Common use of Title Defects Clause in Contracts

Title Defects. An Asset shall be deemed to have a “Title Defect” if Seller is found to have less than Defensible Title and it is reasonably estimated to (a) require an expenditure in excess of $25,000 to remedy or (b) reduce the value of such Asset by an amount in excess of $25,000. For purposes of this Agreement, the term “Defensible Title” shall mean (a) with respect to any Tract identified on Exhibit C – Part 1, such title of Seller that, subject to and except for the Permitted Encumbrances: (i) entitles Seller to receive not less than the percentage set forth in Exhibit C – Part 1 as the net revenue interest for any well drilled or which could be drilled on such Tract of all Hydrocarbons produced, saved and marketed from such well, all without reduction of such interest throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) decreases in connection with those operations in which Seller may from and after the date of this Agreement be a non-consenting co-owner, (C) decreases resulting from the establishment or amendment of pools or units from and after the date of this Agreement, and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; (ii) obligates Seller to bear the percentage of the costs and expenses relating to the maintenance, development and operation of any well drilled or which could be drilled on such Tract not greater than the working interest for such Tract shown in Exhibit C - Part 1, without increase throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate increase in Seller’s corresponding net revenue interest set forth in Exhibit C – Part 1; and (iii) is free and clear of all liens, encumbrances and defects (c) with respect to all other Assets, such title that is good and defensible and is free and clear of all liens, with the exception of Permitted Encumbrances. Notwithstanding the foregoing, (a) the loss of or reduction of interest in any Tract following the Effective Time due to any election or decision made by Seller in accordance with applicable joint operating agreements as permitted under this Agreement shall not constitute a Title Defect and (b) Lease Expirations shall not be treated as a Title Defect hereunder but will instead be exclusively addressed pursuant to Section 4.13.

Title Defects. An Asset (i) Buyer shall be deemed to have waived its right to object to any encumbrance or other title exception or matter pertaining to the Real Property unless Buyer shall have given Sellers a specific written notice of its objection in Buyer’s reasonable discretion (based solely on a title or survey matter that would cause the applicable Parcel to not be rentable in the ordinary course of business) to any such matter (an “Initial Title Objection Notice”) by not later than ten (10) Business Days prior to the expiration of the Inspection Period (the “Initial Title Objection Deadline”). Notwithstanding the foregoing, if an update to a Title Commitment for any Parcel received after the expiration of the Inspection Period and prior to the Closing Date references a new exception to title that (A) is not a Permitted Encumbrance, (B) was not previously reflected or referenced on the Title Commitment, any existing survey or an updated survey delivered or made available to Buyer prior to the expiration of the Inspection Period, (C) was not created by Buyer or Buyer Parties and (D) has a material adverse effect on the Property, the Acquired Companies and the Companion Property, as a whole, then Buyer shall have the right to object to such matter, by delivery of a written notice (a “Subsequent Title Objection Notice”) to Sellers within two (2) Business Days (but not later than the then-scheduled Closing Date) from receipt of such update to a Title Commitment. Sellers shall have no obligation to remove or cure any alleged defects, objections or survey matters raised in an Initial Title Objection Notice or a Subsequent Title Objection Notice (each, a “Title Defect” if Seller is found to have less than Defensible Title and it is reasonably estimated to (a) require an expenditure in excess of $25,000 to remedy or (b) reduce Objection”), except for the value of such Asset by an amount in excess of $25,000. For purposes of this Agreement, the term “Defensible Title” shall meanMandatory Cure Exceptions. (aii) Upon Buyer’s failure to timely deliver an Initial Title Objection Notice or a Subsequent Title Objection Notice with respect to any Tract identified on Exhibit C – Part 1, such encumbrance or other title of Seller that, subject to and except for the Permitted Encumbrances: exception or matter in accordance with clause (i) entitles Seller to receive not less than the percentage set forth in Exhibit C – Part 1 as the net revenue interest for any well drilled or which could be drilled on such Tract of all Hydrocarbons producedabove, saved and marketed from such well, all without reduction of such interest throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) decreases in connection with those operations in which Seller may from and after the date of this Agreement be a non-consenting co-owner, (C) decreases resulting from the establishment or amendment of pools or units from and after the date of this Agreement, and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; (ii) obligates Seller to bear the percentage of the costs and expenses relating to the maintenance, development and operation of any well drilled or which could be drilled on such Tract not greater than the working interest for such Tract shown in Exhibit C - Part 1, without increase throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate increase in Seller’s