Calculation of Title Defect Amounts, Title Benefit Amounts, and Environmental Defect Amounts Sample Clauses
This clause defines the procedures for determining the monetary value of title defects, title benefits, and environmental defects identified during a transaction. It typically outlines the methods for quantifying losses or gains associated with issues affecting property ownership or environmental compliance, such as using fair market value adjustments or specific calculation formulas. By establishing clear guidelines for these calculations, the clause ensures that both parties have a transparent and agreed-upon process for addressing discrepancies, thereby reducing disputes and facilitating fair adjustments to the transaction price.
Calculation of Title Defect Amounts, Title Benefit Amounts, and Environmental Defect Amounts. (a) The Title Defect Amount resulting from a Title Defect shall be determined as follows:
(i) if Purchaser and Seller agree in writing 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 liquidated in amount, then the Title Defect Amount shall be the amount necessary to be paid to remove the Title Defect from Seller’s interest in the affected Property;
(iii) with respect to the Target Interval (except as expressly depth limited within the Target Interval as set forth on Exhibit A-1), if the Title Defect represents a discrepancy between (A) Seller’s aggregate ownership of Net Acres for any Lease and (B) the amount of Net Acres set forth for such Lease in Exhibit A-1, and there is no discrepancy between the aggregate Net Revenue Interest of Seller in such Lease and the Net Revenue Interest set forth for such Lease in Exhibit A-1, then the Title Defect Amount shall be the product of the Allocated Value of such Lease multiplied by a fraction, the numerator of which is the difference between the number of Net Acres owned by Seller in such Lease and the number of Net Acres set forth for such Lease in Exhibit A-1, and the denominator of which is the Net Acres set forth for such Lease in Exhibit A-1;
(iv) with respect to the Target Interval (except as expressly depth limited within the Target Interval as set forth on Exhibit A-1), if the Title Defect represents a discrepancy between (A) the Seller’s aggregate Net Revenue Interest for any Property and (B) the Net Revenue Interest stated in Exhibit A-1 or Exhibit A-2, as applicable, for such Property, and (1) with respect to Properties that are ▇▇▇▇▇, the Seller’s (and Purchaser’s, as successor in interest to Seller) Working Interest in such Property is decreased below the Working Interest amount set forth for such Property on Exhibit A-2 in the same proportion as the decrease in Net Revenue Interest in such Property, or (2) with respect to Properties that are Leases, there is no discrepancy with respect to Seller’s (and Purchaser’s, as successor in interest to Seller) Net Acre ownership in such Property and the amount of Net Acres set forth for such Property on Exhibit A-1, then the Title Defect Amount shall be the product of the Allocated Value of such Property multiplied by a fraction, the numerator of which is the decrease in Seller’s aggregate Net Revenue Interest in such Property and the denominator of which is Se...