Operation of Mortgaged Property. So long as the Indebtedness or any part thereof remains unpaid, and whether or not Mortgagor is the operator of the Mortgaged Property, Mortgagor shall, at Mortgagor's own expense: (a) Do all things necessary to keep unimpaired in all material respects Mortgagor's rights and remedies in or under the Mortgaged Property and shall not, except in the ordinary course of business as a reasonably prudent operator would do under similar circumstances, abandon any well or forfeit, surrender, release or default under any Lease or any Production Sale Contract, or consent to any of the foregoing, directly or indirectly; (b) Perform or cause to be performed, each and all covenants, agreements, terms, conditions and limitations imposed upon Mortgagor or its predecessors in interest and expressly contained in (i) the Leases, the operating agreements governing any of the Leases, any Production Sale Contract, or any instrument or document relating thereto, and (ii) any assignment or other form of conveyance, under or through which the Leases or an undivided interest therein are now held, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect, and to perform or cause to be performed all implied covenants and obligations imposed upon Mortgagor in connection with the Leases, the operating agreements governing any of the Leases, any Production Sale Contract or any document or instrument relating thereto, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect; (c) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Subject Interests to be maintained, developed, protected against drainage, and continuously operated for the production of Hydrocarbons in a good and workmanlike manner as would a prudent operator and in compliance with all applicable operating agreements and contracts; (d) Except to the extent such amounts are being contested in good faith and by appropriate proceedings, cause to be paid, promptly as and when due and payable, (i) all rentals, delay rentals and royalties and indebtedness payable in respect of the Subject Interests, and all expenses incurred in or arising from the operation or development of the Subject Interests and (ii) all amounts due and payable in accordance with the terms of each Production Sale Contract, other than such amounts which Mortgagor is diligently contesting in good faith and by appropriate proceedings; (e) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Operating Equipment to be kept in good and effective operating condition, and all repairs, renewals, replacements, additions and improvements thereof or thereto, necessary to the production of Hydrocarbons from the Subject Interests to be promptly made; (f) Cause the Mortgaged Property or any part thereof or the rents, issues, revenues, profits and other income therefrom to be kept free and clear of all liens, charges, security interests and encumbrances of every character, other than Permitted Encumbrances; and (g) Deliver, or cause to be delivered, to Mortgagees a copy of any notice, demand or other material communication from any other party to the Leases, the operating agreements governing any of the Leases described in Exhibit A attached hereto or any Production Sale Contract relating to any alleged, potential or actual material breach thereunder or material breach of any of the covenants, agreements, terms, or limitations thereof which would have a Material Adverse Effect on the rights of Mortgagor thereunder.
Appears in 1 contract
Operation of Mortgaged Property. So As long as any of the Indebtedness or any part thereof remains Obligations remain unpaid, and whether or not Mortgagor is the operator of the Mortgaged Oil and Gas Property, Mortgagor shall, shall (at Mortgagor's own expense:): 67238.1[August 9, 2001]
(a) Do all things necessary to keep unimpaired in all material respects Mortgagor's rights and remedies in or under the Mortgaged Property and shall not, except in the ordinary course of business as a reasonably prudent operator would do under similar circumstances, Collateral unimpaired; and
(b) Not abandon any well or forfeit, surrender, or release or default under any Lease or any Production Sale Contractlease, or consent to any of the foregoingsublease, directly or indirectly;
(b) Perform or cause to be performed, each and all covenants, agreements, terms, conditions and limitations imposed upon Mortgagor or its predecessors in interest and expressly contained in (i) the Leases, the operating agreements governing any of the Leases, any Production Sale Contractfarmout, or any instrument or document relating thereto, and (ii) any assignment or other form of conveyance, under or through which the Leases or an undivided interest therein are now held, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect, and to perform or cause to be performed all implied covenants and obligations imposed upon Mortgagor in connection with the Leases, the operating agreements governing any of the Leases, any Production Sale Contract or any document or instrument relating thereto, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect;agreement without Lender's prior written consent; and
(c) Cause, or in Cause the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Subject Interests Collateral to be maintained, developed, and protected against drainage, drainage and continuously operated for the production of Hydrocarbons in a good and workmanlike manner as would a prudent operator and would in compliance accordance with all generally accepted practices, applicable operating agreements agreements, and contracts;all Governmental Requirements; and
