Fill and Sign the Sample Lease Unsworth Properties Form

Page 1 of 3 CARBON DIOXIDE STORAGE LEASE This Lease (the “Lease”) is made and entered into on _____ (the “Effective Date” ), between _____, whose address is ______ (the “Lessor”), (whether one or more), and _____, whose address is _____ (the “Lessee”). Lessor has the right to convey carbon dioxide (“CO 2”) storage rights in the premises (the “Property”) described as follows: (Description of Property) For valuable consideration, the receipt of which is acknowledged and confessed, Lessor and Lessee agree as follows: 1. Grant of Storage Rights: Lessor grants, leases, lets, and demises to Lessee, the Property for the exclusive purpose of conducting natural carbon dioxide operations in the _____ Formation, together with all appurtenant estates, interests, and rights as may be rea sonable or necessary for Lessee to conduct storage operations, including, without limitation: (i) the exclusive right to inject, store, and withdraw carbon dioxide into and from the _____ Formati on underlying the Property wholly or partly; (ii) the right to conduct operations, including drilli ng, completing, or reworking wells, and construction and laying of pipelines for transporting carbon dioxide over, under, and across the Property; (iii) to retain title to and ownership of stored CO 2, free of any and all claims or rights by Lessor to receive royalty or any other payment in the CO 2; (iv) the use of the surface of the Property, or any part of it, with rights of ingress and egress, as may be reasonably necessary for Lessee to conduct storage operations or and in connection with those operations by Lessee on the Property and on neighboring lands, and the right to remove, at any time during or within a reasonable time after the termination of this Lease, all machinery, structures, piping, and fixtures placed on the Property; and, (v) other rights and privileges as m ay be necessary or convenient for Lessee to conduct CO 2 storage operations on the Property or adjacent lands, including obtaining regulatory approvals, storage rights, and securing markets for CO 2 storage. The activities described in this paragraph are known and referred to as “CO 2 Storage Operations.” 2. Term: This Lease shall be in force for a primary term of _____ year(s), and as long thereafter as CO 2 is being stored under the Property or adjacent lands in the _____ Formation, CO 2 Storage Operations are being conducted in the _____ CO 2 Storage Unit, and CO 2 storage rental payments are being paid to Lessor by Lessee pursuant to Paragraph 4. below. 3. Pooling: In addition to all other rights granted by this Lease, Lessee is granted the right, at its option, to pool or unitize all or any portion of the Property with any other land, le ase, or leases adjacent to or in the vicinity of the Property, to establish a CO 2 storage unit (a “Storage Unit”) or units to protect the CO 2 injected and stored by the Lessee in the _____ Formation under the Property or acreage pooled with it. The formation of a new Storage Unit or the enlargement of the existing Storage Unit shall conform to the size prescribed or permit ted under the jurisdiction of the appropriate governmental rule or order, and Storage Units later formed Page 2 of 3 shall continue in full force and effect. Additionally, Lessee may conduct physical operations at one or more locations on a Storage Unit, which shall constitute storage operations for all of the tracts or parcels of land within the Storage Unit, including, without limitation, the Property. Lessee’s formation of any Storage Unit shall be independent of and separate from the formation of a unit pursuant to any existing or future oil, gas and mineral leases. It shall be unnec essary for Lessor to approve any action or execute any instrument in addition to this Lease as a condition for forming, modifying, or expanding a Storage Unit. 4. Storage Rentals: As full consideration for this Lease and the estates, rights, and interests with respect to the storage operations granted, Lessee agrees to pay Lessor an annual stora ge rental of _____ Dollars ($_____) (the “Storage Rentals”) in advance, beginning one year from the date of this Lease, and each year thereafter on or before the anniversary date of this Lease for as long as the _____ Formation is being utilized for CO 2 storage operations or the Property is deemed by Lessee to be in a buffer zone for the protection of the _____ Storage Unit. These payments are to be tendered by U. S. mail to Lessor at the address set out above and t he mailing shall constitute full compliance by Lessee with the rental payment obligations. T he Storage Rental amount payable to Lessor shall be proportionately reduced based on the net acre age owned by Lessor divided by the total acreage of the leased Property. Lessor shall deliver wri tten notice to Lessee of any change of address, change of depository, or change of ownership at least thirty (30) days before the date Lessee is requested to make any change in the payment of all royalties or Storage Rentals. Lessee shall not be held in default for failure to m ake the applicable Storage Rental payment until thirty (30) days after receipt of written notice of non-paym ent from Lessor. 