Res 2013-016/Lease with Martin Marietta Materials Southwest, Inc.

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This Lease of Groundwater (the "Lease ") is entered into by and between City of San Marcos, a Texas municipal corporation (the "Lessor ") and Martin Marietta Materials Southwest, Inc., a Texas corporation (the "Lessee "). Lessor and Lessee are sometimes hereinafter referred to singularly as a party and collectively as the parties. This Lease is executed as of the date of the last signature by the parties, but effective retroactively in all respects and effective into the future as of the 1St day of January, 2013 (the "Effective Date "). Subject to the terms and conditions set out in this Lease, Lessor hereby leases to Lessee and Lessee does hereby lease from Lessor the following Edwards Aquifer Groundwater withdrawal rights: 1. Property: The Property consists of the right to withdraw and/or beneficially use 1000 acre feet per annum, of Edwards Aquifer groundwater derived from Edwards Aquifer Authority ( "EAA ") Permit No. P100- 828(HA00222) (the "Permit ") during the term set forth below (and not beyond such term), and all real and personal property rights, appurtenances, permits, authorities, licenses, consents and contract, if any, pertaining to all such property rights. 2. Term: The term of this Lease shall commence on January 1, 2013 and continue through December 31, 2013. 3. Approval by EAA/Lease Payment: Lessee agrees to pay Lessor the sum of $220,000.00 as the Lease Payment. The Lease Payment will be due to Lessor in twelve (12) equal month installments of $18,333.33 due by the 20th of each month with the first installment being due to Lessor on January 20, 2013 and the last installment due on December 20, 2013. In the event the EAA does not approve the transfer of the Property, the Lease will terminate and be of no force and effect and Lessor shall refund to Lessee any portion of the Lease Payment already paid to Lessee within ten (10) business days of Lessor's or Lessee's notice of the EAA's disapproval of the transfer. 4. Other Payments: Lessee shall pay the expense associated with: (i) recording the Application to Transfer -Lease with the EAA; and (ii) recording the Memorandum of Lease of Edwards Aquifer Groundwater in the appropriate county; (iii) any associated filing and recording fees. 5. Fees: Lessee will pay all currently assessed aquifer management fees ($84 per ac. ft.) applicable to the Property for calendar year 2013. In the event the EAA assesses any additional aquifer management fees to the Property in excess of $84 per ac. ft. for calendar year 2013, Lessee shall also pay those aquifer management fees to the EAA directly. 6. Reporting Use: Lessee is aware that it is a requirement of the EAA that (i) the volume of water pumped pursuant to the Permit must be metered by use of a certain type of metering device and (ii) a report of the volume of water pumped filed with the EAA on a regular basis. Lessee further covenants and agrees that Lessee shall be solely responsible for the installation and maintenance of EAA approved metering devices on the wells used by Lessee to produce groundwater pursuant to the Permit in good continuous working order to record and report to the EAA the volume of water pumped by Lessee pursuant to the Permit, as indicated on the referenced metering devices, on forms acceptable to the EAA. Lessee shall timely file all required reports with EAA.