Notice of Title Defects. Buyer shall provide Seller notice of all Title Defects no later than 5:00 p.m. MST on the date which is seven (7) days prior to the Closing Date (the "Title Claim Date"). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value. (a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below: (i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset; (ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D. (iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller; (iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value; (v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder; (vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby; (vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly; (viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and (ix) Such other factors as are reasonably necessary to make a proper evaluation. (b) The term Title Defect shall not include: (i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer; (ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset; (iii) Defects arising out of lack of survey; (iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset; (v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v); (vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and (vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Abraxas Energy Partners LP)
Notice of Title Defects. Buyer shall provide Seller with notice of all purported Title Defects no later than 5:00 p.m. MST Mountain Time on the date which is seven (7) days prior to the Closing Date (the "Title Claim Notification Date"). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Notification Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Mineral Acres, Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined Value and supporting calculations prepared by Buyer in good faith, (f) provide Buyer’s suggested means to address the Title Defect, including any suggested curative work, if any, and (fg) comply with the limitations and Title Defect Value qualifications set forth in Section 4.144.13. Notwithstanding the foregoing and without prejudicing any of Buyer’s rights hereunder, with respect to any purported Title Defects that come to Buyer’s attention, Buyer will promptly provide Seller with appropriate information with respect thereto in order to facilitate Seller’s ability to address such purported Title Defect prior to Closing. Further, Buyer agrees that it will use reasonable efforts to furnish Seller with a list of any purported Title Defects it has discovered at least once per week commencing on the seventh (7th) day following the execution of this Agreement until the Notification Date. Any matters identified Title Defect brought to Seller’s attention by Buyer during prior to the Examination Period Notification Date that is cured to Buyer’s reasonable satisfaction prior to the Notification Date shall not continue to constitute a Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes Defect and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices not be included on Buyer’s notice of Title Defects. SUBJECT TO THE SPECIAL WARRANTY OF TITLE DESCRIBED IN SECTION 4.05 BELOW, ANY MATTERS THAT MAY CONSTITUTE TITLE DEFECTS, BUT OF WHICH SELLER HAS NOT BEEN SPECIFICALLY NOTIFIED BY BUYER IN ACCORDANCE WITH THIS SECTION 4.03, SHALL BE DEEMED TO HAVE BEEN WAIVED BY BUYER. On December 21, 2017, the Parties shall meet and determine upon which which, if any, of the Title Defects, Title Defect Values Values, and methods of cure the Parties have reached agreement. Upon the receipt of such title defect notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing on January 16, 2018, to cure such defecteach outstanding Title Defect at Seller’s sole cost and expense. If Seller should elects not elect to cure a Title DefectDefect at Seller’s cost and expense prior to Closing, and no aspect of such defect Title Defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect Title Defect by the amount of the Title Defect ValueValue in accordance with this Agreement, and, subject to Section 4.04, the Asset affected by such Title Defect shall be conveyed to Buyer at Closing.
(a) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the actual Net Revenue Interest or Net Mineral Acres, as the case may be, attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations Asset is less than that stated in on Exhibit DC, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B1 - [B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest or Net Mineral Acres, as the case may be, for the affected Asset C = Net Revenue Interest or Net Mineral Acres, as the case may be, for the affected Asset as set forth on Exhibit D.C; provided, however, that notwithstanding anything to the contrary in this clause (ii), if the Working Interest attributable to any such Asset as set forth on Exhibit C is not reduced in the same proportion as the Net Revenue Interest set forth on Exhibit C is reduced, then clause (iii) shall apply and this clause (ii) shall not apply.
(iii) If the Title Defect represents an obligation, encumbrance, burden burden, or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidatedunliquidated or if the Title Defect is not of the type described in clause (i) or clause (ii), the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and SellerSeller and such other factors as are reasonably necessary to make a proper determination;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post post-Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected therebyAsset set forth on Exhibit C;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from remain in the purchase and sale contemplated by this Agreement, and but the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ixviii) Such other factors as mutually-agreed upon by the Parties in writing as are reasonably necessary to make a proper evaluationdetermine the value attributable to each Title Defect.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Notice of Title Defects. Buyer shall provide As a condition to Purchaser asserting any claim with respect to any alleged Title Defect, Purchaser must deliver a valid Notice or Notices (each a “Title Defect Notice”) with respect to such alleged Title Defect to Seller on or before 5:00 p.m. Central Standard Time on August 15, 2018 (the “Defect Deadline”). To give Seller an opportunity to commence reviewing and curing Title Defects, Purchaser agrees to use commercially reasonable efforts to give Seller, on or before the end of each calendar week prior to the Defect Deadline (whether before or after Closing), written notice of all alleged Title Defects no later than 5:00 p.m. MST on (as well as any claims that would be claims under the date special warranty of Defensible Title set forth in the Conveyances) discovered by Purchaser during the preceding calendar week, which is seven (7) days notice may be preliminary in nature and supplemented prior to the Closing Date (the "Title Claim Date")Defect Deadline. To In order to be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the a valid Title Defect in reasonable detail (including any Notice as to each alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, each such notice shall be deemed to have been waived by Buyer for all purposes in writing and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not must include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by a description of the reasonable efforts of Buyeralleged Title Defect;
(ii) Defects in the early chain of title consisting a description of the failure Oil and Gas Property subject to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for such alleged Title Defect (the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset“Title Defect Property”);
(iii) Defects arising out the Allocated Value of lack of survey;each Title Defect Property; and
(iv) Defects arising out Purchaser’s good faith reasonable estimate of lack the Title Defect Amount attributable to such Title Defect and the computations and information upon which Purchaser’s estimate is based. As soon as practical after the delivery of corporate a Title Defect Notice, Purchaser shall provide such documentation, to the extent in Purchaser’s or other entity authorization unless Buyer provides a reasonable basis for the Purchaser’s Representatives possession or control, as is reasonably necessary to support Purchaser’s assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
such Title Defect. SUBJECT TO PURCHASER’S RIGHTS HEREUNDER WITH RESPECT TO BREACHES OF THE SPECIAL WARRANTY OF DEFENSIBLE TITLE SET FORTH IN THE CONVEYANCES AND PURCHASER’S RIGHTS TO INDEMNITY PURSUANT TO (vX) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(vSECTION 11.3(a) WITH RESPECT TO A BREACH OF THE COVENANTS AND AGREEMENTS SET FORTH IN SECTION 5.2, SECTION 5.4, AND SECTION 5.5 AND (Y) SECTION 11.3(b) WITH RESPECT TO A BREACH OF THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.5, SECTION 3.8, SECTION 3.9, SECTION 3.10, SECTION 3.12, SECTION 3.13 AND SECTION 3.15, PURCHASER SHALL BE DEEMED TO HAVE WAIVED AND RELEASED, AND COVENANTS THAT IT SHALL WAIVE AND RELEASE, ANY AND ALL TITLE DEFECTS (AND ANY ADJUSTMENTS TO THE UNADJUSTED PURCHASE PRICE ATTRIBUTABLE THERETO) FOR WHICH SELLER HAS NOT RECEIVED ON OR BEFORE THE DEFECT DEADLINE A VALID TITLE DEFECT NOTICE THAT SATISFIES ALL OF THE CONDITIONS AND REQUIREMENTS SET FORTH IN THIS SECTION 6.1(A);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Energy Resources 12, L.P.)
