Operation of the Mortgaged Property Clause Samples
The "Operation of the Mortgaged Property" clause sets out the borrower's obligations regarding the management and maintenance of the property that serves as collateral for a loan. Typically, this clause requires the borrower to keep the property in good repair, comply with all applicable laws, and avoid actions that could diminish its value or violate the terms of the mortgage. For example, the borrower may be required to maintain insurance, pay taxes, and refrain from making unauthorized alterations. The core function of this clause is to protect the lender's security interest by ensuring the property remains valuable and compliant throughout the loan term.
Operation of the Mortgaged Property. So long as the Secured --------------------------------------- Indebtedness or any part thereof remains unpaid:
(a) Mortgagors shall observe and comply with all of the terms and provisions, express or implied, of all Oil and Gas Leases relating to the Subject Interests so long as such Oil and Gas Leases are capable of producing Hydrocarbons in paying quantities, except where such failure to comply would not have a Material Adverse Effect;
(b) Mortgagors shall comply with all contracts and agreements applicable to or relating to the Mortgaged Property or the production and sale of Hydrocarbons therefrom, except to the extent a failure to so comply would not have a Material Adverse Effect;
(c) Mortgagors shall, at all times, take reasonable steps to maintain, preserve and keep all Operating Equipment used with respect to the Mortgaged Property in proper repair, working order and condition, and make all necessary or appropriate repairs, renewals, replacements, additions and improvements thereto so that the efficiency of such Operating Equipment shall at all times be properly preserved and maintained, except where such failure to comply would not have a Material Adverse Effect; provided that no item of Operating Equipment need be so repaired, renewed, replaced, added to or improved, if Mortgagor shall in good faith determine that such action is not necessary or desirable for the continued efficient and profitable operation of the Subject Interests;
(d) Mortgagors shall cause the Mortgaged Property to be kept free and clear of all Liens other than Permitted Encumbrances;
(e) Mortgagors shall comply with the terms of the Credit Agreements with respect to maintenance of insurance. All loss payable clauses or provisions in said policy or policies shall be endorsed in favor of and made payable to Mortgagee, as its interest may appear. Mortgagee shall have the right to collect, and Mortgagors hereby assign to Mortgagee, any and all monies that may become payable under any such policies of insurance by reason of damage, loss or destruction of any of the Mortgaged Property, and Mortgagee may, at its election, either apply all or any part of the sums so collected toward payment of the Secured Indebtedness, whether or not such Secured Indebtedness, or any portion thereof, is then due and payable, in such manner as Mortgagee may elect, or release same to Mortgagors; and
(f) Mortgagors shall not sell, lease, transfer, abandon or otherwise dispose of any portion of the Mor...
Operation of the Mortgaged Property. Whether or not the Borrower is the operator of the Mortgaged Property, the Borrower will, at the Borrower’s own expense, (a) do all things necessary to keep unimpaired the Borrower’s rights in the Mortgaged Property (subject to any permitted abandonment provisions hereinbelow), (b) cause the lands described in Exhibit A 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 accordance with generally accepted practices and applicable operating agreements, and (c) cause to be paid, promptly as and when due and payable, all rentals and royalties payable in respect of the Mortgaged Property, and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower will observe and comply with all terms and provisions, express or implied, of the Mineral Properties, and all agreements and contracts of any type relating to the Mortgaged Property, in order to keep the same in full force and effect, including maintenance of productive capacity of each well or unit comprising the Mortgaged Property, and will not, without the prior written consent of the Lender, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (whether or not such well is located on the Mineral Properties), or located on any unit containing all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness); provided, however, that the Borrower may, to the extent expressly required by the terms of any such lease under a “▇▇▇▇ clause” or similar provision, or to the extent otherwise required by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent of the Lender, the Borrower will not abandon or consent to the abandonment of any well producing from the Mortgaged Property (or properties unitized therewith) so long as such well is capable (or is subject to being made capable through drilling, reworking or other operations which it would be commercially feasible to conduct...
Operation of the Mortgaged Property. Mortgagor will obtain and maintain all material licenses, authorizations, permits and/or approvals necessary for the ownership, operation and management of the Mortgaged Property, including, without limitation, all required environmental permits.
