Common use of ASSIGNMENT OF RUNS Clause in Contracts

ASSIGNMENT OF RUNS. Notwithstanding that, under the Mortgages, Borrower or a Guarantor, as applicable, has assigned to Administrative Agent for the ratable benefit of the Banks all of the proceeds of runs accruing to the Mortgaged Properties covered thereby: (a) Until such time as Administrative Agent shall notify Borrower or Guarantor, as applicable, to the contrary, Borrower or Guarantor, as applicable, shall be entitled to receive from the purchasers or disbursers of production all such proceeds of runs, subject however to the liens created under the Mortgages, which liens are hereby affirmed and ratified. Upon the occurrence and during the continuance of a Default or such other time as Administrative Agent shall in its discretion so elect, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04 above and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all proceeds of runs then held by Borrower or Guarantor, as applicable, or to receive directly from the purchaser or disburser of production all other proceeds of runs. (b) In no case shall any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute in any way a waiver, remission or release of any of its rights under the Mortgages, nor shall any release of any other proceeds of runs or of any rights of Administrative Agent to collect other proceeds of runs thereafter. (c) Borrower or Guarantor, as applicable, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies of the Mortgages the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgages, and instructing that all proceeds of runs be paid directly to Administrative Agent for the ratable benefit of the Banks.

ASSIGNMENT OF RUNS. Notwithstanding that3.1 Subject to Section 3.8 herein, under the Mortgages, Borrower or a Guarantor, as applicable, has assigned to Administrative Agent for the ratable benefit purpose of additionally securing the payment of the Banks Indebtedness and to facilitate the discharge of any of the Indebtedness and as cumulative of any and all rights and remedies herein provided for, effective as of 7:00 a.m. local time wherein the Leases are located as of the date hereof, Mortgagor hereby exclusively bargains, sells, transfers, assigns, sets over and conveys unto Mortgagee, its interest in the Hydrocarbons, together with its share of the proceeds derived from the sale thereof (such proceeds being hereinafter called "proceeds of runs"). Mortgagor directs and instructs each purchaser of the Hydrocarbons to pay to Mortgagee all of the proceeds of runs accruing until such time as such purchaser has been furnished evidence that all Indebtedness has been paid and that the lien evidenced hereby has been released. Mortgagor authorizes Mortgagee to receive and collect all sums of money derived from the proceeds of runs, and no purchaser of the Hydrocarbons shall have the responsibility for the application of any funds paid to Mortgagee. 3.2 Independent of the foregoing provisions and authorities herein granted, Mortgagor agrees to execute and deliver any and all transfer orders, division orders and other instruments that may be requested by Mortgagee or that may be required by the purchaser of the Hydrocarbons for the purpose of effectuating payment of Mortgagor's proceeds of runs to Mortgagee following an Event of Default as defined in the Credit Agreement. 3.3 Mortgagee may, in its sole discretion, elect to return any part of said funds to Mortgagor or to deposit the same to Mortgagor's account without applying it to the Mortgaged Properties covered therebyIndebtedness. Upon Default, the monthly proceeds of Mortgagor's runs actually received by Mortgagee may be held by Mortgagee and applied first to the payment of all accrued interest on the Notes and any other of the Indebtedness and then to the payment of installments of principal of the Notes in the stated order of maturity and then to any other of the Indebtedness owing by Mortgagor to Mortgagee in such manner as Mortgagee may elect, with the balance, if any, to be returned to Mortgagor. 3.4 The receipt by Mortgagee of any monies for the account of Mortgagor, including but not limited to money received as proceeds of runs, shall not in any manner change or alter in any respect the obligations of Mortgagor upon the Indebtedness, and nothing herein contained shall be construed as limiting Mortgagee to the collection of any of the Indebtedness out of the proceeds of runs. The Indebtedness shall continue as the absolute and unconditional obligation of Mortgagor to pay, as provided in the instruments evidencing the Indebtedness, the amounts therein specified at their respective maturity dates, whether by acceleration or otherwise. 