Form 16-4

Blanket Easement Agreement for Groundwater Rights

[For Use with Groundwater Rights Warranty Deed (On Site)]

Notice of confidentiality rights: If you are a natural person, you may remove or strike any or all of the following information from any instrument that transfers an interest in real property before it is filed for record in the public records: your Social Security number or your driver’s license number.

Date:

Grantor:

Grantor’s Mailing Address:

Grantee:

Grantee’s Mailing Address:

[Grantor’s Lienholder:]

[Grantor’s Lienholder’s Mailing Address:]

Easement Property: [describe the property subject to the easement, which may be all or part of the real property]

Real Property: [describe the property in which the grantee has groundwater rights or attach field notes as exhibit A]

“Deed” means the Groundwater Rights Deed in which Grantor conveyed the Ground­water Rights to Grantee, recorded in the real property records of the county or counties in which the Real Property is located.

“Facilities” means aboveground, underground, surface or subsurface pipelines, electric transmission and communication lines and conduits, communication towers, pumps, monitor wells, water wells and well sites (whether production wells or test or exploratory wells), water storage tanks, water treatment facilities, pump station facilities, pumping plant facilities, buildings, machinery, equipment, meters, tangible personal property, roads, gates, bridges, culverts, erosion control structures, fences, cattle guards, and all other necessary, desirable, or convenient installations, appurtenances, facilities, and structures related thereto.

“Force Majeure” means act of war, civil disobedience, insurrection, act of terrorism, act of God, strike, prolonged drought, or prolonged or extreme weather conditions, or other event beyond the reasonable control of a party giving rise to a delay in performance that was not foreseeable and that could not have been avoided through the exercise of reasonable care.

“Groundwater” means all of the underground water, percolating water, artesian water, and any other water from any and all depths and reservoirs, formations, depths and horizons beneath the surface of the Real Property, excluding underflow or flow in a defined subterra­nean channel.

“Groundwater Rights” means the title to the Groundwater and other rights conveyed to Grantee in the Deed.

“Sanitary Control Easement” means an easement around the circumference of a well to prohibit uses that could cause contamination of the groundwater in accordance with the requirement for municipal water supply wells prescribed by the Texas Commission on Envi­ronmental Quality (TCEQ) under sections 290.38(73) and 290.41(c) of title 30 of the Texas Administrative Code and as provided in TCEQ Form 20698.

“Surface Water” means any water, flowing or stationary, naturally presenting itself above the top layer of soil, be that top layer of soil a lake or stream bed, whether the source of the water is from runoff, overflow, springs, or seeps.

“Water” means Groundwater or Surface Water.

Easement Purpose: The installation, construction, operation, use, maintenance, repair, modifi­cation, removal, replacement, and upgrade of Grantee’s Facilities on, from, and across the Easement Property as may be necessary or desirable in connection with the explora­tion, monitoring, testing, drilling, extracting, capturing, collection, development, pump­ing, treatment, withdrawal, production, transmission, transportation, storage, supply, and beneficial use of the Groundwater and other utilization of the Groundwater Rights [include if applicable: , including the transportation of groundwater obtained from other real property].

Consideration: This agreement is executed in connection with the Deed. Consideration paid under the Deed constitutes full consideration for the rights granted under this agreement [include if applicable: , except for payments required by the Surface Damage Payment Addendum].

Reservations and Exceptions from Conveyance: [describe any reservations and exceptions from the conveyance in this instrument]

Exceptions to Warranty: [describe any exceptions to the warranties in this instrument]

Grant of Easement: Grantor, for the Consideration and subject to the Reservations from Con­veyance and Exceptions to Warranty, grants, sells, and conveys to Grantee and Grantee’s heirs, successors, and assigns an easement over, on, under, and across the Easement Property for the Easement Purpose, together with (1) a sanitary control easement around each well site sufficient to meet the requirements of law; (2) the right to use roads, drive­ways, and access ways, and the right of ingress and egress at all times across the [Real Property/Easement Property] for reasonable access to and use of the Easement Property and Grantee’s Facilities for the Easement Purpose; and (3) all and singular the rights and appurtenances thereto in any way belonging (collectively, the “Easement”), to have and to hold the Easement to Grantee and Grantee’s heirs, successors, and assigns forever. Grantor binds Grantor and Grantor’s heirs, successors, and assigns to warrant and for­ever defend the title to the Easement in Grantee and Grantee’s heirs, successors, and assigns against every person whomsoever lawfully claiming or to claim the Easement or any part thereof, except as to the Reservations from Conveyance and Exceptions to War­ranty [include if applicable: , to the extent that such claim arises by, through, or under Grantor, but not otherwise].

