WATERFRONT PROPERTY                      §         IN THE DISTRICT COURT OWNERS ASSOCIATION                        §                                                                                §                                                         V.                  §               216th JUDICIAL DISTRICT                                                                                 § BEXAR-MEDINA - ATASCOSA               § COUNTIES WATER CONTROL              § AND IMPROVEMENT DISTRICT         § NO. 1                                                                   §               BANDERA COUNTY, TEXAS   SETTLEMENT AGREEMENT           The parties to this Settlement Agreement are plaintiffs Waterfront Property Owners Association (“WPOA”) and  Participating WPOA Members (“Members”),  and defendant Bexar-Medina-Atascosa Counties Water Control and Improvement District No. 1 (“BMA”).           In order to settle their disputes and in the interest of determining the property rights of all parties and their common desire to promote cooperation and good stewardship of Medina Lake, the parties hereby compromise and settle this lawsuit on the terms set forth below. A.          General Definitions 1.       “Approval date” means the date on which the boards of directors of BMA and WPOA have both approved this Agreement. 2.       “Building” means a structure having a roof and intended for shelter, housing or enclosure of persons, animals or materials. 3.       “BMA” means the Bexar-Medina-Atascosa Counties Water Control and Improvement District No. 1, and any successor or assign. 4.       “Deeded Land” means a waterfront lot or parcel at Medina Lake that a Member holds or occupies.  “Contour Land” means the portion of a Member’s Deeded Land that lies below Elevation 1084, if any.  However, under circumstances wherein a Member was conveyed Deeded Land, all or part of which was below Elevation 1084, and a reservation or exception from conveyance in the deed conveying such land to such Member or in the Member’s chain of title excepted property below Elevation 1084, for purposes of this Agreement and the Member’s conveyance to BMA by deed without warranty (Exhibit B-2), such reservation and exception shall be disregarded for the purposes of determining Deeded Land and Contour Land under this Agreement, and the Member will be considered to have been deeded the entire property, notwithstanding any such exception, including the portion thereof below the Elevation 1084.  (For example, assume a Member was deeded Lot 1, which included land below Elevation 1084, but his conveyancing deed contained a reservation and/or exception to conveyance and title for “property below the 1084 contour line,” or “any land or improvements that are lying or is situated below the Elevation 1084’ contour line of Medina Lake,” or similar language.  Under such circumstance, the reservation or exception will be disregarded for the purposes of this Agreement and the Member will be considered to have been deeded all of the said Lot 1.  Consequently, such Member’s Deeded Land is all of Lot 1 and the portion thereof below Elevation 1084 is Contour Land.) 5.       “Elevation 1084” means the survey line that approximates the top of Medina Dam as reflected in the applicable plat referenced in Exhibit A. “Elevation 1072” means the survey line that approximates the level of the spillway of the Lake as reflected in the applicable plat referenced in Exhibit A.  The plats referenced in Exhibit A are incorporated herein by reference, and are the same plats filed of record depicting these lots.  As to those lots which are not platted, a more definite metes and bounds description inclusive of the contour calls will be provided by the Member. 6.          “His” means his or hers; “he” means he or she. 7.       “Lakefront” means the area contained within and defined by the lakeside boundary of a Member’s Deeded Land, the water’s edge, and lines drawn between the corner points of the lakeside boundary and the water’s edge according to the following methods:   a. For properties whose lakeside boundary is at or near Elevation 1084—Lines will be drawn from the corner points of the lakeside boundary (or, if there is a public road or dedicated public easement that stops at or near Elevation 1084 running adjacent to the Member’s side lot line, from a point placed at the end nearest the lake of the centerline of the adjoining public road or dedicated public easement, which will function as a corner point for purposes of defining the Lakefront), to two points located on Elevation 1072 that are the shortest distance from the two corner points, respectively.  If there are two or more points on Elevation 1072 that are the shortest distance from a corner point, the point on Elevation 1072 closest to the thread of the main channel of Medina Lake will be used.  The lines will then continue straight toward the water until they reach the water’s edge, another boundary line, or the centerline of the channel. b. For properties whose lakeside boundary is at or near Elevation 1072—Lines will be extended by prolongation from the corner points of the lakeside boundary (in other words, straight extensions of the existing side boundaries of the lot) toward the water until they reach the water’s edge, another boundary line, or the centerline of the channel. c. If the boundary lines drawn according to this subsection (7) would deny a contiguous waterfront property owner access to the Lake, the lines must be modified to provide such access.  