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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
COMMISSION FILE NUMBER 0-14404
LONE STAR TECHNOLOGIES, INC.
(A DELAWARE CORPORATION)
5501 LBJ FREEWAY, SUITE 1200
DALLAS, TEXAS 75240
214/386-3981
I.R.S. EMPLOYER IDENTIFICATION NUMBER: 75-2085454
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, par value $1.00 Nasdaq
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X . No .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of , the number of shares of common stock outstanding was
. The aggregate market value of common stock (based upon the closing
price on the Nasdaq Stock Market on that date) held by nonaffiliates of the
registrant was approximately $ million.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of registrant's Proxy Statement for its 1996 Annual Meeting of
Shareholders are incorporated by reference into Part III hereof.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C> <C>
PART I
ITEM 1. BUSINESS. . . . . . . . . . . . . . . . . . . . . . . 3
ITEM 2. PROPERTIES. . . . . . . . . . . . . . . . . . . . . . 8
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS . . . 9
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS . . . . . . . . . . . . . 9
ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . 10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. . . 10
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA. . . . . . . . . . . . . . . . 15
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . 31
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT . . . . . . . . . . . . . . . . . . 31
ITEM 11. EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . 31
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . 31
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . 31
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 31
ITEM 15. SIGNATURES. . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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PART I
ITEM 1. BUSINESS
GENERAL
Lone Star Technologies, Inc. (LST), a management and holding company, currently
has one principal operating subsidiary, Lone Star Steel Company (Steel), that
serves two business segments: oilfield products and services, comprised of
casing, tubing, and line pipe, that are manufactured and marketed globally to
the oil and gas drilling industry; and, industrial products that consist of
specialty tubing and flat rolled steel that are manufactured and provided to
general industrial markets. LST's consolidated revenues are not seasonal.
However, Steel's revenues are sensitive to the level of domestic drilling
activity, which is in turn dependent on the prices of oil and natural gas.
LST was incorporated in Delaware in 1986 and became the holding company of
Steel, pursuant to Steel's merger with a wholly owned subsidiary of LST. Steel
operated under federal bankruptcy protection from June 1989 to May 1991. During
May 1991, Steel emerged from bankruptcy, and a major creditor group received
19.5% of the common stock of Steel, creating a minority interest in Steel. In
1995, LST repurchased 4.95% of Steel's common stock from Steel's minority
shareholders.
In August 1988, LST acquired, for $48 million, the stock of American Federal
Bank, F.S.B. (AFB), a newly created, federally chartered savings bank. In
November 1993, LST sold the stock of AFB to Guaranty Federal Bank, F.S.B. (GFB)
for $155.7 million, of which LST received $135.7 million in cash on the sale
date and $5.0 million in November 1994. Fifteen million dollars remain in
escrow to provide for payment of claims that could be filed by GFB under the
terms of the sale agreement. The accompanying consolidated financial statements
reflect AFB as a discontinued operation.
LINES OF BUSINESS INFORMATION
In the last three years, segment revenues were as follows:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994 1993
----------- ---------- ----------
$ % $ % $ %
----- --- ----- --- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Oilfield products and services 265.6 62 215.2 60 210.8 63
Industrial products 160.2 38 141.8 40 121.7 37
----- --- ----- --- ----- ---
Consolidated total 425.8 100 357.0 100 332.5 100
----- --- ----- --- ----- ---
----- --- ----- --- ----- ---
</TABLE>
Additional segment information is included in Note B to the consolidated
financial statements.
OILFIELD PRODUCTS AND SERVICES. Steel manufactures, markets, stores, and
transports oil country tubular goods (OCTG) and line pipe.
OCTG manufactured by Steel includes a wide size and chemistry range of electric
resistance welded (ERW) high-quality prime casing and tubing for oil and gas
drilling and production. Casing, which represents about 80% of all OCTG tonnage
sold by Steel, is the structural retainer for the walls of oil and gas wells.
It also serves to prevent pollution of nearby water reservoirs and to prevent
contamination of a well's production. Casing is generally not removed after it
has been installed. Production tubing is installed within the casing to convey
oil and gas to the surface. Steel offers one of the widest ranges of OCTG
diameters (2 3/8" to 16 1/8") and grades produced in the industry, including
grades that have been successfully used for drilling at depths of over 30,000
feet.
Demand for OCTG is affected by drilling activity which is driven by customers'
expectations of future oil and gas prices and political factors such as energy
and trade policies. Domestic drilling activity was down 7% in 1995 from the
prior
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year, according to the average number of rigs operating in this country as
measured by Baker Hughes. Steel's open orders for OCTG at December 31, 1995,
were down 26% from the prior year-end. However, since year-end, open orders
have increased and are now ahead of the December 1995 level. Although a
significant increase in drilling activity is not expected in 1996, a
reduction in imported OCTG could improve the characteristics of the domestic
market. Also, Steel continues its efforts to penetrate global markets.
Twelve percent of its shipments in 1995 were used outside the lower 48 United
States.
LINE PIPE manufactured by Steel ranges in diameter from 2 3/8" to 16" and is
used to gather and transport oil and gas from the well site to storage or
refining facilities. Approximately 5% of Steel's line pipe shipments were
exported in 1995.
OTHER MARKETING ARRANGEMENTS AND AGREEMENTS. Steel has expanded into other
marketing arrangements to sell steel tubular products manufactured by various
unrelated companies. These arrangements are intended to expand Steel's product
offerings without a substantial investment in plant and equipment and enhance
Steel's marketing competitiveness. These transactions are performed on both a
commission basis and through purchase and resale of the products.
OTHER SERVICES. Transportation, storage, and other services are provided by
Steel's subsidiaries.
SALES AND DISTRIBUTION. The domestic OCTG sales distribution network consists
of 12 nonexclusive distributors that maintain and deliver product inventory to
major and independent oil and gas companies that explore for oil and natural
gas. Line pipe is also sold through distributors. Internationally, OCTG is
sold through distributors and trading companies as well as directly to end
users. The largest single customer and the ten largest customers of Steel's
OCTG in 1995 accounted for 8% and 35% of total shipments, respectively. About
77% of the oil and gas wells drilled in the United States in 1995 were located
in Texas, Oklahoma, Kansas, Louisiana, and New Mexico, all within 750 miles of
Steel's mill in Lone Star, Texas. The majority of Steel's oilfield products was
sold for use in these states, as well as the Gulf of Mexico which is less than
250 miles from Steel's mill.
RAW MATERIALS AND INVENTORIES. OCTG and line pipe are generally produced to
fill specific orders and, accordingly, Steel maintains the majority of its
inventory in the form of raw materials, work-in-process, or finished goods
earmarked for specific orders. Some work-in-process and finished inventories
are maintained in order to provide flexibility in responding to customer
demands.
Steel purchases steel slabs and scrap steel for use in the manufacture of its
products. The availability of steel slabs to meet production needs remained
tight in 1995, and it was often necessary for Steel to commit to purchase slabs
90 to 150 days prior to production. Steel's principal raw material for its
internally produced steel slabs is steel scrap, which is purchased in the spot
market. The price of scrap steel and steel slabs is highly volatile and is
influenced by a number of competitive market conditions beyond the control of
Steel.
COMPETITION. OCTG and line pipe are sold in highly competitive markets, and
sales and earnings are affected by price, cost, and availability of raw
materials, oil and gas drilling activity, and general economic conditions.
Steel offers a wide range of sizes and chemistries and, based on shipment data
compiled by the American Iron & Steel Institute, Steel believes that it is one
of the largest domestic suppliers of OCTG. Users of OCTG base their purchase
decisions on four factors: availability, price, quality, and service. Steel
believes that it is competitive in all of these areas.
Two primary markets exist for OCTG, and Steel serves both. Deep critical wells
require high-performance OCTG that can sustain enormous pressure as measured by
burst strength, collapse strength, and yield strength. Both major and
independent oil companies that conduct drilling programs of this nature
emphasize quality and compliance with specific standards. Steel, with its full-
body normalized ERW manufacturing process that meets American Petroleum
Institute standards, competes with seamless OCTG in this market. Operators who
drill shallower wells generally purchase OCTG on the basis of price and
availability because wells of this nature require fewer performance
characteristics. Steel competes in this market, which is served primarily by
producers of seam-annealed ERW and seamless OCTG, with its full range of Lone
Star-Registered Trademark- products as well as with its Wildcat-TM- brand of
OCTG. Several domestic manufacturers produce limited lines of OCTG, and a
number of foreign manufacturers produce OCTG for export to the United States.
Imported OCTG accounted for approximately 15% of the supply available to the
domestic OCTG market during 1995 and 25% in 1994.
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In 1995, several trade cases against foreign producers were resolved in favor
of domestic producers. As a result, the supply of imported OCTG in the
United States is expected to remain comparable to levels experienced in the
last half of 1995 for at least the next 12 months.
INDUSTRIAL PRODUCTS. Steel manufactures and markets specialty tubing and flat
rolled steel.
SPECIALTY TUBING includes a wide array of high-quality, custom-made steel
tubular products which require critical tolerances, precise dimensional control,
and special metallurgical properties. Steel's specialty tubing products range
in size from 7/8" to 15 1/2" in outside diameter and are made from a variety of
combinations of chemical compositions, thermal treatments, mechanical
properties, and surface finishes. The products are used in the manufacture of
automotive, construction, and farm equipment and in industrial applications such
as hydraulic cylinders, stabilizer tubes and intrusion devices, machine parts,
bearing races, downhole pump barrels, and printing rollers. Because of the wide
range of industrial applications, sales traditionally follow general domestic
economic conditions.
Steel produces most of its specialty tubing by the drawn over mandrel (DOM)
process which uses a drawbench to pull tubing through a die and over a mandrel.
Steel's use of the DOM manufacturing process enables the Company to achieve
higher critical tolerances and dimensional control than other processes. The
Company's 1,000,000 pound drawbench, the largest in the United States, also
enables the Company to manufacture larger diameter, heavier wall products and
thus access a broader market than its competitors. Moreover, Steel is the only
DOM specialty tubing manufacturer that produces its own electric arc furnace
(EAF) steel, which allows for control of the complete manufacturing process.
DOM specialty tubing order quantities are typically small (usually less than
50,000 pounds) and made to exact customer specifications. The Company's
integration of steelmaking and tube finishing allows for optimal inventory
control, combined with just-in-time customer delivery of tubes with special
steel chemistries and precise dimensional requirements.
Demand for specialty tubing products, within the traditional markets, was down
slightly in the second half of 1995; however, Steel has continued to identify
new market applications which enabled it to increase both volume and price.
Open orders were down 26% at year-end as compared to prior year-end as many
steel service centers worked to reduce their year-end inventories.
FLAT ROLLED STEEL is used by Steel in the manufacture of tubular products, and
it is also sold to fabricators of large diameter transmission pipe, storage
tanks, rail cars, and a variety of other construction and industrial products.
SALES AND DISTRIBUTION. Domestically, specialty tubing is marketed and sold
through 19 nonexclusive steel service centers and directly to end users.
Specialty tubing products have detailed design specifications and in some cases
long lead times, making annual contracts an efficient mechanism for large
purchasers. The largest single user and the ten largest customers of Steel's
specialty tubing in 1995 accounted for 2% and 16%, respectively, of total
shipments. Internationally, the majority of Steel's specialty tubing is
currently sold directly to end users. Exports accounted for approximately 13%
and 17% of Steel's specialty tubing shipments in 1995 and 1994, respectively.
Flat rolled steel products are sold directly to end users or through steel
service centers, primarily in the southwestern region of the United States.
RAW MATERIALS AND INVENTORIES. Raw materials are readily available from
multiple sources. Production is generally scheduled to meet specific orders
and, accordingly, inventory is managed to minimize the amount of finished goods
on hand. Work-in-process inventories are maintained in order to provide
flexibility in responding to customer needs.
COMPETITION. The market for specialty tubing is competitive. Currently,
however, Steel's specialty tubing sales are primarily constrained by the
capacity limitations of its facilities rather than by competitive factors.
Steel has commenced a capital expenditure program to address its specialty
tubing capacity limitations.
Based on shipment data available and other generally available market data,
Steel believes it is one of the three largest producers of DOM specialty tubing
products. Steel is the only fully integrated DOM producer in the United States.
One of Steel's drawbenches, among the largest in the world, enables it to
produce DOM products in a greater size range than
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its competitors. Because these products are made to end-user specification
and often require just-in-time delivery, only small quantities are imported
into the United States. In contrast to the OCTG market, seamless and ERW
specialty tubing products differ in their applications. ERW is preferred for
many mechanical tubing applications because its consistent wall thickness
requires less machining in the finishing process. Seamless tubes are used
primarily in heavy gauge applications such as boiler and pressure tubing.
Flat rolled steel is sold in highly competitive markets. Sales and earnings are
affected by the cost of raw materials, use of flat rolled steel by Steel in the
manufacture of its tubular products, demand by outside customers, and general
economic conditions. Steel's market for flat rolled steel is generally
concentrated in the southwestern region of the United States where customers use
it in the manufacture of a variety of commercial and industrial products.
RESEARCH, DEVELOPMENT, AND PATENTS
Steel conducts limited research and development activities at its metallurgical
laboratory in East Texas. Its patents do not significantly affect financial
results.
EMPLOYEES
At December 31, 1995, LST and Steel employed a total of 1,696 people, of whom
1,158 were members of two unions represented by three bargaining units. The
majority of union workers are represented by the United Steelworkers of America
under a contract which expires in June 1996, and a new contract will have to be
negotiated. Management considers its relationship with the steelworkers to be
good.
FOREIGN OPERATIONS
Steel conducts no manufacturing operations outside the United States. Export
sales to destinations outside the United States were approximately $37.9
million, $25.5 million, and $20.6 million for the years 1995, 1994, and 1993,
respectively.
ENVIRONMENTAL
Steel's operating activities are governed by numerous environmental laws, which
are regulated by state and federal agencies. The three major areas of
regulation are air quality, water quality, and solid and hazardous waste
management.
RELATIONSHIP OF FEDERAL AND STATE REGULATION. The United States Environmental
Protection Agency (EPA) is responsible for implementing and enforcing federal
environmental laws. In Texas, the environmental regulatory agency is the Texas
Natural Resource Conservation Commission (TNRCC). Most federal environmental
statutes expressly provide for state assumption of responsibility when it can be
demonstrated that the state program is as stringent as the federal program;
however, the EPA retains authority to enforce the program if the state fails to
do so. Texas is authorized to implement the federal hazardous waste program
under the Resource Conservation and Recovery Act (RCRA) and the federal air
quality program under the Clean Air Act. The Texas air quality program also
requires all new or modified facilities that may emit any air contaminant to
obtain a permit which imposes limitations on each emission. Texas has not yet
been delegated authority to implement the federal water quality program under
the Clean Water Act. Therefore, dual federal and state water quality programs
exist in Texas, requiring companies such as Steel to obtain both a federal
permit and a state permit to discharge wastewater into state waters. In
addition, Texas has state environmental programs that supplement and operate
independently of the federal environmental programs. Texas has established its
own program for the regulation of municipal and industrial solid wastes under
the Texas Solid Waste Disposal Act. Steel's operations generate wastes that are
regulated as industrial solid waste under this program.
6
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AIR quality is governed by the federal Clean Air Act and the Texas Clean Air
Act. The TNRCC has primary responsibility for implementing and enforcing the
federal law through the state program. The Texas State Implementation Plan
implements, maintains, and enforces the National Ambient Air Quality Standards
established by the EPA, as well as the other federal air quality programs.
Emission sources at Steel's facilities are regulated by a combination of
individual permit limitations and statewide standards. Sources which existed
before the implementation of the state permitting requirements are registered
with the TNRCC as "grandfathered sources" and are not required to obtain a
permit. If, however, a grandfathered source is modified in a manner that
increases the amount or changes the character of air contaminants emitted into
the atmosphere, it becomes subject to permitting requirements.
Steel is presently in substantial compliance with the conditions of its permits
and applicable standards.
WATER quality is governed by the federal Clean Water Act, implemented by the
EPA, and the state Water Code, implemented by the TNRCC. Steel is required to
have two separate permits to discharge wastewater from each of its outfalls: a
National Pollution Discharge Elimination System (NPDES) permit issued by the EPA
and a wastewater discharge permit issued by the TNRCC. The regulatory emphasis
on wastewater is directed at the control of effluent toxicity. Steel is also
required to have a NPDES permit to discharge storm water that is not commingled
with wastewater. Steel's storm water discharges are permitted through the EPA's
NPDES General Permit for Storm Water Discharges Associated With Industrial
Activities.
In the process of manufacturing low alloy carbon grade steel and fabricating
steel pipe and tube, Steel generates wastewater which contains certain
contaminants from the process. Steel is authorized by both a state and a
federal permit to discharge its wastewater to one of two receiving water bodies,
Ellison Creek Reservoir or Big Cypress Creek. Each permit contains effluent
limitations for the contaminants of concern that might be present in Steel's
wastewater. The effluent limitations are usually the same in both permits, but
if not, the more stringent limitations apply to Steel's wastewater. In order to
comply with these limitations, Steel treats its wastewater before discharge.
The permits require that Steel monitor on a regular basis the concentrations of
the contaminants of concern in its effluent and report the monitoring results to
the TNRCC and the EPA.
Steel's state wastewater discharge permit was renewed effective August 1, 1994,
for a five-year term. Steel is in substantial compliance with that permit.
Although the level of contaminants in the discharge occasionally exceeds the
permit limitations, Steel does not believe that these instances will have any
material consequences to Steel. The only potential issue is the possibility
that the TNRCC will amend Steel's permit to include a whole effluent toxicity
(WET) limit. WET is measured by exposing freshwater organisms, such as fathead
minnow larvae, to various concentrations of effluent for seven days and then
determining the weight and survival of the test organisms. A WET limit is a
legally enforceable limit in a permit that is based on the survival of the test
organism in a stated concentration of the effluent. Without appropriate
modifications to the standard chronic WET test method, Steel does not believe
that, based on existing data, its effluent would be in compliance with a WET
limit during the colder months of the year. The existing data indicate that a
naturally occurring pathogenic bacteria in Steel's effluent causes a failure of
the WET test when the test is performed using effluent collected during the
colder months of the year. Based upon the extensive studies conducted to date,
the test failure does not appear to be due to Steel's process. Therefore, Steel
has been engaged in discussions with the TNRCC concerning the appropriateness of
amending its permit to include a WET limit. In addition, Steel is working to
develop a modification of the standard WET test method that would be acceptable
to both the company and the TNRCC.
Steel's existing federal NPDES permit for wastewater discharges was scheduled to
expire in June 1995. However, this permit continues in effect until the EPA
takes final action on a renewal NPDES permit. On December 31, 1994, the EPA
published a notice of intent to issue Steel a renewal NPDES permit. Steel
timely filed comments on the draft permit. The EPA and Steel reached agreement
on all issues but one raised by Steel in its comments. As in the TNRCC
permitting process, the outstanding issue concerns whether the proposed WET
limit in the draft permit is legally warranted. For the reason discussed above,
Steel opposes the inclusion of a WET limit in its renewal NPDES permit. The EPA
has not yet issued Steel a final renewal NPDES permit. Steel is therefore not
certain whether the EPA will include a WET limit in its permit. Should the EPA
issue Steel a renewal NPDES permit with a WET limit, Steel plans to pursue all
of its administrative options for review and reconsideration of the WET limit.
If Steel should not prevail in its administrative challenge to a WET limit,
Steel would then consider requesting judicial review of the contested permit
condition. Steel
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will also continue working to develop a modification of the standard WET test
method that would be acceptable to the EPA as well as the TNRCC and the company.
Should Steel successfully develop such a modified WET test method, the WET limit
issue might be resolvable without any administrative or judicial action.
Until this issue of the inclusion of a WET limit is resolved through
negotiations with the EPA and the TNRCC, development of an acceptable
modification of the standard WET test method, or final administrative or
judicial action, the need for and nature of control measures, if any, that
Steel might have to implement cannot be accurately predicted.
SOLID AND HAZARDOUS WASTE management is governed by the Texas Solid Waste
Disposal Act and RCRA. The TNRCC has primary responsibility for implementing
and enforcing the federal law through the state program.
Solid waste, some of which is now classified as hazardous, has been generated by
Steel since it began operation. As with similar mills in the industry, Steel's
EAF generates dust containing lead, chromium, and cadmium. Until 1988, Steel
disposed of the EAF dust and other wastes in on-site management units. Steel
does not store hazardous waste and no longer disposes of waste on site. Wastes
are now shipped off-site to commercial facilities for disposal or reclamation.
In the past, Steel operated solid waste management units for the storage and
disposal of nonhazardous and hazardous wastes. These sites include four land-
based RCRA waste management units and a fifth site which predates RCRA. Steel
has submitted to the TNRCC a closure plan for the site not subject to RCRA (a
pond previously used for storing an acidic waste) and plans to close it as a
nonhazardous facility. Two sites subject to RCRA (the plant's landfill and a
site that received air pollution sludge) have been closed as hazardous waste
landfills in accordance with requirements of RCRA and corresponding state
regulations. These sites are subject to post-closure care obligations,
including groundwater monitoring, for up to 30 years. The remaining two sites
have been closed by a combination of removal ("clean closure") and conversion to
nonhazardous landfills in accordance with requirements of RCRA and
corresponding state regulations. Steel is seeking to limit the duration of
future post-closure groundwater monitoring at these facilities based on the
clean closure and nonhazardous status. The TNRCC will issue Steel a permit for
the facilities requiring post-closure care. Steel estimates the actual cost of
post-closure care to be approximately $1 million.
ITEM 2. PROPERTIES
Steel conducts its operations at facilities on a 2,000-acre site in East Texas.
The original facilities, constructed in the 1940's, have been expanded and
modernized, and include two EAF's with a combined capacity of approximately
500,000 ingot tons per year; two rolling mills, a "two-high" mill that rolls the
EAF ingots into slabs and a "four-high" single stand reversing Steckel mill that
produces flat rolled coils; two pipe welding mills; six drawbenches, including
the largest specialty tubing drawbench in the United States; heat treating
facilities; numerous types of ultrasonic and electromagnetic testing and
inspection equipment; finishing facilities at which tubular goods are threaded
and couplings are applied; and, various support facilities including a shortline
railroad and other transportation and storage facilities. Steel's and LST's
headquarters are located in leased facilities in Dallas, Texas.
Steel's annual productive capacity approximates 425,000 slab tons, 1,250,000
coil tons, and 1,000,000 pipe tons. In 1995, the EAF and specialty tubing
facilities operated at near 100% of capacity, while the rolling mills and pipe
mills generally operated at 60% or less of capacity.
In addition to the manufacturing facilities, Steel owns 10,500 acres in Texas
and 3,000 acres in Oklahoma which were purchased primarily for iron ore or coal
reserves, and Steel owns mineral interests on an additional 12,000 acres in
Oklahoma and 60,000 acres in Texas. No minerals have been recovered from these
properties for many years because their use is no longer required in Steel's
operations and significant portions of this land are held for sale. Steel sold
approximately 9,400 acres in East Texas during August 1995.
8
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ITEM 3. LEGAL PROCEEDINGS
LST and its subsidiaries are parties to a number of lawsuits and controversies
which are not discussed in this document. As to the legal proceedings not
discussed, management does not believe, based upon analysis of known facts and
circumstances and reports from legal counsel, that any such matter could have a
material adverse effect upon LST and its subsidiaries taken as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS
LST's Common Stock trades on Nasdaq National Market System under the symbol
LSST. The following table summarizes the range of trading prices by quarter for
the last two years (in $):
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
<S> <C> <C> <C> <C> <C>
1995 High 8 9 1/8 10 1/4 11 1/4
Low 6 1/2 7 1/8 7 5/8 7 1/2
1994 High 9 1/8 8 1/2 7 1/4 7 7/8
Low 7 3/8 6 3/4 6 5 3/4
</TABLE>
As of March 15, 1996, LST had approximately 5,000 common shareholders of record.
LST has paid no dividends on its Common Stock since becoming a public company.
In 1988, LST sold one million shares of Series A nonvoting convertible
cumulative preferred stock, $1.00 par value (Series A Preferred stock), for
$49.6 million in cash. The Series A Preferred stock carried a $50.00 per share
liquidation preference, plus any unpaid dividends, and became redeemable in cash
at the option of LST after September 1993. Dividends were not declared,
accrued, or paid, and cumulative dividends in arrears at January 1, 1994,
approximated $18.8 million. In February 1994, LST redeemed this stock and
extinguished all dividend obligations related to it for $51.7 million.
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ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
($ IN MILLIONS, EXCEPT SHARE AND EMPLOYEE DATA)
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Revenues 425.8 357.0 332.5 277.6 318.9
Oilfield revenues 265.6 215.2 210.8 171.0 218.3
Industrial revenues 160.2 141.8 121.7 106.6 100.6
Gross earnings 26.2 12.8 6.3 8.7 28.7
Selling, general and
administrative expenses (14.6) (16.2) (16.9) (17.6) (27.8)
----- ----- ----- ----- -----
Operating earnings (loss) 11.6 (3.4) (10.6) (8.9) 0.9
Interest income 5.8 4.3 0.9 0.3 3.9
Interest expense (8.7) (8.2) (7.0) (5.8) (4.9)
Other income, net 2.4 2.5 0.3 2.7 1.9
Minority interest (1.5) 1.0 2.3 1.3 0.2
----- ----- ----- ----- -----
Earnings (loss) from
continuing operations 9.6 (3.8) (14.1) (10.4) 2.0
Net earnings (loss) 9.6 1.2 (7.2) 0.1 2.0
Net earnings (loss) per
common share 0.46 (0.04) (0.35) 0.01 0.10
Shares outstanding (millions) 20.5 20.4 20.3 20.3 20.3
Current assets 194.5 180.8 235.6 87.0 72.5
Total assets 357.7 345.7 411.2 364.1 341.0
Current liabilities 53.5 53.4 57.9 41.5 40.5
Total liabilities 255.5 249.6 267.8 207.2 184.2
Shareholders' equity 102.2 96.1 143.4 156.9 156.8
Capital expenditures 14.9 7.0 5.8 11.5 12.4
Depreciation 11.4 11.4 11.0 9.4 8.2
Employees 1,696 1,592 1,688 1,560 1,392
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
OVERVIEW
LST's revenues are derived from Steel's two business segments: oilfield
products and services and industrial products.
PRODUCTS AND MARKETS. The oilfield products business includes the manufacture
and marketing of OCTG, the casing and tubing used in oil and gas well drilling
and production, and line pipe that is used to gather and transport oil and gas
from the well site to storage or refining facilities. Steel is one of the
largest domestic producers and suppliers of OCTG, based on data compiled by the
American Iron & Steel Institute. OCTG represents three-fourths of Steel's
oilfield products volume as measured in tonnage, and exports have ranged from
approximately 7% to 13% of this segment's shipments during the last three years.
Demand for oilfield products is generally affected by customers' expectations of
future oil and gas prices and political factors such as energy and trade
policies. A key indicator of domestic demand is the average number of drilling
rigs operating in the United States which, during the last three years, has been
historically low. According to Baker Hughes, the average United States rig
counts in 1995, 1994, and 1993 were 723, 775, and 755, respectively. Demand is
also affected by the amount of oilfield products imported into this country as
well as available industry inventories. Imported OCTG has represented
approximately 14% of the total supply in 1995, down from 24% in 1994 and 1993.
In 1995, the United States Department of Commerce prevailed in trade cases
instituted against several foreign manufacturers alleging they were being
illegally subsidized on the manufacture of tubular goods and were held to have
dumped their products in the United States market, which resulted in the
imposition of protective tariffs on imports from certain countries. As
10
<PAGE>
a result of reduced import competition, the supply of imported OCTG in the
United States is expected to remain comparable to lower levels experienced in
the last half of 1995 for at least the next 12 months. The effect of
available inventory, which is believed to be low, has been insignificant in
the marketplace in the past three years. The volatility of oil and gas
prices creates uncertainty with respect to the timing and extent of increased
activity in the energy sector. This affects customer confidence in the longer
term outlook for energy prices and as a result some drilling projects may be
deferred. However, international markets strengthened considerably in 1995
as long-postponed exploration and production projects were started. This
trend is expected to continue in 1996 as companies engaged in exploration and
production continue to seek large reserves in the international arena.
Steel's industrial products segment includes two product groups: specialty
tubing and flat rolled steel. Specialty tubing consists of a wide array of
high-quality, custom-made steel tubular products requiring critical tolerances,
precise dimensional control, and special metallurgical properties. These
products are used in the further manufacture of automotive, construction, and
other industrial equipment such as hydraulic cylinders, stabilizer tubes and
intrusion devices, and machine parts.
Steel's primary emphasis in the industrial products segment is the specialty
tubing market. Specialty tubing is used in a wide range of industrial
applications and demand is therefore sensitive to general economic conditions.
Demand was down slightly in the second half of 1995; however, Steel has
continued to identify new market applications which enabled it to increase both
volume and price. Steel is one of the largest domestic producers of specialty
tubing, based on shipment data compiled by the Steel Tube Institute.
International shipments of specialty tubing were 15%, 17%, and 11% of shipments
in 1995, 1994, and 1993, respectively.
Steel's participation in the flat rolled steel commodity market is generally
concentrated in the southwestern region of the United States and is affected by
factors such as price, capacity utilization, and raw material costs. Flat
rolled steel produced by Steel either is further processed by Steel in the
manufacture of tubular products or shipped to customers for the manufacture of a
variety of commercial and industrial products. Flat rolled steel is sold in
highly competitive markets, with price and availability primarily determining
customer purchase decisions.
MANUFACTURING. The manufacture of Steel's products is capital intensive.
Utilization rates are generally below capacity at Steel's manufacturing
facilities, and therefore, Steel has downsized its operations over the past ten
years, adjusting its cost structure to reflect current production levels.
However, there does exist excess capacity that may be used in the future as
needed. Steel is also expanding its specialty tubing facilities, a product line
that has been subject to production constraints. The level of production volume
through Steel's various facilities has a significant effect on the cost of
manufacturing. Key variable costs include costs of raw materials, including
scrap steel, steel slabs, electricity, and natural gas.
As part of Steel's overall capital outlays, LST and the minority shareholders of
Steel have agreed to fund up to $28 million for a capital expenditure program
during 1995 and 1996. Included in the program is a significant expansion of
Steel's capacity to manufacture specialty tubing products. The balance of the
expenditures is being used to upgrade Steel's capability to manufacture tubular
products for use in the energy sector. At the end of 1995, $9.8 million had
been funded for this capital expenditure program.
RESULTS OF OPERATIONS
Consolidated revenues reported in the statements of earnings are as follows:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994 1993
---------- ---------- ----------
$ % $ % $ %
----- --- ----- --- ----- ---
<S> <C> <C> <C> <C> <C> <C>
Oilfield products and services 265.6 62 215.2 60 210.8 63
Industrial products 160.2 38 141.8 40 121.7 37
----- --- ----- --- ----- ---
Consolidated total 425.8 100 357.0 100 332.5 100
----- --- ----- --- ----- ---
----- --- ----- --- ----- ---
</TABLE>
11
<PAGE>
1995 COMPARED WITH 1994
NET REVENUES increased 19% to $425.8 million in 1995 from $357.0 million in
1994. Net revenues of oilfield products increased 23% to $265.6 in 1995 from
$215.2 million in 1994. Shipment volumes and prices increased in 1995 from 1994
levels by 17% and 5%, respectively. Although the average domestic rig count
declined to 723 in 1995 from 774 in 1994, demand for Steel's OCTG was favorably
impacted due to the reduction in imported OCTG caused by the imposition of
protective tariffs on imported products from certain countries in 1995, and by
the types of drilling being conducted, such as deep water drilling in the Gulf
of Mexico, which increased the industry's requirements for larger diameter,
higher grade products for which Steel is most competitive. Export sales of
oilfield products also increased in 1995 from 1994 as international markets
strengthened from long-postponed exploration and production projects that were
started.
Industrial products net revenues increased by 13% to $160.2 million in 1995 from
$141.8 million in 1994. This comprised a 22% increase in specialty tubing net
revenues and was partially offset by a 4% reduction in flat rolled revenues.
For the specialty tubing product group, 1995 volume and price increased by 16%
and 8%, respectively. These increases are generally attributable to the
improvement in the domestic general economy. Flat rolled shipments were down 9%
in volume, although a price increase of 4% was realized for 1995 over 1994.
GROSS EARNINGS improved 105% to $26.2 million in 1995 from $12.8 million in
1994. This was primarily attributable to increased shipments and prices of
oilfield and specialty tubing products. However, increases in raw materials,
principally a 9% increase in the cost of scrap steel and steel slabs, offset
some of these margin improvements.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased 10% to $14.6 million in
1995 from $16.2 million in 1995, primarily due to lower legal and consulting
fees.
INTEREST INCOME was $1.5 million more in 1995 than in 1994 as short-term
interest rates were higher on the average in 1995 than in 1994.
INTEREST EXPENSE for 1995 increased to $8.7 million from $8.2 million in 1994,
reflecting higher interest rates in 1995 on Steel's revolving credit facility.
OTHER INCOME, NET. Net other income in 1995 of $2.4 million included $3.0
million from the gain on sale of approximately 9,400 acres of land in East
Texas. Net other income in 1994 was $2.5 million and included $1.3 million from
the gain on sale of working interests in oil and gas properties.
NET EARNINGS and earnings from continuing operations for 1995 were both $9.6
million, or $0.46 earnings per share. For 1994, there was a loss from
continuing operations of $3.8 million, or $0.19 loss per share. After a $5.0
million gain on sale of discontinued operations, net earnings in 1994 were $1.2
million, and after a $0.10 per share downward adjustment for the redemption of
preferred stock, the 1994 amount available to common shareholders was a $0.04
net loss per share.
1994 COMPARED WITH 1993
NET REVENUES in total increased 7% to $357.0 million in 1994 from $332.5 million
in 1993. Oilfield products and services revenues increased 2% to $215.2 in 1994
from $210.8 million in 1993. Both 1994 shipment volumes and prices were
relatively flat compared with 1993 levels. This corresponds with the domestic
average rig count remaining relatively stable at 775 in 1994 versus 755 in 1993.
Industrial products net revenues increased 17% to $141.8 million in 1994 from
$121.7 million in 1993. This included a 30% increase in specialty tubing net
revenues, reduced by a 4% decrease in flat rolled net revenues. For the
specialty tubing product group, 1994 volume increased 25% and prices improved
5%. These increases were due to improvement in the domestic general economy.
Flat rolled shipments were down 14% in volume, although prices improved 13% in
1994 over 1993.
12
<PAGE>
GROSS EARNINGS increased 103% to $12.8 million in 1994 from $6.3 million in
1993. This was due to an improvement in revenue levels and a better mix of
higher margin products, but was offset by increased steel costs of 9% in 1994
compared to 1993.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased to $16.2 million in 1994
from $16.9 million in 1993.
INTEREST INCOME in 1994 was $4.3 million compared to $0.9 million in 1993 and
was due to earning a full year of interest on investments resulting from the
sale of AFB in November 1993.
INTEREST EXPENSE in 1994 increased to $8.2 million from $7.0 million in 1993,
primarily due to higher average borrowings under Steel's revolving credit
agreement.
OTHER INCOME, NET. Net other income of $2.5 million in 1994 primarily included
nonrecurring gains on sales of Steel's nonstrategic assets. In 1993, there
were fewer sales of such assets.
NET EARNINGS for 1994 were $1.2 million, which included a $5.0 million gain on
sale of discontinued operations. The net loss for 1993 was $7.2 million, which
included $16.5 million for earnings on and gain on sale of AFB's discontinued
operations, and an extraordinary charge of $9.6 million to record Steel's
obligation under the Coal Industry Retiree Health Benefit Act of 1992 to fund
medical and death benefits of assigned retirees and eligible dependents of the
United Mine Workers of America.
On a per share basis, the loss from continuing operations was $0.19 and $0.69
per share for 1994 and 1993, respectively. After adjusting for discontinued
operations, the extraordinary item, and the 1994 $0.10 adjustment for the
redemption of preferred stock, the net loss available to common shareholders was
$0.04 and $0.35 per share for 1994 and 1993, respectively.
Prior to the 1993 sale, AFB earned $21.2 million. As a result of recognizing
only the $135.7 million in proceeds received at the time of the sale, LST
experienced a loss of $4.7 million on the disposition that reduced the reported
1993 earnings from discontinued operations to $16.5 million. The remaining $20
million in sale proceeds was placed in escrow to provide for possible future
claims by GFB that are permitted under the sale agreement. In 1994, LST
received $5 million of the escrowed funds, and $15 million remains in escrow
subject to contested pending claims.
FINANCIAL CONDITION AND LIQUIDITY
LST has no direct business operations other than Steel or significant sources of
cash other than from short-term investments or the sale of securities. Steel is
restricted from paying cash dividends under terms of its revolving credit
agreement; however, LST is reimbursed by Steel for a portion of its operating
costs as provided by its cost-sharing agreement with Steel.
In November 1993, LST sold the stock of AFB, one of its operating subsidiaries,
to Guaranty Federal Bank, F.S.B. (GFB). The accompanying consolidated financial
statements have been restated to reflect AFB as a discontinued operation. The
sale price was $155.7 million; of that, LST received $135.7 million in cash on
the date of the sale and $5 million in November 1994 and $15 million remains in
escrow to pay for certain claims that may be made by GFB pursuant to the sale
agreement. To date, LST has not paid any claims, but approximately $6 million
in claims are pending.
At December 31, 1995, LST had available cash and short-term investments of $72.6
million.
Steel has embarked on a capital expenditure program for the years 1995 through
1997 that is designed to increase the productive capacity for specialty tubing
and make other improvements that will lower operating costs and improve the
quality and precision of Steel's production process. As part of Steel's overall
capital outlays, in November 1994, LST and certain minority shareholders of
Steel agreed to fund up to $23 million for the capital expenditure program. In
October 1995, the minority shareholders agreed to increase this funding up to
$28 million. Steel issues 6% cumulative convertible preferred stock to its
participating shareholders as funds are advanced to finance the program. The
Steel preferred stock
13
<PAGE>
to be issued to LST and the other participating shareholders has a designated
value equal to the amount of the funds advanced and pays quarterly dividends
at the rate of 6% per year. The preferred stock is required to be redeemed
by Steel, unless earlier redeemed or converted, on January 3, 2002, in cash,
at the designated value plus any unpaid dividends. Prior to redemption of the
stock, dividends may be paid in cash, although currently prohibited by the
terms of the revolving credit agreement, or in additional preferred shares,
which is permitted. To date, quarterly dividends have been paid in
additional preferred shares.
These preferred shares are convertible into Steel common stock prior to
redemption at the rate of one share of common stock for each $10,000 of
designated value (subject to antidilution provisions).
In addition, as a result of an earlier unrelated transaction, LST holds warrants
to purchase 241.5 shares of Steel common stock, and other Steel shareholders
hold warrants to purchase 58.5 shares for $33,358 per share (subject to
antidilution provisions). The warrants are exercisable at any time until
December 31, 1998.
Steel presently has a total of 1,000 shares of common stock outstanding. In
November 1995, LST purchased for $1.65 million 49.5 shares of Steel from certain
minority holders. This increased LST's ownership percentage of Steel to 85.45%.
Depending upon warrant exercises and preferred share conversions, this
percentage could change.
LST periodically purchases steel slabs which are consigned to Steel for use in
its production process and thereby affords Steel somewhat longer payment periods
for this raw material. Steel pays LST as the slabs are used or within 90 days,
whichever occurs first. This program's structure is consistent with those
previously established with third parties. During 1995, LST's slab purchases
amounted to approximately $73.1 million.
It is currently anticipated that the remainder of the proceeds from the sale of
AFB will be used by LST for general corporate purposes, which could include
further investment in Steel or such other uses as may reasonably be determined
by the Board of Directors to be in the best interest of LST and its
shareholders. LST believes it has and will continue to have adequate funds to
meet its operating requirements.
Steel requires capital primarily to fund general working capital needs and
capital expenditures. Principal sources of funds include cash generated by
operations, borrowings, and equity financing.
Steel has a revolving credit agreement under which it can borrow the lesser of
$70.0 million or an amount based upon eligible accounts receivable and
inventories that secure the borrowings. The credit line will increase by $2.5
million in March of each of the next three years. At December 31, 1995,
borrowings totaled $45.1 million on an available borrowing base of $69.6
million. The interest rate on borrowings was prime plus 0.75% which, at year-
end, was 9.5%. Steel also pays a fee of 0.5% on the unused portion of the
credit facility. The agreement, which extends to March 1999, contains various
restrictive covenants, including requirements to maintain minimum net worth
levels and meet other financial ratios.
In March 1993, Steel also borrowed $4.6 million at 8.08% to be repaid in equal
monthly installments through March 1997.
Steel believes that funds generated by operations, its borrowing capacity under
the revolving credit agreement, and capital contributions from its shareholders
will provide the liquidity necessary to fund its cash requirements during 1996.
Steel's defined benefit pension plans cover its bargaining unit employees. At
December 31, 1995, the projected benefit obligation exceeded the plans' assets
by $37.9 million. Steel's annual pension expense, including amortization of the
excess obligation, approximates $4.6 million.
The Coal Industry Retiree Health Benefit Act of 1992 required Steel to fund
future medical and death benefits of certain UMWA retirees and dependents. An
extraordinary charge of $9.6 million, net of minority interest, was recognized
in 1993 to reflect future payments which are assessed annually. The 1995
payment amounted to approximately $.5 million, and the 1994 payment amounted to
approximately $1.0 million. Steel is making these payments under protest and
has filed suit in Federal District Court.
14
<PAGE>
Steel's operations are subject to restrictive environmental compliance and
permitting requirements of various governmental agencies that include the
TNRCC and the EPA. Steel has entered into specific agreements with these
agencies to conduct numerous environmental studies and to develop plans to
ensure continuous compliance with applicable laws and regulations. Steel
believes that the cost of maintaining compliance with environmental
requirements will fall within its contemplated operating and capital
expenditure plans, averaging $2-$3 million annually in the foreseeable future.
The matters discussed or incorporated by reference in this Report on Form
10-K that are forward-looking statements involve risks and uncertainties
including, but not limited to, economic conditions, product demand and
industry capacity, competitive products and pricing, manufacturing
efficiencies, availability of raw materials and critical manufacturing
equipment, the regulatory and trade environment, and other risks indicated in
filings with the Securities and Exchange Commission.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Public Accountants . . . . . . . . . . . . . . . 16
Consolidated Statements of Cash Flows, for the years ended
December 31, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . 17
Consolidated Statements of Earnings, for the years ended
December 31, 1995, 1994, and 1993 . . . . . . . . . . . . . . . . . . 18
Consolidated Balance Sheets at December 31, 1995 and 1994. . . . . . . 19
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 20
Schedule I - Condensed Financial Information of Registrant . . . . . . 30
</TABLE>
15
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
Lone Star Technologies, Inc. (LST):
We have audited the accompanying consolidated balance sheets of LST (a
Delaware corporation) and subsidiaries as of December 31, 1995 and 1994, and
the related consolidated statements of earnings, shareholders' equity, and
cash flows for the three years ended December 31, 1995. These financial
statements and the schedule referred to below are the responsibility of LST's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of LST and subsidiaries as of December 31, 1995 and 1994, and the results of
their operations and their cash flows for the three years ended December 31,
1995, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule listed in
the index to consolidated financial statements is presented for the purpose
of complying with the Securities and Exchange Commission's rules and is not a
part of the basic consolidated financial statements. This schedule has been
subjected to the auditing procedures applied in our audits of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
[SIGCUT]
ARTHUR ANDERSEN LLP
Dallas, Texas,
January 30, 1996
16
<PAGE>
LONE STAR TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
------- -------- -------
<S> <C> <C> <C>
Beginning cash and cash equivalents $ 41.8 $140.4 $ 11.5
------ ------ ------
------ ------ ------
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings (loss) from continuing operations
before income tax 9.6 (3.8) (14.1)
Minority interest in Steel 1.5 (1.0) (2.3)
Depreciation and amortization 11.4 11.4 11.0
Accounts receivable, net (9.3) (10.8) (6.2)
Current inventories, net (14.3) 7.0 (13.9)
Accounts payable and accrued liabilities - (4.6) 16.4
Other (3.7) (0.4) (6.2)
------ ------ ------
NET CASH USED BY OPERATING ACTIVITIES (4.8) (2.2) (15.3)
------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (14.9) (7.0) (5.8)
Short-term investments 8.4 (41.0) -
Sale of discontinued operations - 5.0 135.7
Proceeds from sale of assets 4.5 2.0 (0.6)
------ ------ ------
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES (2.0) (41.0) 129.3
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in borrowings under revolvoing
credit agreement 6.1 (2.8) 10.8
Redemption of Series A Preferred stock and
payment of dividend - (51.7) -
Installment note borrowing - - 4.6
Installment note repayment (1.2) (1.0) (0.8)
Minority interest contributions for
Preferred stock in Steel 1.0 - -
Acquisition of minority interest (1.6) - -
Issuance of common stock 0.7 0.1 0.3
------ ------ ------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES 5.0 (55.4) 14.9
------ ------ ------
Net increase (decrease) in cash and cash
equivalents (1.8) (98.6) 128.9
------ ------ ------
ENDING CASH AND CASH EQUIVALENTS $ 40.0 $ 41.8 $140.4
------ ------ ------
------ ------ ------
</TABLE>
See accompanying notes.
17
<PAGE>
LONE STAR TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In millions, except share data)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
------- -------- -------
<S> <C> <C> <C>
Net revenues $ 425.8 $ 357.0 $ 332.5
Cost of goods sold (399.6) (344.2) (326.2)
------- ------- -------
Gross earnings 26.2 12.8 6.3
Selling, general, and administrative expenses (14.6) (16.2) (16.9)
------- ------- -------
Operating earnings (loss) 11.6 (3.4) (10.6)
Interest income 5.8 4.3 0.9
Interest expense (8.7) (8.2) (7.0)
Other income, net 2.4 2.5 0.3
Minority interest in Steel (1.5) 1.0 2.3
------- ------- -------
Earnings (loss) from continuing operations
before income tax 9.6 (3.8) (14.1)
Income tax - - -
------- ------- -------
Earnings (loss) from continuing operations 9.6 (3.8) (14.1)
Earnings from and gain on sale of
discontinued operations - 5.0 16.5
------- ------- -------
Earnings before extraordinary item 9.6 1.2 2.4
Extraordinary item - - (9.6)
------- ------- -------
NET EARNINGS (LOSS) $ 9.6 $ 1.2 $ (7.2)
------- ------- -------
------- ------- -------
Per common share:
Earnings (loss) from continuing operations $ 0.46 $ (0.19) $ (0.69)
Earnings from and gain on sale of
discontinued operations - 0.25 0.81
------- ------- -------
Earnings before extraordinary item 0.46 0.06 0.12
Extraordinary item - - (0.47)
Adjustment for redemption of Series A
Preferred stock - (0.10) -
------- ------- -------
NET EARNINGS (LOSS) AVAILABLE TO COMMON
SHAREHOLDERS $ 0.46 $ (0.04) $ (0.35)
------- ------- -------
------- ------- -------
</TABLE>
See accompanying notes.
18
<PAGE>
LONE STAR TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1995 1994
------ ------
<S> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 40.0 $ 41.8
Short-term investments 32.6 41.0
Accounts receivable, net 64.2 54.9
Current inventories, net 55.7 41.4
Other current assets 2.0 1.7
------ ------
TOTAL CURRENT ASSETS 194.5 180.8
Property, plant, and equipment, net 132.8 130.7
Other noncurrent assets 30.4 34.2
------ ------
TOTAL ASSETS $357.7 $345.7
------ ------
------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable $ 33.0 $ 31.2
Accrued liabilities 19.2 21.0
Current portion of long-term debt 1.3 1.2
------ ------
Total current liabilities 53.5 53.4
------ ------
Long-term debt 95.4 90.6
Postretirement benefit obligations 46.1 42.0
Other noncurrent liabilities 48.8 49.8
Minority interest in Steel 11.7 13.8
------ ------
TOTAL LIABILITIES $255.5 $249.6
------ ------
Commitments and Contingencies (See Note J) - -
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value (authorized:
10,000,000 shares, issued: none) - -
Common stock, $1 par value (authorized:
40,000,000 shares, issued: 20,556,816 and
20,460,686 respectively) 20.5 20.4
Capital surplus 159.5 158.9
Minimum pension liability adjustment (7.7) (3.5)
Retained deficit (69.2) (78.8)
Treasury stock (48,616 shares), at cost (0.9) (0.9)
------ ------
TOTAL SHAREHOLDERS' EQUITY 102.2 96.1
------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $357.7 $345.7
------ ------
------ ------
</TABLE>
See accompanying notes.
19
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Lone Star Technologies, Inc. (LST) is a management and holding company whose
principal operating subsidiary, Lone Star Steel Company (Steel), manufactures
and markets products and services to the oil and gas drilling industry and the
general industrial sector.
ACCOUNTING POLICIES - NOTE A
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the
accounts of LST and its subsidiaries. American Federal Bank, F.S.B. (AFB) is
presented as a discontinued operation due to its sale in November 1993.
Intercompany transactions are eliminated in consolidation.
INVESTMENTS IN DEBT SECURITIES. LST's cash equivalents include U.S. government
debt obligations and corporate debt obligations rated A-1, P-1 or higher with
original maturities of less than three months. Short-term investments consist
of U.S. government debt obligations with original maturities of up to one year.
Investments are classified as held-to-maturity and recorded at cost or
classified as held for sale or trading securities and recorded at market value.
LST's cash equivalents and short-term investments are classified as held-to-
maturity because LST has the intent and ability to hold them to maturity. At
December 31, 1995, LST's carrying amounts of cash equivalents and short-term
investments approximated market value. LST does not invest in or hedge
exposures through the use of derivative financial instruments. At December 31,
1995, investments in debt securities at amortized cost consisted of $62.3
million in U.S. government debt obligations and $10.3 million in corporate debt
obligations.
INVENTORIES of Steel are stated at the lower of cost (principally last-in,
first-out "LIFO") or market value and include raw materials, labor, and
overhead. Inventories at LST are stated at the lower of cost (principally
first-in, first-out "FIFO") or market value and consist of steel slabs.
PROPERTY, PLANT, AND EQUIPMENT are stated at cost. Depreciation is provided on
the straight-line method.
INCOME TAXES. LST files a consolidated federal income tax return. LST
utilizes an asset and liability approach for financial accounting and income tax
reporting. Deferred tax liabilities or assets are recognized for the estimated
future tax effects attributable to temporary differences and carryforwards and
are adjusted whenever tax rates or other provisions of income tax statutes
change.
MINORITY INTEREST. Minority ownership in Steel is included in the liabilities
section of LST's consolidated balance sheets, and results are adjusted in the
consolidated statements of earnings to reflect the participation of minority
ownership in Steel's earnings or losses.
USE OF ESTIMATES. Preparation of the consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosures of contingent assets and liabilities, and the reported
amounts of revenues and expenses. Actual results could differ from those
estimates.
20
<PAGE>
LINES OF BUSINESS AND CURRENT OPERATING ENVIRONMENT - NOTE B
Steel manufactures and markets steel products for the oil and gas industry and
the general industrial sector. Oil and gas industry products include casing and
tubing, used in the drilling and production of wells, and line pipe, used for
the transmission of oil and natural gas. OCTG and line pipe sales are greatly
impacted by the level of domestic oil and gas drilling, which in turn is
primarily dependent on oil and natural gas prices. Because of the volatility of
both prices and drilling activity as well as other factors, demand for these
steel products can be subject to significant fluctuations. General industrial
products include specialty tubing and flat rolled steel. This sector is more
diversified, and sales traditionally follow general domestic economic
conditions.
Steel's primary manufacturing facilities are located in East Texas. Raw
materials and supplies, principally scrap steel and steel slabs, used in the
manufacture of the Company's products have historically been readily available
from various competitive sources. The manufacture of these products uses
several common facilities and shares administrative support. Accordingly,
certain costs and assets are allocated and may not reflect each line of business
as if it were operated separately.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
($ IN MILLIONS; UNAUDITED)
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
OILFIELD PRODUCTS AND SERVICES
Net revenues $265.6 $215.2 $210.8
Operating losses (5.4) (12.1) (13.4)
Identifiable assets 169.2 149.2 162.8
Capital expenditures 6.9 4.3 3.8
Depreciation and amortization $ 7.3 $ 7.1 $ 7.3
INDUSTRIAL PRODUCTS
Net revenues $160.2 $141.8 $121.7
Operating earnings 15.7 8.9 4.3
Identifiable assets 96.9 91.5 86.6
Capital expenditures 8.0 2.7 2.0
Depreciation and amortization $ 4.1 $ 4.3 $ 3.7
CORPORATE AND OTHER NON-SEGMENTS
Net revenues $ 0.0 $ 0.0 $ 0.0
Operating earnings (loss) 1.3 (0.2) (1.5)
Identifiable assets $ 91.6 $105.0 $161.8
TOTAL FROM CONTINUING OPERATIONS
Net revenues $425.8 $357.0 $332.5
Operating earnings (loss) 11.6 (3.4) (10.6)
Total assets 357.7 345.7 411.2
Capital expenditures 14.9 7.0 5.8
Depreciation and amortization $ 11.4 $ 11.4 $ 11.0
</TABLE>
Steel's principal market is domestic, although the Company also sells into
international markets. The majority of sales of pipe products occur through
networks of sales distributors, although some pipe sales and most flat rolled
steel sales are made directly to end users. Sales to the two largest
distributors represented approximately 12% and 10% of total 1995, 1994, and
1993 revenues. Direct foreign revenues as a percent of total revenues were
approximately 9% of the total in 1995, 7% in 1994, and 6% in 1993.
Of Steel's total labor force, 68% are represented by three collective
bargaining agreements. One of these agreements, representing 61% of the
total labor force, will expire in June 1996.
21
<PAGE>
ADDITIONAL BALANCE SHEET INFORMATION - NOTE C
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994
------- -------
<S> <C> <C>
INVENTORIES
Finished goods $ 35.2 $ 28.6
Work in process 46.7 36.2
Raw materials 3.1 3.5
Materials, supplies and other 24.6 23.0
------- -------
Total inventories before LIFO valuation reserve 109.6 91.3
Reserve to reduce inventories to LIFO value (43.7) (39.7)
------- -------
Total inventories 65.9 51.6
Amount included in other noncurrent assets (10.2) (10.2)
------- ------
Net current inventories $ 55.7 $ 41.4
------- -------
------- -------
PROPERTY, PLANT, AND EQUIPMENT
Land and land improvements $ 11.6 $ 12.0
Buildings, structures, and improvements 12.9 12.4
Machinery and equipment 260.4 249.8
Construction in progress 8.8 7.0
------- -------
Total property, plant, and equipment 293.7 281.2
Less accumulated depreciation and amortization (160.9) (150.5)
------- -------
Property, plant, and equipment, net $ 132.8 $ 130.7
------- -------
------- -------
OTHER NONCURRENT ASSETS
Funds held in escrow $ 15.0 $ 15.0
Inventory (supplies and spare parts) 10.2 10.2
Other 5.2 9.0
------- -------
Total other noncurrent assets $ 30.4 $ 34.2
------- -------
------- -------
ACCRUED LIABILITIES
Accrued compensation $ 6.4 $ 6.1
Property taxes 3.1 3.8
Warranty reserves 2.1 2.4
Environmental reserves 1.0 2.0
Pension obligations 2.0 1.4
Other 4.6 5.3
------- -------
Total accrued liabilities $ 19.2 $ 21.0
------- -------
------- -------
OTHER NONCURRENT LIABILITIES
Environmental reserves $ 15.2 $ 14.7
UMWA obligations 10.0 10.4
Deferred gain on sale of discontinued operations 15.0 15.0
Other 8.6 9.7
------- -------
Total other noncurrent liabilities $ 48.8 $ 49.8
------- -------
------- -------
</TABLE>
Accounts receivable is stated net of allowance for doubtful accounts of $1.5
million and $1.9 million at December 31, 1995 and 1994, respectively.
Approximately $97.6 million and $78.8 million of total inventories before
LIFO valuation reserves were accounted for on the LIFO basis at December 31,
1995 and 1994, respectively. Non-LIFO inventories are stated at the lower of
average cost or market. The total inventories before LIFO valuation reserves
approximate replacement cost of the inventories. During 1994, a reduction in
inventory resulted in the depletion of previous LIFO inventory layers. The
financial effect of this reduction was not significant to net results.
22
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - NOTE D
<TABLE>
<CAPTION>
($ IN MILLIONS)
----------------------------------------------------------------------
MINIMUM
SERIES A PENSION
PREFERRED COMMON CAPITAL LIABILITY RETAINED TREASURY
STOCK STOCK SURPLUS ADJUSTMENT (DEFICIT) STOCK TOTAL
--------- ------ ------- ---------- --------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1992 49.6 20.4 158.5 - (70.7) (0.9) 156.9
Net loss - - - - (7.2) - (7.2)
Employee benefit plan
stock issuance - - 0.3 - - - 0.3
Pension liability adjustment -. -. -. (6.6) -. -. (6.6)
----- ---- ----- ---- ----- ---- -----
Balance, December 31, 1993 49.6 20.4 158.8 (6.6) (77.9) (0.9) 143.4
Employee benefit plan
stock issuance - - 0.1 - - - 0.1
Pension liability adjustment - - - 3.1 - - 3.1
Redemption of preferred stock (49.6) - - - (2.1) - (51.7)
Net earnings -. -. -. -. 1.2 -. 1.2
----- ---- ----- ---- ----- ---- -----
Balance, December 31, 1994 - 20.4 158.9 (3.5) (78.8) (0.9) 96.1
Employee benefit plan
stock issuance - 0.1 0.6 - - - 0.7
Pension liability adjustment - - - (4.2) - - (4.2)
Net earnings -. -. -. -. 9.6 -. 9.6
----- ---- ----- ---- ----- ---- -----
Balance, December 31, 1995 -. 20.5 159.5 (7.7) (69.2) (0.9) 102.2
----- ---- ----- ---- ----- ---- -----
----- ---- ----- ---- ----- ---- -----
</TABLE>
PREFERRED STOCK. In 1988, LST sold one million shares of Series A nonvoting
convertible cumulative preferred stock, $1.00 par value (Series A Preferred
stock) for $49.6 million. Dividends were not declared, accrued, or paid, and at
January 1, 1994, the cumulative dividends in arrears approximated $18.8 million.
In February 1994, LST redeemed the Series A Preferred stock and extinguished all
dividend obligations related to it for $51.7 million. Earnings per share in
1994 were adjusted downward by $0.10 to reflect the $2.1 million difference
between the amount paid and the carrying amount. Ten million shares remain
authorized and unissued.
CHANGE IN COMMON SHARES OUTSTANDING:
<TABLE>
<CAPTION>
TREASURY
ISSUED STOCK OUTSTANDING
---------- -------- -----------
<S> <C> <C> <C>
Balance, December 31, 1993 20,436,436 (48,616) 20,387,820
Employee benefit plans 24,250 - 24,250
---------- ------- ----------
Balance, December 31, 1994 20,460,686 (48,616) 20,412,070
Employee benefit plans 96,130 - 96,130
---------- ------- ----------
Balance, December 31, 1995 20,556,816 (48,616) 20,508,200
---------- ------- ----------
---------- ------- ----------
</TABLE>
DEBT - NOTE E
<TABLE>
<CAPTION>
AT DECEMBER 31,
($ IN MILLIONS)
1995 1994
--------------- ---------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ----- -------- -----
<S> <C> <C> <C> <C>
LST convertible subordinated debentures $50.0 $42.5 $50.0 $40.0
Steel revolving credit 45.1 45.1 39.0 39.0
Steel 48-month installment note 1.6 1.6 2.8 2.8
----- ----- ----- -----
Total debt 96.7 89.2 91.8 81.8
less current installments (1.3) (1.3) (1.2) (1.2)
----- ----- ----- -----
Total long-term debt $95.4 $87.9 $90.6 $80.6
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
23
<PAGE>
The $50 million, 8% convertible subordinated debentures are due in 2002 and may
be converted at any time into shares of LST common stock. The conversion price,
initially set at $24.25 per share, is subject to antidilution provisions. Fair
value of the debentures is estimated based upon quotation from brokers.
Steel has a revolving credit agreement under which it can borrow the lesser of
$70.0 million or an amount based upon eligible accounts receivable and
inventories that secure the borrowings. The credit line will increase by $2.5
million in March of each of the next three years. At December 31, 1995,
borrowings totaled $45.1 million on an available borrowing base of
$69.6 million. The interest rate on borrowings was prime plus 0.75% which, at
year-end, was 9.5%. Steel also pays a fee of 0.5% on the unused portion of the
credit facility. The agreement, which extends to March 1999, contains various
restrictive covenants, including requirements to maintain minimum net worth
levels and meet certain financial ratios. Steel's ability to pay cash dividends
is, with limited exceptions, prohibited by the agreement and at December 31,
1995, LST's equity in the net assets of Steel was $63.1 million. The agreement
also restricts Steel's ability to incur additional indebtedness.
In March 1993, Steel also separately borrowed $4.6 million at 8.08% to be repaid
in equal monthly installments through March 1997.
Steel believes that funds generated by operations, its borrowing capacity under
the revolving credit agreement, and temporary advances from its shareholders or
other sources will provide the liquidity necessary to fund operations and
certain capital expenditures in the short term.
At December 31, 1995, debt maturities are as follows: 1996, $1.3 million; 1997,
$0.3 million; 1998, none; 1999, $45.1 million; and thereafter, $50.0 million.
Cash paid for interest during 1995, 1994, and 1993 was $4.9 million, $4.1
million, and $2.9 million, respectively, by Steel; and $4.0 million in each of
the last three years by LST. Interest of $0.3 million was capitalized into
property, plant, and equipment during 1995.
NET EARNINGS PER SHARE - NOTE F
The computation of primary earnings per share is based on the weighted average
number of shares of common stock and common stock equivalents. The numbers of
shares used in 1995, 1994, and 1993 were approximately 20.6 million,
20.4 million, and 20.4 million. For all three years, the effect of potentially
dilutive shares on fully diluted earnings per share was either antidilutive or
not significant. Earnings per share in 1994 were adjusted downward by $0.10 to
reflect the redemption of Series A Preferred stock, described in Note D.
24
<PAGE>
INCOME TAXES - NOTE G
There was not a current or deferred income tax expense or benefit for 1995,
1994, or 1993. A reconciliation of computed income taxes to actual income taxes
follows:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994 1993
----- ----- ------
<S> <C> <C> <C>
Earnings (loss) from continuing operations
before income tax $ 9.6 $(3.8) $(14.1)
Statutory federal income tax rate 35.% 35.% 35.%
----- ----- ------
----- ----- ------
Income tax expense (benefit) at statutory rate 3.4 (1.3) (4.9)
Minority interest (0.5) (0.3) (0.8)
Net operating loss, benefit not recognized (recognized) (2.9) 1.6 5.7
----- ----- ------
Income taxes $ 0.0 $ 0.0 $ 0.0
----- ----- ------
----- ----- ------
</TABLE>
The following table discloses the components of the deferred tax amounts at
December 31, 1995 and 1994:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994
------ ------
<S> <C> <C>
DEFERRED TAX ASSETS - temporary differences
Postretirement benefit accruals $ 14.9 $ 12.9
Environmental reserves 5.5 5.7
UMWA liability 3.6 3.7
Deferred gains 4.9 4.9
Other expense accruals and reserves 6.5 7.1
Inventories 6.1 7.4
Other 0.5 0.6
------ ------
Total deferred tax assets - temporary differences 42.0 42.3
Net operating loss carryforwards 92.3 92.3
------ ------
Total deferred tax assets 134.3 134.6
DEFERRED TAX LIABILITY - temporary difference
for basis in and depreciation of property,
plant, and equipment (35.7) (35.4)
------ ------
Net deferred tax assets 98.6 99.2
Less valuation allowance (98.6) (99.2)
------ ------
NET DEFERRED TAX AMOUNT $ 0.0 $ 0.0
------ ------
------ ------
</TABLE>
At December 31, 1995, LST had federal tax net operating loss carryforwards
(NOL's) of approximately $272 million, a portion of which is related to AFB and
subject to regulatory audit by the Federal Deposit Insurance Corporation. If
not utilized, the NOL's will expire between years 2000 and 2009, and their
future availability may be limited if LST or a member of the consolidated group
experiences an ownership change of more than 50 percentage points, as defined by
IRS regulations. LST's common stock is publicly traded, and management cannot
assure that future trading will not result in an ownership change, as defined,
which would limit availability of the NOL's.
EXTRAORDINARY ITEM - NOTE H
COAL INDUSTRY RETIREE HEALTH BENEFIT ACT OF 1992
In October 1993, Steel was notified by the United Mine Workers of America
Combined Benefit Fund that, under the Coal Industry Retiree Health Benefit Act
of 1992, Steel is required to pay premiums in connection with medical and death
benefits for certain of its former employees who worked in Steel's now-
discontinued coal mining operations. An extraordinary charge of $9.6 million,
net of minority interest, was recognized in 1993 for the total estimated future
payments related to the Act. Payments are assessed annually and will be made
over an extended period for as long as there may be eligible beneficiaries.
Steel is making these payments under protest and has filed suit in Federal
District Court.
25
<PAGE>
EMPLOYEE BENEFIT PLANS - NOTE I
CAPITAL ACCUMULATION PLAN. LST and Steel have defined contribution plans
available to substantially all full-time employees. Participants may make
voluntary pretax contributions to the plans, and LST and Steel make matching
contributions within specified limits. Matching contributions totaled $0.7
million in each of the last three years.
STOCK OPTION PLAN. LST has a long-term incentive plan which provides for the
issuance of up to 2,700,000 shares of common stock to key employees and outside
directors through the granting of incentive (the right to grant further
incentive options expired in 1995) and nonqualified stock options, stock
appreciation rights, restricted stock grants, and performance unit grants. The
option price is not less than the market price on the date of the grant.
Options are generally exercisable for ten years with one-fourth of the shares
becoming exercisable on the one-year anniversary of the grant date and an
additional one-fourth becoming exercisable on the same anniversary date over the
next three years. If a change of control of LST occurs before an option's
fourth anniversary, the option may be exercised in full earlier. Following is a
summary of stock option activity during 1995 and 1994:
<TABLE>
<CAPTION>
SHARES UNDER OPTION PRICE RANGE ($)
------------------- ---------------
<S> <C> <C>
OUTSTANDING, DECEMBER 31, 1993 865,917 2.59 -17.38
Granted in 1994 - - -
Exercised in 1994 (24,250) 3.06 - 6.81
Canceled in 1994 (17,020) 3.06 -16.13
------- -----------
OUTSTANDING, DECEMBER 31, 1994 824,647 2.59 -17.38
Granted in 1995 232,500 6.88 - 8.13
Exercised in 1995 (96,130) 3.06 - 8.50
Canceled in 1995 (68,161) 5.88 -16.13
------- -----------
OUTSTANDING, DECEMBER 31, 1995 892,856 2.59 -17.38
------- -----------
------- -----------
</TABLE>
At December 31, 1995, 1,323,439 shares were available for grant and 503,606
shares were exercisable.
POSTRETIREMENT HEALTH CARE PLAN. Steel sponsors an unfunded, defined benefit,
postretirement health care plan ("Health Care Plan") for most of its bargaining
unit employees and a limited number of nonbargaining unit retirees eligible
under special early retirement programs. Health Care Plan benefits are provided
to eligible retirees until they reach the age of 65, at which time coverage
terminates. Steel accrues for the anticipated cost of retirees' health care
benefits in accordance with Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" (SFAS
No. 106). Net retiree health care benefits expense for 1995, 1994, and 1993
included the following components:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost - health care benefits earned $0.4 $0.5 $0.4
Interest cost on unfunded accumulated
benefit obligation 0.9 0.8 0.8
---- ---- ----
Total retiree health care benefits expense $1.3 $1.3 $1.2
---- ---- ----
---- ---- ----
</TABLE>
The annual rate of the increase in per capita cost of covered health care
benefits was assumed to gradually decrease from 9% to an ultimate trend rate of
6% by the year 2004. An increase of 1% per year in the assumed medical cost
trend rate would have resulted in an additional obligation of $1.1 million for
accumulated benefits at December 31, 1995, and an additional $0.2 million in
health care benefits expense in 1995. Weighted average discount rates of 7.5%
at December 31, 1995, and 8.5% at December 31, 1994, were used to determine the
accumulated obligation.
26
<PAGE>
The following table sets forth the Health Care Plan's unfunded status and the
amounts recognized in the consolidated balance sheets at December 31, 1995 and
1994:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994
----- -----
<S> <C> <C>
Accumulated benefit obligation
Retirees $ 1.1 $ 1.8
Active plan participants - fully eligible 0.2 0.3
Active plan participants - not fully eligible 8.4 8.3
----- -----
Unfunded accumulated benefit obligation 9.7 10.4
Unrecognized net gain 2.2 0.8
----- -----
Net benefit obligation recognized in consolidated balance sheet 11.9 11.2
Amount included in accrued liabilities (0.8) (0.8)
----- -----
Amount included in postretirement benefit obligation $11.1 $10.4
----- -----
----- -----
</TABLE>
PENSION PLANS. Steel has defined benefit pension plans covering its bargaining
unit employees. Retirement benefits are based on years of service at
progressively increasing flat-rate amounts. A special lump-sum payment equal to
13 weeks of vacation pay is made upon retirement. Steel's policy is to fund the
minimum contribution each year as required by applicable regulations. November
30th was the measurement date for determining the plans' assets and obligations
for 1995 and 1994. At December 31, 1995 and 1994, the plans' funded status and
amounts recognized in the consolidated balance sheets were as follows:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994
------ ------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 74.6 $ 64.5
------ ------
------ ------
Accumulated benefit obligation $ 77.0 $ 68.1
------ ------
------ ------
Projected benefit obligation $ 77.7 $ 68.8
Plans' assets at fair value (39.8) (35.1)
------ ------
Projected benefit obligation in excess of plans' assets 37.9 33.7
Unrecognized net gain (loss) (10.4 (5.3)
Unrecognized net obligation at January 1, 1986 (5.1) (6.1)
Adjustment required to recognize minimum liability 14.6 10.7
------ ------
Pension liability recognized in consolidated balance sheet 37.0 33.0
Amount recorded in accrued liabilities (2.0) (1.4)
------ ------
Amount included in postretirement benefit obligation $ 35.0 $ 31.6
------ ------
------ ------
</TABLE>
In determining the projected benefit obligation, the weighted average
discount rate was assumed to be 7.5% at December 31, 1995, and 8.5% at
December 31, 1994. The expected long-term rate of return on assets was
assumed to be 9% and the annual rate of increase in compensation was assumed
to be 5% for both years. In accordance with Statement of Financial
Accounting Standards No. 87, "Employers' Accounting for Pensions," Steel has
recorded an adjustment, as shown in the above table, to recognize a minimum
pension liability. Offsetting this liability at December 31, 1995, was a
noncurrent intangible asset of $5.3 million and a reduction of shareholders'
equity of $7.7 million net of minority interest, with no recorded tax benefit
assumed. The December 31, 1994, adjustment resulted in an offsetting $6.3
million intangible asset and a $3.5 million net equity reduction. The plans'
assets consist primarily of short-term money market investments, government
and corporate obligations, real estate, and public market equity securities.
27
<PAGE>
Net pension expense in 1995, 1994, and 1993 was as follows:
<TABLE>
<CAPTION>
($ IN MILLIONS)
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Service cost - benefits earned $ 0.7 $ 0.9 $ 0.7
Interest cost on projected benefit obligation 5.7 5.5 5.6
Return on plan assets (6.8) 0.9 (3.9)
Gain (loss) deferred 4.0 (4.1) 0.7
Amortization of initial unrecognized obligation 1.0 1.0 1.0
----- ----- -----
Total pension expense $ 4.6 $ 4.2 $ 4.1
----- ----- -----
----- ----- -----
</TABLE>
PROFIT SHARING PLAN. Steel has a profit sharing plan for substantially all
employees which provides for payment of a specified percentage of Steel's
quarterly operating earnings. Steel's payments to employees were as follows:
1995, $0.6 million; 1994, $0.1 million; and 1993, none.
COMMITMENTS AND CONTINGENCIES - NOTE J
Steel's operations are subject to numerous environmental laws. The three major
areas of regulation are air quality, water quality, and solid and hazardous
waste management. The primary governmental oversight agencies include the Texas
Natural Resource Conservation Commission and the Environmental Protection
Agency. Steel has agreements with these agencies to conduct numerous
environmental studies and to develop plans to ensure continuous compliance with
applicable laws and regulations. Steel is engaged in various ongoing
environmental studies, monitoring programs, and capital projects. Estimated
expenditures for certain remediation programs are included in accrued
liabilities and other noncurrent liabilities as shown in Note C. Steel believes
that its environmental expenditures will continue to fall within its
contemplated operating and capital plans.
Steel leases equipment under various operating leases. Rental expense totaled
$3.5 million, $3.3 million, and $3.0 million in 1995, 1994, and 1993,
respectively. Future minimum lease payments under noncancellable operating
leases are as follows: 1996, $1.3 million; 1997, $1.0 million; 1998, $0.6
million; and 1999, $0.3 million.
LST and its subsidiaries are parties to a number of lawsuits and controversies
which are not discussed herein. Management of LST and its operating companies,
based upon their analysis of known facts and circumstances and reports from
legal counsel, does not believe that any such matter will have a material
adverse effect on the results of operations or financial condition of LST and
its subsidiaries, taken as a whole.
SALE OF AFB - NOTE K
In November 1993, LST sold the stock of AFB, one of its operating subsidiaries,
to Guaranty Federal Bank, F.S.B. (GFB). The accompanying consolidated financial
statements have been restated to reflect AFB as a discontinued operation. The
sale price was $155.7 million; of that, LST received $135.7 million in cash on
the sale date and $5 million in November 1994 and $15 million remains in escrow
to pay for claims that may be made by GFB pursuant to the sale agreement. As
these funds are released to LST, they are recognized as income in the periods
received. To date, LST has not paid any claims, but approximately $6 million in
claims are pending.
Prior to the sale, AFB earned $21.2 million in 1993. As a result of recognizing
only the $135.7 million received at the time of the sale, LST experienced a loss
of $4.7 million on the disposition that reduced the reported 1993 earnings from
discontinued operations to $16.5 million.
28
<PAGE>
QUARTERLY FINANCIAL SUMMARY - NOTE L
<TABLE>
<CAPTION>
($ IN MILLIONS, EXCEPT SHARE AMOUNTS;
QUARTERLY AMOUNTS UNAUDITED):
QUARTER
---------------------------------
FIRST SECOND THIRD FOURTH TOTAL YEAR
----- ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C>
1995
Net revenues $97.0 $101.0 $111.8 $116.0 $425.8
Gross earnings 6.0 6.9 6.3 7.0 26.2
Net earnings $ 1.5 $ 2.2 $ 3.6 $ 2.3 $ 9.6
PER COMMON SHARE:
Net earnings available to common
shareholders 0.07 0.11 0.17 0.11 0.46
1994
Net revenues $81.1 $84.8 $ 89.2 $101.9 $357.0
Gross earnings 1.6 2.0 1.3 7.9 12.8
Earnings (loss) from continuing operations (2.6) (2.6) (1.3) 2.7 (3.8)
Gain on sale of discontinued operations 0.0 0.0 0.0 5.0 5.0
Net earnings (loss) $(2.6) $(2.6) $ (1.3) $ 7.7 $ 1.2
PER COMMON SHARE:
Earnings (loss) from continuing operations (0.13) (0.13) (0.06) 0.13 (0.19)
Gain on sale of discontinued operations 0.0 0.0 0.0 0.25 0.25
Adjustment for redemption of Series A
Preferred stock (0.10) 0.0 0.0 0.0 (0.10)
Net earnings (loss) available to common
shareholders (0.23) (0.13) (0.06) 0.38 (0.04)
</TABLE>
RELATED-PARTY TRANSACTIONS - NOTE M
LST and minority shareholders of Steel have agreed to fund up to $28 million for
a capital expenditure program at Steel's East Texas facilities. Steel issues 6%
cumulative convertible preferred stock to its participating shareholders as
funds are advanced. Included in the program is a significant expansion of
Steel's capacity to manufacture specialty tubing products. The balance of the
expenditures is being used to upgrade Steel's capability to manufacture tubular
products for use in the energy sector and to make general improvements
throughout the mill. The two-year program began in early 1995.
