EXHIBIT 10.15
UNITED GENERAL TITLE INSURANCE COMPANY
ISSUING AGENT AGREEMENT
This agreement, ("Agreement") made this 21st day of January, 1998 between
UNITED GENERAL TITLE INSURANCE COMPANY, a corporation organized under the laws
of the State of Louisiana, having its main office at 000 00xx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx, 00000, hereinafter referred to as "Company", and CAPITAL
TITLE AGENCY, INC., operating as a licensed Underwritten Title Company in
ARIZONA, hereinafter referred to as "Issuing Agent".
The parties hereto, in consideration of the mutual promises, covenants and
agreements herein contained, do agree as follows:
1. APPOINTMENT
The Company hereby appoints Issuing Agent as its representative to
originate and solicit applications for and to sign, countersign and issue
commitments, binders, guarantees, title reports, title insurance policies
endorsements and other contracts under which the Company assume liability for
the condition of title to land (hereafter sometimes referred to as "Title
Assurance") with the rules, regulations, procedures and instructions of the
Company as set forth herein, and subject to all applicable laws, rules and
regulations of the Territory, as hereinafter defined, whether now in force or
hereafter issued and promulgated. The appointment of the Issuing Agent herein is
on a mutually non-exclusive basis and is subject to rights of other Issuing
agents of the Company to conduct business and to the right of the Company to
appoint other Issuing agents.
2. TERRITORY
The Issuing Agent shall have the authority to operate its title business
under the terms and conditions of this agreement in the following geographical
area, hereinafter referred to as Territory, but not otherwise:
MARICOPA, MOHAVE AND YAVAPAI COUNTIES
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3. ISSUING AGENT RIGHTS AND RESPONSIBILITIES
a. During the term of this agreement, Issuing Agent shall maintain and
operate a business office devoted to the conduct of a title insurance agency
business, maintain adequate personnel to originate and service such business,
and actively remain engaged in the title insurance agency business.
b. Issuing Agent shall receive and process applications for title insurance
in a prudent, safe, sound and ethical manner and in accordance with recognized
underwriting principles and the rules, regulations and procedures of the
Company, and subject to all applicable laws, rules and regulations of the state
or states in which it operates, whether now in force or hereafter issued and
promulgated.
c. Issuing Agent shall determine insurability of title based on one or more
of the following methods:
i An examination of mailers disclosed in a search by Issuing Agent
of all relevant public records.
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ii. An examination of an abstract of title which shows all relevant
public records prepared and certified by Issuing Agent or by
another recognized professional abstractor whose work is accepted
by prudent local title examiners and is approved by the Company.
iii. An examination of Issuing Agent's indices and records
supplemented to the extent necessary by an abstract or search of
the public records.
iv. Title reports or opinions, on forms furnished or approved by
Company, by Attorneys at Law approved by Company, if permitted by
law.
v. Title reports, commitments, or certificates issued by Company,
the contents of which shall be the responsibility of Company.
d. All supporting documents on which insurability of title is based,
including, but not limited to abstracts, examinations of title, title reports,
title notes, chain of title printouts, copies of recorded documents, policies,
commitments, affidavits, lien waivers, surveys, worksheets and maps. shall be
preserved and maintained in the Issuing Agent's Possession and control during
the term of this Agreement and thereafter for a period of at least ten years, or
for any longer periods as required by law. The Company shall have a reasonable
right of access to each such file and its complete contents, or a duplicate copy
thereof, pertaining to the issue of a title policy of the Company or any other
matter for which the Company may have responsibility.
e. Issuing Agents shall collect or see to the collection of all title
underwriting premiums due the Company for Title Assurances from the parties
responsible therefor. Immediately upon receipt by the Issuing Agent, these
premiums become the property of the Company and are held in trust on behalf of
the Company by and shall be deposited in a segregated trust account in the name
of the Company by the Issuing Agent Issuing Agent shall, on a monthly basis,
submit a report to the Company of all Title Assurances issued during the
preceding month and premium fees therefrom due the Company. Methods of reporting
are described in the Issuing Agent's Procedures Manual and in periodic Company
bulletins. Each report shall include a complete copy of the policy schedules and
endorsements as issued to the insured. - Issuing Agent may retain commissions as
calculated in accordance with Schedule A hereto and remit only the amount due
Company. If the Issuing Agent is eligible for and participates in the Company's
premium billing plan, payment in full of premium billed is expected within
thirty days of receipt of said xxxx. Failure to remit premium due within thirty
days may result in either a suspension or revocation of the Issuing Agent's
authority to issue title policies on behalf of the Company.
