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<br /> <br />4. DEFENSE AND PROSECUTION OF ACTIONS: DUTY OF INSURED CLAIMANT TO COOPERATE, <br /> <br />(a) Upon written request by the insured and subject to the options contained in Section 6 of these Conditions and Stipulations, the Company, at its own cost and without unreasonable delay, shall <br />provide for the defense of an insured in litigation in which any third party asserts a daim adverse to the tiUe or interest as insured, but only as to those stated causes of action alleging a <br />defect. lien or encumbrance or other matter insured against by this policy, The Company shall have the right to select counsel of'its choice (subject to the right of the insured to object for <br />reasonable cause) to represent the insured as to those stated causes of action and shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, <br />costs or expenses incurred by the insured in the defense of those causes of action thai allege matters not insured against by this policy, <br />(b) The Company shall have the right, at its own cosl. to institute and prosecute any action or proceeding or to do any other act that in its opinion may be necessary or desirable to astablish the <br />tiUe to the estate or interest, as insured, or to prevent or reduce loss or damege to the insured, The Company may take any appropriate action under the terms of this policy, whether or not it <br />shall be liable hereunder, and shell not thereby concede liability or waive any provision of this policy. If Ihe Compeny shell exercise'ils righls under this paregreph, II shall do so diligenUy, <br /> <br />(c) Whenever the Company shall heve brought en ecUon or Interposed a dafense es required or permitted by the provisions of this policy, the Company may pursue eny litigation to final <br />determination by a court of compatent Jurisdiction and expreSSly reseIYes the right, In III sole discretion, to appeal from any edverse Judgmanl or ordar. <br /> <br />(d) In all ClS8I where this policy permits or requires Ihe Compeny to prosecute or provide for the defeose of any ection or proceeding, the Insured shell secure to the Compeny the right to so <br />prosecute or provide defense In the ection or proceeding, and all appeals therein, end permllthe Company to use, at lis option, the name of the Insured for this purpose, Whenever requested <br />by the Company, Ihe Insured, althe Company's expense, shall give the Company all reasonable aid (I) In any action or proceeding, IIcuring evidence, obtaining witnessll, prollcuting or <br />dafendlng the action or proceeding, or effecting selllemanl, and (II) In any other lawful acl thai In the opinion of the Company may be necessary or dlllrebleto establish the tiUeto the estate <br />or Interest II Insured, If the Company Is prejudiced by the failure of tha Insured to fumlsh the required cooperation, the Company's obligations to Ihe Insured under tha policy shall terminate, <br />Including any liability or obligation to dafend, prollcute, or continue any litigation, with regard to the matter or melters requiring such cooperetion, <br /> <br />5. PROOF OF LOSS OR DAMAGE, <br /> <br />In addltion'to and after the notices required undar Section 3 of these CondiUons and Stipulations have been provided the Company, a proof of loss or damage signed and sworn to by the insured <br />ctalmant shall be fumlshed to the Company within 91 days alter the Insured claimant shall ascertain the faels giving rise to the loss or damage, The proof of loss or damage shall describe the dafect <br />in, or lien or encumbrence on the tiUe, or other malter Insured against by this policy thai constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculallng the <br />amount of the loss or damage, If the Company Is prejudiced by the failure of the Insured claimant to provide the required proof of loss or damaga, the Company's obligations to the insured under the <br />policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation. with regard to the matter or matters requiring such proof of loss or damage, <br /> <br />In addillon, the insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, <br />inspaction and copying, al such reasonabla times and places as may be designated by any authorized representative of the Company, all records, books, ledgars, checks. correspondence and <br />mamorenda, whether bearing a date before or after Date of Policy, which reasonably pertain to the loss or damage, Further, if requested by any authorized representative of the Company, the <br />insured claimant shall grant its permission, in writing, for any authorized representative of the Company to examine. inspect and copy all records. books. ledgers. checks, correspondence and <br />memoranda in the custody or control of a third party, which reasonably pertain to the loss or damage, All information designated as confidential by the insured claimant provided to the Company <br />, pursuant to this,Section shall not be disclosed to others unless. in the reasonable judgment of the Company, ilis necessary in the administration of the claim, Failure of the insured claimant to submit <br />for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary information from third parties as required In this paragraph shall <br />terminate any liability of the Company under this policy as to that claim. <br /> <br />6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS, TERMINATION OF LIABILITY, <br /> <br />In case of a claim under this policy, the Company shall have the following additional options: <br /> <br />(a) To Payor Tender Payment of the Amount of Insurance. <br /> <br />To payor tender payment of the amount of insurance under this policy, together with any costs, attomeys' fees and expenses incurred by the insured claimant, which were authorized by the <br />Company, up to the time of payment or tender