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Title InsuranceLOAN POLICY OF TITLE INSURANCE Issued by OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY * * * Policy Number 08076593 File Number: 27379 * * Any notice of claim and any other notice or statement in writing required to be given to the Company under this Policy must be given to the Company at the address shown in Section * ixc 17 of the Conditions. COVERED RISKS SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE A, AND THE CONDITIONS, OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation (Ihe "Company) Insures, as of Date of Policy and, to the extent stated In Covered Risks 11, 13, and 14, after Date of Policy, against loss or damage, rot exceeding the Amount of Insurance, sustained or starred by the Insured by reason of: 1. Title being vested other than as stated In Schedule A 2. Any defect in or lien or encumbrance on the Title. Th(s Covered Risk includes but is not limited to insurance against loss from: (a) A defect in the Title caused by: () forgery, fraud, tndtle influence, duress, incompetency, incapacity, or impersonation; (ii) failure of any person or Entity to have authorized a transfer or conveyance; (ii) a document affecting Title not property created, executed, witnessed, sealed, acknowledged, notarized, or delivered; IN) failure to perform those acts necessary to mate a doc rnent by electronic means authorized by law; (v) a document executed under a falsified, expired, or otherw(se invalid power of attorney; (n) a document not property filed, recorded, or Indexed in the Public Records including failure to perform those acts by electronic means authorized by taw, or (vi) a defective judicial or administrative proceeding. (b) The lion of real estate taxes or assessments Imposed on the Title by a governmental authority due or payable, but unpaid. (c) Any encroachment, encumbrance, ulciation, variation, or adverse circumstance affecting the T* thatwould be disclosed by an accurate and complete land survey of the Land. The term " encroachment" includes encroachments of existing improvements located an the Lend onto adjaWng land, and encroachments onto to Land of existing Improvements located on adokAng lard. 3. Lads of good and indefeasible Title. 4. No right of access to and tam the Land. 5. The viclatlon or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) resMng, regulating, prohibiting, or relating to: (a) the occupancy, use, or enjoyment of the Land; (b) the character, dimensions or location of any improvement erected on the Land; (c) the subdivision of land; or (d) environmental protection If a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or Intention to enforce, but only to the extent of the violstlon or enforcement referred to in that notice. 6. An enforcement action based on the exercise of a governmental price power not covered by Covered Rlsk 5 Is notice of the enforcement action, describing any part of the Land, is recorded in the Pubic Records, but only to the extent of the enforcement referred to in that notice. 7. The exercise of the rights of eminent domain if a notice of the exercise, deandbing any part of the Land, Is recorded in the Public Records. 8. Any taking by a governmental body that has occurred and Is binding on the rights of a purchaser for value without knowledge. 9. The Invalidity or unen forceability of the lien of the Insured Mortgage upon the Title. This Covered Risk Includes but is nut Imifed to insurance against loss from any of the following Impairing the lien ofthe Insured Mortgage: (a) forgery, fraud, undue Influence, duress, brcompel:M Incapacity, or impersonation; (b) failure of any person or Entity to have authorized a transfer or conveyance; (c) the Insured Mortgage not being properly created, executed, witnessed, sealed, acknowledged, notarized, or delivered; (d) failure to perform those acts necessary to create a document by electronic means authorized by law, (e) a document executed order a falsified, expired, or otherwise Invalid power of attorney, W a document not properly filed, recorded, or Indexed In the Public Records including failure to perform Lose acts by electronic means authorized by law; or (g) a defective judicial or administrative proceeding. 10. The lack of priority ofthe lien of the Insured Mortgage over any other Ilan or encumbrance. 11. The lack of priority of the lien of the Insured Mortgage. (a) as saw* for each and every advance of proceeds of the loan seared by the Insured Mortgage over any statutory or constitutional mechanic's, contractors, or materielmant lien far services, labor or material having its inception on or before Date of Policy; and (b) over the lien of any assessments for street Improvements under construction or completed at Date of Policy. Issued thiough the Office of Pol Icy Issuer: AGGIEL.AND TITLE COMPANY 3740 COPPERFIELD DR. SUITE 101 BRYAN, TX 77802 PHONE: 979- 731.8400 Authorized Countersignatory ORT Form T -2 Loan Policy of Title Insurance (1 Effective 2 -1 -2010 OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY A Stock Company 400 Second Avenue South, Minneapolis, Minnesota 55401 (612) 371 -1111 8y president ,;. v `ct A!le51 OI-'V` - `^-� Secretary 11- 3�1 12. The invalidity or unenforceabillty of any assignment of the Insured Mortgage, provided the assignment is shown in Schedule A, or the failure of the assignment shown in Schedule A In vast title to the Insured Mortgage in the named Insured assignee free and dear of all liens. 13. The invalidity, unsnforcaabiltty, lack of priority or avoidance of the lien of the Insured Mortgage: (a) resulting from the avoidance in whole or in part, or from a court order providing an alternative remedy, of any transfer of all or any part of the title to or any interest in the Land occurring prior to the transaction creating the lien of the Insured Mortgage because that prior transfer constituted a fraudulent or preferential transfer under federal bankruptcy, state Insolvency, or similar creditors' rights laws; or (b) because the Insured Mortgage constitutes a preferential transfer underfederal barivuptcy, state insolvency, or similar creditors' rights laws by reason of the failure of Its recording In the Public Records: g) to be timely, or n to impart notice of its existence to a purchaser for value or to a judgment or lien creditor. 14. Any defect in or lien or encumbrance on the Title or other matter Included in Covered Risks 1 through 13 that has been created or attached or has been filed or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the Insured Mortgage In the Public Records. The Company will also pay the costs, attomeys' fees, and expenses incurred in defense of any matter insured against by this Policy, but only to the extend provided in the Conditions. EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any Mw, ordinance, permit, or governmental regulation gncluding those relating to building and zoning) restricting, regulating, prohibiting, or relating to g) the occupancy, use, or enjoyment of the land; Q) the character, dimensions, or location of any improvement erected on the land; gi) the subdivision of land; or (v) environmental protection; or the effect of any violation of these laws, ordinances, or govemmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, (lens, encumbrances, adverse claims, or other matters: (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded In the Public Records at Data of Policy, but Known to the Insured Claimant and not disclosed In writing to the Company bythe Insured Claimant priorto the datethe Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11,13 or 14); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an insured to comply with applicable doing business laws of the state where the Land is situated. 5. Invalidity or unenforceabilkty In whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, Is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. 7. Any lien on the Trite for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage In the Public Records. This exclusion does not modify or limit the coverage provided under Covered Risk 11(b). 8. The refusal of any person to purchase, lease or land in oney on the estate or Interest covered hereby In the land described in Schedule A because of Unmarketable True. CONDMONS 1. Defnftn of Terms (a) "Amount of Insurance ": The amount stated In Schedule A, as may be Increased or decreased by endorsement to this policy, increased by Section 8(b), or decreased by Section 10 of these Conditions. (b) "Date of Policy ": The date designated as "Date of Policy" in Schedule A. (c) "Entity ": A corporation, partnership, trust, limited liability company, or other similar legal entity. (d) "Indebtedness": The obligation secured by the Insured Mortgage Including one evidenced by electronic means authorized by law, and if that obligation Is the payment of a debt, the Indebtedness is the sum of : () the amount of the principal disbursed as of Date of Policy; n the amount of the principal disbursed subsequent to Date of Policy; fill) construction loan advances made subsequent to Date at Policy for the purpose of financing in whole or in part the construction of an Improvement tothe Land or related to the Land thatthe Insured was and continued to be obligated to advance at Date of Policy and at the date of the advance; (i v) interest on the Egan; (v) prepayment premiums, exit fees, and other similar fees or penalties allowed by law; (vi) expenses of foreclosure and any other costs of enforcement; (vi) amounts advanced to assure compliance with laws or to protect the lien or the priority of the lien of the Insured Mortgage before the acquisition of the estate or interest in