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(d) If an action or proceeding concerning the Mechanics' Lien is instituted by a third party, Indemnitor shall cause (1) such action or proceeding to be timely defended and resisted by counsel selected by First American which counsel will protect First American and any and all insured(s) to whom First American may have possible liability as a result of the issuance of a Title Policy; and (2) such counsel to deliver to First American a written representation, in a form reasonably satisfactory to First American to the effect that such counsel (i) has accepted employment as counsel to defend any such action or resist any such proceeding, (ii) will promptly undertake any and all reasonable steps to protect First American and its insured(s), and (iii) will keep First American informed as to the status of such action or procedure as reasonably requested by First American, at no cost or expense to First American. Indemnitor may object to First American's choice of counsel for reasonable cause. (e) If the payment of a sum of money will discharge, eliminate or remove the effect of the Mechanics' Lien as to the Property, Indemnitor shall pay such sum as is sufficient to discharge, eliminate or remove the Mechanics' Lien in a manner legally sufficient to effect the release of the Mechanics' Lien of record and shall deliver documents to First American, in a form reasonably satisfactory to First American. (f) Indemnitor shall take such action with respect to the Mechanics' lien as First American shall, in its discretion, authorize Indemnitor in writing to undertake, provided that any such authority shall not be a waiver by First American to require Indemnitor at any time to comply with the foregoing subparagraphs of this Paragraph above, within ten (10) days of First American's written revocation of authority to take action other than that under any other subparagraphs of this Paragraph, and demand that Indemnitor comply with any other subparagraphs of this Paragraph. 5.5. Interest. Indemnitor agrees that any sums which might be advanced or incurred by First American pursuant to this Agreement or by its exercise of any rights hereunder shall be repaid by Indemnitor to First American within ten (10) days of Indemnitor's receipt of First American's written demand, together with interest thereon at four percent (4%) above the reference rate as charged by Bank of America as of the date such sum was advanced by First American and continuing until it is repaid in full, but in no event, shall such rate of interest exceed the lesser of: (a) ten percent (10%) per annum, or (b) the maximum rate permitted by law. 5.6. Determination of Coveraae. Any determination of coverage by First American shall be conclusive evidence that the matter is within the Title Policy coverage as to the Mechanics' Liens for purposes of this Agreement. If First American accepts the defense of a matter within the Title Policy as to the Mechanics' Liens with a reservation of rights, all costs, damages, expenses and legal fees incurred by First American shall be deemed within the terms and obligations of Indemnitor under this Agreement even if the matter is subsequently determined by a court to not be within the Title Policy as to the Mechanics' Liens. 6. REMEDIES. Indemnitor specifically acknowledges that upon any default by any Indemnitor under this Agreement after demand by First American, First American shall have the right to exercise any and all remedies available at law, in equity or under this Agreement against any and all of the Indemnitors, including, but not limited to, injunctive relief, specific performance, damages, self-help and/or resort to any collateral held by First American to secure the obligations of Indemnitor under this Agreement. 7. SUBROGATION AND SUBORDINATION. Indemnitor hereby unconditionally grants to First American any and all rights of subrogation Indemnitor may have with respect to the Mechanics' Liens and agrees to promptly execute any documents with respect to the Mechanics' Liens or any other matter relating to this Agreement request by First American with respect to such right of subrogation and to deliver same to First American. Indemnitor hereby subordinates any and all debts owed to any Indemnitor from any other Indemnitor to the obligations owed to First American under this Agreement. 8. FINANCIAL INFORMATION. Each Indemnitor represents and warrants to First American as of the date of delivery of the financial statements that the statements delivered to First American with respect to that Indemnitor: (a) were prepared in accordance with generally accepted accounting principles ("GAAP") unless otherwise noted therein; (b) are true, complete and correct in all material respects; (c) disclose all material financial information regarding Indemnitor; (d) fairly represent and present the financial condition and operations of Indemnitor; (e) if said statements were not prepared in accordance with GAAP, no GAAP statements and/or audited financial statements exist; and (f) since the date of the financial statements delivered to First American, there has been no material adverse change in the financial condition, operations, assets, liabilities, properties or business prospects of Indemnitor. Each Indemnitor agrees to promptly notify (but in no event later than ten (10) days after Indemnitor learns, by any means, of such event) First American in writing of any event which would reasonably be anticipated to, or which, in any event, would materially alter or in any material respect change said financial condition, operations, Page 2 c2001 First American Title Insurance Company All Rights Reserved .. . -~._...,,-_.,"