Notice of Title Defects. Buyer shall provide give Seller written notice of all Title Defects no later than 5:00 p.m. MST on the date which is seven (7) days prior discovered by Buyer by delivering to the Closing Date (the "Seller a written “Notice of Title Claim Date")Defects” setting forth such Title Defects. To be effective, such notice must The Notice of Title Defects shall (a) be in writingdescribe the Title Defect, (b) be received by Seller on or prior to describe the basis of the Title Claim DateDefect, (c) describe include documentation supporting the basis of the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest)Defect, (d) identify describe in general terms the specific Asset or Assets affected by curative action that Buyer reasonably anticipates would need to be taken in order to cure such Title Defect, (e) include describe Buyer’s good faith estimate of (i) the reduction in (i) the Allocated Property’s Allocated Value, or (ii) the Wapiti Non-Producing Interest’s WNPI Allocated Value caused by the Title Defect, taking into consideration the nature of the Title Defect and the likelihood that such Title Defect may actually result in a claim against or loss of title (“Title Defect Value”) (provided that the Title Defect Value, as together with the aggregate Title Defect Values attributable to any other Title Defects affecting such Allocated Property or Wapiti Non-Producing Interest, shall not exceed the lesser of the Allocated Property’s Allocated Value or the Wapiti Non-Producing Interest’s WNPI Allocated Value, or the cost to cure the Title Defect(s), if the cost to cure is reasonably determined by Buyer in good faithdeterminable), and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but include a description of which Seller has not been specifically notified each Interest Addition discovered by Buyer in accordance with Section 4.5(d) and (g) include associated calculations and documentation. To give Seller an opportunity to commence reviewing and curing alleged Title Defects, Buyer shall regularly and promptly deliver Notice(s) of Title Defects to Seller up to and through the foregoingDefect Notice Deadline; provided that failure to provide a preliminary notice of a Title Defect shall not prejudice Buyer’s right to assert such Title Defect in a final Notice of Title Defects. The final Notice of Title Defects shall be delivered on or before March 15, shall 2012 (the “Defect Notice Deadline”). Buyer will be deemed to have been conclusively waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, (A) any Title Defect Values about which it fails to notify Seller in writing prior to the Defect Notice Deadline and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90B) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the any individual Title Defect Value.
(a) The value attributable with respect to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, which the Title Defect Value is less than $25,000.00 (the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the “Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluationThreshold”).
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Notice of Title Defects. Buyer Prima shall provide Seller notice of all Title Defects no later than 5:00 p.m. MST Mountain Time on the date which is seven (7) days prior to the Closing Date March 24, 2011 (the "“Title Claim Date"”). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer Prima in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any Subject to Section 12.10, any matters identified by Buyer Prima during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer Prima in accordance with the foregoing, shall be deemed to have been waived by Buyer each of the Buyers for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunderObligations. Upon receipt of notices of Title Defects, the Parties Seller and Prima shall meet and determine upon which of the Title Defects, Title Defect Values Values, and methods of cure the Parties Seller and Prima have reached agreement. Upon the its receipt of such notice from BuyerPrima, Seller shall have the option, but not the obligation, for a period ending ninety thirty (9030) days after the Closing to cure such defectTitle Defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer Prima in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations Well is less than that stated in Exhibit DC, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.C;
(iii) If the Title Defect represents an obligation, encumbrance, burden burden, or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer Buyers is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer Seller and SellerPrima;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder or in connection with the Breach of any representation and warranty hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets Well affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from remain in the purchase and sale contemplated by this Agreement, and but the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after the Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that include those matters deemed not to impair marketability in accordance with any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of applicable title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis standards for the assertion that such failure or omission has resulted in a third party's actual and superior claim State of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgmentWyoming.
Appears in 1 contract
Notice of Title Defects. (a) Upon the discovery of a Title Defect by Buyer, Buyer shall provide immediately notify Seller in writing of such Title Defect. Any such notice by Buyer shall include appropriate evidence and documentation to substantiate its position and shall be delivered to Seller. Within five (5) business days after Seller's receipt of all the title defects notice, Seller shall notify Buyer whether Seller agrees with Buyer's claimed Title Defects no later than 5:00 p.m. MST on and/or the date which is seven proposed Defect Values therefore (7) days prior to the Closing Date (the "Title Claim DateSeller's Response"). To be effectiveThe "Defect Value" shall mean the value by which any Property subject to this Agreement is impaired or reduced as a result of the existence of a Title Defect. If Seller does not agree with any claimed Title Defect and/or the proposed Defect Value therefore, then the parties shall enter into good faith negotiations and shall attempt to agree on such matters. If the notice must of Title Defect is given and the Seller does not agree with the claimed Title Defect and/or the proposed Defect Value, the parties shall mutually agree upon an appropriate independent consultant in the state to resolve all points of disagreement relating to Title Defects and Defect Values. If within ten (a10) be in writing, (b) be received by Seller on or prior to days after the Title Claim Date, (c) describe notice of the Title Defect in reasonable detail (including has been provided by Buyer the parties have failed to mutually agree upon such appointment then each party shall retain such a consultant and those two consultants shall retain a third such consultant. The cost of any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected such consultants shall be borne 50% by such Title Defect, (e) include Seller and 50% by Buyer. Each party shall present a written statement of its position on the Title Defect Value, as reasonably determined by Buyer and/or Defect Value in good faithquestion to the consultants within five (5) business days after the third consultant is selected, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but consultants shall make a determination of which Seller has not been specifically notified by Buyer all points of disagreement in accordance with the foregoing, terms and conditions of this Agreement within ten (10) business days of receipt of such position statements. The determination by the consultants shall be deemed to have been waived by Buyer for all purposes conclusive and binding on the parties, and shall constitute Permitted Encumbrances and Assumed Obligations hereunderbe enforceable against any party in any court of competent jurisdiction. Upon receipt of notices of Title Defects, If the Parties shall meet and determine upon which Defect Value of the Title Defects, Title Defect Values and methods Defect(s) exceeds five percent (5%) of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not Sale Price then either party may elect to cure a Title Defect, terminate this transaction and no aspect of such defect is reasonably in dispute, the Purchase Price termination shall be adjusted for such defect by the amount of the Title Defect Valuetreated consistent with Paragraph 14 hereof.
