EX-10.4.22 86 file078.htm LEASE AGREEMENT, DATED 6/2/71



CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.

                                                                 EXHIBIT 10.4.22

                                             Lease and Agreement
                                             Union Oil Company of California

                                      UNION

     THIS LEASE AND AGREEMENT, made and entered into as of this 2nd day of June
1971, by and between DOROTHY GISLER, a widow, JOAN C. HILL and JEAN C. BROWNING

hereinafter referred so as "Lessor", whether one or more, and UNION OIL COMPANY
OF CALIFORNIA, a California corporation, hereinafter referred to as "Lessee".

     WITNESSETH: That Lessor, for and in consideration of Ten Dollars ($10.00)
in hand paid to Lessor by Lessee, the rentals provided for hereinafter, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and in consideration of the covenants and agreements
hereinafter contained by the Lessee to be kept and performed. Lessor has
granted, leased, let and demised and by these presents does grant, lease, let
and demise to Lessee, its grantees, successors and assigns, upon end subject to
the terms and conditions hereinafter set forth, all that certain land (herein
sometimes referred to as the "leased land") situate in the County of Imperial,
State of California, and more particularly described as follows, to-wit:

























(deemed to contain, for the purposes hereof, 204.52 acres, whether there be more
or less) with the sole and exclusive right to Lessee to explore for (by such
methods as it may desire), drill for, produce, extract, take, remove and sell
hot water, steam and thermal energy and extractable

                                                         Lease No. Weber 602051
                                                                         ------



minerals from, and to store, utilize, process, convert and otherwise treat such
hot water, steam and thermal energy upon, said land, and to extract any
extractable minerals during the term hereof, and to inject or reinject in the
leased land effluence from wells located on the leased land or on lands in the
vicinity thereof, with the right of entry on the leased land and use and
occupancy thereof-at all times for said purposes and the furtherance thereof,
including the right to construct, use and maintain thereon and to remove
therefrom structures, facilities and installations, pipe lines, utility lines,
power and transmission lines. Further, the Lessee is hereby granted the use of
roads and ponds on said land together with such rights of way and easements
across said land for the construction of roads, ponds, pipe lines, power and
telephone transmission lines as are necessary or convenient for the exploration,
operation and development of Leased Substances on the leased land or in the
vicinity thereof. In the event this lease should terminate with respect to all
other rights for any reason, the rights herein granted with respect to such
roads, ponds, rights of way and/or easements as are being used at the time of
such termination shall remain in effect so long as such roads, ponds, rights of
way and/or easements are being used by the Lessee, its successors and assigns.
Following such termination, Lessee agrees to pay an annual rental during the
period of use at the rate of ten per cent (10%) of the then current value used
in tax assessments of the land occupied by such roads, ponds, rights of way
and/or easements being used. The possession by Lessee of the leased land shall
be sole and exclusive for the purposes hereof and for purposes incident or
related thereto, excepting that Lessor reserves the right to use and occupy said
land, or to lease or otherwise deal with the same, without unreasonable
interference with Lessee's rights, for mining or extraction and utilization of
minerals lying on the surface of or in vein deposits on or in said land, or for
the extraction of oil, natural hydrocarbon gas and other hydrocarbon substances,
or for any and all uses other than the use and rights permitted to Lessee
hereunder. Lessee agrees to conduct Its activities in a manner which will not
unreasonably interfere with the rights reserved to Lessor. The leased land
includes also any rights of Lessor, presently owned or hereafter acquired, in
and under roads, underlying ditches, and rights of way traversing or adjacent to
said land.

     For the purposes hereof the following definitions shall apply:

     (a) The terms "hot water", "steam" and "thermal energy" shall mean natural
geothermal water and/or steam, and shall also mean the natural heat of the earth
and the energy present in, resulting from or created by, or which may be
extracted from, the natural heat of the earth or the heat present below the
surface of the earth, in whatever form such heat or energy occurs;

     (b) The term "extractable minerals" shall mean any minerals in solution in
the well effluence and all minerals and gases produced from or by means of any
well or wells on the leased land or by means of condensing steam or processing
water produced from or the effluence from any such well or wells; said term
shall also include any water so produced or obtained from condensation of steam;
and further provided that the term "gases" shall not include hydrocarbon gases
that can be produced separately from the hot water, steam and associated
minerals;

