Escrow Agreements Texas Land Title Institute

Transcription

1 Escrow Agreements 2016 Texas Land Title Institute PRESENTED BY: Janet S. Minke, CTIP Vice President, Underwriting Support Services & Agency Representative Alliant National Title Insurance Company

2 JANET S. MINKE, CTIP Vice President, Underwriting Support Services Alliant National Title Insurance Company Toll-free: x440 Direct: EDUCATION BA in Social Science from University of North Texas, 1970 Texas Secondary Teaching Certificate TITLE INSURANCE EXPERIENCE Ms. Minke entered the title insurance industry as an escrow assistant and conveyancer in a fee attorney office in Fort Worth, Texas, in Shortly thereafter, the attorney retired, selling his closing offices to Guardian Title Company, where Ms. Minke remained until 1994, progressing to commercial escrow officer and eventually Executive Vice President. Since that time, she has held various regional and national roles with major national title insurance companies including technology project manager, business process manager and corporate trainer. In her current position with Alliant National Title she is available to respond to underwriting questions, as well as providing reference resources, training and education for the company s partner agents. TEXAS LAND TITLE ASSOCIATION ACTIVITIES AND HONORS Certified Title Insurance Professional (CTIP) Honors: Title Woman of the Year 2006 Professional Excellence Award Outstanding Underwriter Support, 2005 Peggy Hayes Teaching Excellence Award, 1995 President s Award for Outstanding & Exemplary Contribution, & Outstanding Young Title Person, Current Member: Regulatory Committee, Federal Issues Committee, Certification Council, Basic Manual Review Task Force, TRID Task Force TEACHING AND TRAINING ACTIVITIES TLTA and NMLTA Land Title School; Texas Land Title Institute; Title Insurance and Doc Prep Basics State Bar of Texas: Advanced R E Law Course 2006; Agricultural Law Course 2009 FLTA, TLTA, OLTA, NMLTA, LTAC, ALTA, TMBA and NAPMW Conferences and Seminars Underwriter Agency Seminars and Training in Texas, Florida, New Mexico, Oklahoma, Colorado, Missouri and Kansas PUBLICATIONS - Articles in TLTA News and other industry publications Money-Saving Ideas That Everyone Can Use, 1988 Proper Time Management Ensures Efficient Closings, 1989 Tips Help Clarify Procedural Rules, 1991 Training Today s Workforce: Educating for Excellence, 1997 The American Dream And the Importance of Title Insurance, 2006

3 Escrow Agreements I. Understanding Escrow A. Escrow An escrow happens when one or more owners of valuable things (money, securities, documents, or other property) deposit same with an impartial or neutral third party together with written instructions. The valuable things are held by the third party (called the escrow agent) until the happening of a future event spelled out in the instructions, at which time the escrow agent delivers the valuable things according to the written instructions. It is important to note that the escrow agent is not empowered to make decisions about disbursement of the valuable things held in escrow, merely to act on the written instructions of the owners of the valuable things. In real estate transactions, the valuable things are generally money (earnest money, purchase money, funds for curative matters, loan funds, etc.) and documents (Deed, Note, Deed of Trust, Release, etc.). B. Escrow Agent The term escrow agent is somewhat of a misnomer, implying some sort of agency relationship. In fact, the escrow agent is not an agent for either party, since he is not subject to the control of either. It would be less confusing to refer to this party as the escrow holder. An escrow agent or escrow holder represents all parties to the escrow buyer, seller, lender and therefore acts in a fiduciary capacity, with complete impartiality. C. Fiduciary The law says that a fiduciary is one holding a position of trust; someone who usually holds money or property for another under standards a contract or the law imposes. An escrow agent is a fiduciary and will be held to an extremely high standard of care when handling funds and documents in a real estate transaction. II. Good business practices regarding escrows An escrow should only be held when the escrow agent has written instructions from the parties to the escrow. These instructions should be complete, comprehensive, and unambiguous. A. Contract In Texas and many other states, the escrow agent accepts the Contract between a seller and buyer as written escrow instructions with regard to handling an earnest money deposit and funds delivered in connection with the sale. If the contract has not been fully executed, you do not have written instructions from all parties and should not accept any funds or documents. B. Lender Instructions In Texas, escrow agents rely on written instructions from a lender as to documents and funds related to a loan. Any changes to these instructions must also be in writing. An escrow agent should not rely on verbal changes to lender instructions. If the lender is a private lender, the settlement agent should still require written instructions with regard to closing, funding and possible title insurance in connection with the loan Texas Land Title Institute Escrow Agreements Page 1

4 C. Earnest Money Escrow Agreements An escrow agent should only accept earnest money when there is a fully signed Contract delivered with the earnest money. It is a good business practice to refuse to accept an earnest money deposit from anyone other than the buyer in the contract (a third party). III. Escrow Agreement Scenarios A. Gift Funds Sometimes a third party, usually a family member, contributes funds to assist a buyer in purchasing a property (gift funds). When these funds are delivered to the escrow agent, a dilemma arises unless this third party also delivers written instructions as to the funds. If a lender is involved, the lender must always acknowledge in writing a disclosure of the gift funds. B. Interest-bearing Escrows If the parties to the escrow require funds be held in an interest-bearing account, a separate escrow agreement is required. In Texas, there are TDI regulations in regard to opening and maintaining such escrows by title agents and escrow officers. C. Passing title premiums through from one transaction to another Rate Rule R-2 allows a title agent to collect a premium in one transaction and use the premium for a title policy issued in another transaction but only if the criteria in the rule are strictly followed. D. Delayed Funding When the title agent has received executed documents and has reason to suspect funding of the transaction will be delayed, it is a good practice to disclose this possibility to the parties. E. Seller Proceeds Instructions When a transaction involves two or more sellers who desire separate disbursement of proceeds, an authorization should be executed by all sellers. Seller proceeds should only be paid to the seller(s) shown on the settlement statement(s) for the transaction. F. Funds from one transaction transferred to another Any request by a customer to transfer funds from one escrow to another must be supported by written instructions, signed by the owner of the funds copies of which must be retained in both escrow files. This most frequently occurs when a seller in one transaction requests proceeds from the sale be transferred into another file where he is purchasing property. It may also occur when a customer delivers a single check or wire to the escrow agent including funds related to multiple transactions Texas Land Title Institute Escrow Agreements Page 2

5 Escrow Agreements G. Post-closing Escrows If you are in a state, such as Texas, that usually does not have separate escrow instructions but rather relies on the contract and lender instructions, you should only hold funds in escrow after closing and initial funding if you obtain a fully executed written escrow agreement in regard to these funds. The type of escrow agreement depends on the purpose of the escrow. Some examples: 1. Down Date Endorsements In construction closing transactions it is very common for the lender to require the borrower to pay up front for costs to be incurred during the construction project, such as the premiums for down date endorsements, or the cost of an as built survey to be made at the end of construction. When the escrow agent is asked to hold these funds in escrow, the borrower and lender should execute an agreement in regard to these funds. 2. Repairs From time to time a seller and buyer may want a sale transaction to close and fund when some items of repair have not yet been completed. This may only be done with a comprehensive escrow agreement signed by both parties. If a lender is involved, the lender should acknowledge the escrow as generally it will provide for payment of the funds to the buyer if the repairs are not completed. Note: From my experience, this is always a lose-lose scenario for the escrow agent. The repairs won t be done timely or to the satisfaction of the buyer and everyone will be unhappy. 3. Current Taxes Procedural Rule P-20.A.1. allows an escrow for payment of taxes for the current under limited circumstances. b. Owner s Tax Reserve/Escrow Account With Payoff Lender. A Company may insure that taxes are paid for the current tax year if: (1) The Company has satisfactory evidence in its file that the assessed taxes for the current year have been paid by the current lender from the owner s Reserve/Escrow Account held by lender; or (2) In the absence of satisfactory evidence in (1) above, a Company may accept: (i) A sufficient Indemnity executed by a responsible party. (ii) Together with a deposit of funds in an amount sufficient to pay the assessed taxes. (3) When following provision (2) above, the Company shall: (i) Pay the assessed taxes according to the terms of the Indemnity and before they become delinquent, or (ii) Upon receipt of satisfactory evidence that the assessed taxes for the current year have been paid, promptly pay the escrowed funds to the proper party Texas Land Title Institute Escrow Agreements Page 3