The Steel preferred stock issued to LST and the other participating shareholders
has a designated value equal to the amount of the funds advanced, pays quarterly
dividends at the rate of 6% per year on that value, and requires mandatory
redemption by Steel, unless earlier redeemed or converted, on January 3, 2002,
in cash, at the designated value plus any unpaid dividends. Prior to redemption
of the stock, dividends may be paid in cash, although currently prohibited by
the terms of the revolving credit agreement, or in additional preferred shares.
Steel has issued additional preferred shares as stock dividends on a quarterly
basis during 1995.
LST periodically purchases steel slabs which are consigned to Steel to be used
in its production process. Steel pays LST as the slabs are used or within 90
days, whichever occurs first. This program's structure is consistent with those
previously established with third parties. LST's slab purchases amounted to
approximately $73.1 million in 1995 and $38 million in 1994. Intercompany
transactions related to this program are eliminated in consolidation.
29
<PAGE>
LONE STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY ONLY)
<TABLE>
<CAPTION>
($ IN MILLIONS, EXCEPT SHARE DATA)
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994 1993
------ ------- -------
<S> <C> <C> <C>
CONDENSED STATEMENTS OF CASH FLOWS
Net earnings (loss) $ 9.6 $ 1.2 $ (7.2)
Undistributed equity in Steel's losses (earnings) (6.6) 3.9 19.1
Other (3.4) (16.2) (19.0)
------ ------- -------
Net cash used by operating activities (0.4) (11.1) (7.1)
Net cash provided (used) by investing activities (2.0) (36.0) 135.7
Net cash provided (used) by financing activities 0.7 (51.6) 0.3
------ ------- -------
Net increase (decrease) in cash and cash equivalents (1.7) (98.7) 128.9
Beginning cash and cash equivalents 41.7 140.4 11.5
------ ------- -------
Ending cash and cash equivalents $ 40.0 $ 41.7 $ 140.4
------ ------- -------
------ ------- -------
YEARS ENDED DECEMBER 31,
CONDENSED STATEMENTS OF EARNINGS 1995 1994 1993
------ ------- -------
General and administrative expenses $ (1.8) $ (2.3) $ (3.0)
Steel cost sharing 1.5 1.5 1.5
Equity in Steel's earnings (losses) 6.6 (3.9) (19.1)
Interest income 5.8 4.3 0.9
Interest expense (4.0) (4.0) (4.0)
Other income from Steel 1.5 0.6 -
Earnings from and gain on sale of discontinued operations - 5.0 16.5
------ ------- -------
Net earnings (loss) $ 9.6 $ 1.2 $ (7.2)
------ ------- -------
------ ------- -------
Cash dividends received from Steel $ 0.0 $ 0.0 $ 0.0
------ ------- -------
------ ------- -------
AS OF DECEMBER 31, 1995
CONDENSED BALANCE SHEETS 1995 1994
------ -------
Current assets:
Cash and cash equivalents $ 40.0 $ 41.7
Short-term investments 32.6 41.0
Due from Steel 10.1 6.6
Inventories 5.1 6.0
Other current assets 0.2 0.3
------- -------
Total current assets 88.0 95.6
Investment in Steel 72.1 57.1
Other noncurrent assets 13.8 15.9
------- -------
Total assets $ 173.9 $ 168.6
------- -------
------- -------
Current liabilities $ 1.8 $ 1.9
Long-term debt 50.0 50.0
Other noncurrent liabilities 19.9 20.6
------- -------
Total liabilities 71.7 72.5
------- -------
Shareholders' equity:
Series A Preferred stock (authorized: 10,000,000 shares,
issued: none) 0.0 0.0
Common stock, $1 par value (authorized: 40,000,000 shares,
issued: 20,556,816 and 20,460,686, respectively) 20.5 20.4
Capital surplus 159.5 158.9
Minority pension liability adjustment (7.7) (3.5)
Retained deficit (69.2) (78.8)
Treasury stock (48,616 common shares, at cost) (0.9) (0.9)
------- -------
Total shareholders' equity 102.2 96.1
------- -------
Total liabilities and shareholders' equity $ 173.9 $ 168.6
------- -------
------- -------
</TABLE>
30
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required under this item is contained in LST's proxy statement
for the 1996 Annual Meeting of Shareholders, and is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
Information required under this item is contained in LST's proxy statement
for the 1996 Annual Meeting of Shareholders, and is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required under this item with respect to beneficial owners of
more than 5 percent of outstanding common stock and to directors and
executive officers is contained in LST's proxy statement for the 1996 Annual
Meeting of Shareholders, and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required under this item with respect to directors and executive
officers is contained in LST's proxy statement for the 1996 Annual Meeting of
Shareholders, and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. Financial Statements - The following Consolidated Financial
Statements are filed as part of this report:
- Report of Independent Public Accountants
- Consolidated Statements of Cash Flows -
for the years ended December 31, 1995, 1994, and 1993
- Consolidated Statements of Earnings -
for the years ended December 31, 1995, 1994, and 1993
- Consolidated Balance Sheets at December 31, 1995 and 1994
- Notes to Consolidated Financial Statements
2. Schedule I - Condensed Financial Information of Registrant
Note: All schedules not filed herein for which provision is made under
rules of Regulation S-X have been omitted as not applicable or not
required or the information required has been included in the notes
to the consolidated financial statements.
31
<PAGE>
3. Index to Exhibits
DESCRIPTION
3.1 Certificate of Incorporation of Registrant (incorporated by
reference to Exhibit 3(a) to Form S-4 Registration Statement of
LST as filed on April 4, 1986, File No. 33-4581); Certificate of
Amendment to Certificate of Incorporation dated September 30,
1986 (incorporated by reference to Exhibit 3(b) of Form 10-K of
LST as filed on April 7, 1989).
3.2 Agreement and Plan of Merger dated March 6, 1986, among Steel, a
Texas corporation, LST, a Delaware corporation, and Lone Star
Steel Company Merging Corporation, a Delaware corporation
(incorporated by reference to Exhibit II to Form S-4 Registration
Statement of LST as filed on April 4, 1986, File No. 33-4581).
3.3 By-Laws as adopted March 6, 1986, as amended effective September
30, 1986 (incorporated by reference to Exhibit 3(d) of Form 10-K
of LST as filed on April 7, 1989).
4.1 Statement of Resolution establishing Cumulative Preferred Stock,
Series A (par value $1 per share), dated September 9, 1988
(incorporated by reference to Exhibit 3(c) of Form 10-K of LST as
filed on April 7, 1989).
4.2 LST Indenture with Bankers Trust Company, Trustee, with respect
to $50,000,000 8% Convertible Subordinated Debentures Due 2002
(Eurobonds), dated August 26, 1987 (incorporated by reference to
Exhibit 4(c) of Form 10-K of LST as filed on April 7, 1989).
10.1 Amended 1985 Long-Term Incentive Plan (incorporated by reference
to Exhibit A of Proxy Statement of LST as filed on October 22,
1993).
10.2 LST Corporate Improvement Incentive Program adopted October 9,
1990 (incorporated by reference to Exhibit 10(s) to Form 10-K as
filed on March 15, 1991).
10.3 Contingent Severance Policy agreement dated October 23, 1989,
between LST and Rhys J. Best, Vice President and Treasurer
(incorporated by reference to Exhibit 10.3 to Form 10-K as filed
on February 27, 1995).
10.4 Contingent Severance Policy agreement dated October 23, 1989,
between LST and Judith A. Murrell, Vice President - Corporate
Relations (incorporated by reference to Exhibit 10(k) to
Form 10-K as filed on April 2, 1990).
10.5 Employment and Contingent Severance Policy agreements dated
November 20, 1989, between LST and James T. Dougherty, Vice
President and General Counsel (incorporated by reference to
Exhibit 10(l) to Form 10-K as filed on April 2, 1990).
10.6 Employment Agreement dated June 2, 1989, between LST and John P.
Harbin, Chairman of the Board, President, and Chief Executive
Officer (incorporated by reference to Exhibit 10(m) to Form 10-K
as filed on April 2, 1990).
10.7 Steel Employee Stock Purchase Plan (incorporated by reference to
Exhibit 10(m) of Amendment No. 1 to Form S-1 Registration
Statement of Steel as filed on April 15, 1985, File No. 2-95858).
10.8 Financing Agreement dated March 2, 1993, between The CIT
Group/Business Credit, Inc. and Steel (incorporated by reference
to Exhibit 10(af) to Form 10-K as filed on March 15, 1993);
Amendment agreement dated February 14, 1994 (related to Financing
Agreement dated March 2, 1993).
10.9 Amendment Agreement dated February 14, 1994 (related to Financing
Agreement dated March 2, 1993, between The CIT Group/Business
Credit, Inc. and Steel incorporated by reference to Exhibit
10(af) to Form 10-K as filed on March 15, 1993).
10.10 Amendment Agreement dated September 25, 1995 (related to
Financing Agreement dated March 2, 1993, between The CIT
Group/Business Credit, Inc. and Steel, incorporated by reference
to Exhibit 10(af) to Form 10-K as filed on March 15, 1993).
10.11 Loan and Security Agreement dated March 22, 1993, between Steel
and the CIT Group Equipment Financing, Inc. (incorporated by
reference to Exhibit 10.9 to Form 10-K as filed on February 27,
1995).
10.12 Agreement dated November 2, 1994, among Steel, LST, and certain
minority holders of Steel regarding participation in the First
Capital Project by acquiring convertible preferred stock of Steel
(incorporated by reference to Exhibit 10.11 to Form 10-K as filed
on February 27, 1995).
10.13 Stockholders and Registration Rights Agreement among Steel, LST,
and Minority Shareholders of Steel, dated May 16, 1991
(incorporated by reference to Exhibit 10(p) to Form 10-K filed on
March 5, 1992).
10.14 Cost Sharing Agreement between Steel and LST, dated May 16, 1991
(incorporated by reference to Exhibit 10(p) to Form 10-K filed on
March 5, 1992); Amendment to the Cost Sharing Agreement dated May
16, 1991, between LST and Steel dated March 2, 1993 (incorporated
by reference to Exhibit 10(ai) to Form 10-K as filed on March 15,
1993).
32
<PAGE>
10.15 Tax Allocation and Indemnification Agreement dated May 16, 1991,
between Steel and LST (incorporated by reference to Exhibit 10(r)
to Form 10-K filed on March 5, 1992); Amendment to Tax Allocation
and Indemnification Agreement dated May 16, 1991, among LST,
Steel, and Steel subsidiaries dated March 2, 1993 (incorporated
by reference to Exhibit 10(ah) to Form 10-K as filed on March 15,
1993).
10.16 Asset Purchase Agreement by and among Zink and Affiliates, the
Sellers, and Koch Engineering Company, Inc., Buyer, dated
September 18, 1989 (incorporated by reference to Exhibit 7(c) of
Form 8-K as filed on October 19, 1989).
10.17 Stock Purchase Agreement, Assistance Agreement, Capital
Maintenance Agreement, and Subordination Agreement regarding the
acquisition by LST of AFB dated August 18, 1988 (incorporated by
reference to Form 8 (Amendment No. 3 to Form 8-K) dated January
11, 1989); Amendment No. 1 to the Assistance Agreement of August
18, 1988, dated August 31, 1990 (incorporated by reference to
Exhibit 10(q) to Form 10-K as filed on March 15, 1991);
Settlement Agreement and Second Amendment to Assistance Agreement
dated September 30, 1992, among the FDIC, as Manager, the RTC,
AFB, and LSST (incorporated by reference to Exhibit 10(ab) to
Form 10-K as filed on March 15, 1993).
10.18 Agreement and Plan of Merger dated March 25, 1992, as amended by
First Amendment to Agreement and Plan of Merger dated April 15,
1992, between AFB and Americity (incorporated by reference to
Form 8-K dated July 14, 1992).
10.19 Holdback Escrow Agreement dated July 1, 1992, among Americity,
AFB, Bank One, Texas, as Agent, and James C. Jarocki, as
Shareholder Representative (incorporated by reference to Exhibit
10(x) to Form 10-K as filed on March 15, 1993).
10.20 Letter Agreement dated July 1, 1992, among AFB, Americity, and
the FDIC, as Manager (regarding assignment and assumption of the
Termination Agreement and Tax Benefits Cancellation Agreement)
(incorporated by reference to Exhibit 10(y) to Form 10-K as filed
on March 15, 1993); Termination Agreement dated December 18,
1991, among Americity, the FDIC, as Manager, and the RTC
(terminating Assistance Agreement of November 18, 1988, between
Americity and the FSLIC) (incorporated by reference to Exhibit
10(z) to Form 10-K as filed on March 15, 1993); Tax Benefits
Cancellation Agreement dated December 18, 1991, among Americity,
the FDIC, as Manager, and the RTC (incorporated by reference to
Exhibit 10(aa) to Form 10-K as filed on March 15, 1993).
10.21 Stock Purchase Agreement and Agreement and Plan of Reorganization
by and among Guaranty Federal Bank, F.S.B., Guaranty Holdings,
Inc. I, LST, and LSST Financial Services Corporation, dated
February 16, 1993, First Amendment to Stock Purchase Agreement
and Agreement and Plan of Reorganization, dated April 2, 1993,
Second Amendment to Stock Purchase Agreement and Agreement and
Plan of Reorganization, dated August 31, 1993, and Third
Amendment to Stock Purchase Agreement and Agreement and Plan of
Reorganization, dated September 30, 1993 (incorporated by
reference to Exhibit B of Proxy Statement of LST as filed October
22, 1993).
10.22 Holdback Escrow Agreement to Stock Purchase Agreement and
Agreement and Plan of Reorganization, dated November 12, 1993
(incorporated by reference to Exhibit C of Proxy Statement of LST
as filed October 22, 1993).
10.23 Agreement dated October 31, 1995, among Steel, LST and the
minority shareholders of Steel regarding participation in capital
projects not to exceed $5,000,000 by acquiring convertible
preferred stock of Steel.
10.24 Agreement dated December 18, 1995, between Steel and Praxair,
Inc. with respect to construction and operation of an oxygen
plant by Praxair at Steel's Lone Star, Texas, facilities and
purchase of oxygen produced at the same oxygen plant by Steel
from Praxair.
10.25 Contract for the sale of approximately 9,432 acres of land in
East Texas from Steel and Texas and Northern Railway Company to
Prudential Timber Investments, Inc. dated April 27, 1995,
amendment to the same aforementioned April 27, 1995, contract for
sale dated August 31, 1995, and assignment and assumption of
aforementioned contract and amendment by Prudential Timber
Investments, Inc. and Prutimber Fund Two Limited Partnership
dated August 31, 1995.
21 List of Subsidiaries.
24 Powers of Attorney.
(b) Reports on Form 8-K:
DATE OF REPORT DATE FILED DESCRIPTION
None.
33
<PAGE>
ITEM 15. SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
LONE STAR TECHNOLOGIES, INC.
Date: March 21, 1996 By: /s/ Charles J. Keszler
------------------------------------
(Charles J. Keszler)
Vice President - Finance
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
date indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ John P. Harbin,
- ----------------------------- Chairman, Director, and March 21, 1996
(John P. Harbin) Chief Executive Officer
/s/ Charles L. Blackburn*,
- ----------------------------- Director March 21, 1996
(Charles L. Blackburn)
/s/ Dean P. Guerin*,
- ----------------------------- Director March 21, 1996
(Dean P. Guerin)
/s/ Frederick B. Hegi, Jr.*,
- ----------------------------- Director March 21, 1996
(Frederick B. Hegi, Jr.)
/s/ William C. McCord*, Director March 21, 1996
- -----------------------------
(William C. McCord)
/s/ James E. McCormick*, Director March 21, 1996
- -----------------------------
(James E. McCormick)
/s/ Thomas M. Mercer, Jr.*, Director March 21, 1996
- -----------------------------
(Thomas M. Mercer, Jr.)
*By: /s/ Charles J. Keszler
- --------------------------------------
(Charles J. Keszler, Attorney-in-Fact)
34
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
3.1 Certificate of Incorporation of Registrant (incorporated by
reference to Exhibit 3(a) to Form S-4 Registration Statement of
LST as filed on April 4, 1986, File No. 33-4581); Certificate of
Amendment to Certificate of Incorporation dated September 30,
1986 (incorporated by reference to Exhibit 3(b) of Form 10-K of
LST as filed on April 7, 1989).
3.2 Agreement and Plan of Merger dated March 6, 1986, among Steel, a
Texas corporation, LST, a Delaware corporation, and Lone Star
Steel Company Merging Corporation, a Delaware corporation
(incorporated by reference to Exhibit II to Form S-4 Registration
Statement of LST as filed on April 4, 1986, File No. 33-4581).
3.3 By-Laws as adopted March 6, 1986, as amended effective September
30, 1986 (incorporated by reference to Exhibit 3(d) of Form 10-K
of LST as filed on April 7, 1989).
4.1 Statement of Resolution establishing Cumulative Preferred Stock,
Series A (par value $1 per share), dated September 9, 1988
(incorporated by reference to Exhibit 3(c) of Form 10-K of LST as
filed on April 7, 1989).
4.2 LST Indenture with Bankers Trust Company, Trustee, with respect
to $50,000,000 8% Convertible Subordinated Debentures Due 2002
(Eurobonds), dated August 26, 1987 (incorporated by reference to
Exhibit 4(c) of Form 10-K of LST as filed on April 7, 1989).
10.1 Amended 1985 Long-Term Incentive Plan (incorporated by reference
to Exhibit A of Proxy Statement of LST as filed on October 22,
1993).
10.2 LST Corporate Improvement Incentive Program adopted October 9,
1990 (incorporated by reference to Exhibit 10(s) to Form 10-K as
filed on March 15, 1991).
10.3 Contingent Severance Policy agreement dated October 23, 1989,
between LST and Rhys J. Best, Vice President and Treasurer
(incorporated by reference to Exhibit 10.3 to Form 10-K as filed
on February 27, 1995).
10.4 Contingent Severance Policy agreement dated October 23, 1989,
between LST and Judith A. Murrell, Vice President - Corporate
Relations (incorporated by reference to Exhibit 10(k) to
Form 10-K as filed on April 2, 1990).
10.5 Employment and Contingent Severance Policy agreements dated
November 20, 1989, between LST and James T. Dougherty, Vice
President and General Counsel (incorporated by reference to
Exhibit 10(l) to Form 10-K as filed on April 2, 1990).
10.6 Employment Agreement dated June 2, 1989, between LST and John P.
Harbin, Chairman of the Board, President, and Chief Executive
Officer (incorporated by reference to Exhibit 10(m) to Form 10-K
as filed on April 2, 1990).
10.7 Steel Employee Stock Purchase Plan (incorporated by reference to
Exhibit 10(m) of Amendment No. 1 to Form S-1 Registration
Statement of Steel as filed on April 15, 1985, File No. 2-95858).
10.8 Financing Agreement dated March 2, 1993, between The CIT
Group/Business Credit, Inc. and Steel (incorporated by reference
to Exhibit 10(af) to Form 10-K as filed on March 15, 1993);
Amendment agreement dated February 14, 1994 (related to Financing
Agreement dated March 2, 1993).
10.9 Amendment Agreement dated February 14, 1994 (related to Financing
Agreement dated March 2, 1993, between The CIT Group/Business
Credit, Inc. and Steel incorporated by reference to Exhibit
10(af) to Form 10-K as filed on March 15, 1993).
10.10 Amendment Agreement dated September 25, 1995 (related to
Financing Agreement dated March 2, 1993, between The CIT
Group/Business Credit, Inc. and Steel, incorporated by reference
to Exhibit 10(af) to Form 10-K as filed on March 15, 1993).
10.11 Loan and Security Agreement dated March 22, 1993, between Steel
and the CIT Group Equipment Financing, Inc. (incorporated by
reference to Exhibit 10.9 to Form 10-K as filed on February 27,
1995).
10.12 Agreement dated November 2, 1994, among Steel, LST, and certain
minority holders of Steel regarding participation in the First
Capital Project by acquiring convertible preferred stock of Steel
(incorporated by reference to Exhibit 10.11 to Form 10-K as filed
on February 27, 1995).
10.13 Stockholders and Registration Rights Agreement among Steel, LST,
and Minority Shareholders of Steel, dated May 16, 1991
(incorporated by reference to Exhibit 10(p) to Form 10-K filed on
March 5, 1992).
10.14 Cost Sharing Agreement between Steel and LST, dated May 16, 1991
(incorporated by reference to Exhibit 10(p) to Form 10-K filed on
March 5, 1992); Amendment to the Cost Sharing Agreement dated May
16, 1991, between LST and Steel dated March 2, 1993 (incorporated
by reference to Exhibit 10(ai) to Form 10-K as filed on March 15,
1993).
<PAGE>
INDEX TO EXHIBITS (CONTINUED)
EXHIBIT NO. DESCRIPTION
10.15 Tax Allocation and Indemnification Agreement dated May 16, 1991,
between Steel and LST (incorporated by reference to Exhibit 10(r)
to Form 10-K filed on March 5, 1992); Amendment to Tax Allocation
and Indemnification Agreement dated May 16, 1991, among LST,
Steel, and Steel subsidiaries dated March 2, 1993 (incorporated
by reference to Exhibit 10(ah) to Form 10-K as filed on March 15,
1993).
10.16 Asset Purchase Agreement by and among Zink and Affiliates, the
Sellers, and Koch Engineering Company, Inc., Buyer, dated
September 18, 1989 (incorporated by reference to Exhibit 7(c) of
Form 8-K as filed on October 19, 1989).
10.17 Stock Purchase Agreement, Assistance Agreement, Capital
Maintenance Agreement, and Subordination Agreement regarding the
acquisition by LST of AFB dated August 18, 1988 (incorporated by
reference to Form 8 (Amendment No. 3 to Form 8-K) dated January
11, 1989); Amendment No. 1 to the Assistance Agreement of August
18, 1988, dated August 31, 1990 (incorporated by reference to
Exhibit 10(q) to Form 10-K as filed on March 15, 1991);
Settlement Agreement and Second Amendment to Assistance Agreement
dated September 30, 1992, among the FDIC, as Manager, the RTC,
AFB, and LSST (incorporated by reference to Exhibit 10(ab) to
Form 10-K as filed on March 15, 1993).
10.18 Agreement and Plan of Merger dated March 25, 1992, as amended by
First Amendment to Agreement and Plan of Merger dated April 15,
1992, between AFB and Americity (incorporated by reference to
Form 8-K dated July 14, 1992).
10.19 Holdback Escrow Agreement dated July 1, 1992, among Americity,
AFB, Bank One, Texas, as Agent, and James C. Jarocki, as
Shareholder Representative (incorporated by reference to Exhibit
10(x) to Form 10-K as filed on March 15, 1993).
10.20 Letter Agreement dated July 1, 1992, among AFB, Americity, and
the FDIC, as Manager (regarding assignment and assumption of the
Termination Agreement and Tax Benefits Cancellation Agreement)
(incorporated by reference to Exhibit 10(y) to Form 10-K as filed
on March 15, 1993); Termination Agreement dated December 18,
1991, among Americity, the FDIC, as Manager, and the RTC
(terminating Assistance Agreement of November 18, 1988, between
Americity and the FSLIC) (incorporated by reference to Exhibit
10(z) to Form 10-K as filed on March 15, 1993); Tax Benefits
Cancellation Agreement dated December 18, 1991, among Americity,
the FDIC, as Manager, and the RTC (incorporated by reference to
Exhibit 10(aa) to Form 10-K as filed on March 15, 1993).
10.21 Stock Purchase Agreement and Agreement and Plan of Reorganization
by and among Guaranty Federal Bank, F.S.B., Guaranty Holdings,
Inc. I, LST, and LSST Financial Services Corporation, dated
February 16, 1993, First Amendment to Stock Purchase Agreement
and Agreement and Plan of Reorganization, dated April 2, 1993,
Second Amendment to Stock Purchase Agreement and Agreement and
Plan of Reorganization, dated August 31, 1993, and Third
Amendment to Stock Purchase Agreement and Agreement and Plan of
Reorganization, dated September 30, 1993 (incorporated by
reference to Exhibit B of Proxy Statement of LST as filed October
22, 1993).
10.22 Holdback Escrow Agreement to Stock Purchase Agreement and
Agreement and Plan of Reorganization, dated November 12, 1993
(incorporated by reference to Exhibit C of Proxy Statement of LST
as filed October 22, 1993).
10.23 Agreement dated October 31, 1995, among Steel, LST and the
minority shareholders of Steel regarding participation in capital
projects not to exceed $5,000,000 by acquiring convertible
preferred stock of Steel.
10.24 Agreement dated December 18, 1995, between Steel and Praxair,
Inc. with respect to construction and operation of an oxygen
plant by Praxair at Steel's Lone Star, Texas, facilities and
purchase of oxygen produced at the same oxygen plant by Steel
from Praxair.
10.25 Contract for the sale of approximately 9,432 acres of land in
East Texas from Steel and Texas and Northern Railway Company to
Prudential Timber Investments, Inc. dated April 27, 1995,
amendment to the same aforementioned April 27, 1995, contract for
sale dated August 31, 1995, and assignment and assumption of
aforementioned contract and amendment by Prudential Timber
Investments, Inc. and Prutimber Fund Two Limited Partnership
dated August 31, 1995.
21 List of Subsidiaries.
24 Powers of Attorney.
<PAGE>
Exhibit 10.9
AMENDMENT AGREEMENT
February 14, 1994
Lone Star Steel Company
5501 LBJ Freeway, Suite 1200
Dallas, Texas 75380-3546
Gentlemen:
Reference is made to the Financing Agreement between us dated March 2, 1993,
as amended (the "Financing Agreement"). Further reference is made to the
waiver letter between us dated December 29, 1993 (the "Waiver Letter").
Capitalized terms used herein and defined in the Financing Agreement shall
have the same meanings as set forth in said Financing Agreement unless
otherwise specifically defined herein.
Effective immediately, pursuant to mutual understanding, the Financing
Agreement shall be, and hereby is, amended as follows:
1. Paragraph 9 of Section 7 of the Financing Agreement shall
be, and hereby is, amended by deleting the entries under
the headings, "Fiscal Period" and "Net Worth" for the
period from 1-1-94 through and including 12-31-94 and
inserting the following in lieu thereof:
"From 1-1-94 through and
including 3-31-94 $103,000,000.00
From 4-1-94 through and
including 6-30-94 $100,000,000.00
From 7-1-94 through and
including 9-30-94 $ 99,000,000.00
From 10-1-94 through and
including 12-31-94 $101,000,000.00"
2. Paragraph 12 of Section 7 of the Financing Agreement shall be, and
hereby is, amended by deleting the entries under the headings "Fiscal
Period" and "Working Capital" for the period "From 1-1-94 and at all
times thereafter" and inserting the following in lieu thereof:
"From 1-1-94 and at all times $27,800,000.00"
thereafter
3(a) The following definition of "EBITDA" shall be, and hereby is, added
to Section 1 of the Financing Agreement in the proper alphabetical
order:
"EBITDA shall mean, in any period, all earnings of the Company and
its consolidated subsidiaries before interest and tax obligations of
the Company and its consolidated subsidiaries for said period plus
(i) amortization, (ii)
<PAGE>
depreciation, and (iii) similar noncash charges for the Company and
its consolidated subsidiaries for said period minus the sum of
(x) Capital Expenditures and (y) dividends paid with respect to
Preferred Stock by the Company and its consolidated subsidiaries for
said period, all determined in accordance with GAAP on a Lifo basis."
(b) The definition of "Interest Coverage Ratio" shall be, and hereby is,
amended by deleting the reference to "EBIT" as contained therein and
inserting "EBITDA" in lieu thereof.
(c) Paragraph 13 of Section 7 of the Financing Agreement shall be, and
hereby is, amended by (i) deleting therefrom the entries under the
headings "Fiscal Quarter Ending" and "Ratio" for the Fiscal Quarters
ending 3-31-94, 6-30-94, and 9-30-94 and (ii) amending the entry for
the quarter ending 12-31-94 from "2.75 to 1.0" to be ".50 to 1.0".
4. Paragraph 15 of Section 7 of the Financing Agreement shall be, and
hereby is, amended by the addition thereto at the end thereof of the
following three (3) entries under the headings "Period Ending"
and "EBIT":
"3-31-94 ($2,300,000) Loss
6-30-94 ($4,100,000) Loss
9-30-94 ($3,100,000) Loss
12-31-94 ($1,000,000) Loss
5. Paragraph 11 of Section 7 of the Financing Agreement shall be, and
hereby is, amended by deleting therefrom the entries under the
headings "Period" and "Amount" for the period "1-1-94 through and
including 12-31-94 and during each calendar year thereafter" and
inserting the following in lieu thereof:
"1-1-94 through and
including 12-31-94 $8,000,000.00
"1-1-95 through and
including 12-31-95
and during each calendar
year thereafter $15,000,000.00"
6. The expiration date of "February 15, 1994" with respect to the
effectiveness of the waivers set forth in the Waiver Letter shall
be, and hereby is, deleted and such waivers shall be, and hereby
are, made permanent waivers.
7. Paragraph 10(G) of Section 7 of the Financing Agreement shall be,
and hereby is, amended in its entirety to read as follows:
<PAGE>
"G. Declare or pay any dividend of any kind on, or purchase,
acquire, redeem or retire, any of the capital stock or
equity interest (including, without limitation, any warrant
issued by the Company) of the Company or any subsidiary, of
any class whatsoever, whether now or hereafter outstanding,
except that (a) any subsidiary may pay such dividends to the
Company, and (b) the Company may declare and pay dividends
on its capital stock in an amount sufficient to enable the
Parent to i) redeem the capital stock owned by its retired,
deceased or terminated officers or shareholders which the
Parent is contractually obligated to redeem, provided that
in no event shall the aggregate amount of such dividend under
this clause (i) exceed $250,000.00 in the aggregate in any
fiscal year; or (ii) pay income or franchise taxes of the
Company due as a result of the filing of a consolidated,
combined or unitary tax return in which the operations of the
Company are included (as more fully described in the Tax
Allocation and Indemnification Agreement), and (c) commencing
on or after December 31, 1994, the Company may pay dividends
on its preferred stock which has been, or may hereafter be,
issued in connection with the OverLine Facility (as defined in
a certain letter agreement between the Company and CITBC dated
February 14, 1994 which shall be referred to herein as the
"OverLine Agreement") established under this Financing
Agreement (herein "Preferred Stock") and "Preferred Stock
Dividends" respectively), provided that such Preferred
Stock shall be issued as described in the Term Sheet for
Preferred Stock attached hereto as Schedule 1 and that such
Preferred Stock Dividends shall be (x) paid strictly in
accordance with, and subject to, the terms, provisions and
conditions of the Declaration of Rights and Preference under
which such Preferred Stock is issued and (y) paid only after
CITBC has received and reviewed the Company's financial
statements for the immediately preceding fiscal quarter or
year (as the case may be); and further provided that, in any
instance under this Paragraph (G), (A) the Company is not
then in breach or violation of this Financing Agreement, or
(B) after giving effect to such payment, no Event of Default
has occurred or would occur hereunder, or
8. Section 3 of the Financing Agreement shall be, and hereby is,
amended by the addition thereto of a new Paragraph 8 thereto as
follows:
"8. In the event that the sum of (i) the Company's Obligations "as
described in Clause "x")" of the
<PAGE>
definition of Availability as contained in Section 1 of the
Financing Agreement) plus (ii) the Availability Reserve (as described
in such definition of Availability) at any time exceeds the maximum
amount thereof computed pursuant to clauses "a)" and "b)" of such
definition of Availability, the amount of such excess shall be
immediately due and payable upon CITBC's demand therefor."
In consideration of our execution of the foregoing amendment you agree to pay
to us an additional Loan Facility Fee in the amount of $30,000.00. Such fee
is due and payable on the date hereof and may, at our option, be charged to
your Revolving Loan Account on the date hereof.
Except as set forth hereinabove, no other change in, or waiver of the terms,
provisions and conditions of the Financing Agreement is intended or implied.
If the foregoing is in accordance with your understanding of our agreement
kindly so indicate by signing and returning the enclosed copy of this letter.
We have asked each of the guarantors to sign below to confirm their
respective agreements that the guaranties and security agreements executed by
each in our favor shall continue in full force and effect notwithstanding the
foregoing amendments.
THE CIT GROUP/BUSINESS CREDIT, INC.
By TIMOTHY S. CULUM
-------------------------------------
Title: Assistant Secretary
Read and Agreed to:
LONE STAR STEEL COMPANY
By R. W. ARP
--------------------------------
Title: Executive Vice President
LONE STAR LOGISTICS, INC.
T & N LONE STAR WAREHOUSE CO.
TEXAS & NORTHERN RAILWAY COMPANY
FORT COLLINS PIPE COMPANY
TEXAS SPECIALTY FLAT-ROLLED, INC.
LONE STAR STEEL INTERNATIONAL, INC.
By R. W. ARP
--------------------------------
Title: Vice President
of each of the above companies
<PAGE>
SCHEDULE 1 TO AMENDMENT AGREEMENT
LONE STAR STEEL COMPANY
TERM SHEET FOR PREFERRED STOCK
February 10, 1994
1. AMOUNT OF ISSUANCE. Each stockholder of LSS that guarantees a
portion of LLS' indebtedness or other liability to CIT will receive, in the
event such stockholder is required to make payment under such guarantee, an
amount of preferred stock equal to the indebtedness or liability paid by such
stockholder on LSS' behalf.
2. ISSUANCE DATE. The preferred stock will be issued contemporaneously
with, or as soon as reasonably practicable after, such date (if any) as a
stockholder is required to make payment under its guarantee.
3. DIVIDENDS. The preferred stock will be entitled to a 12% cumulative
dividend that will be payable quarterly. No dividends may be paid on LSS'
common stock at any time while the preferred stock is outstanding.
4. REDEMPTION. LSS may redeem the preferred stock at any time by
paying the holder thereof (i) the face amount of such stock and (ii) all
accrued and unpaid dividends through the date of redemption (including an
additionally pro rated dividend based on the number of days elapsed from the
last day of the most recent completed quarterly dividend period through the
redemption date.)
5. REGISTRATION RIGHTS. None
6. VOTING RIGHTS. The preferred stock will possess voting rights only
to the extent required by law.
7. LIQUIDATION PREFERENCE. In the event of the liquidation or
dissolution of LSS, prior to any payment to the holders of LSS' common stock,
the holders of the preferred stock shall be entitled to receive therefor an
amount equal to (i) the face amount of the preferred stock and (ii) all
accrued and unpaid dividends (including an additional pro rated dividend
based on the number of days elapsed from the last day of the most recent
completed quarterly dividend period through the date of liquidation or
dissolution).
8. OTHER RIGHTS. The preferred stock will have such other rights,
preferences and terms (including rights to be converted to common stock) as
are customary in nature and not inconsistent with the other provisions of
this term sheet.
<PAGE>
EXHIBIT 10.10
[THE CIT GROUP LETTERHEAD]
AMENDMENT AGREEMENT
September 25, 1995
Lone Star Steel Company
5501 LBJ Freeway, Suite 1200
Dallas, TX 75380-3546
Gentlemen:
Reference is made to the Financing Agreement between us dated March 2, 1993, as
amended, (herein the "Financing Agreement"). Capitalized terms used herein and
defined in the Financing Agreement shall have the same meanings as set forth
therein unless otherwise specifically defined herein.
You have requested that we amend certain provisions of the Financing Agreement
and we have agreed to do so, subject to, and in accordance with, all of the
terms, provisions and conditions contained herein.
Pursuant to mutual understanding, effective immediately upon the satisfaction of
the Conditions Precedent (as defined below), the Financing Agreement shall be,
and hereby is, amended as follows:
1. The definitions of "Anniversary Date", "Availability" and "Line of
Credit"as contained in Section 1 of the Financing Agreement shall be, and hereby
are, amended in their entirety to read as follows:
"ANNIVERSARY DATE shall mean March 2, 1999 and March 2 in each year
thereafter. "
"AVAILABILITY shall mean at any time the excess of the sum of a) Eligible
Accounts Receivable multiplied by the Accounts Receivable Advance
Percentage and b) the lesser of i) the Inventory Loan Cap or ii) Eligible
Inventory multiplied by the Inventory Advance Percentage over the sum of x)
the outstanding aggregate
<PAGE>
amount of all Obligations of the Company with respect to the outstanding
and unpaid principal balance of Revolving Loans (after giving effect to all
interest, fees and charges actually charged to the Revolving Loan Account
on the respective due dates thereof) and the outstanding and undrawn amount
of Letters of Credit, and y) the Availability Reserve.
"LINE OF CREDIT shall mean the commitment of CITBC to make Revolving Loans
to the Company pursuant to Section 3 hereof and to assist the Company in
opening Letters of Credit pursuant to Section 5 hereof in the aggregate
amount not to exceed $70,000,000, provided that such amount shall be, and
hereby is, automatically (and without any further action by CITBC or the
Company) increased by an amount equal to $2,500,000 on each of March 2,
1996, March 2, 1997 and March 2, 1998 so long as no Default and/or Event of
Default has occurred hereunder (other than a Default or an Event of Default
that has been waived in writing by CITBC or cured to CITBC's
satisfaction)."
2. The following new definitions shall be, and hereby are, added to Section 1
of the Financing Agreement in the proper alphabetical order:
"ACCOUNTS RECEIVABLE ADVANCE PERCENTAGE shall mean eighty-five percent
(85%).
"INVENTORY ADVANCE PERCENTAGE shall mean sixty percent (60%)."
"INVENTORY LOAN CAP shall mean $35,000,000, provided that such amount shall
be, and hereby is, automatically (and without any further action by CITBC
or the Company) increased by an amount equal to $1,000,000 on each of March
2, 1996, March 2, 1997 and March 2, 1998 so long as no Default and/or Event
of Default has occurred hereunder (other than a Default or an Event of
Default that has been waived in writing by CITBC or cured to CITBC's
satisfaction)."
"LIBOR shall mean at any time of determination, and subject to
availability, for each interest period the higher of the applicable London
Interbank Offered Rate paid in London on dollar deposits from other banks
as x) quoted by Chemical Bank, y) published under "Money Rates" in New York
City edition of the Wall Street Journal or if there is no such publication
or statement therein as to Libor then in any publication used in the New
York City financial community or z)
-2-
<PAGE>
determined by CITBC based upon information presented on Telerate Systems at
Page 3750 as of 11:00 a.m. (London Time)."
"LIBOR LOAN shall mean those Revolving Loans for which the Company has
elected to use Libor for interest rate computations."
"LIBOR PERIOD shall mean the Libor for one month, two month, three month or
six month U.S. dollar deposits, as selected by the Company."
3. The definition of "Net Worth" as contained in Section 1 of the Financing
Agreement shall be, and hereby is, amended by deleting the words
"notwithstanding any provision to the contrary contained herein, solely with
respect to the period commencing on 1/1/95 through and including 12/31/95, Net
Worth shall be determined by excluding the effect of any preferred stock issued
during such period to evidence a cash contribution to capital", and inserting
the words "notwithstanding any provision to the contrary contained herein,
solely with respect to any period commencing on or after 1/1/95 , Net Worth
shall be determined by excluding the effect of any preferred stock issued during
such period to evidence a cash contribution to capital and any preferred stock
issued as a stock dividend on any preferred stock during such period.
4. Section 3, Paragraph 1 of the Financing Agreement shall be and hereby is,
amended in its entirety to read as follows:
"1. CITBC agrees, subject to the terms and conditions of this Financing
Agreement from time to time, and within x) the Availability and y) the Line
of Credit, but subject to CITBC's right to make "overadvances", to make
loans and advances to the Company on a revolving basis (i.e. subject to the
limitations set forth herein, the Company may borrow, repay and re-borrow
Revolving Loans). Such loans and advances shall be in the amounts up to the
sum of: a) the outstanding Eligible Accounts Receivable of the Company
multiplied by the Accounts Receivable Advance Percentage, plus b) the
aggregate value of Eligible Inventory of the Company determined at the
lower of cost or market as provided by GAAP multiplied by the Inventory
Advance Percentage, provided that advances against Eligible Inventory shall
not in the aggregate at any time exceed the Inventory Loan Cap. All
requests for loans and advances must be received by an officer of CITBC no
later than 1:00 p.m. New York time of the day on which such
-3-
<PAGE>
loans and advances are required. Should CITBC for any reason honor requests
for advances in excess of the limitations set forth herein, such advances
shall be considered "overadvances" and shall be made in CITBC's sole
discretion, subject to any additional terms as may be mutually agreed upon
between CITBC and the Company."
5. Section 7, Paragraph 9 of the Financing Agreement shall be, and hereby is,
amended by deleting the entries under the headings "Fiscal Period" and "Net
Worth" for the period "at all times thereafter" and inserting the following in
lieu thereof:
"From 1/1/96 through and including
3/31/96 $104,000,000.00
From 4/1/96 through and including
6/30/96 $104,000,000.00
From 7/1/96 through and including
9/30/96 $104,000,000.00
From 10/1/96 through and including
12/31/96 and at all times thereafter $104,000,000.00"
6. Section 7, Paragraph 11 of the Financing Agreement shall be, and hereby is
amended by adding the following:
"1/1/96 through and including
12/31/96 and during each calendar year
thereafter $25,000,000.00"
7. Section 7, Paragraph 13 of the Financing Agreement shall be, and hereby is,
amended by deleting therefrom the entries under the headings "Fiscal Quarter
Ending" and "Ratio" for the periods after 12/31/95.
-4-
<PAGE>
8. Section 7, Paragraph 15 of the Financing Agreement shall be, and hereby is,
amended by the addition thereto at the end thereof of the following four (4)
entries under the heading "Period Ending" and "EBIT".
3/31/96 ($500,000.00) loss
6/30/96 $1,300,000.00
9/30/96 $4,500,000.00
12/31/96 $9,500,000.00"
9. It is understood that the Company will prepare the 1996 Lone Star Steel
Base Operating Plan (the Company's projections prepared for the Company's
performance for the fiscal year ending December 31, 1996), which plan must be
delivered to us no later than December 1, 1995 and be satisfactory to us in our
sole discretion. Based upon such plan the financial covenants for such fiscal
year and thereafter may be revised in a letter agreement to be executed between
you and us. Each of us further agrees to negotiate the revision of such
financial covenants in good faith; however, in the event you and we cannot
mutually agree upon new financial covenants for such fiscal year and thereafter,
the financial covenants in effect as of the date hereof shall continue in full
force and effect unless otherwise amended.
10. Section 8, Paragraph 1 shall be, and hereby is, amended in its entirety to
read as follows:
"1. Interest on the Revolving Loans shall be payable monthly as of the end
of each month and for any such month shall be an amount equal to lesser of
(x) the sum of (a) interest calculated for such month at three-quarters of
one percent (3/4 of 1%) plus the Chemical Bank Rate on a per annum basis on
the average of the net balances owing by the Company to CITBC in the
Company's Revolving Loan Account at the close of each day during such month
on balances other than Libor Loans plus (b) interest on any Libor Loan
calculated for such month at three and one-quarter of one percent (3 1/4%)
plus the Libor that is applicable to such Libor Loan on a per annum basis
on the average.of the net balances owing by the Company to CITBC in the
Company's Revolving Loan Account at the close of each day during such month
on such Libor Loan (and calculated in the same manner separately on each
Libor Loan outstanding for such month, if there is more than one Libor Loan
outstanding such month, with each such calculation of interest on each
Libor Loan aggregated together for purposes of this clause (b) and with the
resulting total to be the interest calculated under this clause (b) for
such month) or (y) interest calculated for such month as under clause (x)
above, except
-5-
<PAGE>
that the calculation shall be at the Maximum Legal Rate rather than the
rates indicated therein. The Company may elect to use Libor as to any then
outstanding Revolving Loans provided (A) there is then no Default and/or
Event of Default, (B) the Company has so advised CITBC of its election to
use Libor and the Libor Period selected no later than two (2) Business Days
preceding the first day of a Libor Period and (C) the election and Libor
shall be effective, provided, there is then no Default and/or Event of
Default, on the fourth Business Day following said notice. The Libor
elections must be for $1,000,000 or whole multiples thereof and there shall
be no more than 3 Libor Loans outstanding at one time. If no such election
is timely made or can be made, or if the Libor rate can not be determined,
then CITBC shall use the Chemical Bank Rate to compute interest. The
Company shall pay to CITBC a $500 processing fee on the effective date of
each Libor election hereunder. In the event of any change in said Chemical
Bank Rate, the rate under clause (a) above shall change, as of the first of
the month following any change, so as to remain three quarters of one
percent (3/4 of 1%) above the Chemical Bank Rate. The rates hereunder shall
be calculated based on a 360-day year. CITBC shall be entitled to charge
the Company's Revolving Loan Account at the rate provided for herein when
due until all Obligations have been paid in full."
11. Section 8, Paragraph 2 of the Financing Agreement shall be, and hereby is,
amended in its entirety to read as follows:
"2. Subject to the conditions set forth in this Paragraph 2, the interest
rates set forth in Paragraph 1 shall be subject to increase or decrease
(herein each a "Rate Adjustment") as outlined below:
i)(x) The spread over the Chemical Rate and the Libor may be reduced or
increased in accordance with the grid set forth below from the spread set
forth in Paragraph 1 above (as such spread may be adjusted from time to
time hereunder) based on the Total Outstanding Debt to Adjusted EBITDA
ratio maintained by the Company for any Fiscal Year commencing with the
Fiscal Year ending December 31, 1996 and each Fiscal Year thereafter;
"Total Outstanding Debt" as used herein shall mean, at any date of
determination, the aggregate principal amount of all Indebtedness (other
than contingent obligations) of the Company and its subsidiaries
outstanding on such date, determined on a consolidated basis. "Adjusted
EBITDA" as used herein shall mean, at
-6-
<PAGE>
any date of determination, EBITDA plus (x) Capital Expenditures and (y)
dividends paid with respect to Preferred Stock by the Company and its
consolidated subsidiaries for said period.
<TABLE>
<CAPTION>
Total Outstanding Chemical Bank Libor
Debt to Adjusted EBITDA Ratio Rate Margin Margin
- ----------------------------- ------------- ------
<S> <C> <C>
1. greater than 3.5 to 1 1.25% 3.75%
2. 3.0 or greater to 1 but
less than 3.5 to 1 1.00% 3.50%
3. 2.5 or greater to 1 but
less than 3.0 to 1 .75% 3.25%
4. 2.0 or greater to 1 but
less than 2.5 to 1 .50% 3.00%
5. less than 2.0 to 1 .25% 2.75%
</TABLE>
(ii) In addition to the foregoing requirements, each Rate Adjustment is
subject to each of the following conditions:
(x) as to any rate reduction, the absence of any Default or Event of
Default on the effective date of any such Rate Adjustment;
(y) each Rate Adjustment will be effective only after CITBC's receipt and
review of the Company's audited financial statements for the
applicable Fiscal Year and shall be effective as follows:
(A) as to the spread over the Chemical Bank Rate on the first day of
the month following CITBC's receipt and a reasonable period not to
exceed 5 business days following such receipt for review of such
audited financial statements; and
(B) as to the spread over Libor on the first day of the next interest
period commencing after CITBC's receipt and a reasonable period
-7-
<PAGE>
not to exceed 5 business days following such receipt for review of
such audited financial statements; and
(z) the effect of any Rate Adjustment shall not in any event:
(A) increase the spread over (i) the Chemical Bank Rate to more than
1 1/4%, or (ii) Libor to more than 3 3/4%; or
(B) reduce the spread over (i) the Chemical Bank Rate to less than 1/4
of 1% or (ii) Libor to less than 2 3/4%.
12. Section 8 shall be, and hereby is, further amended by the addition thereto
of the following new paragraph 12:
"12. The Company shall pay to CITBC upon the request of CITBC, such amount
or amounts as shall compensate CITBC and/or any participant, as such term is
used in, and subject to the terms and provisions of, Section 12, Paragraph 7 of
this Financing Agreement (herein each a "Lender") for any loss, costs or
expenses reasonably incurred by such Lender (as reasonably determined by such
Lender) as a result of: (i) any payment or prepayment on a date other than the
last day of a Libor Period for any such Libor Loan, or (ii) any failure of the
Company for any reason (including, without limitation, termination of a Libor
Loan by CITBC in accordance with the terms hereof due to illegality with respect
to the making or maintaining of any such Libor Loan or otherwise) to borrow a
Libor Loan on the date for such borrowing specified in the relevant notice; such
compensation to include, without limitation, an amount equal to any loss or
expense suffered by such Lender during the period from the date of receipt of
such payment or prepayment or the date of such failure to borrow to the last day
of such Libor Period if the rate of interest obtained by the Lenders upon the
reemployment of an amount of funds equal to the amount of such payment,
prepayment or failure to borrow is less than the rate of interest applicable to
such Libor Loan for such Libor Period. The determination by the Lenders of the
amount of any such loss or expense, when set forth in a written notice to the
Company, containing the Lender's calculations thereof in reasonable detail,
shall be conclusive on the Company, in the absence of manifest error.
Notwithstanding any other provisions herein, if any law, regulation, treaty or
directive or any change therein or in the interpretation or application
thereof shall make it unlawful for CITBC to make or maintain Libor Loans as
contemplatedherein, the then outstanding Libor Loans, if any, shall be converted
automatically to Chemical Bank Rate loans on the next succeeding interest
payment date or within such earlier period as required by law. The Company
hereby agrees promptly to pay CITBC, upon its demand, any additional amounts
necessary to compensate CITBC and any other Lender for any costs reasonably
incurred by
-8-
<PAGE>
CITBC or any such other Lender in making any conversion in accordance with this
paragraph including, but not limited to, any interest or fees payable by CITBC
or such other Lender to any lender of funds obtained by CITBC or any such other
Lender in order to make or maintain Libor Loans hereunder."
13. The effectiveness of the foregoing amendments shall be, and each hereby is,
subject to the fulfillment to our satisfaction of each of the following
conditions (herein each a "Condition Precedent" and collectively the "Conditions
Precedent"):
a) our receipt of a consent (in form and substance satisfactory to us)
from our participant, The Bank of New York Commercial Corporation to
our execution of this Amendment Agreement and their pro-rata
participation in the Line of Credit (as amended herein) under the
Financing Agreement as amended hereby;
(b) your agreement to pay to us (i) in consideration of (x) our execution
of this Amendment Agreement an Accommodation Fee of $50,000; and (y)
the preparation of this Amendment Agreement by our-in-house legal
department a Documentation Fee of $1170, which fees shall be due and
payable in full on the date hereof and may, at our option, be charged
to your Revolving Loan Account on the due date thereof and (ii) all
Out-of-Pocket Expenses, if any, incurred in connection with this
Amendment Agreement and the transactions contemplated hereby, all of
which may (at our option) be charged to your Revolving Loan Account;
and
(c) each of your subsidiaries who has executed the Subsidiary Guaranty and
Security Agreement signing below to confirm that such Subsidiary
Guaranty and Security Agreement shall extend to and include all
Obligations under the Line of Credit as amended and increased hereby
and to further confirm that such Subsidiary Guaranty and Security
Agreement shall remain in full force and effect notwithstanding this
Amendment Agreement.
-9-
<PAGE>
Except as set forth above no other change in or waiver of the terms,
provisions or conditions of the Financing Agreement is intended or implied. If
the foregoing is in accordance with your understanding of our agreement, kindly
so indicate by signing and returning to us the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Kimberly S. Cochran
-----------------------------
Title: AVP
Read and Agreed to:
LOW STAR STEEL COMPANY
By: /s/R. W. Arp
----------------------------------
Title: Ex VIP
Confirmed:
LONE STAR LOGISTICS, INC.
T&N LONE STAR WAREHOUSE CO.
TEXAS & NORTHERN RAILWAY COMPANY
FORT COLLINS PIPE COMPANY
LONE STAR STEEL SALES COMPANY, formerly known as
TEXAS SPECIALTY FLAT-ROLLED, INC.
LONE STAR STEEL INTERNATIONAL, INC.
By: /s/R. W. Arp
----------------------------------
Title: DIRECTOR
Of each of the above
-10-
<PAGE>
September 25, 1995
The Bank of New York Commercial
Corporation
Re: Lone Star Steel Company
(the "Company")
Gentlemen:
Reference is made to: (1) The Participation Agreement between us dated July 14,
1993, as amended from time to time (the "participation Agreement") and (2) the
proposed amendment to the Agreement (as defined in said" Participation
Agreement")a copy of which amendment is attached hereto as Exhibit A (herein the
"Amendment"). Capitalized terms used herein and defined in the Participation
Agreement shall have the same meanings as specified therein unless otherwise
specifically defined herein.
Pursuant to mutual understanding, effective immediately, it is hereby agreed
that:
(i) you consent to our entering into the Amendment and confirm that, except as
otherwise specifically herein provided, your Participation in the Loans to
the Company shall continue in full force and effect in accordance with the
Participation Agreement as amended hereby; and
(ii) the maximum dollar amount of your Participation (as set forth in the
introductory Paragraph of the Participation Agreement) shall be, and hereby
is, automatically (and without any further action by either of us)
increased by an amount equal to your pro-rata share (as determined based
upon the percentage of your Participation) of the Initial Increase in the
Line of Credit (as set forth in the Amendment) and by an amount equal to
your pro-rata share (as determined based upon the percentage of your
Participation) of each scheduled increase in the Line of Credit as more
fully set forth in the Amendment. Each
<PAGE>
such increase shall be effective on the scheduled effective date of each
such increase in the Line of Credit.
Upon our receipt of payment from the Company at the Accommodation Fee in the
amount $50,000 due in connection with the Amendment, we shall pay to you
therefrom your pro-rata share thereof (as determined based upon the percentage
of your Participation).
Except as set forth above no other change in the terms, provisions or conditions
of the Participation Agreement is intended or implied. If the foregoing is in
accordance with your understanding of our agreement, kindly so indicate by
signing and returning to us the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Kimberly S. Cochan
-----------------------------
Title: AVP
Read and Agreed to:
THE BANK OF NEW YORK COMMERCIAL
CORPORATION
By: /s/ Ryan Peak
---------------------------
Title: AVP
<PAGE>
EXHIBIT 10.23
AGREEMENT
This Agreement is entered into this 31st day of October, 1995, among Lone
Star Steel Company ("LSS"), Lone Star Technologies, Inc. ("LST"), Merced
Partners Limited Partnership ("Merced"), TCW Special Credits Fund, TCW Special
Credits Fund II, TCW Special Credits Fund IIb, Weyerhaeuser Company Master
Pension Trust, and Inland Steel Industries Pension Trust (the "TCW Holders") and
Cargill Financial Services Corporation ("Cargill").
WHEREAS, LST, Merced, the TCW Holders and Cargill each have indicated their
interest in participating in additional financing of the acquisition and, as
necessary, the installation of equipment and facilities for LSS, in addition to
the $23,000,000 previously committed for the First Capital Project by those
parties other than Cargill, by acquiring additional convertible preferred stock
of LSS (the "First Capital Project Addition"); and
WHEREAS, the parties hereto now desire to enter into the further agreements
herein with respect to those matters.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree for themselves and their successors
and assigns as follows:
1. LST, Merced, the TCW Holders, and Cargill agree that the preferred
stock that is to be issued to them as provided hereunder, each time any of them
makes an advance of funds to LSS for the First Capital Project Addition, will in
all material respects be issued as provided in paragraph 1(b) of and otherwise
have the same terms or substantially the same terms as set forth in the attached
schedule of preferred stock terms. The advances for which such preferred stock
is to be issued will not exceed in aggregate $5,000,000. This agreement and the
issuance of such preferred stock is subject to the receipt of the requisite
approval necessary therefor under the Stockholders and Registration Rights
Agreement dated May 16, 1991 (the "1991 Stockholders Agreement") among the
parties hereto and the other shareholders of LSS, and the parties hereto agree
to cooperate with one another in seeking such approval and in connection with
any other corporate action by LSS, not yet completed, necessary to authorize, as
soon as possible, such preferred stock and to enable the issuance of shares of
such stock.
2. Each of the parties hereto agree to cooperate with one another and
exercise their best efforts to amend the 1991 Stockholders Agreement so that
such agreement will provide that Merced, the TCW Holders and Cargill will be
entitled to the benefit of the provisions of Appendix l of the 1991 Stockholders
Agreement with respect to the registration of the shares of common stock of LSS
issued to them upon their conversion of any of the preferred stock issued to
them as a result of this Agreement along with the common stock with respect to
which such registration rights are to be provided under
-1-
<PAGE>
paragraph 3 of an earlier agreement of November 2, 1994 between the parties
hereto other than Cargill, and the provisions of this paragraph 2 shall be
deemed an amendment of paragraph 3 of that earlier agreement so as to include
therein the parties hereto and the registration of the additional common stock
that is issued upon conversion of any of the preferred stock issued as a result
of this Agreement (and the terms "New Shares" and "New Agreement" as defined in
that earlier agreement shall be deemed, as used therein and herein, to include
the common stock that is intended to be provided registration rights under this
Agreement in addition to the common stock to be provided such rights under that
earlier agreement), and if the parties hereto are unable to effect such
amendment of the 1991 Stockholders Agreement they will enter into a New
Agreement as regards the registration of the New Shares.
3. Without limiting paragraph 2, LST, Merced, the TCW Holders and Cargill
understand that it is not expected that the preferred stock of LSS that would be
issued to them pursuant hereto, or the common stock that could be acquired upon
conversion of that preferred stock will upon issuance or at any foreseeable time
be registered under the Securities Act of 1933, as amended (the "1933 Act"), and
LST, Merced, each of the TCW Holders and Cargill each represents and warrants to
each other party to this Agreement that such preferred stock and any common
stock that is acquired upon conversion of such preferred stock by it will be
acquired for investment purposes and not with a view to the sale or distribution
of any thereof, except in compliance with federal and state securities laws.
4. LST, Merced, each of the TCW Holders and Cargill. agree among
themselves that in the event any of them should advance funds towards the First
Capital Project Addition for which preferred stock is to be issued as provided
in paragraph 1 above, LST, Merced, the TCW Holders and Cargill shall immediately
make such adjusting payments between one another as are necessary, so that
immediately after any such advances and any adjusting payments are made, (a) LST
will have advanced (including taking into account any adjusting payments) 83.62%
of the funds advanced by LST, Merced, the TCW Holders and Cargill in total to
LSS for the First Capital Project Addition, (b) Merced will have advanced
(including taking into account any adjusting payments) 0.90% of those funds, (c)
the TCW Holders will have advanced (including taking into account any adjusting
payments) 12.72% of those funds, and (d) Cargill will have advanced (including
taking into account any adjusting payments) 2.76% of those funds. The preferred
stock that is to be issued to LST, Merced, the TCW Holders and Cargill pursuant
hereto when any advance is made to LSS for the First Capital Project Addition
will always be issued in the ratio such that 83.62% of the total shares to be
issued at any such time will be issued to LST, 0.90% of the total shares to be
issued at any such time will be issued to Merced, 12.72% of the total shares to
be issued at any such time will be issued to the TCW Holders, and 2.76% of the
total shares to be issued at any such time will be issued to Cargill.
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<PAGE>
5. The references in this Agreement to shares of preferred stock or
common stock will be deemed to refer to both whole shares and to fractional
shares as applicable.
6. This Agreement constitutes the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein, and there
are no restrictions, promises, representations, warranties, covenants, or
undertakings with respect to the subject matter hereof, other than those
expressly set forth or referred to herein.
7. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to agreements made to be performed
entirely in such State, except for paragraph 2, which shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made to be performed entirely in such State.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LONE STAR STEEL COMPANY
By: /s/ John P. Harbin
----------------------------------
Its: Chairman
----------------------------------
LONE STAR TECHNOLOGIES, INC.
By: /s/ John P. Harbin
----------------------------------
Chairman and Chief Executive Officer
TCW Special CREDITS FUND
By: /s/ Richard Mason, Kenneth Liang
----------------------------------
Its: Authorized Signatories of TCW Asset
Management Company, Managing General
Partner of TCW Special Credits as
General Partner of TCW Special Credits
Fund
----------------------------------
TCW SPECIAL CREDITS FUND II
By: /s/ Richard Mason, Kenneth Liang
----------------------------------
Its: Authorized Signatories of TCW Asset
Management Company, Managing General
Partner of TCW Special Credits as
General Partner of TCW Special Credits
Fund II.
----------------------------------
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<PAGE>
TCW SPECIAL CREDITS FUND IIb
By: /s/ Richard Mason, Kenneth Liang
----------------------------------
Its: Authorized Signatories of TCW Asset
Management Company, Managing General
Partner of TCW Special Credits as
General Partner of TCW Special Credits
Fund IIb
----------------------------------
WEYERHAEUSER COMPANY MASTER
PENSION TRUST
By: /s/ Richard Mason, Kenneth Liang
----------------------------------
Its: Authorized Signatories of TCW Asset
Management Company, Managing General
Partner of TCW Special Credits as
Investment Manager of Weyerhaeuser
Company Master Pension Trust.
----------------------------------
INLAND STEEL INDUSTRIES PENSION TRUST
By: /s/ Richard Mason, Kenneth Liang
----------------------------------
Its: Authorized Signatories of TCW Asset
Management Company, Managing General
Partner of TCW Special Credits as
Investment Manager of Inland Steel
Industries Pension Trust.
----------------------------------
MERCED PARTNERS LIMITED PARTNERSHIP
By: EBF & Associates, L.P., General Partner
By: Global Capital Management, Inc.,
General Partner
By: /s/ Michael Frey
----------------------------------
CARGILL FINANCIAL SERVICES
CORPORATION
By: /s/ Pat Halloran
----------------------------------
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<PAGE>
SCHEDULE OF PREFERRED STOCK TERMS
RESTATED CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES, AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET FORTH IN THE
CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
PREFERRED STOCK, SERIES A
(PAR VALUE $1.00 PER SHARE)
LONE STAR STEEL COMPANY
----------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------------------------------
The Undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted on _____________ , 1995, by the Board of Directors of Lone Star Steel
Company (the "Board of Directors"), a Delaware corporation (hereinafter called
the "Corporation") pursuant to authority conferred upon the Board of Directors
by the provisions of the Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), of the Corporation to become effective upon the
next business day following the date this Restated Certificate of Designations
becomes effective:
RESOLVED, that pursuant to the authority vested in the Board of Directors
by Article Fourth of the Certificate of Incorporation the series of preferred
stock of the Corporation designated Preferred Stock, Series A (the "preferred
stock") be, and hereby is, amended, including, but not limited to, in the number
of shares that comprise the series which is increased out of the authorized but
unissued shares of the preferred stock of the Corporation by 75 shares to 450
shares, per value $1.00 per share, and the preferences and relative and other
rights,. and the qualifications, limitations or restrictions of the preferred
stock shall be (in addition to those set forth in the Certificate of
Incorporation), as amended and restated in this Restated Certificate of
Designations in their entirety, as follows:
1. AMOUNT OF ISSUANCE.
(a) To the extent the common stockholders of the Corporation
identified in this paragraph 1(a) below, who have expressed their
willingness to assist in the financing of the acquisition and as
necessary the installation of certain equipment and
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<PAGE>
production facilities for the Corporation (the "First Capital
Project"), advance funds towards that project, those common
stockholders, to wit Lone Star Technologies, Inc. ("LST"), and
TCW Special Credits Fund, TCW Special Credits Fund II, TCW
Special Credits Fund IIb, Weyerhaeuser Company Master Pension
Trust, and Inland Steel Industries Pension Trust (The 'TCW
Holders"), except as stated in paragraph (b), will receive, each
time that funds are advanced to the Corporation for the First
Capital Project, and the Corporation will issue, each such time,
in total to LST and the TCW Holders on the date each advance is
made, that number of shares (and/or fractions of shares) of
preferred stock as equal the number derived, when the total
advance is divided by One Hundred Thousand and No/100 Dollars
($100,000.00), such that, for each One Hundred Thousand and
No/100 Dollars ($100,000.00) advanced, one (1) whole share will
be issued. Of the total shares of the preferred stock to be
issued each time shares are to be issued as provided above,
90.84% of the total shares to be issued will be issued to LST,
9.16% of the total shares to be issued will be issued to the TCW
Holders. Merced Partners Limited Partnership ("Merced") is also
participating in the aforesaid financing contemplated under this
paragraph 1(a) to the extent of 1.087% of the funds advanced, but
acquires the shares of preferred stock it is entitled to from LST
upon the basis of that percentage participation. The total shares
issuable to the TCW Holders, each time shares are to be issued to
them, shall be issued individually among them as the TCW Holders
shall direct. Funds were advanced towards the First Capital
Project and shares of the preferred stock were issued in return
therefor, prior to this Restated Certificate of Designations
becoming effective, and all of that is acknowledged and
confirmed.
(b) After a total of $23,000,000.00 has been advanced to the
Corporation under paragraph 1(a) above for the First Capital
Project, including amounts advanced prior to this restatement and
amounts advanced on and hereafter, as additional advances are
made to the Corporation for the First Capital Project in excess
of $23,000,000.00, the preferred stock, each time an advance is
made, shall be issued to LST, the TCW Holders, Merced and Cargill
Financial Services Corporation ("Cargill") in the following
respective percentages: 83.62% to LST; 12.72% to the TCW Holders;
0.90% to Merced; and 2.76% to Cargill. In all other respects the
shares will be
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<PAGE>
issued upon advances toward the First Capital Project under this
paragraph 1(b) in the same manner as provided in paragraph 1(a).
(c) The "Dollar Value" of the shares of preferred stock shall be One
Hundred Thousand and No/100 Dollars ($100,000.00) per share, and
as proportionately adjusted downward shall be the "Dollar Value"
of fractional shares. Each share of preferred Stock shall have a
par value of One and No/100 Dollar ($1.00) per whole share, and
the entire series of preferred stock shall consist of four
hundred fifty (450) authorized shares. Fractional shares may be
issued.
(d) The foregoing provisions of this paragraph 1 will inure to the
benefit of the respective successors to LST, each of the TCW
Holders, Merced and Cargill so that such successors upon advances
of funds being made for the First Capital Project will be
entitled to receive the preferred stock which the party they
succeeded otherwise would have been entitled to receive under the
foregoing provisions. Unless the context indicates otherwise,
herein the references to "preferred stock refer to this
Preferred Stock, Series A. and not to any other preferred stock.
2. ISSUANCE DATE. The preferred stock will be issued in the number of
shares (or fractions of shares) to LST, the TCW Holders and as stated to Merced
and Cargill, as provided in paragraphs 1(a) and 1(b) above, as and when each
advance is made by any of them to fund the First Capital Project. while the
shares of the preferred stock will be issued by the Corporation when the
advances are made, certificates for the shares of such preferred stock will be
delivered to the shareholders entitled thereto for the preceding calendar
quarter based upon the advances to fund the First Capital Project made during
that quarter each January 1, April 1, July 1, and October 1 after September 30,
1994. In addition, shares of the preferred stock may be issued in payment of
dividends as provided under paragraph 3 below, and the shares of preferred stock
to be issued as dividends will be issued, in each case, when the dividend that
the stock is to pay, is, pursuant to action of the Board of Directors, to be
paid, and the share certificates for such stock will be furnished at the same
time by the Corporation to the holders entitled thereto.
3. DIVIDENDS.
(a) The holders of preferred stock will be entitled to a cumulative
dividend at the rate of six percent (6%) per annum on the Dollar
Value of the shares of preferred stock issued and
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<PAGE>
outstanding accruing from The date of issuance. No dividends of
any kind or other distributions are permitted to be paid or made
on Corporation's common stock at any time while any preferred
stock is outstanding.
(b) As to any share of preferred stock, commencing on the January 1,
April 1, July 1, or October 1 first to occur after such stock is
issued, and for each succeeding quarterly period ending
immediately prior to each succeeding January 1, April 1, July 1,
and October 1, the holder of such stock shall be entitled to
receive, when and as declared as hereinafter provided, out of
funds legally available for that purpose, cash dividends of one
and one-half percent (1.5%) of the Dollar Value of each share or
fractional share held (prorated for the first such dividend
period at the rate of one and one-half percent (1.5%) per quarter
accruing from the actual issue date to the end of that dividend
period), and no more. All dividends shall be payable in arrears,
when and as declared by the Board of Directors. Each such
dividend shall be paid to the holders of record of the preferred
stock as their names appear on the share register of the
Corporation on the date set as the record date for such dividend.
Dividends on account of arrears for any past dividend periods may
be declared and paid at any time without reference to any
dividend payment date, to holders of record on a date, not
exceeding thirty (30) calendar days preceding the payment date
thereof, as may be fixed by the Board of Directors.
(c) To the extent, on any dividend payment date, the holders of the
preferred stock shall not have received the full dividends for
all periods ended up to that date provided for in the other
provisions of this paragraph 3, then such dividends shall
cumulate, whether or not declared and irrespective of whether
such dividends could have been paid for such periods under
applicable law. It is understood that no dividends may be paid in
respect of the preferred stock prior to January 1, 1995 (although
dividends will accrue on the preferred stock outstanding prior to
that date).
(d) If at any time the Corporation pays less than the total amount of
dividends then accrued and payable with respect to the preferred
stock, such payment shall be distributed ratably among the
holders of the preferred stock. Any payment made by the
Corporation on the unpaid cumulative dividends, if less
4
<PAGE>
than the total amount of such dividends, shall be applied first
to those dividends that have been accrued for the longest time.
(e) The Corporation may at any time to the extent it so elects,
declare that dividends on the preferred stock which have accrued
will be payable in shares of preferred stock of a Dollar Value
equal to the dividends to be paid with such stock. Any holder of
preferred stock on which a cash dividend has been declared and
before it is paid may elect to similarly have the Corporation pay
any such dividend to the holder, to the extent the holder elects,
in preferred stock of the Dollar Value equal to the dividend the
holder has elected to be so paid.
4. REDEMPTION.
(a) The Corporation may, provided the Board of Directors has adopted
a resolution approving such action, redeem the preferred stock,
in whole or in part, in cash, at any time by paying the holder or
holders of the shares to be redeemed (i) the Dollar Value of such
stock and (ii) all accrued and unpaid dividends through the date
of redemption on the shares to be redeemed (including a pro rated
dividend based on the number of days elapsed from the last day of
the most recent completed quarterly dividend period through the
redemption date). Each holder of stock redeemed shall be entitled
to payment of that part of the total amount described above for
all the redeemed stock as is attributable to his redeemed stock.
If the Board of Directors has authorized a redemption which, when
authorized, was of less than all of the outstanding shares of the
preferred stock, and because of subsequent conversions of the
preferred stock since then, amounts to more than the actual
outstanding shares on the Redemption Date or, if applicable, the
Final Redemption Date, the Board of Directors' authorization
shall be deemed amended to the number of such outstanding shares
on the Redemption Date or, if applicable, the Final Redemption
Date which shall be the number authorized for redemption. Any
redemption of the preferred stock outstanding shall be
accomplished by redeeming from each holder of record all or a
fraction of each holder's shares, the numerator of which is the
total number of shares to be redeemed as authorized by the Board
of Directors or as deemed amended as provided above, and the
5
<PAGE>
denominator of which is the total number of shares of preferred
stock outstanding on the Redemption Date or, if applicable, the
Final Redemption Date.
(b) On January 3, 2002, the Corporation shall be obligated to redeem
the preferred stock outstanding as a mandatory redemption in
whole for cash. The redemption price shall be equal to the Dollar
Value of the shares redeemed together with any accrued but unpaid
dividends on such shares to and including the date of redemption,
as specified in clauses (i) and (ii) of paragraph 4(a). If less
than all of the outstanding shares of the preferred stock can be
redeemed under applicable law, such shares shall be redeemed pro
rata or by lot as determined by the Board of Directors in its
sole discretion to the maximum extent permitted by applicable
law, and the remaining shares shall be redeemed as and when they
can be redeemed under law.
(c) Notice of every proposed redemption of the preferred stock shall
be sent by or on behalf of the Corporation, by first class mail,
postage prepaid, to the holders of record of the shares to be
redeemed at their respective addresses as they shall appear on
the records of the Corporation, not less than thirty (30) days
nor more than sixty (60) days prior to the date fixed for
redemption (the "Redemption Date") (i) notifying such holders of
the election of the Corporation to redeem such shares and of the
Redemption Date and (ii) stating the place or places at which the
shares called for redemption shall, upon presentation and
surrender of the certificates evidencing such shares, be
redeemed, and the redemption price therefor, and (iii) stating
the name and address of any redemption agent selected by the
Corporation if other than the Corporation, and the name and
address of the Corporation's transfer agent for the preferred
stock. The Corporation may act as the transfer agent for the
preferred stock.
(d) The Corporation may act as the redemption agent to redeem the
preferred stock or appoint as its agent for such purpose a bank
or trust company in good standing, organized under the laws of
the United States of America or any jurisdiction thereof, and
having capital, surplus and undivided profits aggregating at
least Twenty Million and No.100 Dollars ($20,000,000.00), and may
appoint any one or more additional such agents which shall in
each case be a bank or trust company in good
6
<PAGE>
standing organized under the laws of the United States of America
or of any jurisdiction thereof, having an office or offices in
the City of Dallas, Texas, or such other place as shall have been
designated by the Corporation, and having capital, surplus, and
undivided profits aggregating at least Twenty Million and No/100
Dollars ($20,000,000.00). The Corporation or such bank or trust
company is hereinafter referred to as the "Redemption Agent."
Following such appointment and prior to any redemption, the
Corporation shall deliver to the Redemption Agent irrevocable
written instructions authorizing the Redemption Agent, on behalf
and at the expense of the Corporation, to cause such notice of
redemption to be duly mailed as herein provided as soon as
practicable after receipt of such irrevocable instructions and in
accordance with the above provisions. All funds necessary for the
redemption shall be deposited with the Redemption Agent in trust
at least one (1) business day prior to the Redemption Date, for
the pro rata benefit of the holders of the shares so called for
redemption, so as to be and continue to be available therefor.
Neither failure to mail any such notice to one (1) or more such
holders nor any defect in any notice shall affect the sufficiency
of the proceedings for redemption as to other holders.
(e) If notice of redemption shall have been given as hereinbefore
provided, and the Corporation shall not default in the payment of
the redemption price, then each holder of shares called for
redemption shall be entitled to all preferences and relative and
other rights accorded by this resolution until and including the
day immediately prior to the Redemption Date. If the Corporation
shall default in making payment or delivery as aforesaid on the
Redemption Date, then each holder of the shares called for
redemption shall be entitled to all preferences and relative and
other rights accorded by this resolution until and including the
day immediately prior to the date (the "Final Redemption Date")
when the Corporation makes payment as aforesaid to the holders of
the preferred stock. From and after the Redemption Date or, if
the Corporation shall default in making payment or delivery as
aforesaid, the Final Redemption Date, the shares called for
redemption shall no longer be deemed to be outstanding, and all
rights of the holders of such shares shall cease and terminate,
except the right of the holders of such shares, upon surrender of
certificates therefor, to receive amounts to be
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<PAGE>
paid hereunder. The deposit of monies in trust with the
Redemption Agent shall be irrevocable except that the Corporation
shall be entitled to receive from the Redemption Agent the
interest or other earnings, if any, earned on any monies so
deposited in trust, and the holders of any shares redeemed shall
have no claim to such interest or other earnings, and any balance
of monies so deposited by the Corporation and unclaimed by the
holders of the preferred stock entitled thereto at the expiration
of two (2) years from the Redemption Date (or the Final
Redemption Date, as applicable) shall be repaid, together with
any interest or other earnings thereon, to the Corporation, and
after any such repayment, the holders of the shares entitled to
the funds so repaid to the Corporation shall look only to the
Corporation for such payment, without interest.