If the lines are so modified, the Member must at closing provide a survey, metes and bounds description, or other adequate property description of the Lakefront boundary line (s), which shall be attached to the applicable Perpetual Easement and Deed without warranty.  Any ambiguity as to boundaries drawn in accordance with this subsection (7) should be resolved so as not to deny a waterfront property owner access to the Lake. d. “Lakeside boundary” means the boundary line between the two corner points of Deeded Land that are closest to the Lake.  “Centerline of the channel” means the line drawn halfway between the opposing waterlines of a channel of the Lake when the Lake is at Elevation 1072. 8.       “Lake” means Medina Lake, located in Bandera County and Medina County, Texas. 9.       “Member” means the Participating WPOA Members listed in Exhibit D and the heirs and assigns of such Members.  A Member must be a waterfront property owner who is a qualified member of WPOA, as determined by WPOA. “Member” does not include members of WPOA who are not signatories to this Agreement.  A person who uses land primarily for commercial purposes, or who is holding the land for the primary purpose of subdividing it into more than 3 tracts for sale to the public, is not eligible to be a Member with respect to such land.  However, after all closings have been completed in accordance with this Agreement, no party may challenge the right of a Member to participate in this Agreement. 10.     “Waterfront property owner” means a property owner who holds or owns property with a lakeside boundary at, near or below Elevation 1084 and who can access the Lake when it is at elevation 1060 without crossing property belonging to another private landowner. B.          Perpetual Easements to Participating WPOA Members   1.       BMA agrees to convey to each Member an estate in land  in the form of a Perpetual Easement without warranty to the Member’s Contour Land and Lakefront in substantially the form set out in Exhibit B-1.  The Perpetual Easement will run with the land and inure to the benefit of the Member’s heirs and assigns. 2.       Each Perpetual Easement will state that the Member has the following perpetual and irrevocable rights: a. The right to occupy, use, enjoy and build upon the Member’s Contour Land and Lakefront, provided that no new buildings will be built or placed below Elevation 1084 except as stated below. i.                   A building existing or under construction as of October 1, 2004, to the extent it is located or extends below Elevation 1084, may be completed, repaired, maintained, restored, renovated, or replaced, but not enlarged so as to increase living space.  The prior sentence does not apply to replacement of a building that is not permanently affixed to the earth so as to prevent the structure from becoming dislodged during a flood.  For purposes of this subsection, “under construction” includes substantial preparations to build, such as drawing of architectural plans, obtaining building permits, or site preparation. ii.                If a Member has a building that is situated on or extends in part below Elevation 1084, that Member will provide a survey of the location of the building in relation to Elevation 1084 to BMA on or before September 1, 2005, and will provide a written description and photograph or videotape of any such building in relation to Elevation 1084 to BMA on or before March 1, 2005 (BMA will treat  any such photographs or videotapes as confidential and must return them to the  Member without retaining copies in the event the Member’s transaction fails to close).  If a Member fails to provide the survey within 6 months as required by this subsection (ii), the Member agrees to pay the reasonable cost of obtaining a survey to BMA, and will not build, complete, renovate, repair, or replace such building as to that portion below Elevation 1084 after such 6 month period unless and until such survey has been provided.  The parties may enforce this subsection (ii) through arbitration under Section J.  BMA may recovery its reasonable attorneys fees and costs in connection with enforcing this subsection in accordance with Section J(5). iii.             A Member may build any of the following structures below Elevation 1084 for private use, not commercial or public use:   patios, BBQ pits, fireplaces, walkways, gardens, arbors, curbing, walls, driveways, parking lots, decks, docks, ramps, watercraft launch and storage systems, bulkheads, piers, landscape irrigation systems, swimming pools, sport courts or fields, covered or uncovered benches or picnic tables, gazebos, lighting, rain catchment systems, solar panels, windmills and wind power units, fences as permitted by section B(2)(d), and structures intended to prevent erosion, provided that none of these structures shall be built or maintained below Elevation 1084 if determined to be a potential hazard to navigation by the Texas Department of Parks and Wildlife or successor agency.  