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under your,-policy, you must furnish written notice in rdance with Section 3 of the Conditions and Stipi f is.
1/iL
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MORTGAGEE POLICY OF TITLE'INSURANGE ISSUED BY `
}
} S T EWART TITLE t
} GUARANTY COMPANY
}
{ SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED
IN SCHEDULEB AND THE CONDITIONS AND STIPULATIONS, STEWART TITLE GUARANTY COMPANY, a Texas
} corporation, herein called the Company, insures, ai~of Date of Policyst own in Schedule A, against loss or damage, t
} not exceeding the Amount of Insurance stated in Saedule A, sustaine` y r incurred by the insured by reason of:
1. Title to the estate or interest described in Scdule A being vest d other than as stated therein; t
+ plv
2. Any defect in or lien or encumbrance on the title;
} 3. Lack of a right of access to and from the land, L'
} 4. The invalidity or unenforceability of the lien of fh~_insured mortgage upon the title;
5. The priority of any lien or encumbrance over the Ilen of the Insured mortgage;
6. Lack of priority of the lien of the insured mort gage over anx statutory.=or ca lstitutional mechanic's, contractor's,
} or materialman's lien for labor or rrraterial having Its Inceptiorf qn or. before;, Date of Policy; }
} dt'
} 7. The invalidity or unenforceability of any assignment of,fhe Insured mortgage, provided the assignment is shown }
in Schedule A, or the failure of the assignment shown in Sched_ule+A to vest title to the insured mortgage in the
} named insured assignee free and clear_of alf [ie'ns s a'
} 8. Lack of good and indefeasible title
+ The Company also will pay the costs, attorr eys' fees and expens-es Incurred in defense of the title or the lien of the }
} insured mortgage, as insured, but only to the extent provided h the~,Condltlpns and Stipulations.
} In witness whereof, Stewart Title Guaranty Company has caused -thls policy to be signed and sealed by its duly
authorized officers as of Date of Policy shown (n ScFjeduh=. At' F t
} ~r r ~ b t}H
} STEWART ~LTP.LE
.~(3IIARANTY COMPANY'
}y o>~ +
s T, b u.
} Chairman of he Board r* President
ounte igned by:'SU C` }
>3" ~b~/,tun, }
} A rized Signatory
t OS COUNTY ABSTRACT COMPANY }
} Company
+ College Station Texas "
City, State F,: }
EXCLUSIONS FROM COVERAGE
} The following matters are expressly excluded from the coverag&of,?his pol'ccyrastd.•the Company will not pay loss or damage, costs, attorneys' fees t
or expenses that arise by reason of:
f 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) }
} restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any
improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any }
} parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental }
regulations, except to the extent that a notice of the enforcement thereof or o notice of a defect, lien or encumbrance resulting from a violation or
+ alleged violation affecting the land has been recorded in the public records at Date of Policy. }
} (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a
defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of }
t Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding
} from coverage any taking that has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.~Rl
Page 1 of
Policy M-%ov 1" 610516 Serial No.
582 (Rev. 10-1-97
Premium: $125.00 3210, 0700, 0710 P-L
STEWART TITLE GUARANTY COMPANY
SCHEDULE A
File No.: 132943 Policy No.: M-5842-610516
Issued With: 0-5841-173824
AMOUNT OF INSURANCE: $1,300,000.00
DATE OF POLICY: July 27, 2001 at 11:38 AM
1. NAME OF INSURED:
THE FIRST NATIONAL BANK OF BRYAN, 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 INSURED AS ENCUMBERED BY THE INSURED
MORTGAGE IS:
FEE SIMPLE
3. TITLE TO THE ESTATE OR INTEREST IN.THE LAND IS INSURED AS VESTED IN:
SMILING MALLARD DEVELOPMENT, LTD.
4. THE INSURED MORTGAGE AND ASSIGNMENTS THEREOF, IF ANY, ARE DESCRIBED AS
FOLLOWS:
Vendor's Lien retained in Deed dated July 26, 2001, executed by Thousand Oaks Development
Company Joint Venture, a Texas Joint Venture to Smiling Mallard Development, Ltd., securing the
payment of one note of even date therewith in the principal amount of $1,300,000.00, payable to The
First National Bank of Bryan, and said note being additionally secured by deed of trust of even date
therewith to Timothy N. Bryan, Trustee, said Deed of Trust filed for record in the Office of the County
Clerk of Brazos County, Texas, on July 27, 2001, under Clerk's File No. 750132 and recorded in Volume
4247, page 92, Official Records of Brazos County, Texas, and being subject to all of the terms,
conditions and stipulations contained in said note and creed of trust.
5. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS:
TRACT ONE:
Being all that certain 360.00 acre tract or parcel of land, lying and being situated in the J. M. BARRERA
SURVEY, Abstract No. 69, Brazos County, Texas, and being that certain 360.00 acre tract which is
described as the save and except tract in the deed from Brazos Coal, Ltd., to Thousand Oaks
Development Company Joint Venture as recorded in Volume 1454, Page 187, of the Official Records
of Brazos County, Texas, and is further described in the Correction Partition Warranty Deed recorded
in Volume 1569, Page 119, of the Official Records of Brazos County, Texas, and is part of the called
547.1 acre tract and part of the called 409.2 acre tract and part of the called 281.6 acre tract described
in the deed from J. W. McFarlane, Trustee, to Brazos Coal, Limited, as recorded in Volume 543, Page
769, of the Deed Records of Brazos County, Texas, and said 360.00 acre tract being more particularly
described as follows:
BRAZOS COUNTY ABSTRACT COMPANY
Authorized Signature
a
STEWARRT TITLE GUARANTY COMPANY
SCHEDULE A
File No.: 132943 (Continued) Policy No.: M-5842-610516
COMMENCING at the Y2' iron rod found marking an angle point corner in the north line of the 152.93
acre Tract 5, described in the deed to Thousand Oaks Development Company Joint Venture as recorded
in Volume 1454, Page 187, of the Official Records of Brazos County, Texas, same being the southeast
corner of the called 107.349 acre (net) Tract 7, described in the abovementioned Volume 1454, Page
187, of the Official Records of Brazos County, Texas, and same being the southwest comer of the south
end of Cherokee Drive (60' wide right-of-way) according to the plat of Indian Oaks Subdivision recorded
in Volume 361, Page 593, of the Deed Records of Brazos County, Texas, from which a crosstie fence
corner bears S 63° 17'52" W -1.3 feet;
THENCE S 51 ° 22'23" W across the beforementioned 152.93 acre tract for a distance of 3590.36 feet
to a 3/8" iron rod found at a 6" cedar post fence comer marking the southwest comer of the 152.93 acre
tract;
THENCE along the north line of the following McFarlane Tracts: 1213.537 acre - 2nd Tract, Vol. 315,
Pg. 243; 235.123 acre tract, Vol. 1817, Pg. 154; and the 1215.830 acre - 1st Tract, Vol. 315, Pg. 243,
same being the occupied south line of the 547.1 acre - Tract 1 (consisting of a 326.6 acre tract and a
220.5 acre tract, Vol. 382, Pg. 37), and the 409.2 acre - Tract 2, described in the abovementioned
Volume 1454, Page 187, of the Official Records of Brazos County, Texas), (consisting of a 157.7 acre
tract and a 251.5 acre tract, Vol. 382, Pg. 31), adjacent to a crooked fence, as follows:
S 46° 56'57" W for a distance of 173.90 feet to a 3/8" iron rod found marking the northwest comer of
the 1213.537 acre tract, same being the northeast corner of the 235.123 acre tract,
S 47° 57' 31" W for a distance of 269.65 feet to a 12" water oak tree fence angle point,
S 59° 49'55" W for a distance of 113.55 feet to a 16" post oak tree fence angle point,
S 87° 36' 13" W for a distance of 1364.03 feet to a 4" creosote post fence corner at the west end of a
cattle guard entrance at or near the common comer of the 235.123 acre tract and the 1215.830 acre
tract,
N 89° 09'06"W for a distance of 247.35 feet to a Y2' iron rod set at the southeast comer of the 360.00
acre tract, for the PLACE OF BEGINNING of this description;
THENCE N 89° 09'06" W continuing along the north line of the beforementioned 1215.830 acre tract
and the south line of the beforementioned 251.5 acre tract, adjacent to a fence, for a distance of 1690.69
feet to a 3/8" iron rod found (bent) marking the northwest comer of the 1215.830 acre tract, same being
the occupied southwest corner of the 251.5 acre tract in the reconstructed east line of the Frank B.
