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GUARANTEE CONDITIONS AND STIPULATIONS
<br /> 1. DEFINITION OF TERMS. Company pay any fees,costs or expenses incurred by an Assured in the defense
<br /> The following terms when used in the Guarantee mean: of those causes of action which allege matters not covered by this Guarantee.
<br /> (a)the"Assured":the party or parties named as the Assured in this Guarantee, (c)Whenever the Company shall have brought an action or interposed a defense
<br /> or on a supplemental writing executed by the Company. as permitted by the provisions of this Guarantee,the Company may pursue any
<br /> (b)"land":the land described or referred to in Schedule(A)(C)or in Part 2,and litigation to final determination by a court of competent jurisdiction and
<br /> improvements affixed thereto which by law constitute real property.The term expressly reserves the right,in its sole discretion,to appeal from an adverse
<br /> "land"does not include any property beyond the lines of the area described or judgment or order.
<br /> referred to in Schedule(A)(C)or in Part 2,nor any right,title,interest,estate or (d)In all cases where this Guarantee permits the Company to prosecute or provide
<br /> easement in abutting streets,roads,avenues,alleys,lanes,ways,or waterways. for the defense of any action or proceeding,an Assured shall secure to the
<br /> (c)"mortgage":mortgage,deed of trust,trust deed,or other security instrument. Company the right to so prosecute or provide for the defense of any action or
<br /> (d)"public records":records established under state statutes at Date of Guarantee proceeding,and all appeals therein,and permit the Company to use,at its option,
<br /> for the purpose of imparting constructive notice of matters relating to real the name of such Assured for this purpose. Whenever requested by the
<br /> property to purchasers for value and without knowledge. Company,an Assured,at the Company's expense,shall give the Company all
<br /> (e)"date":the effective date. reasonable aidin any action orproceeding,securing evidence,obtaining witnesses,
<br /> prosecuting or defending the action or lawful act which in the opinion of the
<br /> 2. EXCLUSIONS FROM COVERAGE OF THIS GUARANTEE. Company may be necessary or desirable to establish the title to the estate or
<br /> The Company assumes no liability for loss or damage by reason of the following: interest as stated herein,or to establish the lien rights of the Assured. If the
<br /> (a)Taxes or assessments which are not shown as existing liens by the records of Company is prejudiced by the failure of the Assured to famish the required
<br /> any taxing authority that levies taxes or assessments on real property or by the cooperation,the Company's obligationsto the Assuredunderthe Guarantee shall
<br /> public records. terminate.
<br /> (b)(1)Unpatented mining claims;(2)reservations or exceptions in patents or in
<br /> Acts authorizing the issuance thereof,(3)water rights,claims or title to water: 6. PROOF OF LOSS OR DAMAGE.
<br /> whether or not the matters excluded by(1),(2)or(3)are shown by the public In addition to and after the notices required under Section 3 of these Conditions
<br /> records. and Stipulations have been provided to the Company,a proof of loss or damage
<br /> (c)Assurances to title to any property beyond the lines of the land expressly signed and sworn to by the Assured shall be famished to the Company within ninety
<br /> described in the description set forth in the Schedule(A)(C)or in Part 2 of this (90)days after the Assured shall ascertain the facts giving rise to the loss or damage.
