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Ordinance No. 12,666ORDINANCE NO. 12,666 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO AN INDUSTRIAL DISTRICT AGREEMENT WITH CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ********************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and directs the Mayor and City Clerk of the City of Baytown to execute and attest to an Industrial District Agreement with CenterPoint Energy Houston Electric, LLC. A copy of said Industrial District Agreement is attached hereto, marked Exhibit "A" and incorporated herein for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ, and PASSED by the City of Baytown, this the 25`h day of September, 2014. of the City Council of the DONCARLOS, Mayor ATT T: / L TICIA BRYSCH, Clerk w O APPROVED AS TO FORM: j H l NACIO RAMIREZ, SR., City orney \ \COBFSOI \LegallKaren\Files \City Council \Ordinances\2014\September 2511DAwithCenterPointEnergyHoustonElectricLLC .doc Exhibit "A" Industrial District Agreement This Industrial District Agreement ("Agreement'] is made and entered into between the City of Baytown, Texas, a municipal corporation in Harris and Chambers Counties, Texas, hereinafter also referred to as "Baytown" or "City," and CenterPoint Energy Houston Electric, LLC, a limited liability corporation, hereinafter referred to as "Property Owner." In consideration of the promises and of the mutual covenants and agreements herein contained, it is agreed by and between the City and Property Owner as follows: I. Parties This Agreement is made under the authority of Texas Local Government Code Annotated §42.044 (Vernon 1993), article XI, §5 of the Texas Constitution and other applicable law. The parties to the Agreement and their addresses are: 1. The "City" City of Baytown Attn: City Manager P.O. Box 424 Baytown, TX 77522 Copy to: City of Baytown Attn: City Attorney P.O. Box 424 Baytown, TX 77522 2. The "Property Owner" Tax Statement Address: CenterPoint Energy Houston CenterPoint Energy Houston Electric, LLC Electric, LLC P. O. Box 4567 Attn: Justin Hyland Houston, TX 772104567 P. O. Box 4567 Houston, TX 772104567 II. Identification of Property and Industrial District This Agreement includes provisions concerning certain real estate and tangible personal property owned or leased by the Property Owner. Real estate located outside the corporate limits of the City is sometimes referred to herein as the "affected area," and it is described in Exhibit A, which is attached to this Agreement and made a part hereof. Acting pursuant to the above mentioned authority, the City Council of the City has by ordinance, designated the affected area as an industrial district, the same to be known as Baytown Industrial District No. 2 (the "Industrial District"). III. Term The term of this Agreement is seven tax years, from 2014 through 2020, unless it is sooner terminated under the provisions hereof. This Agreement shall be effective and binding on the parties hereto upon execution hereof on behalf of the parties to this Agreement and shall remain in effect for seven years. IV. Limited Immunity from Annexation by the City In consideration of the obligations of the Property Owner herein set forth, the City hereby guarantees for the term of this Agreement the immunity of the affected area from annexation of any type by the City except for such parts of the affected property as may be necessary to annex property owned by third parties within the Industrial District that the City may decide to annex. Additionally, this Agreement shall not affect the continuation of any limited purpose annexation status to which the affected area is now subject. V. Industrial District Payment As part of the consideration for the City's undertakings as set forth above, the Property Owner agrees to pay to the City on or before December 31' of each year during the term hereof a sum of money equal to: the Base Value Industrial District Payment plus the Added Value Industrial District Payment. The sum of the Base Value Industrial District Payment plus the Added Value Industrial District Payment shall be referred to as the Industrial District Payment. A. Base Value Industrial District Payment The Base Value Industrial District Payment shall be calculated as follows: (1) the fair market value as determined by the City, of all of the Property Owner's land and all other tangible property, real, personal or mixed, within the affected area on January 1, 2002, ➢ on January 1, 2009, or ➢ as most recently certified by the chief appraiser of the appraisal district and/or approved by the Industrial Appraisal Review Board established and appointed by the City Council, as of the date of this Agreement, whichever is greater hereinafter referred to as the "Base Year." Such fair market value for the Base Year is agreed to and stipulated by the parties to be FIFTEEN 2 MILLION AND NO /100 DOLLARS ($15,000,000.00), less the fair market value in the Base Year as determined by the City of that portion of the Property Owner's property, real, personal or mixed, which was located within the industrial district on the effective date of this agreement and subsequently annexed by the City, the difference of which is hereinafter referred to as the "Base Year Value," multiplied by (2) the property tax rate per $100.00 of assessed valuation adopted by