MINERAL LEASE PURCHASE AGREEMENT
This Mineral Lease Purchase Agreement ("Agreement") is entered into as of
this 23rd day of February, 1998, by and between High Plain Associates, Inc.,
for itself and its participants ("High Plains") and Pennaco Energy, Inc.
("Pennaco").
RECITALS
WHEREAS, High Plains is generally familiar with the oil and gas and mineral
development underway in Powder River County, Rose Bud County and Big Horn
County, Montana and Xxxxxxxx County, Sheridan County and Xxxxxxx County,
Wyoming, and owns and desires to secure leases of the property described
below as the AMI for sale to Pennaco on the terms and conditions set forth
below; and
WHEREAS, subject to the terms and conditions set forth herein, Pennaco is
willing to purchase and acquire leases tendered to it by High Plains.
NOW, THEREFORE, High Plains and Pennaco agree as follows:
I. DEFINED TERMS AND PRINCIPLES OF CONSTRUCTION.
1. CERTAIN DEFINED TERMS. Each of the capitalized terms shall
have the meanings assigned to them as follows:
(a) "Area of Mutual Interest," or "AMI," shall have
the meaning assigned to the term in Article II.
(b) "Presently-Owned Leases" shall mean oil and
gas and mineral leases of land in the AMI that were
fully executed, owned by High Plains and ready for
assignment and transfer to Pennaco on or before the
Effective Date. Presently-Owned Leases shall
include the leases identified on the attached
Exhibit "A," incorporated herein by this reference.
(c) "Acquired Leases" shall mean oil and gas and
mineral leases of land dated on or after the
Effective Date, containing no limitations with
regard to the rights of lessee or drilling depths,
that is, all rights and all depths, and describing
land located in the AMI. Acquired Leases shall mean
such leases acquired by High Plains, absolutely
owned by High Plains, fully executed and ready for
assignment and transfer to Pennaco.
(d) "Effective Date" shall mean 7:00 a.m., Mountain
Standard Time, January 9, 1998.
(e) "Lease" shall mean an oil and gas and mineral lease of
land located in the AMI whose remaining term as of the
Effective Date, in the case of a Presently-Owned Lease, and
as of the date purchased by Pennaco, in the case of an
Acquired Lease, is five (5) years or longer. Also, any such
Lease shall not contain a drilling condition, other
stipulations or provisions that require lessee to drill and
develop the subject property on terms and conditions not
consistent with the usual and customary practice of the
area. Except as provided in Article VII, no Lease with less
than an 80.00% NRI will be acquired by High Plains without
the prior written consent of Pennaco.
(f) "Private Mineral Leases" shall mean oil and gas
and mineral leases of land located in the AMI whose
lessors and/or lessees are identified on the
attached Exhibit "B," incorporated herein by this
reference.
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1. SINGULAR, PLURAL CONSTRUCTION. All terms defined in this
Article I, Section 1 or in other provisions of this Agreement that are used in
the singular are to have the same meanings when used in the plural and
vice versa.
II. AREA OF MUTUAL INTEREST.
1. "AREA OF MUTUAL INTEREST." shall mean land legally
described in leases that identify real property located in Powder River
County, Rose Bud County and Big Horn County, Montana and Xxxxxxxx County,
Sheridan County and Xxxxxxx County, Wyoming, except that in the State of
Wyoming to be within the Area of Mutual Interest such land shall be located
in the following area: Township 41 North through Township 58 North and Ridge
71 West through Range 85 West.
2. AMI TERM. The term of the AMI shall be co-extensive with
the term of this Agreement. Within the AMI, High Plains shall act as the
undisclosed agent of Pennaco and shall not become or act as an agent of any
other person with regard to (a) the acquisition of coalbed methane leasehold
interests and (b) the subject matter of this Agreement without the prior
express written consent of Pennaco, which consent shall not be unreasonably
withheld.
