded in the Public Records,but only to the extent of the enforcement referred to in that notice. 7. The exercise of the rights of eminent domain if a notice of the exercise,describing any part of the Land,is recorded in the Public Records. 8. Any taking by a governmental body that has occurred and is binding on the rights of a purchaser for value without Knowledge. 9. The invalidity or unenforceability of the lien of the Insured Mortgage upon the Title. This Covered Risk includes but is not limited to insurance against loss from any of the following impairing the lien of the Insured Mortgage (a) forgery,fraud,undue influence,duress,incompetency,incapacity,or impersonation; (b) failure of any person or Entity to have authorized a transfer or conveyance; (c) the Insured Mortgage not being properly created,executed,witnessed,sealed,acknowledged,notarized,or delivered; (d) failure to perform those acts necessary to create a document by electronic means authorized by law; (e) a document executed under a falsified,expired,or otherwise invalid power of attorney; (f) a document not properly filed,recorded,or indexed in the Public Records including failure to perform those acts by electronic means authorized by law;or (g) a defective judicial or administrative proceeding. 10. The lack of priority of the lien of the Insured Mortgage upon the Title over any other lien or encumbrance. 11. The lack of priority of the lien of the Insured Mortgage upon the Title (a) as security for each and every advance of proceeds of the loan secured by the Insured Mortgage over any statutory lien for services, labor,or material arising from construction of an improvement or work related to the Land when the improvement or work is either (i) contracted for or commenced on or before Date of Policy;or (ii) contracted for,commenced,or continued after Date of Policy if the construction is financed,in whole or in part,by proceeds of the loan secured by the Insured Mortgage that the Insured has advanced or is obligated on Date of Policy to advance;and (b) over the lien of any assessments for street improvements under construction or completed at Date of Policy. 12. The invalidity or unenforceability of any assignment of the Insured Mortgage,provided the assignment is shown in Schedule A,or the failure of the assignment shown in Schedule A to vest title to the Insured Mortgage in the named Insured assignee free and clear of all liens. 13. The invalidity,unenforceability,lack of priority,or avoidance of the lien of the Insured Mortgage upon the Title (a) resulting from the avoidance in whole or in part,or from a court order providing an alternative remedy,of any transfer of all or any part of the title to or any interest in the Land occurring prior to the transaction creating the lien of the Insured Mortgage because that prior transfer constituted a fraudulent or preferential transfer under federal bankruptcy,state insolvency,or similar creditors' rights laws; or (b) because the Insured Mortgage constitutes a preferential transfer under federal bankruptcy,state insolvency,or similar creditors' rights laws by reason of the failure of its recording in the Public Records (i) to be timely,or (ii) to impart notice of its existence to a purchaser for value or to a judgment or lien creditor. 14. Any defect in or lien or encumbrance on the Title or other matter included in Covered Risks 1 through 13 that has been created or attached or has been filed or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the Insured Mortgage in the Public Records. The Company will also pay the costs,attorneys'fees,and expenses incurred in defense of any matter insured against by this Policy,but only to the extent provided in the Conditions. EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this (iii) the subdivision of land;or policy,and the Company will not pay loss or damage,costs,attorneys' (iv) environmental protection; fees,or expenses that arise by reason of: or the effect of any violation of these laws,ordinances,or 1. (a) Any law,ordinance,permit,or governmental regulation governmental regulations. This Exclusion 1(a)does not modify or limit (including those relating to building and zoning)restricting,regulating, the coverage provided under Covered Risk 5. prohibiting,or relating to (b) Any governmental police power. This Exclusion 1(b)does not (i) the occupancy,use,or enjoyment of the Land; modify or limit the coverage provided under Covered Risk 6. (ii) the character,dimensions,or location of any improvement 2. Rights of eminent domain. This Exclusion does not modify or limit erected on the Land; the coverage provided under Covered Risk 7 or 8. Form 5011300(7-1-14) Page 2 of 6 ALTA Loan Policy of Title Insurance(6-17-06) Policy# : 5011300-1677452e EXCLUSIONS FROM COVERAGE(Continued) 3. Defects,liens,encumbrances,adverse claims,or other matters business laws of the state where the Land is situated. (a) created,suffered,assumed,or agreed to by the Insured 5. Invalidity or unenforceability in whole or in part of the lien of the Claimant; Insured Mortgage that arises out of the transaction evidenced by the (b) not Known to the Company,not recorded in the Public Insured Mortgage and is based upon usury or any consumer credit Records at Date of Policy,but Known to the Insured Claimant and not protection or truth-in-lending law. disclosed in writing to the Company by the Insured Claimant prior to the 6. Any claim,by reason of the operation of federal bankruptcy,state date the Insured Claimant became an Insured under this policy; insolvency,or