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HomeMy WebLinkAbout09-00500158- 00074764oq i5$ OWNER POLICY OF TITLE INSURANCE 44 0274 100 7707 CHICAGO TITLE INSURANCE COMPANY SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTI0 S FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, Chicago Title Insurance Company, a Missouri corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: I . Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Any statutory or constitutional mechanic's, contractor's, or materialman's lien for labor or material having its inception on or before Date of Policy; 4. Lack of a right of access to and from the land; 5. Lack of a good and indefeasible title. The Company also will pay the costs, attorneys' fees and expenses incurred in defense of the title, as insured, but only to the extent provided in the Conditions and Stipulations. In Witness Hereof, CHICAGO TITLE INSURANCE COMPANY has caused this policy to be executed by its President under the seal of the Company, but this policy is to be valid only when it bears an authorized countersignature, as of the date set forth in Schedule A. ISSUED BY: UNIVERSITY TITLE COMPANY 1021 University Drive E P. O. Drawer DT College Station, Texas 77841 (409) 260-9818 Authorized Signatory CHICAGO TITLE INSURANCE COMPANY President. Secretary. Reorder Form No. 8272 (Rev. 1193) SCHEDULE A Amount of Insurance: $316,000.00 Policy No. 44 0274 100 7707 File No. 961350 Premium: $2,421.00 Date of Policy: February 20, 1997 at 2:53 PM 1. Name of Insured: College Station Independent School District 2. The estate or interest in the land that is covered by this policy is: Fee Simple 3. Title to the estate or interest in the land is insured as vested in: College Station Independent School District 4. The land referred to in this policy is described as follows: Field notes of a 49.026 acre tract or parcel of land lying and being situated in the Robert Stevenson League, Abstract No. 54, City of College Station, Brazos County, Texas, and being the residue of the (called) 49.9812 acre tract (designated as two parcels, First Tract: 35.0 acres and Second Tract: 15.1864 acres save & except 1158.69 square varas) described in a Deed from the Veterans Land Board of the State of Texas to Edward P. McSwain dated December 5, 1989, recorded in volume 1157, Page 397 of the Official Records of Brazos County, Texas, and as now located on the ground being more particularly described as follows: BEGINNING at a 3/4" iron pipe, set near a 7" treated post fence corner in the new southeasterly R.O.W. line of "Graham Road", marking the common corner between the residue of the beforementioned 49.9812 acre parent tract and the adjoining Alton Goree Neelley and Lisa M. Neelley 68.201 acre "residue" tract, a 5/8" iron rod found marking an angle point in said R.O.W. line located N. 44-44-03 E. a distance of 1.43 feet for reference; THENCE S. 45-59-36 E. along a fence marking the line between the McSwain and Neelley parcels for a distance of 2062.05 feet to a 3/4" iron pipe set near a cross-tie fence corner marking their common corner in the northwest line of the Louise Rivers and Frances Mahoney 40 acre parcel, for corner, a 1/2" iron rod of unknown origin found located N. 54-44-45 E. a distance of 1.00 feet for reference; THENCE S. 44-18-48 W. approximately along a fence marking the line between the parent tract and the said 40 acre parcel for a distance of 720.83 feet to a 3/411 iron pipe set beside a cross-tie fence corner marking the west corner of the Rivers and Mahoney tract and the south corner of the beforementioned 35.0 acre parent tract component parcel, for an angle point; THENCE S. 44-00-24 W. along the southeasterly "deed call" line of the beforementioned 14.9812 acre parent tract component parcel (the residue of the A. S. McSwain 136 acre tract which is the parent of said 14.9612 acres lies to the southeast) for a distance of 312.81 feet to a 3/4" iron pipe, set for corner, a 3/8" iron rod found marking the east corner of the adjoining Angus S. McSwain, Jr. 15.1864 acre "Texas Vet.", tract located S. 43-24-30 E. a distance of 5.95 feet and 1/2" iron rod found beside a cross-tie fence corner marking the north corner of the "Bald SEE ATTACHED CONTINUATION OF LEGAL DESCRIPTION Texas Owner Policy T-1 (Rev. 1-1-93) Schedule A Valid Only If Schedule B And ORIGINAL Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company SCHEDULE A Policy No. 44 0274 100 7707 File Number: 961350 (Continuation of Legal Description) Prairie Subdivision" (specifically Lot No. 7) located S. 66-50-24 W. a distance of 1184.56 feet both for reference; THENCE N. 45-59-36 W. along the "deed call" southwesterly line of the 14.9812 acre parent tract component parcel for a distance of 2071.29 feet to a 3/411 iron pipe set in the beforementioned new southeasterly R.O.W. line of "Graham Road", for corner, a 3/41, iron rod found marking an angle point in said R.O.W. line located S. 44-01-36 W. a distance of 1100.58 feet for reference; THENCE along the new set-back southeasterly R.O.W. line of the (nominally 70 feet wide) "Graham Road" for the following two calls: 1) N. 44-01-36 E. for a distance of 1.65 feet to a 5/8" iron rod found beside a 6" treated post marking an angle point in the R.O.W., for an angle point; 2) N. 44-44-03 E. for a distance of 1032.07 feet to the Place of Beginning, containing 49.026 acres of land, more or less. The Company does not represent that the above acreage or square footage calculations are correct. Texas Owner Policy T-I (Rev. 1-1-93) Schedule A Valid Only If Schedule B And ORIGINAL Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company SCHEDULE B Policy No. 44 0274 100 7707 File No: 961350 EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorney's fees or expenses) that arise by reason of the terms and conditions of the leases or easements insured, if any, shown in Schedule A and the following matters: 1. The following restrictive covenants of record itemized below (the Company must either insert specific recording data or delete this exception): Deleted 2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements. 3. Homestead or community property or survivorship rights, if any, of any spouse of any insured. 4. Any titles or rights asserted by anyone, including but not limited to, persons, the public, corporations, governments or other entities, a. to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or b. to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or c. to filled-in lands, or artificial islands, or d. to statutory water rights, including riparian rights, or e. to the area extending from the line of mean low tide to the line of vegetation or the right of access to that area or easement along and across that area. 5. Standby fees, taxes and assessments by any taxing authority for the year 1997, and subsequent years, and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership. 