McGregor - called 320 acre tract, Volume "P", Page 387, of the Deed Records of Brazos County, Texas,
from which a 6" cedar post fence angle point bears N 73° 53'38" E - 27.4 feet and an 8" creosote post
fence corner bears S 00° 05' 16" W -15.9 feet;
THENCE along the reconstructed (no fence) common line between the beforementioned 251.5 acre tract
and the beforementioned McGregor - 320 acre tract, as follows:
N 00° 15'38" W for a distance of 735.05 feet to a %2' iron rod set at the interior ell corner of the 251.5
acre tract, same being the most easterly and southerly northeast corner of the 320 acre tract,
S 89° 44'22" W at a distance of 762 feet, cross the existing occupation fence between the 251.5 acre
and 320 acre tracts, continue on for a total distance of 1596.20 feet to a'/2' iron rod set at the southwest
corner of the 251.5 acre tract, same being an interior ell corner of the 320 acre tract,
N 00" 15'38" W at a distance of 833.33 feet, pass a crosstie fence corner marking a northeast comer
of the 320 acre tract, same being the southeast comer of the beforementioned 157.7 acre tract, continue
on along the common line between the 157.7 acre tract and the 251.5 acre tract, the beforementioned
281.6. acre tract and the beforementioned 326.6 acre tract, for a distance of 4384.94 feet to a %2' iron
rod set;
STEWARRT TITLE GUARANTY COMPANY
SCHEDULE A
File No.: 132943 (Continued) Policy No.: M-5842-610516
THENCE along the lines of the 360.00 acre tract and through the interior of the beforementioned 281.6
acre and 220.5 acre tracts, as follows:
N 89° 4422" E for a distance of 3286.58 feet to a %2' iron rod set, from which a %Z' iron rod found in
concrete marking the occupied interior ell corner of the 281.6 acre tract bears N 33° 01' 16" W - 390.21
feet,
S 00° 15'38" E for a distance of 5152.71 feet to the PLACE OF BEGINNING, containing 360.00 acres
of land, more or less.
TRACT TWO:
Being all that certain 1037.24 acre tract or parcel of land, lying and being situated in the H. G. HUDSON
SURVEY, Abstract No. 141, in the J. W. STEWART SURVEY, Abstract No. 213 and in the J. M.
BARRERA SURVEY, Abstract No. 69, Brazos County, Texas, and being part of the called 547.1 acre
Tract 1 (consisting of a 326.6 acre tract and a 220.5 acre tract, Volume 382, Page 37), part of the called
409.2 acre - Tract 2 (consisting of a 157.7 acre tract and a 251.5 acre tract, Volume 382, Page 31), all
of the called 152.93 acre Tract 5 and part of the called 281.6 acre Tract 6 described in the deed from
Brazos Coal, Ltd., to Thousand Oaks Development Company Joint Venture as recorded in Volume 1454,
Page 187, of the Official Records of Brazos County, Texas, and said 1037.24 acre tract being more
particularly described as follows:
BEGINNING at the iron rod found marking an angle point corner in the north line of the
beforementioned 152.93 acre tract, same being the southeast corner of the called 107.349 acre (net)
Tract 7, described in the abovementioned Volume 1454, Page 187, of the Official Records of Brazos
County, Texas, and same being the southwest corner of the south end of Cherokee Drive (60' wide right-
of-way) according to the plat of Indian Oaks Subdivision recorded in Volume 361, Page 593, of the Deed
Records of Brazos County, Texas, from which a crosstie fence corner bears S 630 17'52" W -1.3 feet;
THENCE along the north line of the beforementioned 152.93 acre tract, same being the south line of the
beforementioned Indian Oaks Subdivision, adjacent to a fence, as follows:
N 78° 06'44" E for a distance of 60.31 feet to a 3/8" iron rod found marking the southeast comer of said
Cherokee Drive, same being the southwest corner of Lot 16, Indian Oaks Subdivision,
N 76° 43' 21" E for a distance of 376.15 feet to a 16" black jack oak tree fence corner at the most
southerly southeast comer of said Lot 16;
THENCE S 41 ° 01'33" E continuing along the north line of the beforementioned 152.93 acre tract, for
a distance of 18.39 feet to an 18" tree stump fence corner;
THENCE S 00° 42'13" E along the east line of the beforementioned 152.93 acre tract, same being the
west line of the Valenta - called 167.609 acre tract, Volume 3160, Page 182, of the Official Records of
Brazos County, Texas, adjacent to a fence, for a distance of 2075.08 feet to a 3/8" iron rod found at a
16" pecan tree (dead) fence corner marking the southeast corner of the 152.93 acre tract, same being
the northeast comer of the McFarlane - called 141.460 acre tract, Volume 341, Page 125, of the Deed
Records of Brazos County, Texas;
THENCE S 88° 58'40" W along the common line between the beforementioned 152.93 acre tract and
the beforementioned 141.460 acre tract, adjacent to, north of and south of a crooked fence line, for a
distance of 2494.09 feet to a %Z" iron rod set at the northwest corner of the 141.460 acre tract, same
being an angle point corner of the 152.93 acre tract, from which a crosstie fence angle point bears N
STEWARRT TITLE GUARANTY COMPANY -
N SCHEDULE A
File No.: 132943 (Continued) Policy No.: M-5842-610516
69° 44' 21" E - 5.9 feet;
THENCE along the common line between the beforementioned 152.93 acre tract and the McFarlane -
1213.537 acre tract (315/243), also known as a remainder 630 acre tract, Volume 1155, Page 786, of
the Official Records of Brazos County, Texas, adjacent to a fence, as follows:
S 61 ° 40'46" W for a distance of 642.37 feet to a crosstie fence angle point,
N 64° 49' 17" W for a distance of 230.26 feet to a 3/8" iron rod found at a 6" cedar post fence comer
marking the southwest comer of the 152.93 acre tract in the east line of the beforementioned 547.1 acre
Tract 1;
THENCE along the northerly lines of the following McFarlane Tracts: 1213.537 acre - 2nd Tract, Vol.