3. PENNACO LIMITATION. Within the AMI, Pennaco may acquire a
lease from another source, but on its sole behalf, Pennaco shall not contract
with any other lease broker.
4. NO HIGH PLAINS' ORRI. In the event that Pennaco does
acquire a lease from a source other than High Plains, High Plains will not
receive an overriding royalty interest ("ORRI") or other interest unless
agreed by the parties in writing.
III. ACQUIRED LEASES.
1. ASSIGNMENT AND TRANSFER OF ACQUIRED LEASES. Subject to
the terms and conditions hereof, High Plains has agreed to sell, assign,
transfer and convey, and Pennaco has agreed to purchase and receive, the
Acquired Leases.
2. PRICE/ACRE; CLOSING. With regard to Acquired Leases, the
purchase price shall equal the price High Plains paid for the Acquired Lease
plus related out-of-pocket expenses and properly substantiated pass-through
costs of contract support incurred at the standard rate. High Plains shall
furnish proper substantiating documentation consisting of copies of lease(s),
lease report, draft (regarding the price High Plains paid) and invoice (the
"Lease Documentation"). Such purchase and sale shall close upon submission
to Pennaco of a complete set of copies of the Lease Documentation with
assignment and conveyancing instruments to follow, fully executed and ready
for recording. The aggregate purchase price shall be paid to High Plains
within ten (10) days of confirmation from Pennaco that all documentation is
proper and complete.
3. PENNACO COMMITMENT. Unless Pennaco notifies High Plains
that Pennaco elects to increase its commitment, Pennaco will not be required
to purchase any Acquired Leases after Pennaco has committed to purchase
Acquired Leases with an aggregate purchase price of One Million Dollars
($1,000,000.00). Upon notification from High Plains that High Plains has
purchased, or committed to the purchase of, Acquired Leases whose value not
to exceed $1,000,000.00, Pennaco may notify High Plains that Pennaco has
elected to increase its commitment, for an amount specified in such notice,
and the provisions of this Agreement shall be applicable with regard to such
additional Acquired Leases.
IV. PRESENTLY-OWNED LEASES.
1. OPTION -- CONSIDERATION. Pennaco will tender to High
Plains, by wire transfer, the sum of $125,000.00 on or before 2:00 p.m.,
Friday, January 30, 1998. With the execution of this Agreement, such sum
shall become a firm obligation and debt owed to High Plains as consideration
for the
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option. Such $125,000.00 sum will be wire transferred to Colorado State Bank
of Denver (telephone number: 000-000-0000) ABA number 000000000 for credit
to the account of High Plains Associates, Inc., account number 0000000.
2. OPTION TO PURCHASE. Upon tendering such $125,000.00 sum
to High Plains, Pennaco will then own the sole and exclusive option to
purchase the Presently-Owned Leases, on or before May 19, 1998, under the
following terms:
a. Pennaco will have the option to elect to purchase
the Presently-Owned Leases until 10:00 a.m., Mountain
Standard Time, March 6, 1998. Once the election to
purchase is made, Pennaco shall become liable for the
purchase price and must complete the transaction.
b. Pennaco will notify High Plains of its election
to purchase the Presently-Owned Leases in writing by
certified letter, courier to the address of High Plains
or via fax on or before 10:00 a.m. Mountain Standard
Time, March 6, 1998, with the final closing set for
10:00 a.m., Mountain Standard Time, May 19, 1998,
in Pennaco's office.
c. Time is of the essence for all times and dates
described above.
d. The $125,000.00 sum as consideration is to be
credited towards the final purchase price for the
Presently-Owned Leases. Such $125,000.00 is
non-refundable, unless High Plains breaches or fails
to satisfy the covenants, representations and warranties
described in Article IV, Paragraph 3.b. i and ii, below,
or in Article VII, or High Plains fails to fulfill all
commitments set forth herein prior to closing,
including, but not limited to, Article IV,
Paragraph 3.b.
e. In the event Pennaco fails, refuses or is unable
for any reason, except as provided in Article 4,
Paragraph 2.d. above, to close the sale in accordance
with the terms hereof, High Plains may retain the
$125,000.00 option consideration and seek specific
performance and any other remedies at law or in equity
for breach of this Agreement.