the City Council for the City, multiplied by the applicable Yearly Payment Rate as detailed below. The applicable Yearly Payment Rate is the sum of the Industrial District Payment Rate plus the Public Community Improvement Rate and shall be determined using the following chart: B. Added Value Industrial District Pavment The Added Value Industrial District Payment shall be calculated as follows: (1) the fair market value as determined by the City, of all of the Property Owner's land and all other tangible property, real, personal or mixed, within the affected area on January 1 of each year in which an Industrial District Payment is due hereunder minus the Base Year Value, hereinafter referred to as the "Added Value," multiplied by (2) the property tax rate per $100.00 of assessed valuation adopted by the City Council for the City for each year of the tern of this Agreement, multiplied by the applicable total added value industrial district payment rate detailed below. The applicable Total Added Value Industrial District Payment Rate shall be determined using the following chart: 3 INDUSTRIAL COMMUNITY YEARLY TALC iAR DbSTRICT IlVIPROVEMENT PAYMENT • • PAYMENT •RATE RATE RATE 2014 .61 .01 .62 2015 .62 .01 .63 2016 .62 .01 .63 2017 .63 .01 .64 2018 .63 .01 .64 2019 .63 .01 •64 2020 .64 .01 .65 B. Added Value Industrial District Pavment The Added Value Industrial District Payment shall be calculated as follows: (1) the fair market value as determined by the City, of all of the Property Owner's land and all other tangible property, real, personal or mixed, within the affected area on January 1 of each year in which an Industrial District Payment is due hereunder minus the Base Year Value, hereinafter referred to as the "Added Value," multiplied by (2) the property tax rate per $100.00 of assessed valuation adopted by the City Council for the City for each year of the tern of this Agreement, multiplied by the applicable total added value industrial district payment rate detailed below. The applicable Total Added Value Industrial District Payment Rate shall be determined using the following chart: 3 TAX YEAR . ADDED VALUE IirTDU3TRIAL , DISTRICT PAYMENT RATE PUBLIC, : COM1VIiTNIT$. IlVII'RO : RATE ... :TOTAL ADDED VALUE.I NDUSTRiAL 'DISTRICT PAYNIENT RATE 2014 0 .01 .01 2015 0 .01 .01 2016 0 .01 .01 2017 0 .01 .01 2018 .21 .01 .22 2019 .42 .01 .43 2020 .64 .01 .65 If the formula used in calculating the Added Value Industrial District Payment produces a negative number, then the Added Value Industrial District Payment shall be $0.00. Valuatim For the purpose of providing a procedure for determining and collecting the amounts payable by the Property Owner hereunder, there are hereby adopted and made a part hereof all provisions of the Constitution and statutes of the State of Texas pertaining to ad valorem taxation as amended throughout the term of this Agreement (including, in particular, the Texas Property Tax Code), except, however, that (i) to the extent that any of such provisions would require the assessment of the Property Owner's property on an equal and uniform basis with property in the general corporate limits of the City, the provisions of this Agreement will control where in conflict with the provisions of such laws and (ii) the income method of appraisal as described in Section 23.012 of the Texas Property Tax Code shall not be limited to only properties for which a rental market exists. Specifically, nothing contained herein shall limit the income method of appraisal specified in Section 23.012 of the Texas Property Tax Code to only properties for which a rental market exists, instead if such method is used, the chief appraiser shall: 1. use income and expense data pertaining to the property, if possible and applicable; 2. make any projections of future income and expenses only from clear and appropriate evidence; 3. use data from generally accepted sources in determining an appropriate capitalization rate; 4. determine a capitalization rate for income - producing property that includes a reasonable return on investment, taking into account the risk associated with the investment. 4 A. Valuation of Prouerty Inside the Corporate Limits but Subsequently Diann exed Land, improvements and tangible property, real or mixed, of the Property Owner, which are disannexed from the corporate limits of the City during the term of this Agreement, shall become part of the affected area immediately upon disannexation. The value for such land, improveme and tangible property, real or mixed, shall be based upon the appraised value for the Base Year, as finally determined by the Chambers County Appraisal District or its legal successor (or through administrative or judicial appeal of the Chambers County Appraisal District's determination) and shall be added to the Base Year Value specified in Article V for purposes of payment hereunder on January 1 of the year the same is disanmexed. B. Valuation of EMRM Outside the Coroorate Limits The parties hereto recognize that said Chambers County Appraisal District is not required to appraise the land, improvements, and tangible property, real or mixed, in the affected area, which are not within the corporate limits of the City, for the purpose of computing the payments hereunder. Therefore, the parties agree that to determine the fair market value of