3.5 Mortgagee is hereby absolved from all liability, including liability for Mortgagee's negligence, for failure to enforce collection of the proceeds of runs and from all other responsibility in connection therewith except the responsibility to account to Mortgagor for funds actually received, provided however that Mortgagee shall not be absolved from liability resulting from the gross negligence or willful misconduct of the Mortgagee. Mortgagor agrees to indemnify and hold Mortgagee or any Holder harmless against any and all liabilities, actions, claims, judgments, costs, charges and attorneys' fees by reason of the assertion that Mortgagee or any Holder has received, either before or after the payment in full of the Indebtedness, funds from the sale of Hydrocarbons claimed by third persons, except for third parties who have valid claims. Mortgagee or any Holder shall have the right to defend against any such claims or actions, employing attorneys of its own selection. If not furnished with indemnity satisfactory to Mortgagee, Mortgagee shall have the right to compromise and adjust any such claims, actions and judgments, and, in addition to the rights to be indemnified as herein provided, all amounts paid by Mortgagee or any Holder in compromise, satisfaction or discharge of any such claim, action or judgment and all court costs, attorneys' fees and other expenses of every character incurred by Mortgagee or any Holder shall be a demand obligation owing by Mortgagor, shall be secured by the lien and security interest evidenced by this instrument and shall bear interest on each such amount from the date that the same is expended, advanced or incurred by Mortgagee until the date of written demand or request by Mortgagee for the reimbursement of same, at a rate of interest equal to the lesser of (i) the Maximum Lawful Rate or (ii) the Default Rate. Any provision to the contrary herein contained notwithstanding, the rate of interest contracted for, charged or received by Mortgagee hereunder shall never exceed the Maximum Lawful Rate. 3.6 Each of the provisions of this Article III shall be deemed a covenant running with the land and shall be binding upon Mortgagor, its successors and assigns, and inure to the benefit of Mortgagee, its successors and assigns. 3.7 The foregoing assignment shall not cause Mortgagee to be: (a) Until such time as Administrative Agent shall notify Borrower a Mortgagee in possession; (b) responsible or Guarantorliable for the control, as applicablecare, management, operation or repair of the Mortgaged Properties or for performing any of the terms, agreements, undertakings, obligations, representations, warranties, covenants and conditions of the Leases; (c) responsible or liable for any waste committed on the Mortgaged Properties by Mortgagor under any of the Leases or by any other party; for any dangerous or defective condition of the Mortgaged Properties; or for any negligence in the management, upkeep, repair or control of the Mortgaged Properties resulting in loss or injury or death to the contraryany person; or (d) responsible for or impose upon Mortgagee any duty to produce Hydrocarbons, Borrower rents, profits, runs, or Guarantor, as applicable, shall be entitled to receive from the purchasers or disbursers of production all such proceeds of runs. Mortgagee shall not directly or indirectly be liable to Mortgagor or any other person as a consequence of: (a) the exercise or failure to exercise any of the rights, subject however remedies or powers granted to Mortgagee hereunder; or (b) the liens created failure or refusal of Mortgagee to perform or discharge any obligation, duty or liability of the Mortgagor arising under the MortgagesLeases. The exclusions from liability contained herein are intended to apply to liability for Mortgagee's negligence except for gross negligence or willful misconduct. 3.8 Notwithstanding the foregoing, which liens are Mortgagee hereby affirmed grants to Mortgagor a license to receive and ratified. Upon collect the revenues and proceeds attributable to such production, provided, however, that, upon the occurrence and during the continuance of a Default or such other time as Administrative Agent shall Default, Mortgagee, acting in its discretion so electsole discretion, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04 above and may exercise all rights and remedies granted under the Mortgages, including shall have the right to obtain possession of all proceeds of runs then held by Borrower or Guarantor, as applicable, or to receive directly from the purchaser or disburser of production all other proceeds of runs. (b) In no case shall any failure, whether purposed or inadvertent, by Administrative Agent terminate Mortgagor's license to collect directly any such revenues and proceeds of runs constitute in any way a waiver, remission or release of any of its rights under the Mortgages, nor shall any release of any other proceeds of runs or of any rights of Administrative Agent by sending to collect other proceeds of runs thereafter. (c) Borrower or Guarantor, as applicable, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies of the Mortgages the purchasers or disbursers of such production produced from the Mortgaged Properties letters in lieu of the existence of the Mortgages, and instructing that all proceeds of runs be paid directly to Administrative Agent for the ratable benefit of the Bankstransfer orders executed by Mortgagor contemporaneously herewith.