the Title: (vil) amounts to pay taxes and Insurance; and Ox) reasonable amounts expended to prevent deterioration of improvements; but reduced by the total of all payments and by any amount forgiven by an Insured. (e) 'Insured ": The Insured named in Schedule A. g) The term 'Insured" also includes: (A) the owner of the Indebtedness and each successor in ownership of the Indebtedness, whether the owner or successor owns the Indebtedness for Its own account or as a trustee or other fiduciary, except a successor who Is an obligor under the provkslons of Section 12(c) of these Conditions; (8) if the Indebtedness is evidenced by a "transferable record," the person or Entity who has "control' of the "transferable record," as these terms are defined by applicable electronic transactions law; (C7 successors to an Insured by dissolution, merger, consolidation, distribution, or reorganization; (D) successors to an Insured by its conversion to another kind of Entity; (E) a grantee of an Insured under a deed delivered without payment of actual valuable consideration conveying the Title (1) If the stock, shares, memberships, or other equity interests of the grantee are wholly -owned by the named Insured, (2) it the grantee wholly owns the named Insured, or (3) it the grantee is wholly -owned by an affiliated Entity of the named Insured, provided the affiliated Entity and the named Insured are both wholly-owned by the same person or Entity; any government agency or instrumentality that is an insurer or guarantor under an insurance contract or guaranty Insuring or guaranteeing the Indebtedness secured by the Insured Mortgage, or any part of h, whether named as an Insured or not; (i) With regard to (A), (8), (C), (D) , and (E) reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor Insured, unless the successor acquired the Indebtedness as a purchaser for value without Knowledge of the asserted defect, lien, encumbrance, or other matter insured against by this policy g) "Insured Clalmant": an Insured claiming loss or damage. (g) 'Insured Mortgage ": the Mortgage described in paragraph 4 of Schedule A. (h) "Knowledge" or 'Known": actual knowledge, not constructive knowledge or notice that may be imputed to an Insured by reason of the Public Records or any other retards that impart constructive notice of matters affecting the Title. of "Land ": The land described In Schedule A, and affixed Improvements that by law constitute real property. The term "Land" does not include any property beyond the lines of the area described In Schedule A, nor any right, title, interest, estate, or easement in abutting streets, roads, avenues, alleys, lanes, ways, or waterways, but this does not modify or limit the extent that a right of access to and from the Land is insured by this policy. ID "Mortgage ": mortgage, deed of trust, trust deed, or other security instrument, Inducting one evidenced by electronic means authorized by law. (k) "Public Records ": records established under state statutes at Date of Policy for the purpose of Imparting constructive notice of matters relating to real property to purchasers for value and without Knowledge. With respect to Covered Risk 5(d), "Public Records" shall also include environmental protection liens filed in the records of the clerk of the United States District Court for the district where the Land is located. (1) "Title ": The estate or interest described in Schedule A. (m) 'Unmarketable Title ": Title affected by an alleged or apparent matter that would permit a prospective purchaser or lessee of the Title or lender on the Title or a prospective purchaser of the Insured Mortgage to be released from the obligation to purchase, lease, or lend it there is a contractual condition requiring the delivery of marketable title. (Continued on inside back cover) 2. Contkaratkn of ka m The coverage of this policy shag continue in force as of Date of Policy in favor of an Insured after aaglsllon of theTille orthe lien of ft Insured Mortgage by an insured or after con- veyance by an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or on€y so long as the Insured shall have liability by reason of warratdles in any transfer or conveyance of the Title. This policy shall not cortinue in force in favor of any purchaser from the Insured of either (7 anestate or interest in the Land, or (II) an obligation secured by a purchase money Mortgage given to the Insured. 3. Notice of Claim to be Given by Insured Claimant The insured shall notify the Company promptly In writing () incase of any litigation as set forth In Section 5(a) below of these below, or (n) in case Knowledge shag come to an ittared of any claim of title or irierest that is adverse to the Title or the Den of the Insured Mortgage, as Insured, and that might cause loss or damage for which the Company may be liable by virttue of this poky. fiche Company Is prejudiced by the failure of the Insured Claimant to provide prompt notice, the Company's liability to the Insured Claimant under the policy shall be reduced to the extent of the prejudice. Subject to the provisions of this policy, upon acquisition of all or any part of the Tolle pursuant to the provisions of Section 2 of time Catditllons, when, after the pate of the Policy, the Insured notifies the Company as required herein of a lien, encumbrance, adverse claim or other defect In title insured by this policy that is riot exuded or excepted from the coverage of this policy, the Company shalt prorpfly investigate the charge to determine whether the lien, encumbrance, adverse claim or defect or other matter is valid and not barred by law or statute. The Company shall notify the Insured in writing, within a reasonable time, of this determination as to the validity or invalidity of the I sured's claim or charge under policy. If the Company concludes that the lion, encumbrance, adverse claim or defect is not covered by this poky, or was otherwise addressed in the dosing of the transaction In connection with which this policy was issued, the Company stall spectiicaty advise the Insured of the reasons or its determination. tl the Company concludes that the lien, encumbrance, adverse claim or defect Is valid, the Company shall take one of the following actions: (s) Institute the necessary proceedings to clear the lien, encumbrance, adverse claim or defect from the Title as insured; (D) Indemnify the Insured as provided In this pokily; 01) upon payment of appropriate premium and charges there- for issue to the Insured Claimant or to a subsequent owner, mortgagee or holder of the estate or interest in the Land insured by this policy, a policy of title Insurance without exception for the lien, encumbrance, adverse claim or defect, said policy to be in an amount equal to the current value of the Land or, if a Loan policy, the amount of the loan; (Iv) indemnify another title insur- ance company in connection with its issuance of a pdicy(les) of title insurance wftiteunt exception for the lien, encumbrance, adverse claim or defect; (v) secure a release or other document discharging the lien, encumbrance, adverse claim or defect; or (v) undertake a commbmatlon of (] through M hereirt 4. ProolafLoss In the event the Company is unable to determine the amord of loss or damage, the Company may, at its option, more as a condlflon of payment that the Insured Claimant furnish a signed proof of lass. The proof of loss must describe the defect, goat, emumbrarxe, or other matter vtsured against by this policy that constibntea the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. 5. Detertse and Prosawfimin ofActyons (a) Upon written request by the Insured, and subject to the options contained In Sections 3 and 7 of these Conditions, the Company, at its own cost and with out unreasonable delay, shall provide for the defense of an Insured in litigation in which any third party asserts a claim covered by this policy adverse to the Insured, This obligation is limited to only those stated causes of action alleging matters Insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the Insured to object for reasonable cause) to represent the insured as to those stated causes of action. It shall not be liable for and writ€ not pay the fees of any other counsel. The Company will not pay any fees, costs, or expenses incurred by the Insured in the defense of those causes of action that allege matters not Insured against by this policy. (6) The Company shall have the right, in addition to the options contained in Section 3 and 7, at its own cost, to Institute and prosecute any action or proceeding or to do any other act that in its opinion may be necessary or desirable to establish the Title, as Insured, or to prevent or reduce loss or damage to the insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable to the Insured. The exercise of these rights shall not be an admission of liability or waiver of any provision of this policy. If the Company exercises its rights under this sub section, it must do on diligently. (c) Whenever the Company brings an action or asserts a defense as required or permitted by this policy, the Company may pursue the litigation to a final determination by a cart of competent jurisdiction and it expressly reserves the right, In Its sole discretion, to appeal from any adverse judgment or order. 