all of the Property Owner's land, improvements, and tangible property located outside the corporate limits of the City in accordance with the market value computation contemplated in the Texas Property Tax Code for the purpose of calculating the Property Owner's payment in the manner described above, the City may choose to use the appraised value for each year in which an Industrial District Payment is due hereunder, as finally determined by the Chambers County Appraisal District (or through administrative or judicial appeal of the Chambers County Appraisal District's determination), or by appraisal conducted by the City and/or by an independent appraiser of the City's selection, and at the City's expense. Nothing contained herein shall ever be construed as in derogation of the authority of the Chambers County Appraisal District to establish the appraised value of land, improvements, and tangible personal property in the annexed portion for ad valorem tax purposes. C. Binding Effect Determination of the Base Year Value and the Added Value in the above - stated manner outside the corporate limits shall be made by the City and approved by the Industrial Appraisal Review Board. Such final fair market value as approved by the Industrial Appraisal Review Board WWI be final and binding unless either parry within thirty (30) days after receipt of the Board's determination petitions for a Declaratory Judgment to the Civil District Court of Harris County, Texas, as provided for by Section XIV hereof. In determining the fair market value of property and improvements as used herein, the Industrial District Appraisal Board shall base its determination on the fair market value as defined in Section VI herein, giving due consideration to comparable present day facilities considering and giving effect to sound engineering valuation practices relative to service life, life expectancy, process and functional obsolescence. 5 The City shall mail one statement to the Property Owner on or about December I of each year showing the total amount due on December 31 of such year pursuant to this Agreement. Such statement shall be mailed to the "Tax Statement Address" noted in this Agreement, Any amounts due on December 31 that are not paid when due shall become delinquent on January 1 of the following year. Provided, however, if the tax statement is mailed after December 10, the delinquency date is postponed to the first day of the next month that will provide a period of at least 21 days after the date of mailing for payment of the amount due. Delinquent amounts shall be immediately subject to the same penalties, interest, attorneys' fees and costs of collection as recoverable by the City in the case of delinquent ad valorem taxes. The City shall have a lien upon the Property Owner's land within the affected area upon any delinquency in the Industrial District Payment. E. Valuation Contests If any differences concerning the appraised values shall not have been finally determined by the due date of the Property Owner's payment hereunder and the Property Owner desires to pursue any additional available remedies, the Property Owner shall, without prejudice to such remedies, pay to the City by December 31 of each year (subject to the exception in the preceding paragraph for statements mailed after December 10), such amount as is provided in the Texas Property Tax Code, as amended throughout the tern of this Agreement, for payments made under such conditions by owners of property within the general corporate limits of the City subject to ad valorem taxation. Any refund payable by the City to the Property Owner hereunder shall be paid within 60 days after receipt by the City of both Chambers County Appraisal District's form notification that the appraised value of the property has been reduced and a written refund request by the Property Owner, if not paid timely, the refund amount shall bear interest at eight percent per annum beginning 60 days after the City received both the Property Owner's written refund request and the Chambers County Appraisal District's formal notification that the appraised value of the property has been reduced. VII. Ci Pliance with Law The City and the Property Owner mutually recognize that the health and welfare of Baytown residents require adherence to high standards of quality in the air emissions, water effluents and noise, vibration and toxic levels of those industries located in the Industrial District, and that development within the District may have an impact on the drainage of surrounding areas. To this end, the Property Owner and the City agree that the same standards and criteria relative to noise, vibration and toxic levels and drainage and flood control which are adopted by the City and made applicable to portions of the City adjacent to the Industrial District shall also be applicable to the affected area. The Property Owner agrees that any industrial or other activity carried on within the affected area will be constructed in strict compliance with all applicable valid state and federal air and water pollution control standards. If the Property 6 Owner's property within the affected area is subject to the Occupational Safety and Health Act, 29 U.S.C. 65, et seq., as amended, then the Property Owner shall undertake to ensure that its facilities and improvements in