6 Escrow Agreements 4. Supplemental Taxes Texas title insurance policies insure against loss or damage resulting from future tax assessments for prior years due to lost exemptions or omitted improvements. When a title agent determines the land to be insured is subject to a future assessment for supplemental taxes, it is appropriate to collect an estimate for payment of these taxes from the owner at the time of closing. 5. Title Matter: Collateralized Indemnity With specific approval from the underwriter whose policy will be issued, a title agent may collect and hold escrow funds in order to insure around an outstanding title matter. Obtain approval from the underwriter of the form to be used. 6. Escrowed Closing Title Matter With specific approval from the underwriter whose policy will be issued, a title agent may be instructed to hold all funds and documents in escrow pending resolution of a potential title matter. (No sample form provided.) IV. Content of Escrow Agreements An escrow agreement does not need to be elaborate, so long as it is clear and unambiguous about what is supposed to happen to the money or documents placed in the hands of the escrow agent. A. Components of a good escrow agreement. 1. Instructions about what the escrow agent should do with the money and/or documents when things work out as planned AND what to do when things don t work out. 2. Clear statement about whether the escrowed funds (if any) will earn interest during the term of the escrow. 3. A final date on which the escrowed funds and/or documents will be disbursed/distributed regardless of the outcome of the transaction. 4. Authority for the escrow agent to disburse/distribute funds and/or documents without further authority from the parties. 5. Indemnification language, holding the escrow agent harmless if the escrow doesn t work out in a way satisfactory to all parties. 6. Signatures by all affected parties (the owners of the valuable things). B. Sample Agreements 1. Gift Funds 2. Investment Authorization 3. Premium Pass Through Authorization 4. Delayed Funding Buyer 5. Delayed Funding Lender 6. Seller Proceeds Instructions 2016 Texas Land Title Institute Escrow Agreements Page 4

7 Escrow Agreements 7. Escrowed Funds Transfer 8. Post-closing Down Date Endorsements 9. Post-closing Repairs, Etc. 10. Post-closing Current Taxes: Collateralized Indemnity 11. Post-closing Supplemental Taxes: Collateralized Indemnity 12. Post-closing Title Matter: Collateralized Indemnity 2016 Texas Land Title Institute Escrow Agreements Page 5

8 File Number: Date: ACKNOWLEDGMENT, INSTRUCTIONS AND WAIVER (Gift Funds) Property: Buyer/Borrower: Gift Donor: Lender: Closing Agent: Acknowledgment. 1. Closing Agent is conducting the closing of a purchase/loan for Buyer/Borrower and Lender. 2. Gift Donor has delivered the sum of $ (the Gift) to Closing agent as a gift to Buyer/Borrower. 3. The amount of the Gift is not contingent on the transaction, or on the funds required by Buyer/Borrower to consummate the purchase. 4. Lender is aware of the gift and of these instructions. Instructions from Gift Donor. 5. Gift Donor instructs Closing Agent to credit the Buyer/Borrower with the full amount of the Gift Funds on the settlement statement for the purchase of the property. 6. Gift Donor instructs Closing Agent to pay any unused funds to the order of Buyer/Borrower upon funding of the purchase transaction. 7. Gift Donor instructs Closing Agent to pay the Gift Funds to Gift Donor Buyer/Borrower if the purchase transaction is not fully consummated and funded. Waiver by Gift Donor. 8. Gift Donor expressly waives any rights, claims, interests or liens in and to the Property by reason of the contribution of funds toward the purchase of the Property. Agreement and Indemnity. 9. Buyer/Borrower and Gift Donor certify, warrant and represent to Closing Agent and any interested party that they have not relied upon any statement, advice, opinion, warranty or representation of Closing Agent regarding this closing, but rather, have relied solely and exclusively upon their own knowledge and understanding of the transaction, or representations and statements of parties other than Closing Agent and/or the advice and opinions of personal tax and/or legal advisors. Buyer/Borrower Buyer/Borrower Gift Donor Gift Donor Date: Date: Date: Date: Acknowledged by: (Lender Authorized Signature) Sample Form Page 1 of 1 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 6

9 INVESTMENT AUTHORIZATION Date: GF # Property Address: Buyer: Seller: Escrow Agent: Escrowed Funds: $ Escrow Agent is hereby authorized and instructed to invest the Escrowed Funds and any additional funds handed herewith, or presently held in the above referenced escrow transaction, in the following manner: Financial Institution: Type of Investment: Certificate of Deposit Money Market Acct Passbook Other (Specify type) Name of Account: In the name of by, Escrow Agent under GF # Interest to accrue for the benefit of If funds are received after the investment deadline set by the institution, the funds will be invested on the following business day. If roll-over of any investment is necessitated, the earnings are to be added to the principal and likewise invested. However, if the type of investment prohibits uneven amounts, any excess is to be held on deposit in said escrow (non-interest bearing). All such funds are to be invested for the full term of this escrow and withdrawn only when you are in a position to use said funds to close the transaction or on whichever occurs first. Escrow Agent is not responsible for any loss of principal or interest as a result of complying with these instructions. The undersigned agree that Escrow Agent will assess an escrow fee in the amount of $ for administrative tasks in opening and maintaining this account. The undersigned hereby release Escrow Agent from any liability and assume all responsibility for any loss to the undersigned, which may result from a lack of FDIC insurance for this investment in excess of $250,000. The undersigned acknowledge that, in calculating the amount of available insurance, the FDIC will consolidate this investment with all other funds of the undersigned which are on deposit with the above designated financial institution. In consideration of acceptance of this instruction by Escrow Agent, the undersigned hereby acknowledge that all earnings will be established by the designated Financial Institution, and also acknowledge that Escrow Agent, is in no way liable for the amount of earnings generated, and provided Escrow Agent has complied with these instructions, Escrow Agent is and shall be held harmless from any loss which might arise in connection with such investment, including, but not limited to principal, interest, attorney fees and/or other cost incurred. Further, Escrow Agent will be held harmless if the investment item is not available, in the amount requested, at the named institution on the date the account is to be initiated. Investment Authorization Sample form Page 1 of 2 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 7

10 THE INTEREST AND DIVIDEND TAX COMPLIANCE ACT OF 1983 REQUIRES THIS CERTIFICATION TO BE SUBMITTED WITH THE INVESTMENT. To be completed by party for whom interest is to accrue. SOCIAL SECURITY NO. or FEDERAL TAXPAYER ID NO. Note: The number on this form is my correct taxpayer identification number. I am not subject to back-up withholding under Section 3406 (A)(1)(C) of the Internal Revenue Code, or; I am not a resident or citizen of the United States nor am I engaged in trade or business in the United States. If you refuse to certify the above information, you may be subject to back-up withholding. (initials of recipient of interest) CERTIFICATION: Under penalties of perjury, I certify that the information provided on this form is true, correct and complete. TYPED NAME AND ADDRESS OF RECIPIENT OF INTEREST: Name of Recipient: Address: Phone: SIGNATURE OF RECIPIENT OF INTEREST: Date: Signatures of parties: Buyer Name Buyer Name Seller Name Seller Name Investment Authorization Sample form Page 2 of 2 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 8

