1.3
Agreement. This Assignment is made and
accepted subject to all of the terms of the Base Agreement, which are hereby
deemed incorporated by reference into this Assignment to the fullest extent
permitted by law. In the event of a conflict between the provisions of this
Assignment and the provisions of the Base Agreement, the provisions of the Base
Agreement shall take precedence.
ARTICLE 2. DISCLAIMER OF WARRANTIES AND TITLE DEFENSE
2.1
DISCLAIMER OF TITLE WARRANTY AND ENCUMBRANCES.
ASSIGNOR CONVEYS THE PURCHASED PROPERTY TO ASSIGNEE SUBJECT TO THE PERMITTED
ENCUMBRANCES 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)