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Ordinance No. 12,088ORDINANCE NO. 12,088 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 NSN PROPERTIES, L.L.C.; 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 NSN Properties, L.L.C. 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 vyl�e of the City Council of the City of Baytown, this the 25th day of October, 2012. � I A - Lei "'r-1 IT, �. \\cobfs0l \legal \Karen \Files \City Counci1\0rdinances\2012 \0ctober 25 \NSNIDA0rdinance.doc H. DONCARLOS, 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 NSN Properties, L.L.C., a Texas 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: NSN Properties, L.L.C. NSN Properties, L.L.C. Attn: President Attn: Property Tax Department 626 W. Alabama 626 W. Alabama Houston, TX 77006 Houston, TX 77006 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. 3 (the "Industrial District "). III. Term The term of this Agreement is seven tax years, from 2012 through 2018, 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 hereof and governing the affected area; to the extent any such prior existing agreement required payment on or after January 1, 2012, such payment obligations are hereby canceled and are superseded by the provisions contained herein. 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 S` 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 2 ➢ 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 TWO MILLION TWO HUNDRED THIRTY -FIVE THOUSAND NINE HUNDRED FORTY AND NO /100 DOLLARS ($2,235,940.00), 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 Payment 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 3 INDUSTRIAL PUBLIC YEARLY TAX YEAR DISTRICT COMMUNITY PAYMENT:, PAYMENT RATE: IMPAG E-1 RATE RATE:' 2012 .61 .01 .62 2013 .62 .01 .63 2014 .62 .01 .63 2015 .63 .01 .64 2016 .63 .01 .64 2017 .63 .01 .64 2018 .64 .01 .65 B. Added Value Industrial District Payment 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 3 (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 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: 'IDUSTtIAL TAX YEAR f ADbED VALUE DYSTRICT �PAYME�TT ':RATE PUBLIC, CO IlVIPRO`TEMENT ATE ' R =` TOTAL: ADDED INDUSTRYAL . DISTRICT:PAYMENT ' RATE 2012 0 .01 .01 2013 0 .01 .01 2014 0 .01 .01 2015 0 .01 .01 2016 .21 .01 .22 2017 .42 .01 .43 2018 .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. VI. Valnatinne 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 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. A. Valuation of Property Inside the Corporate Limits but Subsequently Disannexed 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, improvements 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 disannexed. B. Valuation of Property Outside the Corporate 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 shall be final and binding unless either party 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 5 to comparable present day facilities considering and giving effect to sound engineering valuation practices relative to service life, life expectancy, process and functional obsolescence. 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 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 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 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. 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 C 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 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. 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. 