similar creditors'rights laws,that the transaction creating (c) resulting in no loss or damage to the Insured Claimant; the lien of the Insured Mortgage,is (d) attaching or created subsequent to Date of Policy(however, (a) a fraudulent conveyance or fraudulent transfer,or this does not modify or limit the coverage provided under Covered Risk (b) a preferential transfer for any reason not stated in Covered 11, 13,or 14);or Risk 13(b)of this policy. (e) resulting in loss or damage that would not have been 7. Any lien on the Title for real estate taxes or assessments imposed sustained if the Insured Claimant had paid value for the Insured by governmental authority and created or attaching between Date of Mortgage. Policy and the date of recording of the Insured Mortgage in the Public 4. Unenforceability of the lien of the Insured Mortgage because of the Records. This Exclusion does not modify or limit the coverage provided inability or failure of an Insured to comply with applicable doing- under Covered Risk 11 (b). CONDITIONS 1. DEFINITION OF TERMS electronic transactions law; The following terms when used in this policy mean: (C) successors to an Insured by dissolution,merger, (a) "Amount of Insurance":The amount stated in Schedule A,as consolidation,distribution,or reorganization; may be increased or decreased by endorsement to this policy,increased (D) successors to an Insured by its conversion to by Section 8(b)or decreased by Section 10 of these Conditions. another kind of Entity; (b) "Date of Policy":The date designated as"Date of Policy"in (E) a grantee of an Insured under a deed delivered Schedule A. without payment of actual valuable consideration conveying (c) "Entity":A corporation,partnership,trust,limited liability the Title company,or other similar legal entity. (1)if the stock,shares,memberships,or other equity (d) "Indebtedness":The obligation secured by the Insured interests of the grantee are wholly-owned by the named Mortgage including one evidenced by electronic means authorized by Insured, law,and if that obligation is the payment of a debt,the Indebtedness is (2)if the grantee wholly owns the named Insured,or the sum of (3)if the grantee is wholly-owned by an affiliated (i) the amount of the principal disbursed as of Date of Policy; Entity of the named Insured,provided the affiliated Entity (ii) the amount of the principal disbursed subsequent to Date and the named Insured are both wholly-owned by the of Policy; same person or Entity; (iii) the construction loan advances made subsequent to Date (F) any government agency or instrumentality that is an of Policy for the purpose of financing in whole or in part the insurer or guarantor under an insurance contract or guaranty construction of an improvement to the Land or related to the Land insuring or guaranteeing the Indebtedness secured by the that the Insured was and continued to be obligated to advance at Insured Mortgage,or any part of it,whether named as an Date of Policy and at the date of the advance; Insured or not; (iv) interest on the loan: (ii) With regard to(A),(B),(C),(D),and(E)reserving, (v) the prepayment premiums,exit fees,and other similar however,all rights and defenses as to any successor that the fees or penalties allowed by law; Company would have had against any predecessor Insured,unless (vi) the expenses of foreclosure and any other costs of the successor acquired the Indebtedness as a purchaser for value enforcement; without Knowledge of the asserted defect,lien,encumbrance,or (vii) the amounts advanced to assure compliance with laws or other matter insured against by this policy. to protect the lien or the priority of the lien of the Insured Mortgage (f) "Insured Claimant":An Insured claiming loss or damage. before the acquisition of the estate or interest in the Title; (g) "Insured Mortgage":The Mortgage described in paragraph 4 of (viii)the amounts to pay taxes and insurance;and Schedule A. (ix) the reasonable amounts expended to prevent (h) "Knowledge"or"Known":Actual knowledge,not constructive deterioration of improvements; knowledge or notice that may be imputed to an Insured by reason of the But the Indebtedness is reduced by the total of all payments and by Public Records or any other records that impart constructive notice of any amount forgiven by an Insured. matters affecting the Title. (e) "Insured":The Insured named in Schedule A. (i) "Land":The land described in Schedule A,and affixed (i) The term"Insured"also includes improvements that by law constitute real property. The term"Land"does (A) the owner of the Indebtedness and each successor not include any property beyond the lines of the area described in in ownership of the Indebtedness,whether the owner or Schedule A,nor any right,title,interest,estate,or easement in abutting successor owns the Indebtedness for its own account or as a streets,roads,avenues,alleys,lanes,ways,or waterways,but this does trustee or other fiduciary,except a successor who is obligor not modify or limit the extent that a right of access to and from the Land under the provisions of Section 12(c)of these Conditions; is insured by this policy. (B) the person or Entity who has"control"of the U) "Mortgage":Mortgage,deed of trust,trust deed,or other "transferable record,"if the Indebtedness is evidenced by a security instrument,including one evidenced by electronic means "transferable record,"as these terms are defined by applicable authorized by law. Form 5011300(7-1-14) Page 3 of 6 ALTA Loan Policy of Title Insurance(6-17-06) Policy#: 