Terms and Conditions: The following terms and conditions apply to the Easement granted by this agreement:

1.Character of Easement.      The Easement is a nonexclusive blanket easement and is irrevocable, subject to the terms of this agreement. The Easement is for the benefit of Grantee and Grantee’s heirs, successors, and assigns who at any time own all or any portion of the Groundwater Rights conveyed to Grantee in the Deed.

2.Duration of Easement.      The duration of the Easement is perpetual.

3.Reservation of Rights.      Grantor reserves for Grantor and Grantor’s heirs, succes­sors, and assigns the right to continue to use and enjoy the Easement Property for all purposes that do not interfere with or interrupt the use or enjoyment of the Easement by Grantee for the Easement Purpose, except as limited by the terms of this agreement.

4.Improvement and Maintenance of Easement Property.      Improvement and main­tenance of the Easement Property for the Easement Purpose will be at the sole expense of Grantee, except as otherwise provided by this agreement. Grantee has the right to eliminate any encroachments into the Easement Property. On written request by Grantee, Grantor will execute or join in the execution of easements for drainage, electricity, or utility facilities serv­ing the Easement Property.

5.Use of Water.      Grantee will have the Groundwater Rights provided in the Deed. The compensation paid by Grantee under the Deed [include if applicable: and the Surface Damage Payment Addendum] is the only compensation to which Grantor is entitled if Grantee’s exercise of its rights causes a decline in the Surface Water or Groundwater avail­able to Grantor.

6.Taxes.      Grantor will be responsible for paying all ad valorem property taxes or assessments assessed against the Easement Property (“Taxes”) before delinquency. If Grantor fails to do so, Grantor authorizes Grantee to pay the Taxes, and on such payment, (a) to be subrogated to all liens held by the taxing authority against the Easement Property as security for the Taxes paid, (b) to have the right to set off amounts paid against amounts owed to Grantor under this agreement, and (c) to seek reimbursement of amounts paid in accordance with applicable law. Grantee will have the right, but not the obligation, to pay the Taxes. If Grantee pays the Taxes, at Grantee’s request Grantor will promptly take the action required by section 32.06 of the Texas Tax Code to authorize a transfer of the tax lien to Grantee. Grantee will timely pay any taxes assessed by any taxing authority against Grantee’s Facilities or ease­ment estate in the Easement Property as well as any fees or costs charged by any Groundwater Conservation District or other regulatory body for Grantee’s development, pumping, transpor­tation, or use of the Groundwater.

7.Addenda.      The following [is/are] attached to and [is/are] a part of this agreement:

Easement Location Addendum

Surface Damage Payment Addendum

Surface Use Restrictions Addendum

8.Abandonment of Facilities.      The occurrence of abandonment is to be determined solely by Grantee or by a court of competent jurisdiction. On abandonment of any easement or portion of an easement granted on the Easement Property for the production or transportation of water, Grantee will have one year in which to remove the Facilities, at Grantee’s option or in accordance with any written agreement regarding removal between Grantor and Grantee, and to restore the site to its approximate original condition to the extent reasonably practica­ble. If Grantee does not remove the Facilities, Grantor will become the owner of the Facilities, and Grantee will execute and deliver to Grantor all documents reasonably necessary to indi­cate that the Facilities have been abandoned and that title to the abandoned Facilities and ease­ments and, to the extent owned by Grantee, all communications lines, electric power lines, poles, and appurtenances serving the abandoned Facilities have reverted to Grantor.

9.Cooperation.      Grantor will cooperate with Grantee as reasonably necessary to enable Grantee to obtain any consents or permits necessary for Grantee to withdraw or pro­duce the Groundwater, provided that Grantor will not be obligated to incur any costs thereby. Grantor and Grantee will cooperate with one another in the use of the Real Property, the Ease­ment Property, and the Groundwater in order to effectuate the terms of this agreement.

