Common use of Operation of Subject Interests Clause in Contracts

Operation of Subject Interests. Borrower shall, as an independent contractor and as a prudent operator and at Borrower's sole cost and expense: (i) cause the Subject Interests to be developed, maintained and continuously operated for the production of Hydrocarbons in a good and workmanlike manner, as would a prudent operator (without regard to the existence of the Mortgage or the Override), all in accordance with the Development Plan, generally accepted practices, applicable operating agreements, and applicable federal, state and local laws, rules and regulations (including, without limitation, all Environmental Laws), and in a manner consistent with the production rate assumptions used in, and the levels defined in, the various production profile data provided to Lender; (ii) pay, or cause to be paid, promptly as and when due and payable, (A) all rentals, royalties and operating, development, production and transportation expenses and proceeds payable to the other mineral interest owners in respect of the Subject Interests or the Subject Hydrocarbons, excepting those being contested in good faith, (B) all production related-expenses and production-related taxes incurred in or arising from the operation or development of the Subject Interests, or the producing, treating, gathering, or storing, of the Subject Hydrocarbons; excepting those being contested in good faith or those not yet payable in the ordinary course of business, and (C) all general and administrative related expenses and taxes; excepting those being contested in good faith or those not yet payable in the ordinary course of business; (iii) cause machinery, equipment and facilities necessary for the production of the Subject Hydrocarbons to be kept in prime working order as would a prudent operator (without regard to the existence of the Mortgage) and necessary repairs, renewals, renovations, replacements, additions and improvements thereof or thereto to be promptly made; (iv) give or cause to be given to Lender written notice of every adverse claim or demand made by any Person (other than Lender or the buyer of Hydrocarbons) affecting the Subject Interests or the Subject Hydrocarbons which could have a material adverse effect on the Override or any portion thereof or on Borrower, and of any suit or other legal proceeding instituted with respect thereto, and cause necessary steps to be taken with reasonable diligence to protect and defend the Subject Interests and the Subject Hydrocarbons against any such adverse claim or demand which could have a material adverse effect on the Override or any portion thereof, or Borrower, including, but not limited to, the employment of counsel for the prosecution or defense of litigation; (v) cause the Subject Interests to be kept free and clear of liens, security interests, overriding royalty interest or similar encumbrances, other than Permitted Liens; and (vi) develop, or cause to be developed, any Planned Xxxxx or any other xxxxx within the Oil and Gas Leases described on Schedule I-A. Borrower will maintain, preserve, protect and keep the Subject Interests in good repair, working order and condition, and make necessary and proper repairs, renewals and replacements so that (i) its business carried on in connection therewith may be properly conducted at all times and (ii) the Subject Interests do not decline in value.

Operation of Subject Interests. Borrower shall, as an independent contractor and as a prudent operator and at Borrower's sole cost and expense: (i) cause the Subject Interests to be developed, maintained and continuously operated for the production of Hydrocarbons in a good and workmanlike manner, as would a prudent operator (without regard to the existence of the Mortgage Debenture or the Override), all in accordance with the Development Plan, generally accepted practices, applicable operating agreements, and applicable federal, state and local laws, rules and regulations Applicable Laws (including, without limitation, including all Environmental Laws), and in a manner intended to be consistent with the production rate assumptions used in, and the levels defined in, the various production profile data provided to Lender; (ii) pay, or cause to be paid, promptly promptly, and no longer than 90 days from the billing date for such amount, as and when due and payable, (A) all rentals, royalties and operating, development, production and transportation expenses and proceeds payable to the other mineral interest owners in respect of the Subject Interests or the Subject Hydrocarbons, excepting those being contested in good faith, (B) all production related-expenses and production-related taxes Taxes incurred in or arising from the operation or development of the Subject Interests, or the producing, treating, gathering, or storing, of the Subject Hydrocarbons; excepting those being contested in good faith or those not yet payable in the ordinary course of business, and (C) all general and administrative related expenses and taxes; Taxes, excepting those being contested in good faith or those not yet payable in the ordinary course of business; (iii) cause machinery, equipment and facilities necessary for the production of the Subject Hydrocarbons to be kept in prime working order as would a prudent operator (without regard to the existence of the MortgageDebenture) and necessary repairs, renewals, renovations, replacements, additions and improvements thereof or thereto to be promptly made; (iv) give or cause to be given to Lender written notice of every adverse claim or demand made by any Person (other than Lender or the buyer of Hydrocarbons) affecting the Subject Interests or the Subject Hydrocarbons which could have a material adverse effect on the Override or any portion thereof or on Borrower, and of any suit or other legal proceeding instituted with respect thereto, and cause necessary steps to be taken with reasonable diligence to protect and defend the Subject Interests and the Subject Hydrocarbons against any such adverse claim or demand which could have a material adverse effect on the Override or any portion thereof, or Borrower, including, but not limited to, including the employment of counsel for the prosecution or defense of litigation; and (v) cause the Subject Interests to be kept free and clear of liens, security interests, Liens or overriding royalty interest or similar encumbrances, interests other than Permitted Liens; and (vi) develop, or cause to be developed, any Planned Xxxxx or any other xxxxx within the Oil and Gas Leases described on Schedule I-A. . Borrower will shall maintain, preserve, protect and keep the Subject Interests in good repair, working order and condition, and make necessary and proper repairs, renewals and replacements so that (iA) its business carried on in connection therewith may be properly conducted at all times and (iiB) the Subject Interests do not decline in value.