corresponding net revenue interest set forth in Exhibit C – Part 1; and (iii) is free and clear of all liens, encumbrances and defectsother title exceptions or matters shall thereafter be deemed Permitted Encumbrances, except for the Mandatory Cure Exceptions. (ciii) Should Buyer timely deliver an Initial Title Objection Notice or a Subsequent Title Objection Notice to Sellers as above provided, Sellers shall have the right, at their sole option, upon written notice (each, a “Title Objection Response Notice”) to Buyer within (x) with respect to all other Assetsa response to an Initial Title Objection Notice, eight (8) Business Days of receipt of Buyer’s Initial Title Objection Notice, if any, or (y) with respect to a response to a Subsequent Title Objection Notice, two (2) Business Days of receipt of Buyer’s Subsequent Title Objection Notice (and the then-scheduled Closing Date shall be automatically extended to allow for such response period, if necessary), if any, to elect either of the following: (A) to (1) use commercially reasonable efforts to remove or cure any Title Objection; or (2) deliver to Westcor Land Title Insurance Company, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇ (the “Title Company”) such assurances as the Title Company requires to insure Buyer against any loss arising from such Title Objection (in either of which events, such title that matter shall be a “Seller Cure Matter”), or (B) to elect neither of the elections referenced in Section 4(c)(iii)(A). Failure by Sellers to deliver a Title Objection Response Notice within the applicable time period set forth in clause (iii) above shall be deemed an election by Sellers to proceed under this clause (B). If any Seller makes or is good deemed to make the election described in this clause (B) and defensible and is free and clear Buyer delivers a Continuation Notice prior to the expiration of all liensthe Inspection Period, with the exception of then such Title Objections shall be deemed Permitted Encumbrances. Notwithstanding . (iv) In the foregoing, (a) the loss of or reduction of interest in any Tract following the Effective Time due event a Seller elects to any election or decision made by Seller in accordance with applicable joint operating agreements as permitted under this Agreement shall not constitute use commercially reasonable efforts to cure a Title Defect and (b) Lease Expirations shall not be treated as a Title Defect hereunder but will instead be exclusively addressed Objection pursuant to Section 4.134(c)(iii)(A)(1), and such Seller is unable to cure such Title Objection on or before the date originally scheduled for Closing, then Sellers shall have the right to defer the Closing from time to time (but in no event for more than thirty (30) days after the then-scheduled Closing Date) in order to provide the applicable Seller an opportunity to cure such Title Objection or to proceed under Section 4(c)(iii)(A)(2) (provided that the extension(s) of the Closing Date pursuant to this clause shall not cause the Closing Date to extend more than fifteen (15) days beyond the Closing Outside Date unless Buyer consents in writing). In the event any Seller is unable to cure any Title Objection which such Seller elected to attempt to cure pursuant to Section 4(c)(iii)(A)(1) or Section 4(c)(iii)(A)(2) on or before the date scheduled for Closing (as such date may be extended as set forth above) or Sellers elect or are deemed to elect to proceed under Section 4(c)(iii)(B), then Buyer shall have the election set forth in Section 4(d).

Title Defects. An Asset Within ten (10) days following the Effective Date, with respect to each of the Premises, Sellers shall order an ALTA title insurance commitment (with respect to each of the Premises, the “Title Commitment”) for an owner’s title insurance policy in the amount of the Purchase Price allocated to the Seller of such Premises from Jefferson Title Corporation in accordance with the provisions of Section 4(a) above. Jefferson Title Corporation shall serve as “Referring Title Agent” to the Title Company and shall receive a referral fee from the Title Company pursuant to a separate agreement with the Title Company; provided that the Title Company delivers to Buyer an “Insured Closing Protection Letter” from Lawyers Title Insurance Corporation. The Title Commitment shall show Seller to be vested with good and marketable and insurable fee simple, or in the case of the Ground Leased Properties, leasehold, title to the Respective Premises and fee interest in all improvements and fixtures located on the Respective Premises, or in the case of the Ground Leased Properties, a fee for a period of time under the provisions of the Ground Leases, in an amount equal to the Allocated Purchase Price, free and clear of all Liens (as defined below), covenants, conditions, and rights-of-way other than the Permitted Exceptions. Buyer shall be deemed to have waived its right to object to any encumbrance or other title exception or matter reflected in the Title Commitments and any matter reflected on the Existing Survey (a “Title Defect” if ”) unless Buyer shall have given the Seller of the Premises to which the objection relates a specific written notice of its objection to any such matter that is found not a Permitted Encumbrance (a “Title Notice”) prior to the end of the day that is fifteen (15) days after the Effective Date (the “Title Review Period”). Upon Buyer’s failure to timely object to any encumbrance or other title exception or matter reflected on the respective Title Commitment or the respective Existing Survey, and any update thereof, such encumbrance or other title exception or matter