Common use of Liens and Security Interests Clause in Contracts

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there from, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants to the other parties hereto to this Agreement a lien upon on any interest it now owns or hereafter later acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter later acquires in the personal property and fixtures on or used or obtained for use in connection therewithwith any interest, to secure performance of all of its obligations under this agreement Agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunderunder this Agreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunderunder this Agreement. Such The lien and security interest granted by each party hereto shall include such the party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter later acquired and in lands pooled or unitized therewith with them, or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted there from and equipment situated thereon on or used or obtained for use in connection therewith with the Contract Area (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory inventory, and general intangibles relating thereto to or arising there fromfrom them, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided hereinprovided, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith with or at any time following execution hereofof this Agreement, and Operator is authorized to file this agreement Agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereundergranted. Any party may file this agreementAgreement, the recording supplement executed herewithsupplement, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such a party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said the lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement Agreement by, through through, or under such the party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such the interest hereunder under this Agreement whether or not such the obligations arise before or after such the interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereofof the indebtedness. In addition, upon on default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such the defaulting party’s share of Oil and Gas until the amount owed by such the party, plus interest as provided in Exhibit “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such the defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 one hundred twenty (120) days after rendition of a statement therefor of them by Operator, the non-defaulting parties, including Operator, shall upon shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder under this Agreement or otherwise. If any party does not perform all of its obligations hereunderunder this Agreement, and the failure to perform subjects such that party to foreclosure or execution proceedings pursuant to the provisions of this agreementAgreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunderby this Agreement, such the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon on reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunderparty. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ mechanic’s or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder under this Agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants The Lessor further intends and agrees that, for the purpose of securing the payment of all the amounts owing to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in Lenders under the Contract AreaOperative Agreements, and (i) this Assignment shall also be deemed to be a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property agreement and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there from, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or within the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under meaning of Article 9 of the Uniform Commercial Code. Each party represents and warrants ; (ii) the assignment provided for in Section 2 shall be deemed to be a grant by the Lessor to the other parties hereto that Administrative Agent for the lien and benefit of the Lenders. Lessor does hereby grant to the Administrative Agent for the benefit of the Lenders, a security interest granted by such party in all of the right, title and interest of the Lessor in and to the items described in Section 2 to the Adminis trative Agent for the benefit of the Lenders to secure all Loans advanced by the Lenders, together with interest thereon, and all other parties amounts payable under the Operative Agreements in connection therewith; (iii) the possession by the Administrative Agent or any of its agents of notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be a first deemed to be "possession by the secured party" for purposes of perfecting the security interest pursuant to Section 9-305 of the Uniform Commercial Code; and prior lien(iv) notifications to Persons holding such property, and each party hereby agrees to maintain acknowledgements, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, Lessor shall be deemed to have taken subject to been given for the lien and security interest granted by this Article VII.B. as to all obligations attributable to purpose of perfecting such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Codeany Legal Requirement. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the OperatorLessor, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil Lessee and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreementHoldings shall, to the extent allowed by governing lawconsistent with the Operative Agreements, the defaulting party waives any available right take such actions and execute, deliver, file and record such other documents, financing statements, mortgages and deeds of redemption from and after the date of judgmenttrust as may be necessary to ensure that, any required valuation or appraisement of the mortgaged or secured property prior if this Assignment was deemed to sale, any available right to stay execution or to require create a marshaling of assets and any required bond security interest in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunderitems described in Section 2 in accordance with this Section, such power security interest would be deemed to be exercised in a perfected security interest and will be maintained as such throughout the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable noticeTerm. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.ASSIGNMENT OF LEASES AND RENTS

Liens and Security Interests. Each party Party grants to the other parties hereto to this agreement a lien upon on any interest it now owns or hereafter later acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter later acquires in the personal property and fixtures on or used or obtained for use in connection therewithwith any interest, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunderunder this agreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunderunder this agreement. Such The lien and security interest granted by each party hereto Party shall include such partythe Party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter later acquired and in lands pooled or unitized therewith with them, or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon on or used or obtained for use in connection therewith with the Contract Area (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory inventory, and general intangibles relating thereto to or arising there fromfrom them, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided hereinprovided, each party hereto Party shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto Party in conjunction herewith with or at any time following execution hereofof this agreement, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereundergranted. Any party Party may file this agreement, the recording supplement executed herewithsupplement, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party Party represents and warrants to the other parties hereto that the lien and security interest granted by such party a Party to the other parties shall be a first and prior lien, and each party hereby Party agrees to maintain the priority of said the lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through through, or under such partythe Party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such the interest hereunder under this agreement whether or not such the obligations arise before or after such the interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party Party under the Code. The bringing of a suit and the obtaining of judgment by a party Party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereofof the indebtedness. In addition, upon on default by any party Party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such the defaulting partyParty’s share of Oil and Gas until the amount owed by such partythe Party, plus interest as provided in Exhibit “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such the defaulting partyParty’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party Party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party Party fails to pay its share of cost within 30 one hundred twenty (120) days after rendition of a statement therefor of them by Operator, the non-defaulting parties, including Operator, shall upon shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each such party Party bears to the interest of all such parties. The amount paid by each party so Party paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party Party may independently pursue any remedy available hereunder under this agreement or otherwise. If any party Party does not perform all of its obligations hereunderunder this agreement, and the failure to perform subjects such party that Party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party Party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby Party grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunderby this agreement, such the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon on reasonable notice. Each party Party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunderParty. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ mechanic’s or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder under this agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and the Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement Agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any an party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement Agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreementAgreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lienlien (except as to the liens granted by AE in favor of Citibank, N.A., and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement Agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests interest or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 one hundred twenty (120) days after rendition of a statement therefor therefore by Operator, the non-defaulting partiesparties may, including Operatorbut shall have no obligation to do so, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The Any amount paid by each a party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreementAgreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize utilized the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmenmaterialman’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party Subject to the consent of the United States, as lessor under each of the Leases (“Lessor”), each Party grants to the other parties hereto Parties to this Agreement a lien upon on any interest it now owns or hereafter later acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter later acquires in the personal property and fixtures on or used or obtained for use in connection therewithwith any interest, to secure performance of all of its obligations under this agreement including Agreement including, but not limited to to, payment of expense, interest and fees, the proper disbursement of all monies paid hereunderunder this Agreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunderunder this Agreement. Such The lien and security interest granted by each party hereto Party shall include such partythe Party’s leasehold Leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter later acquired and in lands pooled or unitized therewith with them, or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted there from and equipment situated thereon on or used or obtained for use in connection therewith with the Contract Area (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory inventory, and general intangibles relating thereto to or arising there fromfrom them, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided hereinprovided, each party hereto Party shall shall use reasonable efforts to obtain Lessor’s consent to the security interest grant, execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto Party in conjunction herewith with or at any time following execution hereofof this Agreement, and Operator is authorized to file this agreement Agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated of Nevada (“UCC”) and such other states as Operator shall deem appropriate to perfect the security interest granted hereundergranted. Any party Party may file this agreementAgreement, the recording supplement executed herewithsupplement, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial CodeUCC. Each party Party represents and warrants to the other parties hereto Parties that the lien and security interest granted by such party a Party to the other parties Parties shall be a first and prior lien, subject only to any prior or preferential rights of Lessor, and each party hereby agrees to Party shall maintain the priority of said the lien and security interest against all persons acquiring an interest in the Oil and Gas Leases and Interests covered by this agreement Agreement by, through through, or under such partythe Party. All parties Parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. VII.B as to all obligations attributable to such the interest hereunder under this Agreement whether or not such the obligations arise before or after such the interest is acquired. To the extent that parties Parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situatedUCC, they shall be entitled to exercise the rights and remedies of a secured party under the CodeUCC. The bringing of Bringing a suit and the obtaining of judgment by a party Party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereofof the indebtedness. In addition, upon on default by any party Party in the payment of its share of expenses, interests interest or fees, or upon the improper use of funds by the Operator, the other parties Parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such the defaulting partyParty’s share of Oil and Gas until the amount owed by such partythe Party, plus interest as provided in “Exhibit C,” B, has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such the defaulting partyParty’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party Party or parties Parties stating the amount due as a result of the default, and all parties Parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party Party fails to pay its share of cost costs within 30 one hundred twenty (120) days after rendition of a statement therefor of costs by Operator, the non-defaulting partiesParties, including Operator, shall upon shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each such party Party bears to the interest of all such partiesParties. The amount paid by each party so Party paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B.VII.B, and each paying party Party may independently pursue any remedy available hereunder under this Agreement or otherwise. If any party Party does not perform all of its obligations hereunderunder this Agreement, and the failure to perform subjects such party that Party to foreclosure or execution proceedings pursuant to the provisions of this agreementAgreement, to the extent allowed by governing law, the defaulting party Party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event if a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby Party grants to the other parties Parties a power of sale as to any property that is subject to the lien and security rights granted hereunderby this Agreement, such the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon on reasonable notice. Each party agrees that the other parties The Parties shall be entitled to utilize the provisions of Oil oil and Gas gas lien law or other lien law of any the state in which the Contract Area is situated of Nevada to enforce the obligations of each party hereunderParty. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ mechanic’s or materialmen’s lien law of the state in which the Contract Area is situated of Nevada in order to secure the payment to Operator of any sum due hereunder under this Agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and the Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement Agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any an party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement Agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreementAgreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lienlien (except as to the liens granted by TEC in favor of Citibank, N.A., and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement Agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests interest or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 one hundred twenty (120) days after rendition of a statement therefor by Operator, the non-defaulting partiesparties may, including Operatorbut shall have no obligation to do so, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The Any amount paid by each a party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreementAgreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize utilized the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmenmaterialman’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party Party grants to the other parties hereto Parties a lien upon on any and all interest it now owns or hereafter later acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any and all interest it now owns or hereafter later acquires in the personal property and fixtures on or used or obtained for use in connection therewithwith any interest, to secure performance of all of its obligations under this agreement Agreement, including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunderunder the terms of this Agreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunderby this Agreement, and the proper performance of