6. The following matters and all terms of the documents creating or offering evidence of the matters (We must insert matters or delete this exception): a. Rights of Parties in Possession. b. Easement dated April 20, 1937, executed by J. A. Gandy to City of Bryan, and recorded in Volume 98, Page 84 of the Deed Records of Brazos County, Texas. C. Easement dated April 19, 1937, executed by A. B. McSwain, et ux to City of Bryan, and recorded in Volume 98, Page 319 of the Deed Records of Brazos County, Texas. d. Easement dated January 14, 1982, executed by Edward P. McSwain to Producer's Gas Company, and recorded in Volume 517, Page 507 of the Deed Records of Brazos County, Texas. SEE ATTACHED CONTINUATION OF EXCEPTIONS Texas Owner Policy T-1 (Rev. 1-1-93) Schedule 8 Valid Only If Schedule A And ORIGINAL Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company SCHEDULE B Policy NO. 44 0274 100 7707 File No: 961350 (Continuation of Exceptions) e. Easement dated May 6, 1993, executed by Edward P. McSwain to City of Bryan, and recorded in Volume 1817, Page 243 of the Official Records of Brazos County, Texas. f. Easement dated November 12, 1993, executed by Edward P. McSwain, et al to Aguila Southwest Pipeline Corporation, and recorded in volume 1977, Page 42 of the Official Records of Brazos County, Texas. g. Oil & Gas Lease dated October 26, 1976, executed by Edward P. McSwain to Cities Service Company, recorded in Volume 24, Page 178 of the oil & Gas Lease Records of Brazos County, Texas; as amended January 14, 1993, recorded in Volume 1720, Page 127 of the official Records of Brazos County, Texas; as amended by Waiver of Surface Use dated June 8, 1995, recorded in Volume 2466, Page 311 of the Official Records of Brazos County, Texas. h. Oil & Gas Lease dated February 25, 1991, executed by Edward P. McSwain to The Williams Partnership, recorded in Volume 1260, Page 226 of the official Records of Brazos County, Texas; as amended October 23, 1991, recorded in Volume 1419, Page 260 of the Official Records of Brazos County, Texas; as amended January 14, 1993, recorded in Volume 1720, Page 130 of the official Records of Brazos County, Texas; as amended by Waiver of Surface Use dated June 8, 1995, recorded in Volume 2466, Page 311 of the official Records of Brazos County, Texas. i. Mineral Reservation in Deed dated February 19, 1997, executed by Milan W. Powers and Marsha L. Powers to College Station Independent School District, filed for record on February 20, 1997 in the official Records of Brazos County, Texas, under County Clerk's File No. 623600. UNIVERSITY TITLE COMP~NY T By. X, 7, c cg Authorized countersignature Texas Owner Policy T-1 (Rev. 1-1-93) Schedule B Valid Only If Schedule A And ORIGINAL Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company he Company concludes that the lien, encumbrance, adverse claim or defect s valid, the Company shall take one of,the following a is: (i) institute the ecessary proceedings to clear the lien, encumbrance, a. rse claim or defect rom the title to the estate as insured; (ii) indemnify the insured as provided n this policy; (iii) upon payment of appropriate premium and charges herefor, issue to the insured claimant or to a subsequent owner, mortgagee or polder of the estate or interest in the land insured by this policy, a policy of itle insurance without exception for the lien, encumbrance, adverse claim or lefect, said policy to be in an amount equal to the current value of the property )r, if a mortgagee policy, the amount of the loan; (iv) indemnify another title nsurance company in connection with its issuance of a policy(ies) of title nsurance without exception for the lien, encumbrance, adverse claim or lefect; (v) secure a release or other document discharging the lien, ncumbrance, adverse claim or defect; or (vi) undertake a combination of (i) hrough (v) herein. t. DEFENSE AND PROSECUTION OF ACTIONS: DUTY OF INSURED CLAIMANT TO COOPERATE (a) Upon written request by the insured and subject to the options ontained in Section b of these Conditions and Stipulations, the Company, at is own cost and without unreasonable delay, shall provide for the defense of n insured in litigation in which any third party asserts a claim adverse to the itle or interest as insured, but only as to those stated causes of action alleging defect, lien or encumbrance or other matter insured against this policy. The 'ompany shall have the right to select counsel of its choice (subject to the right ,f the insured to object for reasonable cause) to represent the insured as to nose stated causes of action and shall not be liable for and will not pay the fees ,f any other counsel. The Company will not pay any fees, costs or expenses ncurred by the insured in the defense of those causes of action that allege natters not insured against by this policy. (b) The Company shall have the right, at its own cost, to institute and ,rosecute any action or proceeding or to do any other act that in its opinion may ,e necessary or desirable to establish the title to the estate or interest, as isured, or to prevent or reduce loss or damage to the insured. The Company nay take any appropriate action under the terms of this policy, whether or not t shall be liable hereunder, and shall not thereby concede liability or waive any 1rovision of this policy. If the Company shall exercise its rights under this ,aragraph, it shall do so diligently. (c) Whenever the Company shall have brought an action or interposed a !efen'se as required or permitted by the provisions of this policy, the Company nay pursue any litigation to final determination by a court of competent urisdiction and expressly reserves the right, in its sole discretion, to appeal rom any adverse judgement or order. (d) In all cases where this policy permits or requires the Company to )rosecute or provide for the defense of any action or proceeding, the insured hall secure to the Company the right to so prosecute or provide defense in he action or proceeding, and all appeals therein, and permit the Company to ise, at its option, the name of the insured for this purpose. Whenever requested -y the Company, the insured, at the Company's expense, shall give the 'ompany all reasonable aid (i) in any action or proceeding, securing vidence, obtaining witnesses, prosecuting or defending the action or pro- eeding or effecting settlement, and (ii) in any other lawful act that in the pinion of the Company may be necessary or desirable to establish the title to he estate or interest as insured. If the Company is prejudiced by the failure if the insured to furnish the required cooperation, the Company's obligations o the insured under the policy shall terminate, including any liability or ibligation to defend, prosecute, or continue any litigation, with regard to the natter or matters requiring such cooperation. PROOF OF LOSS OR DAMAGE In addition to and after the notices required under Section 3 of these :onditions and Stipulations have been provided the Company, a proof of loss it damage