5011300-1677452e CONDITIONS(Continued) (k) "Public Records":Records established under state statutes at the Insured Mortgage,as insured,or to prevent or reduce loss or damage Date of Policy for the purpose of imparting constructive notice of matters to the Insured. relating to real property to purchasers for value and without Knowledge. The Company may take any appropriate action under the terms of With respect to Covered Risk 5(d),"Public Records"shall also include this policy,whether or not it shall be liable to the Insured. The exercise of environmental protection liens filed in the records of the clerk of the these rights shall not be an admission of liability or waiver of any provision United States District Court for the district where the Land is located. of this policy. If the Company exercises its rights under this subsection,it (1) "Title":The estate or interest described in Schedule A. must do so diligently. (m) "Unmarketable Title":Title affected by an alleged or apparent (c) Whenever the Company brings an action or asserts a defense matter that would permit a prospective purchaser or lessee of the Title or as required or permitted by this policy,the Company may pursue the lender on the Title or a prospective purchaser of the Insured Mortgage to litigation to a final determination by a court of competent jurisdiction,and be released from the obligation to purchase,lease,or lend if there is a it expressly reserves the right,in its sole discretion,to appeal any adverse contractual condition requiring the delivery of marketable title. judgment or order. 2. CONTINUATION OF INSURANCE 6. DUTY OF INSURED CLAIMANT TO COOPERATE The coverage of this policy shall continue in force as of Date of (a) In all cases where this policy permits or requires the Company Policy in favor of an Insured after acquisition of the Title by an Insured or to prosecute or provide for the defense of any action or proceeding and after conveyance by an Insured,but only so long as the Insured retains any appeals,the Insured shall secure to the Company the right to so an estate or interest in the Land,or holds an obligation secured by a prosecute or provide defense in the action or proceeding,including the purchase money Mortgage given by a purchaser from the Insured,or right to use,at its option,the name of the Insured for this purpose. only so long as the Insured shall have liability by reason of warranties in Whenever requested by the Company,the Insured,at the Company's any transfer or conveyance of the Title. This policy shall not continue in expense,shall give the Company all reasonable aid(i)in securing force in favor of any purchaser from the Insured of either(i)an estate or evidence,obtaining witnesses,prosecuting or defending the action or interest in the Land,or(ii)an obligation secured by a purchase money proceeding,or effecting settlement,and(ii)in any other lawful act that in Mortgage given to the Insured. the opinion of the Company may be necessary or desirable to establish 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT the Title,the lien of the Insured Mortgage,or any other matter as insured. The Insured shall notify the Company promptly in writing(i)in case If the Company is prejudiced by the failure of the Insured to furnish the of any litigation as set forth in Section 5(a)of these Conditions,(ii)in required cooperation,the Company's obligations to the Insured under the case Knowledge shall come to an Insured of any claim of title or interest policy shall terminate,including any liability or obligation to defend, that is adverse to the Title or the lien of the Insured Mortgage,as prosecute,or continue any litigation,with regard to the matter or matters insured,and that might cause loss or damage for which the Company requiring such cooperation. may be liable by virtue of this policy,or(iii)if the Title or the lien of the (b) The Company may reasonably require the Insured Claimant to Insured Mortgage,as insured,is rejected as Unmarketable Title. If the submit to examination under oath by any authorized representative of the Company is prejudiced by the failure of the Insured Claimant to provide Company and to produce for examination,inspection,and copying,at prompt notice,the Company's liability to the Insured Claimant under the such reasonable times and places as may be designated by the policy shall be reduced to the extent of the prejudice. authorized representative of the Company,all records,in whatever 4. PROOF OF LOSS medium maintained,including books,ledgers,checks,memoranda, In the event the Company is unable to determine the amount of loss correspondence,reports,e-mails,disks,tapes,and videos whether or damage,the Company may,at its option,require as a condition of bearing a date before or after Date of Policy,that reasonably pertain to payment that the Insured Claimant furnish a signed proof of loss. The the loss or damage. Further,if requested by any authorized proof of loss must describe the defect,lien,encumbrance,or other representative of the Company,the Insured Claimant shall grant its matter insured against by this policy that constitutes the basis of loss or permission,in writing,for any authorized representative of the Company damage and shall state,to the extent possible,the basis of calculating to examine,inspect,and copy all of these records in the custody or the amount of the loss or damage. control of a third party that reasonably pertain to the loss or damage. All 5. DEFENSE AND PROSECUTION OF ACTIONS information designated as confidential by the Insured