Common use of Certain Price Adjustments Clause in Contracts

Certain Price Adjustments. In the event that, as a part of the due diligence reviews provided for in Section 6 above, Asserted Defects are raised by Buyer and Seller is unable (or unwilling) to cure such Asserted Defects prior to Closing, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was Property affected by an Asserted Defect, then: (a) Buyer and Seller shall, with respect to each Property affected by such matters, for a period of five (5) business days, attempt, in good faith, to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, in the case of a Title Benefit) adjustment of the Base Purchase Price to account for such matters; provided that if (i) the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amount, then the downward adjustment to the Base Purchase Price shall be the amount necessary to be paid to remove the Alleged Defect from the affected Property, (ii) the Alleged Defect represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the downward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be excluded from the transaction contemplated hereby, and the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed the amount set forth in Schedule I with respect to such Property.

Certain Price Adjustments. (a) In the event that, as a part of the due diligence reviews review provided for in Section 6 7.1 above, Asserted Defects are raised by Buyer presented to Seller and Seller is unable (or unwilling) to cure such Asserted Defects prior to ClosingDefects, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was an Oil and Gas Property affected by an Asserted DefectDefect (as provided in Section 7.4), then: (a) then Buyer and Seller shall, with respect to each Oil and Gas Property affected by such mattersone or more Asserted Defects, for a period of five (5) business days, attempt, attempt in good faith, faith to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward adjustment to the Purchase Price to account for such Asserted Defects. Notwithstanding the foregoing or anything herein to the contrary, Seller may elect to specify as an appropriate adjustment to the Purchase Price for a Defect of the type specified in Section 7.1(b)(ii), the ------------------ amount required to discharge such lien. (b) Should Seller determine (or upwardshould Buyer, in the case course of its due diligence review contemplated by Section 7.1, determine) that the ownership of the Properties by Seller entitles Seller to a Title Benefitshare of the production from a well listed in Section 7.1(b)(i) of the Seller Disclosure Schedule greater than the share shown for such well under the column headed "NRI" on Schedule 7.1(b)(i) of the Seller Disclosure Schedule, then Seller may propose an upward adjustment of to the Base Purchase Price to account for such mattersfact, in which case such adjustment shall be handled in a similar manner as provided above with respect to adjustments for Asserted Defects; provided that if the party making such determination shall notify the other party no later than ten business days prior to the Closing. (ic) If the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amountNet Title Adjustments (as defined below) do not exceed $100,000, then the downward adjustment to Base Purchase Price shall not be adjusted. If the Net Title Adjustments do exceed $100,000, the Base Purchase Price shall be the amount necessary to be paid to remove the Alleged Defect from the affected Property, adjusted as provided in subsection (iid) the Alleged Defect represents a discrepancy between or subsection (Ae) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the downward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied below by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be excluded from the transaction contemplated hereby, and the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed the amount set forth in Schedule I with respect to such Property.the

Certain Price Adjustments. In the event thatthat Buyer notifies JN E&P of Asserted Defects, as a part of Sellers shall have the due diligence reviews provided for in Section 6 aboveright (but not the obligation) to attempt to cure, prior to Closing, such Asserted Defects Defects. If Sellers are raised by Buyer and Seller is unable (or unwilling) to cure such Asserted Defects prior to Closing, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was an Oil and Gas Property affected by an Asserted Defect, then: (a) Buyer and Seller Sellers shall, with respect to each Oil and Gas Property affected by such matters, for a period of five (5) business days, attempt, in good faith, attempt to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, in adjustment to the case of a Title Benefit) adjustment of the Base Purchase Price to account for such matters; provided that if , in accordance with the following principles: (i) If the Alleged Asserted Defect is an a mortgage, lien, encumbrance or lien that other charge which is undisputed and liquidated in amount, then the downward adjustment (subject to the Base Purchase Price shall provisions of paragraph (iv) below) the adjustment would be the amount necessary to be paid to remove the Alleged Asserted Defect from the affected Property, ; (ii) the Alleged If there shall be an Asserted Defect (or "NRI Increase", as defined below) which (A) represents a discrepancy between (A1) the Net Revenue Interest for to which Sellers are entitled to receive from any well or unit Property and (B2) the Net Revenue Interest stated on Exhibit B, and (B) there