ON OR AFFECTING THE ASSETS WHICH IS DISCHARGED BY
SELLER AT OR PRIOR TO CLOSING;
(M)
ANY MATTERS SHOWN ON EXHIBIT A-1;
(N)
ANY OTHER LIENS, CHARGES, ENCUMBRANCES, DEFECTS OR IRREGULARITIES
WHICH DO NOT, INDIVIDUALLY OR IN THE AGGREGATE, DETRACT IN ANY MATERIAL RESPECT
FROM THE VALUE OF, OR INTERFERE IN ANY MATERIAL RESPECT WITH THE USE OR
OWNERSHIP OF, THE ASSETS SUBJECT THERETO OR AFFECTED THEREBY (AS CURRENTLY USED
OR OWNED), WHICH WOULD BE ACCEPTED BY A REASONABLY PRUDENT PURCHASER ENGAGED IN
THE BUSINESS OF OWNING AND OPERATING OIL AND GAS PROPERTIES, AND WHICH DO NOT
REDUCE SELLER'S NET REVENUE INTEREST BELOW THAT SHOWN IN EXHIBIT A-1, OR
INCREASE SELLER'S WORKING INTEREST ABOVE THAT SHOWN IN EXHIBIT A-1 WITHOUT A
PROPORTIONATE INCREASE IN NET REVENUE INTEREST;
(O)
MATTERS THAT WOULD OTHERWISE BE CONSIDERED TITLE DEFECTS BUT THAT
DO NOT MEET THE INDIVIDUAL TITLE DEDUCTIBLE SET FORTH IN SECTION 3.4(J);
(P)
IMBALANCES ASSOCIATED WITH THE ASSETS; AND
(Q)
LIENS GRANTED UNDER APPLICABLE JOINT OPERATING AGREEMENTS.
SECTION 3.4
NOTICE OF TITLE DEFECT ADJUSTMENTS.
(A)
TO ASSERT A CLAIM OF A TITLE DEFECT PRIOR TO CLOSING, PURCHASER
MUST DELIVER CLAIM NOTICES TO SELLER (EACH A "TITLE DEFECT NOTICE") ON OR BEFORE
APRIL 2, 2007 (THE "TITLE CLAIM DATE"); PROVIDED, HOWEVER, THAT PURCHASER AGREES
THAT IT SHALL FURNISH SELLER ONCE EVERY TWO (2) WEEKS, COMMENCING ON THE
FOURTEENTH (14TH) DAY FOLLOWING THE DATE OF THIS AGREEMENT UNTIL THE TITLE CLAIM
DATE WITH A TITLE DEFECT NOTICE IF ANY OFFICER OF PURCHASER OR ITS AFFILIATES
DISCOVER OR LEARN OF ANY TITLE DEFECT DURING SUCH TWO (2) WEEK PERIOD.
EACH
TITLE DEFECT NOTICE SHALL BE IN WRITING AND SHALL INCLUDE (I) A DESCRIPTION OF
THE ALLEGED TITLE DEFECT(S), (II) THE UNITS, WARRANTY WELLS OR OTHER ASSETS IN
EXHIBIT A-1 AFFECTED BY THE TITLE DEFECT (EACH A "TITLE DEFECT PROPERTY"), (III)
THE ALLOCATED VALUE OF EACH TITLE DEFECT PROPERTY, (IV) SUPPORTING DOCUMENTS
REASONABLY NECESSARY FOR SELLER (AS WELL AS ANY TITLE ATTORNEY OR EXAMINER HIRED
BY SELLER) TO VERIFY THE EXISTENCE OF THE ALLEGED TITLE DEFECT(S), AND (V) THE
AMOUNT BY WHICH PURCHASER REASONABLY BELIEVES THE ALLOCATED VALUE OF EACH TITLE
DEFECT PROPERTY IS REDUCED BY THE ALLEGED TITLE DEFECT(S) AND THE COMPUTATIONS
AND INFORMATION UPON WHICH PURCHASER'S BELIEF IS BASED. NOTWITHSTANDING ANY
OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, BUT SUBJECT TO PURCHASER'S
RIGHTS IN CONNECTION WITH THE SPECIAL WARRANTY OF TITLE REFERENCED IN SECTION
3.1(B), PURCHASER SHALL BE DEEMED TO HAVE WAIVED ITS RIGHT TO ASSERT TITLE
DEFECTS OF WHICH SELLER HAS NOT BEEN GIVEN NOTICE ON OR BEFORE THE TITLE CLAIM
DATE.
FOR PURPOSES HEREOF, THE "ALLOCATED VALUE" OF AN ASSET SHALL MEAN THE
PORTION OF THE PURCHASE PRICE THAT HAS BEEN ALLOCATED TO A PARTICULAR UNIT,
WARRANTY WELL OR OTHER ASSET IN EXHIBIT A-1.
(B)
SELLER SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO DELIVER TO
PURCHASER ON OR BEFORE THE TITLE CLAIM DATE, WITH RESPECT TO EACH TITLE BENEFIT,
A NOTICE (A "TITLE BENEFIT NOTICE") INCLUDING (I) A DESCRIPTION