(a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Energy Corp of America)
Notice of Title Defects. Buyer shall provide Seller notice of all Title Defects no later than 5:00 p.m. MST on the date which is seven (7) days prior to the Closing Date (the "“Title Claim Date"”). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇W▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's ’s files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's ’s actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's ’s actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (St Mary Land & Exploration Co)
Notice of Title Defects. (a) If Buyer discovers any alleged Title Defect affecting any Asset, Buyer shall provide notify Seller notice of all the alleged Title Defects Defect as promptly as possible, but no later than 5:00 p.m. MST on the date which is seven (7) days prior to expiration of the Closing Date (the "Title Claim Date")Examination Period. To be effective, such this notice (a “Title Defect Notice”) must (ai) be in writing, ; (bii) be received by Seller on or prior to the Title Claim Date, expiration of the Examination Period; (ciii) describe the Title Defect in reasonable sufficient, specific detail (including any alleged variance in the Net Revenue Interest or Working Interest); (iv) include copies of documents necessary for Seller to verify the existence of the alleged Title Defect, (dv) identify the specific Asset or Assets affected by such the Title Defect, ; and (evi) include the Title Defect Value, Value as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14Buyer. Any matters identified by Buyer during the Examination Period that constitute otherwise may have constituted Title Defects, but of which Seller has that are not been specifically notified by Buyer so described in a timely Title Defect Notice complying and delivered in accordance with the foregoingthis Section 4.04(a), shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon Encumbrances.
(b) After receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, an effective Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from BuyerNotice, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to attempt to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Valueat any time prior to the Closing and to postpone the Closing Date up to thirty (30) days beyond the date set forth in Section 12.01 to facilitate the cure.
(ac) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the a Title Defect notices Notice shall be determined in good faith based upon the criteria set forth below:
(i) If the Title Defect is a lien upon on any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;.
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Wellwell, PUD Locationunit, PDNP, well location or Probable and/or Possible Locations Lease is less than that stated in Exhibit DB or the Working Interest attributable to any well, unit or well location is greater than that stated in Exhibit B, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking take into account the Allocated Value of relative change in the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, interest from Exhibit B and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the appropriate Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by . For purposes of this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 term “Allocated Value” means, with respect to the contraryany Asset, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject amount allocated to any accommodation implemented pursuant to that Asset under Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation11.01.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Notice of Title Defects. Buyer shall provide Seller notice of all Title Defects no later than 5:00 p.m. MST on the date which is seven (7) days prior to the Closing Date (the "“Title Claim Date"”). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values Values, and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden burden, or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values Value placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from remain in the purchase and sale contemplated by this Agreement, and but the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than governmental consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by include those matters deemed not to impair marketability in accordance with the reasonable efforts of Buyer;
(ii) Defects in the early chain of applicable title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis standards for the assertion that such failure or omission has resulted state in a third party's actual and superior claim of title to which the affected Asset;
(iiiAsset(s) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgmentis located.
Appears in 1 contract
Sources: Purchase and Sale Agreement (St Mary Land & Exploration Co)
Notice of Title Defects. Buyer shall provide Seller notice of all As a condition to Purchasers asserting any claim with respect to any alleged Title Defects no later than Defect, Purchasers must deliver a valid Notice or Notices (each a “Title Defect Notice”) with respect to such alleged Title Defect to Sellers on or before 5:00 p.m. MST Central Standard Time on the date which that is seven thirty (7) days prior to the Closing Date (the "Title Claim Date"). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (9030) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect Execution Date (the "Title “Defect Value"Deadline”) that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth belowincluding:
(i) If a description of the alleged Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected AssetDefect;
(ii) If the Mineral Interest or Well subject to such Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.Defect;
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of each Mineral Interest subject to the affected Asset, the portion of the Asset affected by the alleged Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Purchasers’ good faith reasonable estimate of the Defect Amount attributable to such Title Defect and the computations and information upon which Purchasers’ estimate is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;based; and
(v) The such reasonable documentation for Sellers to verify such Title Defect Value which shall include, to the extent in the possession or control of Purchasers, (1) a copy of the relevant document to the extent the alleged Title Defect shall be determined without duplication is a document, (2) the deed preceding and following a gap in the chain of any costs title or losses included a title opinion describing the gap in another reasonable detail, to the extent the basis of the alleged Title Defect Value hereunder;
is a gap in a member of the Subject Company Group’s chain of title, (vi3) Notwithstanding anything herein a copy of the document creating or evidencing the Lien or encumbrances, to the contrary, in no event shall a extent the basis of the alleged Title Defect Value exceed is a Lien or encumbrance and (4) any other document reasonably necessary for the Allocated Value Sellers or the Title Arbitration Panel to verify and confirm the existence of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If Defect Amount. The failure to include any of the items above shall not invalidate any Title Defect claim if the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase Notice materially complies with these provisions and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, reasonably identifies the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after ClosingDefect. EXCEPT WITH RESPECT TO ANY CLAIMS PURSUANT TO THE PROVISIONS OF THIS ARTICLE 3, THE SPECIAL WARRANTY OF TITLE SET FORTH IN SECTION 3.6, ANY LIEN THAT SECURES SUBJECT COMPANY INDEBTEDNESS, THE CERTIFICATE TO BE DELIVERED AT THE CLOSING PURSUANT TO SECTION 10.2(e), SECTION 5.8(c) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluationAND SECTION 5.9, PURCHASERS SHALL BE DEEMED TO HAVE WAIVED AND RELEASED, AND COVENANTS THAT IT SHALL WAIVE AND RELEASE, ANY AND ALL TITLE DEFECTS FOR WHICH SELLERS HAVE NOT RECEIVED ON OR BEFORE THE DEFECT DEADLINE A VALID TITLE DEFECT NOTICE.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Securities Purchase Agreement (Kimbell Royalty Partners, LP)
