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(5 continued) the Assured shall not exceed the least of: If a payment on account of a claim does not fully
<br /> in the above paragraph, unless prohibited by law or 0 (a)the amount of liability stated in Schedule A or Over the loss of the Assured the Company shall be
<br /> governmental regulation, shall terminate any liability of in Part 2; subrogated to all rights and remedies of the Assured
<br /> the Company under this Guarantee to the Assured for (b) the amount of the unpaid principal indebted- after the Assured shall have recovered its principal,
<br /> that claim. ness secured by the mortgage of an Assured mortgagee, interest,and costs of collection.
<br /> 6. Options to Pa or Otherwise Settle Claims: as limited or provided under Section 6 of these 12. Arbitration.
<br /> p y Conditions and Stipulations or as reduced under Section
<br /> Termination of Liability. 9 of these Conditions and Stipulations, at the time the Unless prohibited by applicable law, either the
<br /> In case of a claim under this Guarantee, the loss or damage assured against by this Guarantee Company or the Assured may demand arbitration pur-
<br /> Company shall have the following additional options: occurs,together with interest theron;or suant to the Title Insurance Arbitration Rules of the
<br /> (a) To Pay or Tender Payment of the Amount of (c)the difference between the value of the estate American Arbitration Association. Arbitrable matters
<br /> Liability or to Purchase the Indebtedness. or interest covered hereby as stated herein and the value may include, but are not limited to,any controversy or
<br /> The Company shall have the option to pay or settle of the estate or interest subject to any defect, lien or claim between the Company and the Assured arising out
<br /> or compromise for or in the name of the Assured any encumbrance assured against by this Guarantee. of or relating to this Guarantee, any service of the
<br /> claim which could result in loss to the Assured within Company in connection with its issuance or the breach
<br /> the coverage of this Guarantee,or to pay the full amount 8. Limitation of Liability. of a Guarantee provision or other obligation.All arbitra-
<br /> of this Guarantee or, if this Guarantee is issued for the (a) If the Company establishes the title, or ble matters when the Amount of Liability is$1,000,000
<br /> benefit of a holder of a mortgage or a lienholder, the removes the alleged defect, lien or encumbrance, or or less shall be arbitrated at the option of either the
<br /> Company shall have the option to purchase the indebt- cures any other matter assured against by this Company or the Assured. All arbitrable matters when
<br /> edness secured by said mortgage or said lien for the Guarantee in a reasonably diligent manner by any the amount of liability is in excess of$1,000,000 shall
<br /> amount owing thereon,together with any costs,reason- method, including litigation and the completion of any be arbitrated only when agreed to by both the Company
<br /> able attorneys' fees and expenses incurred b the appeals therefrom, it shall have full and the Assured. The Rules in effect at Date of
<br /> Y p y y performed its
<br /> Assured claimant which were authorized by the obligations with respect to that matter and shall not be Guarantee shall be binding upon the parties.The award
<br /> may include attorneys'fees only if the laws of the state
<br /> Company up to the time of purchase. liable for any loss or damage caused thereby. in which the land is located permits a court 4o award
<br /> Such purchase, payment or tender of payment of (b)In the event of any litigation by the Company or attorneys'fees to a prevailing party.Judgment upon the
<br /> the full amount of the Guarantee shall terminate all Iia- with the Company's consent, the Company shall have award rendered by the Arbitrator(s) may be entered in
<br /> bility of the Company hereunder. In the event after no liability for loss or damage until there has been a final any court having jurisdiction thereof.
<br /> notice of claim has been given to the Company by the determination by a court of competent jurisdiction,and The law of the situs of the land shall apply to an
<br /> Assured the Company offers to purchase said indebted- disposition of all appeals therefrom,adverse to the title, arbitration under the Title Insurance Arbitration Rules.
<br /> ness,the owner of such indebtedness shall transfer and as stated herein.
<br /> assign said indebtedness, together with any collateral (c) The Company shall not be liable for loss or A copy of the Rules may be obtained from the
<br /> security,to the Company upon payment of the purchase damage to any Assured for liability voluntarily assumed Company upon request.
