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2003-358
FILE REFERENCE FORM 2003-358 X Additional File Exists Additional File Contains Records Not Public, According to the Public Records Act Other FILES Date Initials Extension, Revivor and Ratification Agreement to Lease - Ordinance No. 2005-315 10/18/05 JR Amendment of Oil, Gas and Lease Non-Drill Site/Pooling Agreement 11/22/06 )R S:bur OUmgYSb~Einvee+➢lWmWf¢tu-IOinlRarurtv.dc ORDINANCE NO.,J4.003 35 8 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A NON-DRILL SITE/POOLING AGREEMENT WITH JOINT RESOURCES COMPANY FOR 353 ACRES OF NORTH LAKES PARK; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton has heretofore determined that it is advisable to lease for oil and gas purposes certain real property located at North Lakes Park, Denton, Texas; and WHEREAS, in compliance with Chapter 71 of the Texas Natural Resources Code (the "Code") the City published notice of its intention to lease such real property for oil and gas purposes once a week for three consecutive weeks in a newspaper with general circulation and published in Denton County, Texas; and WHEREAS, in compliance with the Code, the City Council of the City of Denton held a public hearing under Chapter 26 of the Texas Parks & Wildlife Code and Chapter 71 of the Texas Natural Resources Code; and WHEREAS, the City desires to authorize the City Manager to execute the lease with Joint Resources Company for a non-drill site/pooling agreement; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. Incorporation of Preamble. The above and foregoing preamble is incorporated into the body of this Ordinance as if copied herein in its entirety. SECTION 2. The City Manager or his designee is hereby authorized to execute a non-drill site/pooling oil and gas lease agreement between the City of Denton and Joint Resources Company in return for the payment(s) as outlined in Attachment A for approximately 353 acres at North Lakes Park. SECTION 3. If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance or application thereof to any person or circumstance is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this Ordinance, and the City Council hereby declares it would have passed such remaining portions of this Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. S:`Ow Danmmiz`O~tioerceSnJWm41~1¢cJOwi Pesav[a ds PASSED AND APPROVED this the day of 2003. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY - ' ) 1) n ~ h. . B . / APP OVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY:' Page 2 S:\Our Documents\Gas Well Documents\North Lakes Park Pooling Agreement 101503.doc OIL, GAS AND MINERAL LEASE NON-DRILL SITE/POOLING AGREEMENT THIS OIL, GAS AND MINERAL LEASE (the "Lease") is made this 'f4q day of 1. W &Xz, 2003 (the "Effective Date"), between The City of Denton, Denton, Texas, acting herein by and through its City Manager, Mike Conduff, duly authorized by ordinance to execute this Lease ("LESSOR"), whose address is: 215 East McKinney, Denton, Texas 76201 and Joint Resources Company ("LESSEE"), whose address is: 770 N. Fielder Road, Arlington, Texas 76012. WITNESSETH: 1. Lease of Land. LESSOR in consideration of Seventy-Two Thousand Three Hundred and Sixty-Five Dollars and Fifty Cents ($72,365.50), in hand paid, of the royalties herein provided, and of the agreements of LESSEE herein contained, hereby leases and lets exclusively unto LESSEE for the purpose of a non-drill site/pooling agreement for investigating, exploring, prospecting, drilling and mining for and producing oil, gas and all associated minerals, to produce, save, take care of, treat, transport and own said products, the following described land in Denton County, Texas, to-wit: Legal Description attached as "Exhibit A". For all purposes of this Lease, said land is estimated to comprise 353 acres, whether it actually comprises more or less. However, there is expressly excepted from this Lease and reserved to LESSOR, its successors and assigns, all vanadium, uranium, plutonium, thorium, fissionable minerals and all other minerals of every kind and character in, on and under the land, except only oil, gas, casinghead gas and their byproducts and such other hydrocarbon substances, carbon dioxide and sulfur as are necessarily produced with and incidental to the production of oil and gas, or either of them. 2. Reservation and Surface Use Prohibition. There is hereby excepted and reserved to LESSOR the full use of the land covered hereby and all rights with respect to the surface and subsurface thereof for any and all purposes and all minerals except those expressly leased herein for pooling purposes and only to the extent herein leased to LESSEE. LESSOR reserves and excepts from this Lease all of the surface of the land described in paragraph 1, and LESSEE agrees that it will not conduct drilling operations or any other operations or activities of any nature on the surface of such land. 3. Primary Term: This is a paid up lease and subject to the other provisions here contained, this Lease shall be for a term of twp (2) years from the Effective Date (the "Primary Term") and as long thereafter as oil, gas and other minerals are produced in paying quantities from said land or land with which said land is pooled hereunder. 4. Royalty: As royalty, LESSEE covenants and agrees to pay: a. As a royalty on oil (including all hydrocarbons produced in liquid form at the mouth of the well and also condensate, distillate, and other liquid hydrocarbons recovered from oil or gas run through a separator or similar equipment) 21% of the gross production or the market value thereof received at the wellhead by a bona fide purchaser. LESSEE agrees that before any gas produced from the land is sold, used or processed in a plant, it will be run, free or cost to the parties entitled to royalties, through an adequate oil and gas separator of conventional type or other equipment at least as efficient to the end that all liquid hydrocarbons recoverable from the gas by such means will be recovered. Upon written consent of the royalty owners, the requirement that gas be run through a separator or other equipment may be waived upon terms and conditions as prescribed by them. b. As a royalty on any gas, which is defined as all hydrocarbons and gaseous substances not defined as oil in subparagraph 4.b. above, produced from any well on the land (except as provided in this Lease with respect to gas processed in a plant), 21% of the gross production or the market value thereof received at the wellhead by a bona fide purchaser c. As a royalty on any gas processed in a plant, 21% of the residue gas and the liquid hydrocarbons extracted or the market value thereof, at the option of LESSOR. d. On all substances, including, but not limited to carbon dioxide and sulfur, permitted to be produced from the land by virtue of this Lease, and products, except liquid hydrocarbons, produced or manufactured from gas, and for which no royalty is otherwise specified in this Lease, LESSOR shall have and be entitled to 21% of that produced or saved to be delivered to LESSOR, received at the wellhead by a bona fide purchaser. e. Accounting and payment to LESSOR of royalties from the production of oil and gas from any well shall commence no later than one hundred twenty (120 days after the date the well commences first production. Thereafter, all accountings and payments of royalties shall be made on or before sixty (60) days following the calendar month in which the production occurred. Should LESSEE at any time fail to make royalty payments to LESSOR on or before sixty (60) days following the calendar month in which the production occurred, this Lease shall automatically terminate unless the payments are made within thirty (30) days after written notice is given to LESSEE. Any royalties provided for in this Lease which are not paid to LESSOR within the applicable time periods specified in this paragraph shall accrue interest at the same rate as judgments under the laws of the State of Texas from due date until paid. Acceptance by LESSOR of royalties which are past due shall not act as a waiver or estoppel of LESSOR'S right to receive or recover any and all interest due under the provisions of this paragraph unless the written acceptance or acknowledgment by LESSOR to LESSEE expressly so provides. LESSEE shall pay all reasonable attorney's fees incurred by LESSOR in connection with any lawsuit in which LESSOR is successful in recovering royalties or interest or in terminating this Lease due to LESSEE'S failure to pay royalties within the periods set forth above. f. LESSEE shall use its best efforts to obtain contracts relating to the sale of gas produced from the leased premises provisions providing for the adjustment of the price paid to reflect market fluctuations in gas prices; provided, however, and notwithstanding anything to the contrary in this lease, LESSOR's royalty on any substance produced pursuant to this lease shall 2- never be calculated on a value or price which exceeds the price actually received by LESSEE for the sale of such substance by a bona fide purchaser. . 5. Shut-In Gas. If LESSEE drills a well on land which the LESSOR has permitted to be pooled herewith, which well is capable of producing 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 being during or after the Primary Term (unless released by LESSEE) and it nevertheless shall be considered that oil and gas is being produced from the land covered by this Lease. When, at the expiration of the Primary Term or any time or times thereafter, the Lease is continued in force in this matter, LESSEE shall pay or tender as royalty to the parties who at the time of such payment would be entitled to receive royalty hereunder if the well is producing, or deposit directly with LESSOR at its address shown herein, a sum equal to ten dollars ($10.00) for each gross acre of land subject to this Lease at the time such payment is made. The first payment of such sum shall be on or before the first day of the calendar month at the expiration of ninety (90) days from the date the Lease is not otherwise maintained, and thereafter subsequent payments may be made at annual intervals. LESSEE'S failure to pay or tender or properly or timely pay or tender such sum as royalty shall render LESSEE liable for the amount due and shall operate to terminate this Lease automatically. 6. Limit of Shut-In: Notwithstanding anything to the contrary in this Lease, it is expressly agreed and provided that this Lease cannot and shall not be extended beyond the Primary Term by reason of the shut-in well provisions of Paragraph 5 for any single period of more than two (2) consecutive years or more than three (3) years in the aggregate. 