Common use of Liens and Security Interests Clause in Contracts

Liens and Security Interests. Each Party grants to the other parties to this agreement a lien on any interest it now owns or 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 later acquires in the personal property and fixtures on or used or obtained for use in connection with 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 under this agreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreement. The lien and security interest granted by each Party shall include the Party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later acquired and in lands pooled or unitized with them, or otherwise becoming subject to this agreement, the Oil and Gas when extracted and equipment situated on or used or obtained for use in connection 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, and general intangibles relating to or arising from them, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided, each Party shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party in conjunction with or at any time following execution of this agreement, and Operator is authorized to file this agreement or the recording supplement 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. Any Party may file this agreement, the recording supplement, or 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 that the lien and security interest granted by a Party to the other parties shall be a first and prior lien, and each Party agrees to maintain the priority of the 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 the 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 the interest under this agreement whether or not the obligations arise before or after 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 of the indebtedness. In addition, 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 the defaulting Party’s share of Oil and Gas until the amount owed by the 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 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 one hundred twenty (120) days after rendition of a statement of them by Operator, the non-defaulting parties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party bears to the interest of all parties. The amount paid by each 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 may independently pursue any remedy available under this agreement or otherwise. If any Party does not perform all of its obligations under this agreement, and the failure to perform subjects that 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 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 grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted by this agreement, the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and 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. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the 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 under this agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Partysuch party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themthere from, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party party hereto in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party party may file this agreement, the recording supplementsupplement 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 that the lien and security interest granted by a Party such party to the other parties shall be a first and prior lien, and each Party party hereby agrees to maintain the priority of the said 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 the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on upon 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 the such defaulting Partyparty’s share of Oil and Gas until the amount owed by the Partysuch 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 the such 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 one hundred twenty (120) 30 days after rendition of a statement of them therefor by Operator, the non-defaulting parties, including Operator, shall, on shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party such 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 marshalling 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement Agreement a lien on any interest it now owns or 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 later acquires in the personal property and fixtures on or used or obtained for use in connection with 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 under this agreementAgreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementAgreement. The lien and security interest granted by each Party party shall include the Partyparty’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later acquired and in lands pooled or unitized with them, or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted and equipment situated on or used or obtained for use in connection 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, and general intangibles relating to or arising from them, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided, each Party party shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party party in conjunction with or at any time following execution of this agreementAgreement, and Operator is authorized to file this agreement Agreement or the recording supplement 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. Any Party party may file this agreementAgreement, the recording supplement, or 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 that the lien and security interest granted by a Party party to the other parties shall be a first and prior lien, and each Party party agrees to maintain the priority of 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, or under the Partyparty. 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 the interest under this agreement Agreement whether or not the obligations arise before or after 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 of the indebtedness. In addition, 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 the defaulting Partyparty’s share of Oil and Gas until the amount owed by the Partyparty, 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 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 one hundred twenty (120) days after rendition of a statement of them by Operator, the non-defaulting parties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party party bears to the interest of all parties. The amount paid by each Party 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 under this agreement Agreement or otherwise. If any Party party does not perform all of its obligations under this agreementAgreement, and the failure to perform subjects that Party 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 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 party grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted by this agreementAgreement, the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and 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 Partyparty. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the 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 under this agreement Agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each Subject to the consent of the United States, as lessor under each of the Leases (“Lessor”), each Party grants to the other parties Parties to this agreement Agreement a lien on any interest it now owns or 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 later acquires in the personal property and fixtures on or used or obtained for use in connection with 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 under this agreementAgreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementAgreement. The lien and security interest granted by each Party shall include the Party’s leasehold Leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later acquired and in lands pooled or unitized with them, or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted and equipment situated on or used or obtained for use in connection 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, and general intangibles relating to or arising from them, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided, each 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 in conjunction with or at any time following execution of this agreementAgreement, and Operator is authorized to file this agreement Agreement or the recording supplement 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. Any Party may file this agreementAgreement, the recording supplement, or 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 represents and warrants to the other parties Parties that the lien and security interest granted by 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 agrees to shall maintain the priority of 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, or under