signed and swom to by the insured claimant shall be furnished to he Company within 91 days after the insured claimant shall ascertain the facts riving rise to the loss or damage. The proof of loss or damage shall describe he defect in, or lien or encumbrance on the title, or other matter insured Lgainsl by this policy that constitutes the basis of loss or damage and shall tate, to the extent possible, the basis of calculating the amount of the loss or lamage. If the Company is prejudiced by the failure of the insured claimant o provide the required proof of loss or damage, the Company's obligations to he insured under the policy shall terminate, including any liability or )bligation to defend, prosecute, or continue any litigation, with regard to the natter or matters requiring such proof of loss or damage. In addition, the insured claimant may reasonably be required to submit to -xamination under oath by any authorized representative of the Company and ,hall produce for examination, inspection and copying, at such reasonable imes and places as may be designated by any authorized representative of the ;ompany, all records, books, ledgers, checks, correspondence and memo- anda, whether hearing a date before or after Date of Policy, which reasonably )ertain to the loss or damage. Further, if requested by any authorized representative of the Company, the insured claimant shall grant its permis- sion, in writing, for any aut' red representative of the Company to examine, inspect and copy all recoi. , books, ledgers, checks, correspondence and 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 pursuant to this Section shall not be disclosed to others unless, in the reasonable judgement of the Company, it is necessary in the administration of the claim. Failure of the insured claimant to submit 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 terminate any liability of the Company under this policy as to that claim. 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY In case of a claim under this policy, the Company shall have the following additional options: (a) To Pay or Tender Payment of the Amount of Insurance. To pay or tender payment of the amount of insurance under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay. 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 obligation to defend, prosecute, or continue any litigation, and the policy shall be surrendered to the Company for cancellation. (b) To Pay or Otherwise Settle With Parties Other than the Insured or With the Insured Claimant. (i) To pay or otherwise settle with other parties for or in the name of an insured claimant any claim insured against under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company up to the time of payment and which the Company is obligated to pay; or (ii) To pay or otherwise settle with the insured claimant the loss or damage provided for under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company up to the time of payment and which the Company is obligated to pay. Upon the exercise by the Company of either of the options provided for in paragraphs (b)(i) or (ii), the Company's obligations to the insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, pros- ecute, or continue any litigation. 7. DETERMINATION, EXTENT OF LIABILITY AND COINSURANCE 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 matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy shall not exceed the least of: (i) the Amount of Insurance stated in Schedule A; or (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 this policy at the date the insured Claimant is required to furnish to Company a proof of loss or damage in accordance with Section 5 of these Conditions and Stipulations. (b) In the event the Amount of Insurance stated in Schedule A at the Date of Policy is less than 80 percent of the value of the insured estate or interest or the full consideration paid for the land, 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 at least 20 percent over the Amount of Insurance stated in Schedule A, then this Policy is subject to the following: (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 that the amount of insurance at Date of Policy bears to the total value of the insured estate or interest at Date of Policy; or (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 stated in Schedule A bears to the sum of the Amount of Insurance stated in Schedule A and the amount expended for the improvement. The provisions of this paragraph shall not apply to costs, attorneys' fees and expenses for which the Company is liable under this policy, and shall only apply to that portion of any loss which exceeds, in the aggregate, 10 percent of the Amount of Insurance stated in Schedule A. (c) The Company will pay only those costs, attorneys' fees and expenses incurred in accordance with Section 4 of these Conditions and Stipulations. 8. APPORTIONMENT 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 computed and settled on a pro rata basis as if the amount of insurance under this policy was divided pro rata as to the value on Date of Policy of each separate parcel to the whole, exclusive of any 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 policy and shown by an express statement or by an endorsement attached to this policy. 9. LIMITATION OF LIABILITY (a) If the Company establishes the title, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from the land, all is insured, or takes action in accordance 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 fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby. (b) In the event of any litigation, including 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 determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title as insured. (c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the insured in settling any claim or suit without the prior written consent of the Company. lO.REDUCTION OF INSURANCE: REDUCTION OR TERMINATION OF LIABILITY All payments under this policy, except payments made for costs, attor- neys' fees and expenses, shall reduce the amount of the insurance pro tanto. ]ILLIABILITY NONCUMULATIVE It is expressly understood that the amount of insurance under this policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which the insured has agreed, assumed or taken subject, or which is hereafter executed by an insured and which is a charge or lien on the estate or interest described or referred to in Schedule A, and the amount so paid shall be deemed a payment under this policy to the insured owner. 12. PAYMENT OF LOSS (a) No payment shall be made without producing this policy for endorse- ment of the payment unless the policy has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions and Stipulations, the loss or damage shall be payable within 30 days thereafter. 