6. Duty of lnsured Claimant to Cooperate (a) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding and any appeals, the Insured shall secure to the Company the right to so prosecute or provide defense In the action or proceeding, including the right to use, at its option, the name of the Insured for this purpose. Whenever requested by the Company, the bared, at the Company's expense, shall give the Company all reasonable aid (1) In securing evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement. and (i) in any other lawful act that in the opinion of the Company may be necessary or desirable to establish the Title, the lien of the insured Mortgage or any other matter as Insured. If the Company Is prejudiced by the failure of the Insured to furnish the required cooperation, the Company's obligations to the insured under the policy shall terminate,including any liability or obligation to defend, prosecute, or continue anylitgation, with regard to the matter or matters requiring such cooperation, (b) The Company may reasonably require the Insured Claimant to submit to examination under oath by any authorized representative of the Company and to produce for examination, inspection, and copying, at such reasonable times and places as may be designated by the authorized representative of the Company, all records, in whatever medium maintained, including books, ledgers, checks, memoranda, correspondence, reports, a -mags, disks, tapes, and videos whether bearing a date before or after Date of Policy, that reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the Insured Claimant shall grant Its permission, in writing, for any authorized representative of the Company to examine, Inspect, and copy all of these records in the custody or control of a third party that reasonably pertain to the loss or damage. All information designated as confidential by the Insured Claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, In the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the Insured Claimant to submit for examination under oath, produce any reasonably requested information, or grant permission to secure reasonably necessary Information from third parties as required in this subsection, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim. 7 Options to Pay or Otiferwlse SetGe Claims; Termination of LlabfAty In case of a claim underthis policy, the Company shall have the following additional options: (a) To Pay or Tender Paym ant of the Amount of Insurance or to Purchase the In dethtedness. (1) to pay or tender payment of the Amount of Insurance under this policy together with any costs, attorneys' fees, and expenses Incurred by the Insured Claimant that were authorized by the Company up to the time of paymatt or tender of payment and that the Company is obligated to pay; or (i) To purchase the Indebtedness for the amount of the Indebtedness on the date of pumhase, together with any costs, attorneys' fees, and expenses Incurred by the Insured Claimant that were surthorized by the Company up to fine time of purchase and that the Company is obligated to pay. When the Company purchases the Indebtedness, the insured shall transfer, assign, and convey to the Company the Indebtedness and the Insured Mortgage, together with any collateral security, Upon the exercise by the Company of either of the options provided for In subsection (a)() or (), all labllty and obligations of the Company to the insured under this policy, other than to makethe payment required in those subsections, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation. {b} To Pay or Otherwise Settle with Parties Other than the Insured or with the Insured Claimant. () to pay or otherwise settle wbth other parties for or In the narm of an Insured Claimant any claim Insured against underthis policy, in addition, the Company will pay any costs, attorneys' fees and expenses Incurred by the Insured Claimant that were authorized by the Company up tothe time of payment and that the Company is obligated to pay; or p) to pay or otherwise settle with the Insured Claimant the loss or damage "Ided for under this policy, together with any costs, attorneys' tees, and expenses Incurred by the Insured Claimant that were authorized by the Company up to the time of payment and thatthe Company is obligated to pay. Upon the exercise by the Company of either of the options provided for In sub sections (b}() or (u), the Company's obligations to the Insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation. 8 Oetermihaflon and Extent ofLrab* This policy is a contract of indemniy against actual monetary loss or damage sustained or Incurred by the Insured Claimant who has suffered loss or damage by reason of matters insured against by this poll (a) The extend of liability of the Company for loss or damage under this policy shall not exceed the least of: () the Amount oftruurarimor 01) the Indebtedness, oil) the difference between the value of the Title as insured and the value of the Title subject to the risk insured against by this policy or (v) if a government agency or instrumendallty is the Insured Claimant, the amount A paid in the acquisition of the Tolle or the Insured Mortgage In satisfaction of its insurance contract or guaranty. (b) If the Company pursues Its rights under Sections 3 or 5 of these Conditions and Is unsuccessful in establishing the Title or the lien of the Insured Mortgage, as Insured, (r) the Amount of Insurance shall be Increased by 10 %, and (ii) the Insured Claimant shall have the right to have the loss or damage determined either as of the date the claim was made by the insured Claimant or as of the date it is settled and paid. (Continued on back cover) 10. 11. 12. (c) In the event the insured has acquired the Title in the manner described in Section 2 of these Conditions or has conveyed the Title, then the extent of liability of the Company shall continue as set forth in Section 8(a) of these Conditions. (d) In addition to the extent of liability under (a), (b), and (c), the Company will also pay those costs, attorneys' fees, and expenses incurred in accordance with Sections 5 and 7 of these Conditions. Limitation of Liability (a) l the Company establishes the Title, or removes the alleged defect, lien, or encumbrance, or cures the lack of a right of access to or from the Land or establishes the lien of the Insured Mortgage, all as Insured, or takes action In accordance with Section 3 or 7, in a reasonably diligent manner by any method, including litigation and the completion of any appeals, it shall have fully performed its obligations with respect to that matter and shall not be liable for any less or damage caused to the Insured. (b) In the event of any litigation, Including litigation by the Company or with the Company's consent, the Company shall have no liability for loss or damage unli there has been a final determination by a court of comilsterd Jurlsdlctbon, and disposition of all appeals, adverse to the Title or the lien of the Insured Mortgage, as insured. (c) The Company shall not be liable for loss or damage to the Insured for liability voluntarily assumed by the Insured in selling any claim or suit without the prior written consent of the Company. Reduction of insurance; Reduction or Terminabbn of LiabAfty (a) All payments under this policy, except payments made for costs, attorneys' fees, and expenses, shall reduce the Amount of Insurance by the amount of the payment. However, any payments made prior to the acquisition of Title as provided In Section 2 of these Conditions shah not reduce the Amount of Insurance afforded under this policy except to the extent that the payments reduce the Indebtedness. (b) The voluntary satisfaction or release of the Insured Mortgage shall terminate all Ilabildy of the Company except as provided in Section 2 of these Conditions. Payment of Loss When liability and the extent of loss or damage have been definitely fixed in accordance with these Conditions, the payment shall be made within 30 days. Rights of Recovery Upon Payment or Settlement (a) The Companys Right to Recover. Whenever the Company shag have settled and paid a claim under this policy, it shall be subrogated and entitled to the rights of the Insured Claimant in the Title or insured Mortgage and all other rights and remedies in respect to the claim that the Insured Claimant has against any person or property, to the extent of the amount of any loss, costs, atoomeys' fees, and expenses paid by the Company. if requested by the Company, the Insured Claimant shall execute documents to evidence the transfer to the Company of these rights and remedies. The Insured Claimant shall permit the Company to sue, compromise, or settle in the name of the Insured Claimant and to use the name of the Insured Claimant in any transaction or Iltlgallon Involving these rights and remedies, If a payment on account of a claim does not fully cover the loss of the Insured Claimant, the Company shall defer the exercise of its right to recover until after the Insured Claimant shall have recovered its loss. (b) The Insured's Rights and Limitations. (I) The owner of the Indebtedness may release or substitute the personal liability of any debtor or guarantor, stand or otherwise modify the terms of payment, release a portion of theT tle from the lien of the Insured Mortgage, or release any collateral security for the Indebtedness, it it does not affect the erdorceability or priority of the lien of the Insured Mortgage. (i) If the Insured exercises a right provided in (b)@, but has Kncwledgo of any claim adverse to the Title or the lien of the Insured Mortgage insured against by this policy, the Company shall be required to pay only that part of arrykisses insured against by this policy that shall exceed the amount, it any, loalto the Company by reason of the impairment by the Insured Claimant of the Company's right of subrogation. c) The Company's Rights Against Non- insured Obligors. The Company's right of subrogaUon includes the Insured's rights against non - insured obligors including the rights of the Insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that address subrogation rights. The Company's right of subrogation shall not be avoided by acquisition of the Insured Mortgage by an obligor (except an obligor described In Section 1(e)m(F') of these Conditions) who acquires the Insured Mortgage as a result of an indemnity, guarantee, other policy of insurance, or bond, and the obligor will not be an Insured under this policy. 