7. Pooling: Subject To the reservations and surface use prohibitions of paragraph 2 of this Lease, LESSEE, at its option, is hereby given the right and power to pool or combine the acreage covered by this lease or any portion thereof as to oil and gas, or either of them, with any other land covered by this lease, and/or with any other land, lease or leases in the immediate vicinity thereof to the extent hereinafter stipulated, when in LESSEE'S judgment it is necessary or advisable to do so in order to properly to explore, or to develop and operate said leased premises in compliance with the spacing rules of the Railroad Commission of Texas, or other lawful authority, or when to do so would, in the judgment of LESSEE, promote the conservation of oil and gas in and under and that may be produced from said premises. Units pooled for oil hereunder shall not exceed forty (40) acres, plus a tolerance of 10 percent (10%) thereof, each in area, and units pooled for gas hereunder shall not exceed in area 640 acres each plus a tolerance of ten percent (10%) thereof, provided that should governmental authority having jurisdiction prescribe the creation of units larger than those specified, for the drilling or operation of a well at a regular location or for obtaining maximum allowable from any well to be drilled, drilling or already drilled, units thereafter created may conform in size with those prescribed by governmental regulations. LESSEE under the provisions hereof, may pool or combine acreage covered by this lease or any portion thereof as above provided as to oil in any one or more strata and as to gas in any one or more strata. The units formed by pooling as to any stratum or strata need not conform in size or area with the unit or units in to which the lease is pooled or combined as to any other stratum or strata, and oil units need not conform as to area with gas units. The pooling in one or more instances shall not exhaust the rights of the LESSEE hereunder to pool this lease or portions thereof into other units. LESSEE shall file for record in the appropriate records of the county in which the leased premises are situated an instrument describing and designating the pooled acreage as a pooled unit; and upon such recordation of the -3- unit shall be effective as to all parties hereto, their heirs, successors, and assigns, irrespective of whether or not the unit is likewise effective as to all other owners of surface mineral, royalty or other rights in land included in such unit. LESSEE may at its election exercise its pooling option before or after commencing operations for or completing an oil or gas well on the leased premises, and the pooled unit may include but is not required to include, land or leases upon which a well capable of producing oil or gas in paying quantities has theretofore been completed or upon which operations for the drilling of a well for oil and gas have theretofore been commenced. In the event of operations for drilling on or production of oil or gas from any part of a pooled unit which includes all or a portion of the land covered by this lease, regardless of whether such operations for drilling were commenced or such production was secured before or after the execution of this instrument or the instrument designating the pooled unit, such operations shall be considered as operations for drilling on or production of oil or gas from land covered by this lease whether or not the well or wells be located on the premises covered by this lease and such event operations for drilling shall be deemed to have been commenced on said land within the meaning of paragraph 8 of this lease; and the entire acreage constituting such unit or units, as to oil and gas, or either of them, as herein provided, shall be treated for all purposes, except the payment of royalties on production from the pooled unit, as if the same were included in this lease. For the purpose of computing the royalties to which owners of royalties and payments out of production and each of them shall be entitled on production of oil and gas, or either of them, from the pooled unit, there shall be allocated to the land covered by this lease and included in said unit (or to each separate tract within the unit if this lease covers separate tracts within the unit) a pro rata portion of the oil and gas, or either of them, produced from the pooled unit after deducting that used for operations on the pooled unit. Such allocations shall be on an acreage basis--that is to say, there shall be allocated to the acreage covered by this lease and included in the pooled unit (or to each separate tract within the unit if this lease covers separate tracts within the unit) that pro rata portion of the oil and gas, or either of them, produced from the pooled unit which the number of surface acres covered by this lease (or in each such separate tract) and included in the pooled unit bears to the total number of surface acres included in the pooled unit. Royalties hereunder shall be computed on the portion of such production, whether it be oil and gas, or either of them, so allocated to the land covered by this lease and included in the unit just as though such production was from such land. The production from an oil well will be considered as production from the lease or oil pooled unit from which it is producing and not as production from a gas pooled unit; and production from a gas well will be considered as production from the lease or gas pooled unit from which it is producing and not from an oil pooled unit. The formation of any unit hereunder shall not have the effect of changing the ownership of any shut-in production royalty which may become payable under this lease. If this lease now or hereafter covers separate tracts, no pooling or unitization of royalty interest as between any such separate tracts is intended or shall be implied or result merely from the inclusion of such separate tracts within this lease, but LESSEE shall nevertheless have the right to pool as provided above with consequent allocation of production as above provided. As used in this paragraph 7, the words "separate tract" mean any tract with royalty ownership differing, now or hereinafter, either as to parties or amounts from that as to any other part of the leased premises. 8. Termination. a. If, at the expiration of the Primary Term, LESSEE is not engaged in the actual drilling of a well under the terms of this Lease or if LESSEE has completed or abandoned -4- a well on the land within one hundred twenty (120) days prior to expiration of the Primary Term and is not, at the expiration of one hundred twenty (120) days after the date or completion or abandonment of the well, engaged in the actual drilling of another well under the terms of this Lease, this Lease shall then terminate as to all of the land, save and except the following: Each well producing oil or being drilled, reworked or completed, and classified as an oil well under the rules and regulations of the Railroad Commission of Texas, together with forty (40) acres around each such well (an "Oil Unit"). Each well producing gas (or capable of producing gas with all shut-in royalty having been paid thereon) or being drilled, reworked or completed, and classified as a gas well under the rules and regulations of the Railroad Commission of Texas, together with the one hundred sixty (160) acres around each such well (a "Gas Unit"). b. Each Oil Unit or Gas Unit shall be in as near the form of a square as reasonably practicable considering the boundary of the land and the necessity of a legal location of the well on the unit. Notwithstanding the foregoing, if the Railroad Commission of Texas or other authority having jurisdiction, by rule or order prescribes a larger number of acres for the purposes of securing the maximum allowable production, each unit shall be increased in size as necessary to conform to the number of acres prescribed by the rule or order. C. If, at the expiration of the Primary Term, LESSEE is engaged in the actual drilling of a well under the terms of this Lease or if LESSEE has completed or abandoned a well on the land within ninety (90) days prior to expiration of the Primary Term and is, at the expiration of one hundred twenty (120) days after completion or abandonment of the well, engaged in the actual drilling of another well under the terms of this Lease this Lease shall not terminate so long as LESSEE pursues the drilling of the well with reasonable diligence to completion or abandonment and so long as LESSEE commences the actual drilling of additional and successive wells under the terms of this Lease at intervals not exceeding one hundred twenty (120) days between completion of a well as a producer or dry hole and commencement of actual drilling of the next well under the terms of this Lease. If and when LESSEE fails to commence the actual drilling of a well within the applicable interval (or within the extended time provided in subparagraph 8.d. below, this Lease shall then terminate to all of the land, save and except the Oil Units and Gas Units provided in subparagraph 8.a. above. Upon expiration of the Primary Term or the cessation of the continuous drilling program set forth herein, whichever is later, this Lease shall also terminate as to all depths below each unit retained as to depths below a depth of one hundred feet (100') beneath the deepest producing horizon or zone for each unit. d. If LESSEE, in the conduct of actual drilling operations under this Lease after the expiration of the Primary Term, commences the actual drilling of any next succeeding well within less than the ninety (90) day time interval specified in subparagraph 8.c. and thus speeds up the development of the land, LESSEE shall have credit in time for the -5- accelerated development and may, in the conduct of subsequent actual drilling operations, take advantage of the credit in time on a cumulative basis and thus extend the time for the commencement of actual drilling of any subsequent well or wells required to be drilled under the provisions of this Lease in order to prevent termination of this Lease. Within ten (10) days of the commencement of the actual drilling of each well under the terms of this Lease, LESSEE shall give LESSOR written notice of the date of commencement. Within ten (10) days after the completion or abandonment of each well under the terms of this Lease, LESSEE shall give LESSOR written notice of the date of completion or abandonment and also of the time credit, if any claimed by LESSEE as a result of having commenced the actual drilling of the well within less than the required interval. If LESSEE fails to timely so notify LESSOR in any of these respects, LESSEE shall not be entitled to any credit in time for accelerated development. Nothing contained in this paragraph shall relieve LESSEE of any offset obligation arising by implication or under the terms of this Lease, but any well drilled by LESSEE to satisfy an offset obligation will entitle LESSEE to the privileges of this paragraph. 