operations hereunderunder the terms of this Agreement. Such The lien and security interest granted by each party hereto Party shall include such partythe Party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter later acquired and in the lands pooled or unitized therewith with the Contract Area or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted there from extracted, and equipment situated thereon on or used or obtained for use in connection therewith with it (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory inventory, and general intangibles relating thereto to or arising there fromfrom it, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided hereingranted, each party hereto Party shall execute and acknowledge the Memorandum of Agreement, recording supplement supplement, and/or any financing statement prepared and submitted by any party hereto Party in conjunction herewith with this Agreement or at any time following execution hereofof this Agreement, and Operator is authorized to file this agreement Agreement or the executed Memorandum of Agreement, or recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such all other states as Operator shall deem appropriate to perfect the security interest granted hereundergranted. Any party Party may file this agreementAgreement, the executed Memorandum of Agreement, recording supplement executed herewithsupplement, or such any other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party Party represents and warrants to the other parties hereto Parties that the lien and security interest granted by such party the Party to the other parties Parties shall be a first and prior lien, and each party hereby Party agrees to maintain the priority of said the lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement Agreement by, through through, or under such partythe Party. All parties Parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such the interest hereunder whether or not such the obligations arise before or after such the interest is acquired. To the extent that parties Parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing Bringing of a suit and the obtaining of a judgment by a party Party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereofof any amounts due. In addition, upon on default by any party Party in the payment of its share of expenses, interests or fees, or upon on the improper use of funds by the Operator, the other parties Parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such the defaulting partyParty’s share of Oil and Gas until the amount owed by such partythe Party, plus interest as provided in Exhibit “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such the defaulting partyParty’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party Party or parties Parties stating the amount due as a result of the default, and all parties Parties waive any and all recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party Party fails to pay its share of cost within 30 Thirty (30) days after rendition of a statement therefor for costs by Operator, the non-defaulting partiesParties, including Operator, shall upon shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each such party Party bears to the interest of all such partiesParties. The amount paid by each party so Party paying its share of the unpaid amount shall be secured by the liens and security rights described in this Article VII.B., VII.B. and each paying party Party may independently pursue any remedy available hereunder under this Agreement or otherwise. If any party Party does not perform all of its obligations hereunderunder this Agreement, and the failure to perform subjects such party the Party to foreclosure or execution proceedings pursuant to the provisions of this agreementAgreement, to the extent allowed by governing law, the defaulting party Party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby Party grants to the other parties Parties a power of sale as to any property that is subject to the lien and security rights granted hereunderby this Agreement, such this power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon on reasonable notice. Each party Party agrees that the other parties Parties shall be entitled to utilize the provisions of all Oil and Gas lien law laws or other lien law laws of any state in which the Contract Area is situated to enforce the obligations of each party hereunderParty subject to this Agreement. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ mechanic’s or materialmen’s lien law laws of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party Owner grants to the other parties hereto Operator a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such partyOwner’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto Owner shall execute and acknowledge the a recording supplement and/or any financing statement prepared and submitted by any party hereto Owner in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith herewith, if any, as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code (the “Code”) in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party Owner may file this agreement, the any recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party Owner represents and warrants to the other parties hereto Operator that the lien and security interest granted by such party to the other parties hereby shall be a first and prior lien, and each party Owner hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil oil and Gas Leases gas leases and Interests interests covered by this agreement by, through or under such partyOwner. All parties acquiring an interest in Oil oil and Gas Leases gas leases and Oil oil and Gas Interests gas interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. Section 7(c) as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have Operator has a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they Operator shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party Operator for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party Operator in the payment of its share of expenses, interests interest or fees, or upon the improper use of funds by the Operator, the other parties Operator shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting partyOwner’s share of Oil and Gas until the amount owed by such partyOwner, plus interest as provided in “Exhibit C,” Section 7(b), has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting partyOwner’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties Operator stating the amount due as a result of the default, and all parties waive Owner waives any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party Owner does not perform all of its obligations hereunder, and the failure to perform subjects such party Owner to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party Owner waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party Owner hereby grants to the other parties Operator a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party Owner agrees that the other parties Operator shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree Owner agrees that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s 's leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s 's share of Oil and Gas until the amount owed by such party, plus interest as provided in “"Exhibit C,” " has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s 's share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 one hundred twenty (120) days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ ' or materialmen’s 's lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. (a) Each party Working Interest Party grants to the other parties hereto Working Interest Party a lien Lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract AreaProgram Assets, and a security interest and/or or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement Agreement, including but not limited to payment of expense, interest and fees, the proper disbursement of all monies amounts paid hereunder, the assignment conveyance or relinquishment of interest Working Interests in Oil and Gas Leases any Program Assets as required hereunder, and the proper performance of operations hereunder. Such lien Lien and security interest granted by each party hereto Working Interest Party shall include such partyWorking Interest Party’s leasehold interests, working interestsWorking Interests, operating rights, rights and royalty and overriding royalty interests in the Contract Program Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas Hydrocarbons when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, including all xxxxx, tools, and tubular goods), and accounts (including, without limitation, including accounts arising from gas imbalances Imbalances or from the sale of Oil and/or Gas Hydrocarbons at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. . (b) Each party Working Interest Party represents and warrants to the other parties hereto Working Interest Party that the lien Lien and security interest granted by such party Working Interest Party to the other parties Working Interest Party shall be a first and prior lienLien, and each party Working Interest Party hereby agrees to maintain the priority of said lien Lien and security interest against all persons Persons acquiring an interest in Oil and Gas Leases and Interests