315, Pg. 243; 235.123 acre tract, Vol. 1817, Pg. 154; and the 1215.830 acre -1st Tract, Vol. 315, Pg.
243, same being the occupied south line of the beforementioned 220.5 acre tract and the
beforementioned 251.5 acre tract, adjacent to a crooked fence, as follows:
S 46° 56' 57" W for a distance of 173.90 feet to a 3/8" iron rod found marking the northwest comer of
the 1213.537 acre tract, same being the northeast corner of the 235.123 acre tract,
S 47° 57' 31" W for a distance of 269.65 feet to a 12" water oak tree fence angle point,
S 59° 49' 55" W for a distance of 113.55 feet to a 16" post oak tree fence angle point,
S 87° 36' 13" W for a distance of 1364.03 feet to a 4" creosote post fence corner at the west end of a
cattle guard entrance at or near the common corner of the 235.123 acre tract and the 1215.830 acre
tract,
N 89° 09' 06" W for a distance of 247.35 feet to a %2' iron rod set at the southeast comer of the 360.00
acre tract described in Volume 1569, Page 118, of the Official Records of Brazos County, Texas, from
which a 3/8" iron rod found (bent) marking the northwest corner of the 1215.830 acre tract bears N 89°
09'06" W - 1681.38 feet;
THENCE along the reconstructed lines of the beforementioned 360.00-acre tract, through the interior
of the beforementioned 220.5-acre tract and the beforementioned 281.6-acre - Tract 6, as follows:
N 00° 15'38" W for a distance of 5152.71 feet to a %2' iron rod set at the northeast comer of the 360.00
acre tract, from which a Y2' iron rod found in concrete marking the occupied interior ell comer of the
281.6 acre tract bears N 33° 01' 16" W - 390.21 feet,
S 89° 44'22" W for a distance of 3286.58 feet to a'/2' iron rod set at the northwest corner of the 360.00
acre tract,
S 00° 15' 38" E for a distance of 3551.61 feet to a crosstie fence corner marking the occupied
southeast comer of the beforementioned 157.7 acre tract, same being a northeast corner of the called
320 acre - Frank B. McGregor tract described in Volume "P", Page 387, of the Deed Records of Brazos
County, Texas, from which the southwest corner of the 251.5 acre tract, same being the southwest
corner of the 360.00 acre tract bears S 00° 15'38" E - 833.33 feet;
THENCE along the southerly lines of the beforementioned 157.7-acre tract, same being the northerly
lines of the beforementioned McGregor - 320-acre tract, adjacent to a fence, as follows:
S 89° 44' 22" W for a distance of 1854.96 feet to a 4" creosote post fence corner,
N 02° 09' 26" W for a distance of 556.07 feet to a crosstie fence corner,
S 89° 32' 06" W for a distance of 622.21 feet to a 10" creosote post fence corner marking the southwest
comer of the 157.7 acre tract, same being the southeast corner of the Smith - called 468.48 acre tract,
Volume 2533, Page 315, of the Official Records of Brazos County, Texas;
STEWARRT TITLE GUARANTY COMPANY
SCHEDULE A
File No.: 132943 (Continued) Policy No.: M-5842-610516
THENCE along the west line of the beforementioned 157.7 acre tract and the beforementioned 326.6
acre tract, same being the east line of the beforementioned 468.48 acre tract, adjacent to a fence, as
follows:
N 00° 29' 32" W for a distance of 1296.07 feet to a 10" creosote post fence angle point,
N 00° 26' 28" W for a distance of 2924.95 feet to an 8" creosote post fence corner;
N 00° 29'53" E at a distance of 1598 feet, cross the center of an existing gravel well access road, with
cattle guard entrance (this entrance being at the southeast end of Arrington Road (County Road)),
continue on at a distance of 1620.7 feet, pass a crosstie fence comer at the north end of cattle guard
entrance marking the northeast comer of the 468.48 acre tract, continue on for a total distance of
1625.53 feet to a %2' iron rod set for the northwest comer of the 326.6 acre tract in the south line of the
76.252 acre tract described in Volume 2259, Page 19, of the Official Records of Brazos County, Texas;
THENCE N 89° 04'25" E along the north line of the beforementioned 326.6 acre tract, same being the
south line of the beforementioned 76.252 acre tract and same being along the common line between
the beforementioned Barrera Survey, A-69 and the S. D. Smith Survey, A-210, adjacent to a fence, at
a distance of 1620.67 feet, pass a %2' iron rod found at a 6" creosote post fence corner marking the
southwest corner of Deer Park Subdivision according to the plat recorded in Volume 221, Page 295, of
the Deed Records of Brazos County, Texas, continue on for a total distance of 5611.55 feet to a 3/8" iron
rod found in concrete at a 6" creosote post fence corner marking the occupied northeast comer of the
326.6 acre tract, same being the northwest comer of the Restino -16.68 acre Tract, Volume 1612, Page
254, of the Official Records of Brazos County, Texas;
THENCE along the occupied east line of the beforementioned 326.6 acre tract and the beforementioned
281.6 acre tract, same being the west line of the beforementioned 16.68 acre tract, the Feltz -16.67 acre
tract, Volume 1190, Page 303, of the Official Records of Brazos County, Texas, and the Hall -17.417
acre tract, Volume 498, Page 830, of the Deed Records of Brazos County, Texas, adjacent to a fence,
as follows:
S 00° 30'04" W for a distance of 1487.15 feet to a YT iron rod found (bent) in concrete marking the
common corner between the 16.67 acre and 17.417 acre tracts,
S 01 ° 10' 19" W for a distance of 1098.69 feet to a'/z' iron rod found in concrete marking the occupied
interior ell corner of the 281.6 acre tract, same being the southwest corner of the 17.417 acre tract;
THENCE along the occupied north lines of the beforementioned 281.6 acre tract, same being the south
line of the beforementioned 17.417 acre tract, the Fleming - called 18.307 acre tract, Volume 296, Page