9. Removal of Equipment. Subject to the surface use prohibitions of paragraph 2, LESSEE shall have the right at any time during and for one hundred eighty (180) days after the expiration of this Lease to remove all casing. Thereafter, it shall be deemed abandoned to LESSOR. If LESSEE fails to remove such property, casing and fixtures within such 180 day period, at Lessor's option, ownership of the same will vest in LESSOR, LESSOR'S successors and assigns or LESSOR, at its option, may require the removal of said equipment in addition to all other remedies to which LESSOR is entitled under law. 10. Assignment. The rights of either party hereunder may be assigned in whole or in part, and the provisions hereof shall extend to and bind their respective heirs, successors and assigns; but 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. 11. Title. LESSOR does not warrant or agree to defend the title of the lands covered hereby. LESSEE takes this Lease without warranty of title either express or implied. If LESSOR owns an interest in the oil, gas and minerals leased hereby less than the entire fee simple estate, then the royalties, or other monies accruing from any part of the land to which this Lease covers less than such full interest shall be paid to LESSOR only in the proportion which LESSOR'S interest therein, if any, bears to the whole and undivided fee simple mineral estate therein. It is the sole responsibility of LESSEE to determine the LESSOR's mineral interest. The bonus payment paid for this Lease shall be deemed to be final if no title problems are submitted for resolution within ninety (90) days of the Effective Date. 12. Force Maieure: When drilling, production or other operations under the terms of this Lease or land pooled with such land, or any part thereof are prevented, delayed or interrupted by fire, storm, flood, war, rebellion, insurrection, sabotage, riot, strike, or as a result of some law, order, rule, regulation or necessity of governmental authority, either State or Federal, the Lease shall nevertheless continue in full force and effect and be extended for the period such drilling, production and other operations are so prevented, delayed or interrupted. LESSEE shall not be liable for breach of any express or implied covenants of this Lease when drilling, production or other operations are so prevented, delayed or interrupted, except that nothing in this paragraph 12 -6- shall be construed to suspend the payment of delay rentals, shut-in royalty or any other amount otherwise required to maintain this Lease in effect. 13. Designation of Gas Unit. a. Upon completion of the first well as a producer of oil and/or gas in paying quantities (whether the first or a subsequent well drilled), LESSEE shall designate an approximately sized drilling unit around said first producing well, all out of the above described property, by filing a written designation in the Deed Records of Denton County Texas and shall provide LESSOR with a copy of such unit designation. b.. If a second well is completed as a producer of gas in paying quantities, LESSEE shall again designate an approximately sized drilling unit around said second producing well, all out of the above described property, by filing a written designation in the Deed Records of Denton County, Texas and shall provide LESSOR with a copy of such unit designation. LESSEE shall designate all drilling units in a fair and reasonable manner so that the remaining acreage not included in the drilling units is capable of being drilled or pooled with other lands. All designations of units as provided in this paragraph 13 shall be in accordance with and subject to the provisions of paragraph 8 above. 14. Indemnifications and Insurance. LESSEE shall provide or cause to be provided the insurance described below for each well drilled under the terms of this Lease, such insurance to continue until the well is abandoned and the site restored. Such insurance shall provide that LESSOR shall be a co-insured, without cost, and that said insurance can not be canceled or terminated without thirty (30) days prior notice to LESSOR and ten (10) days notice to LESSOR for nonpayment of premiums. a. General Requirements. Indemnification and Express Negligence Provisions. LESSEE shall expressly release and discharge, all claims, demands, actions, judgments, and executions which it ever had, or now have or may have, or assigns may have, or claim to have, against the LESSOR, it agents, officers, servants, successors, assigns, sponsors, volunteers, or employees, created by, or arising out of personal injuries, known or unknown, and injuries to property, real or personal, or in any way incidental to or in connection with the performance of the oil and gas drilling and production performed by the LESSEE under this lease and the LESSEE shall fully defend, protect, indemnify, and hold harmless the LESSOR, and/or its departments, agents, officers, servants, employees, successors, assigns, sponsors, or volunteers from and against each and every claim, demand, or cause of action and any and all liability, damages, obligations, judgments, losses, fines, penalties, costs, fees, and expenses incurred in defense of the LESSOR, and/or its departments, agents, officers, servants, or employees, including, without limitation, personal injuries and death in connection therewith which may be made or asserted by LESSEE, its agents, assigns, or any third parties on account of, arising out of, or in any way incidental to or in connection with the performance of the oil and gas well drilling and production performed by the LESSEE under this lease and, the LESSEE agrees to indemnify and hold harmless the LESSOR, and/or its departments, and/or its officers, agents, servants, employees, successors, assigns, sponsors, or volunteers from any liabilities or damages suffered as a result of claims, demands, costs, or judgments against the LESSOR and/or, its -7- departments, it's officers, agents, servants, or employees, created by, or arising out of the acts or omissions of the LESSOR occurring on the drill site or operation site in the course and scope of inspecting and permitting the gas wells INCLUDING, BUT NOT LIMITED TO, CLAIMS AND DAMAGES ARISING IN WHOLE OR IN PART FROM THE NEGLIGENCE OF THE LESSOR OCCURRING ON THE DRILL SITE OR OPERATION SITE IN THE COURSE AND SCOPE OF ITS DUTIES UNDER THIS LEASE.. IT IS UNDERSTOOD AND AGREED THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION IS AN INDEMNITY EXTENDED BY THE LESSEE TO INDEMNIFY AND PROTECT THE LESSOR AND/OR ITS DEPARMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES FROM THE CONSEQUENCES OF THE NEGLIGENCE OF THE CITY OF DENTON, TEXAS AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONTRIBUTING CAUSE OF THE RESULTANTANT INJURY, DEATH, AND/OR DAMAGE. b. All policies shall be endorsed to read "THIS POLICY WILL NOT BE CANCELLED OR NON-RENEWED WITHOUT 30 DAYS ADVANCED WRITTEN NOTICE TO THE OWNER AND THE CITY EXCEPT WHEN THIS POLICY IS BEING CANCELLED FOR NONPAYMENT OF PREMIUM, IN WHICH CASE 10 DAYS ADVANCE WRITTEN NOTICE IS REQUIRED". C. Liability policies shall be written by carriers licensed to do business in Texas and with companies with A: VIII or better rating in accordance with the current Best Key Rating Guide, or with nonadmitted carriers that have a financial rating comparable to carriers licensed to do business in Texas approved by the City. d. Liability policies shall name as "Additional Insured" the city and its officials, agents, employees, and volunteers. e. Certificates of insurance must be presented to the City evidencing all coverages and endorsements required by this Section 35-508, and the acceptance of a certificate without the required limits and/or coverages shall not be deemed a waiver of these requirements. f. Claims made policies will not be accepted except for excess policies or unless otherwise provided by this Article. g. Required Insurance Coverages 1. Commercial General Liability Insurance. Coverage should be a minimum Combined Single Limit of $1,000,000 per occurrence for Bodily Injury and Property Damage. This coverage must include premises, operations, blowout or explosion, products, completed operations, blanket contractual liability, underground property damage, broad form property damage, independent contractors protective liability and personal injury. 2. Environmental Impairment (or Seepage and Pollution) shall be either included in the coverage or written as separate coverage. Such coverage shall not exclude damage to the lease site. If Environmental Impairment (or Seepage and Pollution) Coverage is written on a "claims made" basis, the policy must provide -8- that any retroactive date applicable precedes the effective date of the issuance of the permit. Coverage shall apply to sudden and non-sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste material or other irritants, contaminants or pollutants. 3. Automobile Liability Insurance. Minimum Combined Single Limit of $500,000 per occurrence for Bodily Injury and Property Damage. Such coverage shall include owned, non-owned, and hired vehicles. 4. Worker's Compensation Insurance. In addition to the minimum statutory requirements, coverage shall include Employer's Liability limits of at least $100,000 for each accident, $100,000 for each employee, and a $500,000 policy limit for occupational disease, and the insurer agrees to waive rights of subrogation against the city, its officials, agents, employees, and volunteers for any work performed for the city by the LESSEE. 5. Excess (or Umbrella) Liability Insurance. Minimum limit of $10,000,000 covering in excess of the preceding insurance policies. 6. Control of Well Insurance. a. Minimum limit of $5,000,000 per occurrence. b. Policy shall cover the Cost of controlling a well that is out of control, Redrilling or Restoration expenses, Seepage and Pollution Damage. Damage to Property in the LESSEE's Care, Custody, and Control with a sub-limit of $500,000 may be added. 15. Offset Well Requirement. In the event a well or wells producing oil and gas in any quantities that should be brought in by LESSEE or any other LESSEE on adjacent lands and within 330 feet of the land or lands pooled, by permission of LESSOR, with such lands, LESSEE agrees to drill such offset wells as a reasonably prudent LESSEE would drill under the same or similar circumstances. 