Common use of Exchange of Subject Lands Clause in Contracts

Exchange of Subject Lands. Subject to Section 3.3, at Assignor’s option, at any time prior to the Drilling Obligation Completion Date, upon notice from Assignor, the Trust shall execute, acknowledge and deliver to Assignor a recordable instrument (reasonably acceptable to Assignor) that reconveys the Royalty Interest to Assignor and releases from the Mortgage undeveloped portions of the Subject Interests within the AMI Area in connection with Assignor’s exchange of such Subject Interests for other undeveloped acreage outside the AMI Area but within the Designated Area (the “Exchange Acreage”). Concurrently with such release, Assignor and the Trust shall execute, acknowledge and deliver (a) an instrument that amends the Conveyances so that such Exchange Acreage will be subject to the Royalty Interest and be part of the Subject Interests and Subject Lands for all purposes and (b) an instrument that amends the Mortgage so that such Exchange Acreage will be subject to the Mortgage. The Designated Area governmental section in which such Exchange Acreage is located will thereafter be deemed to be part of the AMI Area under this Development Agreement for all purposes and, to the extent the Subject Interests exchanged for the Exchange Acreage constitute all of the Subject Interests within the governmental section in which such Subject Interests are located, such governmental section shall be deemed to be omitted from the AMI Area under this Development Agreement for all purposes. In no event shall Assignor drill or extend any well into any Exchange Acreage unless and until the Conveyances are amended to include such Exchange Acreage as part of the Subject Interests and Subject Lands and the Mortgage is amended so that such Exchange Acreage is subject thereto.