shall thereafter be deemed a Permitted Encumbrance. Each Seller shall have the right to, at its sole option, elect, by written notice given to Buyer (“Seller’s Cure Notice”) within three (3) Business Days following the conclusion of the Title Review Period (“Seller’s Notice Period”), to cure or remove the Title Defect identified by Buyer in Buyer’s Title Notice; provided, however, Seller shall in all events have the obligation to (i) act in good faith in making such election and use commercially reasonable efforts to cure any Title Defects that Seller elects to cure, (ii) specifically remove the Pre-Disapproved Exceptions, and (iii) remove any new Title Defect that attaches to the Real Property subsequent to the conclusion of the Title Review Period. The failure of such Seller to deliver a Seller’s Cure Notice during the Seller’s Notice Period shall be deemed an election by such Seller not to cure such exceptions. Should such Seller elect to attempt to cure or remove any objection, such Seller shall have until two (2) Business Days prior to the Applicable Closing Date (“Cure Period”) in which to accomplish the cure. In the event Seller elects (or is deemed to have less than Defensible elected) not to cure or remove any Title Defect, or in any event Seller fails to cure or remove any Title Defect which Seller agrees or is required to cure within the Cure Period, then Buyer shall be entitled, as Buyer’s sole and it is reasonably estimated exclusive remedies, either to (ai) require upon written demand by Buyer to such Seller and Escrow Agent, to treat such Sellers Property as an expenditure in excess of $25,000 to remedy Excluded Property hereunder, or (bii) reduce waive any Title Defects that Seller has not elected to cure and close this transaction as otherwise contemplated herein. The failure of Buyer to provide written notice to Seller within three (3) Business Days following the value expiration of such Asset the Seller’s Notice Period waiving any objections Seller has not elected to cure shall be deemed an election by an amount in excess of $25,000Buyer to waive Title Defects under clause (ii) above. For purposes of this Agreement, the The term “Defensible TitleLien(s)” as defined herein shall mean (a) , with respect to each Seller, liens and other encumbrances, assessments and/or indebtedness (including the existing mortgage, deeds of trust, but excluding any Tract identified on Exhibit C – Part 1, such title of Seller that, subject to and except for the Permitted Encumbrances: (i) entitles Seller to receive not less than the percentage set forth in Exhibit C – Part 1 as the net revenue interest for any well drilled or which could be drilled on such Tract of all Hydrocarbons producedincluding without limitation, saved and marketed from such welllabor, all without reduction of such interest throughout the duration of the productive life of such wellmaterialmens, except (A) as specifically set forth in Exhibit C – Part 1, (B) decreases in connection with those operations in which Seller may from and after the date of this Agreement be a non-consenting co-owner, (C) decreases resulting from the establishment or amendment of pools or units from and after the date of this Agreement, and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; (ii) obligates Seller to bear the percentage of the costs and expenses relating to the maintenance, development and operation of any well drilled or which could be drilled on such Tract not greater than the working interest for such Tract shown in Exhibit C - Part 1, without increase throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate increase in Seller’s corresponding net revenue interest set forth in Exhibit C – Part 1; and (iii) is free and clear of all mechanics’ liens, encumbrances judgments and defects (c) with respect to all other Assetsfederal, such title that is good state and defensible and is free and clear of all municipal tax liens, with the exception of Permitted Encumbrances. Notwithstanding the foregoing, (a) the loss of or reduction of interest in any Tract following the Effective Time due to any election or decision made by Seller in accordance with applicable joint operating agreements as permitted under this Agreement shall not constitute a Title Defect and (b) Lease Expirations shall not be treated as a Title Defect hereunder but will instead be exclusively addressed pursuant to Section 4.13.

Title Defects. An Asset shall be deemed to have a The term “Title Defect,” if Seller is found as used herein, subject to have less than Defensible Title and it is Permitted Encumbrances, shall be limited to a defect in Seller’s title to the Assets which results or could reasonably estimated be expected to result in (a) require a net revenue interest for an expenditure Asset less than the net revenue interest shown for that Asset in excess of $25,000 to remedy Exhibit “C,” or (b) reduce a working interest for an Asset greater than the working interest shown for that Asset in Exhibit “C” without a corresponding increase in the net revenue interest or (c) the existence of a lien, agreement or other encumbrance. In the event either party notifies the other that Seller owns a greater net revenue interest than that shown on Exhibit “C,” then the Purchase Price shall be increased based upon the amount allocated to the affected Asset on Exhibit “C”. Provided, however, Buyer may not assert a Title Defect for an Asset unless Buyer has allocated value on Exhibit “C” (an allocation of value to a well or lease shall include that portion of the other Assets that are necessary for the operation of such well or lease and the production of hydrocarbons from