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<br />CONDITIONS (continued and concluded)
<br />(c) The Company shall not be liable for loss or damage to the Insured for liability voluntarily assumed by the Insured in settling any claim or suit without the prior
<br />written consent of the Company.
<br />10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY.
<br />(a) All payments under this policy. except payments made for costs, attorneys' fees and expenses, shall reduce the Amount of Insurance by the amount of the pay-
<br />me~owever, any payments made prior to the acquisition of Title as provided in Section 2 of these Conditions shall not reduce the Amount of Insurance afforded under
<br />thi! y except to the extent that the payments reduce the Indebtedness.
<br />,Ll) The voluntary satisfaction or release of the Insured Mortgage shall terminate all liability of the Company except as provided in Section 2 of these Conditions.
<br />11. PAYMENT OF LOSS.
<br />When liability and the extent of loss or damage have been definitely fixed in accordance with these Conditions, the payment shall be made within 30 days.
<br />12. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT.
<br />(a) The Company's Right to Recover.
<br />Whenever the Company shall have settled and paid a claim under this policy, it shall be subrogated and entitled to the rights of the Insured Claimant in the Title or
<br />Insured Mortage and all other rights and remedies in respect to the claim that the Insured Claimant has against any person or property, to the extent of the amount of any
<br />loss, costs, attorney's fees and expenses paid by the Company. If requested by the Company, the Insured Claimant shall execute documents to evidence the transfer tQ,the
<br />Company of these rights and remedies. The Insured Claimant shall permit the Company to sue, compromise or settle in the name of the Insured Claimant and to use the
<br />name of the Insured Claimant in any transaction or litigation involving these rights and remedies.
<br />If a payment on account of a claim does not fully cover the loss of the Insured Claimant, the Company shall defer the exercise of its right to recover until after
<br />the Insured Claimant shall have recovered its loss.
<br />(b) The Insured's Rights and Limitations
<br />(i) The owner of the Indebtedness may release or substitute the personal liability of any debtor or guarantor, extend or otherwise modify the terms of payment,
<br />release a portion of the Title from the lien of the Insured Mortgage, or release any collateral security for the Indebtedness, if it does not affect the enforceabilty 0;
<br />priority of the lien of the Insured Mortgage.
<br />(ii) If the Insured exercises a right provided in (b)(i) , but has Knowledge of any claim adverse to the Title or the lien of the Insured Mortgage insured against by
<br />this policy, the Company shall be required to pay only that part of any losses insured against by this policy that shall exceed the amount, if any, lost to the Company by
<br />reason of the impairment by the Insured Claimant of the Company's right of subrogation.
<br />(c) The Company's Rights Against Non-Insured Obligors.
<br />The Company's right of subrogation includes the Insured's rights against non-insured obligors including the rights of the Insured to indemnities, guaranties, other
<br />policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that address subrogation rights. The Company's right of subrogation
<br />shall not be avoided by acquistion of the Insured Mortgage by an obligor (except an obligor described in Section l(e)(i)(F) of these Conditions) who acquires the
<br />Insured Mortgage as a result of an indemnity, guarantee, other policy of insurance, or bond and the obligor will not be an Insured under this policy.
<br />13. ARBITRATION.
<br />Either the Company or the Insured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of the
<br />American Land Title Association ("Rules"). Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies of other person.
<br />Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service in
<br />connection with its issuance or the breach of a policy provision, or to any other controversy or claim arising out of the transaction giving rise to this policy. All arbitrable
<br />matters when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the option of either the Company or the Insured, unless the Insured is an individual person
<br />(as distinguished from an Entity). All arbitrable matters when the Amount of Insurance is in excess of $2,000,000 shall be arbitrated only when agreed to by both the
<br />Company and the Insured. Arbitration pursuant to this policy and under the Rules shall be binding upon the parties. Judgment upon the award rendered by the Arbitrator(s)
<br />maJl"'-.entered in any court of competent jurisdiction.
<br />14. .BILITY LIMITED TO THIS POLICY: POLICY ENTIRE CONTRACT.
<br />\a) This policy together with all endorsements, if any, attached to it by the Company is the entire policy and contract between the Insured and the Company. In inter-
<br />preting any provision of this policy, this policy shall be construed as a whole.
<br />(b) Any claim of loss or damage that arises out of the status of the Title or lien of the Insured Mortgage or by any action asserting such claim, shall be restricted to
<br />this policy.
<br />(c) Any amendment of or endorsement to this policy must be in writing and authenticated by an authorized person, or expressly incorporated by Schedule A of
<br />this policy.
<br />(d) Each endorsement to this policy issued at any time is made a part of this policy and is subject to all of its terms and provision. Except as the endorsement
<br />expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsement, (iii) extend the Date of Policy or (iv) increase.the
<br />Amount of Insurance. Each Commitment, endorsement or other form, or provision in the Schedules to this policy that refers to a term defined in Section 1 of the Conditions
<br />shall be deemed to refer to the term regardless of whether the term is capitalized in the Commitment. endorsement or other form, or Schedule. Each Commitment, endorse-
<br />ment or other form, or provision in the Schedules that refers to the Conditions and Stipulations shall be deemed to refer to the Conditions of this policy.
<br />15. SEVERABILITY.
<br />In the event any provision of this policy, in whole or in part, is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that
<br />provision or such part held to be invalid and all other provisions shall remain in full force and effect.
<br />16. CHOICE OF LAW; FORUM.
<br />(a) Choice of Law: The Insured acknowledges the Company has underwritten the risks covered by this policy and determined the premium charged therefor in
<br />reliance upon the law affecting interests in real property and applicable to the interpretation, rights, remedies or enforcement of policies of title insurance of the jurisdiction
<br />where the Land is located.
<br />Therefore. the court or an arbitrator shall apply the law of the jurisdiction where the Land is located to determine the validity of claims against the Title or the lien of
<br />the Insured Mortgage that are adverse to the Insured, and in interpreting and enforcing the terms of this policy. In neither case shall the court or arbitrator apply its conflicts
<br />of laws principles to determine the applicable law.
<br />(b) Choice of Forum: Any litigation or other proceeding brought by the Insured against the Company must be filed only in a state or federal court within the United
<br />States of America or its territories having appropriate jurisdiction.
<br />17. NOTICES, WHERE SENT.
<br />Any notice of claim and any other notice or statement in writing required to be given the Company under this Policy must be given to the Company at P.O. Box 2029,
<br />Houston, Texas 77252-2029.
<br />
<br />COMPLAINT NOTICE.
<br />Should any dispute arise about your premium or about a claim that you have filed, contact the agent or write to the Company
<br />that issued the policy. If the problem is not resolved, you also may write the Texas Department of Insurance, P.O. Box 149091,
<br />Austin, TX 78714-9091, Fax No. (512) 475-1771. This notice of complaint procedure is for information only and does not become
<br />a ,..-. or condition of this policy.
<br />
<br />STEW ART TITLE
<br />GUARANTY COMPANY
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