13. Arbitraflan Either the Company or the Insured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of the American Land Tile Association ( "Rules "). Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies of other persons. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service in connection with its issuance or the breach of a policy provision, or to any other controversy or claim arising out of the transaction giving rise to this policy. All arbitrable matters when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the option of either the Company or the Insured, unless the Insured is an individual person (as distinguished from an Entity). All arbitrable matters when the Amount of Insurance is in excess of $2,000,000 shall be arbitrated only when agreed to by bath the Company and the Insured. Arbitration pursuant to this policy and under the Rules shall be binding upon the parties. Judgment upon the award rendered bythe Arbitrators) may be entered in any court of competent jurisdiction. 14. Liability Limited to This Polley; Polley Entire Corrbact (a) This policy together with all endorsements, If any, attached to it by the Company is the entire policy and contract between the Insured and the Company. In Interpreting any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage that arises out of the status of the Title or lien of the insured Mortgage or by any action asserting such claim shag be restricted to this policy. (c) Any amendment of or endorsement to this policy must be in writing and authenticated by an authorized person, or expressly incorporated by Schedule A of this policy. (d) Each endorsement to this policy Issued at any time is made a part of this policy and is subject to all of Its terms and provisions. Except as the endorsement expressly states, it does not () modify any of the terms and provisions of the policy, (ii) modify any prior endorsement, (iii) extend the Date of Policy, or (iv► Increase the Amount of Insurance. Each Commitment, endorsement or other form, or provision in the Schedules to this policy that refers to a term defined in Section 1 of the Conditions shall be deemed to refer to the term regardless of whether the term Is capitalized in the Commitment, endorsement or other form, or Schedule. Each Commitment, endorsement or other farm, or provision In the Schedules that refers to the Conditions and Stipulations shall be deemed to refer to the Conditions of this policy. 15. SeverabRity In the event any provision of this policy, in whole or in part, Is held Invalid or unenforceable under applicable law, the policy shall be deemed not to include that provislon or such part held to be Invalid, and all other provisions shall remain in full force and effect 17 Choice of law; Forum (a) Choice of Law: The Insured acknowledges the Company has underwritten the risks covered by this policy and determined the premium charged there for in reliance upon the law affecting Interests In real property and applicable to the Interpretation, rights, remedies, or enforcement of policies of title Insurance of the jurisdiction where the Land is located. Therefore, the court or an arbitrator shall appiythe law of the jurisdiction where the Land is located to determine the validity of clalms against the Tile or the lien of the Insured Mortgage that are adverse to the Insured and in interpreting and enforcing the terms of this policy. In neither case shall the court or arbitrator apply its conflicts of law principles to determine the applicable law. (b) Choice of Forum: Any litigation or other proceeding brought by the Insured agalnst the Company must be filed only in a state or federal court within the United Slates of America or its lerritories having appropriate jurisdiction. 17 Notice, Where Sera Any notice of claim and any other notice or statement In writing required to be given the Company under this policy must be given to the Company at 400 Second Avenue South, Minneapolis, Minnesota 55401 -2499. FOR INFORMATION, OR TO MAKE A COMPLAINT, CALL: 1-888-678-1700 NOTE: THIS POLICY VALID ONLY IF SCHEDULES A AND B ARE ATTACHED Old Republic IMPORTANT NOTICE To obtain information or make a complaint: You may contact Aggieland Title Company at 079-731 -8400 You may call Old Republic National Title Insurance Company's toll -free telephone number for information or to make a complaint at: 1- 888 - 678 -1700 "ISO IMPORTANTE Para obtener information o para someter una queja: Puede cominicarse con su Analeland Title Company at 979 -731 -8400 Usted puede Ilamar al numero de telefono gratis de Old Republic National Title Insurance Company para informacion o para someter una queja al: You may also write to Old Republic National Title Insurance Company at: 400 Second Avenue South Minneapolis, Minnesota 55401 Attn: Claims Department You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at: 1- 800 - 252 -3439 You may write the Texas Department of Insurance P. 0. Box 149104 Austin, TX 78714 -9104 Fax: (512) 475 -1771 Web: http : / /www.tdi,state.tx.us E-mail: ConsumerProtection tdl state tx us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim you should contact the Old Republic National Title Insurance Company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY This notice is for information only and.does not become a part or condition of the attached document. 1- 888 -678 -1700 Usted tambien puede escribir a Old Republic National Title Insurance Company: 400 Second Avenue South Minneapolis, Minnesota 55401 Attn: Claims Department Puede comunicarse con el Departamento de Seguros de Texas para obtener informacion acerca de companies, coberturas, derechos o quejas al: 1 -800- 252 -3439 Puede escribir al Departament de Seguros de Texas: P. 0. Box 149104 Austin, TX 78714 -9104 Fax: (512) 475 -1771 Web: http: / /www.tdi.state.tx.us E -mail: QMsumerProtection C6tdi.state.tx.us DISPUTAS S08RE PRIMAS O RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con Old Republic National Title Insurance Company primero. Si no se resuelve la disputa, puede entonces comunicarse con el departmento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de information y no se convierte en parte o condicion del documento adjunto. LOAN POLICY OF TITLE INSURANCE Issued by Old Republic National Title Insurance Company SCHEDULE A Name and Address of Title Insurance Company: OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY 400 Second Avenue South, Minneapolis, Minnesota 55401 File No.: 27379 Policy No.: TL 08076593 Loan No.: Address for Reference only: 1010 Welsh Avenue, College Station, TX 77840 Amount of Insurance: $761,600.00 Premium: $125.00 Date of Policy: February 18, 2011, at 11:21 am 1. Name of Insured: Extraco Banks, N.A., and each successor in ownership of the indebtedness secured by the insured mortgage, except a successor who is an obligor under the provisions of Section 12 (c) of the Conditions and Stipulations. 2. The estate or interest in the Land that is encumbered by the Insured Mortgage is: Fee Simple 3. Title is insured as vested in: Campus One Mile Properties, LLC, a Texas limited liability company 4. The Insured Mortgage, and its assignments, if any, are described as follows: Vendor's Lien retained in deed dated February 15, 2011 from Robert E. Carter and Charmane E. Carter to Campus One Mile Properties, LLC, a Texas limited liability company recorded in Volume 10039, page 216, and in deed dated February 15, 2011 from Robert E. Carter and James O. Carter to Campus One Mile Properties, LLC, a Texas limited liability company recorded in Volume 10039, page 220, both securing the payment of one note of even date therewith in the principal sum of $761,600.00, payable to Extraco Banks, N.A., and additionally secured by Deed of Trust of even date therewith executed by Campus One Mile Properties, LLC, a Texas limited liability company to Samuel C. Fulcher, Trustee, said deed of trust filed for record with the County Clerk of Brazos County, Texas on February 18, 2011 and recorded in Volume 10039, Page 231 of the Official Public Records of Brazos County, Texas. 