Claimant provided (a) Upon written request by the Insured,and subject to the options to the Company pursuant to this Section shall not be disclosed to others contained in Section 7 of these Conditions,the Company,at its own cost unless,in the reasonable judgment of the Company,it is necessary in the and without unreasonable delay,shall provide for the defense of an administration of the claim. Failure of the Insured Claimant to submit for Insured in litigation in which any third party asserts a claim covered by examination under oath,produce any reasonably requested information, this policy adverse to the Insured.This obligation is limited to only those or grant permission to secure reasonably necessary information from third stated causes of action alleging matters insured against by this policy. parties as required in this subsection,unless prohibited by law or The Company shall have the right to select counsel of its choice(subject governmental regulation,shall terminate any liability of the Company to the right of the Insured to object for reasonable cause)to represent under this policy as to that claim. the Insured as to those stated causes of action. 7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; It shall not be liable for and will not pay the fees of any other TERMINATION OF LIABILITY counsel. The Company will not pay any fees,costs,or expenses In case of a claim under this policy,the Company shall have the incurred by the Insured in the defense of those causes of action that following additional options: allege matters not insured against by this policy. (a) To Pay or Tender Payment of the Amount of Insurance or to (b) The Company shall have the right,in addition to the options Purchase the Indebtedness. contained in Section 7 of these Conditions,at its own cost,to institute (i) To pay or tender payment of the Amount of Insurance under and prosecute any action or proceeding or to do any other act that in its this policy together with any costs,attorneys'fees,and expenses incurred opinion may be necessary or desirable to establish the Title or the lien of by the Insured Claimant that were authorized by the Company up to the Form 5011300(7-1-14) Page 4 of 6 ALTA Loan Policy of Title Insurance(6-17-06) Policy#:5011300-1677452e CONDITIONS(Continued) time of payment or tender of payment and that the Company is (d) In addition to the extent of liability under(a),(b),and(c),the obligated to pay;or Company will also pay those costs,attorneys'fees,and expenses (ii) To purchase the Indebtedness for the amount of the incurred in accordance with Sections 5 and 7 of these Conditions. Indebtedness on the date of purchase,together with any costs, 9. LIMITATION OF LIABILITY attorneys'fees,and expenses incurred by the Insured Claimant that (a) If the Company establishes the Title,or removes the alleged were authorized by the Company up to the time of purchase and defect,lien,or encumbrance,or cures the lack of a right of access to or that the Company is obligated to pay. from the Land,or cures the claim of Unmarketable Title,or establishes When the Company purchases the Indebtedness,the Insured shall the lien of the Insured Mortgage,all as insured,in a reasonably diligent transfer,assign,and convey to the Company the Indebtedness and the manner by any method,including litigation and the completion of any Insured Mortgage,together with any collateral security, appeals,it shall have fully performed its obligations with respect to that Upon the exercise by the Company of either of the options provided matter and shall not be liable for any loss or damage caused to the for in subsections(a)(i)or(ii),all liability and obligations of the Company Insured. to the Insured under this policy,other than to make the payment (b) In the event of any litigation,including litigation by the required in those subsections,shall terminate,including any liability or Company or with the Company's consent,the Company shall have no obligation to defend,prosecute,or continue any litigation. liability for loss or damage until there has been a final determination by a (b) To Pay or Otherwise Settle With Parties Other Than the court of competent jurisdiction,and disposition of all appeals,adverse to Insured or With the Insured Claimant. the Title or to the lien of the Insured Mortgage,as insured. (i) to pay or otherwise settle with other parties for or in the (c) The Company shall not be liable for loss or damage to the name of an Insured Claimant any claim insured against under this Insured for liability voluntarily assumed by the Insured in settling any policy. In addition,the Company will pay any costs,attorneys'fees, claim or suit without the prior written consent of the Company. and expenses incurred by the Insured Claimant that were 10. REDUCTION OF INSURANCE;REDUCTION OR TERMINATION authorized by the Company up to the time of payment and that the OF LIABILITY Company is obligated to pay;or (a) All payments under this policy,except payments made for (ii) to pay or otherwise settle with the Insured Claimant the costs,attorneys'fees,and expenses,shall reduce the Amount of loss or damage provided for under this policy,together with any Insurance by the amount of the payment. However,any payments costs,attorneys'fees,and expenses incurred by the Insured made prior to the acquisition of Title as provided in Section 2 of these Claimant that were authorized by the Company up to the time of Conditions shall not reduce the Amount of Insurance afforded under this payment and that the Company is obligated to