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conditions and stipulation continued and concluded
<br /> (b) In the event of any litigation, including litigation by the Company or If loss should result from any ad of the insured claimant,as stated above,
<br /> with the Company's consent, the Company shall have no liability for loss or that act shall not void this policy, but the Company, in that event, shall be
<br /> damage until there has been a final determination by a court of competent required to pay only that part of any losses insured against by this policy which
<br /> '.diction, and disposition of all appeals therefrom, adverse to the title, or, if shall exceed the amount, if any, lost to the Company by reason of the impair
<br /> icoble, to the lien of the insured mortgage, as insured. ment by the insured claimant of the Company's right of subrogation.
<br /> (c) The Company shall not be liable for loss or damage to any insured for (b) The Insured's Rights and Limitations.
<br /> liability voluntarily assumed by the insured in settling any claim or suit without Notwithstanding the foregoing, the owner of the indebtedness secured by
<br /> .the prior written consent of the Company. an insured mortgage, provided the priority of the lien of the insured mortgage
<br /> (d) The Company shall not be liable to an insured lender for: (i) any or its enforceability is not affected, may release or substitute the personal lio-
<br /> indebtedness created subsequent to Date of Polity except for advances made to bility of any debtor or guarantor, or extend or otherwise modify the terms of
<br /> protect the lien of the insured mortgage and secured thereby and reasonable payment, or release a portion of the estate or interest from the lien of the
<br /> amounts expended to prevent deterioration of improvements;or(ii)construction insured mortgage, or release any collateral security for the indebtedness.
<br /> loan advances made subsequent to Date of Policy, except construction loon When the permitted ads of the insured claimant occur and the insured has
<br /> advances made subsequent to Date of Policy for the purpose of financing in knowledge of any claim of title or interest adverse to the title to the estate or
<br /> whole or in port the construction of an improvement to the land which at Date of interest or the priority or enforceability of the lien of on insured mortgage,as
<br /> Policy were secured by the insured mortgage and which the insured was and insured, the Company shall be required to pay only that part of any losses
<br /> continued to be obligated to advance at and after Date of Policy. insured against by this policy which shall exceed the amount, if any, lost to the
<br /> 9. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF Company by reason of the impairment by the insured claimant of the Company's
<br /> LIABILITY. right of subrogation.
<br /> (a) All payments under this policy, except payments made for costs, attor• (c) The Company's Rights Against Non-insured Obligors.
<br /> neys' fees and expenses;shall reduce the amount of insurance pro tanto. How- The Company's right of subrogation against non-insured obligors shall exist
<br /> ever, as to on insured lender, any payments made prior to the acquisition of and shall include, without limitation, the rights of the insured to indemnities,
<br /> title to the estate or interest as provided in Section 2(a)of these Conditions and guaranties, other policies of insurance or bonds, notwithstanding any terms or
<br /> Stipulations shall not reduce pro tonto the amount of insurance afforded under conditions contained in those instruments which provide for subrogation rights by
<br /> this policy as to any such insured, except to the extent that the payments reduce reason of this policy.
<br /> the amount of the indebtedness secured by the insured mortgage. The Company s right of subrogation shall not be avoided by acquisition of
<br /> (b) Payment in part by any person of the principal of the indebtedness,or an insured mortgage by an obligor (except on obligor described in Section
<br /> any other obligation secured by the insured mortgage,or any voluntary partial 1(a)(ii)of these Conditions and Stipulations)who acquires the insured mortgage
<br /> satisfaction or release of the insured mortgage, to the extent of the payment, as a result of an indemnity, guarantee, other policy of insurance,or bond and
<br /> satisfaction or release, shall reduce the amount of insurance pro tanto. The the obligor will not be an insured under this policy, notwithstanding Section
<br /> amount of insurance may thereafter be increased by accruing interest and 1(o)(i)of these Conditions and Stipulations.
<br /> advances made to protect the lien of the insured mortgage and secured there- 13. ARBITRATION.
