ISSUING AGENCY AGREEMENT
This Agreement is made this 25th day of August, 1997, between FIDELITY NATIONAL
TITLE INSURANCE COMPANY, a California corporation ("Company"), and Santa Barbara
Title Company, a California Corporation ("Agent") (collectively, the "Parties").
In Consideration of the mutual benefits accruing and subject to the terms and
conditions hereof, the Parties agree as follows:
The Schedules indicated below are attached and incorporated by reference:
[ X ] Schedule A: Effective Date of Agreement, Agent's Territory, Liability
Limit, Compensation, General Liability of Agent
[ X ] Schedule B: Corporate Agent's Bond and Insurance Requirements
[ X ] Schedule C: Exclusivity
[ ] Schedule D: Personal Guarantee
l. APPOINTMENT AND AUTHORITY OF AGENT
Company appoints Agent solely to countersign and issue title insurance
commitments, binders, guarantees, endorsements, title insurance policies
of Company, or any other form whereby Company assumes liability
(collectively, "Title Assurance"j in Agent's Territory set forth in
Schedule A.
2. RESPONSIBILITY OF AGENT
A. Affirmative Covenants. Agent Shall:
1. Receive and process applications for Title Assurances in
accordance with the provisions of state law, in conformity
with usual and customary practices and procedures, prudent
underwriting principles and in full compliance with manuals,
instructions, and bulletins of company from time to time given
to Agent.
2. Maintain a Policy Register (the "Policy Register") referencing
the Agent's file number, policy number, date of issue, name of
insured, amount of policy, premium charged, and the
description of land insured. A legible copy of the policy
Register shall be tendered to Company upon termination of this
Agreement or at any time as requested by Company.
3. Make available for examination by Company, at any time during
normal business hours and with reasonable prior notice from
Company during the term of this Agreement, all financial
records and records relating to the issuance of Company's
Title Assurances by Agent.
4. Provide to Company copies of any audited and any unaudited
financial reports or data submitted to any regulator agencies
with jurisdiction over Agent.
5. Permit Company and its examiners, auditors, and independent
certified public accountants to enter Agent's business
premises for the purpose of inspecting same of performing a
financial, procedural, technical or forms audit.
6. Comply with all applicable federal, state and local laws
including statutes, ordinances, rules, regulations and
judicial opinions.
7. Obtain Company's prior approval where funds are to be held
under an escrow and/or indemnity agreement in order to
facilitate the issuance of a Title Assurance without exception
to or with affirmative coverage over a specific defect, lien
or encumbrance. The funds and property held under any such
escrow and/or indemnity agreement, together with the original
documents evidencing the escrow/indemnity, shall be
transferred to Company on request of Company.
8. Keep safely and segregated, in a FDIC insured escrow/trust
account, which is subject to audit by Company, all monies that
may be entrusted by Agent by Company, or others, in the course
of: (i) Agent's business operations; and, (ii) the issuance of
Company's Title Assurances hereunder. Agent shall exercise a
fiduciary duty with respect to the owners of the funds so
deposited. Agent shall be solely liable for any and all losses
arising by reason of Agent's improper, unauthorized, reckless
or premature disbursement of any escrowed funds.
9. Retain for seven (7) years, or such other time period required
by law, an original or legible copy of its file to evidence
the determination of insurability.
10. If Agent is a corporation or partnership, disclose to Company
any change in the controlling interest in said corporation or
partnership within five (5) business days of the change. A
change in the controlling interest shall be deemed to occur
when an owner of more then fifty percent (50%) of the capital
stock of said corporation ceases to own more than fifty
percent (50% ) of said stock, or when there is a sale of
substantially all of Agent's assets or when there is a change
in more than fifty percent (50% ) ownership of the interest(s)
in the partnership.
B. Negative Covenants. Agent shall not, without the prior written
approval of Company's corporate underwriting department:
1. Accept service of process on behalf of Company.
2. Incur debts in the name of Company.
3. Issue any Title Assurance in a liability amount in excess of
the Risk Limit stated in Schedule A.
4. Commit Company to insure any Extra Hazardous Risk as defined
herein.
5. Alter any Title Assurance or other form furnished by Company
or commit Company to any particular interpretation of
provisions or terms of any Title Assurance.
6. Receive any funds including escrow settlement or closing
funds, in the name of Company, but shall receive funds solely
in Agent's name.
