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Ordinance No. 5,511900405 -4 ORDINANCE NO. 5511 AN ORDINANCE THE CITY i. TEXAS, ACCEPTING THE BID OF MANLEY & WIGGINS FOR AN OIL D LEASE; AUTHORIZING AND AND CLERK THE CITY OF AND ATTEST TO SUCH OIL AND GAS AGREEMENT; PROVIDING FOR , WHEREAS, the City Council of the City of Baytown did authorize the Purchasing Department for the City of Baytown to advertise for bids for an oil and gas lease to be received March 27, 190; and WHEREAS, notice to bidders as to the time and place, when and where the contract would be let was pursuant provisions of TEX.NAT.RESOURCES CODE ch. 71; and Section 1: That the City Council of the City of Baytown hereby accepts the bid of anley & Wiggins for an rail and gas lease having determined that their bid represents the fair value of the lease® EMMETT 0® HUPT , Mayor STATE OF TEXAS 5 5 OIL AND GAS LEASE COUNTY OF HARRIS § This Oil and Gas Lease made this day of , 1990, between the CITY OF BAYTOWN, TEXAS, acting herein through its Mayor, hereunto duly authorized, whose address is P. 0. Box 424, Baytown, Texas, 77522 -0424, as Lessor, and MANLEY AND WIGGINS as Lessee, whose address is 3915 Essex Lane #203, Houston, Texas 77027. W I T N E S S E T H: 1. Estate Granted. Lessor, in consideration of TEN DOLLARS ($10) and other good and valuable consideration in hand paid, of the royalties herein provided, and of the covenants and agreements hereinafter contained on the part of the Lessee to be kept and performed, hereby GRANTS, LEASES and LETS exclusively unto said Lessee, its successors and assigns, for the sole and only purpose of investigating, exploring, prospecting, drilling and operating for, developing, producing, removing and marketing oil and gas (for the purposes of this lease, references to "oil and gas" shall include oil, gas, casinghead gas and the by- products thereof, and such other hydrocarbon substances and sulphur as are produced with, incidental to and as a part of the production of oil or gas only, any other minerals being specifically excluded from this lease), to produce, save, take care of, treat, store and transport and own said products, the lands in Harris County, Texas, described in Exhibit "A" which is attached hereto and made a part hereof for all purposes, which lands are sometimes referred to herein as the "leased premises." For the purpose of calculating certain payments hereinafter provided for, said land is estimated to comprise 50.934 acres, whether it actually comprises more or less. 2. Primary Term. Subject to the other terms and provisions herein contained, this lease shall be for a term of five (5) years from this date (called "primary term "), and as long thereafter as oil or gas is produced in paying quantities from the leased premises or so long as this lease may be continued in force and effect under the other terms and provisions hereof. 3. Royalties. As used in this paragraph 3, the "royalty share" means twenty per cent (20 %). Lessor reserves, and Lessee covenants and agrees for Lessee, its heirs, successors and assigns: A. To deliver to Lessor, or at Lessor's option to deliver to the credit of Lessor to the pipeline to which Lessee may connect its wells the royalty share of all oil (which term shall include all condensate and other • liquid hydrocarbons which are or can be extracted or removed from oil or gas by any extraction methods • provided for herein) produced and saved by Lessee from said land, or from time to time, at the option of Lessee, to purchase such oil and to pay Lessor therefor the highest posted market price for oil of similar kind and quality prevailing in the field where produced on the day of purchase, the royalty share in either case to bear no part of the cost of treating oil to render it marketable pipeline oil. Lessor's royalty share will bear no cost of any kind other than production taxes, if any. B. To pay Lessor on gas and casinghead gas, or other gaseous substance, produced from said land, and sold or used off the premises (and not processed as hereinafter provided), the royalty share of the market value at the well of the gas so sold or used. If such gas shall be processed in an extraction, absorption or similar plant for the extraction of liquid hydrocarbons, Lessee shall pay to Lessor the royalty share of the market value of all gasoline and other products extracted from such gas or casinghead gas together with the royalty share of the market value of the residue gas. For purposes hereof, the term "market value" shall mean the price being paid for Lessee's share of the gas at the time such gas is produced by a gas pipeline purchaser which is unaffiliated by ownership or common control with the Lessee. Unless Lessor or Lessor's representative consent to any such gas purchase contract, which has in fact been arrived at through good faith, arm's - length negotiations, then Lessor shall be deemed to have elected to take the royalty share of gas in kind for the term of such contract. Should Lessor elect to take its royalty gas in kind, then Lessor and Lessee agree that the royalty share of such gas shall be delivered to Lessor at a single point on Lessee's gathering line on the leased premises designated by Lessor. Lessor shall install and maintain, at its sole cost and expense, the necessary pipelines, connections, valves, meters and other facilities for the delivery of said royalty gas to Lessor, at the designated delivery point. Lessor shall assume full responsibility for handling and using said royalty gas from said delivery point. C. To deliver to Lessor, or at Lessor's option, to sell for Lessor's account and account to Lessor for, the royalty share of such other mineral substances or the market value thereof, as may be produced incidental to and as a part of or mixed with oil, gas and other gaseous or liquid hydrocarbons. The royalties retained by Lessor shall be free and • clear of any and all costs and charges whatsoever, including but not limited to, costs of development, production, dehydration, compression and transportation - 2 - • and other similar and related costs and transportation surcharges. All gross production, windfall profits and severance taxes assessed against the royalties retained by Lessor shall be paid by Lessor. All other taxes, except ad valorem taxes assessed against Lessor's retained royalty, if any, shall be paid by Lessee. 4. Shut -in Rovalties. If Lessee drills a well on land covered by this lease or on land pooled therewith, which well is capable of producing oil or gas but such well is not being produced and this lease is not being maintained otherwise as provided herein, this lease shall not terminate, whether it be during or after the primary term (unless released by Lessee) and it shall nevertheless be considered that oil or gas is being produced from the land covered by this lease. When the lease is continued in force in this manner, Lessee shall pay or tender as royalty to the Lessor who at the time of such payment would be entitled to receive royalty hereunder if the well were producing or deposit to their credit in the depository bank as hereinafter provided a sum equal to 1 /12th of the amount equal to Five Hundred and No /100 ($500.00) per acre of land covered by this lease per year for each calendar month, or portion thereoft thereafter during which said well is situated on said land, or on land pooled therewith, and this lease is not otherwise maintained, or this lease is not released by Lessee as to the land on which or the horizon, zone or formation in which the Well is completed. The first payment of such sum shall be made on or before the first day of the calendar month after expiration of ninety (90) days from the date the lease is not otherwise maintained for all accruals to such date, and thereafter on or before the first day of each third calendar month for all accruals to each such date. Lessee's failure to pay or tender or to properly or timely pay or tender any such sum as royalty shall render Lessee liable for the amount due but it shall not operate to terminate this lease. Each such payment or tender shall be made to the parties who at the time of payment would be entitled to received the royalties which would be paid under this lease if the wells were producing, and may be deposited in the Baytown State Bank at Baytown, Texas, or its successors, which shall continue as depositories, regardless of changes in the ownership of shut -in royalty. If any time that Lessee pays or tenders shut -in royalty, two or more parties are, or claim to be, entitled to receive same, Lessee may, in lieu of any other method of payment herein provided, pay or tender such shut -in royalty, in the manner above specified, either jointly to such parties or separately to each in accordance with their respective ownerships thereof, as Lessee may elect. Any payment hereunder may be made by check or draft of Lessee deposited in the mail or delivered to the party entitled to receive payment or to a depository bank • provided for above on or before the last date for payment. In the event of assignment of this lease in whole or in part, - 3 - • liability for payment hereunder shall rest exclusively on the then owners of this lease, severally as to acreage owned by each. Notwithstanding the payment of such shut -in gas or oil well royalty, Lessee shall be and remain under the continuing obligation to use all reasonable efforts (a) to find a suitable market for said gas, and to commence or resume marketing same when a suitable market is available, and (b) to drill such wells thereon as may be necessary to protect the same from drainage by wells on adjoining or nearby land as provided in Section 17 hereof. 