Title Defect

Title Defect. Means any condition, lien, encumbrance, encroachment or defect associated with Seller's title to the Subject Interests that would cause Seller not to have Defensible Title. In evaluating whether an encumbrance, encroachment, irregularity, defect in or objection to title is material, due consideration shall be given to the length of time that the Subject Leases have been producing hydrocarbon substances and whether such defect is of the type... expected to be encountered in the area involved and is customarily acceptable to prudent operators and working interest owners. Such usual and customary defects may include, without limitation, defects that may be deemed to have been cured by possession under applicable statutes of limitation, defects in the early chain of title such as failure to recite marital status in documents, omission of heirship or succession proceedings, lack of survey and failure to record releases of liens, production payments or mortgages that have expired of their own terms. Materialmen's, mechanic's, repairmen's, employee's, contractor's, operator's or other similar liens or charges arising in the ordinary course of business incidental to construction, maintenance or operation of the Subject Interests shall not constitute a Title Defect if they have not been filed, or if they have not yet become due and payable. View More

Title Defect. Means a cloud, encumbrance or other impediment rendering title to a Lease defective to a degree that a reasonably prudent operator in the Rocky Mountains would not acquire the lease as part of a very large exploratory acreage acquisition in which it was seeking leases at an average 80% net revenue interest, unless and until appropriate curative work had been performed to remove the cloud, encumbrance or other impediment. Teton has full knowledge of the Tahosa Acquisition Agreement at the date... hereof, and expressly agrees that no term, condition or other provision of the Tahosa Acquisition Agreement constitutes a Title Defect. View More

Title Defect. As used herein, shall mean: (i) Any encumbrance, encroachment, irregularity, defect in or objection to Seller's title to the Interests (expressly excluding Permitted Encumbrances) that renders Seller's title to the Interests less than Defensible Title; (ii) Seller is in default under some material provision of a lease, farmout agreement or other contract or agreement affecting the Interests which could interfere with the operation,... value or use thereof, prevent Seller from receiving the proceeds of production attributable to Seller's interest therein; or result in cancellation of Seller's interest therein; (iii) Any provision or obligation affecting the Interests contained in any contract or agreement disclosed in the Records which is not customary to currently accept oil and gas industry standards and requires an extraordinary expenditure in connection with the acquisition, exploration, development or operation of the Interests or would materially diminish the Net Revenue Interest set forth on Exhibit "F", or materially increase the Working Interest set forth on Exhibit "F". View More