236, of the Deed Records of Brazos County, Texas, the Flanagan - called 18.071 acre tract, Volume
1201, Page 754, of the Official Records of Brazos County, Texas, the Restino - called 18.163 acre tract,
Volume 297, Page 753, of the Deed Records of Brazos County, Texas, and the Crystal Chen Wiseman
- called 102.504 acre tract, Volume 1228, Page 792, of the Official Records of Brazos County, Texas,
adjacent to a fence, as follows:
S 88° 33'59" E at a distance of 698.15 feet, pass a YT iron rod found at the common corner between
the 17.417 acre and 18.307 acre tracts, continue on for a total distance of 2141.13 feet to a'/Z' iron rod
found at a northeast corner of the 281.6 acre tract and the southeast comer of the 18.071 acre tract,
S 00° 16'24" E for a distance of 54.78 feet to a 5/8" iron rod found at a 2" cedar post fence corner
marking an interior ell comer of the 281.6 acre tract, same being the southwest comer of the 18.163 acre
tract, from which a %2' iron rod found in concrete bears N 830 43' 52" E - 0.92 feet,
S 88° 07'50" E for a distance of 401.80 feet to a 3/8" iron rod found at a 2" cedar post fence corner
marking the southeast comer of the 18.163 acre tract, same being the most westerly southwest corner
of the 102.504 acre tract,
STEWARRT TITLE GUARANTY COMPANY
SCHEDULE A
File No.: 132943 (Continued) Policy No.: M-5842-610516
N 89" 17' 54" E for a distance of 723.67 feet to a Y2" iron rod found in concrete at a 4" creosote post
fence comer marking an interior ell comer of the 102.504 acre tract and the occupied northeast comer
of the 281.6 acre tract;
THENCE S 00° 42' 44" E along the east line of the beforementioned 281.6 acre tract and the
beforementioned 547.1 acre tract, same being the southwesterly line of the beforementioned 102.504
acre tract, adjacent to a fence, for a distance of 2756.30 feet to a Y2" iron rod found in concrete at a
crosstie fence comer marking the most northerly southeast corner of the 547.1 acre tract in the north line
of the beforementioned 152.93 acre tract, from which a iron rod found at a 6" creosote post fence
corner marking the northwest corner of the 152.93 acre tract bears S 89° 3628" W - 1055.24 feet;
THENCE along the north line of the beforementioned 152.93-acre tract, adjacent to a fence, as follows:
S 89° 23'33" E along the south line of the beforementioned 102.504 acre tract for a distance of 610.85
feet to a'/2' iron rod found in concrete marking the common comer between the 102.504 acre tract and
the beforementioned 107.349 acre tract, from which a iron rod found bears S 81 ° 50' 53" E - 3.17
feet, and a crosstie fence corner bears N 03° 00'20" E - 0.9 feet,
N 87'43'28" E for a distance of 1166.54 feet to the PLACE OF BEGINNING, containing 1037.24 acres
of land, more or less.
STEWART TITLE GUARANTY COMPANY
SCHEDULE B
File No.: 132943 Policy No.: M-5842-610516
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 THE LEASES AN EASEMENTS, IF ANY, SHOWN IN SCHEDULE A, AND THE
FOLLOWING MATTERS:
1. THE FOLLOWING RESTRICTIVE COVENANTS OF RECORD ITEMIZED BELOW, BUT THE
COMPANY INSURES THAT ANY RESTRICTIVE COVENANTS HAVE NOT BEEN VIOLATED SO AS
TO AFFECT, AND THAT FUTURE SUCH VIOLATION THEREOF WILL NOT AFFECT, THE VALIDITY
OR PRIORITY OF THE MORTGAGE HEREBY INSURED (INSERT SPECIFIC RECORDING DATA OR
DELETE THIS EXCEPTION):
Item No. 1 is hereby deleted in its entirety.
2. ANY SHORTAGES IN AREA.
3. STANDBY FEES, TAXES AND ASSESSMENTS BY ANY TAXING AUTHORITY FOR THE YEAR 2001
AND SUBSEQUENT YEARS. COMPANY INSURES THAT STANDBY FEES, TAXES AND
ASSESSMENTS BY ANY TAXING AUTHORITY FOR THE YEAR 2001 ARE NOT YET DUE AND
PAYABLE.
4. LIENS AND LEASES THAT AFFECT THE TITLE TO THE ESTATE OR INTEREST, BUT THAT ARE
SUBORDINATE TO THE LIEN OF THE INSURED MORTGAGE.
5. (INSERT HERE ALL OTHER SPECIFIC EXCEPTIONS AS TO SUPERIOR LIENS, EASEMENTS,
OUTSTANDING MINERAL AND ROYALTY INTERESTS, ETC.):
a. The following matters disclosed on survey plat prepared July 2000 by S. M. Kling, Registered
Professional Land Surveyor, State of Texas, No. 2003:
1) Well access road, pipeline riser, tank battery, existing well pad, Brazos Coal Ltd. Unit Well No.
1 existing wellhead and other appurtenances.
2) Discrepancies between fence(s) and boundary line(s) of subject property shown as Area 1 (0.14
acres), Area 2 (1.12 acres) and Area 4 (0.52 acres) on said survey plat.
b. Right-of-Way Easements from G. M. Arnold, et al to Sinclair Refining Company, dated February 26,
1947, recorded in Volume 132, page 48 and dated September 11, 1947, recorded in Volume 132,
page 133, both of the Deed Records of Brazos County, Texas; Assignment of Right-of-Way
Easements from Sinclair Refining Company to Sinclair Pipe Line Company, dated December 31,
1950, recorded in Volume 147, page 417, Deed Records of Brazos County, Texas; Assignment of
Right-of-Way Easements to ARCO Pipe Line Company effective March 1, 1992, recorded in Volume
1559, page 175, Official Records of Brazos County, Texas; Assignment and Assumption Agreement
effective September 30, 1994, between ARCO Pipe Line Company and CITGO Products Pipeline
Company, recorded in Volume 2217, page 231, Official Records of Brazos County, Texas; and as
amended in instrument by and between Thousand Oaks Development Company Joint Venture and
Citgo Products Pipeline Company, dated January 25, 2001, recorded in Volume 4050, page 98,
Official Records of Brazos County, Texas; said easements depicted across interior of subject tracts
STEWART TITLE GUARANTY COMPANY
SCHEDULE B
File No.: 132943 (Continued) Policy No.: M-5842-610516
on survey plat prepared July 2000 by S. M. Kling, Registered Professional Land Surveyor, State of
Texas, No. 2003.