the affected area comply with the applicable fin safety standards of such act and the resolutions from time to time promulgated hereunder (the "OSHA Standards'), but there shall be no obligation to obtain any permits of any kind from the City in connection with the construction, operation or maintenance of improvements and facilities in the affected area not located within the corporate limits of the City. Nonetheless, for construction which commences after the execution of this Agreement, the Property Owner agrees that any structure built within the affected area shall be built in accordance with the building code adopted by the City in effect at the time of construction. The City and the Property Owner recognize that activities in the City's industrial districts are subject to regulation by other governmental entities, including the state and federal governments and their various departments and agencies. The City and the Property Owner also recognize that the City may have an interest in activities in the City's industrial districts that are regulated by other governmental entities. Nothing in this Agreement is intended to limit the City's right and authority to communicate its interest in, or opposition to, those activities to the applicable regulatory agencies or to participate, to the extent allowed by law, in any related administrative or judicial proceeding. VIII. actions The Chief Appraiser of the Chambers County Appraisal District and the City or its independent appraiser shall have the same right to enter and inspect the Property Owner's premises and the same right to examine the Property Owner's books and records to determine the value of the Property Owner's properties as are provided in the Texas Property Tax Code as amended DL Public Community Improvement The Property Owner may apply to the City for reimbursement for a Public Community Improvement Project designed to further the public community improvement goals of the City of Baytown. Such project, the duration of the project, and the location thereof must be approved in writing by the City Manager of the City based upon the public community improvement goals of the City in effect at the time of the application. The Public Community Improvement Project must be completed prior to the expiration of the Agreement year during which it is approved to be eligible for reimbursement, except if it is approved as a multi-year project. The Public Community Improvement Project may be for multiple years; however, in order to be eligible for reimbursement in accordance with this article, it must be completed prior to the expiration or termination of this Agreement. Further, the project may be constructed on the Property Owner's property; provided that the project is visible from and enhances a public way or other public property. Any reimbursement under this article shall be subject to the City Manager's determination that the completed Public Community Improvement Project meets or exceeds those improvement efforts proposed and approved prior to the start of the project. 7 Reimbursement may not exceed the amount the Property Owner will pay to the City based solely upon the Public Community Improvement Rate established in Article V hereof during the term of this Agreement. It is expressly understood and agreed that in any year during the term of this Agreement, the Property Owner shall not submit a request for reimbursement which exceeds the amount the Property Owner has paid to the City based solely upon the Public Community Improvement Rate established in Article V hereof. If the Property Owner fails to receive the City Manager's approval of a Public Community Improvement Project prior to the expiration of an Agreement year, the Property Owner will have no claim to the monies paid to the City based upon the Public Community Improvement Rate and the City shall use such funds for a project consistent with the City's public community improvement goals. X. Default In the event of default by the Property Owner in the performance of any of the terms of this Agreement, including the obligation to make the payments above provided for, the City shall have the option, if such default is not fully corrected within sixty (60) days from the giving of written notice of such default to the Property Owner to either (i) declare this Agreement terminated or (ii) continue the term of this Agreement and collect the payments required hereunder. Notwithstanding any to the contrary contained herein, should the City determine the Property Owner is in default according to the terms and conditions of Section VII hereof, the City shall notify the Property Owner in writing by U.S. Mail, certified return receipt requested, at the address stated in this Agreement, and if such default is not cured within sixty (60) days from the date of such notice (the "Cure Period ") then such failure to cure shall constitute a material breach of this Agreement; provided that, in the case of a default under Section VII for causes beyond the Property Owner's control that cannot with due diligence be cured within such sixty (60) day period or in the event that the failure to cure results from ongoing negotiations with federal or state officials, administrative proceedings or litigation regarding the necessary cure steps, then the cure period shall be extended until such