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 rA 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. 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 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 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. 8 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 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 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. XIII. 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. E 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 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. Authorily 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. 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. 10 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 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 XVIII 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. XIX. 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. 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. XXI. 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. XXII. 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 11 or liabilities of the respective parties hereto or in ascertaining, intent, if any question of intent should arise. XXHL 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. X)(IV. 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 day of 2012, and on behalf of the City this day of )2012. NSN PROPERTIES, L,.L.C., a Texas Limited Liability Company By: J -rEV 6 N E7• 1)4cP M P5V A/ Printed Name Aw4, -o-d Z-e d - Title ATTEST: . Secretary CITY OF BAYTOWN STEPHEN H. DONCARLOS, Mayor 12 3 i r ATTEST: LETICIA BRYSCH, City Clerk APPROVED AS TO FORM: IGNACIO RAMMEZ, SR., tarty Attorney q'� k"-J� LOUISE RICHMAN, Director of Finance R.UenneneWy DecumentslContrac tsUDA1NSNIDA2012.doe 13 I EXHIBIT "A" NO& PK 4OL P6 IM5 OR 892 515 SPECIAL WARRANTY DEED OFFICIAL PUBLIC RECORDS CHAMBERS COUNTY, TEXAS NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE �`�� ALoPERSOVCIerk YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWINC INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RYCORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVERS LICENSE NUMBER. THE STATE OF TEXAS § § KNOWN ALL MEN BY THESE PRESENTS: COUNTY OF CHAMBERS § That CEDAR CROSSING, L.P., a Texas limited partnership ( "Grantor "), for and in consideration of the sum of TEN AND NO 1100 DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, has GRANTED, BARGAINED, SOLD AND CONVEYED, and by these presents does GRANT, BARGAIN, SELL AND CONVEY unto NSN PROPERTIES, L.L.C., a Texas limited liability company ( "(;_ rantee "), that certain tract of parcel of land in Chambers County, Texas, more particularly described in Exhibit A attached hereto and incorporated herein by this reference, together with all rights, titles, and interests appurtenant thereto (such land and interests are hereinafter collectively referred to as the "P- roPcrty "). This Special Warranty Deed and the conveyance hereinabove set forth is executed by Grantor and accepted by Grantee subject to the matters described in 1?xhi it B attached hereto and incorporated herein by this reference, to the extent the same are validly existing and applicable to the Property (hereinafter referred to collectively as the "Permitted Encumbrances ") and the restrictions described in Exhibit C attached hereto and incorporated herein by this reference (the "Restrictions "). Grantor All oil, gas and other minerals in, on and under the Property arc herein reserved by TO HAVE AND TO HOLD the Property, together with all and singular the rights