Subsurface Underground Storage Lease and Agreement

Subsurface Underground Storage Lease and Agreement

(From a Surface Owner, With No Right to Use the Surface of the Lands being Granted)

This Underground Storage Lease and Agreement (the “Storage Lease” or “Agreement”), is entered into by the undersigned, as “Lessor,” whose address is , and , as “Lessee,” whose address is .

1. Lessor, for valuable consideration, which Lessor acknowledges represents rental for the entire term of this Agreement, the receipt and sufficiency of which is acknowledged, leases and lets to Lessee, and Lessee hires and leases from Lessor, the exclusive right, on the terms and conditions provided for in this Agreement, to inject and store carbon dioxide in, and withdraw and remove carbon dioxide from the zones and/or formations, and/or any and all carbon dioxide stratum, strata, formations, or zones underlying the surface of the lands described in Exhibit “A” attached to this Agreement (the “Surface Lands”), those zones and formations are referred to in this Agreement as the “Storage Reservoir,” together with all rights incident to the injection, storage, withdrawal, and removal of carbon dioxide, including, but not limited to the following:

a. The right to use the Storage Reservoir as an Underground Storage Reservoir, to use, produce, or sell any currently producible gas or other hydrocarbons within the Storage Reservoir, and inject, store, and remove carbon dioxide, or air in the Storage Reservoir, and retain possession and ownership of any of those substances stored, as personal property; and,

b. To do and perform all other acts and things as may be necessary, usual or convenient for any and all of the foregoing purposes, or as a part of and in connection with the storage and removal of carbon dioxide in the Storage Reservoir underlying the Surface Lands along or conjointly with other lands in their vicinity.

2. This Storage Agreement shall continue for a term of () years or until the Storage Reservoir is not used for underground storage or the removal or injection for a period of () consecutive years, whichever is later, in which event this Storage Agreement shall terminate at the end of the consecutive year of non-use. Nothing in this paragraph or this Storage Agreement shall obligate or require Lessee to use or continue to use the Storage Reservoir. Lessee shall be the sole judge as to whether carbon dioxide is being stored within or removed from the Storage Reservoir, and Lessee’s determination shall be final and conclusive. No covenants or conditions shall be implied into this Agreement.

3. Lessee shall have no right to enter on the surface of the Surface Lands or within feet below the surface of the Surface Lands.

4. Any payment provided for in this Agreement, following the initial payment, may be made by currency, draft, or check mailed directly to Lessor at Lessor’s address provided for in this Agreement, or such other address Lessor provides to Lessee, in writing.

If, at any time, there be as many as four (4) parties entitled to any payments from Lessee, Lessee may withhold payment unless and until all those parties designate, in writing, in a recordable instrument filed, with a certified copy sent to Lessee, a common agent to receive any payments that are due.

5. If the Lessor owns a lesser interest in the Storage Reservoir than the entire and undivided fee simple estate, then all payments referred to in this Storage Agreement shall be proportionately reduced.

6. Lessee, at its option, may at any time quitclaim and surrender all of the Surface Lands and Storage Reservoir, or any portion of them, in which event this Storage Agreement shall be at an end as to that portion of the Surface Lands and Storage Reservoir surrendered and quitclaimed, and Lessee shall be relieved of all obligations under this Agreement as to the released Surface Lands and Storage Reservoir, except any obligations that have then accrued.

7. Performance of the covenants and conditions imposed on Lessee by this Agreement shall be excused while, and to the extent that, Lessee is hindered in or prevented from complying with its terms, in whole or in part, by war, riots, strikes, walkouts, action of the elements, accidents, inability to obtain services or materials in the open market, or to obtain transportation of materials or equipment, laws, rules, and regulations of any federal, state, municipal, or other governmental agency or other cause beyond the control of the Lessee, whether similar or dissimilar to those specifically enumerated without regard to whether the cause exists at the date of this Agreement or later arises; provided, however, that Lessee shall provide written notice to Lessor of any claim of suspension or excuse of Lessee’s obligations under this paragraph, specifying with particularity the act, event, or condition giving rise to the claim of suspension or excuse and specifying the date on which the act, event, or condition arose.

8. Lessor warrants and agrees to defend the title to the Surface Lands and Storage Reservoir and should Lessor later acquire any additional rights, title, or interests in or to the Storage Reservoir or Surface Lands, those shall be subject to the provisions of this Agreement to the same extent as if owned by Lessor at the date of this Agreement. Lessor agrees that Lessee shall have the right at any time to redeem for the Lessor, by payment, any deed of trust, mortgage, taxes, or other liens on the Surface Lands, or interest in them, in the event of default of payment by the Lessor, and shall be subrogated to the rights of the holder of any liens, and Lessor agrees that any payments made by the Lessee on behalf of Lessor shall be deducted from any amounts of money which may become due the Lessor under the terms of this Storage Agreement.

9. To the extent Lessor owns any rights, title, or interests in and to the mineral estate underlying the Surface Lands, Lessor grants and conveys to Lessee all of Lessor’s rights, title, and interests in and to the oil, gas, and minerals underlying the Surface Lands which lie within the Storage Reservoir. This conveyance of the oil, gas, and minerals shall be for a limited term and until the termination of this Storage Agreement. On the recording of a surrender, release, or quitclaim of this Storage Agreement in the Official Records of the county in which the Surface Lands are located, the oil, gas, and minerals underlying the Surface Lands within the Storage Area conveyed by this Agreement shall automatically revert to the Lessor and Lessor’s successors and assigns.

10. This Storage Agreement shall extend to and be binding on the heirs, assigns, executors, administrators, personal representatives, and successors of Lessor and Lessee, and either party may assign, transfer, and convey, either in whole or in part, their ownership or interest in the land, rights, privileges, and property covered by this Storage Agreement; but no change in ownership of the Surface Lands shall be binding on Lessee until the instrument conveying title shall have been properly recorded in the Official Records of the county in which the Surface Lands are located, and a certified copy furnished the Lessee.

11. Any notices or requests required or permitted by this Agreement shall be deemed sufficient as to delivery if given in writing, deposited in the United States mails, registered, return receipt requested, addressed to the other party as follows:

Lessor:

Lessee:

This Storage Agreement shall be effective on the date of its execution by Lessor set forth below.

(Acknowledgment)

(Exhibit “A”: Description of Lands covered by the Agreement, the “Surface Lands.”)