such well or lease), and unless Buyer reasonably believes that the effect of such Title Defect on the value of the Asset or on Seller’s stated net revenue interest and/or working interest for such Asset would result in a reduction to Buyer’s allocated amount of the Purchase Price for such Asset, as shown on Exhibit “C,” equal to at least Fifteen Thousand and No/100 Dollars ($15,000.00) (“Material Title Defect”). In addition, if the total value of all Material Title Defects, in the aggregate, does not meet or exceed One-Percent (1%) of the Purchase Price as defined in Section 1.3, then there shall be no adjustment to the Purchase Price or any other remedy from or obligation of Seller that shall be available to Buyer. Provided further, in the event the amount attributable to Material Title Defects, in the aggregate, satisfies the threshold percentage set forth above and a reduction to the Purchase Price is warranted, then the Purchase Price shall only be reduced to the extent the amount attributable to Material Title Defects, in the aggregate, exceeds the percentage of the Purchase Price specified above, and all amounts attributable to Material Title Defects, in the aggregate, that are below such threshold percentage shall be borne solely by an amount in excess of $25,000Buyer, and there shall be no adjustment to the Purchase Price therefor. For In determining whether a Title Defect exists as to any Asset for purposes of this Agreement, the term Parties shall give due consideration to the length of time the affected property has been producing hydrocarbon substances and whether any omissions, encroachments, encumbrances or other claimed defects are customarily acceptable to prudent operators and interest owners. Such usual and customary defects include, without limitation, defects that have been cured by possession under applicable statutes of limitations, defects in the early chain of title such as failure to recite marital status in documents, omissions of heirship or succession proceedings, lack of survey or failure to record releases of lien, production payments or mortgages that have expired by their own terms. Notwithstanding the foregoing provisions of this 3.2, none of the following (collectively “Defensible Title” shall mean (a) with respect to any Tract identified on Exhibit C – Part 1, such title of Seller that, subject to and except for the Permitted Encumbrances”) shall constitute a Material Title Defect: (i) entitles Seller Royalties, overriding royalties, production payments, reversionary interests, convertible interests, net profits interests, and similar burdens encumbering the Assets to receive not the extent the net cumulative effect of such burdens do not, as of Closing or any time thereafter during the term of the applicable Asset, operate to reduce the net revenue interests of such Asset to less than the percentage net revenue interests for such Asset set forth in Exhibit C – Part 1 as “C”. (ii) All rights to consent by, required notices to, filings with, or other actions by governmental authorities in connection with the sale or conveyance of the Assets; (iii) Rights reserved to or vested in any governmental entity having appropriate jurisdiction to control or regulate the Assets in any manner whatsoever, and all laws of any such governmental entity; (iv) Easements, rights-of-way, servitudes, surface leases, subsurface leases, pipelines, and structures on, over and through the Assets; (v) All of the terms and conditions of the Material Agreements to the extent they do not result or could not reasonably be expected to result in (a) a net revenue interest for an Asset less than the net revenue interest shown for any well drilled or which could be drilled on such Tract of all Hydrocarbons produced, saved and marketed from such well, all without reduction of such interest throughout the duration of the productive life of such well, except (A) as specifically set forth that Asset in Exhibit C – Part 1, “C,” or (Bb) decreases in connection with those operations in which Seller may from and after the date of this Agreement be a non-consenting co-owner, (C) decreases resulting from the establishment or amendment of pools or units from and after the date of this Agreement, and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; (ii) obligates Seller to bear the percentage of the costs and expenses relating to the maintenance, development and operation of any well drilled or which could be drilled on such Tract not for an Asset greater than the working interest shown for such Tract shown that Asset in Exhibit C - Part 1, “C” without increase throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate corresponding increase in Seller’s corresponding the net revenue interest set forth interest; (vi) Taxes or assessments not yet due or not yet delinquent or, if delinquent, that are being contested by Seller in Exhibit C – Part 1good faith in the normal course of business; and (iiivii) is free and clear Liens of all liens, encumbrances and defects (c) with respect operators relating to all other Assets, such title that is good and defensible and is free and clear of all liens, with the exception of Permitted Encumbrances. Notwithstanding the foregoing, (a) the loss of obligations not yet due or reduction of interest in any Tract following the Effective Time due to any election or decision made by Seller in accordance with applicable joint operating agreements as permitted under this Agreement shall not constitute a Title Defect and (b) Lease Expirations shall not be treated as a Title Defect hereunder but will instead be exclusively addressed pursuant to Section 4.13yet delinquent.