ASSIGNMENT OF RUNS. Notwithstanding that3.1 For the purpose of additionally securing the payment of the Obligations and to facilitate the discharge of any of the Obligations and as cumulative of any and all rights and remedies herein provided for, under the Mortgages, Borrower or a Guarantor, effective as applicable, has assigned to Administrative Agent of 12:01 a.m. Pacific Time for the ratable benefit Mortgaged Property on October 31, 2012, Mortgagor hereby bargains, sells, transfers, assigns, sets over and conveys unto Lender, its interest in the Hydrocarbons, together with its share of the Banks proceeds derived from the sale thereof (such proceeds being hereinafter called “proceeds of runs”). Mortgagor directs and instructs each purchaser of the Hydrocarbons to pay all of the proceeds of runs accruing to directly into the Mortgaged Properties covered thereby: (a) Until Receivables Account until such time as Administrative Agent shall notify Borrower or Guarantor, as applicable, to such purchaser has been furnished evidence that all Obligations has been paid and that the contrary, Borrower or Guarantor, as applicable, shall be entitled to receive lien evidenced hereby has been released. Mortgagor authorizes the foregoing receipt and collection all sums of money derived from the purchasers or disbursers of production all such proceeds of runs, subject however and no purchaser of the Hydrocarbons shall have the responsibility for the application of any funds paid to the liens created under Receivables Account. 3.2 Independent of the Mortgagesforegoing provisions and authorities herein granted, which liens are hereby affirmed Mortgagor agrees upon the occurrence and ratified. during the continuation of an Event of Default to execute and deliver any and all transfer orders, division orders and other instruments that may be requested by Lender or that may be required by the purchaser of the Hydrocarbons for the purpose of effectuating payment for the proceeds of runs to Lender. 3.3 Upon the occurrence and during the continuance continuation of a Default or such other time as Administrative Agent shall in its discretion so electan Event of Default, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04 above and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all monthly proceeds of runs then actually received by Lender may be held by Borrower or GuarantorLender and applied first to the payment of all accrued interest under the Note and then to the payment of principal of the Loan. In its sole discretion, as applicable, Lender may elect to return any part of said funds to Mortgagor or to receive directly from deposit the purchaser same to Mortgagor’s account without applying it to the Obligations or disburser holding the same as cash collateral. 3.4 The receipt by Lender of production all other any monies, including but not limited to money received as proceeds of runs. (b) In no case , shall any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute not in any way a waivermanner change or alter in any respect the obligations of Mortgagor upon the Note or other evidence of the Obligations, remission or release and nothing herein contained shall be construed as limiting the Lender to the collection of any of its rights under the Mortgages, nor shall any release Obligations out of any other the proceeds of runs runs. The Obligations shall continue as the abso­lute and unconditional obligation of Mortgagor to pay, as provided in the Loan Agreement, Note or of any rights of Administrative Agent to collect other proceeds of runs thereafterinstruments evidencing the Obligations, the amount therein specified at its Maturity Date, whether by acceleration or otherwise. (c) Borrower or Guarantor, as applicable, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies 3.5 Each of the Mortgages provisions of this Article III shall be deemed a covenant running with the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgagesland and shall be binding upon Mortgagor, its successors and assigns, and instructing that all proceeds of runs be paid directly inure to Administrative Agent for the ratable benefit of the BanksMortgagor and the Lender, its successors and assigns.

ASSIGNMENT OF RUNS. Notwithstanding that, under Section V of the Mortgages, Borrower or a Guarantor, as applicable, has assigned to Administrative Agent for the ratable benefit of the Banks Lenders all of the proceeds of runs accruing to the Mortgaged Properties covered thereby: (a) Until such time as Administrative Agent shall notify Borrower or Guarantor, as applicable, to the contrary, Borrower or Guarantor, as applicable, shall be entitled to receive from the purchasers or disbursers of production all such proceeds of runs, subject however to the liens created under the Mortgages, which liens are hereby affirmed and ratified. Upon the occurrence and during the continuance of a Potential Default or such other time as Administrative Agent shall in its discretion so elect, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04 SECTION 5.13 above and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all proceeds of runs then held by Borrower or Guarantor, as applicable, or to receive directly from the purchaser or disburser of production all other proceeds of runs. (b) In no case shall any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute in any way a waiver, remission or release of any of its rights under the Mortgages, nor shall any release of any other proceeds of runs or of any rights of Administrative Agent to collect other proceeds of runs thereafter. (c) Borrower or Guarantor, as applicable, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies of the Mortgages the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgages, and instructing that all proceeds of runs be paid directly to Administrative Agent for the ratable benefit of the Banks.