c. 60' wide Right-of-Way Easement from R. C. Dunn to the City of Bryan, dated August 25, 1961,
recorded in Volume 213, page 503, Deed Records of Brazos County, Texas; said easement depicted
adjacent and parallel to west line of Tract Two on survey plat prepared July 2000 by S. M. Kling,
Registered Professional Land Surveyor, State of Texas, No. 2003.
d. 30' wide Pipeline Easement from Thousand Oaks Development Company'Joint Venture to Aquila
Southwest Pipeline Corporation, dated January 22, 1993, recorded in Volume 1714, page 216,
Official Records of Brazos County, Texas; said easement depicted across interior of subject tracts
on survey plat prepared July 2000 by S. M. Kling, Registered Professional Land Surveyor, State of
Texas, No. 2003.
e. 30' wide Pipeline Easement from Thousand Oaks Development Company Joint Venture to Aquila
Southwest Pipeline Corporation, dated April 13, 1993, recorded in Volume 1843, page 1, Official
Records of Brazos County, Texas; said easement depicted adjacent and parallel to north boundary
line of Tract Two on survey plat prepared July 2000 by S. M. Kling, Registered Professional Land
Surveyor, State of Texas, No. 2003.
f. 30' wide Pipeline Easement granted in Right-of-Way Agreement from Thousand Oaks Development
Company Joint Venture to Ferguson Burleson County Gas Gathering System, dated November 18,
1993, recorded in Volume 2065, page 38, Official Records of Brazos County, Texas; said pipeline
depicted across interior of subject tracts on survey plat prepared July 2000 by S. M. Kling, Registered
Professional Land Surveyor, State of Texas, No. 2003; however, said notes on survey plat indicate
the recommendation to more accurately locate/define this easement.
g. 15' wide Pipeline Easement granted in Right-of-Way Agreement from Thousand Oaks Development
Company Joint Venture to Ferguson Burleson Company Gas Gathering System, dated January 22,
1993, recorded in Volume 2065, page 41, Official Records of Brazos County, Texas; said pipeline
easement depicted across interior of subject tracts on survey plat prepared July 2000 by S. M. Kling,
Registered Professional Land Surveyor, State of Texas, No. 2003; however, said notes on survey
plat indicate the recommendation to confirm the compatibility of the record description with the line
so place in the ground.
h. 10' wide communication easement granted in Easement and Right-of-Way Agreement between
Thousand Oaks Development Co. Joint Venture and Williams Communications, Inc. dba Vyvx, Inc.,
dated September 27, 1999, recorded in Volume 3622, page 73, Official Records of Brazos County,
Texas; said easement depicted across interior of subject tracts on survey plat prepared July 2000
by S. M. Kling, Registered Professional Land Surveyor, State of Texas, No. 2003; however, said
notes on survey plat indicate the recommendation to more accurately locate/define this easement.
i. 30' wide Road Easement from Thousand Oaks Development Company Joint Venture to Earline D.
Tison, et al, dated June 1, 1998, recorded in Volume 3160, page 176, Official Records of Brazos
County, Texas; said access easement depicted along portion of Tract Two adjacent to Lot 16 of
Indian Oaks Subdivision on survey plat prepare July 2000 by S. M. Kling, Registered Professional
Land Surveyor, State of Texas, No. 2003.
j. Mineral Deed from J. Walter Smith, et al to Pure Royalty Company, dated March 27, 1927, recorded
in Volume 71, page 61, Deed Records of Brazos County, Texas. Title to this mineral interest has not
been traced subsequent to the date of the above-cited instrument. (Tract Two)
STEWART TITLE GUARANTY COMPANY
SCHEDULE B
File No.: 132943 (Continued) Policy No.: M-5842-610516
k. Mineral Deed from J. Walter Smith, et ux to John D. Rogers, dated April 9, 1938, recorded in Volume
96, page 94, Deed Records of Brazos County, Texas. Title to this mineral interest has not been
traced subsequent to the date of the above-cited instrument. (Tract Two)
1. Mineral Deed from R. W. Ivy, et ux to G. M. Arnold, et ux, dated December 4, 1953, recorded in
Volume 161, page 497, Deed Records of Brazos County, Texas. Title to this mineral interest has not
been traced subsequent to the date of the above-cited instrument. (Tract Two)
m. Estate created by Oil and Gas Leases from George M. Arnold, et ux, et al to Union Pacific Resources
Company, dated February 2, 1993, recorded in Volume 1746, pages 138 and 141, Official Records
of Brazos County, Texas; ratified in instrument recorded in Volume 2031, page 213, Official Records
of Brazos County, Texas. Title to these leases has not been traced subsequent to the date of the
above-cited instruments.
n. Estate created by Oil and Gas Lease from Prescott Ranch Joint Venture, et al to Ogden Resources
Corporation, dated March 27, 1990, recorded in Volume 1175, page 690, Official Records of Brazos
County, Texas; ratified and amended in instruments recorded in Volume 1179, page 36; Volume
1180, page 625; Volume 1216, page 17 and Volume 1713, page 325, Official Records of Brazos
County, Texas. Title to this lease has not been traced subsequent to the date of the above-cited
instrument.
o. Mineral Partition Deeds executed by Brazos Coal, Limited; Global Natural Resources Corporation
of Nevada and Isidore Miller, dated January 1, 1992, recorded in Volume 1454, page 179 and
Correction Mineral Partition Deed recorded in Volume 1569, page 118, both of the Official Records
of Brazos County, Texas. Title to these mineral interests has not been traced subsequent to dates
of the above-cited instruments.
p. Mineral Partition Deed executed by Brazos Coal, Limited; Global Natural Resources Corporation of
Nevada,and Isidore Miller, dated July 7, 1994, recorded in Volume 2174, page 222, Official Records
of Brazos County, Texas. Title to this reservation has not been traced subsequent to dates of the
above-cited instrument.
q. Terms, conditions and stipulations of Surface Waiver executed by Isidore Miller, dated July 26, 2001,
recorded in Volume 4251, page 1, Official Records of Brazos County, Texas.
r. Mineral reservation in Deed from Thousand Oaks Development Company Joint Venture to Smiling
Mallard Development, Ltd., dated July 26, 2001, recorded in Volume 4247, page 51, Official Records
of Brazos County, Texas; subject to terms and conditions of surface waiver and location of drill sites
as detailed therein. Title to this reservation has not been traced subsequent to the date of the above-
cited instrument.
s. Estate created by Oil and Gas Lease from Brazos Coal, Limited, et al to Union Pacific Resources
Company, dated May 2, 1990, recorded in Volume 1302, page 275, Official Records of Brazos
County, Texas. Title to this lease has not been traced subsequent to the date of the above-cited
instrument.
t. Estate created by Oil and Gas Lease from Thousand Oaks Development Corporation Joint Venture
to Odgen Resources Corporation, dated July 26, 2001, and not recorded in Volume 4268, page 55,
Official Records of Brazos County, Texas; subject to terms and conditions of Surface Waiver and
Drill Site Designation Agreement dated July 26, 2001, recorded in Volume 4247, page 83, Official
Records of Brazos County, Texas. Title to this lease has not been traced subsequent to the date
STEWART TITLE GUARANTY COMPANY
SCHEDULE B
File No.: 132943 (Continued) Policy No.: M-5842-610516
of the above-cited instrument.
u. Section 13 of the Conditions and Stipulations of this policy is hereby deleted.
v. The Tax Certificate furnished by the taxing authorities is issued on real estate only. It does not
include minerals and/or personal property, therefore, no liability is assumed herein for the payment
of said mineral and/or personal property tax.