Title Defects. An Asset Not later than ten (10) days prior to the end of the Inspection Period, Buyer shall furnish to Seller a statement specifying any defects in title and/or the survey which are not Permitted Exceptions (“Buyer’s Statement”); provided, however, that each financial encumbrance such as a mortgage or judgment, lien for delinquent real estate taxes, attachment, lien claim or other lien or encumbrance of a definite or ascertainable amount which may be removed by the payment of money that is revealed by the title report shall automatically, and without requirement that same be specified in Buyer’s Statement, be deemed an unpermitted exception. Seller shall notify Buyer within five (5) business days after receipt of Buyer’s Statement or Buyer’s Additional Statement (defined below), as the case may be, whether Seller will remove or insure over with respect to prior liens and encumbrances, and in the event of an encroachment by any improvement, affirmatively insure against compulsory removal which will include a commitment by the Title Company to provide the same coverage in a future policy. If Seller does not agree, or is unable, to remove any such defects, Buyer shall have the right, by notice given to Seller and Escrow Agent within five (5) business days after receipt of Seller’s notice, either to (i) waive the defect and close title without abatement or reduction of the Purchase Price, or (ii) terminate this Agreement and obtain a refund of the ▇▇▇▇▇▇▇ Money Deposit. In the event Buyer chooses to terminate this agreement pursuant to the foregoing sentence, neither party shall have any further liability to the other hereunder except as otherwise expressly provided in this Agreement. Nothing contained in this Agreement shall be deemed to require Seller to take or bring any action or proceeding or any other steps to remove any defect in title or expend monies therefor, nor shall Buyer have a “Title Defect” if any right of action against Seller is found therefor, at law, or in equity, for damages or specific performance for Seller’s inability to have less than Defensible Title and it is reasonably estimated to (a) require an expenditure convey title in excess of $25,000 to remedy or (b) reduce accordance with the value of such Asset by an amount in excess of $25,000. For purposes provisions of this Agreement, the term “Defensible Title” shall mean (aexcept defects that Seller agrees to remove or insure over pursuant to this Section 6(c) with respect but does not exercise commercially reasonable efforts to any Tract identified on Exhibit C – Part 1, such title of Seller that, subject remove or insure over prior to and except for the Permitted Encumbrances: (i) entitles Seller to receive not less than the percentage set forth in Exhibit C – Part 1 as the net revenue interest for any well drilled or which could be drilled on such Tract of all Hydrocarbons produced, saved and marketed from such well, all without reduction of such interest throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) decreases in connection with those operations in which Seller may from and after the date of this Agreement be a non-consenting co-owner, (C) decreases resulting from the establishment or amendment of pools or units from and after the date of this Agreement, and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; (ii) obligates Seller to bear the percentage of the costs and expenses relating to the maintenance, development and operation of any well drilled or which could be drilled on such Tract not greater than the working interest for such Tract shown in Exhibit C - Part 1, without increase throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate increase in Seller’s corresponding net revenue interest set forth in Exhibit C – Part 1; and (iii) is free and clear of all liens, encumbrances and defects (c) with respect to all other Assets, such title that is good and defensible and is free and clear of all liens, with the exception of Permitted EncumbrancesClosing. Notwithstanding the foregoing, (a) prior to the loss Closing, Buyer shall have the right to order an update or a date-down of or reduction of interest in any Tract following the Effective Time due Title Commitment and/or the survey, and, other than Permitted Exceptions, shall have the right to make an objection to any election new lien or decision made by Seller in accordance with applicable joint operating agreements as permitted under this Agreement shall not constitute a Title Defect title defect regarding the Premises which (i) is first revealed or disclosed thereon, and (bii) Lease Expirations and is not acceptable to Buyer (a “Buyer’s Additional Statement”); whereupon Seller shall not be treated as a Title Defect hereunder but will instead obligated to satisfy, cure or remove any such lien or defect at or prior to Closing. Notwithstanding the provisions of this Section to the contrary, in the event that Seller is unable to remove any new lien or title defect referenced in Buyer’s Additional Statement within the five (5) business day period following Seller’s receipt thereof, Seller may extend the Closing Date for an additional period of ten (10) business days by providing written notice thereof to Buyer and Escrow Agent; provided that Seller shall be exclusively addressed pursuant obligated to Section 4.13satisfy, cure or remove any such lien or defect at or prior to Closing.

