Attachment 1 Title Insurance and Closing Services SOW.pdf

U.S. Department of Agriculture Statement of Work for Title Insurance & Agricultural Research Service Closing Services for Acquisition of Two Oct. 25, 2022; Page 1 Parcels from SOGC, Inc.

Statement of Work for Title Insurance & Closing Services for the Acquisition of Three Parcels of Real Property from

SOGC, Inc. Pursuant to a Land Exchange

I. OBJECTIVE

The objective of this Statement of Work ("SOW") is to obtain a title search, title insurance commitment, title insurance policy, and closing services for three tracts of land the United States of America ("United States") will acquire pursuant to a land exchange ("Exchange"). The Exchange is between the United States, acting by and through the U.S. Department of Agriculture ("USDA") Agricultural Research Service ("ARS"), and SOGC Inc. ("SOGC") (collectively the "Parties").

II. BACKGROUND

On September 12, 2022, SOGC and ARS, respectively, signed a Nonbinding Memorandum of Understanding for the Exchange of Real Property Between USDA Agricultural Research Service and SOGC, Inc. ("MOU"). The MOU sets forth a general framework and timeline for the exchange of certain parcels of land between the Parties. The properties to be exchanged are:

A. SOGC will convey the following three parcels to ARS, which are the subject of this

SOW:

1. Hale County Property. Tract 1 – a 321.23 acre parcel, Legal Description:

All of the East half of Section 7, Block D-8, Tract 2 – a 320.26 acre parcel, Legal Description:

All of the West half of Section 6, Block D-8, and Tract 3 -a 200.05 acre parcel, Legal Description: East 204 Acres of the South half of Section 16, Block D-8. The Hale County Property (collectively "Parcels") are identified and described on Exhibit A, which is attached hereto and made a part hereof.

B. ARS will convey the following parcel to SOGC, which is NOT included in this contract:

1. Big Spring, TX Property. A 99.36 +/- acre tract of land being a portion of the Northwest quarter of Section 42, Block 32, Township 1 North, T. & P. RR. Co., Howard County, Texas, and being all of a 130 acre tract of land recorded under Volume 35, Page 186, save and except a 10.19 acre tract of land recorded under Volume 343, Page 237, a 9.99 acre tract of land recorded under Volume 405, Page 272, and a 12.857 acre tract of land recorded under Volume 606, Page 127, all in Real Property Records, Howard County, Texas.

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III. SCOPE

The Scope of this contract includes all the terms, conditions, provisions, and requirements in this SOW. This contract is not limited to the Description of Services set forth below.

The contractor will perform all standard and customary services that are provided for the acquisition of commercial property, including: (1) searching the chains of title of the Parcels in the public records; (2) determining SOGC’s ownership and interest share of the surface and subsurface estates of the Parcels; (3) determining if there are any outstanding ownership or interest shares of the Parcels to the surface and subsurface estates; (4) identifying and providing all underlying documents of public record creating clouds on the title to the Parcels; (5) at ARS' request, obtaining all necessary curative instruments to ensure merchantable, insurable title to the Parcels, ensuring they are properly executed in accordance with Texas state law and, if necessary or customary, ensuring they are properly recorded in accordance with Texas state law; (6) ensuring the conveyance deed is properly executed and recorded in accordance with Texas state law; (7) closing the land exchange on behalf of ARS; and (8) providing title insurance.

IV. STANDARDS AND RESPONSIBILITIES

All services provided shall fully comply with the requirements stated in the Regulations of the Attorney General Governing the Review and Approval of Title for Federal Land Acquisitions (2016) (http://www.justice.gov/enrd/2001-title-standards.pdf), which is hereby incorporated herein by reference.

The contractor is responsible for having up-to-date knowledge of the requirements of Texas state laws on title searches, closing real estate transactions, and title clearance. The title insurance company and its issuing agents must comply with Texas state laws, including title insurance requirements. The contractor must be licensed to do title insurance business in the State of Texas. The title insurance company must be approved by the State of Texas's Insurance Commissioner.

The invoice must be submitted to the Invoice Processing Platform (IPP) for services rendered at www.ipp.gov.

The title insurance commitment must be provided from a closing agent operating with a licensed title insurance company authorized by law and by the State of Texas Insurance Commissioner to issue title insurances policies in Texas. The amount of coverage should be the fair market value of the Parcels.

The title search or abstract must be for a sufficient period of time for the title insurance company to insure the title without objectionable exceptions and must identify all owners of record, outstanding mortgages, liens, judgments or pending suits, outstanding tax claims, easements or rights-of-way of any type, including oil, gas, and mineral interests that have been severed, any water right interests, and any other exceptions that may cloud the title of the property to be acquired. The search must show ownership interest of the surface and subsurface rights associated with the Parcels.

http://www.justice.gov/enrd/2001-title-standards.pdf

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V. DESCRIPTION OF SERVICES

The contractor must coordinate, facilitate, and perform the following services.

A. Closing Protection Letter.

1. The contractor must provide an ALTA Closing Protection Letter ("CPL") or its equivalent to ARS.

2. The CPL must protect ARS from loss due to the closing agent’s failure to comply with ARS' closing instructions. The amount of monetary protection offered in the letter must be the fair market value of the Parcels.

B. Title Commitment

1. Provide a title insurance commitment, based upon a title search of the public records, which covers the Parcels in their entirety. Deliver the commitment to ARS no later than thirty (30) calendar days after the date of the request from ARS.