This Subsection (iii) is subject to Section G. iv.             A Member may not fill or excavate below Elevation 1084, except to the extent necessary to:  (A) prevent erosion; (B) restore soil removed by floodwaters after October 1, 2004; (C) remove soil or debris deposited by floodwaters; (D) secure docks or other allowable buildings and structures; and (E) build upon the property to the extent otherwise allowed by this subsection (a). b. The right to access Medina Lake across the Contour Land and Lakefront, so that the Member can access Medina Lake regardless of the level of the lake. c. The right to use water from the Lake without waste for domestic, livestock, landscape and garden purposes on the Deeded Land, Contour Land and Lakefront.  This water use is independent of and not part of BMA’s permitted water right.  In the event of any priority conflict between BMA’s water rights permit in the Lake and the right of any Member to use water from the Lake, the conflict will be resolved based on the parties’ rights as they existed prior to the signing of this Agreement. d. The right to fence and exclude other persons from the Contour Land and the Lakefront.  However, no new fences will be built below Elevation 1072, except that electrical fences not exceeding 36 inches in height for the purpose of containing animals may be built below Elevation 1072.  New fences may be built between Elevation 1084 and Elevation 1072, but must be electrical or constructed primarily of rock, brick, concrete, stucco, mortar, or masonry.  The rights granted in this subsection (d) are subject to any state or federal law that allows a governmental agency to enter and/or inspect property. e. The right to the non-commercial use of the Lake and the Member’s Lakefront for recreational purposes, including but not limited to fishing, boating, swimming, and diving. f. The right to transfer, devise, lease, rent, mortgage and encumber the Member’s interest in the Contour Land and Lakefront in whole or in part, subject to BMA’s interest in such land, except that Contour Land and Lakefront may not be severed or conveyed separately from the Deeded Land to which they are appurtenant.           3.       Each Member agrees to maintain the Contour Land and Lakefront in which he owns an interest in good condition and free of pollutants as currently defined in Texas Water Code § 26.001 (see Exhibit C).            4.       BMA gives no warranty of title, express or implied.  BMA does not guarantee any ownership of the Members or their heirs or assigns in any of the property described in this Agreement, and does not guarantee that the Members or their heirs or assigns will hold their property free of claims, possession, use, trespass or other interference from third parties.           5.       Any conveyance by BMA of its interest in Contour Land or Lakefront, including any transfer by BMA of its rights to any successor or assign, shall be subject to a Member’s Perpetual Easement.            6.       BMA is not responsible for disputes between landowners concerning boundaries drawn pursuant to Section A.  C.      Deed Without Warranty  Each Member agrees to convey to BMA a Deed without warranty to the Member’s Lakefront and Contour Land, subject to and reserving the Perpetual Easement, in substantially the form set out in Exhibit B-2.  The Deed without warranty will provide that BMA will not be liable for any damage caused by flooding of the land up to Elevation 1084.  This immunity from damages does not apply to flooding above Elevation 1084.  D.          Closing Procedure 1.       Board Approval  To be effective, this Agreement must be approved by the board of directors of BMA in an open meeting duly noticed in accordance with state law, and by the board of directors of WPOA in a meeting held in accordance with its bylaws, and must be approved by the court as a consent judgment.  2.       List of Participating WPOA Members  On or before March 1, 2005, WPOA will provide to BMA a List of Participating WPOA Members who wish to become parties to this Agreement, along with the signatures of all such Members, a listing of the lots and tracts subject to this Agreement, the Members’ mailing addresses, and the length of the Members’ lake frontages for purposes of Lakefront assessments.  The List will be filed with the court and attached hereto as Exhibit D.  If the total number of Members on the List is less than 150, the board of directors of BMA may rescind its approval of this Agreement by April 1, 2005. 3.       Termination of Lawsuit  On or before April 10, 2005, the parties will present a consent judgment for signature by the court attaching and incorporating the terms of this Agreement in accordance with Texas Civil Practice & Remedies Code § 154.071 (b).  4.       Exchange of Deeds  As soon as practicable after providing the List of Participating WPOA Members to BMA, WPOA’s counsel will prepare Perpetual Easements and Deeds without warranty for all Members, provide these deeds to BMA for review, approval and execution, and in coordination with BMA will schedule a closing or closings.  Unless otherwise agreed, copies of Perpetual Easements and Deeds without warranty must be provided to BMA at least 30 days before the closing on those documents.  