(d) Except to the extent such amounts are being contested in good faith and by appropriate proceedings, Promptly pay or cause to be paid, promptly as and paid when due and payable, owing (iand upon request provide Lender with proof of payment) all rentals, delay rentals and royalties and indebtedness payable in respect of the Subject Interests, and Collateral; all expenses incurred in or arising from the operation or development of the Subject Interests Collateral; and (ii) all amounts due taxes, assessments, and payable in accordance with governmental charges legally imposed upon this instrument, upon the terms Collateral, and upon the interest of each Production Sale Contract, other than such amounts which Mortgagor is diligently contesting in good faith and by appropriate proceedings;Lender or of the Trustee; and
(e) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, Cause the Operating Equipment to be kept in good and effective operating condition, condition and cause to be made all repairs, renewals, replacements, additions additions, and improvements thereof or thereto, necessary thereto needful to the production of Hydrocarbons from the Subject Interests Oil and Gas Property; and permit the Trustee and Lender (through their agents and employees) to be promptly made;enter upon the Oil and Gas Property for the purpose of investigating and inspecting the conditions and operations of the Collateral; and
(f) Cause the Mortgaged Property or any part thereof or the rents, issues, revenues, profits and other income therefrom Collateral to be kept free and clear of all liens, charges, security interests interests, and encumbrances of every character, character other than Permitted Encumbrancesthe lien and security interest created by this instrument; taxes constituting a lien but not due and payable; defects or irregularities in title which are not such as to interfere materially with the development, operation, or value of the Collateral and not such as to affect materially the title thereto; those set forth or referred to in Exhibit A; those being contested in good faith by Mortgagor and which do not, in the judgment of Lender, jeopardize the Trustee's and Lender's rights in and to the Collateral; and those consented to in writing by Lender; and
(g) Deliver, Carry with standard insurance companies and in amounts satisfactory to Lender the following insurance: workers' compensation insurance and public liability and property damage insurance in respect of all activities in which Mortgagor might incur liability for death or cause injury or damage to be delivered, to Mortgagees a copy or destruction of any notice, demand or other material communication from any other party property; and to the Leasesextent insurance is carried by others engaged in similar undertakings in the same general areas in which the Collateral is located, well damage and blow out insurance and insurance in respect of the operating agreements governing Operating Equipment against loss or damage by fire, lightning, hail, tornado, explosion, and other similar risks. All policies of insurance shall provide for not less than ten days prior written notice to Lender of cancellation, and Lender shall be named as a loss payee of all insurance insuring any of the Leases described in Exhibit A attached hereto Operating Equipment against loss or damage. Lender may apply any Production Sale Contract relating to any alleged, potential insurance payments which it receives toward part or actual material breach thereunder or material breach full satisfaction of any or all of the covenants, agreements, terms, Obligations whether or limitations thereof which would have a Material Adverse Effect on the rights of Mortgagor thereundernot they are then due.
Appears in 1 contract
Sources: Commercial Security Agreement (United Heritage Corp)
Operation of Mortgaged Property. So As long as the Indebtedness or any part thereof remains unpaidthis instrument has not been released in accordance with Section 9.5, and whether or not Mortgagor is the operator of all or any part of the Mortgaged Oil and Gas Property, Mortgagor shall, at Mortgagor's own expense:
(a) Do comply, or cause the operator to comply, fully with all of the terms and conditions of all leases, mineral agreements and other instruments of title described in Exhibit A and all rights-of-way, easements and privileges necessary for the proper operation of such leases and instruments, and otherwise do all things necessary to keep unimpaired in all material respects Mortgagor's rights and remedies in or under the Mortgaged Property and shall not, except Debenture Mortgagees' interest in the ordinary course of business as a reasonably prudent operator would do under similar circumstances, abandon any well or forfeit, surrender, release or default under any Lease or any Production Sale Contract, or consent to any of the foregoing, directly or indirectlyCollateral unimpaired;