11 INSTRUCTIONS AND ACKNOWLEDGMENT (R-2 Premium Pass Through) File Number Date: Property Address: First Seller: First Buyer: Final Buyer: The following acknowledgments, agreement and instructions are made In accordance with Rate Rule R- 2, promulgated by the Texas Department of Insurance. Acknowledgments 1. Identical land, identified as the Property Address, is being sold by First Seller to First Buyer (First Transaction) and, contemporaneously therewith, sold by First Buyer to Final Buyer (Second Transaction). 2. All instruments of conveyance for First Transaction and Second Transaction are being unconditionally delivered simultaneously. 3. First Buyer does not desire title insurance coverage and wishes to pass the premium paid by First Seller in First Transaction through as a credit toward the premium owed by First Buyer for the owner s policy to be issued to Final Buyer in Second Transaction. Agreement 4. Notwithstanding any provision to the contrary contained in any other agreement between the undersigned, all agree as follows: a. First Seller will pay for the Owner s Title Policy called for in the contract between First Seller and First Buyer; and b. First Buyer waives his right to receive said Owner s Title Policy; and c. The premium paid by First Seller will pass-through and be applied toward the premium owed by First Buyer for the Owner s Title Policy called for in the contract between First Buyer and Final Buyer; and d. Final Buyer will receive an Owner s Title Policy. Instructions to Settlement Agent 5. Apply the Owner s Title Policy premium collected from First Seller toward the Owner s Title Policy premium owed by First Buyer. 6. Issue an Owner s Title Policy to Final Buyer, but not to First Buyer. Signatures: Date Signed: 2016 Texas Land Title Institute - Escrow Agreements Page 9 Pass Through Authorization Sample Form Page 1 of 1 Rev. 11/16

12 ACKNOWLEDGMENT AND AGREEMENT (Delayed Funding Buyer Funds) GF #: Date: Property Address: Buyer: Seller: Escrow Agent: Acknowledgment. 1. Buyer and Seller have been advised by Escrow Agent that funding of their transaction is dependent upon receipt by Escrow Agent of wired funds initiated by Buyer (hereinafter called Wire Receipt). 2. Buyer and Seller understand that no disbursement of funds shall occur and Buyer shall own no interest in the Property until Wire Receipt. 3. Buyer and Seller understand that no existing loans will be paid and that interest on any such loans will continue to accumulate until Wire Receipt. 4. At such time as Wire Receipt occurs, Escrow Agent shall disburse all funds and record appropriate documents of conveyance. Agreements and Indemnity. 5. Should Buyer take possession of the property prior to Wire Receipt, Buyer and Seller release Escrow Agent from any liability, including liability which may occur in the event that Wire Receipt does not occur. Such release includes, but is not limited to, any loss resulting from Buyer failing to have or obtain adequate insurance coverage on, or legal title to, the Property. 6. Buyer and Seller agree to save and hold harmless Escrow Agent from any liability arising under and as a result of any delay in Wire Receipt, and further agree that Escrow Agent may, at its option, require the receipt, release and authorization in writing of all parties before paying money or delivering or redelivering documents or property to any party or to third parties. Escrow Agent shall not be liable for any interest or other charges on the money held by it. Buyer Escrow Agent Seller By: Escrow Officer Delayed Funding Buyer_Sample Form Page 1 of 1 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 10

13 ACKNOWLEDGMENT AND AGREEMENT (Delayed Funding Lender Funds) GF #: Date: Property Address: Buyer/Borrower: Seller: Lender: Escrow Agent: Acknowledgment. 1. Buyer/Borrower (and Seller, if applicable) have been advised by Escrow Agent that funding of their transaction is dependent upon funding of the loan by Lender (hereinafter called Loan Funding). 2. Buyer/Borrower (and Seller, if applicable) understand that no disbursement of funds shall occur and, in the case of a purchase and sale transaction, Buyer/Borrower shall own no interest in the Property until Loan Funding. 3. Buyer/Borrower and/or Seller understand that no existing loans will be paid and that interest on any such loans will continue to accumulate until Loan Funding. 4. At such time as Loan Funding occurs, Escrow Agent shall disburse all funds and record appropriate documents of conveyance. Agreements and Indemnity. 5. Should Buyer/Borrower take possession of the property prior to Loan Funding, Buyer/Borrower and Seller release Escrow Agent from any liability, including liability which may occur in the event that Loan Funding does not occur. Such release includes, but is not limited to, any loss resulting from Buyer/Borrower failing to have or obtain adequate insurance coverage on, or legal title to, the Property. 6. Buyer/Borrower (and Seller, if applicable) agree to save and hold harmless Escrow Agent from any liability arising under and as a result of any delay in Loan Funding, and further agree that Escrow Agent may, at its option, require the receipt, release and authorization in writing of all parties before paying money or delivering or redelivering documents or property to any party or to third parties. Escrow Agent shall not be liable for any interest or other charges on the money held by it. Buyer Escrow Agent Seller By: Escrow Officer Delayed Funding Lender_Sample Form Page 1 of 1 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 11

14 SELLER PROCEEDS INSTRUCTIONS (Instructions and Agreement) File No. Date: Property Address: Seller(s): Escrow Agent:. We, the undersigned Seller(s), do hereby agree and instruct Escrow Agent to disburse the Seller s Net Proceeds in the following manner: WIRE TRANSFER PROCEEDS: (Attach voided check) Note: Escrow Agent does not agree to wire funds out unless the buyer and any lender deliver funds to close by wire transfer. Note: Your bank may deduct an incoming wire transfer fee. Bank name: ABA Routing No.: Customer Acct. Name (s): Account name must match seller s name Account No. Investment Accounts Obtain wiring instructions from your account representative. PICK UP CHECK: Call Seller at MAIL CHECK TO SELLER AT ADDRESS SHOWN BELOW OVERNIGHT CHECK: (An overnight-delivery fee will be deducted from proceeds) Provide physical address for delivery (P. O. box numbers are not acceptable) TRANSFER FUNDS TO PURCHASE TRANSACTION: [Buyer name(s) for purchase transaction must match seller s name(s).] Transfer $ to GF # Title Co. Attn: Phone: SPLIT PROCEEDS: (Provide pick-up, wire, or mailing instructions for each check.) Payee (Must be a Seller) Amount Total ADDITIONAL DISBURSEMENT INSTRUCTIONS: I/we hereby authorize and instruct Escrow Agent to disburse the proceeds in the manner described above. Seller (all sellers must sign) Seller (all sellers must sign) Seller (all sellers must sign) Seller (all sellers must sign) Seller Mailing Address: Seller Phone Number: Sample Form Seller Proceeds Instructions Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 12

15 TRANSFER OF FUNDS AUTHORIZATION Date: File #1 - File from which funds are to be transferred GF # Property Address: Seller: Buyer: File #2 File to which funds are to be transferred GF # Property Address: Seller: Buyer: Escrow Agent: Escrowed Funds (Amount to be transferred): $ Escrow Agent is hereby authorized and instructed to transfer the Escrowed Funds from File #1 to File #2 for the benefit of who is/are to be credited with the funds in File #2. Signature(s) of Owner of Transferred Funds Internal Distribution Note: Obtain signature on three originals Deliver one original to party signing Place a signed original in File #1 and File #2 Sample Form Transfer of Funds Between Files Page 1 of 1 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 13