5. The Land referred to in this policy is described as follows: Metes and bounds description of all that certain tract of land lying and being situated in College Station, Brazos County, Texas. Said tract being all of Lots Five (5), Six (6), Seven (7) and the remainder of Lot Eight (8), Block Four (4), BREEZY HEIGHTS ADDITION, an addition to the City of College Station, Brazos County, Texas, according to the plat recorded in Volume 125, page 433 of the Deed Records of Brazos County, Texas. Said lots 6, 7 and 8 being the same tract of land as described by a deed to Robert E. Carter and James O. Carter recorded in Volume 1977, page 326 of the Official Public Records of Brazos County, Texas. Said Lot 5 being the same tract of land as described by a deed to Robert E. Carter and Charmane E. Carter recorded in Volume 8734, page 15 of the Official Public Records of Brazos County, Texas. Said tract being more particularly described by metes and bounds as follows: BEGINNING at a 1/2 inch iron rod set on the Southwest line of Welsh Avenue (50' R.O.W.) and the Northwest line of Holleman Drive (60' R.O.W.) marking the East corner of the remainder of said Lot 8. For reference, City of College Station GPS Mon. 220 bears: N 74 31' 31" E for a distance of 1673.84 feet; THENCE: S 42° 23' 45" W along the Northwest line of Holleman Drive for a distance of 124.71 feet to a 1/2 inch iron rod set marking the South corner of the remainder of said Lot 8 and the east corner of the remainder of Lot 16 of said Block 4 as described by a deed to Janie Mireles recorded in Volume 4057, page 126 of the Official Public Records of Brazos County, Texas; THENCE: N 48 W along the common line of said Lots 5, 6, 7 and 8, at 119.53 feet pass a 1/2 inch iron rod found, at 174.45 feet pass a 1/2 inch iron rod found, continue on for a total distance of 292.60 feet to a 5/8 inch iron rod found marking the West corner of said Lot 5; FORM T -2: Loan Policy of Title Insurance Page 1 Continuation of Schedule A Policy No. TL 08076593 THENCE: N 41 54' 00" E along the Northwest line of said Lot 4 for a distance of 124.71 feet to a 1/2 inch iron rod set on the Southwest line of Welsh Avenue marking the North corner of said lot 5: THENCE: S 48° 18' 29" E along the Southwest line of Welsh Avenue, at 62.32 feet pass a point form which a 1/2 inch iron rod found on the Northeast line of Welsh Avenue bears: N 41 41' 31" E for a distance of 50.00 feet, continue on for a total distance of 293.67 feet to the POINT OF BEGINNING containing 0.839 acres (36,554 sq. ft.), more or less. Note: The Company is prohibited from insuring the area or quantity of the land described herein. Any statement in the above legal description of the area of land is not a representation that such area or quantity is correct, but is made only for informational and/or identification purposes and does not override Item No. 2 of Schedule B. 6. This policy incorporates by reference those endorsements selected below: ❑ T -5 (Leasehold Loan Policy Endorsement) ❑ T -17 (Planned Unit Development) ❑ T -19 (Restrictions, Encroachments, Minerals) ❑ T -19.2 (Minerals and Surface Damage) ❑ T -19.3 (Minerals and Surface Damage) ❑ T -28 (Condominium) ❑ T -31 (Manufactured Housing) referring to manufactured housing unit serial number ❑ T -31.1 (Supplemental Coverage Manufactured Housing Unit) ❑ T -33 (Variable Rate) ❑ T -33.1 (Variable Rate -- Negative Amortization) ❑ T35 (Revolving Credit/Future Advance) ❑ T -36 (Environmental Protection Lien) Paragraph b refers to the following state statutc(s): TEX. HEALTH & SAFETY CODE §361.194; TEX. HEALTH & SAFETY CODE § §342.007, 342.008; TEX. LOCAL GOV'T CODE § §214.001, 214.0015(b), (d), and (e); and TEX. NATURAL RESOURCES CODE §134.150, if applicable. ❑ T -39 (Balloon Mortgage) ❑ T -42 Equity Loan Mortgage) and subparagraph 2(f) of the Equity Loan Mortgage Endorsement set forth in Procedural Rule P-44.C(2) T is (_J is not added. ❑ T -42.1 (Supplemental Coverage Equity Loan Mortgage) ❑ T -43 (Texas Reverse Mortgage) ® Section 13 of the Conditions of this policy, which relates to Arbitration, is hereby deleted. FORM T -2: Loan Policy of Title Insurance Page 2 LOAN POLICY OF TITLE INSURANCE Issued by Old Republic National Title Insurance Company SCHEDULE B File No.: 27379 Policy No.: TL 08076593 EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that arise by reason of the terms and conditions of leases and easements, if any, shown in Schedule A, and the following matters: The following restrictive covenants of record itemized below, but the Company insures that any such restrictive covenants have not been violated so as to affect, and that future violation thereof will not affect, the validity or priority of the Insured Mortgage (insert specific recording data or delete this exception): Volume 126, page 23, Deed Records, Brazos County, Texas 2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements. Item 2 of Schedule B is hereby amended to read: "shortages in area ". 3. Standby fees, taxes and assessments by any taxing authority for the year 2011, and subsequent years; and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership, but not those 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 tax year. ® Item 3 of Schedule B is hereby amended to delete: "and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership," ® Item 3 of Schedule B is hereby amended to add the following: "Company insures that standby fees, taxes and assessments by any taxing authority for the year 2011 are not yet due and payable." 4. bions and leases tha4 affeet the TWO, but that are subordifteAe to the lion of the Ifisuf 8 d - Me'Agage. (Insert here all other specific exceptions as to superior liens, easements, outstanding mineral and royalty interests, etc.) a. Pending disbursement of the full proceeds of the loan secured by the lien instrument set forth under Schedule A hereof, this policy insures only to the extent of the amount actually disbursed, but increases as each disbursement is made in good faith and without knowledge of any defects in, or objections to, the title up to the face amount of the policy. Nothing contained in this paragraph shall be construed as limiting any exception under Schedule B, or any printed provision of this policy. b. Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in connection with improvements placed, or to be placed, upon the subject land. However, the Company does guarantee that no such liens have been filed with the County Clerk of Brazos County, Texas, prior to the date hereof. C. Five foot (5') utility easement along rear lot lines, as noted on plat recorded in Volume 125, page 433, Deed Records, Brazos County, Texas. d. Twenty five foot (25 building setback from all streets; Five foot (5') building setback from all interior lot lines; Seven and one -half foot (7.5') building setback from the Five foot (5 utility easement along the rear lot line, as set forth in restrictions recorded in Volume 126, page 23, Deed Records, Brazos County, Texas. Restrictions contained in this document based on race, color, religion, material origin, sex, familial status or handicap, if any, are hereby deleted. FORM T -2: Loan Policy of Title Insurance Page 3 Continuation of Schedule B Policy No. TL 08076593 e. Twenty-five foot (25') front building setback; Twenty foot (20') and Seven and one -half foot (7.5 rear building setback; Fifteen foot (15') and Five foot (5 building setback on lot line adjacent to Holleman Drive; Seven and one -half foot (7.5') and Five foot (5 building setback on lot line adjacent to Lot 4; Five foot (5') utility easement along rear lot line, as shown on survey dated February 7, 2011, prepared under the supervision of Brad Kerr, RPLS No. 4502. f Aerial electrical lines run from the rear of each duplex to the rear lot line, as shown on survey dated February 7, 2011, prepared under the supervision of Brad Kerr, RPLS No. 4502. g. Any common or party wall existing between improvements on the herein described property and rights of parties in and to same, if any exist. h. Mineral Reservation as set out in deed dated August 26, 1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 599, page 241, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 5) i. Mineral Reservation as set out in deed dated August 26, 1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 598, page 248, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 7) j. Mineral Reservation as set out in deed dated August 26, 1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 598, page 1012, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 6) k. Mineral Reservation as set out in deed dated August 26, 1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 599, page 255, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 8) 1. Estate created by oil, gas and mineral lease granted to Chaparral Minerals, Inc. by Boyd G. Hall by instrument dated April 3, 1984, recorded in Volume 680, page 708 of the Official Public Records of Brazos County, Texas, and all terms, conditions and stipulations contained therein. Title to this lease has not been investigated subsequent to date thereof. m. Rights of Tenants, as tenants only, under terms and conditions contained in any unrecorded leases. Countersigned Aggieland Title Company B 1 t FORM T -2: Loan Policy of Title Insurance Page 4 GF No. 27379 Old Republic National Title Insurance Company Loan Policy No.: TL 08076593 Premium Amount Rate Rules Property County Liability Date Type Code 1 2 3 4 g 6 7 8 $125.00 1200 41 $761,600.00 02/18/2011 3210 0700 0710 H-34 34 OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY TEXAS RESIDENTIAL OWNER'S POLICY OF TITLE INSURANCE ONE -TO -FOUR FAMILY RESIDENCES OWNER'S INFORMATION SHEET Policy Number TR- 08061251 9 > aF Your Title Insurance Policy is a legal contract between you and Old Republic National Title Insurance Company. This policy is not an opinion or report of your title. It is a contract of indemnity, meaning a promise to pay you or to take other action if you have a loss resulting from a covered tide risk, It applies only to an improved one -to -four family residential property or condominium unit. If your land is not either of these, contact us immediately. Su P61iza de Seguro de Titulo as un contrato legal entre usted y Old Republic National Title Insurance Company. Esla poliza no as una opinion a reporte en relaci6n a su titulo de propiedad_ Es un contrato de indernnif- icaci6n, esto es, las promesa de reemboisarle o de tomar cualquier otro tipo de accidn si usted sufre una perdida como resultado de cualquier riesgo cubierto por la poliza. Esta forma de poliza ha sido designada para ser utiiizada exclusivamente en los casos de propiedades en las cuales hay construidas viviendas para no m6s de cuatro familias o unidades en condominics. Si su propiedad ,no es ninguna de las anteriores, por favor, notifiquenos inmediatamente. We insure you against certain risks to your land title. We list these risks on page 2. The following limit your coverage: • Exclusions on pages 2 and 3. • Exceptions on Schedule B. • Conditions on pages 3 and 4. You should keep the policy even it you transfer the title to your land. If you want to make a claim, see Section 3 under Conditions an page 3. You do not owe any more premiums for the Policy. This sheet is not your insurance Policy. It is only a brief outline of some of the important Policy features. The Policy explains in detail your rights and obligations and our rights and obligations. The Policy — and not this sheet -- is the legal document. YOU SHOULD READ THE POLICY VERY CAREFULLY. THE TOLL -FREE NUMBER OF OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY IS 1.888- 678 -1700. YOU MAY CALL THIS NUMBER TO DISCUSS THIS POLICY OR TO MAKE A COMPLAINT. YOU MAY WRITE TO OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY AT THE ADDRESS IN SECTION 3 UNDER CONDITIONS ON PAGE 3. Policy Issuer: File Number: 27379 AGGIELAND TITLE: COMPANY 3740 COPPERFIELD DR. SUITE 901 BRYAN, TX 77802 PHONE: 979 - 731 -8400 OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY A Stock Compatry 400 Second Avenue Seam, Minneapolis. M+nnewla 55401 (612) 371 1111 By Presrdenl Auttrorued Signatory n Auesr r-oRrI F,F: P45** ow elt h cO TA hurtle Page 1 €Ili? aaroine. TABLE OF CONTENTS PAGE OWNER'S COVERAGE STATEMENT ... . .............. 