5. Partial Releases. Lessee may at any time or times execute and deliver or place of record a release or releases covering any portion or portions of the above described premises and thereby surrender this lease as to such portion or portions and be relieved of all obligations except prior obligations and obligations for surface damages as to the acreage surrendered, and thereafter any payments dependent on the number of acres then subject to this lease shall be reduced in proportion that the acreage covered hereby is reduced by said release or releases. 6. Operations Conducted After Expiration of Term. If at the expiration of the primary term oil or gas is not being produced in paying quantities from the lands covered by this lease or lands pooled therewith, but Lessee is then engaged in operations for drilling or completing any well thereon, this lease shall, nevertheless, remain in force so long as Lessee conducts such operations with no cessation of more than ninety (90) days between completion of one drilling operation and the commencement of the next drilling operation and, if production of oil or gas in paying quantities is obtained, then this lease shall remain in force so long as such production continues in paying quantities in accordance with the terms hereof. Provided further, if any production of oil or gas in paying quantities has been obtained in any well drilled by Lessee, and such production should cease from any cause, this lease shall not terminate if Lessee commences additional drilling or reworking operations within ninety (90) days following such cessation and thereafter diligently prosecutes drilling or reworking operations upon said land with no cessation of more than ninety (90) consecutive days, and if such activity results in the production of oil or gas in paying quantities, then this lease shall continue in force for the duration of such production in accordance with the terms hereof. "Operations for drilling" or "drilling operations" shall mean the actual process of drilling a well in search of oil and /or gas with adequate tools. 7. Use of Surface Restricted; Surface Damages and Restoration. (a) No surface operation shall be conducted on the leased premises except at a location approved in writing by the • City. Such approval of a drilling location shall not be unreasonably withheld. In addition, the following provision shall govern Lessee's use of the surface: - 4 - • (1) Lessee agrees to hold, save and protect Lessor safe and harmless of and from any and all claims that may arise directly or indirectly from its operations on the leased premises, including, but not limited to claims for personal injury or death, property damage or loss, fires, blowouts, leaks, spills, pollutants, contamination and explosions and other causes. Lessee agrees to keep and maintain in force adequate casualty, liability and property damage insurance against all risk and all hazards with coverage in the amounts specified in Exhibit "B" attached hereto, and to name Lessor as an additional insured thereon and to provide written proof of such coverage at Lessor's request. (2) Lessee shall pay to Lessor reasonable compensation for all damages caused by its operations to the surface, roads, trees, landscaping, fences, sidewalks, subsurface fresh water strata, driveways, buildings, playground equipment, utility interruptions, parklands, drainage watersheds, shrubbery, parking areas, curbs and gutters or any other property or improvement of Lessor. a. In the event Lessee uses any of Lessor's roadways, parking areas, bridges or improvements for access to any drillsite, whether such drillsite is located on the lease premises or otherwise, then and in such event, Lessee shall, prior to such use, post a bond in an amount to be set and established by the Lessor and which bond shall be issued and signed by a corporate surety approved by Lessor to indemnify and protect Lessor from any damage of any kind to or destruction of any of Lessor's paved roadway, parking area, curb or gutter, bridges, or drainage or utility facilities. The bond amount shall be adequate to insure repair of any such damages, but shall not exceed that required by Chapter 20 of the Code of Ordinances of the City of Baytown as it may from time to time be amended. b. In addition to and not in substitution of the damages provided from herein, and as additional consideration for this lease, Lessee agrees to pay to Lessor the sum of $10,000 per surface acre for each acre used by Lessee for its operations hereunder. Prior to the commencement of each drilling operation, Lessee shall cause the drillsite, including access roads, to be surveyed and a plat thereof made, and furnish the survey • plat to Lessor a minimum of ten (10) days prior to the commencement of such operations. Payment of said sum by Lessee's check shall