Notice of Title Defects. Buyer shall provide Seller give Sellers written notice of all any Oil and Gas Property that Buyer alleges in good faith to have a Title Defects Defect (a “Title Defect Notice”) no later than September 30, 2011, at 5:00 p.m. MST on the date which is seven (7) days prior to the Closing Date p.m., Central Daylight Time (the "“Title Claim Defect Notice Date"”). To be effective, such Such notice must (a) shall be in writing, writing and shall include the following information: (bi) be received by Seller on or prior to a description of the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (eii) include the reasonable basis for the Title Defect, (iii) the Allocated Value of the affected Oil and Gas Property, and (iv) the Title Defect ValueAmount and the computations upon which Buyer’s belief is based. Upon the written request of Sellers, Buyer shall promptly make available or deliver to Sellers (by electronic mail or otherwise) any reasonable documentation supporting the basis for any Title Defect set forth in a Title Defect Notice. In determining which portions of an Oil and Gas Property has a Title Defect, it is the intent of the parties to include, to the extent possible, only that portion of the affected Oil and Gas Property (whether a Well, unit or leasehold interest, as reasonably determined applicable) materially and adversely affected by Buyer the defect or basis for such Oil and Gas Property being treated as having a Title Defect. Subject only to the special warranty of title set forth in good faith, the conveyances and (f) comply with the limitations and Title Defect Value qualifications limited title warranty set forth in Section 4.14. Any 3.16(a), any matters identified by Buyer during the Examination Period that may otherwise constitute Title Defects, but of which Seller has Sellers have not been specifically notified by Buyer in accordance with the foregoingforegoing by the Title Defect Notice Date, shall be deemed to have been be waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreementpurposes. Upon the receipt of such notice an effective Title Defect Notice from Buyer, Seller Sellers shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to attempt to cure such defectTitle Defect at Sellers’ sole cost and expense at any time prior to Closing. If Seller should not elect to cure a The Oil and Gas Property affected by any uncured Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price Defect at Closing shall be adjusted for such defect by the amount of the a “Title Defect ValueProperty”.
(a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Strategic American Oil Corp)
Notice of Title Defects. Buyer shall provide give Seller written notice of all any Oil and Gas Property that Buyer alleges in good faith to have a Title Defects Defect (a “Title Defect Notice”) no later than January 18, 2011, at 5:00 p.m. MST on the date which is seven (7) days prior to the Closing Date p.m., Central Daylight Time (the "“Title Claim Defect Notice Date"”). To be effective, such Such notice must (a) shall be in writing, writing and shall include the following information: (bi) be received by Seller on or prior to a description of the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (eii) include the reasonable basis for the Title Defect, (iii) the Allocated Value of the affected Oil and Gas Property, and (iv) the Title Defect ValueAmount and the computations upon which Buyer’s belief is based. Upon the written request of Seller, Buyer shall promptly make available or deliver to Seller (by electronic mail or otherwise) any reasonable documentation supporting the basis for any Title Defect set forth in a Title Defect Notice. In determining which portions of an Oil and Gas Property has a Title Defect, it is the intent of the parties to include, to the extent possible, only that portion of the affected Oil and Gas Property (whether a Well, unit or leasehold interest, as reasonably determined applicable) materially and adversely affected by Buyer the defect or basis for such Oil and Gas Property being treated as having a Title Defect. Subject only to the special warranty of title set forth in good faith, the conveyances and (f) comply with the limitations and Title Defect Value qualifications limited title warranty set forth in Section 4.14. Any 3.16(a), any matters identified by Buyer during the Examination Period that may otherwise constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoingforegoing by the Title Defect Notice Date, shall be deemed to have been be waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreementpurposes. Upon the receipt of such notice an effective Title Defect Notice from Buyer, Seller shall have the option, in addition to the remedies set forth in Section 6.2, but not the obligation, for a period ending ninety (90) days after the Closing to attempt to cure such defectTitle Defect at Seller’s sole cost and expense at any time prior to Closing. If Seller should not elect to cure a The Oil and Gas Property affected by any uncured Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price Defect at Closing shall be adjusted for such defect by the amount of the a “Title Defect ValueProperty.
(a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.”
Appears in 1 contract
Sources: Purchase and Sale Agreement (Strategic American Oil Corp)
Notice of Title Defects. In order to exercise its rights under this Section, Buyer shall provide Seller notice of all Title Defects no later than 5:00 p.m. MST CST on the date which is seven (7) days prior to the Closing Date March 8, 2011 (the "Title Claim Date"). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values Values, and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit DC, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.C.
(iii) If the Title Defect represents an obligation, encumbrance, burden burden, or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from remain in the purchase and sale contemplated by this Agreement, and but the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);[Intentionally Omitted]
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and;
(vii) Those matters that do not impair marketability in accordance with the applicable title standards for the State in which the affected Asset is located;
(viii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment; and
(ix) The lack of title in the name of Seller as to those Assets in which Seller's rights and interest are created by an operating agreement or any other instrument by which Seller has rights or interests, or has the right to acquire other interests.
Appears in 1 contract
Sources: Purchase and Sale Agreement (High Plains Gas, Inc.)
Notice of Title Defects. Buyer shall provide Seller notice of all purported Title Defects no later than 5:00 p.m. MST Mountain Time on the date Notification Date; provided, however, that (1) Buyer agrees that it will use reasonable efforts to furnish Seller, as soon as practicable until the Notification Date, written notice of any Title Defect that Buyer discovers or learns about during that week, which is seven (7) days notice may be preliminary in nature and supplemented prior to the Closing Date Notification Date, and (2) the "failure of Buyer to give Seller such preliminary notice will not waive any Title Claim Date")Defects. To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Notification Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined Value and supporting calculations prepared by Buyer in good faith, (f) provide Buyer’s suggested means to address the Title Defect, including any suggested curative work, and (fg) comply with the limitations and Title Defect Value qualifications set forth in Section 4.144.13. Any matters identified by Buyer during the Examination Period that constitute Title DefectsANY MATTERS THAT MAY CONSTITUTE TITLE DEFECTS (EXCEPT THOSE COVERED BY THE SPECIAL WARRANTY OF TITLE SET FORTH IN THE ASSIGNMENT, but of which Seller has not been specifically notified by Buyer in accordance with the foregoingBY THE WARRANTY IN THE WARRANTY DEEDS TRANSFERRING THE FEE SURFACE INTERESTS OR BY THE REPRESENTATIONS AND WARRANTIES IN SECTION 5.29), shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunderBUT OF WHICH SELLER HAS NOT BEEN SPECIFICALLY NOTIFIED BY BUYER IN ACCORDANCE WITH THE FOREGOING, SHALL BE DEEMED TO HAVE BEEN WAIVED BY BUYER FOR ALL PURPOSES AND SHALL CONSTITUTE PERMITTED ENCUMBRANCES AND ASSUMED OBLIGATIONS. Upon the receipt of notices of Title Defectssuch notice from Buyer, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values Values, and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety thirty (9030) days after the Closing to cure such defectTitle Defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect Title Defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect Title Defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, Well or Probable and/or Possible Locations undeveloped location is less than that stated in Exhibit DC, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B1 - [B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.C.