7. Use Company's name in any manner inconsistent with the terms
and conditions of this Agreement.
8. Issue any Title Assurance on land in which any officer,
director, shareholder or partner of Agent has an interest.
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3. RESPONSIBILITY OF COMPANY
Company shall:
A. Furnish to Agent. without cost, the then currently approved forms
of Title Assurances which Agent is authorized to issue hereunder.
B. Provide Agent with any relevant Company manuals, underwriting
bulletins and/or instructions which may now or hereafter be issued
by Company.
C. Be responsible for remitting payment of all Premium taxes.
D. Determine all underwriting questions submitted by Agent.
E. Arrange for reinsurance when necessary, but only to the extent
reinsurance is reasonably available.
F. Furnish its Insured Closing Service Letter to each of Agent's
qualified customers requesting same.
4. COMPENSATION
A. Agent shall remit to Company a percentage of the gross Premiums as
set for in Schedule A on all Title Assurances issued by Agent.
Agent shall hold Company's percentage of gross Premiums in trust
for Company until such time as such remittances are made to Company.
B. No later than the tenth (10th) of each calendar month Agent shall
submit to company copies, with Premium charged set forth thereon,
of all Title Assurances issued by Agent during the previous
calendar month, remit the Company's percentage of the Premium
charged for such Title Assurances and shall return all spoiled,
obsolete or canceled policies accumulated during the previous
calendar month.
5. REINSURANCE AND COINSURANCE
If reinsurance or coinsurance is purchased, the cost shall be deducted
from the Title Assurance Premium before determining the compensation due
to Agent and the remaining Premium together with the cost of the
reinsurance or coinsurance shall be remitted to Company, except as
otherwise agreed in writing between the Parties.
6. ALLOCATION OF LOSSES
A. Agent's General Liability shall be as set forth in Schedule A for any
Loss sustained or incurred as a result of the issuance of Title
Assurances by Agent, unless otherwise mandated by state and federal
law.
B. In the event that a Loss sustained or incurred for a matter arising
under this Agreement resulted or arose from the negligent, willful
or reckless conduct of Agent, Agent's employees or any independent
contractor relied upon by Agent, then Agent shall reimburse Company
for the Loss. The instances where Agent shall be liable to Company
under this subparagraph shall include, without limitation, the
following:
1. Failure of Agent to comply with the terms and conditions of
this Agreement or with the manuals, underwriting bulletins
and/or instructions given to Agent by Company.
2. Issuance of Title Assurances which contain errors or omissions
which could reasonably have been detected by Agent from the
commitment, examiner's report, title search or abstract.
3. Loss arising from escrow or Non-Title Assurance operations of
Agent including, but not limited to, preparation of documents,
providing abstracting services, providing accommodation
services and the handling and disbursement of funds.
4. Any Loss arising out of the issuance of an insured closing
service letter naming Agent.
5. Commission of fraud, conspiracy, dishonesty, misrepresentation
or defalcation by Agent or Agent's aiding and abetting therein.
6. Any act, or failure to act, of Agent which results in Company
sustaining Loss for bad faith, deceptive trade practices,
unfair claim practices, consumer protection violations or
punitive damages.
C. Agent shall be liable to Company for any Loss resulting to Company
by reason of Agent's failure to comply with the terms and
conditions of this Agreement.
D. Recovery of Loss under a claim will first be applied to
reimbursement of Company's Loss, then the balance, if any, to
reimburse Agent's loss. However, if Agent renders material
assistance in achieving recovery of a Loss, then the recovered
funds will be applied: (i) first, to reimburse Company's recovery
related expenses; (ii) second, to Agent's recovery related
expenses; and, (iii) third, to Company and Agent in accordance with
the percentage of loss paid by each party.
7. CLAIMS, LITIGATION AND ADMINISTRATIVE PROCEEDINGS
A. Agent shall immediately notify Company if Agent becomes aware of:
l. Any claim, or threaten claim, under any Title Assurance issued
hereunder.
2. Any judicial action or proceeding affecting or purporting to
affect: (i) Company's interest; or (ii) the rights of an
insured or proposed insured under a Title Assurance issued by
Agent.
3. Any administrative proceeding, including any written
complaints or inquiries, by any insurance department or
regulatory agency involving: (i) one or both of the Parties;
or (ii) a Title Assurance issued by Agent.