be made - 5 - • contemporaneously with the delivery of the survey plat. The advanced surface damage payment called for herein shall be computed by multiplying the total number of square feet in the drillsite and access roads times .22555$5. (3) Lessee agrees that it shall permit Lessor, its agents, attorneys and representatives (at their sole risk and expense) access to the drillsites to inspect the facilities and insure compliance herewith and with the terms of this lease and of the Code of Ordinances of the City of Baytown as it is now or may hereafter be constituted. (4) During operations (whether drilling, completion or workover) and thereafter, Lessee shall: a. Fully abide in all respects with the Code of Ordinances of the City of Baytown as it is now or may hereafter be constituted. b. Operate and power any well by electric motors and lubricate and insulate in a manner to reduce and maintain any noise to a reasonable standard. C. Take necessary steps to keep dust to a minimum. d. Restrict all agents, contractors, employees and representatives to the immediate area of the drill site and advise all of such employees to park and congregate in such restricted area. e. Keep the drillsite and immediate area free of trash and debris. f. Confine the drillsite to the smallest possible area. g. Restore the surface to a clean and even condition, remove all boards and building materials, scrap or waste products and /or chemicals, oil, drilling mud, cement or other materials, to provide a suitable, non -toxic and non - hazardous condition, including removal and replacement of the surface if necessary. h. Employ portable tanks rather than pits for the retention or storage of drilling fluids, salt water, chemicals and the like. i. Prevent the overflow or spillage of oil, salt water • or chemicals on the surface of the premises so that vegetation can grow. . j. Take steps in restoring the surface to provide for adequate drainage. k. Take such steps as may be necessary to prevent salt water, waste materials, chemicals, acid or oil from running or flowing on or across the premises or into creeks, gullies, ditches or ravines that flow across or on the premises, whether by overflow or watershed caused by rain. 1. Use best efforts to prevent agents, contractors, representatives or employees from carrying firearms, alcohol or drugs onto the premises. M. Pay a penalty of $250.00 per day for each day in which cleanup and restoration work called for herein is not completed within thirty (30) days after the workover or completion rig is released. n. Flare no gas except for such limited periods of time as reasonably necessary for testing purposes. o. Keep all areas free of trash and debris and keep trash barrels, if any, emptied and of neat appearance. P. Maintain the locations and wells in a sightly manner with clean stone, gravel or shell, fences and appropriate landscaping. q. Prevent at all times damage to or destruction of any decorative or hardwood trees or outside the drillsite. (b) Nothing in this section shall prevent Lessee from drilling to or through the subsurface of the leased premises by directional techniques. 8. Removal of Property!. Except as provided herein, Lessee shall have the right at any time during or within ninety (90) days after the expiration of this lease to remove all property and fixtures placed by Lessee on said land, excluding the right to draw and remove all casing unless specifically authorized in writing by Lessor. Lessee will bury all pipe lines at least 36 inches below the surface, and no well shall be drilled within two hundred (200) feet of any building now on said land without Lessor's consent. 9. Assignability. The rights of either party hereunder may be assigned, transferred or farmed out in whole or in part. No change or division in ownership of the land, rentals or royalties, however accomplished, shall operate to enlarge the obligations or diminish the rights of Lessee, and no change or division in such ownership shall be binding on Lessee until 7 - thirty (30) days after Lessee shall have been furnished by • certified United States Mail at Lessee's principal place of business with a certified copy of the recorded instrument or instruments evidencing same. Except as provided in the next sentence to the contrary, the rights of the Lessee hereunder may not be assigned in whole or in part without the express written consent of the Lessor hereunder, which consent shall not be unreasonably withheld. Lessee shall have the right to make assignments to its working interest partners without the prior written consent of the Lessor so long as only Lessee is the operator of the wells. Such assignment shall not be effective unless the assignee or assignees thereunder first agree in writing to be bound by the terms and provisions of this lease. In the event this lease shall