16 ESCROW AGREEMENT (Post Closing Down Date Endorsements) GF #: Date: Property: Borrower: Borrower's Mailing Address: Lender: Escrow Agent: Title Agent: Lender has made a construction loan to Borrower and this Escrow Agreement arises out of and as part of the settlement of said sale transaction. Escrow Funds: 1. Escrow Agent hereby acknowledges receipt of funds in the amount of $ and shall deposit same in its standard escrow account, on which interest is not earned by any party. 2. The undersigned hereby release Escrow Agent from any liability and assume all responsibility for any loss to the undersigned, which may result from a lack of FDIC insurance for this investment in excess of $100,000. The undersigned acknowledge that, in calculating the amount of available insurance, the FDIC will consolidate this investment with all other funds of the undersigned which are on deposit with the above designated financial institution. 3. In the event Escrow Funds are insufficient for the Purpose set out below, any and all adjustments will be made between Borrower and Lender, without recourse on Escrow Agent. Purpose of Escrow: 4. Premiums which may be due for Down Date Endorsements required by Lender from time to time during the course of construction. Term of Escrow and Disbursement Instructions: 5. Method of disbursement: Escrow Funds are to be disbursed to title agent periodically over the escrow term as endorsements are ordered by and issued to Lender. 6. Specific Disbursement Instructions: a. Upon receipt of a request for a Down Date endorsement, escrow agent is to disburse the applicable premium to title agent upon issuance of the endorsement. b. Any amount remaining in the escrow upon completion of construction shall be returned to Borrower. 7. This escrow is anticipated to end on or before or at such time Escrow Agent receives written notice that construction is complete. Post Closing Escrow Down Date_Sample Form Page 1 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 14

17 8. In the event no written authorization is received by Escrow Agent on or before the date set forth for the termination of this escrow, Escrow Agent, at its sole election and discretion, shall pay all remaining funds to the order of Borrower, without any recourse or liability to Escrow Agent and without notice to the undersigned. Duties of Escrow Agent. 9. The Escrow Agent does not assume and shall not be under liability on account of performance or nonperformance of any party to the agreement. 10. Escrow Agent's only duty, liability, and responsibility shall be to hold the Escrow Funds under this Escrow Agreement and to deliver same to the persons and under the conditions specified. Escrow Agent shall not be required to determine the sufficiency or propriety of any document delivered to it or of any notice given to it. 11. Escrow Agent shall not be required to take nor be bound by notice of any default of any person, or to take any action with respect to such default involving any expense or liability, unless notice in writing is given to an officer of Escrow Agent of such default and unless it is indemnified in a manner satisfactory to it against any such expense or liability. These instructions shall not be subject to rescission or modification except upon receipt by Escrow Agent of written instructions of all the parties hereto or their successors in interest and no such modification shall be effective unless and until consented to in writing by Escrow Agent. Adverse Claims. 12. In the event of Escrow Agent receiving conflicting instructions from the Borrower and Lender, Escrow Agent shall refuse to comply with any such instructions so long as such disagreement shall continue, and in so refusing Escrow Agent shall not release the Escrow Funds. Escrow Agent shall not be or become liable in any way for its failure or refusal to comply with any such conflicting instructions or adverse claims or demands, and it shall be entitled to continue to refrain from acting until such conflicting instructions or adverse claims or demands (a) shall have been adjusted by agreement and it shall have been notified in writing thereof by the Borrower and Lender or (b) shall have finally been determined in a court of competent jurisdiction. In addition, Escrow Agent may interplead the Escrow Funds or Escrow Documents into a court of competent jurisdiction, after deducting therefrom its attorney's fees, court costs, and escrow fees, if any, which have accrued. 13. Escrow Agent may consult with legal counsel in the event of any dispute, questions as to the construction of the foregoing instructions, or Escrow Agent's duties hereunder, and Escrow Agent shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel. Exculpation. 14. This Escrow Agreement shall be liberally construed in the interest of, and for the protection of, Escrow Agent. No implied covenants or obligations shall be enforceable against Escrow Agent. Any general language contained herein shall not be construed to be limited by specific language herein set forth. 15. Escrow Agent is not a party to, and is not bound by or charged with notice of, any agreement or document out of which this Escrow Agreement may arise. Escrow Agent shall not be bound by any agreement to which it is not a party. 16. Escrow Agent shall be protected in acting upon any notice, request, waiver, consent, receipt or other paper of document believed by Escrow Agent to be genuine and to be Post Closing Escrow Down Date_Sample Form Page 2 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 15

18 signed by the proper party or parties. 17. Escrow Agent shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except its own willful misconduct, and Escrow Agent shall have no duties to anyone except those signing this agreement. 18. Escrow Agent shall not be responsible for any loss or delay occasioned by the closure or insolvency of the financial institution into which Escrow Agent deposited the Escrow Funds. 19. Escrow Agent shall not be responsible for the dishonor of any check, money order, draft, negotiable instrument, or other financial document, received as Escrow Funds by Escrow Agent under this Escrow Agreement. Indemnity. 20. The parties hereto do hereby jointly and severally agree that Escrow Agent shall incur no liability whatsoever in connection with its good faith performance under this Escrow Agreement. The Parties do hereby jointly and severally release and waive any claims they may have against Escrow Agent which may result from this performance in good faith of its functions under this Agreement. Escrow Agent shall be liable only for loss or damage caused directly by its acts of gross negligence while performing as Escrow Agent under this agreement. Specifically, Escrow Agent shall have no liability for any loss, damage, costs, or attorney fees, resulting from a delay in the electronic wire transfer of funds, unless said loss is caused by the direct result of Escrow Agent's gross negligence. 21. In the event that Escrow Agent performs any service not specifically provided hereinabove, or that there is any assignment or attachment of any interest in the subject matter of this escrow or any modification thereof, or that any controversy arises hereunder, or that Escrow Agent is made a party to, or intervenes in, any litigation pertaining to this escrow or the subject matter thereof, Escrow Agent shall be reasonably compensated therefor and reimbursed for all costs and expenses occasioned thereby, and the parties hereto agree jointly and severally to pay the same, to indemnify Escrow Agent against any loss, liability or expense incurred in any act or thing done by it hereunder, it being understood and agreed that Escrow Agent may interplead the subject matter of this escrow into any court of competent jurisdiction, and the act of such interpleader shall immediately relieve Escrow Agent of its duties, liabilities and responsibilities hereunder. 22. The undersigned agree to save and hold harmless Escrow Agent from any liability arising under and as a result of this Escrow Agreement, and further agree that Escrow Agent may, at its option, require the receipt, release and authorization in writing of all parties before paying money or delivering or redelivering documents or property to any party or to third parties. Escrow Agent shall not be liable for any interest or other charges on the money held by it. Additional Terms. 23. Severability. If part of this Agreement is adjudged invalid, the remaining parts are not affected. 24. Notices. All notices under this agreement shall be in writing and shall be given to the Parties at the addresses specified herein. Notices shall be, delivered to the recipient or mailed. Time periods related to mail notice begin with it is deposited in the United States Post Closing Escrow Down Date_Sample Form Page 3 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 16

19 mail properly addressed with sufficient first class (or better) postage to reach its destination. The place where notice is given under this section may be changed from time to time by the Party entitled to received it in the same manner that notice is given. Notice given before a change is not invalidated by the change. 25. Entire Agreement. The foregoing terms constitute the entire agreement between the parties and this agreement shall not be modified, changed or amended by any subsequent written or oral agreement unless agreed to in writing by Escrow Agent. 26. Governing Law. This agreement shall be governed by the laws of the State of Texas. Borrower Borrower name(s) Escrow Agent Lender Lender name(s) By: Escrow Officer Post Closing Escrow Down Date_Sample Form Page 4 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 17

20 ESCROW AGREEMENT (Post Closing) GF #: Date: Property: Buyer: Buyer's Mailing Address: Seller: Seller's Mailing Address: Escrow Agent: Escrow Agent s Mailing Address: Seller has sold the Property to Buyer and this Escrow Agreement arises out of and as part of the settlement of said sale transaction. Escrow Fees. 1. An initial fee of $ shall be paid to Escrow Agent for holding this escrow. 2. For each successive six month period thereafter, an additional charge of $ shall be deducted by Escrow Agent from the remaining funds as an escrow maintenance fee. Escrow Funds: 3. Escrow Agent hereby acknowledges receipt of funds in the amount of $ and shall deposit same in its standard escrow account, on which interest is not earned by any party. 4. The undersigned hereby release Escrow Agent from any liability and assume all responsibility for any loss to the undersigned, which may result from a lack of FDIC insurance for this investment in excess of $100,000. The undersigned acknowledge that, in calculating the amount of available insurance, the FDIC will consolidate this investment with all other funds of the undersigned which are on deposit with the above designated financial institution. 5. In the event Escrow Funds are insufficient for the Purpose set out below, any and all adjustments will be made between Buyer and Seller, without recourse on Escrow Agent. Purpose of Escrow: 6. Insert here the reason(s) for holding the funds, being very specific. For example, To ensure the satisfactory replacement of the rear screen door or To ensure that all items contained in the attached Punch List (marked as Exhibit ) are completed to the satisfaction of Buyer - etc. 7. With respect to the performance of all parties, time is of the essence in the performance of this Escrow Agreement. Sample Form Post Closing Escrow Agreement Page 1 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 18