pay. policy except to the extent that the payments reduce the Indebtedness. Upon the exercise by the Company of either of the options provided (b) The voluntary satisfaction or release of the Insured Mortgage for in subsections(b)(i)or(ii),the Company's obligations to the Insured shall terminate all liability of the Company except as provided in Section under this policy for the claimed loss or damage,other than the 2 of these Conditions. payments required to be made,shall terminate,including any liability or 11. PAYMENT OF LOSS obligation to defend,prosecute,or continue any litigation. When liability and the extent of loss or damage have been definitely 8. DETERMINATION AND EXTENT OF LIABILITY fixed in accordance with these Conditions,the payment shall be made This policy is a contract of indemnity against actual monetary loss within 30 days. or damage sustained or incurred by the Insured Claimant who has 12. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT suffered loss or damage by reason of matters insured against by this (a) The Company's Right to Recover policy. Whenever the Company shall have settled and paid a claim under this (a) The extent of liability of the Company for loss or damage under policy,it shall be subrogated and entitled to the rights of the Insured this policy shall not exceed the least of Claimant in the Title or Insured Mortgage and all other rights and (i) the Amount of Insurance, remedies in respect to the claim that the Insured Claimant has against (ii) the Indebtedness, any person or property,to the extent of the amount of any loss,costs, (iii) the difference between the value of the Title as insured attorneys'fees,and expenses paid by the Company. If requested by the and the value of the Title subject to the risk insured against by this Company,the Insured Claimant shall execute documents to evidence policy,or the transfer to the Company of these rights and remedies. The Insured (iv) If a government agency or instrumentality is the Insured Claimant shall permit the Company to sue,compromise,or settle in the Claimant,the amount it paid in the acquisition of the Title or the name of the Insured Claimant and to use the name of the Insured Insured Mortgage in satisfaction of its insurance contract or Claimant in any transaction or litigation involving these rights and guaranty. remedies. (b) If the Company pursues its rights under Section 5 of these If a payment on account of a claim does not fully cover the loss of the Conditions and is unsuccessful in establishing the Title or the lien of the Insured Claimant,the Company shall defer the exercise of its right to Insured Mortgage,as insured, recover until after the Insured Claimant shall have recovered its loss, (i) the Amount of Insurance shall be increased by 10%,and (b) The Insured's Rights and Limitations (ii) the Insured Claimant shall have the right to have the loss (i) The owner of the Indebtedness may release or substitute or damage determined either as of the date the claim was made by the personal liability of any debtor or guarantor,extend or otherwise the Insured Claimant or as of the date it is settled and paid. modify the terms of payment,release a portion of the Title from the lien (c) In the event the Insured has acquired the Title in the manner of the Insured Mortgage,or release any collateral security for the described in Section 2 of these Conditions or has conveyed the Title, Indebtedness,if it does not affect the enforceability or priority of the lien then the extent of liability of the Company shall continue as set forth in of the Insured Mortgage. Section 8(a)of these Conditions. Form 5011300(7-1-14) Page 5 of 6 ALTA Loan Policy of Title Insurance(6-17-06) Policy#: 5011300-1677452e CONDITIONS(Continued) (ii) If the Insured exercises a right provided in(b)(i),but has (b) Any claim of loss or damage that arises out of the status of the Knowledge of any claim adverse to the Title or the lien of the Title or lien of the Insured Mortgage or by any action asserting such Insured Mortgage insured against by this policy,the Company shall claim shall be restricted to this policy. be required to pay only that part of any losses insured against by (c) Any amendment of or endorsement to this policy must be in this policy that shall exceed the amount,if any,lost to the Company writing and authenticated by an authorized person,or expressly by reason of the impairment by the Insured Claimant of the incorporated by Schedule A of this policy. Company's right of subrogation. (d) Each endorsement to this policy issued at any time is made a (c) The Company's Rights Against Non-insured Obligors part of this policy and is subject to all of its terms and provisions. Except The Company's right of subrogation includes the Insured's rights as the endorsement expressly states,it does not(i)modify any of the against non-insured obligors including the rights of the Insured to terms and provisions of the policy,(ii)modify any prior endorsement,(iii) indemnities,guaranties,other policies of insurance,or bonds, extend the Date of Policy,or(iv)increase the Amount of Insurance. notwithstanding any terms or conditions contained in those instruments 15. SEVERABILITY that address subrogation rights. In the event any provision of this policy,in whole or in part,is held The Company's right of subrogation shall not be avoided by invalid or unenforceable under applicable law,the policy shall be acquisition of the Insured Mortgage by an obligor(except an obligor deemed not to include that provision or such part held