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CONDITIONS AND STIPULATIONS Continued •
<br /> ' (continued from reverse side of Policy Face)
<br /> defect, lien or encumbrance or other matter insured against by this policy. The (ii) in case loss or damage is claimed under this policy by the owner of
<br /> Company shall have the right to select counsel of its choice(subject to the right the indebtedness secured by the insured mortgage, to purchase the indebted-
<br /> of such insured to object for reasonable cause) to represent the insured as to ness secured by the insured mortgage for the amount owing thereon together
<br /> tx-re stated causes of action and shall not be liable for and will not pay the with any costs, attorneys' fees and expenses incurred by the insured claimant
<br /> xf any other counsel. The company will not pay any fees,costs or expenses which were authorized by the Company up to the time of purchase and which
<br /> ,..-.,rred by an insured in the defense of those causes of action which allege the Company is obligated to pay.
<br /> matters not insured against by this policy. If the Company offers to purchase the indebtedness as herein Provided,
<br /> (b) The Company shall have the right, at its own cost, to institute and the owner of the indebtedness shall transfer, assign, and convey the indebted-
<br /> prosecute any action or proceeding or to do any other act which in its opinion ness and the insured mortgage, together with any collateral security, to the
<br /> may be necessary or desirable to establish the title to the estate or interest or Company upon payment therefor.
<br /> the lien of the insured mortgage, as insured, or to prevent or reduce loss or Upon the exercise by the Company of the option provided for in pare-
<br /> damage to an insured. The Company may take any appropriate action under graph a(i), all liability and obligations to the insured under this policy, other
<br /> the terms of this policy,whether or not it shall be liable hereunder,and shall not than to make the payment required in that paragraph, shall terminate, includ-
<br /> thereby concede liability or waive any provision of this policy..If the Company ing any liability or obligation to defend, prosecute, or continue any litigation,
<br /> shall exercise its rights under this paragraph, it shall do so diligently. and the policy shall be surrendered to the Company for cancellation.
<br /> (c) Whenever the Company shall have brought an action or interposed a Upon the exercise by the Company of the option provided for in paragraph
<br /> defense as required or permitted by the provisions of this policy,the Company a(ii) the Company's obligation to an insured Lender under this policy for the
<br /> may pursue any litigation to final determination by a court of competent 'oils- claimed loss or damage, other than the payment required to be made, shall
<br /> diction and expressly reserves the right,in its sole discretion,to appeal from any terminate, including any liability or obligation to defend, prosecute or continue
<br /> adverse judgment or order. any litigation.
<br /> (d) In all cases where this policy permits or requires the Company to prose-' (b) To Pay or Otherwise Settle With Parties Other than the Insured or
<br /> cute or provide for the defense of any action or proceeding, an insured shall With the Insured Claimant.
<br /> secure to the Company the right to so prosecute or provide defense in the action (i) to pay or otherwise settle with other parties for or in the name of
<br /> or proceeding, and all appeals therein, and permit the Company to use, at its an insured claimant any claim insured against under this policy, together with
<br /> option, the name of such insured for this purpose. Whenever requested by the any costs, attorneys'fees and expenses incurred by the insured claimant which
<br /> Company, an insured, at the Company's expense, shall give the Company all were authorized by the Company up to the tithe of payment and which the
<br /> reasonable aid (i) in any action or proceeding, securing evidence, obtaining Company is obligated to pay; or
<br /> witnesses, prosecuting or defending the action or proceeding, or effecting set- (ii) to pay or otherwise settle with the insured claimant the loss or
<br /> tlement, and (ii) in any other lawful act which in the opinion of the Company damage provided for under this policy, together with any costs, attorneys'fees
<br /> may be necessary or desirable to establish the title to the estate or interest or and expenses incurred by the insured claimant which were authorized by the
<br /> the lien of the insured mortgage, as insured. If the Company is prejudiced by Company up to the time of payment and which the Company is obligated to
<br /> the failure of an insured to furnish the required cooperation, the Company's pay.
<br /> obligations to such insured under the policy shall terminate, including any liabil- Upon the exercise by the Company of either of the options provided for in
<br /> ity or obligation to defend, prosecute,or continue any litigation,with regard to paragraphs b(i) or b(ii), the Company's obligations to the insured under this
<br /> the matter or matters requiring such cooperation. policy for the claimed loss or damage,other than the payments required to be
<br /> 5. PROOF OF LOSS OR DAMAGE. made,shall terminate, including any liability or obligation to defend,prosecute
<br /> In addition to and after the notices required under Section 3 of these Con- or continue any litigation.
<br /> 's and Stipulations have been provided the Company, a proof of loss or 7, DETERMINATION AND EXTENT OF LIABILITY.