Agent shall provide an initial notification to Company
describing the allegations and basic known facts. This initial
notification shall be provided, at the addresses and telephone
numbers set forth herein, by: (i) telephone advice; and, (ii)
overnight courier, or, (iii) facsimile transmission. Initial
notification shall be provided to Company within three (3)
business days of Agent becoming aware of any of the matters
described in this subparagraph 7 A. Following this initial
notification Agent shall forward, as soon as reasonably
possible, all relevant documents to Company by overnight courier
or certified or registered mail. Agent agrees to keep Company
fully advised and to promptly forward all relevant
communications and other writings or documents. Agent shall
acknowledge receipt of any notice in the manner set forth by
Company.
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B. Agent agrees that Company shall be fully authorized and empowered,
in its absolute discretion, to control, defend, prosecute, settle,
compromise, and/or dispose of any claim, litigation or proceeding
for which: (i) Company may be liable; and/or (ii) an insured under
a Title Assurance may be liable. Company shall have the rights to
select and approve any counsel representing Company or an insured
under a Title Assurance. Unless specifically authorized by Company
in writing, Agent shall have no right to defend, deny, settle,
compromise, or dispose of any action against Company or an insured.
Company shall have no obligation to provide a defense to Agent.
8. TERMINATION OF AGREEMENT
A. This Agreement may be terminated by either party without cause upon
thirty (30) days' written notice to the other party.
B. This Agreement may be terminated by Company upon ten (10) day's
written notice to Agent upon the occurrence of:
(i.) A material failure of Agent to fulfill the obligations
created under this Agreement, unless Agent cures such
default to satisfaction of Company within such time; or
(ii.) A change, not approved by Company, in the controlling
interest in Agent, if Agent is a corporation or
partnership.
C. This Agreement may be immediately terminated by Company if:
(i.) Financial irregularities are disclosed as result of an
audit or examination of Agent's records or upon failure
of Agent to allow review of its financial records or
records relating to issuance of Company's Title
Assurances by Agent.
(ii.) Agent applies for, consents to, or commences a case
seeking liquidation, insolvency, receivership or
bankruptcy, voluntary or involuntary, or has a
conservator or rehabilitator appointed, or has its
license or permit to do business suspended or canceled,
or if the State covered by the Agreement, Federal
authorities or any regulatory body or court shall
commence a proceeding, which proceeding if successful,
would lead to cancellation of Agent's permit or license
to do business.
(iii.) Company ceases to transact business in Agent's territory.
D. Upon termination of this agreement, Agent shall promptly furnish to
Company all funds, property and agreements held as security for
affirmative assurances given by Agent with respect to Company's Title
Assurances, together with a complete accounting and immediate payment
of any and all unpaid premiums owing to Company, and Agent shall
return to Company the Policy Register, all unused forms, blanks and
supplies, and all manuals, bulletins and instructions furnished by
Company to Agent. Should Agent fail or refuse to return any or all of
the above, Company shall have the right to enter Agent's premises and
remove same. Agent may retain a copy of the Policy Register for its
files and for its exclusive use in complying with the surviving
obligations as set forth herein.
9. PAYMENT OF COSTS AND EXPENSES
If either party shall institute an action against the other for breach
of this Agreement, the unsuccessful party shall pay court costs and
reasonable attorneys' fees to the successful party.
10. NOTICES
All notices permitted or required to be given under this Agreement shall
be in writing addressed as shown below, and may be: (i) personally
delivered; or, (ii) delivered by express courier service; or (iii)
mailed by certified or registered United States Mail. The effective date
of notice shall be: (i) the date of delivery for personal or express
courier deliveries; (ii) the date shown on the "return card" for
certified or registered mail if delivery is by certified or registered
mail. Said notices shall be addressed as follows:
Original to Company: Fidelity National Tile Insurance Company
17911 Von Karman Avenue, Suite 410
Irvine, California 92614-6253
Attn.: Western agency Department
With a Copy to: Fidelity National Tile Insurance Company
17911 Von Karman Avenue, Suite 300
Irvine, California 92614-6253
National Claims Administration
Original to Agent: Santa Barbara Title Company
205 East Carrillo Street
Santa Barbara, CA 93102
The person and/or address for notice may be changed by written notice.
Telephone and telefax numbers are shown for purposes of preliminary
claim and/or legal proceedings notice under paragraph 7 of this
Agreement.
11. GENERAL PROVISIONS
A. Assignment. This Agreement is not assignable by either party
without the prior written consent of the other. This Agreement is.
however, binding on and inures to the benefit of any corporate
successors or assigns of Company and Agent.