16. Location of Drilling Activity, Pipelines and Equipment: No drilling activity shall be conducted on and no pipelines, equipment or other structures shall be placed on or under any pavement, concrete or asphalt or any other improved surface area situated on the above described land. Pipelines shall not be located on the lands covered by this Lease, and shall be situated along routes that least interfere with LESSOR's existing or future use of the surface. No equipment or roads shall be built on city property. The provisions of this paragraph 16 or any other terms, provisions and conditions of this Lease shall in no way impair, prevent or prohibit Lessee's right to drill, complete, equip, rework, maintain and operate a directional, horizontal or other subsurface wellbore and/or drainhole under the land covered by this Lease. When required by LESSOR, LESSEE will bury all pipelines at a depth of six feet (6'), and the location of wells shall comply with Chapter 29, Fire Code, of the Code of Ordinances of the City -9- of Denton, as amended, and all other applicable laws; provided, however, in no event will any such activities or operations be conducted on the surface of the lands covered by this Lease. 17. Compliance with Laws: LESSEE shall comply with all applicable rules, regulations, ordinances, statutes and other laws in connection with any drilling, producing or other operations under the terms of this Lease, including, without limitation, the oil and gas well regulations of the City of Denton. 18. Lease Assignment: The assignment of this Lease by LESSEE, or any successor LESSEE, shall not relieve LESSEE, or any such successor, from its obligations hereunder. LESSOR may, unless it agrees to the contrary, look to the LESSEE and/or any successor of LESSEE for performance of any one or more of such obligations. 19. Water: LESSEE shall not use any water in, on, or under the above-described land 20. Dilieent, Good Faith Operations. Each well drilled under this Lease shall be drilled with reasonable diligence and in good faith and in a good and workmanlike manner in a bona fide attempt to product oil, gas and associated minerals therefrom. 21. Captions and Headings: The captions and headings in this Lease are for convenience only and shall not modify, change, amend, alter, or affect the true meaning of any paragraph, sentence, clause, phrase, or words herein. 22. Memorandum of Lease. LESSOR and LESSEE agree that a memorandum of lease shall be filed of record in the Official Records of Denton County, Texas, evidencing this Lease and the provisions contained in such memorandum to the parties hereto, the land covered by the Lease, the term of the Lease and notice provisions informing the public of the existence of the Lease. 23. Entire Agreement. This Lease states the entire contract between the parties, and no representation or promise, verbal or written, on behalf of either party shall be binding unless contained herein; and this Lease shall be binding upon each party executing the same, regardless of whether or not executed by all owners of the above described land or by all persons above named as "LESSOR", and, notwithstanding the inclusion above of other names as "LESSOR", this term as used in this Lease shall mean and refer only to such parties as execute this Lease and their successors in interest. IN WITNESS WHEREOF, this instrument is executed on the date first above written. -10- CITY OF DENTON, TEXAS - LESSOR ATTEST: *N'wo - MIKE CONDUFF, CITY I nAnNAGER JENNIFER WALTERS, CITY SECRETARY z~ APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: k~3z.rl -11- -11105 ~0~) JOINT RESOURCES COMPANY BY: MARK KALPAKIS, P ENT 770 N. FIELDER ROAD ARLINGTON, TEXAS 76012 STATEOFTEXAS § § COUNTYOFDENTON § Before me, the undersigned notary public, on this day personally appeared MARK KALPAKIS, the PRESIDENT of JOINT RESOURCES COMPANY, a Texas corporation, who is known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed that instrument for the purposes and consideration therein expressed and in the capacity therein stated. Given under my hand and seal of office thisiNt day of NO , 2003. BEDOIE A. MORROW MV COMMISSION EXPIRES V`ti0~-~+Tlr- ,p}•, Septamber3,2008 Notary Public SAN, DwomemnXGu Well Dwumenmftah Leka Pooling Agm nida 12- The J s file-in he'Ci - exact legal r~ - rf~ --Secretary's nfthe; sctyription it 1 ~ is 1 \ te " a B Poten I s 1i~ n _ i Potential as rn lli ~ es North taxes Park U R os ~.aun l~ • -Fro n a . as' s Drilling Sites North takes Paik E~a ® ® s t C 1 Yd d5Y4" ~ g a v vsp \J \4I CL QQ0 .lmo n ~U) 1 J Jc 0 Parcel I All that certain lot, tract or parcel of land lying and being situated in the City and County of Denton, State of Texas, and being it part of the N. H. Meisenheimer Survey, Abstract No. 810, and being a part of a tract of land as conveyed from J. Newton Rayzor to Jess Newton Rayzor et at by Deed dated March 17, 1965, and shown of record in Vol. 521, Page 172, of the Deed Records of Denton County, Texas, and being more particularly described as follows: BEGINN'TNG at the southwest comer of a 92.463 acre tract of land conveyed to H. W. Down, Jr., d/b/a H. W. Down Development Co., Inc, by deed dated February 1, 1965, from Cora Riney et at as recorded in Vol. 520, Page 15, of the Deed Records of Denton County, Texas, said point also being described as the northwest corner of a 116.968 acre tract of land as conveyed to H. W. Down Development Co., inc., et at by Deed dated April 26, 1963, from Alan Whatley et at and recorded in Vol. 499, Page 169, of the Deed Records of Denton County, Texas; THENCE south 88° 41' 56" cast along the south boundary line of the aforesaid 92.463 acre tract of land, same boundary line being the north boundary line of the aforesaid 116.968 acre tract of land, a distance of 2426.76 feet to a point for corner; THENCE north 34° 39' 56" west a distance of 1161.60 feet to a point for comer; THENCE north 88° 55' 56" west a distance of 1290.00 feet to a point for corner; THENCE south 66° 05` 04" west a distance of 500.00 feet to a point for corner, said point lying in the west boundary line for the aforesaid 92.463 acre tract of land; THENCE south 01 ° 35' 04" west along the aforesaid west boundary line of the 92.463 acre tract it distance of 722.20 feet to the place of beginning and containing 43.902 acres of land more or less. w o y ~ V A ~ C ~ k C aS ~ .C C Tl C O y E' a c c3 nQa? a y c y u c y OL L ./r •h p G o v a~ic° Yi c ~ C 4r O . U F- O ip 4 C. L U y V M C- z C >1 :a y O O C 3 ^ "o v p v~ NG1~ a C _ 4 L) 'Lt } L eC `'Ll' c ~ y N a ~ Y a ' C ; > ty cr.. ~ y ~ Y ~ ~ 9 y 9 j ? y y jJ ~ ~-Ca C m ° ~s C v 0 y y v~ y C, a a 7q 6 a~ n DO O ~ ~ c~ ~ M .c ~ ~ y v 3 C T 60 4w y ' a y c C o o0 Y w ~ ~ .'C5 ' L tiC ~ L v .C r4 v O 'F G tz.1 t:.1 Lc~ W l 00 8 O 41 1 ~ 0 Ul It j2 > fn 0 N- .4 o ~ c ~ CC i c p ~ ~ ~ ~ v U. a • u . ~ VJ y O ty L j r 0 gt1 - tq y r I 3 'o p ~ U x .n c! oa cs ~ ~ Y~ v 3 ~ v " u ~ ~ 3 y d E G = _ ~ c ~ c ~ c O V C ~ C C ~ ~ E LY N ~t C+ {`1 It Q N Cn n p h - C7 . ZY G n g . ~ ~ N Gam 4) N ~ ~ C . L C3 ; O ^J ^..l7 bfy L~ ! CI} L q j p U} t i ` O y 4 C m O O ~y.( I at . S . c*J ,n ~ " 'O ' C, t; 1 '7 ' ON U Z 'D 'C 00 ItD u M LY ^ O AJ N ~ iD r- N oc v a O W O DO is _ r v. 7 rn S C . - S O L ^ C ~ C t~ ~ SAY G C ~ O~ O O C p r7 C G L W W W ix7 ES;7 W L".7 w rLl W e Z L O x x u m W e W r - ' ms = = 72 es ~ ~ LJ F F F s,.=, F- © ~ . E - [ ~ ° F F - c ~ a L G 1 4.; '27 Y ° ~ is C m U Yr C C 'C C? n U O CC U ~ ~ = R L p N v rQ U t. C ~ y ^ O v h ±•~O N G C J = V y Q r5 c~3 0 'y c B 0 to C v L3J C ~ C 0 N E L ° V n O v c o c t) LLJ ~ p .c O U ~ y U fl. x ~ F . . 8 C a N c ycJ., c ZSNI a o ° r"O h Q O rv t4' i2 3s ~ 4 Q3 y ~ d o O U O r`J r' (y r' N ` ° `r o U Z ° U C ~ o o P. o O} 6 4 G y 4, ~ d Ch O ~ ~ 0 Q _ rs ci as E- ~ l ° c i n u3 al LL} W W U LU V W .5 Q I - ro z ;z 7_ « aS U N 4: ~ L f-' cUC Parcel 5 All that certain tract or parcel of land lying and situated in the City and County of Denton, State of Texas, being out of the N. K Meisenheimer Survey, Abstract No 910, and being a part cif 75,27 acre tract of land conveyed by Mrs. Grace E. Irwin, a widow, to J. Newton Rayzor by Deed dated March 22, 1960 and shown of rectrrd in Vol. 454, Page 659 of the Deed Records of Denton county, Texas and being also a part of a 12,033 acre tract of land conveyed by Bailey Mullins to J. Newton Raynor by Deed dated May 1, 1961 and drown of record in Vol. 458, Page 582 of the Deed Records of Denton County, 'texas, and being also a part of two parcels of land conveyed by C. E. Bennett to J. Newton Rayzor by Deed dated July 15, 1963 and being more particularly described as follows: COMMENCING at a point in the south boundary line of the N. H. Meisenheimer Survey, Abstract No, 810, Denton County, Texas, said point also being described as the southwest corner of a 116.968 acre tract of land as conveyed to H. W. Down Development Co., Inc., by deed dated April 26, 1963 from Alan Whatley et al and recorded in Vol, 499, Page 169, of the Deed Records of Denton County, Texas, also said point being the southeast corner of the aforementioned 75.27 acre tract of land conveyed by Mrs. Grace Erwin to J. Newton Raynor, said point being also the southeast earner of a 10 acre tract of land conveyed by Denton Independent School District to J. Newton Rayzor et al by deed dated August 12, 1966; THENCE north 01132' 04" east along the east line of aforesaid 75,27 acre tract and the east line of aforesaid 10 acre tract and the west: line of aforesaid 116.968 acre tract a distance of 720.00 feet to a point for corner, said point being the northeast corner of the aforesaid 10 acre tract; to the place of beginning; THENCE north 01° 32' 04" east along the continuation of the aforesaid boundary lines a distance of 916.00 feet to an iron pin for corner, said corner being the northeast corner of the aforesaid 75.27 acre tract of land and the northwest corner of the aforesaid 116.968 acre tract of land: THENCE north 87' 54' 50" west along the north line of aforesaid 75.27 acre tract a distance of 834.60 feet to a point for corner; said point being the southeast corner of the aforesaid 12.033 acre tract of land; THENCE north 01 ° 37' 04" cast along the east boundary line of the aforesaid 12.033 acre tract of land a distance of 500.00 feet at a point for corner; THENCE north 87' 55' 56" west passing the west boundary line of the aforesaid 12.033 acre tract of land and the east line of aforesaid parcels of land conveyed by C. E. Bennett and Dovie Bennett to J. Newton Rayzor, a distance of 550.00 feet to a point for corner; Page 5 of 26 THENCE south 04° 03' 04" west at 496.00 feet passing the south line of aforesaid Bennett to Rayxor parcels of land and the north line of aforesaid 75.27 acre tract of land and continuing a total distance of 1269.00 feet to a point for corner, THENCE south 59" 56' 