f. Issuing Agent shall, maintain a policy register in form provided by or
approved by Company by which Issuing Agent shall enter a record of all insuring
forms supplied by Company and their disposition.
g. Safely keep and store all policies and forms delivered by Company to
Issuing Agent and be liable to Company for any loss or damage suffered by
Company by reason of wrongful or negligent use of such forms. Further, Issuing
Agent shall maintain a policy register and shall account for said forms and
return all spoiled, obsolete or canceled policies and forms to Company.
h. Agents agrees to cooperate and assist in the defense of any litigation
brought as a result of any claim based upon a policy or commitment issued by
Issuing Agent or insured closing service- letter issued on behalf of Issuing
Agent, or in any matter in which the Company becomes involved as a result of the
Issuing Agent's business.
i. The Issuing Agent shall immediately notify Company of an attempted
service of process upon Issuing Agent as representative of Company and the
reasons therefore, if readily obtainable.
j. If a claim is filed with Issuing Agent arising under any title insurance
issued by Issuing Agent, Issuing Agent will immediately make a written report
thereof to Company at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000
and shall lend all reasonable assistance to Company in investigating, adjusting
or contesting any claim.
k. The parties hereto understand and agree that Issuing Agent is not an
Issuing Agent of Company for purposes of conducting an escrow or settlement
business. However, because Company may be liable for acts of Issuing Agent with
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regard to the settlement or escrow business Issuing Agent, under state law, or
regulation, or otherwise, Issuing Agent shall allow Company's representatives to
audit or review the accounts, checks, books, files and records of Issuing Agent
to the extent permitted by law at any reasonable time without notice. Issuing
Agent shall provide Company with a copy of any audit performed of Issuing
Agent's books and records by any public or private auditor or agency within
thirty (30) days after Issuing Agent receives said audit report. In those
instances where Issuing Agent closes transactions and receives and disburses the
money of others, Issuing Agent shall keep and maintain a separate bank account
or accounts for escrow, settlement or closing funds. Issuing Agent shall
maintain such funds in trust for the parties entitled thereto, Issuing Agent
further agrees to reconcile said escrow accounts on a monthly basis and to
maintain adequate records of said escrow, settlement or closing funds and submit
same to Company upon request
l. Issuing Agent agrees to follow the minimum guidelines described below
for handling, accounting and disbursement of closing or escrow funds which come
into the Issuing Agents possession and for which the Company may be or become
responsible:
i. Issuing Agent agrees that funds received in connection with an
escrow, closing, funding or transaction in which a policy of
title insurance of the Company is to be issued are "trust funds"
and agrees to keep such trust funds in a federally insured
financial institution, in an account or accounts separate `from
the Issuing Agent's operating account and designated as "trust"
or "escrow" account and to disburse such funds only for the
purposes for which they were entrusted.
ii. A record of each and every receipt and disbursement transaction
shall be kept in an escrow accounting ledger or system which
contains a record of each escrow for which Issuing Agent has
assigned an internal file number. This accounting record should
contain sufficient detail for purposes of identifying every
receipt and check by number and escrow number, and the
disbursements and deposits must balance on a daily basis wit the
escrow bank account balances involved. Any debit (shortage)
balances which appear for any escrow must be immediately
rectified by either correction of an error or the deposit of
sufficient funds to eliminate the shortage.
iii. The bank account should be reconciled to the control account
(checkbook) monthly. A trial balance of the individual escrow
ledger records should be prepared monthly, retained, and the
total reconciled to the control account (checkbook) and
reconciled bank balance monthly. Checks and drafts should be
pre-number, used in numerical sequence, properly safeguarded and
required dual signatures unless impractical.
m. Issuing Agent shall not, without written approval of the Company which
approval shall be at the Company's sole absolute and unfettered discretion:
i. Commit the Company to a risk in excess of $500,000.00.