21 Term of Escrow and Disbursement Instructions: 8. Method of disbursement: Escrow Funds are to be disbursed at the end of the escrow period in a single lump sum. Escrow Funds are to be disbursed periodically over the escrow term in installments. 9. Specific Disbursement Instructions: insert the events and/or dates which should give rise to disbursement of the Escrow Funds. 10. This escrow is anticipated to end on or before or at such time(s) as Escrow Agent receives written authority from authorizing the release of the Escrow Funds. 11. In the event no written authorization is received by Escrow Agent on or before the date set forth for the termination of this escrow, Escrow Agent, at its sole election and discretion, shall pay all remaining funds to the order of, without any recourse or liability to Escrow Agent and without notice to the undersigned. Duties of Escrow Agent The Escrow Agent does not assume and shall not be under liability on account of performance or nonperformance of any party to the agreement. 13. Escrow Agent's only duty, liability, and responsibility shall be to hold the Escrow Funds under this Escrow Agreement and to deliver same to the persons and under the conditions specified. Escrow Agent shall not be required to determine the sufficiency or propriety of any document delivered to it or of any notice given to it. 14. Escrow Agent shall not be required to take nor be bound by notice of any default of any person, or to take any action with respect to such default involving any expense or liability, unless notice in writing is given to an officer of Escrow Agent of such default and unless it is indemnified in a manner satisfactory to it against any such expense or liability. These instructions shall not be subject to rescission or modification except upon receipt by Escrow Agent of written instructions of all the parties hereto or their successors in interest and no such modification shall be effective unless and until consented to in writing by Escrow Agent. Adverse Claims. 15. In the event of Escrow Agent receiving conflicting instructions from the Buyer and Seller, Escrow Agent shall refuse to comply with any such instructions so long as such disagreement shall continue, and in so refusing Escrow Agent shall not release the Escrow Funds. Escrow Agent shall not be or become liable in any way for its failure or refusal to comply with any such conflicting instructions or adverse claims or demands, and it shall be entitled to continue to refrain from acting until such conflicting instructions or adverse claims or demands (a) shall have been adjusted by agreement and it shall have been notified in writing thereof by the Buyer and Seller or (b) shall have finally been determined in a court of competent jurisdiction. In addition, Escrow Agent may interplead the Escrow Funds or Escrow Documents into a court of competent jurisdiction, after deducting therefrom its attorney's fees, court costs, and escrow fees, if any, which have accrued. 16. Escrow Agent may consult with legal counsel in the event of any dispute, questions as to Sample Form Post Closing Escrow Agreement Page 2 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 19

22 the construction of the foregoing instructions, or Escrow Agent's duties hereunder, and Escrow Agent shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel. Exculpation. 17. This Escrow Agreement shall be liberally construed in the interest of, and for the protection of, Escrow Agent. No implied covenants or obligations shall be enforceable against Escrow Agent. Any general language contained herein shall not be construed to be limited by specific language herein set forth. 18. Escrow Agent is not a party to, and is not bound by or charged with notice of, any agreement or document out of which this Escrow Agreement may arise. Escrow Agent shall not be bound by any agreement to which it is not a party. 19. Escrow Agent shall be protected in acting upon any notice, request, waiver, consent, receipt or other paper of document believed by Escrow Agent to be genuine and to be signed by the proper party or parties. 20. Escrow Agent shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except its own willful misconduct, and Escrow Agent shall have no duties to anyone except those signing this agreement. 21. Escrow Agent shall not be responsible for any loss or delay occasioned by the closure or insolvency of the financial institution into which Escrow Agent deposited the Escrow Funds. 22. Escrow Agent shall not be responsible for the dishonor of any check, money order, draft, negotiable instrument, or other financial document, received as Escrow Funds by Escrow Agent under this Escrow Agreement. Indemnity. 23. The parties hereto do hereby jointly and severally agree that Escrow Agent shall incur no liability whatsoever in connection with its good faith performance under this Escrow Agreement. The Parties do hereby jointly and severally release and waive any claims they may have against Escrow Agent which may result from this performance in good faith of its functions under this Agreement. Escrow Agent shall be liable only for loss or damage caused directly by its acts of gross negligence while performing as Escrow Agent under this agreement. Specifically, Escrow Agent shall have no liability for any loss, damage, costs, or attorney fees, resulting from a delay in the electronic wire transfer of funds, unless said loss is caused by the direct result of Escrow Agent's gross negligence. 24. In the event that Escrow Agent performs any service not specifically provided hereinabove, or that there is any assignment or attachment of any interest in the subject matter of this escrow or any modification thereof, or that any controversy arises hereunder, or that Escrow Agent is made a party to, or intervenes in, any litigation pertaining to this escrow or the subject matter thereof, Escrow Agent shall be reasonably compensated therefor and reimbursed for all costs and expenses occasioned thereby, and the parties hereto agree jointly and severally to pay the same, to indemnify Escrow Agent against any loss, liability or expense incurred in any act or thing done by it hereunder, it being understood and agreed that Escrow Agent may interplead the subject matter of this escrow into any court of competent jurisdiction, and the act of such interpleader shall immediately relieve Escrow Agent of its duties, liabilities and Sample Form Post Closing Escrow Agreement Page 3 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 20

23 responsibilities hereunder. 25. The undersigned agree to save and hold harmless Escrow Agent from any liability arising under and as a result of this Escrow Agreement, and further agree that Escrow Agent may, at its option, require the receipt, release and authorization in writing of all parties before paying money or delivering or redelivering documents or property to any party or to third parties. Escrow Agent shall not be liable for any interest or other charges on the money held by it. Additional Terms. 26. Severability. If part of this Agreement is adjudged invalid, the remaining parts are not affected. 27. Notices. All notices under this agreement shall be in writing and shall be given to the Parties at the addresses specified herein. Notices shall be, delivered to the recipient or mailed. Time periods related to mail notice begin with it is deposited in the United States mail properly addressed with sufficient first class (or better) postage to reach its destination. The place where notice is given under this section may be changed from time to time by the Party entitled to received it in the same manner that notice is given. Notice given before a change is not invalidated by the change. 28. Entire Agreement. The foregoing terms constitute the entire agreement between the parties and this agreement shall not be modified, changed or amended by any subsequent written or oral agreement unless agreed to in writing by Escrow Agent. 29. Governing Law. This agreement shall be governed by the laws of the State of Texas. Buyer buyer name(s) Seller seller name(s) Escrow Agent By: Escrow Officer Sample Form Post Closing Escrow Agreement Page 4 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 21