is a Working Interest change proportionate to the change in Schedule I for such well the Net Revenue Interest resulting from the Asserted Defect (or unitNRI Increase), then the downward amount of the adjustment to the Base Purchase Price shall be the product of the amount value allocated to Sellers' interest in the applicable Property as set forth on Schedule I with respect to such well or unit Exhibit B (herein called the "Allocated Value") multiplied by a fraction, the numerator of which is shall be the change in the Net Revenue Interest decrease of Sellers and the denominator of which is shall be the Net Revenue Interest stated in Schedule I and of Sellers set forth on Exhibit B; (iii) If the Title Benefit Asserted Defect represents a discrepancy between matter of a type not described in paragraphs (i) or (ii) above, the adjustment amount shall be determined by taking into account the Allocated Value of the Property so affected, the portion of the Property affected by the Asserted Defect, the legal effect of the Asserted Defect, the potential economic effect of the Asserted Defect over the life of the affected Property and such other factors as are necessary to make a proper evaluation of the value of the Asserted Defect; (iv) Notwithstanding any other provision contained herein, the aggregate adjustment attributable to the effect of all Asserted Defects related to a given Property shall not exceed the Allocated Value of such Property; provided, however, that Buyer, may elect to have a Property affected by a Defect excluded from the transaction contemplated hereby if such Property is subject to a Defect which will either (A) require remediation operations to be performed on the Net Revenue Interest for any well affected Property, the cost of which is reasonably expected to exceed, or unit and (B) otherwise require the current expenditure of funds in an amount exceeding, the Allocated Value thereof, unless Sellers agree to adjust the Purchase Price in an amount equal to the full costs of such remediation obligations or other required expenditure of funds. (b) Should Sellers determine, or should Buyer, in the course of its due diligence reviews contemplated by Section 7 above, have reasonable cause to believe, that the ownership of the Properties by Sellers entitles the Sellers (whether individually or collectively) to a decimal share of the production from a Well or item listed on Exhibit B greater than the decimal share shown for such Well or item under the column headed "Net Revenue Interest stated in Schedule I for such well or unitInterest" on Exhibit B (herein called an "NRI Increase"), then the party making the determination (or having such cause to believe) that an NRI Increase exists shall promptly notify the other party thereof. JN E&P or Helis may thereafter propose an upward adjustment to the Base Purchase Price to account for such fact, in which case such adjustment shall be handled in the product of the amount set forth on Schedule I same manner as provided above with respect to adjustments for Asserted Defects; provided that the party making such well or unit multiplied by a fractiondetermination shall notify the other party no later than December 15, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or2000. (bc) with respect to each Property as to which Buyer and Seller are Should the parties be unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Propertyin light of the factors set forth above, then each of JN E&P (unless Buyer elects on behalf of the JN Group) and Helis (each a "Seller Group") shall have the right to waive all separately elect to either (i) require that the Closing take place, deposit that portion of the estimated diminution in the Allocated Value of the Property affected thereby as set forth in the Defect Notice (but in no event to exceed the Allocated Value of the Property affected thereby) attributable to such Seller Group in an escrow account and attempt to cure one or more Asserted Defects after the Closing; (ii) refer the matter for arbitration in accordance with respect the provisions of Section 8(d) below, in which case, subject to Section 8(a)(iv) above and the final two sentences of this Section 8(c), the price to be paid at Closing shall be reduced by the average of Sellers' and Buyer's estimates of the diminution in the Allocated Value of the Property affected thereby resulting from such Asserted Defect, or (iii) exclude the interest of such Seller Group in the Property prior to Closing) such Property will be excluded affected thereby from the transaction contemplated hereby, and in which case the Base Purchase Price will be reduced by the Allocated Value of the Property affected thereby, subject to Section 8(a)(iv) above and the final two sentences of this Section 8(c). If the Purchase Price reduction (or increased increase) attributable to the interest of all Sellers which would result from the above provided for procedure (whether determined at Closing o r pursuant to the arbitration pursuant to Section 8(d) below) does not exceed $300,000, then the Purchase Price shall not be adjusted, and if pursuant to the provisions above set forth, Properties were to be excluded from the transaction, none of the Properties which would be excluded by such procedure shall be excluded, except for those properties which Buyer, may, nevertheless, elect to have excluded notwithstanding the fact that no Purchase Price adjustment occurs. If the Purchase Price reduction (increase) attributable to the interest of all Sellers which would result from the above provided