     (c) The term "Leased Substances" shall collectively refer to the matter,
substances and resources, defined in (a) and (b) above, that are the subject of
this lease;



     (d) The term "power potential" as used herein with respect to any well or
wells shall mean the quantity, or units, of energy capable of being recovered
from the hot water, steam or thermal energy produced therefrom by means of any
energy conversion or utilization facility (including, but not limited to,
electrical generating facilities) or equipment designed for use thereof;

     (e) The term "sufficient power potential" as used herein shall be deemed to
mean that power potential which, in the judgment of Lessee shall be sufficient
for the commercial sale or utilization thereof, or shall warrant the
construction of facilities for the commercial sale or other utilization thereof,
or shall justify additional drilling or other operations on the leased land;

     (f) The word "commercial" used in connection with various phrases herein
shall mean those quantities of Leased Substances produced, sold or used, the
value of which, after deducting Lessee's operating costs (or extraction costs in
case of extractable minerals), will provide to Lessee a net return over such
costs sufficient to cause Lessee to continue production thereof or to elect to
proceed with further development or exploratory operations on the leased land.

     The terms and conditions of this Lease and Agreement are as follows,
to-wit:

     1. This lease shall be for a term of ten (10) years from and after the date
hereof (herein called "primary term") and so long thereafter as Leased
Substances, or any of them, be derived or produced in commercial quantities from
the leased land or lands pooled or combined therewith, and for so long, as well,
as Lessee is prevented from producing same, or the obligations of Lessee
hereunder are suspended, for the causes hereinafter set forth.

     If at the expiration of the primary term Lessee has not completed one or
more wells on the leased land, or land pooled therewith, separately or
collectively producing or being capable of producing steam of sufficient power
potential and/or extractable minerals in commercial quantities but Lessee is
then engaged in operations for drilling or reworking of any well on the leased
land or land pooled therewith, this lease shall remain in force so long as
drilling or reworking operations are prosecuted (whether on the same or
different wells) with no cessation of more than six (6) months, and if they
result in production or the establishment to the satisfaction of the Lessee of
the existence of sufficient power potential and/or extractable minerals in
commercial quantities, such well or wells will be deemed to have been completed
and such existence so established during the primary term of this lease.

     2. It is understood and agreed that the initial consideration paid upon the
execution hereof covers not only the privileges granted to the date when a
rental is payable as hereinafter provided, but any and all other rights
conferred hereunder. If on or before one (1) year from the date hereof Lessee
has not drilled such well or wells on the leased land or land pooled therewith
as to indicate or establish to the satisfaction of Lessee the existence of
sufficient power potential and/or extractable minerals in commercial quantities,
then, but subject to Lessee's right of surrender, on or before said anniversary
date, Lessee shall pay or tender to Lessor an annual rental in the amount of One
Thousand Twenty-Two and 60/100 - - - - - Dollars ($1,022.60), which shall
constitute rental until the next anniversary date hereof, and thereafter Lessee
shall, on or before each succeeding anniversary date during the primary term
hereunder, pay or tender



to Lessor an annual rental in the aforesaid amount, this until such time as from
the drilling of well or wells on the leased land, or tend pooled therewith,
there has been established to the satisfaction of the Lessee the existence of
sufficient power potential and/or extractable minerals in commercial quantities.
Upon such establishing as aforesaid, Lessee may nevertheless continue to pay or
tender annual rental payments on or before each anniversary date, this until
Lessee has commenced the actual sale of one or more Leased Substances, and so
long as such annual rental payments be so paid or tendered this lease shall
remain in force and effect, even though thereby extended past the primary term,
and all payments so paid or tendered after the expiration of said primary term
shall be deemed advance royalties, and so long as same are paid each well or
wells shall be deemed to be actually producing one or more Leased Substances in
commercial quantities under the terms hereof; provided, however, that if within
five (5) years from the date of expiration of the primary term hereof Lessee
shall have failed to make, or make arrangements for by executed contract or
contracts, a bona fide commercial sale of one or more Leased Substances then
Lessor, at its option, may consider Lessee in default hereunder. Additionally,
should Lessee fail to make any annual payment herein provided for on or before a
particular anniversary date, Lessor may, at its option, consider Lessee in
default hereunder.