ASSIGNMENT OF RUNS. Notwithstanding that, under Article III of the Mortgages, Borrower or a Guarantorand, as applicable, each Subsidiary has assigned to Administrative Agent for the ratable benefit of the Banks Lenders all of the proceeds of runs accruing to the Mortgaged Properties covered thereby: (a) Until such time as an Event of Default shall have occurred and be continuing and Administrative Agent shall notify Borrower or Guarantorand, as applicable, each Subsidiary, to the contrary, Borrower or Guarantor, as applicable, shall be entitled to receive from the purchasers or disbursers of its production all such proceeds of runs, subject however to the liens created under the Mortgages, which liens are hereby affirmed and ratified. Upon the occurrence and during the continuance of a Default or such other time as Administrative Agent shall in its discretion so electan Event of Default, to the extent permitted pursuant to the Intercreditor Agreement, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04 above and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all proceeds of runs then held by Borrower or Guarantor, as applicable, and any Subsidiary or to receive directly from the purchaser or disburser of production all other proceeds of runs. (b) In no case shall any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute in any way a waiver, remission or release of any of its rights under the Mortgages, nor shall any release of any other proceeds of runs or of any rights of Administrative Agent to collect other proceeds of runs thereafter. (c) Borrower or Guarantorand, as applicable, each Subsidiary, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies of the Mortgages the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgages, and instructing that all proceeds of runs be paid directly to Administrative Agent for the ratable benefit of the BanksLenders.

ASSIGNMENT OF RUNS. Notwithstanding that, under Article III of the Mortgages, Borrower or a Guarantor, as applicable, each Credit Party has assigned to Administrative Agent for the ratable benefit of the Banks all of the proceeds of runs accruing to the Mortgaged Properties covered thereby: (a) Until such time as Administrative Agent shall notify Borrower or Guarantor, as applicable, the appropriate Credit Party to the contrary, Borrower or Guarantor, as applicable, such Credit Party shall be entitled to receive from the purchasers or disbursers of production all such proceeds of runs, subject however to the liens created under the Mortgages, which liens are hereby affirmed and ratified. Upon the occurrence and during the continuance of a Default or such other time as Administrative Agent shall in its discretion so electDefault, Administrative Agent may deliver to the addressees the lettersLetters-in-lieu Lieu described in Section 4.04 above and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all proceeds of runs then held by Borrower or Guarantor, as applicable, the Credit Parties or to receive directly from the purchaser or disburser of production all other proceeds of runs. (b) In no case shall (i) any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute in any way a waiver, remission or release of any of its rights under the Mortgages, nor shall (ii) any release of any other proceeds of runs by Administrative Agent constitute in any way a waiver, remission or release of any of its rights of Administrative Agent to collect other proceeds of runs thereafter, or (iii) Administrative Agent's failure or delay to exercise any of its rights hereunder constitute, in any way, a waiver, remission or release of its right to exercise such rights thereafter. (c) Upon the occurrence and during the continuance of a Default, Borrower or Guarantorthe appropriate Credit Party, as applicablethe case may be, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing writing, and accompanied (if necessary) by certified copies of the Mortgages Mortgages, the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgages, and instructing that all proceeds of runs be paid directly to Administrative Agent for the ratable benefit of the Banks.

ASSIGNMENT OF RUNS. Notwithstanding that, under Article III of the Mortgages, Borrower or a Guarantorand, as applicable, each Subsidiary has assigned to Administrative Agent for the ratable benefit of the Banks all of the proceeds of runs accruing to the Mortgaged Properties covered thereby: (a) Until such time as an Event of Default shall have occurred and be continuing and Administrative Agent shall notify Borrower or Guarantorand, as applicable, each Subsidiary, to the contrary, Borrower or Guarantor, as applicable, shall be entitled to receive from the purchasers or disbursers of its production all such proceeds of runs, subject however to the liens created under the Mortgages, which liens are hereby affirmed and ratified. Upon the occurrence and during the continuance of a Default or such other time as Administrative Agent shall in its discretion so electan Event of Default, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04 above and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all proceeds of runs then held by Borrower or Guarantor, as applicable, and any Subsidiary or to receive directly from the purchaser or disburser of production all other proceeds of runs. (b) In no case shall any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute in any way a waiver, remission or release of any of its rights under the Mortgages, nor shall any release of any other proceeds of runs or of any rights of Administrative Agent to collect other proceeds of runs thereafter. (c) Borrower or Guarantorand, as applicable, each Subsidiary, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies of the Mortgages the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgages, and instructing that all proceeds of runs be paid directly to Administrative Agent for the ratable benefit of the Banks.