STEWART TITLE GUARANTY COMPANY .
SCHEDULE B
File No. 132943 (Continued) Policy No. 0-5841-173824
r. Mineral Partition Deed executed by Brazos Coal, Limited; Global Natural Resources Corporation of
Nevada and Isidore Miller, dated July 7, 1994, recorded in Volume 2174, page 222, Official Records
of Brazos County, Texas. Title to this reservation has not been traced subsequent to dates of the
above-cited instrument.
s. Terms, conditions and stipulations of Surface Waiver executed by Isidore Miller, dated July 26, 2001,
recorded in Volume 4251, page 1, Official Records of Brazos County, Texas.
t. Mineral reservation in Deed from Thousand Oaks Development Company Joint Venture to Smiling
Mallard Development, Ltd., dated July 26, 2001, recorded in Volume 4247, page 51, Official Records
of Brazos County, Texas; subject to terms and conditions of surface waiver and location of drill sites
as detailed therein. Title to this reservation has not been traced subsequent to the date of the above-
cited instrument.
u. Estate created by Oil and Gas Lease from Brazos Coal, Limited, et al to Union Pacific Resources
Company, dated May 2, 1990, recorded in Volume 1302, page 275, Official Records of Brazos
County, Texas. Title to this lease has not been traced subsequent to the date of the above-cited
instrument.
v. Estate created by Oil and Gas Lease from Thousand Oaks Development Corporation Joint Venture
to Odgen Resources Corporation Joint Venture, dated July 26, 2001, and recorded in Volume 4268,
page 55, Official Records of Brazos County, Texas; subject to terms and conditions of Surface
Waiver and Drill Site Designation Agreement dated July 26, 2001, recorded in Volume 4247, page
83, Official Records of Brazos County, Texas. Title to this lease has not been traced subsequent
to the date of the above-cited instrument.
w. Section 14 of the Conditions and Stipulations of this policy is hereby deleted.
x. The Tax Certificate furnished by the taxing authorities is issued on real estate only. It does not
include minerals and/or personal property, therefore, no liability is assumed herein for the payment
of said mineral and/or personal property tax.
STF NART TITHE
GUARANTY COMPANY
ADJUSTABLE MORTGAGE LOAN ENDORSEMENT
Attached to and forming a part of Mortgagee Policy No. M-5842-610516 of STEWART TITLE GUARANTY
COMPANY.
As to the policy to which this Endorsement is attached, the Company will not claim that its liability for the payment
of any loss or damage, under the terms and provisions of the Policy, has been waived or surrendered by the Insured, or
has been reduced by the Company, solely by reason of:
(1) Any provisions of the mortgage or deed of trust described in Schedule A of the Policy which provide-
for adjustment of the interest rate.
(2) Loss of priority of the Lien of the insured mortgage or deed of trust as security for the unpaid principal
balance of the loan, together with interest as charged in accordance with the provisions of the insured
mortgage, which loss of priority is caused by adjustments of the interest rate.
For purposes of Item 2 of this Endorsement, the unpaid principal balance of the loan shall be determined as of the date
of any loss or damage, under the terms and provisions of the Policy, and the unpaid principal balance shall include
unpaid interest calculated as provided by the terms and conditions of the note secured by the mortgage or deed of
trust described in Schedule A of the Policy
The policy to which this Endorsement is attached does not insure against loss or damage based upon usury or claims
of usury, nor any consumer credit protection or truth-in-lending law.
The policy to which this Endorsement is attached does not insure against loss or damage by reason of the failure of the
Insured to comply with any applicable law or regulation relating to adjustable loans made by the Insured.
Nothing herein shall be construed as extending or changing the effective date of the Policy or increasing the
maximum amount of liability provided in said policy. The issuance of this Endorsement shall not extend the liability
hereunder beyond the period of limitation applicable to the indebtedness described in Schedule A calculated from
the original maturity date of such indebtedness or a subsequent renewed and extended maturity date, provided that
Company shall have no liability created by reason of any invalid renewal and extension agreement of either the
indebtedness of the lien nor by reason of the failure to record a renewal and extension agreement of the lien.
This Endorsement shall be effective as of the date of the mortgagee policy to which it is attached.
IN WITNESS WHEREOF. STEWART TITLE GUARANTY COMPANY has caused this Endorsement to be executed by its
President under the seal of the Company, but this Endorsement is to be valid only when it bears an authorized
countersignature. STEWART TITLE
GUARANTY COMPANY
l/v!e-
ti1,t0
Chairman of the oard *rc5r ;tr- President.
,.1
C tersigned:f~C'lti~~
M.
horized Countersignature
RAZOS COUNTY ABSTRACT COMPANY
Company
College Station, Texas
City, State
Serial No.ent 05.864 6 8 8 4 3
FORM T-33 Endorsement (10/1/91) G
..u"rseu.en, nevorvmg k.reurr Line
Form Prescribed by State Board of Insurance of Texas
y r REVOLVING CREDIT ENDORSEMENT
Issued by
+ STEWART TITLE
} GUARANTY COrIPANY
Attached to and made a partof Stewart Title Guaranty Company. Mortgagee Policy No. M-5842-'610516
dated the 27thday of July , T!~ 2001 }
}
} Notwithstanding anything to the contrary contained in this policy, the following terms and provi-
sions shall control and apply:
+ 1. This policy insures only to, and liability hereunder is thereby limited to, the extent of the
} amount of proceeds of the loan secured by the lien instrument set forth under Schedule A hereof
actually disbursed as of the date of this policy, but increases as each subsequent advance or dis-
bursement of loan proceeds is made and decreases as repayment of all or a portion of the amount of
+ loan proceeds disbursed is made from time to time. so that any loss payable hereunder shall be }
} limited to the aggregate amount of loan proceeds actually disbursed less the aggregate of all repay- }
i ments thereof existing at the time a loss occurs hereunder; provided, however, that each disburse-
ment of loan proceeds is made in good faith and without knowledge of any defects in, or objections }
} to, title; and further provided that in no event shall the liability of the Company hereunder exceed the
} face amount of this policy. }
2. The Company hereby insures the Insured that any disbursements of such loan proceeds
} made subsequent to the date of this policy shall be deemed to have been made as of the date of this }
+ policy and shall have the same priority as any advances made as of the date of this policy, except as
} to (i) bankruptcies affecting the estate or interest described on Schedule "A" hereof prior to the date
} of any such advance or disbursement; and, (ii) taxes, costs, charges, damages and other obliga-
tions to the government secured by statutory liens arising or recorded subsequent to the date of the }
} policy.