At the closing(s), WPOA will present to BMA fully executed and recordable copies of the Deeds without warranty, and BMA will present to WPOA fully executed and recordable copies of the Perpetual Easements.  The closings must be completed by April 15, 2005, unless extended by agreement of BMA and WPOA. E.          Lakefront Assessment  1.       Each Member agrees to pay a Lakefront Assessment to BMA in the amount of $1.00 per linear foot per year for that Member’s lake frontage.  The length of the lake frontage for each lot subject to this Agreement is deemed to be the length specified in the applicable plat referenced in Exhibit A, plus any additional frontage that may apply under Section A(7)(a) because of an adjacent public road or dedicated public easement.  If there is any dispute as to the proper length of the lake frontage for purposes of the Lakefront Assessment, BMA may, by September 1, 2005, ask an arbitrator to determine the length in accordance with Section J(4). 2.       Members will pay their Lakefront Assessments to BMA by April 15 of every year (or the next business day if April 15 falls on a weekend or holiday).  If BMA does not receive payment by May 1, it will send the Member a notice of past due assessment.  If BMA does not receive payment within 30 days of sending the notice of past due assessment, it may initiate legal proceedings to collect the Lakefront Assessments, subject to Subsection J.  BMA may charge a 5% late payment penalty plus 10% per annum simple interest on the portion of any Lakefront Assessment that is not paid within 30 days of proper service of the notice of past due assessment. 3.       BMA agrees that the amount of the Lakefront Assessment for Members is fixed and shall not be increased. F.          Inspection of Septic Systems  Each Member agrees to have any septic system located in whole or in part on his property below Elevation 1084 inspected by an appropriate county or state agency or licensed sanitation engineer, to ensure that the system complies with all applicable regulations of the Texas Commission on Environmental Quality (TCEQ) and the county in which the septic system is located.  By September 1, 2005, each Member agrees to provide a copy of their inspection report(s) to their county agency, with a copy to BMA.  If the septic system is determined to be in noncompliance, it must be brought into compliance by the Member as soon as practicable, but in no event to exceed 60 days following the date of the inspection report.  BMA is entitled to seek a review of the inspection by the TCEQ and/or the county if it believes that the inspection does not comply with existing regulations.  Within 6 months of receiving a copy of the inspection report, BMA may seek a re-inspection through arbitration in accordance with Section J(4).  For purposes of this Section, “septic system” means any onsite sewerage facility (OSSF) as defined by the TCEQ. G.     Boat Docks, Piers and Ramps  One dock, pier and/or ramp per lot owned or installed by Members on or before October 15, 2005, and any replacement dock, pier or ramp, are exempt from any fees or other charges by BMA.  This exemption is limited to docks, piers and ramps for private use, not commercial or public use.  Members claiming a fee-exempt dock, pier or ramp under the prior sentence must, as a condition of exemption, maintain proof that the dock, pier or ramp is exempt.  A photograph dated by postmark or a notice filed of record on or before November 1, 2005 and copied to BMA shall be sufficient proof.  Any dock or pier installed or replaced after October 15, 2004 must be constructed and maintained in accordance with the guidelines attached as Exhibit E.  H.          INDEMNIFICATION EACH MEMBER AGREES TO INDEMNIFY, HOLD HARMLESS, AND DEFEND BMA AGAINST LOSS FROM ANY AND ALL CLAIMS, DEMANDS, DAMAGES, CAUSES OF ACTION OR ACTIONS AT LAW OR IN EQUITY THAT MAY HEREAFTER AT ANY TIME BE BROUGHT BY ANY THIRD PARTY AGAINST BMA AS A RESULT OF THE MEMBER OR THE THIRD PARTY’S USE OR ATTEMPTED USE OR INJURIES SUSTAINED BY ANY THIRD PARTY ON THE MEMBER’S CONTOUR LAND AND/OR LAKEFRONT, AND THE USE BY THE MEMBER OR THIRD PARTY OF ANY RIGHTS GRANTED PURSUANT TO THE TERMS OF THE PERPETUAL EASEMENT.  HOWEVER, ANY INDEMNIFICATION UNDER THIS SECTION WILL BE REDUCED BY THE PERCENTAGE OF INTENTIONAL MISCONDUCT OR NEGLIGENCE ADJUDICATED AGAINST BMA OR APPORTIONED TO BMA (OR ANY AGENT, EMPLOYEE, OR DIRECTOR OF BMA) BY THE FINDER OF FACT.  FOR PURPOSES OF THIS SECTION, “THIRD PARTY” DOES NOT INCLUDE AN AGENT OR EMPLOYEE OF BMA WHO CAME UPON THE CONTOUR LAND OR LAKEFRONT WITHOUT THE CONSENT OF THE MEMBER. I.          Taxes  Each Member will continue to pay ad valorem taxes assessed against the property in which the Member owns an interest and any improvement thereon, to the extent assessed to the Member by the tax-assessor.  However, if BMA’s granting of the Perpetual Easement or the Member’s use of the Contour Land or Lakefront creates any property tax liability upon BMA when no such liability would otherwise exist, then the Member shall be responsible for the timely payment of such property tax, and shall reimburse BMA for the payment of any such tax within 30 days of notice from BMA. J.          Dispute Resolution 1.       Any dispute arising under this Agreement must be mediated upon request of any party to the dispute.   