B. Counterparts. This Agreement may be executed in counterparts which
shall collectively constitute a single agreement.
C. Waiver. By failing to exercise any of its rights hereunder, Company
shall not be deemed to have waived any breach on the part of Agent
or to have released Agent from any of its obligations hereunder.
The waiver by either party of a breach of any provision of this
Agreement shall not be deemed a continuing waiver or a waiver of
any subsequent breach of any provision of this Agreement.
D. Severability. If any one or more of the terms of this Agreement
shall be adjudged unenforceable, void, or voidable, the remaining
terms shall not be affected thereby and shall be valid and
enforceable to the full extent permitted by law.
E. Continuing Obligations. In the event this Agreement is terminated,
the obligations to make any payments, including without limitation
Agent's share of any Loss under paragraph 6 herein, to provide
notification as to claims and to provide access to records and
files shall continue beyond the date of termination.
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F. Headings. The subject headings of the paragraphs and subparagraphs
of this Agreement are included for convenience and shall not affect
the construction of interpretation of any of their provisions.
G. Time of the Essence. Time shall be of the essence with respect to
all terms of this Agreement.
H. Further Cooperation. Each of the Parties hereto shall execute and
deliver any and all additional documents and other assurances and
shall do any and all acts and things reasonably necessary in
connection with the performance of their obligations hereunder and
to carry out the intent of the Parties.
I. Entire Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof,
supersedes all prior discussions, understandings or agreements
between the Parties and shall not be amended, modified, or
otherwise changed in any manner except in writing by the Parties.
12. DEFINITION OF TERMS
A. Loss. Loss shall mean sums paid or to be paid by Company, in cash
or otherwise, to settle or compromise claims under any of Company's
Title Assurances issued by Agent. Loss shall include, but not bc
limited to, expenses, costs and attorneys' fees actually paid or
incurred in connection with investigation, negotiation, litigation,
or settlement of such claim which ultimately requires payment of
any sum by Company. Loss, as defined herein, shall be reduced by
the value of any recoveries actually realized by Company.
B. Premium. Premium shall mean the amount payable or paid in
accordance with Company's rates in effect or as otherwise approved
by Company in writing for the issuance of Title Assurances.
C. Extra Hazardous Risks. Extra Hazardous Risks shall mean all risks
which result in a liability not normally assumed by the Company.
Extra Hazardous Risks include, without limitation, the issuance of
a Title Assurance without a Schedule "B" exception for any of the
following matters where said matters affect the subject property:
l. Unrecorded construction/mechanics' liens which may gain
priority over the interest insured where Agent is aware that
the owner, general contractor or a subcontractor may not be
paying its debts as they become due.
2. Any interest of the applicable state, the United States or
other governmental entity in tidelands, swamp and overflow
waters, existing streams or rivers or lands which currently or
formerly were beneath a navigable waterbody.
3. Outstanding subsurface rights containing a right of entry.
4. Existing liens and encumbrances.
5. Bankruptcy, insolvency or creditors' rights.
6. Major encroachments.
7. Non-imputation of knowledge.
8. Indian land or restricted Indian title.
9. Pending actions and litigation.
10. Any risk involving a title about which agent has knowledge of
an existing dispute or of risks, adverse claims or questions
of title known in the community.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be properly
executed by their respective representatives having full authority to do so.
AGENT: Santa Barbara Title Company, COMPANY:
a California Corporation FIDELITY NATIONAL TITLEI
INSURANCE COMPANY
By: /s/ Dennis R. Duffy By: /s/ M'Liss Jones Kane
-------------------------------- -------------------------------
Dennis Duffy M'Liss Jones Kane
Operations Manager Senior Vice President
ATTEST:
----------------------------
Its:
-------------------------------
NOTIFICATION IN COMPLIANCE WITH SECTION 606(A)
OF "THE FAIR CREDIT REPORTING ACT"
In making this Agreement, it is understood that an investigative report may
be made whereby information is obtained through personal interviews with
third parties such as family members, business associates, financial sources,
friends, neighbors or others with whom you are acquainted. This inquiry
includes information as to your character, general reputation, personal
characteristics, and mode of living, whichever may be applicable. You have
the right to make a written request within a reasonable period of time for a
complete and accurate disclosure of additional information concerning the
nature and scope of the investigation.
