conditions and stipulations continued and concluded
<br />(b) In the event,of-any litigation, includin on by the Company or
<br />with the Company's consent, the Company shun imyc no liability for loss or
<br />damage until there has been a final determination by a court of competent
<br />jurisdiction, and disposition of all appeals therefrom, adverse to the title, or, if
<br />applicable, to the lien of the insured mortgage, as insured.
<br />(c) The Company shall not be liable for loss or damage to any insured for
<br />liability voluntarily assumed by the insured in settling any claim or suit without
<br />the prior written consent of the Company.
<br />(d) The Company shall not be liable to an insured lender for: (i) any
<br />indebtedness created subsequent to Date of Policy except for advances made to
<br />protect the lien of the insured mortgage and secured thereby and reasonable
<br />amounts expended to prevent deterioration of improvements; or (ii) construction
<br />loan advances made subsequent to Date of Policy, except construction loan
<br />advances made subsequent to Date of Policy for the purpose of financing in
<br />whole or in part the construction of an improvement to the land which at Dote of
<br />Policy were secured by the insured mortgage and which the insured was and
<br />continued to be obligated to advance at and after Date of Policy.
<br />9. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF
<br />LIABILITY.
<br />(a) All payments under this policy, except payments made for costs, attor-
<br />neys' fees and expenses, shall reduce the amount of insurance pro tanto. How-
<br />ever, as to an insured lender, any payments made prior to the acquisition of
<br />title to the estate or interest as provided in Section 2 a) of these Conditions and
<br />Stipulations shall not reduce pro tanto the amount o insurance afforded under
<br />this policy as to any such insured, except to the extent that the payments reduce
<br />the amount of the indebtedness secured by the insured mortgage.
<br />(b) Payment in part by any person of the principal of the indebtedness, or
<br />any other obligation secured by the insured mortgage, or any voluntary partial
<br />satisfaction or release of the insured mortgage, to the extent of the payment,
<br />satisfaction or release, shall reduce the amount of insurance pro tanto. The
<br />amount of insurance may thereafter be increased by accruing interest and
<br />advances made to protect the lien of the insured mortgage and secured there-
<br />by, with interest thereon, provided in no event shall the amount of insurance
<br />be greater than the Amount of Insurance stated in Schedule A.
<br />(c) Payment in full by any person or the voluntary satisfaction or release of
<br />the insured mortgage shall terminate all liability of the Company to an insured
<br />lender except as provided in Section 2(a) of these Conditions and Stipulations.
<br />10. LIABILITY NONCUMULATIVE.
<br />It is expressly understood that the amount of insurance under this policy
<br />shall be reduced by any amount the Company may pay under any policy insur-
<br />ing a mortgage to which exception is taken in Schedule B or to which the insured
<br />has agreed, assumed, or taken subject, or which is hereafter executed by an
<br />insured and which is a charge or lien on the estate or interest described or
<br />referred to in Schedule A, and the amount so paid shall be deemed a payment
<br />under this policy to the insured owner.
<br />The provisions of this Section shall not apply to an insured lender, unless
<br />such insured acquires title to said estate or interest in satisfaction of the
<br />indebtedness secured by an insured mortgage.
<br />11. PAYMENT OF LOSS.
<br />(a) No payment shall be made without producing this policy for endorse-
<br />ment of the payment unless the policy has been lost or destroyed, in which case
<br />proof of loss or destruction shall be furnished to the satisfaction of the
<br />Company.
<br />(b) When liability and the extent of loss or damage has been definitely
<br />fixed in accordance with these Conditions and Stipulations, the loss or damage
<br />shall be payable within 30 days thereafter.
<br />12. SUBROGATION UPON PAYMENT OR SETTLEMENT.
<br />(a) The Company's Right of Subrogation
<br />Whenever the Company shall have settled and paid a claim under this
<br />policy, all right of subrogation shall vest in the Company unaffected by any act
<br />of the insured claimant.
<br />The Company shall be subrogated to and be entitled to all rights and
<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
<br />the Company, the insured claimant shall transfer to the Company all rights and
<br />remedies against any person or property necessary in order to perfect this right
<br />of subrogation. The insured claimant shall Permit the Company to sue, com-
<br />promise or settle in the name of the insured claimant and to use the name of the
<br />insured claimant in any transaction or litigation involving these rights or
<br />remedies.
<br />If a payment on account of a claim does not fully cover the loss of the
<br />insured claimant, the Company shall be subrogated (i) as to an insured owner,
<br />to all rights and remedies in the proportion which the Company's payment bears
<br />to the whole amount of the loss; and (ii) as to an insured lender, to all rights
<br />and remedies of the insured claimant after the insured claimant shall have re-
<br />covered its principal, interest, and costs of collection.