to be invalid,but described in Section 1(e)(i)(F)of these Conditions)who acquires the all other provisions shall remain in full force and effect. Insured Mortgage as a result of an indemnity,guarantee,other policy of 16. CHOICE OF LAW;FORUM insurance,or bond,and the obligor will not be an Insured under this (a) Choice of Law: The Insured acknowledges the Company has policy. underwritten the risks covered by this policy and determined the 13. ARBITRATION premium charged therefore in reliance upon the law affecting interests in Either the Company or the Insured may demand that the claim or real property and applicable to the interpretation,rights,remedies,or controversy shall be submitted to arbitration pursuant to the Title enforcement of policies of title insurance of the jurisdiction where the Insurance Arbitration Rules of the American Land Title Association Land is located. ("Rules"). Except as provided in the Rules,there shall be no joinder or Therefore,the court or an arbitrator shall apply the law of the consolidation with claims or controversies of other persons. Arbitrable jurisdiction where the Land is located to determine the validity of claims matters may include,but are not limited to,any controversy or claim against the Title or the lien of the Insured Mortgage that are adverse to between the Company and the Insured arising out of or relating to this the Insured and to interpret and enforce the terms of this policy. In policy,any service in connection with its issuance or the breach of a neither case shall the court or arbitrator apply its conflicts of law policy provision,or to any other controversy or claim arising out of the principles to determine the applicable law. transaction giving rise to this policy.All arbitrable matters when the (b) Choice of Forum: Any litigation or other proceeding brought by Amount of Insurance is$2,000,000 or less shall be arbitrated at the the Insured against the Company must be filed only in a state or federal option of either the Company or the Insured.All arbitrable matters when court within the United States of America or its territories having the Amount of Insurance is in excess of$2,000,000 shall be arbitrated appropriate jurisdiction. only when agreed to by both the Company and the Insured. Arbitration 17. NOTICES,WHERE SENT pursuant to this policy and under the Rules shall be binding upon the Any notice of claim and any other notice or statement in writing parties. Judgment upon the award rendered by the Arbitrator(s)may be required to be given to the Company under this policy must be given to entered in any court of competent jurisdiction. the Company at First American Title Insurance Company,Attn: 14. LIABILITY LIMITED TO THIS POLICY;POLICY ENTIRE Claims National Intake Center,1 First American Way,Santa Ana, CONTRACT CA 92707. Phone:888.632.1642. (a) This policy together with all endorsements,if any,attached to it by the Company is the entire policy and contract between the Insured and the Company. In interpreting any provision of this policy,this policy shall be construed as a whole. Form 5011300(7-1-14) Page 6 of 6 ALTA Loan Policy of Title Insurance(6-17-06) FIRST AMERICAN TITLE INSURANCE COMPANY ALTA LOAN POLICY (06-17-06) SCHEDULE A Policy No. : 201500290CAF Policy Date: 0612512015 Time: 09:17. 39 AM Jacket No. : 5011300-1677452 Amount of Insurance: $20,110,000. 00 Address Reference: 4801 W Ten Rd Efland, NC 27243 1 . Name of Insured: ORANGE COUNTY PUBLIC FACILITIES COMPANY ITS SUCCESSORS AND/OR ASSIGNS, AS THEIR INTEREST MAY APPEAR 2 . The estate or interest in the Land that is encumbered by the Insured Mortgage is: FEE SIMPLE 3 . Title is vested in: ORANGE COUNTY, NORTH CAROLINA, A POLITICAL SUBDIVISION OF THE STATE OF NORTH CAROLINA 4 . The Insured Mortgage and its assignments, if any, are described as follows : DEED OF TRUST AND SECURITY AGREEMENT FROM ORANGE COUNTY, NORTH CAROLINA, A POLITICAL SUBDIVISION OF THE STATE OF NORTH CAROLINA, TO REBECCA S. CHAFFIN, TRUSTEE(S) FOR ORANGE COUNTY PUBLIC FACILITIES COMPANY, DATED JUNE 1, 2015, AND RECORDED JUNE 25, 2015, AT 9:17:39 AM IN BOOK 005972 AT PAGE 000576, ORANGE COUNTY REGISTRY, NC, TO SECURE A NOTE OF $20,110,000. 00. Issued through the Office of: Investors Title Commercial Agency, LLC 308 W. Rosemary Street Chapel Hill,NC 27516 Tel. (919)968-2200 (919)945-2469 /Fax(919)968-2225 (800)653-9811 Authorized Countersignature FAYk-439 Page 1 FIRST AMERICAN TITLE INSURANCE COMPANY Policy No. 201500290CAF 5. The Land referred to in this Policy is in the State of NC County of Orange and described as follows : LOCATION OF GRAVELLY HILL MIDDLE SCHOOL - ORANGE COUNTY, CHEEKS TOWNSHIP BEING ALL OF TRACT 1, CONTAINING 65. 505 ACRES, OF THE ORANGE COUNTY BOARD OF EDUCATION PROPERTY AS RECORDED IN PLAT BOOK 100, PAGE 86, ORANGE COUNTY REGISTRY. ORANGE COUNTY PIN #9844-05-7652 6. This policy incorporates by reference those ALTA endorsements selected below: 4-06 (Condominium) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No 4 . 1-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No 5-06 (Planned Unit Development) . . . . . . . . . . . . . . . . No 5. 1-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No 6-06 (Variable Rate) . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes 6.2-06 (Variable Rate--Negative Amortization) . . . . No 8 . 1-06 (Environmental Protection Lien) . . . . . . . . . . . No Referring to the following state statute (s) : NONE 9-06 (Restrictions, Encroachments,Minerals) . . . . No 13. 1-06 (Leasehold Loan) . . . . . . . . . . . . . . . . . . . . . . . . . . No 14 . 