11SUBROGATION UPON PAYMENT OR SETTLEMENT (a) The Company's Right of Subrogation. Whenever the Company shall have settled and paid a claim under this policy, all right of subrogation shall vest in the Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all rights and remedies that the insured claimant would have had against any person or property in respect to the claim had this policy not been issued. If requested by the Company, the insured claimant shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect this right of subrogation. The insured claimant shall permit the Company to sue, compromise or settle in the name of the insured claimant and to use the name of the insured claimant in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of the insured claimant, the Company shall be subrogated to these rights and remedies in the proportion which the Company's payment bears to the whole amount of the loss. If loss should result from any act of the insured claimant, as stated above, that act shall not void this policy, but the Company, in that event, shall be required to pay only that part of any losses insured against this policy that shall ericeed the amount, if any, lost to the Company by reason of the impairment by the insured claimant of the Company's right of subrogation. (b) The Company's Rights Against Non-Insured Obligors, The Company's right of subrogation against non-insured obligors shall exist and shall include, without limitation, the rights of the insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that provide for subrogation rights by reason of this policy. 14. ARBITRATION Unless prohibited by applicable law or unless this arbitration section is deleted by specific provision in Schedule B of this policy, either the Company or the insured may demand arbitration pursuant to the Title Arbitration Rules or the American Arbitration Association, Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service of the Company in connection with the issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less SHALL BE arbitrated at the request of either the Company or the Insured, unless the Insured is an individual person (as distinguished from a corporation, trust, partnership, association or other legal entity). All arbi- trable matters when the Amount of Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the insured. Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the insured, the Rules in effect at Date of Policy shall be binding upon the parties. The award may include attorneys' fees only if the laws of the state in which the land is located permit a court to award attorneys' fees to a prevailing party. Judgement upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. IS. LIABILITY LIMITED TO THIS POLICY: POLICY ENTIRE CONTRACT (a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company. 16. SEVERABILITY In the event any provision of the policy is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect. 17. NOTICES, WHERE SENT All notices required to be given the Company and any statement in writing required to be furnished the Company shall include the number of this policy and shall be addressed to the Company at Chicago Title Insurance Company, Claims Department, 171 North Clark, Chicago, Illinois 60601. COMPLAINT NOTICE Should any dispute arise about your premium or about a claim that you have filed, contact the agent or write to the Company that issued the policy. If the problem is not resolved, you also may write the Texas Department of Insurance, P.O. Box 149091, Austin, TX 78714-9091, Fax No. (512) 475-1771. This notice of complaint procedure is for information only and does not become a part or condition of this policy. 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F 0~ o 3 < t9 LY ~ ~ ~ O d ~ % o A m o 7 ° F,- R. 7 M `r1 O o d rn m 0 °a ° R 5 ° OWNER POLICY OF TITLE INSURANCE 44 0274 100 7707 CHICAGO TITLE INSURANCE COMPANY SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, Chicago Title Insurance Company, a Missouri corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss ordamage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: I , Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Any statutory or constitutional mechanic's, contractor's, or materialman's lien for labor or material having its inception on or before Date of Policy; 4. Lack of a right of access to and from the land; 5. Lack of a good and indefeasible title. The Company also will pay the costs, attorneys' fees and expenses incurred in defense of the title, as insured, but only to the extent provided in the Conditions and Stipulations. In Witness Hereof, CHICAGO TITLE INSURANCE COMPANY has caused this policy to be executed by its President under the seal of the Company, but this policy is to be valid only when it bears an authorized countersignature, as of the date set forth in Schedule A. ISSUED BY: UNIVERSITY TITLE COMPANY 1021 University Drive E P. 0. Drawer DT College Station, Texas 77841 (409) 260-9818 Authorized Signatory CHICAGO TITLE INSURANCE COMPANY President. Secretary. Reorder Form No. 8272 (Rev. 1193) FYCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning taws, ordinances, or regulations) restricting, regulating, prohibiting or relating to 0) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking that has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date (c) resulting in no loss or damage to the insured claimant (d) attaching or created subsequent to Date of Policy; (e) resulting in loss or damage that would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 4. The refusal of any person to purchase, lease or lend money on the estate or interest covered hereby in the land described in Schedule A because of unmarketability of the title. 5. Any claim which arises out of the transaction vesting in the person named in paragraph 3 of Schedule A the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or other state or federal creditors' rights laws that is based on either (i) the transaction creating the estate or interest of the insured by this Policy being deemed a fraudulent conveyance or fraudulent transfer or a voidable distribution or voidable dividend, (ii) the subordination or recharacterization of the estate or interest being insured by this Policy as a result of the application of the doctrine of equitable subordination or (iii) the transaction creating the estate or interest insured by this Policy being deemed a preferential transfer except where the preferential transfer results from the failure of the Company or its issuing agent to timely file for record the instrument of transfer to the Insured after delivery or the failure of such recordation to impart notice to a purchaser for value or a judgement or lien creditor. CONDITIONS AND STIPULATIONS 1. DEFINITION OF TERMS The following terms when used in this policy mean: (a) "insured": the insured named in Schedule A, and, subject to any rights or defenses the Company would have had against the named insured, those who succeed to the interest of the named insured by operation of law as distinguished from purchase including, but not limited