GIVEN OR MADE BY SELLER'S PREDECESSORS (OTHER THAN
AFFILIATES OF SELLER), TO THE EXTENT SELLER MAY LEGALLY TRANSFER SUCH RIGHTS.
(C)
PURCHASER SHALL NOT BE ENTITLED TO PROTECTION UNDER SELLER'S
SPECIAL WARRANTY OF TITLE IN THE CONVEYANCE AGAINST ANY TITLE DEFECT REPORTED BY
PURCHASER TO SELLER UNDER THIS ARTICLE 3. ALL REPORTED TITLE DEFECTS ARE
EXPRESSLY EXCLUDED FROM PROTECTION UNDER SELLER'S SPECIAL WARRANTY OF TITLE IN
THE CONVEYANCE.
Section 3.2
Definition of Defensible Title.
As used in this Agreement, the term "Defensible Title" means that title of
Seller which, subject to Permitted Encumbrances:
(A)
ENTITLES SELLER TO RECEIVE A SHARE OF THE HYDROCARBONS PRODUCED,
SAVED AND MARKETED FROM ANY UNIT OR WELL AFTER SATISFACTION OF ALL ROYALTIES,
OVERRIDING ROYALTIES, NONPARTICIPATING ROYALTIES, NET PROFITS INTERESTS OR OTHER
SIMILAR BURDENS ON OR MEASURED BY PRODUCTION OF HYDROCARBONS (A "NET REVENUE
INTEREST") OF NOT LESS THAN THE "NET REVENUE INTEREST" SHARE SHOWN IN
EXHIBIT 1.2(B) AND EXHIBIT 1.2(C) FOR SUCH UNIT OR WELL, EXCEPT DECREASES IN
CONNECTION WITH THOSE OPERATIONS IN WHICH SELLER MAY AFTER THE EFFECTIVE TIME BE
A NON-CONSENTING CO-OWNER, DECREASES RESULTING FROM THE ESTABLISHMENT OR
AMENDMENT AFTER THE EFFECTIVE TIME OF POOLS OR UNITS, AND DECREASES REQUIRED TO
ALLOW OTHER WORKING INTEREST OWNERS TO MAKE UP PAST UNDERPRODUCTION OR PIPELINES
TO MAKE UP PAST UNDER DELIVERIES AND EXCEPT AS STATED IN SUCH EXHIBIT 1.2(B) AND
EXHIBIT 1.2(C);
(B)
OBLIGATES SELLER TO BEAR A PERCENTAGE OF THE COSTS AND EXPENSES FOR
THE MAINTENANCE AND DEVELOPMENT OF, AND OPERATIONS RELATING TO, (I) ANY UNIT OR
WELL NOT GREATER THAN THE "WORKING INTEREST" SHOWN IN EXHIBIT 1.2(B) AND EXHIBIT
1.2(C) WITHOUT INCREASE EXCEPT AS STATED IN EXHIBIT 1.2(B) AND EXHIBIT 1.2(C)
AND EXCEPT INCREASES RESULTING FROM CONTRIBUTION REQUIREMENTS WITH RESPECT TO
DEFAULTING CO-OWNERS UNDER APPLICABLE OPERATING AGREEMENTS AND INCREASES THAT
ARE ACCOMPANIED BY AT LEAST A PROPORTIONATE INCREASE IN SELLER'S NET REVENUE
INTEREST; AND
(C)
IS FREE AND CLEAR OF LIENS, ENCUMBRANCES, OBLIGATIONS, SECURITY
INTERESTS, IRREGULARITIES, PLEDGES, OR OTHER DEFECTS.
12
As used in this Agreement, the term "Title Defect" means any lien, charge,
encumbrance, obligation (including contract obligation), defect, or other matter
(including, without limitation, a discrepancy in Net Revenue Interest or Working
Interest) that causes a breach of Seller's representation and warranty in
Section 3.1(a).
As used in this Agreement, the term "Title Benefit" shall mean
any right, circumstance or condition that operates to increase the Net Revenue
Interest of Seller in any Property above that shown on Exhibit 1.2(b) and
Exhibit 1.2(c), without causing a greater than proportionate increase in
Seller's Working Interest above that shown in Exhibit 1.2(b) and Exhibit 1.2(c).
Section 3.3
Definition of Permitted
Encumbrances.
As used herein, the term "Permitted Encumbrances" means any or all of the
following:
(A)
ROYALTIES AND ANY OVERRIDING ROYALTIES, REVERSIONARY INTERESTS AND
OTHER BURDENS TO THE EXTENT THAT THEY DO NOT, INDIVIDUALLY OR IN THE AGGREGATE,
REDUCE SELLER'S NET REVENUE INTEREST BELOW THAT SHOWN IN EXHIBIT 1.2(B) AND
EXHIBIT 1.2(C) OR INCREASE SELLER'S WORKING INTEREST ABOVE THAT SHOWN IN
EXHIBIT