the 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 the interest under this agreement Agreement whether or not the obligations arise before or after 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 party under the CodeUCC. The bringing of Bringing 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 of the indebtedness. In addition, on 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 Parties shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of the defaulting Party’s share of Oil and Gas until the amount owed by the 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 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 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 fails to pay its share of cost costs within one hundred twenty (120) days after rendition of a statement of them costs by Operator, the non-defaulting partiesParties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party bears to the interest of all partiesParties. The amount paid by each 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 may independently pursue any remedy available under this agreement Agreement or otherwise. If any Party does not perform all of its obligations under this agreementAgreement, and the failure to perform subjects 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 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 grants to the other parties Parties a power of sale as to any property that is subject to the lien and security rights granted by this agreementAgreement, the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and 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. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the 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 under this agreement Agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Partysuch party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party an party hereto in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party party may file this agreementAgreement, the recording supplementsupplement 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 that the lien and security interest granted by a Party 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 party hereby agrees to maintain the priority of the 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, through or under the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on upon 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 shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of the such defaulting Partyparty’s share of Oil and Gas until the amount owed by the Partysuch 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 the such 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 one hundred twenty (120) days after rendition of a statement of them therefore by Operator, the non-defaulting partiesparties may, including Operatorbut shall have no obligation to do so, shall, on upon request by Operator, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The Any amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party such 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 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon reasonable notice. Each Party 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Party’s such party's leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party party hereto in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party party may file this agreement, the recording supplementsupplement 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 that the lien and security interest granted by a Party such party to the other parties shall be a first and prior lien, and each Party party hereby agrees to maintain the priority of the said 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 the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on upon 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 the such defaulting Party’s party's share of Oil and Gas until the amount owed by the Partysuch 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 the such defaulting Party’s party'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 one hundred twenty (120) days after rendition of a statement of them therefor by Operator, the non-defaulting parties, including Operator, shall, on shall upon request by Operator, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party such 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 marshalling 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party Owner grants to the other parties to this agreement Operator a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreement. The Such lien and security interest granted by each Party shall include the PartyOwner’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party Owner shall execute and acknowledge the a recording supplement and/or any financing statement prepared and submitted by any Party Owner in conjunction with herewith or at any time following execution of this agreementhereof, and Operator is authorized to file this agreement or the recording supplement executed 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 grantedgranted hereunder. Any Party Owner may file this agreement, the any recording supplementsupplement 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 Operator that the lien and security interest granted by a Party to the other parties hereby shall be a first and prior lien, and each Party Owner hereby agrees to maintain the priority of the 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, through or under the 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on 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 the defaulting PartyOwner’s share of Oil and Gas until the amount owed by the 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 the 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 one hundred twenty (120) days after rendition of a statement of them by Operator, the non-defaulting parties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party bears to the interest of all parties. The amount paid by each 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 may independently pursue any remedy available under this agreement or otherwise. If any Party Owner does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party Owner grants to the other parties to this agreement Operator a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreement. The Such lien and security interest granted by each Party shall include the PartyOwner’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party Owner shall execute and acknowledge the a recording supplement and/or any financing statement prepared and submitted by any Party Owner in conjunction with herewith or at any time following execution of this agreementhereof, and Operator is authorized to file this agreement or the recording supplement executed 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 grantedgranted hereunder. Any Party Owner may file this agreement, the any recording supplementsupplement 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 Operator that the lien and security interest granted by a Party to the other parties hereby shall be a first and prior lien, and each Party Owner hereby agrees to maintain the priority of the 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 the 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on 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 the defaulting PartyOwner’s share of Oil and Gas until the amount owed by the 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 the 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 one hundred twenty (120) days after rendition of a statement of them by Operator, the non-defaulting parties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party bears to the interest of all parties. The amount paid by each 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 may independently pursue any remedy available under this agreement or otherwise. If any Party Owner does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party grants to the other parties to this agreement Parties a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property property' and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The 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 shall include the such Party’s 's leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party may file this agreement, the recording supplementsupplement 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 Parties that the lien and security interest granted by a such Party to the other parties Parties shall be a first and prior lien, and each Party hereby agrees to maintain the priority of the said 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 the such Party. 