ASSIGNMENT OF RUNS. Notwithstanding that(a) For the purpose of additionally securing the payment of the Indebtedness and to facilitate the discharge of any of the Indebtedness and as cumulative of any and all rights and remedies herein provided for, under the Mortgages, Borrower or a Guarantor, effective as applicable, has assigned to Administrative Agent of 12:01 a.m. Pacific Time for the ratable benefit Mortgaged Property on September 17, 2010, Mortgagor hereby bargains, sells, transfers, assigns, sets over and conveys unto Lender, its interest in the Hydrocarbons, together with its share of the Banks proceeds derived from the sale thereof (such proceeds being hereinafter called “proceeds of runs”). Subject to Section 3.1(b), Mortgagor directs and instructs each purchaser of the Hydrocarbons to pay to Lender all of the proceeds of runs accruing to the Mortgaged Properties covered thereby: (a) Until until such time as Administrative Agent shall notify Borrower or Guarantor, as applicable, to such purchaser has been furnished evidence that all Indebtedness has been paid and that the contrary, Borrower or Guarantor, as applicable, shall be entitled lien evidenced hereby has been released. Mortgagor authorizes Lender to receive and collect all sums of money derived from the purchasers or disbursers of production all such proceeds of runs, subject however and no purchaser of the Hydrocarbons shall have the responsibility for the application of any funds paid to Lender. (b) For its convenience and notwithstanding the liens created under foregoing, Lender has elected not to exercise immediately its right to receive payment to it directly of the Mortgagesproceeds of any sale of the oil, which liens gas and other minerals produced or sold from the Mortgaged Properties and agrees to exercise such right solely upon the occurrence and continuance of an Event of Default and the purchasers may continue to make such payment or delivery of the proceeds to Mortgagor until such time as Mortgagor and the purchasers have received notice that an Event of Default has occurred and is continuing, and that the purchasers are hereby affirmed directed to make payment or delivery of the proceeds directly to Lender. 3.2 Independent of the foregoing provisions and ratified. authorities herein granted, Mortgagor agrees upon the occurrence and during the continuation of an Event of Default to execute and deliver any and all transfer orders, division orders and other instruments that may be requested by Lender or that may be required by the purchaser of the Hydrocarbons for the purpose of effectuating payment for the proceeds of runs to Lender. 3.3 Upon the occurrence and during the continuance continuation of a Default or such other time as Administrative Agent shall in its discretion so electan Event of Default, Administrative Agent may deliver to the addressees the letters-in-lieu described in Section 4.04 above and may exercise all rights and remedies granted under the Mortgages, including the right to obtain possession of all monthly proceeds of runs then actually received by Lender may be held by Borrower or GuarantorLender and applied first to the payment of all accrued interest under the Note and then to the payment of principal of the Loan. In its sole discretion, as applicable, Lender may elect to return any part of said funds to Mortgagor or to receive directly from deposit the purchaser same to Mortgagor’s account without applying it to the Indebtedness or disburser holding the same as cash collateral. 3.4 The receipt by Lender of production all other any monies, including but not limited to money received as proceeds of runs. (b) In no case , shall any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute not in any way a waivermanner change or alter in any respect the obligations of Mortgagor upon the Note or other evidence of the Indebtedness, remission or release and nothing herein contained shall be construed as limiting the Lender to the collection of any of its rights under the Mortgages, nor shall any release Indebtedness out of any other the proceeds of runs runs. The Indebtedness shall continue as the absolute and unconditional obligation of Mortgagor to pay, as provided in the Note or of any rights of Administrative Agent to collect other proceeds of runs thereafterinstruments evidencing the Indebtedness, the amount therein specified at its Maturity Date, whether by acceleration or otherwise. (c) Borrower or Guarantor, as applicable, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies 3.5 Each of the Mortgages provisions of this Article III shall be deemed a covenant running with the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgagesland and shall be binding upon Mortgagor, its successors and assigns, and instructing that all proceeds of runs be paid directly inure to Administrative Agent for the ratable benefit of the BanksMortgagor and the Lender, its successors and assigns.

