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HomeMy WebLinkAboutResolution - 2005-R0067 - Contract Of Sale - Groundwater Rights - Frank Tidwell And Shane Hone - 02_10_2005Resolution No. 2005-R0067 February 10, 2005 ftem�No: 42" RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Contract of Sale for Groundwater Rights by and between the City of Lubbock (as Buyer) and Frank Tidwell and Shane H. Hone (collectively, as Seller) regarding groundwater rights in Bailey County, Texas. Said Contract of Sale is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 10th day of February 2005. ell TOM MARTIN, MAYOR PRO TEM ATTEST: Rebecca Garza, City Secretary APPROVED AS T CONTENT: Ches Carthel, Water Planning Engineer APPROVED AS TO FORM: ':�4 Richard K. Casner, First Assistant City Attorney as/ccdocs/Res. COSTidwell/Hone February 1, 2005 itesolu'doid N6. IM-Iwio February 1.0, 26 Tte>tnT©. 42 . CONTRACT OF SALE FOR GROUNDWATER RIGHTS jJ11S Contract of Sale (the "Contract") is made and entered into this _ 10,A-day of 4A_1 2005 (the "Effective Date"), by and between Frank Tidwell ("Tidwell"), 2315-A 50`h Street, Lubbock, Texas, 79412, and Shane H. Hone ("Hone"), 1517 Bell Street, Amarillo, Texas, 79106 (Tidwell and Hone are collectively referred to herein as the "Seller"), and the City of Lubbock, a Texas home -rule municipal corporation, P.O. Box 2000, Lubbock, Texas, 79457 (the "Buyer"). WHEREAS, Seller owns the surface estate and/or groundwater rights in, on and under certain real property located in Bailey County, Texas, being described on Exhibit "A", attached hereto and made a part hereof for all purposes (the "Land"); and WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from Seller, the groundwater rights, subject to the reservation set forth herein, upon the terms and conditions set forth herein. NOW, THEREFORE, for and in consideration of TEN DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Buyer agree as follows: ARTICLE I CONVEYANCE 1.01 Seller agrees to sell and convey to Buyer and Buyer agrees to purchase from Seller, upon the following terms and conditions, the following property: (a) 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 Land, now or in the future located in, on, or under the Land (the "Groundwater") and specifically including, but not limited to, the right to capture, explore for, drill for, develop, maintain, withdraw, produce, transport and/or otherwise beneficially use the Groundwater and the right to utilize the surface of the Land for the exercise of such rights, including rights of ingress and egress, over, across, and under the Land. (b) A blanket easement and right-of-way on, over, in, under, along, and across the Land for the purposes of installing, constructing, inspecting, operating, maintaining, repairing, removing, and replacing pipelines, electric transmission and communication lines and conduits, communication towers, pumps, monitor wells, water wells, well sites, water storage tanks, water treatment facilities, pump station facilities, buildings, machinery, equipment, personal property, roads, gates, erosion control structures, and Groundwater Rights Contract of Sale.Tidwell.Hone Page 1 of 17 all other necessary and desirable appurtenances, facilities and structures related thereto, as may be necessary or desirable in connection with the exploration, monitoring, drilling, extraction, capturing, production, transportation, storage and other utilization of the Groundwater on and from the Land, together with the right of ingress and egress over, under, upon and across the Land to engage in such activities as may necessary, requisite, convenient or appropriate in connection with the foregoing. Any roads, pipelines (other than collection or gathering lines to and from water wells) and electric lines utilized by Buyer in connection with the rights granted herein shall be located as near a boundary line on the Land as is reasonably practicable, as determined by Buyer in its discretion. (c) Sanitary control easements for public water wells to be granted by Seller or heirs, devisees, and assigns, as requested by Buyer from time to time whenever well sites are identified by Buyer, in form as required by applicable state and federal laws and regulations to provide sanitation easements around each of Buyer's well sites on the Land. This provision shall survive the closing of this transaction and the execution and delivery of the conveyancing documents contemplated hereby. In the event of a breach of this Section 1.01(c), Buyer may, at its option, enforce this provision by any remedy available to it by law, equity, contract or otherwise, including without limitation, specific performance and injunctive relief. (d) All permits, licenses or other governmental authorizations relating to the rights described in paragraphs (a) and (b), above, including without limitation, any permits issued by the High Plains Underground Water Conservation District No. 1. The items described in (a) through (d) of this Section 1.01 are collectively referred to herein as the "Property". 