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SCHEDULE A
Attached and made a part of the Agreement between Fidelity National Title
Insurance Company ("Company") and Santa Barbara Title Company, a California
Corporation("Agent").
EFFECTIVE DATE OF AGREEMENT, AGENT'S TERRITORY
LIABILITY LIMIT, COMPENSATION, GENERAL LIABILITY OF AGENT
l. Effective Date of Original Agreement: August 14th, 1997
2. Effective date of Extension (if any):
3. Agent's Territory: Santa Barbara County
4. Liability Limit On any Title Assurance which has liability in excess of
$ 1,000,000.00, Agent shall first review and obtain Company's written
approval prior to issuing the Title Assurance.
5. Compensation: Agent shall pay Company twelve percent (11%) of the gross
premiums on all Title Assurances issued by Agent. There
shall be an additional 1% Management Fee. Management Fee
shall be for accounting services including but not limited
to accounting profit and loss and balance sheet information,
corporate legal including underwriting, human resources
including insurance and 401K, statutory auditing including
the preparation of all statutory reports and federal and
state tax returns.
In the event that Agent no longer needs management's
services, upon ninety (90) days' prior notice to Company
said fee and services shall terminate.
6. General Liability of Agent: Subject to the provisions of subparagraph 6
B above, Agent shall be liable for the first $5,000.00 of any Loss
sustained or incurred by Company as a result of the issuance of the
Title Assurances by Agent.
7. Governing Law. This Agreement is to be construed, enforced, and governed
according to and by the laws of the State of California in all respects.
SCHEDULE B
CORPORATE AGENT'S BOND AND INSURANCE REQUIREMENTS
l. Agent shall, at its own expense, maintain a blanket fidelity bond in a
principal sum of at least Fifty Thousand Dollars and No Cents
($50,000.00) in a form and issued by a company acceptable to Company and
naming Company as an additional insured or payee.
2. Agent shall, at its own expense, maintain errors and omissions liability
insurance in a principal sum of a least Two Hundred Fifty Thousand
Dollars and No Cents ($250,000.00) per occurrence and Five Hundred
Thousand Dollars and No Cents ($500,000.00) total annually, in a form
and issued by a company acceptable to Company, with a deductible of no
more than Five Thousand Dollars and No Cents (5,000.00) and naming
Company as an additional insured or payee.
3. Agent shall annually furnish Company with true copies of the bond(s) and
policy together with current premium receipts for said bond(s) and
insurance.
4. Upon request of Company, Agent agrees to notify its fidelity bond or
errors and omissions insurance carrier of any claim for which Agent may
be liable to Company.
SCHEDULE C
EXCLUSIVITY
During the term of this Agreement, Agent shall not act as Agent for or in any
manner aid the procurement of any Title Assurance for any other title insurance
company except Fidelity National Title Insurance Company unless: (i) Company
declines to issue insurance with respect to a particular transaction (in which
case Agent may use any title insurance company of its choosing with respect to
that particular transaction): (ii) Lessor otherwise condents to the Lessee's use
of another underwriter; or (iii) a customer of Lessee declines to accept title
insurance from Lessor.
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The coincidental use by a competitive title insurer of an abstract or title
report by Agent shall not be construed as a violation of this provision.
In the event that control of the Company is transferred to an independent third
party, outside of the Fidelity companies (which shall include any Fidelity
affiliate, subsidiary or employee), Agent shall have the right to cause this
Agreement to become non-exclusive for the remainder of the term of the
Agreement.
COMPLIANCE WITH CALIFORNIA LAND TITLE ASSOCIATION
ACCOUNT, OVERSIGHT AND CONTROL GUIDELINES
Company and Agent hereby agree that effective January I, 1996, Agent shall
comply with the California Land Title Association Account Review Processes and
Oversight and Internal Control Guidelines, the American Land Title Association
Escrow Internal Control Guidelines for Title Insurance Companies, Agencies and
Approved Attorneys and Employee Affidavit (collectively referred to as the
"Guidelines") in compliance with Section l2389.6 of the California Insurance
Code. Agent shall comply with the procedures set out in said Guidelines as they
may be further modified from time to time by Company in order to comply with
requirements of the Department of Insurance or the California Insurance Code. In
the event of any disparity between said Guidelines and the California Insurance
Code, the provision of the Insurance Code shall prevail.