and appurtenances thereto in anywise belongings unto Grantee, his heirs, legal representatives, and assigns forever, and Grantor does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND all and singular; the title to the Property unto the said Grantee, his heirs, legal representatives, 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, subject only to the Permitted Encumbrances and the Restrictions. EXCEPT FOR THE WARRANTY OF TITLE SET FORTH ABOVE, GRANTOR EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY NATURE, KIND OR CHARACTER WHATSOEVER, EXPRF,SS OR IMPLIED, REGARDING 'fHE PHYSICAL AND ENVIRONMENTAL CONDITION OF THE PROPERTY OR THE IMPROVEMENTS ON THE PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, Return To& 974310 4 WC Charter Title Company I 4265 San Felipe, Suite 350 Houston. TX 77027 070 /£00(a XAQ10 Alunoo sz2giu '243 9068L9Z604 XVJ 5V :11 a314 ZTOZ /TZ /ii '2006 Pc VOL 9 IBM OR 892 516 AND GRANTEE ACCEPTS SUCH PROPERTY AND IMPROVEMENTS TN AN "AS IS -- WHERL IS" CONDITION, WITH ALL FAULTS. GRANTEE, BY ITS ACCEPTANCE OF THIS DEED EXPRESSLY WAIVES ANY RIGHT OR CLAIM AGAINST GRANTOR FOR DAMAGES, RESCISSION OR OTHER REMEDY AT LAW OR IN EQUITY WITH RESPECT TO OR RESULTING FROM THE PHYSICAL CONDITION OF THE PROPERTY AND THE IMPROVEMENTS THEREON, INCLUDING WITHOUT LIMITATION, THE ENVIRONIVIENTAL CONDITIOON OF THE PROPERTY. THE WAIVER AND EXCULPATION PROVIDED ABOVE SHALL BE DEEMED TO BE COVENANTS RUNNING WITH THE LAND AND BINDING ON ALL SUCCESSORS AND ASSIGNS OF GRANTEE AND ALI, OPERATORS OF THE PROPERTY. Grantee's address is 626 W. Alabama, Houston, Texas 77006. [signature pages follow] 974310_4 noc 2 V10/0000 X=2T3 d ;unoo 912quiv43 SOD8L9Z60D Xvj 9D:TT O3M ZTOZ /TZ /TT 2006 R '%19L fG im OR M 517 - FXLCULTD this Z! day of AvS A f- 2006 GRANTOR: CFDA R CROSSING, L.P., a Texas limitcd partnership BY: Cedar Crossing Management, L.L.C., a Texas limited liability company, its general partner By- Name: Lb D v t 0 t D1010C �-- Title: THE STATE OF TEXAS § COUNTY OF HARRIS § by is insLrument was acknowledged before me on this the day ofjZ��gen 2006 ' ' of Cedar Crossing Management, L.L.C., a Texas limitcd liability companyal part ner of Cedar Crossing, L.P., a Texas limited partnership, on behalf of said partnership. p toll �! ✓ Yll /l1 - /f ! �' 1 J ✓ 1 ! 111. l` ,►"'�'s� KIM t_AVERN 1 NOTARY PUBLIC. OF TExA9 Q M hRY CpµMISScNE ss V�1, OP116, AUG. 17, 2006 lll!!11 J!!! l !.11l1. 974510. 4. DOS Notary Public for the State of Texas 6 T 0 / 5 0 0 X1213 A4unoo 9sagwvg3 5068L9Z60D Xvj 96 :TT a3M ZTOZ /TZ /TT 2006 BK WL PG I' CR 592 518 GRANTEE: NSN PROPERTIhS, L.L.C., a Texas limited liability company Hy: Fob: WlpR�Yerir►a Name: ... Title: gi 102% ihnac *r THE STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledge fore me on this the dagof 2p�ti by - y�f� l °�idCtr of NSN Properties, L.L.C., a Texas limited liability company, on behalf of said limited liability company. Pl ✓lJ�tiJJJ./l1JlJJlIlJJJ.�l� ) 1 Notary Public for the State of Texas .•x' °�` KIM LAVERN NOTARY AUOUC. STATE Of TEXAS 1�a MY CO► MISSION EXINRES =rt�` AUG. 17, 2006 �1Jfll�IJ.I�lJJ./YJ./.rJJ/YlJ� 974510 _4. UOC 4 _ ..,,... t.,.aa..�.�.. �� ..