56' east a distance of 550.00 feet to a point for corner; THENCE south 54° 03' 04" west a distance of 995.00 feet to a point for cotter in the south line of aforesaid 7527 acre tract said point being also in the south line of the aforesaid N, H. Meisenheimer Survey; THENCE south 88° 03' 56" east along the south line of aforesaid 75.27 acre tract and the aforesaid south line of N. H. Meisenheimer Survey a distance of 1169.65 feet to a point for corner, said point also being the southwest comer of aforesaid 10 acre tract of land; THENCE north 02° 00' 00" east along the west line of aforesaid 10 acre tract of land, a distance of 778.15 feet to a point for corner, said point being the northwest corner of the aforesaid 10 acre tract, THENCE south 88° 00' 00" east along the north line of the aforesaid 10 acre tract a distance of 75.88 feet to the P, C, of a curve to the right having a central angle of 91 34 a tangent of 150.00 feet, and a radius of 1700.93 feet; THENCE along the arc of said curve a distance of 299.30 feet to the P. `I'_ of the curve„ THENCE south 78° 26' 00" east along the north line of aforesaid 10 acre tract a distance of 200.00 feet to the place of beginning and containing 47.6866 acres of land more or less. Save and Except Tract 1 ALL that certain lot, tract, or parcel of land lying and being situated in the N. H. 1?Icisenheimer Survey A-810 and being part ofa tract shown by deed to the City of Denton, Texas recorded in Golutne 697, Page 217 of the Deed Records of Denton County, Texas and being more particularly described as follows; BEGINNING at the northwest corner of said City ol'Denton tract; 'ITIENCE south 4003' 04" west a distance of 1269.0 fl. to a point for a corner; THENCE south 59° 56' 56" east a distance of 75,89 ft. to a point for a corner; THENCE north 1 ° 03' 10" east a distance of 1304.05 fL to the Point of Beginning and containing 0.994 acres of land. Page 6 of 26 G lY C S d V~ L L y+ O O = = ~ ~ ~ ~ _J} C O ~ m ' - ~ ~ ypzn a p a`i _ _y s C> m t _ t ~ [ C O ` O T7 Ca O~ tl j is O ~ Y y O J O C , Q O G O U O O ~ 0~ • O' O 03 .C G ~ ~ m t,., O C ~ C fl. P v w • b (C ~ . O o O cn r - x o o_o G O G` f b O s . O ay -p tC M - y O G G T7 o •p rn yy C O ~ r., bb U O. G pyj C %n O v ti i . CL tCd ~ O C ~ i ~ } ~ ~ t7 Q v X ~ Q W y O ~ N^ G Y7 ~ Yr~ 'L7 O y ~ o GG .n b 00 U n y 0 v N y LA V Y n at h Co " s a.~ O c.:: u, o o ~ 2 2 y x Z v, L• _ a r ..+3 O Q p . ~I N M. v o t3 i o ~ G 2s c c ~ a G r~ v y y p y ~ a. 'O w G ro ro -a _ ' ~ y G C s o M ri 9 3 G~ Y ~ t7 w ~ ~ 'aT v; V' 'jy ~ N - F-e G ~ w L G y" ~ v v ~ „ y O ~ w N tU., 4 n N in tC c1 C ~ C. C} G Chl y v N i s b ° o s ar5 3 y ~ a z O d O vii 4 O w s c s CA y C 7 Gh vl c° Z r; s c r C v u t3 " a ' o C v 4 ~ ~ C,7 CJ ~ F ~ F ~ Parcel 7 Tract I All that certain tract or parcel of land lying and situated in the City and County of Denton, State of Texas, being a part of the N. II. Meisenheimer Survey, Abstract No. 810, and being also a part of a 1168 acre tract of land described as "First Tract" in a Deed dated August 28, 1963, and shown of record in Vol. 499, Page 169, Deed Records, Denton County, Texas, from J. W. Jagoe, Jr. et al to H. W, Down Development Co., Inc,, a corporation, and J. Newton Rayzor of Denton County, 'texas; Tract Two being 10 acres out of the same said N. H. Meisenheimer Survey, Abstract No. 810, conveyed by the Denton Independent School District to J. Newton Rayzor of Harris County, Texas and Jess Newton Rayzor et al; being more particularly described in two tracts as follows: BEGINNING at an iron pin in a fence corner located in the southwest corner of aforesaid 116.8 acre tract, said iron pin being located also in the south boundary line of aforesaid N. N, Meisenheimer Survey, and the north boundary line of the Robert Beaumont Survey, Abstract No. 31; T14ENrCE south 88°28' 56" east along the south boundary line of aforesaid 116,8 acre tract, and the south line of the aforesaid Meisenheimer Survey at a distance of 739.2 feet, passing the northwest corner of Lot 1, Block XXIV of the North University Place Addition, Fourth Section, as addition to the City of Denton, State of Texas and continuing on along the north boundary line of said ;forth University Place Addition, and aforesaid north boundary line of the Robert Beaumont Survey, and aforesaid south boundary line of the N, 1.1 Meisenheimer Survey at 869.69 feet passing the northeast corner of aforesaid Lot 1, Block XXIV, and the west boundary line of Georgetown Street, and continuing on and at 919.69 feet, passing the east boundary line of Georgetown Street, and the northwest corner of Lot 1, Block XXII, North University Place Addition, and the southwest corner of a 10.837 acre tract of land conveyed to the Denton Independent School District by J. Newton Rayzor et al, by Deed dated May 12, 1966 and shown of record in Vol. 540, Paste 663 of the Deed Records of Denton County, Texas, and continuing on along the same aforesaid survey lines and the north line of North University Place and the south boundary line of said 10.837 acre tract of land and at 1518.65 feet passing the northeast corner of Lot 7,13lock XXII of North University Place Addition, and continuing on along the same line an additional 50 feet for a total distance of 1,568.65 feet to an iron pin, a point for corner, said point being located north 88° 28' 56" west a distance of 17.4 feet from the southeast corner of aforesaid 10.837 acre tract of land; THENCE north 46° 41' 04" east, and at 24.55 feet passing the east boundary line of aforesaid 10.837 acre tract of land, and the west boundary line ofa 3.020 acre tract of land conveyed to the Denton Independent School District by 1-1_ W. Down Development Co., inc. by Deed dated August 12, 1966 and shown of record in Vol. 540, Page 659 of Deed Records of Denton County, Texas, continuing on and at 335.31 feet, passing the Page 9 of 26 east boundarv line oi'aforesaid 3.020 acre tract of land, and continuing on a total distance of 460.00 feet to an iron pin for corner; THENCE north 71° 26' 4" cast a distance of 1146.80 feet to an iron pin f'or corner in the west boundary line of Hinkle Drivc; THENCE north 00° 48' 04" east along the west boundary line of Hinkle Drive a distance of 90.00 feet to point for comer, said point being also the intersection of the west boundary line of Hinkle Drive and the north boundary line of Old Sanger Road; THENCE south 89° 00' 56" east along the north boundary line of Old Sanger Road, a distance of 70.00 feet to an iron pin for corner; THENCE north '4°'9' S6" west a distance of 1039.1 feet to a point for earner in the north boundary line of aforesaid 116.8 acre tract of land and the south boundary line ofa 92.463 acre tract of land conveyed by Cora Riney et al, Harry W. Down, Jr., d/b/a H. W. Down Development Co., Inc. by Deed dated February 1, 1965 and shown of record in Vol. 520, Page 18 of the Deed Records of Denton County, Texas. THENCE north 88° 41' 56" west along the north line of atoresaid 116.8 acre tract and the south line of aforesaid 92.463 acre tract, a distance of 2426.76 feet to an iron pin for comer; said corner being the northwest corner of aforesaid 116.8 acre tract and the southwest corner of aforesaid 92.463 acre tract; THENCE south 01° 32' 04" west, along the west boundary line of aforesaid 116.8 acre tract, a distance of 1636.00 feet to the place of beginning and containing a total of 93.6861 acres of land more or less, which includes 70.834 acres out of the aforesaid 10.837 acres, and 2,0562 acres out of the aforesaid 3.020 acres belonging to the Denton Independent School District, leaving a net 80.7959 acres in the Tract 1. Tract II All that certain lot, tract or parcel of land lying, and being situated in Denton County, Texas, which was conveyed by Warranty deed dated July 1, 1958, from Robert W. Irwin, Wayne G_ Irwin, and R. L. Irvin to Mrs, Grace E. Irwin as shown of record in Vol. 438, Paoe 679, Deed Records of Denton County, Texas and apparently being the same land described in a deed from Lingwiller to B. W. McKenzie, said deed being dated April 7, 1923 and recorded in Vol. 188, page 325, Deed Records of Denton County, Texas; also a small amount adjoining the northern portion of the east end, as it is included under fence on the ground at the date of this survey (March 17, 1960) it being the intent of this survey to ascertain the amount Lifland in road and under fence, (Mrs. Grace E. Iwin's fence) and to describe said land, said land being out of the N. H. Meisenheimer Survey, Abstract No. 810, Denton Comity, Texas, more particularly described as follows: BI-01-,'NING at the southeast corner of the aforesaid tract of land; Page 10 of 26 THENCE north 1' 34' cast along the east boundary line a distance of 720.00 feet to a point for corner; THENCE north 78° 26' west, a distance of 200 feet to the P. C. ofa curve to the left having a central angle of 9° 34', a tangent distance of 150 feet, a radius of 1700,9256 feet; THENCE along said curve a distance of 299.30 feet to the P. T, of said curve; THENCE north 88' 00' west a distance of 75.88 feet to a point for a corner; THENCE south 2° 00' west a distance of 778,15 feet to a point for corner in the south line of aforesaid tract; THENCE south 88° 00' cast along the south line of aforesaid tract, a distance of 576.45 feet to the place of beginning, containing 10,000 acres of land more or less. Save and Except ALL that certain lot, tract, or parcel of land lying and being situated in the N, H. Meisenheimer Survey A-810 and being part of a tract shown by deed to the City of Denton recorded in Volume 697, Page 207 Deed Records of Denton County, Texas and being more particularly described as follows; COMMENCING at the northeast corner of said City of Denton tract, THENCE south 34' 39' 56" east a distance of 1039.10 ft.; THENCE north 89' 00' 56" west a distance of 70.00 ft.; THENCE south 0.0' 48' 04" west a distance of 90.00 ft.; THENCE south 71' 26'04" west a distance of 15.37 fl, to the Point of Beginning; THENCE north 0.0' 48' 04" east a distance of 24.43 ft. to a point in the southerly right- of way of Windsor Drive in a curve to left, whose radius is 484.52 ft. and central angle 27° 25' 59'; THENCE with said curve to the left, in a southwesterly direction a distance of 231.98' to the P.T. of said curve; THENCE south 60° 25' 46" west a distance of 177.67 R. to a point where the southerly right-ofway line of Windsor Drive intersects the southeasterly line of said City of Denton tract; Page 1 I of 26 L a a iJ ar .C O N 4 - v; T ~ _ N N ~ in C1Y of C C O C N ~ C ' j _IX3 v C cC C W 'C11 O 6 ~ 4+ O ra ~ O h- W u t"V ...r vi H Pa reel 8 Tract I ALL that certain tract or parcel of land situated in Denton County, `Texas, out of the N. H. Meisenheimer Survey, Abstract No. 