(iii) If the Title Defect represents an obligation, encumbrance, burden burden, or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post post-Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets Asset affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from remain in the purchase and sale contemplated by this Agreement, and but the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ixviii) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by include those matters deemed not to impair marketability in accordance with the reasonable efforts of Buyer;
(ii) Defects in the early chain of applicable title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis standards for the assertion that such failure or omission has resulted in a third party's actual and superior claim State of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgmentUtah.
Appears in 1 contract
Notice of Title Defects. Buyer shall provide Seller notice of all Title Defects no later than 5:00 p.m. MST on the date which is seven (7) days prior to the Closing Date (the "Title Claim Date"). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇Wells, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Abraxas Petroleum Corp)
Notice of Title Defects. Buyer shall provide Seller notice of all Title Defects no later than 5:00 p.m. MST on the date which is seven (7) days prior to the Closing Date (the "“Title Claim Date"”). To be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer ▇▇▇▇▇ during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values Values, and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations Allocated Asset is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × x (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden burden, or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values Value placed upon the Title Defect by Buyer ▇▇▇▇▇ and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets Allocated Asset affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from remain in the purchase and sale contemplated by this Agreement, and but the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's ’s files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer ▇▇▇▇▇ provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's ’s actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer ▇▇▇▇▇ provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's ’s actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(viivi) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement
Notice of Title Defects. (a) Buyer shall provide notify Seller notice of all alleged Title Defects as promptly as possible, but no later than 5:00 p.m. MST on the date which is seven (7) days prior to expiration of the Closing Date (the "Title Claim Date")Examination Period. To be effective, such notice (a “Title Defect Notice”) must (ai) be in writing, ; (bii) be received by Seller on or prior to the Title Claim Date, expiration of the Examination Period; (ciii) describe the Title Defect in reasonable reasonably-specific detail (including any alleged variance in the Net Revenue Interest or Working Interest), ; (div) identify the specific Asset or Assets affected by such the Title Defect, ; and (ev) include the value of the Title Defect Value, as reasonably determined by Buyer in good faithBuyer. Notwithstanding Buyer’s rights and remedies under this Agreement (including indemnification) for Seller’s breach of its representations and warranties under this Agreement, and (f) comply with subject to the limitations and Title Defect Value qualifications set forth special warranty of title in Section 4.14. Any the Assignment, any matters identified by Buyer during the Examination Period that constitute otherwise may have constituted Title Defects, but of which Seller has that are not been specifically notified by Buyer so described in a timely Title Defect Notice complying and delivered in accordance with the foregoingthis Section 4.04(a), shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect ValueEncumbrances.
(ab) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the a Title Defect notices Notice shall be determined in good faith based upon the criteria set forth below:
(i) If the Title Defect is a lien upon on any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;.
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, proved project or Probable and/or Possible Locations undeveloped location is less than that stated in Exhibit DB, and there is a proportionate decrease in the Working Interest stated in Exhibit Exhibit B for such Well proved project or undeveloped location, then the Title Defect Value shall be is the absolute value product of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, multiplied by a fraction, the affected Asset shall be excluded from numerator of which is the purchase difference between the Net Revenue Interest set forth in Exhibit B and sale contemplated by the actual Net Revenue Interest, and the denominator of which is the Net Revenue Interest stated in Exhibit B. For purposes of this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 term “Allocated Value” means, with respect to the contraryany Asset, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject amount allocated to any accommodation implemented pursuant to that Asset under Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation11.01.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Notice of Title Defects. (a) If Buyer discovers any Title Defect affecting any Asset, Buyer shall provide Seller notice notify the Sellers of all the alleged Title Defects Defect as promptly as possible but no later than 5:00 p.m. MST on the date which is seven (7) days prior to expiration of the Closing Date (the "Title Claim Date")Examination Period. To be effective, such this notice (a “Title Defect Notice”) must (ai) be in writing, ; (bii) be received by Seller on or the Sellers prior to the Title Claim Date, expiration of the Examination Period; (ciii) describe the Title Defect in reasonable reasonably sufficient detail (including any alleged variance in the Net Revenue Interest or Working Interest), ; (div) identify the specific Asset or Assets affected by such the Title Defect, ; and (ev) include the value of the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14Buyer. Any matters identified by Buyer during the Examination Period that constitute otherwise may have constituted Title Defects, but of which Seller has that are not been specifically notified by Buyer so described in a timely Title Defect Notice complying and delivered in accordance with the foregoingthis Section 4.04(a), shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon Encumbrances.
(b) After receipt of notices of an effective Title DefectsDefect Notice, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller Sellers shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to attempt to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Valueat any time prior to the Closing and to postpone the Closing Date (with respect to all of the Assets or only those Assets affected by the Title Defect) up to thirty (30) days beyond the date set forth in Section 12.01 to facilitate the cure; provided however that the foregoing shall not limit the Sellers’ ability to elect remedies for Title Defects as provided in Section 4.05(a).
(ac) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the a Title Defect notices Notice shall be determined in good faith based upon the criteria set forth below:
(i) If the Buyer and Sellers agree on the Title Defect Value, that amount shall be the Title Defect Value.
(ii) If the Title Defect is a lien upon an Encumbrance on any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien Encumbrance from the affected Asset;.