the Program Assets covered by this agreement Agreement by, through or under such partyWorking Interest Party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests the Program Assets covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, law or otherwise, shall be deemed to have taken subject to the lien Lien and security interest granted by this Article VII.B. Section 21.19 as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. . (c) To the extent that parties the Working Interest Parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situatedState of Texas, they shall be entitled to exercise the rights and remedies of a secured party under the Codethereunder. The bringing of a suit and the obtaining of judgment by a party Working Interest Party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien Lien rights or security interest as security for the payment thereof. In addition, upon default by any party either Working Interest Party in the payment of its share of expenses, interests or fees, fees or upon the improper use of funds by the Operator(in each case, including any amounts owed to a Schlumberger Service Provider), the other parties Working Interest Party shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting partyWorking Interest Party’s share of Oil and Gas Production, plus interest at the Default Rate calculated from the date of default, breach or other accrual of a claim, until the amount owed by such party, plus interest as provided in “Exhibit C,” has been Working Interest Party is received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting partyWorking Interest Party’s share of Oil and GasProduction. All purchasers of production Production may rely on a notification of default Default from the non-defaulting party or parties a Working Interest Party stating the amount due as a result of the defaultDefault, and all parties both Working Interest Parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. . (d) If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party either Working Interest Party does not perform all of its obligations hereunder, and the failure to perform subjects such party Working Interest Party to foreclosure or execution proceedings pursuant to the provisions of this agreementAgreement, to the extent allowed by governing lawApplicable Law, the defaulting party such Working Interest Party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable lawApplicable Law, each party Working Interest Party hereby grants to the other parties Working Interest Party a power of sale as to any property that is subject to the lien Lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law Applicable Law or otherwise in a commercially reasonable manner and upon reasonable notice. . (e) Each party Working Interest Party agrees that the other parties Working Interest Party shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law Applicable Law of any state in which the Contract Area is situated State of Texas to enforce the obligations of each party Working Interest Party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party Owner grants to the other parties hereto Operator a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such partyOwner’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto Owner shall execute and acknowledge the a recording supplement and/or any financing statement prepared and submitted by any party hereto Owner in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith herewith, if any, as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code (the “Code”) in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party Owner may file this agreement, the any recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party Owner represents and warrants to the other parties hereto Operator that the lien and security interest granted by such party to the other parties hereby shall be a first and prior lien, and each party Owner hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil oil and Gas Leases gas leases and Interests interests covered by this agreement by, through xxxxx.xx or under such partyOwner. All parties acquiring an interest in Oil oil and Gas Leases gas leases and Oil oil and Gas Interests gas interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. Section 7(c) as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have Operator has a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they Operator shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party Operator for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party Operator in the payment of its share of expenses, interests interest or fees, or upon the improper use of funds by the Operator, the other parties Operator shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting partyOwner’s share of Oil and Gas until the amount owed by such partyOwner, plus interest as provided in “Exhibit C,” Section 7(b), has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting partyOwner’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties Operator stating the amount due as a result of the default, and all parties waive Owner waives any recourse available against purchasers for releasing production proceeds as provided in this paragraph. SINGLE OWNER TURNKEY DRILLING & OPERATING AGREEMENT, PAGE 8 If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party Owner does not perform all of its obligations hereunder, and the failure to perform subjects such party Owner to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party Owner waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party Owner hereby grants to the other parties Operator a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party Owner agrees that the other parties Operator shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree Owner agrees that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants Borrower shall not create, incur, assume, or suffer to the exist any mortgage, security deed, deed of trust, security interest, pledge, encumbrance, Lien or charge of any kind (including charges on property purchased under conditional sales or other parties hereto a lien upon title-retention agreements) on any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expenseproperty or assets, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxxthe Collateral, toolsnow owned or hereafter acquired, except for (collectively, “Permitted Liens”) (i) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings and against which reserves deemed adequate by Lender have been set up (excluding any Lien imposed pursuant to any of the provisions of ERISA); (ii) Liens arising in the ordinary course of business such as (A) Liens of carriers, warehousemen, mechanics and materialmen and other similar liens imposed by applicable Law, and tubular goods)(B) Liens in the form of deposits or pledges incurred in connection with worker’s compensation, unemployment compensation and accounts other types of governmentally imposed social security (includingexcluding Liens arising under ERISA) or (C) Liens in connection with surety bonds, without limitationbids, accounts arising from gas imbalances performance bonds and similar obligations for sums not overdue or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory being diligently contested in good faith by appropriate proceedings and general intangibles relating thereto not involving any advances or arising there from, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement borrowed money or the recording supplement executed herewith as a lien deferred purchase price of property or mortgage services and, in each case, for which Borrower maintain adequate reserves in accordance with GAAP and the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in execution or other enforcement of which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken effectively stayed; (iii) subject to the lien limitation set forth in Section 4.2(f), Liens arising in connection with capital leases or operating leases (and attaching only to the property being leased) or Liens that constitute purchase money security interests on any property securing permitted debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such purchase money security interest granted by this Article VII.B. as to all obligations attributable attaches to such interest hereunder whether or not property within twenty (20) days after the acquisition of such obligations arise before or after such interest is property and attaches solely to the property so acquired. To the extent that parties have a security interest ; (v) Liens arising under the Uniform Commercial Code Loan Documents; and (vi) easements, rights of way, zoning ordinances and other similar encumbrances affecting the Real Property Collateral that do not create a Material Adverse Change on the value or use of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies Real Property Collateral or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment operations as expected to be operated thereon, provided however, that Borrower shall obtain the subordination of its share any easement or right of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice way to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting partyXxxxxx’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall Mortgage upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by OperatorXxxxxx.