1.02 There is hereby reserved unto Hone, his heirs, devisees and assigns, the right to use the water under the Land for normal and usual domestic purposes on the Land, but excluding therefrom any right to utilize water for commercial uses of any kind or type and/or the right to sell such water. ARTICLE II CONSIDERATION 2.01 The Purchase Price (herein so called) to be paid by Buyer to Seller, jointly, for the sale and conveyance of the Property shall be Thirty Thousand Thirteen and no/100 Dollars ($30,013). The Purchase Price shall be payable by Buyer to Groundwater Rights Contract of Sale.Tidwell.Hone Page 2 of 17 Seller, jointly, in cash, cashier's check, or personal check, at close of the transaction contemplated hereby (the "Closing"). 2.02 Within ten (10) days following execution of this Contract by Seller and Buyer, Buyer shall deliver to (i) Stewart Title of Lubbock (the "Title Company"), a deposit in the amount of One Thousand Dollars ($1,000.00)(the "Earnest Money"), which shall, if the transaction contemplated hereby shall close, be applied to the Purchase Price, and if not, delivered as hereinafter provided; and (ii) Seller, jointly, a check in the amount of One Hundred Dollars ($100.00), which amount has been bargained for and agreed to as independent consideration of this Contract, such independent consideration is in addition to and independent of any other consideration or payment provided in this Contract, is non- refundable, shall be retained by Seller, notwithstanding any other provision of this Contract, and shall not be applied to the Purchase Price at Closing. ARTICLE III TITLE AND SURVEY 3.01 Within thirty (30) days after the Effective Date, Seller shall cause to be delivered to Buyer, at Seller's expense, a Title Commitment ("Commitment"), together with copies of all documents and plats ("Documents"), if any, which are shown on Schedule B or Schedule C as exceptions to the Commitment, issued by Stewart Title Guaranty Company (the "Underwriter"), showing Seller, and/or either of them, as record title owner of the Groundwater and surface estate of the Land, and the terms of which the Underwriter agrees to issue to Buyer at Closing an Owner's Policy of Title Insurance (the "Title Policy"), in the amount of Purchase Price, insuring Seller's, and/or either of them, fee simple title to the Groundwater and further insuring the Easements. 3.02 Within thirty (30) days after the Effective Date, Seller, at Seller's sole cost and expense, shall cause a Survey (herein so called) to be furnished to Buyer. The Survey shall be a new Survey prepared by a registered surveyor ("Surveyor") reasonably acceptable to Buyer; shall be currently dated; shall show the location on the Land of all improvements, fences, easements (identified by recording information), roads and rights -of -way; and shall contain a legal description of the boundaries of the Land by metes and bounds. The Surveyor shall certify to Buyer and to the Title Company that the Survey was made on the ground of the Land; that the Survey is correct; that there are no visible discrepancies, conflicts, encroachments, overlapping of improvements, fences, easements, roads or rights - of -way except as shown on the Survey; and that the Survey is a true, correct and accurate representation of the Land. The metes and bounds description of the Land contained in the Survey and in the Title Policy shall be used for purposes of describing the Land in the General Warranty Deed conveying the Property from Seller to Buyer. Groundwater Rights Contract of Sale.Tidwell.Hone Page 3 of 17 3.03 On or before thirty (30) days after Buyer's receipt of the last of the Commitment, Documents, and Survey, Buyer shall provide to Seller written notice of ,any objections to the Commitment and Survey (the "Objections"). Notwithstanding anything contrary herein, all items set forth in Schedule C of the Commitment shall be satisfied by Seller at or prior to Closing. Seller shall cure the Objections within twenty (20) days after Seller's receipt of Buyer's notice of the Objections. In the event Seller is unable or unwilling to cure all Objections within said twenty days, if said time period is not extended, Buyer may, at its election, either (a) terminate this Contract in its entirety by giving Seller written notice and have the Earnest Money returned to it; (b) extend the cure period an additional thirty (30) days; or (c) waive any such uncured Objections and proceed to Closing. 