- .,.,... D10 /9000 xzajO Aiunoa 9zagweg3 "POL9Z609 XVJ 9D:11 0314 Z1 OZ/ TZ /11 20% 8c uot ,po 18005 OR ST 519 EXHIBIT A Desc ' tion of Pro Reny BEING A 11-568 ACRE (503,897 SQ. FT.) TRACT OF LAND LYING IN THE W.D. SMITH SURVEY, ABSTRACT 23 CHAMBERS COUNTY, TEXAS, BERs G OUT OF A CALLED 82.662 ACRE TRACT AND A CALLED 870.338 ACRE TRACT AS RECORDED IN VOLUME 456, PAGE 338 OF THE CHAuMBERS COUNTY DEED RECORDS, CHAMBERS COUNTY, TEXAS AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS (ALL BEARENGS BASED ON THE TEXAS STATE COORDINATE SYSTEM, SOUTH CENTRAL LONE, ALL COORDINATES SHOWN ARE. SURFACE); COMMENCING AT AN INTERIOR CORNER OF A PARCEL OF LAND IDENTIFIED AS THE POINT OF BEGINNING OF TRACT 3 PART 18 (CALLED 370.338 ACRES) IN A SURVEY PREPARED BY SURVCOV INC, llA'fEU MARCH 2, 2003, SAID POINT BEING THE SOUTHEAST CORNER ON A 331.1178 ACRE TRACT CALLED "MAIN MILL" AND RECORDED IN VOLUME B, PAGE 136 OF THE PLAT RECORDS OF CHAMBERS COUNTY, SAID POINT HAVING COORDINATES OF Y-13,821,504.5840, X=3,272,350.2053; THENCE N 53 0I 1'06" E, 431.42, FEET TO A 5/8 INCH [RON ROD WITH CAP (BURY-I- PARTNERS) SET FOR THE SOUTH END OF A CURVE TO THE LEFT HAVING A RADIUS OF 417.24 FEET, A CENTRAL ANGLE OF 30 057'35 ", AND A CHORD BEARING AND DISTANCE OF N 48 048'17" E - 250.35 FEET, BEING THE SOUTHWEST CORNER AND POINT OF BEGINNING OF THE HEREIN DESCRIBED TRACT; THENCE ALONG THE ARC OF SAID CURVE TO THE LEFT A DISTANCE OF 225.46 FEET TO THE POINT OF COMPOUND CURVATURE W ITII A CURVE TO THE LEFT HAVING A RA61US OF 407.11 FEET, A CENTRAL ANGLE OF 04 004'03 ", AND A CIIORD BEARING AND DISTANCE OF N 32 °47'06 "F. - 28.90 FEET; THENCE ALONG THE ARC OF -SAID CURVE, 28.90 FEET TO A 5/8 INCH ROD WITH CAP (BURY +PAR'T`NERS) SET FOR THE END OF SAID CURVE; THENCE N 00 000'08" W, 588.38 FEET TO A AN ANGLE POINT IN THE WEST LINE OF THE HEREIN DFSCRIBED TRACT; THENCE N 000 14'55" W, 388.90 FEET TO AN "X" CUT [N CONCRETE SET FOR THE NORTHWEST CORNER OF THE HEREIN DESCRIBED 'TRACT; 974510_4.T)OC Exhibit A, Page I D TO/ L00(a z� K TO Ajunoo asagwey3 SO48L9Z60b XVj 96 :TT Q3M ZTOZ /TZ /TT 20% N VOL n 18M R .592 520 THENCE S 89 051'54" E, 218.06 FEET TO AN "X" CUT IN CONCRETE SET IN THE NORTH LINE OF A CONCRETE DRIVE FOR THE MOST WESTERLY NORTHEAST CORNER OF THE HEREIN DESCRIBED TRACT; THENCE S 00 °48'54" E. 345.95 FEET TO A 5/8 INCH IRON ROD WITH CAN (13URY +PARTNERS) SET FOR THE POINT OF CURVATURE OF A NDN- TANGENT CURVE TO THE RIGHT HAVING A RADIUS OF 67.62 FELT, A CENTRAL ANGLE OF 59 036'25 ", AND A CHORD REARING AND DISTANCE OF N 52 014'40" E - 67.22 FEET, FOR AN INTERIOR CORNER OF THE HEREIN DESCRIBED TRACT; THENCE ALONG THE ARC OF SAID CURVE TO THE RIGHT A DISTANCE OF 70.35 FEET TO A 518 INCH IRON ROD WITH CAP (BURY +PA,RTNERS) FOR THE POINT OF TANGENCY; THENCE S 89 024'28" E, 235.56 FEET TO A 5/8 INCH IRON ROD WITH CAP (BURYI•PARTNERS) SET FOR THE MOST EASTERLY NOR'T'HEAST CORNER OF THE HEREIN DESCRIBED ,rRAC'.T; THENCE S 00 °10'06" W, 834.04 FEET TO A 5/8 INCH IRON ROD WITH CAP (BURY +PARTNERS) SET FOR TI•IE SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT; THENCE S 89 °5754" W, 695.90 FEET TO THE POINT OF BEGINNING AND CONTAINING 11.568 ACRES OF LAND MORE OR LESS. SAVE-AND EXCE91 THE FOLLOWING TRACT: BEING A 0.670 ACRE (29,193 SO. FT.) TRACT OF LAND LYING IN THE W.U. SMITH SURVEY, ABSTRACT 2.3 CIAMBERS COUNTY, TEXAS, BEING OUT OF A CALLED 82.662 ACRE TRACT AND A CALLED 870.338 ACRE TRACT AS RECORDED IN VOLUME 456, PAGE 338 OF THE CHAMBERS COUNTY DEED RECORDS, CHAMBERS COUNTY, TEXAS, OUT OF A 11.568 ACRE TRACT, AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS (ALL BEARINGS BASED ON THE TEXAS S -rATE COORDINATE SYSTEM, SOUTH CENTRAL ZONE, ALL COORDINATES SHOWN ARE SURFACE); COMMENCING AT AN INTERIOR CORNER OF A PARCEL OF LAND IDENTIFIED AS THE POINT OT BEGINNING OF TRACT 3 PAR-[' 18 (CALLED 870.338 ACRES) IN A SURVEY PREPARED BY SURVCON INC. DATED MARCH 2, 2003, SAID POINT BF.ING THE SOUTHEAST CORNER OF A 331.1178 ACRE TRACT CALLED "MAIN MILL" AND RECORDED IN VOLUME 974310 4.DOC Exhibit A, Page 2 6 TO/ a 0 0 (a .