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxxwxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.affect

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract AreaArea of Mutual Interest, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s 's leasehold interests, working interests, operating rights, . and royalty and overriding royalty interests in the Contract Area of Mutual Interest now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxxwells, tools, and tubular goods), and accounts (including, without limitationxxxxtation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there from, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 thirty days (30) days after rendition of a statement therefor therefore by Operatorthe Manager of Operations, the non-defaulting parties, including Operatorthe Manager of Operations, shall upon request by Operatorthe Manager of Operations, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area of Mutual Interest is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that the Contract Operator may invoke or utilize the mechanics’ ' or materialmen’s material men's lien law of the state in which the Contract Area of Mutual Interest is situated in order to secure the payment to Contract Operator of any sum due hereunder for services performed or materials supplied by Contract Operator.

Liens and Security Interests. Each party grants Borrower shall not create, incur, assume, or suffer to the exist any mortgage, security deed, deed of trust, security interest, pledge, encumbrance, Lien or charge of any kind (including charges on property purchased under conditional sales or other parties hereto a lien upon title-retention agreements) on any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expenseproperty or assets, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxxthe Collateral, toolsnow owned or hereafter acquired, except for (collectively, “Permitted Liens”) (i) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings and against which reserves deemed adequate by Lender have been set up (excluding any Lien imposed pursuant to any of the provisions of ERISA); (ii) Liens arising in the ordinary course of business such as (A) Liens of carriers, warehousemen, mechanics and materialmen and other similar liens imposed by applicable Law, and tubular goods)(B) Liens in the form of deposits or pledges incurred in connection with worker’s compensation, unemployment compensation and accounts other types of governmentally imposed social security (includingexcluding Liens arising under ERISA) or (C) Liens in connection with surety bonds, without limitationbids, accounts arising from gas imbalances performance bonds and similar obligations for sums not overdue or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory being diligently contested in good faith by appropriate proceedings and general intangibles relating thereto not involving any advances or arising there from, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement borrowed money or the recording supplement executed herewith as a lien deferred purchase price of property or mortgage services and, in each case, for which Borrower maintain adequate reserves in accordance with GAAP and the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in execution or other enforcement of which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken effectively stayed; (iii) subject to the lien limitation set forth in Section 4.2(f), Liens arising in connection with capital leases or operating leases (and attaching only to the property being leased) or Liens that constitute purchase money security interests on any property securing permitted debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such purchase money security interest granted by this Article VII.B. as to all obligations attributable attaches to such interest hereunder whether or not property within twenty (20) days after the acquisition of such obligations arise before or after such interest is property and attaches solely to the property so acquired. To the extent that parties have a security interest ; (v) Liens arising under the Uniform Commercial Code Loan Documents; and (vi) easements, rights of way, zoning ordinances and other similar encumbrances affecting the Real Property Collateral that do not create a Material Adverse Change on the value or use of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies Real Property Collateral or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment operations as expected to be operated thereon, provided however, that Borrower shall obtain the subordination of its share any easement or right of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice way to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting partyXxxxxx’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall Mortgages upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by OperatorXxxxxx.

Liens and Security Interests. Each party grants (a) The Loans made (both for principal and interest) and the Fund’s other obligations under this Agreement, the Note and the other Loan Documents (collectively, the “Obligations”) shall be secured by, and the Fund shall grant to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract AreaLender, and a security interest and/or purchase money security interest and lien in any interest it now owns and to, and collateral assignment of, all of the Remaining Capital Commitments of the Fund’s Members, the rights of Fund or hereafter acquires the Adviser to call capital and issue Drawdown Notices under the LLC Agreement and each Member’s Subscription Agreement and to enforce the same and in the personal property proceeds thereof and fixtures on in and to the Capital Commitment Account (defined below), in each case pursuant to a Security Agreement executed and delivered as of the date hereof by the Fund in favor of the Lender (as may be amended, restated, supplemented or used or obtained for use in connection therewith, otherwise modified from time to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and feestime, the proper disbursement of all monies paid hereunder“Security Agreement”), together with financing statements, account control agreements and other documents reasonably satisfactory to the assignment or relinquishment of interest in Oil Lender. The Security Agreement, pledge agreements, financing statements, account control agreements and Gas Leases as required hereunder, other documents and the proper performance of operations hereunder. Such lien instruments from time to time executed and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject delivered pursuant to this agreement, Agreement and any documents or instruments amending or supplementing the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from same are collectively referred to herein as the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there from, and all proceeds and products of the foregoing“Collateral Documents”. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect The Fund agrees that the security interest granted hereunder. Any party may file this agreement, and lien in and to the recording supplement executed herewith, or such other documents Collateral (as it deems necessary as a lien or mortgage defined in the applicable real estate records and/or a financing statement with Security Agreement) in favor of the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties Lender shall at all times be a first priority and prior lienexclusive lien subject only to Permitted Liens. The Fund shall also cause the Adviser to execute a letter agreement in favor of the Lender in respect of certain matters relating to the Collateral (the “Adviser Letter Agreement”). (b) In order to secure further the payment and performance by the Fund of the Obligations, and each party hereby agrees to maintain the priority of said lien and security interest against Fund shall require that all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of lawMembers wire transfer, or otherwisesend checks for deposit, shall to that certain account held by the Fund at State Street Bank and Trust Company or another custodian or depositary bank reasonably acceptable to Lender (the “Custodian”), for credit to the Fund in Account No. 11595345, which account shall, on or prior to the date twenty (20) days after the date of this Agreement (or such later date as agreed to by the Lender in writing) be deemed to have taken subject to a tri-party account control agreement among the lien Fund, Custodian and security interest granted Lender (the “Control Agreement”) reasonably acceptable to the Lender (the “Capital Commitment Account”), all monies or sums paid or to be paid by this Article VII.B. as any Member to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code capital of the state in which Fund as Contributed Capital as and when Contributed Capital is called pursuant to the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit Drawdown Notices and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereofLLC Agreement. In addition, the Fund shall, upon default by receipt, deposit into the Capital Commitment Account any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect payments and monies which it receives directly from the purchaser Members as Contributed Capital. The Fund shall not direct any Member to make payments to the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result capital of the default, and all parties waive any recourse available against purchasers for releasing production proceeds Fund as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as Contributed Capital to any property that is subject to account other than the lien and security rights granted hereunderCapital Commitment Account, such power to be exercised in unless the manner Lender has provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operatorits prior written consent.