5. VOTING RIGHTS. The preferred stock issued and outstanding will possess
voting rights only to the extent required by law and as provided herein. If and
to the extent the preferred stock may be entitled to vote on any matter, each
whole share of the preferred stock voting shall be counted as one (1) vote and
the fractional shares voting will be counted as fractional votes, in each case
the fractional vote will be the same as the fraction of a share that is voting,
except that in any case when the preferred stock is voting on any matter with
the common stock, each share or fractional share of the preferred stock voting
will be counted as having the same vote as the shares of common stock into which
that preferred stock could be converted at the time of voting.
6. LIQUIDATION PREFERENCE AND MERGER.
(a) In the event of the voluntary or involuntary liquidation,
dissolution, or other winding up of the affairs of the
Corporation, prior to any payment or distribution to the holders
of the Corporation's common stock or with respect to any other
stock which is not to receive assets of the Corporation before
receipt by the holders of the preferred stock of the full amount
they are to receive as provided in this subparagraph the holders
of the preferred stock shall be entitled to receive for the
preferred stock an amount equal to (with each holder entitled to
that part of such amount as is attributable to his shares) (i)
the Dollar Value of the preferred stock outstanding and (ii) all
accrued and unpaid dividends through the date of liquidation,
dissolution or other winding up of the affairs of the Corporation
(including a pro rated dividend based on the number of days
elapsed from the last day of the most recent completed quarterly
dividend period through the date of
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<PAGE>
liquidation, dissolution or winding up of the affairs of the
Corporation).
(b) The amount payable pursuant to paragraph 6(a) shall be paid in
cash to the extent available to the Corporation and to the extent
not so in property taken at its fair value as determined by the
Board of Directors. If such payment shall have been made in full
to the holders of the preferred stock, the remaining assets and
funds of the Corporation shall be distributed among the holders
of common or other stock remaining outstanding of the Corporation
according to their respective shares and priorities.
(c) In the event of the liquidation, dissolution, or winding up of
the affairs of the Corporation as described in paragraph 6(a),
the holders of the preferred stock will share in the assets,
funds, and property of the Corporation on a parity with or junior
to, as the case may be, any other stock of the Corporation which
is to share on a parity with or prior to the preferred stock
under such circumstances in accordance with the provisions of the
Certificate of Incorporation or Certificate of Designation
related to that other stock.
(d) The Corporation will not, without first obtaining the affirmative
vote or written consent of the holders of not less than 92% of
the shares of preferred stock outstanding at the time,
consolidate or merge with another corporation or corporations
(other than any mergers or consolidations of the Corporation with
any of its subsidiaries, whether owned directly or indirectly by
the Corporation, which mergers and consolidations this paragraph
6(d) will not apply to) or sell, lease, transfer or otherwise
dispose of, in one transaction or a series of related
transactions, all or substantially all of its assets without
first paying the holders of the preferred stock outstanding the
same amount through the date of the merger, consolidation, sale,
lease, transfer, or other disposition as is provided in clauses
(i) and (ii) of paragraph 6(a) through the date of liquidation,
dissolution, or winding up and in accordance with paragraph 6(b).
7. CONVERSION.
(a) Each whole share of preferred stock will be convertible at any
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<PAGE>
time after issuance by the holder into 10 shares of common stock
of the Corporation, or as such number is adjusted pursuant to the
following provisions, such number as stated above and as it may
be adjusted to be ratably reduced downward for fractional shares
outstanding of the preferred stock The number of shares of common
stock into which the preferred stock is convertible is based on a
conversion price of $10,000 per share of common stock. Such price
shall be ratably adjusted to reflect any change in the number of
shares of common stock into which the preferred stock is
convertible pursuant to the provisions of paragraph 7(b). In
addition, if after the date hereof the Corporation shall, at any
time while the preferred stock remains outstanding, otherwise
than as a result of any of the events as described in paragraph
7(b) issue any (i) shares of common stock, or (ii) securities
that are convertible into or exchangeable for common stock, or
(iii) options, warrants or other rights to acquire common stock,
in any case described under clause (i), (ii), or (iii), at a
price of less than $10,000 per share of common stock or, after
such price has been adjusted from $10,000 per share pursuant to
the foregoing provisions or the following provisions of this
paragraph 7(a), at a price less than the amount to which such
$10,000 may previously have been appropriately adjusted pursuant
to the foregoing provisions or the following provisions of this
paragraph 7(a), then each whole share of preferred stock will be
convertible at any time thereafter by the holder into the number
of shares of common stock of the Corporation based upon a new
conversion price equal to the lowest issuance, conversion,
exchange, or exercise price, as the case may be, for the common
stock pursuant to clause (i), (ii), or (iii) above, adjusting
such price appropriately for any events described in paragraph
7(b). Fractional shares of preferred stock may be converted on a
ratable basis at such new adjusted conversion price. Each holder
may convert his preferred stock in whole or in such part
(including fractional shares) as he chooses when he converts the
stock.
(b) If at any time after September 30, 1994 and prior to the
conversion of the preferred stock the Corporation shall have
effected a common stock split or the outstanding common stock of
the Corporation shall have been subdivided or combined into a
greater or lesser number of shares or shares of its common stock
shall have been distributed as a dividend on any class of its
stock, and after giving effect to any prior
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<PAGE>
adjustments under paragraph 7(a) and This paragraph 7(b), the
number of shares of common stock into which each share of
preferred stock can be converted shall be increased or decreased
to reflect proportionately the increase or decrease in the number
of shares of common stock outstanding.
(c) Upon the occurrence of any event which requires any of the
adjustments provided for above, then and in each such case the
Corporation shall give notice thereof to the holders of the
preferred stock, which notice shall state the increase or
decrease, if any, in the number of shares of common stock into
which the preferred stock shall be convertible, setting forth in
reasonable detail the method of calculation and the facts upon
which such calculation is based.
(d) In case after September 30,1994, at any time:
(i) the Corporation shall offer for subscription pro rata
to the holders of the common stock any additional shares of stock
of any class or other rights;
(ii) there shall be any capital reorganization of the
Corporation, or reclassification of the common stock or
consolidation or merger of the Corporation with or into (other
than with a wholly owned subsidiary), or sale of all or
substantially all of its assets to, another corporation or
entity; or
(iii) there shall be a voluntary or involuntary
dissolution, liquidation, or winding-up of the Corporation;
then, in each such case, the Corporation shall give to the
holders of the preferred stock (a) notice of the date on which
the books of the Corporation shall close or a record shall be
taken for determining the holders of common stock entitled to
receive any such subscription rights or for determining the
holders of common stock entitled to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding-up and (b) in the case of
any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, notice of the date
(or, if not then known, a reasonable approximation thereof by the
Corporation) when the same shall take place. Such notice shall
also specify the date on which the holders of
11
<PAGE>
common stock shall be entitled to receive such subscription
rights or to exchange their common stock for stock or other
securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice shall
be given at least twenty (20) days prior to the record date or
the date on which the Corporation's books are closed in respect
thereof. Failure to give any such notice or any defect therein
shall not affect the validity of the proceedings referred to in
clause (i), (ii), and (iii) above.
(e) Any accrued and unpaid dividends on the preferred stock being
converted (with the current quarterly dividend for the quarter
during which the conversion occurs being paid in an amount
prorated to the date of conversion) shall either be paid within
five (5) days of the conversion to the converting preferred stock
holder in cash or in an additional number of whole and/or
fractional shares of common stock equal to the number of common
shares that would have been issued had the total amount of those
dividends which were not paid in cash represented an equivalent
Dollar Value of additional preferred stock converted along with
the preferred stock that was actually converted by the holder.
(f) The certificate for the shares of the preferred stock being
converted will be surrendered to the Corporation, and if less
than all shares of the preferred stock represented by a
certificate are converted, a certificate for the number of shares
not converted, which shall have a Dollar Value commensurate with
that number of shares, shall be returned to the holder.
8. RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation shall at
all times reserve and keep available out of its authorized, but unissued, shares
of common stock, solely for the purpose of effecting the conversion of the
shares of the preferred stock, such number of its shares of common stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the preferred stock and to effect the exercise of all
rights, warrants, and options to purchase common stock, and if at any time the
number of authorized, but unissued, shares of common stock shall not be
sufficient to effect the conversion of all then outstanding shares of the stock,
and such other convertible stock or securities and rights, warrants, and
options, the Corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of
common stock to such number of shares as shall be sufficient for such purpose.
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<PAGE>
9. NOTICES. Any notice required by the provisions hereof to be given to
any holders of shares of the preferred stock shall be deemed given upon the
earlier of actual receipt or seventy-two (72) hours after the same has been
deposited in the United States mail, by certified or registered mail, return
receipt requested, postage prepaid, and addressed to the holder of record at his
address appearing on the books of the Corporation.
10. ISSUANCE TAX. The issuance of certificates for common stock upon the
conversion of preferred stock shall be made without charge to the converting
holder of the preferred stock for any issuance tax in respect thereof, provided
that the Corporation shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of the preferred stock converted
therefor.
11. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by law,
the shares of preferred stock shall not have any preferences or relative,
participating, optional or other special rights, other than those specifically
set forth herein and in the Corporation's Certificate of Incorporation. The
shares of preferred stock shall have no preemptive or subscription rights.
12. AMENDMENT ETC. In addition to any other rights provided by law, so
long as any preferred stock is outstanding, the Corporation, without first
obtaining the affirmative vote or written consent of the holders of not less
than ninety two percent (92%) of the shares of preferred stock outstanding at
the time, will not:
(a) amend or repeal any provision of, or add any provision to, the
Certificate of Incorporation, the Restated Certificate of
Designations related to the preferred stock, or By-Laws if such
action would materially adversely change the preferences, rights,
privileges or powers of, or the restrictions provided for the
benefit of, the preferred stock, or increase or decrease the
number of shares of preferred stock authorized hereby; or
(b) authorize or increase the authorized number of shares of any
series or class of stock, which would be entitled to receive
dividends or Other distributions at any time in preference to the
preferred stock before any of the dividends under paragraph 3
hereof for that period and all past quarterly dividend periods
prior to such time have been paid on the preferred stock, or
would be entitled to receive assets upon the liquidation,
dissolution, or winding up of the affairs of the Corporation in
preference to the preferred stock before any of the assets the
preferred stock is to receive under those circumstances have been
received, except that a merger or consolidation of the
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<PAGE>
Corporation into another corporation or corporations pursuant to
which the holders of the preferred stock are to receive stock of
the surviving corporation or corporations with substantially the
same preferences, rights, privileges, powers, and restrictions
for the benefit of such holders as the preferred stock of The
Corporation will not be deemed an event that falls within this
subparagraph or subparagraph (a) immediately above.
13. HEADINGS OF SUBDIVISIONS. The headings of the various paragraphs
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
14. SEVERABILITY OF PROVISIONS. If any right, preference, or limitation
of the preferred stock set forth herein is invalid, unlawful or incapable of
being enforced by reason of any rule of law or public policy, all other rights,
preferences, and limitations set forth herein which can be given effect without
the invalid, unlawful or unenforceable right, preference or limitation shall,
nevertheless, remain in full force and effect, and no right, preference or
limitation herein set forth shall be deemed dependent upon any other such right,
preference or limitation unless so expressed herein.
15. STATUS OF REACQUIRED SHARES. Shares of preferred stock which have been
issued and reacquired by the Corporation in any manner or converted shall be
canceled, and will no longer have the status of authorized shares of preferred
stock or be capable of being issued.
16. SINGULAR. PLURAL, ETC. Herein, unless the context is to the contrary,
references to the singular shall include the plural, to the masculine shall
include the feminine and the neuter, and to shares of stock shall include
fractional shares, and VICE VERSA, and, unless the context is otherwise,
references to the holder of stock shall mean the record holder and references to
the voting or the consent of the holders of such stock shall mean the record
holders of the stock as of the record date set by the Board of Directors for
such vote or consent.
IN WITNESS WHEREOF, Lone Star Steel Company has caused this Certificate to
be duly executed this ____ day of ____________ ,1995.
LONE STAR STEEL COMPANY
By:
-------------------------
-------------------------
-------------------------
ATTEST:
- ------------------------------
-14-
<PAGE>
EXHIBIT 10.24
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL COMPANY
AND
PRAXAIR, INC.
PLANT AT: LONE STAR STEEL COMPANY
LONE STAR, TEXAS
DECEMBER 18, 1995
CONFIDENTIALITY NOTICE
Please note that this Agreement contains Praxair's trade secrets and
confidential information, the disclosure of which may cause Praxair irreparable
harm. Lone Star Steel Company shall hold this Agreement in confidence in accord
with the terms and conditions of ARTICLE 14 of the Agreement.
- -C-1995 PRAXAIR TECHNOLOGY, INC. - ALL RIGHTS RESERVED
<PAGE>
ARTICLE SUBJECT Page
- ------- -------
ARTICLE 1 - DEFINITIONS 1
ARTICLE 2 - QUANTITY 5
ARTICLE 3 - SPECIFICATIONS 7
ARTICLE 4 - MEASUREMENT AND DELIVERY 8
ARTICLE 5 - INSTALLATION AND FIRST DELIVERY 9
ARTICLE 6 - DURATION OF AGREEMENT 10
ARTICLE 7 - PRICES 11
ARTICLE 8 - ADJUSTMENT OF PLT PRODUCED OXYGEN 14
ARTICLE 9 - ADJUSTMENT OF LIQUID OXYGEN PRICE 14
ARTICLE 10 - TAXES 15
ARTICLE 11 - SHUTDOWN 16
ARTICLE 12 - CONTINGENCIES 16
ARTICLE 13 - LIABILITY 17
ARTICLE 14 - CONFIDENTIALITY 21
ARTICLE 15 - OXYGEN PLANT SITE(S) 22
ARTICLE 16 - ENVIRONMENTAL CONDITIONS 25
ARTICLE 17 - UTILITIES 26
ARTICLE 18 - ELECTRIC POWER GUARANTEE 27
ARTICLE 19 - FAIR LABOR STANDARDS ACT 28
ARTICLE 20 - APPLICABLE LAW 28
ARTICLE 21 - DISPUTE RESOLUTION 28
ARTICLE 22 - NOTICES 30
<PAGE>
ARTICLE 23 - ASSIGNMENT 30
ARTICLE 24 - PROMOTIONAL USE 31
ARTICLE 25 - HEADINGS 31
ARTICLE 26 - WAIVER 31
ARTICLE 27 - PRIOR AGREEMENTS 31
ARTICLE 28 - ENTIRE AGREEMENT 32
EXHIBIT A SITE LOCATION and OXYGEN DELIVERY
POINT DRAWING 33
EXHIBIT B ELECTRICAL SPECIFICATIONS 34
EXHIBIT C BILLING EXAMPLES 35
EXHIBIT D PROCESS WATER SPECIFICATIONS 36
EXHIBIT E AVOIDED COST OF ELECT POWER 37
EXHIBIT F CANCELLATION FEE 39
EXHIBIT G REPRICING CALCULATION 40
EXHIBIT H AIR QUALITY LEVELS 41
<PAGE>
THIS AGREEMENT made and entered into as of December 18, 1995, by and
between PRAXAIR, INC., a Delaware Corporation, with an office at 39 Old
Ridgebury Road, Danbury, CT. 06810 (hereinafter referred to as "Seller") and
LONE STAR STEEL COMPANY, a corporation organized and existing under the laws of
the State of Delaware (hereinafter referred to as "Buyer"), with an office
located at 5501 LBJ Freeway, Suite 1200, Dallas, Texas 75380.
W I T N E S S E T H:
WHEREAS, Buyer requires substantial quantities of Oxygen for use at its
plant in Lone Star, Texas and has requested Seller to supply such quantities of
Oxygen from a plant to be constructed, owned and operated by Seller; and
WHEREAS, Seller is willing to make substantial investment, construct, own
and operate a plant on a site(s) to be mutually selected and furnished by Buyer,
from which Seller will supply Oxygen to Buyer;
NOW THEREFORE, in consideration of the foregoing and the mutual promises
herein, Buyer and Seller agree as follows:
ARTICLE I - DEFINITIONS
1.1 "Buyer's Mill" means Buyer's plant at the location referred to above,
and/or any additions thereto and/or any location to which any operations
conducted by Buyer during the term of this Agreement may be subsequently moved.
1.2 "Oxygen" means oxygen, in liquid or gaseous form, as delivered by
Seller or required by Buyer, other than that supplied in cylinders for use at
Buyer's Mill.
1.3 "Oxygen Plant" means the facilities referred to above to be
constructed, owned and operated by Seller which contain facilities for the
production, compression, storage and vaporization of oxygen for the purposes of
supplying Buyer hereunder. The Oxygen Plant includes the Liquid Oxygen Supply
System as defined in ARTICLE 1.11.
<PAGE>
1.4 "Oxygen Plant Site(s)" means the plot(s) of land at Buyer's Mill,
mutually selected by Buyer and Seller for the Oxygen Plant and the Oxygen
Plant's Liquid Oxygen Supply System. The Oxygen Plant Site(s) location(s) and
boundaries are described in ARTICLE 15.1.
1.5(a) "Oxygen Distributing System" means the system of trunk and service
pipelines to be constructed, now or as required, owned and maintained by Buyer
at Buyer's expense and used to transport Oxygen from the Oxygen Delivery Points
to the various electric arc furnace use points at Buyer's Mill.
1.5(b) "High Purity Oxygen Distributing System" means the system of
trunk and service pipelines to be constructed, now or as required, owned and
maintained by Buyer at Buyer's expense and used to transport High Purity (99.5%)
Liquid Oxygen from the Oxygen Delivery Points to the various high purity (99.5%)
use points at Buyer's Mill.
1.6 "Cubic Foot" used as a measure of Oxygen means that quantity of oxygen
which in gaseous form would occupy a volume of one cubic foot at 70 degrees
Fahrenheit temperature and 14.696 pounds per square inch absolute pressure. Such
quantity is herein referred to as "Standard Cubic Foot" or "SCF".
1.7 "SCFH" shall mean a rate of flow which would be equivalent to one (1)
SCF if continued for a one (1) hour period.
1.8(a)"Plant Produced Oxygen" means all oxygen produced by the Oxygen
Plant and introduced into the Oxygen Distributing System as gaseous oxygen
(capacity ratings are set forth in ARTICLE 2.2).
1.8(b)"Liquid Oxygen" means any oxygen delivered into the High Purity
Oxygen Distributing System from the Liquid Oxygen Supply System. The minimum
Liquid Oxygen purity shall be ninety nine point five percent (99.5%) pure.
1.9 "First Delivery" means the date of first delivery of Plant Produced
Oxygen from the Oxygen Plant to the Oxygen Delivery Point under this Agreement.
1.10 "Buyer's Oxygen Requirements" means Buyer's total present and future
requirements, in gaseous and liquid form, of Oxygen other than that supplied in
cylinders for use at Buyer's Mill.
PRAXAIR BUSINESS CONFIDENTIAL 2
<PAGE>
1.11 "Liquid Oxygen Supply System" means the Seller supplied liquid oxygen
storage vessels and vaporizers. The capacity of such vessels will be 26,000
gallons. The vaporization equipment will be capable of vaporizing 88,000 SCFH.
1.12 "Oxygen Delivery Point(s)" means the flange(s) where Seller's Oxygen
Plant will be connected to Buyer's Oxygen Distributing System and to Buyer's
High Purity Oxygen Distributing System, as indicated on EXHIBIT A, in accord
with ARTICLE 15. Buyer accepts title and risk of loss of Plant Produced
Oxygen and Liquid Oxygen at this (these) point(s).
1.13 "Shutdown" means a period of time during which operation of the Oxygen
Plant is suspended or reduced pursuant to ARTICLE 11 hereof.
1.14 "High Pressure Receiver" means the gaseous storage receiver installed
hereunder for the storage of Plant Produced Oxygen. The capacity of such vessel
is 2,000 cubic feet water volume. At a maximum working pressure of 450 psig, the
receiver will have a usable storage capacity of thirty two thousand (32,000 SCF)
at an Oxygen Distributing System pressure of one hundred and fifty pounds per
square inch gauge (150psig). The maximum instantaneous withdrawal rate of oxygen
will be equivalent to 2,000 SCF per minute. The High Pressure Receiver, when
filled to its maximum rated capacity, will be capable of supplying oxygen at a
withdrawal rate of 2,000 SCF per minute for a sixteen minute period, into the
Oxygen Distributing System at a pressure of one hundred and fifty pounds per
square inch gauge (150 psig).
1.15 "Avoided Cost of Electric Power" means that amount of electric power,
expressed in terms of kilowatt hours (kwh), that the Oxygen Plant would have
consumed while introducing Plant Produced Oxygen into the Oxygen Distributing
System. The Avoided Cost of Electric Power shall be calculated by multiplying
the amount of Plant Produced Oxygen delivered during an Oxygen Plant Shutdown,
times 1.50 kwh/100 cubic feet, times Buyer's average cost of power over the
immediately preceding 12-month period, expressed in cents per kwh. EXHIBIT E
attached hereto illustrates the intent of the parties with respect to the
calculation of the Avoided Cost of Electric Power.
1.16 "Best Efforts" means that the party referred to as undertaking such
efforts (the "Performing Party") shall work earnestly and diligently to achieve
the described action or purpose taking into account commercial practicability
and emergencies in the public interest, which may
PRAXAIR BUSINESS CONFIDENTIAL 3
<PAGE>
otherwise take precedence over the action or purpose in question. Where the
Performing Party is required to use its Best Efforts in the performance of an
obligation and it is unable to satisfy such obligation, the Best Efforts
obligation shall also include a requirement that the Performing Party
demonstrate or furnish such supporting documentation evidencing the efforts
undertaken to satisfy such obligations, as such other party may reasonably
request.
1.17 "Material Uncorrected Default" means any act or omission defined as
such in the Agreement, or the following:
(a) If a party shall become bankrupt or insolvent or make an
assignment for the benefit of creditors;
(b) If any creditor appoints a receiver or a receiver manager of the
assets or the business of a party or seizes the assets of a party; provided
however, that this circumstance shall not be deemed to be a Material Uncorrected
Default if such appointment or seizure is effectively stayed and the claims
secured thereby are being contested in good faith and by appropriate
proceedings;
(c) A party initiates proceedings for its liquidation, dissolution or
winding up;
(d) A party ceases to carry on business;
(e) If the Oxygen Plant is shutdown for any reason, including but not
limited to, a contingency as defined in ARTICLE 12, and cannot be, or, has
not been rendered operational within four (4) months from the date of the
commencement of such event;
(f) If Seller fails to complete construction of the Oxygen Plant by
March 15, 1996, and responsibility for such delay in completion is not
attributable either to Buyer, or, as a result of a contingency event as defined
in ARTICLE 12.1, provided however, the occurrence of such a delay in
completion shall not be a Seller's Material Uncorrected Default if substantially
at all times prior to complete construction of the Oxygen Plant, Seller is able
to supply Buyer's actual Oxygen requirements, up to the maximum flow rates and
in accordance with the other supply parameters described in ARTICLE 2. via the
Liquid Oxygen Supply System; and,
(g) If Buyer fails to make any payment required hereunder within the
time specified, and such failure continues for a period of fifteen (15) days
after receipt of written notice from Seller.
PRAXAIR BUSINESS CONFIDENTIAL 4
<PAGE>
ARTICLE 2 - QUANTITY
2. 1 Seller will sell and deliver to the Oxygen Delivery Point(s) and Buyer
will purchase and receive from Seller, on the terms and conditions hereinafter
set forth Buyer's Oxygen Requirements as set forth in this ARTICLE 2.
2.2 Seller agrees to sell and deliver and Buyer agrees to purchase and
receive Oxygen up to the instantaneous rate(s) set forth below:
Plant Produced Oxygen in; full operation..... 88,000 SCFH
Liquid Oxygen........As required, in accord with ARTICLE 2.3
2.3 If, from time to time, Buyer requires Plant Produced Oxygen at
instantaneous rates in excess of the rate(s) set forth in ARTICLE 2.2,
Seller will deliver to Buyer, and Buyer will purchase and receive such Oxygen to
the extent that in Seller's sole discretion such Oxygen is deemed to be
available for Buyer from the Liquid Oxygen Supply System at the Oxygen Plant and
delivery may be made within the flow and pressure limitations of the equipment
installed. Such Oxygen delivery to Buyer above the instantaneous production
rates shall be considered Liquid Oxygen. The delivery of Oxygen at the Oxygen
Delivery Point(s) constitutes Buyer's purchase thereof Measurement and delivery
of Liquid Oxygen is in accord with ARTICLE 4.3.
2.4 Buyer and Seller agree to meet from time to time to review the maximum
instantaneous demand rates and specifications for purposes of determining
Buyer's future requirements of Oxygen which are also the subject of this
Agreement. Each party agrees to negotiate in good faith for the additional
charges and fees pertaining to any additional or upgraded production facilities,
equipment, controls, storage vessels and/or plant relocations as such are
required. Commencing at any time after two (2) years following the date of First
Delivery, Buyer and Seller also agree to negotiate in good faith mutually
acceptable changes to this Agreement that may be requested by either party
hereto as a result of a significant decrease in Buyer's Oxygen Requirements,
(I.E. greater than a fifty percent (50%) reduction in Buyer's average monthly
consumption of Oxygen as measured over a twelve (12) month period when compared
to the average monthly consumption of Oxygen in the immediately preceding twelve
(12) month period).
2.5 If Seller is unable to supply and/or deliver Liquid Oxygen to the
Liquid Oxygen Supply System in accordance with ARTICLE 2 of this Agreement,
to the extent required by Buyer
PRAXAIR BUSINESS CONFIDENTIAL 5
<PAGE>
for any reason whatsoever, including but not limited to, for reasons due to a
shutdown or a contingency, and for a period of greater than six (6) hours, Buyer
shall have the right to obtain any additional Liquid Oxygen it requires from a
reputable third party industrial gas supplier and Seller shall, subject to the
indemnity and the terms and conditions set forth below, permit such third party
industrial gas company to deliver such additional Liquid Oxygen into the Liquid
Oxygen Supply System.
(a) In consideration of Seller granting the rights to Buyer set forth
in this ARTICLE 2.5, Buyer shall indemnify and hold harmless Seller from
and against all claims, demands, damages, losses, expenses, costs (including
legal fees and the costs of experts), penalties and fines which may be made or
brought against Seller or which Seller may suffer or incur arising out of or
incidental to any deliveries of Liquid Oxygen by third parties into the Liquid
Oxygen Supply System.
(b) ARTICLE 3 shall be inapplicable to any Liquid Oxygen obtained by
Buyer from such other third party industrial gas supplier and Seller shall have
no liability in connection with any such product.
(c) Buyer shall obtain such Liquid Oxygen from the other industrial
gas supplier at Buyer's sole risk, liability and expense; provided, however,
Seller will promptly reimburse Buyer for fifty percent (50%) of any difference
in price (such reimbursement to take the form of a credit on the next normally
occurring invoice from Seller to Buyer) if the amount of such invoice exceeds
the required reimbursement between the contract price set forth in this
Agreement and the price charged by such other industrial gas company with
respect to the first 88,000 SCFH of Buyer's Oxygen Requirements. Seller's
obligation to make such reimbursement is predicated upon Buyer using its Best
Efforts to obtain the Liquid Oxygen at or around the price for Liquid Oxygen set
forth in this Agreement but taking into account the purity, availability, and
delivery schedule for the substitute liquid oxygen.
PRAXAIR BUSINESS CONFIDENTIAL 6
<PAGE>
(d) Seller has the right to disallow the delivery of Liquid Oxygen
from any other person into the Liquid Oxygen Supply System at any time if in
Seller's sole judgment, acting reasonably, a situation exists which may result
in injury to person or property or damage to the Oxygen Plant.
(e) After receiving verbal or written notice from Seller that Seller
is able to again supply Liquid Oxygen to Buyer, Buyer shall promptly discontinue
further deliveries of liquid oxygen from the third party industrial gas supplier
except to the extent that Buyer has made a binding commitment to receive such
delivery; provided, however, Buyer shall not make any commitment with a third
party industrial gas supplier for the supply of liquid oxygen unless it is
cancelable upon five (5) days prior written notice.
ARTICLE 3 - OXYGEN SPECIFICATIONS:
3.1 Plant Produced Oxygen delivered hereunder will be at least ninety
percent (90%) pure on a dry basis and will be delivered into the Oxygen
Distributing System at a minimum pressure of one hundred and fifty pounds per
square inch gauge (150 psig). Oxygen delivered to the Liquid Oxygen Supply
System will be at least ninety nine point five percent (99.5%) pure on a dry
basis and will be delivered into the Oxygen Distributing System at a minimum
pressure of one hundred and forty pounds per square inch gauge (140 PSIG).
Seller warrants to Buyer that (i) Seller has good and marketable title to the
Oxygen; and (ii) the Oxygen complies with the specifications set forth in
this ARTICLE 3.1. Any Oxygen delivered which does not meet the foregoing
specification (s) may be rejected by Buyer by providing Seller with verbal
notice within eight (8) hours and subsequent written confirmation within
forty-eight (48) hours of delivery thereof. No charge will be made for
Oxygen so rejected. Seller reserves the right to confirm Buyer's data leading
to such rejection. Except in the case of gross negligence or willful
misconduct by Seller, no claim of any kind with respect to Oxygen delivered
or for the nondelivery thereof hereunder, whether or not based on negligence,
warranty, strict liability or any other theory of law will be greater than
the purchase price of the quantity of non-conforming Oxygen with respect to
which such claim is made. The foregoing represents Buyer's exclusive remedy
and Seller's sole obligation, with respect to claims relating to the
conformity of Oxygen
PRAXAIR BUSINESS CONFIDENTIAL 7
<PAGE>
delivered hereunder. THERE ARE NO EXPRESS WARRANTIES BY SELLER OTHER THAN THOSE
SPECIFIED IN THIS ARTICLE 3.1. NO WARRANTIES BY SELLER (OTHER THAN WARRANTY
OF TITLE AS PROVIDED IN THE UNIFORM COMMERCIAL CODE) SHALL BE IMPLIED OR
OTHERWISE CREATED UNDER THE UNIFORM COMMERCIAL CODE, INCLUDING BUT NOT LIMITED
TO WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 4 - MEASUREMENT AND DELIVERY
4.1 Plant Produced Oxygen will be measured by Seller's metering system
specified in ARTICLE 15.7. Readings will be corrected to SCF.
4.2 Seller, at its expense; will test and calibrate Seller's metering
equipment quarterly during the first two (2) years of Oxygen Plant operation and
thereafter on an annual basis, provided that Seller has demonstrated to Buyer's
satisfaction the accuracy of Seller's metering equipment. Buyer may have its
representatives present during such tests. Buyer will have the right at any
other time to request that Seller test Seller's metering equipment, with
reasonable advance notice, Seller will test the metering equipment in the
presence of Buyer's representatives, and if the metering equipment is found on
such test to be accurate, Buyer will pay Seller the cost and expense of such
test, but if found on such test to be inaccurate, then the cost and expense of
such test and of correcting the inaccuracy in the metering equipment will be
borne by Seller. If on any test the metering equipment is found to be
inaccurate, a correcting invoice will be rendered to cover the actual amount of
Oxygen delivered to Buyer through the metering equipment for the thirty (30) day
period prior to the date on which such test was made, or the period from the
date such metering equipment was last tested and considered accurate, whichever
period is shorter. If on any test of the metering equipment, its inaccuracy is
not over two percent (2%), either high or low, the meter will be considered
accurate.
4.3 Buyer will give Seller reasonable advance notice of the quantities of
Liquid Oxygen needed for its use. Seller will exert Best Efforts to deliver such
quantities of Oxygen within twenty-four (24) hours after receipt of an order
from Buyer. In addition, Seller will have the right to anticipate Buyer's need
for Oxygen and make delivery at such times as are consistent
PRAXAIR BUSINESS CONFIDENTIAL 8
<PAGE>
with Seller's delivery schedule. The quantities delivered will be measured by
Seller by the method it regularly uses for the type of delivery made.
4.4 If, at Buyer's request, Seller delivers at any one time less than six
thousand (6,000) gallons of liquid Oxygen into the Liquid Oxygen Supply System,
Buyer will pay Seller any special expenses incurred. If Buyer at any time
restricts access to the Liquid Oxygen Supply System, Buyer will pay Seller any
special expenses incurred. Said special expenses could be in the form of a
surcharge.
ARTICLE 5 - INSTALLATION AND FIRST DELIVERY
5.1 Seller and Buyer will endeavor to make and receive the First Delivery
of Plant Produced Oxygen on or before February 1, 1996
5.2 Seller's ability to make the First Delivery of Plant Produced Oxygen
on February 1, 1996 is dependent upon Buyer's preparation of the site, and
supply of utilities per the schedules set forth in ARTICLE 15 and ARTICLE 17.1.
If Seller is unable to make the First Delivery of Plant Produced Oxygen on
February 1, 1996, because of Buyer's failure to comply with such schedules, or
its acts, omissions, or delay, then Seller shall supply Buyer's Oxygen
Requirements by delivery of interim Liquid Oxygen, and the price of such oxygen
shall be the price for Liquid Oxygen in ARTICLE 7.1. If Seller is unable to make
the First Delivery of Plant Produced Oxygen on February 1, 1996, because of
Seller's acts, omissions, or delay, then Seller shall supply Buyer's oxygen
requirements by delivery of interim Liquid Oxygen, and the price of such oxygen
shall be at the equivalent Plant Produced Oxygen price as adjusted for Buyer's
Avoided Cost of Electric Power.
5.3 Seller shall promptly notify Buyer, in writing, if any act or
omission, or delay by Buyer threatens to delay timely completion of the Oxygen
Plant so that the First Delivery of Plant Produced Oxygen will not take place on
the date required hereunder. In such event, Buyer and Seller shall promptly meet
to discuss and develop a mutually agreeable plan with specific division of
responsibilities to remedy such delay.
5.4 The cost of obtaining any permits, if required, for construction and
operation of the Oxygen Plant shall be borne equally by both Buyer and Seller.
The cost for any future permits which may be required for operation of the
Oxygen Plant shall also be shared equally by both Buyer and Seller. Seller will
be responsible for obtaining all permits.
PRAXAIR BUSINESS CONFIDENTIAL 9
<PAGE>
ARTICLE 6 - DURATION OF AGREEMENT
6.1 Except as provided in ARTICLES 12.3, this Agreement will be in effect
from the date first written above and continue for a period of ten (10) years
from the date of First Delivery of Plant Produced Oxygen and will continue in
effect thereafter until terminated by either party upon giving not less than
twelve (12) months prior written notice of termination to the other party.
6.2 That any time after two (2) years year following the date of First
Delivery of Plant Produced Oxygen hereunder, Buyer no longer has any requirement
for oxygen at Buyer's Plant or Buyer's oxygen volume requirements are reduced,
(excluding any contingencies which may arise as described in ARTICLE 12), for a
continuous twelve (12) month period to less than fifty percent (50%) of Buyer's
average monthly consumption of Oxygen (as compared to the average monthly
consumption of Oxygen in the immediately preceding twelve (12) month period),
ending at any time after such two (2) year period following the date of First
Delivery, Buyer shall have the right to request that Buyer and Seller enter into
good faith negotiations for a reduced Oxygen supply and the parties shall enter
such negotiations. If, after ninety (90) days following Buyer's request for
negotiations, Buyer and Seller are unable to reach mutual agreement with respect
to the terms and conditions pertaining to a reduced Oxygen supply, and such
other issues as the costs associated with removal of the Oxygen Plant and
installation of a smaller oxygen delivery facility, then Buyer shall have the
right to terminate this Agreement by providing Seller with twelve (12) months
prior written notice and paying Seller on the date of termination a cancellation
fee computed as follows:
Cancellation Fee = BMF x K x N
where:
BMF is the current Base Monthly Fee in effect upon the date of
termination,
K is equal to 0.40 (40%) during years three, four and five;
K is equal to 0.20 (20%) during years six through ten; and
N is equal to one hundred and twenty (120) minus the number of months
since date of First Delivery.
6.3 Any time after five years (5) years following the date of First
Delivery of Plant Produced Oxygen hereunder, Buyer shall have the right to
terminate this Agreement for any reason by providing Seller with twelve (12)
months prior written notice and paying Seller on the date of termination a
cancellation fee computed as follows:
PRAXAIR BUSINESS CONFIDENTIAL 10
<PAGE>
Cancellation Fee = BMF x K x N
where:
BMF is the current Base Monthly Fee in effect upon the date of
termination,
K is equal to 0.60 (60%); and
N is equal to one hundred and twenty (120) minus the number of months
since Date of First Delivery
EXHIBIT F is attached hereto and made a part hereof for the purposes of
illustrating the intent of the parties with respect to ARTICLE 6.2 AND 6.3.
6.4 If, at any time following the date of First Delivery of Plant Produced
Oxygen hereunder, a party hereto believes in good faith, that there is a
Material Uncorrected Default by the other party hereto of any material
obligation under this Agreement, the party having such belief shall promptly
commence the procedures set forth in ARTICLE 21- DISPUTE RESOLUTION.
ARTICLE 7 - PRICES
7.1 Upon First Delivery of Plant Produced Oxygen and thereafter for the
first twelve month period following First Delivery, Seller will invoice Buyer
and Buyer will pay Seller as promptly as possible at the beginning of the
following month, for all Plant Produced Oxygen consumed by Buyer in
the previous month and all Liquid Oxygen delivered to Buyer in the previous
month, in accord with price(s) set forth below, as adjusted under ARTICLE 8 AND
9, plus the amount of any taxes as set forth in ARTICLE 10.
THE FOLLOWING PRICES WILL BE IN EFFECT DURING THE FIRST
TWELVE (12) MONTH PERIOD FOLLOWING FIRST DELIVERY:
Months one (1) through six (6)
- PLANT PRODUCED OXYGEN: Months one (1) through six ( 6):
Base Monthly Fee.................... $0.00/Month
All Plant Produced Oxygen SCF delivered in each month
................................ $0.125/100 SCF
PRAXAIR BUSINESS CONFIDENTIAL 11
<PAGE>
Months seven (7) through twelve (12)
- PLANT PRODUCED OXYGEN: Months seven (7) through twelve (12):
Base Monthly Fee: First 21,759,000 SCF delivered in
each month........................ $28,000/Month
All Plant Produced Oxygen Over 21,750,000 SCF delivered in
each month........................ $0.125/100 SCF
- MONTHS ONE (1) THROUGH TWELVE (12)
LIQUID OXYGEN:
First 10,000,000 SCF per month..... $0.29/100 SCF
All over 10,000,000 SCF per month.. $0.351100 SCF
7.2 Commencing upon the first anniversary of the date of First Delivery
and thereafter, as promptly as possible at the beginning of each month, Seller
will invoice Buyer and Buyer will pay Seller for the Plant Produced Oxygen in
accord with the prices set forth below in this ARTICLE 7.2 as adjusted under
ARTICLE 8 AND 9, plus the amount of any taxes as set forth in ARTICLE 10, and as
promptly as possible at the beginning of the following month, Seller will
invoice Buyer and Buyer will pay Seller for all Plant Produced Oxygen over
43,500,000 SCF consumed by Buyer in the previous month and all Liquid Oxygen
delivered to Buyer in the previous month, in accord with price(s) set forth
below, as adjusted under Article 8 and 9 plus the amount of any taxes as set
forth in ARTICLE 10.
THE FOLLOWING PRICES WILL BE IN EFFECT COMMENCING UPON
THE FIRST ANNIVERSARY OF FIRST DELIVERY:
- PLANT PRODUCED OXYGEN:
Base Monthly Fee: First 43,500,000scf delivered in
each month................... $56,000 /Month
All Plant Produced Over 43,500,000 SCF delivered in
each month................... $0.125/100 SCF
PRAXAIR BUSINESS CONFIDENTIAL 12
<PAGE>
- LIQUID OXYGEN:
First 10,000,000 SCF per month...... $0.29/100 SCF
All over 10,000,000 SCF per month... $0.35/100 SCF
Pricing specified above in ARTICLE 7.2 for Plant Produced Oxygen
and Liquid Oxygen will remain firm for a period of two (2) years
from the First Delivery. Thereafter, the prices will be adjusted
in accordance with ARTICLE 8 AND 9 with the first price
adjustment to commence as of January 1, 1998.
7.3 Subject to the suspension of Buyer's obligation to pay the Monthly Fee
during the first six (6) months following First Delivery, even if Buyer has no
requirements or partial requirements for Oxygen during any month, Buyer will pay
the Base Monthly Fee for Plant Produced Oxygen, and for any Liquid Oxygen
delivered during the previous month, as adjusted under ARTICLES 8 AND 9
respectively, plus the amount of taxes as set forth in ARTICLE 10.
7.4 Terms of payment will be net cash twenty (20) days following the date
of invoice. In the event of a failure by Buyer to pay any invoice within said
time period, Seller shall among its legal remedies have the right, if such
invoice is not paid within ten (10) days after written notice to Buyer, to (a)
assess a late payment charge against the unpaid portion of such invoice amount,
at 1.5% per month of the unpaid balance per month until payment is received,
provided however, said late charge shall not be higher than that permitted by
law, and/or (b) refuse to supply Oxygen except for receipt of cash with order
and/or payment in full of outstanding charges and/or (c) suspend this Agreement.
In addition, if Buyer falls to make any payment required hereunder within the
time specified, and such failure continues for a period of fifteen (15) days
after receipt of written notice from Seller, that shall constitute a Buyer
Material Uncorrected Default in accord with ARTICLE 1.17(g). Seller will have
the right to revise the late payment charge as specified in this ARTICLE 7.4 by
giving Buyer thirty (30) days written notice.
7.5 The parties to this Agreement acknowledge the potential value of
Electronic Data Interchange ("EDI") for invoicing and paying of invoices and,
therefore, agree that if both parties desire to implement EDI, then Buyer and
Seller shall, following the request for EDI implementation, enter into good
faith negotiations to implement EDI to provide for Seller to invoice Buyer and
Buyer to pay Seller hereunder.
PRAXAIR BUSINESS CONFIDENTIAL 13
<PAGE>
ARTICLE 8 - ADJUSTMENT OF PLANT PRODUCED OXYGEN PRICE
8.1 Commencing January 1, 1998 and thereafter on each January and July
1st, Seller shall have the right, subject to a maximum yearly adjustment of two
percent (2%), to adjust the price(s) specified in ARTICLE 7.2 for Plant Produced
Oxygen: Base Monthly Fee, First 43,500,000 SCF/month; and Plant Produced Oxygen
Over 43,500,000 SCF/month for the term of this Agreement in accordance with the
change in the Producer Price Index - Industrial Commodities(1982 = 100), as
published by the United States Department of Labor, hereinafter referred to as
"PPI" for each of the above specified periods in accord with the following
formula:
New Monthly Price = Base Monthly Price x [0.65 + (0.35 x (Current PPI/Base
PPI))]
in which the "Base Monthly Price" is the price specified in ARTICLE 7.2 for
Plant Produced Oxygen: Base Monthly Fee, First 43,500,000 SCF delivered in
month; Base Monthly Price is also the price specified in ARTICLE 7.2 for All
Plant Produced Oxygen Over 43,500,000 SCF delivered in month and "Current PPI"
is the PPI for the month preceding the effective date of the new monthly fee,
during the contract term and "Base PPI" is the PPI for the month of December
1995. If said "PPI" index is revised and published on some basis other than 1982
= 100, the values will be adjusted to the 1982 = 100 base in accordance with
such conversion schedule or factor as may be supplied by the Department of
Labor. EXHIBIT G IS attached hereto and made a part hereof for the purposes of
illustrating the intent of the parties with respect to this ARTICLE 8.
ARTICLE 9 - ADJUSTMENT OF LIQUID OXYGEN PRICE
9.1 Commencing January 1, 1998 and thereafter on each January and July
1st, Seller shall have the right, subject to a maximum yearly adjustment of four
percent (4%), to adjust the price(s) for Liquid Oxygen specified in ARTICLE 7.2
for the term of this Agreement in accordance with the change in the Producer
Price Index - Industrial Commodities (1982 = 100), as published by the United
States Department of Labor, hereinafter referred to as "PPI" for each of the
above specified periods in accord with the following formula:
PRAXAIR BUSINESS CONFIDENTIAL 14
<PAGE>
New Liquid Oxygen Price = Base Liquid Oxygen Price x (Current PPI/Base PPI)
in which the "Base Liquid Oxygen Price" is the price specified in ARTICLE 7.2
for Liquid Oxygen and "Current PPI" is the PPI for the month preceding the
effective date of the New Liquid Oxygen Price during the contract term and "Base
PPI" is the PPI for the month of December 1995. If said "PPI" index is revised
and published on some basis other than 1982 = 100, the values will be adjusted
to the 1982 = 100 base in accordance with such conversion schedule or factor as
may be supplied by the Department of Labor. EXHIBIT G is attached hereto and
made a part hereof for the purposes of illustrating the intent of the parties
with respect to this ARTICLE 9.
ARTICLE 10 - TAXES
10.1 Seller shall bear and pay all federal, state, and local taxes
based upon or measured by its net income, and all general franchise taxes
imposed on corporations on account of their existence or their right to transact
business.
10.2 Buyer will pay the amount of any sales, use, or other excise tax
imposed upon the Oxygen Plant or upon the purchase of Oxygen Plant equipment,
construction and installation by reason of production, storage, sales,
transportation, or delivery of Oxygen hereunder. If initially paid by Seller,
such tax, shall be invoiced to Buyer as a separate item and paid by Buyer to
Seller. If any act or omission caused by Buyer results in any tax or penalties
being imposed, Buyer shall hold Seller harmless from and against such interest
and penalties. If any act or omission caused by Seller results in any tax or
penalties being imposed, Seller shall hold Buyer harmless from and against such
interest and penalties.
10.3 Buyer will pay any property taxes levied on the Oxygen Plant
Site(s) and Oxygen Plant equipment. Buyer will reimburse Seller for any property
taxes with respect to the Oxygen Plant.
10.4 The prices set forth in ARTICLE 7. 1 AND 7.2 do not include any
taxes, charges, or fees other than those per ARTICLE 10.1. If at any time while
this Agreement is in effect any tax, charge, or fee other than as set forth in
ARTICLE 10.1 is newly imposed on Seller by any governmental authority which
increases Seller's costs incurred in the production, sale or delivery of Oxygen
to Buyer hereunder, or if, due to a rate change or other action of the
governmental authority there is an increase in any such tax presently existing,
then Buyer will reimburse Seller
PRAXAIR BUSINESS CONFIDENTIAL 15
<PAGE>
therefore to the extent that Seller can reasonably demonstrate that its cost for
production, sale, or delivery hereunder are directly increased thereby.
10.5 Buyer hereby represents that it is exempt from all sales and use
taxes. Buyer will notifY Seller if any change in its tax exempt status occurs.
ARTICLE 11 - SHUTDOWN
11.1 Seller will have the right from time to time to shut down the
production facilities of the Oxygen Plant for such period of time as may be
necessary for Seller to make ordinary repairs and for maintenance consistent
with proper operation. During any such period, Seller shall deliver into the
Liquid Oxygen storage vessel of the Liquid Oxygen Supply System specified in
ARTICLE 1.11, Buyer's requirements of Oxygen for Buyer's Plant in accord with
ARTICLE 2.2 and such Oxygen delivered into the storage vessel shall be priced in
accord with ARTICLE 7 as Liquid Oxygen subject to the provisions of ARTICLE
11.2.
11.2 In the event that the production facilities of the Oxygen Plant
are shut down for reasons other than contingency events covered by ARTICLE 12,
more than a total of one and a half percent (1.5%) of the time during one (1)
calendar year period or prorated portion thereof following the date of First
Delivery of Oxygen hereunder, then Buyer shall pay for Oxygen delivered up to
88,000 SCFH at Plant Produced Oxygen pricing specified in ARTICLE 7.2 OR 7.3 as
appropriate, plus the Avoided Cost of Electric Power. Any Oxygen Plant
shutdowns which are coincident with Buyer not requiring oxygen for Buyer's Mill
shall not count as downtime for the purpose of this ARTICLE 11.2. The intent of
the parties with respect to this ARTICLE 11.2 is illustrated by EXHIBIT C
attached hereto and made a part hereof.
ARTICLE 12 - CONTINGENCIES
12.1 Neither party hereto will be liable to the other for default or
delay in the performance of any of its obligations hereunder (except any
obligation to make payment when due other than a situation where the means for
making or delivering the payment is experiencing a contingency at the time when
due) due to act of God, accident, fire, flood, storm, riot, war, sabotage,
explosion, strike, concerted acts of workers, national defense requirement,
governmental law, ordinance, rule or regulation whether valid or invalid,
extraordinary failure of
PRAXAIR BUSINESS CONFIDENTIAL 16
<PAGE>
equipment or apparatus, inability to obtain electricity or other type of energy,
raw material, labor, equipment or transportation, or any similar or different
contingency beyond its reasonable control which would make performance
commercially impracticable, whether or not the contingency is of the same class
as those enumerated above, it being expressly agreed that such enumeration shall
be non-exclusive, provided however, that neither business downturn nor economic
conditions will qualify as a contingency within the meaning of this ARTICLE 12.
12.2 If, for any period, a contingency covered by ARTICLE 12.1 reduces
or fully interrupts Seller's Oxygen supply capability at the Oxygen Plant,
Buyer's and Seller's commitments under ARTICLE 2 and the prices set forth in
ARTICLE 7.1 AND 7.2 will be inapplicable to the extent of the reduction or
interruption in Oxygen supply. Seller will use reasonable efforts to deliver in
accord with Buyer's demand any Oxygen which Seller has reasonably available for
Buyer from the Liquid Oxygen Supply System and other locations; and Seller will
give prompt notice to Buyer of the reduction or interruption. Buyer will accept
and pay for any Oxygen so delivered before said notice. Upon receiving said
notice, Buyer will advise Seller to discontinue said deliveries or request that
they be continued. Seller will continue said deliveries, if so requested, for as
long as Seller, in its sole discretion, deems that its own needs and contract
commitments to others will permit. Buyer will pay for any Oxygen delivered from
other locations pursuant to this ARTICLE 12.2 at the price for Liquid Oxygen
plus any additional costs related to special purchase, freight or special
handling.
12.3 During any period that delivery of oxygen is interrupted or reduced
due to a contingency affecting Seller's performance hereunder, the duration of
this Agreement will be extended for a period equal to one (1) times the duration
of the contingency and Seller shall provide to Buyer prompt written notice of
such extension. During any period that delivery of oxygen is interrupted or
reduced due to a contingency affecting Buyer's performance hereunder, the
duration of this Agreement will be extended for a period equal to one (1) times
the duration of the contingency.
ARTICLE 13 - LIABILITY AND INSURANCE
13.1 Buyer acknowledges that there are hazards associated with the
storage and handling of Oxygen. Buyer agrees that its personnel concerned with
Oxygen are aware of the
PRAXAIR BUSINESS CONFIDENTIAL 17
<PAGE>
hazards and assumes all responsibility for providing appropriate warnings to its
employees, independent contractors and others of all hazards to persons and
property in any way connected with Oxygen. Seller will provide Buyer documents,
including Seller's Material Safety Data Sheet(s) containing Seller's safety and
health information pertaining to Oxygen supplied hereunder and Buyer will
incorporate such information into Buyer's safety program. Buyer shall be
responsible for complying with all relevant reporting obligations under the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections
11001-11049 (EPCRA, also known as Title III of the Superfund Amendments and
Reauthorization of 1986 (SARA Title III) resulting from the presence at Buyer's
Plant of Oxygen supplied under this Agreement. Buyer also assumes all
responsibility for the suitability and the results of using Oxygen alone or in
combination with other articles or substances and in any manufacturing, medical,
or other process or procedure. Except in the case of a willful breach of this
Agreement, neither party shall be liable to the other for any incidental,
consequential, indirect or special damages hereunder.
13.2 EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT:
(a) THE LIABILITY OF BUYER AND SELLER TO THE OTHER PARTY DUE TO
ORDINARY NEGLIGENCE WHICH CAUSES THE DESTRUCTION OF OR DAMAGE TO THE PROPERTY OF
THE OTHER PARTY SHALL BE (1) APPORTIONED BETWEEN BUYER AND SELLER BASED ON THEIR
RELATIVE FAULT, IF ANY, IN SUCH RATIO AS MAY BE MUTUALLY AGREED OR DETERMINED BY
BINDING ARBITRATION OR OTHER AGREED UPON MEANS OF ALTERNATE DISPUTE RESOLUTION
PURSUANT TO ARTICLE 21 HEREOF, AND (2) LIMITED TO THE ACTUAL COST OF REPAIRING,
REPLACING OR RESTORING SUCH PROPERTY I.E. IN SUCH A CASE A PARTY SHALL NOT BE
ENTITLED TO RECOVER FROM THE OTHER PARTY FOR BUSINESS INTERRUPTION, LOST PROFITS
OR INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES.
(b) SOLELY IN THE CASE OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR
WILLFUL BREACH OF THIS AGREEMENT BY A PARTY, THE OTHER PARTY SHALL BE ENTITLED
TO RECOVER, IN ADDITION TO THOSE DAMAGES DESCRIBED IN ARTICLE 13.2 (a) FOR
BUSINESS INTERRUPTION, LOST PROFITS, INCIDENTAL, CONSEQUENTIAL, AND INDIRECT,
DAMAGES. ANY SUCH DAMAGES SHALL BE APPORTIONED BETWEEN BUYER AND SELLER BASED ON
THEIR RELATIVE FAULT FOR ANY SUCH GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR
WILLFUL BREACH IF ANY, IN SUCH RATIO AS MAY BE MUTUALLY AGREED OR DETERMINED BY
BINDING ARBITRATION OR OTHER AGREED UPON MEANS OF ALTERNATE DISPUTE RESOLUTION
PURSUANT TO ARTICLE 21 HEREOF. IN NO CASE SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY EXEMPLARY OR PUNITIVE DAMAGES.
PRAXAIR BUSINESS CONFIDENTIAL 18
<PAGE>
(c) EACH OF SELLER AND BUYER SHALL CAUSE ITS RESPECTIVE PROPERTY
DAMAGE CARRIERS TO WAIVE ITS RIGHTS OF SUBROGATION WITH RESPECT TO THE OTHER
PARTY HERETO ONLY.
(d) ANY DISPUTE UNDER THIS ARTICLE 13.2 SHALL BE RESOLVED THROUGH
BINDING ARBITRATION OR OTHER AGREED UPON MEANS OF ALTERNATE DISPUTE RESOLUTION
PURSUANT TO ARTICLE 21 HEREOF.
13.3 Each party hereby agrees to indemnity the other and hold the
other party harmless from any actions, lawsuits, demands, claims, losses,
expenses, costs, including but not limited to legal fees, and damages, arising
from the injury, illness or death of their respective employees while engaged in
any activities connected to this Agreement to the extent hereinafter provided in
this ARTICLE 13.3.
In the event a claim, lawsuit or other proceeding (collectively the
"Proceeding") for damages arising from personal injury or death resulting from
negligence is brought by, on behalf of, or derivative of an employee (including
an employee's family members) for Seller or Buyer against the party (either
Seller of Buyer) by which he or she is not employed (the "Nonemploying Party")
based upon the same accident or related factual circumstances with respect to
which the other such party (the "Employing Party") could raise the employers'
workers' compensation defense as a bar to such employee's negligence claim or
lawsuit against the Employing Party (the "Workers' Compensation Bar"), (i) the
Employing Party shall keep the right to raise the Workers' Compensation Bar as a
defense to such employee's negligence claim or lawsuit against the Employing
Party and (ii) the Nonemploying Party and Employing Party shall have the right
to have apportioned between them, based solely on their relative fault, if any,
In such ratio as may be mutually agreed or as determined by binding arbitration
or other mutually acceptable means of alternate dispute resolution pursuant to
ARTICLE 21, the aggregate cost of (A) all judgments, settlements, legal fees and
other costs and expenses, incurred in connection with the Proceeding and (B) all
payments made to such employee (including such employee's family members) in any
workers' compensation proceeding relating to the same accident or related
factual circumstances giving rise to the Proceeding (such aggregate cost of the
items described in clauses (A) and (B)being herein collectively called
"Damages").
In the event there is an opportunity to settle the Proceeding and one party
(the "Rejecting Party") rejects a settlement offer favored by the other party
(the "Favoring Party")
PRAXAIR BUSINESS CONFIDENTIAL 19
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(i)(a) the Favoring Party may settle the Proceeding at its own expense, (b) the
Rejecting Party shall thereafter bear the burden of proving, in arbitration or
other mutually acceptable means of alternate dispute resolution, the extent to
which the settlement was unreasonable for the purpose of determining the amount
of Damages to be apportioned and (c) such damages shall thereafter be
apportioned through arbitration or other mutually acceptable means of alternate
dispute resolution or (ii) the Favoring Party may instead allow the Proceeding
to continue until it is ultimately disposed of through a judgment or settlement
(with the Rejecting Party having the option to assume the control and direction
of the defense of such Proceeding if it is not already controlling and directing
such defense) and, if the amount of Damages resulting from the Proceeding
(exclusive of any Damages in the related workers' compensation proceeding) is
greater than the amount of the rejected settlement, that greater amount of
ultimately disposing of the Proceeding shall be allocated to the Rejecting
Party. If following the rejection by the Rejecting Party of any settlement offer
there arises one or more opportunities to settle the Proceeding (1) the parties
shall thereafter in each instance again follow the procedures set forth above in
this paragraph, and the rejection of any prior settlement opportunities shall no
longer be taken into consideration hereunder and (2) in the event a settlement
is ultimately accepted by both Seller and Buyer, the Damages shall, in the
absence of mutual agreement through good faith negotiation of the parties be
apportioned through arbitration or other mutually acceptable means of alternate
dispute resolution.
Arbitration or other mutually acceptable means of alternate dispute
resolution pursuant to ARTICLE 21 is the exclusive remedy for determining the
reasonableness of the settlement amount to be apportioned and the apportionment
of Damages, and neither Seller nor Buyer may enforce its rights under this
ARTICLE 13.3 in any other forum.
Each of Buyer and Seller shall cause its respective workers' compensation
carrier to waive its workers' compensation lien and rights of subrogation with
respect to the other party only.
13.4 Seller shall carry and maintain Workers Compensation Insurance,
General Liability insurance and Automobile Liability insurance covering its
employees that are working on the Buyer's property and performing the services
required by this Agreement. The amount of such coverage shall be as follows:
PRAXAIR BUSINESS CONFIDENTIAL 20
<PAGE>
<TABLE>
<CAPTION>
Type of Insurance Limits per Occurrence Aggregate Limits
- ----------------- --------------------- ----------------
<S> <C> <C>
Workers Compensation Statutory Statutory
General liability $5,000,000 $5,000,000
Automobile liability $2,000,000 $2,000,000
</TABLE>
Seller's liability insurance policies shall add the Buyer as an additional
insured only as it pertains to Seller's negligence.
13.5 Buyer and Seller shall each appoint an individual from their
respective financial organizations for the purpose of acting as a "Financial
Representative" under this Agreement. Either Buyer or Seller shall have the
right to change its appointed Financial Representative by providing notice in
accord with this Agreement. The Financial Representatives shall meet in person
or by telephone at least once each calendar quarter, or with such frequency as
the parties may otherwise agree. At each such meeting Buyer shall furnish to
Seller, Buyer's financial statements (which may be its consolidated financial
statements) in the form typically prepared for financial institutions.
ARTICLE 14 - CONFIDENTIALITY
14.1 This Agreement and all drawings, diagrams, specifications, prices,
operating data and costs and other materials provided by Seller and identified
as confidential and the information therein (hereinafter called "Confidential
Information") shall be held confidential by the parties. Confidential
Information shall not be reproduced or distributed except, where required by
law, to obtain necessary permits, or make filings (and in such case the party
obtaining such permit or making such filing shall obtain confidential treatment
for such filings or, in the case of a refusal to accord such treatment or a
public filing, such party shall obtain the consent of the other party to the use
of the information to be disclosed) and to the respective employees of Buyer and
Seller who have responsibilities for performance hereunder or who otherwise have
a need-to-know for Internal auditing, tax reviews, and other such reasons. In
the case of any of the aforementioned disclosures, the parties agree to inform
their respective employees and any governmental agencies hat such information is
Confidential Information and is to be treated accordingly. All Confidential
Information shall be received in confidence and each party shall exercise the
same decree of care to hold such information in confidence as it uses with
respect to its own trade
PRAXAIR BUSINESS CONFIDENTIAL 21
<PAGE>
secrets and/or confidential and proprietary material. Unless otherwise agreed
and set forth in a signed writing, the parties agree to keep all such material
confidential for a period which shall expire two (2) years after the termination
of this Agreement. Neither party shall be obligated to maintain information as
confidential that: (a) becomes generally available to the public other than as a
result of disclosure by that party or its employees, (b) was known to that
party, or its employees prior to the time such information was furnished to that
party by the other party as established by credible evidence, or (c) becomes
available to that party on a non-confidential basis from a third party who is
not under any obligation to maintain the confidentiality of such information.
The parties shall each be obligated to take appropriate measures to avoid any
improper use, including laws relating to insider trading, of any such
Confidential Information including, but not limited to, that information
provided pursuant to ARTICLE 13.5 above.
ARTICLE 15 - OXYGEN PLANT SITE
15.1 Buyer will furnish a mutually acceptable Oxygen Plant Site(s) to
Seller approximately one hundred (100) feet by one hundred and twenty (120) feet
for the Oxygen Plant and the Liquid Oxygen Supply System, cleared, graded, and
free from any toxic or hazardous materials in violation of, or whose presence
requires investigation or remediation in accordance with, local, state or
federal law, rules or guidance, free from underground or overhead obstructions,
and having a load-bearing capacity of twenty-five hundred (2,500) pounds per
square foot three (3) feet below grade, with provisions for drainage of surface
and rain water, without any charge to Seller. Buyer, at its expense, will
prepare and furnish to Seller a drawing no later than September 1, 1995 showing
the location of such site. Seller shall within thirty (30) days of first
delivery, furnish a drawing specifying the location of the Oxygen Plant on the
Oxygen Plant Site and designating the Oxygen Delivery Point. Said drawing will
be deemed to be EXHIBIT A to this Agreement.
15.2 Buyer, at its expense, will perform any soil tests reasonably
required by Seller by September 1, 1995.
15.3 If required, Buyer and Seller shall jointly work together and
equally share in the cost of obtaining all necessary federal, state or local
permits, licenses and authorizations for construction and operation of the
Oxygen Plant no later than November 1, 1995. If subsequent to
PRAXAIR BUSINESS CONFIDENTIAL 22
<PAGE>
the execution of this Agreement, any new, local, state or federal law, rule, or
regulation requires additional permits, licenses, authorizations or rights,
Buyer and Seller shall jointly work together and equally share in the cost of
obtaining any additional permits, licenses, authorizations or rights. Seller
shall be responsible for obtaining such permits. If modifications to the Oxygen
Plant, Oxygen Plant Site(s), or Oxygen Plant operations are required due to the
above, the cost for modifications will be borne equally by both Buyer and
Seller..
15.4 Buyer, at its expense, will construct, install or cause to be
constructed, installed and maintain foundations and foundation pilings (if
necessary), security fencing and isolation barriers, hub drains, grounding grid,
lighting and gravel as reasonably required by Seller's drawings and design
specifications. Seller will provide drawings and specifications no later than
September 20, 1995. Buyer will use reasonable effort to complete its preparation
of the Oxygen Plant Site(s) and make it then available to Seller no later than
November 10, 1995.
15.5 Buyer, at its expense, will construct, install or cause to be
constructed or installed, operate and maintain the Oxygen Distributing System
and the High Purity Oxygen Distributing System and extend them to the point(s)
on the Oxygen Plant Site(s) which Seller designates. Buyer is responsible for
installing and maintaining appropriate pressure relief devices on the Oxygen
Distributing System and the High Purity Oxygen Distributing System. The Oxygen
Distributing System and High Purity Oxygen Distributing System will remain the
property of Buyer at all times. Seller will make the connections between the
Oxygen Distributing System, the High Purity Oxygen Distributing System and the
Oxygen Plant. Buyer will complete installation of the Oxygen Distribution System
for the Oxygen Plant no later than December 1, 1995 and the High Purity Oxygen
Distributing System for the Oxygen Plant's Liquid Oxygen Supply System no later
than October 15, 1995.
15.6 Buyer, at its expense, will provide a clear roadway reasonably
acceptable to Seller and suitable for access to the Oxygen Plant Site(s) by a
tractor trailer sixty (60) feet long and weighing eighty thousand (80,000)
pounds, and a right to use Buyer's railroad siding, if necessary and available.
15.7 Seller, at its expense, will construct, operate, own and maintain
the Oxygen Plant on the Oxygen Plant Site(s) and install Seller's metering
equipment. The Oxygen Plant and metering equipment will remain the property of
Seller at all times, and Seller will remove it within
PRAXAIR BUSINESS CONFIDENTIAL 23
<PAGE>
six (6) months after the termination or expiration of this Agreement. If
required by law, the Seller will remediate any environmental contamination it
may have caused at the plant site through its construction and operation of the
Oxygen Plant.
15.8 Buyer will install an Oxygen Plant alarm enunciation panel for
the Oxygen Plant no later than January 1, 1996. Such panel shall receive
electrical power from a source separate from the Oxygen Plant. The alarm panel
shall be monitored by Buyer. Buyer will immediately notify Seller by telephone
at a number designated by Seller should any alarm signal be received.
15.9 Buyer grants Seller an unrestricted right of access twenty-four
(24) hours a day to the Oxygen Plant Site(s) for the term of this Agreement and,
thereafter, for the removal of the Oxygen Plant.
15.10 Buyer will prevent persons other than Seller's representatives or
Buyer's employees authorized by Seller from entering the Oxygen Plant Site(s) or
altering, repairing or adjusting, or otherwise tampering with the Oxygen Plant.
Buyer will prohibit storage of flammable or corrosive materials within two
hundred (200) feet of the Oxygen Plant Site(s), unless approved in writing by
Seller. Buyer will prohibit smoking or use of open flames by its employees
within the area of the Oxygen Plant Site(s). Buyer will provide a fire hydrant
within one hundred (100) feet of the Oxygen Plant Site(s) or other fire
suppression system reasonably acceptable to Seller and available for use in the
protection of the Oxygen Plant.
15.11 Buyer will hold Seller harmless from and against liens and claims
against the Oxygen Plant due to its location on Buyer's premises. Seller will
hold Buyer harmless from and against liens and claims against the Oxygen Plant
Site(s) and Buyer's Mill due to the location of Seller's Oxygen Plant thereon.
15.12 Buyer and Seller agree to negotiate, in good faith, any fees
associated with modifications to the Oxygen Plant Site(s) requested by Buyer. Ml
Oxygen delivered during plant outages for modifications requested by Buyer
(other than to effect compliance with this Agreement) will be Liquid Oxygen and
the outage will not be considered as shutdown as specified in ARTICLE 11.2.
PRAXAIR BUSINESS CONFIDENTIAL 24
<PAGE>
ARTICLE 16 - ENVIRONMENTAL CONDITIONS
16.1 The parties agree that the maximum allowable impurity levels in
the inlet air available to the Oxygen Plant for the efficient operation of the
Oxygen Plant are set forth in EXHIBIT H. If impurity levels in the inlet air
available to the Oxygen Plant exceed the levels set forth in EXHIBIT H and if
such impurity levels will affect the safe or reliable operation of the Oxygen
Plant or impose or result in additional maintenance, repair, operational or
replacement requirements for the Oxygen Plant, then Buyer, upon receipt of
written notice from Seller of the existence of such factors shall:
(a) correct such impurity levels so as to conform with levels set
forth in EXHIBIT H; or
(b) reimburse Seller for the costs of additions or modifications to
the Oxygen Plant or its components reasonably necessary to
alleviate such conditions for the safe or reliable operation; or
(c) reimburse Seller for increased Oxygen Plant operational,
maintenance, repair or replacement costs attributable to such
non-conforming impurity levels.
16.2 Buyer warrants that there are no toxic or hazardous materials or
substances on, in or under the Oxygen Plant Site(s) which would prevent or
increase the cost of the construction or operation of the Oxygen Plant or which
would cause injury or death to Seller's employees or any other persons on or at
the Oxygen Plant Site(s) or which would cause damage or injury to any adjoining
property. Buyer shall indemnify and hold Seller harmless from and against any
and all claims, liabilities, costs (including attorney's fees), expenses,
damages, penalties and fines resulting from any breach of the foregoing warranty
or from any toxic or hazardous materials now or hereafter in, on or under the
Oxygen Plant Site(s) which did not occur or result directly from any action of
Seller.
16.3 Seller, at its expense, will construct the Oxygen Plant to
conform with Occupational Safety and Health Administration (OSHA) requirements
related to noise levels. The noise emissions for the Oxygen Plant will not
exceed the time weighted average of 85dba at the boundary of the Oxygen Plant
Site(s). If for any reason subsequent to the date of this Agreement, any
reduction in such noise emission level results in additional maintenance,
repair, operational or
PRAXAIR BUSINESS CONFIDENTIAL 25
<PAGE>
replacement requirements for the Oxygen Plant, then Buyer and Seller shall
(a) equally share in the costs of additions or modifications to the Oxygen Plant
or its components reasonably necessary to meet any such reduced noise levels or
(b) equally share in the increased Oxygen Plant operational, maintenance, repair
or replacement costs attributable to such factors. At Buyer's request, Seller
and Buyer will meet to discuss and evaluate Buyer's and Seller's options
hereunder or determine any other mutually acceptable option.
ARTICLE 17 - UTILITIES
17.1 Buyer, at its expense, will provide facilities to deliver
temporary construction power to the point(s) within the Oxygen Plant Site(s)
which Seller designates. Buyer, at no cost to Seller, will provide 60 AMP, 480
volt, 3 phase, 60 Hertz service to Seller no later than thirty (30) days after
the date of execution of this Agreement.
17.2 In accord with the specifications set forth in EXHIBIT B to this
Agreement, Buyer, at its expense, will provide permanent facilities to deliver
electric power to the point(s) on the Oxygen Plant Site(s) which Seller
designates and terminate all main electrical supply feeder(s) at Seller's
electrical gear and Buyer will also install circuit breaker(s) and other
necessary equipment at Buyer's source of power as requested by Seller to protect
against short-circuits and overloads in Buyer's feeder and the motor control
center of the Oxygen Plant. Buyer will install the necessary underground
electrical conduits from Seller's electrical switchgear to the use points in the
Oxygen Plant which Seller designates. Electric power shall be available to
Seller no later than sixty (60) days prior to the date of First Delivery.
17.3 Buyer, at its expense, will provide storm and sewer connections
at the points on the Oxygen Plant Site(s) designated by Seller, no later than
December 1, 1995 and Buyer, at no cost to Seller, shall remove and treat all
discharges from the Oxygen Plant in accordance with all applicable federal,
state and local laws, rules, and regulations for the term of this Agreement.
Said discharges will include process water, air compression condensate, and site
runoff.
17.4 Buyer, at its expense, will install or cause to be installed five
(5) dedicated telephone lines with free access (not connected through a
switchboard) at the points within the Oxygen Plant Site(s) designated by Seller
and should be in service no later than December 1, 1995. Seller will pay for all
use charges associated with the telephone service after installation.
PRAXAIR BUSINESS CONFIDENTIAL 26
<PAGE>
17.5 Buyer, at its expense, will provide a three-quarter inch hose bib
(3/4 inch) and facilities for potable water supply to the point(s) on the Oxygen
Plant Site(s) which Seller designates, no later than November 1, 1995. Buyer
will pay for all charges associated with the supply of water.
17.6 Buyer will provide access to Buyer's existing sanitary facilities
twenty-four (24) hours per day for the use by Seller's employees or
representatives operating, servicing, maintaining or otherwise involved with the
Oxygen Plant.
17.7 Buyer, at its expense, will provide facilities for the supply of
process seal water in accordance with the process water specifications set forth
in EXHIBIT D of this Agreement, at a minimum rate equal to twenty gallons per
minute (20 gpm), and at a minimum pressure of forty pounds per square inch gauge
(40 psig). The process water shall be supplied to the point(s) on the Oxygen
Plant Site(s) which Seller designates no later than thirty (30) days prior to
the date of First Delivery. Buyer will pay for all charges associated with the
supply of water.
ARTICLE 18 - ELECTRIC POWER GUARANTEE
18.1 At the ambient conditions set forth in ARTICLE 2 and at a Plant
Produced Oxygen level of 88,000 SCFH, the production facilities of the Oxygen
Plant will utilize no more than 1.50 kwh per 100 cubic feet at a pressure of 150
psig. Electric Power shall mean all power used for supplying Plant Produced
Oxygen into the Oxygen Distributing System at 150 psig. (The electric power
required for compression of Plant Produced Oxygen into the High Pressure
Receiver is not reflected in the 1.50 kwh. Power for compression into the High
Pressure Receiver will result in an electric power consumption greater than 1.50
kwh per 100 cubic feet). A power usage test shall be conducted by Seller, at no
cost to Buyer, within one hundred and twenty (120) days of First Delivery. The
cost of testing shall be borne by Seller. The dates for the test will be
mutually selected by Buyer and Seller in order to minimize disruption of their
respective operations.
18.2 The results of the test specified in ARTICLE 18.1 shall be
adjusted to the ambient conditions set forth in ARTICLE 3 and an actual power
use rate at the selected level of operation shall be derived. Seller shall be
deemed to have demonstrated compliance hereunder if during any test performed
the adjusted power usage is within five (5%) percent of 1.50 kwh per 100 cubic
feet. Should the adjusted power usage exceed the values set forth above by more
than five
PRAXAIR BUSINESS CONFIDENTIAL 27
<PAGE>
percent (5%), Seller shall have the right to modify or replace any equipment as
required and to again perform a test at Seller' expense. If Seller cannot
correct the operating power, and the power exceeds that set forth in ARTICLE
18.1 by greater than five (5%) percent, Seller at its option shall either make
further repairs or adjustments to the Oxygen Plant as necessary, or Seller shall
pay Buyer, by a mutually agreed upon method of compensation, the increased costs
for electricity resulting from Seller's failure to achieve performance defined
as acceptable by ARTICLE 18.1 AND 18.2. Any such compensation will be for a
period of time thirty (30) days prior to the date of the test or the date such
test was last conducted, whichever period is shorter, and continue until Seller
achieves performance as acceptable by ARTICLE 18.1 AND ARTICLE 18.2.
ARTICLE 19 - FAIR LABOR STANDARDS ACT
19.1 Seller represents that Oxygen delivered to Buyer hereunder will have
been produced in compliance with the Fair Labor Standards act of 1938, as
amended.
ARTICLE 20 - APPLICABLE LAW
20.1 This Agreement will be governed by the substantive laws of the State
of Texas. Seller will comply with all applicable federal, state and local laws
and regulations.
ARTICLE 21 - DISPUTE RESOLUTION
21.1 Disputes under this Agreement shall be subject to the following
procedures:
(a) In the event that a party to this Agreement has reasonable grounds to
believe that the other party hereto has failed to fulfill any obligation
hereunder, or, that its expectation of receiving due performance under this
Agreement may be impaired, such party will promptly notify the other party in
writing of the substance of its belief The party receiving such notice must
respond in writing within thirty (30) days of receipt of such notice and either
provide evidence of cure of the condition specified, or provide an explanation
of why it believes that its performance is in accordance with the terms and
conditions of this Agreement, and also specify three (3) dates, all of which
must be within thirty (30) days from the date of its response, for a meeting to
resolve the dispute. The claiming party will then select one (1) of the three
(3) dates, and a dispute resolution
PRAXAIR BUSINESS CONFIDENTIAL 28
<PAGE>
meeting will be held. Buyer and Seller shall each use their Best Efforts to
resolve the dispute in a manner consistent with the intent of this Agreement.
Each party shall have the right to demand that a representative of the other
party having authority to execute amendments to this Agreement be in attendance
at all such dispute resolution meetings.