Title Defects. An Asset shall be deemed to have a “Title Defect” if Seller is found to have less than Defensible Title and it is reasonably estimated to (a) require an expenditure (i) Buyer may seek to cause LandAmerica Commercial Services, Dallas, Texas (the “Title Company”) to deliver to Buyer a commitment for a title insurance policy in excess favor of $25,000 Buyer with respect to remedy the Real Property leased by Waskom and comprising W▇▇▇▇▇’▇ gas processing plant located in Waskom, Texas as more fully described, by a full and complete legal description, in Schedule 2.05(a)(1) hereto (the “Waskom Site”), such policy to be a standard form Texas title insurance policy in favor of Buyer insuring W▇▇▇▇▇’▇ leasehold interest in the Waskom Site (the “Waskom Title Policy”). Buyer shall be responsible for the payment of all costs and expenses associated with the issuance of the Waskom Title Policy and Sellers shall use their commercially reasonable efforts to deliver to the Title Company any affidavits, agreements or (b) reduce other documents or assurances reasonably necessary to cause the value issuance of such Asset by an amount the Waskom Title Policy. Buyer agrees that it will not delay the Closing, if all other conditions to the occurrence of the Closing shall have then been satisfied in excess of $25,000. For purposes accordance with the provisions of this Agreement, due to the term “Defensible Title” shall mean (a) with respect to any Tract identified on Exhibit C – Part 1, unavailability of such title commitment provided that the provisions of Seller that, subject this sentence shall not restrict Buyer’s ability to and except for the Permitted Encumbrances:object to Title Defects pursuant to Section 2.05(b) below. (i) entitles Seller Buyer may seek to receive cause a Texas registered and licensed professional surveyor identified by Buyer to deliver to Buyer a current survey with respect to the Waskom Site to meet the requirements of the Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys jointly established by the American Land Title Association, the American Congress on Surveying and Mapping and the National Society of Professional Surveyors. Buyer agrees that it will not less than delay the percentage set forth Closing, if all other conditions to the occurrence of the Closing shall have then been satisfied in Exhibit C – Part 1 as accordance with the net revenue interest for any well drilled or which could be drilled on such Tract provisions of all Hydrocarbons producedthis Agreement, saved and marketed from such well, all without reduction due to the unavailability of such interest throughout survey within the duration of time frame specified above, provided that the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) decreases in connection with those operations in which Seller may from and after the date provisions of this Agreement be a non-consenting co-owner, sentence shall not restrict Buyer’s ability to object to any Title Defects pursuant to Section 2.05(b) below. (Cb) decreases resulting from the establishment or amendment of pools or units from and after As soon as reasonably practicable following the date of this Agreement, and (D) decreases required in no event later than 15 Business Days prior to allow other working interest owners the Closing Date, Buyer shall deliver to make up past underproduction or pipelines Sellers written notices identifying each matter that it believes in good faith to make up past under deliveries; (ii) obligates Seller to bear the percentage be a Title Defect, together with a reasonable, good faith estimate of the costs associated Title Defect Amount for each such alleged Title Defect, and expenses relating reasonable written documentation to support Buyer’s claims of each such Title Defect (the maintenance“Title Defect Notice”). In order for Sellers to review the alleged Title Defects listed in the Title Defect Notice, development Buyer will provide to Sellers and operation their representatives copies of any well drilled or which could be drilled on such Tract not greater than documents used to determine the working interest for such Tract shown in Exhibit C - Part 1, without increase throughout existence of a Title Defect and the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate increase in Seller’s corresponding net revenue interest set forth in Exhibit C – Part 1; and (iii) is free and clear of all liens, encumbrances and defectsestimated Title Defect Amount. (c) If Sellers disagree with the existence of a Title Defect or the associated Title Defect Amount, then Sellers shall notify Buyer of such disagreement in writing (a “Notice of Disagreement”) within 5 Business Days after their receipt of the applicable Title Defect Notice. Such Notice of Disagreement shall specify in reasonable detail Sellers’ grounds for such disagreement, the Title Defect Amount estimated by Sellers therefore, or both, as the case may be. To the extent Sellers do not contest a Title Defect or a Title Defect Amount in a Notice of Disagreement within 5 Business Days after receipt of the applicable Title Defect Notice, Sellers shall be deemed to have accepted the existence of such Title Defect or Title Defect Amount, which shall be final, binding and conclusive for all purposes hereunder. (d) If a Notice of Disagreement is timely provided by Sellers, Buyer and Sellers shall use commercially reasonable efforts for a period of 3 Business Days after delivery of such Notice of Disagreement (or such longer period as they may mutually agree) to resolve any disagreements with respect to all other Assetsthe existence of any Title Defect or Title Defect Amount contested in the Notice of Disagreement. If, at the end of such title period, they are unable to resolve such disagreements, then, upon the written request of either party, Sellers and Buyer agree that they will turn the dispute over to an independent, experienced real estate attorney who is practicing law with a regional law firm that is good nationally recognized in the midstream oil and defensible gas industry, that is mutually agreed upon by Sellers and is free and clear of all liensBuyer (the “Title Defect Arbitrator”), with the exception of Permitted Encumbrances. Notwithstanding the foregoing, to resolve any remaining disagreements. (ae) the loss of or reduction of interest The Title Defect Arbitrator shall determine as promptly as practicable (but in any Tract event within 10 Business Days) following the Effective Time due date on which such dispute is referred to the Title Defect Arbitrator the existence of any election alleged Title Defect or decision made the disputed Title Defect Amount, as the case may require, identified in the Notice of Disagreement and not previously resolved by Seller the parties. Each party shall set forth in accordance writing its position regarding the existence of each alleged Title Defect and Title Defect Amount referred to the Title Defect Arbitrator for resolution, and the Title Defect Arbitrator shall be required to select the position of either one party or the other with applicable joint operating agreements respect to each such Title Defect or Title Defect Amount, as permitted under the case may require. The costs of the Title Defect Arbitrator shall be allocated by the Title Defect Arbitrator between the parties based upon the positions on the Title Defects asserted by the parties ultimately selected by the Title Defect Arbitrator. The determination of the Title Defect Arbitrator shall be final, conclusive and binding on the parties and shall be enforceable in any court having jurisdiction. (f) As used in this Agreement Agreement, an “Agreed-Upon Title Defect” shall not constitute mean any of (i) a Title Defect and that is not contested under any Notice of Disagreement, (bii) Lease Expirations shall not be treated as a Title Defect hereunder but will instead be exclusively addressed that is mutually agreed upon or deemed agreed upon by Buyer and Sellers or (iii) a Title Defect recognized as such by determination of the Title Defect Arbitrator pursuant to Section 4.132.05(e) above. An “Agreed-Upon Title Defect Amount” shall mean any of (i) a Title Defect Amount that is not contested under any Notice of Disagreement, (ii) a Title Defect Amount that is mutually agreed upon or deemed agreed upon by Buyer and Sellers or (iii) a Title Defect Amount recognized in a determination of the Title Defect Arbitrator pursuant to Section 2.05(e) above.