ii. Commit the Company to a risk involving a title where Issuing
Agent has knowledge of defects, adverse claims or questions of
title known in the community.
iii. Any unusual, uninsurable or, or extra ordinary risk as set forth
in Company's rules, instructions or manuals or known by Issuing
Agent
iv. Accept an application for title insurance for an amount less than
the present fair market value of the premises involved for
owner's policies nor for less than the amount of indebtedness for
loan policies.
v. Vary or. change the printed portion of any form of commitment,
policy or endorsement, nor commit Company to any particular
interpretation of the terms or provisions of any commitment,
policy or endorsement.
vi. Incur debt in the name of the Company, adjust any claim for loss
on behalf of the Company or accept service of summons, or other
process on behalf of the Company.
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vii. Receive any fund, including escrow or closing funds, in the name
of the Company, but shall receive and account for same on its own
account.
viii.Issue any Title Assurance on land in which Issuing Agent or any
of its employees, officers or directors, partners or stockholders
have an interest or will have an interest upon issuance of the
Title Assurance.
ix. Charge a premium less than one approved by Company or promulgated
by the Insurance Commissioner in the state of operation,
exclusive of any special work charges where permitted.
x. Issuing Agent shall not create liability of Company to any party
for funds deposited in the Issuing Agents escrow or trust
account.
n. Issuing Agent agrees to indemnify Company for all loss, costs or damage
including attorney's fees and other costs which Company may sustain or become
liable for on account of:
i. Failure of Issuing Agent to comply with the terms of this
Agreement or with rules, regulations and instructions given to
Issuing Agent by Company.
ii. Any dishonest, fraudulent malicious, criminal or grossly
negligent act, or dishonest fraudulent malicious or grossly
negligent omission by Issuing Agent, its employees or its agent,
in connection with either:
a. The issuance of an abstract of title, commitment, evidence
of title, or policy of the company, or
b. A closing by the Issuing Agent its employees, or its agents
of any transaction involving the issuance of a policy of the
company.
iii. Escrow loss limited to losses occasioned by Issuing Agent's
failure to disburse properly or close in accordance with escrow
instruction; or where such escrow funds are misappropriated by
Issuing Agent, its officers, employees or agents.
iv. Any loss suffered by an insured under a usual form of title
policy where any printed exceptions, conditions and stipulations
have been eliminated or modified without the express approval of
the Company.
v. Any and all losses payable on the basis of erroneous preliminary
reports or other title reports when no title insurance policy has
been issued.
vi. Any and all losses arising from the payoff of existing liens by
parties other than the Issuing Agent unless approved by the
Company.
vii. Fraud, dishonesty or defalcation of Issuing Agent, its employees,
officers, directors or agents of Issuing Agent.
viii.Any act or failure to act of an employee, agent, officer pr
attorney of Issuing Agent which could result in Company being
liable for bad faith, unfair claim practices, punitive damages or
deceptive trade practices.
o. Issuing Agent may, at its option, pay any and all claims brought against
it under terms of this section, and shall then be subrogated to the rights of
Company with respect to same.
p. Issuing Agent shall carry at its own cost and expense the professional
liability insurance policy or policies and/or bonds shown on Schedule B attached
hereto, and provide complete copies of same to the Company.
q. Issuing Agent shall not use in its corporate name or any assumed
business name the words "United General" with out the written consent of the
president of the Company. Issuing Agent shall not state or imply in advertising,
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business promotional material or otherwise, the existence of any relationship or
affiliation between the Company and Issuing Agent other than that Issuing Agent
is an authorized policy issuing agent of Company.
4. COMPANY RIGHTS AND RESPONSIBILITIES
a. Company shall have the right at all reasonable times to examine all
trust or escrow accounts or records of Issuing Agent and to check any and all
settlement checks, books, records and files of Issuing Agent pertinent to its
title and escrow operations. Issuing Agent shall promptly, upon request by
Company, authorize the bank or other depository institution where such trust or
escrow accounts pertaining to the title and escrow operations are located to
allow the Company a right of access to such accounts.
b. Company shall determine promptly all questions of risk submitted by the
Issuing Agent and to issue a written approval or denial of the risk, if the risk
submitted is in writing or if specifically requested by Issuing Agent to issue a
written memorandum regarding basis of the denial of incurring such risk.
c. The Company shall be liable for all losses, damages, expenses and costs
arising out of claims covered by and based upon title insurance forms issued
under the terms of this Agreement excepting only those losses, damages, expenses
and costs caused by actions or omissions for which Issuing Agent is made
responsible herein.
d. Company shall have the right to adjust, settle or compromise claims and,
in its sole discretion, to commence, defend, compromise or withdraw from
actions, suits or prosecutions and in general do all things in connection
therewith that it may deem expedient.