(b) If the parties cannot (in good faith discussions with each party using
their respective Best Efforts) resolve their dispute during said meeting(s), the
matter shall be submitted for binding decision in accord with a mutually
acceptable form of alternate dispute resolution, or, failing to agree on such
mutually acceptable form of alternate dispute resolution in accord with the
rules of the American Arbitration Association ("Alternate Dispute Procedure").
If the parties cannot mutually agree upon an arbitration panel of three (3)
members, the panel shall be selected by the American Arbitration Association.
The place of the hearing and disposition of claims shall be in Chicago,
Illinois. The parties shall agree upon procedures for presentation of evidence
and witnesses and use of experts, or, in the absence of such agreement, the
procedures for presentation of evidence and witnesses and use of experts shall
be determined by the arbitration panel. The panel shall be instructed to render
a written decision of the matter specifying rights, remedies and damages within
an agreed upon time period, and if no time period is agreed upon, it shall be a
reasonable time as determined by the panel. The parties shall also agree upon
procedures for challenging the decision of the panel, or, if they fail to agree
or no agreement is reached, any requests for rehearing or modification of the
written opinion shall be at the discretion of the panel. There shall be only one
prevailing party with respect to any matter submitted to the panel, whose
decision must be based upon a preponderance of the evidence and the applicable
law and on the basis of a majority vote of the arbitrators. Until the written
decision is issued, each of the parties shall bear one-half of the costs of the
Alternate Dispute Procedure. Upon the issuance of the written decision by the
panel, the losing party shall, in addition to any damages or other remedies
specified, reimburse the prevailing party for all reasonable costs and expenses
paid by the prevailing party in connection with the Alternate Dispute Procedure.
The award in the Alternate Dispute Resolution shall be final and binding on the
parties, and the judgment on such award may be entered in any court having
jurisdiction.
PRAXAIR BUSINESS CONFIDENTIAL 29
<PAGE>
ARTICLE 22 - NOTICES
22.1 All notices, requests, demands, invoices, and other
communications under this Agreement, except those communications pursuant to
ARTICLE'S 12.2 AND 2.5 which may be given electronically, telephonically or by
facsimile transmission, shall be made in writing and shall be deemed to have
been duly given on the date of service if served personally on the party to whom
notice is to be given, or on the fourth day after mailing if mailed to the party
to whom notice is to be given, by first class mail postage prepaid, and properly
addressed as follows:
To Seller at: PRAXAIR, INC.
P.O.Box 44
175 East Park Drive
Tonawanda, New York 14151 - 0044
Attention: Vice President On - Site Gases
Facsimile Telephone # 716-879-7047
To Buyer at: Lone Star Steel Company
P.O. Box 1000
Lone Star, Texas 75668 - 1000
Attention: Vice President Primary Operations
Facsimile Telephone # 903-656-6571
Invoices at: Lone Star Steel Company
P.O. Box 1000
Lone Star, Texas 75668 - 1000
Either party may change its address(s) for purposes of this Article by giving
the other party notice of the new address in the manner set forth above.
ARTICLE 23 - ASSIGNMENT
23.1 This Agreement shall inure to the benefit of and bind the respective
successors and assigns of the parties hereto and except as provided below, any
assignment of this Agreement without the prior written consent of the other
party, which shall not be unreasonably withheld, shall be void. Seller may
assign its rights under this Agreement, including the rights to receive payments
hereunder to a subsidiary, affiliate, partnership, venture or financial
institution (but in such case Seller shall remain liable to Buyer for Seller's
obligations hereunder). Such assignment
PRAXAIR BUSINESS CONFIDENTIAL 30
<PAGE>
shall be promptly acknowledged in writing by Buyer after notice of assignment is
received from Seller. In addition, Seller may, without Buyer's consent, assign
all or part of this Agreement to an affiliate of Seller or any party obtaining
substantially all of the business assets of Seller by way of a merger,
consolidation or acquisition. Buyer may, without Seller's consent, assign all or
part of this Agreement to an affiliate of Buyer or any party obtaining
substantially all of the business assets of Buyer by way of a merger,
consolidation or acquisition (but in such case Buyer shall remain liable to
Seller for Buyer's obligations hereunder).
ARTICLE 24 - PROMOTIONAL USE
24.1 Upon reasonable advance notice by Seller, Buyer hereby grants to
Seller the right to use the Oxygen Plant for promotional purposes including site
visits, etc. Specific promotional uses shall be subject to Buyer's approval,
provided, however, that such approval shall not be unreasonably withheld, and
subject to the parties agreeing to an appropriate access agreement.
ARTICLE 25 - HEADINGS
25.1 Any headings and the Table of Contents contained in this
Agreement are used only as a matter of convenience and reference and are in no
way intended to define, limit, expand or describe the scope of this Agreement.
ARTICLE 26 - WAIVER
26.1 A waiver of any of the terms and conditions hereof shall not be
deemed a continuing waiver, but shall apply solely to the instance to which the
waiver is directed.
ARTICLE 27 - PRIOR AGREEMENTS
27.1 This Agreement cancels and supersedes any prior agreement or
agreements between Buyer and Seller for delivery of Oxygen to Buyer's Plant, but
this Agreement shall not be construed as a renunciation or discharge of any
claim in damages for an antecedent breach.
PRAXAIR BUSINESS CONFIDENTIAL 31
<PAGE>
ARTICLE 28 - ENTIRE AGREEMENT
28.1 The entire Agreement is contained herein. There are no other
promises, representations or warranties affecting this Agreement, and any other
or different terms and conditions in any purchase orders issued or accepted
hereunder shall be deemed null and void. Neither of the parties shall be bound
by any terms, conditions, decisions, definitions, warranties or representations
with respect to the subject matter hereof other than as expressly provided
herein, or as duly set forth on or subsequent to the date hereof in a writing
duly signed by the parties to be bound thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
LONE STAR STEEL COMPANY PLAXAIR, INC.
By: /s/ Gary E. Braun By: /s/ J.E. Gonzalez
-------------------------------- -----------------------------------
Gary E. Braun J.E. Gonzalez
-------------------------------- -----------------------------------
Title: Vice President, Manufacturing Title: V.P. American On-Site Group
------------------------------- -----------------------------------
Date: Date: 2/7/96
------------------------------- -----------------------------------
PRAXAIR BUSINESS CONFIDENTIAL 32
<PAGE>
EXHIBIT A
SITE LOCATION AND OXYGEN DELIVERY POINT DRAWING
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
PRAXAIR INC.
Final "As built" drawing to be supplied thirty (30) days of First Delivery and
inserted in Agreement as EXHIBIT A.
PRAXAIR BUSINESS CONFIDENTIAL
33
<PAGE>
EXHIBIT B
SPECIFICATIONS FOR ELECTRICAL POWER
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
PRAXAIR INC.
ELECTRICAL POWER
The electrical power supply shall have the capability to permit starting the
largest motor across the line without causing a voltage drop in excess of 15
percent (15%) at the Oxygen Plant switchgear. The largest motors will be:
Vacuum Pump Motor 4160 volts, 1250 horsepower
The voltage variation shall not be more than PLUS OR MINUS 10%. The supply
shall be 60 hertz, 3 phase, wye connected. Above 600 volts, the wire shall be
resistance grounded. Below 600 volts, the wire shall be solid grounded. The
supply voltage unbalance between phases shall not be greater than PLUS OR MINUS
1% for both steady-state and instantaneous conditions, except for fault
conditions. The supply voltage drop shall not exceed a maximum of 25% and the
duration will not exceed 0.17 seconds. The supply voltage sine wave harmonic
distortion shall not exceed 5% total and 3% for any individual harmonic per the
prevailing IEEE Standard: "Guidelines with Regard to Limiting Harmonic Voltage
Distortion Factor." The electric power supply will be protected from electrical
short circuits and overloads by the electric power supplier. All feeders shall
be terminated at the oxygen plant electrical gear.
PRAXAIR BUSINESS CONFIDENTIAL
34
<PAGE>
EXHIBIT C
LONE STAR STEEL BILLING EXAMPLES
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
DATE of FIRST DELIVERY: PRAXAIR, INC.
1 February 1996
<TABLE>
<CAPTION>
Feb-July 96 August-Jan 97 Feb 97 Mar 97 Apr 97 May 97
------ ------ ------ ------
note 1 note 2
<S> <C> <C> <C> <C> <C> <C>
Hrs per Mon 730 730 672 744 720 744
Tot Yr hrs 8760 8760 8760 8760 8760 8760
Total dn time hrs/mon 0 0 14 6 35 0
Praxair caused Dntime 0 0 14 6 35 0
Lone Star Steel Caused downtime 0 0 0 1.6 0 11.5
contingency Downtime 0 0 0 0 0 0
Total % Dn Time/mon 0.00% 0.00% 2.08% 0.81% 4.86% 0.00%
Praxair Cum Dn time Hrs/yearly basis 0 0 14 20 55 55
Praxair Cum % DnTime/yearly basis 0.00% 0.00% 0.16% 0.22% 0.61% 0.61%
Pit produced GOZ first: 43.5mmcf/mon $0 $0 $56,000 $56,000 $56,000 $56,000
Pit produced G02 > 43.5mmcf/mon $0.125 $0.125 $0.125 $0.125 $0.125 $0.125
Liquid Oxygen cost
First 10,000,000 cf/mon $0.290 $0.290 $0.290 $0.290 $0.290 $0.290
All Over 10,000,000 cf/mon $0.350 $0.350 $0.350 $0.350 $0.350 $0.350
Avoided cost of Electric Power $0.041 $0.041 $0.041 $0.041 $0.041 $0.041
Volume consumed by LSS
- ----------------------
LSS Monthly Plant Produced Oxy
consumed 26,280,000 34,164,000 37,632,000 47,616,000 55,440,000 33,480,000
LSS vol consumed during Praxair
caused Down 0 0 784,000 384,000 2,695,000 0
ACEP volume 0 0 0 0 0 0
LSS vol consumed during LSS
caused Downtime 0 0 0 102,400 0 517,500
High Purity (99.5%) Liquid Oxygen 4,106,250 4,836,250 5,376,000 6,696,000 6,696,000 6,547,200
Contingency Volume (ie:Power failure) 0 0 0 0 0 0
TOT GOZ to be invoiced =
Contingency vol +LSS DnTmVol+ 4,106,250 4,836,250 6,160,000 7,182,400 9,391,000 7,064,700
Px DnTmVol>1.5%+H
INVOICE TO LONE STAR STEEL
Oxy Pit Monthly Facility Fee
(note 1 $0 $28,000 $56,000 $56,000 $56,000 $56,000
Pit Prod Go2 All volumes $32,850 n/a n/a n/a n/a n/a
Pit Prod GO2 > 21.750mmcf/mon n/a $15,518 n/a n/a n/a n/a
Pit Prod GO2 > 43.5mmcf/mon $0 n/a $0 $5,145 $14,925 $0
LO2: First 10,000,000 scf/mon $11,908 $14,025 $17,864 $20,829 $27,234 $20,488
LO2: All Over 10,000,000 scf/mon $0 $0 $0 $0 $0 $0
ACEP $0 $0 $0 $0 $0 $0
-- -- -- -- -- --
Total invoice to Lone Star Steel $44,758 $57,543 $73,864 $81,974 $98,159 $76,488
<CAPTION>
June 97 July 97 Aug 97 Sept 97 Oct 97 Nov 97
------- ------- ------ ------- ------ ------
note 3 note 4
<S> <C> <C> <C> <C> <C> <C>
Hrs per Mon 720 744 744 720 744 720
Tot Yr hrs 8760 8760 8760 8760 8760 8760
Total Dn time hrs/mon 10 48 21 12.5 14.6 7.1
Praxair caused Dntime 7 48 42 12.5 14.6 7.1
Lone Star Steel Caused downtime 0 4 0 0 0 0
Contingency Downtime 3 0 0 0 0 0
Total % Dn Time/mon 1.39% 6.45% 2.82% 1.74% 1.96% 0.99%
Praxair Cum Dn Time Hrs/yearly basis 65 113 134 146.5 161.1 168.2
Praxair Cum % Dntime/yearly basis 0.72% 1.26% 1.49% 1.63% 1.79% 1.87%
Pit produced GOZ first: 43.5mmcf/mon $56,000 $56,000 $56,000 $56,000 $56,000 $56,000
Pit produced G02 > 43.5mmcf/mon $0.125 $0.125 $0.125 $0.125 $0.125 $0.125
Liquid Oxygen cost
First 10,000,000 cf/mon $0.290 $0.290 $0.290 $0.290 $0.290 $0.290
All Over 10,000,000 cf/mon $0.350 $0.350 $0.350 $0.350 $0.350 $0.350
Avioded cost of Electric Power $0.041 $0.041 $0.041 $0.041 $0.041 $0.041
Volume consumed by LSS
- ----------------------
LSS Monthly Plant Produced Oxy
consumed 57,600,000 66,960,000 43,598,400 50,400,000 49,104,000 35,280,000
LSS vol consumed during Praxair
caused Down 560,000 4,320,000 2,461,200 875,000 963,600 347,900
ACEP volume 0 0 0 875,000 963,600 347,900
LSS vol consumed during LSS
caused Downtime 0 360,000 0 0 0 0
High Purity (99.5%) Liquid Oxygen 6,192,000 6,696,000 7,440,000 12,960,000 5,170,800 5,848,560
Contingency Volume (ie:Power failure) 240,000 0 0 0 0 0
TOT GOZ to be invoiced =
Contingency vol LSS DnTmVol+ 6,752,000 11,376,000 9,901,200 12,960,000 5,170,800 5,848,560
+Px DnTmVol>1.5%+H
INVOICE TO LONE STAR STEEL
Oxy Pit Monthly Facility Fee
(note 1 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000
Pit Prod Go2 All volumes n/a n/a n/a n/a n/a n/a
Pit Prod GO2 > 21.750mmcf/mon n/a n/a n/a n/a n/a n/a
Pit Prod GO2 > 43.5mmcf/mon $17,625 $29,325 $123 $8,625 $7,005 $0
LO2: First 10,000,000 scf/mon $19,581 $35,000 $28,713 $35,000 $14,995 $16,961
LO2: All Over 10,000,000 scf/mon $0 $0 $0 $10,360 $0 $0
ACEP $0 $0 $0 $359 $359 $143
-- -- -- ---- ---- ----
Total invoice to Lone Star Steel $93,206 $120,325 $84,836 $109,985 $78,000 $72,961
<CAPTION>
Dec 97 Jan 1998 July 1998 Jan 1999 July 1999
------
note 5 note 3 note 3 note 4 note 4
<S> <C> <C> <C> <C> <C>
Hrs per Mon 744 744 744 744 720
Tot Yr hrs 8760 8760 8760 8760 8760
Total Dn time hrs/mon 300 27.9 2.6 0 12.3
Praxair caused Dntime 0 23.4 0 0 12.3
Lone Star Steel Caused downtime 300 4.5 2.6 0 0
Contingency Downtime 300 0 0 0 0
Total % Dn Time/mon 40.32% 3.75% 0.35% 0.00% 1.71%
Praxair Cum Dn Time Hrs/yearly basis 206.2 0 0 0 38.7
Praxair Cum % Dntime/yearly basis 2.30% 0.00% 0.00% 0.00% 0.43%
Pit produced GOZ First: 43.5mmcf/mon $56,000 $56,458 $56,686 $57,129 $57,419
Pit produced G02 > 43.5mmcf/mon $0.125 $0.125 $0.127 $0.127 $0.128
Liquid Oxygen cost
First 10,000,000 cf/mon $0.290 $0.297 $0.300 $0.300 $0.309
All Over 10,000,000 cf/mon $0.350 $0.358 $0.362 $0.362 $0.372
Avoided cost of Electric Power $0.041 $0.043 $0.043 $0.044 $0.044
Volume consumed by LSS
- ----------------------
LSS Monthly Plant Produced Oxy
consumed 43,896,000 58,776,000 62,868,000 62,868,000 64,080,000
LSS vol consumed during Praxair
caused Down 0 1,848,600 0 0 1,094,700
ACEP volume 0 0 0 0 0
LSS vol consumed during LSS
caused Downtime 17,700,000 355,500 219,700 0 0
High Purity (99.5%) Liquid Oxygen 7,017,408 7,017,408 7,017,408 7,017,408 6,791,040
Contingency Volume (ie:Power failure) 17,700,000 0 0 0 0
TOT GOZ to be invoiced =
Contingency vol LSS DnTmVol+ 24,717,408 9,221,508 7,237,108 7,017,408 7,885,740
+Px DnTmVol>1.5%+H
INVOICE TO LONE STAR STEEL
Oxy Pit Monthly Facility Fee
(note 1 $56,000 $56,458 $56,686 $57,129 $57,419
Pit Prod Go2 All volumes n/a n/a n/a n/a n/a
Pit Prod GO2 > 21.750mmcf/mon n/a n/a n/a n/a n/a
Pit Prod GO2 > 43.5mmcf/mon $495 $19,095 $24,597 $24,597 $26,342
LO2: First 10,000,000 scf/mon $35,000 $27,388 $21,711 $21,052 $24,367
LO2: All Over 10,000,000 scf/mon $0 $0 $0 $0 $0
ACEP $0 $0 $0 $0 $0
-- -- -- -- --
Total invoice to Lone Star Steel $91,495 $102,941 $102,995 $102,779 $108,128
</TABLE>
NOTES:
Note 1: Examples illustrates that during First 6 month Oxygen Plant operation
(Feb 96 thru July 96) no Take or Pay Monthly Fac Fee; all Pit Produced
Oxy volume is billed at $0.125/100 scf.
Note 2: Example illustrates that during Second 6 month Oxygen Plt operation
(Aug 96 thru Jan 97) $28,000 Take or Pay Monthly Fac Fee for first
21,750,000 scfm and $0.125/100 scf for all over.
Note 3: Example illustrates a Power failure that caused the Oxy Plt to be
shutdown for 3 hours. LSS continued to operate during that period and
240,000 scf consumed is billed at LO2 price.
Note 3: Examples illustrates that first repricing became effective on Jan 1,
1998, using Dec 1997 as PPic and Dec 1996 as PPib (see Exhibit H)
Second repricing became effective on July 1, 1998 using June 1988
as PPic and Dec 1997 as PPib (see Exhibit H)
Note 4: Example illustrates that Px has exceeded its Calendar year 1.5%
Downtime cap and LSS no longer is invoiced Liquid Oxygen price for Px
caused downtime.
Note 5: Example illustrates that LSS has a contingency event and consumed
17,700,000 scf during that event which will be priced at LO2 price.
35
<PAGE>
EXHIBIT D
SPECIFICATIONS FOR PROCESS WATER
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
PRAXAIR INC.
SPECIFICATIONS FOR PROCESS WATER
Industrial grade treated seal water is necessary for proper operation of the
Oxygen Plant. Its constituents should be at lesser concentrations than shown
in the following list.
SEAL WATER
----------
PH 6 to 8 PH
Total Suspended Solids 20 ppm
Total Dissolved Solids 200 ppm
Total Alkalinity (as CaCO(3)) 100 ppm
Total Hardness (as CaCO(3)) 140 ppm
Calcium (as CaCO(3)) 70 ppm
Manganese 0.02 ppm
Iron 0.2 ppm
Chlorides 15 ppm
Silica (as SiO(2)) 10 ppm
COD 40 ppm
BOD(5) 5 ppm
Oil and Grease 5 ppm
Toxic and Hazardous Substances Below Detection Limits
This is a partial listing of possible chemical constituents. If available
water is of questionable quality or does not meet the above requirements, a
water analysis needs to be evaluated with Praxair to determine its impact
on Oxygen Plant performance.
PRAXAIR BUSINESS CONFIDENTIAL
36
<PAGE>
EXHIBIT E
AVOIDED COST OF POWER
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
PRAXAIR INC.
THE AVOIDED COST OF ELECTRICAL POWER SHALL BE CALCULATED IN ACCORDANCE WITH
THE FOLLOWING FORMULA:
$ ACEP = (BO2) x (SE) x ($/KWH)
WHERE:
$ ACEP is the avoided cost of electrical power expressed in terms of
dollars
$/KWH is Buyer's average cost of electrical power expressed in terms
of $/kwh (note 1)
SE is Seller's Energy utilization expressed in terms of kwh/100 SCF
and is 1.50kwh/100 SCF
BO2 is the amount of oxygen Buyer consumes while Sellers Oxygen Plant
is Shutdown
EXAMPLE: During a billing month Seller incurred five plant shutdowns. Seller
caused three of the shutdowns due to mechanical problems. One shutdown was
caused by inability of Buyer to supply required utilities and one was caused by
a contingency.
SHUTDOWN CAUSE DURATION OXYGEN CONSUMED
-------------- -------- ---------------
Seller mechanical 10.0 hrs 662,500
Seller mechanical 4.0 hrs 220,000
Seller mechanical 3.2 hrs 218,700
Buyer caused 6.0 hrs 386,890
Contingency 1.5 hrs 95.678 (note 2)
---------------
1,583,768 TOTAL OXYGEN
(95,678) LESS CONTINGENCY
(386 890) LESS BUYER CAUSED
SHUTDOWNS
---------
1,101,200 BO2
EXAMPLE CALCULATION "A":
Billing example where both Buyer and Seller caused downtime exist and also a
contingency event occurred during the month. For example purposes only, $/KWH
is assumed to be $0.031/kwh and BO2 is 1,101,200 cf
PRAXAIR BUSINESS CONFIDENTIAL
37
<PAGE>
$ ACEP = (BO2) x (SL) x ($/kwh)
= (1,101,200) x (1.50/100) x ($0.031)
= $512.05
Seller shall invoice Buyer $ 512.05 on the monthly invoice for the
Avoided Cost of Electrical Power.
EXAMPLE CALCULATION "B"
Billing Example where Seller, through no fault of Buyer does not make
First Delivery as specified in ARTICLE 5.2
and is one month late. During that one month period Buyer consumed
30,240,000 SCF of Oxygen for use in its Electric Arc Furnace and 4,360,000
SCF in its high Purity use points. All Oxygen was delivered by Seller from
the Liquid Oxygen Storage System. Seller will invoice Buyer and Buyer will
pay Seller as follows
EAF OXYGEN
$/100 SCF of ACEP equals = (1.50/100) x ($0.031)
= $0.047/100 SCF of Oxygen
Invoice = (30,240,000SCF x $0.125/100) + (30,240,000 x SCF x $0.047/100)
= ($37,800) + ($14,212)
= $52,012
HIGH PURITY OXYGEN
$/100 SCF of Liquid Oxygen = $0.29/100
INVOICE: = (4,360,000 SCF x $0.29/100)
= $12,644
TOTAL INVOICE TO BUYER = $52,012 + $12,644
= $64,656
NOTES:
NOTE 1: Contingency, Buyer caused shutdown volumes and Force Majeure are billed
at Liquid Oxygen Price and not used in calculation of ACEP.
NOTE 2: Buyer shall provide to Seller, in written form, by January 1st of
each year, Buyer's average cost of electrical power, which shall be used in
the calculation of the Avoided Cost of Electrical Power for that calendar
year.
PRAXAIR BUSINESS CONFIDENTIAL
38
<PAGE>
8Feb 1996 EXHIBIT F
LSSEXH_F CANCELLATION FEE CALCULATION
Cancellation Fee
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
PRAXAIR INC.
Date of First Delivery 1 February 1996
Basic term Ends 1 February 2006
Cancellation Fee = BMF x K x N
where:
BMF is the current Base Monthly Fee in effect upon the date of
termination,
K under Article 6.2 is equal to 0.40 during years 3,4,5
and 0.20 during years 6 to 10
K under Article 6.3 is equal to 0.60 during years 6 to 10
N is equal to the number of months remaining to the end of the basic
term of the Agreement
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Contract year 0 1 2 3 4 5 6 7 8 9 10
Calendar Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Date of Termination
(note 1) n/a n/a 1Aug1998 1Feb1999 25Nov2000 1June2001 1Jan2002 8July2003 31May2004 1Mar2005
K factor Article 6.2 n/a n/a 0.4 0.4 0.4 0.2 0.2 0.2 0.2 0.2
K factor Article 6.3 n/a n/a n/a n/a n/a 0.6 0.6 0.6 0.6 0.6
"BMF" (example only) $56,000 $56,000 $56,000 $56,392 $56,956 $56,814 $57,950 $59,109 $60,291 $61,497 $62,419
"N" n/a n/a 90 84 62 56 49 30 20 11
Cancellation Fee in
accord with Art 6.2 (Note 2 n/a n/a $2,030,112 $1,913,719 $1,408,976 $649,038 $579,266 $361,746 $245,987 $137,322
Cancellation Fee in
accord with Art 6.3 (Note 2 n/a n/a n/a n/a n/a $1,947,113 $1,737,799 $1,085,238 $737,962 $411,967
</TABLE>
NOTES:
Note 1: Buyer must provide Seller with 12 months prior written notice of the
Date of Termination.
Note 2: Seller will invoice Buyer and Buyer will pay Seller on date of
termination, net fifteen (15) days.
39
<PAGE>
EXHIBIT G
LONE STAR STEEL REPRICING CALCULATION
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
PRAXAIR INC.
<TABLE>
<CAPTION>
Contract Year 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FACILITY FEE 1 Feb 96 1 Jan 97 1 Jan 98 1 Jan 99 1 Jan 00 1 Jan 01 1 Jan 02 1 Jan 03 1 Jan 04 1 Jan 05
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Base Monthly Fee n/a $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000 $56,000
2% annual Max Price Adj
Factor n/a 1.040 1.061 1.082 1.104 1.126 1.149 1.172 1.195
Maximum Monthly Fac Fee n/a $56,240 $59,427 $60,614 $61,830 $63,067 $64,327 $65,615 $66,926
LO2 PRICE
Base: First 10,000,000 scf/mon $0.290 $0.290 $0.290 $0.290 $0.290 $0.290 $0.290 $0.290 $0.290 $0.290
4% annual Max Price Adj
Factor n/a 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423
Maximum Mon First 10,000,000
scf Price $0.290 $0.314 $0.326 $0.339 $0.353 $0.367 $0.382 $0.397 $0.413
Base All Over 10,000,000
scf/mon $0.350 $0.350 $0.350 $0.350 $0.350 $0.350 $0.350 $0.350 $0.350 $0.350
4% annual Max Price Adj
Factor n/a 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423
Maximum Mon All Over
10,000,000 scf Price $0.350 $0.379 $0.394 $0.410 $0.426 $0.443 $0.461 $0.479 $0.498
FACILITY FEE EXAMPLE
Base PP is Dec 1995 125.5 1 Jan 97 1 Jan 98 1 Jan 99 1 Jan 00 1 Jan 01 1 Jan 02 1 Jan 03 1 Jan 04 1 Jan 05
-------- -------- -------- -------- -------- -------- -------- -------- --------
PPlc (Example only) 128.0 131.5 134.0 133.5 132.9 129.4 130.6 171.0 175.6
Repricing Formula Adjuster =
(0.65 + (0.35*(PPlc/PPlb))) 1.007 1.017 1.024 1.022 1.021 1.011 1.014 1.127 1.140
Calculated Monthly Facility
Fee n/a $56,937 $57,327 $57,249 $57,156 $56,609 $56,796 $63,106 $63,824
Max Allowable Contract Monthly
Facility Fee n/a $58,240 $59,427 $60,614 $61,830 $63,067 $64,327 $65,615 $66,926
Facility Fee to be billed to
Buyer $0 $56,937 $57,327 $57,249 $57,156 $56,609 $56,796 $63,106 $63,824
LO2 PRICE EXAMPLE
FIRST 10,000,000 SCF
Base PPl is Dec 1995 125.5 1 Jan 97 1 Jan 98 1 Jan 99 1 Jan 00 1 Jan 01 1 Jan 02 1 Jan 03 1 Jan 04 1 Jan 05
-------- -------- -------- -------- -------- -------- -------- -------- --------
PPlc (Example only) 128.0 131.5 134.0 133.5 132.9 129.4 130.6 171.0 175.6
Repricing Formula Adjuster =
(PPlc/PPlb) 1.020 1.048 1.068 1.064 1.059 1.031 1.041 1.363 1.399
Calculated First 10,000,000
scf/mon Price $0.296 $0.304 $0.310 $0.306 $0.307 $0.299 $0.302 $0.395 $0.406
Max Allowable First 10,000,000
scf/mon $0.350 $0.379 $0.394 $0.410 $0.426 $0.443 $0.461 $0.479 $0.496
LO2 Price for First 10,000,000
scf/mon
to be billed to Buyer $0.296 $0.304 $0.310 $0.308 $0.307 $0.299 $0.302 $0.395 $0.406
LO2 PRICE EXAMPLE
ALL OVER 10,000,000 SCF
Base PPl is Dec 1995 125.5 1 Jan 97 1 Jan 98 1 Jan 99 1 Jan 00 1 Jan 01 1 Jan 02 1 Jan 03 1 Jan 04 1 Jan 05
-------- -------- -------- -------- -------- -------- -------- -------- --------
PPlc (Example only) 128.0 131.5 134.0 133.5 132.9 129.4 130.6 171.0 175.6
Repricing Formula Adjuster =
(PPlc/PPlb) 1.020 1.048 1.068 1.064 1.059 1.031 1.041 1.363 1.399
Calculate All Over 10,000,000
scf/mon Price $0.357 $0.367 $0.374 $0.372 $0.371 $0.361 $0.364 $0.477 $0.490
Max Allowable All Over
10,000,000 scf/mon $0.350 $0.379 $0.394 $0.410 $0.426 $0.443 $0.461 $0.479 $0.498
LO2 Price for All Over
10,000,000 scf to be billed
to Buyer $0.350 $0.367 $0.374 $0.372 $0.371 $0.361 $0.364 $0.477 $0.490
</TABLE>
40
<PAGE>
EXHIBIT H
AIR QUALITY-IMPURITY LEVELS
ATTACHED TO AND MADE A PART OF
OXYGEN SUPPLY AGREEMENT
BETWEEN
LONE STAR STEEL
AND
PRAXAIR INC.
COMPONENT MAXIMUM, CONTINUOUS AMOUNT PPM VOL.
Hydrogen 10
Carbon Monoxide 35
Carbon Dioxide 350
Acetylene 1.0
Ethane 0.1
Ethylene 5.0
Propylene 0.2
Propane --
C4 and Heavier Hydrocarbons 0.1
Sulfur Dioxide 0.1
Hydrogen Sulfide 0.05
Mercaptans 0.1
Ammonia 1.0
Total Chlorides --
NOX 0.05
Other Impurities --
Particulars 2.5 mg/m(3)
PRAXAIR BUSINESS CONFIDENTIAL
41
<PAGE>
EXHIBIT 10.25
CONTRACT FOR THE PURCHASE
AND SALE OF PROPERTY
THIS AGREEMENT, made as of the Effective Date (as hereinafter
defined), by and among PRUDENTIAL TIMBER INVESTMENTS, INC., a Delaware
corporation (hereinafter referred to as "Purchaser"), LONE STAR STEEL, a
Delaware corporation and TEXAS and NORTHERN RAILWAY COMPANY, a Texas
corporation (hereinafter referred to individually and together as "Seller");
and FIRST AMERICAN TITLE INSURANCE COMPANY (hereinafter referred to as
"Escrow Agent");
W I T N E S S E T H:
WHEREAS, Seller is the owner of those certain tracts or parcels of
land in Cass, Marion, Morris and Upshur Counties, State of Texas, containing
approximately 9,432 acres, all of which tracts or parcels are more fully
described in EXHIBIT A attached hereto, and Seller wants to sell that land
together with all buildings, structures and other improvements located thereon,
all tenements, hereditaments, easements, appurtenances and privileges thereto
belonging, all trees, timber and, to the extent unharvested at Closing (as
hereinafter defined), crops of Seller now located thereon, and all mineral
rights and interests with respect thereto other than oil and gas (such oil and
gas, to the extent not heretofore reserved or transferred, or not subject to
being transferred under leases heretofore entered into, is to be reserved to
Seller), and other than minerals, trees or timber which have been or are
currently contemplated to be transferred pursuant to the documents described in
Exhibit D attached hereto or any of the Leases (as hereinafter defined) (said
land, together with said buildings, structures, improvements, tenements,
hereditaments, easements, appurtenances, privileges, trees, timber, crops, and
mineral rights and interests, all of which, as stated above, Seller wants to
sell, being hereinafter referred to as the "Property"); and
WHEREAS, Purchaser desires to purchase and Seller desires to sell
the Property;
NOW, THEREFORE, the parties have agreed and do hereby agree as
follows:
1. AGREEMENT OF PURCHASE AND SALE. Subject to the provisions of
this contract, and for the consideration herein stated, Seller agrees to sell
the Property to Purchaser and Purchaser agrees to buy the Property from Seller.
2. PURCHASE PRICE. The purchase price (hereinafter referred to as
the "Purchase Price") to be paid by Purchaser for the Property will be FOUR
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($4,500,000.00), and will be
<PAGE>
payable to Seller in funds available for immediate credit upon the Closing (as
hereinafter defined). The Purchase Price will be subject to adjustment as
provided in paragraphs 5, 9(b) and 9(c) hereof.
3. EARNEST MONEY. Within three (3) business days after the
Effective Date of this contract, Purchaser will deliver to Escrow Agent the sum
of $200,000.00 (said amount, together with all interest earned thereon, is
hereinafter referred to as the "Earnest Money"). Escrow Agent agrees to hold and
disburse said amount in accordance with the terms hereof. At the Closing Escrow
Agent will return the Earnest Money to Purchaser.
4. CLOSING.
(a) The execution and delivery of the documents and
instruments for the consummation of the purchase and sale pursuant hereto
(herein referred to as the "Closing") will take place at 10:00 a.m. on the 40th
day after the end of Inspection Period (as hereinafter defined), at the offices
of Purchaser's counsel, Sutherland, Asbill & Brennan, at 999 Peachtree Street,
N.E., Atlanta, Georgia, subject to extension as provided in paragraph 9 hereof,
or such earlier date and time, and/or such other location, as may be mutually
agreeable to Seller and Purchaser. At the Closing, Seller will execute and
deliver a special warranty deed conveying the Property to Purchaser subject only
to the Permitted Encumbrances (as hereinafter defined), an affidavit as to the
non-foreign status of Seller (or, if Seller is a foreign person or entity,
Seller will deliver to Purchaser a withholding exemption certificate pursuant to
Section 1445 of the Internal Revenue Code of 1954, as amended), an assignment or
assignments of the Leases (as defined in paragraph 10(a) (ii) below), in
accordance with the provisions of paragraph 4(b) below, an owner's affidavit
satisfactory to Purchaser and its title insurer (such satisfaction by Purchaser
and such insurer not to be unreasonably withheld), and evidence, satisfactory to
Purchaser and its title insurer (such satisfaction by Purchaser and such insurer
not to be unreasonably withheld), with respect to the power and authority of
Seller to enter into and consummate this contract and the transactions
contemplated hereby and of the persons executing documentation on behalf of
Seller, and Seller hereby agrees to execute and deliver such other deeds,
assignments, certificates, affidavits and instruments as may be reasonably
necessary or desirable to consummate the purchase and sale contemplated hereby
and to obtain the issuance of the title insurance policy insuring Purchaser's
fee simple title to the Property as of the date of Closing. The parties agree to
do such other acts and execute and deliver such other documents and instruments
as are reasonably necessary or desirable for the consummation of the
transactions contemplated hereby.
(b) The following provisions shall apply with respect to
the Leases (as defined in paragraph 10(a) (ii) below):
(i) The assignment of the Leases to be executed at
the Closing pursuant to paragraph 4(a) above shall include (A) Seller's
assignment of all Leases other than the Mitchell Lease (as hereinafter defined)
and other than the Timber
-2-
<PAGE>
Deeds (as defined below) and all right, title and interest of Seller therein,
thereto or thereunder, (B) Purchaser's assumption and agreement to perform all
obligations of Seller to be performed subsequent to the Closing under such
Leases, (C) Seller's agreement to indemnifY and hold harmless Purchaser from and
against any and all claims, demands, liabilities, losses, damages, costs and
expenses suffered or incurred by or asserted against Purchaser which relate to
such Leases and result from or arise out of any act or omission prior to the
Closing, besides the act of entering into such Leases, and (D) Purchaser's
agreement to indemnify and hold harmless Seller from and against any and all
claims, demands, liabilities, losses, damages, costs and expenses suffered or
incurred by or asserted against Seller which relate to such Leases and result
from or arise out of any act or omission subsequent to the Closing.
(ii) To the extent, if any, that any of the Leases
to be assigned pursuant to paragraph 4(a) above are not assignable pursuant to
their terms, at the Closing Purchaser and Seller shall enter into a written
arrangement acceptable to Purchaser (such acceptance not to be unreasonably
withheld), in lieu of the assignment thereof, which arrangement shall include
(A) Seller's agreement to pass all benefits to be received by Seller after the
Closing under such unassigned Leases on to Purchaser and to enforce the
provisions thereof, at the cost of Purchaser, for the benefit of Purchaser, and
(B) Purchaser's agreement to perform such unassigned Leases for the benefit of
Seller to the extent of the performance required of Seller thereunder after the
Closing, provided that Purchaser shall be excused from the obligation so to
perform to the extent, if any, that Purchaser's performance is not accepted by
any other party to such Leases (which refusal to accept Purchaser's performance
is legally permitted) or Purchaser is prevented from performing by the acts or
omissions of Seller or any other party to such Leases (which if prevented by
another party, the other party is legally entitled to do).
(iii) With respect to that certain Oil, Gas and
Mineral Lease between Seller and Mitchell Energy Corporation, dated December 15,
1993, which is listed on Exhibit C hereto (the "Mitchell Lease"), Purchaser
shall agree in writing at the Closing to indemnify and hold harmless Seller from
any liability of Seller under paragraph 11 of the Mitchell Lease if and only to
the extent that any such liability arises as a result of a lien which shall
become superior to and have priority over the interest or rights of the lessee
under the Mitchell Lease and shall have been created by or result from
Purchaser's actions or other's actions which Purchaser has permitted subsequent
to the Closing; provided, further, that the deed to be delivered at Closing or
such other writing to be recorded shall contain a provision, for the benefit of
Seller, its successors and assigns, as a covenant running with the land, to the
effect that each subsequent owner of any of the property which is the subject of
paragraph 11 of the Mitchell Lease, so long as such lease is in effect, shall be
responsible to Seller, its successors and assigns, for such liens which shall
become superior to and have priority over, or interfere with, the interest or
rights of the lessee under the Mitchell Lease and shall have been created by or
result from the actions of such owner and actions that such owner permits in
like manner as provided above as the Purchaser is responsible for such liens
which shall
-3-
<PAGE>
become superior to and have priority over, or interfere with, the interest or
rights of the lessee under the Mitchell Lease and shall have been created by or
result from its actions and the actions it permits. It is expressly understood
and agreed that, except as expressly provided in the preceding sentence,
Purchaser shall not be responsible or liable for any other liability, duty or
obligation of Seller under paragraph 11 of the Mitchell Lease, and Seller shall
agree in writing at the Closing to indemnify and hold harmless Purchaser from
such other liabilities, duties and obligations and the consequences of any
breach thereof by Seller before or after the Closing.
(iv) With respect to the Mitchell Lease, Seller
shall assign to Purchaser in writing at the Closing all rights, powers and
benefits of Seller in, to and under the Mitchell Lease to the extent that such
rights, powers and benefits relate to the surface estate (including, without
limitation, trees and timber), but such assignment shall not include any rights,
powers or benefits under the Mitchell Lease to the extent such rights, powers or
benefits relate to oil, gas and such minerals as are covered by the Mitchell
Lease.
(v) With respect to that certain Timber Deed
between Seller and Weyerhaeuser Company, dated March 31, 1994 (the "Weyerhaeuser
Deed"), and that certain Timber Deed between Seller and Ward Timber Company,
Inc., dated April 12, 1994 (the "Ward Deed") (collectively, the "Timber Deeds"),
both of which are listed on Exhibit D hereto, notwithstanding any contrary
provisions of paragraph 4(b) (i) above, Seller shall agree in writing at the
Closing as follows: (A) Purchaser shall have no responsibility, obligation or
liability with respect to any representations or warranties made by Seller
relating to the title to any timber covered by either of the Timber Deeds; (B)
Purchaser shall have no responsibility, obligation or liability for the
reimbursement, refund or rebate of any portion of the purchase price paid by
either of the grantees under the Timber Deeds; (C) Purchaser shall have no
responsibility, obligation or liability with respect to any agreement or
representation of Seller made in either of the first two paragraphs on the third
page (i. e., the execution page) of the Weyerhaeuser Deed; and (D) Seller shall
have the sole responsibility, obligation and liability with respect to the
matters mentioned in the foregoing clauses (A), (B) and (C) of this paragraph
4(b)(v), and Seller shall indemnify and hold harmless Purchaser from and against
any and all claims, demands, liabilities, losses, damages, costs and expenses
suffered or incurred by or asserted against Purchaser which result from or arise
out of any of the matters mentioned in said clauses (A), (B) and (C) of this
paragraph 4(b)(v), provided that nothing in this paragraph 4(b)(v) or paragraphs
4(b)(iii) or (iv) above, shall be deemed to impair the status of the Timber
Deeds or the Mitchell Lease as Permitted Encumbrances or affect the continued
performance and enjoyment of the terms thereof by the parties thereto as
Permitted Encumbrances.
(vi) The provisions of the last sentence of
paragraph 6(a) below, and those provisions as they are incorporated in the
special warranty deed to be delivered at the Closing, will not apply with
respect to any damages from activities in connection with the Timber Deeds and
the Mitchell Lease, but instead, Seller hereby
-4-
<PAGE>
agrees at the Closing to assign in writing to Purchaser, all rights of Seller
under the Timber Deeds and the Mitchell Lease that obligate the other parties to
those Timber Deeds and Mitchell Lease to conduct their operations and activities
on the Property in accordance with the requirements set forth in those Leases
and to pay Seller for or to repair any damage of the same sort as is intended to
be indemnified under the provisions of the last sentence of paragraph 6(a) that
is attributable to the activities of those other parties after the Closing.
(vii) At the Closing, Seller shall deliver to
Purchaser complete originals, if available to Seller, or otherwise copies, of
all of the Leases to be assigned to Purchaser and shall provide to Purchaser the
last known address of each of the lessees under the Leases.
5. SURVEY OF PROPERTY. Purchaser will have the right to obtain a
current boundary survey of the Property on or before the date of Closing, made
by a registered Texas land surveyor at Purchaser's expense (hereinafter referred
to as the "Survey"). Purchaser will arrange for the surveyor to furnish Seller a
copy of each Survey that is made at the same time the Survey is furnished to
Purchaser by the surveyor. The Survey will contain a calculation of the acreage
within the Property to the nearest one-hundredth (100th) of an acre. The Survey
and the acreage calculation contained therein will be deemed correct and binding
on Purchaser and Seller. In the event the Survey reveals that the total acreage
of the Property is different than 9,432 acres, the Purchase Price will be
reduced if less and increased if more than 9,432 acres by an amount equal to the
product of $477.10 multiplied by the difference between 9,432 acres and the
actual number of acres contained within the Property, as revealed by the Survey.
Seller will furnish Purchaser as soon as possible with copies of all surveys or
maps of all or any part of the Property which Seller has in its possession.
6. TITLE.
(a) Seller agrees to convey to Purchaser good and
indefeasible fee simple title to the Property, free and clear of all liens,
encumbrances, mortgages, deeds of trust, deeds to secure debt, restrictions,
charges, assessments, agreements, options, covenants, boundary line disputes,
encroachments, easements, licenses, leases, reservations, tenancies, and claims
of any character, except for those matters set forth on Exhibit B attached
hereto (hereinafter referred to as the "Permitted Encumbrances") and those
additional matters which are deemed Permitted Encumbrances pursuant to the
provisions of this contract. The deed to be given by Seller to Purchaser at the
Closing, shall be subject to the Mitchell Lease, the rights of the parties to
the Mitchell Lease are acknowledged by the parties hereto to be a Permitted
Encumbrance, and shall contain a reservation in favor of Seller and its
successors and assigns of all oil and gas and, to the extent rights to mine and
remove other minerals are given under the Mitchell Lease in addition to oil and
gas, such other minerals located in and under and which may be produced from the
Property, together with the right in any of them and any future lessee of any of
them, of ingress and egress to and the right in any of them and such lessee to
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be upon the Property at all times for the purposes of drilling, exploring,
operating and developing said Property for oil and gas and removing the same
therefrom, and the general right of ingress and egress to and over existing
roadways on the Property at any time in order that the adjoining lands of Seller
not included in this sale will not be landlocked as a result of this sale. Such
reservation shall contain a provision for the benefit of Purchaser and its
successors and assigns, as a covenant running with the land, to the effect that
Seller, its successors and assigns, any lessee of any of such oil and gas under
any lease entered into by Seller, its successors or assigns after the Closing,
and any operator or exploration company or other person or entity conducting
exploration, mining, drilling or similar activities on or under any portion of
the Property for Seller, its successors and assigns, or any such lessee, and any
person or entity exercising the right of ingress and egress to and upon the
Property, shall be liable to Purchaser for, and shall indemnify and hold
Purchaser harmless from and against, any and all damages to the surface of the
Property (including, without limitation, any trees or timber thereon) caused by
or resulting directly or indirectly from any of such activities.
(b) On or before the 135th day after the Effective Date,
Seller will deliver to Purchaser a commitment for an owner's title insurance
policy in the amount of the Purchase Price, issued by a reputable title
insurance company acceptable to Purchaser, showing fee simple title to the
Property to be vested in Seller and committing to insure Purchaser's fee simple
title to the Property at Closing, provided, however, such 135 day period shall
automatically be extended for up to an additional thirty (30) days if Seller is
unable, due to circumstances beyond Seller's control, to deliver the commitment
to Purchaser, and further provided, however, that, if such inability continues,
the period within which Seller shall provide the title commitment shall be
deemed extended beyond that additional period indefinitely, subject to this
contract being capable of being canceled at any time by Seller or Purchaser
under paragraph 6(d) hereof (the date which is the earlier of the expiration of
the initial 135 day period, as may be extended, or the date upon the delivery of
the title commitment to Purchaser pursuant to this paragraph 6(b), is
hereinafter referred to as the "Commitment Date"). Simultaneously with the
delivery of such title commitment, Seller will deliver or cause to be delivered
to Purchaser legible copies of all documents listed in the title commitment as
exceptions affecting title to the Property, including, without limitation, all
documents and instruments within the chain of title to the Property containing
oil, gas or other mineral reservations or conveyances. Purchaser will have
thirty (30) days after receipt of such commitment and copies of all documents
listed as title exceptions to examine the title to the Property and furnish to
Seller written notice of any objections to any exceptions listed in the title
commitment affecting Seller's title to the Property, whether based upon recorded
documents or not (an exception affecting title meaning anything that would
prevent Seller from conveying the title to the Property that it has agreed to
convey under paragraph 6(a) hereof), other than the Permitted Encumbrances in
items 1, 3, 4 and 5 set forth on Exhibit B attached hereto. Seller will exercise
its best efforts to cure or remove at or prior to Closing all objections to
Seller's title to the Property, but except for objections that relate to
monetary liens, will not be obligated to spend money to do so. In the event that
Purchaser fails to give notice to Seller on or before the
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expiration of said thirty (30) day period of Purchaser's objection to any
exception to Seller's title to the Property, such exception will be deemed to be
a Permitted Encumbrance and Purchaser will be deemed to have agreed to accept
title to the Property subject to such exception; provided, however, Purchaser
shall also have the right to object, at any time, to any title exceptions
created, suffered or discovered between the date of the title commitment
obtained by Seller and the date of Closing. In the event that Purchaser gives
such notice of objection to any title exception and Seller fails to cure or
remove such exception at or prior to Closing, Purchaser, at its sole option, may
elect any of the following:
(i) to cancel this contract, whereupon Escrow Agent
will return the Earnest Money to Purchaser and no party hereto
will have any further rights or obligations hereunder; or
(ii) to close the transaction contemplated hereby
with no reduction in the Purchase Price, and take the Property
subject to all such uncured and unremoved objections, which
will be deemed Permitted Encumbrances, except for any
objection to a monetary lien, with respect to which Seller
will be obligated to utilize all or a portion of the Purchase
Price to remove or otherwise cure such monetary lien at the
Closing. As used herein, "monetary lien" shall mean a charge
against the Property making it security for the payment of a
debt, judgment, mortgage, assessment or taxes.
(c) Except as contemplated by the documents set forth on
Exhibit D, so long as this contract remains in force, Seller will not except as
permitted under the next sentence, enter into any lease, encumber or convey all
or any part of the Property or any interest therein, or enter into any agreement
granting to any person any right with respect to the Property or any portion
thereof, without the prior written consent of Purchaser. Seller may enter into
other leases affecting the Property for oil and gas (but not any other minerals)
in the future after the Closing, and in respect to any such leases that are
entered into in the future by Seller, the provisions of the last sentence of
paragraph 6(a) above shall apply.
(d) If Seller is unable to deliver the title commitment as
called for under paragraph 6(b) hereof within the maximum period including the
30-day extension, but not the deemed extension permitted under paragraph 6(b)
hereof, because the title commitment has not been issued, either Seller or
Purchaser will have the option, exercisable at either Seller's or Purchaser's
election, prior to Seller's actual delivery of the title commitment during any
period of deemed extension, to cancel this contract, whereupon the Escrow Agent
will return the Earnest Money to Purchaser and no party will have any rights or
obligations hereunder.
7. INSPECTION. Purchaser will have until the 30th day after the
Commitment Date to inspect the Property, (the "Inspection Period") among other
things,
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to verify the timber values located thereon, to perform environmental
evaluations and verify compliance with applicable laws, ordinances and
regulations. If, as a result of such inspection or for any other reason,
Purchaser, in its sole discretion, decides not to purchase the Property and
gives Seller written notice of its decision on or before the end of the
Inspection Period, then this contract will terminate, whereupon Escrow Agent
will pay $100.00 of the Earnest Money to Seller in consideration of Seller's
execution of this contract and will return the remainder of the Earnest Money to
Purchaser, and no party hereto will have any further rights or obligations
hereunder. Purchaser and its agents, representatives, employees, engineers and
contractors will have the right to enter upon the Property to inspect, examine,
survey and make test borings, soil bearing tests, timber cruises and other
engineering tests or surveys which it may deem necessary or advisable. Purchaser
hereby agrees to indemnify and hold Seller harmless for any and all cost and
expense resulting from claims or damages caused by said inspections,
examinations, surveys and tests. On or before fifteen (15) days after the
Effective Date hereof, Seller will deliver to Purchaser or make available for
review at Seller's offices at either Suite 1200, 5501 LBJ Freeway, Dallas, Texas
75240, or at Seller's mill offices at Highway 259 South, Lone Star, Texas 75668
all materials relating to the Property in the possession of Seller or its agents
or attorneys, including without limitation, all aerial photographs, maps,
charts, existing surveys, timber cruises, previous deeds, leases, reports,
timber type maps, timber inventories, soil maps, growth and yield information,
harvest schedules, timber bid customer lists and other papers relating to the
Property.
8. ENVIRONMENTAL AUDIT. Purchaser will have the right within the
same period as the Inspection Period under paragraph 7 hereof to obtain, at
Purchaser's expense, an environmental audit or assessment of the Property. In
the event that such audit or assessment reveals the existence of any waste
disposal site, dump site, land fill or hazardous substance (as defined in
paragraph 10(a) (ix) below) in, on, under or about the Property, Purchaser will
have the option, exercisable at Purchaser's sole election, to cancel this
contract, provided it has notified Seller of its decision to cancel within the
same Inspection Period as under paragraph 7 hereof, whereupon Escrow Agent will
return the Earnest Money to Purchaser and no party hereto will have any further
rights or obligations hereunder.
9. CONDITION OF PROPERTY; DAMAGE; CONDEMNATION.
(a) Seller agrees that at the Closing the Property will be
in the same condition as exists on the date hereof, normal wear and tear and
changes in condition resulting from activities in accordance with the Leases (as
hereinafter defined) excepted, subject to and also except for changes from
condemnation and casualties beyond Seller's control. All risk of loss to the
Property or any part thereof prior to the Closing will be borne entirely by
Seller. During the term of this contract prior to Closing, or prior to the
cancellation or termination of this contract, whichever occurs first, Seller
will neither cut or remove nor permit the cutting or removal of any timber or
trees or the mining of any gravel or other minerals, excluding oil and gas,
located on the Property,
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except pursuant to the documents described in EXHIBIT D and the other Leases,
without the prior consent of Purchaser.
(b) If at any time prior to the Closing, the Property or
any part thereof (including, but not limited to, any timber or trees which are
included as part of the Property) is destroyed or damaged by fire or other
casualty, then Purchaser, at its sole option, may elect, if all or a material
part of the Property is destroyed or damaged, either as provided in clause (i)
or (ii) immediately following (and if less than all or a material part of the
Property is destroyed or damaged Purchaser must proceed as provided in clause
(ii)), (i) to cancel this contract, whereupon Escrow Agent will return the
Earnest Money to Purchaser and no party hereto will have any further rights or
obligations hereunder, or (ii) to purchase the Property, whereupon the Purchase
Price will be reduced by an amount equal to the product of the number of acres
damaged or destroyed multiplied by $477.10. Purchaser's option under this
paragraph 9(b) will be exercisable at any time on or before fifteen (15) days
after Purchaser's receipt of notice of the occurrence of such damage or
destruction and the date of Closing will be extended to the extent necessary to
permit the exercise of such option by Purchaser and the determination of the
Purchase Price reduction.
(c) If at any time prior to the Closing, any action or
proceeding is filed or threatened under which the Property or any part thereof
may be taken pursuant to any law, ordinance or regulation by condemnation or the
right of eminent domain, then Purchaser, at its sole option, may elect, if all
or a material part of the Property may be taken, either as provided in clause
(i) or (ii) immediately following (and if less than all or a material part of
the Property may be taken Purchaser must proceed as provided in clause (ii)),
(i) to cancel this contract, whereupon Escrow Agent will return the Earnest
Money to Purchaser and no party hereto will have any further rights or
obligations hereunder, or (ii) to purchase the Property, or so much of the
Property as has not actually been taken and transferred by the Closing (and,
under those circumstances where there has been an actual taking by Closing, such
of the Property as is remaining and not taken shall be deemed the Property which
is to be purchased), pursuant to this contract, notwithstanding such action or
proceeding, and receive a credit against the Purchase Price in the amount of all
net proceeds of any awards of damages for any such taking paid to Seller with
respect to the Property and, if any of such proceeds are uncollected prior to
Closing, such uncollected proceeds shall be assigned to Purchaser (without
recourse) by assignment in form reasonably satisfactory to Purchaser and
Purchaser shall control any further efforts to collect such sums, including
through legal action or proceedings, and bear all costs of those efforts, and,
in addition, any provisions of this contract regarding the Leases that cover any
of the Property taken by the Closing will be deemed modified in such a manner so
as to equitably account for the fact that all or some, as the case may be, of
the property under the affected Leases is not to be sold under this contract so
that those provisions applicable to the affected Leases, to an equivalent extent
as those Leases apply to property not to be sold because of its taking, will be
deemed to be inapplicable and of no effect under this contract. The term "net
proceeds" shall mean the proceeds payable to Seller minus the reasonable and
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actual attorneys' fees incurred by Seller in recovering any such award.
Purchaser's option under this paragraph 9(c) #11 be exercisable at any time on
or before fifteen (15) days after Purchaser has first been made aware of an
amount that the party seeking or threatening such taking has communicated that
such party is willing to pay to the owner of the property as damages on account
of such taking, or been made aware that such party has failed, when requested,
to state an amount, and the date of Closing will be extended to the extent
necessary to permit the exercise of such option by Purchaser.
10. WARRANTIES AND REPRESENTATIONS.
(a) Seller hereby warrants and represents to Purchaser as
of the Effective Date and as of the date of the Closing, as follows:
(i) To Seller's knowledge, except for the Permitted
Encumbrances, there are no liens, encumbrances, deeds of
trust, restrictions, agreements, options or other claims which
affect the Property which are not of record in the appropriate
real property records.
(ii) Attached hereto as EXHIBIT C and EXHIBIT D and
hereby made a part hereof are true and accurate summaries of
all hunting and fishing leases and licenses, all timber deeds
and any and all other leases and licenses in effect which
affect the Property (herein referred to as the "Leases");
Seller has delivered to Purchaser complete copies of all of
the Leases; and to Seller's knowledge the Leases remain in
full force and effect and have not been modified, amended or
previously assigned.
(iii) There is no pending or threatened action or
proceeding (including, but not limited to, any condemnation or
eminent domain action or proceeding) before any court,
governmental agency or arbitrator which may adversely affect
Seller's ability to perform this contract or which may affect
the Property.
(iv) To Seller's knowledge, the Property is in
compliance with all statutes, ordinances, rules, regulations,
orders and requirements of all federal, state and local
authorities and any other governmental entity having
jurisdiction over the Property; and to Seller's knowledge,
Seller has not received any notice from any such governmental
entity of any violation of any of the aforesaid statutes,
ordinances, rules, regulations, orders and requirements.
(v) Seller is a corporation duly formed and validly
existing under the laws of the State of Delaware and Texas, as
the case may
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be, and is duly qualified to do business in the State of
Texas, and Seller has the full capacity, power and authority
to enter into this contract and fully perform its obligations
hereunder.
(vi) This contract and the performance hereof by
Seller will not contravene any law or contractual restriction
binding on Seller.
(vii) Seller has the full right, power, and authority
to enter into and perform this contract; and no consent,
approval, order or authorization of any court or other
governmental entity is required to be obtained by Seller in
connection with the execution and delivery of this contract or
the performance hereof by Seller.
(viii) This contract has been duly executed and
delivered by Seller and constitutes the valid and binding
obligation of Seller, enforceable against Seller in accordance
with its terms subject to applicable bankruptcy, insolvency
and other similar laws affecting the enforceability of
creditors' rights generally and the discretion of the courts
with respect to equitable remedies.
(ix) To Seller's knowledge, no portion of the
Property has ever been used as a land fill or as a dump to
receive garbage, refuse, or waste, whether or not hazardous,
and to Seller's knowledge, there is and has been no hazardous
substance stored, handled, installed, released, spilled or
disposed in, on, under or about the Property. For purposes of
this warranty, the term "hazardous substance" means any
chemical, compound, constituent, material, waste, contaminant
(including, without limitation, petroleum, crude oil or any
fraction thereof) or other substance as defined in or
regulated by any of the following sources as amended from time
to time: (i) the Resource Conservation and Recovery Act of
1976, 42 USC Section 6901 et seq. (RCRA); (ii) the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 USC Section 9601 et seq. (CERCLA);
(iii) the Hazardous Materials Transportation Act, 49 USC
Section 1801, et seq.; (iv) the Toxic Substances Control Act,
15 USC Section 2601 et seq.; (v) the Clean Water Act, 33 USC
Section 1251 et seq.; (vi) the Clean Air Act, 42 USC
Section 1857 et seq.; (vii) all laws of the State of Texas; and
(viii) any federal, state or local regulation, rule or order
issued or promulgated under or pursuant to any of the
foregoing or otherwise by any department, agency or other
administrative, regulatory or judicial body.
(x) The Property is in the same condition as
existed on the date Purchaser inspected the Property on
January 26, 1995,
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except changes as a result of normal wear and tear and
activities in accordance with the Leases. Since such date,
there has been no destruction or damage to the Property or any
part thereof or any improvements, timber or trees thereon by
fire or other casualty (other than such damage or destruction
as may occur after the Effective Date hereof which is the
subject of paragraph 9(b) above), and no timber has been
harvested, cut or removed on or from the Property other than
pursuant to the Timber Deeds and no timber has been cut or
removed on or from the Property other than as expressly
permitted under the other Leases.
(xi) For purposes of Section 3(14) of the Employee
Retirement and Income Security Act of 1974, as amended
(hereinafter referred to as "ERISA"), Seller is not a party in
interest with Purchaser.
(xii) The Property does not constitute an asset of an
employee benefit plan affiliated with Seller, as defined in
Section 3(3) of ERISA.
(xiii) No party other than Seller, or other parties to
the documents identified on Exhibit D, has any right to
conduct timbering operations on the Property or any right,
title or interest in and to any timber located on the
Property.
(b) All warranties and representations will be true as of
the Effective Date of this contract and as of the date of the Closing.
(c) Seller hereby agrees to indemnify and hold harmless
Purchaser from and against any liability, cost, damage, loss, claim, expense or
cause of action (including but not limited to attorneys' fees and court costs)
incurred by or threatened against Purchaser as a result of any breach of any of
the warranties or representations by Seller contained in this paragraph 10,
except as to any inaccuracy in any representation or warranty which arises as a
result of anything occurring after the Effective Date and about which inaccuracy
Seller advises Purchaser at or before Closing, which inaccuracies shall not be
breaches and as respects which there shall be no obligation on Seller's part to
indemnify Purchaser.
11. BROKERAGE COMMISSION. At the Closing, Seller will pay to Hay &
Jones, Inc. (hereinafter referred to as "Broker") a brokerage commission
pursuant to the terms of a separate agreement. It is understood and agreed that
Purchaser will not be responsible for paying any commission, fee or other
compensation to Broker. Seller and Purchaser each warrant and represent to the
other that, except for the commission payable to Broker by Seller, neither has
incurred any liability for any brokerage fee or commission in connection with
the execution and delivery of this contract or the
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consummation of the transactions contemplated hereby. Seller and Purchaser each
agree to indemnify and hold harmless the other from any and all damage, loss,
liability, expense and claim (including but not limited to attorneys' fees and
court costs) arising with respect to any such fee or commission which may be
suffered by the indemnified party by reason of any action or agreement of the
indemnifying party.
12. TAXES; EXPENSES.
(a) Ad valorem real property taxes on the Property, special
assessments, utility charges (if any) and all rental payments with respect to
the Leases to be assigned to Purchaser at the Closing will be prorated as of the
date of Closing. If actual tax bills for the calendar year of Closing are not
available, said taxes will be prorated based on tax bills for the previous
calendar year and the parties hereto agree to cause a reproration of said taxes
upon the receipt of tax bills for the calendar year of Closing. If the Property
is not designated a separate tax parcel, said taxes will be adjusted to an
amount bearing the same relationship to the total tax bill which the acreage
contained within the Property bears to the acreage contained within the property
included within said tax bill. Seller will pay or cause to be paid all timber
taxes, severance taxes and any other taxes imposed with respect to timbering
operations on the Property prior to the date of Closing and all income and/or
capital gains taxes attributable to the sale of the Property. Purchaser shall be
responsible for all special assessments subsequently assessed against the
Property for land use changes resulting in connection with any changes in the
land use of the Property after the sale pursuant to this contract.
(b) Seller will pay the cost of the title examination, the
title insurance premium and any other charges in connection with the standard
coverage in Purchaser's owner's title insurance policy for aggregate coverage
limits of no more than the Purchase Price and without endorsements for which
added charge is made.
(c) Each party will pay its respective costs and expenses
of legal representation.
13. CONDITIONS. Unless waived by Purchaser, and in the case of the
condition in clause (iii) below any waiver must occur on or before the end of
the Inspection Period, the obligations of Purchaser under this contract are
expressly made subject to the fulfillment in all respects of the following
conditions precedent:
(i) the truth and accuracy as of the date of the
Closing of each and every warranty and representation herein made by Seller;
(ii) Seller's timely performance of and compliance
with each and every term, condition, agreement, restriction and obligation to be
performed and complied with by Seller under this contract; and
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(iii) the receipt by Purchaser of the commitment for
the title insurance policy specified in paragraph 6(b) in form and substance
reasonably satisfactory to Purchaser, such satisfaction not to be unreasonably
withheld, provided that this condition shall be deemed satisfied unless
Purchaser gives Seller notice of its dissatisfaction with the form or substance
of the commitment received by Purchaser within thirty (30) days of its receipt.
In the event any of the above conditions are not satisfied on or
before Closing, or before the condition becomes unwaivable in the case of the
condition under clause (iii) above, Purchaser will have the right, exercisable
at Purchaser's sole election, on or before Closing, except in the case of the
condition in clause (iii) above only, exercisable on or before the date that
condition becomes unwaivable, to cancel this contract, whereupon Escrow Agent
will return the Earnest Money to Purchaser and no party hereto will have any
further rights or obligations hereunder.
14. EARNEST MONEY; DEFAULT; REMEDIES.
(a) If the purchase and sale of the Property contemplated
hereby is not consummated because of a default by Purchaser under this contract,
then Escrow Agent will return the Earnest Money to Purchaser and Seller may
avail itself of any and all remedies at law or in equity, including a suit for
monetary damages or specific performance.
(b) If the purchase and sale of the Property contemplated
hereby is not consummated because of a default by Seller under this contract,
then Escrow Agent will return the Earnest Money to Purchaser and Purchaser may
avail itself of any and all remedies at law or in equity, including a suit for
monetary damages or specific performance.
(c) The duties of Escrow Agent will be as follows:
(i) During the term of this contract, Escrow Agent
will invest the Earnest Money in U.S. Government Treasury
securities or in an interest bearing account, as directed by
Purchaser, and will deliver the Earnest Money in accordance
with the terms and provisions of this contract.
(ii) If this contract is terminated by the mutual
written agreement of Seller and Purchaser, or if Escrow Agent
is unable to determine at any time to whom the Earnest Money
should be delivered, or if a dispute develops between Seller
and Purchaser concerning to whom the Earnest Money should be
delivered, then in any such event, Escrow Agent will request
joint written instructions from Seller and Purchaser and will
deliver the Earnest Money in accordance with such joint
written instructions. In the event that
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such written instructions are not received by Escrow Agent
within ten (10) days after Escrow Agent has served a written
request for instructions upon Seller and Purchaser, Escrow
Agent will have the right to pay the Earnest Money into a
court of competent jurisdiction and interplead Seller and
Purchaser in respect thereof, and thereafter Escrow Agent will
be discharged of any obligations in connection with this
contract.
(iii) If costs or expenses are incurred by Escrow
Agent because of litigation or a dispute between Seller and
Purchaser arising out of the holding of the Earnest Money in
escrow, Seller and Purchaser will each pay Escrow Agent
one-half of such reasonable and direct costs and expenses.
Except for such costs and expenses, no fee or charge will be
due or payable to Escrow Agent for its services as escrow
holder.
(iv) By joining herein, Escrow Agent undertakes only
to perform the duties and obligations imposed upon it under
the terms of this contract and expressly does not undertake to
perform any of the other covenants, terms and provisions
incumbent upon Seller and Purchaser hereunder.
(v) Purchaser and Seller hereby agree and
acknowledge that Escrow Agent assumes no liability in
connection herewith except for gross negligence or willful
misconduct; that Escrow Agent will never be responsible for
the validity, correctness or genuineness of any document or
notice referred to under this contract; and that Escrow Agent
may seek advice from its own counsel and will be fully
protected in any action taken by it in good faith in
accordance with the opinion of its counsel.
15. ASSIGNMENT. Purchaser will have the right to assign its rights
under this contract without the consent of Seller, but will continue liable
under this contract.
16. NO WAIVER. No action or failure to act by any party hereto
will constitute a waiver of any right or duty afforded to such party under this
contract, nor will any such action or failure to act constitute an approval of
or acquiescence in any breach of this contract except as may be specifically
agreed in writing.
17. GOVERNING LAW. This contract will be governed by the laws of
the State of Texas.
18. NOTICE. Any and all notices, elections and communications
required or permitted by this contract will be made or given in writing and will
be delivered in person, by facsimile or sent by postage prepaid United States
mail, certified or registered,
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return receipt requested, to the other parties at the addresses or facsimile
numbers set forth below, or such other address or facsimile numbers as may be
furnished by notice in accordance with this paragraph. The date of notice given
by personal delivery will be the date of such delivery. The effective date of
notice by mail will be the date such notice is mailed. The effective date of
notice transmitted by facsimile will be the date confirmation of complete
receipt is received by the transmitting party during normal business hours or on
the next business day if not confirmed during normal business hours.
Seller: Lone Star Steel Company
Suite 1200, 5501 LBJ Freeway
Dallas, Texas 75240
Attention: R. W. Arp
Facsimile #: (214) 770-6413
with a copy to: Lone Star Steel Company
Suite 1200, 5501 LBJ Freeway
Dallas, Texas 75240
Attention: James T. Dougherty
Facsimile #: (214) 770-6471
Purchaser: Prudential Timber Investments, Inc.
Prudential Center
800 Boylston Street
Boston, Massachusetts 02199
Attention: Douglas W. Charles
Facsimile #: (617) 236-2499
with a copy to: Sutherland, Asbill & Brennan
999 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
Attention: Haynes R. Roberts
Facsimile #: (404) 853-8806
Escrow Agent: First American Title Insurance Company
5775 Glenridge Drive, N.E.
Atlanta, Georgia 30328
Attention: Richard Holloway
Facsimile #: (404) 303-1235
19. ENTIRE AGREEMENT. This contract contains the entire agreement
among the parties hereto with respect to the subject matter hereof and cannot be
amended or supplemented except by a written agreement signed by all parties.
20. CAPTIONS. The captions of paragraphs in this contract are for
convenience and reference only and are not part of the substance hereof.
-16-
<PAGE>
21. SEVERABILITY. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained in this
contract, or the application thereof in any circumstance is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences of this contract, will not be in any way
impaired, it being the intention of the parties that this contract will be
enforceable to the fullest extent permitted by law.
22. COUNTERPARTS. This contract may be executed in counterparts
which will be construed together as one instrument.
23. BINDING EFFECT. This contract will bind the parties hereto and
their respective heirs, legal representatives, successors and assigns.
24. TIME OF ESSENCE. Time is of the essence of this contract.
25. SURVIVAL. Notwithstanding any provision of this contract to
the contrary, the agreements and other provisions of this contract, including
without limitation the warranties, representations and indemnities set forth
herein, except paragraph 6(a) above, will survive the Closing, and the
indemnities set forth in paragraphs 7 and 11 shall survive any termination of
this contract, provided that (other than as respects any representations in
paragraph 29 which are not intended to be affected by this proviso) no claim
related to the breach of any of the representations and warranties in this
contract or related to recovery under the indemnification set forth in paragraph
10(c) may be asserted, nor may any suit related thereto be commenced, after
three years after the Effective Date.
26. EFFECTIVE DATE. The effective date (the "Effective Date") of
this contract will be the last date on which all parties hereto shall have
executed this contract, as indicated below.
27. INCORPORATION OF EXHIBITS. All exhibits referred to herein are
hereby incorporated in this contract by this reference.
28. AS-IS. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS CONTRACT, IT IS UNDERSTOOD AND AGREED THAT THE PROPERTY WILL BE CONVEYED
"AS IS" WITHOUT ANY REPRESENTATION OR WARRANTY BY SELLER EXCEPT AS EXPRESSLY SET
FORTH HEREIN. SELLER HAS NOT MADE AND DOES NOT HEREBY MAKE (EXCEPT AS EXPRESSLY
SET FORTH HEREIN) ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, ITS CONDITION, ITS
COMPLIANCE WITH ENVIRONMENTAL LAWS OR OTHER LAWS, INCOME TO BE DERIVED THEREFROM
OR EXPENSES TO BE INCURRED WITH RESPECT
-17-
<PAGE>
THERETO, THE OBLIGATIONS, RESPONSIBILITIES OR LIABILITIES OF THE OWNER THEREOF,
OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE PROPERTY, AND
PURCHASER ACKNOWLEDGES THAT IT IS NOT RELYING UPON ANY SUCH REPRESENTATION OR
WARRANTY MADE BY SELLER OR BY ANY OTHER PERSON EXCEPT FOR THOSE EXPRESSLY SET
FORTH HEREIN.
29. WAIVER OF TEXAS DECEPTIVE TRADE PRACTICES ACT. It is the
intent of Seller and Purchaser to waive all of the provisions (other than
Section 17.555) of the Texas Deceptive Trade Practices - Consumer Protection
Act, Subchapter E of Chapter 17 of the Texas Business and Commerce Code (the
"DTPA") as such provisions are or may be applicable to this contract and the
transaction evidenced hereby. Accordingly, Seller and Purchaser hereby represent
and agree as follows:
(a) Purchaser represents to Seller that Purchaser is not in
a significantly disparate bargaining position with respect to this contract and
the transaction evidenced hereby.
(b) Purchaser represents to Seller that Purchaser is
represented by legal counsel in connection with this contract.
(c) Purchaser represents to Seller that this contract does
not involve a purchase or lease of a family residence occupied or to be occupied
as Purchaser's residence.
(d) Seller and Purchaser agree that the total consideration
paid or to be paid by Purchaser for the acquisition of the Property exceeds
$500,000.
(e) Seller and Purchaser hereby agree, for themselves and
their respective heirs, personal representatives, successors and assigns, that
all of the provisions of the DTPA (except for Section 17.555 thereof) which are
or may be applicable to this contract and the transaction evidenced hereby are
hereby waived, including specifically, without limitation, all rights and
remedies resulting from or arising out of any and all acts or practices of the
other party in connection with this contract and the transaction evidenced
hereby, regardless of whether such acts or practices occurred before or after
the execution of this contract. The provisions of this paragraph 29 shall
survive the Closing or any cancellation or termination of this contract. Seller
and Purchaser agree to have their respective attorneys execute this contract in
order to comply with Section 17.42(a)(3) of the DTPA.
-18-
<PAGE>
IN WITNESS WHEREOF, this contract has been duly executed, sealed
and delivered by the parties hereto the day and year written below as the date
of execution.
SELLER:
LONE STAR STEEL COMPANY
Date of execution by Seller: By: \s\ R. W. Arp
--------------------------------
Title: EX V/P
--------------------------
4/24/95
- --------------------
Attest: \s\ James T. Dougherty
-----------------------------
Title: SECRETARY
---------------------------
TEXAS AND NORTHERN RAILWAY COMPANY
Date of execution by Seller: By: \s\ R. W. Arp
--------------------------------
Title: TREASURER
--------------------------
4/24/95
- --------------------
Attest: \s\ James T. Dougherty
---------------------------
Title: SECRETARY
--------------------------
PURCHASER:
PRUDENTIAL TIMBER INVESTMENTS, INC.
Date of execution by Purchaser: By: \s\ D. W. Charles
--------------------------------
Title: Exec Vice President
--------------------------
4/25/95
- --------------------
Attest: \s\ Frederick W. Blum
----------------------------
Title: Assistant Secretary
--------------------------
(Signatures continued on following page)
-19-
<PAGE>
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE COMPANY
Date of execution by Escrow Agent: By: \s\ Richard G. Holloway
--------------------------------
April 27, 1995 Title: Richard G. Holloway, Counsel
- ---------------------------------- --------------------------
National Accounts
Attest: \s\ Robert M. R??
----------------------------
Title: Vice-President
--------------------------
Acknowledgement of Counsel for Seller and Purchaser of the DTPA waiver set forth
in paragraph 29 of the contract.
\s\ ???
-----------------------------------
Counsel for Purchaser
\s\ ???
-----------------------------------
Counsel for Seller
-20-
<PAGE>
Exhibit A
Property Number F-023
1009.87 acres of land, Lone Star Steel Company fee simple lands, Walter H.
Gilbert Survey, Abstract No. 160, Marion County, Texas.