     3. Lessee shall pay to Lessor a royalty Ten Percent (10%) of the gross
proceeds received by Lease from the sale of hot water, steam or thermal energy,
as such, produced from the leased land at and as of the point of origin on the
leased land; royalty on steam may be computed and paid for on the basis of
pounds of steam produced, saved and sold by Lessee, or may be computed on the
basis of the number of kilowatt hours of electric power generated by the use of
such steam, but shall be computed and paid for on whatever basis which shall
properly reflect the royalty portion of the gross proceeds received by Lessee
from sale of hot water, steam and thermal energy, as such, produced from the
leased land at and as of the point of origin on the leased land. With respect to
extractable minerals, a royalty Lessee shall pay to Lessor Ten Percent (10%) of
the net proceeds received by Lessee from the sale of any gas (as herein defined)
and from the sale of effluence (containing minerals and/or minerals in solution)
produced and sold from any well or walls on the leased land, or, in the event
Lessee extracts from the effluence minerals and/or minerals in solution Ten
Percent (10%) of the proceeds received by Lessee from the sale of minerals
and/or minerals in solution contained in and extracted from the effluence
produced and sold from such well or wells less costs of transportation and
extraction. Lessee shall pay to Lessor on or before the twenty-fifth day of each
month the royalties accrued and payable for the preceding calendar month, or on
or before the twenty-fifth day of the month next following that in which Lessee
receives payment therefor from the purchaser thereof, whichever method shall
apply, and in making such royalty payments Lessee shall deliver to Lessor
statements setting forth the basis for computation and determination of such
royalty.

     Lessee shall not be required to account to Lessor for or to pay any royalty
on hot water, steam, thermal energy or extractable minerals produced by Lessee
on the leased land which are not utilized, saved and sold, or which are used by
Lessee in its operations on or with respect to the leased land for or in
connection with the developing, recovering, producing, extracting and/or
processing of hot water, steam and/or minerals in solution or in facilities used
in connection therewith, including operations of facilities for the generation
of electric power, or which are unavoidably lost.




     Lessee shall have the right, from time to time and at any time, to
commingle (for purposes of storing, transporting, utilizing, selling or
processing, or any of them) the or any of the Leased Substances produced or
extracted from production from the leased land or lands pooled therewith with
like Leased Substances, or any of them, produced from other lands or units in
the vicinity of the leased land, and in the event of such commingling Lessee
shall meter, gauge or measure the production from the leased land, or from the
unit or units including same or other units or lands, as the case may be, and
compute and pay Lessor's royalty payable under the provisions hereof on the
basis of such production so determined or allocated, as the case may be.

     4. Lessee may, at any time or from time to time as a recurring right,
either before of after production but within twenty (20) years from the date
hereof, for drilling, development, or operating purposes, pool, unitize or
combine all or any part of the leased land into a unit with any other land or
lands or lease or leases (whether held by Lessee or others) adjacent, adjoining
or in the immediate vicinity of the leased land which Lessee desires to develop
or operate as a unit, provided that the total acreage to be embraced within any
such drilling, development, or operating unit shall not exceed one thousand nine
hundred twenty (1,920) acres, plus an acreage tolerance of Ten Percent (10%).
Such a unit shall become in existence upon Lessee's filing in the office of the
County Recorder in the county in which the leased land is situated a notice of
such unitization, describing said unit. Lessee shall also mail a copy of such
notice to Lessor. Any well (whether or not Lessee's well) commenced, drilled,
drilling and/or producing or being capable of producing in any part of such unit
shall for all purposes of this lease be deemed a well commenced, drilled,
drilling and/or producing on the leased land, and Lessee shall have the same
rights and obligations with respect thereto and to drilling and producing
operations upon the lands from time to time included within any such unit a
Lessee would have if such lands constituted the leased land; provided, however,
that notwithstanding this or any other provision or provisions of this lease to
the contrary:

     (1) production as to which royalty is payable from any such well or wells
drilled upon any such unit, whether located upon the leased land or other lands,
shall be allocated to the leased land in the proportion that the surface acreage
of the leased land in such unit bears to the total surface acreage of such unit,
and such allocated portion thereof shall for all purposes of this lease be
considered as having been produced from the leased land, and the royalty payable
under this lease with respect to the leased land included in such unit shall be
payable only upon that proportion of such production so allocated thereto, and,

     (2) if any taxes of any kind are levied or assessed (other than taxes on
the land and on Lessor's improvements), any portion of which is chargeable to
Lessor under Paragraph 12 hereof, then the share of such taxes to be borne by
Lessor as provided in this lease, shall be in proportion to the share of the
production from such unit allocated to the leased land.