1. PURCHASE TERMS. If Pennaco makes the election to purchase
the Presently-Owned Leases in accordance with the provisions hereof, the
purchase and sale shall be as follows:
a. Pennaco will purchase 100% of an undivided
interest in all of the Presently-Owned Leases and
Private Mineral Leases subject to the applicable terms
and reservations set out herein. Assignments shall be
made to Pennaco Energy Inc., 0000 Xxxxxx Xxxx, Xxxxx X,
Xxx Xxxxx, XX 00000.
b. Pennaco shall pay High Plains $35.00/net acre for
all leasehold interests insofar and only insofar as to
depths from the surface of the earth down to 2500 feet
or 100 feet below the stratigraphic equivalent of the
base of the tertiary age coal, whichever is deeper,
delivered by High Plains, subject to the following
reservation of an ORRI and the following provisions:
i) High Plains will arrange for its participants
to execute any requested assignment documents,
including, but not limited to, any participant
releases, to Pennaco and present such documents to
Pennaco at closing.
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ii) Such assignments will contain: a 60 day
reassignment clause in the event Pennaco desires
to drop, terminate or relinquish any leasehold;
only warrant title by, through or under High
Plains, but not otherwise; and any reserved ORRI
shall apply to all substitute, extended or renewal
leases taken or acquired by Pennaco or its
successor or assigns.
1. CLOSING DATE. Closing is set for 10:00 a.m., Mountain
Standard Time, May 19, 1998, (or at an earlier date designated by Pennaco) at
Pennaco's office.
2. OPTION TO PURCHASE PRESENTLY-OWNED LEASES (DEEP RIGHTS).
For a period of one (1) year from the closing date of Pennaco's purchase of
the Presently-Owned Leases, Pennaco will have the sole and exclusive option
to purchase the "deep rights" of a Presently-Owned Lease for $40.00/ net
acre. With regard to any such Presently-Owned Lease so assigned and
transferred by High Plains, "deep rights" shall mean those unlimited drilling
rights below 2,500 feet from the surface of the earth or 100 feet below the
base of the stratigraphic equivalent of the base of the tertiary age coal
formation, whichever is deeper. Such option shall be exercisable with thirty
(30) days advance written notice and shall close on the date identified in
such written notice or other mutually agreed upon date at which time the
leases shall be tendered, ready for recording and the total purchase price
shall be due and payable. If such leases ("Presently-Owned Leases - Deep
Rights") otherwise conform to the terms, conditions and other provisions of
this Agreement, Pennaco shall purchase at least 60% of such Presently-Owned
Leases - Deep Rights tendered to Pennaco. For purposes of this paragraph,
"60% of such Presently-Owned Leases" shall mean a 100% of an undivided
interest in 60% times the total number of acres described in such
Presently-Owned Leases tendered to Pennaco. For example, if 20,000 acres are
otherwise properly tendered Pennaco shall purchase 12,000 acres.
3. PRIVATE MINERAL LIMITATION. To the extent that a
Presently-Owned Lease is a Private Mineral Lease, the purchase option
described in this Article IV shall not be available.
