Common use of Title Defect Value Clause in Contracts

Title Defect Value. In determining which portions of an Asset constitute a Title Defect, it is the intent of the parties to include, to the extent possible, only that portion of any affected Asset (whether a Well, Unit or leasehold interest, as applicable) that is adversely affected by the defect. The Defect Value for a Title Defect shall not exceed the Allocated Value of the Asset and shall be determined by the parties in good faith taking into account all relevant factors, including, but not limited to, the following: (a) The Allocated Value of the affected Asset; (b) The potential or actual reduction in the warranted NRI of the affected Property, or the potential or actual increase in the warranted WI to the extent such increase is not accompanied by a corresponding increase in NRI; (c) If the Title Defect represents only a possibility of title failure, the probability that such failure will occur; (d) The legal effect of the Title Defect; and (e) If the Title Defect is a lien or encumbrance on a Asset, the cost of removing such lien or encumbrance.

Title Defect Value. In determining which portions of an Asset constitute a Title Defect, it is the intent of the parties to include, to the extent possible, only that portion of any affected Asset (whether a Well, Unit unit or leasehold interest, as applicable) that is adversely affected by the defect. The Defect Value for a Title Defect shall not exceed the Allocated Value of the Asset and shall be determined by the parties in good faith taking into account all relevant factors, including, but not limited to, the following: (a) The Allocated Value of the affected Asset; (b) The potential or actual reduction in the warranted NRI of the affected Property, or the potential or actual increase in the warranted WI to the extent such increase is not accompanied by a corresponding increase in NRI; (c) If the Title Defect represents only a possibility of title failure, the probability that such failure will occur; (d) The legal effect of the Title Defect; and (e) If the Title Defect is a lien or encumbrance on a an Asset, the cost of removing such lien or encumbrance.