810, and being part ofa 116.968 acre tract of land as conveyed to H, W. Down Development Company, inc., or al by deed dated April 24, 1963 from Alan Whatley, et al and recorded in Volume 499, page 169 of the Deed Records of Denton County, Texas, and more particularly described as follows: BEGINNING at a point in the south line of the above mentioned 116.968 acre tract, and in the north line of a 49.039 acre tract, described in the above mentioned deed, at a point which is 1145.85 feet, south 88° 28' 56" east from the northwest corner ofsaid 49.039 acre tract. Said beginning point also being in the south line of the said N. H. Meisenheimer Survey and in the north line of the Robert Beaumont Survey, Abstract No. 31 and in the west line of the proposed northerly extension of Malone Street in a curve to the left, with a radius of 229100 feet and a central angle of 38° 55' 20"; said point also being the northeast corner of air 8.398 acre tract conveyed on even date herewith, by H. W. Down Development Company, Inc., to J, Newton Rayzor; THENCE, northerly along the arc of said curve to the left a distance of 410.14 feet to the beginning of a reverse curve to the right with a radius of 535.00 feet, and a central angle of 2 F 30' 30"; THENCE along the arc of said curve to the right, a distance of 200.83 feet, to a point for an angle; THENCE north 43a 40' 56" west a distance of 35.36 feet to a point for an angle, said point being in the south line ofa proposed westerly extension of Windsor Drive; THENCE north 88° 40' 56" west with the south line ofsaid proposed Windsor Drive, a distance of 121.19 feet to a point for a corner; THENCE south i ° 19' 04" west a distance of 613.07 feet to a point for a comer in the south line of said 116.698 acre tract and in the south line of the said N. H_ Meisenheimer Survey; THENCE~ south 88° 28' 56" east with the said south line of the N. H. Meisenheimer Survey a distance of 298.98 feet to the place of beginning, and containing 3.020 acres of land. Tract 11 Al I that certain tract or parcel of land in Denton County, Texas, out of the N. H. Meisenheimer Survey, Abstract No. 810, and being part of a 116.968 acre tract as Page 13) of 26 conveyed to H. W. Down Development Company, Inc. by deed dated April 24, 1963, from Alan Whatley, et al and recorded in Volume 499, Page 169 of the Deed Records of Denton County, Texas, and more particularly described as follows: BEGINNING at a point in the north line of a 49.039 acre tract mentioned in the same deed, said point being located 180.49 feet south 880 28'56" east from its northwest corner, and in the south line of the above mentioned called 116.968 acre tract, and in the north line of the Robert Beaumont Survey, Abstract No. 31 and in the south line of the said N. 1-1. Meisenheimer Survey at a point in the east line of the proposed northerly extension of Georgetown Drive; THENCE continuing south 88' 28' 56" east with the south line of said 116.968 acre tract and the south line of the said N. H. Meisenheimer Survey, a distance of666.37 feet to a point for a corner in the southwest corner of a 3.020 acre tract conveyed by H. W. Down Development Company, Inc_, et al to Denton Independent School District by deed dated March 12, 1966; THENCE north 1' 19' 04" east with the west line of the said 3.020 acre tract a distance of 613.07 feet to a point fbr a corner in the south line of tite proposed westerly extension of Windsor Drive; said point being also the northwest corner of aforesaid 3.020 acre tract; TI,IENCE north 88' 40' 56" west with the south line of proposed Windsor Drive a distance of 38.81 feet to the beginning of a curve to the left:, with a radius of 375,00 feet and a central angle of 15° 37' 30'% THENCE along the are of said curve to the left, a distance of 102.27 feet to the beginning of a curve to the right, with a radius of 358.00 feet, and a central angle of'301 49' 30'% THENCE along the arc of said curve to the right, a distance of 192.60 feet to the end of the curve; THENCE north 73° 28' 56" west continuing with the south line of proposed Windsor Drive a distance of 475.00 feet, to a point for an angle; TUIE-NCE south 611 31' 04" west a distance of 35.36 feet to a point for an angle in the east line of the proposed northerly extension of Georgetown Drive, at the beginning of a curve to the left, with a radius of 376.62 feet, and a central angle of 43)' 31' 21"; THENCE along the are of said curve and with the east line of said proposed Georgetown Drive extension a distance of 286.09 feet to a point at the end of said curve; THENCE south 27' 00' 17" east with the easterly line of proposed Georgetown Drive, a distance of 106.15 feet to the beginning of a curve to the right, with a radius of 590.62 feet and a central angle of 28° 31' 21"; Page 14 of 26 THENCE along the arc of said curve to the right, and with the east line of the said proposed Georgetown Drive extension, a distance of 294.02 feet to the end of said curve; THENCE south 1 ° 31' 04" west continuing with the east line of proposed Georgetown Drive a distance of 50 feet to the point of beginning and containing 10.837 acres of land. Tract 111 All that certain tract or parcel of land in Denton County, Texas out of the Robert Beaumont Survey, Abstract No. 1, and being pan ofa 49,039 acre tract as conveyed to H, W. Down Development Company, inc., et al, by deed dated August 28, 1963 from Alan Whatley, ct al and recorded in Volume 499, page 169 of the Deed Records of Denton County, Texas, and being more particularly described as follow=s: BEGINNING at a point in the north line of the above mentioned 49.039 acre tract, which is 1 145.85 feet, south 88° 28' 56" east from its northwest corner; said beginning point also described as being in the north line of the said Robert Beaumont Survey, and in the west line of the proposed northerly extension of Malone Street; said west line being in a southerly curve to the right, and having a radius of 2293.00 feet, and a central angle of 38° SS' 20"; THENCE along the arc of said southerly curve to the right, and with the west line of the said proposed Malone Street extension, a distance of 951.35 feet, to a point for a corner in the south line of said 49.039 acre tract at a point which is 1133.34 feet from its southwest corner; said point also being the northeast corner of the above described 2.786 acre tract; THENCE north 88" 27' 56" west with the said south line of the 49.039 acre tract, a distance of 341.91 feet to a point for a corner in the east line of the proposed northerly extension of Bowling Green Street, said point also being the northwest corner of the above mentioned 2.786 acre tract; THENCE north 0136' 09" east with the said cast line of Bowling Green Street extension, a distance of 59.43 feet to the beginning of a curve to the right, with a radius of 3755.89 feet and a central angle of 0° 54' 55"% THENCE with the are of said curve to the right, and with the east line of the said Bowling Green Street extension, a distance of 60.00 feet to the end of said curve; THENCE north to 31' 04" east with the east line of the said Bowling Green Street extension a distance of 595.00 feet to the beginning of a curve to the left with a radius of 100.00 feet, and a central angle of 900 00' 00"; THENCE: along the are of said curve to the left, and with the east line of the said Bowling Green Street extension a distance of 122.08 feet to a point for a corner; Page IS of 26 THENCE departing from the said Bowling Green Street, north 21' 34' 17" east a distance of 144.84 feet to a point for a corner in the north line of the said 49.039 acre tract, said point being located 779.45 feet, south 88' 28' 56" east from its northwest corner; THENCE south 88' 28' 56" east with the north line of the said 49.039 acre tract, a distance of 366.40 feet to the place of beginning and containing 8.398 acres of land. Tract IV All that certain tract or parcel of land in Denton County, Texas out of the Robert Beaumont Survey, Abstract No. 31, and being part of a 31.140 acre tract as conveyed to H. W. Down Development Company, Inc. by deed dated April 24, 1963 by John W. Porter and recorded in Volume 493, Page 257 of the Deed Records of Denton County, Texas and more particularly described as follows: COMMENCING in the north line of North University Place Addition an addition to the City of Denton, Texas as recorded in Volume 4, Page 10 of the Plat Records of Denton County, 'texas, and in the west line of Malone Street as shown on said North University Place Addition plat, and 67.70 feet north I' 22` 04" east from the southeast corner of Lot 6, Block XVI of said Addition, in the beginning of a curve to the left with a radius of 1560.01 feet and a central angle of 6' 22' 10"; THENCE with the west line of the proposed northerly extension of Malone Street, same being along the arc ofsaid curve to the left a distance of 173.42 feet to the beginning ofa curve to the right, with a radius of 1680.01 feet and a central angle of 6122' 10"; THENCE continuing with said proposed extension of Malone Street, same being along the arc of the said curve to the right, a distance of 186.76 feet to the end of said curve; THENCE north I' 22' 04" east continuing with the west line of proposed Malone Street extension, a distance of 169.18 feet to its intersection with the centerline of a proposed cast-west street: T14ENCE north 21 51' 24" east a distance of 50.00 feet to a point in the west line of said Malone Street, the point of beginning of the tract herein described said point being at the beginning of a curve to the right, with a radius of 760,00 feet, and a central angle of 15' 52' 30"; THENCE with the west line of said proposed Malone Street extension, same being along the are of said curve to the right, a distance of 210.57 feet to the beginning of a reverse curve to the left, with a radius of 2293,00 feet, and a central angle of 381 55' 20`; THENCE continuing with said proposed Malone Street extension, same being along the arc of the last mentioned curve to the left, a distance of 196.19 feet to a point for a corner Page 16 of 26 C U ~ ~ W CO U" y TS vs ti O 'a C GS h C V O C C N r ro p pa; ~ J y m p M h ~ C C]. W L. O d C ~ O 4. ' V ~ CV1 O a O C O ,U c: se: .C rz n C 7Y QY t1 cC r3 G? w ~ b0 L p d 0 2 -q O CRj . L o U N . C Y ~ i s. ~ G y i' Ti. O W r} s . O v O C to O 4 O x. ~1 u u C m p G .'C., v; C y v. ~ cC tC v. ai U L R G3 V C~ w (n ~ L m 4.. CJ 3' a ~ L ~ C ~ $ t V1 C ? . n tt5 Y ~ L 'Cp c: y V~ y U H C, y M C y v j o 00L c vv c o 0 o u h 00 O al) c (7 v (7 5n ° J O C7 t W h w y 7 C C R / L - r. G v ~ ~ ~ ~ rL N G ~ i ~ C ~ J „ . ~ oo r' Ts v H fL 3 h u} G*3 E^ c. n o F- v c m ro c F' c ~ c p ~v o ~ p CJ w 'a Rf O ~ G r~ C p cv ~a m ~ 4. F' Ci. b ,O n 9Q U v Ti ~ s.