(b) Perform except to the extent a prudent operator would do so, not abandon any well which is producing or cause to be performedcapable of production or forfeit, each and all covenantssurrender or release any lease, agreementssublease, terms, conditions and limitations imposed upon Mortgagor mineral agreement or its predecessors in interest and expressly contained in (i) the Leases, the operating agreements governing any of the Leases, any Production Sale Contract, farmout or any instrument or document relating thereto, and (ii) any assignment operating agreement or other form of conveyance, under or through which the Leases or an undivided interest therein are now held, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect, and to perform or cause to be performed all implied covenants and obligations imposed upon Mortgagor in connection with the Leases, the operating agreements governing any of the Leases, any Production Sale Contract or any document agreement or instrument relating theretocomprising or affecting the Oil and Gas Property without Debenture Mortgagees's prior written consent, except where the failure to so perform, individually or in the aggregate, will which consent shall not have a Material Adverse Effectbe withheld unreasonably;
(c) Cause, or in cause the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Subject Interests Oil and Gas Property to be maintained, developed, developed and protected against drainage, drainage and continuously operated for the production of Hydrocarbons in a good and workmanlike manner as would a prudent operator and would in compliance accordance with all generally accepted practices, applicable operating agreements and contractsall applicable federal, state, tribal and local laws, rules, regulations and orders;
(d) Except to the extent such amounts are being contested in good faith and by appropriate proceedings, promptly pay or cause to be paid, promptly as and paid when due and payable, (i) owing all rentals, delay rentals other payments and royalties and indebtedness payable in respect of the Subject InterestsOil and Gas Property, and if any; all expenses incurred in or arising from the operation or development of the Subject Interests Collateral; and (ii) all amounts due taxes, assessments and payable in accordance with governmental charges imposed upon the terms of each Production Sale Contract, other than such amounts which Mortgagor is diligently contesting in good faith and by appropriate proceedingsCollateral or Mortgagor;
(e) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, cause the Operating Equipment to be kept in good and effective operating condition, condition and cause to be made all repairs, renewals, replacements, additions and improvements thereof or thereto, thereto necessary to or appropriate for the production of Hydrocarbons from the Subject Interests Oil and Gas Property and permit the Debenture Mortgagees (through its agents and employees), upon reasonable prior notice and during normal business hours, to be promptly madeenter upon the Oil and Gas Property for the purpose of investigating and inspecting the condition and operation of the Collateral;
(f) Cause cause the Mortgaged Property or any part thereof or the rents, issues, revenues, profits and other income therefrom Collateral to be kept free and clear of all liens, charges, security interests interests, encumbrances, adverse claims and encumbrances title defects of every character, character other than Permitted Encumbrances(i) the lien and security interest created by this instrument, (ii) taxes constituting a lien but not due and payable, (iii) defects or irregularities in title which are not such as interfere materially with the development, operation or value of the Collateral and not such as to materially affect title thereto, (iv) those set forth or referred to in Exhibit A hereto, (v) those being contested in good faith by Mortgagor and which do ▇▇▇, ▇▇ the judgment of Debenture Mortgagees, jeopardize the Debenture Mortgagees's rights in and to the Collateral, and (vi) those consented to in writing by Debenture Mortgagees; provided, however, that Debenture Mortgagees may take such reasonable independent action in connection with any such matters affecting the Collateral as it deems advisable, and all costs and expenses thereof, including, without limitation, attorneys' fees incurred by Debenture Mortgagees in taking such action, shall be part of the Obligations hereunder;
(g) defend, indemnify and hold harmless the Debenture Mortgagees and other Secured Parties, and their respective employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the violation of or noncompliance with any Environmental Laws applicable to the properties owned or operated by the Mortgagor, or any orders, requirements or demands of governmental authorities related thereto, including, without limitation, attorney's and consultant's fees, investigation and laboratory fees, environmental response and cleanup costs, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the party seeking indemnification therefor; and
(gh) Deliverexecute, acknowledge and deliver to Debenture Mortgagees such other and further instruments and do such other acts as in the opinion of Debenture Mortgagees are necessary or cause desirable to be deliveredeffect the intent of this instrument or otherwise protect and preserve the interests of Debenture Mortgagees hereunder, to Mortgagees a copy promptly upon request of any notice, demand or other material communication from any other party to the Leases, the operating agreements governing any of the Leases described in Exhibit A attached hereto or any Production Sale Contract relating to any alleged, potential or actual material breach thereunder or material breach of any of the covenants, agreements, terms, or limitations thereof which would have a Material Adverse Effect on the rights of Mortgagor thereunderDebenture Mortgagees.