<br /> Guarantee,or title to streets,roads,avenues,lanes,ways or waterways in which The proof of loss or damage shall describe the matters covered by this Guarantee
<br /> such land abuts,or the right to maintain therein vaults,tunnels,ramps orany other which constitute the basis of loss or damage and shall state,to the extent possible,
<br /> structure or improvement;or any rights or easements therein unless such the basis of calculating the amount of the loss or damage. If the Company is
<br /> property,rights or easements are expressly and specifically set forth in said prejudiced by the failure of the Assured to provide the required proof of loss or
<br /> description. damage, the Company's obligation to such assured under the Guarantee shall
<br /> (d)(1)Defects,liens,encumbrances oradverqeclaims against the title,if assurances terminate. In addition, the Assured may reasonably be required to submit to
<br /> are provided as to such title,and as limited by such assurances. (2)Defects, examination under oath by any authorized representative of the Company and shall
<br /> liens,encumbrances,adverse claims or other matters(a)whether or not shown produce for examination, inspection and copying,at such reasonable times and
<br /> by the public records,and which are created,suffered,assumed or agreed to by places as may be designated by any authorized representative of the Company,all
<br /> one or more of the Assureds-,(b)which result in no loss to the Assured;or(c) records,books,ledgers,checks,correspondence and memoranda,whether bearing
<br /> which do no result in the invalidity or potential invalidity of any judicial or non- a date before or after Date of Guarantee,which reasonably pertain to the loss or
<br /> judicial proceeding which is within the scope and purpose of assurances damage.Further,if requested by any authorized representative of the Company,the
<br /> provided. Assured shall grant its permission,in writing,for any authorized representative of
<br /> the Company to examine,inspect and copy all records,books,ledgers,checks,
<br /> 3. NOTICE OF CLAIM TO BE GIVEN BY ASSURED CLAIMANT. correspondence and memoranda in the custody or control of a third party,which
<br /> An Assured shall notify the Company promptly in writing in case knowledge reasonably pertain to the loss or damage.All information designated as confidential
<br /> shall come to an Assured hereunder of any claim of title or interest which is adverse by the Assured provided to the Company pursuant to this Section shall not be
<br /> to the title to the estate or interest,as stated herein,and which might cause loss or disclosed to others unless, in the reasonable judgment of the Company, it is
<br /> damage for which the Company may be liable by virtue of this Guarantee.If prompt necessary in the administration of the claim.Failure of the Assured to submit for
<br /> notice shall not be given to the Company,then all liability of the Company shall examination under oath,produce other reasonably requested information or grant
<br /> terminate with regard to the matter or matters for which prompt notice is required; permission to secure reasonably necessary information from thirdpartiesas required
<br /> provided,however,that failure to notify the Company shall in no case prejudice the in the above paragraph,unless prohibited by law or governmental regulation,shall
<br /> rights of any Assured under this Guarantee unless the Company shall be prejudiced terminate any liability of the Company under this Guarantee to the Assured for that
<br /> by the failure and then only to the extent of the prejudice. claim.
<br /> 4. NO DUTY TO DEFEND OR PROSECUTE. 7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS:
<br /> The Company shall have no duty to defend or prosecute any action or proceeding TERMINATION OF LIABILITY.
<br /> to which the Assured is a party,notwithstanding the nature of any allegation in In case of a claim under this Guarantee,the Company shall have the following
<br /> such action or proceeding. additional options:
<br /> (a)To Pay or Tender Payment of the Amount of Liability or to Purchase the
<br /> 5. COMPANY'S OPTION TO DEFEND OR PROSECUTE ACTIONS; Indebtedness.
<br /> DUTY OF ASSURED CLAIMANT TO COOPERATE. The Company shall have the option to pay or settle or compromise for or in
<br /> Even though the Company has no duty to defend or prosecute as set forth in the name of the Assured any claim which could result in loss to the Assured
<br /> Paragraph 4 above: within the coverage of this Guarantee,or to pay the full amount of this Guarantee
<br /> (a)The Company shall have the right,at its sole option and cost,to institute and or,if this Guarantee is issued for the benefit of a holder of a mortgage or a
<br /> prosecute any action or proceeding,interpose a defense,as limited in(b),or to lienholder,the Company shall have the option to purchase the indebtedness
<br /> do any other act which in its opinion may be necessary or desirable to establish secured by said mortgage orsaid lien for the amount owing thereon,together with
<br /> the title to the estate or interest as stated herein,or to establish the lien rights of any costs,reasonable attorneys'fees and expenses incurred by the Assured
<br /> the Assured,or to prevent orreduce loss or damage to the Assured.The Company claimant which were authorized by the Company up to the time of purchase.
<br /> may take any appropriate action under the terms of this Guarantee,whether or Such purchase,payment or tender of payment of the full amount of the Guarantee
<br /> not it shall be liable hereunder,and shall not thereby concede liability or waive shall terminate all liability of the Company hereunder. In the event after notice
<br /> any provision of this Guarantee. If the Company shall exercise its rights under of claim has been given to the Company by the Assured the Company offers to
<br /> this paragraph,it shall do so diligently. purchase said indebtedness,the owner of such indebtedness shall transfer and
<br /> (b)If the Company elects to exercise its options as stated in Paragraph 5(a)the assign said indebtedness,together with any collateral security,to the Company
<br /> Company shall have the right to select counsel f* ho'ce(subject to the right upon payment of the p price.
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<br /> of such Assured to object forreasonable nt the Assured and shall
<br /> not be liable for and will not pay the fees of any#oe,counsel,nor will the
<br /> cause)
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