(iiiii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations NRI for a Federal Unit described on Exhibit F is less than that stated the percentage or decimal interest set forth in Exhibit DF as the Company’s NRI for such Federal Unit, then the Title Defect Value shall will be the absolute value product of (A) the number determined by relative change from the following formula: Title Defect Value = A × NRI as shown in Exhibit F and (1-[B/C]B) A = the Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.such Federal Unit.
(iiiiv) If the Title Defect represents an obligation, encumbranceEncumbrance, burden or charge upon on the affected Asset (including any an instance where the NRI for a Well is less than the NRI for the applicable Federal Unit or an instance of an increase in Working Interest a WI for a Well or ▇▇▇▇▇ for which there is not a proportionate increase in Net Revenue InterestNRI) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the probability that a potential title failure will result in an actual title failure, the Title Defect Values Value placed upon the Title Defect by Buyer and Seller;the Sellers, and any such other reasonable factors as are necessary to make a proper evaluation.
(ivv) If a Title Defect is not in effect effect, affects only certain depths, or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such the consequences of that fact shall be taken into account in determining the Title Defect Value;.
(vvi) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;Value.
(vivii) Notwithstanding anything herein in this Agreement to the contrary, in no event shall a Title Defect Value exceed the proportional share of the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets Federal Unit affected thereby;
(vii) If by the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;Defect.
(viii) Notwithstanding To give the provisions of this Section 4.03 Sellers an opportunity to commence reviewing possible Title Defects, Buyer shall give the Sellers, on or before 5:00 p.m. Mountain Time each Friday prior to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting expiration of the failure to recite marital status Examination Period, notice of all Title Defects discovered by Buyer during the preceding week, which notice may be preliminary in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual nature and superior claim of title supplemented prior to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption expiration of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgmentExamination Period.
Appears in 1 contract
Sources: Membership Interest and Asset Purchase Agreement (Resolute Energy Corp)
Notice of Title Defects. Buyer shall provide deliver to Seller notice of all a written “Title Defects Defect Notice” as soon as reasonably possible but no later than 5:00 p.m. MST p.m., Mountain Time, on the date which is seven (7) days prior to Defect Notice Date. The Title Defect Notice must satisfy the Closing Date (the "Title Claim Date"). To be effective, following conditions precedent: such notice must (a1) be in writing, writing and asserted in good faith; (b2) be received by Seller on name the affected Lease or prior to Well (such affected Lease or Well is a “Title Defect Property”); (3) describe each Title Defect and the Title Claim Date, basis for it; (c4) describe the Title Defect in reasonable detail (including any alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such necessary curative for each Title Defect, ; (e5) include attach copies of the Supporting Documentation; (6) state the Allocated Value of the Title Defect Value, as reasonably determined by Buyer in Property; (7) state Buyer’s good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount faith estimate of the Title Defect Value.
; and (a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria 8) set forth below:
(i) If the Title Defect computations upon which Buyer’s estimate is a lien upon any Assetbased; provided, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is however, that the Net Revenue Interest attributable sufficiency or volume of documents delivered pursuant to this Section 4.2(c) shall not serve as any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then basis to dispute the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount validity of the Title Defect Value shall Notice. To give Seller an opportunity to commence reviewing and curing Title Defects, Buyer agrees to use reasonable efforts to give Seller, once at the end of every two week period prior to the Defect Notice Date, written notice of all alleged Title Defects discovered by Buyer during the preceding two week period, which notice may be determined by taking into account preliminary in nature and supplemented prior to the Allocated Value expiration of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value Notice Date; provided that failure to provide preliminary notice of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein not prejudice Buyer’s right to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of assert any Title Defect comprising hereunder on or before the Defect Notice Date. “Supporting Documentation” for a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term particular Title Defect shall not include:
means, (i) Defects based solely on an assertion that Seller's files lack informationif the basis is derived from any document, provided that any missing material information can be obtained by the reasonable efforts a copy of Buyer;
such document (or pertinent part thereof) or (ii) Defects if the basis is derived from any gap in the early Seller’s chain of title consisting of title, the failure to recite marital status in a document recorded documents preceding and following the gap, or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) if the basis is not as described in subsections (i) and (ii), then reasonable, written documentation. Buyer irrevocably waives all Claims for Title Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for not submitted by 5:00 p.m., Mountain Time, on the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgmentDefect Notice Date.
Appears in 1 contract
Notice of Title Defects. If Buyer discovers any Title Defect, Buyer shall provide promptly notify Seller notice of all Title Defects no later than 5:00 p.m. MST on the date which is seven (7) days thereof prior to the Closing Date (expiration of the "Title Claim Date")Examination Period. To be effective, such notice must (a “Title Defect Notice”) shall be in writing and shall include (a) be in writinga description of each alleged Title Defect, (b) be received by Seller on the Asset or prior to the portion thereof affected thereby (each “Title Claim DateDefect Property”), (c) describe the value of such Title Defect in reasonable detail Property (including any alleged variance in which shall be the Net Revenue Interest or Working InterestAllocated Value thereof), (d) identify the specific Asset or Assets affected by documentation sufficient to reasonably support such asserted Title Defect, and (e) include the amount which Buyer reasonably believes to be the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Amount resulting from such alleged Title Defect Value qualifications and the computations and information upon which Buyer’s belief is based. To give Seller an opportunity to commence reviewing and curing any Title Defects, Buyer agrees to use reasonable efforts to give Seller, each Monday following the execution of this Agreement but prior to the expiration of the Title Examination Period, written notice of all Title Defects (as well as any claims that would be claims under the Special Warranty set forth in Section 4.14. Any matters identified the Assignments) discovered by Buyer during the previous week, which notice may be preliminary in nature and supplemented from time to time prior to expiration of the Title Examination Period; provided, however, that Buyer’s failure to notify Seller as set forth above shall not constitute a waiver of any such alleged Title Defect to the extent that notice is received prior to the expiration of the Title Examination Period. Subject to Buyer’s rights with respect to any breach by Seller of Section 7.03, any matters that may otherwise constitute Title Defects but that are not specifically disclosed to Seller pursuant to a Title Defect Notice delivered to Seller prior to the expiration of the Title Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, shall be deemed to have been waived by Buyer Buyer, on behalf of itself and its successors and assigns, for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunderpurposes. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the optionright, but not the obligation, for a period ending ninety (90) to attempt to cure any asserted Title Defects of which it has been advised by Buyer at any time prior to sixty days after the Closing Date (the “Cure Period”). During the period of time from Closing to the expiration of the Cure Period, Buyer agrees to afford Seller and its officers, employees and other authorized representatives reasonable access, during normal business hours, to the Assets and all Files in Buyer’s or any of its Affiliates’ possession in order to facilitate Seller’s attempt to cure any such defectTitle Defects. If Seller should not elect No reduction shall be made to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by with respect to any Title Defect properly asserted in good faith prior to the amount expiration of the Title Defect Value.