Appears in 1 contract
Operation of Mortgaged Property. So As long as any of the Indebtedness or any part thereof remains Obligations remain unpaid, and whether or not Mortgagor is the operator of the Mortgaged Oil and Gas Property, Mortgagor shall, shall (at Mortgagor's own expense:): 67231.1[August 9, 2001]
(a) Do all things necessary to keep unimpaired in all material respects Mortgagor's rights and remedies in or under the Mortgaged Property and shall not, except in the ordinary course of business as a reasonably prudent operator would do under similar circumstances, Collateral unimpaired; and
(b) Not abandon any well or forfeit, surrender, or release or default under any Lease or any Production Sale Contractlease, or consent to any of the foregoingsublease, directly or indirectly;
(b) Perform or cause to be performed, each and all covenants, agreements, terms, conditions and limitations imposed upon Mortgagor or its predecessors in interest and expressly contained in (i) the Leases, the operating agreements governing any of the Leases, any Production Sale Contractfarmout, or any instrument or document relating thereto, and (ii) any assignment or other form of conveyance, under or through which the Leases or an undivided interest therein are now held, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect, and to perform or cause to be performed all implied covenants and obligations imposed upon Mortgagor in connection with the Leases, the operating agreements governing any of the Leases, any Production Sale Contract or any document or instrument relating thereto, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect;agreement without Lender's prior written consent; and
(c) Cause, or in Cause the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Subject Interests Collateral to be maintained, developed, and protected against drainage, drainage and continuously operated for the production of Hydrocarbons in a good and workmanlike manner as would a prudent operator and would in compliance accordance with all generally accepted practices, applicable operating agreements agreements, and contracts;all Governmental Requirements; and
(d) Except to the extent such amounts are being contested in good faith and by appropriate proceedings, Promptly pay or cause to be paid, promptly as and paid when due and payable, owing (iand upon request provide Lender with proof of payment) all rentals, delay rentals and royalties and indebtedness payable in respect of the Subject Interests, and Collateral; all expenses incurred in or arising from the operation or development of the Subject Interests Collateral; and (ii) all amounts due taxes, assessments, and payable in accordance with governmental charges legally imposed upon this instrument, upon the terms Collateral, and upon the interest of each Production Sale Contract, other than such amounts which Mortgagor is diligently contesting in good faith and by appropriate proceedings;Lender or of the Trustee; and
(e) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, Cause the Operating Equipment to be kept in good and effective operating condition, condition and cause to be made all repairs, renewals, replacements, additions additions, and improvements thereof or thereto, necessary thereto needful to the production of Hydrocarbons from the Subject Interests Oil and Gas Property; and permit the Trustee and Lender (through their agents and employees) to be promptly made;enter upon the Oil and Gas Property for the purpose of investigating and inspecting the conditions and operations of the Collateral; and
(f) Cause the Mortgaged Property or any part thereof or the rents, issues, revenues, profits and other income therefrom Collateral to be kept free and clear of all liens, charges, security interests interests, and encumbrances of every character, character other than Permitted Encumbrancesthe lien and security interest created by this instrument; taxes constituting a lien but not due and payable; defects or irregularities in title which are not such as to interfere materially with the development, operation, or value of the Collateral and not such as to affect materially the title thereto; those set forth or referred to in Exhibit A; those being contested in good faith by Mortgagor and which do not, in the judgment of Lender, jeopardize the Trustee's and Lender's rights in and to the Collateral; and those consented to in writing by Lender; and
(g) Deliver, Carry with standard insurance companies and in amounts satisfactory to Lender the following insurance: workers' compensation insurance and public liability and property damage insurance in respect of all activities in which Mortgagor might incur liability for death or cause injury or damage to be delivered, to Mortgagees a copy or destruction of any notice, demand or other material communication from any other party property; and to the Leasesextent insurance is carried by others engaged in similar undertakings in the same general areas in which the Collateral is located, well damage and blow out insurance and insurance in respect of the operating agreements governing Operating Equipment against loss or damage by fire, lightning, hail, tornado, explosion, and other similar risks. All policies of insurance shall provide for not less than ten days prior written notice to Lender of cancellation, and Lender shall be named as a loss payee of all insurance insuring any of the Leases described in Exhibit A attached hereto Operating Equipment against loss or damage. Lender may apply any Production Sale Contract relating to any alleged, potential insurance payments which it receives toward part or actual material breach thereunder or material breach full satisfaction of any or all of the covenants, agreements, terms, Obligations whether or limitations thereof which would have a Material Adverse Effect on the rights of Mortgagor thereundernot they are then due.