} This endorsement when countersigned below by an Authorized Countersignature is made a part
}
of said policy. Except as expressly modified by the provisions hereof, this endorsement is subject to
} the following policy matters: (i) Insuring Provisions; (ii) Exclusions from Coverage; (iii) Schedule "B"
} Exceptions; (iv) the Conditions and Stipulations; and, (v) any prior endorsements. Except as stated }
t herein, this endorsement does not: (i) extend the effective date of the policy and/or any prior en- }
dorsements; or, (ii) increase the face amount of the policy.
• STEWART TITLE
} GUARANTY COMPANY +
} Chairman of the oard~, President- }
} C igned: t' a
} A rized Countersignature }
} RAZOS COUNTY ABSTRACT COMPANY
Company }
t }
College Station, Texas
City, State
i
Serial r--5817. 21284
Number
583-T-35 (8-1-95)
y
✓
BknZOS COUNTY ABSTRACT COMy ANY
PRIVACY POLICY NOTICE
PURPOSE 01' THIS'NOTTCE
Title V of the Gramm-Leach-Bliley Act (GLBA
) generally prohibits any financial
institution, directly or through its affiliates, from'sharing nonpublic personal information
about you with a nonaffiliated third party unless: the.institution provides you with a notice
o its privacy policies and practices; such as'the type of information that it collects about
you and the categories of persons or entities to whom it may be disclosed. In compliance
with the GLBA, we are providing you with this document,. which notifies you of the
privacy: policies and practices of Brazos County Abstract Coin'pany.
We may collect nonpublic personal information about you from the following.sources:
_,,:,,Information we receive from you, such as on appl'a.Mions or.other fotirt~s
• Information about your transactions we, secure;_frorrl ou files, or ,from our
aff liates `or others. 1;:.:
• Information we receive from a consumer reporting agency.
• Information that we receive from others invol,ve~d ; >your Xzansactid6 such as the
oreal estate agent or lender.
i, d 'Pr~'~}5'; ~
Unless it is specifically stated otherwise in an' amende430
, Pg1i y Qtice, no
additional nonpublic personal information will be collected about you.
We may disclose any of the above information that we Rcollect about our customers or
former customers to our affiliates or to nonaffiliated third parties as permitted by law.
We also may disclose this infonnation about our customers .or former customers to the
following types of nonaffiliated coinpariies that perform marketing services on our behalf
or with whom we have joint marketing agreements:
• Financial service providers such as 'companies engaged in banking, consumer
finance, securities and insurance.
• Non-financial companies such as envelope,stuffers,.and-other fulfillment service
providers
WE DO NOT DISCLOSE ANY NONPUBLIC PERSONRAI;,JNFpRMATION ABOUT
YOU-~1WITH"~ANYONE FOR ANY' PURPOSETHAT IS NOT . SPECIFICALLY
PERMITTED BY LAW.;" '
We restrict access to nonpublic personal information about yol to those employees who
need to know that information in order to Provide plro¢ucts hor services-t4 qou;- We
maintain., physical, electronic and -procedural "s'afegu'ards tha comply with -federal.
regulations to guard your nonpublic personal information. °
SThWART TITLE
GUARANTY COMPANY
IMPORTANT INFORMATION VISO IMPORTANTE
FOR INFORMATION, OR PARA INFORMACIION, 0
TO MAKE A COMPLAINT PARA SOMETER UNA OUEJA
CALL OUR TOLL-FREE TELE. LLAME AL NUMERO GRATIS
PHONE NUMBER
1-800.729.1902 1-800-729.1902
ALSO TAMBIEN
YOU MAY CONTACT PUEDE COMUNICARSE CON
THE TEXAS DEPARTMENT EL DEPARTAMENTO DE SEGUROS
OF INSURANCE AT DE TEXAS AL
1-800-252-343.9 1-800-252-3439
to obtain information on: pare obtener Informaclon sobre:
1. filing a complaint against an 1. como someter una queja en contra
insurance company or agent, de una companla de seguros o
2. whether an insurance company or agente de seguros,
agent is licensed, 2. sl una companla de seguros o
3. complaints received against an agenle de seguros tiene licencia,
insurance company or agent, 3. quejas re4ldas en contra de una
4.; policyholder rights, and compania de seguros o agente de
5: a list of consumer publications seguros 1
and services available through 4, los derechos del asegurado, y
the Department. 5. una lista de public4clones y
servicios para cothsumidores.
disponibles a travel del'Departmento
YOU MAY ALSO WRITE TO TAMBIEN PUEDE ESCRIBIR AL
THE TEXAS DEPARTMENT OF DEPARTMENTO DE SEGUROS DE
INSURANCE TEXAS
P.O. BOX 149104 P.O. BOX 149104
AUSTIN, TEXAS 78714-9104 AUSTIN, TEXAS 78714-9104-
FAX NO (512) 475-1771 FAX NO (512) 47,5.1771
t
(continued from reverse side of Policy Face)
connection with its issuance of a policy(ies) of title i ce without exception secure reasonably nec nformation from third parties as required in this
for the lien, encumbrance, adverse claim or defect; :cure a release or other paragraph, unless pro _,ted by law or governmental regulatiopr shall termi-
document discharging the lien, encumbrance, adverse claim or defect; or (vi) nate any liability of the Company under this policy as to that claim.
undertake a combination of (i) through (v) herein. 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS: TERMINATION
4. DEFENSE AND PROSECUTION OF ACTIONS: DUTY OF INSURED CLAIMANT OF LIABILITY.
TO COOPERATE. In case of a claim under this policy, the Company shall have the following
(a) Upon written request by the insured and subject to the options con- additional options:
tained in Section 6 of these Conditions and Stipulations, the Company, at its (a) To Pay or Tender Payment of the Amount of Insurance or to Pur-
own cost and without unreasonable delay, shall provide for the defense of an chase the Indebtedness.
insured in litigation in which any third party asserts a claim adverse to the title (i) to pay or tender payment of the amount of insurance under this
or interest as insured, but only as to those stated causes of action alleging a policy, together with any costs, attorneys' fees and expenses incurred by the
defect, lien or encumbrance or other matter insured against by this policy. The insured claimant, which were authorized by the Company, up to the time of
Company shall have the right to select counsel of its choice (subject to the right payment or tender of payment and which the Company is obligated to pay; or
of the insured to object for reasonable cause) to represent the insured as to (ii) to purchase the indebtedness secured by the insured mortgage for
those stated causes of action and shall not be liable for and will not pay the the amount owing thereon together with any costs, attorneys' fees and expenses
fees of any other counsel. The Company will not pay any fees, costs or expenses incurred by the insured. claimant, which were authorized by the Company up to
incurred by the insured in the defense of those causes of action that allege the time of purchase and which the Company is obligated to pay.