be owned in whole or in part or in undivided interests by more than four persons or entities, all persons or entities owning working interests hereby agree and designate the registered agent of Lessee as their registered agent for service of process and as their attorney -in -fact for the purposes of executing any release of this Oil and Gas Lease. In the event of assignment hereof in whole or in part, liability for breach of any obligation hereunder shall rest upon the Lessee hereunder as well as any assignees of said lease jointly and severally; provided, however, that Lessee or any assignee of Lessee who is not an owner of a working interest in said lease at the time of such breach shall no longer be liable to Lessor for any such breach if Lessor shall have consented in writing to such assignment. Lessor shall have the right to assure itself of the financial responsibility of any proposed Assignee (except as provided in the second sentence of this Paragraph) and Lessor may require any such proposed Assignee to furnish a bond or other security to ensure its performance hereunder. 10. Covenant to Reasonably Develop. After the discovery of oil or gas in paying quantities on said premises, Lessee shall develop the leased premises as would a reasonably prudent operator under the same or similar circumstances. 11. Force Maleure. All express or implied covenants of this lease shall be subject to all Federal and State laws, Executive Orders, Rules or Regulations, and this lease shall not be terminated in whole or in part, nor Lessee held liable in damages for failure to comply therewith, if compliance is prevented by, or failure is the result of, any such valid Law, Order, Rule or Regulation, or if prevented by an Act of God or of the public enemy. If oil or gas is discovered but production or further operations are prevented by any of the causes enumerated in this Paragraph 11, this lease shall be considered producing and shall continue in full force and effect until Lessee is permitted to produce the oil or gas, and as long thereafter as oil or gas actually is produced in paying quantities as herein provided. • Lessee agrees to use its best efforts to cure the cause of any delay so as to commence or recommence operations or production as • soon as practicable and to promptly inform Lessor as to causes of delay and efforts to cure same. 12. No Warranty of Title. Lessor believes that it is the owner of the mineral estate covered by this lease, but it makes no warranty of title to the Lessee. Lessee agrees to give to Lessor a copy of its title opinion as to the ownership of the mineral estate covered by this lease. It is agreed, however, that if Lessor owns or controls a mineral interest in the leased premises less than the entire fee simple estate, then the royalties and other monies to be paid to Lessor shall be reduced proportionately. 13. Notices. Any and all notices, reports or information required or permitted to be given hereunder shall be deemed to have been delivered and received when delivered in person to the party directed, or five (5) days after being deposited in the United States mail, postage prepaid, certified with return receipt requested, addressed to Lessor or Lessee at their respective addresses stated above. The parties may change their respective addresses for receiving notices hereunder by giving notice of such change in the manner above provided. 14. Use of Water. Lessee shall have free use of water from said land, except water from Lessor's wells, reservoirs, and tanks for drilling operations hereunder. Lessee shall not drill or operate water wells or take water in such way as to injure the water wells of Lessor or interfere with or restrict the supply of water to Lessor. Lessee shall not use fresh or potable water for secondary recovery or waterflood operations. in drilling oil or gas wells, Lessee shall advise Lessor of any fresh water bearing formations encountered and shall upon request furnish Lessor any and all logs made by Lessee from the surface of the ground to the bottom of the surface casing. Upon abandonment of any well drilled for oil or gas, Lessee shall offer to turn it over to Lessor, with the hole in suitable condition to be completed as a water well in a fresh water formation. Lessor shall have thirty (30) days after receipt of such offer in which to elect to take over such well, unless a drilling rig is on location, in which case, the period shall be shortened to twenty--four (24) hours. It is understood if Lessor takes over the well and pipe, Lessor will assume all future responsibility for the well above the plugs which shall be set by Lessee at all depths below the deepest fresh water sand. 15. Pooling and unitization. Lessee is hereby granted the right to pool or unitize, as to any one or more formations, the land covered by this lease or any