Appears in 1 contract
Sources: Commercial Security Agreement (United Heritage Corp)
Operation of Mortgaged Property. So As long as any of the Indebtedness or any part thereof remains Obligations remain unpaid, and whether or not Mortgagor is the operator of the Mortgaged Oil and Gas Property, Mortgagor shall, shall (at Mortgagor's ’s own expense:):
(a) Do all things necessary to keep unimpaired in all material respects Mortgagor's ’s rights and remedies in or under the Mortgaged Property and shall not, except in the ordinary course of business as a reasonably prudent operator would do under similar circumstances, Collateral unimpaired; and
(b) Not abandon any well or forfeit, surrender, or release or default under any Lease or any Production Sale Contract, or consent to any of the foregoing, directly or indirectly;
(b) Perform or cause to be performed, each and all covenants, agreements, terms, conditions and limitations imposed upon Mortgagor or its predecessors in interest and expressly contained in (i) the Leases, the operating agreements governing any of the Leasessublease, any Production Sale Contractfarmout, or any instrument or document relating thereto, and (ii) any assignment or other form of conveyance, under or through which the Leases or an undivided interest therein are now held, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect, and to perform or cause to be performed all implied covenants and obligations imposed upon Mortgagor in connection with the Leases, the operating agreements governing any of the Leases, any Production Sale Contract or any document or instrument relating thereto, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect;agreement without Lender’s prior written consent; and
(c) Cause, or in Cause the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Subject Interests Collateral to be maintained, developed, and protected against drainage, drainage and continuously operated for the production of Hydrocarbons in a good and workmanlike manner as would a prudent operator and would in compliance accordance with all generally accepted practices, applicable operating agreements agreements, and contracts;all Governmental Requirements; and
(d) Except to the extent such amounts are being contested in good faith and by appropriate proceedings, Promptly pay or cause to be paid, promptly as and paid when due and payable, owing (iand upon request provide Lender with proof of payment) all rentals, delay rentals and royalties and indebtedness payable in respect of the Subject Interests, and Collateral; all expenses incurred in or arising from the operation or development of the Subject Interests Collateral; and (ii) all amounts due taxes, assessments, and payable in accordance with governmental charges legally imposed upon this Mortgage, upon the terms Collateral, and upon the interest of each Production Sale Contract, other than such amounts which Mortgagor is diligently contesting in good faith and by appropriate proceedings;Lender; and
(e) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, Cause the Operating Equipment to be kept in good and effective operating condition, ordinary wear and tear excepted, and cause to be made all repairs, renewals, replacements, additions additions, and improvements thereof or thereto, necessary thereto needful to the production of Hydrocarbons from the Subject Interests Oil and Gas Property; and permit Lender (through their agents and employees) to be promptly made;enter upon the Oil and Gas Property for the purpose of investigating and inspecting the conditions and operations of the Collateral; and
(f) Cause the Mortgaged Property or any part thereof or the rents, issues, revenues, profits and other income therefrom Collateral to be kept free and clear of all liens, charges, security interests interests, and encumbrances of every character, character other than the lien and security interest created by this Mortgage; Permitted EncumbrancesLiens (as defined in the Loan Agreement, and including liens and security interests granted to parties under joint operating agreements affecting the Collateral); taxes constituting a lien but not due and payable; defects or irregularities in title which are not such as to interfere materially with the development, operation, or value of the Collateral and not such as to affect materially the title thereto; those set forth or referred to in Exhibit A; those being contested in good faith by Mortgagor and which do not, in the judgment of Lender, jeopardize Lender’s rights in and to the Collateral; and those consented to in writing by Lender; and
(g) Deliver, Carry with standard insurance companies and in amounts satisfactory to Lender the following insurance: workers’ compensation insurance and public liability and property damage insurance in respect of all activities in which Mortgagor might incur liability for death or cause injury or damage to be delivered, to Mortgagees a copy or destruction of any notice, demand or other material communication from any other party property; and to the Leasesextent insurance is carried by others engaged in similar undertakings in the same general areas in which the Collateral is located, well damage and blow out insurance and insurance in respect of the operating agreements governing Operating Equipment against loss or damage by fire, lightning, hail, tornado, explosion, and other similar risks. All policies of insurance shall provide for not less than ten days prior written notice to Lender of cancellation, and Lender shall be named as a loss payee of all insurance insuring any of the Leases described in Exhibit A attached hereto Operating Equipment against loss or damage. Lender may apply any Production Sale Contract relating to any alleged, potential insurance payments which it receives toward part or actual material breach thereunder or material breach full satisfaction of any or all of the covenants, agreements, terms, Obligations whether or limitations thereof which would have a Material Adverse Effect on the rights of Mortgagor thereundernot they are then due.