Liens and Security Interests. Each party grants to As of the other parties hereto a lien upon date of this Agreement, Subordinated Creditor has no security interests or liens over any interest it now owns property of Borrower or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Areaany subsidiary of Borrower, and a Subordinated Creditor hereby agrees that, until the termination of this Agreement, it shall not create any security interest and/or purchase money security interest interests or liens over any property of Borrower or any subsidiary of Borrower. Without limitation of the foregoing, but in furtherance thereof, so long as this Agreement shall remain in effect: (1) Subordinated Creditor shall not commence, prosecute or participate in any interest it now owns other action, whether private, judicial, equitable, administrative or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewithotherwise, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances any bankruptcy case against Borrower or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there from, and all proceeds and products any of the foregoing. To perfect the lien and security agreement provided hereinAffiliate Guarantors or any of its (or their) assets, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto PROVIDED THAT, (i) as more fully set forth in conjunction herewith or at any time following execution Section 5 hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party Subordinated Creditor may file this agreement, the recording supplement executed herewith, a proof of claim in a bankruptcy or such other documents as it deems necessary as a lien insolvency proceeding involving Borrower or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code any of the state in Affiliate Guarantors, which the Contract Area is situated, they proof of claim shall be entitled to exercise the rights indicate Subordinated Creditor's subordination hereunder and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon (ii) should any default by any party occur in the payment of its share any amounts of expensesprincipal and/or accrued interest which, pursuant to Section 4 below, Borrower is permitted to pay to Subordinated Creditor, and Subordinated Creditor is permitted to receive from Borrower, Subordinated Creditor may xxx on the Subordinated Note in respect of such default and obtain judgment thereon, but Subordinated Creditor shall not execute upon or otherwise enforce such judgment except with the prior written consent of the Senior Lender or unless this Agreement has been terminated; (2) Subordinated Creditor shall have no right either to possess any such assets, enforce any security interests in, foreclose, levy or feesexecute upon, or upon collect or attach any such assets, whether by private or judicial action or otherwise; and (3) Subordinated Creditor shall neither take, nor consent to or acquiesce in the improper use taking of, any action hereafter to set aside, challenge or otherwise dispute the existence or priority of funds by any Senior Indebtedness or the Operatorcreation, the other parties shall have the rightattachment, without prejudice to other rights perfection or remedies, to collect from the purchaser the proceeds from the sale continuation of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus any lien or security interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive Senior Lender in any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If assets of Borrower or any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by OperatorAffiliate Guarantor.

Liens and Security Interests. Each party Party grants to the other parties hereto Parties a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property property' and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto Party shall include such party’s Party's leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto Party shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto Party in conjunction herewith or at any time following execution hereof, and Operator any Party is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator such Party shall deem appropriate to perfect the security interest granted hereunder. Any party Party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party Party represents and warrants to the other parties hereto Parties that the lien and security interest granted by such party Party to the other parties Parties shall be a first and prior lien, and each party Party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such partyParty. All parties Parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. VII.B as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants To secure performance by the Borrower of the payment of each Note and the other Obligations: (a) The Parent shall grant, pledge and assign to the other parties hereto Administrative Agent, for the benefit of each of the Banks, a perfected security interest and lien upon (subject only to any security interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in lien granted to the Contract AreaSeller under, and a security interest and/or purchase money security interest as that term is defined in, the Acquisition Repurchase Agreement) in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment the Parent's Equity Interests into any Subsidiary of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith Parent (including, without limitation, all xxxxxany Newly Formed Subsidiary as and when formed), toolswhether now existing or hereafter formed, any such grant, pledge and assignment to be in the form of the Pledge Agreement attached hereto as Exhibit F. (b) Any Newly Formed Subsidiary formed in connection with the acquisition of an Eligible Asset in accordance with, and tubular goods)subject to, all of the terms and accounts conditions set forth in the Acquisition Repurchase Agreement (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas Sections , , and thereof) shall, at the wellhead)time of the acquisition of such Eligible Asset, contract rightsgrant, inventory pledge and general intangibles relating thereto or arising there fromassign to the Administrative Agent, for the benefit of each of the Banks, (i) an exclusive, perfected and prior security interest in and to all of such Newly Formed Subsidiary's right, title and interest in and to such Eligible Asset, any such grant, pledge and assignment to be in the form of the Security Agreement attached hereto as Exhibit I, and (ii) an exclusive, perfected and prior security interest in and to all proceeds of such Newly Formed Subsidiary's right, title and products interest in and to the Collection Account established with respect to the Eligible Asset, any such grant, pledge and assignment to be in the form of the foregoing. To perfect Account Control Agreement attached hereto as Exhibit J. (c) Any Newly Formed Subsidiary formed in connection with the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto acquisition of an Eligible Asset in conjunction herewith or at any time following execution hereofaccordance with, and Operator is authorized to file this agreement or subject to, all of the recording supplement executed herewith as a lien or mortgage terms and conditions set forth in the applicable real estate records Acquisition Repurchase Agreement (including, without limitation, Sections , , and as a financing statement with thereof) shall, at the proper officer under time of the Uniform Commercial Code acquisition of such Eligible Asset deliver to the Administrative Agent or its designee (including the Custodian) the documents identified in the state Custodial Agreement. (d) Any Mortgage Asset Files (as that term is defined in which the Contract Area is situated Acquisition Repurchase Agreement) not delivered to the Administrative Agent or its designee (including the Custodian) are and such other states shall be held in trust by the applicable