TITLE DEFECT
VALUE HEREUNDER.
(IV)
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL
A TITLE DEFECT VALUE EXCEED THE ALLOCATED VALUE OF THE WELLS, UNITS OR OTHER
ASSETS AFFECTED THEREBY.
SECTION 3.05
REMEDIES FOR TITLE DEFECTS.
(A)
UPON THE RECEIPT OF SUCH EFFECTIVE NOTICE FROM BUYER, SELLERS AND
BUYER SHALL FOR A PERIOD OF FIVE (5) BUSINESS DAYS AFTER THE TITLE DEFECT NOTICE
ATTEMPT TO MUTUALLY AGREE ON A RESOLUTION INCLUDING, BUT IF NO SUCH RESOLUTION
IS REACHED, SELLERS MAY, AT THEIR SOLE OPTION (I) ATTEMPT TO CURE SUCH TITLE
DEFECT AT ANY TIME PRIOR TO THE CLOSING, OR (II) EXCLUDE THE AFFECTED ASSET FROM
THE SALE AND REDUCE THE PURCHASE PRICE BY THE MUTUALLY AGREED ALLOCATED VALUE OF
SUCH AFFECTED ASSET.
(B)
WITH RESPECT TO EACH TITLE DEFECT THAT IS NOT CURED ON OR BEFORE
THE CLOSING, EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 3.05, THE PURCHASE
PRICE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE TITLE DEFECT VALUE AGREED UPON
IN WRITING BY BUYER AND SELLERS.
(C)
IF ANY TITLE DEFECT IS IN THE NATURE OF AN UNOBTAINED CONSENT TO
ASSIGNMENT OR OTHER RESTRICTION ON ASSIGNABILITY, THE PROVISIONS OF SECTION 3.08
SHALL APPLY.
(D)
IF ON OR BEFORE CLOSING THE PARTIES HAVE NOT AGREED UPON THE
VALIDITY OF ANY ASSERTED TITLE DEFECT OR HAVE NOT AGREED ON THE TITLE DEFECT
VALUE ATTRIBUTABLE THERETO, EITHER PARTY SHALL HAVE THE RIGHT TO ELECT TO HAVE
THE VALIDITY OF SUCH TITLE DEFECT AND/OR SUCH TITLE DEFECT VALUE DETERMINED BY
AN INDEPENDENT EXPERT PURSUANT TO SECTION 16.03. IF THE VALIDITY OF ANY ASSERTED
TITLE DEFECT, OR THE TITLE DEFECT VALUE ATTRIBUTABLE THERETO, IS NOT DETERMINED
BEFORE CLOSING, THE PURCHASE PRICE PAID AT CLOSING SHALL BE REDUCED BY VIRTUE OF
SUCH DISPUTED TITLE DEFECT OR TITLE DEFECT VALUE, AND UPON THE FINAL RESOLUTION
OF SUCH DISPUTE THE TITLE DEFECT VALUE, IF ANY, FOUND TO BE ATTRIBUTABLE TO SUCH
TITLE DEFECT SHALL, SUBJECT TO THIS SECTION, BE PAID BY BUYER TO SELLERS.
NOTWITHSTANDING THE FOREGOING, THE SELLERS SHALL HAVE UNILATERAL RIGHT TO
EXCLUDE THE AFFECTED ASSET FROM THE SALE WITH A CORRESPONDING REDUCTION IN THE
PURCHASE PRICE.
(E)
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IF THE
VALUE OF A GIVEN INDIVIDUAL TITLE DEFECT (OR INDIVIDUAL TITLE BENEFIT AS DEFINED
IN
8
SECTION 3.09(A)) DOES NOT EXCEED $250,000, THEN NO ADJUSTMENT TO THE PURCHASE
PRICE SHALL BE MADE FOR SUCH TITLE DEFECT (OR TITLE BENEFIT); HOWEVER, IF THE
VALUE OF A TITLE DEFECT (OR TITLE BENEFIT) EXCEEDS $250,000, THEN THE TOTAL
VALUE OF SUCH TITLE DEFECT (OR TITLE BENEFIT) MAY BE ASSERTED AND THE PURCHASE
PRICE SHALL BE ADJUSTED ACCORDINGLY.
SECTION 3.06
SPECIAL WARRANTY OF TITLE. EACH SELLERS HEREBY AGREES TO
WARRANT AND DEFEND ITS TITLE TO THE ASSETS SOLELY UNTO BUYER AGAINST EVERY
PERSON WHOMSOEVER LAWFULLY CLAIMING OR TO CLAIM THE SAME OR ANY PART THEREOF,
BY, THROUGH OR UNDER SUCH SELLERS, BUT NOT OTHERWISE; SUBJECT, HOWEVER, TO THE
PERMITTED ENCUMBRANCES AND THE OTHER MATTERS SET FORTH HEREIN.