Examination Period (a“Asserted Title Defects”) The value attributable for which Seller has provided notice to each Title Defect (Buyer prior to or on the "Title Defect Value") Closing Date that is asserted by Buyer in Seller intends to attempt to cure the Title Defect notices during the Cure Period or for which Seller has provided notice to Buyer prior to or on the Closing Date that Seller disputes the existence, in whole or in part, which notice shall be determined based upon the criteria set forth below:
(i) If the Title Defect is include a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value description of the number determined matters in dispute. An election by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment Seller to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of attempt to cure a Title Defect shall be determined without duplication prejudice to its rights under Section 4.11 and shall not constitute an admission against interest or a waiver of any costs Seller’s right to dispute the existence, nature or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locationsvalue of, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal cost to the Allocated Value of such Assetcure, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this alleged Title Defect. Subject to Section 4.03 to the contrary4.09, the Title Defect Value of any Amounts resulting from the Title Defects asserted by Buyer and not cured by Seller prior to Closing shall be retained by the Escrow Agent at Closing from the Deposit, unless the Parties agree otherwise; provided, however, to the extent such Title Defect comprising Amounts (together with any other amounts held by the Escrow Agent pursuant to Section 5.03) exceed the Deposit, at the Closing, Buyer shall deposit with the Escrow Agent a required consent portion of the Purchase Price equal to such excess (without duplication); provided further, however (i) if, Seller elects to cure an Asserted Title Defect, the Title Defect Amount resulting from such Asserted Title Defect shall be released to Seller upon cure if such Asserted Title Defect is cured by the expiration of the Cure Period, and if not obtained cured by then, such Title Defect Amount shall be released to Buyer at such time, or if the Parties have not agreed on (other than consents customarily obtained after Closingx) the proper and adequate cure for any such Title Defect, (y) the Title Defect Amount and/or (z) whether the Asserted Title Defect constitutes a Title Defect (each a “Disputed Title Matter”), then such Title Defect Amount shall be treated as provided in the following sub-part (ii), and (ii) if an Asserted Title Defect is a Disputed Title Matter, such Asserted Title Defect shall be finally and exclusively resolved in accordance with the provisions of Section 4.11 and release of the Title Defect Amount by the Escrow Agent for such Asserted Title Defect shall be resolved in accordance therewith. If, prior to the expiration of the Cure Period, a Disputed Title Matter exists, then such dispute(s) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects finally and exclusively resolved in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of accordance with the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment4.11.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Gastar Exploration Inc.)
Notice of Title Defects. Buyer shall provide As a condition to Purchaser asserting any claim with respect to any alleged Title Defect, Purchaser must deliver a valid Notice or Notices (each a “Title Defect Notice”) with respect to such alleged Title Defect to Seller on or before 5:00 p.m. Central Standard Time on January 23, 2018 (the “Defect Deadline”). To give Seller an opportunity to commence reviewing and curing Title Defects, Purchaser agrees to use commercially reasonable efforts to give Seller, on or before the end of each calendar week prior to the Defect Deadline (whether before or after Closing), written notice of all alleged Title Defects no later than 5:00 p.m. MST on (as well as any claims that would be claims under the date special warranty of Defensible Title set forth in the Conveyances) discovered by Purchaser during the preceding calendar week, which is seven (7) days notice may be preliminary in nature and supplemented prior to the Closing Date (the "Title Claim Date")Defect Deadline. To In order to be effective, such notice must (a) be in writing, (b) be received by Seller on or prior to the Title Claim Date, (c) describe the a valid Title Defect in reasonable detail (including any Notice as to each alleged variance in the Net Revenue Interest or Working Interest), (d) identify the specific Asset or Assets affected by such Title Defect, (e) include the Title Defect Value, as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications set forth in Section 4.14. Any matters identified by Buyer during the Examination Period that constitute Title Defects, but of which Seller has not been specifically notified by Buyer in accordance with the foregoing, each such notice shall be deemed to have been waived by Buyer for all purposes in writing and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from Buyer, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Value.
(a) The value attributable to each Title Defect (the "Title Defect Value") that is asserted by Buyer in the Title Defect notices shall be determined based upon the criteria set forth below:
(i) If the Title Defect is a lien upon any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Well, PUD Location, PDNP, or Probable and/or Possible Locations is less than that stated in Exhibit D, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking into account the Allocated Value of the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 to the contrary, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject to any accommodation implemented pursuant to Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation.
(b) The term Title Defect shall not must include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by a description of the reasonable efforts of Buyeralleged Title Defect;
(ii) Defects in the early chain of title consisting a description of the failure Oil and Gas Property subject to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for such alleged Title Defect (the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset“Title Defect Property”);
(iii) Defects arising out the Allocated Value of lack of survey;each Title Defect Property; and
(iv) Defects arising out Purchaser’s good faith reasonable estimate of lack the Title Defect Amount attributable to such Title Defect and the computations and information upon which Purchaser’s estimate is based. As soon as practical after the delivery of corporate a Title Defect Notice, Purchaser shall provide such documentation, to the extent in Purchaser’s or other entity authorization unless Buyer provides a reasonable basis for the Purchaser’s Representatives possession or control, as is reasonably necessary to support Purchaser’s assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
such Title Defect. SUBJECT TO PURCHASER’S RIGHTS HEREUNDER WITH RESPECT TO BREACHES OF THE SPECIAL WARRANTY OF DEFENSIBLE TITLE SET FORTH IN THE CONVEYANCES AND PURCHASER’S RIGHTS TO INDEMNITY PURSUANT TO (vX) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(vSECTION 11.3(a) WITH RESPECT TO A BREACH OF THE COVENANTS AND AGREEMENTS SET FORTH IN SECTION 5.2, SECTION 5.4, AND SECTION 5.5 AND (Y) SECTION 11.3(b) WITH RESPECT TO A BREACH OF THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.5, SECTION 3.8, SECTION 3.9, SECTION 3.10, SECTION 3.12, SECTION 3.13 AND SECTION 3.15, PURCHASER SHALL BE DEEMED TO HAVE WAIVED AND RELEASED, AND COVENANTS THAT IT SHALL WAIVE AND RELEASE, ANY AND ALL TITLE DEFECTS (AND ANY ADJUSTMENTS TO THE UNADJUSTED PURCHASE PRICE ATTRIBUTABLE THERETO) FOR WHICH SELLER HAS NOT RECEIVED ON OR BEFORE THE DEFECT DEADLINE A VALID TITLE DEFECT NOTICE THAT SATISFIES ALL OF THE CONDITIONS AND REQUIREMENTS SET FORTH IN THIS SECTION 6.1(A);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Energy Resources 12, L.P.)
