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may take any appropriate action under the terms of this Guarantee,whether or not
<br /> it shall be liable hereunder, and shall not thereby concede liability or waive any 10. Reduction of Liabill or Termination of Liability-All payments under this
<br /> provision of this Guaranlee. If the Company shall elfte its rights under this Guarantee, except pay made for costs, attorneys' fees and expenses
<br /> paragraph,it shAll do so diligently. W pursuant to Paragraph 5 i6reduce the amount of liability pro tanto.
<br /> (b) If the Company elects to exercise its options as stated in Paragraph 5(a) 11. Payment of Loss
<br /> the Company shall have the right to select counsel of its choice(subject to the right (a) No payment shall be made without producing this Guarantee for
<br /> of such Assured to object for reasonable cause)to represent the Assured and shall endorsement of the payment unless the Guarantee has been lost or destroyed, in
<br /> not be liable for and will not pay the fees of any other counsel,nor will the Company which case proof of loss or destruction shall be furnished to the satisfaction of the
<br /> pay any fees,costs or expenses incurred by an Assured in the defense of those Company.
<br /> causes of action which allege matters not covered by this Guarantee.
<br /> (c) Whenever the Company shall have brought an action or interposed a (b)When liability and the extent of loss or damage has been definitely fixed in
<br /> defense as permitted by the provisions of this Guarantee, the Company may accordance with these Conditions and Stipulations, the loss or damage shall be
<br /> pursue any litigation to final determination by a court of competent jurisdiction and payable within thirty(30)days thereafter.
<br /> expressly reserves the right, in its sole discretion, to appeal from an adverse 12. Subrogation Upon Payment or Settlement - Whenever the Company shall
<br /> judgement or order. have settled and paid a claim under this Guarantee, all right of subrogation shall
<br /> (d) In all cases where this Guarantee permits the Company to prosecute or vest in the Company unaffected by any act of the Assured claimant.
<br /> provide for the defense of any action or proceeding,an Assured shall secure to the The Company shall be subrogated to and be entitled to all rights and remedies
<br /> Company the right to so prosecute or provide for the defense of any action or which the Assured would have had against any person or property in respect to the
<br /> proceeding,and all appeals therein,and permit the Company to use,at its option, claim had this Guarantee not been issued. If requested by the Company, the
<br /> the name of such Assured for this purpose.Whenever requested by the Company, Assured shall transfer to the Company all rights and remedies against any person
<br /> an Assured,at the Company's expense,shall give the Company all reasonable aid or property necessary in order to perfect this right of subrogation.The Assured shall
<br /> in any action or proceeding,securing evidence,obtaining witnesses,prosecuting or permit the Company to sue,compromise or settle in the name of the Assured and
<br /> defending the action or lawful act which in the opinion of the Company may be to use the name of the Assured in any transaction or litigation involving these rights
<br /> necessary or desirable to establish the title to the ,estate or interest as stated or remedies.
<br /> herein,or to establish the lien rights of the Assured. If the Company is prejudiced
<br /> by the failure of the Assured to furnish the required cooperation, the Company's It a payment on account of a claim does not fully cover the loss of the Assured
<br /> obligations to the Assured under the Guarantee shall terminate. 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 /> 6. Proof of Loss or Damage-In addition to and after the notices required under
<br /> Section 3 of these Conditions and Stipulations have been provided to the 13. Arbitration - Unless prohibited by applicable law, either the Company or the
<br /> Company,a proof of loss or damage signed and sworn to by the Assured shall be Assured may demand arbitration pursuant to the Title Insurance Arbitration Rules of
<br /> furnished to the Company within ninety(90)days after the Assured shall ascertain the American Arbitration Association. Arbitrable matters may include, but are not
<br /> the facts giving rise to the loss or damage. The proof of loss or damage shall limited to,any controversy or claim between the Company and the Assured arising
<br /> describe the matters covered by this Guarantee which constitute the basis of loss out of or relating to this Guarantee,any service of the Company in connection with
<br /> or damage and shall state, to the extent possible, the basis of calculating the its issuance or the breach of a Guarantee provision or other obligation.All arbitrable
<br /> amount of the loss or damage. If the Company is prejudiced by the failure of the matters when the Amount of Liability is$1,000,000 or less shall be arbitrated at the
<br /> Assured to provide the required proof of loss or damage,the Company's obligation option of either the Company or the Assured. All arbitrable matters when the
<br /> to such Assured under the Guarantee shall terminate.In addition,the Assured may amount of liability is in excess of$1,000,000 shall be arbitrated only when agreed
<br /> reasonably be required to submit to,examination under oath by any authorized to by both the Company and the Assured.The Rules in effect at Date of Guarantee
<br /> representative of the Company and shall produce for examination, inspection and shall be binding upon the parties.The award may include attorneys'fees only if the
<br /> copying, at such reasonable times and places as may be designated by any laws of the state in which the land is located permits a court to award attorneys'
<br /> authorized representative of the Company, all records, books, ledgers, checks, fees to a prevailing party.Judgement upon the award rendered by the Arbftrator(s)
<br /> correspondence and memoranda,whether bearing a date before or after Date of may be entered in any court having jurisdiction thereof.
<br /> Guarantee,which reasonably pertain to the loss or damage. Further,if requested The law of the situs of the land shall apply to an arbitration under the Title A
<br /> by any authorized representative of the Company, the Assured shall grant its copy of the Rules may be obtained from the Company upon request.
<br /> permission, in writing, for any authorized representative of the Company to
<br /> examine, inspect and copy all records, books, ledgers, checks, correspondence 14. Liability Limited to This Guarantee;Guarantee Entire Contract
<br /> and memoranda in the custody or control of a third party,which reasonably pertain
<br /> to the loss or damage. All information designated as confidential by the Assured (a)This Guarantee together with all endorsements, if any,attached hereto by
<br /> provided to the Company pursuant to this Section shall not be disclosed to others the Company is the entire Guarantee and contract between the Assured and the
<br /> unless, in the reasonable judgement of the Company, it is necessary in the Company. In interpreting any provision of this Guarantee,this Guarantee shall be
<br /> administration of the claim. Failure of the Assured to submit for examination under construed as a whole.
<br /> oath,produce other reasonably requested information or grant permission to secure (b)Any claim of loss or damage,whether or not based on negligence,or any
<br /> reasonably necessary information from third parties as required in the above action asserting such claim,shall be restricted to this Guarantee.
<br /> paragraph,unless prohibited by law or governmental regulation,shall terminate any
<br /> liability of the Company under this Guarantee to the Assured for that claim. (c) No amendment of or endorsement to this Guarantee can be made except
<br /> by a writing endorsed hereon or attached hereto signed by either the President,a
<br /> 7. Options to Pay or Otherwise Settle Claims: Termination of Liability- In Vice President, the Secretary, an Assistant Secretary, or validating officer or
<br /> case of a claim under this Guarantee, the Company shall have the following authorized signatory of the Company
<br /> additional options: 15. Notices,Where Sent-All notices required to be given the Company and any
<br /> (a)To Pay or Tender Payment of the Amount of Liability or to Purchase the statement in writing required to be furnished the Company shall include the number
<br /> Indebtedness. of this Guarantee and shall be addressed to the Company at P.O. Box 2029
<br /> The Company shall have the option to pay or settle or compromise for or in Houston,Texas 77252-2029.
<br /> STEWART TITLE
<br /> Page 4 GUARANTY COMPANY
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