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if for federal income tax purposes this Agreement and the operations
hereunder are regarded as a partnership, then each of the parties hereto
hereby elect to be excluded from the application of all the provisions of
Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code of 1986,
as permitted and authorized by Section 761 of said code and the regulations
promulgated hereunder. Operator is hereby authorized and directed to
execute on behalf of each of the parties hereto such evidence of this election
as may be required by the Secretary of the Treasury of the United States or
the Federal Internal Revenue Service.

15. Operator shall have the right to resign at any time, upon ten (10) days
written notice to Owners. Operator shall have the right to designate
another Operator of her/his choosing and to make assignment of this
Agreement to such designee. Operator may be removed at any time by the
vote of a majority of the Owners.

16. This Agreement may be executed in counterparts and shall extend to and
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns, and shall constitute a covenant running with the
property and mineral and leasehold estates covered thereby.

17. Liability of Parties

The liability of the Parties to this Agreement shall be several, not joint or
collective. Each Party shall be responsible only for its own obligations, and shall be
liable only for its proportionate share of the costs of developing and operating the
Contract Area. Accordingly, the liens granted among the Parties in Article VII.B.
(Expenditures and Liabilities of Parties; Liens and Security Interests) are given to
secure only the debts of each severally, and no Party shall have any liability to third
Parties to satisfy the default of any other Party in the payment of any expense or
obligation under the terms of this Agreement. It is not the intention of the Parties to
create, nor shall this Agreement be construed as creating, a mining or other
partnership, joint venture, agency relationship or association, or to render the Parties
liable as partners, co-ventures, or principals. THE PARTIES SHALL NOT BE
CONSIDERED FIDUCIARIES OR TO HAVE ESTABLISHED A CONFIDENTIAL
RELATIONSHIP, BUT RATHER SHALL BE FREE TO ACT ON AN ARM’S
LENGTH BASIS IN ACCORDANCE WITH THEIR OWN RESPECTIVE
INTERESTS.

18. FORCE MAJEURE

If any Party is rendered unable, wholly or in part, by force majeure to carry
out its obligations under this Agreement, other than the obligation to indemnify or
make money payments or furnish security, that Party shall give all other Parties
prompt written notice of the force majeure with reasonably full particulars
concerning it; the obligations of the Party giving the notice, so far as it is affected by

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