Operation of the Mortgaged Property. Borrower will:
(a) Make such repairs and replacements and take such other steps as may be necessary to maintain the Mortgaged Property (to the extent owned or leased by Borrower) and any abutting grounds, sidewalks, roadways and parking and landscaped areas under Borrower's control in at least as good condition as the same now are or hereafter may be put in while this Mortgage is outstanding, deterioration incidental to reasonable wear and tear, casualty and eminent domain takings only excepted, it being understood, however, that the foregoing exception for reasonable wear and tear shall not relieve Borrower from the obligation to repair or replace worn out, inoperative, obsolete or otherwise deficient elements of the Mortgaged Property;
(b) Maintain all Required Approvals in full force and effect, except when the failure to maintain a Required Approval could not have a material adverse effect on the Mortgaged Property or the Borrower; and
(c) Perform all of Borrower's obligations under all contracts relating to the ownership, use, operation, maintenance or occupancy of the Mortgaged Property except when the failure to perform could not have a material adverse effect on the Mortgaged Property or the Borrower. Notwithstanding the foregoing, the Borrower shall have the right to discontinue operation of any Mortgaged Property in accordance with Section 9.08 of the Indenture of First Mortgage, as in effect on the date hereof.
Operation of the 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 Mortgagor's rights in the Mortgaged Property and not, except in the ordinary course of business, abandon any well or forfeit, surrender or release any oil and gas lease or any rights in the Mortgaged Property, or enter into any operating agreement with respect to the Mortgaged Property, without the prior written consent of Trustees; (b) Cause the lands described in Exhibit A to be maintained, developed, protected against drainage, and continuously operated for the production
Operation of the Mortgaged Property. Whether or not the Borrower is the operator of the Mortgaged Property, the Borrower will, at the Borrower's own expense, (a) do all things necessary to keep unimpaired the Borrower's rights in the Mortgaged Property (subject to any permitted abandonment provisions hereinbelow), (b) use its best efforts to cause the lands described in Exhibit "A" 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 accordance with generally accepted practices and applicable operating agreements, and (c) cause to be paid, promptly as and when due and payable, all rentals and royalties payable in respect of the Mortgaged Property, and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower will observe and comply with all terms and provisions, express or implied, of the Mineral Properties, and all agreements and contracts of any type relating to the Mortgaged Property, in order to keep the same in full force and effect, including, without limitation, maintenance of productive capacity of each well or unit comprising the Mortgaged Property, and will not, without the prior written consent, which consent shall not be unreasonably withheld, of the Lender, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (whether or not such well is located on the Mineral Properties), or located on any unit containing all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage); provided, however that the Borrower may, to the extent expressly required by the terms of any such lease under a "Pugh clause" or similar provision, or to the extent otherwis▇ ▇▇quired by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent of the Lender, which consent shall not be unreasonably withheld, Borrower will not abandon or consent to the abandonment of any well producing from the Mortgaged Property (or properties unitized therewith) so long as such well is capable (or is subje...
Operation of the Mortgaged Property. Borrower will:
(a) Not, except as expressly approved in writing by Lender (such approval not to be unreasonably withheld with respect to such alteration of addition), make or permit any material alteration (other than tenant improvements) or addition to, any removal or demolition (other than removal of tenant improvements in order to accommodate new tenants) of, or any strip or waste of, the Mortgaged Property;
(b) Not permit the use of the Mortgaged Property for any purpose except the lawful uses being made thereof as of the date hereof;
(c) Not operate the Mortgaged Property or any building or improvement now or hereafter located thereon, or permit the same to be operated, as a cooperative or condominium building or buildings in which the tenants or occupants participate in the ownership, control or management of the Mortgaged Property or any portion thereof, whether as tenants, stockholders or otherwise, or otherwise submit the Mortgaged Property to the provisions of Massachusetts General Laws Chapter 183A;
(d) Maintain all Required Approvals in full force and effect; and
(e) Perform all of Borrower's obligations under all contracts relating to the ownership, use, operation, maintenance or occupancy of the Mortgaged Property.