SOUTHERN TITLE INSURANCE CORPORATION

RICHMOND, VIRGINIA

            THIS INDEMNITY BOND, given by ______________________ _______________________(hereinafter called the Indemnitor) to Southern Title Insurance Corporation, a Virginia corporation (hereinafter called the Company) on ___________________, 20___ .

            Indemnitor is firmly bonded to the Company in the sum of  $ ___________.

            WHEREAS, Indemnitor has requested Company to issue its policy(s) of title insurance insuring an interest in or title to certain real estate in ____________________, Virginia, described in policy/commitment no._____________________ issued by Company and/or described in exhibit attached hereto and made a part hereof without exception to, or providing certain affirmative insurance against, the following matters (hereinafter referred to as the Exception):

Any lien, or right to a lien,  for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records.

            AND WHEREAS, Company is unwilling to so issue such policy(s) unless indemnified by Indemnitor as hereinafter provided;

            AND WHEREAS, Indemnitor has, as an inducement to Company, offered to indemnify Company against loss or damage for which Company may become liable by reason of the omission or deletion of the Exception or by reason of providing the affirmative insurance set forth in said Policy(s) or Commitment against loss, damage, cost or expense which may result from the matters referred to in the Exception,

            AND WHEREAS, Indemnitor recognizes that Company in the normal course of its business, may be called upon to issue additional Owner’s or Loan policies on all or part of said real estate in the future which will afford the same or similar protection,

            NOW THEREFORE, the condition of this obligation is such that if Indemnitor, its heirs, administrators, executors, successors, and assigns, or any of them, shall and do at all times hereafter well and sufficiently save, defend, keep harmless, and indemnify Company, its successors and assigns of and from all loss, damage, cost, charge, liability or expense, including court costs and attorneys’ fees, which it may sustain, suffer or be put to under its policy or policies of title insurance or otherwise on account of the omission or deletion of, or affirmative insurance in connection with, the Exception, and in the event of any claims or liens in connection with the Exception being filed of record, shall cause same to be paid and discharged of record without delay, then this obligation shall be null and void, otherwise to remain in full force and effect.

            As security for the performance of the terms hereof Indemnitor hereby deposits with the Company, the receipt of which is hereby acknowledged, the following:

                        NONE

            The conditions, covenants, and terms of this Indemnity Bond are printed on the following page and incorporated herein by reference.

            IN WITNESS WHEREOF, the parties have hereunto set their hands and seals this ____ day of ______________,  20___.

CONDITIONS, COVENANTS, AND TERMS OF THE ABOVE INDEMNITY BOND ARE:

1. Indemnitor agrees that Company may, in its discretion, report to its proposed insured the existence of the matters set forth as the Exception to the title and refuse to issue such policy(s) of title insurance unless Company is furnished with satisfactory acknowledgment by the proposed insured that said proposed insured is aware of the existence of the matters set forth as the Exception to the title. In no event shall this instrument be construed to be a Commitment, Binder or other agreement to issue a policy of title insurance.

2. The obligations of Indemnitor under this instrument shall continue until the liability of Company under the policy(s) (including, without limitation, additional Owner’s or Loan policies) issued in reliance upon it has been fully discharged. When in the opinion of Company, the title to the real estate is no longer subject to the Exception, Company agrees to return to the Indemnitor, without interest, all collateral deposited with Company, except for the portion which may have been used as provided herein and less Company’s escrow charge.

3. Indemnitor agrees that if at any time Company deems it necessary in order to satisfy its obligations under said policy(s), it may, in its sole discretion, without notice to Indemnitor, pay, satisfy, compromise or do any other act necessary in its judgment to obtain a release or discharge of the Exception to the title and in doing so may apply any or all of the collateral deposited with Company as security. Indemnitor hereby authorizes and empowers Company to advance and pay all sums necessary to obtain a release, discharge or satisfaction of the matters set forth as the Exception to the title, and specifically authorizes Company to sell any collateral deposited with Company as security. Notwithstanding anything herein which may be construed to the contrary, Indemnitor agrees that Company shall not have to pay, incur, or sustain monetary loss in any amount before being entitled to so apply the collateral deposited hereunder or to call upon Indemnitor to provide to Company additional funds necessary to pay, satisfy, compromise or do any other act necessary to obtain a release or discharge of the Exception to the title or otherwise satisfy Company’s obligations under said Policy(s); and Indemnitor shall promptly furnish such funds so demanded.

4. If Company shall sustain or incur loss or damage either because no collateral was deposited or the collateral was insufficient, or because Indemnitor failed to provide sufficient funds upon demand by Company, Indemnitor shall become indebted to Company in an amount equal to the loss and loss expense sustained or incurred by Company and agrees to repay Company that amount on demand, together with interest thereon at the rate of 8% per annum from the date of demand.

5. If Indemnitor fails timely to take such steps as in the opinion of Company are necessary to remove the matters set forth herein as the Exception to the title, on or before agreed date as provided herein, Company is authorized in its own discretion to take whatever steps, including but not limited to the commencement of legal action or payment of money, that it determines necessary or advisable to remove said matters, and in connection therewith Indemnitor shall, upon demand, advance to Company all funds necessary, including all costs, attorney’s fees, and other expenses.

6. If the collateral deposited with Company is insufficient to obtain a release or discharge of the Exception (including attorney’s fees, costs and all other expense of so obtaining) the Indemnitor, upon demand by Company, shall advance to Company all such funds as, in the sole discretion of Company, may be necessary to obtain such release or discharge or otherwise satisfy Company’s obligations under said Policy(s).

7. Company shall have the right to select and approve any and all counsel who may be retained by Company or by Indemnitor to defend any action brought by any party as a result of Company issuing its policy(s) without showing said Exception, or insuring against loss, damage, cost or expense which may result from the matters referred to in said Exception, or any counsel retained by Company or Indemnitor to bring any action or to perform any work to correct the matters shown in the Exception, and Indemnitor agrees promptly to pay the counsel so selected or approved by Company.

8. In this instrument, wherever the context so requires, the singular number includes the plural, and where there is more than one person included as Indemnitor the obligations of this agreement shall be binding on all such persons jointly and severally. “Person” herein includes individuals, husband and wife (jointly and severally), corporations, partnerships and all other entities designated in and executing this instrument as Indemnitors. If any Indemnitor be not bound hereunder for any reason, this instrument shall still be binding upon the other Indemnitors. “Policy” shall be deemed to include a binder or commitment; and “Commitment” shall be deemed to include binder.

9. This instrument shall be liberally construed in the interest of and for the protection of the Company. If any provision hereof is held to be void or unenforceable under the laws of any place covering its construction or enforcement, this instrument shall not be void or vitiated thereby, but shall be construed to be in force with the same effect as though such provision were omitted.

10. The liability of Indemnitor under this instrument is direct and primary and is not conditioned or contingent upon prior pursuit of any remedies by Company except demand for performance upon Indemnitor. Indemnitor shall be liable for and shall pay promptly to Company all costs, expense and attorney’s fees incurred by Company in enforcing its rights hereunder.

11. This instrument shall be binding upon Indemnitors, and each of them, their heirs, assigns, and legal successors, and shall inure to the benefit of Company, its successors or assigns, including, without limitation, any other insurer involved in reinsuring, in any manner, any liabilities of Company under any policy(s) of title insurance or endorsement(s) thereto issued in reliance hereon.

12. Written notice shall be deemed to have been duly served if delivered to a member of the firm or to an officer of the corporation for whom it was intended, or if delivered at or sent by Registered or Certified Mail to the appropriate address shown herein.