Operation of Subject Interests. Borrower shallAt all times from the date hereof until the termination of the Overriding Royalty and whether or not any Grantor is the operator of the Subject Interests, as an independent contractor and as a prudent operator and Grantors, at Borrower's sole Grantors' cost and expense, shall: (ia) cause Cause, or to the extent a Grantor is not the operator, use their best efforts to cause, the Subject Interests to be maintained in full force and effect, and to be developed, maintained protected against drainage, and continuously operated for the production of Hydrocarbons in a good and workmanlike manner, manner as would a prudent operator (and without regard to the existence burden of the Mortgage or the OverrideOverriding Royalty), all in accordance with the Development Plan, generally accepted industry practices, applicable operating agreements, and all applicable federal, state and local laws, rules and regulations (including, without limitation, all Environmental Laws)regulations, and in a manner consistent shall otherwise comply with the production rate assumptions used inall applicable laws, rules and the levels defined in, the various production profile data provided to Lenderregulations; (iib) payPay, or cause to be paid, promptly as and when due and payable, (A) all rentals, rentals and royalties and operating, development, production and transportation expenses and proceeds payable to the other mineral interest owners in respect of the Subject Interests or the Subject Hydrocarbonsproduction therefrom, excepting those being contested in good faithand all costs, (B) all production related-expenses and production-related taxes liabilities incurred in or arising from the operation or development of the Subject Interests, or the producing, treating, gathering, or storing, marketing or transporting of the Subject Hydrocarbons; excepting those being contested in good faith or those not yet payable in the ordinary course of business, and (C) all general and administrative related expenses and taxes; excepting those being contested in good faith or those not yet payable in the ordinary course of businessHydrocarbons therefrom; (iiic) cause Cause, or to the extent a Grantor is not the operator, use their best efforts to cause, all xxxxx, machinery, equipment and facilities of any kind now or hereafter located on the Subject Interests, and necessary or useful in the operation thereof for the production of the Subject Hydrocarbons therefrom, to be provided and to be kept in prime working order good and effective operating condition as would a prudent operator (and without regard to the existence burden of the Mortgage) Overriding Royalty), and necessary all repairs, renewals, renovations, replacements, additions and improvements thereof or thereto thereto, useful or needful to such end, to be promptly made; (ivd) give Give or cause to be given to Lender Grantee written notice of every adverse claim or demand made by any Person (other than Lender or the buyer of Hydrocarbons) person affecting the Subject Interests or Interests, the Subject Hydrocarbons which could have a material adverse effect on produced <PAGE> 61 therefrom, the Override or Overriding Royalty and/or the Overriding Royalty Hydrocarbons in any portion thereof or on Borrowermanner whatsoever, and of any suit or other legal proceeding instituted with respect thereto, and at Grantors' expense cause all necessary and proper steps to be taken with reasonable diligence to protect and defend the Subject Interests and Interests, the Subject Hydrocarbons produced therefrom, the Overriding Royalty and/or the Overriding Royalty Hydrocarbons against any such adverse claim or demand which could have a material adverse effect on the Override or any portion thereofdemand, or Borrower, including, including (but not limited to, ) the employment of counsel for the prosecution or defense of litigationlitigation and the contest, release or discharge of such adverse claim or demand; (ve) cause Cause the Subject Interests to be kept free and clear of liens, security interests, overriding royalty interest or similar encumbrancescharges and encumbrances of every character, other than Permitted Liens; and (vi) develop, or cause to be developed, any Planned Xxxxx or any other xxxxx within the Oil and Gas Leases described on Schedule I-A. Borrower will maintain, preserve, protect and keep the Subject Interests in good repair, working order and condition, and make necessary and proper repairs, renewals and replacements so that (i) its business carried on in connection therewith may be properly conducted at all times Taxes constituting a lien but not due and payable, and (ii) the Permitted Encumbrances; (f) Pay all Taxes (except those contested in good faith) when due and before they become delinquent, and reimburse Grantee for any Taxes paid by Grantee as a result of the Overriding