24 COLLATERALIZED INDEMNITY AND ESCROW AGREEMENT CURRENT TAXES GF#: Date: Indemnitor(s): Indemnitor s Address: Property: Indemnitee: Indemnitor s Address: Escrow Agent: Escrow Agent s Address: Facts 1. Indemnitor has requested Indemnitee and Escrow Agent (hereinafter called the Company, whether one or more) to issue its policy or policies (hereinafter called policies, whether one or more) of title insurance insuring an interest in or title to the Property without exception to taxes for the year (hereinafter called Current Taxes). 2. Holder of current loan on the property has withdrawn funds from Indemnitee s escrow account for payment of Current Taxes on the Property; however, payment of these taxes has not yet been credited on the records of one or more tax assessor-collectors. 3. The Company is, therefore, unwilling to issue its policies without exception to the Current Taxes unless indemnified by Indemnitor. 4. Indemnitor has, as an inducement to the Company, offered to indemnify the Company, against loss or damage for which Company may become liable by reason of insuring against loss, damage, cost or expense which may result from the Current Taxes. 5. Indemnitor recognizes that the company, in the normal course of its business, may be asked to issue additional policies in the future which will afford the same or similar protection. Agreement 6. Indemnitor hereby indemnifies and agrees to hold the Company harmless from all liability, loss or damage of any nature, including attorneys fees and expenses sustained or incurred in enforcing this agreement and in defending the insured, which the Company may sustain or incur resulting from the issuance, either now or in the future, of policies of title insurance which insure the named insureds in the policies, pursuant to terms and provisions, against loss or damage that may result from the Current Taxes. 7. The Company agrees to issue its policies insuring an interest in or title to the Property and insuring the named insureds, solely in accordance with the terms and provisions of said policies, against loss or damage which may result from the Current Taxes. Indemnity & Escrow-Current Taxes_Sample Form Page 1 of 3 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 22

25 Collateral 8. As security for the performance of the terms of this agreement Indemnitor hereby deposits with Escrow Agent, the receipt of which is hereby acknowledged, the amount of $ which shall be deposited in Escrow Agent s standard escrow account, on which interest is not earned by any party. 9. The undersigned hereby release Escrow Agent from any liability and assume all responsibility for any loss to the undersigned, which may result from a lack of FDIC insurance for this investment in excess of $100,000. The undersigned acknowledge that, in calculating the amount of available insurance, the FDIC will consolidate this investment with all other funds of the undersigned which are on deposit with the above designated financial institution. Covenants, Conditions and Terms 10. Indemnitor agrees that Escrow Agent in its sole discretion, without notice to the Indemnitor, use the Collateral to pay, satisfy, compromise or do any other act necessary in its judgment to pay the Current Taxes and any penalty, interest or other charge in connection therewith, and in doing so may use any or all of the collateral deposited as security. The Indemnitor hereby authorizes and empowers the Company to advance and pay any sums necessary to obtain a Tax Certificate showing all sums due for the year (Current Year) as paid in full on or before January 15,. The Indemnitor further authorizes and empowers the Company to use any or all of the collateral deposited with the Company to offset ay losses sustained by the Company in any dealings with Indemnitor. 11. Notwithstanding anything in this agreement which may be construed to the contrary, Indemnitor agrees that the Company shall not have to pay, incur, or sustain monetary loss in any amount respecting the performance of this agreement before being entitled to call upon Indemnitor to provide to Company all funds necessary to pay, satisfy, compromise or do any other act necessary to obtain a Tax Certificate showing all sums due for the Current Year are paid in full; and Indemnitor shall promptly furnish any funds so demanded. 12. If the Company shall sustain or incur loss or damage either because the collateral was insufficient, or because the Indemnitor failed to provide sufficient funds upon demand by the Company, the Indemnitor shall be come indebted to the Company in an amount equal to the loss and loss expense sustained or incurred by the Company and agrees to repay the Company that amount on demand, together with interest thereon at a rate equal to the maximum legal rate from the date of demand. 13. In this agreement, wherever the context so requires, the singular number includes the plural, and where there is more than one person included as the Indemnitor the obligations of this agreement shall be binding on all such persons jointly and severally. Person herein includes individuals, husband and wife (jointly and severally), corporations, partnerships and all other entities designated in and executing this agreement as Indemnitor. If any Indemnitor be not bound hereunder for any reason, this agreement shall still be binding upon the other Indemnitors. 14. This Agreement shall be liberally construed in the interest of and for the protection of the Company. If any provision of this agreement be held to be void or unenforceable under the laws of any pace governing its construction or enforcement, this agreement shall not be void or vitiated thereby, but shall be construed to be in force with the same effect as thought such provision were omitted. 15. The liability of Indemnitor under this agreement is direct and primary and is not conditioned or contingent upon prior pursuit of any remedies by the Company except demand for performance upon the Indemnitor. Indemnitor shall be liable for and shall pay promptly to the Company all costs, expenses and attorneys fees incurred by the Company in enforcing this agreement. 16. This Agreement shall be binding upon the Indemnitors, and each of them, their heirs, assigns, Indemnity & Escrow-Current Taxes_Sample Form Page 2 of 3 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 23

26 and legal successors, and shall inure to the benefit of the Company, its successors or assigns, including, without limitation, any other insurer involved in reinsuring, in any manner, any liabilities of the company under any policies of title insurance or endorsements thereto issued in reliance hereon. 17. Written notice shall be deemed to have been duly served if delivered to the person or to a member of the firm or to an officer of the corporation for whom it was intended or if delivered at or sent by Registered or Certified Mail to the appropriate address shown herein. 18. The obligations of Indemnitor under this Agreement shall continue until the liability of the company under the policies issued in reliance upon it has been fully discharged. When, in the opinion of the Company, the title to the Property is no longer subject to the Current Taxes, the Company agrees to return to the Indemnitor all collateral deposited with the Company, except for the portion which may have been used as provided herein, but, in doing so, it is without any express or implied release of the obligations of Indemnitor. 19. Company shall not be liable for lost or unearned interest on any security held under this agreement, nor otherwise for loss thereof, except for its intentional acts or gross negligence. Indemnitor: [Typed name(s)] Escrow Agent: [Settlement Agent Name] By: Indemnity & Escrow-Current Taxes_Sample Form Page 3 of 3 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 24

27 COLLATERALIZED INDEMNITY AND ESCROW AGREEMENT SUPPLEMENTAL TAXES GF#: Date: Indemnitor(s): Indemnitor s Address: Property: Indemnitee: Indemnitee s Address: Insured(s): Insured s Mailing Address: Escrow Agent: Facts. 1. Indemnitor has requested Indemnitee and Escrow Agent (hereinafter called the Company, whether one or more) to issue its policy or policies (hereinafter called policies, whether one or more) of title insurance insuring an interest in or title to the Property. 2. Indemnitor is the current owner of the Property, which is being taxed on the basis of an exemption allowed for the current year which will be removed by the appraisal district at the time of the conveyance by Indemnitor; or an exemption allowed in a previous tax year during which the Indemnitor no longer occupied the property as homestead and/or no longer qualified; or an exemption allowed to a previous owner who was either over 65, disabled, or both (the Exemption) and for which Indemnitor does not qualify; or a valuation which does not include all existing improvements. 3. Supplemental Taxes may/will be assessed for the current and/or preceding years in which taxes were collected based on the Exemption after the owner of the Property ceased to qualify, or on a valuation which did not include all existing improvements. 4. The taxing authorities are unable or unwilling to make a determination or issue the bills for the Supplemental Taxes until a future date. 5. The promulgated exception relating to taxes in Texas title insurance policies provides coverage to an insured owner or lender against loss or damage as a result of taxes or assessments for prior years because of an exemption granted to a previous owner of the property under Section 11.13, Texas Tax Code, or because of improvements not assessed for a previous year. 6. The Company is, therefore, unwilling to issue its policies unless indemnified by Indemnitor. 7. Indemnitor has, as an inducement to the Company, offered to indemnify the Company, against loss or damage for which Company may become liable by reason of providing the affirmative Indemnity & Escrow-Supplemental Taxes_Sample Form Page 1 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 25