of payment and which the Company is obligated to pay. <br /> <br />Upon the exercise by the Company of this option, all liability and obligations to the insured under this policy, other than to make the payment required, shall terminate, including any liability or <br />obligation to defend, prosecute, or continue any litigation, and the policy shall be surrendared to the Company for cancellation, <br /> <br />(b) To Payor Otherwise Settle With Parties Other than the Insured or With the Insured Claimant, <br /> <br />(i) to payor otherwise setUe with other parties for or in the name of an insured claimant any claim insured against under this policy, together with any costs, attomeys' fees and expenses <br />incurred by the insured claimant, which ware authorized by the Company up to tha time or payment and which the Company is obligated to pay; or <br /> <br />(ii) to payor otherwise setUe with the insured claimant the loss or damage provided for under this policy, together with any costs, attomeys' fees and expenses incurred by the insured <br />claimant, which ware authorized by the Company up to the time of payment and which the Company is obligated to pay, <br /> <br />Upon the exercise by the Company of either of the options providad for in paragraphs (b)(i) or (ii), the Company's obligations to the insured under this policy for the claimed loss or damage, other <br />than the payments required to be made, shalltarminata. including any liability or obligation to defend, prosecute or continue any litigation, <br /> <br />7. DETERMINATION, EXTENT OF LIABILITY AND CONINSURANCE. <br /> <br />This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the insured claimant who has suffered loss or damage by reason of mailers insured against by <br />this policy and only to the extent herein described, <br /> <br />(a) The liability of the Company under this policy shall not axceed the least of: <br /> <br />0) the Amount of Insurance stated in Schedule A; <br /> <br />(ii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by <br />this policy at the date the insured claimant is required to fumish to Company a proof of loss or damage in accordance with Section 5 of these Conditions and Stipulations, <br /> <br />(b) In the eventtha Amount of Insurance stated in Schedule A at the Date of Policy is less than 80 percent of the value of the insured estale or interest or the full consideration paid for the land, <br />whichever is less, or if subsequent to the Date of Policy an improvement is erected on the land which increases the value of the insured estate or Interest by atleasl 20 percent over the <br />Amount of Insurance stated in Schedule A, then this Policy is subject to the following: <br /> <br />(i) where no subsequent improvement has been made, as to any partial loss, the Company shall only pay the loss pro rata in the proportion thai the amount of insurance at Date of Policy <br />bears to the total velue of the insured estate or interest at Date of Policy; or <br /> <br />(ii) where a subsequent improvement has been made, as to any partial loss, the Company shall only pay the loss pro rata in the proportion that 120 percent of the Amount of Insurance <br />stated in Schedule A bears to the sum of the Amount of Insurance stated in Schedule A and amount expended for the imProvement. <br /> <br />The provisions of this paragraph shall not apply to costs, attomeys' fees and expenses for which the Company is liable under this policy, and shall only apply to that portion of any loss which <br />exceeds, in the aggregate, 10 percent of the Amount of Insurance stated in Schedule A, <br /> <br />(c) The Company will pay only those costs, attomeys' fees and expenses Incurred in accordance with Section 4 of these Conditions and Stipulations, <br /> <br />8. APPORTIONMENT <br /> <br />If the land described in Schedule A consists of two or more parcels that are not used as a single site, and a loss is established affecting one or more of the parcels but not all, the loss shall be <br />computed and setUed on a pro rata basis as W the amount of Insurance undar this policy was dividad pro rata as to the value on Date of Policy of each separate parcel to the whole, exclusive of any <br />improvements made subsequent to Date of Policy, unless a liability or value has otherwise been agreed upon as to each parcel by the Company and the insured at the time of the issuance of this <br />policy and shown by an express statement or by an endorsement atteched to this policy, <br /> <br />9. LIMITATION OF UABILlTY, <br /> <br />(a) If the Company establishes the tiUe, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from Ihe land, all as insured, or takes action in accordance <br />with Section 3 or Section 6, in a reasonably diligent manner by any method, including litigation and the completion of any appeals therefrom, it shall have full performed its obligations with <br />respeclto thet matter and shall not be liable for any loss or damage caused thereby, <br /> <br />(b) In the event of any litigation, induding litigation by the Company or with the Company's consent, the Company shall have no liability for loss or damage until there has been a final <br />determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the tiUe as insured, <br /> <br />(c) The Company shall not be liable for loss or damage to any insured for liability voluntarily essumed by the insured in setUing any claim or suit without the prior written conllnt of the Company, <br /> <br />10, REDUCTION OF INSURANCE: REDUCTION OR TERMINATION OF LIABIUTY. <br /> <br />All paymenll under this policy, axcept payments made for costs. attornays' fees and expenses, shall reduce the amount of the insurance pro tanto, <br /> <br />(Continued on Reverse Side of Page) <br /> <br /> <br /> <br />'I if; <br />./'" <br /> <br /> <br />CONDITIONS AND STIPULATIONS - Continued <br />