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<br />I-elIKI
<br />(7 (a) cont.)
<br />Upon the exercise by the Company of the option provided for in Paragraph
<br />(a) the Company's obligation to the Assured under this Guarantee for the claimed
<br />loss or damage, other than to make the payment required in that paragraph, shall
<br />terminate, including any obligation to continue the defense or prosecution of any
<br />litigation for which the Company has exercised its options under Paragraph 5,
<br />and the Guarantee shall be surrendered to the Company for cancellation.
<br />(b) To Pay or Otherwise Settle With Parties Other Than the Assured or With the
<br />Assured claimant.
<br />To pay or otherwise settle with other parties for or in the name of an Assured
<br />Claimant any claim assuredagainstunder this Guarantee, together with any
<br />costs, attorneys' fees and expenses incurred by the Assured claimant which were
<br />authorized by the Company up to the time of payment and which the Company
<br />is obligated to pay.
<br />Upon the exercise by the Company of the option provided for in Paragraph (b)
<br />the Company's obligation to the Assured under this Guarantee for the claimed
<br />loss or damage, other than to make the payment required in that paragraph, shall
<br />terminate, including any obligation to continue the defense or prosecution of any
<br />litigation for which the Company has exercised its options under Paragraph 5.
<br />This Guarantee is a contract of Indemnity against actual monetary loss or damage
<br />sustained or incurred by the Assured claimant who has suffered loss or damage by
<br />reason of reliance upon the assurances set forth in this Guarantee and only to the
<br />extent herein described, and subject to the exclusions stated in Paragraph 2.
<br />The liability of the Company under this Guarantee to the Assured shall not exceed
<br />the least of:
<br />(a) the amount of liability stated in Schedule A;
<br />(b) the amount of the unpaid principal indebtedness secured by the mortgage of
<br />an Assured mortgagee, as limited or provided under Section 7 of these Conditions
<br />and Stipulations or as reduced under Section 10 of these Conditions and
<br />Stipulations, at the time the loss or damage assured against by this Guarantee
<br />occurs, together with interest thereon; or
<br />(c) the difference between the value of the estate or interest covered hereby as
<br />stated herein and the value of the estate or interest subject to any defect, lien
<br />or encumbrance assured against by this Guarantee.
<br />ON 011 T, 10 94'% 4 to] . [o] a I Ell " 3 1110 6'J1
<br />(a) If the Company establishes the title, or removes the alleged defect, lien or
<br />encumbrance, or cures any other matter assured against by this Guarantee in a
<br />reasonably diligent mannerby any method, including litigation and the completion
<br />of any appeals therefrom, it shall have fully performed its obligations with
<br />respect to that matter and shall not be liable for any loss or damage caused
<br />thereby.
<br />(b) In the event of any litigation by the Company or with the Company's consent,
<br />the Company shall have no liability for loss or damage until there has been a final
<br />determination by a court of competent jurisdiction, and disposition of all appeals
<br />therefrom, adverse to the title, as state herein.
<br />(c) The Company shall not be liable for loss or damage to any Assured for liability
<br />voluntarily assumed by the Assured in settling any claim or suit without the prior
<br />written consent of the Company.
<br />10. REDUCTION OF LIABILITY OR TERMINATION OF LIABILITY.
<br />All payments under this Guarantee, except payments made for costs, attomeys'fees
<br />and expenses pursuant to Paragraph 5 shall reduce the amount of liability pro tanto.
<br />(a) No payment shall be made without producing this Guarantee for endorsement
<br />of the payment unless the Guarantee has been lost or destroyed, in which case
<br />proof of loss or destruction shall be furnished to the satisfaction of the Company.
<br />(b) When liability and the extent of loss or damage has been definitely fixed in
<br />accordance with these Conditions and Stipulations, the loss or damage shall be
<br />payable within thirty (30) days thereafter.
<br />Whenever the Company shall have settled and paid a claim under this Guarantee,
<br />all right of subrogation shall vest in the Company unaffected by any act of the
<br />Assured claimant.
<br />The Company shall be subrogated to and be entitled to all rights and remedies
<br />which the Assured would have had against any person or property in respect to
<br />the claim had this Guarantee not been issued. If requested by the Company, the
<br />Assured shall transfer to the Company all rights and remedies against any
<br />person or property necessary in order to perfect this right of subrogation. The
<br />Assured shall permit the Company to sue, compromise or settle in the name of
<br />the Assured and to use the name of the Assured in any transaction or litigation
<br />involving these rights or remedies.
<br />If payment on account of a claim does not fully cover the loss of the Assured
<br />the Company shall be subrogated to all rights and remedies of the Assured after
<br />the Assured shall have recovered its principal, interest, and costs of collection.
<br />13. ARBITRATION.
<br />Unless prohibited by applicable law, either the Company or the Assured may
<br />demand arbitration pursuantto the Title Insurance Arbitration Rules of theAmerican
<br />Arbitration Association. Arbitrable matters may include, but are not limited to, any
<br />controversy orclaim between theCompany and the Assured arising outof orrelating
<br />to this Guarantee, any service of the Company in connection with its issuance or the
<br />breach of a Guarantee provision or other obligation. All arbitrable matters when the
<br />Amount of Liability is $ 1,000,000 or less shall be arbitrated at the option of either
<br />the Company or the Assured. All arbitrable matters when the Amount of Liability
<br />is in excess of $1,000,000 shall be arbitrated only when agreed to by both the
<br />Company and the Assured. The Rules in effect at Date of Guarantee shall be binding
<br />upon the parties. The award may include attomeys'fees only if the laws of the state
<br />in which the land is located permits a court to award attorneys' fees to a prevailing
<br />parry. Judgment upon the award rendered by the Arbitrator(s) may be entered in any
<br />court having jurisdiction thereof.
<br />The law of the situs of the land shall apply to an arbitration under the Title Insurance
<br />Arbitration Rules.
<br />A copy of the Rules may be obtained form the Company upon request.
<br />14. LIABILITY LIMITED TO THIS GUARANTEE; GUARANTEE
<br />ENT MCONTRACT.
<br />(a) This Guarantee together with all endorsements, if any, attached hereto by
<br />the Company is the entire Guarantee and contract between the Assured and
<br />the Company. In interpreting any provision of this Guarantee, this Guarantee
<br />shall be construed as a whole.
<br />(b) Any claim of loss or damage, whether or not based on negligence, or any
<br />action asserting such claim, shall be restricted to this Guarantee.
<br />(c) No amendment of or endorsement to this Guarantee can be made except by a
<br />writing endorsed hereon or attached hereto signed by either the President, a Vice
<br />President, the Secretary, an Assistant Secretary, or validating officeror authorized
<br />signatory of the Company.
<br />15. NOTICES, WHERE SENT.
<br />AM notices required to be given the Company and any statement in writing required
<br />to be furnished the Company shall include the number of this Guarantee and shall
<br />be addressed to the Company at P.O. Box 1680, Denver, Colorado 80201.
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