2 COVERED TITLE RISKS ............................ 2 OUR DUTY TO DEFEND AGAINST COURT CASES ...... 2 SCHEDULE A ........... .........................INSERT 3 POLICY NUMBER, DATE AND AMOUNT and 4 1. Name of Insured 4 2. Interest in Land Covered 4 3. Description of the Land 4 SCHEDULE B — EXCEPTIONS ......................INSERT 4 EXCLUSIONS .... ............................... 2 and 3 OWNER'S COVERAGE STATEMENT This Policy insures your title to the land described in Schedule A — 9 that land is a one-lo-four family residential property or condominium unit. Your insurance, as described in this Coverage Statement, is effective on the Policy Date shown in Schedule A. This document is title insurance. It is not an opinion or report of your title. It is a contract of Indemnity, meaning a promise to pay you or to take other action if you have a loss resulting from a covered title risk Your insurance under this contract is limited by the following: • Exclusions on pages 2 and 3. • Exceptions in Schedule B, insert. • Conditions on pages 3 and 4. We insure you against actual loss resulting from: • Any title risks covered by this Policy — up to the Policy Amount, and • Any costs, attorneys' fees and expanses we have to pay under this Policy. We must approve the attorney before the attorney begins to work. You have the right to disapprove our choirs; of attorney for reasonable cause. COVERED TITLE RISKS This Policy covers the following title risks subject to the Exceptions (Schedule B, insert) and Exclusions (p. 2 and 3), if they affect your title to the land on the Policy Date. We do not promise that there are no covered risks. We do insure you if there are covered We risks. 1. Someone else owns an interest in your title. 2. A document is invalid because of improper signature, acknowledgment, delivery, or recording. 3. A document Is invalid because of forgery, fraud, duress, incompetency, incapacity or impersonation. 4. Restrictive covenants apply to your title. 5. There is a lien on your this because of • a mortgage or deed of trust, • a judgment, tax, or special assessment, or • a charge by a homeowner's or condominium association. 6. There are liens on your title for labor and material which have their inception before the policy date. However, we will not cover liens for labor and material that you agreed to pay for. 7. Others have rights in your title arising out of leases, contracts, or options, Pape 2 PAGE CONDITIONS .... ............................... 3 and 4 1. Definitions ............................. I .... 3 2. Continuation of Coverage .............. . . . ..... 3 3. Your Duties 9 You Make a Claim ............... 3 4, Our Choices When You Notify Us of a Claim... 3 and 4 S. Handling a Claim or Court Case ................ 4 6. Limitation of Our Liablilly ...................... 4 7. Transfer of Your Rights ....................... 4 8. Arbitration ... ............................... 4 9. Entire Contract Provision ...................... 4 10. Complaint Notice ............................ 4 8. Someone else has an easement on your land. 9. You do not have good and indefeasible title. 10. There are other defects in your title. 11. There are other liens or encumbrances on your title. This Policv also covers the following title risk: You do not have any legal right of access to and from the land, OUR DUTY TO DEFEND AGAINS COURT CASES We will defend your title in the part or parts of a court case involving a Title Risk covered by this Policy. We will pay the costs, attomeys' fees, and expenses that we incur in that defense. We will not pay for the parts of a case not involving a covered title risk You may disapprove our choice of attorney for reasonable cause. We can end this duty to defend your title by exercising any of our options listed in Rem 4 of the Conditions, see pages 3 and 4. This Policy is not complete without Schedules A and B. EXCLUSIONS In addition to the Exceptions in Schedule B, we do not insure you against loss, costs, attorneys' fees, and expenses resulting from these Exclusions: 1. We do not cover loss caused by the exercise of governmental police power or the enforcement or violation of any law or government regulation. This includes building and zoning ordinances and laws and regulations concerning: a. Land use b. Improvements on the land c. Land division d. Environmental protection This exclusion does not apply to notices of violations or notices of enforcement that appear in the public records at Policy Date. However, there may be an Exception in Schedule B. 2. We do not cover the right to take the land by condemning it, unless: a. a notion of exercise of the right appears in the public records on the Policy Date, or b. the taking happened before the Policy Date and is binding on you if you bought the land without knowing of the taking. 3. We do not cover title risks: a. that are created, allowed, or agreed to by you, (Continued on itsW back Mv) (Continued kom inside 6W dap) a. that are known to you, but not to us on the Policy Date unless they appeared in the public records, ;. that result in no loss to you, or J. that first affect your title after the Policy Date — this does not limit the labor and material lien coverage in item 6 of the Covered Title Risks. We do not cover the effect of failure to pay value for your title. 5. We do not cover lack of a right: a. to any land outside the area specifically described and referred to in Rem 3 of Schedule A, b. in streets, alleys, or waterways that touch your land. This exclusion does not limit the access coverage in the Covered Title Risks, S. We do not cover any claim based upon allegations that your purchase of We (or acquisition of We by gift or otherwise): a. was a fraudulent conveyance, fraudulent transfer, voidable distribution, or voidable dividend; b. should be subordinated or recharacterized as a result of equitable subordination; c. was a preferential transfer unless (1) the Company or its issuing agent failed to timely rile for record the deed to you after delivery or (2) the recordation of the deed to you is not legal record notice. (We do cover the two types of claims described in c. (1) and c. (2) above.) 7. We do not cover the refusal of any person to buy, lease or lend money on your lard because of unmarketabifity of the title. 8. We do not cover claims concerning the physical condition of your land or of the access to your land. CONDITIONS 1. DEFINITIONS a. ct � ua�l Loss This Is the difference between the value of your land without the covered idle risk and the value of your land with the covered title risk. These values are the respective values at the time you must furnish proof of your loss. b. Document A deed or other conveyance of tkle to you or a prior owner. c. Easement. A portion of your land someone else has the right to use orraa — special purpose. d. Government Regulation Any federal, state, or local law, constitutional provision, regulation, ordinance, or guideline. a. Land. The land or condominium unit described in Schedule A and any improvements on the land that are real property. f. Knowledo or known Actual knowledge, not constructive knowledge or notice that may be imputed to an insured by the public records. g. Mortgage. A type of lien on the land such as a deed of trust or other security instrument. h. Public Records. Those records required by Texas law and maintained by publ c o ials in the county where the property is located that give legal notice of matters affecting your title. I. Title. The ownership interest in the laird, as shown in Schedule A. r j. We, us or our The fitle insurance company. This is Oki Republic Natlonal Title Insurance Company. IL You, your The insured. 2. CONTINUATION OF COVERAGE We Insure you as long as you: a. own your Title, b. own a mortgage from anyone who buys your Title, c. are liable for any Title warranties you make. Page 3 We insure anyone who receives your We because of your death. We do not insure your transferee or assignee. 