Appears in 1 contract
Operation of Mortgaged Property. So As long as any of the Indebtedness or any part thereof remains Obligations remain unpaid, and whether or not Mortgagor is the operator of the Mortgaged PropertyOil and Gas Properties, Mortgagor shall, shall (at Mortgagor's ’s own expense:):
(a) A. Do all things necessary to keep unimpaired in all material respects Mortgagor's ’s rights and remedies in or under the Mortgaged Property and shall not, except in the ordinary course of business as a reasonably prudent operator would do under similar circumstances, Collateral and not abandon any well or forfeit, surrendersurrender or release any oil and gas lease, release sub-lease or default under any Lease farm-out or any Production Sale Contract, or consent to any of the foregoing, directly or indirectly;
(b) Perform or cause to be performed, each and all covenants, agreements, terms, conditions and limitations imposed upon Mortgagor or its predecessors in interest and expressly contained in (i) the Leases, the operating agreements governing any of the Leases, any Production Sale Contract, or any instrument or document relating thereto, and (ii) any assignment or other form of conveyance, under or through which the Leases or an undivided interest therein are now held, except where the failure to so perform, individually or rights in the aggregate, will not have a Material Adverse Effect, and to perform Collateral or cause to be performed all implied covenants and obligations imposed upon Mortgagor in connection with enter into any operating agreement without the Leases, Beneficiary’s prior written consent; and
B. Cause the operating agreements governing any of the Leases, any Production Sale Contract or any document or instrument relating thereto, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect;
(c) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Subject Interests Collateral to be maintained, developed, developed and protected against drainage, drainage and continuously operated for the production of Hydrocarbons in a good and workmanlike manner as would a prudent operator would in accordance with generally accepted practices, applicable operating agreements, and in compliance with all applicable operating agreements federal, state and contracts;
(d) Except to the extent such amounts are local laws, rules and regulations, excepting those being contested in good faith and by appropriate proceedings, faith; and
C. Promptly pay or cause to be paid, promptly as and paid when due and payable, owing: (i1) all rentals, delay rentals and royalties and indebtedness payable in respect of the Subject Interests, and Collateral; (2) all expenses incurred in or arising from the operation or development of the Subject Interests Collateral; and (ii3) all amounts due taxes, assessments and payable in accordance with government charges legally imposed upon this instrument, upon the terms Collateral, upon the interest of each Production Sale Contract, other than such amounts which Mortgagor is diligently contesting in good faith and by appropriate proceedings;
(e) CauseBeneficiary or the Trustee, or in upon the event Mortgagor is not the operator income and profits from any of the Subject Interests, use reasonable efforts to cause, above; and
D. Cause the Operating Equipment to be kept in good and effective operating condition, condition and cause to be made all repairs, renewals, replacements, additions and improvements thereof or thereto, necessary thereto needful to the production of Hydrocarbons from the Subject Interests Oil and Gas Properties; and permit the Trustee and Beneficiary (through its agents and employees) to be promptly made;enter upon the Oil and Gas Properties for the purpose of investigating and inspecting the conditions and operations of the Collateral; and
(f) E. Cause the Mortgaged Property or any part thereof or the rents, issues, revenues, profits and other income therefrom Collateral to be kept free and clear of all liens, charges, security interests interests, and encumbrances of every charactercharacter other than: (1) the lien and security interest created by this instrument; (2) taxes constituting a lien but not due and payable; (3) defects or irregularities in title, other than Permitted Encumbrancesand liens, security interests, charges or encumbrances which are not such as to interfere materially with the development, operation or value of the Collateral and not such as to affect materially title thereto; (4) those being contested in good faith by Mortgagor in such manner as not to jeopardize the Trustee’s consented to in writing by the Beneficiary; and
F. Carry with standard insurance companies and in amounts satisfactory to the Beneficiary the following insurance: (g1) Deliverworkmen’s compensation insurance and public liability and property damage insurance in respect of all activities in which the Mortgagor might incur personal liability for the death or injury of an employee or third person, or cause damage to be deliveredor destruction of another’s property; and (2) to the extent such insurance is carried by other engaged in similar undertakings in the same general area in which the Collateral is located, insurance in respect of the Operating Equipment against loss or damage by fire, lightening, hail, tornado, explosion and other similar risks. All policies of insurance will provide the maximum prior written notice to Mortgagees a copy Beneficiary of cancellation which the insurance company will provide. Beneficiary may apply any proceeds of such insurance which it may receive toward part or full satisfaction of any notice, demand or other material communication from any other party to the Leases, the operating agreements governing any all of the Leases described in Exhibit A attached hereto Obligations secured hereby whether or any Production Sale Contract relating to any alleged, potential or actual material breach thereunder or material breach of any of the covenants, agreements, terms, or limitations thereof which would have a Material Adverse Effect on the rights of Mortgagor thereundernot they are then due and owing.