V. HIGH PLAINS' OVERRIDING ROYALTY.
1. ACQUIRED LEASES. Except as provided for in Article V.
Paragraph 3, below, with regard to Acquired Leases that Pennaco purchases
from High Plains, Pennaco will receive a net revenue interest ("NRI") of .8
and each of Pennaco and High Plains will retain an overriding royalty
interest ("ORRI") equal to .500000 times the difference between .2 minus the
royalty and existing or committed ORRI's (expressed as decimal). For
purposes of illustration the parties set forth the following table (all
interests reflect 100% of 8/8 working interest):
ROYALTY PENNACO HIGH PLAINS PENNACO
NRI ORRI ORRI
0.1250 0.80000 0.02500 0.05000
0.1875 0.80000 0.00625 0.00625
0.2000 0.80000 0.00000 0.00000
1. PRESENTLY-OWNED LEASES. With regard to Presently-Owned
Leases that Pennaco purchases from High Plains, Pennaco will receive a NRI of
.8 and each of Pennaco and High Plains will retain an ORRI equal to .33333
and .66667, respectively, times the difference between .2 minus the royalty
and existing or committed ORRI's (expressed as decimal). For purposes of
illustration the parties set forth the following table (all interests reflect
100% of 8/8 working interest):
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XXXXXXX XXXXXXX XXXX XXXXXX XXXXXXX
NRI ORRI ORRI
0.1250 0.80000 0.05000 0.025000
0.1875 0.80000 0.00833 0.004170
0.2000 0.80000 0.00000 0.000000
1. LIMITATION. Notwithstanding anything to the contrary
appearing herein and except as provided in paragraph 4 of this Article, the
NRI purchased by Pennaco under any Acquired Lease or Presently-Owned Lease
shall not be less than 80% of 8/8's working interests proportionately reduced
to the actual working interest acquired. Further, notwithstanding anything
to the contrary appearing herein, with regard to Acquired Leases, the ORRI
retained by High Plains shall in no event exceed 2.5%, except with regard to
the Acquired Leases located in Montana (excluding the Xxxxxxx-Xxxxxx acreage)
the ORRI shall not exceed 1.5%.
2. ONE-HALF PERCENT TO SUB-BROKERS. In connection with the
acquisition of Presently-Owned Leases and Acquired Leases, High Plains was
required to convey a one-half percent (.5%) to a one percent (1.0%)
overriding royalty interest to induce a sub-broker (Xxxxxxxxx, Xxx & Xxxxxx,
Xxxxxxx) to convey the Leases to High Plains. With regard to the sub-brokers
identified in this Article V, Paragraph 4, the minimum NRI permitted under
this Agreement shall be 79.00% to 79.50%, not 80.00%.
VI. TERM AND TERMINATION.
1. TERM. This Agreement shall be for primary term commencing
on the Effective Date and,t unless earlier terminated as provided herein,
shall continue until, and without further notice end on, December 31, 1999.
2. EXTENSION OF TERM. Within thirty (30) days prior to the
end of the primary term, either party may propose to extend the term of this
Agreement by sending notice to that effect and propose the length of any
extension of the term. The other party shall timely respond and, upon
written agreement regarding the length of any such extension, the provisions
of this Agreement, to the extent not otherwise amended, shall continue in
full force and effect.
3. TERMINATION. In the event that (i) either High Plains or
Pennaco violates any provision of this Agreement; (ii) in the reasonable
discretion of Pennaco or High Plains, as the case may be, the other party
fails to satisfactorily perform its obligations; (iii) Pennaco is sued on
account of the conduct of High Plains, or (iv) High Plains is sued on account
of Pennaco; then, at the option of the aggrieved party ("Non-Breaching
Party"), and without prejudice to its other rights and remedies, this
Agreement may be terminated upon notice to that effect sent to the party that
is in breach of this Agreement (the "Breaching Party"). Upon termination,
the Non-Breaching Party shall be under no further obligation to the Breaching
Party, except to pay amounts owing for services, unless the Non-Breaching
Party shall believe in good faith that payment of such amounts should be
suspended, withheld or such amounts should be set-off against any amounts
owing to the Non-Breaching Party.