negotiations, administrative proceedings or litigation are concluded. B. Default by City In the event of default by the City, the Property Owner may, if such default is not fully corrected within 60 days from giving written notice of such default to the City, terminate this Agreement. Upon such termination, both the Property Owner and the City shall be relieved of all further obligations hereunder, but the Property Owner shall not be relieved of the obligation to pay any amounts that accrued prior to such termination. In the event of termination, the City shall have the right to repeal the ordinance designating the affected area as an industrial district. Provided, however, if the termination occurs as a result of the City's exercising its option to terminate (as provided in the first sentence of this Section X), the City shall not have the right to annex the affected area into the general corporate limits of the City so as to subject the affected 8 area to ad valorem taxes for any part of the period covered by the Property Owner's last payment hereunder. xi. Notice Any notice to the Property Owner or the City concerning the matters to which the Agreement relates may be given in writing by registered or certified mail addressed to the Property Owner or the City at the appropriate respective addresses set forth on the cover page of this Agreement. Any such notice in writing may be given in any other manner. If given by registered or certified mail, the notice shall be effective when mailed. With the exception of annual bills for payments due herein, notice given in any other manner shall be effective when received by the Property Owner or the City, as the case may be. XII. No Further EKMion of Taxing Jurisdiction Nothing herein contained shall be construed to change or enlarge the jurisdiction, power or authority of the City over or with respect to the affected area as prescribed by applicable law, except as specifically provided in this Agreement. The Property Owner shall not be obligated by virtue of this Agreement, or the establishment of the industrial district covering the affected area not within the corporate limits of the City, to make any payments to the City in the nature of a tax or assessment based upon the value of the Property Owner's property in the affected area during the term of this Agreement other than the payments specified herein. Specifically, the Property Owner shall not be liable for any City taxes within the affected area, including, without limitation, City ad valorem taxes on taxable property within the affected area XHI. Reimbursement for Services If the Property Owner requests and receives mutual aid firefighting assistance and is a member of Channel Industries Mutual Aid organization ( "CRAA') or similar organization, the Property Owner shall reimburse the City for costs incurred by the City in providing fire protection services to the Property Owner as shall be provided in the charter, bylaws and agreements pursuant to which CIMA or such similar organization is organized and operates. If the Property Owner requests and receives mutual aid firefighting assistance and is not a member of CIMA or a similar organization, then the Property Owner shall be required to reimburse the City for costs actually expended by the City in providing any firefighting assistance to the Property Owner, including chemical and personnel costs. XIV. Declaratory Judgment Action If any disagreement arises between the parties concerning the interpretation of this Agreement, it is agreed that either of the said parties may petition any Civil District Court of 0 Harris County, Texas, for a Declaratory Judgment determining said controversy and the cause shall be tried as other civil causes. If the controversy affects an Industrial District Payment, the Property Owner shall, pending final determination of said controversy, pay to the City on the due date the same amount which was paid to the City for the last preceding period as to which there was no controversy concerning the amount owed by the Property Owner to the City. The Property Owner agrees to tender any additional amount of potential liability to the registry of the Civil District Court, Harris County, Texas, pending final determination of the controversy beyond any further appeal. XV. Assignment This Agreement shall not bestow any rights upon any third party, but rather, shall bind and benefit the Property Owner and the City only. If the Property Owner conveys all or any part of the property then covered hereby, the Property Owner shall notify the City within 30 days of the conveyance and shall thereafter cease to be obligated with respect to the property so conveyed and the Base Year Value plus the Added Value shall be apportioned between the Property Owner and the grantee based upon the property conveyed, only if the grantee thereof enters into an Industrial District Agreement with the City with respect to such property so conveyed. No right or obligation under this Agreement may be sold, assigned or transferred. XVI. Authority The Property Owner covenants that it has the authority to enter into this Agreement by virtue of being either the legal or equitable owner of a possessory estate (including a leasehold estate) in the land comprising the affected area, which will not terminate before the expiration date of this