Appears in 1 contract
Operation of Mortgaged Property. So long as the Indebtedness or any part thereof remains unpaid, and whether or not Mortgagor is the operator of the Mortgaged Property, Mortgagor shall, at Mortgagor's own expense:
(a) Do do all things necessary to keep unimpaired in all material respects Mortgagor's rights and remedies in or under the Mortgaged Property and shall notand, except as otherwise permitted hereby or in the ordinary course of business as a reasonably prudent operator would do under similar circumstancesLoan Agreement, shall not (i) abandon any well or forfeit, surrender, release or default under (other than any default that, individually or in the aggregate with all other such defaults, would not have a material adverse effect on Mortgagor's business) any Lease or any Production Sale ContractContract (except to the extent that any such Production Sale Contract constitutes a Receivable), or in the event Mortgagor is not the operator, shall use its best efforts to prevent any of the above, unless undertaken in the ordinary course of business or (ii) abandon, sell, convey, assign, lease or otherwise transfer any right, title or interest of Mortgagor under the Production Sale Contracts (except to the extent that such Production Sales Contracts constitute Receivables), or consent to any of the foregoing, directly or indirectly;
(b) Perform except as otherwise permitted in the Loan Agreement, perform or cause to be performed, except where any failure to so perform or cause to be performed would not, individually or in the aggregate with all other such failures, have a material adverse effect or Mortgagor's business, each and all covenants, agreements, terms, conditions and limitations imposed upon Mortgagor or its predecessors in interest and expressly contained in (i) the Leases, the operating agreements governing any of the Leases, any Production Sale Contract, or and any instrument or document relating thereto, and (ii) any assignment or other form of conveyance, under or through which the Leases or an undivided interest therein are now held, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect, and to perform or cause to be performed all implied covenants and obligations imposed upon Mortgagor in connection with the Leases, the operating agreements governing any of the Leases, any Production Sale Contract or any document or instrument relating thereto, except where the failure to so perform, individually or in the aggregate, will not have a Material Adverse Effect;
(c) Causecause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable its best efforts to cause, the Subject Interests to be maintained, developed, protected against drainage, and continuously operated for the production of Hydrocarbons Hydrocarbons, helium and/or other minerals, as applicable, in a good and workmanlike manner as would be operated by a prudent operator and in compliance with all applicable operating agreements and contracts;
(d) Except to the extent such amounts are being contested in good faith and by appropriate proceedings, cause to be paid, promptly as and when due and payable, (i) all rentals, delay rentals and royalties and indebtedness payable in respect of the Subject Interests, and all expenses incurred in or arising from the operation or development of the Subject Interests applicable federal, state and (ii) all amounts due local laws, rules and payable in accordance with the terms of each Production Sale Contractregulations, other than such amounts which Mortgagor is diligently contesting in good faith and by appropriate proceedings;
(e) Cause, or in the event Mortgagor is not the operator of the Subject Interests, use reasonable efforts to cause, the Operating Equipment to be kept in good and effective operating condition, and all repairs, renewals, replacements, additions and improvements thereof or thereto, necessary to the production of Hydrocarbons from the Subject Interests to be promptly made;
(f) Cause the Mortgaged Property or any part thereof or the rents, issues, revenues, profits and other income therefrom to be kept free and clear of all liens, charges, security interests and encumbrances of every character, other than Permitted Encumbrances; and
(g) Deliver, or cause to be delivered, to Mortgagees a copy of any notice, demand or other material communication from any other party to the Leases, the operating agreements governing any of the Leases described in Exhibit A attached hereto or any Production Sale Contract relating to any alleged, potential or actual material breach thereunder or material breach of any of the covenants, agreements, terms, or limitations thereof which would have a Material Adverse Effect on the rights of Mortgagor thereunder.excepting those
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