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CONDITIONS AND STIPULATIONS - ( Continued and•Conduded From Reverse Side )
<br />10. LIABILITY NONCUMULATIVE
<br />If the insured acquires title to the estate or interest in satisfaction of the indebtedness
<br />secured by the insured mortgage, or any part thereof, it is expressly understood
<br />that the amount of insurance under this policy shall be reduced by any amount the
<br />Company may pay under any policy insuring a mortgage to which exception is taken
<br />in Schedule B or to which the insured has agreed, assumed, or taken subject, or
<br />which is hereafter executed by an insured and which is a charge or lien on the estate
<br />or interest described or referred to in Schedule A, and the amount so paid shall
<br />be deemed a payment under this policy.
<br />11. PAYMENT OF LOSS
<br />(a) No payment shall be made without producing this policy for endorsement of
<br />the payment unless the policy has been lost or destroyed, in which case proof of
<br />loss or destruction shall be furnished to the satisfaction of the Company.
<br />(b) When liability and the extent of loss or damage has been definitely fixed in
<br />accordance with these Conditions and Stipulations, the loss or damage shall be payable
<br />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 policy,
<br />all right of subrogation shall vest in the Company unaffected by any act of the in-
<br />sured claimant.
<br />The Company shall be subrogated to and be entitled to all rights and remedies
<br />which the insured claimant would have had against any person or property in respect
<br />to the claim had this policy not been issued. If requested by the Company, the in-
<br />sured claimant shall transfer to the Company all rights and remedies against any
<br />person or property necessary in order to perfect this right of subrogation. The in-
<br />sured claimant shall permit the Company to sue, compromise or settle in the name
<br />of the insured claimant and to use the name of the insured claimant in any transac-
<br />tion or litigation involving these rights or remedies.
<br />If a payment on account of a claim does not fully cover the loss of the insured
<br />claimant, the Company shall be subrogated to all rights and remedies of the insured
<br />claimant after the insured claimant shall have recovered its principal, interest, and
<br />costs of collection.
<br />(b) The Insured's Rights and Limitations.
<br />Notwithstanding the foregoing, the owner of the indebtedness secured by the in-
<br />sured mortgage, provided the priority of the lien of the insured mortgage or its
<br />enforceability is not affected, may release or substitute the personal liability of any
<br />debtor or guarantor, or extend or otherwise modify the terms of payment, or release
<br />a portion of the estate or interest from the lien of the insured mortgage, or release
<br />any collateral security for the indebtedness.
<br />When the permitted acts of the insured claimant occur and the insured has knowledge
<br />of any claim of title or interest adverse to the title to the estate or interest or the
<br />priority or enforceability of the lien of the insured mortgage, as insured, the Com-
<br />pany shall be required to pay only that part of any losses insured against by this
<br />policy which shall exceed the amount, if any, lost to the Company by reason of
<br />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 against non-insured obligors shall exist and
<br />shall include, without limitation, the rights of the insured to indemnities, guaranties,
<br />other policies of insurance or bonds, notwithstanding any terms or conditions con-
<br />tained in those instruments which provide for subrogation rights by reason of this
<br />policy.
<br />The Company's right of subrogation shall not be avoided by acquisition of the
<br />insured mortgage by an obligor (except an obligor described in Section 1(a)(ii) of
<br />these Conditions and Stipulations) who acquires the insured mortgage as a result
<br />of an indemnity, guarantee, other policy of insurance, or bond and the obligor will
<br />not be an insured under this policy, notwithstanding Section I(a)(i) of these Condi-
<br />tions and Stipulations.
<br />13. ARBITRATION
<br />Unless prohibited by applicable law, either the Company or the insured may de-
<br />mand arbitration pursuant to the Title Insurance Arbitration Rules of the American
<br />Arbitration Association. Arbitrable matters may include, but are not limited to, any
<br />controversy or claim between the Company and the insured arising out of or relating
<br />to this policy, any service of the Company in connection with its issuance or the
<br />breach of a policy provision or other obligation. All arbitrable matters when the
<br />Amount of Insurance is $1,000,000 or less shall be arbitrated at the option of either
<br />the Company or the insured. All arbitrable matters when the Amount of Insurance
<br />is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Com-
<br />pany and the insured. Arbitration pursuant to this policy and under the Rules in
<br />effect on the date the demand for arbitration is made or, at the option of the insured,
<br />the Rules in effect at Date of Policy shall be binding upon the parties. The award
<br />may include attorneys' fees only if the laws of the state in which the land is located
<br />permit a court to award attorneys' fees to a prevailing party. Judgment upon the
<br />award rendered by the Arbitrator(s) may be entered in any court having jurisdiction
<br />thereof.
<br />The law of the situs of the land shall apply to an arbitration under the Title In-
<br />surance 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 />(a) This policy together with all endorsements, if any, attached hereto by the Com-
<br />pany is the entire policy and contract between the insured and the Company. In
<br />interpreting any provision of this policy, this policy shall be construed as a whole.
<br />(b) Any claim of loss or damage, whether or not based on negligence, and which
<br />arises out of the status of the lien of the insured mortgage or of the title to the
<br />estate or interest covered hereby or by any action asserting such claim, shall be
<br />restricted to this policy.
<br />(c) No amendment of or endorsement to this policy can be made except by a
<br />writing endorsed hereon or attached hereto signed by either the President, a Vice
<br />President, the Secretary, an Assistant Secretary, or validating officer or authorized
<br />signatory of the Company.
<br />15. SEVERABILITY
<br />In the event any provision of this policy is held invalid or unenforceable under
<br />applicable law, the policy shall be deemed not to include that provision and all other
<br />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 re-
<br />quired to be furnished the Company shall include the number of this policy and
<br />shall be addressed to the Company at:
<br />Fidelity National Title Insurance Company
<br />National Claims Administration:
<br />17911 Von Karman Avenue, Suite 300
<br />Irvine, CA 92614-6253
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