Being a 1068.06 acre tract of land located in the Walter H. Gilbert Survey,
Abstract No. 160, and being situated North 63 DEG. West approximately 20 miles
from Jefferson, the County Seat of Marion County, Texas, and being more
particularly described as follows:
Beginning at a 6" x 6" concrete monument marked JG- I & GN-WHG, said concrete
monument being the north northeast corner of this tract of land, said concrete
monument being the north northeast corner of the said Gilbert Survey, said
concrete monument being the southeast corner of the I&GN RR Company Survey,
Abstract No. 1433, said concrete monument being also in the west survey line of
the James Graham Survey, Abstract No. 163;
Thence: south 0 DEG. 04' west, along the Graham-Gilbert survey line at 234.77'
pass the center line of an old logging road, at 451.77' pass the center line of
an old logging road, in all a total distance of 472.20' to a 4" iron pipe, said
iron pipe being an "L" corner of the said Gilbert Survey, said iron pipe being
also an "L" corner of this tract of land;
Thence: North 89 DEG. 30' East, along the Graham-Gilbert Survey line, in all a
total distance of 771.79' to a 4" iron pipe for the east northeast corner of
this tract of land, said iron pipe being also the northwest corner of the Andy
Mims Estate 99.17 acre tract of land;
Thence: South, along the Lone Star Steel Company-Andy Mims Estate Boundary
line at 2887.26' pass the center line of an old road, in all a total distance of
3529.16' to a 4" iron pike for al "L" corner of this tract of land, said iron
pipe being the southwest corner of the said Mims Estate 99.17 acre tract of
land, said iron pipe being in the most southern north survey line of the Heirs
of John Ware Survey, Abstract No. 393, said iron pine being also in the north
line of the old Nash 160 acre tract of land now' being held in fee by the Lone
Star Steel Company;
Thence: west, along the Heirs of John Ware Survey line in all a total distance
of 1417.281 to a 4" iron pipe for an "L" corner of this tract of land, said iron
pipe being the west northwest corner of the said Heirs of John Ware Survey, said
iron pipe being also the northwest corner of the old Nash 160 acre tract of land
now being held in fee by the Lone Star Steel Company;
Thence: South, at 1886.76' pass the center line of a creek flowing east, at
2142.76' pass the engineer center line of the Texas State farm-to-market Highway
No. 729, and in all a total distance of 2638.90' to a 4" iron pipe for an inside
"L" corner of the said Gilbert Survey, said iron pine being the south southwest
corner of the said Ware Survey, said iron pine being also the southwest corner
of the said Nash 160 acre tract of land now being held in fee by the Lone Star
Steel Company;
<PAGE>
Exhibit A
Property Number F-023 (cont.)
Thence: East, at 394.40' pass the engineer center line of the said Texas State
farm-to-market Highway No. 729, at 1079.80' pass the engineer center line of a
spur track of the old Port Bolivar Iron Ore Railroad, at 1249.40' pass the
center line of an old road and in all a total distance of 2639.60' to a 4" iron
pipe for an "L" corner of the said Gilbert Survey, said iron pine being also the
southeast corner of the said old Nash 160 acre tract of land now being held in
fee by the Lone Star Steel Company;
Thence: North, at 16.34' pass the center line of a creek flowing east, and in
all a total distance of 722.20' to a 4" iron pipe, also a 12" pine marked x for
an "L" corner of the said Gilbert Survey, said iron pipe being an outside "L"
corner of the Heirs of John Ware Survey, said iron pipe being also in the east
line of the said old Nash 160 acre tract of land now being held in fee by the
Lone Star Steel Company;
Thence: East, along the Ware-Gilbert Survey line, at 187.70' pass the center
line of an old logging road, at 1336.70', pass the center line of an old
unimproved county road, at 2167.70' pass the engineer center line station 1566-
15 of the said old PBIO RR and in all a total distance of 2637.70' to a 4" iron
pipe for the north southeast corner of the said Gilbert Survey, said iron pipe
being the southeast corner of the said Ware Survey, said iron pipe being also in
the west survey line of the David Bruton Survey, Abstract No. 432;
Thence: South, along the Bruton-Gilbert Survey, at 246.46' pass the center
line of a creek flowing east, at 310.46' pass the center line of a creek flowing
east, and continuing south along the William Holloway, Abstract No. 186, Gilbert
Survey line, at 2304.46' pass the center line of an old lane, at 3075.06' pass
the engineer center line station 1747-73.4 of the said Texas State farm-to-
market High-way No. 729, and in all a total distance of 3137.56' to a stake for
the east southeast corner of this tract of land, said stake being also 40'
perpendicularly distant from the engineer center line of said Texas State farm-
to-market Highway No. 729;
Thence: in a northwesterly direction, 40' perpendicularly distant from and
parallel to engineer center line of the said Texas State farm-to-market Highway
No. 729, in all a total distance of 4589.18' to a stake, said stake being 40'
perpendicularly distant from engineer center line of the said Texas State farm-
to-market Highway No. 729; said stake being also 100.00' perpendicularly distant
from the engineer center line of the said old PBIO RR;
Thence: in a westerly direction, 100.00' perpendicularly distant from and
parallel to the engineer center line of the said old PBIO RR, in all a total
distance of 275.50' to a 4" iron pipe for an "L" corner of this tract of land;
<PAGE>
Exhibit A
Property Number F-023 (cont.)
Thence: South, at 111.50' pass the center line of a creek flowing north, at
659.50' pass the center line of said creek flowing north, at 1939.50' pass the
canter line of an old logging road, in all a total distance of 2839.50' to an
old car axle for the south southeast corner of this tract of land, said old axle
being west 3629.11' from the southeast corner of the said Gilbert Survey, said
old axle being west 710.31' from the northeast corner of the Edwin Price Survey,
Abstract No. 315, said old car axle being in the north survey line of the said
Price Survey, said old axle being also in the south survey line of the said
Gilbert Survey;
Thence: West along the Price-Gilbert Survey lines, at 596.30' pass the center
line of a creek flowing south, at 1334.30' pass the center line of an old
logging road, et 2264.30' pass the center line of a creek flowing south, at
3616.30' pass the center line of an old road, at 4258.30' pass the center line
of a creek flowing south, and in all a total distance of 4594.53' to a 4" iron
pipe for the south southwest corner of this tract of land, said Iron pipe being
the south southwest corner of the said Gilbert Survey, said iron pipe being the
northwest corner of the said Price Survey, said iron Pipe being also in the east
survey line of the William C. Johnson Survey, Abstract No. 225;
Thence: North, along the Johnson-Gilbert Survey line, in all a total distance
of 674.0 feet to a 4" iron pipe set at the southwest corner of a 26.58 acre
tract of land;
Thence: East, in all a total distance of 694.50' to a 4" iron pipe set at the.
southeast corner of the said 26.58 acre tract of land;
Thence: North, in all a total distance of 1666.80' to a 4" iron pipe set at
the northeast corner of the said 26.58 acre tract of land;
Thence: West, in all a total distance of 694.50' to a 4" iron pipe set at the
northeast corner of the said William C. Johnson Survey. Said iron pipe being an
"L" corner of the said Gilbert Survey;
Thence: North, in all a total distance of 1872.00' to a 4" iron pipe set at
the northeast corner of a 160.45 acre tract of land;
Thence: West, in all a total distance of 3683.59' to a 4" iron pipe set in the
west line of the said Gilbert Survey, same being the east line of the James A.
Blundell Survey, A-26;
Thence: North, along the Blundell-Gilbert Survey line at 1682.34' pass the
center line of an old logging road, and in all a total distance of 1861.34' to a
4" iron pipe for the east northwest corner of the said Gilbert Survey, said iron
pipe being the northeast corner of the said Blundell Survey, said iron pipe
being in the south boundary line of the J. M. Niblett Estate. 301.43 acre tract
of land, said iron pipe being also the west northwest corner of this tract of
land;
<PAGE>
Exhibit A
Property Number F-023 (cont.)
Thence: East, along the Niblett-Lone Star Steel Company boundary line, at
1193.98' pass the center line of a creek flowing south, at 1706.98' pass the
center line of an old logging road, at 2105.98' pass the center line of a creek
flowing north, in all a total distance of 2515.00' to a 4" iron pipe for an "L"
corner of this tract of land, said iron pipe being also the southeast corner of
the said Niblett Estate 301.43 acre tract of land;
Thence: North 0 DEG. 13' East, along the Niblett Estate-Lone Star Steel Company
boundary line, at 462.00' pass the engineer center line of the said Texas State
farm-to-market Highway No. 729, in all a total distance of 1456.8' to a 4" iron
pipe set at the southwest corner of a 60 acre tract of land;
Thence: North 89 DEG. 00' East, along and with the south line of the said 60
acre tract of land, in all a total distance of 1263.60' to a 4" iron pipe for
the southeast corner of the said 60 acre tract of land. Said iron pipe being in
the west line of the Mims Estate 157.90 acre tract of land;
Thence: South, along and with the west line of the Mims Estate lands, in all a
total distance of 27.71' to a 4" iron pipe set at the southwest corner of the
Mims Estate 157.90 acre tract of land;
Thence: East, at 545.00' Pass the center line of an old logging road, at
903.001 pass the center line of a creek flowing north, in all a total distance
of 2647.32' to a 4" iron pipe for an "L" corner of this tract of land, said iron
pipe being also the southeast corner of the Mims Lstate 157.90 acre tract of
land;
Thence: North, along the Mims-Lone Star Steel Company boundary line at 600.00'
pass the center line of an old logging road, at 1100.00' pass the center line of
an old road, at 1581.00' pass the center line of the said old road, in all a
total distance of 2652.99' to a 4" iron pipe for the most eastern northwest
corner of this tract of land, said iron pipe being in the north survey line of
the said Gilbert Survey, said iron pine being the northeast corner of the said
Mims Estate 157.90 acre tract of land, said iron pipe being also in the south
survey line of the said I&GN RR Company Survey;
Thence: North 89 DEG. 06' East, along the I&GN RR Company-Gilbert Survey line
in all a total distance of 844.92' to the place of beginning, and containing
1068.06 acres of land, more or less, save and except 38.69 acres of land for the
old PBIO RR right-of-way and 19.5 acres of land for the farm-to-market Highway
No. 729 right-of-way, leaving a total of 1009.87 acres in this tract of land.
<PAGE>
Exhibit A
Property Number F-031
The Lone Star Steel Company fee simple 147.79 acre tract of land
in the Heirs of John Ware Survey, Abstract No. 393, Marion County, Texas, F-31.
Being a 159.91 acre tract of land located in the Heirs of John Ware Survey,
Abstract No. 393, and being situated North 63 DEG. West approximately 20 miles
from Jefferson, the County Seat of Marion County, Texas, said 159.91 acre tract
of land being previously described and duly recorded in Vol. C-2, page 198 of
the deed records of Marion County, Texas, said 159.91 acres of land being
previously known as the J. S. Wash 160 acre survey, and being duly recorded in
the General Land Office at Austin, Texas, and being more particularly described
as follows:
Beginning at a 4" iron pipe for the northeast corner of this tract of land, said
iron pipe being an inside "L" corner of the Walter H. Gilbert Survey, Abstract
No. 160, said iron pipe being an outside "L" corner of the said Ware Survey,
said iron pipe being the southeast corner of the Andy Mims Estate 99.17 acre
tract of land, said iron pipe being also the northeast corner of the old Nash
160 acre tract of land;
Thence West along the Gilbert-Ware survey line At 1222.32? pass a 4" iron
pipe for the southwest corner of the said Andy Mims Estate 99.17 acre tract of
land, in all a total distance of 2639.60' to a 4" iron pipe for the northwest
corner of this tract of land, said iron pipe being the northwest corner of the
old Nash 160 acre tract of land, said iron pipe being an outside "L" corner of
the said Gilbert Survey, said iron pipe being also the west northwest corner of
the said Ware Survey;
Thence South along the Gilbert-Ware survey line, at 1886.76' pass the center
line of a creek flowing in a southeasterly direction, at 2142.76' pass the
engineer center line of the said Texas State farm-to-market Highway No. 729, and
in all a total distance of 2638.901 to a 4" iron pipe for the southwest corner
of this tract of land, said iron pipe being the southwest corner of the old Nash
160 acre tract of land, said iron pipe being an outside "L" corner of the said
Gilbert Survey, said iron pipe being also the southwest corner of the said Ware
Survey;
Thence East along the Gilbert-Ware survey line, at 394.40' pass the engineer
center line of the said Texas State farm-to-market Highway N. 729, at 690.140'
pass the center line of the said creek flowing in a southeasterly direction, at
1079.50' pass the Engineer center line of the said old PBIO RR spur line, at
1249.40' pass the center line of an old road, and in all a total distance or
2639.60' to a 4" iron pipe for the southeast corner of this tract of land, said
iron pipe being an outside "L" corner of the said Gilbert Survey, said iron
pipe being the west southeast corner of the said Ware Survey, said iron pipe
being also the southeast corner of the old Nash 160 acre tract of land;
Thence North along, the Gilbert-Ware survey line, at 16.34' pass the center
line of a creek flowing east, at 722.20' pass a 4" iron pipe for an inside "L"
corner of the said Gilbert Survey, said iron pipe being also an outside "L"
corner of the said Heirs of John Ware Survey, and continuing north in all a
total distance of 1916.70' to the place of beginning and containing 159.91 acres
of land, more or less, SAVE AND EXCEPT 4.09 acres of lend, right-of-way, deeded
to the Port Bolivar Iron Ore Railroad for a spur line into the old East Texas
Brown Ore Company ore field, and being more particularly described as follows:
<PAGE>
Exhibit A
Property Number F-031 (cont.)
Beginning at a stake in the at right-of-way of the said spur line of the said
old PBIO RR, said stake being east 1139.80' from the southwest corner of the
Heirs of John Ware Survey, Abstract No. 3??3, said stake being in a north survey
line of the Walter H. Gilbert Survey, Abstract No. 160, said stake being also
50.00' perpendicularly distant from the engineer center line of the said spur
line of the said old PBIO RR;
Thence In a northeasterly direction 50.00' perpendicularly distant from and
parallel to the engineer center line of the said spur line of the said old PBIO
RR 325.00' to a stake, said stake being also 50.00' perpendicularly distant
from the engineer center line stating 15;
Thence North 48 DEG. 36' East 25.00' to a stake, said stake being 75.00'
perpendicularly distant from engineer center line station 15 of the said spur
line of the said old PBIO RR;
Thence in a northwesterly direction 75.00' perpendicularly distant from and
parallel to the engineer center line of the said spur line of the said old PBIO
RR 1000.00' to a stake, said stake be in 75.00' perpendicularly distant from
engineer center line station 25, said stake being also the end of the said spur
line;
Thence South 48 DEG. 36' West at 75.00' pass the engineer center line station
25 of the said spur line of the old PBIO RR and in all a total distance of
150.00' to a stake, said stake being in the south right-of-way line of the said
spur line of the said old PBIO RR, said stake being also 75.00' perpendicularly
distant from the engineer center line station 25 of the said spur line of the
said old PBIO RR;
Thence in a southeasterly direction 75.00' perpendicularly distant from and
parallel to the engineer center line of the said spur line of the said old PBIO
RR 1000.00' to a stake, said stake being 75.00' perpendicularly distant from the
engineer center line station 15 of the said spur line of the said old PBIO RR;
Thence North 48 DEG. 36' East 25.00' to a stake, said stake being 50.00'
perpendicularly distant from the engineer center line station 15;
Thence in a southeasterly direction 50.00' perpendicularly distant from and
parallel to the engineer center line of the said spur line of the said old PBIO
RR 249.75' to a stake, said stake being in a north survey line of the said
Gilbert Survey, said stake being also east 1019.80' from the said southwest
corner of the said Ware Survey;
Thence East along the Gilbert-Ware Survey line, at 60.00' pass the engineer
center line of the said spur line of the said old PBIO RR and in all a total
distance of 120.00' to the place of beginning, and containing 4.09 acres of land
more or less.
And there is also SAVED AND EXCEPTED from this tract of land 2.81 acres of
right-of-way deeded to the Texas State highway Department for the Texas State
Farm-to-market Highway No. 729, and being more particularly described as
follows:
<PAGE>
Exhibit A
Property Number F-031 (cont.)
Beginning at a stake, said stake being the south survey line of the Heirs of
John Ware Survey, Abstract No. 393, said stake being in a north survey line of
the Walter H. Gilbert Survey, Abstract No. 160, said stake being also east
520.50' from the southwest corner of the said Ware Survey;
Thence in a northwesterly direction 40' perpendicularly distant from and
parallel to the engineer center line of the said Texas State farm-to-market
Highway No. 729 820.00' to a stake, said stake being in the west survey line of
the said Ware Survey, said stake being in an east survey line of the said
Gilbert Survey, said stake being also North 595.00' from the said southwest
corner of the said Ware Survey;
Thence South along the Gilbert-Ware Survey line, at 75.00' pass the engineer
center line of the said Texas State farm-to-market Highway No. 729, and in all a
total distance of 150.00' to a stake, said stake being also North 445.00' from
the said southwest corner of the said Ware Survey;
Thence in a southeasterly direction 40.00' perpendicularly distant from and
parallel to the engineer center line of the said Texan State farm-to-market
Highway No. 729, 550.00' to a stake, said stake being in the south survey line
of the said Ware Survey, said stake being in a north survey line of the said
Gilbert Survey, said stake beings also east 325.00' from the said southwest
corner of the said Ware Survey;
Thence West along the Gilbert-Ware Survey line, at 92.75' pass the engineer
center line of the said Texas State farm-to-market Highway No. 729, in all total
distance of 195.50' to the place of beginning, and containing 2.81 acres of
land, more or less.
And there is also SAVED AND EXCEPTED from this tract of land 5.22 acres of land
being more perpendicularly described as follows:
Being a 5.22 acre tract of land located in the Heirs of John Ware Survey,
Abstract No. 393, and being situated in Marion County, Texas, and being more
particularly described as follows:
Beginning at a stake for the southwest corner of this tract of land, said stake
being West 819.30' from the most southern southeast corner of the said Ware
Survey line, same being a corner of W.H. Gilbert Survey, Abstract No. 160, said
stake being also in the north survey line of the said Gilbert Survey;
Thence North 24 DEG. 59' East, in all a total distance of 462.50' to a stake
for an angle corner, said stake being in a rock pile, said corner being also a
fence corner;
Thence North 31 DEG. 51' East, 266.20' to a stake for the northwest corner of
this tract of land, said stake being also a fence corner;
Thence North 85 DEG. 20' East, 159.29' to a stake for a corner;
<PAGE>
Exhibit A
Property Number F-031 (cont.)
Thence South 33 DEG. 10' East, 161.91' to a stake for a corner, said stake
being also in a fence corner;
Thence South 16 DEG. 05' West, 543.47' to a stake for a southeast corner of
this tract of land, said stake being also in the Ware-Gilbert Survey line;
Thence West along the Ware-Gilbert Survey line, 425.50' to the place of
beginning, containing 5.22 acres of land, more or less;
leaving in all a total of 147.79 acres of land in this tract, more or less.
<PAGE>
Exhibit A
Property Number F-030
FIELD NOTES
for a Survey of 646.05
acres of land out of
Marion and Cass Counties, Texas, situate approximately N. 63 DEG. W. 20 miles
from Jefferson and S. 56 DEG. W. 18.14. miles from Linden known as the I & G.N.
R.R. Co. Survey, Abstract 433, and being the same land as patented to said
Railroad Company in Patent No. 208, Vol. 112, said 646.05 acres being wore
particularly described as follows:
BEGINNING at a 6" x 6" concrete monument with copper disk marked "MW-IGN-WHG"
set in the east line of McKinney & Williams Survey, Abstract 393, at the
original most northerly northwest corner of the Walter H. Gilbert Survey and
having American Polyconic Grid co-ordinates (in feet) of N: 3,227,252.47 and E:
3,721,701.09 for she most Southerly southwest corner of this survey. From this
monument old witness trees stand as follows: a 20" pine marked "X" bears S.
86 DEG. 30' E. 2.6 vrs. and a 14" White oak marked "X" bears N. 31 DEG. 40' E.
2.2 vrs.
THENCE Along with the East line of the Mckinney and Williams Survey, Abstract
numbers 393 and 392, N. 0 DEG. 29' 55" W 1679.35 vrs. (4664.9') to a monument
marked "MW-IGN" set in the Northeast corner of said McKinney and Williams
Survey, Abstract 392 and having grid co-ordinates (in feet) of N: 3,231,915.20
and E: 3,721,559.98 for an "L" corner of this survey. From this monument a 14"
Post oak marked "X" bears S. 65 DEG. 30' E. 9.0 vrs. and an 8" Hickory marked
"X" bears N. 87 DEG. 30' E. 11.0 vrs.
THENCE Along with the North line of said McKinney & Williams Survey West
540.87 vrs. (1502.4') to a monument marked "TS 2-IGN-MW" set in said line at
the original Southeast corner of a T. S. Sweatman Survey and having grid
co-ordinates (in feet) of N: 3,231,882.83 and E: 3,720,057.90 for the most
northerly southwest corner of this survey. From this monument two old
witness trees stand as follows: 7 pine marked "X" bears W. 35 W. 1.8 vrs.
and a 15" Hickory marked "X" bears S. 2 DEG. 10' E. 8.1 vrs. This monument is
set at an old pile of rock for corner.
THENCE N. 0 DEG. 0' 38" E. at 404.20 vrs. pass over the northeast corner of said
Sweatman Survey and continuing same course along with the East line of the G. H.
Allen Survey in all 770.82 vrs. (2141.2') to a monument marked "TSS-IGN-GHA" set
in the south line of the "Big" T.S. Sweatman Survey at the original most
southerly northeast corner of the G. H. Allan Survey and having grid co-
ordinates (in feet) of N: 3,234,023.51 and E: 3,720,012.16 for the most westerly
Northwest corner of this survey. From this corner old original witness trees
stand as follows: an 8" Hickory marked "X" bears N. 35 DEG. 30' E. 3.0 vrs. and
a 7" Post Oak marked "X" bears W. 45 DEG. 40' W. 11.6 vrs.
<PAGE>
Exhibit A
Property Number F-030 (cont.)
THENCE Along with the south line of said T. S. Sweatman Survey S 89 DEG. 51'
03 " E. 525.76 vrs. (1460.4') to the original Southeast corner of said Survey a
monument marked "TSS-IGN" set in an old rock pile and having grid coordinates
(in feet) of N:3,234,051.15 and E: 3,721,472.34 for an "L" corner of this
survey. From this monument two old original witness trees stand as follows: 8"
Post Oak marked "X" bears S. 52 DEG. 30' W. 4.9 vrs.; old 5" Hickory marked "X"
bears S 87 DEG. 30' E. 4.9 vrs.
THENCE Along with the east line of said Sweatman Survey N. 0 DEG. 14' 17" E.
215.11 vrs. (597.5') to a monument marked "TSS-LCL-IGN" set in said line at
southwest corner of L. C. Luckel Survey and having grid co-ordinates (in feet)
of N: 3,234,648.59 and E:3,721,461.95 for the most northerly northwest corner of
this survey. From this monument a 12" Post Oak marked "X" bears S. 66 DEG. E.
5.2. vrs. and an "8" Post Oak marked "X" bears N. 56 DEG. E. 4.9 vrs.
THENCE Along with the South line of said Luckel Survey, S. 89 DEG. 51' 03" E.
1236.84 vrs. (3435.7') to a monument marked "LCL-JG-IGN" set in the west line of
the James Graham at the southeast corner of said Luckel Survey, having grid co-
ordinates (in feet) of N: 3,234,713.68 and E: 3,724,897.01 for the northeast
corner of this survey. From this monument an 18" Red Oak marked "X" bears N.
79 DEG. 15' W. 7.5 vrs. and a 15" Post Oak marked "X" bears S. 37 DEG. 30' W.
12.2 vrs.
THENCE Along with the west line of said James Graham Survey S. 0 DEG. 03' 59"
W. 2641.88 vrs. (7338.6') to a monument marked "IGN-JG-MHG" set in said line at
the most northerly northeast corner of the W. H. Gilbert Survey and having grid
co-ordinates (in feet) of N: 3,227,376.65 and E: 3,725,046.64 for the southeast
corner of this survey. From this monument a 22" Post Oak marked "X" bears N.
86 DEG. 20' W. 19.3 vrs. and an 8" pine marked "X" bears N. 55 DEG. 40' W. 13.1
vrs.
THENCE Along with the North line of said Gilbert Survey S. 89 DEG. 06' 32" W.
1205.23 vrs. (3347.9') to place of beginning and containing 646.05 acres of land
of which approximately 103.4 acres lies in Cass County and the balance of
approximately 542.6 acres lies in Marion County. (The county line was not run in
connection with this survey and therefore the division of acreage is approximate
only.
<PAGE>
Exhibit A
Property Number F-030 (cont.)
SAVE AND EXCEPT the following property:
All that certain tract or parcel of land situated in the I & G.N.R.R. Survey,
Marion County, Texas and being more particularly described as follows:
BEGINNING at an iron pin for corner in a fence, same being in a West
line of the bone Star Steel tract as fenced and occupied on the ground
and also being in a West line of the I & G.N. R.R. Survey A-433 as
fenced and occupied on the ground, and said corner being in the East
line as fenced of a tract owned by George Jackson;
THENCE S 65 DEG. 39' 57" E a distance of 108.40 feet to an iron pin
for corner;
THENCE S 0 DEG. 04' 05" E a distance of 228.64 feet to an iron pin
for corner near a fence, same being in the North right-of-way line of
State Highway No. 155;
THENCE Southwesterly with the North right-of-way line of State
Highway No. 155 along a curve to the right having a central angle of
32 DEG. 47' a distance of 112.13 feet to a fence corner for corner,
same being in the North right-of-way line of State Highway No. 155, and
also being a Southwest corner of the Lone Star Steel tract as fenced
and occupied on the ground;
THENCE N 0 DEG. 24' 26" E generally with a fence and with a West line
of the Lone Star Steel tract as fenced and occupied on the ground and
with the East line as fenced of a tract owned by George Jackson a
distance of 321.31 feet to the Place of Beginning containing 0.631
acres of land.
AND SAVE AND EXCEPT the 11.693 acres of the above described property conveyed
for a highway right of way as evidenced by a Right-of-Way Deed dated September
7, 1951, executed by Lone Star Steel Company to the State of Texas.
<PAGE>
Exhibit A
Property Number F-030 (cont.)
AND SAVE AND EXCEPT the following property:
Being a 39.90 Acre tract of land located in the I & GN Railroad Company Survey,
A-433, and being situated in Marion County, Texas, said 39.90 acre tract of and
being the same tract of land described in deed from Marion-Cass Development
Company to Malissie Hall Campbell, dated June 26, 1940 and being duly recorded
in Volume 116, page 523 the Deed Records of Marion County, Texas and being more
particularly described as follows:
Beginning at a 6" x 6" concrete monument with a copper disc marked
"MW-IGN-WHG" a 20" pine marked "X" bears S 86 DEG. 30' E 2.6 varas, a 14"
white oak marked "X" bears N. 31 DEG. 40' E 2.2 varas, said concrete monument
being the southwest corner of the said I & GN Railroad Survey, said concrete
monument being the north northwest corner of the Walter H. Gilbert Survey,
A-160, said concrete monument being also in the east survey line of the
McKinney & Williams Survey, A-393;
Thence N 89 DEG. 07' E along the Gilbert I & GN Railroad Survey line 796.00' to
a 1/2" iron pin for the southeast corner of this tract of land;
Thence N 0 DEG. 457 W, in all a total distance of 1835.10' to a 1/2" iron pin
for an ell corner of this tract of land;
Thence N 88 DEG. 00' E, in all a total distance of 206.90' to a 1" iron pin for
an ell corner of this tract of land;
Thence N 0 DEG. 45' W, in all a total distance of 283.00' to & 1" iron pin
ford the northeast corner of this tract of land;
Thence S 88 DEG. 00' W at 744.00' past the engineer's center line of Texas
State Highway # 155, and in all a total distance of 1003.00' to a 1" iron pin
for the northwest corner of this tract of land, said iron pin being in the most
east-west survey line of the said I & GN Railroad Company survey, said iron pin
being also in the east survey line of the McKinney &,Williams Survey, A-392;
Thence S 0 30' E along the McKinney & Williams, A-392 - I & GN Railroad
Company Survey and along the McKinney & Williams, A-393 - I & GN Railroad Survey
line, in all & total distance of 2102.47' to the place of beginning, containing
39.90 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-188
Being a 167-4/5 acre tract situated in Morris and Marion
Counties, Texas, of the John H. Johnson Headright Survey and more
particularly described as follows:
BEGINNING at the N.E. corner of a 137-acre tract of land now
owned by Sol Smith of the same headright survey from which & pine brs.
S. 32 deg. E. 7 vrs. off a post oak brs. S. 79 DEG. E. 6-1/2 vrs. off,
both mkd. X;
THENCE South 2762-2/10 vrs. a stake in John Johnson's N.B.
line;
THENCE East 140 vrs. a stake on the S.E. corner of John
Johnson Survey;
THENCE North 1766-1/3 vrs. a stake the N.W. corner of a 59-1/2
acre tract now owned by Maynold McCain of same headright;
THENCE East with Maynold McCain N.B. line 671-1/3 vrs. to his
N.E. corner, a stake;
THENCE North 986 vrs. a stake;
THENCE West 711 vrs. to the PLACE OF BEGINNING, containing
187-4/5 acres of land, more or less.
SAVE AND EXCEPT an undivided 5/6 of the oil and gas lying in, on,
under or that may be produced from the above described Tract
heretofore reserved, together with the right of ingress and egress for
the purposes of drilling, mining, exploring for and producing the
same.
<PAGE>
Exhibit A
Property Number F-187
Being a 100-acre tract of land out of the T. S. Sweatman Survey,
Morris County, Texas, said tract being situated about 15 miles nearly due
south from Daingerfield, Texas, and more particularly described as follows:
BEGINNING at the NW corner of a survey of 263 acres of land made for
T. S, Sweatman;
THENCE East with the North line of said survey, 351-63/100 vrs. to
a stake from which a post oak brs. S 85 W. 23 links off, mkd. X;
THENCE South 716.50 vrs to a stake from which a water oak brs. H.
67 E. 8 links off, mkd. X;
THENCE East 84-58/100 vrs. to a water oak for a corner, mkd. X;
THENCE South 716-50/100 vrs. to a stake in the South line of said
263-acre survey;
THENCE West 436-21/100 vrs. to the S.W corner of said survey;
THENCE North with the West line of same 1433 vrs. to the PLACE OF
BEGINNING, containing 100 acres of land more or less.
LESS AND EXCEPT the following:
(a) 2 acres described in deed of September 23, 1914, from A.M.
Rhyne to the Trustees of Grahamfield M.E. Church, which is described
as follows:
BEGINNING at the Northeast corner of 100-acres tract of land
above described;
THENCE South with East line of said tract of land 99 yds.;
THENCE West 99 yards;
THENCE North 99 yards;
THENCE East 99 yds. to the PLACE OF BEGINNING, containing 2
acres of land, more or less.
(b) 4 acres, more or less, described in deed of September 27,
1954, from Birdie Simpson et vir to Cleve Hopkins recorded in Volume
76, Page 104 of the Deed Records of Morris County, Texas, to which
reference is hereby made.
(c) 2 acres described in deed of December 3, 1970, from Maud
Salmon et vir to Ralph Hopkins, recorded in Volume 133, Page 173 of
the Morris County Deed Records, to which reference is hereby made.
SAVE AND EXCEPT all oil and gas lying in, on, under or that may be
produced from the above described Tract heretofore reserved, together with
the right of ingress and egress for the purposes of drilling mining,
exploring for and producing the same.
<PAGE>
Exhibit A
Property Number F-011
FIELD NOTES
for a Survey of 176.61
acres of land situate
in Cass County, Texas, approximately 17.2 miles S. 64 DEG. 30' W. from
Linden, known as the J. W. KIRKPATRICK SURVEY, abstract 627, and being the
same land as described in Vol. 1, Page 23 of the Surveyors Records of
Cass,County, said 176.6% acres being described as follows:
BEGINNING at a 6" x 6" concrete monument with copper disk marked "WCE-JWK-TL"
set in old OrigInal Pile of Rock in the east line of W. C. Everett Survey for
the most easterly northwest corner of the Thomas Lee Surveys and having American
Polyconic Grid co-ordinates (in feet) of N: 3,243,342.62 Land. E= 3,720,355,30
for the southwest corner of this survey. From this monument a 4" Hickory marked
"X" bears N. 58 DEG. 15' E. 4.3 vrs. and a 12" Hickory marked "X" bears N. 87
DEG. 15' W. .12.5 vrs.
THENCE Along with the east line of the W. C. Everett Survey N. 0 DEG. 18'
23" E. 889.94 vrs. (2472.0') to a monument marked "WCE-WK-JWK" set in the
south line of the William King Survey at the Northeast corner of said Everett
Survey and having grid co-ordinates (in feet) of N: 3,245,814.34 and E:
3,720,315.26 for the Northwest corner of this survey. From this monument a
6" Post Oak marked "X" bears N. 14 E. 14.5 vrs. and an 8" cost Oak marked
"X" bears S. 35 DEG. 45' W. 11.6 vrs.
THENCE Along with the south line of the William King Survey N. 89 DEG. 55. 10"
E 1160.35 vrs. (3223.2') to a monument marked "WE-SMW-JWK" se set in said line
at the northwest corner; of the S. M. Williams Survey and having grid co-
ordinates (in feet) of N: 3,245,888.31 and E. 3,723,537.60.for the northeast
corner of this survey. From this corner a 16" Post Oak marked "X" bears S. 68
DEG. E. 9.4 vrs. and an 8" Hickory marked "X" bears N. 49 DEG. 45' E. 13.3 vrs.
THENCE South along with the west line of said Williams Survey at 829.45 vrs.
passing over the southwest corner of same and in all 853.45 vrs. (2369.4') to a
monument marked "JWK-EHV-JWK" set at a corner of the E. H. Vincent Survey in the
North line of the J. W. Kirkpatrick Survey, Abstract 628, and having grid co-
ordinates (in feet) of N: 3,243,519.42 and E: 3,723,588.68 for the southeast
corner of this Survey. From this monument a 3" Post Oak marked "X" bears N.
13 DEG. 15' E. .6.5 vrs. and a 3" Sweet Gum marked "X" bears If 44 DEG. 30' E.
7.9 vrs.
THENCE Along with the north line of said Kirkpatrick Survey, Abstract 628, N.
89 DEG. 54' 43" W. 983.56 vrs. (2732.1') to the northwest corner of same, a
monument marked "JWF,A627-JWK,A-628" having grid co-ordinates (in feet) of If:
3,243,464.77 and E: 3,720,857.12 for an "L" corner of this Survey. From this
monument a 12" Red Oak marked "X" bears If. 49 DEG. 15' W. 1.5 vrs. and another
12" Red Oak marked "X" bears N. 82 DEG. 45' W. 10.9 vrs.
<PAGE>
Exhibit A
Property Number F-011 (cont.)
THENCE S. 0 DEG. 04' 15" E. 40.43 vrs. (112.3') to 9 monument marked
"JWK-JWK-TL" set in the west line of said Kirkpatrick Survey, Abstract 628, at
the original most northerly northeast corner of the Thomas Lee Survey and having
grid co-ordinates (in-feet) of N: 3,243,352.50 and E: 3,720,859.68 for the most
westerly south-east corner of this Survey. From this monument two old witness
trees stand as follows: 8" Post Oak marked "X" bears N 79 DEG. 20' W. 1.5 vrs.
and a 20" Red Oak marked "X" bears S. 61 DEG. 15' W. 3.6 vrs. We marked a 12"
Sweet Gum "X" bearing S. 29 E. 7.0 vrs.
THENCE Along with a north line of the Thomas Lee Survey S. 89 DEG. 53' 15" W.
181.61 vrs. (504.5') to place of beginning containing 176.61 acres of land.
<PAGE>
Property No. F-012
FIELD NOTES for
a Survey of 146.99 acres
of land situate in Cass
County, Texas, approximately 9.3 miles S. 27 DEG. E. from Daingerfield known as
the J.W. KIRKPATRICK SURVEY, ABSTRACT No. 628, and being the same land as
described in Vol. 1, Page 455, of the Surveyors Records of Cass County; said
146.99 acres being more particularly described as follows:
BEGINNING at a 6" x 6" concrete monument with copper disk marked "TL-JWK" set at
an old Rock Pile for an original "L" corner of the Thomas Bee Survey and having
American Polyconic Grid co-ordinates (in feet) of N: 3,241,387.70 and E:
3,720,904.49 for the original southwest corner of this Survey. From this
monument a 4" Post Oak marked "X" bears N. 35 DEG. 30' E. 13.1 vrs. and a 6"
Post Oak marked "X" bears S. 66 DEG. 30' W. 12.3 vrs.
THENCE Along with an east line of said Lee Survey N. 0 DEG. 04' 15" .W. at
707.51 vrs. passing over the most northerly northeast corner of same and in all
747.94 vrs. (2077.6') to a monument marked "JWK,A627-JWK,A628", set at an "L"
corner of the J. W. Kirkpatrick Survey, Abstract No. 627, and having grid co-
ordinates (in feet) of N: 3,243,464.77 and E: 3,720,857.12 for the northwest
corner of this Survey. From this monument a 12" Red Oak marked "X" bears N. 49
DEG. 15' W. 1.5 vrs. and another 12" Red Oak also marked "X" bears N. 82 DEG.
45' W. 10.9 vrs.
THENCE Along with a south line of the Kirkpatrick Survey, Abstract No. 627,
S. 89 54' 43" E. at 983.56 vrs. passing over the southeast corner,of same and
in all 1119.78 vrs. (3110.5') to a monument marked "EHV-JWK" set et an "L"
corner of the E. H. Vincent Survey and having grid co-ordinates (in feet) of N:
3,243,527.05 and E: 3,723,966.99 for the northeast corner of this Survey. From
this monument a 4" Post Oak marked "X" bears S. 68 DEG. E. 4.3 vrs. and a 3"
Post Oak marked "X" bears N. 81 DEG. 30' E. 3.7 vrs.
THENCE Along with the west line of said E. H. Vincent Survey S. 1 DEG. 26'
40".W. 747.56 vrs. (2076.6') to a monument marked "JWK-EHV-JHK" set in the north
line of the J. H. Kernels Survey et the southwest corner of said Vincent Survey
and having grid co-ordinates (in feet) of N: 3,241,450.50 and E: 3,723,959.40
for the southeast corner of this Survey. From this monument a 3" Black Gum
marked "X" bears N. 12 DEG. W. 3.8 vrs. and 4" Sweetgum marked "X" bears, N
24 DEG. 15' E. 6.8 vrs.
THENCE Along with the north line of the J. H. Kernels Survey W. 89 DEG. 56'
35" W at 601.83 vrs. passing over the northwest corner of same and,
continuing same course, along with the north line of the Thomas Lee Survey in
all 1100.00 vrs. (3055.6') to the place of beginning containing 146.99 acres
of land.
<PAGE>
Exhibit A
Property Number F-021
Being a 203.35 acre tract of land situated in Cass County, Texas,
approximately South 63 DEG. 30' West 16.5 miles from Linden, Texas and being
located in the S. P. Williams Survey, Abstract No. 1120, and being the same
land described in warranty deed from P. J. Stroman and Miss C. D. Stroman to
L. G. Luckel, Trustee, and being duly recorded in Vol. L-3, page 333 of the
deed records of Cass County, Texas, and being more particularly described as
follows:
Beginning at a 6" x 6" concrete monument marked JWK-SMW-EHV, said concrete
monument being in the east survey line of the J. W. Kirkpatrick Survey, Abstract
No. 627, said concrete Monument being the southwest corner of the said Williams
Survey, said concrete monument being the north-northwest corner of the E. H.
Vincent Survey, Abstract No. 1027, said concrete monument being north 65.42'
from another 6" x 6" concrete monument, an "L" corner of the said Vincent
Survey, said concrete monument being also the southwest corner of this tract of
land;
Thence North along the Kirkpatrick-Williams Survey line 2304.21' to a 6" x 6"
concrete monument marked JWK-WK-SNW, said concrete monument being the west
northwest corner of the said Williams Survey, said concrete monument being the
northeast corner of the J. W. Kirkpatrick Survey, Abstract No. 627, said
concrete monument being in the south survey line of the William King Survey,
Abstract No. 611, said concrete monument being also the northwest corner of this
tract of land;
Thence North 89 DEG. 55' East along the King-Williams Survey line, at 195.00'
pass the engineer center line of an unimproved county road, in all a total
distance of 2066.17' to a 6" x 6" concrete monument marked WK-SMW, said concrete
monument being the southeast corner of the said King Survey, said concrete
monument being an "L" corner of the said Williams Survey, said concrete monument
being also in the north boundary line of this tract of land;
Thence North 89 DEG. 57' East, in all a total distance of 1778.83' to an iron
pin for the northeast corner of this tract of land, said iron pin being an old
truck anle, said iron pin being in a boundary line fence from which a 6" Hickory
marked X bears South 70 DEG. 00', East 40.00' said iron pin being also the
northeast corner of this tract of land;
Thence South 0 DEG. 03' West along the said boundary line fence, same being, a
well marked and painted survey line, at 97.00' pass an old axle in said boundary
line fence from which a 14" Pine is marked X, at 924.00' pass a 2" iron pipe
from which a 16" Sweet Gum is marked X, at 1169.00' pass the center line of a
creek flowing east, in all a total distance of 2304.00' to a 11/2 iron pipe for
the southeast corner of this tract of land from which a 9" Pine marked X bears
North 70 DEG. 00' West 20', said iron pipe being in the south survey line of the
said Williams Survey, said iron pine being also in the north survey line of the
said E. H. Vincent Survey;
<PAGE>
Exhibit A
Property Number F-021 (cont.)
Thence South 89 DEG. 57' west along the Vincent-Williams Survey line, at
913.00' pass the center line of a creek flowing in a southward direction, at
1033.00' pass the center line of a creek flowing in a southward direction, at
2379.00' pass the engineer center line of an unimproved county road, in all a
total distance of 3843.00' to the place of beginning, containing 203.35 acres of
land, more or less.
<PAGE>
Exhibit A
Property Number F-135
BEING a 148.22 acre tract of land located in the William King
survey, A-611, and being situated approximately S 64 DEG. W 15.8
miles from the City of Linden, Cass county, Texas. Said 148.22
acre tract of land being more particularly described as follows:
BEGINNING at a 4" iron pipe set in the east line of the said
William King Survey, A-611, for the southeast corner of this
tract of land. Said iron pipe being N 00 DEG. 4' E 1877.5 feet
from the southeast corner of the said William King Survey. Said
iron pipe being also in the west line of the O. H. King Survey, A-
829.
THENCE N 89 DEG. 35' W in all a total distance of 3137.40 feet to
a 4" iron pipe for the southwest corner of this tract of land.
THENCE N 00 DEG. 13' W in all a total distance of 2050.2 feet to a
4" iron pipe for the northwest corner of this tract of land.
THENCE S 89 DEG. 45' E in all a total distance of 3147.40 feet to
a 4" iron pipe, set in the east line of the said William King
Survey, for the northeast corner of this tract of land. Said
iron pipe being also in the west line of the said O. H. King
Survey line.
THENCE S 00 DEG. 4' W along and with the east line of the said
William King Survey, in all a total distance of 2059.30 feet to
the place of beginning, containing 148.22 acres of land, more or
less.
LESS AND EXCEPT an undivided, non-participating 1/3 interest in
and to all the oil and gas royalty in, on, under, or that may be
produced from the above described property for a term of twenty
(20) years beginning October 30, 1959, heretofore reserved by
Mrs. Coy Dunbar and husband in deed dated October 30, 1959, to
Joe Lane Allen, recorded in Volume 382, Page 209 of the Deed
Records of Cass County, Texas, as amended by instrument dated
February 2, 1962, executed by the said Mrs. Coy Dunbar and
husband and recorded in Volume 423, Page 310 of said Deed
Records.
<PAGE>
Exhibit A
Property Number F-147
BEING a 130.0 acre tract of land located in the William King
Survey, A-611, and being situated approximately South 63 deg.
West 15.8 miles from the City of Linden, Cass County, Texas; said
130.0 acre tract of land being the same land as described in a
warranty deed from Jennie Taylor, et al, to G. B. Goolsby dated
July 26, 1909, and duly recorded in Volume X-4, page 266 of the
Deed Records of Cass County, Texas; said 130.0 acre tract of land
being more particularly described as follows:
BEGINNING at a 6" x 6" concrete monument with a copper disk
marked "SMW-WK" set at the Southeast corner of the said William
King Survey for the southeast corner of this tract of land; said
monument being an "L" corner of the S. M. Williams Survey, A-1120;
THENCE South 89 deg. 55 min. West along and with the
south line of the said William King Survey in all a total
distance of 3127.90 feet to an iron pin for the southwest corner
of this tract of land;
THENCE North 0 deg. 13 min. West in all a total distance
of 1904.85 feet to an iron pin for the northwest corner of this
tract of land;
THENCE South 89 deg. 35 min. East in all a total distance
of 3137.40 feet to an iron pin set in the east line of the said
William King Survey for the northeast corner of this tract of
land;
THENCE South 0 deg. 04 min. West along and with the east
line of the said William King survey in all a total distance of
1,877.50 feet to the place of beginning, containing 130.0 acres
of land, more or less, which land is known as the Goolsby 130.0
acre tract of land.
<PAGE>
Exhibit A
Property Number F-189
Being a 9.66 acres tract of land located in the William King Survey, A-611,
and being situated approximately S. 14 DEG. 00' W. a distance of 6 miles from
the City of Hughes Springs, Cass County, Texas. Said 9.66 acres tract of land
being more particularly described as follows:
Beginning at a 4" iron pipe set in the south line of the said William King
Survey for the southwest corner of this tract of land. Said iron pipe being in
the Morris-Cass County line. Said iron pipe being the southeast corner of a
tract of land owned by Lone Star Steel Company.
Thence: North, along and with the east line of the Lone Star Steel Company's
property, same being the county line, a distance of 1950.96 feet to an iron pin
for the northwest corner of this tract of land.
Thence: S. 89 DEG. 08' E. a distance of 215.83 feet to an iron pin set at the
northwest corner of the Willie Higgs tract of land for the northeast corner of
this tract of land.
Thence: South, along and with the west line of the said Higgs property, a
distance of 1947.38 feet to an iron pin set in the south line of the said King
Survey, at the southwest corner of the said Higgs property for the southeast
corner of this tract of land.
Thence: S. 89 DEG. 55' W. along and with the south line of the said King
Survey, a distance of 215.81 feet to the place of beginning, containing 9.66
acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-083
All that certain 436.003 acre tract of land in the William King Survey, A-412 in
Morris County, Texas, being part of the called 278.2 acre tract and part of the
called 645.88 acre tract conveyed from Roger Steward and wife Grace Steward to
Lone Star Steel Company by Warranty Deeds dated November 6, 1953 and recorded in
volume 90, Page 237 and volume 90, Page 239 respectively of the Deed Records of
Morris County, Texas, said tracts are part of Lone Star steel Company Tract No.
F-83, said 436.003 acre tract of land being more particularly described as
follows:
Beginning at a concrete monument found for an ell corner of the Stephen Stone
Survey, A-264, the Southwest corner of said King Survey and of this tract;
THENCE: N 00 DEG 02'38" W with the West line of said King Survey, 1977.83
feet to a 5/8" iron rod set for the most Westerly Northwest corner of this
tract and the most Northerly Northeast corner of a 164.339 acre tract in said
Stone Survey;
THENCE: East with a new line 699.76 feet to a 5/8" iron rod set for an ell
corner of this tract;
THENCE: North with a new line, 3080.21 feet to a 5/8" iron rod-set for the
intermediate Northwest corner of this tract;
THENCE: East with a new line 225.00 feet to a 5/8" iron rod set for an ell
corner of this tract;
THENCE: North with a new line, 500.00 feet to a 5/8" iron rod set for the most
Northerly Northwest corner of this tract;
THENCE: East with a new line, 2965.33 feet to a 5/8" iron rod set in the
apparent Morris and Cass County line for the Northeast corner of this tract,
same being in the West line of the Texas & Northern Railway Co. called 685.03
acre tract described in Deed recorded in Volume 609, Page 857 of the Deed
Records of Cass County, Texas;
THENCE: S 00 DEG. 01'24" E with said apparent County line, 5552.73 feet to a 4"
iron pipe found in the South line of said King Survey for the Southeast corner
of this tract and the Southwest corner of the Lone Star Steel Company called
9.66 acre tract of land described in Deed recorded in Volume 535, Page 331 of
the Deed Records of Cass County, Texas, said 4" iron pipe is called as being on
the Cass and Morris County line in the above referenced Deed;
THENCE: S 89 DEG. 59'38" W with the North line of the William C. Everett
Survey, A-407, 2297.36 feet to & concrete monument found for its Northwest
corner, the most Easterly Northeast corner of said Stone Survey and of the
said 164.339 acre tract, from which a 10" Hickory bears N 04 DEG. 46' E, 30.7
feet and an 18" Sweetgum bears S 68 DEG. 28' W, 30.6 feet, both marked with
an old "X";
THENCE: S 89 DEG. 49'05" W with the Easterly North line of said Stone Survey,
1593.47 feet to the POINT OF BEGINNING, containing 436.003 acres of land, more
or less.
<PAGE>
Exhibit A
Property Number F-166
All that certain 123.634 acre tract of land in the John D. Burton
Survey, A-36 in Morris County, Texas, being part of the Lone Star
Steel Company called 128.76 acre Tract No. F-166 described in
Warranty Deed from J. H. Dalby, et ux. recorded in Volume 124, Page
445 of the Deed Records of Morris County, Texas, said 123.634 acre
tract of land being more particularly described as follows:
Commencing at a concrete monument found for the Northeast corner of
the said Burton Survey and an ell corner of the Stephen Stone Survey,
A-264;
THENCE: S 00 52'33" E with the East line of said Burton Survey,
438.45 feet to a 5/8" iron rod set for the most Easterly Northeast
corner of this tract and the POINT OF BEGINNING, same being the
Southeast corner of a 5.187 acre tract;
THENCE: S 00 DEG 52'33" E with said East line, 2145.31 feet to a 5/8"
iron rod set for the most Easterly Southeast corner of this tract and
the Northeast corner of the Hugh Beasley called two acre tract of land
described in Warranty Deed recorded in Volume 199, Page 413 of the
Deed Records of Morris County, Texas;
THENCE: N 89 DEG 40'42" W with the North line of said Beasley
tract, 362.88 feet to a 1" iron pipe found for its Northwest corner
and an ell corner of this tract;
THENCE: S 00 DEG 51'18" E with the West line of said Beasley tract,
239.92 feet to a 5/8" iron rod set at fence cornerpost for its
Southwest corner and the most Southerly Southeast corner of this tract
in the South line of said Burton Survey;
THENCE: N 89 DEG. 42'27" W with said South line, at 359.24 feet pass
a concrete monument found for the Northeast corner of the John H.
Bostick Survey, A-13 and continuing for a total distance of 1687.01
feet to a 3" iron pipe found for the Southwest corner of this
tract;
THENCE: N 00 DEG. 48'38" W, 2741.43 feet to a 1" iron rod found in
the North line of said Burton Survey for the Northwest corner of this
tract;
THENCE: N 87 DEG. 59'49" E with said North line, 1390.63 feet to a
5/8" iron rod set for the most Northerly Northeast corner of this tract
and the Northwest corner of said 5.187 acre tract;
THENCE: S 32 DEG. 44'47"' E with a new line, 493.97 feet-to a 5/8"
iron rod set for an ell corner of this tract and the Southwest corner
of said 5.187 acre tract;
THENCE: East with a new line, 395.29 feet to the POINT OF BEGINNING,
containing 123.634 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-174
Tract 1
All that certain 164.339 acre tract of land in the Stephen Stone
Survey, A-264 in Morris County, Texas, being part of the Lone Star
Steel Company called 240.05 acre Tract No. F-174 described in
Warranty Deed Recorded in volume 126, Page 251 of the Deed Records of
Morris County, Texas, said 164.339 acre tract of land being more
particularly described as follows:
Beginning at a concrete monument found in the North line of the Thomas
Lee Survey, A-331 (Morris county) A-1197 (Cass County) for the
Southwest corner of the William C. Everett Survey, A-407 (Morris
County) A-333 (Cass County), the Southeast corner of the said Stone
Survey and of this tract;
THENCE: N 89 DEG. 57'03 W with said North line, 58.82 feet to a
concrete monument found for the most Westerly Northwest corner of said
Lee Survey and the most Northerly Northeast corner of the G. H. Allen
Survey, A-396;
THENCE: N 89 DEG. 51'07" W with the North line of said Allen Survey,
1831.93 feet to a concrete monument found for an angle Point in the
South line of this tract, from which a fence cornerpost bears S 89
DEG. W, 2.3 feet;
THENCE: N 89 DEG. 44'52" W with said North line, 328.76 feet to a
5/8" iron rod set for the Southwest corner of this tract, from which a
2" iron pipe bears S 00 09'49" W, 6.32 feet and a fence cornerpost
bears N 00 08' W, 43.8 feet, said 5/8" iron rod being the Southeast
corner of the Hugh Beasley tract of land described in Deed recorded in
Volume 189, Page 300 of the Deed Records of Morris County, Texas;
THENCE: N 00 DEG. 09'49" E with the East line of said Beasley tract,
2226.03 feet to a concrete monument found for an ell corner of said
Stone Survey and the Southeast corner of the John D. Burton Survey,
A-36;
THENCE: N 00 DEG. 52'33" with the East line of said Burton Survey,
2385.31.feet to a 5/8" iron rod set for the Northwest corner of this
tract, the most Easterly Northeast corner of a 123.634 acre tract and
the Southeast corner of a 5.187 acre tract;
THENCE: East with a new line, 668.19 feet to a 5/8" iron rod set in
the Northerly East line of said Stone Survey and the West line of the
William King Survey, A-412 (Morris County) A-611 (Cass County) for the
most Northerly Northeast corner of this tract;
THENCE: S 00 DEG. 02'38" E with said West line, 1977.83 feet to a
concrete monument found for the Southwest corner of said King Survey,
an ell corner of said Stone Survey and of this tract;
THENCE: N 89 DEG. 49'05" E with the South line of said King Survey,
1593.47 feet to a concrete monument found for the Northwest corner of
said Everett Survey, the most easterly Northeast corner of said Stone
Survey and of this tract, from which a 10" Hickory bears N 04 DEG. 46'
E, 30.7 feet and an 18" Sweetgum bears S 68 DEG. 28' W, 30.6 feet, both
marked with an old "X";
THENCE: S 00 DEG. 17' 35" W with the West line of said Everett
Survey, 2644.55 feet to the POINT OF BEGINNING, containing 164.339
acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-174 (cont.)
Tract 2
All that certain 34.654 acre tract of land in the Stephen Stone
Survey, A-264 in Morris County, Texas, being part of the Lone Star
Steel Company called 240.05 acre Tract No. F-174 described in
Warranty Deed from Bertram Hedick, et al. recorded in Volume 126, Page
251 of the Deed Records of Morris County, Texas, said 34.654 acre
tract of land being more particularly described as follows:
Beginning at a concrete monument found in the North line of the John
D. Burton Survey, A-36 for the Southeast corner of the James Winton
Survey, A-323, the most Westerly Southwest corner of the said Stone
Survey and the Southwest corner of this tract;
THENCE: N 00 DEG. 38'07" W with the East line of said Winton Survey,
1672.85 feet to a concrete monument found for the Northwest corner of
said tract No. F-174 and of this tract;
THENCE: S 65 DEG. 46'55" E. 666.05 feet to a 5/8" iron rod set for
the Northeast corner of this tract;
THENCE: S 32 DEG. 44'47" E with a new line, 1603.42 feet to a 5/8"
iron rod set in the North line of said Burton Survey for the Southeast
corner of this tract and the most Northerly Northeast corner of a
123.634 acre tract;
THENCE: S 87 DEG. 59'49. W with said North line, at 1390.63 feet pass
the Northwest corner of said 123.634 acre tract and continuing for a
total distance of 1457.10 feet to the POINT OF BEGINNING, containing
34.654 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-175
All that certain 205.342 acre tract of land in the James Winton Survey, A-323
in Morris County, Texas, being all of the Lone Star Steel Company called
203.93 acre Tract No. F-175 described in Warranty Deed from Eunice L. Gray
recorded in Volume 128, Page 314 of the Deed Records of Morris County, Texas;
said 205.342 acre tract of land being more Particularly described as follows:
Beginning at a concrete monument found in the North line of the John D. Burton
Survey, A-36 for the Southeast corner of the said Winton Survey and of this
tract, same being the. most Westerly Southwest corner of the Stephen Stone
Survey, A-264 and the Southwest corner of a 34.654 acre tract;
THENCE: N 89 DEG. 56'28" W with said North line, 2718.08 feet to a concrete
monument found for the Northwest corner of said Burton Survey and the most
Easterly Northeast corner of the Joseph D Lilly Survey, A-191;
THENCE: N 89 DEG. 54'14" W with the most Easterly North line of said Lilly
Survey, 989.81 feet to a concrete monument found for its ell corner, the
Southwest corner of said Winton Survey and of this tract;
THENCE: N 00 DEG. 06'17" E with the Northerly East line of said Lilly Survey,
1562.57 feet to a concrete monument found for its most Northerly Northeast
corner and the Southeast corner of the J. H. Skinner Survey, A-283;
THENCE: N 01 DEG. 20'02" E with the East line of said Skinner Survey, 1265.04
feet to a concrete monument found for its Northeast corner, the most Westerly
Northwest corner of said Winton Survey and the Northwest corner of this tract,
same being in the South line of the James B. Dalby Survey, A-89;
THENCE: N 89 DEG. 32'52" E with said South line, 1065.94 feet to a 5/8" iron
rod set for its Southeast corner, the ell corner of said Winton Survey and an
angle point in the North line of this tract;
THENCE: S 65 DEG. 44'48" E, 2841.97 feet to a concrete monument found in the
East line of said Winton Survey and the most Westerly West line of said Stone
Survey for the Northeast corner of this tract;
THENCE: S 00 DEG. 38'07" E with said West line, 1672.85 feet to the POINT OF
BEGINNING, containing 205.342 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-198
All that certain tract or parcel of land in Morris County, Texas, being a
101.85 acre tract of land located in the J.. D. Lilly Survey, A-191, and being
situated approximately S. 13 deg. E. 7.3 miles from the town of Daingerfield,
Morris County, Texas, said tract being situated in the east portion of the
said J. D. Lilly Survey, the.North, East and South Boundary lines of the said
101.85 acre tract of land being coincident with respective lines of said Lilly
Survey, as described in Volume 43, Page 137 of the Deed Records of Morris
County, Texas, said 101.85 acres being more particularly described as follows:
BEGINNING at a 6"x 6" concrete monument with copper disk marked "JHS-JW-JDL".
set in the West line of the James Winton Survey, A-323, said concrete monument
being the southeast corner of the J.R. Skinner Survey, A-283, said concrete
monument being also the most northerly northeast corner of this tract of land;
THENCE South 0 DEG. 08' West along the Winton-Lilly Survey line 1563.0' to a
monument marked "JW-JDL" set at the southwest corner of the said Winton Survey
for an ell corner of this tract of land;
THENCE South 89 DEG. 56' East along the Winton-Lilly Survey line 989.6' to a
monument marked "JW-JDB-JDL" set in said line at the northwest corner of the
J.D. Bruton Survey, A-36, for the most southerly northeast corner. of this tract
of land;
THENCE South 1 DEG. 29' East along the Bruton-Lilly Survey line, 1337.6" to
the most northerly southwest corner of the said Bruton Survey, a monument marked
"JDB-JC-JDL" set in the north line of the Joel Cherry Survey A-59, for the
southeast corner of this tract of land;
THENCE South 89 DEG 59' West along the Cherry-Lilly Survey line 1640.0' to a
4" iron pipe for the most southerly southwest corner of the said 101.85 acre
tract of land, said iron pipe being also N 89 deg. 59' 1519.0' from the
southwest corner of the said Lilly Survey;
THENCE North 0 DEG. 02' East 1336.04' to a 4" iron pipe for an ell corner of
this tract. of land;
THENCE South 89 DEG. 47' W. 835.0' to a 4" iron pipe for the most western
southwest corner of this tract of land;
THENCE North 0 DEG. 08' W. 1563.0' to a 4" iron pipe set in the south
boundary line of the J. H. Skinner Survey for the northwest corner of this
tract of land, said iron pipe being also N 89 deg. 47' E 674.4' from the
northwest corner of the said Lilly Survey;
THENCE North 89 DEG. 47' E along the Skinner-Lilly Survey line 1450.0' to
the PLACE OF BEGINNING, containing 101.85 acres of land, more or less; LESS
AND EXCEPT certain undivided interest in the oil, gas and other minerals in,
on, under and that may be produced from the above described property
heretofore reserved together with the right of ingress and egress on and to
said lands for the purposes of exploring for, developing, producing and
marketing same.
<PAGE>
Exhibit A
Property Number F-208
Tract 1
Being ar 80 acre tract of land, and being the West one-half (W 1/2) of that
certain 160 acre tract of land located in the J. D. Bruton Survey, A-36, and
being situated approximately S. 19" 00' E. a distance of 9 miles from the City
of Daingerfield, Morris County, Texas, said 160 acre tract of land being more
particularly described as follows:
BEGINNING at an iron pin set in the North line of the J. D. Bruton Survey,
A-36, said iron pin being the Northwest corner of a 128.76 acres tract of land
conveyed by J. H. Dalby et ux to bone Star Steel Company by Warranty Deed
dated April 18, 1968, recorded in Volume 124, Page 445, Deed Records of Morris
County, Texas, said iron pin being also the northeast corner of this tract of
land.
THENCE South 00 DEG. 52' East along and with the West line of the said Dalby
tract of land, a total distance of 2742.21 feet to an iron pin set in the
South line of the J. D. Bruton Survey for the southwest corner of the Dalby
tract of land, said iron pin being also the Southeast corner of this tract of
land.
THENCE North 89 DEG. 42' 07" West, a total distance of 2291. 8 feet to a 6"
x 6" concrete monument with a copper disk marked "JDB-JHB-JC", for the most
Southerly Southwest corner of this tract of land;
THENCE North 1 DEG. 09' 45" East, a total distance of 1385. 8 feet to a 6"
x 6" concrete monument with a copper disk marked "JDB-JC", for an "L" corner
of this tract of land;
THENCE South 89 DEG. 58' 37" West, a total distance of 454. 2 feet, to a 6"
x 6" concrete monument with a copper disk marked "JDL-JDB-JC" for the most
Westerly Southwest corner of this tract of land;
THENCE North 1 DEG. 29' 18" West 1337. 6 feet to a 6" x 6" concrete
monument with a copper disk marked "JDB-TDL-JW for the Northwest corner of
this tract of land;
THENCE South 89 DEG. 56' 06" East along and with the North line of the said
J. D. Bruton Survey, 2719.1 feet to a 6" x 6" concrete monument with a copper
disk marked "JW-SS-JDB";
THENCE North 88 DEG. 00' 30" East in all a total distance of 66.4 feet to
the place of beginning, containing 160 acres of land more or less.
LESS AND EXCEPT HOWEVER one-half (1/2) of the oil and gas royalty heretofore
reserved for a period of thirty (30) years from December 28, 1976.
<PAGE>
Property Number P-208 (cont.
Tract 2
Being an 80 acre tract of land, and being the East one-half (E-1/2) of that
certain 160 acre tract of land located in the J. D. Bruton Survey, A-36, and
being situated approximately S. 19 00' E. a distance of 9 miles from the City
of Daingerfield, Morris County, Texas, said 160 acre tract of land being more
particularly described as follows:
BEGINNING at an iron pin set in the North line of the J. D. Bruton Survey,
A-36, said iron pin being the Northwest corner of a 128.76 acres tract of land
conveyed by J. H. Dalby et ux to Lone Star Steel Company by Warranty Deed
dated April 18, 1968, recorded in Volume 124, Page 445, Deed Records of Morris
County, Texas, said iron pin being also the northeast corner of this tract of
land.
THENCE South 00 DEG. 52' East along and with the West line of the said Dalby
tract of land, a total distance of 2742.21 feet to an iron pin set in the
South line of the J. D. Bruton Survey for the southwest corner of the Dalby
tract of land, said iron pin being also the Southeast corner of this tract of
land.
THENCE North 89 DEG. 42' 07" West, a total distance of 2291.8 feet to a
6" x 6" concrete monument with a copper disk marked "JDB-JHB-JC", for the most
Southerly Southwest corner of this tract of land;
THENCE North 1 DEG. 09' 45" East, a total distance of 1385.8 feet to a 6" x 6"
concrete monument with a copper disk marked "JDB-JC", for an "L" corner of
this tract of land;
THENCE South 89 DEG. 58' 37" West, a total distance of 454.2 feet, to a
6" x 6" concrete monument with a copper disk marked "JDB-JDB-JC" for the most
Westerly Southwest corner of this tract of land;
THENCE North 1 DEG. 29' 18" West 1337.6 feet to a 6" x 6" concrete monument
with a copper disk marked "JDB-JDL-JW for the Northwest corner of this tract of
land;
THENCE South 89 DEG. 56' 06" East along and with the North line of the said
J. D. Buton Survey, 2719.1 feet to a 6" x 6" concrete monument with a copper
disk marked "JW-SS-JDB";
THENCE North 88 DEG. 00' 30" East in all a total distance of 66.4 feet to the
place of beginning, containing 160 acres of land more or less.
TOGETHER WITH all land and interest therein owned or claimed by Lone Star
Steel Company adjacent or contiguous to the Land particularly described above
and lying in the J. D. Bruton Survey, Morris County, Texas, although not
included within the boundaries particularly described above; there is excepted
from this clause the interest in royalty heretofore reserved.
LESS AND EXCEPT HOWEVER one-half (1/2) of the oil and gas royalty heretofore
reserved.
<PAGE>
Exhibit A
Property Number F-208 (cont.)
SAVE AND EXCEPT from the above described Properties:
Being a 35.00 acres tract of land located in the J. D. Bruton Survey, A-36,
and being situated approximately S. 15 00' E. a distance of 8.5 miles from
the City of Daingerfield, Morris County, Texas. Said 35.00 acres tract of land
being more particularly described as follows:
Beginning at a 6" x 6" concrete monument with a copper disk marked
"JC-JDB-JKB" set at the south southwest corner of the said J. D. Bruton Survey
for the southwest corner of this tract of land. Said monument being the
northwest corner of the John Bostick Survey, A-13, and in the east line of the
Joel Cherry Survey, A-59.
Thence: N. 01 DEG. 09' 45" E. along and with the-west line of the said Bruton
Survey a distance of 1385.8 ft. to a 6"x6" concrete monument with a copper
disk marked "JDB-JC" set at the northeast corner of the said Cherry Survey,
same being an indenture corner of the said Bruton Survey for an angle corner
in the west line of this tract of land.
Thence: N. 01 DEG. 01' W. a distance of 142.5 ft. to a point set in the center
line of a Public Road for the northwest corner of this tract of land.
Thence: in a northeasterly direction along and with the said Public Road as
follows: N. 50 DEG. 29' E. -- 178.4 ft.; N. 74 DEG. 59' E. -- 321.7 ft.; and N.
66 DEG. 25' E. -- 459.8 ft. to an iron pin set in said Public Road for the
northeast corner of this tract of land. An iron pin bears South a distance of
20.0 ft. set for a reference corner.
Thence: South, a distance of 1913.51 ft. to an iron pin set in the south line
of the said Bruton, Survey for the southeast corner of this tract of land.
Thence: N. 89 DEG. 42' W. along and with the south line of the said Bruton
Survey a distance of 895.4 ft. to the place of beginning, containing 35.00
acres of land, more or less.
TOGETHER WITH all iron and iron ore in, on, under or that may be produced from
the above described property.
TOGETHER WITH an undivided 1/2 of Oil and gas royalty in and under the
aforesaid lands heretofore reserved in deed to Lone Star Steel Company from
R.R, Newby and wife in December, 1976, for a period Of 30 years from date of
such deed.
<PAGE>
Exhibit A
Property Number F-214
Being a part of the W. J. Freeman 118. 00 acre tract of band and a part of the
Joel Cherry Survey, Abstract No. 59, in Morris County, Texas, and being more
particularly described as follows:
BEGINNING at the SE corner of the J. D. Lilly Survey, Abstract No. 191, at a
concrete monument, said corner being also in the Cherry-Lilly Boundary Line;
THENCE South 89 deg. 58' West along the Cherry-Lilly Boundary Line a
distance of 98.99 vrs. (275.00') a point for the NE corner of this tract of
land;
THENCE South 1 deg. 09' West 235.21 vrs. (653.40') the SE corner of same;
THENCE South 89 deg. 58' West 359.97 vrs. (1000.00') the SW corner of same;
THENCE North 1 deg. 09' East 235.21 vrs. (653.40') the NW corner of same;
THENCE North 89 deg. 58' East along said Cherry-Lilly Boundary line 360.19
vrs. (1000.60') to the place of beginning, containing 14.997 acres more or
less.
SAVE AND EXCEPT, all minerals in, to, and under the above described tract of
land heretofore reserved.
<PAGE>
Exhibit A
Property Number .45
BEING a 100.04 acre tract of land located in the J. H. Bostick Survey A-13.
and being situated approximately S 16 deg. E 8.9 miles from the City of
Daingerfield, Morris County, Texas. Said 100.04 acre tract of land being the
same land as described in a warranty deed from J. D. Roach and wife, M. B.
Roach,to Albert Rockwell, dated March 20, 1885, and duly recorded in Vol. D.
Page 315, of the Deed Records of Morris County, Texas. Said 100.04 acre
tract of land being more particularly described as follows:
BEGINNING at a 6" X 6" concrete monument with a copper disk marked "JC-JHB-PM"
act in the N line of the Peter Miller Survey, A-200, and at the SW corner of the
said J. H. Bostick Survey for the SW corner of this tract of land. Said
monument being the SE corner of the Joel Cherry Survey, A-59.
THENCE N 0 deg. 18 min. E along and with the E line of the said Cherry Survey,
same being the W line of the said Bostick Survey, in all a total distance of
2,087.5 feet to an iron pin for the NW corner of this tract of land;
THENCE S 89 deg. 18 min. E in all a total distance of 2,087.5 feet to an iron
pin for the NE corner of this tract of land;
THENCE S 0 deg. 18 min. W in all a total distance of 2,087.5 feet to an iron pin
set in the S line of the said Bostick Survey and in the N line of the said Peter
Miller Survey for the SE corner of this tract of land;
THENCE N 89 deg. 18 min. W along and with the N line of the said Peter Miller
Survey, same being the S line of the said J. H. Bostick Survey, in all a total
distance of 2,087.5 feet to a place of beginning, containing 100.04 acres of
land.
<PAGE>
Exhibit A
Property Number F-185
Being a 46.24 acres tract of land located in the J. H. Bostick Survey, A-13,
and being situated approximately S. 16 deg. 00' E. a distance of 9 miles from
the City of Daingerfield, Morris County, Texas, said 46.24 acres tract of land
being the same land described as a 40 acres tract of land in an Iron Ore
Mining Lease from Jennie McCullough, et al to W. O. Irvin, Trustee, dated
August 10, 1941 and duly recorded in Volume 43, page 193 of the Deed Records
of Morris County, Texas, said 46.24 acres tract of land being more
particularly described as follows:
BEGINNING at a 6" x 6" concrete monument set at the southeast comer of the
said J. H. Bostick Survey for the southeast corner of this tract of land, said
monument being an "L" corner of the A. Sayle Survey, A-266;
THENCE N. 89 deg. 19' W., along and with the south line of the said J. H.
Bostick Survey a distance of 1606.5 ft. to an iron pin for the southwest
corner of this tract of land;
THENCE N. 00 deg. 18' E. a distance of 1247.4 it. to an iron pin for the
northwest corner of this tract of land;
THENCE S. 89 deg. 48' E. a distance of 1605.4 it. to a 6"x6" concrete
monument set in the east line of the said J. H. Bostick Survey, at the
north-northwest corner of the said A. Sayle Survey for the northeast comer of
this tract of land;
THENCE S. 00 deg. 15' W. along and with the east line of the said J. H.
Bostick Survey a distance of 1261.0 ft. to the place of beginning, containing
46.24 acres of land, more or less.
SAVE AND EXCEPT an undivided 4/5 of all the oil and gas lying in, on, under or
that may be produced from the above described property heretofore reserved,
together with the right of ingress and egress for the purposes of drilling,
mining, exploring and producing same.
<PAGE>
Exhibit A
Property Number F-186
Being a 31.19 acres tract of land located in the Peter Miller Survey, A-200
and being situated approximately S. 15 deg. 00'S. a distance of 9.4 miles from
the City of Daingerfield, Morris County, Texas, said 31.19 acres tract of land
being the same land as described in a Warranty Deed from David S. Giles,
Trustee, to W. C. Stevens, et al dated May 3, 1950 and duly recorded in Volume
64, page 43 of the Deed Records of Morris County, Texas, said 31.19 acres
tract of land being more particularly described as follows:
BEGINNING at a concrete monument set at the northeast corner of the said Peter
Miller Survey for the northeast comer of this tract of land, said monument
being the west northwest of the Argyle Sayle Survey, A-266;
THENCE S. 00 deg. 20' W. along the east line of the said Peter Miller
Survey, a distance of 692.0 ft. to an iron pin for the southeast corner of
this tract of land;
THENCE N. 89 deg. 18' W. a distance of 1968.0 ft. to an iron pin for the
southwest comer of this tract of land;
THENCE N. 01 deg. 05' E. a distance of 692.05 ft. to an iron pipe set in the
north line of the said Peter Miller Survey for the northwest corner of this
tract of land;
THENCE S. 89 deg. 18' E. along and with the north line of the said Peter
Miller Survey, a distance of 1959.0 ft. to the place of beginning, containing
31.19 acres of land, more or less.
SAVE AND EXCEPT an undivided 4/5 of all the oil and gas lying in, on, under or
that may be produced from the above described property heretofore reserved,
together with the right of ingress and egress for the purposes of drilling,
mining, exploring and producing same.
<PAGE>
Exhibit A
Property Number P-196
All that certain lot, tract or parcel of land in Morris County, Texas, and
being an 89.705 acres tract of land located in the Joel Cherry Survey, A-59,
and being situated approximately S. 120 45' E. a distance of 8.5 miles from
the City of Daingerfield, Morris County, Texas, said 89.705 acres tract of
land being the same land as described in a Deed from Joe Ney Schwartz to
Mrs. Cora Ney Friede, dated February 18, 1931, and duly recorded in Volume 15,
Page 321, Deed Records of Morris County, Texas, said 89.705 acres tract of
land being more particularly described as follows:
BEGINNING at a concrete monument with copper disk marked "JC-JHB-PM" set at
the southeast corner of the said Joel Cherry Survey for the southeast corner
of this tract of land, said monument being the southwest corner of the John
Bostick Survey, A-13, and in the north line of the Peter Miller Survey, A-200;
THENCE N. 89 DEG. 18' 03" W. along and with the south line of the said Joel
Cherry Survey a distance of 1142.0 feet to a Pine knot set in a rock pile for
the southwest corner of this tract of land; a 6" Red Oak bears S 35 00'
E.--9.0 feet, and a 12" Sweetgum bears S. 45 DEG. 00' W.--14.0 feet, both marked
"X";
THENCE N. 00 DEG. 45' 40" E. along and with a well marked and painted line, a
distance of 3459.31 feet to an iron pin set in a branch for the northwest
corner of this tract of land; a 16" Sweetgum bears N. 60 00' W.--12.0 feet,
and a 12" Sweetgum bears N. 50 DEG. 00' E.--15.0 feet, both marked "X";
THENCE S. 89 DEG. 48' 01" E. along a well marked line a distance of 1114.0
feet to a concrete monument marked "JC-JHB-JDB" set in the east line of the
said Joel Cherry Survey for the northeast corner of this tract of land; said
monument being the northwest corner of the said John Bostick Survey;
THENCE S. 00 DEG. 17' 53" W. along and with the east line of said Joel Cherry
Survey, a distance of 3469.7 feet to the PLACE OF BEGINNING, containing 89.705
acres of land, more or less.
SAVE AND EXCEPT an undivided 1/2 of all royalty on oil and gas in, on, under
or that may be produced from the above described property heretofore reserved,
together with the right of ingress and egress for the purposes of drilling,
mining, exploring and producing same.