part thereof with any other land, lease, leases, mineral estates or parts thereof for the production of oil, gas and other minerals and their respective constituent products. Units pooled for oil hereunder shall not exceed forty (40) acres each in area and gas units shall not exceed three hundred twenty (320) acres each in area, each plus a tolerance of ten percent (10 %), provided that if any federal or 0 state law, executive order, rule or regulation shall prescribe a spacing pattern for the development of the field or allocate a producing allowable on acreage per well, then any such units may embrace as much additional acreage as may be so prescribed or as may be used in such allocation or allowable. Lessee shall file written unit designations in the county in which the premises are located. Such units may be designated either before or after the completion of wells, and Lessee may reduce, enlarge, reform, modify or dissolve such units at any time prior to the discovery Of oil or gas on the pooled acreage, or after discovery of oil or gas at any time subsequent to the cessation of production thereof by filing a written declaration to such effect in the same county. A unit shall be effective on the date set forth in said declaration or if said declaration provides no effective date, then it shall be effective upon filing of the declaration. Drilling operations on or production from any part of the pooled acreage shall be treated as if such drilling operations were upon or such production was from the land described in this lease whether or not the well or wells are located on the leased premises. The entire lease acreage shall be treated for all purposes, except the payment of royalties on production from the pooled unit, as if it were included in such unit. In lieu of the royalties herein provided, Lessor shall receive on production from a unit so pooled only such portion of the royalty stipulated herein as the amount of Lessor's acreage placed in the unit or Lessor's royalty interest therein on an acreage basis bears to the total acreage pooled in the particular unit involved. Formation of one or more units shall not exhaust Lessee's right to form additional units, and any subsequently formed units need not conform in size, shape, area or stratum with other units. Notwithstanding any provisions hereof to the contrary, if a part of the leased premises is included within a pool or proration unit, drilling operations or production from the unitized premises shall maintain this lease only as to that portion of the leased premises within such pool or unit, regardless of whether such unit is located totally within the acreage covered by this lease or not. As to that portion of the leased premises not included in a unit after expiration of the primary term this lease may be maintained only by production or by operation of other provisions herein which pertain to reworking operations, drilling operations or additional drilling operations. Within sixty (60) days after the expiration of the primary term, Lessee agrees to release in recordable form all acreage not held by production in paying quantities or by operations as elsewhere herein provided. In the event a gas unit is formed hereunder such unit shall include all of the leased premises, and in the event an oil unit is formed hereunder such unit shall include at least one--half of the leased premises. - 10 - • 16. Compliance With Regulatory Authorities. The Lessee agrees that it is bound by the rules of both the Texas Railroad Commission and the City of Baytown as they may apply. 17. Offset Obligation. Should a well producing oil and /or gas in paying quantities be completed within 200 feet of the leased premises, or at any distance within 200 feet of the leased premises, or at any distance from the leased premises which is capable of draining oil or gas from the leased premises, and should such production continue for at least three (3) months, Lessor may, at its sole discretion, elect to require Lessee to drill an offset well on the leased premises to prevent or minimize drainage of oil or gas from the leased premises. The location of such offset well shall be designated by Lessor, but must be as close as possible to the point on the premises nearest the well to be offset which is reasonably suitable for drilling purposes. If Lessor elects not to require the drilling of an offset well, Lessee will have no liability to Lessor for drainage of oil or gas from the premises. The obligation to drill offset well shall not apply where (i) the well to be offset is separated from the leased premises by a well, producing from the same horizon, from which Lessor is receiving royalties or (ii) there is already on the leased premises a well within 200 feet of the outside boundary thereof which is producing from the same horizon. In the event Lessee