Defect Amount definition

Defect Amount is defined in Section 3.2(d).

Defect Amount means: (a) if the relevant Defect affects all of Seller’s interest in an Asset, such that the Defect results in a complete failure of title with respect thereto, the Defect Amount shall equal the full Allocated Value for the affected Asset; (b) if the Defect constitutes undischarged taxes, indebtedness, or Liens encumbering all or any portion of any Asset, the Defect Amount shall equal the sum necessary to be paid to the obligee to remove the Defect; (c) if the Defect results from a deficiency in Seller’s actual Net Revenue Interest relative to that shown for the affected Lease or Well on Exhibit B and on which the Allocated Value of such Lease or Well is based, the Defect Amount shall equal the positive difference (if any) obtained by subtracting (i) the product obtained by multiplying the Allocated Value for the affected Lease or Well by the ratio of the actual Net Revenue Interest being conveyed to the Net Revenue Interest set forth for such Lease or Well on Exhibit B, from (ii) the Allocated Value for such Lease or Well; (d) if the Defect results from Seller’s actual expense-bearing interest in a Lease or Well being greater than the Working Interest shown for the affected Lease or Well on Exhibit B and on which the Allocated Value of such Lease or Well is based, and such larger expense-bearing interest is not accompanied by a proportionate increase in Seller’s Net Revenue Interest in such Lease or Well, the Defect Amount shall equal the positive difference (if any) obtained by subtracting (i) a recalculated Allocated Value for such Lease or Well using the same production rates, pricing, costs, tax forecasts, and discount factors used to calculate the original Allocated Value for such Lease or Well, adjusted to account for the diminution in the net present value of the future cash flows that results from the higher expense-bearing interest, from (ii) the Allocated Value for such Lease or Well set forth on Exhibit B; and (e) if the Defect is one other than the Defects described above in clauses (a), (b), (c), and (d) of this definition, the Defect Amount shall equal an amount determined by Seller and Buyer by evaluating the portion of the Assets affected by such Defect, the legal effect of the Defect, and the potential economic effect of the Defect over the life of the Assets affected.

Defect Amount has the meaning provided such term in Section 7.3.

Examples of Defect Amount in a sentence

• The Title Arbitrator, however, may not award the Buyer a greater Title Defect Amount than the Title Defect Amount claimed by Buyer in its applicable Title Defect Notice and may not award Seller a greater Title Benefit Amount than the Title Benefit Amount claimed by Seller in its applicable Title Benefit Notice.

• The Title Arbitrator, however, may not award the Buyer a greater Title Defect Amount than the Title Defect Amount claimed by Buyer in its applicable Title Defect Notice.

• To the extent that Seller disputes that any item described in the Notice of Title Defect actually constitutes a Title Defect or disputes the Title Defect Amount assigned by Buyer to any such Title Defect ("Contested Defect"), Seller shall deliver to Buyer a notice so stating ("Defect Notice").

• The Title Arbitrator, however, may not award (a) Buyer a greater Title Defect Amount than the Title Defect Amount claimed by Buyer in the applicable Title Defect Notice (which such Title Defect Amount shall not exceed the Allocated Value of the applicable Title Defect Property) or (b) SM Energy a greater Title Benefit Amount than the Title Benefit Amount claimed by SM Energy in the applicable Title Benefit Notice.

• The Title Arbitrator, however, may not render an award with respect to a Title Defect Amount or a Title Benefit Amount, in each case, in excess of the highest value for such Title Disputed Matter adjustment as claimed by Buyer or Seller, as applicable, or below the lowest value for such Title Disputed Matter adjustment as claimed by Seller or Buyer, as applicable.

More Definitions of Defect Amount

Defect Amount. An amount (expressed as a positive number) equal to the aggregate Asset Value of the Mortgage Loans owned by Purchaser hereunder less the aggregate Purchase Price for all such Mortgage Loans if at any time the aggregate Asset Value of the Mortgage Loans is less than the aggregate Purchase Price for all such Mortgage Loans.

Defect Amount has the meaning set forth in Section 6.4(a)(i).

Defect Amount means the diminution of value of the Assets attributable to any breach of Section 3.19 or the special warranty of Defensible Title in the Asset Conveyances that actually burdens, encumbers or affects Mineral Interests or Xxxxx and shall be determined as follows:

Defect Amount is defined in Section 2.9(e).

Defect Amount means any Title Defect Amount, as defined in Section 8.3, and any Environmental Defect Amount, as defined in Section 8.5.

Defect Amount means any Title Defect Amount, as defined in Section 8.3, and any Environmental Defect Amount, as defined in Section 8.7(b).

Defect Amount means, with respect to each Property affected by an Asserted Defect, an amount determined by Seller and Buyer to account for such Asserted Defect.