<br /> price. b the Assured in settling an claim or suit without the
<br /> Y g Y 13. Liability Limited to This Guarantee;
<br /> Upon the exercise by the Company of the option prior written consent of the Company. Guarantee Entire Contract.
<br /> provided for in Paragraph(a)•the Company's obligation
<br /> to the Assured under this Guarantee for the claimed loss 9. Reduction of Liability r Termination of (a)This Guarantee together with all endorsements,
<br /> or damage,other than to make the payment required in Liability. if any, attached hereto by the Company is the entire
<br /> that paragraph,shall terminate,including any obligation All payments under this Guarantee, except pay- Guarantee and contract between the Assured and the
<br /> to continue the defense or prosecution of any litigation ments made for costs, attorneys' fees and expenses Company. In interpreting any provision of this
<br /> for which the Company has exercised its options under pursuant to Paragraph 4 shall reduce the amount of Guarantee, this Guarantee shall be construed as a
<br /> Paragraph 4,and the Guarantee shall be surrendered to liability pro tanto. whole.
<br /> the Company for cancellation. (b) Any claim of loss or damage, whether or not
<br /> (b)To Pay or Otherwise Settle With Parties Other 10. Payment of Loss. based on negligence, or any action asserting such
<br /> Than the Assured or With the Assured Claimant. claim,shall be restricted to this Guarantee.
<br /> (a) No payment shall be made without producing
<br /> To pay or otherwise settle with other parties for or this Guarantee for endorsement of the payment unless (c) No amendment of or endorsement to this
<br /> in the name of an Assured claimant any claim assured the Guarantee has been lost or destroyed,in which case Guarantee can be made except by a writing endorsed
<br /> against under this Guarantee, together with any costs, proof of loss or destruction shall be furnished to the hereon or attached hereto signed by either the
<br /> attorneys' fees and expenses incurred by the Assured satisfaction of the Company. President, a Vice President,the Secretary, an Assistant
<br /> claimant which were authorized by the Company up to (b)When liability and the extent of loss or damage Secretary,or validating officer or authorized signatory of
<br /> the time of payment and which the Company is obligat- has been definitely fixed in accordance with these the Company.
<br /> ed to pay. Conditions and Stipulations,the loss or damage shall be 14. Notices,Where Sent.
<br /> Upon the exercise by the Company of the option payable within thirty(30)days thereafter.
<br /> provided for in Paragraph (b)the Company's obligation All notices required to be given the Company and
<br /> to the Assured under this Guarantee for the claimed loss 11. Subrogation Upon Payment or Settlement. any statement in writing required to be furnished the
<br /> or damage,other than to make the payment required in Whenever the Company shall have settled and Company shall include the number of this Guarantee
<br /> that paragraph,shall terminate,including any obligation paid a claim under this Guarantee, all right of subroga- and shall be addressed to the Company at 114 East Fifth
<br /> to continue the defense or prosecution of any litigation tion shall vest in the Company unaffected by any act of Street, Santa Ana,California 92701.
<br /> for which the Company has exercised its options under the Assured claimant.
<br /> Paragraph 4.
<br /> The Company shall be subrogated to and be
<br /> 7. Determination and Extent of Liability. entitled to all rights and remedies which the Assured
<br /> would have had against any person or property in
<br /> This Guarantee is a contract of Indemnity against respect to the claim had this Guarantee not been issued.
<br /> actual monetary loss or damage sustained or incurred If requested by the Company,the Assured shall transfer
<br /> by the Assured claimant who has suffered loss or dam- to the Company all rights and remedies against any per-
<br /> age by reason of reliance upon the assurances set forth son or property necessary in order to perfect this right
<br /> in this Guarantee and only to the extent herein of subrogation.The Assured shall permit the Company
<br /> described,and subject to the Exclusions From Coverage to sue,compromise or settle in the name of the Assured
<br /> of This Guarantee. and to use the name of the Assured in any transaction
<br /> The liability of the Company under this Guarantee or litigation involving these rights or remedies.
<br />
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