     Allocation as aforesaid of production from any such unit, whether to the
leased land or in like manner to other lands therein, shall continue
notwithstanding any termination, either in whole or in part (by surrender,
forfeiture or otherwise), of this or any other lease covering lands in such unit
until such time as the owner of such lands so terminated shall enter into an
agreement to drill for or produce or shall drill for or produce or permit or
cause the drilling for or production from any part of such lands, whereupon all
such lands formerly included in such unit and as to which the lease covering the
same shall have terminated shall be excluded in



determining the production to be allocated to the respective lands in such unit;
additionally, in the event of the failure of Lessor's, or any other owner's,
title as to any portion of the land included in any such unit, such portion of
such land shall likewise be excluded in allocating production from such unit;
provided, however, Lessee shall not be held to account for any production
allocated to any lands excluded from any such operating unit unless and until
Lessee has actual knowledge of the aforesaid circumstances requiring such
exclusion. Any exclusion shall be deemed effective the first day of the month
next following the date upon which such exclusion becomes finally established.

     Lessee may, at its sole option, at any time when there is no production in
such unit of Leased Substances in quantities deemed paying by Lessee, terminate
such unit by a written declaration thereof, in the same manner in which it was
created.

     5. At such time as Lessee shall have drilled and completed such well or
wells on the leased land or land pooled therewith which shall indicate to the
satisfaction of Lessee a sufficient power potential, or the existence of
extractable minerals in commercial quantities, Lessee may at any time thereafter
construct and install on the leased land facilities for the commercial sale or
use of hot water, steam or thermal energy produced from the leased land or lands
in the vicinity thereof or pooled therewith, or for the extraction of
extractable minerals, or for development of electric power from the use of steam
or thermal energy produced from the leased land or lands in the vicinity thereof
or pooled therewith.

     6. Lessee shall have the right to drill such well or wells on the leased
land as Lessee may deem desirable for the purposes hereof, including wells for
injection or re-injection purposes; provided, however, that Lessee agrees to
utilize for such purpose or purposes only so much of the leased land as shall be
reasonably necessary for Lessee's operations and activities thereon. No well
shall be drilled within one hundred (100) feet of any residence or barn now on
said land without Lessor's consent. Lessee shall have free use of water from
said land for all operations thereon or on land pooled therewith, provided that
such free use shall not interfere with Lessor's own use for domestic,
commercial, stock or agricultural purposes, nor interfere with any contractual
commitments of Lessor relating thereto and existing on the date hereof. Lessee
shall not be entitled to free ___________ which has been or is being purchased
by Lessor.

     6-a. Notwithstanding any provisions to the contrary contained herein, this
lease and all rights granted to Lessee hereunder are expressly limited to those
depths lying below 500 feet below the surface of the leased lands and Lessee
shall not have the right to enter upon or use any portion of said leased lands
lying above said depth.

     Lessee shall protect said land against liens of every character arising
from its operation thereon. Lessee, at its own expense, prior to commencing
operations on the leased land, shall obtain, and thereafter while this lease is
in effect shall maintain, adequate Workmens Compensation Insurance. Lessee shall
protect Lessor against damages of every kind and character arising out of the
operations or working of Lessee or those under Lessee's control upon the leased
land, but Lessee shall not be liable hereunder in the event of the negligence or
willful misconduct of parties other than Lessee. In the event any building or
personal property be



damaged or destroyed, or grazing or agricultural lands be destroyed by Lessee's
operations, then Lessee shall be liable for, and to the extent of, the
reasonable value thereof.

     Lessee shall have the right at any time and from time to time to remove
from the leased land any and all casing, mach-

     6-a. Notwithstanding any provisions to the contrary contained herein, this
lease and all rights granted to Lessee hereunder are expressly limited to those
depths lying below 500 feet below the surface of the leased lands and Lessee
shall not have the right to enter upon or use any portion of said leased lands
lying above said depth.

then producing or capable of producing or being drilled, and in respect to which
Lessee shall not be in default, together with the rights, rights of way and
easements which may be retained by Lessee by virtue of the granting clause of
this lease, and together with rights granted Lessee in Paragraph 5, hereof.

