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Order No.: 08026699 -920 -CMM Guarantee No.: CA-SFXFC-IMP-81021-1-15-08026699
<br />GUARANTEE CONDITIONS AND STIPULATIONS
<br />1. DEFINITION OF TERMS
<br />The following terms when used in this Guarantee mean:
<br />(a) "land": the land described, specifically or by
<br />reference, in this Guarantee and Improvements affixed
<br />thereto which by law constitute real property;
<br />(b) "public records": those records which impart
<br />constructive notice of matters relating to said land;
<br />(c) "date the effective date;
<br />(d) "the Assured": the party or parties named as the
<br />Assured in this Guarantee, or in a supplemental writing
<br />executed by the Company;
<br />(e) "mortgage": mortgage, deed of trust, trust deed,
<br />or other security instrument.
<br />2. EXCLUSIONS FROM COVERAGE OF THIS
<br />GUARANTEE
<br />The Company assumes no liability for loss or damage
<br />by reason of the following:
<br />(a) Taxes or assessments which are not shown as
<br />existing liens by the records of any taxing authority that
<br />levies taxes or assessments on real property or by the
<br />public records.
<br />(b) Unpatented mining claims; reservations or
<br />exceptions in patents or In Acts authorizing the Issuance
<br />thereof; water rights, claims or title to water.
<br />(c) Title to any property beyond the lines of the land
<br />expressly described in the description set forth In this
<br />Guarantee, or title to streets, roads, avenues, lanes, ways
<br />or waterways on which such land abuts, or the right to
<br />maintain therein vaults, tunnels, ramps or any other
<br />structure or improvement; or any rights or easements
<br />therein unless such property, rights or easements are
<br />expressly and specifically set forth in said description.
<br />(d) Defects, liens, encumbrances, adverse claims
<br />against the tide as guaranteed or other matters (1).created,
<br />suffered, assumed or agreed to by one or more of the
<br />Assured; or (2) resulting in no loss to the Assured.
<br />3. PROSECUTION OF ACTIONS
<br />(a) The Company shall have the right at its own cost to
<br />institute and prosecute any action or proceeding or do any
<br />other act which in its opinion may be necessary or desirable
<br />to establish or confirm the matters herein guaranteed; and
<br />the Company may take any appropriate action under the
<br />terms of this Guarantee whether or not it shall be liable
<br />thereunder and shall not thereby concede liability or waive
<br />any provision thereof.
<br />(b) In all cases where the Company does so institute
<br />and prosecute any action or proceeding, the Assured shall
<br />permit the Company to use, at its option, the name of the
<br />Assured for such purpose. Whenever requested by the
<br />Company, the Assured shall give the Company all
<br />reasonable aid in prosecuting such action or proceeding,
<br />and the Company shall reimburse the Assured for any
<br />expense so Incurred.
<br />4. NOTICE OF LOSS -- LIMITATION OF ACTION
<br />A statement in writing of any loss or damage for which
<br />it is claimed the Company is liable under this Guarantee
<br />shall be furnished to the Company within sixty days after
<br />such loss or damage shall have been determined, and no
<br />right of action shall accrue to the Assured under this
<br />Guarantee until thirty days after such statement shall have
<br />been furnished, and no recovery shall be had by the
<br />Assured under this Guarantee unless action shall be
<br />commenced thereon within two years after expiration of
<br />said thirty day period. Failure to furnish such statement of
<br />loss or damage or to commence such action within the time
<br />hereinbefore specified, shall be a conclusive bar against
<br />81021 Litigation Guarantee
<br />CLTA Guarantee Form No.1 (12/16/92)
<br />maintenance by the Assured of any action under this
<br />Guarantee.
<br />S. OPTION TO PAY, SETTLE OR COMPROMISE
<br />CLAIMS
<br />The Company shall have the option to pay or settle or
<br />compromise for or in the name of the Assured any claim
<br />which could result in loss to the Assured within the coverage
<br />of this Guarantee, or to pay the full amount of this
<br />Guarantee or, If this Guarantee is issued for the benefit of a
<br />holder of a mortgage, the Company shall have the option to
<br />purchase the indebtedness secured by said mortgage. Such
<br />purchase, payment or tender of payment of the full amount
<br />of the Guarantee shall terminate all liability of the Company
<br />hereunder. In the event after notice of claim has been
<br />given to the Company by the Assured the Company offers
<br />to purchase said Indebtedness, the owner of such
<br />indebtedness shall transfer and assign said Indebtedness
<br />and the mortgage securing the same to the Company upon
<br />payment of the purchase price.
<br />6. LIMITATION OF LIABILITY --PAYMENT OF LOSS
<br />(a) The liability of the Company under this Guarantee
<br />shall be limited to the amount of actual loss sustained by
<br />the Assured because of reliance upon the assurances herein
<br />set forth, but -In no event_ shall such liability exceed the
<br />amount of the liability stated on the face page hereof.
<br />(b) The Company will pay all costs imposed upon the
<br />Assured in litigation carried on by the Company for the
<br />Assured, and all costs' and attorneys' fees In litigation
<br />carried on by the Assured with the written authorization of
<br />the Company.
<br />(c) No claim for damages shall arise or be
<br />maintainable under this Guarantee (1) if the Company after
<br />having received notice of an alleged defect, lien or
<br />encumbrance not shown as an Exception or excluded herein
<br />removes such defect, lien or encumbrance within a
<br />reasonable time after receipt of such notice, or (2) for
<br />liability voluntarily assumed by the Assured in settling any
<br />claim or suit without written consent of the Company.
<br />(d) All payments under this Guarantee, except for
<br />Attorneys' fees as provided for In paragrapli 6 (b) hereof,
<br />shall reduce the amount of the liability hereunder pro tanto,
<br />and no payment shall be made without producing this
<br />Guarantee for endorsement of such payment unless the
<br />Guarantee be lost or destroyed, in which case proof of such
<br />loss or destruction shall be furnished to the satisfaction of
<br />the Company.
<br />(e) When liability has been definitely fixed in
<br />accordance with the conditions of this Guarantee, the loss
<br />or damage shall be payable within thirty days thereafter.
<br />7. SUBROGATION UPON PAYMENT OR SETTLEMENT
<br />Whenever the Company shall have settled a claim
<br />under this Guarantee, all right of subrogation shall vest in
<br />the Company unaffected by any act of the Assured, and it
<br />shall be subrogated to and be entitled to all rights and
<br />remedies which the Assured would have had against any
<br />person or property in respect to such claim had this
<br />Guarantee not been Issued. If the payment does not cover
<br />the loss of the Assured, the Company shall be subrogated to
<br />such rights and remedies in the proportion which said
<br />payment bears to the amount of said loss. The Assured If
<br />requested by the Company, shall transfer to the Company
<br />all rights and remedies against any person or property
<br />necessary In order to perfect such right of subrogation, and
<br />shall permit the Company to use the name of the Assured in
<br />any transaction or litigation Involving such rights or
<br />remedies.
<br />75E-46
<br />Page 8
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