<br /> ge signed and sworn to by each insured claimant shall be furnished to the This policy is a contract of indemnity against actual,monetary loss or dam-
<br /> Company within 90 days after the insured claimant shall ascertain the facts age sustained or incurred by the insured claimant who has suffered loss or
<br /> giving rise to the loss or damage.The proof of loss or damage shall describe the damage by reason of matters insured against by this policy and only to the
<br /> defect in,or lien or encumbrance on the title,or other matter insured against by extent herein described.
<br /> this policy which constitutes the basis of loss or damage and shall state,to the (a) The liability of the Company under this policy to on insured lender shall
<br /> extent possible,the basis of calculating the amount of the loss or damage. If the not exceed the least of:
<br /> Company is prejudiced by the failure of an insured claimant to provide the (i) the Amount of Insurance stated in Schedule A, or, if applicable,
<br /> required proof of loss or damage, the Company's obligations to such insured the amount of insurance as defined in Section 2 (c) of these Conditions and
<br /> under the policy shall terminate, including any liability or obligation to defend, Stipulations;
<br /> prosecute, or continue any litigation, with regard to the matter or matters (ii) the amount of the unpaid principal indebtedness secured by the
<br /> requiring such proof of loss or damage. insured mortgage as limited or provided under Section 8 of these Conditions
<br /> In addition, an insured claimant may reasonably be required to submit an and Stipulations or as reduced under Section 9 of these Conditions and Stipula-
<br /> examination under oath by any authorized representative of the Company and tions, at the time the loss or damage insured against by this policy occurs,
<br /> shall produce for examination,inspection and copying,at such reasonable times together with interest thereon; or
<br /> and places as may be designated by any authorized representative of the (iii) the difference between the value of the insured estate or interest
<br /> Company,all records,books,ledgers,checks,correspondence and memoranda, as insured and the value of the insured estate or interest subject to the defect,
<br /> whether bearing a date before or after Date of Policy, which reasonably per- lien or encumbrance insured against by this policy.
<br /> tain to the loss or damage. Further, if requested by any authorized represents- (b) In the event the insured lender has acquired the estate or interest in the
<br /> tive of the Company, the insured claimant shall grant its permission, in writing, manner described in Section 2(a) of these Conditions and Stipulations or has
<br /> for any authorized representative of the Company to examine,inspect and copy conveyed the title,then the liability of the Company shall continue as set forth in
<br /> all records, books, ledgers, checks, correspondence and memoranda in the cus- Section 7(a)of these Conditions and Stipulations.
<br /> tody or control of a third party,which reasonably pertain to the loss or damage. (c) The liability of the Company under this policy to an insured owner of
<br /> All information designated as confidential by an insured claimant provided to the estate or interest in the land described in Schedule A shall not exceed the
<br /> the Company pursuant to this Section shall not be disclosed to others unless, in least of:
<br /> the reasonable judgment of the Company, it is necessary in the administration (i) the Amount of Insurance stated in Schedule A; or,
<br /> of the claim. Failure of an insured claimant to submit for examination under (ii) the difference between the value of-the insured estate or interest
<br /> oath, produce other reasonably requested information or grant permission to as insured and the value of the insured estate or interest subject to the defect,
<br /> secure reasonably necessary information from third parties as required in this lien or encumbrance insured against by this policy.
<br /> paragraph, unless prohibited by law or governmental regulation, shall fermi- (d) The Company will pay only those costs, attorneys' fees and expenses
<br /> nate any liability of the Company under this policy as to that insured for that incurred in accordance with Section 4 of these Conditions and Stipulations.
<br /> claim. 8.. LIMITATION OF LIABILITY.
<br /> b. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION (a) If the Company establishes the title,or removes the alleged defect,lien
<br /> OF LIABILITY. or encumbrance, or cures the lack of a right of access to or from the land, or
<br /> 1 case of a claim under this policy, the Company shall have the following cures the claim of unmarketability of title,or otherwise establishes the lien of the
<br /> c final options: insured mortgage, all as insured, in a reasonably diligent manner by any
<br /> •(a) To Pay or Tender Payment of the Amount of Insurance or to Pur- method, including litigation and the completion of any appeals therefrom, it
<br /> chase the Indebtedness. shall have fully performed its obligations with respect to that matter and shall not
<br /> (i) to pay or tender payment of the amount of insurance under this be liable for any loss or damage caused thereby.
<br /> policy together with any costs, attorneys' fees and expenses incurred by the _.. , - .,.. /7
<br /> insured claimant, which were authorized by the Company, up to the time of
<br /> payment or tender of payment and which the Company is obligated to pay; or • ,.. k'
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