Defective Interest definition

Defective Interest as used herein shall mean: (i) That portion of the Assets affected by a Title Defect; (ii) Subject to the provisions of Section 5.07, that portion of the Assets with respect to which any preferential right to purchase is exercised unless Buyer (A) waives such preferential right to purchase, (B) pays Seller for the affected Assets, and (C) elects to receive the consideration received from the holder as a result of the exercise of such preferential right to purchase; (iii) That portion of the Assets affected by any suit, action or other proceeding before any court or governmental agency that reasonably could result in a material loss or impairment of Seller’s title to any portion of the Assets, or a material impairment of or diminution in the value thereof; (iv) That portion of the Assets subject to a consent to assignment or other approval that (a) is not obtained by Seller prior to Closing, and (b) is required in order for the assignment from Buyer to Seller of the Assets subject thereto to be effective; (v) That portion of the Assets with respect to which Seller has the obligation under a take-or-pay contract to deliver gas without receiving full payment at the time of delivery, or with respect to which Seller has produced, taken, transported and/or processed more than its share of gas thereby creating an imbalance, unless Buyer and Seller can agree to an appropriate adjustment to the Purchase Price; and (vi) That portion of the Assets (A) materially damaged or destroyed by fire or other casualty prior to Closing, or (B) with respect to which, prior to Closing, there is a taking or threatened taking in condemnation or under the right of eminent domain.

Defective Interest means

Defective Interest means that portion of the Interests (as determined in accordance with Section 7.03(c)) affected by a Title Defect or that Buyer is otherwise entitled under Sections 7.02 or 7.04 to treat as a Defective Interest, and of which Seller has been given notice by Buyer prior to September 23, 1996, (the "DEFECT NOTICE DATE"), except as provided hereinafter in this Section 7.03(a). Any notice of any Defective Interest shall be in writing and shall include: (i) a description of the Defective Interest, (ii) the specific basis for the defect that Buyer believes causes such Interest to be a Defective Interest, and (iii) the amount by which Buyer has determined the value of the Defective Interest has been reduced and the computations and information upon which Buyer's determination is based. Buyer shall be deemed to have waived all Title Defects and any other defect to any Interest of which Seller has not been given such notice prior to the Defect Notice Date. If Seller (i) disagrees that a Defect Adjustment or Exclusion Adjustment is warranted; (ii) disagrees that the matter giving rise to such claims is uncured, or (iii) disagrees with the amount of the related Defect Adjustment claimed by Buyer in any notice given in accordance with this Section 7.03(a), then Seller, at its option, may remove the defective property from the sale, attempt to cure the defect at Seller's sole cost and expense, agree to a mutually acceptable purchase price reduction or terminate this Agreement without liability to Buyer except for return of the Performance Deposit, without interest, provided that Seller may not terminate this Agreement unless the aggregate value of Title Defects exceeds twenty percent (20%) of the Preliminary Purchase Price;

Examples of Defective Interest in a sentence

• After the Defective Interest Notice Date (prior to which the adjustment provisions of Section 3.4 also shall be in effect) and subject to the provisions of Section 3.6, the indemnity provided for herein shall be the sole and exclusive remedy, as between the parties hereto, for a breach or failure of a warranty or representation of title.

• If Seller receives notice of such exercise prior to Closing, Seller shall give Purchaser notice thereof in accordance with Section 3.4(a) prior to the Closing, in which event the property affected by such preferential purchase right shall be treated as a Defective Interest.

• Such notice shall be in writing and shall include a description of the Defective Interest, the reason Buyer believes such portion of the Assets to be a Defective Interest, and the amount, not to exceed its Allocated Value, by which Buyer believes the value of the affected portion of the Assets is reduced due to the Defective Interest.

• If the Defective Interest is a consent to assign that cannot be obtained and that is required in order for the assignment from Buyer to Seller of any portion of the Assets subject thereto to be effective, then the value attributable to the Defective Interest is the Allocated Value (or portion thereof) attributable to the affected Assets.

• Notwithstanding the foregoing, if the Cure Period as to any Defective Interest has not expired on or prior to the date scheduled for Closing, then Closing as to the remainder of the Assets shall proceed on schedule, and the Closing Date (if any) with respect to the said Defective Interest shall be governed by Sections 5.03 and 5.07(b).

More Definitions of Defective Interest

Defective Interest has the meaning given in Section 7.01(b) hereof. ------------------

Defective Interest means a PGR Lease affected by a Title Defect that reduces the Allocated Value of the affected PGR Lease by more than One Hundred Fifty Thousand Dollars ($150,000.00). Exhibit 10.17

Defective Interest means a PGR Lease affected by a Title Defect that reduces the Allocated Value of the affected PGR Lease by more than One Hundred Fifty Thousand Dollars ($150,000.00).

Defective Interest is defined in Section 4.2(a).

Defective Interest means a Well, Well Location or Other Asset affected by a Title Defect that reduces the Allocated Value of the affected Well, Well Location or Other Asset by more than $20,000 (the “Individual Title Defect Threshold”). For purposes hereof, a “Title Defect” means any lien, encumbrance, adverse claim, encroachment, irregularity, defect in or objection to title, excluding Permitted Encumbrances, that alone or in combination with other defects renders Seller’s title to a Well, Well Location or Other Asset less than Defensible Title.

Defective Interest means that portion (or all) of such Evaluated Asset affected by such title defect. The term "Allocated Value" is defined in Section 11 below. Material Title Defects shall be limited to the assets evaluated in the Reserve Reports identified in Section 11 below (respectively herein called the "SWOC Evaluated Assets", the "San Salvador Evaluated Assets" and the "Spruce Hills Evaluated Assets" and together, with the Venture Resources Evaluated Assets (the "Evaluated Assets"). The term "title defects" shall not include the following ("Permitted Encumbrances"):

Defective Interest means an Asset (i.e., a line item on Exhibit B or B-1) affected by a Title Defect that reduces the Allocated Value of the affected Asset by more than $5,000.00. The amount by which the Allocated Value of a Defective Interest has been reduced by a Title Defect (the "Defect Value") shall be calculated pursuant to subsection 4.2(d). For purposes of this Section 4.2(a), "Threshold Value" shall mean that the total Defect Values for all Defective Interests reduces the Allocated Value of the affected Asset(s) by more than $100,000 in the aggregate for all affected Assets. Buyer shall not be entitled to give notice pursuant to Section 4.2(b) or be entitled to adjustments pursuant to Section 4.2(d) unless the Threshold Value has been reached or exceeded.