shall fail to timely commence operations for the drilling of any required offset well, then and in such event, Lessee shall promptly file of record in the Official Public Records of Real Property of Harris County a full release of this lease except as to those areas which are included within units created under the provisions hereof on which there is production or operations, and except for two acres around each well located on the leased premises which is not pooled with other land. 18. Lessor's Representative. Lessor hereby designates the City Manager of the City of Baytown as its agent for purposes of receiving all notices provided for herein. Wherever in this lease consent, authorization or approval of the Lessor is required or permitted, such consent, authorization or approval may be granted by the City Manager. The City Manager, may, at his discretion, refer any such matter to the City Council for such consent, authorization or approval. EXECUTED IN DUPLICATE as of the date first above written. ATTEST: LESSOR: CITY OF BAYTOWN, TEXAS • By: EILEEN HALL, City Clerk EMMETT 0. HUTTO, Mayor - 11 - 0 LESSEE: MANLEY & WIGGINS ROBERT M. WIGGINS, Partner THE STATE OF TEXAS COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared EMMETT 0. HUTTO, Mayor, of the City of Baytown, Texas, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of , 1990. (NOTARY SEAL) NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS THE STATE OF TEXAS 5 5 COUNTY OF HARRIS 5 BEFORE ME, the undersigned authority, on this day personally appeared ROBERT M. WIGGINS, individually and as partner composing the firm of MANLEY & WIGGINS, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity herein stated. Given under my hand and seal of office this day of , 19 (NOTARY SEAL) 5:5:17:14 NOTARY PUBLIC IN AND FOR THE STATE OF T E X A S - 12 - TRACT I BEING a parcel or tract of land out of the Christian Smith Survey, Barris County, Texas, and being that certain 9.704 acre tract of land conveyed to the City of Baytown by deed recorded at FC 140 -73 -1124 of the Deed Records of Harris County, Texas, and being more particularly described by metes and bounds as follows: BEGINNING at the Northeast corner of Cedar Crest Cemetery, said point being located in the South line of a tract of land owned by the City of Baytown, said POINT OF BEGINNING being marked by a 3/4" iron pipe and a fence corner; THENCE, South 0 049041" West with the East line of Cedar Crest Cemetery, as marked by a fence, a distance of 547.05 feet to a 3/40 iron pipe marking an intra corner of the herein described tract and the most Easterly Southeast corner of Cedar Crest Cemetery; THENCE, North 89 907108" West with a South line of Cedar Crest Cemetery, a distance of 162.86 feet to a 1" iron pipe marking an intra corner of said cemetery; THENCE, South 34 022137' West with an East line of said cemetery, a distance of 139.53 feet to an old buggy spring marking the Northeast corner of a one acre tract of land, owned, or formerly owned by T. E. Abernathy; THENCE, South 82 00'18' East with the North line of the Abernathy tract, a distance of 337.15 feet to the Northeast corner of said Abernathy tract; THENCE? South 47 025114" West with the East line of the said Abernathy tract a distance of 164.18 feet to the Southeast corner of said tract, said point being located in the North line of the Cedar Bayou Methodist Church property; THENCE, South 49 019153' East with the North line of the Cedar Bayou Methodist Church property, a distance of 276.00 feet to the West bank of Cedar Bayou Stream; EXHIBIT A • THENCE, Northeasterly with the meanders of the West bank of Cedar Bayou Stream as follows: North 38 019145" North 35 015103" North 59 °40116' North 53 016135" North 50 059133" North 57 026132" North 61 019158" North 73 115120" East East East East East East East East 12.10 feet 78.59 feet 79.13 feet 99.57 feet 57.41 feet 110.53 feet 103.06 feet 191.39 feet to the Southeast corner of the City of Baytown tract, said point marked by a fence post. THENCE, North 54 013141" West with a South line of the City of Baytown tract a distance of 431.46 feet to a 3/4" iron pipe marking an angle point in said South line; THENCE, North 75 026127" West with a South line of the City of Baytown tract, a distance of 142.93 feet to a 2" iron pipe marking an intra Southwest corner of the City of Baytown tract; THENCE, North 4 012'46" East with City of Baytown tract a distance 1/2 inch iron rod marking an City of Baytown tract; a West line of the of 237.14 feet to a intra corner of the THENCE, North 72 026' West with a South line of the City of Baytown tract, a distance of 329.63 feet to the POINT OF BEGINNING, enclosing a tract of land containing 9.704 acres, more or less. EXHIBIT A TRACT II . BEING a parcel of land, out of the Christian Smith Survey, Abstract No. 69, Harris County, Texas, and