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obligations of the parties under the Lease. WFC's position, which OSM <br />apparently takes issue with, is that the Lease prohibits the Morgans from <br />continuing to protest WFC's activities, and that this is indeed one of the important <br />rights that WFC bargained and paid the Morgans for, handsomely, as part of its <br />Lease obligations. See, Lease 17(f) ("Lessor agrees to refrain from interfering <br />with, delaying or obstructing Lessee's exercise of its Rights hereunder ... by any <br />means whatever.") Over the years, the Morgan family has already pocketed <br />$900,000.00 in royalty payments from WFC, and otherwise would be entitled to a <br />total well in excess of one million dollars in such payments through the term of the <br />Lease. It is WFC's belief that the Morgan family, having reaped the majority of <br />the benefits of the Lease, is now escalating a dispute over long-settled regulatory <br />issues solely in order to extract additional financial concessions from WFC. OSM <br />may not be aware that Frank Morgan has filed suit against WFC seeking over $5.1 <br />Million in damages, and has also filed a parallel suit against the Division seeking <br />the identical amount, for a combined total of $10.2 Million. WFC's suspension of <br />the royalty payment should be considered in the context of these exorbitant <br />demands. <br />The TDN letter correctly notes that the issue of royalty payments under the Lease <br />is "a matter outside the jurisdiction of the regulatory authority." See, TDN letter <br />page 2. WFC does not see how its attempts to enforce the private Lease agreement <br />that it has complied with in every particular would somehow bring it into violation <br />of the Colorado regulatory program, regardless of whether or not a court of law <br />would find the subject language enforceable. However, WFC takes very seriously <br />its obligations to comply with all applicable statutes and regulations, and therefore, <br />simply for the purposes of avoiding an issue under the regulatory program, WFC <br />will make the subject royalty payment within 5 days, without requiring any <br />conditions on the Morgans' part. This solution should resolve the issue raised in <br />the TDN. <br />Finally, WFC notes that because the Lease gives WFC a 30-day period in which to <br />cure any alleged default, the Lease is not in default even assuming, for the sake of <br />argument, that WFC had no right to suspend payment. The relevant Lease <br />provision is as follows: <br />If Lessee shall default in making any payment or in the <br />performance of any obligation hereunder, Lessor shall not be <br />entitled to proceed with any legal remedy therefore unless and until <br />Lessor shall have first given written notice to Lessee of such default <br />sent by certified mail, return receipt requested, and shall have given <br />the opportunity to Lessee to correct same within thirty (30) days <br />following receipt of such notice.