Newly Formed Subsidiary or its designee for the benefit of the Administrative Agent as Operator shall deem appropriate to perfect the beneficiary of an exclusive, perfected and prior security interest granted hereunder. Any party may file this agreementin and to all of such Newly Formed Subsidiary's right, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents title and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings Eligible Asset pursuant to the provisions related Security Agreement. The applicable Newly Formed Subsidiary or its designee shall maintain a copy of this agreementthe Mortgage Asset File and the originals of the Mortgage Asset File not delivered to the Administrative Agent or its designee (including the Custodian). The possession of the Mortgage Asset File by the applicable Newly Formed Subsidiary or its designee is at the will of the Administrative Agent for the sole purpose of servicing the related Eligible Asset, and such retention and possession by such Newly Formed Subsidiary or its designee is in a custodial capacity only. Each Mortgage Asset File retained or held by the applicable Newly Formed Subsidiary or its designee shall be segregated on such Newly Formed Subsidiary's books and records, to the extent allowed by governing lawpossible, from the defaulting party waives any available right other assets of redemption from such Newly Formed Subsidiary or its designee and after the date books and records of judgment, any required valuation such Newly Formed Subsidiary or appraisement its designee shall be marked appropriately to reflect clearly the sale of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, related Eligible Asset to the extent permitted by Administrative Agent. The applicable lawNewly Formed Subsidiary or its designee shall release its custody of the Mortgage Asset File only in accordance with written instructions from the Administrative Agent, each party hereby grants unless such release is required as incidental to the other parties servicing of the Eligible Assets. (e) The Parent and each of its Subsidiaries which is a power of sale as party to any property that is subject Derivatives Contract shall grant, pledge and assign to the lien Administrative Agent, for the benefit of each of the Banks, all of its right, title and security rights granted hereunderinterest in and to any such Derivatives Contract, such power grant, pledge and assignment to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner form and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, content acceptable to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state Administrative Agent in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operatorits sole and absolute discretion.

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement Agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interestsinterest, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection connections therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellheadWellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any authorizes each other party hereto in conjunction herewith to execute, acknowledge and file any and all financing statements and supplements or at any time following execution hereof, and continuations thereof to evidence the security interests granted by the parties hereunder. Operator is authorized to file this agreement Agreement or the any recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreementAgreement, the or any recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement Agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. VII.B as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by of a party for the secured indebtedness shall not be deemed an and election of remedies or to otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in Exhibit “Exhibit C,” B”, has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operatorif the due date as herein provided, the non-defaulting parties, including Operator, shall shall, upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in this Article VII.B.VII.B, and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings proceeding pursuant to the provisions of this agreementAgreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, and any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay state execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants Borrower shall not create, incur, assume, or suffer to the exist any mortgage, security deed, deed of trust, security interest, pledge, encumbrance, Lien or charge of any kind (including charges on property purchased under conditional sales or other parties hereto a lien upon title-retention agreements) on any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expenseproperty or assets, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxxthe Collateral, toolsnow owned or hereafter acquired, except for (collectively, “Permitted Liens”) (i) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings and against which reserves deemed adequate by Lender have been set up (excluding any Lien imposed pursuant to any of the provisions of ERISA); (ii) Liens arising in the ordinary course of business such as (A) Liens of carriers, warehousemen, mechanics and materialmen and other similar liens imposed by applicable Law, and tubular goods)(B) Liens in the form of deposits or pledges incurred in connection with worker’s compensation, unemployment compensation and accounts other types of governmentally imposed social security (includingexcluding Liens arising under ERISA) or (C) Liens in connection with surety bonds, without limitationbids, accounts arising from gas imbalances performance bonds and similar obligations for sums not overdue or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory being diligently contested in good faith by appropriate proceedings and general intangibles relating thereto not involving any advances or arising there from, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement borrowed money or the recording supplement executed herewith as a lien deferred purchase price of property or mortgage services and, in each case, for which Borrower maintain adequate reserves in accordance with GAAP and the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in execution or other enforcement of which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken effectively stayed; (iii) subject to the lien limitation set forth in Section 4.2(f), Liens arising in connection with capital leases or operating leases (and attaching only to the property being leased) or Liens that constitute purchase money security interests on any property securing permitted debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such purchase money security interest granted by this Article VII.B. as to all obligations attributable attaches to such interest hereunder whether or not property within twenty (20) days after the acquisition of such obligations arise before or after such interest is property and attaches solely to the property so acquired. To the extent that parties have a security interest ; (v) Liens arising under the Uniform Commercial Code Loan Documents; and (vi) easements, rights of way, zoning ordinances and other similar encumbrances affecting the Real Property Collateral that do not create a Material Adverse Change on the value or use of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies Real Property Collateral or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment operations as expected to be operated thereon, provided however, that Borrower shall obtain the subordination of its share any easement or right of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice way to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting partyLxxxxx’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall Mortgage upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by OperatorLxxxxx.