2. The title insurance commitment must confirm the issuance of a final title insurance policy to the "United States of America" on ALTA U.S. Policy Form 9-28-91 (Revised 12/3/2012).

3. Provide a copy of the deed(s) vesting ownership in SOGC or any other party determined to have a current ownership interest in the Parcels.

4. Provide copies of all instruments of public record that either create clouds on the title to the Parcels or are listed as exceptions in Schedule B, Section II of the title insurance commitment, including instruments creating rights in, interests to, or encumbrances on the Parcels.

5. Identify the actions and materials needed to cure, discharge, or remove each title defect, lien, encumbrance, or other matter excepted from title insurance coverage. Upon ARS' request, work with the USDA Office of the General Counsel ("OGC") to cure specific title insurance exceptions to the Parcels.

6. Ensure that ARS obtains title to the Parcels free and clear of, and unencumbered by, any protective or restrictive covenants.

7. Ensure ARS has legal access to the Parcels.

8. Specify the public records searched, e.g., probate office, circuit court, federal district court, etc.

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C. Closing Services

1. Fully comply with all closing instructions provided by ARS and OGC.

2. Comply with the title commitment requirements set forth in Schedule B, Section I.

3. Ensure all exceptions required to be removed, released, subordinated, waived, or otherwise handled as set forth in the ARS closing instructions have been completed and the applicable clearance documents recorded, and all other requirements met. Proposed subordination agreements, satisfactions, releases, partial releases, and other title curative documents to be signed at closing will be provided to ARS for review and approval at least 3 business days prior to closing.

4. Ensure that no new encumbrances have been recorded against the Parcels since the date of the most recent title insurance commitment, no adverse change in title has occurred, and there are no intervening matters affecting title that might result in a new title exception to the policy. If any new encumbrances have been recorded against the subject properties or other adverse changes in title have occurred since the date of the most recent title commitment, notify the designated ARS contact immediately and do not proceed until further instructions are received. The contractor may be required to provide a pro forma title policy or marked up title insurance commitment, or an updated title insurance commitment, to confirm all title requirements will be met at or prior to closing.

5. Obtain signatures on all necessary secondary documents, such as releases, subordination agreements, satisfactions, lien waivers, owner (seller/grantor) affidavits, etc.

6. Obtain the written authorization of OGC before making any modifications to the Quitclaim Deed.

7. Proceed with closing upon ARS/OGC direction.

8. Confirm the identity of the SOGC officials who have the authority to execute the Quitclaim Deed conveying the Parcels to ARS. Ensure the Quitclaim Deed provided by OGC is properly executed, witnessed, acknowledged, and notarized in accordance with Texas state law.

9. The contractor must schedule the exchange of quitclaim deeds with SOGC at a mutually agreed upon location and time. The contractor must obtain a properly executed and acknowledged quitclaim deed from SOGC and obtain signatures from both parties.

10. Record the Quitclaim Deed conveying the Parcels to ARS in the appropriate land record(s), e.g., county probate office, county registrar's office, circuit court office, etc., in accordance with Texas state law.

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11. Ensure any secondary documents which need to be recorded in the land records, such as releases, subordination agreements, satisfactions, lien waivers, owner (seller/grantor) affidavits, etc., are properly recorded in the appropriate land records in accordance with Texas state law. Proposed subordination agreements, satisfactions, releases, partial releases, and other title curative documents to be signed at closing will be provided to ARS for review and approval at least 3 business days prior to closing.

12. Ensure the Parcels are conveyed to the United States free of any liens for taxes or assessments, and free of any protective or restrictive covenants.

13. Provide the ARS a copy of all tax receipts for taxes on the Parcels that have been paid in the tax year in which closing occurs.

14. Notify the ARS by telephone, email, or mail at least three (3) days prior to closing.

15. Record all deeds and any curative instruments provided by SOGC or ARS and provide the ARS with receipts for recording fees.

16. Complete these services within thirty (30) calendar days after the date of written request from ARS.

D. Title Insurance Policy

1. Provide a final title insurance policy using American Land Title Association (ALTA) U.S. Policy 09-28-1991 (Revised 12/3/2012).

The contractor must issue a policy of title insurance on ALTA U.S. Policy Form 9/28/91 (Revised 12/3/12), with the “United States of America” named as the insured party for the Fair Market Value for each property, as determined by the appraisal. Said policy of title insurance should use the same legal description of the subject property as in the deed and boundary survey provided by ARS. The final policy should reflect the execution and recording information pertaining to the associated deed, including: the date the deed was executed and recorded, and the book, page, and recording office.

2. After the Quitclaim Deed and secondary documents have been recorded, provide the original recorded documents to ARS with confirmation of such recording.

3. Provide other services, as necessary, to finalize the Exchange.

The contractor will provide all contract deliverable, including the above-listed items, to the designated ARS contact identified on the attachment to this statement of work.

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IX. AMENDMENTS

All amendments and modifications to this contract must be approved in writing by the ARS contracting officer.

X. NONDISCLOSURE

Work performance required by this statement of work will involve access to potentially sensitive information about governmental and landowner issues. All contractor personnel must comply with the terms of AGAR 452.224-70, “Confidentiality of Information,” as well as provisions of the Privacy Act of 1974, 5 U.S.C. Section 552a.

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EXHIBIT A

Hale County Property: