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Ordinance No. 14,500ORDINANCE NO. 14,500 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 LONE STAR NGL ASSET HOLDINGS II, LLC, FOR FRAC NO. 8; 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 Lone Star NGL Asset Holdings II, LLC, for Frac No. 8. 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 affirmative vote of the City Council of the City of Baytown, this the I oth day of September, 2020. NDON CAPETILLO, Mayor AT41CIABRYSCH, LE Clerk APPROVED AS TO FORM: KA EN L. HORNER, Interim City Attorney R: Karen Horner Documents Files City Council Ordinances 2020 September 10 1DAwithLone Star NGL Asset Holdings 11, LLC, for Frac No. 8.docx 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 Lone Star NGL Asset Holdings II, LLC, a Delaware limited liability company, 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: Lone Star NGL Asset Holdings II, Lone Star NGL Asset Holdings I LLC c o KE Andrews 800 E. Sonterra Blvd, Suite 400 1900 Dalrock Road San Antonio, Texas 78258-3941 Rowlett, TX 77588 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 2020 through 2026, 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. This Agreement supersedes any prior existing agreements between the Property Owner and the City relating to the subject matter specific to the term hereof. 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 Iimited 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 3151 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 agreed to and stipulated by the parties to be as follows for each year indicated: 2020 $35,000,000.00 2021 $100 000,000.00 2022 $250,000 000.00 2 (2) 2023 $250 000,000.00 2024 $250,000,000.00 2a25 $250,000 000.00 2026 $250 000 000.00 hereinafter referred to as the "Base Value," multiplied by the property tax Council for the detailed below: plus rate per $100.00 of assessed valuation adopted by the City City, multiplied by the applicable Yearly Payment Rate as TAX YEAR YEARLY PAYMENT RATE 2020 .66 2021 .66 2022 .66 2023 .6b 2024 .66 2025 .66 2026 .66 B. Added Value Industrial District Payment, The Added Value Industria! 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 refereed 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 term of this Agreement, multiplied by the applicable added value industrial district payment rate detailed below. The applicable Added Value Industrial District Payment Rate shalt be determined using the following chart: 3 TAX YEAR ADDED VALUE INDUSTRIAL. DISTRICT PAYMENT RATE 2020 .00 2021 .00 2022 .25 2023 .35 2024 .45 2025 .55 2026 .66 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. VI. Valuations and Collections A. Generally The parties hereto recognize that said Chambers County Appraisal District is not required to appraise for the City the land, improvements, and tangible property, real or mixed, in the affected area, which is not within the corporate limits of the City, for the purpose of computing the payments hereunder. 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; and 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 The parties agree that the fair market value of the Property Owner's land, improvements, and tangible property subject to Subsections B and C of this section shall be determined in accordance with the market value computation contemplated in the Texas Property Tax Code for the purpose of calculating the Property Owner's payment under this Agreement on properties annexed or disannexed subsequent to the commencement of this Agreement. The City may choose to use the appraised value 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 an independent appraiser of the City's selection at the City's expense. The determination of fair market values by the City shall be final and binding unless the Property Owner, within thirty (30) days after receipt of the City's determination, petitions for a Declaratory Judgment to the Civil District Court of Hams County, Texas, as provided for by Section XIII hereof. 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. B. Adiustment of Base Value for Property Inside the Corporate Limits but Subsequently Disannexed Land, improvements and tangible property, real or mixed, of the Property Owner, which is 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 disannexed land, improvements and tangible property, real or mixed shall be determined as described in Subsection A of this Section based upon the year in which the property is disannexed and shall be added to the Base Value specified in Article V each year after the disannexation for purposes of payment hereunder. C. Adiustment of Base Value for Property Outside the Corporate Limits but Subsequently Annexed Land, improvements and tangible property, real or mixed, of the Property Owner, which is annexed into the corporate limits of the City during the term of this Agreement, shall be removed from the affected area the year after the annexation. The value for such annexed land, improvements and tangible property, real or mixed shall be determined as described in Subsection A of this Section based upon the year in which the property is annexed and shall be subtracted from the Base Value specified in Article V each year after the annexation for purposes of payment hereunder. D. Statements The City shall mail one statement to the Property Owner on or about December 1 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 is pursuing through a declaratory judgment action as specified in Subsection A, the Property Owner shall, without prejudice to such action, 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 term 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 (i) Chambers County Appraisal District's formal notification that the appraised value of the property has been reduced and (ii) a written refund request by the Property Owner. If not paid timely, the refund amount shall bear interest at the rate specified in Section 2251.025 of the Texas Government Code 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. Compliance 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 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 fire safety standards of such act and the resolutions from time to time promulgated hereunder (the "OSHA 2 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, 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. Inspections 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. IX. Default A. Default by Property Owner 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 anything 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 7 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 IX), 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 area to ad valorem taxes for any part of the period covered by the Property Owner's last payment hereunder. X. 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. XI. No Further Expansion 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. 8 XII. Reimbursement for Services If the Property Owner requests and receives mutual aid firefighting assistance and is a member of Channel Industries Mutual Aid organization ("CIMA") 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. XIII. 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 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. XIV. Assignment This Agreement shall not bestow any rights upon any third parry, 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. XV. Authorijy 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 9 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 they represent. XVI. No 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 furnish (1) sewer or water service, (2) police protection, (3) fire protection (4) road or street repairs, and (5) garbage pickup service. XVII. 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 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 XVII 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. "III. Complete Agreement 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. XIX. 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. 10 XX. Ambiguities In the event of any ambiguity in any of the terms 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. XXI. Headings 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. XXII. Choice of Law: Venue 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. XXIII. 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 AgreenRent is executed in multiple counterparts on behalf of the Property Owner is day of Or& 2020, and on behalf of the City this Q, day of 220 LONE STAR NGL ASSET HOLDINGS II, LLC STATE OF TEXAS § COUNTY OF § Before me,l. , the unde igned notary public, on this day personally appeared , the of Lone Star NGL Asset Holdings II, LL , the owner of the a ted property, kno 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, in the capacity, and for the consideration therein expressed. SUBSCRIBED AND SWORN before me this day of , 2020. ;;' ;t BEYSLYMHERKWEZ Notary Public and for the State of Texas _•:' ••= MyNoq ID#4894172 ..''.� sY�'•"r Sepletltbar3, 2Q22 CITY OF BAYTOWN BRANDON CAPETILLO, Mayor ATTEST: LETICIA BRYSCH, City Clerk APPROVED AS TO FORM: KAREN L. HORNER, Interim City Attorney VICTOR BROWNLEES, Finance Director R Koren FdesContracts Industnal Drstnct Agreements Lone Star NGL Asset Holdings IANewCompanylDA — Non -Logistics - FRAC S.doc 12 EXHIBIT A 2010 EK VOL PG 60669 OR 1230 225 MEMORANDUM OF OIL, GAS AND MINERAL LEASE OFFICIAL PUBLIC RECORDS CHAMBERS COUNTY, TEXAS Heather H. Hawthorne, County Clerk State of Texas KNOW ALL MEN BY THESE PRESENTS, THAT County of Chambers § THE ROBERT A. WELCH FOUNDATION, as Lessor, has leased, subject to the terms and conditions of the lease hereinafter described, unto SAMSON LONE STAR LLC, Two West Second Street, Tulsa, Oklahoma 78103, as Lessee, those certain tracts or parcels of land described as follows: Tract 1. One hundred sixty (160.0) acres of land, more or less, being Lots 25, 26, 27, 28, 29, 40, 41, 42, 43, 44, 45, 46, 48, 49, 63 and 64 in the T. & N. O. RR Survey, Abstract No. 293, Section 133, in the Seabreze Subdivision, Chambers County, Texas, and being a portion of the same land referred to in the third item in a deed from Tulane Gordon to R. A. Welch dated November 23, 1936, recorded in Volume 55, Page 367 of the Deed Records of Chambers County, Texas. (TX-080) Tract 2. Thirty (30.0) acres of land, more or less, being Lots 2, 6 and 19 in the T. & N. O. R.R. Co. Survey, Section 133, Abstract 293, in the Seabreeze Subdivision, Chambers County, Texas, and being a portion of the same land referred to in the second item in a deed from Tulane Gordon to R. A. Welch dated November 23, 1936, and recorded in Volume 55, Page 367 of the Deed Records of Chambers County, Texas. (TX-079) This Memorandum is executed for the purposes of recordation in the Office of the County Clerk of Chambers County, Texas, in order to give notice of the rights of Samson Lone Stat LLC which are more fully set forth in that certain Oil and Gas Lease dated September 29, 2010 for a primary term of two (2) years between the parties set forth therein, reference to which is being here made for all purposes. It is not intended by this Memorandum to construe, define, limit or modify said lease but merely 2010 BY. VOL PG 60669 OR 1230 226 disclose to the public that said lease does exist and the original of which is in the possession of the Lessee. DATED this 29th day of September, 2010. THE ROBERT A. WELCH FOUNDATION B Norbert Dittrich, President State of Texas County of Harris This instrument was acknowledged before me this 29th day of September, 2010 by Norbert Dittrich, as President of THE ROBERT A. WELCH FOUNDATION. Signature of Notary Public . KATHRYN M. KIRK . ►loan weft Oft a tam Myu'� UNNE 221, 20 41 2010 Br, VOL Fri 60669 OR 1230 227 The State of Texas § County of Harris Norbert Dittrich, Being duly swom, on his oath deposes and says: I, Norbert Dittrich, am President of The Robert A. Welch Foundation and I do hereby certify that the following is a true and correct copy of a resolution unanimously adopted at a meeting of the Directors of said Foundation held on September 29, 2010, at which a duly authorized quorum was present: "Resolved that Norbert Dittrich, President of The Robert A. Welch Foundation, be and is hereby authorized at his discretion, to execute and deliver on behalf of The Robert A. Welch Foundation an oil and gas lease to Samson Lone Star LLC covering the Foundation's interest in 190.0 acres of land, more or less, located in Chambers County, Texas. Said lease shall reserve a one -quarter (1/4) royalty, have a primary term of two (2) years and contain such other terms and conditions as he shall deem appropriate". I further certify that the above resolute has not bol�scinded, cancelled or amended. orbert Dfttrich, President 0�9, ao/a Dat The State of Texas § County of Harris This instrument was acknowledged before me on the 29th day of September, 2010 by Norbert Dittrich, President of The Robert A. Welch Foundation, a Texas Nonprofit Corporation, on behalf of said corporation. Notary Public in and for the State of TexasRYN M. KIRK [G::: 20 41 After filing please return to: Cindy Morgan J. Mark Smith & Associates, Inc 7485 Phelan Blvd. Beaumont, TX 77706 2010 BK VOL Fr, 6L1669 OR 1230 228 FILED FOR RECORD IN: Chambers County ON: OCT 29, 201ri AT Os:.53P AS A(H) Public Records Heather H. Hawthorne, COUNTY CLERK CLERK NUMBER 60669 PAGES { AMOUNT: 2¢.fl RECEIPT NUMBER 10256243 BY REDMONDS S1ATE OF TEXAS Chambers County AS STAMPED HEREON BY ME. OCT 29r 2010 Heather H. Haut r COUNTY CLERK Cv.G Recorded: _ IZ 2010 8K VOL PG 60666 OR 1230 219 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THM INSTRUMENT BEFORE IT IS FILED OF RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER MEMORANDUM OIL, GA& Nffff440"ASE CHAMBERS COUNTY, TEXAS Heather H. Hawthorne, County Clerk STATE OF TEXAS § § KNOWN ALL MEN BY THESE PRESENTS: COUNTY OF CHAMBERS $ REFERENCE is here made to that certain Oil, Gas and Mineral Lease dated Sei*mber;0?2010, by and between Claude Marsball Harding, dealing in his sole and separate property, whose address is 10 Taylor Lane, Dayton , Texas 77535 (called "Lessor" whether one or more), and Samson Lone Star, LLC. a Texas limited liability company whose address is Two West Second Street, Tulsa, Oklahoma 74103 ("Lessee"), under the terms of which Lessee was granted an Oil, Gas and Mineral Lease with respect to the following described land located in Chambers County, Texas: SEE ATTAHCED EXHBIT "A" Subject to the provisions contained in the Oil, Gas and Mineral Lease reference above the lease is for a term of THREE (3) year from September .30, 2010, and shall continue as long thereafter as oil or gas is produced from the Leased Premises or land pooled therewith, or the Lease is otherwise maintained, all as more particularly set out in said oil and gas lease of even date herewith to which reference is hereby made for all purposes including further description of the terms, provisions, and conditions of the lease. In the event this lease is not continued beyond the primary term by production, on -going operations, or by any other means or provision herein contained, Lessee shall have the option, but not the obligation, to extend the primary term of this lease as to all or any portion of the leased premises for an additional and extended term of TWO (2) years, and for so long thereafter as this lease is continued or maintained in force and effect by the production, or allocation to the leased premises, of oil, gas or other hydrocarbons, or by any other means or provisions herein contained. "Cann a of .r.e r m - maps --obey` J - t - of �,_ r eale �J , ,iQi�li nr ac rnmmunily 1rrp11ed3L L -71% /f The Lessors for the purpose of acknowledging in the public records the existence of said lease execute this Memorandum of Lease. IN WITNESS WHEREOF, this instrument is executed as of the date of each parry's acknowledgment below, but to be effective as of the date hereinabove lust written. This instrument may be executed in multiple counterparts. LESSOR: �� t &gei 24 �GC�j A�, Claude Marshall Harding, eali and separate property Acknowledgement STATE OF TEXAS § COUNTY OF Lk § This instrument was acknowledged before me on the day of �� g y September, 2010 by Claude Marshall Harding, dealing in his sole and separate property an hr�use UU" Notary Public i rd for the State of Texas WENDY WEEKS Nolary Ptkk am d Tams BY Oorwntrrian Exam a1-07,Zp12 2010 BY, VOL PG 60666 OR 1230 220 EXHIBIT "A" Attached to and made a part of that certain Oil and Gas Lease by and between Claude Marshall Harding, as Lessor and Samson Lone Star, LLC, as Lessee, dated See6i .e. r 30 , 2010 Tract 1: 160 acres of land, more or less, out of the Samuel Mather A-190, Chambers County, Texas, being described in that certain Patent, dated December 15, 1873 form the State of Texas to Otto Groos, assignee of Sam Mather and recorded in Volume 65, Page 244 of the Deed Records of Chambers County, Texas. Tract 2 : 94 acres of land, more or less, being all of the West Half (W/2) of the R. C. Frankland 188 Acre Survey Number 3, Abstract 331, as patented to R. C. Frankland, by Patent No. 217, Volume 29, dated November 22, 1877, and recorded in Volume E , Page 225 of the Deed Records of Chambers County, Texas and being the same land described as the Fifth Tract of the Fourth Division of Partition Deed, dated May 8, 1944, recorded in Volume 88, Page 453 et seq. of the Deed Records of Chambers County, Texas; SAVE AND EXCEPT a 94 acre tract, more or less, being the East Half (E/2) of the R.C. Frankland Survey No. 3, Abstract 331 as described in Lease to Ventura Energy, dated November 10 , 2008, as recorded in Volume 1111, Page 356, in the Official Public Records of Chambers County, Texas. FILED FOR RECORD IN. - Chambers Counts ON.' OCT 29? 