AT CLOSING; OR
(B)
IF AFTER A REASONABLE TIME FOR GOOD FAITH NEGOTIATION, PURCHASER AND
SELLER HAVE FAILED TO AGREE ON THE AMOUNT BY WHICH THE PURCHASE PRICE SHOULD BE
REDUCED PURSUANT TO SECTION 3.5(D)(I), AND SELLER HAS NOT SELECTED THE OPTION
PROVIDED FOR IN 3.5(A)(II) PRIOR TO TWO BUSINESS DAYS PRIOR TO CLOSING, THE
DISPUTE SHALL BE SUBMITTED TO BINDING ARBITRATION AS PROVIDED IN SECTION 7.14.
(C)
WITH RESPECT TO EACH UNIT OR WELL AFFECTED BY TITLE BENEFITS
REPORTED UNDER SECTION 3.4(B), THE PURCHASE PRICE SHALL BE INCREASED BY AN
AMOUNT (THE "TITLE BENEFIT AMOUNT") EQUAL TO THE INCREASE IN THE ALLOCATED VALUE
FOR SUCH UNIT OR WELL CAUSED BY SUCH TITLE BENEFITS, AS DETERMINED PURSUANT TO
SECTION 3.5(E).
THE CLOSING PAYMENT SHALL BE INCREASED BY SUCH TITLE BENEFIT
AMOUNT.
(D)
SECTION 3.5(D) SHALL BE THE EXCLUSIVE RIGHT AND REMEDY OF PURCHASER
WITH RESPECT TO SELLER'S BREACH OF ITS WARRANTY AND REPRESENTATION OF DEFENSIBLE
TITLE IN
14
SECTION 3.1(A).
THE TITLE DEFECT AMOUNT RESULTING FROM A TITLE DEFECT SHALL BE
DETERMINED AS FOLLOWS:
(I)
IF PURCHASER AND SELLER MUTUALLY AGREE UPON THE TITLE DEFECT
AMOUNT, THAT AMOUNT SHALL BE THE TITLE DEFECT AMOUNT;
(II)
IF THE TITLE DEFECT IS A LIEN, ENCUMBRANCE OR OTHER CHARGE WHICH
IS UNDISPUTED AND THE AMOUNT OF SAME CAN BE EXACTLY DETERMINED AND AGREED UPON
BY PURCHASER AND SELLER, THEN THE TITLE DEFECT AMOUNT SHALL BE THE AMOUNT
NECESSARY TO BE PAID TO REMOVE THE TITLE DEFECT FROM THE TITLE DEFECT PROPERTY;
(III)
IF THE TITLE DEFECT REPRESENTS A DISCREPANCY BETWEEN (A) THE NET
REVENUE INTEREST FOR ANY TITLE DEFECT PROPERTY (WHICH HAS BEEN AGREED TO BY
SELLER AND PURCHASER) AND (B) THE NET REVENUE INTEREST OR PERCENTAGE STATED ON
EXHIBIT 1.2(B) AND EXHIBIT 1.2(C), THEN THE TITLE DEFECT AMOUNT SHALL EQUAL THE
FOLLOWING:
THE ALLOCATED VALUE OF SUCH TITLE DEFECT PROPERTY MINUS THE PRODUCT
OF THE ALLOCATED VALUE OF SUCH TITLE DEFECT PROPERTY MULTIPLIED BY A FRACTION,
THE NUMERATOR OF WHICH IS THE NET REVENUE INTEREST FOR THE TITLE DEFECT PROPERTY
AND THE DENOMINATOR OF WHICH IS THE NET REVENUE INTEREST OR PERCENTAGE OWNERSHIP
STATED ON EXHIBIT 1.2(B) AND EXHIBIT 1.2(C); AND
(IV)
IF THE TITLE DEFECT REPRESENTS AN OBLIGATION, ENCUMBRANCE, BURDEN
OR CHARGE UPON OR OTHER DEFECT IN TITLE TO THE TITLE DEFECT PROPERTY OF A TYPE
NOT DESCRIBED IN SUBSECTIONS (I), (II) OR (III) ABOVE, THE TITLE DEFECT AMOUNT
SHALL BE DETERMINED BY TAKING INTO ACCOUNT THE ALLOCATED VALUE OF THE TITLE
DEFECT PROPERTY, THE PORTION OF THE TITLE DEFECT PROPERTY AFFECTED BY THE TITLE
DEFECT, THE LEGAL EFFECT OF THE TITLE DEFECT, THE POTENTIAL ECONOMIC EFFECT OF
THE TITLE DEFECT OVER THE LIFE OF THE TITLE DEFECT PROPERTY, THE VALUES PLACED
UPON THE TITLE DEFECT BY PURCHASER AND SELLER AND SUCH OTHER FACTORS AS ARE
NECESSARY TO MAKE A PROPER EVALUATION.
(E)
THE TITLE BENEFIT AMOUNT FOR ANY TITLE BENEFIT SHALL BE THE PRODUCT
OF (A) THE ALLOCATED VALUE OF THE AFFECTED UNIT OR WELL MULTIPLIED BY (B)(I) A