WITHOUT WARRANTY OF TITLE, EXPRESS OR IMPLIED. SPECIFICALLY WITH
RESPECT TO THE EASEMENTS, RIGHTS-OF-WAY AND PERMITS FOR THE PIPELINES COMPRISING
A PART OF THE PURCHASED PROPERTY, ASSIGNOR EXPRESSLY DISCLAIMS, AND ASSIGNEE
HEREBY WAIVES, ALL WARRANTIES AND REPRESENTATIONS THAT ASSIGNOR OWNS THE
EASEMENTS, RIGHTS-OF-WAY AND PERMITS; THAT THEY ARE IN FORCE AND EFFECT; THAT
THEY MAY BE ASSIGNED; THAT THEY ARE CONTIGUOUS; THAT THE PIPELINES LIE WITHIN
THE EASEMENTS, RIGHTS-OF-WAY AND PERMITS; OR THAT THEY GRANT THE RIGHT TO LAY,
MAINTAIN, REPAIR, REPLACE, OPERATE, CONSTRUCT, OR REMOVE THE PIPELINES. ASSIGNOR
EXPRESSLY DISCLAIMS, AND ASSIGNEE HEREBY WAIVES, ALL WARRANTIES AND
REPRESENTATIONS THAT THERE ARE ANY EASEMENTS, RIGHTS-OF-WAY, OR PERMITS IN FORCE
AND EFFECT WITH RESPECT TO THE PIPELINES. NO DUTY IS OWED BY ASSIGNOR TO
ASSIGNEE WITH RESPECT TO THE SECTOR MORTGAGE INDEBTEDNESS OTHER THAN AS SET
FORTH IN ARTICLE VIII OF THE BASE AGREEMENT. ASSIGNOR SHALL HAVE NO LIABILITY TO
ASSIGNEE AS A RESULT OF ANY DEFAULT BY ASSIGNOR WITH RESPECT TO THE SECTOR
MORTGAGE INDEBTEDNESS OR ANY ACTION TAKEN BY SECTOR CAPITAL CORPORATION AS A
CONSEQUENCE OF SUCH DEFAULT.
2
2.2
Defense of Title. To the limited extent
provided in the Base Agreement, ASSIGNOR agrees to defend title to the Property
against the claims and demands (other than the Permitted Encumbrances as defined
in the Base Agreement) of all persons claiming the same or any part thereof by,
through or under ASSIGNOR but not otherwise. Any title failure not arising by
through or under ASSIGNOR shall reduce the Net Revenue Interest of ASSIGNEE on a
proportionate basis.
2.3
CONDITION AND FITNESS OF THE PROPERTY. EXCEPT
AS EXPRESSLY SET FORTH IN THE BASE AGREEMENT, ASSIGNOR CONVEYS THE PROPERTY TO
ASSIGNEE WITHOUT ANY EXPRESS, STATUTORY OR IMPLIED WARRANTY OR REPRESENTATION OF
ANY KIND INCLUDING WARRANTIES RELATING TO (i) THE CONDITION OR MERCHANTABILITY
OF THE PROPERTY, OR (ii) THE FITNESS OF THE PROPERTY FOR A PARTICULAR PURPOSE.
ASSIGNEE HAS INSPECTED, OR BEFORE CLOSING WILL INSPECT OR WILL HAVE BEEN GIVEN
THE OPPORTUNITY TO INSPECT, THE PROPERTY AND IS SATISFIED AS TO THE PHYSICAL,
OPERATING, REGULATORY COMPLIANCE, SAFETY AND ENVIRONMENTAL CONDITION (BOTH
SURFACE AND SUBSURFACE) OF THE PROPERTY AND ACCEPTS THE PROPERTY "AS IS," "WHERE
IS," AND "WITH ALL FAULTS" AND IN ITS PRESENT CONDITION AND STATE OF REPAIR.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ASSIGNOR MAKES NO
REPRESENTATION OR WARRANTY AS TO (i) THE VALUE, QUALITY, QUANTITY, VOLUME OR
DELIVERABILITY OF ANY OIL, GAS OR OTHER. MINERALS OR RESERVES (IF ANY) IN, UNDER
OR ATTRIBUTABLE TO THE PROPERTY (INCLUDING WITHOUT LIMITATION PRODUCTION RATES,
DECLINE RATES AND RECOMPLETION OR DRILLING OPPORTUNITIES), (ii) ALLOWABLES, OR
OTHER REGULATORY MATTERS, (iii) THE PHYSICAL, OPERATING, REGULATORY COMPLIANCE,
SAFETY OR ENVIRONMENTAL CONDITION OF THE PROPERTY, (iv) PROJECTIONS AS TO EVENTS
THAT COULD OR COULD NOT OCCUR, OR (v) THE GEOLOGICAL OR ENGINEERING CONDITION OF
THE PROPERTY OR ANY VALUE THEREOF.
2.4
INFORMATION ABOUT THE PROPERTY. EXCEPT AS
EXPRESSLY SET FORTH IN THE TRANSACTION DOCUMENTS, ASSIGNOR DISCLAIMS ALL
LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENTS OR
COMMUNICATIONS