28 insurance set forth in said policies against loss, damage, cost or expense which may result from the Supplemental Taxes. 8. Indemnitor recognizes that the company, in the normal course of its business, may be asked to issue additional policies in the future which will afford the same or similar protection. Agreement. 9. Indemnitor hereby indemnifies and agrees to hold the Company harmless from all liability, loss or damage of any nature, including attorneys fees and expenses sustained or incurred in enforcing this agreement and in defending the insured, which the Company may sustain or incur resulting from the issuance, either now or in the future, of policies of title insurance which insure the named insureds in the policies, pursuant to terms and provisions, against loss or damage that may result from the Supplemental Taxes. 10. The Company agrees to issue its policies insuring an interest in or title to the Property and insuring the named insureds, solely in accordance with the terms and provisions of said policies, against loss or damage which may result from the Supplemental Taxes. Collateral. 11. As security for the performance of the terms of this agreement Indemnitor hereby deposits with Escrow Agent, the receipt of which is hereby acknowledged, the amount of $ ] (the Collateral) which shall be deposited in Escrow Agent s standard escrow account, on which interest is not earned by any party. 12. The Collateral is to be used for the payment of the Supplemental Taxes when assessed by the Appraisal District and billed by the applicable taxing authorities. Should the Collateral be insufficient for payment in full of the Supplemental Taxes, Indemnitor agrees to immediately reimburse Escrow Agent for any shortage upon demand. Should the Supplemental Taxes be less than the Collateral, Escrow Agent agrees to refund the unused portion to Indemnitor on about March 1,. 13. The undersigned hereby release Escrow Agent from any liability and assume all responsibility for any loss to the undersigned, which may result from a lack of FDIC insurance for this investment in excess of $100,000. The undersigned acknowledge that, in calculating the amount of available insurance, the FDIC will consolidate this investment with all other funds of the undersigned which are on deposit with the above designated financial institution. Covenants, Conditions and Terms 14. The Indemnitor agrees that the Company will report to its proposed insureds the existence of the potential Supplemental Taxes. 15. Indemnitor agrees that Escrow Agent in its sole discretion, without notice to the Indemnitor, use the Collateral to pay, satisfy, compromise or do any other act necessary in its judgment to obtain a release or discharge of the Supplemental Taxes and any penalty, interest or other charge in connection therewith, and in doing so may use any or all of the collateral deposited as security. The Indemnitor hereby authorizes and empowers the Company to advance and pay any sums necessary to obtain a release, discharge or satisfaction of the Exception. The Indemnitor further authorizes and empowers the Company to use any or all of the collateral deposited with the Company to offset ay losses sustained by the Company in any dealings with Indemnitor. 16. Notwithstanding anything in this agreement which may be construed to the contrary, Indemnitor agrees that the Company shall not have to pay, incur, or sustain monetary loss in any amount respecting the performance of this agreement before being entitled to call upon Indemnitor to provide to Company all funds necessary to pay, satisfy, compromise or do any other act necessary to obtain a release or discharge of the Supplemental Taxes; and Indemnitor shall promptly furnish any funds so demanded. Indemnity & Escrow-Supplemental Taxes_Sample Form Page 2 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 26

29 17. If the Company shall sustain or incur loss or damage either because the collateral was insufficient, or because the Indemnitor failed to provide sufficient funds upon demand by the Company, the Indemnitor shall be come indebted to the Company in an amount equal to the loss and loss expense sustained or incurred by the Company and agrees to repay the Company that amount on demand, together with interest thereon at a rate equal to the maximum legal rate from the date of demand. 18. If the Indemnitor fails timely to take such steps as in the opinion of the company are necessary to remove the Supplemental Taxes on demand by the Company, including but not limited to the commencement of legal action or payment of money, that it determines necessary or advisable to remove said matters and in connection therewith the Indemnitor shall, upon demand, advance to the Company all funds necessary, including all costs, attorneys fees, and other expenses. In any event, Indemnitor is required to remove the Supplemental Taxes prior to any enforcement or operation of the Supplemental Taxes which may defeat, terminate, subordinate or have other adverse effect on the title to or other interest in the property insured by the Company s policies. 19. The Company shall have the right to select and approve any and all counsel who may be retained by the Company or Indemnitor to bring any action or to perform any work to correct the matters resulting from the Supplemental Taxes, and Indemnitor agrees promptly to pay the counsel so selected or approved by the Company. 20. In this agreement, wherever the context so requires, the singular number includes the plural, and where there is more than one person included as the Indemnitor the obligations of this agreement shall be binding on all such persons jointly and severally. Person herein includes individuals, husband and wife (jointly and severally), corporations, partnerships and all other entities designated in and executing this agreement as Indemnitor. If any Indemnitor be not bound hereunder for any reason, this agreement shall still be binding upon the other Indemnitors. 21. This Agreement shall be liberally construed in the interest of and for the protection of the Company. If any provision of this agreement be held to be void or unenforceable under the laws of any pace governing its construction or enforcement, this agreement shall not be void or vitiated thereby, but shall be construed to be in force with the same effect as thought such provision were omitted. 22. The liability of Indemnitor under this agreement is direct and primary and is not conditioned or contingent upon prior pursuit of any remedies by the Company except demand for performance upon the Indemnitor. Indemnitor shall be liable for and shall pay promptly to the Company all costs, expenses and attorneys fees incurred by the Company in enforcing this agreement. 23. This Agreement shall be binding upon the Indemnitors, and each of them, their heirs, assigns, and legal successors, and shall inure to the benefit of the Company, its successors or assigns, including, without limitation, any other insurer involved in reinsuring, in any manner, any liabilities of the company under any policies of title insurance or endorsements thereto issued in reliance hereon. 24. Written notice shall be deemed to have been duly served if delivered to the person or to a member of the firm or to an officer of the corporation for whom it was intended or if delivered at or sent by Registered or Certified Mail to the appropriate address shown herein. 25. The obligations of Indemnitor under this Agreement shall continue until the liability of the company under the policies issued in reliance upon it has been fully discharged. When, in the opinion of the Company, the title to the Property is no longer subject to the Supplemental Taxes, the Company agrees to return to the Indemnitor all collateral deposited with the Company, except for the portion which may have been used as provided herein, but, in doing so, it is without any express or implied release of the obligations of Indemnitor. Indemnity & Escrow-Supplemental Taxes_Sample Form Page 3 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 27

30 26. Company shall not be liable for lost or unearned interest on any security held under this agreement, nor otherwise for loss thereof, except for its intentional acts or gross negligence. Acknowledgement and Agreement 27. The Insured acknowledges the escrow and the purpose for the escrow. 28. The insured agrees to promptly forward to Indemnitee any bills or correspondence received from the Appraisal District or from any taxing entity regarding taxes for prior years or supplemental taxes due. Indemnitor(s): [Typed name(s)] Insured(s): [Typed name(s)] Escrow Agent: [Settlement Agent Name] By: Indemnity & Escrow-Supplemental Taxes_Sample Form Page 4 of 4 Rev. 11/ Texas Land Title Institute - Escrow Agreements Page 28