Agreement. Additionally, the officers executing this Agreement on behalf of the parties hereby represent that such officers have full authority to execute this Agreement and to bind the party he represents. XVII. Rio Municipal Services It is agreed that during the term of this Agreement, the City is under no obligation to provide any governmental, proprietary or other municipal services to the affected area. Specifically, but without limitation, it is agreed that the City shall not be required to fiunish (1) sewer or water service, (2) police protection, (3) fire protection (4) road or street repairs, and (5) garbage pickup service. XVIII. Severability If any provision of this Agreement, or any covenant, obligation or agreement contained herein, including, without limitation, that term hereof, is determined by a court to be invalidated 10 or unenforceable, such provision, covenant, obligation or agreement shall be reformed so as to comply with applicable law. If it is not possible to so reform such provision, covenant, obligation or agreement, such determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. Provided, further that such invalidity or unenforceability shall not affect any valid and enforceable provision thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. Notwithstanding the above, if the application of this Section XVIR requires reformation or revision of any term that removes or materially diminishes the obligation of the Property Owner to make the payments to the City described herein (except in the event of a reformation that shortens the term of this Agreement), the City shall have the option to declare this Agreement terminated. XDL Com lei to Agr =ent This Agreement contains all the agreements of the parties relating to the subject matter hereof and is the full and final expression of the agreement between the parties. XX. Non-waiver Failure of either party hereto to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. M Ambiguities In the event of any ambiguity in any of the terns of this Agreement, it shall not be construed for or against any party hereto on the basis that such party did or did not author the same. XXII. Headina The headings appearing at the first of each numbered section in this Agreement are inserted and included solely for convenience and shall never be considered or given any effect in construing this Agreement or any provision hereof, or in connection with the duties, obligations or liabilities of the respective parties hereto or in ascertaining intent, if any question of intent should arise. 11 l XRL Choice of Law: Venug This Agreement shall in all respects be interpreted and construed in accordance with and governed by the laws of the State of Texas and the City, regardless of the place of its execution or performance. The place of making and the place of performance for all purposes shall be Baytown, Harris County, Texas. XXIV. Agreement Read The parties acknowledge that they have read, understand and intend to be bound by the terms and conditions of this Agreement. IN WITNESS WHEREOF, this Agreement is executed in multiple counterparts on behalf of the Property Owner this _LC,,b day of Sgne, BR . 2014, and on behalf of the City this day of 12014. ATTEST: ATTEST: LETICIA BRYSCH, City Clerk 12 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC By. �,," e.r Lam. A . Printed Name VIP Tp� x Title CITY OF BAYTOWN STEPHEN H. DONCARLOS, Mayor APPROVED AS TO FORM: IGNACIO RAMIRE7,, SR., City Attorney LOUISE RICHMAN. Finance Director P-Vw mwmy Ooaasa Mdw 13 EXHIBIT A Boundaries of Jordan Substation Real Estate Covered Under Industrial District Agreement NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. STATE OF TEXAS COUNTY OF CHAMBERS } SPECIAL WARRANTY DEED KNOW ALL PERSONS BY THESE PRESENTS' This Special Warranty Deed is dated thlsxay of August, 2012 (°Deed*). THAT, Patti K Kroll, herein called Grantor, whetfnerone ormore, for and In consideration of the sum of TEN DOLLARS ($10.00) CASH and othervaluable considerations to Grantor paid by CenterPolnt Energy Houston Electric, LLC, a Tw= limited liability company, herein called Grantee, whose principal address is P. 0. Box 1700, Houston, Texas 77261, the receipt of which Is hereby acknowledged, has GRANTED, SOLD AND CONVEYED and by these presents, does GRANT, SELL AND CONVEY unto said Grantee, and Grantee's su ors and assigns, all of the following described lands, to wit Those certain tracts containing 31.799 -acres of land and 8.186 -acres of land out of a 144.93 -acre tract in the Hannah Nash League, Abstract 20, in Chambers County, Texas, being further described on EXHIBITS "A" and "B," attached hereto and made part hereof (hereinafter the "Property*) This Deed and conveyance is made subject to all oil, gas and mineral reservations or conveyances of record In the office of the County Clerk of Chambers County, Texas, and Grantor, for itself. Its helm, successors and assigns hereby reserves all oil, gas and other minerals on, in or under, or that may be produced from the Properly herein granted; provided, however, that as to any mineral Interest to which title shell remain vested in Grantor by virtue of this reservation, Grantor hereby waives all rights to use the surface of the Property herein granted for the purpose of exploring for, developing or producing said