Common use of Article 3 - Term Clause in Contracts

Article 3 - Term. 3.1 Subject to earlier expiration because of the commencement of the Permit/Construction Term, the first three (3) years following the Effective Date of this Agreement shall be the “Initial Term”. This Agreement shall terminate at the end of the Initial Term if Operator has failed to apply for a permit to construct a Class VI injection well on the Property. However, upon a showing of good cause by Operator, this Agreement may be extended by the State in its discretion for up to an additional two (2) years at the end of the Initial Term (“Initial Discretionary Term”) if Operator has failed to apply for a permit to construct a Class VI injection well on the Property. In order for Operator to exercise this option, Operator shall notify the State at least ninety (90) days prior to the expiration of the Initial Term that it wishes to exercise this option. If extended by an Initial Discretionary Term, then this Agreement shall terminate at the end of the Initial Discretionary Term if Operator has failed to apply for a permit to construct a Class VI injection well on the Property.