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GUARANTEE CONDITIONS AND STIPULATIONS
<br /> 1. Definition of Terms-The following terms when used in the Guarantee mean: the°name of the Assured any claim which could result in loss to the Assured within
<br /> the coverage of this Guarantee,or to pay the full amount of this Guarantee or,if this
<br /> (a)"the Assured":the parry or parties named as the Assured in this Guarantee, Guarantee is issued for the benefit of a holder of a mortgage or a lienholder,the
<br /> or on a supplemental writing executed by the Company. Company shall have the option to purchase the indebtedness secured by said
<br /> (b)"land":the land described or referred to in Schedule(A)(C)or in Part 2,and mortgage or said lien for the amount owing thereon, together with any costs,
<br /> improvements affixed thereto which by law constitute real property. The term"land" reasonable attorneys'fees and expenses incurred by the Assured claimant which
<br /> does not include any property beyond the lines of the area described or referred to were authorized by the Company up to the time of purchase.
<br /> in Schedule(A)(C)or in Part 2, nor any right,title, interest,estate or easement in Such purchase,payment or tender of payment of the full amount of the
<br /> abutting streets,roads,avenues,alleys,lanes,ways or waterways. Guarantee shall terminate all liability of the Company hereunder. In ft event
<br /> (c) "mortgage": mortgage, deed of trust, trust deed, or other security after notice of claim has been given to the Company by the Assured
<br /> instrument. offers to purchase said indebtedness, r of such indebtedness II trans-
<br /> (d) "public records": records established under state statutes at Date of fer and assign said indebtedness,together with any collateral security,to the
<br /> Guarantee for the purpose of imparting constructive notice of matters relating to Company upon payment of the purchase price.
<br /> real property to purchasers for value and without knowledge. Upon the exercise by the Company of the option provided for in Paragraph(a)
<br /> (e)"date":the effective date. theCompany'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 /> 2. Exclusions from Coverage of this Guarantee-The Company assumes no terminate,including any obligation to continue the defense or prosecution of any
<br /> liability for loss or damage by reason of the following: litigation for which the Company has exercised its opfions under Paragraph 5,and
<br /> (a)Taxes or assessments which are not shown as existing liens by the records the Guarantee shall be surrendered to the Company for cancellation.
<br /> of any taxing authority that levies taxes or assessments on real property or by the (b)To Pay or Otherwise Settle With Parties Other Than the Assured or With
<br /> public records. the Assured Claimant.
<br /> (b)(1)Unpatented mining claims;(2)reservations or exceptions in patents or in To pay or otherwise settle with other parties for or in the name of an
<br /> Acts authorizing the issuance thereof; (3) water rights, claims or title to water: Assured claimant any claim assured against under this Guarantee, together with
<br /> whether or not the matters excluded by (1), (2) or (3) are shown by the public any costs, attorneys'fees and expenses incurred by the Assured claimant which
<br /> records. were authorized by the Company up to the time of payment and which the
<br /> (c)Assurances to title to any property beyond the lines of the land expressly Company is obligated to pay.
<br /> described in the description set forth in Schedule (A)(C) or in part 2 of this Upon the exercise by the Company of the option provided for in Paragraph(b)
<br /> Guarantee,or title to streets, roads,avenues, lanes,ways or waterways on which the Company's obligation to the Assured under this Guarantee for the claimed loss
<br /> such land abuts,or the right to maintain therein vaults,tunnels,ramps or any other or damage, other than to make the payment required in that paragraph, shall
<br /> structure or improvement;or any rights or easements therein unless such property, terminate, including any obligation to continue the defense or prosecution of any
<br /> rights or easements are expressly and specifically set forth in said description. litigation for which the Company has exercised its options under Paragraph 5.
<br /> (d)(1) Defects, liens, encumbrances or adverse claims against the title, if 8. Determination and Extent of Liability - This Guarantee is a contract of
<br /> assurances are provided as to such title,and as limited by such assurances. Indemnity against actual monetary loss or damage sustained or incurred by the
<br /> (2) Defects, liens, encumbrances, adverse claims or other matters (a) Assured claimant who has suffered loss or damage by reason of reliance upon the
<br /> whether or not shown by the public records, and which are created, suffered, assurances set forth in this Guarantee and only to the extent herein described,and
<br /> assumed or agreed to by one or more of the Assureds;(b)which result in no loss to subject to the exclusions stated in Paragraph 2.
<br /> the Assured:or(c)which do not result in the invalidity or potential invalidity of any The liability of the Company under this Guarantee to the Assured shall not
<br /> judicial or non-judicial proceeding which is within the scope and purpose of exceed the least of:
<br /> assurances provided
<br /> (a)the amount of liability stated in Schedule A;
<br /> 3. Notice of Claim to be Given by Assured Claimant-An Assured shall notify (b)the amount of the unpaid principal indebtedness securedby the mortgage
<br /> the Company promptly in writing in case knowledge shall come to an Assured of an Assured mortgagee, as limited or provided under Section 7 of these
<br /> hereunder of any claim of title or interest which is adverse to the title to the estate Conditions and Stipulations oras reduced under Section 10 of these Conditions
<br /> or interest,as stated herein,and which might cause loss or damage for which the and Stipulations, at the time the loss or damage assured against by this
<br /> Company may be liable by virtue of this Guarantee. If prompt notice shall not be Guarantee occurs,together with interest thereon;or
<br /> given to the Company,then all liability of the Company shall terminate with regard (c)the difference between the value of the estate or interest covered hereby as
<br /> to the matter or matters for which prompt notice is required;provided,however,that stated herein and the value of the estate or interest subject to any defect, lien or
<br /> failure to notify the Company shall in no case prejudice the rights of any Assured encumbrance assured against by this Guarantee.
<br /> under this Guarantee unless the Company shall be prejudiced by the failure and
<br /> then only to the extent of the prejudice.
<br /> 9. Limitation of Liability
<br /> . No Duty to Defend or Prosecute-The Company shall have no duty to defend (a)If the Company establishes the title,or removes the alleged defect, lien or
<br /> or prosecute any action or proceeding to which the Assured is a parry, encumbrance, or cures any other matter assured against by this Guarantee in
<br /> notwithstanding the nature of any allegation in such action or proceeding. reasonably diligent manner by any method, including litigation and the completion
<br /> of any appeals therefrom,it shall have fully performed its obligations with respect to
<br /> . Company's Option to Defend or Prosecute Actions; Duty of Assured that matter and shall not be liable for any loss or damage caused thereby.
<br /> Claimant to Cooperate. - Even though the Company has no duty to defend or
<br /> prosecute asset forth in Paragraph 4 above: consent,
<br /> In the event of any litigation by the Company or with the Company's
<br /> consent, the Company shall have no liability for loss or damage until there has
<br /> (a)The Company shall have the right, at its sole option and cost,to institute been a final determination by a court of competent jurisdiction,and disposition of all
<br /> and prosecute any action or proceeding,interpose a defense,as limited in(b),or to appeals therefrom,adverse to the title,as stated herein.
<br /> do any other act which in its opinion may be necessarULidesirable to establish the (c) The Companyof be liable for loss or damage to any Assured for
<br /> title to the estate or interest as stated herein,or to ntarily h the lien rights of the liability voluassu y the Assured in setting any claim or suit without the
<br /> Assured, or to prevent or reduce loss or damage to MF Assured. The Company prior written consent of the Company.
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