said parcel of land being all of that certain tract described in Deed of Record in Volume 2692, Page 647 of the Deed Records of Harris County, Texas, SAVE AND EXCEPT a tract of one acre, more or less, conveyed heretofore by Charles Laird, Et Ux to L. D. Oliver and recorded in Volume 3607, Page 471 of the Deed Records of Harris County, Texas, and said parcel of land being described by metes and bounds as follows: BEGINNING on the Easterly right -of -way of Old Cedar Bayou Road, sometimes called Ilfrey Road, said point of beginning being at the Northwest corner of Schillings 1.1 acres, and 1.1 acres now a part of Cedar Crest Cemetery; THENCE with the Easterly right -of --way of Old Bayou Road, North 35 degrees 14 minutes 41 seconds East, a distance of 55.59 feet to a 3/4" iron pipe, for corner; THENCE North 82 degrees 54 minutes 28 seconds East, and along an old fence row, a distance of 275.76 feet to corner, a 3/4" iron pipe, and said corner situated in the Westerly line of Oliver 1 acre tract; THENCE with the West line of Oliver 1 acre tract, South 11 degrees 50 minutes 09 seconds West, a distance of 96.91 East to corner, said corner described as situated 50 feet perpendicular from the Northerly line of Cedar Crest Cemetery tract; THENCE South 76 degrees 55 minutes 53 seconds East, said call parallel to the North line of Cedar Crest Cemetery tract, but perpendicular 50 feet distant therefrom, a distance of 108.97 feet to corner, said corner being at the Southeast of Oliver 1 acre tract; THENCE with the East line of Oliver 1 acre tract, North 11 degrees 50 minutes 09 seconds East, a distance of 423.29 feet to corner, said corner being the Northeast corner of Oliver 1 acre tract, and said corner situated in the south line of Donnelly Estate tract; THENCE with the Southerly line of Donnelly Estate tract, and along the fence thereof, South 74 degrees 23 minutes 33 seconds East 375.18 feet to turn in said South line of Donnelly tract; THENCE continuing thereon along the Southerly line of Donnelly tract, South 63 degrees 15 minutes 42 seconds East a distance of 297.86 feet to corner, being a turn in the South line of Donnelly tract; EXHI A THENCE with degrees 20 81 degrees corner, sa l ine /bank of the South line of Donnelly Estate North 82 minutes 40 seconds East 569.95 feet, North 04 minutes 20 seconds East 709.06 feet to id corner situated in the West shore Cedar Bayou Stream; THENCE with the Westerly and Northerly bank of Cedar Bayou Stream South 07 degrees 14 minutes 08 seconds East 737.14 feet, South 14 degrees 47 minutes 27 seconds West 361.85 feet, South 55 degrees 08 minutes 34 seconds West 193.40 feet; South 85 degrees 57 minutes 11 seconds, West 192.50 feet, North 75 degrees 40 minutes 49 seconds West 584.83 feet, South 87 degrees 46 minutes 02 seconds West 250.24 feet to corner, said corner situated East of the point of confluence of a county drainage ditch with the North shore of Cedar Bayou; THENCE North 53 degrees 38 minutes 23 seconds West, a distance 441.41 feet said call being along the Northeasterly line of Schillings tract, and said call being along the Northeasterly right -of -way of county drainage ditch; THENCE North 75 degrees 14 minutes 47 seconds West, and along North line of Schillings tract crossing over aforesaid drainage ditch, a distance of 143.16 feet to a 2" iron pipe at the Southeast corner of Dr. W. Schillings 6.3 acre tract; THENCE North 03 degrees 03 minutes 28 seconds East, 252.85 feet to corner; THENCE North 72 degrees 25 minutes 41 seconds West, and along an old fence row, 329.18 feet to corner, a 3/4" iron pipe, and being at a fence corner, and being a corner of Cedar Crest Cemetery; THENCE along the North line of Cedar Crest Cemetery, North 76 degrees 55 minutes 53 seconds West, 421.25 feet to the POINT OF BEGINNING, and containing within these metes and bounds 41.23 acres of land, more or less. S:5:17 :9 0 EXH181 f A EXHIBIT "B" 0 INSURANCE Lessee shall obtain and at all times while operations are being carried on hereunder maintain in effect insurance policies as to the following risks: (a) Workmen's Compensation and Employer's Liability Insurance to fully comply with the laws of the State of Texas and to cover all employees working on the leased premises or leases or in connection therewith. (b) General Liability (Bodily Injury) Insurance with limits of not less than $500,000 for each occurrence; and General Liability (Property Damage) Insurance with limits of $100,000 for each occurrence. (c) Automobile Public Liability Insurance covering all automotive equipment used hereunder with limits of not less than $250,000 for Bodily Injury for each person and $500,000 Bodily Injury for each occurrence and $100,000 for Property Damage. (d) Excess Liability (Umbrella Coverage) of not less than $10,000,000. (e) OEE /Well Control of not less than $5,000,000.