taken pursuant to Section 2.3, the
respective capital account balances of EGEL and PMOG shall be equal.
ARTICLE 3
TITLE MATTERS
SECTION 3.1
TITLE.
(A)
THE CONVEYANCE SHALL CONTAIN A SPECIAL WARRANTY OF TITLE AGAINST EVERY
PERSON LAWFULLY CLAIMING OR TO CLAIM THE INTEREST TO BE CONVEYED BY EQUITABLE TO
THE COMPANY OR ANY PART THEREOF BY, THROUGH AND UNDER EQUITABLE AND ITS
AFFILIATES, BUT NOT OTHERWISE, SUBJECT TO PERMITTED ENCUMBRANCES, BUT SHALL
OTHERWISE BE WITHOUT WARRANTY OF TITLE, EXPRESS, IMPLIED OR STATUTORY, EXCEPT
THAT THE CONVEYANCE SHALL TRANSFER TO THE COMPANY ALL RIGHTS OR ACTIONS ON TITLE
WARRANTIES GIVEN OR MADE BY EQUITABLE'S PREDECESSORS (OTHER THAN AFFILIATES OF
EQUITABLE), TO THE EXTENT EQUITABLE MAY LEGALLY TRANSFER SUCH RIGHTS.
(B)
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 3.1(A) AND THE
CONVEYANCE, SECTION 3.3 SHALL PROVIDE PMOG'S AND THE COMPANY'S EXCLUSIVE REMEDY
IN RESPECT OF ASSERTED TITLE DEFECTS REPORTED IN ACCORDANCE WITH THIS ARTICLE
3.
NEITHER PMOG NOR THE COMPANY SHALL BE ENTITLED TO MAKE ANY CLAIMS AGAINST
EQUITABLE OR ANY OF ITS AFFILIATES UNDER EQUITABLE'S SPECIAL WARRANTY OF TITLE
IN THE CONVEYANCE AGAINST ANY SUCH ASSERTED TITLE DEFECT.
9
SECTION 3.2
DEFINITIONS OF DEFENSIBLE TITLE AND PERMITTED ENCUMBRANCES.
(A)
AS USED IN THIS AGREEMENT WITH RESPECT TO THE ASSETS, THE TERM "DEFENSIBLE
TITLE" MEANS MARKETABLE TITLE IN SOUTHWESTERN VIRGINIA, FREE AND CLEAR OF ALL
LIENS, CHARGES, ENCUMBRANCES, IRREGULARITIES OR OTHER DEFECTS ("ENCUMBRANCES")
OTHER THAN PERMITTED ENCUMBRANCES.
THE TERM "TITLE DEFECT" MEANS, AS
APPLICABLE, (I) ANY ENCUMBRANCE THAT WOULD CAUSE EQUITABLE NOT TO HAVE
DEFENSIBLE TITLE OR (II) OTHER THAN WITH RESPECT TO THE LANDS COVERED BY THE
ORIGINAL LEASE OR ANY EXPLORATION AGREEMENT PMOG AREA, THE LACK OF EASEMENTS OR
OTHER AGREEMENTS COVERING THE CONTINUOUS LENGTH OF EACH PIPELINE INCLUDED IN THE
ASSETS ALLOWING FOR THE TRANSPORTATION OF THE HYDROCARBONS AS CURRENTLY
TRANSPORTED THROUGH SUCH PIPELINE.
THE TERM "ASSERTED TITLE DEFECT" MEANS A
TITLE DEFECT REPORTED BY PMOG OR THE COMPANY PURSUANT TO SECTION 3.3 HEREOF.
(B)
AS USED IN THIS AGREEMENT, THE TERM "PERMITTED ENCUMBRANCES" MEANS ANY OR
ALL OF THE FOLLOWING:
(I)
ALL CONTRACTS;
(II)
PREFERENTIAL RIGHTS;
(III)
THIRD-PARTY CONSENT REQUIREMENTS AND SIMILAR RESTRICTIONS WITH
RESPECT TO WHICH WAIVERS OR CONSENTS ARE OBTAINED BY EQUITABLE FROM THE
APPROPRIATE PARTIES PRIOR TO THE CLOSING DATE OR THE APPROPRIATE TIME PERIOD FOR
ASSERTING THE RIGHT HAS EXPIRED OR WHICH ARE EXPRESSLY NOT REQUIRED TO BE
SATISFIED PRIOR TO A TRANSFER;
(IV)
LIENS FOR CURRENT TAXES OR ASSESSMENTS NOT YET DELINQUENT OR, IF
DELINQUENT, BEING CONTESTED IN GOOD FAITH BY APPROPRIATE ACTIONS AND LISTED ON
EXHIBIT A-5;
(V)
MATERIALMAN'S, MECHANIC'S, REPAIRMAN'S, EMPLOYEE'S, CONTRACTOR'S,
OPERATOR'S AND OTHER SIMILAR LIENS OR CHARGES ARISING IN THE ORDINARY COURSE OF
BUSINESS FOR AMOUNTS NOT YET DELINQUENT (INCLUDING ANY AMOUNTS BEING WITHHELD AS
PROVIDED BY LAW), OR, IF DELINQUENT, BEING CONTESTED IN GOOD FAITH BY
APPROPRIATE ACTIONS AND LISTED ON EXHIBIT A-6;
(VI)
ALL RIGHTS TO CONSENT, BY REQUIRED NOTICES TO, FILINGS WITH, OR
OTHER ACTIONS BY GOVERNMENTAL AUTHORITIES IN CONNECTION WITH THE SALE OR