~ 0 LS C y s-. y p c co u pU Parcel 10 Tract I All that certain tract or parcel of land situated in Denton County, Texas, out of the Robert Beaumont Survey, Abstract 31, and being a part of a 31.202 acre tract of land conveyed to H. W. Down Development Co., Inc. by deed dated April 24, 1963, by John. W. Porter and recorded in Volume 493, page 257 of the Deed Records of Denton County, Texas, and being more particularly described as follows: BEGINNING at a point in the West right of way line of Malone Street, said point being located North 1 *22'041' East, a distance of 78,4 feet from the Southeast corner of Lot No- 6 in Block XVI of North University Place, Third Section, an addition to the City of Denton, 'texas, as recorded in Vol. 4, page 10 of the Plat Records of Denton County, Texas, said beginning point being also the Northeast corner of aforesaid Lot No_ 6, Block XVI of North University Place Addition; THENCE North 89° Ol'31" West along the North line of aforesaid Lot No. 6 in Block X VI of North University Place Addition, a distance of 118.97 feet to a point for corner in the East line of a 16 foot utility easement along the West end of aforesaid Lot No_ 6, Chock XVI, said point being also located North 1°22'04" East, along the East fine of said utility easement, a distance of 10.16 feet from the North line of aforesaid North University Place, Third Section, THENCE North 1023'11 " West along the East line of aforesaid utility easement, a distance of 337.22 feet to a point for corner: THENCE North 1°22'04" East, at adistance of 159.55 feet passing the South boundary line of Auburn ,)rive, a street in North University Place Addition, Fourth Section, and continuing a total distance of 209.57 feet to point for corner in the North line of Auburn Drive, said point being also located in the South line or a 2.786 acre tract of land conveyed to J. Newton Rayzor by H. W. Down Development co., Inc.; THENCE South 87°08'36' East along the North line of a proposed Easterly extension of Auburn Drive and the South line of aforesaid 2.786 acre tract, a distance of 90.91 feet to a point for corner; "I"HENICE North 47°51'24" East, a distance of 35.36 feet to a point for corner in the East line of aforesaid 2.786 acre tract, said point being also located in the West right of way line of a proposed -Northerly extension of Malone Street at the beginning of a curve to the right, having a radius of 760.0 feet and a central angle of 15°52'30"; THENCE along the West line of said proposed Malone Street extension, same being along the arc of said curve to the right, a distance of 210.57 feet to the beginning of a reverse curve to the left, having a radius of 2293.00 feet, and a central angle of 38°55'20", Page 19 of 20 THENCE continuing along the West line of said proposed Malone Street extension, same being along the arc of last mentioned curve to the left, a distance of 196.19 feet to a point for corner in the North line of aforesaid 31.202 acre tract, said corner point being located South 88°27'56" East, a distance of 113' .34 feet from the Northwest corner of said 31.202 acre tract, and said point also being the Northeast corner of aforesaid 2.786 acre tract; THENCE South 88127'56" East along the North line of aforesaid 31.202 acres, a distance of 258,66 feet to a point for corner, said point being also the Northeast comer of a 4.4 acre tract of land conveyed by Louis Groening to H. W. Down Development co., Inc_ by deed dated March 29, 1965, and shown of record in Vol. 521, page 200 of the Deed Records of Denton County, Texas; THENCE South 1 °08' West, a distance of 974.4 feet to a point for corner in the North line of North University Place Addition, third Section, and the south line of aforesaid 31202 acres; THENCE North 88°37'56" West along said South line of aforesaid 31.020 acres and North line of said North University Place Addition, at a distance of 268.85 feet passing the East line of aforesaid Malone Street and continuing a total distance of 328.85 feet to a point for corner in the West line of said Malone Street and the East line of aforesaid Lot No. 6 in Block XVI of North University Place Addition; THENCE North 01°22'04" East along the West line of aforesaid Malone Street, a distance of 10.7 feet to the place of beginning, and containing 8.821 acres of land. Save and except 7.297 acres as shown by plat of the fifth section of North University Place Addition to the City of Denton, Texas as filed originally in Volume 9, Page 22 Plat Records of Denton County, Texas leaving 1.524 acres of land. Tract 11 All that certain tract or parcel of land situated in Denton County. 'T'exas, out of the Robert ,Beaumont Survey, Abstract No. 31, conveyed by Louis Groening to H. W. Down Development Co., inc. by deed dated March 29, 1965, and shown of record in Vol, 521, page 200 of the Deed Records of Denton County, "Texas, and being more particularly described as follows CBEGk\'NING at a point in the Northeast corner of a 31.202 acre tract of land described in Tract I hereof; THENCE south 01'08' West along the East line of aforesaid 31.202 acre tract, a distance of 429.8 feet to a fence comer in the North line of a gravel road to a point for corner; THENCE South 87°51' East along a fence in the North line ofaforesaid gravel road, a distance of 434.6 feet to an iron pin for corner; Page 20 of 26 w e C ri F C ~ 6 c .b c _ am, O 'c w 6 y U W 7 U f^1 4.. y O u y c v, a y _ :c a m ti cv c ~ vz C OA ro .2, ~ TJ SS O ~ r m U t . 77 C` 6 F-. U Q Vr t C -c aY C W W "n y F 5 H J F Parcel ti All that certain 45,214 acre tract, or parcel of land situated in the R. Beaumont Survey, Abstract No. 31, City and County of Denton, Texas said tract being part of that 106.64 acre tract of land as described in deed from D, C. Sockwell and wife, Sallie Sock-well, to J- W. Scott, as recorded in Volume 325, page 387, Deed Records of Denton County, Texas, said tract being further described herein by metes and hounds as follows: BEGItiINING for the southwest corner of this, at a steel rod found in the west line of aforementioned 106.64 acre tract, said point being the eastern southeast comer of that 41.14 acre tract of land described in deed from J. H. Briscoe to the City of Denton dated June 5, 1972 and recorded in Volume 647, page 245, of the Deed Records of Denton County, 'T'exas; THENCE south 89° 06' 30" east 659.6 feet to a steel rod set; THENCE north 00 51' west 2556.4 feet to a steel rod set; THENCE north 62° 15' east 665.4 feet to a steel rod found at the northeast corner of aforementioned 106.64 acre tract; THENCE south 89° 02' west 1257.0 feet along the northern line of aforementioned 106.64 acre tract to a steel rod set at the northwestern corner of said 106.64 acre tract; THENCE south 0° 57' 30" east 11417 feet to a steel rod found at the northeast corner of that 19.82 acre tract described in deed from J. H. Briscoe to the City ol'Denton dated May 1, 1969, and recorded in Volume 584, Page 167, of the Deed Records of Denton County, 'texas; THENCE south I ° 01' east 590.75 feet along the western line of said 106.64 acre tract to a steel rod found at the corner common as southeast corner of 19.82 acre tract and northeast confer of said 41.14 acre tract; THENCE south 0' 52' east 1100.4 feet ufth fence line to the place of beginning W U ~ vi " ~ U v 4. O ~ cY S1 .U v, X i 4.. .a h p :xi y5'j LL CY. 0. ~ ttl ~ ~ d? ~ O L ..C V., Ln cir t± 6>' .a y o O q ~ ~ v O s N rJ ~ G VI z,,., O r4 N rn N .C1 O Q m p y ca N 0.0 ,.D rn y ~ CY h eva ~ U 00 s cw 00 o a v C•^ 67 O ~ U y rn U ~ O s U -c N C v 4. r O~ v s 0 C G m ~ 'O LtI ~ C orJ „ ~ ~ O v •O N OA ~ t) ~ ~ t•f y ~ h+ .m _ ~ _ O O i ~ ~ tC • O v N M :A n t" f S1 d C7 . a'' 00 C ° U 0 L M V~ L a a, o ~ ro v Y f, c v v ~ o w p n'i h R1 Ci n~ Nti .b .=+4 r etl v j C tV O v " w vs s,., ~ ~ o n Q ~ ~ w ~ co c~5 b o ~ vx n o` U. N v n ~ ,p C ih G ~ :n J U C h J o Q - N Im - 00 'V > U V V '27 h N ...r W y > rn w W c3 OJ w y 63 9J -0 L 4w w O ctl p ^ LY C C y C O V ~ ti . O ~ C 4 t.J v 4 . L 04- o v • , c u x O u c v On UO ~ o 00 r y CL ti p U v 3 rtc v v L w v as ~ W rW ~ W m W •ce O 0 L14 Q ti w x ..y C x described as tollows, to-wit BEGINNING at an iron pin set in the east right of way line of Bonnie Brae Street, said point of beginning being 26.5 feet east and 1,142.56 feet south of the northwest comer of the abovementioned 128 acre tract; THENCE east with the south boundary line ofa tract conveyed by J. H. Briscoe to Jeane Outtrim by deed dated March 15, 1966, and recorded in Volume 454, Page 568 of the Deed Records of Denton County, Texas, 1,474.4 feet to an existing iron pin set as the southeast corner of said Outtrim tract, to a point for a corner in the east boundary line of said 128 acre tract; THENCE south with the east boundary line of said 128 acre tract, 594.74 feet, more or less, to a point for a corner 594.74 feet north of and perpendicular to the south boundary line of said Outtrim tract; TL7rXI C ..en,.i CnA?A ,.....+1..,1"....,7.,,._11.1 -:.1, L- -.A. 6.., «.1.._... 1:., Outtrim tract, 1,475.1 feet, more or less, to a point for a corner in the east right of way line of said Bonnie Brae Street; THENCE north with the east right of way line of said Bonnie Brae Street, 594.74 feet, more or less, to the place of beginning and containing 24.000 acres of land, more or less. Page 25 of 26 V: V L G `f^5~ ap w ~ L 'Q C ti y L y .a yr cc p p ~'N C "0 G H O d v A7 v m u v m i 0 ~ L O O C ci ~ at ~ W °.^to. C ^ O L~ O iV V' v O O -p ,y us CL w ' ^y C .-r 1T X ~ r~is O O U Cdl c iC (.v. O w O .w. vi C vy ~T t, L 't7 +U O C R ~ T O r 'C Q C~ O - s' O L ~ w 'as wpm w T N IV O O 21 O OC b F .C O _h w i C y, O C ~ v ~3 s. 