     9. Notwithstanding any other provisions of this lease, and in consideration
of the payment made by the Lessee to the Lessor for the execution of this lease,
Lessee shall have the right at any time prior to or after default hereunder, to
quitclaim and surrender to Lessor all right, title and interest of Lessee in and
to the leased land, or any part thereof, and thereupon all rights and
obligations of the parties hereto one to the other shall cease and terminate as
to the lands or areas so quitclaimed and surrendered, save and except as to any
then accrued monetary obligations or royalty obligations of Lessee then payable
as to which Lessee shall remain liable to Lessor, and save and except the
rights, rights of way and easements which may be retained by Lessee by virtue of
the granting clause of this lease, and provided that in the event of a partial
quitclaim and surrender, any future rentals will be reduced proportionately by
the number of acres in the area so quitclaimed and surrendered.

     10. In the event Lessor at the time of making this lease owns a less
interest in the leased land than One Hundred Percent (100%) of the rights and
interests herein granted or leased to Lessee, then the rentals and royalties
accruing hereunder shall be paid to Lessor only in the proportions which
Lessor's interest bears to a One Hundred Percent (100%) interest therein in the
leased land. Notwithstanding the foregoing, should Lessor hereafter acquire any
additional right, title or interest in or to the leased land, it shall be
subject to the provisions hereof to the same extent as if owned by Lessor at the
date hereof, and any increase in payments of money hereunder necessitated
thereby shall commence with the payment next following receipt by Lessee of
satisfactory evidence of Lessor's acquisition of such additional interest.

     11. Lessor hereby warrants and agrees to defend title to the leased land
and agrees that Lessee, at its option, may pay and discharge any taxes,
mortgages, trust deeds or other liens or encumbrances existing, levied or
assessed on or against the leased land, and in the event Lessee exercises such
option, Lessee shall be subrogated to the rights of any holder or holders
thereof, and shall have, among other rights, the right of applying to the
discharge of any such mortgage, tax or other lien or encumbrance any royalties
or rentals accruing to Lessor hereunder.

     12. Lessee shall pay all taxes levied on Lessee's structures and
improvements placed on the leased land by Lessee. Lessee shall pay 90% and the
Lessor shall pay 10% of any taxes



assessed against any Leased Substances stored on the leased land. In the event
any taxes are levied or assessed against the right to produce Leased Substances
from the leased land or in the event any increase in the taxes levied or
assessed against the leased land shall be based upon the production from the
leased land of Leased Substances, then in either such event Lessee shall pay 90%
of any such taxes or increase, as the case may be, and Lessor shall pay 10%
thereof. Lessor shall pay all taxes levied or assessed against the leased land
as such without reference to the production of Leased Substances therefrom and
shall pay all taxes levied and assessed against any and all rights in or to or
with respect to the leased land not covered by this lease and shall pay all
taxes levied and assessed against all structures and improvements owned by
Lessor or placed on the leased land by or pursuant to permission of Lessor.

     13. The rights of either party hereunder may be assigned in whole or in
part, and the right and privilege so to do is hereby reserved by each party, and
the provisions hereof shall extend to the heirs, successors and assigns of the
parties hereto, but no change or division in ownership of the land, rentals or
royalties, however accomplished, shall operate to enlarge the obligations or
diminish the rights of Lessee, and Lessee may continue to operate the leased
land and to pay and settle rentals or royalties as an entirety, and no such
change in ownership shall be binding upon Lessee until the expiration of thirty
(30) days after Lessee is furnished with satisfactory written evidence thereof.
In the event of assignment of this lease as to a segregated portion of said
land, the rentals payable hereunder shall be apportionable between the several
leasehold owners ratably according to the surface area of each, and default in
rental payment by one shall not affect the rights of other leasehold owners
hereunder.

     14. The obligations of Lessee hereunder shall be suspended and the term of
this lease shall be extended, as the case may be, while Lessee is prevented from
complying therewith, in whole or in part, by strikes, lockouts, riots, actions
of the elements, accidents, delays in transportation, inability to secure labor
or materials in the open market, laws, rules or regulations of any federal,
state, municipal or other governmental agency, authority or representative, or
other matters or conditions beyond the reasonable control of Lessee, whether or
not similar to the conditions or matters herein specifically enumerated.