Royalty or the Overriding Royalty Hydrocarbons or the production of same; (g) Pay promptly when due and before they become delinquent all operating expenses and all xxxxxxxx under applicable joint operating agreements (except to the extent contested in good faith); (h) Not resign as operator of any Subject Interests do operated by any Grantor until and unless the successor operator has been approved in writing by Grantee; (i) Not conduct any work or operation in any wellbore of a Subject Well, which work or operation is related to any horizon, zone formation or interval not decline included in valuethe Subject Interests without the prior written consent of Grantee; (j) Enforce the terms of all agreements related to the Xxxx-Xxxxxxx Production Payment and exercise all rights and remedies with respect thereto, all with reasonable diligence; and (k) Not amend any of the agreements related to the Xxxx-Xxxxxxx Production Payment that could adversely affect the HHOC Production Payment or the Overriding Royalty. 10.

Operation of Subject Interests. Except for any such matters which would not reasonably be expected to have a Material Adverse Effect, Borrower shall, and shall cause each of its Subsidiaries and Persons hired to perform any such functions to, as an independent contractor and as a prudent operator and at Borrower's ’s sole cost and expense: (i) cause the Subject Interests to be developed, maintained and continuously operated for the production of Hydrocarbons in a good and workmanlike manner, as would a prudent operator (without regard to the existence of the Mortgage or the OverrideMortgage), all in accordance with the Development PlanBudget and activities contemplated with respect to the Approved Expenditures, generally accepted practices, applicable operating agreements, and applicable federal, state and local laws, rules and regulations (including, without limitation, all Environmental Laws), and in a manner consistent with the production rate assumptions used in, and the levels defined in, the various production profile data provided to Lender; (ii) pay, or cause to be paid, promptly promptly, and no longer than 30 days from the due date for such amount, as and when due and payable, (A) all rentals, royalties and operating, development, production, production handling and transportation expenses and proceeds payable to the other mineral interest owners in respect of the Subject Interests or the Subject Hydrocarbons, excepting those being contested in good faith, (B) all production related-expenses and production-related taxes incurred in or arising from the operation or development of the Subject Interests, or the producing, treating, gathering, or storing, of the Subject Hydrocarbons; excepting those being contested in good faith or those not yet payable in the ordinary course of business, and (C) all general and administrative related expenses and taxes; excepting those being contested in good faith or those not yet payable in the ordinary course of business; (iii) cause machinery, equipment and facilities necessary for the production of the Subject Hydrocarbons to be kept in prime working order as would a prudent operator (without regard to the existence of the MortgageMortgage or Security Agreement) and necessary repairs, renewals, renovations, replacements, additions and improvements thereof or thereto to be promptly made; (iv) give or cause to be given to Lender written notice of every adverse claim or demand made by any Person (other than Lender or the buyer of Hydrocarbons) affecting the Subject Interests or the Subject Hydrocarbons which could have a material adverse effect on the Override Borrower or any portion thereof or on Borrowerof its Subsidiaries, and of any suit or other legal proceeding instituted with respect thereto, and cause necessary steps to be taken with reasonable diligence to protect and defend the Subject Interests and the Subject Hydrocarbons 41 against any such adverse claim or demand which could have a material adverse effect on the Override Borrower or any portion thereof, or Borrowerof its Subsidiaries, including, but not limited to, the employment of counsel for the prosecution or defense of litigation; and (v) cause the Subject Interests to be kept free and clear of liens, security interests, overriding royalty interest or similar encumbrances, other than Permitted Liens; . Borrower shall, and (vi) developshall cause each of its Subsidiaries to, or cause to be developed, any Planned Xxxxx or any other xxxxx within the Oil and Gas Leases described on Schedule I-A. Borrower will maintain, preserve, protect and keep the Subject Interests in good repair, working order and condition, and make necessary and proper repairs, renewals and replacements so that (i) its business carried on in connection therewith may be properly conducted at all times and (ii) the Subject Interests do not decline in valuetimes.