VII. SPECIAL MATTERS.
1. XXXXXXX XXXXXXXXXX GROUP. Notwithstanding any other term,
covenant or provision contained herein, XxXxxxx-Xxxxxxxxxx, X.X., will assign
its "held by production" ("HBP") "Xxxxx Ranch Lease," dated August 18, 1967,
recorded in Book 132, Page 68, of the Photo Records of Xxxxxxxx County,
Wyoming, to Pennaco, on the following terms:
a. Four (4) year subassignment from January 15, 1998;
b. Rights and interests granted are from the surface of the earth
down to 2,000 feet;
x. XxXxxxx-Xxxxxxxxxx L.P., will reserve and retain the difference
between existing burden and twenty percent of eight/eighths (20%
of 8/8ths) as an overriding royalty
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interest;
d. In the event any tract or parcel of the "Xxxxx Ranch Lease" at
the effective date of the assignment is burdened with royalty,
overriding royalty and/or production payments in excess of twenty
percent of eight/eighths (20% of 8/8ths); XxXxxxx-Xxxxxxxxxx L.P.
(assignor), shall retain and reserve NO overriding royalty as to
that particular tract or parcel;
e. The four (4) year subassignment will contain a "xxxx" clause and
a one hundred eighty (180) day continuous drilling clause; and
f. Other terms and conditions of the subassignment affecting this
acreage/lease will be consistent with those "private minerals"
being leased and assigned hereunder to Pennaco.
1. LEASE TERM LESS THAN 5 YEARS, NOT HBP. In those cases
where the lease acquired by High Plains does not qualify as a Presently-Owned
Lease or an Acquired Lease because the remaining term is less than five (5)
years, High Plains shall make such leases available for inspection by Pennaco
and, if Pennaco notifies High Plains that Pennaco elects to purchase any such
lease, Pennaco and High Plains shall determine the purchase price subject to
the following table:
REMAINING TERM PURCHASE PRICE/ACRE
GREATER THAN 4 years $35.00
GREATER THAN 3 years but LESS THAN 4 $30.00
GREATER THAN 2 years but LESS THAN 3 $25.00
GREATER THAN 2 years $20.00
1. TITLE FAILURE; CUMULATIVE TITLE FAILURES. In the event
that a Lease is rejected on the ground of Title Failure, High Plains shall
have a reasonable time period, not to exceed thirty (30) days, to cure the
title; provided, however, that if Pennaco received notice from High Plains
that High Plains is in good faith diligently undertaking to cure such defect,
the period for curing such defect shall be extended an additional thirty (30)
days from the date that such cure period would have otherwise expired. If
the title cannot be cured in the reasonable opinion of Pennaco, then Pennaco
shall re-tender the lease to High Plains, and shall be reimbursed for the
related purchase price. The right to such reimbursement shall be effective
for a period of six (6) months, and thereafter shall be null and void,
measured from the date that the close of the purchase of the Lease (that is,
a Presently-Owned lease). Except with regard to any Presently-Owed Lease
whose title fails after May 19th, 1998 on account of U.S. Public Law No. 323,
30 U.S.C. Section 81 or U.S. Public Law Xx. 000, 00 X.X.X. Xxxxxxx 00, if
during the term of this Agreement, uncured Title Failure shall occur with
regard to twenty percent (20%), as measured by the aggregate purchase price,
of such Presently-Owned Leases, then, at the option of Pennaco, Pennaco may
rescind this Agreement and shall be entitled to recover all consideration
paid or obligation incurred with regard, or related, to such Leases (that is,
Presently-Owned Leases). For the purpose of this paragraph "Title Failure"
shall mean a material defect in the ownership interest assigned and
transferred to Pennaco. For these purposes "Title Failure" shall not mean an
immaterial defect in the designation of a prior holder of an interest, such
as a defect requiring an Affidavit of Identity.
2. HIGH PLAINS PARTNERS. High Plains fully assumes all
duties, obligations and liabilities regarding accounting, distributing and
otherwise assuring that each of the persons or entities constituting a
participant represented by High Plains receives anything owing to such
participants under this Agreement. High Plains shall indemnify and hold
Pennaco harmless from any losses, claims and damages (and reasonable
attorney's fees) that may be asserted against Pennaco on account of or in any
way related to this Agreement.