5. TERMINATION
a. This Agreement may be canceled by either party hereto by written notice
of intention to cancel sent by certified mail by either party to the other. Any
cancellation shall take effect at the expiration of sixty (60) days after the
mailing of such notice, unless mutually agreed by the parties to take effect at
an earlier or later date. In the event of a material breach of this Agreement, a
party may terminate this Agreement effective immediately by giving notice to the
other by certified mail.
b. This Agreement may be terminated by either party hereto after thirty
(30) days following the filing of a petition in bankruptcy by either party
hereto, or when the petition, if filed by a creditor of such party, contains an
allegation of insolvency and results in a final adjudication of bankruptcy
against either party, or if either party should go into liquidation,
receivership or have a conservator or rehabilitator appointed.
c. The Company shall have the right forthwith to cancel and terminate this
Agreement in the event Issuing Agent falls to report and to pay to Company the
underwriting risk premium due the latter in accordance with the provisions of
paragraph 3e herein above, or otherwise fails to company with the terms and
provisions of this Agreement or if Company shall receive information of any act
of apparent fraud or dishonesty on the part of the Issuing Agent or any of
Issuing Agent's officers. employees or agents.
d. In the event of any shortage of funds in Issuing Agent's escrow, closing
or trust account, Company may terminate this Agreement immediately upon written
notice to the Issuing Agent, notwithstanding any provision s herein to the
contrary.
e. The issuance of a Cease and Desist Order by any legally authorized
regulatory agent by the terms of which Issuing Agent is prohibited from further
business activity in Arizona as a title insurance agency.
f. Issuing withdrawal, voluntary, by Company from the Territory, or any
part thereof covered by this Agreement or the disqualification of Company to
transact or continue to transact business therein, shall automatically terminate
this agreement. It is expressly agreed that Company has the right at any time,
solely at its option, to withdraw from such Territory, or any part thereof, or
cease business therein for any reason deemed proper and sufficient by Company,
including but not limited to business, economic and financial reasons, or on
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account of any taxes, license fees, laws, restriction, or of regulations or
orders of any governmental authority affecting the business contemplated
hereunder or the mode or cost of transacting same, or premiums or income arising
therefrom.
g. Upon the termination of this Agreement, all supplies, forms and records
of Company in the possession of Issuing Agent shall promptly be delivered by
Issuing Agent to Company, and Issuing Agent shall promptly account for and pay
to Company all underwriting fees due, including but not limited to underwriting
fees which Issuing Agent has collected for policies to be issued, pursuant to
outstanding commitment. Notwithstanding a termination of the agreement, all
duties obligations and undertaking s of the Issuing Agent herein contained shall
survive such termination and remain in full force and effect until such time as
the same have been fully performed.
h. If, upon termination of this Agreement, Issuing Agent shall have in its
possession or under its control any funds or other indemnity against loss or
damage to Company, upon or by reason of a commitment or policy, Issuing Agent
shall forthwith transfer said funds and other indemnity to Company, together
with all agreements and other writings pertaining thereto.
i. At the option of Company, this Agreement may be terminated should there
be a change in ownership of the controlling interest of the Issuing Agent or a
change in the management of the Issuing Agent. A change in the ownership of the
capital stock of at least 51% or more of such stock shall be deemed to be a
change in the ownership or controlling interest of the Issuing Agent.
Notification to the Company of such change in ownership or control must occur
within thirty days of said change.
6. MISCELLANEOUS
a. Company may from time to time promulgate rules for the transaction of a
title insurance business by Issuing Agent. Issuing Agent agrees to abide by such
rules and regulations.
b. All notices provided herein shall be in writing, by certified mail,
return receipt requested, addressed to the parties set forth below or as may be
changed by further communications in writing.
i. Notices to Issuing Agent shall be sent to:
Capital Title Agency, Inc.