Title Defects. An Asset If on the Closing Date Equitable shall be deemed unable to cause title to the Malls to be in accordance with the terms of this Agreement as a result of any exception to title that is not a Permitted Exception, Purchaser may terminate this Agreement by notice to Equitable delivered on or prior to the Closing Date, as the same may have been extended, in which event this Agreement shall be terminated and of no further force or effect, the Deposit or Letter(s) of Credit shall be returned to Purchaser, and neither party shall have any obligations of any nature to the other hereunder or by reason hereof, except as to those obligations hereunder that are specifically stated to survive such termination. Equitable shall be under no obligation to take any steps or to institute or prosecute any action or proceedings, or expend any sums of money, to remove from title to the Mall any defect, encumbrance or objection to title; provided, however, that Equitable shall be responsible for discharging any liens or encumbrances which do not constitute Permitted Encumbrances, which can be discharged solely by the payment of a “Title Defect” if Seller is found to have less than Defensible Title and it is reasonably estimated to (a) require an expenditure sum of money not in excess of $25,000 to remedy or (b) reduce the value of such Asset by an amount in excess sum of $25,0005,000,000 in the aggregate which arise solely on account of obligations undertaken or actions performed by Equitable. For purposes of this Agreement, the term “Defensible Title” shall mean (a) with respect to Equitable may use any Tract identified on Exhibit C – Part 1, such title of Seller that, subject to and except for the Permitted Encumbrances: (i) entitles Seller to receive not less than the percentage set forth in Exhibit C – Part 1 as the net revenue interest for any well drilled or which could be drilled on such Tract of all Hydrocarbons produced, saved and marketed from such well, all without reduction of such interest throughout the duration part of the productive life Purchase Price to discharge the same, provided that Equitable shall deliver to Purchaser at the Closing instruments in recordable form sufficient to discharge such liens and encumbrances of record. Except for Equitable's failure to discharge such wellliens or encumbrances as aforesaid up to an aggregate amount of $5,000,000, except (A) as specifically set forth Equitable shall not be deemed in Exhibit C – Part 1, (B) decreases in connection with those operations in which Seller may from and after the date of this Agreement be a non-consenting co-owner, (C) decreases resulting from the establishment or amendment of pools or units from and after the date default of this Agreement, and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; (ii) obligates Seller to bear the percentage of the costs and expenses relating to the maintenance, development and operation of any well drilled or which could be drilled on such Tract not greater than the working interest for such Tract shown in Exhibit C - Part 1, without increase throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate increase in Seller’s corresponding net revenue interest set forth in Exhibit C – Part 1; and (iii) is free and clear of all liens, encumbrances and defects (c) with respect to all other Assets, such title that is good and defensible and is free and clear of all liens, with the exception of Permitted Encumbrances. Notwithstanding the foregoing, (a) the loss of or reduction of interest in any Tract following the Effective Time due to any election or decision made by Seller in accordance with applicable joint operating agreements as permitted under this Agreement shall not constitute a Title Defect and (b) Lease Expirations Purchaser shall not be treated entitled to damages of any kind, if Equitable shall fail or be unable to cause title to the Mall to be in the condition called for by this Agreement, nor shall Purchaser in such 49 circumstances be entitled to specific performance of this Agreement. In no event shall Equitable be obligated to discharge any mechanic's or similar lien created by a Tenant in occupancy at the Closing whose Lease is in full force and effect and in good standing (as a Title Defect hereunder described in subsection 4.1.7) or an Adjoining Owner, but will instead be exclusively addressed pursuant Equitable shall use reasonable efforts to Section 4.13.cause such Tenant or Adjoining Owner to do so. 14.2