3. YOUR DUTIES IF YOU MAKE A CLAIM You must follow this process to make a claim: a. You Must Give Us Notice Of Your Claim If anyone claims a right against your insured title, you must notify us promptly. Send the notice to Old Republic National Title Insurance Company, 400 Second Avenue South, Minneapolis, Minnesota 55401 or call 1.800.328.4441 and ask for a claims attorney. If you initially notify us by phone, we recommend that you also notify us in writing. Please include the Policy number shown in Schedule A, and the county where the land is. Our obligation to you is reduced or ended R: (1) you fail to give prompt notice, and (2) your failure affects our ability to dispose of or to defend you against the claim. Our obligation is reduced only to the extent that your failure affects our ability to dispose of or to defend you against the claim. b. You Must Give Us Proof of Your Loss if We Request ft. You must send to us, if we request, your signed proof of loss within 91 days of our request on a standard form supplied by us. Within 15 days after we receive your notice of claim, we must request a signed proof of loss. if not, we waive our right to require a proof of loss. This waiver will not waive our other rights under the policy. The statement must have the following information to the best of your knowledge: (1) the Covered Title Risks which resulted in your loss, (2) the dollar amount of your loss, and (3) the method you used to compute the amount of your toss. c. You Must Provide Papers We Request We may require you to show us your records, checks, letters, contracts, and other papers that relate to your claim of loss. We may make copies of these papers. If you tell us this Information is confidential, we will not disclose it to anyone else unless we reasonably believe the disclosure is necessary to administer the claim. d. You Must Answer questions Under Oath. We may require you to answer questions under oath. e. Effect of Failure to Cooperate. ur obligation to you reduces or ends d you fall or refuse to: (1) (a) provide a statement of loss, (b) answer our questions under oath, or (c) show us the papers we request, and (2) your failure or refusal affects our ability to dispose of or to defend you against the claim. 4. OUR CHOICES WHEN YOU NOTIFY US OF A CLAIM a. After we receive your claim notice or in any other way learn of a matter for which we are liable, we can do one or more of the following: (1) Pay the claim against your fitle. (2) Negotiate a settlement. (3) Prosecute or defend a court case related to the claim. (4) Pay you the amount required by this Policy. (5) Take other action under Section 4b. (b) Cancel this policy by paying the Policy Amount, then in force, and only those costs, attorneys' fees and expenses incurred up to that time that we are obligated to pay. (Continued on beck #AP) (Caftwd from 4 ide had paver) We can choose which of these to do. b. if you report to us that a covered title risk exists, we will promptly investigate to determine ff that covered title risk is valid and not barred by law or statute. A covered title risk is a title risk that this Policy does not exclude or except. If we conclude that your claim, or any part of your claim, is covered by the policy, we will take one or more of the following actions to the extent that it is covered: (1) Institute all necessary legal proceedings to clear the title to the property; (2) Indemnify you pursuant to the terms of the policy; (3) Issue a new title policy without making exception to the covered Title risk. If another insurer issues the new title policy to your purchaser, lender or other transferee without making exception to the covered title risk, we will indemnify the other insurer. (4) Secure a release of the covered title risk. c. If we deny your claim, or any part of your claim, not more than 15 days after we deny the claim, we will: (1) notify you in writing, and (2) give you the reasons for denial of your claim in writing 5. HANDLING A CLAIM OR COURT CASE You must cooperate with us in handling any claim or court case and give us all relevant information. We must repay you only for those settlement costs, attorneys' fees and expenses that we approve in advance. When we defend or sue to clear your title, we have a right to choose the attorney. You have the right to disapprove our choice of attorney for reasonable cause, We can appeal any decision to the highest court. We do not have to pay your claim until your case is finally decided. We do not agree that the matter is a covered title risk by defending. 6. LIMITATION OF OUR LIABILITY Our liability is limited by the following: a. We will pay up to your actual loss or the Policy Amount in force when the claim is made — whichever is less. b. If we remove the claim against your title with reasonable diligence or take other action under this policy after receiving notice of it, we will have no further liability for it. c. All payments we make under this policy — except for costs, attorney's tees and expenses — will be subtracted from your Policy Amount. d. 9 the Covered Title Risk is an easement, we may pay an insured mortgage holder instead of paying you when a written agreement between you and the mortgage holder allows. If the claim involves another Covered Title Risk, we may pay the mortgage holder instead of paying you. The amount paid to the mortgage holder is considered a payment to you under your policy and will be subtracted from your policy amount. e. If you do anything to affect any right of recovery or defense you may have, we can subtract from our liability the amount by which you reduced the value of that right or defense. But we must add bank to our liability any amount by which our expenses are reduced as a result of your action. Page 4 7. TRANSFER OF YOUR RIGHTS When we settle a claim, we have all the rights you had against any person or property related to the claim. You must transfer these rights to us when we ask and you must not do anything to affect these rights. You must let us use your name in enforcing these rights. We will not be liable to you if we do not pursue these rights or if we do not recover any amount that might be recoverable. With the money we recover from enforcing these rights, we will pay whatever part of your loss we have not paid. We have a right to keep what is left. 8. ARBITRATION It it is permitted under Texas or federal law, you and we may agree to arbitration when you file a claim. The arbitration may decide any matter in dispute between you and us. Arbitration is one means of alternative dispute resolution. It may lessen the time and cost of claims settlement. You may wish to consider another form of mediation or use the court system. If you choose arbitration, you may give up some discovery rights and your right to sue. The arbitration award may: a. include attorneys' fees if allowed by state law, and/or b. be entered as a judgment in the proper court. The arbitration shall be under the Title Insurance Arbitration Rules of the American Arbitration Association, You may choose current Rules or Rules in existence on Policy Date. The law used in the arbitration is the law of the place where the property is located. You can get a copy of the Rules from us. 9. ENTIRE CONTRACT PROVISION Thfs policy and any endorsements we attach are the entire contract between you and us. Any claim you make against us must be under this Policy and is subject to its terms. Old Republic IMPORTANT NOTICE To obtain information or make a complaint: You may contact AQaleland Title Company at 979 -731 -8400 You may call Old Republic National Title Insurance Company's toll -free telephone number for information or to make a complaint at: 1 -888- 678 -1700 AVISO IMPORTANTE Para obtener information o para someter una queja: Puede cominicarse con su Alaaleland Title Company at 979 - 731 -8400 Usted puede liamar al numero de telefono gratis de Old Republic National Title Insurance Company para information o para someter una queja al: You may also write to Old Republic National Title Insurance Company at: 400 Second Avenue South Minneapolis, Minnesota 55401 Attn: Claims Department You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at: 1- 800 -252 -3439 You may write the Texas Department of Insurance: P. 0. Box 149104 Austin, TX 78714 -9104 Fax: (512) 475 -1771 Web: http: / /www.tdi.state.tx.us E- mail: ConsumerPmtectionCa @tdi.state.tx.us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim you should contact the Old Republic National Title Insurance Company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY This notice is for information only and.does not become a part or condition of the attached document. 1 -888- 678 -1700 Usted tamblen puede escribir a Old Republic National Title Insurance Company: 400 Second Avenue South Minneapolis, Minnesota 55401 Attn: Claims Department Puede comunicarse con el Departamento de Seguros de Texas para obtener information acerca de companies, coberturas, derechos o quejas al: 1 -800- 252 -3439 Puede escribir al Departament de Seguros de Texas: P. 0. Box 149104 Austin, TX 78714 -9104 Fax: (512) 475 -1771 Web: htto: / /www.tdi.state.tx.us E -mail: ConsumgrProtection tdi.state.tx.us DISPUTAS S08RE PRIMAS O RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclarno, debe comunicarse con Old Republic National Title Insurance Company primero. Si no se resuelve la disputa, puede entonces comunicarse con el departmento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de information y no se convierte en parte o condition del documento adjunto. OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY TEXAS RESIDENTIAL OWNER'S POLICY OF TITLE INSURANCE ONE -TO -FOUR FAMILY RESIDENCES SCHEDULE A Policy Number: TR 08061251 Policy Date: February 18, 2011, at 11:21 am Policy Amount: $976,000.00 Premium: $5,521.00 Name of Insured: Campus One Mile Properties, LLC, a Texas limited liability company We insure your interest in the land covered by this Policy is: Fee Simple Legal Description of land: File Number: 27379 Metes and bounds description of all that certain tract of land lying and being situated in College Station, Brazos