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CONDITIONS AND STIPULATIONS 1 . DEFINITION OF TERMS . ( d ) In all cases where this policy permits or requires the Company to prose- The following terms when used in this policy mean : cute or provide for the defense of any action or proceeding , the insured shall (a ) " insured " : the insured named in Schedule A, and , subject to any rights secure to the Company the right to so prosecute or provide defense in the action or defenses the Company would have had against the named insured , those who or proceeding , and all appeals therein , and permit the Company to use, at its succeed to the interest of the named insured by operation of law as distinguished option , the name of the insured for this purpose . Whenever requested by the from purchase including , but not limited to, heirs, distributees, devisees, survivors, Company, the insured , at the Company' s expense, shall give the Company all personal representatives, next of kin , or corporate or fiduciary successors . reasonable aid ( i ) in any action or proceeding , securing evidence , obtaining wit- ( b ) " insured claimant" : an insured claiming loss or damage . nesses, prosecuting or defending the action or proceeding , or effecting settle- (c) " knowledge" or " known " : actual knowledge, not constructive knowledge ment, and ( ii ) in any other lawful act which in the opinion of the Company may or notice which may be imputed to an insured by reason of the public records as be necessary or desirable to establish the title to the estate or interest as insured . defined in this policy or any other records which impart constructive notice of If the Company is prejudiced by the failure of the insured to furnish the required matters affecting the land . cooperation , the Company's obligations to the insured under the policy shall ter- (d ) " land" : the land described or referred to in Schedule A, and improve- minute, including any liability or obligation to defend , prosecute, or continue any ments affixed thereto which by law constitute real property . The term ' land" litigation, with regard to the matter or matters requiring such cooperation . does not include any p(pperty beyond the lines of the area described or referred 5 . PROOF OF LOSS OR DAMAGE, to in Schedule A, nor any right, title, interest, estate or easement in abutting In addition to and after the notices required under Section 3 of these Condi- streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall tions and Stipulations have been provided the Company, a proof of loss or dam- modify or limit the extent to which a right of access to and from the land is age signed and sworn to by the insured claimant shall be furnished to the Com- insured by this policy. pany within 90 days after the insured claimant 'shall ascertain the facts giving rise (e) mortgage . mortgage, deed of trust, trust deed, or other security to the loss or damage . The proof of loss or damage shall describe the defect in, instrument. or lien or encumbrance on the title , or other matter insured against by this policy (f) " public records" : records established under state statutes at Date of Pol- which constitutes the basis of loss or damage and shall state, to the extent possi- icy for the purpose of imparting constructive notice of matters relating to real ble, the basis of calculating the amount of the loss or damage . If the Company is property to purchasers for value and without knowledge . With respect to Section prejudiced by the failure of the insured claimant to provide the required proof of 1 (a )(iv) of the Exclusions From Coverage, " public records" shall also include loss or damage, the Company's obligations to the insured under the policy shall environmental protection liens filed in the records of the clerk of the United States terminate, including any liability or obligation to defend , prosecute, or continue district court for the district in which the land is located. any litigation , with regard to the matter or matters requiring such proof of loss or (g) "unmarketability of the title" : an alleged or apparent matter affecting damage . the title to the land, not excluded or excepted from coverage, which would entitle In addition , the insured claimant may reasonably be required to submit to a purchaser of the estate or interest described in Schedule A to be released from examination under oath by any authorized representative of the Company and the obligation to purchase by virtue of a contractual condition requiring the shall produce for examination, inspection and copying, at such reasonable times delivery of marketable title. and places as may be designated by any authorized representative of the Com- 2. CONTINUATION OF INSURANCE AFTER CONVEYANCE OF TITLE, pany, all records, books, ledgers, checks, correspondence and memoranda , The coverage of this policy shall continue in force as of Date of Policy in whether bearing a date before or after Date of Policy, which reasonably pertain favor of an insured only so long as the insured retains an estate or interest in the to the loss or damage . Further, if requested by any authorized representative of land, or holds an indebtedness secured by a purchase money mortgage given by the Company, the insured claimant shall grant its permission , in writing , for any a purchaser from the insured , or only so long as the insured shall have liability by authorized representative of the Company to examine, inspect and copy all reason of covenants of warranty made by the insured in any transfer or convey- records, books, ledgers, checks, correspondence and memoranda in the custody ante of the estate or interest. This policy shall not continue in force in favor of or control of a third party, which reasonably pertain to the loss or damage . All any purchaser from