Notice of Title Defects. (a) If Buyer discovers any alleged Title Defect affecting any Asset, Buyer shall provide notify Seller notice of all the alleged Title Defects Defect as promptly as possible, but no later than 5:00 p.m. MST on the date which is seven (7) days prior to {1914556;9} - 16 - expiration of the Closing Date (the "Title Claim Date")Examination Period. To be effective, such this notice (a “Title Defect Notice”) must (ai) be in writing, ; (bii) be received by Seller on or prior to the Title Claim Date, expiration of the Examination Period; (ciii) describe the Title Defect in reasonable sufficient, specific detail (including any alleged variance in the Net Revenue Interest or Working Interest); (iv) include copies of documents necessary for Seller to verify the existence of the alleged Title Defect, (dv) identify the specific Asset or Assets affected by such the Title Defect, ; and (evi) include the Title Defect Value, Value as reasonably determined by Buyer in good faith, and (f) comply with the limitations and Title Defect Value qualifications Buyer. Except as set forth in Section 4.14. Any 4.06, any matters identified by Buyer during the Examination Period that constitute otherwise may have constituted Title Defects, but of which Seller has that are not been specifically notified by Buyer so described in a timely Title Defect Notice complying and delivered in accordance with the foregoingthis Section 4.04(a), shall be deemed to have been waived by Buyer for all purposes and shall constitute Permitted Encumbrances and Assumed Obligations hereunder. Upon Encumbrances.
(b) After receipt of notices of Title Defects, the Parties shall meet and determine upon which of the Title Defects, an effective Title Defect Values and methods of cure the Parties have reached agreement. Upon the receipt of such notice from BuyerNotice, Seller shall have the option, but not the obligation, for a period ending ninety (90) days after the Closing to attempt to cure such defect. If Seller should not elect to cure a Title Defect, and no aspect of such defect is reasonably in dispute, the Purchase Price shall be adjusted for such defect by the amount of the Title Defect Valueat any time prior to the Closing.
(ac) The value attributable to each Title Defect (the "“Title Defect Value"”) that is asserted by Buyer in the a Title Defect notices Notice shall be determined in good faith based upon the criteria set forth below:
(i) If the Title Defect is a lien upon on any Asset, the Title Defect Value is the amount necessary to be paid to remove the lien from the affected Asset;.
(ii) If the Title Defect asserted is that the Net Revenue Interest attributable to any Wellwell, PUD Locationunit, PDNP, well location or Probable and/or Possible Locations Lease is less than that stated in Exhibit DB or the Working Interest attributable to any well, unit or well location is greater than that stated in Exhibit B, then the Title Defect Value shall be the absolute value of the number determined by the following formula: Title Defect Value = A × (1-[B/C]) A = Allocated Value for the affected Asset B = Correct Net Revenue Interest for the affected Asset C = Net Revenue Interest for the affected Asset as set forth on Exhibit D.
(iii) If the Title Defect represents an obligation, encumbrance, burden or charge upon the affected Asset (including any increase in Working Interest for which there is not a proportionate increase in Net Revenue Interest) for which the economic detriment to Buyer is unliquidated, the amount of the Title Defect Value shall be determined by taking take into account the Allocated Value of relative change in the affected Asset, the portion of the Asset affected by the Title Defect, the legal effect of the Title Defect, the potential discounted economic effect of the Title Defect over the life of the affected Asset, interest from Exhibit B and the Title Defect Values placed upon the Title Defect by Buyer and Seller;
(iv) If a Title Defect is not in effect or does not adversely affect an Asset throughout the entire post Effective Time productive life of such Asset, such fact shall be taken into account in determining the Title Defect Value;
(v) The Title Defect Value of a Title Defect shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder;
(vi) Notwithstanding anything herein to the contrary, in no event shall a Title Defect Value exceed the Allocated Value of the ▇▇▇▇▇, PUD Locations, PDNP, Probable and/or Possible Locations, or other Assets affected thereby;
(vii) If the Title Defect Value of an Asset is equal to the appropriate Allocated Value of such Asset, the affected Asset shall be excluded from the purchase and sale contemplated by . For purposes of this Agreement, and the Purchase Price shall be adjusted accordingly;
(viii) Notwithstanding the provisions of this Section 4.03 term “Allocated Value” means, with respect to the contraryany Asset, the Title Defect Value of any Title Defect comprising a required consent not obtained (other than consents customarily obtained after Closing) shall be determined subject amount allocated to any accommodation implemented pursuant to that Asset under Section 4.07; and
(ix) Such other factors as are reasonably necessary to make a proper evaluation11.01.
(b) The term Title Defect shall not include:
(i) Defects based solely on an assertion that Seller's files lack information, provided that any missing material information can be obtained by the reasonable efforts of Buyer;
(ii) Defects in the early chain of title consisting of the failure to recite marital status in a document or omissions of successors of heirship or estate proceedings, unless Buyer provides a reasonable basis for the assertion that such failure or omission has resulted in a third party's actual and superior claim of title to the affected Asset;
(iii) Defects arising out of lack of survey;
(iv) Defects arising out of lack of corporate or other entity authorization unless Buyer provides a reasonable basis for the assertion that the action was not authorized and that such lack of authorization has resulted in a third party's actual and superior claim of title to the affected Asset;
(v) Defects that are defensible by possession under applicable statutes of limitations for adverse possession or for prescription; provided that the mere passage of time in and of itself shall not establish any presumption of the applicability of the provisions of this Section 4.03(b)(v);
(vi) Defects asserting a change in an applicable Working Interest or Net Revenue Interest based on a change in drilling and spacing units, tract allocation or other changes in pooling or unit participation occurring after the date of this Agreement; and
(vii) Title requirements customarily considered as advisory or which can be waived as a matter of prudent business judgment.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Mid-Con Energy Partners, LP)