06 (Future Advance - Priority) . . . . . . . . . . . . . . . Yes 14 . 1-06 (Future Advance - Knowledge) . . . . . . . . . . . . . . No 14 .3-06 (Future Advance - Reverse Mortgage) . . . . . . . No 22-06 (Location) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No The following endorsements are attached hereto and incorporated herein: ALTA 8.2-06 FATIC-439 Page 2 FIRST AMERICAN TITLE INSURANCE COMPANY Policy No. 201500290CAF SCHEDULE B - PART I EXCEPTIONS FROM COVERAGE This Policy does not insure against loss or damage (and the Company will not pay costs, attorneys ' fees, or expenses) that arise by reason of: 1. Taxes are exempt. 2. Subject to matters shown on plats recorded in Plat Book 100 at Pages 149, 150 & 151, Plat Book 100 at Page 86, Plat Book 96 at Page 86, Plat Book 70 at Page 108 and Plat Book 14 at Page 171. 3. Right(s) of Way to Duke Power Company recorded in Book 205 at Page 114, Book 158 at Page 47, Book 450 at Page 125 and Book 543 at Page 559. 4. Sixty Eight (68) foot transmission line Right of Way to Duke Power Company as shown on plats recorded in Plat Book 14 at Page 171, Plat Book 70 at Page 108 and Plat Book 96 at Page 86. 5. Right(s) of Way to North Carolina State Highway Commission recorded in Book 159 at Page 678, Book 186 at Page 653, Book 198 at Page 826, Book 208 at Page 453 and Book 208 at Page 468. 6. Cross easements for access roads to school property and adjoining tract for soccer complex recorded in Book 3630 at Page 456 as amended by that certain Declaration of Amended and Revised Easement recorded in Book 4161 at Page 185; and cross easement recorded in Book 3630 at Page 460 as amended by that certain Declaration of Amended and Revised Easement recorded in Book 4161 at Page 181 and as shown on plats recorded in Plat Book 96 at Page 86 and Plat Book 100 at Page 149. 7. Special Use Permits permitting the use of subject property for a public school recorded in Book 3630 at Page 464 and Book 3705 at Page 60. 8. Piedmont Electric Membership Corporation Right of Way Agreement as recorded in Book 4153 at Page 349. 9. Declaration of Easement for Water and Sewer Lines as recorded in Book 4161 at Page 190. FATIC-439 Page 3 FIRST AMERICAN TITLE INSURANCE COMPANY Policy No. 201500290CAF 10. Declaration of Easement for Sewer Lift Station/Sewer Pump Station recorded in Book 4161 at Page 195. 11. 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. The term "encroachment" includes encroachments of existing improvements located on the Land onto adjoining land, and encroachments onto the Land of existing improvements located on adjoining land. Paragraph 2 (c) of the Covered Risks is hereby deleted. NOTE: Upon receipt of satisfactory plat of survey and surveyor's report, this exception will be eliminated or amended in accordance with the facts disclosed thereby. NOTE: The following endorsements are attached to the mortgagee's final policy: ALTA 6-06 ALTA 8.2-06 ALTA 14-06 AFFIRMATIVE INSURED CLOSING PROTECTION COVERAGE PROVIDED - As to the transaction for which this binder and/or policy is issued, the Company affords insured closing protection as described in the North Carolina Insured Closing Protection Letter (NCTIRB-01-2003) to the Proposed and/or Insured Lender and its successors and/or the Proposed and/or Insured Owner. Said letter is incorporated herein in its entirety. The approved attorney is the Closing Attorney referenced above. Claims under such letter shall be made promptly to the Company at its claims office at P.O. Drawer 2637, Chapel Hill, NC 27515 FATIC-439 Page 4 FIRST AMERICAN TITLE INSURANCE COMPANY Policy No. 201500290CAF SCHEDULE B -PART II In addition to the matters set forth in Part 1 of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage: Lease to the Orange County Board of Education, recorded in Book 4014 at Page 45; subordinated by Lease Modification and Subordination Agreement with the Orange County Board of Education recorded in Book 5972 at Page 592. FATIC-439 Page 5 wgqC First American Title Insurance Company ALTA ENDORSEMENT FORM 6-06 (Variable Rate) Attached to Policy No. 201500290CAF This endorsement is made a part of the Policy to which it is attached. The Company insures against loss or damage sustained by the Insured by reason o£ 1. The invalidity or unenforceability of the lien of the Insured Mortgage resulting from its provisions that provide for changes in the rate of interest. 2. Loss of priority of the lien of the Insured Mortgage as security for the unpaid principal balance of the loan, together with interest as changed in accordance with the provisions of the Insured Mortgage, which loss of priority is caused by the changes in the rate of interest. "Changes in the rate of interest", as used in this endorsement, shall mean only those changes in the rate of interest calculated pursuant to the formula provided in the Insured Mortgage at Date of Policy. This endorsement does not insure against loss or damage based upon: 1. usury, or 2. any consumer credit protection or truth in lending law. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. IN WITNESS WHEREOF, First American Title Insurance Company has caused this Endorsement to be signed and sealed on its date of issue set forth herein. Dated: June 25,2015 First American Title Insurance Company Countersigned by: INVESTORS TITLE COM RCIAL AGENCY,LLC (1,I&A_67 (-., f_ Authorized Signatory Page: 1 First American Title Insurance Company ALTA ENDORSEMENT FORM 8.2-06 (Commercial Environmental Protection Lien)(10/16/08) Attached to Policy No. 201500290CAF This endorsement is made a part of the Policy to which it is attached. The Company insures against loss or damage sustained by the Insured by reason of an environmental protection lien that, at Date of Policy, is recorded in the Public Records or filed in the records of the clerk of the United States district court for the district in which the Land is located,unless the environmental protection lien is set forth as an exception in Schedule B. This endorsement is issued as part of the policy. Except as it expressly states,it does not(i)modify any of the terms and provisions of the policy,(ii)modify any prior endorsements, (iii)extend the Date of Policy, or(iv)increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise,this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. IN WITNESS WHEREOF, First American Title Insurance Company has caused this Endorsement to be signed and sealed on its date of issue set forth herein. Dated: June 25,2015 First American Title Insurance Company Countersigned by: INVESTORS TITLE COMMERCIAL AGENCY,LLC Autho ized Signatory • Page: I •• Page: I First American Title Insurance Company ALTA ENDORSEMENT FORM 14-06 Future Advance—Priority (Revised 2-3-11) Attached to Policy No. 201500290CAF This endorsement is made a part of the Policy to which it is attached. 1. The insurance for Advances added by Sections 2 and 3 of this endorsement is subject to the exclusions in Section 4 of this endorsement and the Exclusions from Coverage in the Policy, except Exclusion 3(d), the provisions of the Conditions, and the exceptions contained in Schedule B. a. "Agreement," as used in this endorsement, shall mean the note or loan agreement,the repayment of Advances under which is secured by the Insured Mortgage. b. "Advance," as used in this endorsement, shall mean only an advance of principal made after the Date of Policy as provided in the Agreement, including expenses of foreclosure, amounts advanced pursuant to the Insured Mortgage to pay taxes and insurance, assure compliance with laws, or to protect the lien of the Insured Mortgage before the time of acquisition of the Title, and reasonable amounts expended to prevent deterioration of improvements, together with interest on those advances. c. "Changes in the rate of interest," as used in this endorsement, shall mean only those changes in the rate of interest calculated pursuant to a formula provided in the Insured Mortgage or the Agreement at Date of Policy. 2. The Company insures against loss or damage sustained by the Insured by reason of: a. The invalidity or unenforceability of the lien of the Insured Mortgage as security for each Advance. b. The lack of priority of the lien of the Insured Mortgage as security for each Advance over any lien or encumbrance on the Title. c. The invalidity or unenforceability or lack of priority of the lien of the Insured Mortgage as security for the Indebtedness, Advances and unpaid interest resulting from(i)re-Advances and repayments of Indebtedness, (ii) earlier periods of no indebtedness owing during the term of the Insured Mortgage, or d. (iii)the Insured Mortgage not complying with the requirements of state law of the state in which the Land is located to secure Advances. 3. The Company also insures against loss or damage sustained by the Insured by reason of: a. The invalidity or unenforceability of the lien of the Insured Mortgage resulting from any provisions of the Agreement that provide for(i) interest on interest, (ii) changes in the rate of • Page: 1 •• Page: 1 M . First American Title Insurance Company interest, or(iii) the addition of unpaid interest to the Indebtedness. b. interest on interest, (ii) changes in the rate of interest, or(iii) the addition of unpaid interest to the Indebtedness. c. Lack of priority of the lien of the Insured Mortgage as security for the Indebtedness, including any unpaid interest that was added to principal in accordance with any provisions of the Agreement, interest on interest, or interest as changed in accordance with the provisions of the Insured Mortgage, which lack of priority is caused by (i) changes in the rate of interest, (ii) interest on interest, or(iii) increases in the Indebtedness resulting from the addition of unpaid interest. 4. This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys' fees, or expenses) resulting from: a. The invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as security for any Advance made after a Petition for Relief under the Bankruptcy Code (11 U.S.C.)has been filed by or on behalf of the mortgagor; b. The lien of real estate taxes or assessments on the Title imposed by governmental authority arising after Date of Policy; c. The lack of priority of the lien of the Insured Mortgage as security for any Advance to a federal tax lien, which Advance is made after the earlier of(i) actual knowledge of the Insured that a federal tax lien was filed against the mortgagor, or(ii)the expiration, after notice of a federal tax lien filed against the mortgagor, of any grace period for making disbursements with priority over the federal tax lien provided in the Internal Revenue Code (26 U.S.C.); d. Any federal or state environmental protection lien. 5. The Indebtedness includes Advances. IN WITNESS WHEREOF, First American Title Insurance Company has caused this Endorsement to be signed and sealed on its date of issue set forth herein. Dated: June 25,2015 First American Title Insurance Company Countersigned by: I STORS TITL COAI RCIAL AGENCY,LLC Authorized Signatory • Page:2 •• Page:2