3. TITLE, OWNERSHIP, AUTHORITY. High Plains represents and
warrants to Pennaco that (a) High Plains owns, or at the time of assignment
and transfer, will own, or be authorized in its name
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to assign, transfer and convey the entire 100% right, title and interest in
and to each Lease (subject to such restrictions and to depths as described
herein); (b) that each such Lease is free and clear of liens, security
interests or encumbrances; and (c) High Plains is duly authorized and
empowered to execute and deliver any assignments, deeds and related
instruments to transfer and fully vest title and all interests and rights of
ownership in Pennaco.
4. FIRST RIGHT OF REFUSAL; OPTION AND PREFERENTIAL RIGHT.
Subject to the provisions of this Paragraph 6 and with regard to federal,
state and tribal leases offered by competitive bid, High Plains may in good
faith acquire a Lease for its own account if High Plains (a) purchases such
Lease for an amount in excess of the purchase price authorized in advance by
Pennaco; (b) offers such Lease to Pennaco for the purchase price High Plains
agreed to pay for such Lease, and (c) within forty-eight (48) hours of
receipt of such offer, Pennaco rejects the Lease. If Pennaco accepts the
offer and acquires such Lease for the amount paid by High Plains, such Lease
will be considered an Acquired Lease. If Pennaco rejects the Lease then
Pennaco shall retain an option to purchase or a preferential right of
purchase with regard to such Lease during the term of this Agreement. In the
event Pennaco elects to exercise its option to purchase, Pennaco shall give
High Plains ten (10) days prior notice. Within ten (10) days of receipt from
High Plains of its actual purchase price for such Lease, Pennaco shall remit
to High Plains, as the purchase price an amount equal to the purchase price
plus rentals, plus interest at a rate of 1% compounded monthly and the Lease
shall be considered Presently-Owned Leases. In the event that High Plains
receives a good a faith offer to purchase such Lease from an unrelated third
party, High Plains shall give prompt notice to Pennaco including with such
notice all supporting documentation, and Pennaco shall have ten (10) days to
accept or reject the offer. In the event that Pennaco accepts such offer it
shall pay High Plains an amount equal to the amount offered by such third
party.
5. AFTER-ACQUIRED INTERESTS. The provisions of this
Agreement shall not apply to the any and all mineral and/or royalty interests
which High Plains may hereafter acquire; provided, however, that with regard
to the lease, exploitation or development of such interests, Pennaco is
hereby granted a first right of refusal. In the event that High Plains
receives a good faith offer to lease from an unrelated third party, or, for
its own account, decides to exploit or develop such interests, High Plains
shall give prompt notice to Pennaco including with such notice all supporting
documentation, and Pennaco shall have ten (10) days to match such terms. In
the event that Pennaco matches such offer it shall pay High Plains an amount
equal to the amount offered by such third party on terms no less favorable
than the terms contained in such offer.
VIII. MISCELLANEOUS.
1. HIGH PLAINS' CONSIDERATION. (a) PRESENTLY-OWNED LEASE.
High Plains acknowledges that payment of the purchase price by Pennaco --
$35.00 + $40.00 + corresponding High Plains' ORRI shall be High Plains'
consideration. Pennaco acknowledges that High Plains has contributed the
time of its salaried staff to this arrangement. (b) ACQUIRED LEASES. High
Plains acknowledges that payment of High Plains' purchase price of the
Acquired Lease + its out-of-pocket expenses + properly substantiated
pass-through costs of contract support incurred at the standard rate + the
corresponding High Plains' ORRI shall be High Plains' consideration.
2. RECORDATION. Either party may record this Agreement or a
memorandum thereof upon the earlier of the commencement of production under a
lease or one (1) year from the date hereof.
3. NOTICES. Any and all notices, request, demands and written
communications allowed or required hereunder shall be delivered in person, faxed
or sent by United States mail, postage prepaid, addressed as follows:
Xxx Xxxxxx Pennaco Energy, Inc.