minerals. This Deed and conveyance Is expressly made and accepted use Is" and' where is" with all faults and is subject to: (n all valid and subsisting restrictions, reservations, covenants, conditions, rights of way, easements, liens, and other encumbrances, If eny, now in foros and existing of record In the office of the County Clerk of Chambers County, Texas, to which reference Is here made for all purposes; and (i) those easements which, though not of record, are evidenced on the ground to the extent same pertain to the Property. If Grantee should elect to sell all or any portion the Property within bon (10) years of the date of this Deed, then Grantor shag have the right of first refusal to repurchase the Property for the same price Grantee paid to Grantor for same. A registered or certified letter addressed to Grantor atthe last brawn postal address shall constitute sufficient notice to the Grantor of Grantors option to exercise the right of first refusal to repurchase the Property. Grantor shall exercise its right of first refusal solely in writing by certified or registered letter to Grantee's address, CenterPolnt Energy Houston Electric, LLC, Attn: Surveying and Right of Way, P.O. Book 1700, Houston, Taxes, 77251 -1700. if Grantor falls to respond, in witting, at the above -named address, within ably (60) days following the date of mafiing of the aforesaid notice letter, then Grantor's right of first refusal shall automatically expire by ifs own terns. Taxes forthe current year have been prorated as ofthe date ofexecutim ofthis Instrument by Grantor and are assumed by Grantee. TO HAVE AND TO HOLD the above described Property, together with all and singular the rights and appurtenances thereto in anywise belonging, unto the said Grantee, Grantees sucoessors and assigns, foreverand Grentordoes hereby bind Grantor and Grantors successors, heirs, assigns and legal representatives, to warrant and forever defend all and singular the promises unto the said Grantee, Grantee's successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through or under Grantor, but not otherwise. ePNW WWM* nee* OW K R" Pape 1 of 2 Job No. 68295 11-2 Parcel Noe. csV-Wrr 6 060-00 EXCEPT FOR THE WARRANTY OF TITLE HEREIN, ALL WARRANTIES ARE EXPRESSLY DISCLAIMED BY GRANTOR. EXECUTED AND ACKNOWLEDGED this day of August, 2012. Patli K. Kroll, GRANTOR ACKNOWLEDGMENT STATE OF TEXAS COUNTY OF BEFORE ME, the undersigned authority, a Notary Public In and forthe State of Texas, on this day personally appeared Patti K. Kroll, known to me to be the person whose name is subscribed to the foregoing Special Warranty Deed and admowiedged to me that she executed the same for the purposes and consideration therein expreseed and In the capacity thereln stated. AFTER RECORDING RETURN TO: SURVEYING & RIGHT OF WAY CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC P.O. BOX 1700 HOUSTON, TX 77261 1700 ep-W Nl m* Dead 9Pa K Krd) Page 2 of 2 ). Notarys Signature c5v"Z1 9 /`!. (Name typed or printed) Commission Expires: ®L .3 Job NM SURVIi -2 Pamd Noa. CU74W A CUT-= Job 59283711 Map C -246/C -547 Parcel C547 -007 EXHIBIT "A" A 31.799 -acre tract or parcel of land out of the Hannah Nash League, Abstract 20, in Chambers County, Texas, being out of that certain 144.93 -acre tract described in a deed to Patti Kroll from Lillian Anne Keyser, dated September 13,1996, and filed of record in Clerk's File (96) 312110 of the Official Public Records of Chambers County, Texas, and being out of Share 1 -K as referenced In Cause Number F412 815 as recorded in volume 177, page 583 of the Deed Records of Chambers County, Texas and volume 16, page 220 in the Minutes of District Court of Harris County, for the 1271' Judicial District of Texas. All coordinates and bearings stated herein are referred to the Texas Coordinate System of 1983, South Central Zone, as defined in the Texas Natural Resources Code, Sec. 21.071, et. Seq. and are based on an RTK and conventional survey performed in December of 2011 and January of 2012. All distances recited are surface and may be converted to grid by multiplying by the scale factor 0.999903439. Said 31.799 -acre tract is described as follows: BEGINNING at a set %' iron rod wifh plastic cap marked'CENTERPOiNT ENERGY", on the east line of the said 144.93 -acre tract apd being on the north right -of way line of F.M. Highway 1942 also known as Crosby - Barbers Hill Road, being. 14 feet wide, and having coordinates X= 3259796.52, Y= 13880318.23, from which bears a found 1 -1/4' iron pipe at- N:•12015' 39' W., 1.39 feet; THENCE, S. 77' 2T 02" W., along the north right- of-way line of F.M. Highway 1942, a distance of 1605.30 feet to a call and found iron rod with aluminum cap marked'H.L. &P. Co." on the easterly One of a 340 feet wide CenterPoint Energy Company electric transmission easement as recorded In volume 307, page 311 of the Deed Records of Chambers County, Texas; THENCE, N. 35 °21' 13" W., departing the north right -of -way line of F.M. Highway 1942 and along the east line of the said 340 feet wide CenterPoint Energy Company easement, a distance of 54.68 feet to a set W iron rod with plastic cap marked 'CENTERPOINT ENERGY.