'C ~ M ~ O .Y> h ^ w N O+ ~ 4Y Ott Ly ~p ~ ui Cy lC tifl " _ ton tC ,C ~ p G - - O O' A C O tY. .c r $ C $ c'~.. O ~;c3 tOi~f C CJ rO3 tb :7 in O :n p Y v 00 » r 4LrW4 rtl0v rv p N p y* w i O 'i' ro v 0 ar Q [5. f,4 Do .w. O O O O a 3 _m ~ ~ en Cu i., on 4.i W W !sy LL' w N u O ^ re m MEMORANDUM OF OIL, GAS AND MINERAL LEASE THE STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DENTON That on the 4th, day of November, 2003, being the effective date hereof, The City of Denton, Denton, Texas (hereinafter referred to as "Lessor") and Joint Resources Company., whose address is 770 N. Fielder Road, Arlington, Texas 76012 (hereinafter referred to as "Lessee"), entered into an Oil, Gas and Mineral Lease (hereinafter referenced as "Said Lease") covering the following described land (hereinafter referred to as "Subject Land") situated in Denton County, Texas, to-wit: Legal Description attached as "Exhibit A". Reference to said deed is hereby made for a complete description of the lands covered hereby and for all purposes. For the exclusive right for investigating, exploring, prospecting, drilling and mining for and producing oil, gas and all other minerals, conducting exploration, geologic and geophysical surveys and other related oil and gas operations on and under Subject Land. The Said Lease shall extend until November 4, 2005 and as long thereafter as oil, gas or other minerals is produced from Subject Land or lands with which Subject Land are pooled therewith. The execution of this Memorandum of Oil, Gas and Mineral Lease, shall serve as notice of execution and existence of a Said Lease and be incorporated herein, and made a part hereof in all respects. This memorandum shall be subject to all term and provisions as set forth in Said Lease. A copy of Said Lease can be found in the business files of Joint Resources Company, at the address above. WITNESS THE EXECUTION HEREOF as of the respective acknowledgment date below. CITY OF I\ TEXAS-LESSOR BY: c ael A. Conduff City Manager ATTEST: JENNIFER WALTERS, CITY SECRETARY BI APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY:. OPu ~ C.J STATE OF TEXAS COUNTY OF DENTON Before me, -QIa4e. )_O~eAvgg 'la✓A~' the undersigned notary public, on this day personally appeared M i r_ hn P I a O o n d'` the 4 a VA a na <&,C of the City of Denton, Texas, who is know to me to be the person whose name is subscribed to the foregoingment, and acknowledged to me that he/she executed that instrument for the purposes and consideration therein expressed. r4ptary Public Printed Name of otary Public i _ The act legal scription ' - f -file in th City Secretary's Offic O OF~RTI2T~Ca& Drilling Sites ®!l :~I Nall t~l F r ~ \ T L ■ 1111111111111111111 70 2004 00007757 Recorded On: January 20, 2004 Denton County Cynthia Mitchell County Clerk Denton, TX 76202 Instrument Number: 2004-7757, As Memorandum Parties: CITY OF DENTON TEXAS LESSOR Billable Pages: 4 To Number of Pages: 4 Comment: Memorandum 20.00 Total Recording: 20.00 Examined and Charged as Follows: THIS PAGE IS PART OF THE INSTRUMENT Any provision herein which restricts the Sale, Rental or use of the described REAL PROPERTY because of color or race is invalid and unenforceable under federal law. File Information: Document Number: 2004-7757 Receipt Number: 81783 Recorded Date/Time: January 20, 2004 03:49P User I Station: B Smithers - Cash Station 3 Record and Return To: CITY OF DENTON TEXAS 601 E HICKORY STE B DENTON TX 76205 THE STATE OF TEXAS) COUNTY OF DENTON } I hereby certify that this Instrument was FILED In the File Number sequence on the datemme printed heron, and was duly RECORDED In the Official Records of Denton County, Texas. Crj Wwt County Clerk Denton County, Texas AMENDMENT OF OIL, GAS AND LEASE NON-DRILL SITE / POOLING AGREEMENT STATE OF TEXAS COUNTY OF DENTON KNOW ALL MEN BY THESE PRESENTS THAT: WHEREAS, on November 4, 2003, the City of Denton, Denton, Texas, as Lessor, did execute and deliver to Joint Resources Company, as Lessee, an Oil, Gas and Mineral Lease Non-Drill Site Pooling Agreement (the "Lease") which is recorded by a Memorandum of Oil, Gas and Mineral Lease as Instrument No. 2004-7757, Official Records of Denton County, Texas, covering 353 acres, more or less; and WHEREAS, Lessor and the Lessee executed an Extension, Revivor and Ratification Agreement dated September 21, 2005 extending and ratifying the Lease in the manner therein set forth; and WHEREAS, the Lease is now owned by Stroud Energy, Ltd. ("Stroud") and it is the desire of the undersigned parties that the Lease be amended as follows. NOW THEREFORE, the undersigned, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, do hereby agree as follows: 1. The Exhibit "A" attached to the Lease is hereby deleted and replaced with the Exhibit "A" attached hereto. 2. The primary term shall be extended until one hundred twenty (120) days following the expiration of the primary term as set forth in the Lease and as further amended in the Extension, Revivor, and Ratification Agreement as referenced herein, thereby increasing and amending the primary term until March 4, 2007. All other terms and conditions of the Lease shall remain in full force and effect and the undersigned Lessors do hereby ratify, confirm, grant, lease and let unto Stroud, its successors and assigns, all of the lands described above under the terms, covenants and agreements in the Lease, and any amendments thereto. 17 IN WITNESS WHEREOF this instrument is executed the 22-day of , 2006, but the same shall be effective for all purposes as of November 4, 20 CITY O NT ATTEST B George C. Campbell City Manager Approved as to Form: By: he; Jennifer Walters City Secretary By:_ City STROUD ENERGY, LTD By: Stroud-Fnergy Manage By: D. Neal Harring ofi Vice President Land STATE OF TEXAS COUNTY OF DENTON GP, L.L.C., its General Partner This instrument was acknowledged before me on thvv day of 2006, by George C. Campbell as City Manager of the City of Denton, Denton, Texas, on behalf of said entity. JENNIFER K. WALTERS Notary Public, state of Texas My Commission Expires December 19, 2006 STATE OF TEXAS COUNTY OF TARRANT tary blic, tate of Texas This instrument was acknowledged before me on the Tl~- day of qO.wA A'- 2006, by D. Neal Harrington, Vice President Land of Stroud Energy Management GP, L.L.C., a Texas limited liability company, General Partner of Stroud Energy, Ltd., a Texas limited partnership, on behalf of said partnership. 16~d-7'QA'1-ZL Notary Public, State of Texas Karen A Price ,PS Notary Public, State of Texas = My Commission Expires: December 14, 2008 EXHIBIT "A" Attached to and made a part of that certain Amendment of Oil, Gas and Mineral Lease Non-Drill Site / Pooling Agreement dated 2006, by and between the City of Denton, Denton, Texas and Stroud Energy, Ltd. PROPERTY DESCRIPTION: Tract 1 43.902 acres of land, more or less, a part of,the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated January 19, 1974, from Eugenia Porter Rayzor et al to City of Denton, recorded in Volume 697, Page 213 of the Official Public Records of Denton County, Texas. Tract 2 4.182 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated May 29, 1973, from A. J. Jones and wife, Vivian Jones to City of Denton, recorded in Volume 676, Page 341 of the Official Public Records of Denton County, Texas. Tract 3 3.368 acres of land, more or less, a pant of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated April 19, 1974, from B. E. Ratliff and wife, Cora Ratliff to City of Denton, recorded in Volume 704, Page 265 of the Official Public Records of Denton County, Texas. Tract 4 3.191 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated May 7, 1974, from L. G. Hardaway and wife, Marion Hardaway to City of Denton, recorded in Volume 706, Page 126 of the Official Public Records of Denton County, Texas. Tract 5 47.6866 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated January 31, 1974, from Eugenia Porter Rayzor, Individually and as Independent Executrix of the Estate of J. Newton Rayzor to City of Denton, recorded in Volume 697, Page 217 of the Official Public Records of Denton County, Texas. Tract 6 2.581 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated January 11, 1991, from Rayzor Investments, LTD. to City of Denton, recorded in Volume 2935, Page 3532 of the Official Public Records of Denton County, Texas. Tract 7 80.7959 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated January 19, 1974, from Eugenia Porter Rayzor et al to City of Denton, recorded in Volume 697, Page 207 of the Official Public Records of Denton County, Texas. Tract 8 10.0 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated January 19, 1974, from Eugenia Porter Rayzor et al to City of Denton, recorded in Volume 697, Page 207 of the Official Public Records of Denton County, Texas. Tract 9 3.02 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated March 19, 1974, from Denton I.S.D. to City of Denton, recorded in Volume 700, Page 485 of the Official Public Records of Denton County, Texas. Tract 10 10.837 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Warranty Deed dated March 19, 1974, from Denton I.S.D. to City of Denton, recorded in Volume 700, Page 485 of the Official Public Records of Denton County, Texas.. Tract 11 45.214 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated December 14, 1972, from San Marcos Investments, Inc. to City of Denton, recorded in Volume 662, Page 435 of the Official Public Records of Denton County, Texas. Tract 12 20.0 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated January 30, 1973, from Jeanne Outtrim, a widow, Donald D. Webb and wife, Zan Webb to City of Denton, recorded in Volume 664, Page 652 of the Official Public Records of Denton County, Texas. Tract 13 20.0 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated January 30, 1973, from Jeanne Outtrim, a widow to City of Denton, recorded in Volume 664, Page 651 of the Official Public Records of Denton County, Texas. Tract 14 20.0 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated May 1, 1969, from James Hughes Briscoe, a/k/a J. H. Briscoe to City of Denton, recorded in Volume 584, Page 167 of the Official Public Records of Denton County, Texas. Tract 15 42.133 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated June 5, 1972, from J. H. Briscoe, a/k/a James Hughes Briscoe, a single man, Individually and as Trustee for the Estate of Lillie E. Briscoe, deceased and as Independent Executor of the Estate of Lillie E. Briscoe, deceased to City of Denton, recorded in Volume 647, Page 245 of the Official Public Records of Denton County, Texas. Tract 16 8.3271 acres of land, more or less, a part of the N. Meisenheimer Survey, A-810, and being described in that certain Special Warranty Deed dated November 29, 2001, from Young Men's Christian Association of Metropolitan Dallas to City of Denton, recorded in Volume 4973, Page 3696 of the Official Public Records of Denton County, Texas. Tract 17 8.398 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated March 19, 1974, from Denton I.S.D. to City of Denton, recorded in Volume 700, Page 485 of the Official Public Records of Denton County, Texas. Tract 18 2.786 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated March 19, 1974, from Denton I.S.D. to City of Denton, recorded in Volume 700, Page 485 of the Official Public Records of Denton County, Texas. 2 Tract 19 1.524 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated December 16, 1992, from Barworth Corporation to City of Denton, recorded in Volume 3418, Page 118 of the Official Public Records of Denton County, Texas. Tract 20 4.4 acres of land, more or less, a part of the R. Beaumont Survey, A-31, and being described in that certain Warranty Deed dated December 16, 1992, from Barworth Corporation to City of Denton, recorded in Volume 3418, Page 118 of the Official Public Records of Denton County, Texas.