to, heirs, distributees, devices, survivors, personal representatives, next of kin, or corporate, partner- ship or fiduciary successors, and specifically, without limitation, the follow- ing: (i) the successors in interest to a corporation resulting from merger or consolidation or the distribution of the assets of the corporation upon partial or complete liquidation; (ii) the partnership successors in interest to a general or limited partnership which dissolves but does not terminate; (iii) the successors in interest to a general or limited partnership resulting from the distribution of the assets of the general or limited partner- ship upon partial or complete liquidation; (iv) the successors in interest to a joint venture resulting from the distribution of the assets of the joint venture upon partial or complete liquidation; (v) the successor or substitute trustee(s) of a trustee named in a written trust instrument; or (vi) the successors in interest to a trustee or trust resulting from the distribution of all or pan of the assets of the trust to the beneficiaries thereof. (b) "insured claimant": an insured claiming loss or damage. (c) "knowledge" or "known": actual knowledge, not constructive knowl- edge or notice that may be imputed to an insured by reason of the public records as defined in this policy or any other records which impart construc- tive notice of matters affecting the land. (d) "land": the land described or referred to in Schedule A, and improvements affixed thereto that by law constitute real property. The term "land" does not include any property beyond the lines of the area described or referred to in Schedule A, nor any right, title, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the land is insured by this policy. (e) "mortgage": mortgage, deed of trust, trust deed, or other security instrument. (f) "public records": records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge. With respect to Section I(a)(iv) of the Exclusions From Coverage, "public records" also shall include environmental protection liens filed in the records of the clerk of the United States district court for the district in which the land is located. (g) "access": legal right of access to the land and not the physical condition of access. The coverage provided as to access does not assure the adequacy of access for the use intended. 2. CONTINUATION OF INSURANCE AFTER CONVEYANCE OF TITLE The coverage of this policy shall continue in force as of Date of Policy in favor of an insured only so long as the insured retains an estate or interest in the land, or holds an indebtedness secured by a purchase money mortgage given by a purchaser from the insured, or only so long as the insured shall have liability by reason of covenants of warranty made by the insured in any transfer or conveyance of the estate or interest. This policy shall not continue in force in favor of any purchaser from the insured of either (i) an estate or interest in the land, or (ii) an indebtedness secured by a purchase money mortgage given to the insured. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT The insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 4(a) below, or (ii) in case knowledge shall come to an insured hereunder of any claim of title or interest that is adverse to the title to the estate or interest, as insured, and that might cause loss or damage for which the Company may be liable by virtue of this policy. If prompt notice shall not be given to the Company, then as to the insured all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required; provided, however, that failure to notify the Company shall in no case prejudice the rights of any insured under this policy unless the Company shall be prejudiced by the failure and then only to the extent of the prejudice. When, after the date of the policy, the insured notifies the Company as required herein of a lien, encumbrance, adverse claim or other defect in title to the estate or interest in the land insured by this policy that is not excluded or excepted from the coverage of this policy, the Company shall promptly investigate the charge to determine whether the lien, encumbrance, adverse claim or defect is valid and not barred by law or statute. The Company shall notify the insured in writing, within a reasonable time, of its determination as to the validity or invalidity of the insured's claim or charge under the policy. If the Company concludes that the lien, encumbrance, adverse claim or defect is not covered by this policy, or was otherwise addressed in the closing of the transaction in connection with which this policy was issued, the Company shall specifically advise the insured of the reasons for its determination. If SCHEDULE A Amount of Insurance: $316,000.00 Policy NO. 44 0274 100 7707 File No. 961350 Premium: $2,421.00 Date of Policy: February 20, 1997 at 2:53 PM 1. Name of Insured: College Station Independent School District 2. The estate or interest in the land that is covered by this policy is: Fee Simple 3. Title to the estate or interest in the land is insured as vested in: College Station Independent School District 4. The land referred to in this policy is described as follows: Field notes of a 49.026 acre tract or parcel of land lying and being situated in the Robert Stevenson League, Abstract No. 54, City of College Station, Brazos County, Texas, and being the residue of the (called) 49.9812 acre tract (designated as two parcels, First Tract: 35.0 acres and Second Tract: 15.1864 acres save & except 1158.69 square varas) described in a Deed from the Veterans Land Board of the State of Texas to Edward P. McSwain dated December 5, 1989, recorded in Volume 1157, Page 397 of the Official Records of Brazos County, Texas, and as now located on the ground being more particularly described as follows: BEGINNING at a 3/4" iron pipe, set near a 7" treated post fence corner in the new southeasterly R.O.W. line of "Graham Road", marking the common corner between the residue of the beforementioned 49.9812 acre parent tract and the adjoining Alton Goree Neelley and Lisa M. Neelley 68.201 acre "residue" tract, a 5/8" iron rod found - marking an angle point in said R.O.W. line located N. 44-44-03 E. a distance of 1.43 feet for reference; THENCE S. 45-59-36 E. along a fence marking the line between the McSwain and Neelley parcels for a distance of 2062.05 feet to a 3/4" iron pipe set near a cross-tie fence corner marking their common corner in the northwest line of the Louise Rivers and Frances Mahoney 40 acre parcel, for corner, a 1/2" iron rod of unknown origin found located N. 54-44-45 E. a distance of 1.00 feet for reference; THENCE S. 44-18-48 W. approximately along a fence marking the line between the parent tract and the said 40 acre parcel for a distance of 720.83 feet to a 3/411 iron pipe set beside a cross-tie fence corner marking the west corner of the Rivers and Mahoney tract and the south corner of the beforementioned 35.0 acre parent tract component parcel, for an angle point; THENCE S. 44-00-24 W. along the southeasterly "deed call" line of the beforementioned 14.9812 acre parent tract component parcel (the residue of the A. S. McSwain 136 acre tract which is the parent of said 14.9812 acres lies to the southeast) for a distance of 312.81 feet to a 3/411 iron pipe, set for corner, a 3/8" iron rod found marking the east corner of the adjoining Angus S. McSwain, Jr. 15.1864 acre "Texas Vet.", tract located S. 43-24-30 E. a distance of 5.95 feet and 1/2" iron rod found beside a cross-tie fence corner marking the north corner of the "Bald Texas Owner Policy T-I (Rev. 1-1-93) Schedule A SEE ATTACHED CONTINUATION OF LEGAL DESCRIPTION ORIGINAL Valid Only If Schedule B And Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company SCHEDULE A Policy No. 44 0274 100 7707 File Number: 961350 (Continuation of Legal Description) Prairie Subdivision" (specifically Lot No. 7) located S. 66-50-24 W. a distance of 1184.56 feet both for reference; THENCE N. 45-59-36 W. along the "deed call" southwesterly line of the 14.9812 acre parent tract component parcel for a distance of 2071.29 feet to a 3/411 iron pipe set in the beforementioned new southeasterly R.O.W. line of "Graham Road", for corner, a 3/41, iron rod found marking an angle point in said R.O.W. line located S. 44-01-36 W. a distance of 1100.58 feet for reference; THENCE along the new set-back southeasterly R.O.W. line of the (nominally 70 feet wide) "Graham Road" for the following two calls: 1) N. 44-01-36 E. for a distance of 1.65 feet to a 5/8" iron rod found beside a 6" treated post marking an angle point in the R.O.W., for an angle point; 2) N. 44-44-03 E. for a distance of 1032.07 feet to the Place of Beginning, containing 49.026 acres of land, more or less. The Company does not represent that the above acreage or square footage calculations are correct. Texas Owner Policy T-I (Rev. 1-1-93) Schedule A Valid Only If Schedule B And ORIGINAL Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company SCHEDULE B Policy No. 44 0274 100 7707 File No: 961350 EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorney's fees or expenses) that arise by reason of the terms and conditions of the leases or easements insured, if any, shown in schedule A and the following matters: 1. The following restrictive covenants of record itemized below (the Company must either insert specific recording data or delete this exception): Deleted 2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements. 3. Homestead or community property or survivorship rights, if any, of any spouse of any insured. 4. Any titles or rights asserted by anyone, including but not limited to, persons, the public, corporations, governments or other entities, a. to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or b. to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or c. to filled-in lands, or artificial islands, or d. to statutory water rights, including riparian rights, or e. to the area extending from the line of mean low tide to the line of vegetation or the right of access to that area or easement along and across that area. 5. Standby fees, taxes and assessments by any taxing authority for the year 1997, and subsequent years, and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership. 6. The following matters and all terms of the documents creating or offering evidence of the matters (We must insert matters or delete this exception): a. Rights of Parties in Possession. b. Easement dated April 20, 1937, executed by J. A. Gandy to City of Bryan, and recorded in Volume 98, Page 84 of the Deed Records of Brazos County, Texas. C. Easement dated April 19, 1937, executed by A. B. McSwain, et ux to City of Bryan, and recorded in Volume 98, Page 319 of the Deed Records of Brazos County, Texas. d. Easement dated January 14, 1982, executed by Edward P. McSwain to Producer's Gas Company, and recorded in Volume 517, Page 507 of the Deed Records of Brazos County, Texas. SEE ATTACHED CONTINUATION OF EXCEPTIONS Texas Owner Policy T-I (Rev. 1-1-93) Schedule B Valid Only If Schedule A And ORIGINAL Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company SCHEDULE B Policy No. 44 0274 100 7707 File No: 961350 (Continuation of Exceptions) e. Easement dated May 6, 1993, executed by Edward P. McSwain to City of Bryan, and recorded in Volume 1817, Page 243 of the official Records of Brazos County, Texas. f. Easement dated November 12, 1993, executed by Edward P. McSwain, et al to Aguila Southwest Pipeline Corporation, and recorded in Volume 1977, Page 42 of the Official Records of Brazos County, Texas. g. Oil & Gas Lease dated October 26, 1976, executed by Edward P. McSwain to Cities Service Company, recorded in volume 24, Page 178 of the oil & Gas Lease Records of Brazos County, Texas; as amended January 14, 1993, recorded in Volume 1720, Page 127 of the official Records of Brazos County, Texas; as amended by Waiver of Surface Use dated June 8, 1995, recorded in Volume 2466, Page 311 of the Official Records of Brazos County, Texas. h. Oil & Gas Lease dated February 25, 1991, executed by Edward P. McSwain to The Williams Partnership, recorded in Volume 1260, Page 226 of the Official Records of Brazos County, Texas; as amended October 23, 1991, recorded in Volume 1419, Page 260 of the Official Records of Brazos County, Texas; as amended January 14, 1993, recorded in volume 1720, Page 130 of the official Records of Brazos County, Texas; as amended by Waiver of Surface Use dated June 8, 1995, recorded in Volume 2466, Page 311 of the official Records of Brazos County, Texas. i. Mineral Reservation in Deed dated February 19, 1997, executed by Milan W. Powers and Marsha L. Powers to College Station Independent School District, filed for record on February 20, 1997 in the official Records of Brazos County, Texas, under County Clerks File No. 623600. UNIVERSITY TITLE COM ~)wAA,' By. , ly- Z~A*--.~ c cg Authorized Countersignature 61 Texas Owner Policy T-1 (Rev. 1-1-93) Schedule B Valid Only If Schedule A And ORIGINAL Cover Page Are Attached. UNIVERSITY TITLE COMPANY Chicago Title Insurance Company he Company concludes that the lien, encumbrance, adverse claim or defect s valid, the Company shall take one of,the following a, is: (i) institute the ecessary proceedings to clear the lien, encumbrance, a. rse claim or defect rom the title to the estate as insured; (ii) indemnify the insured as provided n this policy; (iii) upon payment of appropriate premium and charges herefor, issue to the insured claimant or to a subsequent owner, mortgagee or colder of the estate or interest in the land insured by this policy, a policy of itle insurance without exception for the lien, encumbrance, adverse claim or lefect, said policy to be in an amount equal to the current value of the property )r, if a mortgagee policy, the amount of the loan; (iv) indemnify another title nsurance company in connection with its issuance of a policy(ies) of title nsurance without exception for the lien, encumbrance, adverse claim or lefect; (v) secure a release or other document discharging the lien, ncumbrance, adverse claim or defect; or (vi) undertake a combination of (i) hrough (v) herein. t. DEFENSE AND PROSECUTION OF ACTIONS: DUTY OF INSURED CLAIMANT TO COOPERATE (a) Upon written request by the insured and subject to the options •ontained in Section 6 of these Conditions and Stipulations, the Company, at is own cost and without unreasonable delay, shall provide for the defense of n insured in litigation in which any third party asserts a claim adverse to the itle or interest as insured, but only as to those stated causes of action alleging defect, lien or encumbrance or other matter insured against this policy. The :ompany shall have the right to select counsel of its choice (subject to the right ,f the insured to object for reasonable cause) to represent the insured as to hose stated causes of action and shall not be liable for and will not pay the fees ,f any other counsel. The Company will not pay any fees, costs or expenses ncurred by the insured in the defense of those causes of action that allege natters not insured against by this policy. (b) The Company shall have the right, at its own cost, to institute and ,rosecute any action or proceeding or to do any other act that in its opinion may -e necessary or desirable to establish the title to the estate or interest, as nsured, or to prevent or reduce loss or damage to the insured. The Company nay take any appropriate action under the terms of this policy, whether or not i shall be liable hereunder, and shall not thereby concede liability or waive any provision of this policy, If the Company shall exercise its rights under this -aragraph, it shall do so diligently. (c) Whenever the Company shall have brought an action or interposed a !efense as required or permitted by the provisions of this policy, the Company nay pursue any litigation to final determination by a court of competent urisdiction and expressly reserveg the right, in its sole discretion, to appeal rom any adverse judgement or order. (d) In all cases where this policy permits or requires the Company to )rosecute or provide for the defense of any action or proceeding, the insured .hail secure to the Company the right to so prosecute or provide defense in he action or proceeding, and all appeals therein, and permit the Company to ise, at its option, the name of the insured for this purpose. Whenever requested ,y the Company, the insured, at the Company's expense, shall give the :ompany all reasonable aid (i) in any action or proceeding, securing vidence, obtaining witnesses, prosecuting or defending the action or pro- ceding or effecting settlement, and (ii) in any other lawful act that in the pinion of the Company may be necessary or desirable to establish the title to he estate or interest as insured. If the Company is prejudiced by the failure ,f the insured to furnish the required cooperation, the Company's obligations o the insured under the policy shall terminate, including any liability or )bligation to defend, prosecute, or continue any litigation, with regard to the natter or matters requiring such cooperation. PROOF OF LOSS OR DAMAGE In addition to and after the notices required under Section 3 of these 'onditions and Stipulations have been provided the Company, a proof of loss Ir damage signed and sworn to by the insured claimant shall be furnished to he Company within 91 days after the insured claimant shall ascertain the facts riving rise to the loss or damage. The proof of loss or damage shall describe he defect in, or lien or encumbrance on the title, or other matter insured Lgainst by this policy that constitutes the basis of loss or damage and shall ,fate, to the extent possible, the basis of calculating the amount of the loss or lamage. If the Company is prejudiced by the failure of the insured claimant o provide the required proof of loss or damage, the Company's obligations to he insured under the policy shall terminate, including any liability or )bligation to defend, prosecute, or continue any litigation, with regard to the natter or matters requiring such proof of loss or damage. In addition, the insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and ,hall produce for examination, inspection and copying, at such reasonable Imes and places as may be designated by any authorized representative of the :ompany, all records, books, ledgers, checks, correspondence and memo- anda, whether bearing a date before or after Date of Policy, which reasonably >ertain to the loss or damage. Further, if requested by any authorized representative of the Company, the insured claimant shall grant its permis- sion, in writing, for any aut' red representative of the Company to examine, inspect and copy all recoi. , books, ledgers, checks, correspondence and 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 pursuant to this Section shall not be disclosed to others unless, in the reasonable judgement of the Company, it is necessary in the administration of the claim. Failure of the insured claimant to submit 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 terminate any liability of the Company under this policy as to that claim. 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY In case of a claim under this policy, the Company shall have the following additional options: (a) To Pay or Tender Payment of the Amount of Insurance. To pay or tender payment of the amount of insurance under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay. 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 obligation to defend, prosecute, or continue any litigation, and the policy shall be surrendered to the Company for cancellation. (b) To Pay or Otherwise Settle With Parties Other than the Insured or With the Insured Claimant. (i) To pay or otherwise settle with other parties for or in the name of an insured claimant any claim insured against under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company up to the time of payment and which the Company is obligated to pay; or (ii) To pay or otherwise settle with the insured claimant the loss or damage provided for under this policy, together with any costs, attorneys' fees and expenses incurred by the insured claimant, which were authorized by the Company up to the time of payment and which the Company is obligated to pay. Upon the exercise by the Company of either of the options provided for in paragraphs (b)(i) or (ii), the Company's obligations to the insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, pros- ecute, or continue any litigation. 