     If at any time after the expiration of fifteen (15) years from date hereof
the production of all Leased Substances ceases for any cause other than one or
more of the causes hereinabove enumerated, this lease shall nevertheless remain
in full force and effect for an additional period of one (1) year from cessation
and thereafter if, and so long as, Lessee commences and continues diligently and
in good faith the steps, operations or procedures to cause a resumption of such
production (either through the existing wells or the drilling of new wells),
until such production be resumed.

     15. All statements of production and royalty and all payments to be made by
Lessee to Lessor hereunder shall be sent to the persons hereinafter set forth,
respectively, at the addresses indicated and each such person shall be entitled
to receive that portion of the total rentals and royalty payable hereunder as is
hereinafter set forth after the name of such person:




Lessee shall, upon notification of change of ownership in the lands or in
rentals or royalties hereunder, as provided in Paragraph 13 hereof, divide and
distribute the same to the new owners of such interests; provided, however, that
if at any time there are three or more persons entitled to rentals or royalties
hereunder, Lessee may, at its option, withhold payment of such rentals or
royalties until a majority in interest of such persons designate in writing in a
recordable instrument delivered to Lessee, a bank, trust company or corporation,
as a common agent and depositary, to receive all payments due hereunder to such
persons. Such designation may be changed at any time in the same manner.
Delivery of all statements and payments hereunder may be made by depositing the
same in the United States mail duly addressed to Lessor at the above address or
addresses or to such agent and depositary which shall constitute full
performance of Lessee's obligation to make such delivery. In the event that the
amount payable under this lease shall result in a payment of less than Five
Dollars ($5.00) becoming due Lessor, Lessee may, at its option, withhold and
accrue sufficient periodic payments until the total due Lessor exceeds Five
Dollars ($5.00).

     16. Any notice herein required or permitted to be given or furnished by one
party to the other shall be in writing. Delivery of such written notice to
Lessor shall be made by depositing the same in the United States mail duly
certified and addressed to Lessor at c/o James R. Moore, Rutan & Tucker, 401
Civic Center Drive West, Santa Ana, California 92701 and delivery of such
written notice to Lessee shall be made by depositing the same in the United
States mail duly certified and addressed to Lessee at Union Oil Center, 461
South Boylston Street, Los Angeles, California 90017. Either party hereto may by
written notice to the other party change its address to any other location.

     17. In the event any part or portion or provision of this instrument shall
be found or declared to be null, void or unenforceable for any reason whatsoever
by any Court of competent jurisdiction or any governmental agency having
authority thereover, then and in such event only such part, portion or provision
shall be affected thereby, and such finding, ruling or decision shall not in any
way affect the remainder of this instrument or any of the other terms or
condition hereof, which said remaining terms and conditions shall remain
binding, valid and subsisting and in full force and effect between the parties
hereto, it being specifically understood and agreed that the provisions hereof
are severable for the purposes of the provisions of this clause. In this
connection, this lease shall not in any event extend beyond such term as may be
legally permissible under present applicable laws, and should any such
applicable law limit the term hereof to less than that herein provided, then
this lease shall not be void but shall be deemed to be in existence for such
term and no longer.

     18. If more than one person is named as a Lessor herein and one or more of
them fails to execute this lease, said lease shall nevertheless (when accepted
by Lessee) become effective as a lease from such of said named parties Lessor as
may have executed the same.



     19. This lease may be executed in any number of counterparts and all such
counterparts shall be deemed to constitute a single lease and the execution of
one counterpart by any party Lessor shall have the same force and effect as if
such party had signed all the other counterparts.

     20. This Lease and Agreement and all of the terms, covenants and conditions
hereof shall extend to the benefit of and be binding upon the respective heirs,
successors and assigns of the parties hereto.

     IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed as of the date hereinabove first written.

                                              /s/
------------------------------------          ----------------------------------
                                                 Dorothy Gisler

                                              /s/
------------------------------------          ----------------------------------
                                                 John C. Hill

                                              /s/
------------------------------------          ----------------------------------
                                                 Jean C. Browning

------------------------------------          ----------------------------------
                 Subscribing Witness                                      Lessor

                                              UNION OIL COMPANY OF CALIFORNIA

                                              By
                                                --------------------------------
                                                                          Lessee