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(5 continued) i 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 10over 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 /> as limited or provided under Section 6 of these 12. Arbitration.
<br /> 6. Options to Pay or Otherwise Settle Claims: 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 /> of the estate or interest subject to any defect, lien or claim between the Company and the Assured arising out
<br /> The Company shall have the option to pay or settle of or relating to this Guarantee, any service of the
<br /> or compromise for or in the name of the Assured an encumbrance assured against by this Guarantee.
<br /> P Y Company in connection with its issuance or the breach
<br /> claim which could result in loss to the Assured within , Limitation of Liability. of a Guarantee provision or other obligation.All arbitra-
<br /> the coverage of this Guarantee,or to pay the full amount ble matters when the Amount of Liability is$1,000,000
<br /> of this Guarantee or, if this Guarantee is issued for the (a) If the Company establishes the title, or or less shall be arbitrated at the option of either the
<br /> benefit of a holder of a mortgage or a lienholder, the removes the alleged defect, lien or encumbrance, or Company or the Assured. All arbitrable matters when
<br /> Company shall have the option to purchase the indebt- cures any other matter assured against by this the amount of liability is in excess of$1,000,000 shall
<br /> edness secured by said mortgage or said lien for the Guarantee in a reasonably diligent manner by any be arbitrated only when agreed to by both the Company
<br /> amount owing thereon,together with any costs,reason- method, including litigation and the completion of any and the Assured. The Rules in effect at Date of
<br /> able attorneys' fees and expenses incurred by the appeals therefrom, it shall have fully performed its Guarantee shall be binding upon the parties.The award
<br /> Assured claimant which were authorized by the obligations with respect to that matter and shall not be 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 to 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 an collateral A copy of the Rules may be obtained from the
<br /> y (c) The Company shall not be liable for loss or Company upon request.
<br /> security,to the Company upon payment of the purchase damage to any Assured for liability voluntarily assumed
<br /> price. by the Assured in settling any claim or suit without the 13. Liability Limited to ThisGuarantee;
<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 f Liability r Termination o (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 Allp -except p ments under this Guarantee, t p ay Guarantee and contract between the Assured and the to continue the defense or prosecution of any litigation meets made for costs, attorneys' fees and expenses Company. In interpreting any provision of this
<br /> for which the Company has exercised its options underGuarantee, this Guarantee shall be construed as a
<br /> Paragraph 4,and the Guarantee shall be surrendered to Pursuant to Paragraph 4 shall reduce the amount of whole.
<br /> P liability pro tanto.
<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 1 . Payment of Loss. based on negligence, or any action asserting such
<br /> Than the Assured or With the Assured Claimant. (a) No payment shall be made without producing claim,shall be restricted to this Guarantee.
<br /> (c) No amendment of or endorsement to this
<br /> To pay or otherwise settle with other parties for or this Guarantee for endorsement of the payment unless Guarantee can be made except by a writing endorsed
<br /> in the name of an Assured claimant any claim assured the Guarantee has been lost or destroyed,in which case hereon or attached hereto signed by either the
<br /> against under this Guarantee,together with any costs, proof of loss or destruction shall be furnished to the President, a Vice President,the Secretary, an Assistant
<br /> attorneys'fees and expenses incurred by the Assured satisfaction of the Company. Secretary,or validating officer or authorized signatory of
<br /> claimant which were authorized by the Company up to ( )b When liability and the extent of loss or damage
<br /> the time of payment and which the Company is obligat- hsthe Company.
<br /> as been definitely fixed in accordance with these
<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 tobegiven 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 Company shall include the numberofthis Guarantee
<br /> Whenever the Company shall have settled and and shall be addressed to the Company at 1 First
<br /> that paragraph,shall terminate,including any obligation paid a claim under this Guarantee, all right of subroga- American Way,Santa Ana,California 92707.
<br /> to continue the defense or prosecution of any litigation tion shall vest in the Company unaffected by any act of
<br /> for which the Company has exercised its options under the Assured claimant.
<br /> Paragraph 4. 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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