the insured of either (i) an estate or interest in the land, or (ii) information designated as confidential by the insured claimant provided to the an indebtedness secured by a purchase money mortgage given to the insured . Company pursuant to this Section shall not be disclosed to others unless, in the 3 . NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT, reasonable judgment of the Company, it is necessary in the administration of the The insured shall notify the Company promptly in writing (i) in case of any claim . Failure of the insured claimant to submit for examination under oath, pro- litigation as set forth in Section 4(a) below, (ii) in case knowledge shall come to duce other reasonably requested information or grant permission to secure rea - an insured hereunder of any claim of title or interest which is adverse to the title sonably necessary information from third parties as required in this paragraph to the estate or interest, as insured , and which might cause loss or damage for shall terminate any liability of the Company under this policy as to that claim . which the Company may be liable by virtue of this policy, or (iii) if title to the 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS ; TERMINATION OF estate or interest, as insured, is rejected as unmarketable. If prompt notice shall LIABILITY. not be given to the Company, then as to the insured all liability of the Company In case of a claim under this policy, the Company shall have the following shall terminate with regard to the matter or matters for which prompt notice is additional options: required; provided , however, that failure to notify the Company shall in no case (a) To Pay or Tender Payment of the Amount of Insurance. prejudice the rights of any insured under this policy unless the Company shall be To pay or tender payment of the amount of insurance under this policy prejudiced by the failure and then only to the extent of the prejudice. together with any costs, attorneys' fees and expenses incurred by the insured 4. DEFENSE AND PROSECUTION OF ACTIONS ; DUTY OF INSURED claimant, which were authorized by the Company, up to the time of payment or CLAIMANT TO COOPERATE, tender of payment and which the Company is obligated to pay. (a) Upon written request by the insured and subject to the options contained Upon the exercise by the Company of this option, all liability and obligations in Section 6 of these Conditions and Stipulations, the Company, at its own cost to the insured under this policy, other than to make the payment required , shall and without unreasonable delay, shall provide for the defense of an insured in terminate, including any liability or obligation to defend , prosecute, or continue litigation in which any third party asserts a claim adverse to the title or interest as any litigation , and the policy shall be surrendered to the Company for insured, but only as to those stated causes of action alleging a defect, lien or cancellation . encumbrance or other matter insured against by this policy. The Company shall ( b) To Pay or Otherwise Settle With Parties Other than the Insured or have the right to select counsel of its choice (subject to the right of the insured to With the Insured Claimant. object for reasonable cause to represent the insured as to those stated causes of (i) to pay or otherwise settle with other parties for or in the name of an action and shall not be liab a for and will not pay the fees of any other counsel . insured claimant any claim insured against under this policy, together with any The Company will not pay any fees, costs or expenses incurred by the insured in costs, attorneys' fees and expenses incurred by the insured claimant which were the defense of those causes of action which allege matters not insured against by authorized by the Company up to the time of payment and which the Company this policy. is obligated to pay; or ( b) The Company shall have the right, at its own cost, to institute and prose- (ii) to pay or otherwise settle with the insured claimant the loss or dam - cute any action or proceeding or to do any other act which in its opinion may be age provided for under this policy, together with any costs, attorneys' fees and necessary or desirable to establish the title to the estate or interest, as insured , or expenses incurred by the insured claimant which were authorized by the Com- to prevent or reduce loss or damage to the insured . The Company may take any pany up to the time of payment and which the ompany is obligated to pay. appropriate action under the terms of this policy, whether or not it shall be liable Upon the exercise by the Company of eitheCr of the is provided for in hereunder, and shall not thereby concede liability or waive any provision of this paragraphs ( b)(i) or (ii), the Company's obligations to the insured under this pol - policy . If the Company shall exercise its rights under this paragraph , it shall do so icy for the claimed loss or damage, other than the payments required to be diligently, made, shall terminate, including any liability or obligation to defend , prosecute (c) Whenever the Company shall have brought an action or interposed a or continue any litigation . defense as required or permitted by the provisions of this policy, the Company 7. DETERMINATION , EXTENT OF LIABILITY. may pursue any litigation to final determination by a court of competent jurisdic- This policy is a contract of indemnity against actual monetary loss or dam - tion and expressly reserves the right, in its sole discretion, to appeal from any age sustained or incurred by the insured claimant who has suffered loss or dam - adverse judgment or order. age by reason of matters insured against by this policy and only to the extent herein described . ( continued and concluded on last page of this policy )