May 14, 1998
Xxxxx X. Xxxxx
Frontier Natural Gas Corporation
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Re: Right of First Offer; Conflicts
Dear Xxxxx:
Reference is made to that certain Acquisition Agreement and Plan of
Exchange, dated as of January 19, 1998 (the "Acquisition Agreement"), by and
among Frontier Natural Gas Corporation ("Frontier"), Esenjay Petroleum
Corporation ("Esenjay") and Aspect Resources LLC ("Aspect"). Capitalized
terms used but not defined herein shall have the meanings specified in the
Acquisition Agreement. This letter agreement is being delivered pursuant to
Sections 10.01(r) and 10.03(n) of the Acquisition Agreement.
Aspect agrees that after the date hereof it will negotiate in good faith
to reach a mutual understanding and agreement with Frontier regarding an area
of mutual interest arrangement or right of first offer arrangement relating
to certain lands and areas surrounding the Prospect Areas (the "Halo Region").
Frontier acknowledges that Aspect owns and is likely to acquire and
develop lands and Oil and Gas Interests located within the Halo Region and in
other areas in which Frontier may have an interest. Frontier acknowledges and
agrees that (i) Aspect and its officers, members, managers, agents,
employees, and affiliates may acquire or develop, independently or with
others, any lands or Oil and Gas Interests, including lands or Oil and Gas
Interests that may be the same or similar to lands or Oil and Gas Interests
owned by Frontier and that might be in direct or indirect competition with
Frontier's business or interests, and (ii) except for the rights provided
hereinabove, Frontier shall have no rights in or to such lands or Oil and Gas
Interests. Frontier further agrees that Aspect shall not be obligated to
present any investment opportunity (oil and gas related or otherwise) or
prospective economic advantage to Frontier, even if the opportunity is of the
character that, if presented to Frontier, could be taken by Frontier and that
Aspect shall have the right to hold any investment opportunity or prospective
economic advantage for its own account or to recommend such opportunity to
persons other than Frontier. Frontier hereby waives any and all rights and
claims which it may otherwise have against Aspect
Xxxxx X. Xxxxx
May 14, 1998
Page 2
and its officers, members, managers, agents, employees, and affiliates as a
result of any of such activities.
If this letter evidences your understanding with respect to the
foregoing matters, please evidence such understanding in the space provided
below and return a fully executed copy of this letter to me for our files.
Sincerely,
Aspect Resources LLC
By: Aspect Management Corporation,
its Manager
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Xxxx Xxxxxxxx, President
ACKNOWLEDGED AND AGREED TO
THIS 14 DAY OF MAY, 1998
Frontier Natural Gas Corporation
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, President