ASSIGNMENT OF RUNS. Notwithstanding that, under 3.1. For the Mortgages, Borrower or a Guarantor, as applicable, has assigned to Administrative Agent for purpose of additionally securing the ratable benefit payment of the Banks Obligations and to facilitate the discharge of any of the Obligations and as cumulative of any and all rights and remedies herein provided for, effective as of the Effective Date, Mortgagor hereby bargains, sells, transfers, assigns, sets over and conveys unto Mortgagee, its successors and assigns, Mortgagor’s interest in the Hydrocarbons, together with its share of the proceeds derived from the sale thereof (such proceeds being hereinafter called “Proceeds of Runs”). Mortgagor directs and instructs each purchaser of the Hydrocarbons to pay to Mortgagee all of the proceeds Proceeds of runs accruing to the Mortgaged Properties covered thereby: (a) Until Runs until such time as Administrative Agent such purchaser has been furnished evidence that all Obligations has been paid and that the lien evidenced hereby has been released. Mortgagor authorizes Mortgagee to receive and collect all sums of money derived from the Proceeds of Runs, and no purchaser of the Hydrocarbons shall notify Borrower have the responsibility for the application of any funds paid to Mortgagee. 3.2. Independent of the foregoing provisions and authorities herein granted, Mortgagor agrees to execute and deliver any and all transfer orders, division orders and other instruments that may be requested by Mortgagee or Guarantorthat may be required by the purchaser of the Hydrocarbons for the purpose of effectuating payment for the Proceeds of Runs to Mortgagee following an Event of Default, as applicable, to the contrary, Borrower or Guarantor, as applicable, shall be entitled to receive from the purchasers or disbursers of production all such proceeds of runs, subject however to the liens created under the Mortgages, which liens are hereby affirmed and ratifiedterm is defined below. 3.3. Upon the occurrence and during the any continuance of a Default or an Event of Default, the monthly Proceeds of Runs actually received by Mortgagee may be held by Mortgagee and applied first to the payment of all accrued interest of the Obligations and then to the payment of installments of principal of the Obligations in stated order of maturity owing by Mortgagor to Mortgagee in such other time manner as Administrative Agent shall in its discretion so Mortgagee may elect, Administrative Agent with the balance, if any, to be returned to Mortgagor. In its sole discretion, Mortgagee may deliver elect to return any part of said funds to Mortgagor or to deposit the same to Mortgagor’s account without applying it to the addressees the letters-in-lieu described in Section 4.04 above and may exercise all rights and remedies granted under the MortgagesObligations. 3.4. The receipt by Mortgagee of any monies, including but not limited to money received as Proceeds of Runs, shall not in any manner change or alter in any respect the obligations of Mortgagor upon the Obligations, and nothing herein contained shall be construed as limiting Mortgagee to the collection of any of the Obligations out of the Proceeds of Runs. The Obligations shall continue as the absolute and unconditional obligation of Mortgagor to pay, as provided in the instruments evidencing the Obligations, the amounts therein specified at their respective maturity dates, whether by acceleration or otherwise. 3.5. Mortgagee is hereby absolved from all liability for failure to enforce collection of the Proceeds of Runs and from all other responsibility in connection therewith except the responsibility to account to Mortgagor for funds actually received. Mortgagor agrees to indemnify and hold Mortgagee or any Holder harmless against any and all liabilities, actions, claims, judgments, costs, charges and reasonable attorneys’ fees by reason of the assertion that Mortgagee or any Holder has received, either before or after the payment in full of the Obligations, funds from the sale of Hydrocarbons claimed by third persons, except for third parties who have valid claims. Mortgagee or any Holder shall have the right to obtain possession defend against any such claims or actions, employing attorneys of its own selection. If not furnished with indemnity satisfactory to the Mortgagee, Mortgagee shall have the right to compromise and adjust any such claims, actions and judgments, and, in addition to the rights to be indemnified as herein provided, all proceeds amounts paid by Mortgagee or any Holder in compromise, satisfaction or discharge of runs then held any such claim, action or judgment and all court costs, reasonable attorneys’ fees and other expenses of every character incurred by Borrower Mortgagee or Guarantorany Holder shall be a demand obligation owing by Mortgagor, as applicable, or to receive directly shall be secured by the lien and security interest evidenced by this instrument and shall bear interest on each such amount from the purchaser date that the same is expended, advanced or disburser incurred by Mortgagee until the date of production all other proceeds payment of runssame, at the Default Rate. (b) In no case shall any failure, whether purposed or inadvertent, by Administrative Agent to collect directly any such proceeds of runs constitute in any way a waiver, remission or release of any of its rights under the Mortgages, nor shall any release of any other proceeds of runs or of any rights of Administrative Agent to collect other proceeds of runs thereafter. (c) Borrower or Guarantor, as applicable, will upon the instruction of Administrative Agent join with Administrative Agent in notifying in writing and accompanied (if necessary) by certified copies of the Mortgages the purchasers or disbursers of production produced from the Mortgaged Properties of the existence of the Mortgages, and instructing that all proceeds of runs be paid directly to Administrative Agent for the ratable benefit of the Banks.