10.Modifications.      This Easement Agreement may be modified or terminated by the written agreement of Grantor and Grantee, provided, however, that if the Easement Property is divided into two or more tracts, this agreement may be modified or terminated as to any tract by Grantee and the owner of that portion of the Easement Property at the time the modi­fication or termination is requested, without the requirement for the consent of any owner of any other portion of the Easement Property. Such modification or termination will be binding on and affect only the rights of Grantee and the owner of the portion of the Easement Property who enters into the modification or termination of this agreement with regard to that owner’s tract and will not affect the terms and provisions of this agreement as they apply to any other portion of the Easement Property.

11.Equitable Rights of Enforcement.      This Easement may be enforced by restraining orders and injunctions (temporary or permanent) prohibiting interference and commanding compliance. Restraining orders and injunctions will be obtainable on proof of the existence of interference or threatened interference, without the necessity of proof of inadequacy of legal remedies or irreparable harm, and will be obtainable only by the parties to or those benefited by this agreement, provided, however, that the act of obtaining an injunction or restraining order will not be deemed to be an election of remedies or a waiver of any other rights or rem­edies provided by this agreement or available at law or in equity. All rights and remedies pro­vided by this agreement or available at law or in equity are cumulative, not exclusive, and may be exercised successively or concurrently.

12.Attorney’s Fees.      If any party retains an attorney to enforce this agreement, the party prevailing in litigation is entitled to recover reasonable attorney’s fees and court and other costs.

13.Force Majeure.      Any provision in this agreement to the contrary notwithstand­ing, if a party is delayed in the performance of an obligation under this agreement due to an event of Force Majeure, that party will be given an extension of one day for each day in which the party was unable to perform its obligation due to the event of Force Majeure.

14.Binding Effect.      This agreement binds and inures to the benefit of the parties and their respective heirs, successors, and assigns. The covenants and conditions stated in this agreement run with the land.

15.Choice of Law.      This agreement will be construed under the laws of the state of Texas, without regard to choice-of-law rules of any jurisdiction. Venue is in the county or counties in which the Easement Property is located.

16.Counterparts.      This agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts will be construed together and will constitute one and the same instrument.

17.Waiver of Default.      It is not a waiver of or consent to default if the nondefaulting party fails to declare immediately a default or delays in taking any action. Pursuit of any rem­edies set forth in this agreement does not preclude pursuit of other remedies in this agreement or provided by law.

18.Further Assurances.      Each signatory party agrees to execute and deliver any additional documents and instruments and to perform any additional acts necessary or appro­priate to perform the terms, provisions, and conditions of this agreement and all transactions contemplated by this agreement. At the request of Grantee, Grantor will execute a separate Sanitary Control Easement for each of Grantee’s wells in the form attached as Exhibit B or on another form supplied by Grantee meeting TCEQ requirements.

19.Indemnity.      Each party agrees to indemnify, defend, and hold harmless the other party from any loss, attorney’s fees, expenses, or claims attributable to (a) breach or default of any provision of this agreement by the indemnifying party or (b) the negligent acts or omis­sions of the indemnifying party, its employees, agents, representatives, or persons with whom it contracts for the performance of activities on the Easement Property.

20.Entire Agreement.      This agreement, all attached exhibits and addenda, and the Deed constitute the entire agreement of the parties concerning the grant of the Easement by Grantor to Grantee. There are no representations, warranties, agreements, or promises pertain­ing to the grant of the Easement that are not in those documents. All addenda and exhibits to this agreement are incorporated herein.

21.Legal Construction.      If any provision in this agreement is for any reason unen­forceable, to the extent the unenforceability does not destroy the basis of the bargain among the parties, the unenforceability will not affect any other provision hereof, and this agreement will be construed as if the unenforceable provision had never been a part of the agreement. Whenever context requires, the singular will include the plural and neuter include the mascu­line or feminine gender, and vice versa. Article and section headings in this agreement are for reference only and are not intended to restrict or define the text of any section. This agreement will not be construed more or less favorably between the parties by reason of authorship or origin of language.