+o�zmawwa:rr -v: •a: �, ..::•: •. .�... _ (zQTJ Ajuno3 sxagweyO 5068L9Z606 XVJ 9 D :TT Cl 3m Z10Z /TZ /TT 20% 19 VOL PG 18005 OR M 521 B, PAGE 136 OF THE PLAT RECORDS OF CHAMBE -RS COUNTY, SAID POINT HAVING COORDINATES OF Y =l 3,821,504.5840, X =3,272,350.2053; THENCE N 53011'06" E, 431.42 FEET TO A 5/8 [NCIJ [RON ROD WITH CAP (BURY +PARTNERS) SET FOR THE SOUTHWEST CORNER OF THE SAID 11.568 ACRE TRACT; THENCE N 89 057'54" E, ALONG THE SOUTH LINE OF SAID 11.568 ACRE TRACT, 381.37 FEET TO A POINT BEING THE SOUTHWEST CORNER AND POINT OF BEGINNING OF THE HEREIN[ DESCRIBED TRACT; THENCE N 00 007'14" W, 129.02 FEET TO THE POINT OF CURVATURE OF A CURVE TO THE LEFT HAVING A RADIUS OF 67.88 FEET, A CENTRAL ANGLE OF 73 009'23 ", AND A CHORD BEARING AND DISTANCE OF N 3 6 °31' 11 " W - 80.90 FEET; THENCE ALONG THE ARC OF SAID CURVE TO THE LEFT A DISTANCE OF 86.67 FEET TO THE END OF SAID CURVE; THENCE S 89 05634" W, 144.57 FEET TO A POINT LYING IN THE WEST PROPERTY LINE OF SAID 11.568 ACRE TRACT, BEING TIIE MOST WESTERLY SOUTHWEST CORNER OF TIIE HEREIN DESCRIBED TRACT; THENCE N 00000,08" W, ALONG THE WEST LINE OF SAID 11.568 ACRE TRACT, 26.00 FEET TO A POINT FOR TIE MOST WESTERLY NORTHWEST CORNER OF THE HEREIN DESCRIBED TRACT; THENCE N 89 °56'34" E, 144.55 FEET TO THE POINT OF CURVA'T'URE OF A CURVE TO THE LEFT HAVING A RADIUS OF 62.20 FEET, A CEN'T'RAL ANGLE OF 74 008'40 ", AND A CHORD BEARING AND DISTANCE OF N 39 °39'38" E - 74.99 FEET; THENCE ALONG THE ARC OF'SATD CURVE TO THE LEFT A DISTANCE OF 80.48 FEET TO THE END OF SAID CURVE; THENCE N 00 °07'14" W. 582.00 FEET TO A POINT FOR THE MOST NORTHERLY NORTHWEST CORNER OF THE HEREIN DESCRIBED TRACT; THENCE N 88 004'58" E, 29.18 FEET TO A POINT IN THE EAST PROPERTY LINE OF SAID 11.568 ACRE TRACT, FOR THE NORTHEAST CORNER OF TIIE HEREIN DESCRIBED TRACT; THENCE S 00 04854" E, ALONG _SAID EAST PROPERTY LINE, 65.25 FEET TO THE POINT OF CURVATURE OF A NON - TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 67.62 FEET, A CENTRAL ANGLE OF 11 039'35 ", AND A CHORD BEARING AND DISTANCE OF S 16 036'55" W - 13.73 FEET; 074510 4.TZOC Exhibit A, Page 3 6 T 0 / 6 0 0 ® waxwrr�ara u;a•sYx�e *esw r. sraor.:.,.: �.,..:: r.. „ N29TO AqunoD s2ogwvy3 SoVgL9Z606 xvj 96:TT GUM ZTOZ /TZ /TT ')005 PK tlo. P6 18045 OR p2 52, THENCE ALONG THE ARC OF SAID CURVE TO THE LEFT, DEPARTING SAID EAST PROPERTY LINT, A DISTANCE OF 13.75 FEET TO THE END OF SAID CURVE; THENCE S 00 007'14" E, 782.33 FELT TO A POINT LYING ON THE SOUTH PROPERTY LINE OF SAID 11.568 ACRE TRACT, BEING THE SOUTHEAST CORNER OF THE HEREIN DLSCRI13Fn TRACT; THENCE S 89 057'54" W, ALONG SAID SOUTH PROPPRTY LINE, 26.00 FEET TO THE POINT OF BEGINNING AND CONTAINING 0.670 ACRES OF LAIND MORE OR LESS. 974310 4.[306 Exhibit A, Pagc 4 112 a73 A:tun03 Q =agmIIgo S068L9Z60D XV L6-TT OHM ZT0Z /TZ /iT 20% RK LIOL N IBM OR 892 523 EXHTRIT R Permitted Encumbrances 1. An casement in favor of Chambers County as described in instrument executed by Grantor dated March 26, 1965 recorded in Volume 262, Page 314 of the Deed Records of Chambers County, Texas. 2. Reservation of predecessor in titles as to 1 /16th non - participating royalty interest in Deed executed by Southern Pacific Company, to United States Steel Corporation, as disclosed by instrument dated June 21, 1966, recorded in/undcr Volume 276, page 117 of the Real Property Records of Chambers County, Texas. 