7. DETERMINATION, EXTENT OF LIABILITY AND COINSURANCE 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 matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy shall not exceed the least of: (i) the Amount of Insurance stated in Schedule A; or (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 this policy at the date the insured Claimant is required to furnish to Company a proof of loss or damage in accordance with Section 5 of these Conditions and Stipulations. (b) In the event the Amount of Insurance stated in Schedule A at the Date of Policy is less than 80 percent of the value of the insured estate or interest or the full consideration paid for the land, 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 at least 20 percent over the Amount of insurance stated in Schedule A, then this Policy is subject to the following: (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 that the amount of insurance at Date of Policy bears to the total value of the insured estate or interest at Date of Policy; or (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 stated in Schedule A bears to the sum of the Amount of Insurance stated in Schedule A and the amount expended for the improvement. The provisions of this paragraph shall not apply to costs, attorneys' fees and expenses for which the Company is liable under this policy, and shall only apply to that portion of any loss which exceeds, in the aggregate, 10 percent of the Amount of Insurance stated in Schedule A. (c) The Company will pay only those costs, attorneys' fees and expenses incurred in accordance with Section 4 of these Conditions and Stipulations. 8. APPORTIONMENT 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 computed and settled on a pro rata basis as if the amount of insurance under this policy was divided pro rata as to the value on Date of Policy of each separate parcel to the whole, exclusive of any 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 policy and shown by an express statement or by an endorsement attached to this policy. 9. LIMITATION OF LIABILITY (a) If the Company establishes the title, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from the land, all is insured, or takes action in accordance 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 fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby. (b) In the event of any litigation, including 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 determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title as insured. (c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the insured in settling any claim or suit without the prior written consent of the Company. 10. REDUCTION OF INSURANCE: REDUCTION OR TERMINATION OF LIABILITY All payments under this policy, except payments made for costs, attor- neys' fees and expenses, shall reduce the amount of the insurance pro tanto. 1LLIABILITY NONCUMULATIVE It is expressly understood that the amount of insurance under this policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which the insured has agreed, assumed or taken subject, or which is hereafter executed by an insured and which is a charge or lien on the estate or interest described or referred to in Schedule A, and the amount so paid shall be deemed a payment under this policy to the insured owner. 12. PAYMENT OF LOSS (a) No payment shall be made without producing this policy for endorse- ment of the payment unless the policy has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions and Stipulations, the loss or damage shall be payable within 30 days thereafter. 11SUBROGATION UPON PAYMENT OR SETTLEMENT (a) The Company's Right of Subrogation. Whenever the Company shall have settled and paid a claim under this policy, all right of subrogation shall vest in the Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all rights and remedies that the insured claimant would have had against any person or property in respect to the claim had this policy not been issued. If requested by the Company, the insured claimant shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect this right of subrogation. The insured claimant shall permit the Company to sue, compromise or settle in the name of the insured claimant and to use the name of the insured claimant in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of the insured claimant, the Company shall be subrogated to these rights and remedies in the proportion which the Company's payment bears to the whole amount of the loss. If loss should result from any act of the insured claimant, as stated above, that act shall not void this policy, but the Company, in that event, shall be required to pay only that part of any losses insured against this policy that shall eiceed the amount, if any, lost to the Company by reason of the impairment by the insured claimant of the Company's right of subrogation. (b) The Company's Rights Against Non-Insured Obligors. The Company's right of subrogation against non-insured obligors shall exist and shall include, without limitation, the rights of the insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that provide for subrogation rights by reason of this policy. 14. ARBITRATION Unless prohibited by applicable law or unless this arbitration section is deleted by specific provision in Schedule B of this policy, either the Company or the insured may demand arbitration pursuant to the Title Arbitration Rules or the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service of the Company in connection with the issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less SHALL BE arbitrated at the request of either the Company or the Insured, unless the Insured is an individual person (as distinguished from a corporation, trust, partnership, association or other legal entity). All arbi- trable matters when the Amount of Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the insured, Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the insured, the Rules in effect at Date of Policy shall be binding upon the parties. The award may include attorneys' fees only if the laws of the state in which the land is located permit a court to award attorneys' fees to a prevailing party. Judgement upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. 15.LIABILITY LIMITED TO THIS POLICY: POLICY ENTIRE CONTRACT (a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company. 16. SEVERABILITY In the event any provision of the policy is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect. 17. NOTICES, WHERE SENT All notices required to be given the Company and any statement in writing required to be furnished the Company shall include the number of this policy and shall be addressed to the Company at Chicago Title Insurance Company, Claims Department, 171 North Clark, Chicago, Illinois 60601. COMPLAINT NOTICE Should any dispute arise about your premium or about a claim that you have filed, contact the agent or write to the Company that issued the policy. If the problem is not resolved, you also may write the Texas Department of Insurance, P.O. Box 149091, Austin, TX 78714-9091, Fax No. (512) 475-1771. This notice of complaint procedure is for information only and does not become a part or condition of this policy. FOR INFORMATION, OR TO MAKE A COMPLAINT, CALL: 1-500-442-4303