matters not insured against by this policy. If the Company offers to purchase the indebtedness as herein provided,
(b) The Company shall have the right, at its own cost, to institute and the owner of the indebtedness shall transfer, assign, and convey the indebted-
prosecute any action or proceeding or to do any other act that in its opinion ness and the insured mortgage, together with any collateral security, to the
may be necessary or desirable to establish the title to the estate or interest or Company upon payment therefor.
the lien of the insured mortgage, as insured, or to prevent or reduce loss or Upon the exercise by the Company of either of the options provided for in
damage to the insured. The Company may take any appropriate action under paragraphs a(i) or (ii), all liability and obligations to the insured under this
the terms of this policy, whether or not it shall be liable hereunder, and shall not policy, other than to make the payment required in those paragraphs, shall
thereby concede liability or waive any provision of this policy. If the Company terminate, including any liability or obligation to defend, prosecute, or continue
shall exercise its rights under this paragraph, it shall do so diligently. any litigation, and the policy shall be surrendered to the Company for
(c) Whenever the Company shall have brought an action or interposed a cancellation.
defense as required or permitted by the provisions of this policy, the Company (b) To Pay or Otherwise Settle With Parties Other than the Insured or
may pursue any litigation to final determination by a court of competent juris- With the Insured Claimant.
diction and expressly reserves the right, in its sole discretion, to appeal from any (i) to pay or otherwise settle with other parties for or in the name of
adverse judgment or order, an insured claimant any claim insured against under this policy, together with
(d) In all cases where this policy permits or requires the Company to prose- any costs, attorneys' fees and expenses incurred by the insured claimant, which
cute or provide for the defense of any action or proceeding, the insured shall were authorized by the Company up to the time of payment and which the
secure to the Company the right to so prosecute or provide defense in the action Company is obligated to pay; or
or proceeding, and all appeals therein, and permit the Company to use, at its (ii) to pay or otherwise settle with the insured claimant the loss or
option, the name of the insured for this purpose. Whenever requested by the damage provided for under this policy, together with any costs, attorneys' fees
Company, the insured, at the Company's expense, shall give the Company all and expenses incurred by the insured claimant, which were authorized by the
reasonable aid (i) in any action or proceeding, securing evidence, obtaining Company up to the time of payment and which the Company is obligated to
witnesses, prosecuting or defending the action or proceeding, or effecting set- pay.
tlement, and (ii) in any other lawful act that in the opinion of the Company Upon the exercise by the Company of either of the options provided for in
may be necessary or desirable to establish the title to the estate or interest or paragraphs b(i) or (ii), the Company's obligations to the insured under this pol-
the lien of the insured mortgage, as insured. If the Company is prejudiced by icy for the claimed loss or damage, other than the payments required to be
the failure of the insured to furnish the required cooperation, the Company's made, shall terminate, including any liability or obligation to defend, prosecute
obligations to the insured under the policy shall terminate, including any liability or continue any litigation.
or obligation to defend, prosecute, or continue any litigation, with regard to the 7. DETERMINATION AND EXTENT OF LIABILITY.
matter or matters requiring such cooperation. This policy is a contract of indemnity against actual monetary loss or dam-
5. PROOF OF LOSS OR DAMAGE. age sustained or incurred. by the insured claimant who has suffered loss or
In addition to and after the notices required under Section 3 of these Con- damage by reason of matters insured against by this policy and only to the
ditions and Stipulations have been provided the Company, a proof of loss or extent herein described.
damage signed and sworn to by the insured claimant shall be furnished to the (a) The liability of the Company under this policy shall not exceed the least
Company within 91 days after the insured claimant shall ascertain the facts of:
giving rise to the loss or damage. The proof of loss or damage shall describe the (i) the Amount of Insurance stated in Schedule A, or, if applicable, the
defect in, or lien or encumbrance on the title, or other matter insured against by amount of insurance as defined in Section 2 (c) of these Conditions and
this policy that constitutes the basis of loss or damage and shall state, to the Stipulations;
extent possible, the basis of calculating the amount of the loss or damage. If the (ii) the amount of the unpaid principal indebtedness secured by the
Company is prejudiced by the failure of the insured claimant to provide the insured mortgage as limited or provided under Section 8 of these Conditions
required proof of loss or damage, the Company's obligations to the insured and Stipulations or as reduced under Section 9 of these Conditions and Stipula-
under the policy shall terminate, including any liability or obligation to defend, tions, at the time the loss or damage insured against by this policy occurs,
prosecute, or continue any litigation, with regard to the matter or matters together with interest thereon; or
requiring such proof of loss or damage. (iii) the difference between the value of the insured estate or interest
In addition, the insured claimant may reasonably be required to submit to as insured and the value of the insured estate or interest subject to the defect,
examination under oath by any authorized representative of the Company and lien or encumbrance insured against by this policy at the date the insured
shall produce for examination, inspection and copying, at such reasonable times Claimant is required to furnish to Company a proof of loss or damage in accor-
and places as may be designated by any authorized representative of the dance with Section 5 of these Conditions and Stipulations.
Company, all records, books, ledgers, checks, correspondence and memoranda, (b) In the event the insured has acquired the estate or interest in the
whether bearing a date before or after Date of Policy, which reasonably per- manner described in Section 2(a) of these Conditions and Stipulations or has
tain to the loss or damage. Further, if requested by any authorized representa- conveyed the title, then the liability of the Company shall continue as set forth in
tive of the Company, the insured claimant shall grant its permission, in writing, Section 7(a) of these Conditions and Stipulations.
for any authorized representative of the Company to examine, inspect and copy (c) The Company will pay only those costs, attorneys' fees and expenses
all records, books, ledgers, checks, correspondence and memoranda in the cus- incurred in accordance with Section 4 of these Conditions and Stipulations.
tody or control of a third party, which reasonably pertain to the loss or damage. 8. LIMITATION OF LIABILITY.
All information designated as confidential by the insured claimant provided to (a) If the Company establishes the title, or removes the alleged defect, lien
the Company pursuant to this Section shall not be disclosed to others unless, in or encumbrance, or cures the lack of a right of access to or from the land, or
the reasonable judgment of the Company, it is necessary in the administration otherwise establishes the lien of the insured mortgage, all as insured, or takes
of the claim. Failure of the insured claimant to submit for examination under action in accordance with Section 3 or Section 6, in a reasonably diligent
oath, produce other reasonably requested information or grant permission to manner by any method, including litigation and the completion of any appeals
(continued and concluded on reverse side)