1988 James P. Chudleigh-lots 1-7, block 1437

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(c) The Company shall have the right at its ~wn cost to' institute 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 of this policy. 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 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. Exdusions 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~ Ifl!Iured in writing~ ~thin,a re~~nable time, of its det~r- DAMAGE BY REASON OF THE FOLLOWING: mlOatlon as to the vall~lty or lOvalldlty of the Insured's clalm or charge under the pohcy. 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 INTENI)ED BY THE INSURED NOR the Company shall specifically advise the insured of the rea- LOSS OF OPPORTUNITY OR ECONOMIC sons forits determination. Ifthe Company concludes that,the EXPECTATION. lien, encumbrance, adverse claim or defect is valid, the Com- (b) G tal . hts f l' . t d' pany shall take one of the following actions: (1) institute the overnmen ng 0 po Ice power or ermnen omaln ., . , . . necessary proceedlOgs to clear the hen, encumbrance, adverse unless notice of the exercise of such nghts appears 10 the 1 . d Ii t f th' t'tl t th e tat . red (2) . calm or eec rom e Ie 0 e s easlnsu ; pubhc n:cords at the date hereof; and th~ co~u~nces ohny indemnif .. th In ured as rovided in this olicy' (3) upon law, ordmance or governmental regulation lOcludmg, but not yes. p . p" r 'ted t b 'Id' d . nf payment of appropnate premIUm and charges therefore, Issue Iml 0, UI 109 an lomng 0 lOances. to the current Insured or to a subsequent owner, mortgagee or (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 shores or beds ~f lien, encumbrance, adverse claim or defect, said policy to be in navigable or perennial rivers and streams, lakes, bays, gulfs or ' an amount equal to the current value of the property C?r, if a oceans, or to any land extending from the line of mean low ' mortgagee policy, the amount of the loan; (4) indemnify tide to the line ofvegetation, or to lands beyond the line ofthe another title insurance company in connectio,n 'with 'its issu- harbor or bulkhead lines as established or changed by any ance of apolicy(ies) of title insurance without, exception for government, or to filled-in lands, or artificial islands, or to the lien, encumbrance, adverse claim or defect; (5) secure a riparian rights, or the rights or interests of the State of Texas rel~ase or other document discharging the lien, encumbrance, r or the public generally in the area extel,lding from the line of adverse claim or defect; or (6) undertake a combination of I. . ... mean low ti~e to the line of vegetatioAtheir right of access through 5. herA ..;.~ ~he[t!to, or nght of easement along ~ross the same. .., ~1048:i5 CONDITIONS AND STIPULATIONS CONTINUED INSIDE COVER "'1\ gt~ (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. (a) In all cases where this policy provides for the defense of any action or proceeding, the Insured shall secure to the Company the right to so pro"ide 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. 3. Defense and Prosecution of Actions (d) Defects, liens;encumbrances, adverse claims, or other 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 policv 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-' munityproperty or survivorship rights, if any, of any spouse of any Insured." ~. \ ~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 success()rs in interest to a gem,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 assets of ,such joint venture upon partial or complete liquidation; (vi) the successor or substitute trustee of a trustee named in a written trust instrument; or (vii) the successors in interest to a trustee ()r trust resulting from the distribution of all or part of the assets of such trust to the beneficiaries thereof. CONDIITIONS AND STIPULATIONS I. Deftnltions