County, Texas. Said tract being all of Lots Five (5), Six (6), Seven (7) and the remainder of Lot Eight (8), Block Four (4), BREEZY HEIGHTS ADDITION, an addition to the City of College Station, Brazos County, Texas, according to the plat recorded in Volume 125, page 433 of the Deed Records of Brazos County, Texas. Said lots 6,7 and 8 being the same tract of land as described by a deed to Robert E. Carter and James O. Carter recorded in Volume 1977, page 326 of the Official Public Records of Brazos County, Texas. Said Lot 5 being the same tract of land as described by a deed to Robert E. Carter and Charmane E. Carter recorded in Volume 8734, page 15 of the Official Public Records of Brazos County, Texas. Said tract being more particularly described by metes and bounds as follows: BEGINNING at a 1/2 inch iron rod set on the Southwest line of Welsh Avenue (50' R.O.W.) and the Northwest line of Holleman Drive (60' R.O.W.) marking the East corner of the remainder of said Lot 8. For reference, City of College Station GPS Mon. 220 bears: N 74° 31' 31" E for a distance of 1673.84 feet; THENCE: S 42 45" W along the Northwest line of Holleman Drive for a distance of 124.71 feet to a 1/2 inch iron rod set marking the South corner of the remainder of said Lot 8 and the east corner of the remainder of Lot 16 of said Block 4 as described by a deed to Janie Mireles recorded in Volume 4057, page 126 of the Official Public Records of Brazos County, Texas; THENCE: N 48 18' 35" W along the common line of said Lots 5, 6, 7 and 8, at 119.53 feet pass a 1/2 inch iron rod found, at 174.45 feet pass a 112 inch iron rod found, continue on for a total distance of 292.60 feet to a 5/8 inch iron rod found marking the West corner of said Lot 5; THENCE: N 41° 54' 00" E along the Northwest line of said Lot 4 for a distance of 124.71 feet to a 1/2 inch iron rod set on the Southwest line of Welsh Avenue marking the North corner of said lot 5: THENCE: S 48 18' 29" E along the Southwest line of Welsh Avenue, at 62.32 feet pass a point form which a 1/2 inch iron rod found on the Northeast line of Welsh Avenue bears: N 41 41' 31" E for a distance of 50.00 feet, continue on for a total distance of 293.67 feet to the POINT OF BEGINNING containing 0.839 acres (36,554 sq. ft.), more or less. Note: The Company is prohibited from insuring the area or quantity of the land described herein. Any statement in the above legal description of the area of land is not a representation that such area or quantity is correct, but is made only for informational and /or identification purposes and does not override Item No. 2 of Schedule B. FORM T -111: Texas Residential Owner's Policy of Title Insurance Page 1 OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY TEXAS RESIDENTIAL OWNER'S POLICY OF TITLE INSURANCE ONE -TO -FOUR FAMILY RESIDENCES SCHEDULE B Policy Number: TR 08061251 File Number: 27379 EXCEPTIONS We do not cover loss, costs, attorneys' fees and expenses resulting from: 1. The following restrictive covenants of record itemized below (We must either insert specific recording data or delete this exception.): Volume 126, page 23, Deed Records, Brazos County, Texas 2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements. 3. Homestead or community property or survivorship rights, if any, of any spouse of any insured. (Applies to the Owner's Policy only.) 4. Any titles or rights asserted by anyone, including, but not limited to, persons, the public, corporations, governments or other entities, a. to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or b. to lands beyond the line of harbor or bulkhead lines as established or changed by any government, or c. to filled -in lands, or artificial islands, or d. to statutory water rights, including riparian rights, or e. to the area extending from the line of mean low tide to the line of vegetation, or the rights of access to that area or easement along and across that area. Standby fees, taxes and assessments by any taxing authority for the year2011, and subsequent years; and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership, but not those 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 tax year. 6. The following matters and all terms of the documents creating or offering evidence of the matters (We must insert matters or delete this exception.): a. Vendor's lien retained in deed dated February 15, 2011, recorded in Volume 10039, page 216, of the Official Public Records of Brazos County, Texas from Robert E. Carter and Charmane E. Carter to Campus One Mile Properties, LLC, a Texas limited liability company for the benefit of Extraco Banks, N.A. as therein provided and all of the terms, provisions and conditions of said instrument. b. Vendor's lien retained in deed dated February 15, 2011, recorded in Volume 10039, page 220, of the Official Public Records of Brazos County, Texas from Robert E. Carter and James O. Carter to Campus One Mile Properties, LLC, a Texas limited liability company for the benefit of Extraco Banks, N.A. as therein provided and all of the terms, provisions and conditions of said instrument. C. Deed of Trust dated February 15, 2011, recorded in Volume 10039, page 231, of the Official Public Records of Brazos County, Texas executed by Campus One Mile Properties, LLC, a Texas limited liability company to Samuel C. Fulcher, Trustee, for the benefit of Extraco Banks, N.A. as therein provided, and all of the terms, provisions and conditions of said instrument. FORM T -1R: Texas Residential Owner's Policy of Title Insurance Page 2 Continuation of Schedule B Policy No. TR 08061251 d. Any and all liens arising by reason of unpaid bills or claims for work performed or materials furnished in connection with improvements placed, or to be placed, upon the subject land. However, the Company does guarantee that no such liens have been filed with the County Clerk of Brazos County, Texas, prior to the date hereof. e. Liability hereunder at the date hereof is limited to $332,800.00. Liability shall increase as contemplated improvements are made, so that any loss payable hereunder shall be limited to said sum plus the amount actually expended by the insured in improvements at the time the loss occurs. Any expenditures made for improvements, subsequent to the date of this policy, will be deemed made as of the date of this policy. In no event shall the liability of the Company hereunder exceed the face amount of this policy. Nothing contained in this paragraph shall be construed as limiting any exception or any printed provision of this policy. f. Five foot (5') utility easement along rear lot lines, as noted on plat recorded in Volume 125, page 433, Deed Records, Brazos County, Texas. g. Twenty five foot (25') building setback from all streets; Five foot (5') building setback from all interior lot lines; Seven and one -half foot (7.5') building setback from the Five foot (5) utility easement along the rear lot line, as set forth in restrictions recorded in Volume 126, page 23, Deed Records, Brazos County, Texas. Restrictions contained in this document based on race, color, religion, material origin, sex, familial status or handicap, if any, are hereby deleted. h. Twenty -five foot (25) front building setback; Twenty foot (20') and Seven and one -half foot (7.5') rear building setback; Fifteen foot (15) and Five foot (5') building setback on lot line adjacent to Holleman Drive; Seven and one -half foot (7.5') and Five foot (5') building setback on lot line adjacent to Lot 4; Five foot (5') utility easement along rear lot line, as shown on survey dated February 7, 2011, prepared under the supervision of Brad Kerr, RPLS No. 4502. Aerial electrical lines run from the rear of each duplex to the rear lot line, as shown on survey dated February 7, 2011, prepared under the supervision of Brad Kerr, RPLS No. 4502. j. Any common or party wall existing between improvements on the herein described property and rights of parties in and to same, if any exist. k. Mineral Reservation as set out in deed dated August 26, 1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 599, page 241, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 5) Mineral Reservation as set out in deed dated August 26, 1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 598, page 248, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 7) m. Mineral Reservation as set out in deed dated August 26, 1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 598, page 1012, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 6) n. Mineral Reservation as set out in deed dated August 26,1983 from Boyd G. Hall to Michael G. Holt, recorded in Volume 599, page 255, Deed Records of Brazos County, Texas. Title to this interest not investigated subsequent to date of said instrument. (As to Lot 8) o. Estate created by oil, gas and mineral lease granted to Chaparral Minerals, Inc. by Boyd G. Hall by instrument dated April 3, 1984, recorded in Volume 680, page 708 of the Official Public Records of Brazos County, Texas, and all terms, conditions and stipulations contained therein. Title to this lease has not been investigated subsequent to date thereof. FORM T -1R: Texas Residential Owner's Policy of Title Insurance Page 3 Continuation of Schedule B Policy No. TR 08061251 p. Rights of Tenants, as tenants only, under terms and conditions contained in any unrecorded leases. Countersigned Aggieland Title Company FORM T -1R: Texas Residential Owner's Policy of Title Insurance Page 4 GF No. 27379 Old Republic National Title Insurance Company Texas Residential Owner's Policy Number.: TR 08061251 Premium Amount Rate Rules Property County Liability Date Type Code 1 2 3 4 5 6 7 8 $5,521.00 1200 41 $976,000.00 02/18/2011 3210 0700 0710