3.04 At Closing, Seller, at Seller's sole cost and expense, shall cause the Title Policy to be furnished to Buyer. ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS 4.01 For purposes of inducing Buyer to enter into this Contract and consummate the transaction contemplated hereby, each Seller represents and warrants to Buyer the following, which shall be true and accurate as of the date of this Contract and as of the date of Closing: (a) other than Seller, there are no parties presently in possession of the Land or the Groundwater or having any rights, of whatsoever kind or character, to same; (b) Seller has good and indefeasible fee simple title to the Land and Groundwater, free and clear of any and all liens, leases, tenancies, security interests, covenants, conditions, restrictions, rights of way, easements, judgments, mineral interests and any other matter that may affect title; (c) the execution by Seller of this Contract and consummation of the transactions contemplated hereby do not result in, and at Closing will not result in, a breach of any term or provision of, or constitute a default or condition which upon notice or lapse of time, or both, will ripen into a default under any contract, deed of trust, security agreement or any other obligation of which Seller, or either of them, is a party, or to which Seller, or either of them, the Groundwater, or the Land, or any portion thereof, is bound. 4.02 No Hazardous Substances, as defined below, are located on the Land, have been released into the environment, or deposited, discharged, placed or disposed of, at, on or under the Land. To the best of Seller's knowledge, no Hazardous Substances are located on the property adjoining the Land. "Hazardous Groundwater Rights Contract of Sale.Tidwell.Hone Page 4 of 17 Substances" shall mean, but not necessarily be limited to, any substance which is or contains (i) any hazardous substances now or hereafter defined in Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (42 U.S.C. §9601, et seq), or any regulations promulgated thereunder; (ii) any hazardous waste now or hereafter defined in the Resource Conservation and Recovery Act, as amended (42 U.S.C. §6901, et seq,), or any regulations promulgated thereunder; (iii) any substance regulated by the Toxic Substances Control Act, as amended (15 U.S.C. §2601, et seq), or any regulations promulgated thereunder; (iv) gasoline, diesel fuel, or any other petroleum hydrocarbons; (v) polychlorinated biphenyls; (vi) any additional substances or materials (whether solid, liquid or gas) which are classified, defined or listed as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, regulated substances, toxic substances, or words of similar meaning or regulatory affect under the foregoing statutes or any other present or future federal, state or local law, statute, ordinance, rule, regulation and the like, or the common law or any applicable laws relating to the Land. All the representations and warranties set forth herein shall survive closing of the transaction contemplated by this Contract. ARTICLE V DUE DELIGENCE REVIEW PERIOD 5.01 Within fifteen (15) calendar days after the Effective Date, Seller, at Seller's sole cost and expense, shall furnish to Buyer true and correct copies of the following items (collectively, the "Review Documents") to the extent Seller is either in possession of, or has the right to obtain, same: (a) any and all engineering, soil, environmental, hydrological, geological feasibility or similar studies, reports, maps or the like relating to the Property or the Land; (b) copies of all leases currently affecting the Property or the Land, including any and all amendments, modifications and supplements thereto; (c) copies of all agreements or documents relating to, or which may relate to or affect, the Land or Property; (d) copies of all surveys, plats and maps relating to all or any portion of the Land; and (e) copies of any title commitments or title policies relating to all or any portion of the Property or the Land. Groundwater Rights Contract of Sale.Tidwel1.Hone Page 5 of 17 5.02 At any time from and after the Effective Date, Buyer, its agents, employees, contractors, consultants, and invitees shall have the right to enter upon the Land and inspect, explore, test, and otherwise investigate the Land and Groundwater for purposes of conducting feasibility studies, tests, inspections, and examinations regarding the Land and the