<PAGE>
Exhibit A
Property Number F-215
Being a 53.02 acres tract of land of which 46.37 acres are located in the
J. H. Bostick Survey, A-13 and 6.65 acres are located in the Stephen Stone
Survey, A-264 and being situated approximately S. 16 00' S. a distance of 8
wiles from the City of Daingerfield, Morris County, Texas. Said 53.02 acres
tract of land being more particularly described as follows:
Beginning at a concrete monument with a copper disk marked "JHB-SS-AS" set in
the east line of the said Bostick Survey, at the southwest corner of the said
Stone Survey and at the north northwest corner Of the A. Sayles Survey, A-266
for a corner in the south line of this tract of land.
Thence: N. 89 DEG. 36' 36" W. a distance of 1348.03 ft. to an iron pin for the
southwest corner of this tract of land.
Thence: N, 00 DEG. 41' 13" E. a distance of 2225.17 ft. to an iron pipe set in
the north line of the said Bostick Survey for the northwest corner of this
tract of land.
Thence: S. 42 DEG. 17' 02" E. a distance of 3029.24 ft. to an iron pipe set
at a fence corner for the southeast corner of this tract of land.
Thence: N. 89 DEG. 48' 13" 14. a distance of 724.0 ft. to the place of
beginning containing 53.02 acres of land, more or less.
<PAGE>
Exhibit A
Property Number TN-147
Being a 685.03 acres tract of land located in the William King Survey, A-611,
and being situated approximately S.71DEG. W.--16.5 miles from the City of
Linden, Cass County, Texas. Said 685.03 acres tract of land being more
particularly described as follows:
ALL OF THE FOLLOWING DESCRIBED PROPERTY LYING EAST OF FARM ROAD 161 AND SOUTH OF
CASS COUNTY ROAD # 1592.
Beginning AT A 6" X 6" concrete monument with a copper disk marked "??-???-???"
set at the northeast corner of the said William King Survey for the northeast
corner of this tract of land. Said monument being the southeast corner of the
John Bird Survey, A-59, and in the west line of the J.H. Callison Survey, A-336.
Thence: S.0 DEG. 04' W. along and with the east line of the William King Survey
in all a total distance of 1765.0 feet to a stake set in an old fence line for
the east southeast corner of this tract of land.
Thence: West, along and with an old fence line, in all a total distance of
2124.0 feet to stake for an "L" corner of this tract of land.
Thence: South, along and with an old fence line in all a total distance of
496.0 feet to an iron pin for an "L" corner of this tract of land.
Thence: West, in all a total distance of 600.0 feet to an iron pin set at the
northwest corner of the Harris Chapel Methodist Church property for an "L"
corner of this tract of land.
Thence: South, in all a total distance of 731.0 feet to a stake for an angle
corner of this tract of land.
Thence: S. 48 DEG., 09' E. a distance of 109.41 feet to an iron pin for an
angle corner of this tract of land.
Thence: S.0 DEG. 21'E. along with an old fence line, in all a total distance of
1760.8 feet to an iron pin for an "L" corner of this tract of land.
Thence: West, in all a total distance of 569.64 feet to an iron pin for an "L"
corner of this tract of land.
Thence: S.0 DEG. 13'E. in all a total distance of 3650.0 feet to a 4" iron pipe
set at the southwest corner of a 148.22 acres tract of land owned by Lone Star
Steel Company, for an "L" corner to this tract of land.
Thence: N.89 DEG. 08'W. along and with a fence line, in all a total distance of
2648.75 feet to an iron pin set in the Cass and Morris County line for the
southwest corner of this tract of land.
Thence: North, along and with the said county line in all a total distance of
8425.49 feet to an iron pin set in the north line of the said Williams King
Survey and in the south line of the said John Bird Survey, for the northwest
corner of this tract of land.
Thence: N.89DEG. 54'E. along and with the said King and Bird Survey lines, in
all a total distance of 5838.10 feet to the place of begining, containing 685.03
acres of land, more or less, SAVE AND EXCEPT 9.0 acres of land for Farm-to-
Market Highway No. 161, leaving 676.03 acres in this tract.
<PAGE>
Exhibit A
Property Number TN-147 (cont)
Save and Except:
A 0.17 acre tract of land, described as follows:
Begining at an iron pin set at the northwest corner of the Harris Chapel
Methodist Church property for the northeast corner of this tract of land.
Thence South, along and with the west line of the said Harris Chapel Methodist
Church property, a distance of 185.0 feet to an iron pin for the southeast
corner of this tract of land.
Thence West, a distance of 40.0 ft. to an iron pin for the southwest corner of
this tract of land.
Thence North, a distance of 185.0 ft. to an iron pin for the northwest corner of
this tract of land.
Thence East a distance of 40.0 ft. to the place of beginning, containing 0.17
acre of land, more or less.
IT IS THE INTENT OF BOTH PARTIES TO CONVEY ONLY THE PROPERTY LYING EAST OF FARM
ROAD 161 AND SOUTH OF CASS COUNTY ROAD #1592.
<PAGE>
Exhibit A
Property Number F-192
Tract 1
All that certain lot, tract or parcel of land, being a 40.709 acres tract of
land located in the John R. Boon Survey, A-6, in Morris County and A-56 in
Cass County, said 40.709 acres tract of land being situated approximately
S. 51 deg. 00' W. a distance of 2 miles from the City of Hughes Springs, Cass
County, Texas, said 40.709 acres tract of land being more particularly
described as follows:
BEGINNING at an iron pin set at the fence corner for the northeast corner of
this tract of land, said iron pin being the northeast corner of the Joseph
McIntyre original 58.6 acres tract of land, said iron pin being S. 76 deg. 30'
E. a distance of 4,235.0 feet from the northwest corner of the said
John R. Boon Survey;
THENCE: S. 01 deg. 00' W. along and with an old fence line a distance of
1,408.0 feet to an iron pin set at the fence corner for the southeast corner
of this tract of land, said iron pin being the southeast corner of the said
Joseph McIntyre original 58.6 acres tract of land;
THENCE: S. 89 deg. 12' 35', W. along and with an old fence line a distance of
2,014.41 feet to an iron pin set at a fence corner for the southwest corner of
this tract of land;
THENCE: N. 34 deg. 00' E. a distance of 130.0 feet to an iron pin for the
west northwest corner of this tract of land;
THENCE: E., a distance of 229.49 feet to an iron pin for an indenture corner
of this tract of land;
THENCE: N. 36 deg. 00' E. a distance of 846.0 feet to an iron pin set at an
angle corner in the east line of the V. Lewis tract of land for an angle
corner in the west line of this tract of land;
THENCE: N. 45 deg. 45' E. a distance of 922.0 feet to an iron pin set at the
northeast corner of the said V. Lewis tract of land for the north northwest
corner of this tract of land;
THENCE: E., along and with an old fence line a distance of 579.0 feet to the
PLACE OF BEGINNING, containing 40.709 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-192 (cont.)
Tract 2
All that certain lot, tract or parcel of land, being a 0.664 acre tract of
land located in the John R. Bodn Survey, A-6, and being situated approximately
s. 49 deg. 00' E. a distance of 5 miles from the City of Daingerfield, Morris
County, Texas, said 0.664 acre tract of land being more particularly described
as follows:
BEGINNING at an iron pin set in the east right-of-way line of Farm Road
No. 250 for the southwest corner of this tract of land, said iron pin being
S 36 deg. 45' E. a distance of 3,060.0 feet from the Northwest corner of the
said John a. Boon Survey;
THENCE N. 30 deg. 07' E. along and with the said east right-of-way line of
said Farm Road No. 250, a distance of 150.0 feet to an iron pin for the
northwest corner of this tract of land;
THENCE S. 85 deg. 30' 20" E. a distance of 238.14 feet to an iron pin set in
a fence line for the northeast corner of this tract of land;
THENCE S. 34 deg. 00' W. a distance of 130.0 feet to an iron pin set at a
fence corner for the southeast corner of this tract of land;
THENCE S. 89 deg. 12' 35" W. along and with said fence lane a distance of
240.0 feet to the PLACE OF BEGINNING, containing 0.664 acre of land, more or
less.
<PAGE>
Exhibit A
Property Number F-207
Being an 88.43 acres tract of land located in the John R. Boon Survey, A-56,
and being situated approximately S. 34 DEG. 00' W. a distance of 1.6 miles from
the City of Hughes Springs, Cass County, Texas. Said 88.43 acres tract of land
being a portion of a 429.93 acres tract of land as described in a Deed from
G. F. Little to R. L. Little dated November 17, 1926, and duly recorded in
Volume I-5, page 141, Deed Records of Cass County, Texas. Said 88.43 acres
tract of land being more particularly described as follows:
BEGINNING at an iron pin set at a fence corner at the south southwest corner
of the said 429. 93 acres tract of land for the south southwest corner of this
tract of land. Said iron pin being N. 590 31' W. a distance of 4651.0 feet
from the southeast corner of the said John R. Boon Survey.
THENCE North, along and with an old fence line and hedge row a distance of
4535.0 feet to an iron pin set at a fence corner for an indenture corner of
this tract of land.
THENCE S. 88 DEG. 42' W. along and with an old fence line in all a total
distance of 1164.30 feet to an iron pin set at a fence corner in the east
right-of-way line of Farm Road No. 250 for the west southwest corner of this
tract of land.
THENCE N. 47 DEG. 10' E. along and with the east right-of-way line of said
Farm Road No. 250 a distance of 264.0 feet to an iron pin for the northwest
corner of this tract of land.
THENCE N. 89 DEG. 00' E. a distance of 1797.4 feet to an iron pin set in a
fence line for the northeast corner of this tract of land.
THENCE S. 01 DEG. 10' 26" W. along and with a fence line and hedge row a
distance of 4720.53 feet to an iron pin set in the south line of said 429.93
acres tract of land for the southeast corner of this tract of land.
THENCE West, along and with an old fence line, same being the south line of
the said 429.93 acres tract of land a distance of 730.0 feet to the place of
beginning, containing 88.43 acres of land, more or less.
SAVE AND EXCEPT for a period of twenty-five (25) years from January 16, 1976,
am undivided 1/16 royalty (being 1/2 of the usual 1/8 royalty) in all oil and
gas in, an, under and that may be produced from the above described property
heretofore reserved.
<PAGE>
Exhibit A
Property Number F-165
Tract of land located in the John R. Boon Survey, A-56 and being situated
approximately S. 28 00' a distance of 1.7 miles from the City of Hughes
Springs, Cass County, Texas, said tract being a portion of a 110 acres tract of
land described in a Warranty Deed from Georgia Spooner and Audrie Bockmon to
Dr. Donald R. Smith, et al dated September 15, 1967 and duly recorded in
Volume 498, page 85 of the Deed Records of Cass County, Texas, and said tract
of land being more particularly described as follows:
BEGINNING at an iron pin set at the southeast corner of the said 110 acres
tract of land for the southeast corner of this tract of land;
THENCE N. 89 DEG. 27' w. along and with the south line of the said 110 acres
tract of land, a distance of 1276.90 ft. to an iron pin set at the southwest
corner of the said 110 acres tract of land for the southwest corner of this
tract of land;
THENCE N. 01 DEG. 54' E. along and with the west line of the said 110 acres
tract of land, a distance of 2003.70 ft. to an iron pin for the northwest
corner of this tract of land;
THENCE S. 89 DEG. 38' E. a distance of 1225.0 ft. to an iron pin set at the
east northeast corner of the said 110 acres tract of land for the northeast
corner of this tract of land;
THENCE S. 00 DEG. 25' W. along and with the east line of the said 110 acres
tract of land, a distance of 2007.08 ft. to the PLACE OF BEGINNING, containing
57.58 acres of land, more or less.
LESS AND EXCEPT an undivided 1/2 of all the oil, gas and other minerals in, on
and under the above described property which has been heretofore reserved.
<PAGE>
Exhibit A
Property Number F-191
All that certain lot, tract or parcel of land in Cass County, Texas, being a
101.87 acres tract of land located in the J. R. Boon Survey, A-56, and being
situated approximately 1 mile South from the town of Hughes Springs, Cass
County, Texas, said tract of land being located in the northeast portion of
said Boon Survey, said 101.87 acres tract of land being also previously
described in Iron Ore Lease from W. H. Phillips, et ux, Bulah, to W. O. Irvin,
Trustee, dated March 10, 1942, and being duly recorded in Volume T.8, Page 18
of the Deed Records of Cass County, Texas and being more particularly
described as follows:
BEGINNING at a rock pile for the southwest corner of the W. C. Nichols 38.03
acres tract of land, said rock pile being also an angle corner in the north
boundary line of this tract of land;
THENCE: S. 89 DEG. 35' E. along and with an old fence line, in all a total
distance of 705.07 feet to a stake set in the east boundary line of said Boon
Survey for the northeast corner of this tract of land, said stake being the
southeast corner of the W. C. Nichols 38.03 acres, said stake being also in
the west boundary line of the I. Campbell Survey, A-178;
THENCE: N. 0 DEG. 01' E. along the Campbell-Boon Survey line and the Hughes
Springs Harris Chapel Road, in all a total distance of 2029.87 feet to a stake
set in said line for the southeast corner of this tract of land;
THENCE: N. 89 DEG. 41' W., in all a total distance of 2189.69 feet to a 1" iron
pin for the southwest corner of this tract of land;
THENCE: N. 0 DEG. 24' E., in all a total distance of 2038.19 feet to a stake
for the northwest corner of this tract of land;
THENCE: S. 89 DEG. 25' E. along and with an old fence line, in all a total
distance of 1469.67 feet to the "PLACE OF BEGINNING, containing 101.87 acres
of land, more or less.
LESS, however, 25.06 acres conveyed to Mrs. Leah Gray Fox by W. H. Phillips
and wife, Bulah Ohal Phillips by Warranty Deed dated April 8, 1940, and being
duly recorded in Volume H-9, page 62 of the Deed Records of Cass County, Texas
and being more particularly described as follows:
BEGINNING at a 1" iron pin for the southwest corner of this tract of land,
said iron pin being also the southwest corner of the above described 101.87
acres tract of land;
THENCE: N. 0 DEG. 24' E. 498.93 feet to a stake for the southwest corner of the
above described 76.81 acres tract of land, said stake being also the northwest
corner of this tract of land;
THENCE: S. 89 DEG. 41' E. 2186.35 feet to a stake in the east boundary line of
the said Boon Survey, said stake being also in the west boundary line of the
said Campbell Survey, said stake being the northeast corner of this tract of
land, said stake being also the southeast corner of the above described 76.81
acres tract of land;
<PAGE>
Exhibit A
Property Number F-191 (cont.)
THENCE: S. 0 DEG. 01' E. along the Campbell-Boon Survey line, in all a total
distance of 498.93 feet to a stake set in said line, said stake being also the
southeast corner of this tract of land;
THENCE: N. 89 DEG. 41' W., in all a total distance of 2189.69 feet to the PLACE
OF BEGINNING, containing 25.06 acres of land, more or less.
Also, LESS 1.6 acres Highway Right-of-Way for FM 161.
ALSO SAVE AND EXCEPT an undivided one-half (1/2) of the usual one-eighth (1/8)
royalty on oil and gas that may be produced from the above described property
heretofore reserved.
<PAGE>
Exhibit A
Property Number F-159
Being all that certain lot, tract or parcel of land in the John R. Boon, 113
Survey, cass county, Texas, described by metes and bounds as follows:
BEGINNING at the Northeast corner of the old Brooks farm and the Southeast
corner of the Mrs, S. L. Gray farm;
THENCE West 773 vrs. with the North boundary line of the old Brooks farm;
THENCE North 179.6 vrs. to stake for corner;
THENCE East 773 vrs. to stake for corner;
THENCE South 179.6 vrs. to the place of beginning, containing 24.6 acres of
land.
<PAGE>
Exhibit A
Property Number F-176
Tract 1
Being a 103.94 acres tract of land located in the James T. Dove Survey, A-82,
and being situated approximately S. 35 DEG. 00' E. a distance of 3.5 miles from
the City of Daingerfield, Morris County, Texas. Said 103.94 acres tract of
land being previously described in an Iron Ore Deed from R. R. Barber, et ux,
to L. C. Luckel, Trustee, dated April 6, 1909, and duly recorded in Volume Q,
page 189 of the Deed Records of Morris County, Texas. Said 103.94 acres tract
of land being more particularly described as follows:
Beginning at a point in the east boundary line of the said J. T. Dove Survey
for the east northeast corner of this tract of land. Said point being S. 00
DEG. 10' W. a distance of 1844.5 ft. from the north northeast corner of the said
J. T. Dove Survey.
Thence: S. 00 DEG. 10' W. along and with the east line of the said Dove Survey,
in all a total distance of 2592.87 ft. to a point for the southeast corner of
this tract of land.
Thence: N. 89 DEG. 27' w. along and with an old fence line, in all a total
distance of 1496.3 ft. to an iron pin set at a fence corner for the southwest
corner of this tract of land.
Thence: N. 01 DEG. 00' W. along and with an old fence line, in all a total
distance of 3239.0 ft. to an iron pin set at a fence corner for the northwest
corner of this tract of land. Said iron pin being in the north line of the
said Dove Survey.
Thence: East, along and with the north line of the said Dove Survey, a
distance of 902.18 ft. to a stake for the north northeast corner of this tract
of land.
Thence: S. 00 DEG. 10' W. a distance of 660.0 ft to a stake for an "L" corner
of this tract of land.
Thence: East, a distance of 660.0 ft. to the place of beginning, containing
103.94 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-176 (cont.)
Tract 2
All that certain lot, tract or parcel of land in the J. T. Dove Survey,
Abstract No. 82, Morris County, Texas, being more fully described in a deed
from Winston Banks to W. K. Blanton by deed dated March 29, 1867, and being
the same land conveyed to V.F. Cramer by C. D. Cramer in a deed of October 1,
1936, recorded in Volume 31, Page 592, Deed Records of Morris County, Texas,
to which recorded deed reference is hereby made for all purposes.
Together with all land and interest therein owned or claimed by Lone Star Steel
Company by limitation or otherwise, in the J. T. Dove Survey, Morris County,
Texas, although not included within the boundaries of the land particularly
described above, subject to any prior reservation of mineral rights.
<PAGE>
Exhibit A
Property Number P-130
BEING a 100.54 acre tract of land located in the James T. Dove Survey, A-82,
and being situated approximately S 27 deg. E -3.5 miles from the City of
Daingerfield, Morris County, Texas. Said 100.54 acre tract of land being the
same 100 acre tract of land as conveyed from Sue Brooks Jenkins to Virgil
Walters by Warranty Deed dated December 7, 1960, and duly recorded in Volume
96, page 525 of the Deed Records of Morris County, Texas. Said 100.54 acre
tract of land being more particularly described as follows:
BEGINNING at a stake in the east boundary line of the said J.T. Dove Survey
for the southeast corner of this tract of land. Said stake being in the west
line of the Elizabeth Beard Survey, A-17, Said stake being N. 0 deg. 10'
E. 1142.9 feet from a 6" x 6" concrete monument with copper disk marked "E.B.
- -J.D." set at the southwest corner of the said E. Beard Survey. Said monument
being an "L" corner of the said James T. Dove Survey.
THENCE N. 89 deg. 39' W. along and with an old fence line in all a total
distance of 3660.9 feet to a 4" x 4" concrete monument set in the west line of
the said J.T. Dove Survey for the southwest corner of this tract of land.
Said monument being also in the east line of the M. Bowers Survey, A-35.
THENCE N. 0 deg. 13' W along and with the Bowers-Dove Survey line in all a
total distance of 1103.9 feet to a 4" iron pipe for the west-northwest corner
of this tract of land.
THENCE S. 89 deg. 35' E. along and with an old fence line in all a total
distance of 2165.9 feet to a 4" iron pipe for an "L" corner of this tract of
land.
THENCE N. 1 deg. 43' E along and with an old fence line in all a total
distance of 229.0 feet to a 4" iron pipe for the north-northwest corner of
this tract of land.
THENCE S. 89 deg. 27' E along and with an old fence line in all a total
distance of 1496.3 feet to a stake set in the west line of the said J.T. Dove
Survey, for the northeast corner of this tract of land. Said stake being in
the west line of the said E. Beard Survey.
THENCE S. 0 deg. 10' W along and with the Beard-Dove Survey Line in all a
total distance of 1325.5 feet to the place of beginning, containing 100.54
acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-190
Being a 51.87 acres tract of land located in the Ed West Survey, A-339,
and being situated approximately S. 57 deg. 00' E. a distance of 3.5 miles
from the City of Daingerfield, Morris County, Texas, said 51.87 acres tract
of land being previously described in a Warranty Deed from R. R. Morrison,
Trustee, to D. W. McClain and wife, Joyce, dated May 29, 1962, and duly
recorded in Volume 103, Page 205, Deed Records of Morris County, Texas, said
51.87 acres tract of land being more particularly described as follows:
BEGINNING at a 6" x 6" concrete monument with copper disk marked "EW-
JWS-JLR-WL" said concrete monument being the southwest corner of this tract of
land, said concrete monument being the southwest corner of the Ed West Survey,
A-339, said concrete monument being the southeast corner of the J. W. Stoddard
Survey, A-273, said concrete monument being the northeast corner of the J. L.
Riddle Survey, A-251, said concrete monument being also the northwest corner of
the Wm. Fultz Survey, A-109;
THENCE N. 0 deg. 55' W. along the Stoddard-West Survey line at 3042.09
feet pass a 3" iron pipe the northeast corner of the said Stoddard Survey,
same being the southeast corner of the A. F. Hargiss Survey, A-129, and
continuing N. 0 deg. 55' W. along the Hargiss-West Survey line, in all a
total distance of 3247.0 feet to a stake for the northwest corner of this
tract of land, said stake being in the engineer's center line of the old
Daingerfield & Jefferson Highway;
THENCE in a southeasterly direction along and with the engineer's center
line of said old Daingerfield & Jefferson highway, in all a total distance of
891.30 feet to a stake for the north northeast corner of this tract of land,
said stake being also the northwest corner of the Oak Grove Union Church Lot;
THENCE S. 28 deg. 00' W. along the Church boundary line, in all a total
distance of 183.62 feet to a stake for an ell corner of this tract of land,
said stake being also the southwest corner of the said Church lot;
THENCE S. 77 deg. 00' E. along the Church boundary line, in all a total
distance of 138.107 feet to a stake for the East northeast corner of this
tract of land, said stake being in the west line of the M. Nelson property,
said stake being also the southeast corner of the said Church lot;
THENCE S. 01 deg. 56' E. along the said Nelson boundary line, in all a
total distance of 2538.15 feet to a stake for the southeast corner of this
tract of land, said stake being in the south survey line of the said West
Survey, said stake being also in the north survey line of the said Fultz
Survey;
THENCE S. 89 deg. 32' W. along the Fultz-West Survey line, in all a
total distance of 801.80 feet to the PLACE OF BEGINNING, containing 51.87
acres of land, more or less, all of which lies in the Ed West Survey, A-339.
LESS AND EXCEPT an undivided 1/2 of the oil, gas and sulfur (but not
iron, ore and gravel) in, on, under or that may be produced from the above
described property heretofore reserved.
<PAGE>
Exhibit A
Property Number F-202
Being a 57.95 acres tract of land located in the Ed West Survey, A-339, and
being situated approximately S. 61 DEG. 00' E. a distance of 3.4 miles from the
city of Daingerfield. Morris County, Texas. Said 57. 95 acres tract of land
being a portion of those lands as described in an Iron Ore Deed from
Mrs. Minnie Nelson et al to to W. O. Irwin, Trustee, and recorded in Volume
43, page 253, Deed Records of Morris County, Texas. Said 57.95 acres tract of
land being more particularly described as follows:
BEGINNING at a 2" iron pipe set in the south line of the said Ed West Survey
for the southwest corner of this tract of land. Said iron pipe being S. 89 DEG.
39' E. a distance of 801.80 feet from the southwest corner of the said Ed West
Survey. Said iron pipe being set in the north line of the Wm. Fultz Survey,
A-109;
THENCE N. 01 DEG. 00' W. along and with an old fence line and hedge row a
distance of 2675.15 feet to an iron pin set in the centerline of the old
Daingerfield & Jefferson Public Road for the west northwest corner of this
tract of land. A 2" iron pipe bears S. 01 DEG. 00' E. a distance of 45.0 feet
set for reference corner;
THENCE S. 57 DEG. 09' E. along and with the centerline of said Public Road a
distance of 232.10 feet to an iron pin for an indenture corner of this tract
of land. A 2" iron pipe bears N. 13 DEG. 31' E. a distance of 29. 5 feet set for
reference corner;
THENCE N. 13 DEG. 31' E. along and with an old fence line a distance of 314. 3
feet to a 2" iron pipe set at a fence corner for the north northwest corner of
this tract of land;
THENCE N. 89 DEG. 52' E. along and with said fence line a distance of 623.0
feet to an iron pin set in the centerline of a Public Road for the north
northeast corner of this tract of land. A 2" iron pipe bears S. 89 DEG. 52' W. a
distance of 21.5 feet set for a reference corner;
THENCE S. 00 DEG. 36' W. along and with the centerline of the said Public Road
a distance of 780. 90 feet to an iron pin set in the centerline of the said old
Daingerfield & Jefferson Public Road for an indenture corner of this tract of
land;
THENCE S. 59 DEG. 20' E. along and with the centerline of said Public Road a
distance of 193.6 feet to an iron pin for the east northeast corner of this
tract of land. A 2" iron pin bears S. 12 DEG. 30' W. a distance of 28.0 feet set
for reference corner;
THENCE in a southerly direction, along and with am old fence line and hedge
row as follows: S. 12 DEG. 30' W. --523. 0. feet; S. 01 45' W. --583.38 feet:
S. 00 DEG. 15' W. --555.60 feet; and S. 02 DEG. 15' E. --333.0 feet to a 2" iron
pipe set in the south line of the said Ed West Survey for the southeast corner
of this tract of land. Said iron pipe being set in the north line of the said
Wm. Fultz Survey;
THENCE N. 89 DEG. 39' W. along and with the south line of the said Ed West
Survey a distance of 881.0 feet to the place of beginning, containing 57. 95
acres of land, more or less:
<PAGE>
Exhibit A
Property Number F-205
All that certain tract or parcel of land situated in Morris County,
Texas, a portion of the Wm. S. Fultz HR Survey, A-109, of said
county, and being more particularly described as follows:
BEGINNING at the Northwest corner of said Wm. S. Fultz
HR Survey;
THENCE South 420 vrs. to a stake;
THENCE East 1019 vrs. to the Southwest corner of a
4 acres tract conveyed to W. G. Bird;
THENCE North 150 vrs. to the Northwest corner of said
4 acres tract;
THENCE East 150 vrs. to the Northeast corner of said
4 acres tract;
THENCE South 150 vrs. to the Southeast corner of said
4 acres tract;
THENCE East 175 vrs. to a stake on the East Boundary
Line of the Wm. S. Fultz HR Survey;
THENCE 420 vrs. to the Northeast corner of said
Wm. S. Fultz HR Survey;
THENCE West 1344 vrs. to the PLACE OF BEGINNING, con-
taining 96 acres of land, more or less of the Wm. S.
Fultz HR Survey.
<PAGE>
Exhibit A
Property Number F-085
All that certain lot, tract or parcel of land being a part of the Ed West
Survey, Abstract No. 339, located in Morris County, Texas, same being a
101.01 acre tract of land and being located approximately four miles east
from the County Site of Daingerfield, Morris County, Texas, and being more
particularly described as follows:
BEGINNING at a 4" iron pipe for the Southeast corner of this tract of land, said
corner being the most westerly Southwest corner of the Anna McMillan 100 acre
tract of land, said corner being also in the north boundary line of the Hall 50
acre tract of land;
THENCE North 68 deg. 55' West along the Hall North boundary line, in all a
total distance of 728.94 varas to a 4" iron pipe for the Southwest corner of
this tract of land, said iron pipe being the Northwest corner of the said Hall
tract of land;
THENCE North 1 deg. 43" West in all a total distance of 497.84 varas to
a 4" iron pipe for the Northwest corner of this tract of land, said iron pipe
being also the Southwest corner of the B. F. Hall 20 acre tract of land;
THENCE North 88 deg. 18' East, in all a total distance of 830.09 varas to a
4" iron pipe for the Northweast corner of this tract of land, said iron pipe
being the Northwest corner of the said Anna McMillan tract of land;
THENCE South 6 deg. 01' East along the McMillan West boundary line in all a
total distance of 318.20 varas to a 4" iron pipe in the east boundary line of
this tract of land, said iron pipe being also in the West boundary line of the
McMillan tract of land;
THENCE South along the McMillan West boundary line in all a total distance of
532.79 varas to the place of beginning, containing 101.01 acres of land, more or
less, BEING the same tract of land described in a Warranty Deed from W. B.
Womack to Elmore Wallaco dated December 3, 1900, and recorded in Volume K, page
12 of the Morris County Deed Records, and also the same land described in a
Warranty Deed from Jack Wallace et al to W. J. McLeary dated January 20, 1953,
and recorded in Volume 68, page 616, of the Morris County Deed Records, to
which deeds and records thereof reference is here made for all pertinent
purposes.
<PAGE>
Exhibit A
Property Number F-182
All that certain lot, tract or parcel of land in Morris County, Texas, being
309.93 acres of land of which 132.40 acres are located in the Edward West
Survey, A.339, 106.70 acres are located in the Alex F. Hargiss Survey, A. 129,
and 70.83 acres are located in the William Crowder Survey, A-53, said 309.93
acres of land being situated approximately S. 70 deg. 00' E. a distance of 2.8
miles from the City of Daingerfield, Morris County, Texas, said 309.93 acres
of land consists of 239.88 acres tract of land and a 20.05 acres tract of land
and being more particularly described as follows:
TRACT 1
BEGINNING at an iron pin set in the east right-of-way line of the L & A
Railroad for the northwest corner of this tract of land, said iron pin being
in the north line of the William Crowder Survey and S 89 deg. 53' W. a
distance of 1144.0 ft. from the northeast corner of the said William Crowder
Survey;
THENCE N. 89 deg. 53' E. at 1144.0 ft. pass the northeast corner of the said
William Crowder Survey, at 2996.0 ft. pass the west line of the said Edward
West Survey, in all a total distance of 5299.0 ft. to an iron pin set at a
fence corner for the northeast corner of this tract of land;
THENCE South, along and with the centerline of a public road, a distance of
2502.0 ft. to an iron pin for the southeast corner of this tract of land;
THENCE S 89 deg. 45' W. along and with an old fence line, at 2303.0 ft. pass
the west line of the said Edward West Survey, at 4155.0 ft. pass the west line
of the Alex F. Hargiss Survey, in all a total distance of 4600.05 ft. to an
iron pin set in the east right of way line of the L & A Railroad for the
southwest corner of this tract of land;
THENCE in a northwesterly direction, along and with the east right-of-way
line of said L & A Railroad as follows: N 22 deg 49' W 799.57 ft; N 20 deg 07"
W. 410.02 ft; West 31.0 ft; N 12 deg. 54' W 282.12 ft; and N. 07 deg 54' W.
1124.08 ft. to the PLACE OF BEGINNING, containing 289.88 acres of land, more
or less.
TRACT 2
BEGINNING at an iron pin set in the west right-of-way line of the L & A
Railroad for the northeast corner of this tract of land, said iron pin being
in the north line of the William Crowder Survey and S, 89 deg 53' W. a
distance of 1346.0 ft. from the northeast corner of the said William Crowder
Survey;
THENCE in a southeasterly direction, along and with the west right-of-way
line of said L & A Railroad as follows: S. 07 deg. 54' E. 1149.32 ft. and
S. 12 deg. 02' E. 249.48 ft. to an iron pin set at a fence corner for the
southeast corner of this tract of land;
THENCE West, along and with said fence line a distance of 666.0 ft. to an
iron pin set at a fence corner for the south southwest corner of this tract of
land, said iron pin being in the north right-of-way line of the old L & A
Railroad;
<PAGE>
Exhibit A
Property Number F-182 (cont.)
THENCE N. 67 deg. 14' W. along and with the said north right-of-way line, a
distance of 87.84 ft. to an iron pin set in an old fence line for the west
southwest corner of this tract of land;
THENCE N. 00 deg. 09' E. along and with an old fence line and hedge row, a
distance of 1347.0 ft. to an iron pin set in the north line of the said William
Crowder Survey for the northwest corner of this tract of land;
THENCE N. 89 deg. 53' E. along and with the north line of the said Wm.
Crowder Survey, a distance of 534.0 ft. to the PLACE OF BEGINNING, containing
20.05 acres of land, more or less.
SAVE AND EXCEPT 1/8 royalty on all oil and gas that may be produced or saved
from the above described property heretofore reserved, together with the right
of ingress and egress for the purposes of drilling, mining, exploring and
producing same.
<PAGE>
Exhibit A
Property Number F-194
All that certain lot, tract or parcel of land in Morris County, Texas, being a
46.337 acre tract of land located in the Edward West Survey, A-339, and being
situated approximately S. 75 deg. 00' E. a distance of 3.2 miles from the City
of Daingerfield, Morris County, Texas, said 46.337 acre tract of land being a
portion of a 50 acre tract of land as described in a Warranty Deed from Lula
J. Connor, a widow, to Roy M. Howell and Arthur M. Howell dated January 9,
1948, and duly recorded in Volume 60, Page 31, Deed Records of Morris County,
Texas, said 46.337 acre tract of land being more particularly described as
follows:
BEGINNING at an iron pin set in the centerline of a Public Road for the
northwest corner of this tract of land, said iron pin being the Southwest
corner of a 101.01 acre tract, of land owned by Lone Star Steel Company, said
iron pin being the northwest corner of the said 50 acre tract of land, a 4"
iron pipe bears S 68 deg. 55' E. -- 20.0 feet set for a reference corner;
THENCE S. 68 deg. 55' E. along and with an old fence line and hedge row, a
distance of 2,908.2 feet to an iron pin set at a fence corner for the
northeast corner of this tract of land;
THENCE S. 24 deg. 00' W. along and with an old fence line a distance of
748.0 feet to an iron pin set at a fence corner for the southeast corner of
this tract of land;
THENCE N. 69 deg. 02' 55" W. along and with an old fence line and hedge row,
a distance of 2,151.84 feet to an iron pin set at a fence corner for the south
southwest corner of this tract of land;
THENCE North, along and with a fence line, a distance of 100.0 feet to an
iron pin set at a fence corner for an indenture corner of this tract of land;
THENCE N. 69 deg. 02' 55" W. along and with a fence line, a distance of
428.0 feet to an iron pin set in the centerline of said Public Road for the
west southwest corner of this tract of land, an iron pin bears S. 69 deg.
02' 55,' E -- 27.0 feet set for reference corner;
THENCE North, along and with the centerline of said road, a distance of
707.0 feet to the PLACE OF BEGINNING, containing 46.337 acres of land, more or
less.
SAVE AND EXCEPT an undivided one-half (1/2) of all oil and gas minerals in,
on, under and that may be produced from the above described property
heretofore reserved.
<PAGE>
Exhibit A
Property Number F-178
Being a 70 acres tract of land located in the Edward West Survey, A-339, and
being situated approximately s. 75 deg. 00' E. a distance of 4.2 miles from
the City of Daingerfield, Morris County, Texas. Said 70 acres tract of land
consists of a 50 acres tract of land as described in a deed from M. C. Bell to
S. A. French and recorded in Volume 6, Page 528, Deed Records of Morris
County, Texas, and a 20 acres tract of land as described in deed from
J B. Wallace to S. A. French and duly recorded in Volume 6, Page 527, Deed
Records of Morris County, Texas, said 70 acres tract of land being more
particularly described as follows:
BEGINNING at an iron pin set at the southeast corner of the said 20 acres
tract of land for the southeast corner of this tract, said iron pin being
N. 52 deg. 30' E. a distance of 8500.0 feet from the southwest corner of the
said Edward West Survey;
THENCE North, a distance of 699 varas to a stake for the northeast corner of
this tract of land;
THENCE West, a distance of 349 varas to a stake for the north northwest
corner of this tract of land:
THENCE South 23 deg. 00' W. a distance of 155 varas to a stake for an 'L'
corner of this tract of land;
THENCE North 67 deg. 00' W a distance of 152 varas to a stake for the west
northwest corner of this tract of land;
THENCE South 23 deg. 00' W. a distance of 266 varas to a stake for the west
southwest corner of this tract of land;
THENCE South 67 deg. 00' E. a distance of 202 varas to a stake for an angle
corner of this tract of land;
THENCE South, a distance of 292 varas to a stake for the south southwest
corner of this tract of land;
THENCE East, a distance of 480 varas to the PLACE OF BEGINNING, containing
70 acres of land, more or less.
SAVE AND EXCEPT 1 acre out of the above described property, together with the
residence and all improvements situated thereon heretofore reserved, described
as follows:
BEGINNING at an iron pin in the south line of the said 70 acres tract of land
for the southeast corner of this tract of land, said iron pin being West a
distance of 252.0 ft. from the southeast corner of the said 70 acres tract of
land;
THENCE West, along and with the south line of the said 70 acres tract of
land, a distance of 208.71 ft. to an iron pin for the southwest corner of this
tract of land;
THENCE North, a distance of 208.71 ft. to an iron pin for the northwest
corner of this tract of land;
THENCE East, a distance of 208.71 ft. to an iron pin for the northeast
corner of this tract of land;
THENCE South, a distance of 208.71 ft. to the PLACE OF BEGINNING, containing
1.00 acre of land, more or less.
SAVE AND EXCEPT an undivided 1/16 royalty, being 1/2 of the usual 1/8 royalty,
in and to all oil and gas in, on, under or that may be produced from the above
described property heretofore reserved, together with the right of ingress and
egress for the purpose of drilling, mining and producing same.
<PAGE>
Exhibit A
Property Number F-173
TRACT 1:
Being 50 acres of land, more or less, of the Ed West Survey, situated in Cass
County, Texas, known as the Norwood tract of land;
BEGINNING at the NW corner of a 12 acre tract owned by T. B. Lilley in said
survey;
THENCE North 168 varas to the SW corner of a tract owned by Gus Bradley, a
stake, a pine bears S 10 East 7-1/5 varas, a Hickory bears South 51 East
15-3/5 varas, both marked X;
THENCE East 93 varas to the SE corner of said Bradley tract, a Hickory bears
South 81 East 2-1/5 varas, another North 10 West 2-1/5 varas, both marked X;
THENCE North 457 varas to a stake in Bradley's EB line, a P O bears South 28
East 16-1/5 varas marked X;
THENCE East 425 varas to a stake in Bradley's WB line a RO bears South
63-1/2 West 3 varas marked X;
THENCE South with Bradley's WB line 625 varas to the NE corner of said 12
acre tract;
THENCE West 518 varas with the NB line of same to the PLACE OF BEGINNING,
containing 50 acres of land, more or less, and being the same land described
in deed from G. T. Norwood to T. B. Lilley, dated November 12, 1906, and
recorded in Volume F-3, Page 553 of the Deed Records of Cass County, Texas.
TRACT 2:
Being 12 acres of land of the Ed West Survey situated in Cass County, Texas;
BEGINNING at the NW corner of a 38 acre tract owned by J. M. Niblett, Jr.;
THENCE East with said Niblett's ND line 518 varas to the NE corner of said
Niblett 38 acre tract;
THENCE North 130.7 varas a stake, a P O bears South 2 varas marked X;
THENCE West 518 varas to a stake, a B.J. bears S. 22 East 7-1/2 varas marked
X;
THENCE South 130.7 varas to the PLACE OF BEGINNING, containing 12 acres of
land, more or less, of the Ed West Survey in Cass County, Texas, and being the
same property described in deed from G. T. Norwood to T. B. Lilley, dated
February 9, 1906, and recorded in Volume F-3, Page 497 of said Deed Records.
<PAGE>
Exhibit A
Property Number F-173 (cont.)
TRACT 3:
Being 81 acres and 1242 square varas of land, more or less, of the Ed West
Survey situated in Morris and Cass Counties, Texas;
BEGINNING at the SE corner of the original A. Hargiss subdivision of said
survey;
THENCE West with Hargiss SB line 825 varas to a stake, a small B.J. bears
North 43 East 5 varas marked X;
THENCE North 700 varas to a stake, a small PO Hargiss EB line a BJ bears
West 2-1/2 varas marked X;
THENCE East 477 varas to a stake in said Hargiss EB line from which a Black
Jack bears due West 2-1/2 varas off marked X;
THENCE South 232 varas to a corner of said Hargiss subdivision;
THENCE South 60 degrees East 402 varas to another corner of said Hargiss
tract;
THENCE South 263 varas to the PLACE OF BEGINNING, containing 81 acres and
1242 square varas of land, more or less, and being the same property described
in deed from P. G. Seagle, et ux, to T. B. Lilley, dated November 24, 1883,
and recorded in Volume C, Page 507 of the Deed Records of Morris County,
Texas.
SAVE AND EXCEPT
a 65.0 acres tract of land located in the Edward West Survey, A-339 and
A-1080, Morris and Cass Counties, Texas. Said 65.0 acres tract of land being
situated approximately N. 60 DEG. 00' W. a distance of 1.50 miles from the City
of Hughes Springs, Cass County, Texas. Said 65.0 acres tract of land being a
portion of an 81 acres tract of land described as Tract 3 in a Warranty Deed
from John B. Lilley, et al to Lone Star Steel Company dated October 8, 1968,
and duly recorded in Volume 126, page 110 of the Deed Records of Morris
County, Texas. Said 65.0 acres tract of land being more particularly
described as follows:
Beginning at the southwest corner of the said 81 acres tract of land for the
southwest corner of this tract of land. Said corner being N. 61 DEG. 00' E. a
distance of 6180.0 ft. from the southwest corner of the said Edward West
Survey.
Thence: North, along and with an old fence tine, a distance of 1210.0 ft. to
a point in the centerline of a Public Road for the northwest corner of this
tract of land.
<PAGE>
Exhibit A
Property Number F-173 (cont.)
Thence: In an Easterly direction, along and with the centerline of said road,
as follows: N. 77 DEG. 39' E. 1060.0 ft.; S 74 DEG. 00' E. - 360.0 ft.; and S.
61 DEG. 00' E. - 1132.0 ft. to a point in a road intersection for the northeast
corner of this tract of land.
Thence: S. 00 DEG. 30' W., along and with the centerline of said road, a
distance of 730.0 ft. to a stake set at the southeast corner of the said 81
acres tract of land, for the southeast corner of this tract of land.
Thence: S. 88 DEG. 31' W., along and with the south line of said 81 acres tract
of land, a distance of 2365.43 ft. to the place of beginning, containing 65.0
acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-163
All That certain tract or parcel of land, containing 573.92 acres, located in
the Edward West Survey, A-1080, Cass County, Texas, and being situated
approximately N. 30 Deg. W. -2 miles from the town of Hughes Springs, Texas.
Said 573.92 acre tact of land being more particularly described as follows,
to-wit:
BEGINNING at a point in the north line of the said West Survey, and the south
line of the J. C. Harrison Survey, A-491, for the northeast corner of this
described tract of land. Said corner being N. 89 Deg. 54' W. - 6211.0 feet
from The northeast corner of the West Survey.
THENCE: S. 00 Deg. 02' E., a total distance of 1763.5 feet to a point for an
indenture corner of this tract.
THENCE: S. 89 Deg. 54' E., a total distance of 1192.0 feet to a point for
northeast corner of this tract.
THENCE: S. 00 Deg. 03' E., a total distance of 289.3 feet to a point for an
indenture corner of this tract.
THENCE: N. 89 Deg. 38' E., a total distance of 1054.0 feet to a point for a
northeast corner of this tract. Said corner being the northwest corner of the
W. Shaddix 60 acre tract. (Deed Ref. Vol. V-3, Page 426, Deed Records of Cass
County, Texas).
THENCE: S. 00 Deg. 03' E., a total distance of 1251.9 feet to the southwest
corner of the said Shaddix 60 acre tract for an indenture corner of this
tract.
THENCE: S. 89 Deg. 44' E., along the south line of the Shaddix 60 acre tract,
a total distance of 2166.6 feet to the southeast corner thereof for the
east-northeast corner of this tract.
THENCE: S. 00 Deg. 16' W., at 113.0 feet pass an old car axle marking the
northwest corner of a 31.13 acre tract of land described as Tract No. 1 in a
Warranty Deed from Lena Bell Irvin Shaddix to Lone Star Steel Company (Deed
Ref. Vol, 478, Page 472, Deed Records of Cass County, Texas), continuing same
course, in all a total distance of 2812.4 feet to the southwest corner of the
Lone Star Steel 31.13 acre tract for an angle corner in the east line of this
tract. Said corner being in the middle of Hughes Creek and being also the
northwest corner of a 67.71 acre tract of land described in a Warranty Deed
from T. E. Whisenant, et al, to Lone Star Steel Company.
THENCE: S. 00 Deg. 03' W., along the west line of the said 67.71 acre tract,
a total distance of 1695.0 feet to a rock pile for the southeast corner of
this tract. Said corner being also the northeast corner of a 9.89 acre tract
of land described in a Warranty Deed from J. D. Beaty and wife to Lone Star
Steel Company (Deed Ref. Vol. 474, Page 166, Deed Records of Cass County,
Texas).
<PAGE>
Exhibit A
Property Number F-163 (cont.)
THENCE: N. 88 Deg. 55' W., along the north line of said 9.89 acre tract, a
total distance of 694.2 feet-to the northwest corner thereof for an indenture
corner of this tract.
THENCE: S. 00 Deg. 24' E., along the west line of the aforementioned 9.89
acre tract, a total distance of 606.1 feet to a point for a southeast corner
of this tract.
THENCE: West, a total distance of 756.9 feet to a 3/4" iron pipe heretofore
set for the northeast corner of a 78.33 acre tract described in a Warranty
Deed from Ruby Boatright, et al, to Lone Stir Steel Company (Deed Ret. Vol.
467, Page 535, Deed Records of Cass County, Texas).
THENCE: S. 89 Deg. 38' W., along the north line of said 78.33 acre tract, a
total distance of 2194.0 feet to the northwest corner thereof for an indenture
corner of this tract.
THENCE: S. 00 Deg. 22' W., along the west line of the aforementioned 78.33
acre tract, a total distance of 627.6 feet to a point in the approximate
center of a public road for a southeast corner of this tract.
THENCE: N. 60 Deg. 56' W., along and with said road, a total distance of
1132.4 feet to a point for the southwest corner of this tract.
THENCE: N. 00 Deg. 28' W., a total distance of 1218.3 feet to the southwest
corner of the Vernon Lilly 12 acre tract for a corner of this tract.
THENCE: N. 89 Deg. 10' E., along the south line of the Lilly 12 acre tract, a
total distance of 1439.6 feet to the southeast corner of same for a corner of
this tract.
THENCE: N. 00 Deg. 01' E., at 363.1 feet pass the northeast corner of the
Lilly 12 acre tract, same being the southeast corner of a 50 acre tract in
the name of Vernon Lilly, continuing same course along the east line of the
Lilly 50 acre tract, in all a total distance of 2108.1 feet to the northeast
orner of the Lilly 50 acre tract for a corner of this tract.
THENCE: N. 89 Deg. 43' W., along the north line of the Lilly 50 acre tract, a
total distance of 1192.9 feet to the northwest corner thereof for a corner of
this tract.
THENCE: S. 00 Deg. 19' E., along a west line of the Lilly 50 acre tract, a
total distance of 1269.4 feet to an indenture corner of the Lilly tract for an
indenture corner of this tract.
THENCE: N. 89 Deg. 43' W., along a north line of the Lilly tract, a total
distance of 258.3 feet to a northwest corner of the Lilly tract for a corner
of this tract.
<PAGE>
Exhibit A
Property Number F-163 (cont.)
THENCE: N. 00 Deg. 19' W., a total distance of 1269.4 feet to a point for an
angle corner in the west line of this tract.
THENCE: N. 00 Deg. 02' W., a total distance of 5147.2 feet to a point in the
north line of the Ed West Survey for the northwest corner of this tract.
THENCE: S. 89 Deg. 54' E., along the north line of the said West Survey, a
total distance of 258.3 feet to the place of beginning, containing 573.92
acres of land.
SAVE AND EXCEPT
a 1.11 acre tract of land located in the Edward West Survey, A-1080, and being
situated approximately N. 30 DEG. 00' W. a distance of two (2) miles from the
City of Rugbes Springs, Cass County, Texas. Said 1.11 acre tract of land being a
portion of a 573.92 acres tract of land as described in a Warranty Deed from
C. B. Niblett et al to Lone Star Steel Company, dated November 13, 1967, and
duly recorded in Volume 499, page 496, Deed Records of Cass County, Texas.
Said 1.11 acre tract of land being more particularly described as follows:
BEGINNING at an iron pipe set at a northeast corner of the said 573.92 acres
tract of land for the northeast corner of this tract of land. Said iron pipe
being the northwest corner of the W. Shaddix 60-acre tract of land. Said iron
pipe being S. 62 DEG. 48' W. a distance of 4457.0 ft. from the northeast corner
of the said Edward West Survey;
THENCE S. 00 DEG. 03' E. along and with the east line of the said 573.92 acres
tract of land a distance of 287.2 ft. to an iron pin for the southeast corner
of this tract of land;
THENCE S. 62 DEG. 17' W. a distance of 170.7 ft. to an iron pin set on the
east side of a public road for the southwest corner of this tract of land;
THENCE N. 00 DEG. 59' E. along and with the east side of said public road, a
distance of 365.71 Ft. to an iron pin set in the north line of the said 573.92
acres tract of land for the northwest corner of this tract of land;
THENCE N. 89 DEG. 38' E. along and with the north line of the said 573.92
acres tract of land a distance of 144.6 ft. to the place of beginning containing
1.11 acre of land, more or less.
<PAGE>
Exhibit A
Property Number F-153
BEING a 9.69 acre tract of land located in the Edward West Survey, A-1080,
Cass County, Texas, and being situated approximately North 45 deg. West, one
mile from the City of Hughes Springs, Cass County, Texas; said 9.69 acre tract
of land being a portion of a 69.09 acre tract of land described as "Fourth"
tract in a partition deed made between J. D. Bradley, et ux, dated October 27,
1963, and duly recorded in Volume 447, page 199, of the Deed Records of Cass
County, Texas: said 9.69 acre tract of land being,also the same land described
as a 9.5 acre tract of land in a deed from T. H. Briggs to A. D. Bradley dated
December 31, 1901, and duly recorded in Volume D-3, page 472, of the Deed
Records of Cass County, Texas; said 9.69 acre tract of land being more
particularly described as follows:
BEGINNING at a stake set at the North Northeast corner of the said 69.09 acre
tract of land for the Northeast corner of this tract of land; said stake being
the Northeast corner of the said 9.5 acre tract of land;
THENCE South 0 deg. 30 min. West, along and with the East line of the said
9.5 acre tract of land, in all a total distance of 609.7 feet, to a stake set
at the Southeast corner of the said 9.5 acre tract of land for the Southeast
corner of this tract of land;
THENCE North 89 deg. 26 min. West, along and with the South line of the said
9.5 acre tract of land, in all a total distance of 683.0 feet to a stake set
at the Southwest corner of the said 9.5 acre tract of land for the Southwest
corner of this tract of land;
THENCE North 0 deg. 32 min. West, along and with the West line of the said
9.5 acre tract of land, in all a total distance of 616.2 feet to a stake set
at the Northwest corner of the said 9.5 acre tract of land for the Northwest
corner of this tract of land;
THENCE South 88 deg. 54 min. East, along and with the North line of the said
9.5 acre tract of land, in all a total distance of 694.2 feet to the place of
beginning, containing 9.69 acres of land.
SAVE AND EXCEPT an undivided 1/2 royalty on all oil and gas in, under, or that
may be produced from the above described property heretofore reserved,
together with the right of ingress and egress at all times, for the purposes
of drilling, mining, exploring, producing and transporting same.
<PAGE>
Exhibit A
Property Number F-149
All that tract and parcel of land situated in the Edward West Survey, Abstract
No 1080 of Cass County, Texas, and consisting of 78.33 acres of land and being
situated approximately North 45 deg. West 1 mile from the City of Hughes
Springs, Cass County, Texas; said 78.33 acre tract of land consists of a portion
of a 50 acre tract and a portion of a 49 acre tract of land as described in a
warranty deed from Mrs. C. A. Williams to A. D. Bradley, dated November 5, 1891
and duly recorded in Volume F-3, page 23, Deed Records of Cass County, Texas,
and a portion of a 60 acre tract of land as described in a warranty deed from
Jas. A. Shaddix et ux N.M. to A. D. Bradley dated May 14, 1903, and duly
recorded in Volume B-3, page 501 of the Deed Records of Cass County, Texas; and
being the same land described as First Tract in that certain partition deed
executed by J. D. Bradley, et al, dated October 27, 1963, recorded in Volume
447, page 199, Deed Records of Cass County, Texas, and being more particularly
described as follows:
BEGINNING at a stake set at the Southwest Corner of the said 60 acre tract of
land for the Southwest Corner of this tract of land; said stake being North 72
deg. 30 min. East, 8,085.0 feet from the Southwest Corner of the said Ed West
Survey: said stake being at the intersection of two county roads;
THENCE South 89 deg. 39 min. East, along and with the South line of the said 60-
acre tract of land, in all a total distance of 670.0 feet to a stake for the
South Southeast Corner of this tract of land;
THENCE North 0 deg. 38 min. East in all a total distance of 752.4 feet to a
stake set in the North line of the said 60 acre tract of land for an corner of
this tract of land;
THENCE South 89 deg. 55 min. East, along and with the North line of the said 60
acre tract of land in all a total distance of 758.0 feet to a stake set for the
middle Southeast corner of this tract of land;
THENCE North 0 deg. 38 min. East in all a total distance of 316.2 feet to a
stake set for an corner of this tract of land;
THENCE South 89 deg. 55 min. East in all a total distance of 766.0 feet to a
stake set for the east southeast corner of this tract of land;
THENCE North 0 deg. 38 min. East in all a total distance of 1129.0 feet to a
stake set in the North line of the said 50 acre tract of land for the north
northeast corner of this tract of land;
THENCE South 89 deg. 38 min. West along and with the North line of the said 50
acre tract of land in all a total distance of 2194.0 feet to a stake set at the
Northwest corner of the said 50 acre tract of land for the Northwest Corner of
this tract of land, said stake being set in an old county road;
THENCE South 0 deg. 38 min. West along and with said county road, in all a total
distance of 2177.1 feet to the PLACE OF BEGINNING, containing 78.33 acres of
land, more or less.
<PAGE>
Exhibit A
Property Number F-149 (cont.)
SAVE AND EXCEPT and undivided 1/16 royalty (being 1/2 of the usual 1/8
royalty) in and to all the oil and gas, casinghead gas and gasoline in, on,
under, and that may be produced from the above described property heretofore
reserved, together with the right of ingress and egress at all times for the
purposes of mining, drilling, exploring, producing, and transporting oil and
gas.
<PAGE>
Exhibit A
Property Number F-065
All that certain parcel of land located about 3/4 mile north of the City of
Hughes Springs, Texas, and being 5.80 acres a part of the Edward West Survey,
out of the C. E. Watson, Sr. 100 acre tract, at a point in the Hughes Springs
and Holly Springs road, beginning at the Northeast corner of Mrs. Ila Taylor's
10 acre tract of land an iron stake for corner;
Thence West 1620 feet to Wilson's East line an iron stake for corner;
Thence North with Wilson's East line 373 feet an iron stake for corner;
Thence East 803 feet an iron stake for corner;
Thence South 353 feet an iron stake for corner;
Thence East 867 feet an iron stake for corner;
Thence South 19 feet to place of beginning containing 5.80 acres of land. Being
the same land described in deed dated September 6, 1940, from K.C. Watson and
wife to Era Callaway and recorded in Volume R-8 Page 611, Deed Records of Cass
County, Texas.
<PAGE>
Exhibit A
Property Number F-064
All that certain parcel of land located about 1 mile North of the City of Hughes
Springs, Texas and being 15.22 acres apart of the Edward West Survey.
Beginning 1637 feet North of the S.E. Corner of the C.E. Watson 100 acre tract,
at a point in the Hughes Springs and Holly Springs road; Thence North with said
East boundary of said C.E. Watson 100 acre tract and with road 456 feet to stake
the South East corner of D.L.D. Whisenant 1/2 acre tract; Thence West 180.5
feet to the South West corner of said 1/2 acre tract iron stake for corner;
Thence North 111 feet to the North West corner of said 1/2 acre tract. Thence
North 89 deg West with South line of D.L.D. Whisenant tract of land 1500 feet to
the South West corner of same and N.W. corner of the C.E. Watson Estate tract
iron stake for corner; Thence South 230 feet to iron stake for corner in West
line of the C.E. Watson 100 acre tract; Thence East 803 feet to iron stake for
corner; Thence South 353 feet to iron stake for corner; Thence East 867 feet
to place of beginning. Being the same land described in deed dated March 7,
1940, from L. M. Watson, et, al to Mrs. Era (Watson) Callaway and recorded in
Volume E-8, Page 379, Deed Records of Cass County, Texas.
SAVE AND EXCEPT the following property:
That certain tract or parcel of land, situated in the County of Cass, State
of Texas in the Edward West Survey, A-1080 as more particularly described as
follows:
Beginning at a point the centerline of FM Highway 2150, said point being
centerline Station 52-39 and the Southeast Corner of a 15.22 Acre tract owned by
the Lone Star Steel Co.
THENCE: West, along the South boundary line of said tract, a distance of fifty
(50') feet to a pod in the West Right-of-Way line of said FM Highway
2150.
THENCE: N 2 DEG.00' E, a distance of 472 feet to a point in the North boundary
of said tract, said pod being fifty (50') feet left of centerline
Station 57-11.
THENCE: East, a distance of fifty (50') feet to centerline Station 57*11.
THENCE S 2 DEG.00' W, a distance of 472 feet to the point of beginning.
Containing 0.78 acres more or less.
Said 0.78 acres are also described as Parcel No. 2 in that certain
Right-of Way Deed dated July 20, 1954, executed by Lone Star Steel Company to
the State of Texas.
<PAGE>
Exhibit A
Property Number F-068
All that certain tract or parcel or land described as follows: Being (24) acres
out of the Ed West H.T. Survey located about one mile Northwest from the town or
Hughes Springs and described as follows to-wit; Beginning at A. D. Bradley's S.
E, Corner at a rock; Thence North along said Bradley's East line to a stake for
cor; Thence East along said Bradley's South line to a rock C. E. Watson's Sr.
West line a rock for cor; Thence South along C. E. Watson's West line to a rack
for cor; Thence West to the place of beginning the same being 24 acres of land
out of the T. H. Brigg's old homestead and being (24) acres of land, more or
less. Also another tract or land of the same H.R survey described as follows:
Beginning at the S.E. corner of a tract or land made for Mrs. C. J. Wilson by
the grantors herein. Thence North 100 feet a stake C. E, Watson's land. Thence
West 60 feet to A. D. Bradley's cor. on land. Thence South along Bradley's East
line 100 feet to Mrs. C. J. Wilson's land. Thence East 60 feet to the place or
beginning. Being the same property described in Cass County Deed Records Vol. E-
4, Page 380.
Being the same land described in deed from Mrs. Nolie Hearne, et al, to R.W.
Bentley and C.H. Callaway dated September____, 1948, and recorded in Volume
250, Page 246, Deed Records of Cass County, Texas.
<PAGE>
Exhibit A
Property Number F-067
All that certain tract or parcel of land situated in Cass County, Texas and
described as follows to-wit: Beginning at the S. W. corner of C. E. Watson's
tract of land and the N.W. corner of J. M. Cook's land; Thence North 219 yards
at a stake; Thence East 219 yards a stake; Thence South 219 yards a stake;
Thence West 219 yards a stake the place of beginning containing 10 acres of land
a part of the Ed West H.L Surrey. Being the property described in Cass County
Deed Records, Vol.V-3, Page 483.
Being the same land described in deed from Mrs. Nolie Hearne, et al, to R.W.
Bentley and C.H. Callaway dated September 1948, and recorded in Volume 250, Page
246, Deed Records of Cass County, Texas.
<PAGE>
Exhibit A
Property Number F-066
All that certain tract or parcel or land being a part or the Ed West H.R. Survey
and described an follows: Beginning at a point in the Hughes Springs and Holly
Springs road 130 feet North of the Southeast corner of the C.E. Watson 100 acre
tract and the Northeast corner of a small lot formerly deeded to Mrs. Eula Witt;
Thence West with Mrs. Witt's North line and Mrs. Ila Taylor's North line 268
feet to the Northwest corner of Mrs. Taylor's lot; Thence South 130 feet a
stake; Thence West 736 feet to J. C. Wilson's South east corner; Thence North
657 feet to said Wilson's Northeast corner; Thence West 568 feet to a stake for
corner; Thence North 155 feet a stake for corner; Thence East 1588 feet to stake
for corner; Thence South to place of beginning 684 feet containing 20 acres of
land. Being the same land described in deed dated June 24, 1943, from W. O.
Witt and wife to R. W. Bentley and C. H. Callaway, recorded in Volume E-8, Page
640, Deed Records of Cass County, Texas.
SAVE AND EXCEPT the following property:
That certain tract or parcel of land, situated in the County of Cass, State
of Texas in the Edward West Survey, A-1080 as more particularly described as
follows:
Beginning at a point in the centerline of FM Highway 2150, said point being
Station 37 48 and the southeast corner of a 20 acre tact owned by the Lone Star
Steel Company.
THENCE: West, along the south boundary line of said tract, a distance of fifty
(50') feet to a point in the West Right-of-Way line of said FM Highway
2150.
THENCE: N 1DEG. 45' W, a distance of 145.9 feet to a point fifty (50') feet
left of PI Station 38 93.9.
THENCE: N 2DEG. 45' W, a distance of 533.1 feet to a point fifty (50') feet
left of Station 44*27, said point being on the north boundary line of
said 20 acre tact
THENCE: East, along said boundary line, a distance of fifty (50') feet to a
point in the centerline of FM Highway 2150 at Station 44 27.
THENCE: S 2DEG. 45' E, a distance of 533.1 feet to centerline Station 38 93.9.
THENCE: S 1DEG. 45' E, a distance of 145.9 feet to the point of beginning.
Containing 0.54 acres more or less.
Said 0.54 acres are also described as Parcel No. 1 in that certain Right-
of-Way Deed dated July 20, 1954, executed by Lone Star Steel Company to the
State of Texas.
<PAGE>
Exhibit A
Property Number F-091
Being a 52.708 acre tract of land located in the Larking Martin Survey,
Abstract No. 698, Cass County, Texas, a part of the old W. A. Hooton 163.12 acre
tract of land, described in a deed from R. S. Arnold to C. A. Traylor and being
recorded in Vol. N-4, page 298 of the Deed Records of Cass County, Texas, being
more particularly described as follows:
Beginning at a rock pile for the southwest corner of this tract of land, said
rock pile being the southwest corner of the old Hooton 163.12 acre tract of
land, said rock pile being the northwest corner of the old Borris Survey, also
in the east boundary line of the Ed West Survey, Abstract 1080;
Thence North along The C. A. Traylor west boundary line and the East line of the
Ed West survey, Abstract No. 1080, in all a total distance of 3026.90' to a
stake for the northwest corner of this tract of land, said stake being also the
southwest corner of the Calloway tract of land;
Thence North 89DEG. 20' East along the C. A. Traylor-Galloway boundary line, in
all a total distance of 749.51' to a stake for the northeast corner of this
tract of land, also the northwest corner of the Jimmie Traylor 59.04 acre tract
of land;
Thence South 0DEG. 20' East along the C. A. Traylor - J. Traylor boundary line,
in all a total distance of 3037.84' to a stake for The southeast corner of this
tract of land, and the southwest corner of the J. Traylor tract of land, said
stake being also in the north boundary line of the old Burris Survey;
Thence South 89DEG. 28' West, along the C. A. Traylor south boundary line same
being the old Hooton south boundary line, in all a total distance of 762.51' to
the place of beginning, containing 52.708 acres of land, more or less.
Save and except, however, 4 acres in the form of a square out of the Southwest
corner of the above described tract of land.
<PAGE>
Exhibit A
Property Number F-091 (cont.)
SAVE AND EXCEPT the following property:
That certain tract or parcel of land, situated in the County of Cass, State
of Texas in the Larkin Martin Survey, A-698 as more particularly described as
follows:
Beginning at a point twenty-five (25') left of the centerline of FM Highway
2150 at Station 32 07, said point being the Southwest Corner of the Lone Star
Steel tract
THENCE: in a northerly direction along the Lone Star Steel Company boundary,
said boundary being a fenceline, a distance of approximately 2,637
feet to a point approximately three (3') feet from right of centerline
Station 58 40, said point being on the North boundary of the Lone Star
Steel Company tract and on the south boundary of the Bently & Calloway
tract.
THENCE: East, a distance of forty.seven (47') feet along said boundary to a
point in the East Right-of-Way line.
THENCE: S 2DEG.0 W, a distance of 615.8 feet to a point fifty (50') feet right
centerline PT Sta. 52 24.2.
THENCE: In a southerly direction, remaining fifty (50') feet from, parallel to
and concurrent with the centerline of FM 2150, said centerline being
on a 1DEG.00DEG. curve to the right, a distance 456.7 feet to PC
Station 47 675.
THENCE: S 2DEG.45' E, a distance of 874.1 feet, to a point fifty (50') feet
right PI Station 38 93.4.
THENCE: S 1DEG.45' E, a distance of 686.4 feet, to a point fifty (50') feet
right Station 32 07, said point being on the North boundary of the
Jimmie Traylor Trust and the south boundary of the Lone Star Steel
Company trust
THENCE: W, a distance of 75 feet to the point of beginning.
Containing 2.39 acres more or less.
Said 2.39 acres are also described as Parcel No. 5 in that certain
Right-of-Way Deed dated July 20, 1954, executed by Lone Star Steel Company to
the State of Texas.
AND SAVE AND EXCEPT the oil and gas in, on, and under the above described
lands heretofore reserved, together with the right of ingress and egress for the
purpose of developing and removing the same therefrom.
<PAGE>
Exhibit A
Property Number F-092
Being a 59.04 acre tract of land located in the Larking Martin Survey, Abstract
No. 698, Cass County, Texas, being a part of the old W.A. Hooten 163.12 acre
tract of land, being described in deed from T.C. Connor, et al to Jimmie
Traylor, and recorded in Vol. F-8, page 49, of the Deed Records of Cass County,
Texas, same being also more particularly described as follows:
Beginning at a stake for the southeast corner of this tract of land, said stake
being in the south boundary line of the said Hooten place, said stake being the
southwest corner of the R. G. Mason 26.36 acre tract of land, said stake being
also in the north boundary line of the old Burris Survey;
Thence North 0DEG. 09' east along the Traylor boundary line, at 1129.31' pass
the northwest corner of the said Mason tract of land, same being the southwest
corner of the A. E. Dalby tract of land, and continuing North 0DEG. 31' east
850.01' to a stake for an "L" corner of this tract of land, said stake being
also the northwest corner of the said A. H. Dalby 20.799 acre tract of land;
Thence South 89DEG. 15' East along the Traylor-Dalby boundary line, in all a
total distance of 1129.90' to a stake for the most northern southeast corner of
this tract of land, said stake being also the northeast earner of the said Daily
tract et land;
Thence North 0DEG. 30' West along the Traylor east boundary line and along the
engineer center line et a county road, in all a total distance of 1087.67' to a
stake for the northeast corner of this tract of land, said stake being in the
north survey line of the said Martin survey, and in the south boundary line of
the D. W. Henderson survey;
Thence South 89DEG. 20' West along the Martin-Henderson survey line, at 1008.00'
pass a iron pin in a rock pile, in all a total distance of 1582.88' to a stake
for the northwest corner of this tract of land, said stake being also the
northeast corner of the G. A. Traylor 52.708 acre tract of land;
Thence South 0DEG. 20' East along the G. A. Traylor J. Traylor boundary line, in
all a total distance et 3037.84' to a stake for the southwest corner of this
tract of land, said stake being the southeast corner of the said G. A. Traylor
tract of land, said stake being also in the south boundary line of the old said
Hooten tract of land;
Thence North 89DEG. 23' East along the old Hooten boundary line, in all a total
distance of 433.65' to the place of beginning, containing 59.04 acres of land,
more or less.
There is excepted from this conveyance the oil and gas in, on, and under the
above described lands heretofore reserved, together with the right of ingress
and egress for the purpose of developing and removing the same therefrom.
<PAGE>
Exhibit A
Property Number F-193
Being a 21.30 acre tract of land located in the Larking Martin Survey, A-698,
and being situated approximately 13 miles North 78 deg. West from the town of
Linden, Cass county, Texas, same being a part of the old W. A. Hooten 163.12
acre tract of land, same being previously described in Deed from Mrs. H. D.
Ashley to A. H. Dalby, duly recorded in Volume K-9, page 241 of the Deed Records
of Cass County, Texas, and being more particularly described as follows:
BEGINNING at a stake for the SE corner of this tract of land, said stake
being the NE corner of the R. G. Mason 26.36 acre tract of land, said stake
being also in the west right-of-way line of the Marietta-Hughes Springs Highway
No. 250, said stake being 40' perpendicularly distant from the engineer's center
line of said Highway No. 250;
THENCE in a Northeasterly direction 40' perpendicularly distant from and
parallel to the engineer's center line of said Highway No. 250, and along the
west right-of-way line of said Highway No. 250 and along a curve to the right,
in all a total distance of 579.82' to a 4" iron pipe, said iron pipe being in
the east boundary line of this tract of land, said iron pipe being also the
south corner of the R. H, Pool 0.834 acre tract of land in the shape of a
triangle;
THENCE North 0 deg. 30' West along the Dalby-Pool boundary line, at 293.50'
pass the northwest corner of said Pool tract of land, in all a total distance of
309.95' to a stake for the northeast corner of this tract of land, said stake
being the most northern southeast corner of the Jimmie Traylor tract of land;
THENCE North 89 deg. 15' West along the Dalby-Traylor boundary line, at
19.90' pass a 1-1/2" iron pipe, in all a total distance of 1,129.90' to a stake
for the northwest corner of this tract of land, said stake being also an "L"
corner of the said Traylor tract of land;
THENCE South 0 deg. 31' West along the Dalby-Traylor boundary line, in all
a total distance of 850.01' to a stake for the southwest corner of this tract of
land, said stake being also the northwest corner of the said Mason tract of
land;
THENCE South 89 deg. 17' East along the Dalby-Mason boundary line, in all a
total distance of 921.02' to the PLACE OF BEGINNING, containing 21.30 acres of
land.
SAVE AND EXCEPT the following described 3.50 acres tract of land:
Being a 3.50 acres tract of land located in the Larkin Martin Survey, A-698, and
being situated approximately North, a distance of one mile from the City of
Hughes Springs, Cass County, Texas, said 3.50 acres tract of land being a
portion of a 21.30 acres tract of land as described in a Warranty Deed from Mrs,
H. D. Ashley et vir, H. D. Ashley to A. H. Dalby and Mattie Dalby dated August
23, 1944 and duly recorded in Volume K-9, page 241, Deed Records of Cass County,
Texas, said 3.50 acres tract of land being more particularly described as
follows:
<PAGE>
Exhibit A
Property Number F-193 (cont.)
BEGINNING at a 4" iron pipe set in the west right-of-way line of F.M.
Highway 250 for the northeast corner of this tract of land, said iron pipe being
in the east line of the said 21.30 acres tract of land, said iron pipe being the
south corner of a 5.51 acres tract of land owned by Lone Star Steel Company;
THENCE in a southwesterly direction along and with the west right-of-way
line of said highway as follows: S. 45 deg. 45' W. - 100.0 ft.; S. 34 deg. 41'
W. - 100.0 - ft.; S. 26 deg. 58' W. - 100.05 ft.; S. 20 deg. 07' W. - 100.0 ft.;
and S. 16 deg. 06' W. - 17.40 ft. to a 1" iron pipe for the southeast corner of
this tract of land;
THENCE South 87 deg. 12' W a distance of 372.7 ft. to a stake for the
southwest corner of this tract of land;
THENCE North 04 deg. 50' East a distance of 410.13 ft. to a stake for the
northwest corner of this tract of land;
THENCE South 85 deg. 55' East a distance of 552.23 ft. to the PLACE OF
BEGINNING, containing 3.50 acres of land, more or less.
SAVE AND EXCEPT an undivided one-half (1/2) of all oil and gas minerals in,
on, under or that may be produced from the above described property heretofore
reserved, together with the right of ingress and egress for the purposes of
drilling, mining, exploring and producing same.
<PAGE>
Exhibit A
Property Number F-118
The following described property, situated, lying and being in the County of
Cass and State of Texas, to-wit:
Being 1-1/2 acres of land out of Larkin Martin headright survey being also a
part of 52 acre tract out of said survey described in deed to
R.H.Poole, executed by W.T.Connor,Jr. et als recorded Vol.L-7, page 368 Cass
County Deed Records, tract hereby conveyed described as follows:
Beginning at a point 325 feet East of the N W corner of said 52 acre Poole tract
of land;
THENCE EAST with NB L of said 52 acre tract 237 feet to stake for corner;
THENCE SOUTH WEST 355 ft. to a point which is 354 feet East of W.B.L. off above
mentioned 52 acre tract of land;
THENCE WEST 237 feet to a point 117 feet East of W B L of said 52 acre tract of
land;
THENCE NORTH East 355; feet to place of beginning,
Being the same land described in deed to Henry E.Eppsand Susie Epps his wife,
executed by R.C.Wood et al dated July 3, 1957.
<PAGE>
Exhibit A
Property Number F-081
Being an 11.01 acre tract of land being situated in the southeastern portion of
the old original A. T. Hooten 163.12 acre tract of land and being situated in
the Larking Martin Survey, Abstract No 698, Cass County, Texas, and being more
particularly described;as follows:
Beginning at a stake for the northeast corner of the R. G. Mason 26.36 acre
tract of land, previously described in Vol. H-8, page 4 of the deed records of
Cass County, Texas, said stake being the southeast corner of the A. H. Dalby
20.799 acre tract of land, said stake being also 40' perpendicularly distant
from the engineer center line of Texas State Highway No. 250;
Thence North 89DEG. 17' West along the Mason-Dalby boundary line, in all a total
distance of 921.02' to the stake fop the northwest corner of this tract of land,
said stake being the northwest corner of the R. G. Mason 26.36 acre tract of
land, said stake being the southwest corner of the A. R. Dalby 20.799 acre tract
of land, said stake being also in the east boundary line of the Jimmie Traylor
59.04 acre tract of land;
Thence South 0DEG. 09' West along the Mason-Traylor boundary line, in all a
total distance of 394.50' to a stake for the southwest corner of this tract of
land;
Thence South 77DEG. 08' East in all a total distance of 991.50' to a stake for
the southeast corner of this tract of land, said stake being also 40'
perpendicularly distant from the engineer center line of the said Texas State
Highway No. 250;
Thence in a northwesterly direction 40' perpendicularly distant from and
parallel to the engineer center line of the said Texas State Highway No. 250, in
all a total distance of 781.61' to the place of beginning, containing 11.01
acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-009
Being a 207.85 acre tract of land located in the Reese Hughes Survey, A-487, and
being situated in Cass County, Texas on the waters of Black Cypress, about 13
miles N 86DEG. 00' W from the town of Linden, said 207.85 acres being previously
described in Deed from H. A. Perlstein, et al, to Marion-Cass Development
Company, dated April 9, 1932 and being duly recorded in Volume G-6, page 340,
Deed Records of Cass County, Texas and being more particularly described as
follows:
Beginning at a 4" iron pipe for the most southern southeast corner of the said
Hughes Survey, said iron pipe being the southeast corner of this tract of land,
said iron pipe being the southwest corner of the M. D. Fulgham Survey, A-378,
said iron pipe being also East 381.83' from a 4" iron pipe, the northwest corner
of the J B. Trenary Survey, A-1054;
Thence North along the Fulgham-Hughes survey line, same being an old fence line,
at 1771.10' pass the engineer's center line of the old Linden & Hughes Springs
highway, at 2992.51' pass a 4" iron pipe, an ell corner' of the said Hughes
Survey, same being the northwest corner of the said Fulgham Survey, and
continuing North, in all a total distance of 3723.06' to a 4" iron pipe, the
northeast corner of this tract of land, said iron pike being an ell corner of
the said Hughes Survey, said iron pipe being also the southwest corner of the J.