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 of the indebtedness. In addition, 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 the defaulting Party’s share of Oil and Gas until the amount owed by the 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 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 one hundred twenty (120) days after rendition of a statement of them by Operator, the non-defaulting parties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party bears to the interest of all parties. The amount paid by each 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 may independently pursue any remedy available under this agreement or otherwise. If any Party does not perform all of its obligations under this agreement, and the failure to perform subjects that 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 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 grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted by this agreement, the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and 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. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the 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 under this agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Partysuch party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party party hereto in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party party may file this agreement, the recording supplementsupplement 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 that the lien and security interest granted by a Party such party to the other parties shall be a first and prior lien, and each Party party hereby agrees to maintain the priority of the said 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 the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on upon 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 the such defaulting Partyparty’s share of Oil and Gas until the amount owed by the Partysuch 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 the such 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 one hundred twenty (120) days after rendition of a statement of them therefor by Operator, the non-defaulting parties, including Operator, shall, on upon request by Operator, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party such 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 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Partysuch party’s leasehold interestsinterest, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party shall execute party hereto authorizes each other party hereto to execute, acknowledge and acknowledge file any and all financing statements and supplements or continuations thereof to evidence the recording supplement and/or any financing statement prepared and submitted security interests granted by any Party in conjunction with or at any time following execution of this agreement, and 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 grantedgranted hereunder. Any Party party may file this agreement, the recording supplementAgreement, 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 party represents and warrants to the other parties hereto that the lien and security interest granted by a Party such party to the other parties shall be a first and prior lien, and each Party party hereby agrees to maintain the priority of the 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, through or under the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 party under the Code. The bringing of a suit and the obtaining of judgment by of a Party 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 of the indebtednessthereof. In addition, on upon 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 the such defaulting Partyparty’s share of Oil and Gas until the amount owed by the Partysuch 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 the such 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 one hundred twenty (120) days after rendition of a statement of them by Operatorif the due date as herein provided, the non-defaulting parties, including Operator, shall, on upon request by Operator, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party 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 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 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Partysuch party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party an party hereto in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party party may file this agreementAgreement, the recording supplementsupplement 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 that the lien and security interest granted by a Party 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 party hereby agrees to maintain the priority of the 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, through or under the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on upon 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 shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of the such defaulting Partyparty’s share of Oil and Gas until the amount owed by the Partysuch 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 the such 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 one hundred twenty (120) days after rendition of a statement of them therefore by Operator, the non-defaulting partiesparties may, including Operatorbut shall have no obligation to do so, shall, on upon request by Operator, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The Any amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party such 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 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon reasonable notice. Each Party 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party grants to the other parties to this agreement Parties a lien on any and all interest it now owns or 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 later acquires in the personal property and fixtures on or used or obtained for use in connection with 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 under the terms of this agreementAgreement, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunderby this Agreement, and the proper performance of operations under the terms of this agreementAgreement. The lien and security interest granted by each Party shall include the Party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later acquired and in the lands pooled or unitized with them, the Contract Area or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted extracted, and equipment situated on or used or obtained for use in connection with the Contract Area 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, and general intangibles relating to or arising from themit, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedgranted, each Party shall execute and acknowledge the Memorandum of Agreement, recording supplement supplement, and/or any financing statement prepared and submitted by any Party in conjunction with this Agreement or at any time following execution of this agreementAgreement, and Operator is authorized to file this agreement Agreement or the executed Memorandum of Agreement, or recording supplement 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. Any Party may file this agreementAgreement, the executed Memorandum of Agreement, recording supplement, or 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 represents and warrants to the other parties Parties that the lien and security interest granted by a the Party to the other parties Parties shall be a first and prior lien, and each Party agrees to maintain the priority of 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, or under the 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 the interest under this agreement whether or not the obligations arise before or after 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 party under the Code. The bringing Bringing of a suit and the obtaining of a 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 of the indebtednessany amounts due. In addition, on default by any 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 the defaulting Party’s share of Oil and Gas until the amount owed by the 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 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 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 fails to pay its share of cost within one hundred twenty Thirty (12030) days after rendition of a statement of them for costs by Operator, the non-defaulting partiesParties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party bears to the interest of all partiesParties. The amount paid by each 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 may independently pursue any remedy available under this agreement Agreement or otherwise. If any Party does not perform all of its obligations under this agreementAgreement, and the failure to perform subjects that the 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 