5. Structures on Property and Surface Restoration: At such time that Lessee is no longer conducting CO 2 Storage Operations, Lessee agrees to remove all unnecessary equipment and materials and re-grade the disturbed area so as to return the surface to its origi nal condition as near as practical and repair or pay for any damages to improvements to the land that may be cause as a result of Lessee’s operations. 6. Non-Disturbance: In order to protect Lessee’s storage operations in the _____ Formation, Lessor agrees to use acreage and depths underlying the Property not subject to this Lease for exploration activities in a manner that will not disturb the _____ Formati on, or impair, damage, or interrupt Lessee’s storage operations. Lessor agrees to use the acreage for pooling purposes only, and will require any future oil, gas, and mineral lessee to adhere to the non- disturbance provisions of this paragraph. If Lessor fails to comply with this non-disturbance provision, that failure will foreseeably result in immediate harm to Lessee’s storage operations which cannot be adequately compensated by monetary damages. Therefore, Lessee shall have the right to all remedies, including the right to: (i) enjoin any pending exploration opera tion that is inconsistent with, or in violation of, this non-disturbance provision; and, (ii) recover damages related to or resulting from a breach of this covenant by any future lessee or any third party. 7. Surrender: Lessee may, at any time, on payment of all Storage Rentals then due, surrender the Lease as to all and any part or parts of the Property by mailing a rele ase to the Lessor or by placing a surrender on record in the proper county, and thereafter this Lease shall become null and void as to the land to which the release or surrender is made, and a ll payments Page 3 of 3 and liabilities thereafter to accrue by the terms of this Lease shall cease. If a part or parts of the Property is released or surrendered, the land retained shall continue to draw its pro rata share of the Storage Rentals provided for in this Lease. On the final surrender of all of the Property and the _____ Formation, or the termination of this Lease (no matter how termination may be brought about), Lessee shall: (a) file a notice of abandonment of the Property in the _____ Records of _____ County, _____, which shall release all of the Lessee’s estates, interests, and rights in the Property and in the _____ Formation; and, (b) have a period of twenty-four (24) months thereafter to (i) remove and salvage all Surface Equipment, (ii) restore the Property as provided in the Lease, and (iii) as long as necessary thereafter to withdraw all non-nati ve hydrocarbons injected into the _____ Formation during the term of this Lease, or on acreage adjacent to or in the vicinity of the Property. 8. Warranty; Rental Adjustment: Lessor warrants and agrees to defend the title to the Property and agrees that Lessee, at Lessee’s option, may pay and discharge any taxes, mort gages, or installments or interest or other liens existing, levied, or assessed on or against the Property, and, in the event Lessee exercises this option, it shall be subrogated to the rights of any holder or holders of them and Lessee may be reimbursed by applying to the discharge of any mortgage or installment or interest, tax or other lien, any sum becoming due Lessor under this L ease. All payments are to be made according to Lessor’s respective interest in the Property, i n accordance with the provisions of this Lease. If Lessor owns a less interest in the Property than the entire and undivided fee simple estate, the amounts provided for shall be paid to Lessor only in proportion which Lessor’s interest bears to the whole and undivided fee. 9. Assignment: No conveyance or assignment by Lessor shall be binding on Lessee until Lessee has been furnished with a certified copy of the instrument effecting the change. 10. Governing Law: This Lease shall be governed by and construed in accordance with the laws of the State of _____. The provisions of this Lease shall extend to and be binding on the heirs, legal representatives, successors and assigns of Lessor and Lessee. This Lease, executed, whether singularly or in multiple counterparts, shall be binding on the parties to it, and all of which shall constitute the same original instrume nt for all purposes, shall be effective for all purposes as of the Effective Date. Lessor Lessee (Acknowledgments)