within ten (10) days prior to such filing.
SECTION 2.4
DEPOSIT
On or before 12:00 p.m. on February 2, 2007, Purchaser will pay to Seller an
earnest money deposit in an amount equal to $43,000,000 (the "Deposit").
The
Deposit shall be non-interest bearing and applied against the Purchase Price if
the Closing occurs or shall be otherwise distributed in accordance with the
terms of this Agreement.
ARTICLE 3
TITLE MATTERS
SECTION 3.1
SELLER'S TITLE.
(A)
EXCEPT FOR THE SPECIAL WARRANTY OF TITLE REFERENCED IN SECTION
3.1(B) AND WITHOUT LIMITING PURCHASER'S RIGHT TO ADJUST THE PURCHASE PRICE BY
OPERATION OF THIS ARTICLE 3, SELLER MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO SELLER'S TITLE TO ANY
OF THE ASSETS, AND PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT THE SOLE REMEDY
FOR ANY DEFECT OF TITLE, INCLUDING ANY TITLE DEFECT, WITH RESPECT TO ANY OF THE
ASSETS (I) BEFORE CLOSING, SHALL BE AS SET FORTH IN SECTION 3.4(D) AND (II)
AFTER CLOSING, SHALL BE PURSUANT TO THE SPECIAL WARRANTY OF TITLE REFERENCED IN
SECTION 3.1(B).
(B)
THE CONVEYANCE COVERING THE ASSETS TO BE DELIVERED BY SELLER TO
PURCHASER SHALL BE SUBSTANTIALLY IN THE FORM OF EXHIBIT B HERETO (THE
"CONVEYANCE").
THE CONVEYANCE SHALL CONTAIN A SPECIAL WARRANTY OF DEFENSIBLE
TITLE BY, THROUGH AND UNDER SELLER AND ITS AFFILIATES, BUT NOT OTHERWISE, TO THE
UNITS, WARRANTY WELLS AND OTHER ASSETS SHOWN ON EXHIBIT A-1, SUBJECT TO THE
PERMITTED ENCUMBRANCES, BUT SHALL OTHERWISE BE WITHOUT WARRANTY OF TITLE OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY OR OTHERWISE.
(C)
PURCHASER SHALL NOT BE ENTITLED TO PROTECTION UNDER SELLER'S
SPECIAL WARRANTY OF TITLE IN THE CONVEYANCE AGAINST ANY TITLE DEFECT REPORTED BY
PURCHASER UNDER SECTION 3.4(A) AND/OR ANY TITLE DEFECT ACTUALLY KNOWN BY ANY
OFFICER OF PURCHASER OR ANY OF ITS AFFILIATES PRIOR TO THE TITLE CLAIM DATE.
(D)
NOTWITHSTANDING ANYTHING HEREIN PROVIDED TO THE CONTRARY, IF A
TITLE DEFECT UNDER THIS ARTICLE 3 RESULTS FROM ANY MATTER WHICH COULD ALSO
RESULT IN THE BREACH OF ANY REPRESENTATION OR WARRANTY OF SELLER SET FORTH IN
ARTICLE 5, THEN PURCHASER SHALL ONLY BE ENTITLED TO ASSERT SUCH MATTER (I)
BEFORE CLOSING, AS A TITLE DEFECT TO THE EXTENT PERMITTED BY THIS ARTICLE 3, OR
(II) AFTER CLOSING, AS A BREACH OF SELLER'S SPECIAL WARRANTY OF TITLE CONTAINED
IN THE CONVEYANCE TO THE EXTENT PERMITTED BY THIS SECTION 3.1, AND SHALL BE
PRECLUDED FROM ALSO ASSERTING SUCH MATTER AS THE BASIS OF THE BREACH OF ANY SUCH
REPRESENTATION OR WARRANTY.
SECTION 3.2
DEFINITION OF DEFENSIBLE TITLE.
As used in this Agreement, the term "Defensible Title" means that title of
Seller with respect to the Units, Warranty Wells or other Assets shown in
Exhibit A-1 that, except for and subject to Permitted Encumbrances:
(A)
ENTITLES SELLER TO RECEIVE A SHARE OF THE HYDROCARBONS PRODUCED,
SAVED AND MARKETED FROM ANY UNIT, WARRANTY WELL OR OTHER ASSET SHOWN IN EXHIBIT
A-1 THROUGHOUT THE
8
DURATION OF THE PRODUCTIVE LIFE OF SUCH UNIT, WARRANTY WELL OR OTHER