Jackson Survey, A-589;
Thence West, in all a total distance of 6296.17' to a 4" iron pipe, the
northwest corner of this tract of land, said iron pipe being in the west survey
line of the said Hughes Survey, said iron pike being also in the east survey
line of the J. C. Chambers Survey, A-215;
Thence South along the Chambers-Hughes survey line, at 191.82' pass a 1" iron
pin, the northeast corner of the Aubrey Aycock
163.56 acre tract of land and continuing south, in all a total distance of
2445.18' to a 4" iron pipe for the west southwest corner of this tract of land,
said iron pipe being also the west southwest corner of the said Hughes Survey,
said iron pipe being the southeast corner of the said Chambers Survey, said iron
pipe being also in the north survey line of the Larking Martin Survey, A-698;
Thence N 89DEG. 20' E along the Martin-Hughes survey line, in all a total
distance of 111.1 2' to a 4" iron pipe, the most
<PAGE>
Exhibit A
Property Number F-009 (Cont.)
western southeast corner of this tract of land, said iron pipe being the
northeast corner of the said Martin Survey, said iron pipe being also South
538.93' from a 4" iron pipe, the northwest corner of the R. L. Ward Survey,
A-1132;
Thence North along the Ward-Hughes survey line, in all a total distance of
538.93' to a 4" iron pipe for an ell corner of this tract of land, said iron
pipe being an ell corner of the said Hughes Survey, said iron pipe being also
the northwest corner of the said Ward Survey;
Thence East along the Ward-Hughes survey line, in all a total distance of
3861.42' to a 4" iron pipe for an ell corner of this tract of land, said iron
pipe being an ell corner of the said Hughes Survey, said iron pipe being also
the northeast corner of the said Ward Survey;
Thence South along the Ward-Hughes survey line, at 408.00' pass the engineer's
center line of the old Linden & Hughes Springs highway and continuing south, in
all a total distance of 1816.81' to & 4" iron pipe for the most eastern
southwest corner of this tract of land, said iron pipe being the most eastern
southwest corner of the said Hughes Survey, said iron pipe being in the east
survey line of the said Ward Survey, said iron pike being also the northwest
corner of the said Trenary Survey;
Thence East, along the Trenary-Hughes survey line, in all a total distance of
381.83' to the place of beginning, containing 207.85 acres of land, more or
less.
<PAGE>
Exhibit A
Property Number F-069
Tract 1:
All that certain lot, tract or parcel of land situated in Cass County, Texas,
a portion of a tract of land heretofore conveyed by J.A. Burleson and wife to
B.W. Burleson of record in Volume 254, page 177 Deed Records of Cass County,
Texas, to which reference is hereby made for all purposes, the land herein
conveyed being described as follows:
Beginning at the southwest corner of the tract described in Volume 254, page
177 Deed Records aforesaid; thence north 30 yds. to northwest corner of tract
described in Volume 254, page 177 Deed Records aforesaid; thence in a
southeasterly direction 50 yds. to a stake for corner in north boundary line of
aforesaid tract; thence south 30 yds. to a stake for corner; thence in a
northwesterly direction 50 yds. to place of beginning, being a part of the Ed
West Hoodright Survey, being same land deeded to J.A. Burleson by Meddard Parker
and wife on February 27, 1953.
Tract 2:
All that certain tract or parcel of land described as follows:
Being a 6.999 acre tract of land located in the Ed West Survey, Cass County,
Texas and being situated approximately 1 1/2 miles north of the city limits of
Hughes Springs, Cass County, Texas; and being a part of the J.A. Burleson Sr.
51.25 acre tract of land, described in the Deed Records of Cass County, Texas,
and being recorded in Volume 241, page 174; said 6.999 acre tract being more
particularly described as follows:
Beginning at an iron pin for the southwest corner of said described 6.999 acre
tract of land, said iron pin being in the East boundary line of the J.D. Bradley
tract of land, said iron pin being also the northwest corner of the Haddard
Parker tract of land;
THENCE South 80 DEG. 06' East along the Burleson-Parker boundary line 215.98
varas (600.00') to a stake for a corner, and stake being in the west boundary
line of the West 17.5 acre tract of land out of the Cook Estate, said stake
being the southeast corner of the said 6.999 acre tract of land, said stake
being also the northeast corner of the Haddard Parker tract of land;
THENCE North along the Burleson-Cook Estate boundary line, in all a total
distance of 161.00 varas (450.00') to a stake in the center line of a County
road; said stake being the northwest corner of the said 17.5 acre tract of land
out of the said Cook Estate, said stake being the northwest corner of the said
6.999 acre tract of land, said stake being also the southeast corner of the
Calloway tract of land;
THENCE West along the center line of the said County road, same being the
North boundary line of the said 6.999 acre tract of land, a total distance of
212.77 varas, (591.07') to a stake for a corner, said stake being also the
northeast corner of the Louis Lovelady 1.5 acre tract of land;
THENCE South along the Burleson-Lovelady boundary line, a total distance of
124.85 varas (346.84') to the place of beginning, containing 6.999 acres of
land, more or less.
The road on the East side of the above described property must be left open for
the use of the public.
<PAGE>
Exhibit A
Property Number F-073
All that certain tract or parcel of land described as follows:
Being a 28.222 acre tract of land located in the Ed West Survey, Abstract No.
1080, Cass County, Texas and being situated approximately 1 mile north of the
township of Hughes Springs, Cass County, Texas, same being 28.222 acres out
of the original tract of land deeded from J.A. Burleson Sr., at et ux Mrs.
Lula Burleson Sr. to J.D. Bradley at et ux Lois Bradley, said 28.222 acre
tract of land being more particularly described as follows:
BEGINNING at an iron pin for the Southeast corner of said 28.222 acre tract
of land, said corner being also the southwest corner of the H.H. Mosley 1.3
acre tract of land;
THENCE North along the Mosley-Bradley boundary line, same being the Burleson-
Bradley boundary line, in all a total distance of 275.35 yards to a stake for a
corner, said corner being the southeast corner of the Louis Lovelady 1.5 acre
tract of land, said corner being also a northeast corner of said described
26.222 acre tract of land;
THENCE West along the Lovelady-Bradley boundary line, in all a total distance
of 80.99 varas for the southwest corner of said Lovelady 1.5 acre tract of land,
said corner, being in the east boundary line of the Marcia McCord 3.0 acre tract
of land;
THENCE South, along the Bradley-McCord boundary line, in all a total distance
of 7.20 varas to an iron pin for the southeast corner of the said McCord tract
of land;
THENCE West, along the McCord-Bradley boundary line, in all a total distance
of 147.82 varas to the southwest corner of said McCord tract of land;
THENCE North along the McCord-Bradley boundary line in all a total distance
of 67.13 varas to a north northwest corner of said described 28.222 acre tract
of land, said corner being in the said Margie McCord west boundary line, said
corner being also the southeast corner of the W.E. McCord 0.37 acre tract of
land;
THENCE West along the McCord-Bradley boundary line at 45.35 varas pass the
southwest corner of said W.E. McCord tract of land, said corner being also the
southeast corner of the Jeff Lovelady 0.63 acre tract of land; thence continuing
on West, in all a total distance of 122.03 varas to an inner northeast corner of
said described 28.222 acre tract of land, same being the southwest corner of the
said Jeff Lovelady tract of land;
THENCE North along the Lovelady-Bradley boundary line, a total distance of
46.26 varas to the center line of a County road, same being the most northern
northeast corner of said described 28.222 acre tract of land, same being the
northwest corner of the said Jeff Lovelady tract of land, same being also in the
south boundary line of the Bradley Estate tract of land;
THENCE West along the center line of the said County road, same being the
Bradley Estate-Bradley boundary line, a total distance of 205.90 varas to the
northwest corner of the said described 28.222 acre tract of land, same being
also the northeast corner of the McMillan tract of land;
THENCE South along the McMillan-Bradley boundary line fence, in all a total
distance of 298.78 varas to the southwest corner of said described 28.222 acre
tract of land;
THENCE South 81 DEG.33' East along the Bradley south boundary line, in all a
total distance of 562.85 varas to the place of beginning, containing 28.222
acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-157
Being a 40.98 acre tract of land located in the H. S. Proctor Survey, Abstract
No. 220 and being situated approximately one (1) mile Northwest from the City of
Daingerfield, the County seat of Morris County, Texas, said 40.98 acres being
previously described and duly recorded in Deed Records of Morris County, Texas,
and being more particularly described as follows:
BEGINNING at an 1" iron pin, the Northeast corner of this tract of land, said
iron pin being in the North survey line of the said Proctor Survey, said iron
pin being in the South Survey line of the W. J. Hamilton Survey, Abstract No.
128, said iron pin being also the Northwest corner of the old E. F. Aldridge 180
acre tract of land;
THENCE South along the Aldridge-Williams boundary line, in all a total distance
of 1606.37' to a 1" iron pin for the southeast corner of this tract of land,
said iron pin being at the base of the trunk of an 8" post oak tree marked "X"
an original corner, said iron pin being also the Northern Northeast corner of
the M.A. Key 150 acre tract of land;
THENCE West along the Key-Williams boundary line, in all a total distance of
1111.20' to a 1" iron pin for the southwest corner of this tract of land, said
iron pin being also an "L" corner of the said M.A. Key 150 acre tract of land;
THENCE North along the Key-Williams boundary line, in all a total distance of
1606.37' to a 1" iron pin for the northwest corner of this tract of land, said
iron pin being in the north survey line of the said Proctor Survey, said iron
pin being in the south survey line of the said Hamilton Survey, said iron pin
being also the most northern northeast corner of the said Key 150 acre tract of
land;
THENCE East along the Proctor-Hamilton Survey line, in all a total distance of
1111.20' to the place of beginning, containing 40:98 acres of land, more or
less.
SAVE AND EXCEPT an undivided one-half (1/2) interest in and to oil and gas
minerals only in, on, under or that may be produced from the above described
property heretofore reserved, together with the right of ingress and egress for
the purposes of exploration, drilling, mining and producing same.
<PAGE>
Exhibit A
Property Number F-158
TRACT 1:
BEING situated approximately N. 75DEG. 00' W., one mile from the City of
Daingerfield, Morris County, Texas. Said 73.50 acre tract of land being a
portion of a 200 acre tract of land as described in a Warranty Deed from A. R.
Hare and wife, M. H. Hare to Mrs. M. A. Key, dated February 25, 1903, and duly
recorded in Volume N, Page 120, of the Deed Records of Morris County, Texas.
Said 73.50 acre tract of land being more particularly described as follows:
BEGINNING at an iron pin set in the north line of the H. S. Proctor Survey,
A-220, for the northwest corner of this tract of land. Said iron pin being N.
89DEG. 57' E. - 1078.0 feet from the northwest corner of the said H. S. Proctor
Survey. Said iron pin being in the south line of the W. J. Hamilton Survey,
A-128.
THENCE N. 89DEG. 57' E. along and with the north line of the said H. S.
Proctor Survey, in all a total distance of 627.30 feet, to an iron pin set at
the northwest corner of the L. Williams 40.98 acre tract of land for the north
northeast corner of this tract of land.
THENCE South, along and with the west line of the said L. Williams 40.98
acre tract of land, in all a total distance of 1606.37 feet to an iron pin set
at the southwest corner of the said Williams land for an "L" corner of this
tract of land.
THENCE East, along and with the south line of the said Williams land, in
all a total distance of 1111.20 feet, to an iron pin set at the southeast corner
of the said Williams land for the east northeast corner of this tract of land.
THENCE South, along and with an old marked line, in all a total distance of
1244.94 feet, to an iron pin set for the east southeast corner of this tract of
land.
THENCE N. 89DEG. 30' W., in all a total distance of 1208.58 feet, to an
iron pin set for an "L" corner of this tract of land.
THENCE South, in all a total distance of 45.95 feet, to an iron pin set for
the south southeast corner' of this tract of land.
THENCE S. 82DEG. 57' W., along and with an old marked line, in all a total
distance of 534.0 feet, to an iron pin for the southwest corner of this tract of
land.
THENCE North, in all a total distance of 2951.70 feet, to the place of
beginning, containing 73.50 acres of land.
SAVE AND EXCEPT a one acre tract of land described in a Warranty Deed from
John F. Key, et al, to Morris County, for a fire lookout tower, dated December
21, 1951 and duly recorded in Volume 66, Page 504, of the Deed Records of Morris
County, Texas, leaving 72.50 acres of land in this tract of land.
SAVE AND EXCEPT an undivided one-half of the oil and gas in, on, under and
that may be produced from the above described property heretofore reserved,
together with the right of ingress and egress for the purposes of drilling,
mining, exploring, producing and transporting same.
<PAGE>
Exhibit A
Property Number F-158 (cont.)
TRACT 2:
All that certain tract or parcel of land situated in Morris County, Texas and
being a part of the H. S. Proctor Survey and said beginning point being located
as follows:
BEGINNING at the SEC of the 40 acre tract owned by the William Bros., in the
Proctor Survey;
THENCE with Williams' SBL 694 feet to a stake;
THENCE South 8DEG. 45' East 269 feet to a state and being the beginning point
of the land herein conveyed;
THENCE North 37-1/2DEG. West 104.36 feet to a stake for corner:
THENCE South 52-1/2DEG. West 208.72 feet to a stake for corner;
THENCE South 37-1/2DEG. East 208.72 feet to a stake for corner;
THENCE North 52-1/2DEG. East 208.72 feet to a stake for corner;
THENCE North 37-1/2DEG. West 104.36 feet to the place of beginning, containing
one (1) acre of land:
SAVE AND EXCEPT from the above described properties
Being a 3.007 acres tract of land located in the H. S. Proctor Survey, A-220,
and being situated approximately N. 75DEG. 00' a distance of 1.2 miles from the
new Courthouse in the City of Daingerfield, Morris County, Texas. Said 3.007
acres tract of land being a portion of a 40.96 acres tract of land as described
in a Warranty Deed from R. H. Key et al to Lone Star Steel Company dated June
30, 1966, and duly recorded in Volume 118, page 521, Deed Records of Morris
County, Texas, and a portion of a 72.50 acres tract of land as described in a
Warranty Deed from R. H. Key et alto Lone Star Steel Company dated July 15,
1966, and duly recorded in Volume 118, page 603, Deed Records of Morris County,
Texas. Said 3.007 acres tract of land being more particularly described as
follows:
BEGINNING at an iron pin set at the southwest corner of a 1.00 acre tract of
land for Morris County Fire Tower for the south corner of this tract of land.
Said iron pin being S. 47DEG. 30' E. a distance of 2810.50 feet from the
northwest corner of said H. S. Proctor Survey;
THENCE North 13' 30' W. a distance of 550.0 feet to an iron pin for the
northwest corner of this tract of land;
THENCE South 73DEG. 30' E. a distance of 550.0 feet to an iron pin for the east
corner of this tract of land;
<PAGE>
Exhibit A
Property Number F-158 (cont.)
THENCE South 46DEG. 30' W: a distance of 550.0 feet to the place of beginning,
containing 3.007 acres of land, more or less.
AND SAVE AND EXCEPT from the above described properties
Being a 1.00 acre tract of land located in the H. S. Proctor Survey, A-220. and
being situated approximately N. 74DEG. 00'
W. a distance of 1.3 miles from the new Courthouse in the City of Daingerfield,
Morris County. Texas. Said 1.00 acre tract of land being a portion of a 72.50
acres tract of land as described in a Warranty Deed from R. H. Key et al to Lone
Star Steel Company dated July 15, 1966, and duly recorded in Volume 118, page
603, Deed Records of Morris County, Texas. Said 1.00 acre tract of land being
more particularly described as follows:
BEGINNING at an iron pin set at the south corner of a 3.007 acres tract of land
for Southwestern Electric Power Company for the southeast corner of this tract
of land;
THENCE North 13DEG. 30' West a distance of 208.71 feet to an iron pin for the
northeast corner of this tract of land;
THENCE South 66DEG. 30' West a distance of 208.71 feet to an iron pin for the
northwest corner of this tract of land;
THENCE South 13DEG. 30' East a distance of 208.71 feet to an iron pin for the
southeast corner of this tract of land;
THENCE North 66DEG. 30' East a distance of 208.71 feet to the place of
beginning, containing 1.00 acre of land, more or less.
<PAGE>
Exhibit A
Property Number F-078
Being a 36.97 acre tract of land, of which approximately 20.18 acres are located
in the H. S. Proctor Survey, A-220, and approximately 16.19 acres are located in
the A. Urquhart Survey, A-296, said tract being also in and adjoining the city
of Daingerfield, Morris County, Texas;
Beginning at a 4" iron pipe for the southwest corner of this tract of land, said
iron pipe being the northwest corner of the B. I. Curry lands, said iron pipe
being also in the east boundary line of the Connor 40.00 acre tract of land;
Thence S 89DEG. 37' E 2108.60' to a 4" iron pipe for the south southeast corner
of this tract of land;
Thence N 5DEG. 03' W 157.80' to a 4" iron pipe for an ell corner of this tract
of land;
Thence N 84DEG. 10' E 204.451 to a 4" iron pipe set in the west right-of-way of
a public road for the east southeast corner of this tract of land;
Thence N 35DEG. 09" W along the west right-of-way of said public road, 307.47'
to a 4" iron pipe for an angle point in the east boundary line of this tract of
land;
Thence N 48DEG. 02' W along the west right-of-way of said public road 581.82' to
a 4" iron pipe for the northeast corner of this tract of land, said iron pipe
being in the north boundary line of said Urquhart Survey, said iron pipe being
also in the south boundary line of, the J. Woolsey Survey, A-308;
Thence S 88DEG. 56' W along the Woolsey-Urquhart survey line, continuing along
the Woolsey-Proctor survey line, in all a total distance of 1335.50' to a 4"
iron pipe for the north northwest corner of this tract of land;
Thence South 298.30' to a 4" iron pipe for an ell corner of this tract of land;
Thence West 291.70' to a 4" iron pipe for the west northwest corner of this
tract of land;
Thence S 1DEG. 25' W 524.56' to the place of beginning, containing 36.97 acres
of land more or less.
<PAGE>
Exhibit A
Property Number F-160
FIRST TRACT Being a 27.16 acre tract of land located in the H. S. Proctor
Survey, A-220, and being situated in the northwest portion of the City of
Daingerfield, Morris County, Texas. Said 27.16 acre tract of land being a
portion of those lands as described in a Warranty Deed from J. Y. Bradfield to
B. I. Curry dated January 1, 1886, and duly recorded in Volume D, Page 513 of
the Deed Records of Morris County, Texas. Said 27.16 acre tract of land being
more fully described as follows:
BEGINNING at a 4" iron pipe set at the south-southeast corner of a 36.97 acre
tract of land owned by Lone Star Steel Company for the northeast corner of this
tract of land. Said iron pipe being S. 00DEG. 25' W. - 870.30 ft. from the
northeast corner of the said H. S. Proctor Survey,
THENCE: S. 03DEG. 37' E. in all a total distance of 100.0 ft, to an iron pin for
the east-southeast corner of this tract of land.
THENCE: N. 89DEG. 37' W. in all a total distance of 1364.06 ft. to an iron pin
for an "L" corner of this tract of land.
THENCE: S. 01DEG. 42' E. in all a total distance of 754.34 ft. to an iron pin
for an "L" corner of this tract of land.
THENCE: N. 37DEG. 46' E. in all a total distance of 560.00 ft. to an iron pin
for an angle corner of this tract of land.
THENCE: S. 42DEG. 21' E. in all a total distance of 201.90 ft. to an iron pin
for an angle corner of this tract of land.
THENCE: S. 00DEG. 03' E. in all a total distance of 658.11 ft. to a 4" iron pipe
set at the south-southeast corner of the B. I. Curry lands for the
south-southeast corner of this tract of land.
THENCE: S. 39DEG. 49' W. along and with an old fence line and hedge row in all a
total distance of 453.06 ft. to an iron pin for the south-southwest corner of
this tract of land.
THENCE: N. 00DEG. 04' W. along and with an old fence line in all a total
distance of 308.45 ft. to an iron pin for an "L" corner of this tract of land.
THENCE: S. 89DEG. 56' W. along and with an old fence line in all a total
distance of 333.70 ft. to an iron pin for the middle-southwest corner of this
tract of land.
THENCE: N. 00DEG. 58' W. in all a total distance of 656.20 ft. to an iron pin
for an "L" corner of this tract of land.
THENCE: N. 39DEG. 27' W. in all a total distance of 660.00 ft. to an iron pin
for the west-southwest corner of this tract of land.
THENCE: N. 00DEG. 56' W. in all a total distance of 688.00 ft. to an iron pin
set at the northwest corner of the said B. I. Curry lands for the northwest
corner of this tract of land. Said iron pin being the southwest corner of a
36.97 acre tract of land owned by Lone Star Steel Company.
THENCE: S. 89DEG. 37' E. along and with the north line of the said B. I. Curry
lands, same being the south line of the land owned by Lone Star Steel Company,
in all a total distance of 2108.6 ft. to the place of beginning, containing
27.16 acres of land.
<PAGE>
Exhibit A
Property Number F-160 (cont.)
SECOND TRACT Being a 10.00 acre tract of land located in the H. S. Proctor
Survey, A-220, and being situated in the northwest portion of the City of
Daingerfield, Morris County, Texas. Said 10.00 acre tract of land being a
portion of those lands as described in a Warranty Deed from J. Y. Bradfield to
B. I. Curry, dated January 1, 1886, and duly recorded in Volume D, Page 513, of
the Deed Records of Morris County, Texas. Said 10.00 acre tract of land being
more particularly described as follows:
BEGINNING at an iron pin set at the west-southwest corner of the B. I. Curry
lands for the southwest corner of this tract of land. Said iron pin being S.
45DEG. 30' W. 3040.30 ft. from the northeast corner of the said H. S. Proctor
Survey.
THENCE: N. 00DEG. 58' W. along and with the west line of the said B. I. Curry
land in all a total distance of 661.38 ft. to an iron pin for the northwest
corner of this tract of land.
THENCE: N. 89DEG. 27' E. in all a total distance of 660.00 ft. to an iron pin
for the northeast corner of this tract of land.
THENCE: S. 00DEG. 58' E. in all a total distance of 656.20 ft. to an iron pin
set in the south line of the said B. I. Curry land for the southeast corner of
this tract of land.
THENCE: S. 89DEG. 00' W. along and with the south line of the said B. I. Curry
land in all a total distance of 660.00 ft. to the place of beginning, containing
10.00 acres of land.
LESS AND EXCEPT the iron and iron ore in and under the above described tract two
heretofore conveyed by J. Y. Bradfield to B. I. Curry by the aforesaid deed.
LESS AND EXCEPT an undivided one-half of all the oil, gas and other minerals
heretofore reserved, except iron and iron ore, in, on, under or that may be
produced from the above described property together with the right of ingress
and egress for the purpose of drilling, exploring for and producing same.
<PAGE>
Exhibit A
Property Number F-195
Being 46.81 acres of land located in the H. S. Proctor Survey, A-222,
Daingerfield, Norris County, Texas; previously described in Warranty Deed from
E. F. Aldredge, et al to Joe Bradfield, recorded in Volume 8, Page 561 of the
Deed Records of Norris County, Texas, and more particularly described as
follows:
BEGINNING at a 1" iron pin for the northeast corner of this tract of land,
said iron pin being the southeast corner of the G. A. Connor tract of land, said
iron pin being in the west boundary line of the B. I. Curry tract of land, said
iron pin being S 0DEG.31' W 480.20' from a 4" iron pipe, the southwest corner of
the old Ed Scroggins tract of land, said iron pin being also in the most
northern west boundary line of the city limits of Daingerfield, Texas;
THENCE S 0 DEG. 31' W along the Bradfield-Curry boundary line and continuing
along the Bradfield-D. J. Jenkins boundary line, same being the most northern
west city limit boundary line of the town of Daingerfield, Texas, at 1714.03'
pass a 1" iron pin in the north right-of-way line of the old Daingerfield-Cason
highway and in all a total distance of 1754.03' to a stake for the southeast
corner of this tract of land, said stake being in the south right-of-way line of
the said old Daingerfield-Cason highway, said stake being the northeast corner
of the Flemister Park addition to the City of Daingerfield, Texas, said stake
being also the center line of the old Bradfield road;
THENCE N 88 DEG. 26' W along the north boundary line of the said Flemister
Park addition to the City of Daingerfield, in all a total distance of 1166.76'
to a stake for the southwest corner of this tract of land;
THENCE N 0 DEG. 31' E at 20.00' pass the engineer's center line of the old
Daingerfield-Cason highway, at 40.00' pass a 1" iron pin the southeast corner of
the G. C. Fewell tract of land and continuing N 0DEG.31' E, in all a total
distance of 1754.03' to a 1" iron pin for the northwest corner of this tract of
land, said iron pin being also in the south boundary line of the said Connor
tract of land;
THENCE S 88 DEG. 26' E along the Connor-Bradfield boundary line, in all a
total distance of 1166.76' to the PLACE OF BEGINNING, containing 45.91 acres of
land.
SAVE AND EXCEPT a 1.07 acre tract of land located in the south part of this
tract of land, and being more particularly described as follows:
BEGINNING at a stake for the southeast corner of this tract of land, said
stake being 20.00' perpendicular distant from the engineer's center line of the
said old Daingerfield-Cason highway, said stake being the northeast corner of
the said Flemister Park addition to the City of Daingerfield, said stake being
also in the center line of the Bradfield road;
THENCE N 88 DEG. 26' W along the north boundary line of the said Flemister
Park addition, in all a total distance of 1166.76' to a stake for the southwest
corner of this tract of land, said stake being 20.00' perpendicular distant from
the engineer's center line of the said old Daingerfield-Cason highway;
THENCE N 0 DEG. 31' E at 20.00' pass the engineer's center line of said old
Daingerfield-Cason highway, in all a total distance of 40.00' to a 1" iron pin
for the northwest corner of this tract of land, said iron pin being also the
southwest corner of the Joe Bradfield 44.84 acre tract of land;
THENCE S 88 DEG. 26' E along the south boundary line of the said Bradfield
44.84 acre tract of land, same being the most western north boundary line of the
city limits of the City of Daingerfield, and in all a total distance of 1166.76'
to a 1" iron pin for the northeast corner of this tract of land, said iron pin
being also the southeast corner of the said Bradfield 44.84 acre tract of land;
THENCE S 0 DEG. 31' W at 20.00' pass the engineer's center line of said old
Daingerfield-Cason highway and in all a total distance of 40.00' to the PLACE OF
BEGINNING, containing 1.07 acres of land, more or less, and leaving in all a
total of 44.84 acres herein conveyed.
<PAGE>
Exhibit A
Property Number F-195 (cont.)
AND SAVE AND EXCEPT:
BEGINNING at a point in center of Old Daingerfield-Cason Road at the Southwest
corner of 45.9 acres tract described in Warranty Deed from E. F. Aldredge, et
al, to Joe Bradford, recorded in Volume 8, Page 561, Deed Records of Morris
County, Texas; THENCE East with old road for 208.7 feet to a point in road;
THENCE North for 165 feet to a point for corner: THENCE West for 208.7 feet to a
point for corner; THENCE South for 165 feet to point of Beginning; Said tract
containing 0.79 acre of land.
AND SAVE AND EXCEPT an undivided 3/4 of all oil and gas in, on, under or that
may be produced from the above described property heretofore reserved, together
with the right of ingress and egress for the purposes of exploring for,
drilling, producing and removing same.
<PAGE>
Exhibit A
Property Number F-040
Being a 4.18 acre tract of land located in the H. S. Proctor Survey A-220 and
being situated in the northwest portion of the city of Daingerfield, Morris
County, Texas. Said 4.18 acre tract of land being also previously described in
warranty deed from Maggie Turner et al to Steve D. Ford, dated September 13,
1950 and being duly recorded in Vol. 65, page 8-9 of the deed records of Morris
County, Texas and being more particularly described as follows.
Beginning at a 4" iron pipe for the southwest corner of this tract of land, said
iron pipe being the south-southeast corner of the B. I. Curry Estate land. Said
iron pipe being also in the north line of a 2.38 acre tract of land owned by
Lone Star Steel Company.
Thence N 89DEG. 16' E along an old fence line at 184.01' pass the north-east
corner of said 2.38 acre tract of land containing, same course in all a total
distance of 309.60' to a 4" iron pipe for the south-southeast corner of this
tract of land.
Thence North in all a total distance of 239.60' to a 4" iron pipe for an ell
corner of this tract of land.
Thence East in all a total distance of 208.40' to a 4" Iron pipe for the east-
southeast corner of this tract of land. Said iron pipe being also in the west
line of the original town of Daingerfield, Texas.
Thence North along the west line of the original town of Daingerfield to a 4"
iron pipe set in the south line of said the Curry Estates for the northeast
corner of this tract of land.
Thence S 59DEG. 34' W along an old fence line in all a total distance of 521.02'
to a 4" iron pipe for the northwest corner of this tract of land. Said iron
pipe being also an ell corner of the said Curry Estate.
Thence S 0DEG. 23' E along an old fence line in all a total distance of
448.00' to the place of beginning containing 4.18 acres of land more or less.
<PAGE>
Exhibit A
Property Number F-161
Being a 3.0 acres tract of land located in the H.S. Proctor Survey, A-220, and
being situated in the Northwest portion of the City of Daingerfield, Morris
County, Texas; said 3.0 acres tract of land being the same land as described in
a Warranty Deed from J.R. Smith to Sam L. Dale, dated December 27, 1902, and
duly recorded in Volume L. page 362 of the Deed Records of Morris County, Texas;
said 3.0 acres tract of land being more particularly described as follows:
BEGINNING at the Northeast corner of a tract previously sold by B.I. Curry to
J.R. Smith, a stake, also the Northwest corner of a tract now owned by Williams
Bros.;
THENCE South 138 varas to a stake set in the North side of a street, this date
surveyed out;
THENCE North 86-1/2DEG. West along and with said street, 130 varas to a stake;
THENCE North 126 varas to the North line of the said Smith tract;
THENCE East 130 varas to the place of beginning, containing 3.0 acres of land,
more or less.
SAVE AND EXCEPT a non-participating one-half of one-eighth royalty interest in
the oil and gas only produced from this tract of land heretofore reserved.
<PAGE>
Exhibit A
Property Number F-038
Being a 2.38 acre tract of land located in the H. S Proctor Survey A-220 and
being situated in the northwest portion of the town of Daingerfield, Morris
County, Texas. Said 2.38 acre tract of land being also previously described in
warranty deed from L. E. Chapman and wife, Era A. Chapman to Steve D. Ford,
dated July 1, 1950 and being duly recorded in Vol. 63 page 434 of the deed
records of Morris County, Texas and being, more particularly, described as
follows.
Beginning at a 4" iron pipe for the southwest corner of this tract of land.
Said iron pipe being the southeast corner of a tract of land owned by Sam Dale.
Said iron pipe being also in the north right-of-way of Union Street.
Thence N 0DEG. 45' E along an old fence line in all a total distance of 382.04'
to a 4" iron pipe for the northwest corner of this tract of land. Said iron
pipe being the northeast corner of the Sam Dale tract of land. Said iron pipe
being also in the south line of the B. I. Curry Estate land.
Thence N' 59DEG. 16' E. along an old fence line 78.00' pass the southwest corner
of a 4.18 acre tract of land owned by Lone Star Steel Company continuing same
course in all a total distance of 262.00' to a 4" iron pipe for the northeast
corner of this tract of land. Said iron pipe being also in the south line of
the said 4.18 acre tract of land.
Thence S 0DEG. 26' E along an old fence line in all a total distance of 396.41'
to a 4" iron pipe set in the north right-of-way line of said Union Street for
the southwest corner of this tract of land.
Thence N 87DEG. 40' W 25' perpendicular distance from and parallel to the
Engineers centerline of said street in all a total distance of 270.22 to the
place of beginning containing 2.38 acres of land more or less.
<PAGE>
Exhibit A
Property Number F-181
All those certain tracts or parcels of land being out of the H. S. Proctor
Survey, Abstract No. 220, Morris County, Texas, and more particularly described
as follows:
TRACT 1: Being Six acres of land more or less of the H. S. Proctor Survey;
BEGINNING at the N W corner of the Burrell Moore Subdivision of said H. S.
Proctor Survey, a stake in the E B line of the Robert Hughes land;
THENCE East 313-3/5 varas to a rock for corner in said Burrell Moore N B line:
THENCE North 108 varas to a rock for corner;
THENCE West 313-3/5 varas to said Hughes E B line:
THENCE South 108 varas with said line to the place of beginning, containing six
(6) acres of land, more or less.
TRACT 2: Being 7-1/5 acres of land of said H. S. Proctor Survey:
BEGINNING at a stake in the E B line of the, Robert Hughes Subdivision of said
H. S. Proctor Survey, at the S W corner of a tract owned by B. I. Currey;
THENCE East 357 varas to the N W corner of a three-acre lot previously surveyed
for Samuel L. Dale;
THENCE South 126 varas to a street;
THENCE North 86-1/2 degrees West 357 varas with said street to the E B line of
said Robert Hughes Subdivision;
THENCE North 102 varas to the place of beginning, containing 7-1/5 acres of
land, more or less.
TRACT 3: Being 4374/5645 of an acre of land, more or less, of the H. S. Proctor
Survey;
BEGINNING at the S E corner of a six-acre tract formerly sold to W. J. Key. a
subdivision of said H. S. Proctor Survey;
THENCE East 40-1/2 varas, a stake;
THENCE North 108 varas a stake;
THENCE West 40-1/2 varas to the N E corner of said six-acre tract;
THENCE South 108 varas with the E B line of said six-acre tract: to the place of
beginning, containing 4374/5645 of an acre of land, more or less.
<PAGE>
Exhibit A
Property Number F-162
BEING all our undivided interest in and to 4.02 acres of land located in the
K.S. Proctor Survey, A-220, situated in the Northwest part of the City of
Daingerfield, Morris County, Texas, said 4.02 acre tract of land being the same
land as previously described in a warranty deed from D.J. Jenkins to T.B. Price,
dated June 1, 1912, and duly recorded in Volume T, page 335, of the Deed Records
of Morris County, Texas; said 4.02 acre tract of land being more particularly
described as follows:
BEGINNING at a 4" iron pipe set in the North line of the said Daingerfield-Cason
public road for the southeast corner of this tract of land, said iron pipe being
the southwest corner of a 5.08 acre tract of land owned by Lone Star Steel
Company; said iron pipe being South 16DEG. 00' West 3622.0 feet from the
Northeast corner of the H.S. Proctor Survey;
THENCE North 68DEG. 33' West along and with the North line of said Daingerfield-
Cason public road, in all a total distance of 401.83 feet to an iron pin set in
an old fence line for the southwest corner of this tract of land;
THENCE North 02DEG. 01' West, along and with said old fence line, in all a total
distance of 397.25 feet to an iron pin set in the south line of Union Street for
the Northwest corner of this tract of land;
THENCE South 88DEG. 21' East along and with the south line of Union Street, in
all a total distance of 383.15 feet to a 4" iron pipe set at the Northwest
corner of this said 5.08 acre tract of land, for the Northeast corner of this
tract of land;
THENCE South 00DEG. 32' East, along and with the West line of the said 5.08 acre
tract of land, in all a total distance of 533.02 feet to the place of beginning,
containing 4.02 acres of land.
SAVE AND EXCEPT, an undivided four-twelfths (4/12th) interest in and to all the
oil and gas minerals only heretofore reserved.
<PAGE>
Exhibit A
Property Number F-039
Being a 5.03 acre tract of land located in the H. S. Proctor Survey, A-220 and
being situated in the northwest portion of the city of Daingerfield, Morris
County, Texas. Said 5.08 acre tract of land being previously described, in
warranty deed from Lula J. Connor, a widow, to Steve D. Ford, dated July 6, 1950
and being duly recorded in Vol. 63, pages 434-435 of the deed records of Morris
County, Texas and being more particularly described as follows.
Beginning at a 4" iron pipe for the northeast corner of this tract of land.
Said iron pipe being in the south right-of-way of Union Street, said iron pipe
being the northwest corner of a tract of land owned by the city of Daingerfield.
Thence, N 86DEG. 01' W-25' perpendicular distance from and parallel to the
Engineers centerline of said street in all a total distance of 559.88' to 4"
iron pipe for the northwest corner of this tract of land. Said iron pipe being
also in an old fence line.
Thence S 0DEG. 32' E along and with said old fence line in all a total distance
of 533.02' to a 4" iron pipe set in the north line of the old Cason-Daingerfield
public road for the southwest corner of this tract of land.
Thence in a southeasterly direction 25' perpendicular distance from and parallel
to the engineers centerline of said Cason-Daingerfield public road in all a
total distance of 406.61' to a 4" iron pipe for the southeast corner of this
tract of land. Said iron pipe being also the southwest corner of a tract of land
owned by the city of Daingerfield.
Thence N 0DEG. 33' E along the west line of the said tract of land owned by the
city of Daingerfield in all a total distance of 720.04' to the place of
beginning containing 5.08 acres of land more or less.
<PAGE>
Exhibit A
Property Number F-168
Being an 85.0-acres tract of land located in the J. V. Cherry Survey, A-51 and
being situated approximately S. 05DEG. 00' W. a distance of five miles from the
city of Daingerfield. Said 85.0 acres tract of land being the east 85.0 acres
of a 167-acres tract of land as described in a Warranty Deed from O. M. Fuquay,
et ux to Cecil M. Jerden end wife, dated June 21, 1937 and duly recorded in
Volume 34, page 635 of the Deed Records of Morris County, Texas. Said 85.0-
acres tract of land being more particularly described as follows:
Beginning at the southeast corner of the said 167-acres tract of land for the
southeast corner of this tract of land.
Thence: S. 86DEG. 30' W. along and with the south lane of the said 167-acres
tract of land a distance of 1263.80 ft. to a stake for the southwest corner of
this tract of land.
Thence: N. 00DEG. 31' W. parallel to the east line of the said 167-acres tract
of land, a distance of 2974.0 ft. to a stake set in the north line of the said
167-acres tract of land for the northwest corner of this tract of land.
Thence: East, a distance of 1261.4 ft. to a stake set at the northeast corner of
the said 167-acres tract of land for the northeast corner of this tract of land.
Thence: S. 00DEG. 31' E. along and with the east line of the said 167-acres
tract of land a distance of 2897.0 ft. to the place of beginning, containing
85.0 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-142
BEING 9.97 acres of land located in the H.S. Proctor Survey, A-220, and being
situated approximately West 1.3 mile from the Courthouse in Daingerfield, Morris
County, Texas; said 9.97 acres of land being portions of a 100 acre tract of
land as described in a Warranty Deed from G.H. McTyre, et ux, to Goldie May
Burke, et al, dated October 12, 1954, and duly recorded in Volume 76, page 189
of the Deed Records of Morris County, Texas; said 9.97 acres of land being two
separate tracts of land more particularly described as follows:
FIRST TRACT: BEING all of the above said 100 acre tract lying North of the
relocated State Highway No. 11;
BEGINNING at a stake set at the Northeast corner of the said 100 acre tract of
land for the Northeast corner of this tract of land;
THENCE South along and with the East line of the said 100 acre tract of land in
ail a total distance of 248.4 feet to a stake set in the North right of way line
of the State Highway No. 11 for the Southeast corner of this tract of land;
THENCE North 67 DEG. 50' West along and with the North right of way of said
Highway in all a total distance of 658.8 feet to a stake set in the North line
of the said 100 acre tract of land for the West corner of this tract of land;
THENCE East, along and with the North line of the said 100 acre tract of
land, in all a total distance of 610.11 feet to the place of beginning,
containing 1.74 acre of land, more or less.
SECOND TRACT: BEGINNING at a stake set at the Southeast corner of the said
100 acre tract of land for the Southeast comer of this tract of land; THENCE
North along and with the East line of the said 100 acre tract of land, in
all a total distance of 2380.0 feet to a stake set in the South right of way
line of the State Highway No. 11 for the Northeast corner of this tract of
land; THENCE North 67 DEG. 51' West, along and with the South right of way
line of said Highway, in all a total distance of 162.0 feet to a stake for
the Northwest corner of this tract of land; THENCE South 150 feet
perpendicular distance from and parallel to the East line of the said 100
acre tract of land, in all a total distance of 2399.5 feet to a stage set in
the South line of the said 100 acre tract of land for the Southwest corner of
this tract of land; THENCE South 74 DEG. 30' East, along and with the South
line of the said 100 acre tract of land, in all a total distance of 155.7
feet to the place of beginning, containing 8.23 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-142 (cont.)
SAVE AND EXCEPT:
a 0.99 acre tract of land located in the H.S. Proctor Survey, A-220,
and being situated approximately West 1.3 miles from the Courthouse in
Daingerfield, Morris County, Texas; said 0.99 acre tract of land being a
portion of a 1.74 acre tract of land described as "first tract" in a Warranty
Deed from Myra Louise Sargent Miner, et al, to Lone Star Steel Company dated
the 2nd day of March, 1964, and duly recorded in Volume 110, page 548, of the
Deed Records of Morris County, Texas; said 0.99 acre tract of land being more
particularly described as follows:
BEGINNING at a 4' x 4" concrete monument set at the west corner of the said 1.74
acre tract of land for the west corner of this tract of land; said monument
being set in the north right of way line of State Highway No. 11;
THENCE East along and with the north line of the said 1.74 acre tract of
land, in all a total distance of 466.5 feet to a stake for the northeast corner
of this tract of land;
THENCE South in all a total distance of 184.4 feet to a stake set in the
north right of way line of the said Highway No. 11 for the southeast corner of
this tract of land;
THENCE North 68 DEG. 26' West along and with the north right of way line of
said Highway No. 11. in all a total distance of 501.6 feet to the place of
beginning containing 0.99 acre of land, more or less.
<PAGE>
Exhibit A
Property Number F-143
All that certain tract or parcel of land described as follows: to-wit:
BEING a 1.00 acre tract of land located in the H.S. Proctor Survey, A-220, and
being situated approximately West 0.20 mile from the City of Daingerfield,
Morris County, Texas: said 1.00 acre tract of land being a portion of a 50 acre
tract of land conveyed to Annie Cramer by a partition deed dated August 29,
1936, and duly recorded in Volume 31, page 474 of the Deed Records of Morris
County, Texas; said 1.00 acre tract of land being more particularly described as
follows:
BEGINNING at a stake set at the southeast corner of the said 50 acre tract of
land for the southeast corner of this tract of land;
THENCE North along and with the east line of the said 50 acre tract of land,
In all a total distance of 585.0 feet to a stake set at the southeast corner of
a 32.1702 acre tract of land conveyed to Gifford and Hill, Inc. by Annie Cramer;
THENCE South 14 DEG. 23' West in all a total distance. of 603.9 feet to a
stake set in the south line of the said 50 acre tract of land for the
southwest corner of this tract of land;
THENCE East, along and with the south line of the said 50 acre tract of land,
in all a total distance of 150.0 feet to the place of beginning, containing 1.00
acre of land, more or less.
<PAGE>
Exhibit A
Property Number F-138
All that certain lot tract or parcel of land described as follows, to-wit:
BEING 79.55 acres of land of which 32.10 acres are located in the H.S. Proctor
Survey, A-220, and 19.15 acres are located in the 14.5. Proctor Survey, A-229,
and 28.30 acres are located in the J.W. Stoddard Survey, A-272; said 79.55 acres
of land are two separate tracts of land and are described as follows:
FIRST TRACT: Being a 45.20 acre tract of land located in the H.S. Proctor Survey
A-229, and in; the J.W. Stoddard Survey A-272, Morris County, Texas; said 45.20
acre tract of land being situated approximately south 40 deg. west 1.7 miles
from the City of Daingerfield, Morris County, Texas; said 45.20 acre tract of
land being a portion of a 57.50 acre tract of land as described in a Warranty
Deed from J.W. Stephenson, et al, to S.E. Moore, dated February 5, 1900 and duly
recorded in Volume Q, page 26 of the Deed Records of Morris County, Texas; said
45.20 acre tract of land being more particularly described as follows:
BEGINNING at an iron pin set in the South line of the said J. W. Stoddard
Survey, A-272, for the Southeast corner of this tract of land; said iron pin
being North 89 deg. 32' West, 1919.44 feet from the Southeast corner of the said
J.W. Stoddard Survey;
THENCE North 89 deg. 32' West along and with the South line of the said
Stoddard Survey in all a total distance of 366.00 feet to a stake for the South-
Southwest corner of this tract of land;
THENCE North 7 deg. 37' East, along and with an old fence line in all a total
distance of 1124.90 feet to a stake set at an old fence corner for an "L" corner
of this tract of land;
THENCE South 85 deg. 391 West along and with the said old fence line in all a
total distance of 315.90 feet to a stake set in a branch for a corner of this
tract of land;
THENCE in a Northwesterly direction along and with the meanders of said
branch as follows: North 39 deg. 48' West, 390.50 feet and North 32 deg. 00'
West, 94.33 feet to a stake set at the Southwest corner of a 10.00 acre tract of
land retained by Mrs. Pearl Childress out of the above said 57.50 acre tract of
land;
THENCE North 49 deg. 05' East along and with the South line of the said 10.00
acre tract of land, in all a total distance of 397.00 feet to a stake set at the
Southeast corner of the said 10.00 acre tract for an "L" corner of this tract of
land;
<PAGE>
Exhibit A
Property Number F-138 (cont. - 2)
THENCE North 33 deg. 18' West along and with the East line of the said 10.00
acre tract of land, in all a total distance of 1036.12 feet to a 1/2 inch iron
pin set at the Northeast corner of the said 10.00 acre tract of land for an "L"
corner of this tract of land;
THENCE South 49 deg. 12' West along and with the North line of the said 10.00
acre tract of land, in all a total distance of 192.87 feet to a point set in a
county road at an angle corner in the North line of the said 10.00 acre tract of
land for the West-Southwest corner of this tract of land;
THENCE North 9 deg. 52' East along and with an old fence line and hedge row
in all a total distance of 776.48 feet to a stake set at a fence corner for the
North corner of this tract of land;
THENCE South 63 deg. 31' East along and with said old fence line in all a
total distance of 616.72 feet to a stake for an angle corner in the North line
of this tract of land;
THENCE South 27 deg. 47' East in all a total distance of 253.19 feet to a
stake for an angle corner in the North line of this tract of land;
THENCE South 61 deg. 01' East in all a total distance of 817.37 feet to a
stake set at an old fence corner for the East-Northeast corner of this tract of
land;
THENCE South 16 deg. 01' West along and with said old fence line, in all a
total distance of 1275.52 feet to a stake set at a fence corner for an "L"
corner of this tract of land;
THENCE South 78 deg. 41' East in all a total distance of 86.69 feet to a
stake for the South-Northeast corner of this tract of land;
THENCE South 0 deg. 13' West along and with a fence line in all a total
distance of 1101.00 feet to the place of beginning, containing 45.20 acres of
land, more or less.
SECOND TRACT: Being a 34.92 acre tract of land located in the 14.5. Proctor
Survey, A-220, and in the 14.5 Proctor Survey, A-229, and in the J.W. Stoddard
Survey, A-272, Morris County, Texas; said 34.92 acre tract of land being
situated approximately South 50 deg. West 1.7 miles from the City of
Daingerfield, Morris County, Texas; said 34.92 acre tract of land consists of
the following:
(1) a 21.50 acre tract of land and an 8.00 acre tract of land as described in a
deed from C.A. Moore, et al, to S.R. Moore, dated March 5, 1915 and duly
recorded in Volume T, pages 513 and 514 of the Deed Records of Morris County,
Texas, (2) a 3.50 acre tract of land as described in a deed from W.F. Moore, et
al, to 5.2. Moore dated July 20, 1908 and duly recorded in Volume 14, page 619
of the Deed Records of Morris County, Texas, and (3) a 3.67 acre tract of land
as described in a deed from 0.3. Connor and wife, Villa Connor, to S.R. Moore
dated January 31, 1920 and duly recorded
<PAGE>
Exhibit A
Property Number F-138 (cont. - 3)
in Volume 6, page 508 of the Deed Records of Morris County, Texas; said 34.92
acre tract of land being more particularly described as follows:
BEGINNING at a stake set in the North right-of-way line of the L & A Railroad
for the West-Southwest corner of this tract of land; said stake being North 78
deg. 30' East, 1375.00 feet from the Southwest corner of the said H.S Proctor.
Survey, A-220;
THENCE South 61 deg. 43' East along and with the said railroad right-of-way
line, in all a total distance of 1010.65 feet to a stake for the West-Southeast
corner of this tract of land;
THENCE North 16. deg. 41' East along and with a fence line, in all a total
distance of 236.97 feet to an iron pin for an "L" corner of this tract of land;
THENCE South 74 deg. 32' East along and with said fence line in all a total
distance of 978.43 feet to a stake set at a fence corner for an angle corner in
the South line of this tract of land;
THENCE South 66 deg. 11' East, in all a total distance of 391.33 feet to a
stake for an "L" corner of this tract of land;
THENCE South 6 deg. 20' West in all a total distance of 90.55 feet to a stake
for an "L" corner of thiS tract of land;
THENCE South 67 deg. 04' East along and with a fence line in all a total
distance of 700.36 feet to a stake for the East-Southeast corner of this tract
of land;
THENCE North 52 deg. 08' East, in all a total distance of 22.80 feet to a
stake fox the East-Northeast corner of this tract of land;
THENCE North 49 deg. 09' West, along and with a fence line in all a total
distance of 411.15 feet to a stake set in the South right-of-way line of said
railroad for an angle corner in the North line of this tract of land;
THENCE North 34 deg. 51' West, in all a total distance of 96.27 feet to a
stake set in the North right-of-way line of said railroad for an angle corner of
this tract of land;
THENCE North 74 deg. 36' West along and with an old fence line, in all a
total distance of 662.79 feet to a stake set at a fence corner for an "L" corner
of this tract of land;
<PAGE>
Exhibit A
Property Number F-138 (cont. - 4)
THENCE North 17 deg. lot East along and with an old fence line, in all a
total distance of 775.55 feet to a stake set at a fence corner for the North-
Northeast corner of this tract of land;
THENCE North 84 deg. 47' West along and with said fence line in all a total
distance of 704.92 feet to a stake set in the east line of the H. McTyre Estate
100 acre tract of land for an "L" corner of this tract of land;
THENCE South along and with the East line of the said McTyre land, in all a
total distance of 80.00 feet to a stake set at the East-Southeast corner of the
said McTyre land for an "L" corner of this tract of land;
THENCE North 73 deg. 32' West along and with the South line of the said
McTyre land, In all a total distance of 1344.14 feet to a stake for the West-
Northwest comer of this tract of land;
THENCE South 13 deg. 22' West along and with an old fence line, in all a
total distance of 627.00 feet to the place of beginning, containing 34.92 acres
of land, more or less.
SAVE AND EXCEPT 0.57 acre of land for the L & A Railroad right-of-way, leaving
34.35 acres in this tract of land.
<PAGE>
Exhibit A
Property Number F-142 (cont. - 5)
AND SAVE AND EXCEPT from the above described properties the 108 acre tract of
land conveyed by Lone Star Steel Company to J.W. Croley and wife Maveline Croley
pursuant to the terms of a Warranty Deed dated August 26, 1963.
AND SAVE AND EXCEPT from the above described properties the following tract:
Being a 1.00 acre tract of land located in the H. S. Proctor Survey, A-220,
Morris County, Texas. Said 1.00 acre tract of land being situated approximately
S. 50 W. 1.7 miles from the City of Daingerfield, Morris County, Texas, and
being & portion of a 34.92 acre tract of land described as Second Tract in a
Warranty Deed from A. C. Moore, et al to Lone Star Steel Company, dated April
22, 1963, recorded in Volume 106, pages 24, et seq. of the Deed Records of
Morris County, Texas. Said, 1.00 acre tract of land being more particularly
described as follows:
BEGINNING at an iron pipe set in the North right-of-way line of the L&A Railroad
far the south corner of this triangular-shaped tract of land, said pipe being N.
780 301 E. 1375.0 feet from the Southwest corner of the said H. S. Proctor
Survey, A-220, said pipe being also the Southeast corner of a tract of land now
owned by Gerald Stotts;
THENCE N. 90 DEG. 51' E. along and with the Stotts East boundary line, in
all a total distance of 723.5 feet to a stake for the Northwest corner of
this tract of land;
THENCE S. 74 DEG. 42' E. in all a total distance of 122.0 feet to an iron pipe
set in a fence corner for the Northeast corner of this tract of land;
THENCE S. 19 DEG. 00' W. along arid with a fence in all a total distance of
723.0 feet to the place of beginning, containing 1.00 acre of land, more or
less.
<PAGE>
Exhibit A
Property Number F-139
All that certain lot, tract or parcel of land described as follows:
BEING an 18.94 acre tract of land located in the M.S. Proctor Survey, A-220, and
the M.S. Proctor Survey, A-229, and being situated approximately South 63 deg.
West 1.6 miles from the City of Daingerfield, Morris County, Texas; said 18.94
acre tract of land being a portion of a 33 acre tract of land as. described in
a-Warranty Deed from Roe Jean Moore to James W. Croley dated December 13, 1961,
and duly recorded in Volume 101, page 126 of the Deed Records of Morris County,
Texas; said 18.94 acre tract of land being more particularly described as
follows:
BEGINNING at an iron pin set at the Northwest corner of the said 33 acre tract
of land for the Northwest corner of this tract of land; said iron pin being set
North 81 deg. 041 West, 1305.0 feet from the Northeast corner of the said M.S.
Proctor Survey, A-229;
THENCE South 74 deg. 32' East, along and with an old fence line same being
the North line of the said 33 acre tract of land, in all a total distance of
978.43 feet to a stake for the northeast corner of this tract of land;
THENCE South 17 deg. 30' West, in all a total distance of 400.0 feet to a
stake set in the South right-of-way of the L & A Railroad for an angle corner in
the East line of this tract of land;
THENCE South 9 deg. 52' East, in all a total distance of 497.0 feet to a
stake set in the South line of the said 33 acre tract of land for the Southeast
corner of this tract of land;
THENCE North 63 deg. 31' West, along and with the South line of the said 33
acre tract of land, in all a total distance of 300.0 feet to a stake for an
angle corner in the South line of this tract of land;
THENCE North 75 deg. 41' West, along and with the South line of the said 33
acre.tract of land, in all a total distance of 899.75 feet to a stake set at the
Southwest corner of the said 33 acre tract of land for the Southwest corner of
this tract of land;
THENCE North 16 deg. 41' East, along and with the West line of the said 33
acre tract of land, at 520 feet pass the centerline of the said L & A Railroad,
in all a total distance of 810.00 feet to the place of beginning, containing
18.94 acres of land, more or less.
SAVE AND EXCEPT 125 acres of land for the said L & A Railroad right-of-way
leaving a total of 16.69 acres in this tract of land;
AND SUBJECT to any mineral conveyance previously made.
<PAGE>
Exhibit A
Property Number F-139 (cont.)
AND SAVE AND EXCEPT: All that certain tract or parcel of land described as
follows:
BEING A 0.90 acre tact of land located in the H.S.
Proctor Survey. A-229, and being situated approximately South 63 DEG. 00'
West, 1.6 miles front the City of Daingerfield, Morris County, Texas; said
0.90 acre tract of land being a portion of an 18.94 acre tract of land as
described in a Warranty Deed from James W. Croley and wife, Maveline Croley,
to Lone Star Steel Company, dated August 26, 1963, and duly recorded in
Volume 108, page 329, of the Deed Records of Morris County, Texas; said 0.90
acre tract of land being more particularly described as follows:
BEGINNING at an iron pin set at the Southeast corner of the above said 18.94
acre tract of land for the South corner of this tract of land;
THENCE North 6 DEG. 09' West, in all a total distance of 577.8 feet to an
iron pin set in the South right of way line of the L & A railroad for the
northwest corner of this tract of land;
THENCE in an easterly direction along and with South right of way line of
the said L & A Railroad as follows: South 58 DEG. 30' East, 132.0 feet and
South 65 DEG. 28' East, 38.0 feet to an iron pin set at an angle corner in
the East line of the said 18.94 acre tact of land for the Northeast comer of
this tract of land;
THENCE South 9 DEG. 52' West, along and with the East line of the said
18.94 acre tract of land, in all a total distance of 497.0 feet to the place
of beginning, containing 0.90 acres of land.
<PAGE>
EXHIBIT A
Property Number F-144
All that certain tract or parcel of land described as follows: to-wit:
BEING a 77.00 acre tract of land, more or less, of which 2.06 acres are located
in the J. N. Gray Survey, A-115, and 74.94 acres are located in The J. N. Gray
Survey, A-116, said 77.00 acre tract of land being located approximately South
32 deg. West 2 miles from the City of Daingerfield, Morris County. Texas; said
77. 00 acre tract of land being more particularly described as follows:
BEGINNING at a 4" from pipe set at the Northwest corner of the J. N. Gray
Survey, A-116, for the Northwest corner of this tract of land; said iron pipe
being in the East line of the John V. Cherry Survey, A-51, and at the South-
Southwest comer of the H. S. Proctor Survey, A-229;
THENCE South 89 deg. 16' East along and with the North line of the said J. N.
Gray Survey, A-116, at 2639.10 feet pass a stake set at the Northeast comer of
the said J. N. Gray Survey, A-116, same being the Northwest corner of the J. N.
Gray Survey, A-115, continuing same course along and with the North line of the
said J. N. Gray Survey, A-115, in all a total distance of 2880. 20 feet to a
stake for the Northeast corner of this tract of land;
THENCE South 18 deg. 00' West in all a total distance of 780.20 feet to a
stake set in the West line of the J. N. Gray Survey, A-115, and in the East line
of the J. N. Gray Survey, A-116, for an angle corner in the East line of this
tract of land;
THENCE South along and with the East line of the J. N. Gray Survey, A-116, in
all a total distance of 1558.03 feet to a 4" iron pipe set for the Southeast
comer of this tract of land. said iron pipe being the Northeast corner of an 85
acre tract of land owned by Lone Star Steel Company;
THENCE North 41 deg. 03' West along and with the Northeast line of the said
85 acre tract of land, in all a total distance of 2427.88 feet to a 4" iron pipe
set at the North corner of the said 85 acre tract of land for an "L" corner of
this tract of land;
THENCE South 52 deg. 39' West along and with the Northwest line of the said
85 acre tract of land, in all a total distance of 1214. 23 feet to a 4" iron
pipe set at the Northwest comer of the said 85 acre tract of land for the
Southwest comer of this tract of land; said iron pipe being in the West line of
the J. N. Gray Survey, A-116, and in the East line of the John V. Cherry Survey,
A-51;
THENCE North along and with the West line of the said J. N. Gray Survey,
A-116, in all a total distance of 1303.14 feet to the place of beginning,
containing 77.00 acres of land, more or less.
SAVE AND EXCEPT a one-half of the usual one-eight royalty in and to the oil and
gas in, on and under the described land heretofore reserved.
<PAGE>
Exhibit A
Property Number F-112
Being an 85.00 acre tract of land located in the J.N. Gray Survey, A-116, Morris
County, Texas, more particularly described as follows:
BEGINNING at a 4" iron pipe set in the east line of the J.V. Cherry Survey, A-
51, for the southwest corner of the said Gray Survey, for the southwest corner
of this tract of land, being also the northwest corner of the Wiley George
Survey, A-124;
Thence north along the Cherry-Gray survey line, same being an old fence line,
1,300.00 ft. to a 4" iron pipe for the northwest corner of this tract of land,
said corner being south 1,303.14 ft. from a 4" iron pipe, the northwest corner
of the said Gray Survey, and the northeast corner of the said Cherry Survey;
Thence E 52 DEG. 39' E, 1,314.12 ft. to a 4" iron pipe for an ell corner of this
tract of land;
Thence S 41 DEG. 03' E, 2,427.58 ft. to a 4" iron pipe in the east survey
line of the said Gray Survey for the northeast corner of this tract of land,
said corner being south 2,303.14' from a stake, the northwest corner of the
said Gray Survey;
Thence south along the east line of the J.H. Gray Survey, A-116, and west line
of the J.H.Gray Survey, A-115, a distance of 300.00 ft. to a 4" iron pipe for
the southeast corner of this tract of land, also the southeast corner of the
Gray Survey, A-116; the southwest corner of the Gray Survey, A-115, also in the
north survey line of the J. Christopher Survey, A-57;
Thence S 89 DEG. 16' W along the Christopher-Gray, A-116, survey line at
1,277.88 ft. pass a 4" iron pipe, the northwest corner of the said
Christopher Survey, also the northeast corner of the George Survey, A-124,
and continuing S 89 DEG. 16' W.,in all a total distance of 2,639.10 ft. to
the place of beginning, containing 85.00 acres of land, more or less.
SAVE AND EXCEPT a one-half of the usual one-eighth royalty in and to the oil and
gas in, on and under the described land heretofore reserved.
<PAGE>
Exhibit A
Property Number F-150
Being all that certain lot, tract or parcel of land in the John V. Cherry
Survey, A-51, Morris County, Texas situated approximately 5.39 deg. 00 min. W,
2.7 miles from the City of Daingerfield, Morris County, Texas, and being more
particularly described as follows:
BEGINNING at a 4" iron pipe set in the east line of the said Cherry
Survey and the west line of the Wiley George Survey, A-124, for the northeast
corner of this described tract of land. Said iron pipe being S. 0 deg. 20
min. E. 500.04 feet from the northwest corner of the said Wiley George Survey.
THENCE, S.O deg. 20 min. E. along and with the Cherry-George Survey line, a
total distance of 685.5 feet to a 4" iron pipe for the southeast corner of this
tract of land;
THENCE N. 89 deg. 58 min. W., a total distance of 1584.0 feet to an
iron pin set in the approximate center-line of a county road for the
southwest corner of this tract of land;
THENCE in a northwesterly direction, along and with said county road as
follows:
N.3 deg. 00 min West - 398.9 feet and
N.16 deg. 26 min. West - 299.4 feet to an iron pin set
for the northwest corner of this tract;
THENCE S. 89 deg. 58 min. E., a total distance of 1685.6 feet to the
place of beginning, containing 25.41 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-121
BEING a 41.81 acre tract of land located in the John V. Cherry Survey, A-51,
and being situated approximately S. 5 DEG. W., 5 miles from the City of
Daingerfield, Morris County, Texas. Said 41.81 acre tract of land being Lot
or Tract No. 9 of the partition of the P. C. Barnard 214 acre tract of land
in the District Court of Morris County, Texas in Cause No. 5051, therein
entitled W. R. Barnard, et al, Vs. Johnnie Barnard, et &1, the Decree of
Partition being recorded in Vol. 2, Page 575, of the Civil Minutes of the
District Court of Morris County, Texas. Said 41.81 acre tract of land being
the same land described in a Deed from Sarah Lou Beauchamp, et vir, to Lois
Coco, et al, dated September 22, 1944, and recorded in Vol. 51, Page 435, of
the Deed Records of Morris County, Texas.
BEGINNING at a 4" iron pipe set in the east line of the said J. V. Cherry Survey
for the southeast corner of this tract of land. Said iron pipe being the
south-east corner of the said P. C. Barnard 214 acre tract of land. Said iron
pipe being S. 0 DEG. 20' E., 294.2 ft. from the northwest corner of
the Wm. McDonald Survey, A-197.
THENCE: N. 0 DEG. 20' W. along and with the east line of the said J. V. Cherry
Survey, in a all a total distance of 1389.6 feet to a 4" iron pipe set at the
northeast corner of the said 214 acre tract of land for the northeast corner of
this tract of land.
THENCE: N. 89 DEG. 58' W., along and with the north line of the said 214 acre
tract of land, in all a total distance of 1132.8 feet to a 4" iron pipe set at
the northeast corner of Lot No. 8 of said Partition for the northwest corner of
this tract of land.
THENCE: S. 0 DEG. 20' E., along and with the east line of Lot No. 8 of said
Partition, in all a total distance of 1570.6 feet to a 4" iron pipe set in the
south line of the said 214 acre tract of land for the southwest corner of this
tract of land. Said iron pipe being the southeast corner of Lot No. 8 of said
Partition.
THENCE: S. 89 02' E., along and with the south line of the said 214 acre
tract of land, in all a total distance of 1152.9 feet to the place of beginning,
containing 41.81 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-111
Being a 75.67 acre tract of land located in the W. George Survey, A-124, and
being situated approximately S 5 00' W five miles from the town of
Daingerfield, Morris County, Texas, said 75.67 acres of land being previously
described in Iron Ore Lease from J. Y. Bradfield, et al to W. O. Irvin, Trustee,
dated October 11, 1941, Volume 43, page 95-100, Deed Records of Morris County,
Texas, said 75.67 acre tract of land being also more particularly described as
follows:
Beginning at a 4" iron pipe for the Northwest corner of this tract of land, said
4" iron pipe being in the East survey line of the John V. Cherry Survey, A-51,
said iron pipe being the Northwest corner of the said George Survey, said iron
pipe being also the Southwest corner of the J. H. Gray Survey, A-116:
THENCE S 89 DEG. 16' E along the Gray-George survey line, in all a total
distance of 1,361.22' to a 4" iron pipe, the Northeast corner of this tract
of land, said iron pipe being the Northwest corner of the Jacob Christopher
Survey, A-57, said iron pipe being also N 89 DEG. 16' W 1,277.88' from a 4"
iron pipe, the Southwest corner of the said Gray Survey;
THENCE S 1 DEG. 07' W along the Christopher-George survey line, in all a
total distance of 2,463.59' to a 4" iron pipe, the South- east corner of this
tract of land, said iron pipe being N 1 DEG. 07' E 323.31' from a 4" iron
pipe, the Southwest corner of the said Christopher Survey;
THENCE West along an old fence line 1,298.80' to a 4" iron pipe, the
Southwest corner of this tract of land, said iron pipe being in the East
survey line of the said Cherry Survey, said iron pipe being in the West
survey line of the said George Survey, said iron pipe being also S 0 DEG. 20'
E 2,480.55' from a 4" iron pipe, the Northwest corner of the said George
Survey;
THENCE N 0 DEG. 20' W along the Cherry-George Survey line, in all a total
distance of 2,480.55' to the place of beginning, containing 75.67 acres of
land, more or less.
<PAGE>
Exhibit A
Property Number F-110
Being a 141.19 acre tract of land located in the J. Christopher Survey, A-57,
and being situated approximately S 5 DEG. 00' W five miles from the town of
Daingerfield, Morris County, Texas, said 141.19 acre tract of land being
previously described in Iron Ore Lease from J. Y. Bradfield, et al, to W. C.
Irvin, Trustee, dated October 11, 1941 and duly recorded in Volume 43, page
95-100, Deed Records of Morris County, Texas and being more particularly
described as follows:
Beginning at a 4" iron pipe, the northeast corner of this tract of land, said
iron pipe being the northeast corner of the said Christopher Survey, said
iron pipe being in the south survey line of the J. N. Gray Survey, said iron
pipe being also the northwest corner of the Samuel Johnson Survey;
Thence S 0 DEG. 08' E along the Johnson-Christopher survey line, in all a
total distance of 2338.73' to a 4" iron pipe, the southeast corner of this
tract of, land, said iron pipe being also N 0 DEG. 08' W 414.26' from a 4"
iron pipe for the southeast corner of the said Christopher Survey;
Thence N 89 DEG. 39' W, in all a total distance of 476.00' to a iron pipe
for an angle point in the south boundary line of this tract of land, said
iron pipe being also the northwest corner of the Holt 4.55 acre tract of land;
Thence N 89 DEG. 43' W, in all a total distance of 2159.04' to a 4" iron
pipe in a rock pile for the southwest corner of this tract of land, said iron
pipe being in the west survey line of the said Christopher Survey, said iron
pipe being in the east survey line of the Wiley George Survey, A-124, said
iron pipe being also N 1 DEG. 07' E 406.67' from a 4" iron pipe, the
southwest corner of the said Christopher Survey;
Thence N 1 DEG. 07' E along the George-Christopher survey line, in all a
total distance of 2380.23' to a 4" iron pipe for the northwest corner of this
tract of land, said iron pipe being the northwest corner of the said
Christopher Survey, said iron pipe being the northeast corner of the said
George Survey, said iron pipe being also in the south survey line of the J.
N. Gray Survey, A-116;
Thence S 89 DEG. 16' E along the Gray, A-116-Christopher survey line, at
1277.88' pass a 4" iron pipe, the southeast corner of the said Gray, A-116,
same being the Gray, A-115 southwest corner and continuing S 89 DEG. 16' E
along the Gray, A-115-Christopher survey line, in all a total distance of
2583.54' to the place of beginning, containing 141.19 acres of land, more or
less.
<PAGE>
Exhibit A
Property Number F-216
All that certain lot, tract or parcel of land more particularly described as
follows, to-wit:
Being a 18.85 acre tract of land located in the J. Christopher Survey,
A-57, and the Samuel Stewart Survey; A-258, and being situated approximately
S 5 DEG. 00' W five miles from the town of Daingerfield, Morris County, Texas
and being previously described in Iron Ore lease from J. B. Holt, et ux,
Frances, to W. O. Irvin, Trustee, dated February 5, 1945 and being duly
recorded in Volume 53. page 349, Deed Records of Morris County, Texas and
being more particularly described as follows:
BEGINNING at a 4" iron pipe, the southeast corner of the J. Christopher
Survey, A-57, said iron pipe being the southwest corner of the Samuel Johnson
Survey, A-161, said iron pipe being the north survey line of the Samuel
Stewart Survey, A-258, said iron pipe being also an ell corner of this tract
of land;
THENCE N 0 DEG. 08' W along the Johnson-Christopher survey line, in
all a total distance of 414.26' to a 4" iron pipe for the north northeast
corner of this tract of land;
THENCE N 89 DEG. 39' W, in all a total distance of 476.00' to a 4"
iron pipe for the northwest corner of this tract of land;
THENCE S 0 DEG. 11' W, in all a total distance of 417.17' to a 4" iron
pipe for an angle point in the west boundary line of this tract of land, said
iron pipe being in the Christopher-Stewart boundary line:
THENCE South, in all a total distance of 624.00' to a 4" iron pipe for
the southwest corner of this tract of land;
THENCE East, in all a total distance of 998.45' to a 4" iron pipe for
the south-east corner of this tract of land;
THENCE North, in all a total distance of 624.00' to a 4" iron pipe for
the east northeast corner of this tract of land, said iron pipe being in the
Johnson-Stewart survey line;
THENCE West, along the Johnson-Stewart boundary line, in all a total
distance of 520.15' to the place of beginning, containing 18.85 acres of
land, more or less. of which 4.55 acres lie in the J. Christopher Survey,
A-57, and 14.30 acres in the Samuel Stewart Survey, A-258.
<PAGE>
Exhibit A
Property Number F-57
Being a 178.42 acre tract of land located in the Ahira Butler Survey, A-22,
and being situated In Upshur County, Texas, said 178.42 acre tract of land
being previously described in warranty deed from J. N Irvin, et ux, to J. H.
Smith dated July 22, ,1931 and being duly recorded in Volume 86, page 107
Deed Records of Upshur County, Texas and being more particularly described as
follows:
Beginning at a pine knot from which a 28" sweet gum marked "X" bears S 53
00' E 23.00', said pine knot being in the west survey line of the said Butler
Survey, said pine knot being also S 29 49' E 4895.74' from the northwest
corner of the said Butler Survey;
Thence S, 89 DEG. 57' E along a well marked old survey line 3104.19' to an
old stake for the northeast corner of this tract of land, said old stake
being also an angle point in the Lone Star Steel Company 224.02 acre tract of
land, a 8" iron wood tree marked "X" bears N 65 DEG. 00' W 4.00';
Thence S 17 DEG. 59' E along the Lone Star Steel Company 224.02 acres
178.42 acre boundary line, in all a total distance of 770.92' to a rock pile
for an angle corner of this tract of land, said rock pile being also the
southwest corner of the said Lone Star Steel Company 224.02 acre tract of
land;
Thence S 1 DEG. 54' W along a well marked old survey line, in all a total
distance of 2620.44' to a 4" iron pipe for a southeast corner of this tract
of land;
Thence West along a well marked old survey line 1337.91' to a 4" iron pipe
for the southwest corner of this tract of land, said iron pipe being also in
the west survey line of the said Butler Survey;
Thence N 29 DEG. 49' W along the west survey line of the said Butler
Survey, same being a well marked old survey line at 1392.13' past a pine knot
and in all a total distance of 3857.13' to the place of beginning, containing
178.42 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-58
Being a 224.02 acre tract of land located In the Ahira Butler Survey, A-22,
and being situated in Upshur County, Texas, said 224.02 acres of land being
previously described in warranty deed from E. S. Nixon to J. A. Bradey dated
October 8, 1858 and being duly recorded in Volume H, page 304 Deed Records of
Upshur County, Texas and being more particularly described as follows:
Beginning at a rock pile for the northwest corner of the John Lowry Survey,
A-273 from which a 10" post oak marked "X" bears N 5 DEG. 00' W 13.00' said
rock pile being an ell corner of the said Butler Survey, said rock pile being
the south southwest corner of the Lone Star Steel Company 285.05 acre tract
of land, said rock pile being also the southeast corner of this tract of land;
THENCE S 67 DEG. 43' W along a well marked old survey line 3324.50' to a
rock pile for the southwest corner of this tract of land, said rock pile
being also an angle corner in the Lone Star Steel Company 178.42 acre tract
of land;
THENCE N 17 DEG. 59' W along the Lone Star Steel Company 178.42 acre-224.02
acre boundary line, same being a well marked old survey line, in all a total
distance of 770.92' to an old stake for an angle point in this tract of land,
from which an 8" iron wood tree marked "X" bears N 65 00' W 4.00', said old
stake being the northeast corner of the said Lone Star, Steel Company 178.42
acre tract of land;
THENCE N 0 DEG. 41' W along a well marked old survey line, in all a total
distance of 2627.47' to a rock pile for the northwest corner of this tract of
land from which a 8" pine marked "X" bears N 34 00' E 9.00', a 8" post oak
marked "X" bears S 88 DEG. 00' W 3.00', a 8" hickory marked "X" bears N 71
DEG. 00' E 8.00';
THENCE N 67 DEG. 07' E along a well marked old survey line at 945.77' past
an old stake for the north southwest corner of the Lone Star Steel Company
285.05 acre tract of land, and in all a total distance of 2500.20' to a 4"
iron pipe for the northeast corner of this tract of land, said iron pipe
being also an ell corner of the Lone Star Steel Company 285.05 acre tract of
land;
THENCE S 18 DEG. 43' E along the Lone Star Steel Company 235.05 acre-
224.02 acre boundary line, in all a total distance of 3243.09' to the place
of beginning containing 224.02 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-59
Being a 99.546 acre tract of land located on the north survey line of the
Ahira Butler Survey, A-22, and being situated in Upshur County, Texas, said
99.546 acres of land being previously described in warranty deed dated May 1,
1931 from Ernest W. Reed, et ux, to J. H. Smith and being duly recorded in
Volume 83, page 598 of the Deed Records of Upshur County, Texas and being
more particularly described as follows:
Beginning at a 4" iron pipe for the northwest corner of this tract of land,
said 4" iron pipe being the northeast corner of the W. C. Elms 160 acre tract
of land, said 4" iron pipe being also in the north survey line of the said
Butler Survey;
Thence S 30 DEG. 04' E along the Elms-99.546 acre boundary line, in all a
total distance of 1981.69' to a 4" iron pipe for the southwest corner of this
tract of land, from which bears an 8" post oak marked "X", a 12" post oak
marked "X", said 4" iron pipe being also the northwest corner of the Ernest
W. Reed Estate, et al, 100 acre tract of land;
Thence N 60 DEG. 11' E along the Reed-99.546 acre boundary line, same being
a well marked old survey line, in all a total distance of 2249.88' to a rock
pile for the southeast corner of this tract of land, from which bears a 12"
hickory marked "X", a 14" sweet gum marked "X", said rock pile being also in
the west boundary line of a 285.05 acre tract of land belonging to the Lone
Star Steel plant;
Thence N 34 DEG. 14' W along the 285.05 acre-99.546 acre boundary line, in
all a total distance of 918.91' to a 1" iron pin for an angle corner in this
tract of land, said iron pin being the northwest corner of the said 285.05
acre tract of land, said iron pin being also the southwest corner of the T.