High Plains Associates, Inc. Attention: President
0000 Xxxxx Xxxxxx #000 0000 Xxxxxx Xxxx, Xxxxx X
0
Xxxxxx, XX 00000 Xxx Xxxxx, XX 00000
Fax: 000-000-0000 Fax: 000-000-0000
Phone: 000-000-0000 Phone: 000-000-0000
Any notice sent by fax shall be deposited in the mail on the same
day. All such notices, requests, demands and other communications
shall be deemed given and effective, when personally delivered, upon
receipt and, when mailed, three business days after such
communication was deposited in the mail. Each party may change its
address at any time, and from time to time, by giving written notice
to the other party.
1. PRIOR NOTIFICATION, APPROVAL, CONSENT. Any provision of
this Agreement requiring notification, approval or consent from Pennaco shall
mean approval that is requested and obtained prior to the required deadline
or expiration date and shall only be effective if evidenced by a written
instrument executed by an officer of Pennaco.
2. CHOICE OF LAW; HEADINGS; COUNTERPARTS. This Agreement
shall be governed by and construed in accordance with the laws of the State
of Colorado with respect to agreements wholly executed and performed within
such state. The headings in this Agreement are inserted for convenience of
reference only and shall not affect the meaning, interpretation or
construction of this Agreement. This Agreement may be executed in
counterparts by the parties hereto and if so executed by all parties shall be
of the same force and effect as if all parties had executed the same
instrument. All counterparts shall constitute one in the same instrument.
3. COMPLETE AGREEMENT; MODIFICATIONS. This Agreement
supersedes all prior agreements or understandings, written or oral, with
regard to the subject matter hereto, and constitutes the express and entire
agreement of the parties with regard to the subject matter hereof. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by both parties.
4. FORCE MAJEURE. Each of the parties hereto shall perform
its obligations in good faith and shall carry out its obligations to the best
of its ability. In the event that either party is rendered unable to carry
out its obligations under this Agreement on account of any cause or condition
not reasonably within the control of the party claiming suspension and which
by exercise of due diligence such party is unable to prevent or overcome such
party's obligation hereunder shall be suspended during the continuance of the
inability to perform such obligation, but shall be remedied with all
reasonable dispatch. Either party shall have the right to terminate this
Agreement if such suspension shall continue for a period in excess of sixty
(60) days. Notwithstanding anything to contrary appearing herein, the
provisions of this Article VIII, Paragraph 7 shall not apply to the ability
of either Pennaco or High Plains, as the case may be, to pay cash
consideration to the other party then due and owing.
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5. WAIVERS. No failure on the part of Pennaco to exercise,
and no delay in exercising, any power or right hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any power or
right preclude any other or further exercise thereof or the exercise of any
other power or right.
6. ASSIGNMENT; BINDING EFFECT. Subject to the following
sentence, this Agreement shall be binding upon High Plains and Pennaco and
inure to the benefit of their respective heirs, successors and assigns;
without limiting the generality of the forgoing, the obligations of High
Plains are personal and may not be assigned or transferred. Notwithstanding
anything contrary appearing herein, in the event that Pennaco assigns this
Agreement, Pennaco shall notify High Plains at least thirty (30) days prior
to the effective date of the assignment and High Plains shall have thirty
days to either consent to the assignment or terminate this Agreement. In the
event that High Plains fails to timely respond, High Plains will be deemed to
have terminated this Agreement.
IN WITNESS WHEREOF, the parties, or their authorized representatives,
have signed this Agreement effective the date first appearing above.
"High Plains" "Pennaco"
High Plains Associates, Inc., for itself Pennaco Energy, Inc.
and any Partners
By: By or on behalf of:
--------------------------------- ----------------
Typed/Printed Name: Typed/Printed Name:
------------------ ----------------
Its: Its:
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