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and the Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement Agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any an party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement Agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreementAgreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lienlien (except as to the liens granted by TEC in favor of Citibank, N.A., and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement Agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreementAgreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests interest or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in “Exhibit C,” has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 one hundred twenty (120) days after rendition of a statement therefor therefore by Operator, the non-defaulting partiesparties may, including Operatorbut shall have no obligation to do so, shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The Any amount paid by each a party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreementAgreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize utilized the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmenmaterialman’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each party grants to the other parties hereto a lien upon any interest it now owns or hereafter acquires in Oil and Gas Leases and Oil and Gas Interests in the Contract Area, and a security interest and/or purchase money security interest in any interest it now owns or hereafter acquires in the personal property and fixtures on or used or obtained for use in connection therewith, to secure performance of all of its obligations under this agreement including but not limited to payment of expense, interest and fees, the proper disbursement of all monies paid hereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations hereunder. Such lien and security interest granted by each party hereto shall include such party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or hereafter acquired and in lands pooled or unitized therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from therefrom and equipment situated thereon or used or obtained for use in connection therewith (including, without limitation, all xxxxxwxxxx, tools, and tubular goods), and accounts (including, without limitation, accounts arising from gas imbalances or from the sale of Oil and/or Gas at the wellhead), contract rights, inventory and general intangibles relating thereto or arising there fromtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided herein, each party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any party hereto in conjunction herewith or at any time following execution hereof, and Operator is authorized to file this agreement or the recording supplement executed herewith as a lien or mortgage in the applicable real estate records and as a financing statement with the proper officer under the Uniform Commercial Code in the state in which the Contract Area is situated and such other states as Operator shall deem appropriate to perfect the security interest granted hereunder. Any party may file this agreement, the recording supplement executed herewith, or such other documents as it deems necessary as a lien or mortgage in the applicable real estate records and/or a financing statement with the proper officer under the Uniform Commercial Code. Each party represents and warrants to the other parties hereto that the lien and security interest granted by such party to the other parties shall be a first and prior lien, and each party hereby agrees to maintain the priority of said lien and security interest against all persons acquiring an interest in Oil and Gas Leases and Interests covered by this agreement by, through or under such party. All parties acquiring an interest in Oil and Gas Leases and Oil and Gas Interests covered by this agreement, whether by assignment, merger, mortgage, operation of law, or otherwise, shall be deemed to have taken subject to the lien and security interest granted by this Article VII.B. as to all obligations attributable to such interest hereunder whether or not such obligations arise before or after such interest is acquired. To the extent that parties have a security interest under the Uniform Commercial Code of the state in which the Contract Area is situated, they shall be entitled to exercise the rights and remedies of a secured party under the Code. The bringing of a suit and the obtaining of judgment by a party for the secured indebtedness shall not be deemed an election of remedies or otherwise affect the lien rights or security interest as security for the payment thereof. In addition, upon default by any party in the payment of its share of expenses, interests or fees, or upon the improper use of funds by the Operator, the other parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of such defaulting party’s share of Oil and Gas until the amount owed by such party, plus interest as provided in Exhibit “Exhibit C,” ”, has been received, and shall have the right to offset the amount owed against the proceeds from the sale of such defaulting party’s share of Oil and Gas. All purchasers of production may rely on a notification of default from the non-defaulting party or parties stating the amount due as a result of the default, and all parties waive any recourse available against purchasers for releasing production proceeds as provided in this paragraph. If any party fails to pay its share of cost within 30 one hundred twenty (120) days after rendition of a statement therefor by Operator, the non-defaulting parties, including Operator, shall shall, upon request by Operator, pay the unpaid amount in the proportion that the interest of each such party bears to the interest of all such parties. The amount paid by each party so paying its share of the unpaid amount shall be secured by the liens and security rights described in Article VII.B., and each paying party may independently pursue any remedy available hereunder or otherwise. If any party does not perform all of its obligations hereunder, and the failure to perform subjects such party to foreclosure or execution proceedings pursuant to the provisions of this agreement, to the extent allowed by governing law, the defaulting party waives any available right of redemption from and after the date of judgment, any required valuation or appraisement of the mortgaged or secured property prior to sale, any available right to stay execution or to require a marshaling marshalling of assets and any required bond in the event a receiver is appointed. In addition, to the extent permitted by applicable law, each party hereby grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted hereunder, such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and upon reasonable notice. Each party agrees that the other parties shall be entitled to utilize the provisions of Oil and Gas lien law or other lien law of any state in which the Contract Area is situated to enforce the obligations of each party hereunder. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the mechanics’ or materialmen’s lien law of the state in which the Contract Area is situated in order to secure the payment to Operator of any sum due hereunder for services performed or materials supplied by Operator.