1987 Naegeli Properties, Inc.-all of outlot 404, LP outlots

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(c) The Company shall have the right at its own cost to ii1stitut~ and without undue delay prosecute any action or proceeding or to do any other act which in its opinion may be necessary or desirable to establish the title to the estate or interest as insured, and the Company may take any appropriate action under the terms of the policy, whether or not it shall be liable thereunder, and shall not thereby concede liability or waive any provision ofthis policy. When, after the date ofthe 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 which is not excluded or excepted from the coverage of this policy, the Company shall promptly investigate such charge to determine whether the lien, encumbrance, adverse claim or defect is valid 2. Exclusions from the Coverage of this Policy and not barred by law or statute. The Company shall notify THE POLICY DOES NOT INSURE AGAINST LOSS OR th~ I~ured in writing! ~thin.a ~?nable time, of its det~r- DAMAGE BY REASON OF THE FOLLOWING: mmatlon as to the vall~lty or mvalldlty of the Insured's chum or charge under the pollcy. If the Company concludes that the (a) LACK OF ADEQUATE TITLE IN THE INSURED lien, encumbrance, adverse claim or defect is not covered by PROPERTY TO ALLOW IT TO BE USED, SOLD, this policy, or was otherwise addressed in the closing of the TRANSFERRED, LEASED OR MORTGAGED FOR transaction in connection with which this policy was issued, ANY PURPOSE INTENDED BY THE INSURED NOR the Company shal1'specifica1ly advise the insured of the rea- LOSS OF OPPORTUNITY OR ECONOMIC so!ls for its determination. If the Company.concludes that-the EXPECTATION. lien, encumbrance, adverse claim or defect is valid, the Com- (b) G tal . ht f r . t d' pany shall take one of the following actions: <-I) institute the overnme!l ng s 0 p.o Ice power .or emmen ?mllln necessary proceedings to clear the lien, encumbrance, adverse unle~s notice of the exercise of such nghts appears 10 the claim or defect from the title to the estate as insured; (2) publlc n:cords at the date 'hereof; and th~ cO!lsequ~nces of any indemnify the Insured as provided in this policy; (3) upon law, ordmance or governmental regulation mcludmg, but not a t f . t . d ch es there'"ore 'Issue I. . ed b 'Id' d . rd' P ymen 0 appropna e premium an arg 1', Imlt to, UI 109 an zomng 0 mances. , t th t I red t bse t e mortgagee or o e curren nsu or 0 a su quen own r, (c) Any titles or rights asserted by anyone including, but not holder of the estate or interest in the land insured by this limited to, persons, corporations, governments or other enti- policy, a policy of title insurance without- exception for the. ties to tidelands, or lands comprising the s~ores or beds of lien, encumbrance, ~ve~ claim' or defect,.said pc;>licy tp be in navigable or perennial rivers and streams, lakes, bays, gulfs or an amount equal to the current value of the property or, if a oceans, or to any land extending from the line of mean low \} mortgagee policy, the 'amo,unt of the loan; (4) indemnify . tide to the line of vegetation, or to lands beyond the line of the another title insurapce company in connection with its issu- ~ harbor or bulkhead lines as established or changed by any ance of a policy(ies) of title' insurance without exception fo,", ,; government, or to filled-in lands, or artificial islands, or to the lien, encumbrance, adverse claim or defect; (5) secure ,it riparian rights, or the rights or interests of the State of Texas rel~ase or other document discharging the lien, encumbrat;lce, or the public generally in the area ext~nding from the line of adverse claim or 4efect; or (6) undertake a combination of I. mean low tide to the line of vegetatioA their right of access through 5. he" ' '.. }~ret~, or right of easement along ~ross the same.. , B-I048-1~ CONDITIONS AND STIPULATIONS CONTINUED INSIDE COVER ~'J,. 'r.. .:...... (b) The Company shall have the right to select counsel of its own choice whenever it is required to defend any action or proceed- ing, and such counsel shall have' complete control of said defense. 3. Defense and Prosecution of Actions (a) In all cases where t~is policy provides for the defense of any action or proceeding, the Insured shall secure to the Company the right to so provide defense in such action or proceeding. and all appeals therein. and permit it to use. at its option. the name of the Insured for such purpose. . (d) Defects. liens. encumbrances. adverse claims. or othe~ matters' , (I) created. suffered. assumed or agreed to by the Insured; (2) . · not known to the Company and not shown by the public records but known to the Insured either at the date of this policy or at the date the Insured acquired an estate or interest insured by this policy and not disclosed in writing by the Insured to the Company.prior to the date such Insured became an Insured hereunder; (3) resulting in no loss or damage to the Insured; (4) attaching or created subsequent to the date of this policy; (5) resulting in loss or damage which would not have been sustained if the Insured had paid value for the estate or interest insured by this policy; or (6) the homestead or com- munity property or survivorship rights. if any. ohny spouse of any Insured." .,,1[' Th.e following terms when used in this policy mean: (a) "land": The land described. specifically or by reference. in Schedule A. and improvements affixed thereto which by law constitute real property. (b) "public records": Those, records which impart constructive notice of matters relating to the land. (c) "knowledge": Actual knowledge, not constructive knowledge or notice which may be imputed to the Insured by reason of any public records. (d) "date": The effective date, including hour if specified. (e) In~ured: the Insured named in Schedule A and, subject to any rights or defenses the Company may have had against the named Insured or any person or entity who succeeds to the interest of such named Insured by operation of law as distin- guished from purchase, any person or entity who succeeds to the interest of such named Insured by operation of law as distinguished from purchase including but not limited to the following: (i) heirs, devisees, distributees, executors and administrators; (ii) the successors in interest to a corporation resulting from merger or consolidation or the distribution of the assetS of such corporation upon partial or complete liquidation; (iii) the partnership successors in interest to a gent-ral or limited partnership which dissolves but does not terminate; (iv) the successors in interest to a general or limited partner- ship resulting from the distribution of the assets of such general or limited partnership upon partial or complete liquidation; (v) the successors in interest to a joint venture resulting from the distribution of the asset,s of ,such joint venture upon partial or complete liquidation; (vi) the successor or substitute trustee of a trustee named in a written trust instrument; ot (vii) the successors in interest to a trustee or trust :resulting from the distribution of all or part of the assets of such trust to the beneficiaries thereof. CONDITIONS AND STIPULATIONS I. Definitions