H. Sandlin 127.7 acre tract of land;
Thence N 29 DEG. 42' W along the Sandlin-99.546 acre boundary line, same
being an old painted survey line, in all a total distance of 1043.24' to a 1"
iron pin for the northeast corner of this tract of land, said iron pin being
also in the north survey Line of the said Butler Survey;
Thence S 60 DEG. 46' W along the north survey line of the said Butler
Survey, same being a well marked old surveyline, in all a total distance of
2190.10' to the place of beginning, containing 99.546 acres of land, more or
less.
<PAGE>
Exhibit A
Property Number F-60
Being a 285.05 acre tract of land located in the Ahira Butler Survey, A-22,
and being situated in Upshur County, Texas, said 235.05 acre tract of land
being prevIously known as the J. H. Smith Estate 285.05 acre tract of land,
known as the mountain land, said mountain land being more particularly
described as follows:
Beginning at a rock pile for the northwest corner of the John Lowry Survey,
A-273, from which a 10" post oak marked "X" bears N 5 DEG. 00' W 13.00', said
rock pile being also an ell corner of the Ahira Butler Survey, A-22;
Thence N' 18 DEG. 43' W along the Lone Star Steel Company 24.02 acre
tract-285.05 acre tract of land boundary line, in all a total distance of
3243.09' to a 4" iron pipe for an ell corner of this tract of land, said iron
pipe being also the northeast corner of the said Lone Star Steel Company
24.02 acre-tract of land;
Thence S 67 DEG. 07' W along the Lone Star Steel Company 224.02 acre-285.05
acre boundary line, same being a well marked old survey line, in all a total
distance of 1554.43' to an old stake for the most north southwest corner of
this tract of land;
Thence N 29 DEG. 57' W along the.Ernest W. Reed Estate, et al, 100
acre-285.05 acre boundary line, same being a well marked old survey line, in
all a total distance of 2279.29' to a rock pile for an angle corner in this
tract of land, from which bears a 12" hickory marked "X", a 14" sweet gum
marked "X", said rock pile being also the southeast corner of the Lone Star
Steel Company, 99.546 acre tract of land;
Thence N 34 DEG. 14' W along the Lone Star Steel Company 99.546 acre-285.05
acre boundary line, in all a total distance of 918.91' to a 1" iron pin for
the northwest corner of this tract of land, from which a 8" red oak snag
bears S 81 W 13' said iron pin being also the southwest corner of the T. H.
Sandlin 127.70 acre tract of land;
Thence N 59 DEG. 25' E along the Sandlin-235.05 acre boundary line, same
being an old painted survey line, in all a total distance of 2576.53' to a 4"
iron pipe for the northeast corner of this tract of land, from which a 12"
pine marked "X" bears S 21 00' E 3.00', said iron pipe being also the
northwest corner of the T.C Connor 532.35 acre tract of land;
Thence S 29 DEG. 45' E, along the Connor-285.05 acre boundary line, in all
a total distance of 6535.32' to a pine knot in a rock pile for the southeast
corner of this tract of land, said pine knot being also in the southwest
corner of the said Connor 532.35 acre tract of land, said pine knot being
also in the north survey line off the John Lowry Survey, A-273;
Thence S 57 DEG. 51' W along the Lowry-Butler Survey line, in all a total
distance of 1575.23' to the place of beginning, containing 285.05 acres of
lend, more or less.
<PAGE>
Exhibit A
Property Number F-217
Being a 3. 70 acres tract of land located in the C. Stinson Survey, A-464,
and being a portion of a 5.945 acres tract of land as described in a Warranty
Deed from Merlin Quinn and wife, Ruth Quinn to Robert Burns and Sidney Rex
Moughon, dated September 24, 1977 and duly recorded in Volume 388, Page 937,
Deed Records of Upshur County, Texas. Said 3.70 acres tract of land being
more particularLy described as follows:
Beginning at a concrete monument set at the southwest corner of the said
5.945 acres tract of land for the southwest corner of this tract of land.
Said monument being the south southwest corner of the said G. Stinson Survey;
Thence N. 01 DEG. 21' W. a distance of 473.5 ft. to an iron pin set in the
south right-of-way line of Farm Road No. 2796 for the northwest corner of
this tract of land.
Thence N. 85 DEG. 53' E. along and with the south right-of-way line of said
highway a distance of 383. 8 ft. to an iron pin for the northeast corner of
this tract of land.
Thence S. 29 DEG. 42' E. a distance of 246.0 ft. to an iron pin set in the
south line of the said G. Stinson Survey for the southeast corner of this
tract of land.
Thence S. 59 DEG. 48' W. along and with the south line of the said G.
Stinson Survey, a distance of 571.0 ft. to the place of beginning, containing
3.70 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-029
Being a 270.56 acre tract of land situated in the James Graham Survey, Abstract
No. 163 and being partly located in Marion and partly in Cass Counties, Texas,
same being previously described In the District Clerk's office, Marion County,
Texas in the case of C. B. Morris vs. No. 13,584, Marion-Cass Development
Company, said tract of land being located approximately 17 miles east of the
town of Jefferson, Texas, County Seat of Marion County, Texas, said tract of
land being also more particularly described as follows:
Beginning at a 4" iron pipe for the southwest corner of this tract of land,
said iron pipe being 990.94' North 0 DEG. 04' East from the southeast corner
of the I & GN RR Co. Survey, Abstract No. 433, said iron pipe being in the I
& GN RR Co. James Graham survey line, said iron pipe being also the northwest
corner of the A. G. Holloman Estate 50 acre tract of land;
Thence South 39 DEG. 56' East along the Holloman-270.56 acre tract of land
boundary line, at 952.50' a 4" iron pipe, the southwest corner of the M.
Paire 29.27 acre tract of land, at 1549.21' pass the southeast corner of the
said Holloman tract of land, name being the northwest corner of & Bose Paire
150 acre tract of land, at 2480.20' the most southern southeast corner of the
M. Paire 29.27 acre tract of land, in all a total distance of 2500.20' to a
4" iron pipe for the most southern southeast corner of this tract of land,
said iron pipe being also the southwest corner of the J. Stanton 50 acre
tract of land;
Thence North 0 DEG. 04' East along the 270.56 acre tract-Stanton boundary
line in all a total distance of 500.22' to a 4" iron pipe for an "L" corner
of this tract of land;
Thence South 89 DEG. 56' East in all a total distance of 152.79' to a 4"
iron pipe for tho most northern southeast corner of this tract of land;
Thence North 0 DEG. 04' East, at 478.17' pass a 1" iron pin for the
northwest corner of the said Stanton 50 acre tract of land, same being the
southwest corner of the P. Hicks, et al 124.50 acre tract of land, and in all
a total distance of 2023.24' to a 4" iron pine for the most southern
northeast corner of this tract of land, said iron pipe being in the west
boundary line of the said Hicks tract of land, said iron pipe being also a
southeast corner of the J. Spearman tract of land;
Thence North 89 DEG. 56' West along the 270.56 acre tract of land-Spearman
boundary line, in all a total distance of 1239.14' to a 4" iron pipe for an
"L" corner of this tract of land, same being also an 13" sweet gum marked X
for an original corner of this tract of land;
Thence North 0 DEG. 27' West along the 270.56 acre tract of land-Spearman
boundary line, in all a total distance of 2228.06' to a 4" iron pine for a
south northeast corner of this tract of land;
Thence North 89 DEG. 56' West along the said 270.56 acre tract-Spearman
boundary line in all a total distance of 436.36' to a 4" iron pipe for an "L"
corner of this tract of land, same being also a 16" hickory tree marked X for
an original corner of this tract of land;
<PAGE>
Exhibit A
Property Number F-029 (cont.)
Thence North 0 DEG. 04' East, in all a total distance of 2379.26' to a 4"
iron pipe in the north survey line of the said J. Graham Survey, said iron
pipe being also the northwest corner of the W. M. Todd 62.5 acre tract of
land, said iron pipe being also in the south survey line of the J. H. Kernels
Survey, Abstract No. 616, Cass County, Texas;
Thence North 89 DEG. 56' West along the Graham-Kernels survey line 907.50'
to a 4" iron pipe for the northwest corner of this tract of land, said iron
pipe being the northwest corner of the said Graham Survey, said iron pipe
being also the most southern northeast corner of the L. C. Luckel Survey;
Thence South 0 DEG. 04' West along the Luckel-Graham survey line, at
778.30' a concrete monument for the southeast corner of the said Luckel
Survey, same being also the most southern northeast corner of the said I & GN
RR Co. Survey, and continuing along the Graham-I & GN RR Co. survey line, in
all a total distance of 7124.57' to the place of beginning, and containing
270.56 acres of land, more or less;
SAVE AND EXCEPT a 29.27 acre tract of land being previously described in deed
from Marion-Cass Development Company to McKinley Paire and Joe McCasland for
reason of occupancy and being duly recorded in Vol. 94, page 604 in the deed
records of Marian County, Texas, and being more particularly described as
follows:
Beginning at a 4" iron pipe for the most southern southeast corner of this
tract of land, said iron pipe being North 89 DEG. 56' Last 20.00' from the
most southern southeast corner of the above described 270.56 acre tract of
land, said iron pipe being also in the north boundary line of the Bose Paire,
et al 150 acre tract of land;
Thence North 0 DEG. 04' East 520.00' to a 4" iron pipe for an "L" corner of
this tract of land;
Thence South 89 DEG. 56' East 152.79' to a 4" iron pipe for the most
northern southeast corner of this tract of land;
Thence North 0 DEG. 04' East 286.10' to a 4" iron pipe for the northeast
corner of this tract of land, said iron pipe being North 39 56' West 20.00'
from the most eastern boundary line of the said described 270.56 acre tract
of land;
Thence North 39 DEG. 56' West 1680.50' to a 4" iron pipe for the northwest
corner of this tract of land;
Thence South 0 DEG. 04' West 806.101 to a "4" iron pipe for the southwest
corner of this tract of land, said iron pipe being In the south boundary line
of the said described 270.56 acre tract of land, said iron pipe being also in
the north boundary line of the said Holloman 50 acre tract of land;
<PAGE>
Exhibit A
Property Number 029 (cont.)
Thence South 89 DEG. 56' East along the south boundary line of the said
described 270.56 acre tract of land, in all a total distance of 1527.70' to
the place of beginning, and containing 29.27 acres of land, more or less.
There is also reserved all of the oil, gas, and any and all other minerals in
and upon and under the East 9 acres of this said described exception.
AND SAVE AND EXCEPT:
All that certain 39.863 acre tract of land in the James Graham Survey, A-1334
in Cass County, Texas, being part of the called 270.56 acre tract of land
known as the Lone Star Steel Company Tract No. F-29, said 39.863 Acre tract
of land being more particularly described as follows:
Beginning at a 4" Iron Pipe found in the South line of the J. II. Kernels
Survey, A-616 for the most Easterly Northeast corner of the L. C. Luckel
survey, A-1315 described in the Sheriff's Deed to H. C. Knowles dated
February 5, 1943, and recorded in volume V-8, Page 497 of the Deed Records of
Cass County, Texas, the Northwest corner of the said Graham Survey, the
Northwest corner of the said called-270.56 acre tract and of this tract;
Thence; North 88 DEG. 45' 53" East with the South line of the said Kernels
survey and the North line of the said Graham Survey, 907.27 feet to a 4" Iron
Pipe found for the most Northerly Northeast corner of the said called 270.56
acre tract, the Northeast corner of this tract and the Northwest corner off
the called 62-1/2 acre Lot #9 described in a Warranty Deed to W. M. Todd
dated January 10, 1925 and recorded in Volume X-1, Page 121 off the Deed
Records off Marion, County, Texas;
Thence; South 01 DEG. 17' 20" East with the West line of the said Lot #9 and
generally along fence, 1915.25 feet to a 3/4" Iron Rod set in the approximate
boundary line between Cass County and Marion County, Texas for the southeast
corner of this tract;
Thence: West, with the said approximate boundary line, 915.53 feet to a 3/4"
Iron Rod set in the East line of the I. & G. N. R. R. Survey, A-1279 in
Cass County, Texas and the West line of the said Graham Survey for the
Southwest corner of this tract;
Thence: North 0 DEG. 02' 47" West with said West line, at 1117.86 feet pass
a 6" x 6" Concrete Monument found for the Northeast corner of the said I. &
G. N. R. R. Survey and the Southeast corner of the said Luckel Survey and
continuing for a total distance off 1895.57 feet to the Point of Beginning,
containing 39.863 acres of land, more or less.
<PAGE>
Exhibit A
Property Number F-029 (cont.)
AND SAVE AND EXCEPT:
The 5.67 acres of the above described property conveyed for a highway
right-of-way as evidenced by a Right-of-Way Deed dated September 7, 1951,
executed by Lone Star Steel Company to the State of Texas.
<PAGE>
Exhibit A
Property Number F-008
Being a 32.&5 acre tract of land located in the Reese Hughes Survey, A-437,
and being situated in Cass County, Texas on the waters of Black Cypress,
about 13 miles N 86 DEG. 00' W from the town of Linden, said 32.45 acres
being previously described in Deed from H. A. Perlstain, et al, to
Marion-Cass Development Company, dated April 9, 1932 and being duly recorded
in Volume G-6, page 340, Deed Records of Cass County, Texas and being more
particularly described as follows:
Beginning at a 4" iron pipe for the most eastern southeast corner of the said
Hughes Survey, said iron pipe being in the west boundary line of the W. G.
Kirk Survey, A-625, said iron pipe being also the north northeast corner of
the M. D. Fulgham Survey, A-378;
Thence N 1 DEG. 10' E along the Kirk-Hughes survey line, same being an old
fence line, in all a total distance of 730.70' to a 4" iron pipe for the
northeast corner of this tract of land; said iron pipe being also the
southeast corner of the J. Jackson Survey, A-589;
Thence West along the Jackson-Hughes survey line, in all a total distance
of 1941.80' to a 4" iron pipe for the northwest corner of this tract of land,
said iron pipe being an ell corner of the said Hughes Survey, said iron pipe
being the southwest corner of the said Jackson Survey, said iron pipe being
also the northeast corner of the Lone Star Steel Company 207.85 acre tract of
land;
Thence South along the Lone Star Steel Company 207.85-32.45 acre boundary
line, in all a total distance of 730.55' to a 4" iron pipe for the southwest
corner of this tract of land, said iron pipe being an ell corner of the said
Hughes Survey, said iron pipe being also the northwest corner of the said
Fulgham Survey;
Thence East along the Fulgham-Hughes boundary line, in all a total distance
of 1926.92' to the place of beginning, containing 32.45 acres of land, more
or less.
<PAGE>
Exhibit A
Property Number TN-157
All that certain tract or parcel of land being situated in Morris County,
Texas, and being 205 acres and 5335 square varas of land, more or less, of
the R. P. Holcomb Survey and being all of the following 207-5335/5645 acre
tract except two acres conveyed for school purposes:
BEGINNING at a stake at the Northwest corner of the John Logsden Survey an
'L' corner of said R. P. Holcomb Survey, a hickory bears N 67 W 17-1/2 vrs.,
a post oak bears N 9 varas;
THENCE South at 1100 vrs. the old Jefferson road, and at 1300 varas in all
the Southwest corner of the John Logsden Survey. a hickory bears N 36 W
17-1/2 vrs. a red oak brs. S 10 E 4 vrs.;
THENCE East with the South Boundary Line of said John Logsden Survey 160
varas to the Northwest corner of a tract of 20 acres 110 square varas, owned
by I. B. McCain, and lying in said R. P. Holcomb Survey;
THENCE South 200 varas to the Southwest corner of said I. B. McCain tract
on the South Boundary Line of said R. P. Holcomb Survey:
THENCE West with the South Boundary Line of said R. P. Holcomb Survey 460
varas to the most southern Southwest corner of said survey on the East
Boundary Line of the D. B. Sorrell Survey, a post oak bears N 22 E 15 varas;
THENCE North with the East Boundary Line of said D.B. Sorrell's Survey 275
varas to its Northeast corner an 'L' corner of said R. P. Holcomb Survey, a
pine bears N 77 W 4 varas, a post oak bears N 9 E 3.4 varas;
THENCE West 570 varas with the North Boundary Line of the said D. B.
Sorrell Survey to the Southeast corner of the J. A. Welch Survey, a pine
bears N 89 DEG. E. 3.8 vrs., another bears S 51 W 5 vrs.;
THENCE North with the East Boundary Line of said J. A. Welch Survey at 725
varas the Southeast corner of the S. C. White Survey, at 750 varas the old
Jefferson road at 1225 varas in all, the Southwest corner of a 56-4/5 acre
tract being conveyed to C. W. Jenkins by D. J. Jenkins;
THENCE East with the South Boundary Line of said C. W. Jenkins' 56-4/5 acre
tract, 870 vars to the place of beginning, containing in all 207 acres and
5335 square varas of land but there is excepted herefrom a tract of two (2)
acres conveyed for school purposes, leaving 205 acres and 5335 square varas
of land, more or less.
LESS AND EXCEPT 10 acres of land sold by Anna Sue Nasits and husband, Ben J.
Nasits to Lone Star Steel Company by deed dated May 16, 1955, recorded in
volume 78, page 358, Morris County Deed Records.
ALSO EXCEPT tract of land sold by Ben J. Nasits and wife, Sue Nasits to The
City of Lone Star, Texas, by deed dated June 5, 1955, recorded in Volume 78,
page 290, Morris County Deed Records.
There is excepted from this conveyance one-fourth (1/4) of the oil and gas
minerals produced and saved from the hereinabove described land heretofore
reserved.
<PAGE>
Exhibit A
Property Number F-184
Being a 77.95 acre tract of land located in the G. H. Allen Survey, A-396, and
being situated approximately S 17 DEG. 30' E, 10 miles from the town of
Daingerfield, Morris County, Texas, said tract of land being the north 77.95
acres of the said Allen Survey, said 77.95 acre tract of land being also
previously described in Iron Ore Lease from Jennie McCullough, et al, to W. O.
Irvin, Trustee, dated August 10, 1941, and being duly recorded in Volume 43,
pages 193 & 194 of the Deed Records of Morris County, Texas, and being more
particularly described as follows:
Beginning at a 6" x 6" concrete monument with copper disk marked "SS-TL-CHA" set
in the south line of the Stephen Stone Survey, A-264, for the northeast corner
of this tract of land, said monument being the north northeast corner of the
said Allen Survey, said monument being the northwest corner of the Thomas Lee
Survey, A-331, said concrete monument being also N 89 DEG. 48' W, 58.8' from a
concrete monument marked "SS-WCE-TL", the southeast corner of the said Stone
Survey;
Thence S 0 DEG. 03' E along the Lee-Allen survey line, in all a total distance
of 1847.40' to a 4" iron pipe for the southeast corner of this tract of land;
Thence N 89 DEG. 48' W, in all a total distance of 1844.03' to a 4" iron pipe
set in the west line of the said Allen Survey, for the southwest corner of this
tract of land, said iron pipe being also in the east line of the A. Sayle
Survey, A-266;
Thence N 0 DEG. 19' E along the Sayle-Allen survey line, in all a total distance
of 1847.40' to a 6" x 6" concrete monument with copper disk marked "SS-AS-GEA"
set in the south line of the said Stone Survey for the northwest corner of this
tract of land, said monument being the northwest corner of the said Allen
Survey, said monument being also the northeast corner of the said Sayle Survey;
Thence S 89 DEG. 48' E in all a total distance of 1832.20' to the place of
beginning, containing 77.95 acres of land, more or less.
<PAGE>
Exhibit A
Property Number TN-224
All that certain tract of land being a 107.81 Acre tract of land located in
the William King Survey, A-611, Cass County, Texas, and being situated
approximately S. 64 deg. W. - 16.0 miles from the City of Linden, Cass
County, Texas. Said 107.81 Acre tract of land being the same tract of land
as described in an iron ore lease from Mrs. Willie Higgs, a widow, to W.O.
Irvin, Trustee, dated December 8, 1941, and being duly recorded in Volume
T-8, Page 6, of the Deed Records of Cass County, Texas. Said 107.81 Acre
tract of land being more particularly described as follows:
BEGINNING at a 1" iron pin set in the South line of the William King Survey
and the North line of the W.C. Everett Survey, A-407, far the Southwest
corner of this tract of land. Said iron pin being S. 89 deg. 55' W. 275.09
feet from a concrete monument marked "W.K., - W.C.E., J.W.K.", and set at the
Northeast corner of the W.C. Everett-Survey and the Northwest corner of the
J.W Kirkpatrick Survey, A-627.
THENCE: North, in all a total distance of 1947.38 feet to a 1" iron pin set
for the Northwest corner of this tract of land.
THENCE: S. 89 deg. 08' E. in all a total distance of 2433.19 feet to a 4"
iron pipe set for the Northeast corner of this tract of land. Said iron pipe
also being the Southwest corner of a 148.22 Acre tract of land owned by Lone
Star Steel Company.
THENCE: S. 0 deg. 13' E., in all a total distance of 1907.05 feet to a 1"
iron pin set in the South line of the William King Survey, A-611, and the
North line of the J.W. Kirkpatrick Survey, A-627. Said iron pin being the
Southeast corner of this tract of land.
THENCE: S 89 deg. 55' W., along and with the South line of the said William
King Survey, in all a total distance of 2440.12 feet to the place of
beginning, containing 107.81 acres of land, more or less;
EXCEPTING: All of the oil, gas, sulphur and other liquid hydrocarbons
heretofore reserved or conveyed.
<PAGE>
EXHIBIT B
Permitted Encumbrances
1. Ad valorem real estate taxes not yet due and payable.
2. All exceptions to title deemed Permitted Encumbrances pursuant to paragraph
6(b) hereof.
3. The transactions under the Timber Deeds more particularly described on
EXHIBIT D attached hereto and all ownership and other rights and interests
affecting the Property created or provided under the documents described on
EXHIBIT D, and all prior reservations and transfers of oil, gas and other
minerals and all ownership and other rights and interests created in
connection or that may arise as a result of prior reservations or transfers
with respect to oil, gas or other minerals on the Property including,
without limitation, rights of access to the Property and rights to come
upon the Property and conduct activities to explore for, drill, mine or
otherwise remove any oil or gas or other minerals from the Property.
4. The standard pre-printed Exclusions From Coverage in the standard Texas
title insurance policies and a general survey exception in a form
reasonably satisfactory to Purchaser, provided the following form is deemed
acceptable to Purchaser: "Any matter not of record which both (a) would be
disclosed by a current, accurate survey and inspection of the subject
property and (b) evidences rights or claims of third parties to the subject
property."
5. Leases set forth in EXHIBIT C attached hereto.
<PAGE>
EXHIBIT C
SUMMARY OF LEASES
USE LEASES
<TABLE>
<CAPTION>
LESSEE PROPERTY NO. LEASED ACRES
- ------ ------------ ------------
<S> <C> <C>
Andrews, Danny F-184 77.95
Andrews, Danny F-188 167.80
Beasley, Hugh F-166 4.00
Brabham, Charles L. F-064 20.00
Bryant, Emmit F-184 118.00
Burleson, Neva M. F-073 13.36
Cope, W. F-190 1.37
Cope, W. F-202 7.00
Daniel, Roger F-220 59.00
Daniel, Roger TN 157 182.00
Domino, Jerry F-011 176.61
Domino, Jerry F-012 146.99
Domino, Jerry F-021 203.30
Floyd, J. M. F-190 50.50
French, James A. F-173 15.00
French, James A. F-178 15.00
Hackney, E. F., Jr. F-187 92.00
Hicks, C. R. F-029 60.00
Hicks, C. R. F-030 365.00
Hughes Springs Little League F-066 12.07
Hull, Charles N. F-202 32.00
Irvin, Hobert TN 147 250.00
Kennedy, Emit F-149 3.00
Larsen, Miguel F-145 100.04
Larsen, Miguel F-185 46.24
Larsen, Miguel F-186 30.19
Latham, J. A. F-163 205.00
Lone Star Gun Club F-110 141.19
Lone Star Gun Club F-111 75.67
Lone Star Gun Club F-112 85.00
Lone Star Gun Club F-144 74.75
Malone, Vince F. F-138 33.35
Malone, Vince F. F-182 289.88
McCord, Margie F-069 3.00
McCord, Margie F-073 14.86
McFarland, Kevin F-023 575.00
Monaghan, Patrick F-166 80.00
Monighan, Patrick F-215 53.02
Morris County Peace Officers F-174 100.00
</TABLE>
Page 1 of 2
<PAGE>
EXHIBIT C
SUMMARY OF LEASES
USE LEASES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
LESSEE PROPERTY NO. LEASED ACRES
- ------ ----------- - ------------
<S> <C> <C>
Olive, C. K. F-135 148.22
Olive, C. K. F-147 130.00
QWEST Management, Inc. F-157 .61
Rodgers, Brian F-029 135.00
Rodgers, Brian F-030 230.00
Rountree, Curtis F-196 89.07
Scott, Beulah M. F-186 1.00
Shepperd, Lewis M. F-033 556.00
Shepperd, Lewis M. F-166 10.00
Shepperd, Lewis M. F-175 203.93
Shepperd, Lewis M. F-198 101.85
Shepperd, Lewis M. F-204 69.81
Shepperd, Lewis M. F-208 80.00
Shepperd, Lewis M. F-214 15.00
Star Cable Association F-158 .63
Stewart, Eddie F-130 100.54
Stewart, Eddie F-176 100.00
Terry, Harold F-008 32.45
Terry, Harold F-009 207.85
Trent, Inc. F-158 .06
Walker, Billy G. F-066 7.82
Walker, Billy G. F-067 9.00
Walker, Billy G. F-066 24.18
Wellborn, Keith F-?? 24.60
Wellborn, Keith F-16?? 57.58
Wellborn, Keith F-191 75.21
Wellborn, Keith F-192 41.37
Wellborn, Keith F-207 88.89
Wicker, C. N. F-023 600.00
Williams, C.L. F-121 42.00
Williams, C.L. F-150 25.41
Woccard, Gary TN-147 282.00
OIL, GAS LEASE
- ----------------------------------------------------------
Mitchell Energy Company Various 1,233.05
SURFACE LEASES
- -----------------------------------------------------------
Chism, Colia F-023 4.01
Chism, Colia F-023 45.42
Paire, Bose, Jr. F-023 7.39
McDaniel, H. E. F-023 8.26
</TABLE>
Page 2 of 2
<PAGE>
EXHIBIT D
Ongoing Transactions
1. Timber Deed of March 31, 1994 by Lone Star Steel Company to Weyerhaeuser
Company covering Property in Morris and Cass Counties, Texas. (copy
attached)
2. Timber Deed of April 12, 1994 by Texas and Northern Railway Company and
Ward Timber Company, Inc. covering property in Cass County, Texas. (copy
attached)
-24-
<PAGE>
EXHIBIT D
TIMBER DEED
THE STATE OF TEXAS, { KNOW ALL MEN BY THESE PRESENTS:
{
COUNTY OF CASS AND MORRIS. {
That LONE STAR STEEL COMPANY whose address is
highway 259 South, Lone Star, Texas
--------------------------------------------------------------------------
75668
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
herein called GRANTOR(S), of the State and County aforesaid, for and in
consideration of the sum of Ten and No/100----($10.00) Dollars, and other good
and valuable considerations, to me/us in hand paid by WEYERHAEUSER COMPANY
herein called GRANTEE, of Howard County, Arkansas as follows:
Cash in hand paid, the receipt of which is hereby acknowledged;
do by these presents Grant, Bargain. Sell and Convey unto the said Grantee, the
following described timber:
All PINE TREES marked with a slash of blue paint at approximately eye level
and a spot of blue paint at the stump at ground level:
said timber being standing, growing or felled, on the following described lands:
Being all that certain 287 acres of land, more or less, located in the J.
R. Boon Survey, Abstract No. 6, Cass County, Texas, and Abstract No. 6 in
Morris County, Texas, and shown on the attached plat, Exhibit "A" to which
reference is here made for all purposes;
TO HAVE AND TO HOLD the same unto the said Grantee, and his, its or their
heirs, successors or assigns, hereby Warranting and Defending the title to said
timber against all persons, together with the right to enter on said lands and
the exclusive right to cut, fell and remove said timber, and with the right of
ingress and egress from, to and over said lands for such purposes and the right
to construct roads or bridges for such purposes. Said timber shall be removed
from said lands on or before MARCH 31, 1996, and after said date, all rights and
titles to any timber remaining on said lands shall revert to and vest in
Grantor.
Grantor will be given reasonable notification prior to initiation of
harvesting by Grantee. Grantee and his agents will meet with landowner or his
agent for the purpose of discussing provisions of sale at a preharvest meeting
scheduled at the time of notification. Landowner or his agent shall make
determination as to the need for a ceasing of harvesting operations due to
extremely high fire danger or due to extremely wet weather, in either case, to
act in the best interest to protect Grantor's property and the timber not
designated for sale by this agreement. Grantor agrees to provide Grantee with
additional time for completion of timber harvesting if delays are caused due to
extremely high fire danger or extremely wet weather which may occur during the
actual harvesting operations.
Grantee shall conduct all cutting and removal operations so as to minimize
to the fullest extent possible damage to any and all trees and timber not
covered hereunder. For excessively damaging timber not covered herein, Grantee
will pay Grantor at a rate to be determined and as stated below in a schedule of
liquidated damages.
<PAGE>
Except as otherwise provided herein, Grantee shall cut all trees as
close to the ground as practicable, but in no event shall the height of any
pine stumps exceed twelve (12) inches above the surface of the ground, or any
hardwood stumps exceed N/A inches above the surface of the ground.
Roads, bridges, culverts, drainage ditches, fences, firelanes, pastures,
or crops, or any other improvements or structures damaged by Grantee shall be
repaired by him. Any damage as stated above shall be repaired immediately
upon notice by Grantor or his agent. All roads, skid trails and landing
areas will be leveled and smoothed of any and all ruts and cleared of debris.
All pastures, roads, fields, firebreaks, property lines and running streams
or improvements and drainage ditches shall be cleared of all logs, timber,
limbs and other debris associated with logging. All trash or litter
associated with harvesting shall be removed from the property immediately
upon notification by Grantor or his agent, and no trash or litter will be
allowed on the property during harvesting. In the event said repairs or
corrections are not made or if any such debris is not removed promptly after
notice from Grantor or his agent, Grantee shall be liable to the Grantor for
any expenses incurred by Grantor in making such repairs or in removing such
debris. Water-turnouts, wing ditches and water-bars should be installed
along all sloped roadways. Culverts will be placed at all creek crossings.
Grantor, his heirs. representatives and assigns, shall in no way be
liable or responsible for any injuries or dan;ages occasioned to the persons or
property of any persons whatsoever by the operations of Grantee pursuant
hereto, and Grantee hereby binds and obligates itself, its representatives,
heirs and assigns to pay and satisfy any and all claims, of any nature
whatsoever, arising by means of the Grantee's operations hereunder, and
Grantee hereby covenants that it will hold harmless and indemnify Grantor,
his representatives, heirs and assigns from any and all liability and
obligations, of every kind and character, having to do with and arising out
of Grantee's operations under the terms of this Agreement.
GRANTOR MAKES NO WARRANTY, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR USE FOR ANY PARTICULAR PURPOSE, WITH RESPECT TO THE VALUE,
QUALITY OR QUANTITY OF ANY TIMBER COVERED BY THIS DEED. NOR DOES GRANTOR MAKE
ANY REPRESENTATIONS OR COVENANTS WITH RESPECT TO THE VALUE, QUALITY OR QUANTITY
OF AMY TIMBER COVERED BY THIS DEED, NOR WITH RESPECT TO THE LOGGING
CONDITIONS EXISTING UPON THE REAL PROPERTY DESCRIBED HEREIN AND IN CONNECTION
WITH THE CUTTING AND REMOVAL OF TIMBER UNDER THE TERMS OF THIS AGREEMENT.
For cutting or excessively damaging of any trees by Grantee which are not
designated for cutting or removal, and which have not been purchased and are
not conveyed to Grantee hereby shall entitle Grantor to recover from Grantee
liquidated damages as follows:
For cutting or excessively damaging of any pine trees measuring up to
twelve (12) inches at the stump, measured outside the bark four (4)
inches above the ground level, Grantee shall pay Grantor at a rate
of $60.00 per standard cord. For cutting or excessively damaging of
any pine trees measuring twelve (12) inches and larger in diameter.
measured outside the bark at a point four (4) inches above the
ground level, Grantee will pay Grantor at a rate of $500.00 per
thousand board feet, Doyle Scale.
For cutting or excessively damaging of any hardwood trees which are not
covered herein, Grantee will pay Grantor at a rate of $50.00 per
standard cord, for trees measuring up to twelve (12) inches in
diameter, outside the bark at a point four (4) inches above ground
level. and $400.00 per thousand board feet for trees measuring twelve
(12) inches and larger, in diameter, measured outside the bark at a
point four (4) inches above the ground level.
In the event Grantee shall fail or refuse to make such payment or payments,
then and in addition to any other remedies to which Grantor nay be entitled
to either at law or in equity. Grantor shall have the right to recover such
liquidated damage payments by suit, together with all costs, expenses and
reasonable attorney's fees incurred by Grantor for the purpose of collecting
said liquidated damage payments.
<PAGE>
Grantor also transfers and assigns to Grantee all necessary rights of
ingress and egress over and across the above described property and any other
property owned by Grantor and contiguous thereto for the purposes of cutting and
removing the trees and timber herein sold and conveyed. In the event the
Grantee is unable to obtain the necessary right-of-way or easements. Grantor
agrees to acquire the necessary right-of-way at its expense from adjacent
landowners which will enable the Grantee to remove the timber and timber
products to a public road from the hereinabove described lands. If Grantor is
unable to acquire necessary right-of-way, Grantee shall be reimbursed in full or
for the prorated portion of the purchase price which relates to the affected
acreage.
Grantor represents that there are no threatened or endangered species of fish,
wildlife or plants or habitant therefore on any of the land subject to the best
of Grantor's knowledge. If any restrictions by law or governmental regulation
or if any action or threatened action from a state, federal or local government
agency prevents Grantee from cutting or removing the timber purchased hereunder,
Grantor hereby agrees to reimburse Grantee for the volume that is standing on
the tract as a result of such regulation. action or threatened action. Said
volume to be determined by a joint cruise conducted by Grantor and Grantee.
It is agreed between Grantor and Grantee that this agreement shall not be
assigned, sold or transferred by Grantee, in whole or in part, without the prior
written consent of Grantor, and that Grantee shall remain primarily liable to
Grantor for the terms and conditions herein in the event of any transfer or
assignment.
WITNESS OUR HANDS on this the 31st day of MARCH, 1994.
LONE STAR STEEL COMPANY Weyerhaeuser Company
- ------------------------------ -----------------------------
BY: /s/William J. Magnuson BY: /s/ James R. Moore
- ------------------------------ -----------------------------
William J. Magnuson James R. Moore
Vice President
- ------------------------------ -----------------------------
-Grantor- -Grantee-
THE STATE OF TEXAS,
COUNTY OF MORRIS
This instrument was acknowledged before me on this the 31st day of MARCH,
1994 by the said William J. Magnuson of LONE STAR STEEL COMPANY and on behalf
of said company
[STAMP] /s/ Juanita Sturdivant
-----------------------------------
Notary Public State of Texas
THE STATE OF TEXAS,
COUNTY OF CASS.
This instrument was acknowledged before me on this the 31st, day of MARCH, 1994,
by the said James R. Moore or WEYERHAEUSER COMPANY, and on behalf of said
company.
[STAMP] /s/ Gary L. Price
-------------------------------------
Notary Public, State of Texas
<PAGE>
[MAP]
Lone Star Steel Company tract No.1: Being 287 acres of land, more or less,
located in J. R. Boon Survey, abstract No. 6, Cass County, Texas and
abstract No. 6 in Morris County, Texas!
EXHIBIT "A"
MAP
<PAGE>
EXHIBIT D
TIMBER DEED
------------
THE STATE OF TEXAS,
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF CASS AND MORRIS.
That William J. Magnuson, President of T & N RAILROAD COMPANY whose address
Highway 259 South, Lone Star, Texas 75668 herein called GRANTOR(S), of the State
and County aforesaid, for and in consideration of the sum of Ten and
No/100----($10.00)----Dollars, and other good and valuable considerations, to
me/us in hand paid by WARD TIMBER COMPANY, INC, herein called GRANTEE, of Cass
County, Texas, as follows:
Cash in hand paid, the receipt of which is hereby acknowledged;
do by these presents Grant, Bargain, Sell and Convey unto the said Grantee, the
following described timber:
All pine trees marked with a slash of blue paint at approximately eye level
and a spot of blue paint at the stump at ground level, and all merchantable
hardwood timber measuring up to sixteen (16) inches in diameter outside the
bark at a point six (6) inches above the ground level;
said timber being standing, growing or felled, on the following described lands:
TRACT NO. 1: 595 acres, King Survey, Cass County, Texas;
TRACT NO. 2: 183 acres, Holcomb Survey, Morris County, Texas;
TRACT NO. 3-A: 123 acres, Rogers and Boon Surveys, Morris County, Texas;
All three tracts referenced on the attached plats, Exhibits "A", "B", and "C",
to which reference is here made for all purposes;
TO HAVE AND TO HOLD the same unto the said Grantee, and his, its or their
heirs, successors or assigns, hereby Warranting and Defending the title to said
timber against all persons, together with the right to enter on said lands and
the exclusive right to cut, fell and remove said timber, and with the right of
ingress and egress from, to and over said lands for such purposes and the right
to construct roads or bridges for such purposes. Said timber shall be removed
from said lands on or before April 15, 1996, and after said date, all rights and
titles to any timber remaining on said bands shall revert to and vest in
Grantor.
Grantor will be given reasonable notification prior to initiation of
harvesting by Grantee. Grantee and his agents will meet with landowner or his
agent for the purpose of discussing provisions of sale at a preharvest meeting
scheduled at the time of notification. Landowner or his agent shall make
determination as to the need for a ceasing of harvesting operations due to
extremely high fire danger or due to extremely wet weather, in either case, to
act in the best interest to protect Grantor's property and the timber not
designated for sale by this agreement. Grantor agrees to provide Grantee with
additional time for completion of timber harvesting if delays are caused due to
extremely high fire danger or extremely wet weather which may occur during the
actual harvesting operations.
Grantee shall conduct all cutting and removal operations so as to minimize
to the fullest extent possible damage to any and all trees and timber not
covered hereunder. For excessively damaging timber not covered herein, Grantee
will pay Grantor at a rate to be determined and as stated below in a schedule of
liquidated damages.
<PAGE>
Except as otherwise provided herein, Grantee shall cut all trees as close
to the ground as practicable, but in no event shall the height of any pine
stumps exceed twelve (12) inches above the surface of the ground, or any
hardwood stumps exceed twelve (12) inches above the surface of the ground.
Roads, bridges, culverts, drainage ditches, fences, firelanes, pastures,
or crops, or any other improvements or structures damaged by Grantee shall be
repaired by him. Any damage as stated above shall be repaired immediately upon
notice by Grantor or his agent. All roads, skid trails and landing areas will
be leveled and smoothed of any and all ruts and cleared of debris. All
pastures, roads, fields, firebreaks, property lines and running streams or
impondments and drainage ditches shall be cleared of all logs, timber, limbs
and other debris associated with logging. All trash or litter associated with
harvesting shall be removed from the property immediately upon notification by
Grantor or his agent, and no trash or litter will be allowed on the property
during harvesting. In the event said repairs or corrections are not made or if
any such debris is not removed promptly after notice from Grantor or his agent,
Grantee shall be liable to the Grantor for any expenses incurred by Grantor in
making such repairs or in removing such debris. Water-turnouts, wing ditches
and water-bars should be installed along all sloped roadways. Culverts will be
placed at all creek crossings.
Grantor, his heirs, representatives and assigns, shall in no way be liable
or responsible for any injuries or damages occasioned to the persons or property
of any persons whatsoever by the operations of Grantee pursuant hereto, and
Grantee hereby binds and obligates itself, its representatives, heirs and
assigns to pay and satisfy any and all claims, of any nature whatsoever, arising
by means of the Grantee's operations hereunder, and Grantee hereby covenants
that it will hold harmless and indemnify Grantor, his representatives, heirs and
assigns from any and all liability and obligations, of every kind and character,
having to do with and arising out of Grantee's operations under the terms of
this Agreement.
GRANTOR MAKES NO WARRANTY, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR USE FOR ANY PARTICULAR PURPOSE, WITH RESPECT TO THE VALUE,
QUALITY OR QUANTITY OF ANY TIMBER COVERED BY THIS DEED. NOR DOES GRANTOR MAKE
ANY REPRESENTATIONS OR COVENANTS WITH RESPECT TO THE VALUE, QUALITY OR QUANTITY
OF ANY TIMBER COVERED BY THIS DEED, NOR WITH RESPECT TO THE LOGGING CONDITIONS
EXISTING UPON THE REAL PROPERTY DESCRIBED HEREIN AND IN CONNECTION WITH THE
CUTTING AND REMOVAL OF TIMBER UNDER THE TERMS of THIS AGREEMENT.
For cutting or excessively damaging of any trees by Grantee which are not
designated for cutting or removal, and which have not been purchased and are not
conveyed to Grantee hereby shall entitle Grantor to recover from Grantee
liquidated damages as follows:
For cutting or excessively damaging of any pine trees measuring up to
twelve (12) inches at the stump, measured outside the bark four (A) inches
above the ground level. Grantee shall pay Grantor at a rate of 560.00 per
standard cord. For cutting or excessively damaging of any pine trees,
measuring twelve (12) inches and larger in diameter, measured outside the
bark at a point four (4) inches above the ground level, Grantee will pay
Grantor at a rate of $500.00 per thousand board feet, Doyle Scale.
For cutting or excessively damaging of any hardwood trees which are not
covered herein, Grantee will pay Grantor at a rate of $400.00 per thousand
board feet for trees measuring sixteen (16) inches and larger, in diameter,
measured outside the bark at a point six (6) inches above the ground level.
In the event Grantee shall fail or refuse to make such payment or payments, then
and in addition to any other remedies to which Grantor may be entitled to either
at law or in equity, Grantor shall have the right to recover such liquidated
damage payments by suit, together with all costs, expenses and reasonable
attorney's fees incurred by Grantor for the purpose of collecting said
liquidated damage payments.
<PAGE>
It is agreed between Grantor and Grantee that this agreement shall not be
assigned, sold or transferred by Grantee, in whole or in part, without the prior
written consent of Grantor, and that Grantee shall remain primarily liable to
Grantor for the terms and conditions herein in the event of any transfer or
assignment.
Grantor and Grantee hereby agree that timber harvesting will be conducted
so as to comply with the Technical Guidelines for Implementing best Management
Practices as compiled by the Texas Forestry Association in connection with the
1972 Federal Water Pollution Control Act and the Clean Water Act of 1987.
WITNESS OUR HANDS on this the 12th day of April, 1994.
T & N RAILROAD COMPANY WARD TIMBER COMPANY, INC.
---------------------- -------------------------
By:/s/ William J. Magnuson By: /s/ Mark Wilson
----------------------- ---------------
William J. Magnuson, President Mark Wilson
------------------------------ --------------------------
-Grantor- -Grantee-
THE STATE OF TEXAS,
COUNTY OF
This instrument was acknowledged before me on this the ---- day of April
1994 by the said William J. Magnuson, President of T & N RAILROAD COMPANY and
on behalf of said Company.
/s/ Sue Pool
[STAMP] -----------------------------
Notary Public, State of Texas
THE STATE OF TEXAS,
COUNTY OF
This Instrument was acknowledged before me on this the 13th day of
April 1994. by the said Mark Wilson of WARD TIMBER COMPANY, INC., and on behalf
of said Corporation.
/s/ Sue Pool
[STAMP] -----------------------------
Notary Public, State of Texas
THE STATE OF
COUNTY OF
This instrument was acknowledged before me on this the 13 day of April,
1994, by the said -------------------------------------------------
-----------------------------
Notary Public, State of
<PAGE>
T & N Railroad Co.
EXHIBIT "A" Tract No. 1
595 Acres King Survey, Cass County, Texas. (N)
[MAP]
Scale: 1" = 1,320'
<PAGE>
EXHIBIT "B"
T & N Railroad Co.
Tract No. 2
183 acres
Holcomb Survey, Morris County, Texas. (N)
[MAP]
Scale: 1" = 1,320'
<PAGE>
EXHIBIT "C" (N)
T & N Railroad Co.
Tract No. 3-A
123 Acres
Rogers & Boon Surveys, Morris County, Texas.
[MAP]
Scale: 1" = 1,320'
<PAGE>
AMENDMENT TO CONTRACT FOR
THE PURCHASE AND SALE OF REAL ESTATE
This Amendment to Contract for the Purchase and Sale of Real Estate (this
"Amendment") is entered into by and between PRUDENTIAL TIMBER INVESTMENTS, INC.,
a Delaware corporation ("Purchaser"), LONE STAR STEEL COMPANY, a Delaware
corporation, and TEXAS AND NORTHERN RAILWAY COMPANY, a Texas corporation
(hereinafter referred to individually and together as "Seller"), and FIRST
AMERICAN TITLE INSURANCE COMPANY ("Escrow Agent").
AGREED FACTS
A. Seller, Purchaser and Escrow Agent entered into a Contract for the Purchase
and Sale of Real Estate dated April 24, 1995 (the "Contract") for the
purchase and sale of approximately 9,432 acres of land located in Cass,
Marion, Morris and Upshur Counties, Texas (the "Property").
B. The parties to the Contract desire to amend the Contract to (i) substitute
the tract of land described in EXHIBIT A attached hereto for Tract 3,
Parcel F-188 (as defined in the Contract), (ii) modify the Contract with
respect to certain unrecorded easements, a lease agreement, or holdover
tenancy thereunder, and Seller's ownership interest in Tract 8, Parcel F-
196 (as defined in the Contract), (iii) delete Property Number F-066 from
Exhibit A to the Contract and the Lease Agreement between Lone Star Steel
Company and Hughes Springs Little League Association from Exhibit C to the
Contract, and (iv) acknowledge changes to the Property legal descriptions.
C. Seller, Purchaser and Escrow Agent intend for this Amendment to set forth
the entirety of their agreement made this date as it relates to the matters
described above.
AGREEMENT
In consideration of the above stated facts, which are hereby acknowledged
and confessed as true and correct by Purchaser, Seller and Escrow Agent, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, it is hereby AGREED as follows:
1. Tract 3, Parcel F-188 is hereby deleted from Exhibit A to the Contract
and the new Tract 3, Parcel F-188 described in EXHIBIT A to this
Amendment is substituted in lieu thereof.
<PAGE>
2. Purchaser acknowledges to Seller that it is aware that the following
unrecorded easements (the "Easements") affect portions of the
Property:
A. Easement for sanitary purposes as granted in Sanitary Easement
dated September 4, 1974 from Lone Star Steel Company to Bi-County
Water Supply Corporation and located on Tract 19, Parcel F-158
(as defined in the Contract).
B. Right of Way Easement for the purpose of constructing,
installing, operating, inspecting, and maintaining a water line,
as granted in Right of Way Easement dated January 25, 1974 from
Lone Star Steel Company to Bi-County Water Supply Corporation and
located on Tract 22, Parcel 142 (as defined in the Contract).
C. Right of Way Easement for the purpose of constructing,
installing, operating, inspecting, and maintaining a water line,
as granted in Right of Way Easement dated January 25, 1974 from
Lone Star Steel Company to Bi-County Water Supply Corporation and
located on Tract 22, Parcel 143 (as defined in the Contract).
Purchaser further acknowledges that for purposes of paragraph 10(c) of
the Contract, Seller's failure to except the Easements from the
representations and warranties made in the Contract does not
constitute a breach of any of such warranties and representations, and
agrees that the Easements shall be deemed Permitted Encumbrances.
3. Purchaser acknowledges to Seller that it is aware of that certain
Lease dated August 1, 1990 (the "Lease") between T & N Lone Star
Warehouse Company, as lessor, and Pacesetter Trucking, as lessee,
which lease is attached hereto as EXHIBIT B and covers, or the
holdover tenancy thereunder covers, a portion of Tract 9, Parcel
TN-147 (as defined in the Contract). Purchaser further acknowledges
that for purposes of paragraph 10(c) of the Contract, Seller's
failure to except the Lease, or the holdover tenancy thereunder,
from the representations and warranties made in the Contract does not
constitute a breach of any such warranties and representations, and
agrees that the Lease shall be deemed one of the Leases under the
Contract and treated as one of those Leases to be assigned to and
assumed by Purchaser and be deemed one of the Permitted Encumbrances.
-2-
<PAGE>
4. Purchaser acknowledges to Seller that it is aware of the following
mineral leases (the "Mineral Leases"), copies of which have been
furnished to Purchaser, that relate to portions of the Property:
A. Oil, Gas and Mineral Lease dated September 3, 1993 between
Marion-Cass Development Co., represented by Charles H. Weinbaum,
Jr., President, as lessor, and Mitchell Energy Corporation, as
lessee.
B. Oil, Gas and Mineral Lease dated January 27, 1994 between Rhyne
Simpson, Jr., as lessor, and Mitchell Energy Corporation, as
lessee.
C. Oil, Gas and Mineral Lease dated January 27, 1994 between Maude
Marie Simpson Salmon, as lessor, and Mitchell Energy Corporation,
as lessee.
D. Oil, Gas and Mineral Lease dated January 27, 1994 between Rolan
C. Simpson and wife, Dorothy D. Simpson, Individually and as
Trustees under Agreement dated October 4, 1984, for the benefit
of Rolan C. Simpson and Dorothy D. Simpson, as lessor, and
Mitchell Energy Corporation, as lessee.
E. Oil, Gas and Mineral Lease dated January 27, 1994 between Phil
Simpson, Trustee of the Simpson Family Trust, as lessor, and
Mitchell Energy Corporation, as lessee.
Purchaser further acknowledges that for purposes of paragraph 10(c) of
the Contract, Seller's failure to except the Mineral Leases from the
representations and warranties made in the Contract does not
constitute a breach of any of such representations and warranties, and
Purchaser agrees that the Mineral Leases shall be deemed Permitted
Encumbrances and Leases under the Contract, but not treated as Leases
that are to be assigned to and assumed by Purchaser under the
Contract.
5. Property Number F-066 is hereby deleted from Exhibit A to the
Contract, and the Lease Agreement dated February 23, 1982, between
Lone Star Steel Company, as lessor, and Hughes Springs Little League
Association, as lessee, is hereby deleted from Exhibit C to the
Contract.
6. Purchaser hereby acknowledges that Seller owns (or may own) only an
undivided 11/12th interest in Tract 8, Parcel F-196 and that an
undivided one-twelfth (1/12th) interest may be owned by a third party.
Purchaser agrees to accept conveyance of the interest owned by Seller
(provided that such interest is not less than an undivided 11/12th
interest) as being in full
-3-
<PAGE>
performance of the Contract as regards the title to be conveyed to
that tract and parcel under the Contract. Purchaser further
acknowledges that for purposes of paragraph 10(c) of the Contract,
Seller's failure to except from the representations and warranties
made in the Contract that it owns (or may own) only an undivided
11/12th interest in Tract 8, Parcel F-196 does not constitute a breach
of any of such representations and warranties. The fact that an
undivided 1/12th interest in Tract 8, Parcel F-196 may be owned by a
third party shall be deemed a Permitted Encumbrance.
7. Seller and Purchaser hereby acknowledge that the legal descriptions of
certain parcels comprising the Property have been revised INTER ALIA
by Morris County Land, Abstract & Title Company, Daingerfield, Texas
and under this Amendment. The legal description of the property that
is conveyed to Purchaser or its assigns as set forth in the special
warranty deeds delivered by Seller to Purchaser or its assigns at the
Closing (as defined in the Contract) under the Contract is hereby
accepted and agreed to by the parties hereto as the legal description
of the Property under the Contract.
8. This Amendment shall be and hereby is incorporated into the Contract
for all intents and purposes and all terms, provisions and definitions
of the Contract shall apply.
9. Except where inconsistent with the terms of this Amendment, the
Contract as amended by the Amendment is hereby ratified and affirmed
in all respects.
10. This Amendment may be executed in multiple counterparts, and, if so,
each counterpart shall be deemed an original to the same effect as if
all parties hereto had executed the same instrument.
-4-
<PAGE>
This Amendment, upon being executed by all of the parties, shall be
effective as of the 31st day of August, 1995.
SELLER:
LONE STAR STEEL COMPANY
By:/s/ R. W. Ayp
-----------------------------------------
Name: R. W. Ayp
---------------------------------------
Title: Exec. Vice President
--------------------------------------
TEXAS AND NORTHERN RAILWAY
COMPANY
By:/s/ R. W. Ayp
-----------------------------------------
Name: R. W. Ayp
---------------------------------------
Title: Treasurer
--------------------------------------
PURCHASER:
PRUDENTIAL TIMBER INVESTMENTS,
INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE
COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-5-
<PAGE>
This Amendment, upon being executed by all of the parties, shall be
effective as of the day of August, 1995.
----
SELLER:
LONE STAR STEEL COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
TEXAS AND NORTHERN RAILWAY
COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
PURCHASER:
PRUDENTIAL TIMBER INVESTMENTS,
INC.
By:/s/ D. W. Charles
-----------------------------------------
Name: Exec. Vice President
---------------------------------------
Title: D. W. Charles
--------------------------------------
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE
COMPANY
By:/s/ Richard. C. Holloway
-----------------------------------------
Name: Richard C. Holloway
---------------------------------------
Title: Counsel
--------------------------------------
-5-
<PAGE>
Lone Star Steel Company
P. O. Box 1000
Lone Star, Texas 75668
F-188
Field Notes on 159.528 Acre Tract
J. H. Johnson Survey, A-222, Marion County, Texas
J. H. Johnson Survey, A-160, Morris County, Texas
G. H. Allen Survey, A-516, Marion County, Texas
G. H. Allen Survey, A-396, Morris County, Texas
All that certain 159.528 acre tract of land in the J. H. Johnson Survey, A-222,
in Marion County, Texas, and A-160, in Morris County, Texas, and in the G. H.
Allen Survey, A-516, in Marion County, Texas, and A-396, in Morris County,
Texas, being the same land in use and Possession by Lone Star Steel Company and
the same land conveyed from Maud Marie Salmon, et al., to Lone Star Steel
Company by Warranty Deed dated October 2, 1971, and recorded in Volume 135, Page
518, of the Deed Records of Morris County, Texas, and described therein as
"Tract No. 2"; less, save and except the called 17.87 acre tract conveyed from
A. M. Rhyne to C. C. Miller by Warranty Deed dated June 28, 1919, and recorded
in Volume Q-1, Page 613, of the Deed Records of Marion County, Texas, said
159.528 acre tract being more particularly described as follows:
Beginning at a rock pile found for the Northwest corner of the McKinney and
Williams Survey, A-291, in Marion County, Texas, and an ell corner of the
said J. H. Johnson Survey, same being the Southwest corner of the Coy Simmons
called 2 acre tract described in Volume 171, Page 294, of the Deed Records of
Marion County, Texas, from which an axle bears S 21 DEG.58'51"E 5.44 feet and
an 8" Post Oak Marked "X" bears S 07 DEG.58' W 5.5 feet;
THENCE: S 00DEG.09'21" W with the West line of said McKinney and Williams
Survey and the lower East line of said J. H. Johnson Survey 901.71 feet to a
3/8" iron rod found for the Northeast corner of the said 17.87 acre tract
conveyed to C. C. Miller, being the same 17.87 acre tract conveyed to Oneda
Buggs by Warranty Deed recorded in Volume 248, Page 177, of said Deed Records
from which a 6" Sweet Gum marked "X" bears S 05 DEG.30' 6.68 feet and a 3/4"
iron pipe bears S 00 DEG.01"22" E 69.52 feet;
THENCE: N 89 DEG.50'39" W with the North Line of said called 17.87 acre tract
381.61 feet to a 5/8 iron rod set for the Southwest corner of this tract;
THENCE: N 00 DEG.06'51" E with the East line of the J. V. Melton called 86.7
acre tract described in Volume 165, Page 438, of the Deed Records of Marion
County, Texas, 1394.37 feet to a found 1/2" iron rod, from which a 12" Post
Oak marked "X" bears S 01 DEG.45' W 45.6 feet;
THENCE: N 00 DEG.08'35" W with said Melton East line 1622.30 feet to a 5/8"
iron rod set for the Northeast corner of same and the Southeast corner of the
Betty Jo Richards called 146.50 acre tract described in Volume 138, Page 629,
of said Deed Records of Morris County, Texas;
THENCE: N 3 DEG.11'48" E with said Richards lower East line passing the
Southeast corner of a one-acre tract at 1488.80 feet and continuing to a
total distance of 1697.50 feet to a 5/8" Iron Rod set for the Northeast
corner of said one-acre tract;
THENCE: N 2 DEG.48'56" E with the upper East line of said Richards tract
982.23 feet to a 5/8" iron rod set at a fence corner for the Northeast of
said Richards tract and the most Westerly Southwest corner of the W. B.
Clifton called 354.2 acre tract described in Volume 110, Page 506, of the
Deed Records of Morris County, Texas, from which a Concrete Monument with
bronze disc stamped "JHJ-GHA-AS" bears S 89 DEG.00'20" W 77.03 feet;
A-1
<PAGE>
Lone Star Steel Company P. O. Box 1000 Lone Star, Texas 75668 F-188 Field
Notes on 159.528 Acre Tract J. H. Johnson Survey, A-222, Marion County, Texas
J. H. Johnson Survey, A-160, Morris County, Texas G. H. Allen Survey, A-516,
Marion County, Texas G. H. Allen Survey, A-396, Morris County, Texas Page 2
of 2
THENCE: S 89 DEG.04'08" E along a line 111.11 feet north of the North line
of the said J. H. Johnson Survey, 1804.03 feet to a Concrete Monument with
bronze disc stamped "JBJ-GHA", found for an ell corner of said Clifton 354.2
acre tract;
THENCE: S 00 DEG.26'08" E passing at 111.11 feet the Northeast corner of said
J. H. Johnson Survey and continuing with the East line of same and the lower
West line of the G. H. Allan Survey and said Clifton 354.2 acre tract, 3149.87
feet to a Concrete Monument with bronze disc stamped "GHA-GWD-MM" found for
Northeast corner of the Manard McCain called 59 1/2 acre tract, described in
Volume B-1, Page 484, of the Deed Records of Marion County, Texas;
THENCE: N 89 DEG.42'00" W with the North line of said McCain 59 1/2 acre tract,
1595.54 feet to a 1 1/4" iron rod found for the Northwest corner of same;
THENCE: S 00 DEG.21'38" E with the West line of said McCain 59 1/2 acre tract,
1621.29 feet to the Point of Beginning, containing 159.528 acres of land, more
or less.
I, David R. Collins, Registered Professional Land Surveyor #1954, do hereby
certify that the above field notes are true and correct as shown on Plat
#LSS2461, according to a survey made by me, upon the ground, July 2, 1995.
/s/ David. R. Collins
--------------------------------------------
David R. Collins, RPLS #1954
[SEAL] P. O. Box 1028
Atlanta, Texas 75551
THE STATE OF TEXAS:
THE COUNTY OF CASS:
BEFORE ME, the undersigned authority, on this day personally appeared DAVID
R. COLLINS, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purpose and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 7th day of AUGUST, 1995.
/s/ Sandra Hart
--------------------------------------------
[SEAL] SANDRA HART, Notary Public
Cass County, Texas
A-2
<PAGE>
EXHIBIT B
LEASE
THIS AGREEMENT OF LEASE, by and between T AND N LONE STAR WAREHOUSE
COMPANY, hereinafter called "Lessor", and PACESETTER TRUCKING, hereinafter
called "Lessee".
W I T N E S S E T H :
1.
Lessor hereby leases and lets unto Lessee, and Lessee hereby rents from
Lessor, all that certain property in the Wm. King survey, A-011, Cass County,
Texas, containing 0.94 acre, more or less, hereinafter called the "demised
premises", and made a part hereof for all purposes, including all buildings
erected on "demised premises".
2.
This lease is for a term of one (1) year beginning AUGUST 1, 1990 and
expiring JULY 31, 1991. Rental for such term is the sum of Three Thousand
Dollars and No/100 Dollars (3600.00) payable in advance at the rate of
$300.00 per month upon execution hereof. This lease may be terminated by either
party hereto, for any reason, by thirty (30) days written notice to the other
party.
3.
Lessee has inspected the demised premises and accepts the same in their
present condition. Exception: one section of fence will be removed and same
will be replaced at termination of lease.
4.
During the term of this lease and any renewal and extension thereof Lessee
will, at its cost and expense:
(a) take good care of the demised premises and suffer no waste;
(b) keep the demised premises and all buildings and improvements
thereon in good condition and repair;
(c) comply with all laws, ordinances, rules and regulations imposed
by federal, state or local governmental entities applicable to
the demised
<PAGE>
premises, the improvements thereon, Lessee's use and occupancy
thereof
(d) suffer no liens or encumbrances to be placed upon the demised
premises or Lessee's interest therein;
(e) pay all ad valorem taxes and assessments levied against all
improvements placed upon the demised premises by Lessee and all
personal property of Lessee situated thereon;
(f) prevent any nuisances in, upon or in connection with the demised
premises;
(g) use the demised premises so as to prevent washing and erosion of
the demised premises and any adjacent lands of lessor.
5.
Lessor will pay all ad valorem taxes and assessments levied against the
demised premises during the term hereof and any extensions of such term, but
excluding any such taxes and assessments levied against improvements placed
thereon by lessee and all personal property of lessee situated thereon.
6.
Lessor shall not be liable to Lessee or Lessee's employees agents or
invitees, or to any other person whatsoever, for any injury to or death of
persons or damage to or destruction of property on or about the demised
premises, or caused by the demised premises being out of repair, or caused by
the act or omission of Lessee, its agents, servants, employees, guests or
contractors, and Lessee agrees to indemnify Lessor and hold it harmless from
any loss, expense or claims, including attorney's fees arising out of any such
damage or injury, even though the same may have been caused wholly or in part
by the act or neglect of Lessor.
7.
It is agreed and understood that any holding over by the Lessee of
the leased premises after the expiration of this lease shall operate and be
construed as a tenancy from month to month at a rental of $300.00.
B-2
<PAGE>
EXECUTED this 1st day of August 1990.
T & N LONE STAR WAREHOUSE COMPANY
By /s/Kyle Pennington
------------------------------
Kyle Pennington, Manager
PACESETTER TRUCKING COMPANY
By /s/Scott Fairless
------------------------------
Scott Fairless
Terminal Manager
B-3
<PAGE>
EXHIBIT A
Being .2 0.94 acre tract of land located in the Wm. King Survey, A-611 and
being located approximately S. 15 DEG. 00' W. a distance of 4 miles, from the
City of Hughes Springs, Cass County, Texas. Said 0.94 acre tract of land being
a portion of 2.675 acres tract of land as described in a Warranty Deed from
Joe L. Allen at al to Texas and Northern Railway company, dated May 24, 1978
and duly recorded in Volume 509, page 857 of the Deed records of Cass County.
Said 0.94 acre tract of land being more particularly described as follows:
Beginning at an iron pin set in the east right-of-way line of farm road no. 101
for the northwest corner of this tract of land. Said on pin being set in the
north line of the said We. King Survey.
Hence: S. 89 DEG. 54' E. along and with the north line of the said Wm. being
Survey a distance of 250.0 ft. to an iron pin for the northeast corner of this
tract of land.
Hence: S. 11 DEG. 00' W. a distance of 157.0 ft. to an iron pin for the
northeast corner of this tract of land.
Hence: S. 89 DEG. 54 W. a distance of 250.0 ft. to an iron pin set in the east
right-of-way line of said farm Road No. 161 for the south corner of this
tract of land.
Hence: N. 11 DEG. 00' E. along and with said highway right-of-way line
distance of 167.0 ft. to the place of beginning, containing 0.94 acre of land,
more or less.
B-4
<PAGE>
ASSIGNMENT AND ASSUMPTION OF CONTRACT
THIS ASSIGNMENT is made this 31st day of August, 1995, by PRUDENTIAL TIMBER
INVESTMENTS, INC., a New Jersey corporation (hereinafter referred to as
"Assignor") to PRUTIMBER FUND TWO LIMITED PARTNERSHIP, a Delaware limited
partnership (hereinafter referred to as "Assignee").
BACKGROUND STATEMENT
A. Assignor entered into that certain Contract for the Purchase and Sale
of Property, having an Effective Date of April 24, 1995, with Lone Star Steel
Company, Texas and Northern Railway Company and First American Title Insurance
Company for the purchase of timberland located in Cass, Marion, Morris and
Upshur Counties, Texas, as amended by that certain Amendment to Contract for the
Purchase and Sale of Real Estate, dated of even date herewith (as amended, the
"Contract").
B. Assignor desires to assign, and Assignee desires to accept all of the
interest of Assignor under the Contract.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of $1.00, the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
Assignor does hereby assign, transfer and set over unto Assignee all of
Assignor's rights, duties and obligations under the Contract. Assignee hereby
assumes and accepts all of the rights, duties and obligations of Assignor
arising out of the Contract.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment and
affixed their seals as of the day and year first above written.
ASSIGNOR:
PRUDENTIAL TIMBER INVESTMENTS,
INC., a New Jersey corporation
By:/s/ Douglas W. Charles
-----------------------------------------
Douglas W. Charles
Executive Vice President
<PAGE>
ASSIGNEE:
PRUTIMBER FUND TWO LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Prudential Timber Investments, Inc., its sole
general partner
By:/s/ Douglas W. Charles
-----------------------------------------
Douglas W. Charles
Executive Vice President
-2-
<PAGE>
Exhibit 21
Page 1 of 1
SUBSIDIARIES OF LONE STAR TECHNOLOGIES. INC.
I. Environmental Holdings, Inc.
A. Zinkanada, Inc.
B. Zinklahoma, Inc.
II. Lone Star Steel Company
A. Fort Collins Pipe Company
B. Lone Star Logistics, Inc.
C. Lone Star Steel International, Inc.
D. Lone Star Steel Sales Company
E. Rotac, Inc.
F. T & N Lone Star Warehouse Company
G. Texas & Northern Railway Company
III. Conexas, Inc.
IV. Extrusion Research Institute, Ltd.
<PAGE>
Exhibit 24
Page 1 of 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned hereby irrevocably constitutes and appoints JOHN P.
HARBIN, CHARLES J. KESZLER and JUDITH A. MURRELL, or any of them, as the true
and lawful agents and attorneys-in-fact of the undersigned (the "Attorneys-in-
Fact"), each with full power to appoint a substitute or substitutes to act
hereunder, to execute and deliver for and on behalf of the undersigned the
Annual Report of Lone Star Technologies, Inc. on Form 10-K (including any
amendments thereto) to be filed with the Securities and Exchange Commission
pursuant to the Securities and Exchange Act of 1934 for the fiscal year ended
December 31, 1995. The undersigned hereby ratifies and confirms all that the
Attorneys-in-Fact, or any substitute or substitutes, may do by virtue of this
Power of Attorney.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney at
Dallas, Texas on this 28TH day of February, 1996.
/S/ Dean P. Guerin
------------------
Dean P. Guerin
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, STACI GIBSON , a Notary Public in and for the State of Texas,
on this day did personally appear DEAN P. GUERIN, known to me to be the person
whose name is subscribed to the foregoing Power of Attorney, and acknowledged to
me that he executed such Power of Attorney for the purposes and consideration
therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28TH day of February, 1996.
/S/ Staci Gibson
-----------------------------
Notary Public, State of Texas
(SEAL)
My Commission Expires: June 2, 1999
<PAGE>
Exhibit 24
Page 2 of 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned hereby irrevocably constitutes and appoints JOHN P.
HARBIN, CHARLES J. KESZLER and JUDITH A. MURRELL, or any of them, as the true
and lawful agents and attorneys-in-fact of the undersigned (the "Attorneys-in-
Fact"), each with full power to appoint a substitute or substitutes to act
hereunder, to execute and deliver for and on behalf of the undersigned the
Annual Report of Lone Star Technologies, Inc. on Form 10-K (including any
amendments thereto) to be filed with the Securities and Exchange Commission
pursuant to the Securities and Exchange Act of 1934 for the fiscal year ended
December 31, 1995. The undersigned hereby ratifies and confirms all that the
Attorneys-in-Fact, or any substitute or substitutes, may do by virtue of this
Power of Attorney.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney at
Dallas, Texas on this 28TH day of February, 1996.
/S/ William C. McCord
---------------------
William C. McCord
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, STACI GIBSON , a Notary Public in and for the State of Texas, on
this day did personally appear WILLIAM C. MCCORD , known to me to be the person
whose name is subscribed to the foregoing Power of Attorney, and acknowledged to
me that he executed such Power of Attorney for the purposes and consideration
therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28TH day of February, 1996.
/S/ Staci Gibson
-----------------------------
Notary Public, State of Texas
(SEAL)
My Commission Expires: June 2, 1999
<PAGE>
Exhibit 24
Page 3 of 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned hereby irrevocably constitutes and appoints JOHN P.
HARBIN, CHARLES J. KESZLER and JUDITH A. MURRELL, or any of them, as the true
and lawful agents and attorneys-in-fact of the undersigned (the "Attorneys-in-
Fact"), each with full power to appoint a substitute or substitutes to act
hereunder, to execute and deliver for and on behalf of the undersigned the
Annual Report of Lone Star Technologies, Inc. on Form 10-K (including any
amendments thereto) to be filed with the Securities and Exchange Commission
pursuant to the Securities and Exchange Act of 1934 for the fiscal year ended
December 31, 1995. The undersigned hereby ratifies and confirms all that the
Attorneys-in-Fact, or any substitute or substitutes, may do by virtue of this
Power of Attorney.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney at
Dallas, Texas on this 28TH day of February, 1996.
/S/ Charles L. Blackburn
------------------------
Charles L. Blackburn
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, STACI GIBSON , a Notary Public in and for the State of Texas, on
this day did personally appear CHARLES L. BLACKBURN , known to me to be the
person whose name is subscribed to the foregoing Power of Attorney, and
acknowledged to me that he executed such Power of Attorney for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28TH day of February, 1996.
/S/ Staci Gibson
-----------------------------
Notary Public, State of Texas
(SEAL)
My Commission Expires: June 2, 1999
<PAGE>
Exhibit 24
Page 4 of 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned hereby irrevocably constitutes and appoints JOHN P.
HARBIN, CHARLES J. KESZLER and JUDITH A. MURRELL, or any of them, as the true
and lawful agents and attorneys-in-fact of the undersigned (the "Attorneys-in-
Fact"), each with full power to appoint a substitute or substitutes to act
hereunder, to execute and deliver for and on behalf of the undersigned
Annual Report of Lone Star Technologies, Inc. on Form 10-K (including any
amendments thereto) to be filed with the Securities and Exchange Commission
pursuant to the Securities and Exchange Act of 1934 for the fiscal year ended
December 31, 1995. The undersigned hereby ratifies and confirms all that the
Attorneys-in-Fact, or any substitute or substitutes, may do by virtue of this
Power of Attorney.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney at
Dallas, Texas on this 28TH day of February, 1996.
/S/ Frederick B. Hegi. Jr.
--------------------------
Frederick B. Hegi, Jr.
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, STACI GIBSON , a Notary Public in and for the State of Texas, on
this day did personally appear FREDERICK B. HEGI, JR. , known to me to be the
person whose name is subscribed to the foregoing Power of Attorney, and
acknowledged to me that he executed such Power of Attorney for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28TH day of February, 1996.
/S/ Staci Gibson
-----------------------------
Notary Public, State of Texas
(SEAL)
My Commission Expires: June 2, 1999
<PAGE>
Exhibit 24
Page 5 of 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned hereby irrevocably constitutes and appoints JOHN P.
HARBIN, CHARLES J. KESZLER and JUDITH A. MURRELL, or any of them, as the true
and lawful agents and attorneys-in-fact of the undersigned (the "Attorneys-in-
Fact"), each with full power to appoint a substitute or substitutes to act
hereunder, to execute and deliver for and on behalf of the undersigned the
Annual Report of Lone Star Technologies, Inc. on Form 10-K (including any
amendments thereto) to be filed with file Securities and Exchange Commission
pursuant to the Securities and Exchange Act of 1934 for the fiscal year ended
December 31, 1995. The undersigned hereby ratifies and confirms all that the
Attorneys-in-Fact, or any substitute or substitutes, may do by virtue of this
Power of Attorney.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney at
Dallas, Texas on this 28TH day of February, 1996.
/S/ James E. McCormick
----------------------
James E. McCormick
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, STACI GIBSON , a Notary Public in and for the State of Texas,
on this day did personally appear JAMES E. MCCORMICK, known to me to be file
person whose name is subscribed to the foregoing Power of Attorney, and
acknowledged to me that he executed such Power of Attorney for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28TH day of February, 1996.
/S/ Staci Gibson
-----------------------------
Notary Public, State of Texas
(SEAL)
My Commission Expires: June 2, 1999
<PAGE>
Exhibit 24
Page 6 of 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned hereby irrevocably constitutes and appoints JOHN P.
HARBIN, CHARLES J. KESZLER and JUDITH A. MURRELL, or any of them, as the true
and lawful agents and attorneys-in-fact of the undersigned (the "Attorneys-in-
Fact"), each with full power to appoint a substitute or substitutes to act
hereunder, to execute and deliver for and on behalf of file undersigned the
Annual Report of Lone Star Technologies, Inc. on Form 10-K (including any
amendments thereto) to be filed with file Securities and Exchange Commission
pursuant to file Securities and Exchange Act of 1934 for the fiscal year ended
December 31, 1995. The undersigned hereby ratifies and confirms all that the
Attorneys-in-Fact, or any substitute or substitutes, may do by virtue of this
Power of Attorney.
IN WITNESS WHEREOF, file undersigned has executed this Power of Attorney at
Dallas, Texas on this 28TH day of February, 1996.
/S/ Thomas M. Mercer Jr.
------------------------
Thomas M. Mercer, Jr.
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, STACI GIBSON , a Notary Public in and for the State of Texas,
on this day did personally appear THOMAS M. MERCER. JR. , known to me to be
the person whose name is subscribed to the foregoing Power of Attorney, and
acknowledged to me that he executed such Power of Attorney for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 28TH day of February, 1996.
/S/ Staci Gibson
-----------------------------
Notary Public, State of Texas
(SEAL)
My Commission Expires: June 2, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 40
<SECURITIES> 33
<RECEIVABLES> 66
<ALLOWANCES> 2
<INVENTORY> 56
<CURRENT-ASSETS> 195
<PP&E> 294
<DEPRECIATION> 161
<TOTAL-ASSETS> 358
<CURRENT-LIABILITIES> 54
<BONDS> 0
0
0
<COMMON> 21
<OTHER-SE> 81
<TOTAL-LIABILITY-AND-EQUITY> 358
<SALES> 426
<TOTAL-REVENUES> 426
<CGS> 400
<TOTAL-COSTS> 414
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9
<INCOME-PRETAX> 10
<INCOME-TAX> 0
<INCOME-CONTINUING> 10
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10
<EPS-PRIMARY> .46
<EPS-DILUTED> 0
</TABLE>