31 GF # Date: COLLATERALIZED INDEMNITY AND ESCROW AGREEMENT TITLE MATTER Indemnitor(s): Indemnitor s Address: Property: Indemnitee: Indemnitee s Address: Escrow Agent: Escrow Agent s Address: Facts. 1. Indemnitor has requested Indemnitee and Escrow Agent (hereinafter called the Company, whether one or more) to issue its policy or policies (hereinafter called policies, whether one or more) of title insurance insuring an interest in or title to the Property. 2. The Company is unwilling to issue its policies without exception to the matter(s) (hereinafter called the Exception, whether one or more) described on Exhibit A attached hereto unless indemnified by Indemnitor. 3. Indemnitor has, as an inducement to the Company, offered to indemnify the Company, against loss or damage for which Company may become liable as a result of the omission or deletion of the Exception or by reason of providing the affirmative insurance set forth in said policies against loss, damage, cost or expense which may result from the matters referred to in the Exception. 4. Indemnitor recognizes that the company, in the normal course of its business, may be asked to issue additional policies in the future which will afford the same or similar protection. Agreement. 3. Indemnitor hereby indemnifies and agrees to hold the Company harmless from all liability, loss or damage of any nature, including attorneys fees and expenses sustained or incurred in enforcing this agreement and in defending the insured, which the Company may sustain or incur resulting from the issuance, either now or in the future, of policies of title insurance which insure the named insureds in the policies, pursuant to terms and provisions, against loss or damage that may result from the Exception. Indemnitor agrees to do whatever is required by the company to remove the Exception on demand by the Company. on or before. 4. The Company agrees to issue its policies insuring an interest in or title to the Property and insuring the named insureds, solely in accordance with the terms and provisions of said policies, against loss or damage which may result from the Exception. Collateral. 5. As security for the performance of the terms of this agreement Indemnitor hereby deposits with Escrow Agent, the receipt of which is hereby acknowledged, the amount of $ which shall be deposited in Escrow Agent s standard escrow account, on which interest is not earned by any party 6. The undersigned hereby release Escrow Agent from any liability and assume all responsibility for any loss to the undersigned, which may result from a lack of FDIC insurance for this investment in excess of $100,000. The undersigned acknowledge that, in calculating the amount of available Escrow Agreement Indemnity Sample Form Page 1 of 4 Rev. 01/ Texas Land Title Institute - Escrow Agreements Page 29

32 insurance, the FDIC will consolidate this investment with all other funds of the undersigned which are on deposit with the above designated financial institution. Covenants, Conditions and Terms 7. The Indemnitor agrees that the Company may, in its discretion, report to its proposed insureds the existence of the Exception. If the express insurance offered by the Company is not satisfactory to its proposed insureds, the Company shall be under no obligation to issue such policies and may, at its election, either refuse to issue or, provided the /company is furnished with satisfactory acknowledgment by the proposed insured that said proposed insured is aware of the existence of the Exception, issue such policies without showing the Exception. 8. Notwithstanding anything in this agreement which may be construed to the contrary, Indemnitor agrees that the Company shall not have to pay, incur, or sustain monetary loss in any amount respecting the performance of this agreement before being entitled to call upon Indemnitor to provide to Company all funds necessary to pay, satisfy, compromise or do any other act necessary to obtain a release or discharge of the Exception; and Indemnitor shall promptly furnish any funds so demanded. 9. If the Company shall sustain or incur loss or damage either because no collateral was deposited or the collateral was insufficient, or because the Indemnitor failed to provide sufficient funds upon demand by the Company, the Indemnitor shall be come indebted to the Company in an amount equal to the loss and loss expense sustained or incurred by the Company and agrees to repay the Company that amount on demand, together with interest thereon at a rate equal to the maximum legal rate from the date of demand. 10. If the Indemnitor fails timely to take such steps as in the opinion of the company are necessary to remove the Exception, on or before agreed date as provided herein or on demand by the Company, including but not limited to the commencement of legal action or payment of money, that it determines necessary or advisable to remove said matters and in connection therewith the Indemnitor shall, upon demand, advance to the Company all funds necessary, including all costs, attorneys fees, and other expenses. In any event, Indemnitor is required to remove the Exception prior to any enforcement or operation of the Exception which may defeat, terminate, subordinate or have other adverse effect on the title to or other interest in the property insured by the Company s policies. 11. The Indemnitor agrees that if at any time the Company deems itself insecure it may in its sole discretion, without notice to the Indemnitor, pay, satisfy, compromise or do any other act necessary in its judgment to obtain a release or discharge of the Exception and in doing so may use any or all of the collateral deposited with the Company as security. The Indemnitor hereby authorizes and empowers the Company to advance and pay any sums necessary to obtain a release, discharge or satisfaction of the Exception, and specifically authorizes the Company to sell any collateral deposited with the Company as security. The Indemnitor further authorizes and empowers the Company to use any or all of the collateral deposited with the Company to offset ay losses sustained by the Company in any dealings with Indemnitor. 12. The Company shall have the right to select and approve any and all counsel who may be retained by the Company or Indemnitor to bring any action or to perform any work to correct the matters shown in the Exception, and Indemnitor agrees promptly to pay the counsel so selected or approved by the Company. 13. In this agreement, wherever the context so requires, the singular number includes the plural, and where there is more than one person included as the Indemnitor the obligations of this agreement shall be binding on all such persons jointly and severally. Person herein includes individuals, husband and wife (jointly and severally), corporations, partnerships and all other entities designated in and executing this agreement as Indemnitor. If any Indemnitor be not bound hereunder for any reason, this agreement shall still be binding upon the other Indemnitors. 14. This Agreement shall be liberally construed in the interest of and for the protection of the Company. If any provision of this agreement be held to be void or unenforceable under the laws Escrow Agreement Indemnity Sample Form Page 2 of 4 Rev. 01/ Texas Land Title Institute - Escrow Agreements Page 30

33 of any pace governing its construction or enforcement, this agreement shall not be void or vitiated thereby, but shall be construed to be in force with the same effect as thought such provision were omitted. 15. The liability of Indemnitor under this agreement is direct and primary and is not conditioned or contingent upon prior pursuit of any remedies by the Company except demand for performance upon the Indemnitor. Indemnitor shall be liable for and shall pay promptly to the Company all costs, expenses and attorneys fees incurred by the Company in enforcing this agreement. 16. This Agreement shall be binding upon the Indemnitors, and each of them, their heirs, assigns, and legal successors, and shall inure to the benefit of the Company, its successors or assigns, including, without limitation, any other insurer involved in reinsuring, in any manner, any liabilities of the company under any policies of title insurance or endorsements thereto issued in reliance hereon. 17. Written notice shall be deemed to have been duly served if delivered to the person or to a member of the firm or to an officer of the corporation for whom it was intended or if delivered at or sent by Registered or Certified Mail to the appropriate address shown herein. 18. The obligations of Indemnitor under this Agreement shall continue until the liability of the company under the policies issued in reliance upon it has been fully discharged. When, in the opinion of the Company, the title to the Property is no longer subject to the Exception, the Company agrees to return to the Indemnitor all collateral deposited with the Company, except for the portion which may have been used as provided herein, but, in doing so, it is without any express or implied release of the obligations of Indemnitor. 19. Company shall not be liable for lost or unearned interest on any security held under this agreement, nor otherwise for loss thereof, except for its intentional acts or gross negligence. 20. This agreement shall be performable, and venue shall be in County, Texas. Indemnitor: By: Indemnitee: Underwriter Name By: Escrow Agent: By: Escrow Agreement Indemnity Sample Form Page 3 of 4 Rev. 01/ Texas Land Title Institute - Escrow Agreements Page 31

34 Exhibit A (Insert full description(s) of the matters/exceptions for which the Indemnity is given.) Escrow Agreement Indemnity Sample Form Page 4 of 4 Rev. 01/ Texas Land Title Institute - Escrow Agreements Page 32

35 11/17/2016 Janet S. Minke, Alliant National Title insurance Company Understanding Escrow Escrow Escrow Agent Fiduciary 2016 TEXAS LAND TITLE INSTITUTE 1

36 11/17/2016 Good Business Practices Contract Signed by all parties Complete and unambiguous Lender Instructions For all new loans All revisions in writing Earnest Money Only with complete contract 2016 TEXAS LAND TITLE INSTITUTE Escrow Agreement Scenarios Gift Funds Interest-bearing Accounts Passing Premiums Through Delayed Funding Seller Proceeds Funds from one Deal to Another 2016 TEXAS LAND TITLE INSTITUTE 2

37 11/17/2016 Post Closing Escrow Down Date Endorsements Repairs Current Taxes Supplemental Taxes Title Matters 2016 TEXAS LAND TITLE INSTITUTE Sample Agreements 2016 TEXAS LAND TITLE INSTITUTE 3