Groundwater deemed necessary or desirable by Buyer, including but not limited to, surveys, well tests, drilling of tests wells, hydrological studies, and transmission studies. All of such activities shall be at Buyer's expense. Notwithstanding any term or provision of this Contract to the contrary, should Buyer determine, in its sole and absolute discretion, that the Groundwater is not suitable for Buyer's intended purposes or is not of the value as presently contemplated, Buyer may terminate this Contract by giving written notice of such termination to Seller on or before one hundred twenty (120) days after the Effective Date (the "Review Period"). In the event that Buyer does not receive the Title Commitment, Survey, or Documents within the time specified in this Contract, the period of review described above shall be extended one (1) day for each day any of said items are past due. In the event Buyer elects to terminate this Contract pursuant to this Section 5.02, this Contract shall be terminated, and no party to this Contract shall thereafter have any further rights, liabilities or obligations hereunder to the other. The provisions of this Section 5.02, and all other provisions of this Contract allowing Seller to terminate upon the occurrence of certain events, are cumulative and not in lieu of each other. ARTICLE VI CLOSING 6.01 Closing shall be held at the office of the Title Company (or such other location as may be mutually agreed upon by Seller and Buyer) on or before thirty (30) days following the expiration of the Review Period. 6.02 (a) At Closing, Seller shall: (i) cause the Title Policy to be issued to Buyer, subject only to the exceptions permitted thereon by Buyer; (ii) deliver full and exclusive possession of the Property, free and clear of any and all unpermitted restrictions, conditions, easements, liens, and other encumbrances; (iii) execute and deliver such documents as may be reasonably required by Buyer, Underwriter and/or Title Company; (iv) deliver a General Warranty Deed ("Deed") in the form attached hereto as Exhibit `B", and made a part hereof, conveying the Property to Buyer. (b) At Closing, Buyer shall deliver the purchase price to Seller, jointly. (c) Current taxes and assessments upon the Property, if any, shall be prorated as of Closing. Groundwater Rights Contract of Sale.Tidwell.Hone Page 6 of 17 ARTICLE VII EVENTS OF DEFAULTS / REMEDIES 7.01 Seller's Remedies upon Buyer's Defaults. In the event Buyer fails to comply with any of the provisions of this Contract for any reason other than (i) termination of this Contract by Buyer pursuant to a right to so terminate expressly set forth in this Contract; or (ii) failure by Seller, or either of them, to perform hereunder, Seller shall be entitled, as their sole and exclusive remedy, to terminate this Contract and recover the Earnest Money as liquated damages in full satisfaction of any and all claims they may have against Buyer hereunder. 7.02 Buyer's Remedies upon Seller's Defaults. In the event Seller fails to comply with any of the provisions of this Contract for any reason other than (i) termination of this Contract by Buyer pursuant to a right to so terminate expressly set forth in this Contract; or (ii) failure by Buyer to perform hereunder, Buyer shall be entitled to: (i) terminate this Contract by giving Seller notice of such election prior to Closing and receive back the Earnest Money; (ii) enforce specific performance hereof; and (iii) seek other relief as may be available to it by law or equity. All of the remedies set forth in this Section 7.02 are cumulative and not exclusive and may be exercised concurrently. The exercise of a remedy by Buyer hereunder shall not, in any event, be deemed an election of remedies. 7.03 In the event any litigation arises out of this Contract between the parties hereto, the non -prevailing party shall pay the prevailing party all reasonable attorneys' fees, expenses, and costs expended or incurred in connection with such litigation. ARTICLE VIII MISCELLANEOUS 8.01 This Contract constitutes the entire agreement of the parties hereto regarding the subject matter hereof and supercedes any and all prior agreements and understandings of the parties hereto, whether oral or written. This Contract can be amended or modified only by a duly authorized written agreement executed by Seller and Buyer. 8.02 This Contract, and the terms, covenants and conditions herein contained, shall be covenants running with the land and inure to the benefit of and be binding upon the heirs, devisees, successors and assigns of each of the parties hereto. 