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SCHEDULE A
EFFECTIVE DATE OF AGREEMENT, AGENT'S TERRITORY
LIABILITY LIMIT, COMPENSATION, GENERAL LIABILITY OF AGENT
1. Effective Date of Original Agreement: Date the California Department
of Instance approves the sale of
60% of American Title Company to
American Title Company Holdings,
Inc.
2. Effective Date of Extension:
3. Agent's Territory: Kern County
Alameda County
Contra Costa County
Fresno County
Los Angeles County
Madera County
Orange County
Riverside County
San Bernardino County
Sacramento County
San Diego County
San Mateo County
Santa Clara County
Ventura County
4. Liability Limit: On any Title Assurance which has liability
in excess of $1,000,000.00, Agent shall
first review and obtain Company's written
approval prior to issuing the Title
Assurance.
5. Compensation: Agent shall pay Company twelve percent
(11%) of the gross premiums on all Title
Assurances issued by Agent. There shall be
an additional 1% Management Fee.
Management Fee shall be for accounting
services including but not limited to
accounting profit and loss and balance
sheet information, corporate legal
including underwriting, human resources
including insurance and 401K, statutory
auditing including the preparation of all
statutory reports and federal and state
tax returns. In the event that Agent no
longer needs management's services, upon
ninety (90) days' prior notice to Company
said fee and services shall terminate.
6. General Liability of Agent: Subject to the provisions of subparagraph
6B above, Agent shall be liable for the
first $5,000.00 of any Loss sustained or
incurred by Company as a result of the
issuance of the Title Assurances by Agent.
7. Governing Law: This Agreement is to be construed,
enforced, and governed according to and by
the laws of the State of California in all
respects.
SCHEDULE B
CORPORATE AGENT'S BOND AND INSURANCE REQUIREMENTS
1. Agent shall, at its own expense, maintain a blanket fidelity bond in a
principal sum of at least Fifty Thousand Dollars and No Cents
($50,000.00) in a form and issued by a company acceptable to Company and
naming Company as an additional insured or payee.
2. Agent shall, at its own expense, maintain errors and omissions liability
insurance in a principal sum of at least Two Hundred Fifty Thousand
Dollars and No Cents ($250,000.00) per occurrence and Five Hundred
Thousand Dollars and No Cents ($500,000.00) total annually, in a form
and issued by a company acceptable to Company, with a deductible of no
more than Five Thousand Dollars and No Cents ($5,000.00) and naming
Company as an additional insured or payee.
3. Agent shall annually furnish Company with true copies of the bond(s) and
policy together with current premium receipts for said bond(s) and
insurance.
4. Upon request of Company, Agent agrees to notify its fidelity bond or
errors and omissions insurance carrier of any claim for which Agent may
be liable to Company.
SCHEDULE C
EXCLUSIVITY
During the term of this Agreement, Agent shall not act as Agent for or in
any manner aid the procurement of any Title Assurance for any other title
insurance company except Fidelity National Title Insurance Company of
California unless: (i) Company declines to issue insurance with respect to a
particular transaction (in which case Agent may use any title insurance
company of its choosing with respect to that particular transaction): (ii)
Lessor otherwise consents to the Lessee's use of another underwriter; or
(iii) a customer of Lessee declines to accept title insurance from Lessor.
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The coincidental use by a competitive title insurer of an abstract or title
report prepared by Agent shall not be construed as a violation of is
provision.
In the event that control of the Company is transferred to an independent third
party, outside of the Fidelity companies (which shall include any Fidelity
affiliate, subsidiary or employee), Agent shall have the right to cause this
Agreement to become non-exclusive for the remainder of the term of the
Agreement.
COMPLIANCE WITH CALIFORNIA LAND TITLE ASSOCIATION
ACCOUNT, OVERSIGHT AND CONTROL GUIDELINES
Company and Agent hereby agree that effective January 1, 1996, Agent shall
comply with the California Land Title Association Account Review Processes
and Oversight and Internal Control Guidelines, the American Land Title
Association Escrow Internal Control Guidelines for Title Insurance Companies,
Agencies and Approved Attorneys and Employee Affidavit (collectively referred
to as the "Guidelines") in compliance with Section 12389.6 of the California
Insurance Code. Agent shall comply with the procedures set out in said
Guidelines as they may be further modified from time to time by Company in
order to comply with requirements of the Department of Insurance or the
California Insurance Code. In the event of any disparity between said
Guidelines and the California Insurance Code, the provision of the Insurance
Code shall prevail.
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