<br />If loss should am any act of the insured claimant, as stated above,
<br />that act shall not . ,, . ,,.is policy, but the Company, in that event, shall be
<br />required to oy only that part of any losses insured against by this policy which
<br />shall exceed the amount, if any, lost to the Company by reason of the impair-
<br />ment by the insured claimant of the Company's right of subrogation.
<br />(b) The Insured's Rights and Limitations.
<br />Notwithstanding the foregoing, the owner of the indebtedness secured by
<br />an insured mortgage, provided the priority of the lien of the insured mortgage
<br />or its enforceability is not affected, may release or substitute the personal lia-
<br />bility of any debtor or guarantor, or extend or otherwise modify the terms of
<br />payment, or release a portion of the estate or interest from the lien of the
<br />insured mortgage, or release any collateral security for the indebtedness.
<br />When the permitted acts of the insured claimant occur and the insured has
<br />knowledge of any claim of title or interest adverse to the title to the estate or
<br />interest or the priority or enforceability of the lien of an insured mortgage, as
<br />insured, the Company shall be required to pay only that part of any losses
<br />insured against by this Policy which shall exceed the amount, if any, lost to the
<br />Company by reason of the impairment by the insured claimant of the Company's
<br />right of subrogation.
<br />(c) The Company's Rights Against Non-insured Obligors.
<br />The Company's right of subrogation against non-insured obligors shall exist
<br />and shall include, without limitation, the rights of the insured to indemnities,
<br />guaranties, other policies of insurance or bonds, notwithstanding any terms or
<br />conditions contained in those instruments which provide for subrogation rights by
<br />reason of this policy.
<br />The Company's right of subrogation shall not be avoided by acquisition of
<br />an insured mortgage by an obligor (except an obligor described in Section
<br />I (a)(ii) of these Conditions and Stipulations) who acquires the insured mortgage
<br />as a result of an indemnity, guarantee, other policy of insurance, or bond and
<br />the obligor will not be an insured under this policy, notwithstanding Section
<br />1(a)(i) of these Conditions and Stipulations.
<br />13. ARBITRATION.
<br />Unless prohibited by applicable low, either the Company or the insured
<br />may demand arbitration pursuant to the Title Insurance Arbitration Rules of the
<br />American Arbitration Association. Arbitrable matters may include, but are not
<br />limited to, any controversy or claim between the Company and the insured aris-
<br />ing out of or relating to this policy, any service of the Company in connection
<br />with its issuance or the breach of a policy provision or other obligation. All
<br />arbitrable matters when the Amount of Insurance is $1,000,000 or less shall be
<br />arbitrated at the option of either the Company or the insured. All arbitrable
<br />matters when the Amount of Insurance is in excess of $1,000,000 shall be arbi-
<br />trated only when agreed to by both the Company and the insured. Arbitration
<br />pursuant to this policy and under the Rules in effect on the date the demand for
<br />arbitration is made or, at the option of the insured, the Rules in effect at Date of
<br />Policy shall be binding upon the parties. The award may include attorneys' fees
<br />only if the laws of the state in which the land is located permit a court to award
<br />attorneys' fees to a prevailing party. Judgment upon the award rendered by
<br />the Arbitrator(s) may be entered in any court having jurisdiction thereof.
<br />The law of the situs of the land shall apply to an arbitration under the Title
<br />Insurance Arbitration Rules.
<br />A copy of the Rules may be obtained from the Company upon request.
<br />14. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT.
<br />(c) This policy together with all endorsements, if any, attached hereto by
<br />the Company is the entire policy and contract between the insured and the
<br />Company. In interpreting any provision of this policy, this policy shall be
<br />construed as a whole.
<br />(b) Any claim of loss or damage, whether or not based on negligence, and
<br />which arises out of the status of the lien of the insured mortgage or of the title
<br />to the estate or interest covered hereby or by any action asserting such claim,
<br />shall be restricted to this policy.
<br />(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 />Vice President, the Secretary, an Assistant Secretary, or validating officer or
<br />authorized signatory of the Company.
<br />15. SEVERABILITY.
<br />In the event any provision of the policy is held invalid or unenforceable
<br />under applicable law, the policy shall be deemed not to include that provision
<br />and all other provisions shall remain in full force and effect.
<br />16. NOTICES, WHERE SENT.
<br />All notices required to be given the Company and any statement in writing
<br />required to be furnished the Company shall include the number of this policy
<br />and shall be addressed to the Company at P.O. Box 2029, Houston, Texas
<br />77252.2029, and identify this policy by its printed policy serial number which
<br />appears on the bottom of the front of the first page of this policy.
<br />
|