8.03 Any notice required, provided for or permitted by this Contract must be in writing. Notice may, unless otherwise provided herein, be given or served by depositing same in United States mail, postage prepaid, registered or certified, and Groundwater Rights Contract of Sale.Tidwell.Hone Page 7 of 17 addressed to the party to be notified, with a return receipt requested, by hand delivering same to such party or by sending a facsimile transmission. Notice deposited in the United States mail in the manner herein above described shall be effective upon such deposit. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purposes of notice, the addresses of the parties shall, until changes hereinafter are provided, be as follows: Seller: Frank Tidwell 2315-A 50`h Street Lubbock, Texas 79412 Facsimile : Shane H. Hone 1517 Bell Street Amarillo, Texas 79106 Facsimile: Buyer: City of Lubbock Attn: Ches Carthel, Water Planning Engineer P O Box 2000 Lubbock, Texas 79457 Facsimile: 806-775-2051 with copy to: Richard K. Casner, First Assistant City Attorney P O Box 2000 Lubbock, Texas 79457 Facsimile: 806-775-3307 The parties hereto shall have the right from time to time to change their respective addresses, by providing at least five (5) days written notice to the other party as provided herein. 8.04 In case any one or more of the provisions contained in this Contract shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof Groundwater Rights Contract of Sale.Tidwell.Hone Page 8 of 17 and this Contract shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 8.05 All references to the exhibits contained herein are references to exhibits attached hereto all of which are made a part hereof. It is expressly understood that if any exhibit attached hereto which is to be executed and delivered at Closing contains blanks, the same should be completed correctly and in accordance with the terms and provisions contained herein and as contemplated hereby prior to or at the time of execution and delivery thereof. 8.06 All representations and warranties made in this Contract by Seller shall be continuing and shall be true and correct on and as of the date of Closing with the same force and effect as if made at that time. Seller agrees, jointly and separately, to indemnify, defend and hold Buyer harmless from and against any loss, cost, liability, claim, fine, judgment or expense, including without limitation, attorneys' fees and court costs, arising out of any breach of Seller's representations and warranties made in this Contract. All of the representations and warranties made by Seller in this Contract and the indemnity contained in this Section 8.06 shall survive the Closing. IN WITNESS WHEREOF, this Contract has been duly executed by the parties hereto as of the Effective Date. Frank Tidw-ell f� —8hafte H. Hone CITY OF LUBBOCK TOM MARTIN, MAYOR PRO TEM ATTEST: R ecca Garza, City Secretary -�— Groundwater Rights Contract of Sale.Tidwell.Hone Page 9 of 17 APPROVED TO CONTENT: r? L� Ches Carthel, ater Planning Engineer APPROVED AS TO FORM: Richard Casner, First Assistant City Attorney Richard/Tidwell Contract of Sale.Rdline Groundwater Rights Contract of Sale.Tidwell.Hone Page 10 of 17 EXHIBIT "A" To Contract of Sale For Groundwater Rights LEGAL DESCRIPTION of 137.73 acres of land, located in Bailey County, Texas, and being further described as follows: That certain 183.56 acres of land being a part of Survey 5, League 205, Garza County School Land, Bailey County, Texas and being described by metes and bounds as follows: BEGINNING at a 2 inch pipe found for the Southwest corner of Survey 5 and the Southwest corner of this tract; THEN N 2°55'44" E, a distance of 5860.05 feet to a 1 '/4 inch pipe found for the Northwest corner of Survey 5 and the Northwest corner of this tract; THEN S 86°54'36" E, along the North line of Survey 5, a distance of 5918.24 feet to a '/2 inch steel rod with cap found for the Northeast corner of this tract; THEN S 3°07' 14" W, a distance of 766.65 feet to a point for the Easternmost Southeast corner of this tract; THEN N 86035' 11" W a distance of 5178.59 feet to a 1 '/4 inch pipe found for an inside corner of Survey 5 and an inside corner of this tract; THEN S 3°52'24" W a distance of 5112.42 feet to a 1 '/4 inch pipe found for the Southernmost Southeast corner of Survey 5 and Southernmost Southeast corner of this tract; THEN N 87°50'49" W a distance of 653.05 feet to the POINT OF BEGINNING. LESS AND EXCEPT that certain 45.83 tract of land, described by metes and bounds as follows: BEGINNING at a 2 inch iron pipe found for the Southwest corner of Survey 5 and the Southwest corner of this tract; THEN N 02°55'44" E along the West line of Survey 5 a