* for a comer, AU* i8n1MOH W11JOWM8USWA1XW WMAMDSOURDSDUMOUM MREVSiMS17=WAMCMCWCW=tDM18UWAU*31.M ACR68.dae Job 59283711 Map 0-246/C -547 Parcel C547 -007 EXHIBIT "A" THENCE, N. 15' 23' 04" E., a distance of 1068.57 feet to a set W iron rod with plastic cap marked'CENTERPOINT ENERGY" to a point 65 feet south of the south line of a CenterPoint Energy Co. 65 feet wide Easement Assignment as recorded in volume 562, page 237, in the Deed Records of Chambers County; THENCE, N. 77016'22" E., along a line 65 feet south of and parallel to the south line of the said CenterPoint Energy Co. 65 feet wide Easement Assignment for a distance of 1130.95 feet to a set W iron rod with plastic cap marked "CENTERPOINT ENERGY" for comer, being on the east line of the said 144.93 acre tract from which bears a found 2 -1/2' iron pipe at N. 12° 15' 39" W., 130.00 feet; THENCE, S. 12' 15' WE., along the east line of the said 144.93 -acre tract and passing at 24.14 feet a point forthe southwest comer of the Edna Dunaway Tract 4 being called 4.387 - acres as recorded in County Clerks file (00) 443 189 of the Official Public Records of Chambers County, Texas, (1/2 interest) and County Clerks file (04) 683 167 of the Official Public Records of Chambers County, Texas (1/2 Interest), and the northwest comer of the Sidonie Ulrich Tract 1, called the residue of 32.979 -acres, as recorded In volume 242, page 441 of the Deed Records of Chambers Countyfrom which bears a found iron rod with plastic carp marked 'R.P.LS.#4890" at S. 77' 30'22"W., 2.11 feet, and passing at 488.76 feet the southwest corner of the said residue of 32.979 -acre tract, and the northwest comer of the Edna Dunaway Tract 3 called 13.473 -acre tract as recorded in Clerk's file (00) 443189 of the Official Public Records of Chambers County,(112 Interest) and County Clerk's file (04) 683 167 of the Official Public Records of Chambers County, Texas (1/2 Interest) from which bear; a found iron rod with plastic cap marked "R.P.L.S.#4980" at S. 77' 04'38'W., 0.92 feet, and continuing for a total distance of 998.00 feet to the POINT OF BEGINNING of the herein described tract and containing 31.799 -acres of land. Sketch 14 -E -06F was drawn in conjunction with this description. This description is based on a survey performed by CenterPoint Energy Houston Electric, LLC. .:........... . S. .L.S. 617-- A" FDstB120 IISM f11 JORDAN MWATIOWAMN AND BOUNDS bF3C1601f WMY M MMNS 6 tt 2012VAM& CW UV JORCAN SUWAMM M.M ACRUAG Job 59283714 Map C -246/C -547 Parcel C547 -008 EXHIBIT "B" A 8.168 -acre tract or parcel of land out of the Hannah Nash League, Abstract 20, in Chambers County, Texas, being out of that certain 144.93 -acre tract described in a deed to Patti Kroll from Lillian Anne Keyser, dated September 13, 1996, and filed of record In Clerk's File (96) 312110 of the Official Public Records of Chambers County, Texas, and being out of Share 1 -K as referenced In Cause Number F412 815 as recorded inyolume 177, page 583 of the Deed Records of Chambers County, Texas and volume 16, page 220 in the Minutes of District Court of Hams County, for the 1271i Judicial District of Texas. All coordinates and bearings stated herein are referred to the Texas Coordinate System of 1983, South Central Zone, as defined In the Texas Natural Resources Code, Sea 21.071, et. Seq. and are based on an RTK and conventional surrey performed in December of 2011 and January of 2012. All distances recited are surface and may be converted to grid by multiplying by the scale factor 0.999903439. Said 8.168 -acre tract is described asfollows: COMMENCING at a set W iron rod with plastic cap marked "CENTERPOINT ENERGY, on the east line of the said 144.93 -acre tract and being on the north right -of -way line of F.M. Highway 1942 also known as Crosby - Barbers Hill Road, being 120 feet wide, and having coordinates X= 3259796.52, Y =13880318.23, from which bears a found 1 -114' iron pipe at N. 12' 15' 39' W., 1.39 feet; THENCE, S. 77' 2T 02" W., along the north right- of-way line of F.M. Highway 1942, a distance of 1605.30 feet to a call and found iron rod with aluminum cap marked "H.L.&P. Co.' on the easterly line of a 340 feet wide CenterPoint Energy Company electric transmission easement as rocorded in volume 307, page 311 of the Deed Records of Chambers County, Texas; THENCE, N. 35"21'13" W., departing the north right -of -way line of F.M. Highway 1942 and along the easterly line of the said 340 feet wide CenterPolnt Energy Company easement, a distance of 138.64 feet to a set W Iron rod with plastic cap marked 'CENTERPOINT ENERGY' for the POINT OF BEGINNING of the herein described tract, &JOPhMMIMMI M=TAT=&jw ACFAMAG Job 59283711 Map C -246/C -547 Parcel C547 -008 EXHIBIT "B" e THENCE, N. 35 "21' 13" W., a distance of 937.13 feet to a set'/" iron rod with plastic cap I marked "CENTERPOINT ENERGY", for a oomerand being 65 feet south of the south line of i a CenterPolnt Energy Co. 65 feet wide Easement Assignment as recorded in volume 562, page 237, in the Deed Reoordb of Chambers County; THENCE, N. 77" 16'22" E., along a line 65 feet south of and parallel to the said 65 feet wide s easement assignment, a distance of 822.64 feet to a set 3/4" iron rod with plastic cap marked "CENTERPOINT ENERGY" for a comer, THENCE, S. 15" 23' 04" W., distance of 986.71'feet to the POINT OF BEGINNING of the i herein described tract and containing 8.168 -acres of land. i Sketch 14 -E -06F was drawn in conjunction with this description. 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