3. Reservation of an undivided 1 /8th non - participating royalty interest of all oil, gas and other minerals produced and saved from subject land by Southern Pacific Company, as therein provided by instrument dated May 24, 1966 recorded in Volume 276, Page 117 of the Decd Records of Chambers County, 'Texas. 4. A 1 /64th royalty interest in all of the oil, gas and other minerals produced from 88.5 acres and a 7/256 royalty interest in 42.04 acres, as reserved in deed dated October 18, 1928 from W.E. Kerr to L.J. Lawrence recorded in Volume 27, page 58 of the Decd Records of Chambers County, 'Peas. 5. A 3/64th royalty interest in all of the oil, gas and other minerals produced from 88.5 acres, as reserved in deed dated December 26, 1930 from L.J. Lawrence et ux to L.D. Wilburn ct at, recorded in Volume 32, page 270 of the Decd Records of Chambers County, Texas. 6. A 1 /32nd royalty interest in all of the oil, gas and other minerals produced from 28.54 acres, as recorded in decd dated February 6, 1931, by Dell e. Browns et vir to L.D. Wilburn et al, recorded in Volume 32, page 467 of the Deed Records of Chambers County, Texas. 7. Reservation of one - sixteenth (1/1 6th) perpetual royalty interest in all oil and gas that may be produced and saved from the land, us therein provided, retained by Leslie Doyle Wilburn, et al, dated February 28, 1967 recorded in Volume 283, page 186 of Chambers County, 'Texas. 8. Remaining interest in all of the oil, gas and other minerals produced from said land (except an undivided 20 % of Grantor's right, title and interest in the oil, gas and other minerals), retained by USX Corporation, a Delaware corporation, dated May 18, 2000 filed under Volume 456, page 155 (2000003125) of Chambers County, Texas. 9. Terms, conditions and provisions contained in that certain deed from USX Corporation, a Delaware corporation to Cedar Crossing, L.P., a Texas limited 974510 a.1)oC Exhibit R, Page 1 D I 0/ T TOO �:- c:r.:::..: :.. •; 4z2TJ A4uno3 s22g1ue43 SOVOL9Z60D XVJ L0 '-IT a314 LI OZ/ TZ /IT =6 w a M 10005 OR 892T,.4 Partnership, dated May 18, 2000 filed under Volume 456, page 155 (2000003125) of Chambers County, Texas. 10. Existing Private Road Easements as mentioned but not located in instrument entitled Certificate Regarding: Agreement to Grant Easements, executed by Cedar Crossing, L.P., a Texas limited partnership, dated April 12, 2006 filed under Volume 866, page 187 (2006014928) of the Real Property Records of Chambers County, Texas. 974S)0 4.00C. Exhibit 13, Page 2 0TO /ZTOfa 42013 Xquno3 S3a Wg �''israraw�aavv►ar..�.w -»-r. r.:: .... .. 4 43 5068L9Z606 xvj LV -TT a3M ZTOZ /TZ /11 2006 BK VOL PG 10005 OR e92 5n5 EXHIBIT C Restrictions 1 • Any building, structure or vertical improvernent hereafter constructed on the Property must be set back at least twenty (20) feet from any public road or private road owned by anyone other than Grantee. 2. Grantee may construct a water well on the Property; provided, however, that if a water line is constructed that serves the Property and is available for Grantee to tie into, Grantee shall tie into such water line and immediately close and plug the water well in accordance with all applicable laws and regulations. 974510 4 -DOC Lixhibit C, Pagc t 6T0 /£T0 �.w. ..�.�..:�._......_... _... KzaIJ Aqunoa szagwvyo Sop 9L9Z606 xv:I O.Z /IZ /II C6,oriwT +fe Co 2006 EK WC • PG 18005 GR SP,. 526 FILED FOR RECORD IN: CK ors Cwtti ON: AM 22, 2006 AT 01:36P AS A(H) Public Recar�is Sism E. Roshto, COUNTY CLERK CLEW HIktBER 00018005 ANDT: 55.00 RECEIPT NUMBER 06213856 BY KERI STATE OF TEXAS Dkyftrs County AS STAMPED HEREOF{ BY XE-. AUG 22p 2006 Susan E. o, E Recar ed. %XaT3 A;uno3 9sagweg3 SOOBL9Z606 K1f:I L6 -11 a3M ZTOZ /IZ /11