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Head
ii. Notices to Company shall be sent to:
United General Title Insurance Company
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Agency Department
c. This agreement together with all of the schedules attached hereto
constitutes the entire relations between the parties and there are no
representations, warranties, covenants or promises, whether made as inducement
to the execution hereof, or otherwise, not set forth herein, all such and all
prior negotiations being expressly merged and integrated herein.
d. This Agreement is binding on and ensures to the benefit of any corporate
successors of Company.
e. This Agreement is not transferable by either party without the written
consent of the other.
f. In the event any portion of this Agreement is held to be invalid and/or
unenforceable under applicable law, the remaining portion of this Agreement
shall continue in full force and effect as if the invalid and/or unenforceable
portion had never been included in this Agreement.
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g. If either party shall institute an action against the other party for
breach of this Agreement, the unsuccessful party shall pay court costs and
reasonable attorney's fees to the successful xxxxx.
h. If this Agreement is canceled pursuant to any of the terms hereof, the
obligations to make any payments, provide notification as to claims and to
provide the records and files or access thereto shall continue beyond the date
of the cancellation of this Agreement.
i. Company agrees to pay premium taxes or any taxes similar thereto
assessed against the title insurance premiums and Issuing Agent agrees to pay
all other taxes of whatever nature to all other taxing authorities.
j. No failure by Company to insist upon strict performance of any provision
of the Agreement or to exercise any right power, or remedy arising out of a
breach of this Agreement and no acceptance of any payment or remittance from
Issuing Agent during such breach, shall constitute a waiver of such breach or of
any such provision. No express waiver of any such breach shall affect this
Agreement, which shall continue in full force and effect. No express waiver of
any such breach shall affect the rights of Company as to any other then existing
or subsequent breach of any provision of this Agreement.
k. Captions used in this Agreement are not binding as they relate to the
body of the Agreement.
In witness whereof, the parties hereto have caused this agreement to be executed
the day and year first above written.
UNITED GENERAL TITLE INSURANCE COMPANY CAPITAL TITLE AGENCY, INC.
a Louisiana corporation
BY: /s/ Xxxxx Xxxxxxxx BY:/s/ Xxxxxx X. Head
----------------------------------- ----------------------------
XXX XXXX
ITS: Vice President ITS: CEO
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SCHEDULE A
Attached to and made a part of the Agreement between UNITED GENERAL TITLE
INSURANCE COMPANY, hereinafter referred to as Company and
CAPITAL TITLE AGENCY. INC.
hereinafter referred to as Issuing Agent.
EFFECTIVE DATE OF AGREEMENT, DESCRIPTION OF
ISSUING AGENT'S TERRITORY, RISK LIMITS, TITLE INSURANCE
RATES, COMMISSIONS, AND CANCELLATION
1. Effective date of this Agreement:
2. Issuing Agent shall not insure any risk in excess $500,000.00 without prior
approval of Company.
3. RATES. Attached to this Schedule A and identified as "Exhibit 1" are the
title insurance rates referred to in this Agreement This Agreement and this
schedule shall automatically be amended to include any amendments to title
insurance rates that may be enacted or promulgated by any governmental
agency, legislature or commission. Company shall provide copies of said
amendments to Issuing Agent;
4. COMMISSIONS. Issuing Agent shall be entitled to a commission on all Title
Assurances issued by Issuing Agent for Company, which commission shall be
90 % of the title insurance rates set forth in Exhibit 1 attached hereto.
5. COMMISSIONS. In cases where Company directly refers title insurance
business to Issuing Agent, Issuing Agent shall be entitled to a commission
on those Title Assurances issued by Issuing Agent for such referred
business, which commission shall be 90% of the insurance rates set forth
in Exhibit 1 attached hereto.
6. CANCELLATION. This Agreement may be canceled by either party hereto, other
than as set forth in Section 5 of the Agency Agreement, by written notice
of intention to cancel sent by registered or certified United States mail
to the other party hereto at their last known business address. Any such
cancellation shall take effect at the expiration of sixty (60) days after
the mailing of such notice.