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 grants to the other parties Parties a power of sale as to any property that is subject to the lien and security rights granted by this agreementAgreement, the this power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on reasonable notice. Each 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 PartyParty 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 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 under this agreement for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Partysuch party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreementAgreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party an party hereto in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party party may file this agreementAgreement, the recording supplementsupplement 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 that the lien and security interest granted by a Party 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 party hereby agrees to maintain the priority of the 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, through or under the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtednessthereof. In addition, on upon 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 shall have the right, without prejudice to other rights or remedies, to collect from the purchaser the proceeds from the sale of the such defaulting Partyparty’s share of Oil and Gas until the amount owed by the Partysuch 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 the such 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 one hundred twenty (120) days after rendition of a statement of them therefor by Operator, the non-defaulting partiesparties may, including Operatorbut shall have no obligation to do so, shall, on upon request by Operator, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The Any amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party such 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 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon reasonable notice. Each Party 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 Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Party’s such party's leasehold interests, working interests, operating rights, . and royalty and overriding royalty interests in the Contract Area of Mutual Interest now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted there from and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themthere from, and all proceeds and products of the foregoing. To perfect the lien and security agreement provided, each Party shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party in conjunction with or at any time following execution of this agreement, and Operator is authorized to file this agreement or the recording supplement 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. Any Party may file this agreement, the recording supplement, or 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 that the lien and security interest granted by a Party to the other parties shall be a first and prior lien, and each Party agrees to maintain the priority of the 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 the 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 the interest under this agreement whether or not the obligations arise before or after 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 of the indebtedness. In addition, 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 the defaulting Party’s share of Oil and Gas until the amount owed by the 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 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 party fails to pay its share of cost within one hundred twenty thirty days (12030) days after rendition of a statement therefore by the Manager of them by OperatorOperations, the non-defaulting parties, including Operatorthe Manager of Operations, shall, on shall upon request by Operatorthe Manager of Operations, pay the unpaid amount in the proportion that the interest of each Party such party bears to the interest of all such parties. The amount paid by each Party 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 party may independently pursue any remedy available under this agreement hereunder or otherwise. If any Party party does not perform all of its obligations under this agreementhereunder, and the failure to perform subjects that Party such 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 marshalling 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 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 by this agreementhereunder, the such power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and on upon 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 of Mutual Interest is situated to enforce the obligations of each Partyparty 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 mechanic’s 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 under this agreement hereunder for services performed or materials supplied by Contract Operator.

Liens and Security Interests. Each Party party grants to the other parties to this agreement hereto a lien on upon any interest it now owns or later 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 later hereafter acquires in the personal property and fixtures on or used or obtained for use in connection with any interesttherewith, 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 under this agreementhereunder, the assignment or relinquishment of interest in Oil and Gas Leases as required hereunder, and the proper performance of operations under this agreementhereunder. The Such lien and security interest granted by each Party party hereto shall include the Partysuch party’s leasehold interests, working interests, operating rights, and royalty and overriding royalty interests in the Contract Area now owned or later hereafter acquired and in lands pooled or unitized with them, therewith or otherwise becoming subject to this agreement, the Oil and Gas when extracted therefrom and equipment situated on thereon or used or obtained for use in connection with the Contract Area 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, inventory and general intangibles relating to thereto or arising from themtherefrom, and all proceeds and products of the foregoing. To perfect the lien and security agreement providedprovided herein, each Party party hereto shall execute and acknowledge the recording supplement and/or any financing statement prepared and submitted by any Party party hereto in conjunction with herewith or at any time following execution of this agreementhereof, 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 grantedgranted hereunder. Any Party party may file this agreement, the recording supplementsupplement 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 that the lien and security interest granted by a Party such party to the other parties shall be a first and prior lien, and each Party party hereby agrees to maintain the priority of the said 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 the Partysuch 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 the such interest under this agreement hereunder whether or not the such obligations arise before or after the 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 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 of the indebtedness. In addition, 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 the defaulting Party’s share of Oil and Gas until the amount owed by the 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 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 one hundred twenty (120) days after rendition of a statement of them by Operator, the non-defaulting parties, including Operator, shall, on request by Operator, pay the unpaid amount in the proportion that the interest of each Party bears to the interest of all parties. The amount paid by each 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 may independently pursue any remedy available under this agreement or otherwise. If any Party does not perform all of its obligations under this agreement, and the failure to perform subjects that 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 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 grants to the other parties a power of sale as to any property that is subject to the lien and security rights granted by this agreement, the power to be exercised in the manner provided by applicable law or otherwise in a commercially reasonable manner and 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. Without limiting the generality of the foregoing, to the extent permitted by applicable law, Non-Operators agree that Operator may invoke or utilize the 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 under this agreement for services performed or materials supplied by Operator.affect