distance of 2953.51 feet to a point for the Northwest corner of this tract; THEN S 86053'46" E a distance of 701.50 feet to a point in an East line of Survey 5 for the Northeast corner of this tract; THEN S 03°52'24" W a distance of 2942.92 feet to a 1 i/4 inch iron pipe found for the Southernmost Southeast corner of Survey and the Southeast corner of this tract; THEN N 87050'49" W a distance of 653.05 feet to the POINT OF BEGINNING. Groundwater Rights Contract of Sale.Tidwell.Hone Page 11 of 17 EXHIBIT "B" to Contract of Sale For Groundwater Rights STATE OF TEXAS § COUNTY OF BAILEY § GENERAL WARRANTY WATER DEED KNOW ALL MEN BY THESE PRESENTS: WHEREAS, pursuant to Warranty Deed With Vendors Lien, dated on or about June 17, 2003, Frank Tidwell conveyed to Shane H. Hone ("Hone"), reserving all of the water rights therein, a certain two hundred (200) acre tract of land, called Tract 12 therein and located in Survey 5, League 205, Garza County School Land and Tract 4 of Survey 2, League 205, Walker County School Land, John DePauw Land, Bailey County, Texas, according to the map, plat and/or dedication deed thereof recorded in Volume 63, Page 243, Deed Records of Bailey County, Texas, ("Tract 12"), being more particularly described therein; WHEREAS, by Warranty Deed With Vendors Lien, dated June 17, 2003, Frank Tidwell conveyed to Shane H. Hone, reserving all of the water rights therein, a certain two hundred (200) acre tract of land, called Tract 11 therein and located in Section 56, Block Y, Survey 5, League 205, Garza County School Land and Tract 4 of Survey 2, League 205, Walker County School Land, John DePauw Land, Bailey County, Texas according to the map, plat and/or dedication deed thereof recorded in Volume 63, Page Groundwater Rights Contract of Sale.Tidwell.Hone Page 12 of 17 c. 243, Deed Records of Bailey County, Texas, ("Tract 11"), being more particularly described therein; WHEREAS, that certain 137.73 acre tract of land, more or less, is comprised of a portion of the lands contained in Tract 11 and Tract 12, and is particularly described in Exhibit "A", attached hereto (the "Land"); WHEREAS, Frank Tidwell and Shane H. Hone now desire to convey to the. City of Lubbock, Texas, a Texas home rule municipal corporation, 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 Land, a blanket easement and right-of-way on, over, in, under, along and across the Land for purposes set forth below, and other certain rights and interests as provided below: NOW, THEREFORE, Frank Tidwell, not joined by his wife for the reason that the property conveyed herein is not homestead, has never been part of his homestead, nor intended to be homestead, and Shane H. Hone (herein collectively called "Seller"), for and in consideration of sum of Ten and No Hundred Dollars ($10.00) and other good and valuable consideration to Seller in hand paid by the City of Lubbock, a Texas home -rule municipal corporation (herein called "Buyer"), P.O. Box 2000, Lubbock, Texas, 79457, the receipt and sufficiency of which is hereby acknowledged and confessed, has GRANTED, SOLD, AND CONVEYED, and by these presents does GRANT, SELL, AND CONVEY, unto Buyer: (a) 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 Land, Groundwater Rights Contract of Sale.Tidwell.Hone Page 13 of 17 a now or in the future located in, on, or under the Land (the "Groundwater") and specifically including, but not limited to, the right to capture, explore for, drill for, develop, maintain, withdraw, produce, transport and/or beneficially use the Groundwater and the right to utilize the surface of the Land for the exercise of such rights, including rights of ingress and egress over, across, and under the Land; (b) a blanket easement and right-of-way on, over, in, under, along, and across the Land for the purposes of installing, constructing, inspecting, operating, maintaining, repairing, removing, and replacing pipelines, electric transmission and communication lines and conduits, communication towers, pumps, monitor wells, water wells, well sites, water storage tanks, water treatment facilities, pump station facilities, buildings, machinery, equipment, personal property, roads, gates, erosion control structures, and all other necessary and desirable appurtenances, facilities, and structures related thereto, as may be necessary or desirable in connection with the exploration, monitoring, drilling, extraction, capturing, production, transportation, storage and other utilization of the Groundwater on and from the Land, together with the right of ingress and egress over, under, upon and across the Land to engage in such activities as may be necessary, requisite, convenient