2010 AT 03:53P AS A(H) Public Records Heather H. Hawthorne_? COUNTY CLERK CLERK NUMBER 60666 PAGES 2 AMOUNT: 20.00 RECEIPT NUMBER 10256243 BY REDMONDS STATE OF TEXAS Chambers County AS STAMPED HEREON BY ME. OCT 29? 2010 Heather H. HQVtqiet.COUNTY CLERK Recorded: After filing please return to: Cindy Morgan J. Mark Smith & Associates, Inc. 7485 Phelan Blvd. Beaumont, TX 77706 2010 Br, VOL Fr 60668 OR 1230 223 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED OF RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER MEMORANDUM OIL, GAS AND MINERAL LEASE OFFICIAL PUBLIC RECORDS CHAMBERS COUNTY, TEXAS Heather H. Hawthorne, County Clerk STATE OF TEXAS KNOWN ALL MEN BY THESE PRESENTS: COUNTY OF CHAMBERS REFERENCE is here made to that certain Oil, Gas and Mineral Lease dated October 18, 2010, by and between Pamela Dancy-Bush, whose address is 108 North Avenue A, Freeport, Texas 77541, hereinafter called "Lessor," whether one or more, and Samson Lone Star, LLC, a Texas Limited liability company, Two West Second Street, Tulsa, OK 74103, (hereinafter referred as to the "Lessee"), under the terms of which Lessee was granted an Oil, Gas and Mineral Lease with respect to the following described land, which land is located in the County of Chambers, State of Texas, to -wit: SEE EXHIBIT "A" Subject to the provisions contained in the Oil, Gas and Mineral Lease reference above the lease is for a term of THREE (3) year from October 18, 2010 and shall continue as long thereafter as oil or gas is produced from the Leased Premises or land pooled therewith, or the Lease is otherwise maintained, all as more particularly set out in said oil and gas lease of even date herewith to which reference is hereby made for all purposes including further description of the terms, provisions and conditions of the lease. The Lessors for the purpose of acknowledging in the public records the existence of said lease execute this Memorandum of Lease. IN WITNESS WHEREOF, this instrument is executed as of the date of each party's acknowledgment below, but to be effective as of the date hereinabove first written. This instrument may be executed in multiple counterparts. OR: Pamela Dancy-Bush i Acknowledgement STATE OF TEXAS § COUNTY OF § This instrument was acknowledged before me on the day of b Ata..10 uJu , 2010 by Pamela Dancy-Bush. a{,+r � K11A COP tale o o, (� _ Notary Public, State Ot Texes & \ "L :.f My Commission Expires ' November 16, 2013 Notary Public in and for the State of 9 2010 BK, VOL PG 6066E OR 1230 224 EXHIBIT "A" Tract 1- 50.00 acres of land, more or less, being lots 1, 2, and 3 in Block 70 of the J. M. Duran Survey, A-1 1, being more fully described in Correction to Mineral and Royalty Deed dated October 24, 1994, but is effective as of August 3, 1993, between Leon Stanley White, H, grantor and Humus, Inc., et at, grantee, filed at Document Number 9527825, in the Official Public Records of Chambers County, Texas. Tract 2- 10.00 acres of land, more or less, being Lot 10 in Block 72 of the Winnie Suburbs, Chambers County, located in the J. M. Duran League, Abstract 11, and being the same land described in a Deed from gEorge Steuber to National Stansdard Oil Corporation, dated March 4, 1944, recorded in Volume 85, Page 576, Deed Records of Chambers County, Texas. FILED FOR. RECORD IN: Chambers County ON: OCT 29r 2010 AT 03:53P AS A(H) Public Records Heather H. Hawthorner COUNTY CLERK, CLERK NUMBER 6066E PAGES 2 AMOUNT: 20.00 RECEIPT NUMBER: 10256243 BY REDMONDS STATE OF TEXAS Chambers County AS STAMPED HEREON BY ME. OCT 29r 2010 Heather H. HawtkVer COUNTY CLERK �,�j� Rpcarded:CL��dL'f�J After filing please return to: Cindy Morgan J. Mark Smith & Associates, Inc. 7485 Phelan Blvd. Beaumont, TX 77706