The parties to the dispute shall share the costs of mediation equally.  The mediation will be non-binding unless otherwise agreed by the parties to the dispute.  If the mediation does not resolve the dispute, the cost of the mediation shall be a taxable court cost in any litigation arising from the dispute. 2.       If BMA believes that any Member has violated or is in violation of this Agreement, it must serve notice of violation to the Member within 6 months of the date BMA knew or should have known of the violation.  If a Member believes that BMA has violated or is in violation of this Agreement, the Member must serve notice of violation to BMA within 6 months of the date the Member knew or should have known of the violation.            3.       The party receiving notice of violation must be afforded at least 30 days following service of notice of violation to cure the alleged violation.  If this cure period is not afforded, the party receiving notice of violation is entitled to a 30-day abatement of any proceeding concerning the dispute.           4.       The parties shall arbitrate in accordance with the Texas General Arbitration Act any dispute concerning whether a septic system inspected under Section F should be re-inspected, or the correct length of a Member’s lake frontage for purposes of Section E (Lakefront Assessment), or whether a Member must pay or reimburse property taxes assessed against or paid by BMA in accordance with Section I.                                                              a. The arbitrator may order a re-inspection of a septic system if BMA offers evidence that the inspection was not performed in a proper manner by a qualified inspector, or that the inspection report is inaccurate or not reliable.  If the arbitrator orders a re-inspection and the parties to the dispute cannot agree on a qualified inspector to perform the re-inspection, the arbitrator shall select a qualified inspector.  The arbitrator may require the parties to the dispute to make a deposit to cover the cost of the re-inspection.  The reasonable cost of the re-inspection shall be awarded as costs to the prevailing party.                                                              b. If the length of the lake frontage for purposes of Section E cannot be accurately determined from any of the referenced plats, the arbitrator must determine the proper length of the lake frontage by determining the length of the lakeside boundary of the Member’s Deed Land and adding any additional frontage that may apply under Section A(7)(a) because of an adjacent public road or dedicated public easement.  The reasonable cost of any surveying necessary to determine the proper lake frontage inspection shall be awarded as costs to the prevailing party.                           c.   If the parties to the dispute cannot agree on an arbitrator, any of the parties to the dispute may petition the district court of the county in which the land is located to appoint an arbitrator.  The court or the arbitrator may order the parties to mediate the dispute.            5.       In any arbitration or litigation relating to this Agreement, the court shall award reasonable attorneys fees and costs to the prevailing party.  Mediation fees and expenses shall be taxed as court costs.           6.       Except as otherwise stated, notices under this section must be given in accordance with Texas Rule of Civil Procedure 21a.  If a Member wishes to change his mailing address, he must give notice of the change to BMA in writing.  Notice sent to the Member’s most recent designated mailing address is deemed to be effective as to the Member. K.          Medina Lake Coordinating Committee  A Medina Lake Coordinating Committee (“MLCC”) is hereby formed, consisting of 2 members appointed by BMA and 2 members appointed by WPOA.  The members appointed will serve at the pleasure of the appointing board.  The  purpose of the MLCC is to serve as a liaison and forum for communications and exchange of information, administration and facilitation of this Agreement, improvement of relations between BMA and Medina Lake landowners, coordination of clean-up activities and other lake improvement projects, responses to floods and other conditions affecting the lake, and discussion of other matters of mutual interest.  The MLCC will be an advisory body, not an official decision-making body, but to the extent practicable will comply with the Texas Open Meetings Act and Public Information Act.  BMA may approve and pay the reasonable and lawful expenses of the MLCC and its committee members.  Committee members are not entitled to compensation.  BMA and WPOA may agree to change the configuration, membership and functions of the MLCC. L.          Other Provisions 1.       The obligations undertaken and rights granted under this Agreement are intended to run with the land and bind and inure to the benefit of the heirs and assigns of the parties. 2.       Nothing in this agreement is intended to define, limit or expand rights in lands above Elevation 1084, or rights of persons who are not parties to this Agreement, or BMA’s rights in relation to persons who are not parties to this Agreement. 3.       