Title Defects. An Asset As soon as reasonably practicable (and on an ongoing basis), but no later than 5:00 p.m. MDT on Wednesday, August 24, 2005 (the “Objection Deadline”), the Purchaser may notify the Sellers in writing of Title Defects affecting assets of the Company, its Subsidiaries or Four Star. The Purchaser’s notice asserting Title Defects shall include a reasonably detailed description and explanation (including any available supporting documentation) of each Title Defect claimed, the assets affected, and the value that the Purchaser in good faith attributes to the Title Defect, which shall not exceed the Allocated Value of such property. The Purchaser and the Sellers shall meet periodically to attempt to agree on resolution with respect to Title Defects. The Sellers shall have the right, but not the obligation, to attempt, at their sole cost, to cure or remove any Title Defects. The Sellers’ election to attempt to cure a Title Defect shall not constitute a waiver of Sellers’ right to dispute the existence, nature or value of, or cost to cure, the Title Defect. In the event that any Title Defect(s) as to which the Purchaser has given the Sellers timely notice as provided in this Section 3(a) are not remedied or cured prior to Closing, then, subject to the other provisions of this Section 3, the Aggregate Purchase Price shall be deemed to have a “reduced by the aggregate value of all such uncured Title Defects, determined as follows: (1) where the Sellers agree in writing with the value of the Title Defect as set forth in the Purchaser’s notice, that value shall be the value of the Title Defect” ; (2) if Seller the Title Defect is found to have less than Defensible a lien, encumbrance or other charge upon a property which is undisputed and liquidated in amount, then the value of the Title and it is reasonably estimated to Defect shall be the lesser of (aA) require an expenditure in excess the Allocated Value of $25,000 to remedy such property or (bB) reduce the amount necessary to be paid to the obligee to remove the Title Defect from the interest of the Company, its Subsidiaries or, in the case of Four Star, the percentage equity interest of MBOW Four Star Corporation in Four Star multipled by Four Star’s interest, as applicable, in the affected property; (3) if the Allocated Value for a property is positive and the Title Defect represents a discrepancy between the Net Revenue Interest for such property and the Net Revenue Interest for that property stated on Exhibit “C”, then the value of such Asset Title Defect shall be the product of the Allocated Value for such property multiplied by an amount in excess of $25,000. For purposes of this Agreementa fraction, the term “Defensible Title” shall mean (a) with respect to any Tract identified numerator of which is the decrease in Net Revenue Interest and the denominator of which is the Net Revenue Interest stated on Exhibit C – Part 1, “C” (it being understood that if such title of Seller that, subject to and except for the Permitted Encumbrances: (i) entitles Seller to receive reduction in Net Revenue Interest is not less than the percentage set forth in Exhibit C – Part 1 as the net revenue interest for any well drilled or which could be drilled on such Tract of all Hydrocarbons produced, saved and marketed from such well, all without reduction of such interest throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) decreases in connection with those operations in which Seller may from and after the date of this Agreement be a non-consenting co-owner, (C) decreases resulting from the establishment or amendment of pools or units from and after the date of this Agreement, and (D) decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; (ii) obligates Seller to bear the percentage of the costs and expenses relating to the maintenance, development and operation of any well drilled or which could be drilled on such Tract not greater than the working interest for such Tract shown in Exhibit C - Part 1, without increase throughout the duration of the productive life of such well, except (A) as specifically set forth in Exhibit C – Part 1, (B) increases resulting from contribution requirements with respect to defaulting co-owners under applicable operating agreements, and (C) increases to the extent that they are accompanied by a proportionate increase decrease in Seller’s corresponding net revenue interest set forth the Working Interest then such descrepency shall constitute a separate Title Defect); and (4) if the Title Defect represents an obligation, encumbrance, burden or charge upon or other defect in Exhibit C – Part title to the affected property of a type not described in subsections (1; and (iii) is free and clear of all liens, encumbrances and defects (c) with respect to all other Assets, such title that is good and defensible and is free and clear of all liens, with the exception of Permitted Encumbrances. Notwithstanding the foregoing), (a2) or (3) above, the loss value of or reduction of interest in any Tract following the Effective Time due to any election or decision made by Seller in accordance with applicable joint operating agreements as permitted under this Agreement shall not constitute a Title Defect and (b) Lease Expirations shall not be treated as a determined by taking into account the Allocated Value for the property so affected, the portion of the property affected by the Title Defect, the legal effect of the Title Defect, the potential economic effect of the Title Defect hereunder but will instead be exclusively addressed pursuant over the life of the affected property, and such other factors as are appropriate to Section 4.13make a proper evaluation, in each case net to the interest, as represented on Exhibit “C”, of the Company, its Subsidiaries or, in the case of Four Star, the percentage equity interest of MBOW Four Star Corporation in Four Star multipled by Four Star’s interest, as applicable, in the affected property.