22.Notices.      Any notice required or permitted under this agreement must be in writ­ing. Any notice required by this agreement will be deemed to be given (whether received or not) the earlier of receipt or three business days after being deposited with the United States Postal Service, postage prepaid, certified mail, return receipt requested, and addressed to the intended recipient at the address shown in this agreement. Notice may also be given by regular mail, personal delivery, courier delivery, or e-mail and will be effective when received. Any address for notice may be changed by written notice given as provided herein. If the Easement Property is divided into two or more tracts, Grantee will be deemed to have complied with any notice requirement under this agreement if Grantee provides written notice only to the owners of the tracts directly affected by the matter for which notice is being given.

23.Recitals.      Any recitals in this agreement are represented by the parties to be accu­rate and constitute a part of the substantive agreement.

24.Dispute Resolution.      If a dispute arises between the parties with regard to the rights or obligations of the parties as set forth in this agreement, the aggrieved party will pro­vide written notice of its complaint or claim to the other party with sufficient specificity to enable the recipient to determine the cause and nature of the complaint. On receipt of the notice, the receiving party will have a reasonable period of time, not to exceed thirty days, in which to respond in writing to the other party. If the parties are not able to resolve the issues to their mutual satisfaction through negotiation within thirty days after the commencement of negotiations, or within such longer period as the parties may agree on, the parties agree to mediate the matter in good faith before instituting a suit for damages or exercising any right to terminate expressly provided by this agreement.

25.Time.      Time is of the essence. Unless otherwise specified, all references to “days” mean calendar days. Business days exclude Saturdays, Sundays, and legal public holi­days. If the date for performance of any obligation falls on a Saturday, Sunday, or legal public holiday, the date for performance will be the next following regular business day.

26.Partial Releases.      Grantor and Grantee acknowledge that Grantor may need por­tions of the Easement Property released from this Blanket Easement from time to time in order to use, sell, or finance portions of the Easement Property. If, before the installation of Facilities by Grantee, Grantor makes a written request for a partial release of any portion of this Blanket Easement to Grantee, Grantee will, within forty-five days after receipt of the request, provide Grantor with written consent to the partial release or with proposed plans showing Grantee’s intended use of the area. If the request is granted, Grantor, at Grantor’s expense, will provide the partial release, in a mutually acceptable form, and the field-note description of the area to be released. Grantee may condition the partial release on Grantor’s conveyance of easement rights to replace those being released. If Grantee fails to respond to Grantor in writing within the required time, Grantee will be deemed to have consented to the partial release and will execute the partial release of the area when presented by Grantor. If Grantee fails to do so in a timely manner, Grantor will have the right to execute the partial release on behalf of Grantee and to record it in the real property records as evidence of the release.

27.Relocation of Facilities.      After the installation of Facilities by Grantee, Grantor will have the right to require Grantee to execute a partial release of the easement rights granted under this Easement Agreement and to relocate Facilities installed in an easement area if all the following conditions are met: (a) Grantor pays for all surveying and document preparation costs for the area to be released and easements required to be provided by Grantor; (b) Grantor provides a comparable replacement easement to Grantee, at Grantor’s expense, for the easement to be released and all additional easements on Grantor’s or neigh­boring properties necessary for the operation of Grantee’s relocated Facilities, in form and content reasonably acceptable to Grantee; (c) the proposed relocation will not materially increase the cost of operating Grantee’s Facilities or result in a material adverse change in the efficiency or productivity of Grantee’s Facilities; (d) Grantor pays for the reasonable costs arising from the relocation of Grantee’s Facilities, including, to the extent applicable, site preparation work, making additions or alterations to the Facilities in order to connect them to Grantee’s remaining Facilities, hydrological investigations in connection with determining water quality and quantity, drilling replacement wells, the construction of new roads if neces­sary to provide reasonable access to the new easement or Facilities, plugging wells in accor­dance with applicable legal requirements, and the removal of debris; and (e) reimbursement to Grantee for any loss of profits or increase in operating costs during the period in which the relocation of the Facilities occurs and that result from the relocation activities. To initiate the process, Grantor must make written request to Grantee for the relocation, identifying with rea­sonable particularity the easement or easement areas to be released. Grantee will have a rea­sonable period of time, not to exceed ninety days, in which to make an initial evaluation and response to Grantor regarding the cost and feasibility of relocating Grantee’s Facilities. If Grantee believes that the proposed relocation will not meet the conditions of (c) above, or that Grantor will not be able to provide suitable replacement easements or is not financially able to pay the costs of relocation, Grantee will notify Grantor of the basis for its determination. If Grantor does not agree with Grantee, Grantor will have the right to pursue dispute resolution as provided in paragraph 24. above. If the parties are able to reach an agreement on the terms for the relocation, they will commit those terms to writing. Grantee may require Grantor to escrow funds, furnish a letter of credit, or provide other reasonable guarantee of Grantor’s financial ability to perform its obligations as a condition to entering into the relocation agree­ment.