WPOA and BMA covenant that this Agreement has been duly and lawfully approved by their respective boards of directors, and that the persons signing this Agreement on their behalf have authority to do so. 4.       Nothing in this Agreement should be construed to authorize any party to violate any federal, state or local law, ordinance or regulation.  If any part of this Agreement or any related transaction is determined to be unlawful or unenforceable, the court may sever or reform that part in order to preserve this settlement and effectuate the intent of the parties.  It is the intention of the parties that all property descriptions contained in instruments relating to this Agreement, including but not limited to instruments in the parties’ chains of title, be adequate to satisfy the Statute of Frauds.  If any such property description is deemed to not be adequate to satisfy the Statute of Frauds, if reasonably possible and to the extent of the court’s equitable powers, and consistent with the parties’ intentions, the court should reform or modify the description to satisfy the Statute of Frauds.  If necessary to make a property description legally sufficient, the court may consider relevant extrinsic evidence and/or order a survey, with costs to be taxed as court costs. 5.       Nothing in this Agreement is to be construed as an admission by WPOA or any of its members that BMA has the power under chapter 51 of the Texas Water Code or other law to regulate water quality, land use, or other matters outside its territorial boundaries.  Nothing in this Agreement is to be construed as a limitation on the power, if any, BMA may hold under Chapter 51 of the Texas Water Code or other law to regulate water quality, land use, or other matters outside its territorial boundaries. 6.       It is the intention of the parties that the estates in property conveyed in connection with this settlement be amenable to title insurance.  However, BMA does not guarantee that the property conveyed will be insurable. 7.       All notices required by this Agreement must be in writing.  All approvals and agreements ancillary or pertaining to this Agreement must be in writing and signed by the party giving approval or the parties to the agreement. 8.       Any suit relating to this Agreement must be brought in Bandera County, Texas, if the dispute involves land located in Bandera County, or in Medina County, Texas, if the dispute involves land located in Medina County. 9.       Fully-signed duplicates of this Agreement will be treated as originals.  Telecopied signatures will be treated as original signatures. 10.     The Exhibits attached to this Agreement are incorporated into and integral to this Agreement. 11.     Unless otherwise provided, the computation of time under this Agreement will conform to Rule 4 of the Texas Rules of Civil Procedure. 12.     The parties will be responsible for their own attorney’s fees and costs incurred in connection with this lawsuit. 13.     In addition to the acts recited in this Agreement to be performed by the parties or any Member, the parties and all Members agree to perform or cause to be performed, prior to, at or after closing, any and all further acts as may be reasonably necessary or requested in order to consummate the transactions, closing, conveyances, and purposes contemplated hereby. 14.     The parties agree to file for record in the public records of the county clerks’ offices of Bandera and Medina Counties, sufficient notice concerning the acreage and/or lots affected by the terms of this Agreement, sufficient to give constructive notice of this Agreement and its effect upon the title to the acreage and/or lots covered thereby. 15.     This Agreement, attachments and instruments executed in connection with this Agreement set forth the entire agreement among the parties.  16.     It is the intention of the parties that Exhibits B-1 and B-2 conform to the definitions and other provisions of this Agreement.  The parties authorize their attorneys to make appropriate changes to these instruments to conform them to this Agreement prior to final filing of this Agreement. SIGNATURE PAGE For the Bexar-Medina-Atascosa Counties Water Control and Improvement District No. 1: _______________________                       ___________________ Tommy Fey, President                                       Date _______________________                       ___________________ Will Carter, Secretary                                        Date For the Waterfront Property Owners Association: _______________________                       ___________________ David Bowman, President                    Date _______________________                       ___________________ Linda Bachmeier, Secretary                     Date STATE OF TEXAS                        §                                                             § COUNTY OF MEDINA                 §             This instrument was acknowledged before me on the _______ day of November 2004, by Tommy Fey, President of the Board of Directors of the Bexar-Medina-Atascosa Water Control and Improvement District No. 1.             ____________________________________                                                                     Notary Public, State of Texas                ____________________________________                                                                                      Typed/Printed Notary Name             My commission expires:          STATE OF TEXAS                        §                         § COUNTY OF MEDINA                        §             This instrument was acknowledged before me on the _______ day of November 2004, by Will Carter, Secretary of the Board of Directors of the Bexar-Medina-Atascosa Water Control and Improvement District No. 1.             ____________________________________                                                             Notary Public, State of Texas              ____________________________________                                                            Typed/Printed Notary Name             My commission expires:          STATE OF TEXAS                        §                         § COUNTY OF BANDERA                        §             This instrument was acknowledged before me on the _______ day of November, 2004, by David Bowman, President of the Waterfront Property Owners Association.             ____________________________________                                                             Notary Public, State of Texas                ____________________________________                                                            Typed/Printed Notary Name             My commission expires:          STATE OF TEXAS                                    §                         § COUNTY OF BANDERA                        §             This instrument was acknowledged before me on the _______ day of November, 2004, by Linda Bachmeier, Secretary of the Waterfront Property Owners Association.      ____________________________________                                                             Notary Public, State of Texas   ____________________________________                                                             Typed/Printed Notary Name My commission expires:          LIST OF EXHIBITS EXHIBIT A          List of Plats showing Elevation 1084 and Elevation 1072 (will be provided by WPOA’s attorney on or before February 1, 2005) EXHIBIT B-1       Form of Perpetual Easement EXHIBIT B-2       Form of Deed Without Warranty EXHIBIT C           Texas Water Code § 26.001(13) EXHIBIT D          List of Participating WPOA Members with Signatures EXHIBIT E           Boat/Pier Construction Guidelines EXHIBIT C Texas Water Code § 26.001(13) “Pollutant” means dredged spoil, solid waste, incinerator residue, sewage, garbage, sewage sludge, filter backwash, munitions, chemical wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt, and industrial, municipal, and agricultural waste discharged into any water in the state.  The term:             (A)            includes:                                                                              (i) tail water or runoff water from irrigation associated with an animal feeding operation or concentrated animal feeding operation that is located in a major sole source impairment zone as defined by Section 26.502;  or                (ii)  rainwater runoff from the confinement area of an animal feeding operation or concentrated animal feeding operation that is located in a major sole source impairment zone, as defined by Section 26.502;  and             (B)             does not include tail water or runoff water from irrigation or rainwater runoff from other cultivated or uncultivated rangeland, pastureland, and farmland or rainwater runoff from an area of land located in a major sole source impairment zone, as defined by Section 26.502, that is not owned or controlled by an operator of an animal feeding operation or concentrated animal feeding operation on which agricultural waste is applied.   EXHIBIT D   List of Participating WPOA Members To be provided with signatures within 60 days of approval date and incorporated herein in accordance with Section D(2)   The following persons hereby join this Settlement Agreement as Participating WPOA Members and agree to be bound by its terms:   [Signatures and acknowledgements] EXHIBIT E DOCK/PIER CONSTRUCTION GUIDELINES 1.  A boat dock or pier must be located in front of the property belonging to the dock’s owner, unless the owner has permission from another landowner to locate the dock or pier in front of that landowner’s property. 2.  A boat dock must be located as close as practicable to the shoreline.  A boat dock or pier must not create a hazard to navigation as determined by the Texas Department of Parks and Wildlife or successor agency. 3.  A boat dock or pier must be constructed with environmentally safe materials.  Containers that previously stored pesticides, herbicides, or any other toxic chemicals may not be used in the construction of a boat dock or pier. 4.  A boat dock or pier must be fabricated of materials manufactured or suitable for marine use, and must not use metal barrels for flotation.  5.  A boat dock or pier must be securely anchored to prevent its detachment and becoming a floating hazard during times of high water. 6.  A boat dock or pier must have a durable tag or label permanently affixed that states the owner’s name and address. 7.  The water side(s) of a boat dock or pier must be well marked by reflective devices.     Medina Lake WPOA Website!