Common use of Interests of Parties Clause in Contracts

Interests of Parties. The remaining Escrow Funds attributable to the Oil & Gas Lease, if any, as of the Effective Date (the “Remaining Escrow Funds”), shall be applied to the costs and liabilities incurred in operations pursuant to this Agreement to the extent consistent with the “part one work plan” set forth in the Option Agreement’s Exhibit 1.2(c), prior to any other costs and liabilities being incurred by the Parties in operations hereunder. After the expenditure of the Remaining Escrow Funds, the Desert Discoveries Net Sales Proceeds shall be applied to the costs and liabilities incurred in operations conducted pursuant to this Agreement, prior to any other costs and liabilities being incurred by the Parties in operations hereunder. Thereafter, all costs and liabilities incurred in operations conducted under this Agreement shall be borne and paid by the Parties as their respective interests are set forth in Exhibit A, except as may be otherwise expressly provided for herein. All equipment and materials acquired in operations hereunder on the Oil and Gas Leases shall be owned by the Parties as their respective interests are set forth in Exhibit A. Subject to the provisions of this Agreement, the Parties shall also own all production of Oil and Gas from the Oil and Gas Leases as their respective interests are set forth in Exhibit A, subject, however, to the payment of royalties and other burdens on production as described herein. The Oil and Gas Leases are jointly owned by the Parties and the Parties’ respective undivided interests in the Oil and Gas Leases shall be deemed separate leasehold interests for the purposes of this Agreement. If any Party has contributed an interest in the Oil and Gas Leases which are burdened (whether before or after this Agreement’s Effective Date) with an assignment of production given as security for the payment of money or with any royalty, overriding royalty, production payment, or other burden on production other than the royalty due and payable to the BLM under the Oil and Gas Leases (an “Additional Burden”), the Party or Parties so burdened (each a “Burdened Party”) shall assume and alone bear all the obligations of such Additional Burden(s) and shall indemnify, defend and hold the other Parties harmless from any and all claims attributable to such respective Additional Burden(s). Further, if a Burdened Party fails to pay, when due, its share of expenses chargeable hereunder, all provisions of Article VII.B. shall be enforceable against the Additional Burden in the same manner as they are enforceable against the interest of the Burdened Party. If the Burdened Party is required under this Agreement to assign or relinquish to any other Party or Parties all or a portion of its interest and/or the production attributable thereto, said other Party or Parties shall receive said assignment and/or production free and clear of said Additional Burden, and the Burdened Party shall indemnify, defend and hold harmless such other Party or Parties from any and all claims and demands for payment asserted by owners of the Additional Burden.

Interests of Parties. The remaining Escrow Funds attributable to the Oil & Gas Lease, if any, as of the Effective Date (the “Remaining Escrow Funds”), shall be applied to the costs and liabilities incurred in operations pursuant to this Agreement to the extent consistent with the “part one work plan” set forth in the Option Agreement’s Exhibit 1.2(c), prior to any other costs and liabilities being incurred by the Parties in operations hereunder. After the expenditure of the Remaining Escrow Funds, the Desert Discoveries Net Sales Proceeds shall be applied to the costs and liabilities incurred in operations conducted pursuant to this Agreement, prior to any other costs and liabilities being incurred by the Parties in operations hereunder. Thereafter, all costs and liabilities incurred in operations conducted under this Agreement shall be borne and paid by the Parties as their respective interests are set forth in Exhibit A, except as may be otherwise expressly provided for herein; provided, however, to the extent not paid from the Remaining Escrow Funds, then as between Desert Discoveries and ▇▇▇▇▇▇, Desert Discoveries agrees to pay all costs that would otherwise be charged to ▇▇▇▇▇▇ for the completion and/or abandonment of one of the Empire Cobble Cuesta Unit 1-12 and Empire Paradise Unit 2-12 ▇▇▇▇▇. All equipment and materials acquired in operations hereunder on the Oil and Gas Leases shall be owned by the Parties as their respective interests are set forth in Exhibit A. Subject to the provisions of this Agreement, the Parties shall also own all production of Oil and Gas from the Oil and Gas Leases as their respective interests are set forth in Exhibit A, subject, however, to the payment of royalties and other burdens on production as described herein. The Oil and Gas Leases are jointly owned by the Parties and the Parties’ respective undivided interests in the Oil and Gas Leases shall be deemed separate leasehold interests for the purposes of this Agreement. If any Party has contributed an interest in the Oil and Gas Leases which are burdened (whether before or after this Agreement’s Effective Date) with an assignment of production given as security for the payment of money or with any royalty, overriding royalty, production payment, or other burden on production other than the royalty due and payable to the BLM under the Oil and Gas Leases (an “Additional Burden”), the Party or Parties so burdened (each a “Burdened Party”) shall assume and alone bear all the obligations of such Additional Burden(s) and shall indemnify, defend and hold the other Parties harmless from any and all claims attributable to such respective Additional Burden(s). Further, if a Burdened Party fails to pay, when due, its share of expenses chargeable hereunder, all provisions of Article VII.B. shall be enforceable against the Additional Burden in the same manner as they are enforceable against the interest of the Burdened Party. If the Burdened Party is required under this Agreement to assign or relinquish to any other Party or Parties all or a portion of its interest and/or the production attributable thereto, said other Party or Parties shall receive said assignment and/or production free and clear of said Additional Burden, and the Burdened Party shall indemnify, defend and hold harmless such other Party or Parties from any and all claims and demands for payment asserted by owners of the Additional Burden.