   
[Name of grantor]

   
[Name of grantee]

Consent and Subordination by Lienholder

Lienholder, as the holder of [a] lien[s] on the Real Property, consents to the above grant of an Easement, including the terms and conditions of the grant, and Lienholder subordinates its lien[s] to the rights and interests of Grantee, so that a foreclosure of the lien[s] will not extinguish the rights and interests of Grantee.

   
[Name of lienholder]

Exhibit A

Real Property

Exhibit B

Sanitary Control Easement

[TCEQ Form 20698]

Texas Commission on Environmental Quality
Sanitary Control Easement

Date:

Grantor(s):

Grantor’s Address:

Grantee:

Grantee’s Address:

Sanitary Control Easement:      Purpose, Restrictions, and Uses of Easement:

1.The purpose of this easement is to protect the water supply of the well described and located below by means of sanitary control.

2.The construction, existence, and/or operation of the following within a 150-foot radius of the well described and located below are prohibited:  septic tank or sewage treatment perforated drainfields; areas irrigated by low dosage, low angle spray on-site sewage facili­ties; absorption beds; evapotranspiration beds; abandoned, inoperative or improperly con­structed water wells of any depth; underground petroleum and chemical storage tanks or liquid transmission pipelines; sewage treatment plants; sewage wet wells; sewage pumping stations; drainage ditches which contain industrial waste discharges or wastes from sewage treatment systems; animal feed lots; solid waste disposal sites, landfill and dump sites; lands on which sewage plant or septic tank sludge is applied; lands irrigated by sewage plant efflu­ent; military facilities; industrial facilities; wood-treatment facilities; liquid petroleum and petrochemical production, storage, and transmission facilities; Class 1, 2, 3, and 4 injection wells; pesticide storage and mixing facilities; and all other constructions or operations that could pollute the groundwater sources of the well that is the subject of this easement. For the purpose of this easement, improperly constructed water wells are those wells which do not meet the surface and subsurface construction standards for a public water supply well.

3.The construction, existence and/or operation of tile or concrete sanitary sewers, sewer appurtenances, septic tanks, storm sewers, cemeteries, and/or the existence of livestock in pastures is specifically prohibited within a 50-foot radius of the water well described and located below.

4.This easement permits the construction of homes or buildings upon the Grantor’s property, and farming and ranching operations, as long as all items in Restrictions Nos. 2 and 3 are recognized and followed.

The Grantor’s property subject to this Easement is described in the documents recorded at: Volume [number], Pages [number] of the real property records of [county] County, Texas.

Property Subject to Easement:      

All of that area within a 150 foot radius of the water well located [number] feet at a radial of degrees from the [specify] corner of Lot [number], of a Subdivision of Record in Book [number], Page [number] of the County Plat Records, [county] County, Texas.

Term:

This easement shall run with the land and shall be binding on all parties and persons claiming under the Grantor(s) for a period of two years from the date that this easement is recorded; after which time, this easement shall be automatically extended until the use of the subject water well as a source of water for public water systems ceases.

Enforcement:

Enforcement of this easement shall be proceedings at law or in equity against any per­son or persons violating or attempting to violate the restrictions in this easement, either to restrain the violation or to recover damages.

Invalidation:

Invalidation of any one of these restrictions or uses (covenants) by a judgment or court order shall not affect any of the other provisions of this easement, which shall remain in full force and effect.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor does hereby grant and convey to Grantee and to its succes­sors and assigns the sanitary control easement described in this easement.

   
[Name of grantor]