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SCHEDULE B
Attached to and made a part of the Agreement between UNITED GENERAL TITLE
INSURANCE COMPANY, hereinafter referred to as Company and
CAPITAL TITLE AGENCY. INC.
hereinafter referred to as Issuing Agent.
ISSUING AGENT'S FINANCIAL CONDITION AND
INSURANCE COVERAGES
1. Issuing Agent shall, upon request, provide Company with a balance sheet and
income statement, as of the close of Issuing Agent's most recent fiscal
year or at such other times as requested by Company.
2. Issuing Agent agrees that it will obtain and maintain the following
insurance coverages in a form acceptable to the Company.
The following provisions as indicated and initialed are applicable to this
Agreement.
[ ] Title Insurance Agent's Errors and Omissions Policy and Opinion of Title
Coverage with limits of not less than $_____.
[ ] Abstractor's Error and Omissions Policy with limits of not less then
$________________.
[ ] Escrow Agent's Errors and Omissions Policy with limits of not less than
$_______________.
[ ] Commercial blanket bond or similar fidelity bond covering its officers
and employees with limits of not less than $__.
[ ] Lawyer's Professional Liability insurance with limits of not less than
$______________.
[ ] Such other insurance or bonding as required by the laws of the state or
territory where Issuing Agent is engaged in business.
Any of the above policies shall provide that at least ten (10) days prior notice
of cancellation shall be given to Company. Issuing Agent agrees to furnish
Company with evidence of compliance with this provision, including a copy of
said policy(ies) and every renewal thereof.
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SCHEDULE C
Attached to and made a part of the Agreement between UNITED GENERAL TITLE
INSURANCE COMPANY hereinafter referred to as Company and
CAPITAL TITLE AGENCY. INC.
hereinafter referred to as Issuing Agent
INSURED CLOSING AGENCY AGREEMENT
WHEREAS, Issuing Agent is authorized to issue tide insurance on behalf of
Company in the State of ARIZONA and in connection therewith, has been requested
by one or more lending institutions to close real estate loans on behalf of such
lending institutions and issue Title Assurances in connection therewith; and
WHEREAS, such lender or lenders have or may in the future request, in
connection with such loan closings, a guaranteed loan closing letter from
Company assuring the faithful performance of the closing instructions of such
lender by Issuing Agent
NOW, THEREFORE, in consideration of the issuance of such guaranteed closing
letters in the past or hereafter by Company, Issuing Agent undertakes to
indemnify Company from any and all liability, loss or damage Company may suffer
as a result of claims, demands, costs or judgments arising against it as a
result of its issuance of any such guaranteed closing letters.
It is agreed that Company may. at any time, and without notice to Issuing
Agent, cancel such guaranteed closing letters.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
BY:/s/ E. Xxxxx Xxxxxxxx BY: /s/ Xxxxxx X. Head
-------------------------------------- ----------------------------
E. Xxxxx Xxxxxxxx Xxxxxx X. Head
Vice President Chairman/CEO
United General Title Insurance Company Capital Title Agency, Inc.
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SCHEDULE D
Attached to and made a part of the Agreement between UNITED GENERAL TITLE
INSURANCE COMPANY, hereinafter referred to as Company and
CAPITAL TITLE AGENCY. INC.
hereinafter referred to as Jssuing Agent
Being part of a certain Agency Contract between United General Title Insurance
Co.,. and Issuing Agent:
1. If co-insurance is required by an insured, the cost of such co-insurance
will be deducted from the premium and sent to Company together with the
normal underwriting fee on the balance..
2. Issuing Agent shall indemnify and hold the Company harmless from all losses
sustained by it as a proximate result of Issuing Agent's fraudulent or
other willful misconduct, or gross negligence, while acting in any capacity
by reason of which the Company becomes legally responsible for such acts or
omissions.
3. Issuing Agent shall be liable for the first Five Thousand ($5,000.00)
dollars, including the Company's attorney fees and preliminary
investigation expenses relating to claims or demands made under title
insurance undertakings issued by Company though Issuing Agent provided such
losses are not the proximate result of fraud or other willful misconduct or
gross negligence on the part of Issuing Agent.
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