or appropriate in connection with the foregoing; and Groundwater Rights Contract of Sale.Tidwell.Hone Page 14 of 17 t (c) all permits, licenses, or other governmental authorizations relating to the rights described in paragraphs (a) and (b), above, including without limitation, any permits issued by the High Plains Underground Water Conservation District No. 1. (All the above described property, property rights and property interests are herein collectively referred as the "Property"). Seller further covenants and bind themselves, their heirs, devisees and assigns, to convey to Buyer sanitary control easements for public water wells, as requested by Buyer, from time to time, whenever well sites are identified by Buyer, in form as required by applicable state and federal laws and regulations, to provide sanitation easements around each of Buyer's well sites on the Land. This covenant shall be deemed for all purposes as a covenant running with the land. Buyer shall, in exercising its rights granted herein, locate any roads, pipelines (other than collection or gathering lines to and from water wells) or electric lines as near a boundary line on the Land as is reasonably practicable, as determined by Buyer in its discretion. There is hereby reserved unto Hone, his heirs, devisees, and assigns, the right to use the water under the Land for normal and usual domestic purposes on the Land, but excluding therefrom the right to utilize water for commercial uses of any kind or type and/or the right to sell such water. TO HAVE AND TO HOLD the Property, together with all and singular the rights and appurtances thereto in anywise belonging unto Buyer and Buyer's successors and assigns forever, and Seller does hereby bind Seller's heirs, devisees, successors and assigns to WARRANT AND FOREVER DEFEND all and singular the Property unto Groundwater Rights Contract of Sale.Tidwell.Hone Page 15 of 17 Buyer and Buyer's successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof. IN WITNESS WHEREOF, executed this 1 day of ur , 2005. SELLER: FRANK TIDWELL STATE OF TEXAS COUNTY OF .� SELLER: SHANE H. HONE 41. ignature This instrument was acknowledged before me on this — 1.0- day of;-161, 2005, by Frank Tidwell. [%TAOS WELDON NOTARY PUBLIC, STATE OF TEXAS MYcxmra�ion iron 088-4fl-2Q48 STATE OF TEXAS COUNTY �Jyij N ary Public, State of Texas My commission expires: tL �—/E} zc)OV This instrument was acknowledged before me on this 711 day of �� , 2005, by Shane H. Hone. TAOS WELDON NOTARY PUBLIC, Not Public, State of Texas srar �Fr�xAs M commission expires: � ltol?, ) My on res C 0.2008 Groundwater Rights Contract of Sale.Tidwell.Hone Page 16 of 17 C IN EXHIBIT "A" TO GENERAL WARRANTY WATER DEED LEGAL DESCRIPTION of 137.73 acres of land, located in Bailey County, Texas, and being further described as follows: That certain 183.56 acres of land being a part of Survey 5, League 205, Garza County School Land, Bailey County, Texas and being described by metes and bounds as follows: BEGINNING at a 2 inch pipe found for the Southwest corner of Survey 5 and the Southwest corner of this tract; THEN N 2°55'44" E, a distance of 5860.05 feet to a 1 1/4 inch pipe found for the Northwest corner of Survey 5 and the Northwest corner of this tract; THEN S 86054'36" E, along the North line of Survey 5, a distance of 5918.24 feet to a %2 inch steel rod with cap found for the Northeast corner of this tract; THEN S 3°07' 14" W, a distance of 766.65 feet to a point for the Easternmost Southeast corner of this tract; THEN N 86'35' 11" W a distance of 5178.59 feet to a 1 1/4 inch pipe found for an inside corner of Survey 5 and an inside corner of this tract; THEN S 3°52'24" W a distance of 5112.42 feet to a 1 '/4 inch pipe found for the Southernmost Southeast corner of Survey 5 and Southernmost Southeast corner of this tract; THEN N 87°50'49" W a distance of 653.05 feet to the POINT OF BEGINNING. LESS AND EXCEPT that certain 45.83 tract of land, described by metes and bounds as follows: BEGINNING at a 2 inch iron pipe found for the Southwest corner of Survey 5 and the Southwest corner of this tract; THEN N 02°55'44" E along the West line of Survey 5 a distance of 2953.51 feet to a point for the Northwest corner of this tract; THEN S 86°53'46" E a distance of 701.50 feet to a point in an East line of Survey 5 for the Northeast corner of this tract; THEN S 03°52'24" W a distance of 2942.92 feet to a 1 '/4 inch iron pipe found for the Southernmost Southeast corner of Survey and the Southeast corner of this tract; THEN N 87050'49" W a distance of 653.05 feet to the POINT OF BEGINNING. Groundwater Rights Contract of Sale.Tidwell.Hone Page 17 of 17