Common use of Operation of Assets Clause in Contracts

Operation of Assets. The Company shall: ------------------- (1) cause the Assets to be maintained and operated in the ordinary course of business in accordance with the Company's past practices (including the repair or replacement of damaged, destroyed, obsolete, depreciated, non-working or non-economical items of equipment or other personal property without regard to the limitation of Section 8.1(c)(3) below), maintain insurance now in force with respect to the Assets, and pay or cause to be paid all costs and expenses in connection therewith promptly when due; (2) cause, or in the event the Company is not operator, use reasonable efforts to cause, the Assets to be maintained and operated in material compliance with all Laws; (a) not commit to participate in the drilling of any new well or other new capital expenditure on the Assets the projected cost of which (net to the Company's interest and without consideration of any cost overruns) is in excess of $500,000 in any single instance, or (b) elect to become a nonconsenting party with respect to any operation or capital expenditure proposed by a third Person if the projected cost of such operation or capital expenditure (net to the Company's interest and without consideration of any cost overruns) is in excess of $500,000 in any single instance, or if the Company's election not to participate in such operation or capital expenditure would cause a permanent forfeiture of any Well or Unit valued in excess of $500,000 in the Property Schedule, in both cases without the advance written consent of Buyer, which consent shall not be unreasonably withheld and which consent or non-consent must be given by Buyer within the lesser of (x) ten (10) days of Buyer's receipt of the notice from Seller or the Company or (y) one-half (2) of the applicable notice period within which the Company is contractually obligated to respond to third parties to avoid a deemed election by the Company regarding such operation or capital expenditure (provided Seller or the Company promptly gives such notice to Buyer after Seller or the Company receives it), as specified in Seller's or the Company's notice to Buyer requesting such consent which notice shall set forth the Company's recommendation as to whether the Company should participate in such operation or capital expenditure; provided that, failure by Buyer to respond within the aforesaid applicable period shall constitute Buyer's approval of the recommendation of the Company set forth in such notice with respect to such operation or capital expenditure; (4) maintain and keep the Assets in full force and effect, except where such failure is due to (i) the failure to pay a delay rental, royalty, shut in royalty or other payment by mistake or oversight (including the Company's negligence) unless caused by the Company's gross negligence or willful misconduct, or (ii) the failure to participate in an operation due to the express or deemed nonconsent of Buyer; and (5) use reasonable diligence to maintain its relationships with suppliers, customers and others having material business relations with the Company with respect to the Assets so that they will be preserved for Buyer on and after the Closing Date.

Operation of Assets. The Company Seller shall: -------------------: (1) cause the Assets to be maintained and operated (and the production attributable thereto marketed, sold, exchanged, processed and otherwise handled) in the ordinary course of business in accordance with the Company's Seller’s past practices (including the repair or replacement of damaged, destroyed, obsolete, depreciated, non-working or non-economical items of equipment or other personal property without regard to the limitation of Section 8.1(c)(38.1(c)(2) below), maintain insurance now in force with respect to the Assets, and pay or cause to be paid all costs and expenses in connection therewith promptly when due; (2) cause, or in the event the Company is not operator, use reasonable efforts to cause, the Assets to be maintained and operated in material compliance with all Laws; (a) not commit to participate in the drilling of any new well or other new capital expenditure operations on the E & P Assets the projected cost of which (net to the Company's Seller’s interest and without consideration of any cost overruns) is in excess of $500,000 25,000 in any single instance, or (b) elect to become a nonconsenting party with respect to any operation or capital expenditure proposed by a third Person if the projected cost of such operation or capital expenditure (net to the Company's interest and without consideration of any cost overruns) is in excess of $500,000 in any single instance, or if the Company's election not to participate in such operation or capital expenditure would cause a permanent forfeiture of any Well or Unit valued in excess of $500,000 in the Property Schedule, in both cases without the advance written consent of Buyer, which consent shall not be unreasonably withheld and which consent or non-consent must be given by Buyer within the lesser of (x) ten (10) days of Buyer's ’s receipt of the notice from Seller or the Company or (y) one-half (2½) of the applicable notice period within which the Company Seller is contractually obligated to respond to third parties to avoid a deemed election by the Company Seller regarding such operation or capital expenditure (provided Seller or the Company promptly gives such notice to Buyer after Seller or the Company receives it)operation, as specified in Seller's or the Company's ’s notice to Buyer requesting such consent which notice shall set forth the Company's recommendation as to whether the Company should participate in such operation or capital expenditureconsent; provided that, failure by Buyer to respond within the aforesaid applicable period shall constitute Buyer's approval of the recommendation of the Company set forth ’s consent to Seller’s participation in such notice with respect to such operation well or capital expenditureother operation; (43) maintain and keep the Assets in full force and effect, except where such failure is due to (i) the failure to pay a delay rental, royalty, shut in royalty or other payment by mistake or oversight (including the Company's Seller’s negligence) unless caused by the Company's Seller’s gross negligence or willful misconduct, or (ii) the failure to participate in an operation due to the express or deemed nonconsent of Buyerwhich Buyer does not timely approve; and (54) use Seller’s reasonable diligence best efforts to maintain its relationships with suppliers, customers and others having material business relations with the Company Seller with respect to the Assets so that they will be preserved for Buyer the Company on and after the Closing Date.