<br /> by, with interest thereon, provided in no event shall the amount of insurance Unless prohibited by applicable law, either the Company or the insured
<br /> be greater than the Amount of Insurance stated in Schedule A. may demand arbitration pursuant to the Title Insurance Arbitration Rules of the
<br /> (c) Payment in full by any person or the voluntary satisfaction or release of American Arbitration Association. Arbitrable matters may include, but are not
<br /> the insured mortgage shall terminate all liability of the Company to an insured . limited to,any controversy or claim between the Company and the insured aris-
<br /> lender except as provided in Section 2(o)of these Conditions and Stipulations. ing out of or relating to this policy, any service of the Company in connection
<br /> LIABILITY NONCUMULATIVE. with its issuance or the breach of a policy provision or other obligation. All
<br /> it is expressly understood that the amount of insurance under this policy arbitrable matters when the Amount of Insurance is$1,000,000 or less shall be
<br /> snail be reduced by any amount the Company may pay under any policy insur- arbitrated at the option of either the Company or the insured. All arbitrable
<br /> ing o mortgage to which exception is token in Schedule B or to which the insured matters when the Amount of Insurance is in excess of$1,000,000 shall be arbi-
<br /> has agreed, assumed, or token subject, or which is hereafter executed by on trated only when agreed to by both the Company and the insured, Arbitration
<br /> insured and which is a charge or lien on the estate or interest described or pursuant to this policy and under the Rules in effect on the date the demand for
<br /> referred to in Schedule A,and the amount so paid shall be deemed a payment arbitration is mode or,at the option of the insured,the Rules in effect at Date of
<br /> under this policy tothe insured owner. Policy shall be binding upon the parties.The award may include attorneys'fees
<br /> The provisions of this Section shall not apply to an insured lender,.ispless only if the laws of the state in which the land is located permit a court to award
<br /> such insured acquires title to said estate or interest in satisfaction of the attorneys' fees to a prevailing party. Judgment upon the award rendered by
<br /> indebtedness secured by an insured mortgage. the Arbitrator(s) may be entered in ony court having jurisdiction thereof,
<br /> •11. PAYMENT OF LOSS. The law of the situs of the land shall apply to an arbitration under the Title
<br /> (a) No payment shall be made without producing this policy far endorse- Insurance Arbitration Rules.
<br /> ment of the payment unless the policy has been lost or destroyed,in which case A copy of the Rules matt be obtained from the Company upon request.
<br /> proof of loss or destruction shall be furnished to the satisfaction of the 1U. LIABILITY LIMITED TO THIS POUCY; POLICY ENTIRE CONTRACT.
<br /> Company. (a) This policy together with all endorsements, if any, attached hereto by
<br /> (b) When liability and the extent of loss or damage has been definitely the Company is the entire policy and contract between the insured and the
<br /> fixed in accordance with these Conditions and Stipulations,the lass or damage Company. In interpreting any provision of this policy, this policy shall be
<br /> shall be payable within 30 days thereafter, construed as a whole.
<br /> 12. SUBROGATION UPON PAYMENT OR SETTLEMENT. (b) Any claim of loss or damage,whether or not based on negligence,and
<br /> (a) The Company's Right of Subrogation which arises out of the status of the lien of the insured mortgage or of the title
<br /> Whenever the Company shall have settled and paid a claim under this to the estate or interest covered hereby or by any action asserting such claim,
<br /> policy,all right of subrogation shall vest in the Company unaffected by any act shall be restricted to this policy.
<br /> of the insured claimant. (c) No amendment of or endorsement to this policy can be made except by
<br /> a writing endorsed hereon or attached hereto signed by either the President,a
<br /> The Company shall be subrogated to and be entitled to all rights and
<br /> Vice President, the Secretory, an Assistant Secretary, or validating officer or
<br /> remedies which the insured claimant would have had.against any person or
<br /> property in respect to the claim had this policy not been issued.If requested by author zed signatory of the Company.
<br /> the Company,the insured claimant shall transfer to the Company all rights and 15. SEVERABIUTY.
<br /> remedies against any person or property necessary in order to perfect this right In the event any provision of the policy is held invalid or unenforceable
<br /> of subrogation. The insured claimant shall permit the Company to sue, cony under applicable law, the policy shall be deemed not to include that provision
<br /> promise or settle in the name of the insured claimant and to use the name of.the and all other provisions shall remain in full force and effect.
<br /> insured claimant in any transaction or litigation involving these rights;or 16. NOTICES,WHERE SENT.
<br /> remedies. . All notices required to be given the Company and any statement in writing
<br /> If a payment on account of a claim does not fully cover the loss of the required to be furnished the Company shall include the number of this policy
<br /> d claimant, the Company shall be subrogated(i)as to an insured owner, and shall be addressed to the Company at P.O. Box 2029, Houston, Texas
<br /> 1..-"r rights and remedies in the proportion which the Company's payment bears 77252-2029, and identify this policy by its printed policy serial number which
<br /> to the whole amount of the loss; and (ii) as to an insured lender, to all rights appears on the bottom of the front of the first page of this policy.
<br /> and remedies of the insured claimant after the insured,claimant shall hove re-
<br /> covered its principal, interest, and costs of collection.
<br /> . — ., ry
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