for procedure exceeds $300,000, the Purchase Price shall be adjusted by the total amount of such reduction (or increase). (d) If Sellers or Buyer are unable to agree as to whether a Defect exists, the value to be attributable to an Asserted Defect prior to Closing and any Seller Group has elected not to exclude the affected Property pursuant to the provisions of paragraph 8(c) above, then either Buyer or any such Seller Group may elect to refer the matter to be resolved by a Defect Expert ("Defect Expert"), to be selected by the parties. Such Defect Expert shall be an attorney or other party with not less than 15 years experience in the case oil and gas industry such that he or she is considered an expert in oil and gas title matters. The Defect Expert may enlist the advice of a Title Benefit) petroleum engineer mutually agreed by the amount set forth on Schedule I parties with respect to any valuation issues and any other experts as such Defect Expect shall deem reasonably necessary. Within 10 business days after referral of such matter to Defect Expert, each of Buyer and the Seller Group(s) participating in such proceeding acting as a single party (the "Participating Sellers") shall deliver to each other and to the xxxxx plus Defect Expert a notice setting forth in adequate detail the amount set forth issues to be determined by the Defect Expert and the decision (on Schedule I a word for word basis) that such party desires the Defect Expert to make with respect to the units issues being determined (the "Decision Notice"); provided, however, in which preparing the Decision Notice each party (as well as the Defect Expert) shall be bound by the provisions of Section 8(a)(iv) above. Within two business days after giving of the two Decision Notices, the Parties shall attend a meeting with the Defect Expert at a mutually acceptable time and place to discuss fully the content of such Property participates; and (c) notwithstanding anything Decision Notice and based thereon whether either or both wish to modify their Decision Notices in any way. Any such modifications shall be discussed, so that when each party finalizes its Decision Notice, it shall do so with full knowledge of the content of the other parties' final Decision Notice. The finalization of such Decision Notices and the deliver of same by each party to the contrary in this Agreement, the aggregate downward adjustment other shall occur at such meeting unless by mutual agreement they agree to the Base Purchase Price have one or more additional meetings for any title such purposes. The Defect attributable Expect shall be required to any Property shall not exceed the amount adopt a decision set forth in Schedule I either Decision Notice and shall have no power to reach any other result. Such Defect Expert shall adopt a decision that in his or her judgment is more fair and equitable and in conformity with respect the principles set forth in subparagraphs (a)(i) through (a)(iv) of this Section 8, the Allocated Value of affected Property, the likelihood of its economic effect on the affected Property and such other reasonable and customary standards as are applicable to the situation. The decision, to be made in writing and signed by the Defect Expert shall determine such Propertydispute. Such decision shall be made, signed and delivered to the parties at the meeting unless otherwise agreed by the parties. The expenses of the Defect Expert and any other expert retained by the Defect Expert shall be borne one-half by the Participating Sellers and one-half by Buyer except that such party shall pay fees and expenses of its counsel, witnesses and employees. The determination and award of the Defect Expect shall be final and binding upon the parties and judgment may be entered thereon in any court of competent jurisdiction upon the application therefore of either party. Within five (5) business days from the execution of such decision, any payment resulting from the decision shall be made.

Certain Price Adjustments. In the event thatIf, as a part of the due diligence reviews provided for in Section 6 5.1 above, Asserted Defects are raised by Buyer presented to Seller and Seller is unable (or unwilling) to cure such Asserted Defects prior to Closing, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was Property affected by an Asserted Defect, then: (a) Buyer and Seller shall, with respect to each Basic Property affected by such mattersan Asserted Defect, for a period of five (5) business days, attempt, in good faith, attempt to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, in adjustment to the case of a Title Benefit) adjustment of the Base Purchase Price to account for such matters; provided that if (i) the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amount, then the downward adjustment to the Base Purchase Price shall be the amount necessary to be paid to remove the Alleged Defect from the affected Property, (ii) the Alleged Defect represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the downward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; orAsserted Defect, (b) with respect to each Basic Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Basic Property, then: (i) If the Asserted Defect is a mortgage, lien, encumbrance or other charge which is undisputed and liquidated in amount, then (unless subject to the provisions of paragraph (v) below) the adjustment shall be the amount necessary to be paid to remove the Asserted Defect from the affected Basic Property; (ii) If there shall be an Asserted Defect affecting an Oil and Gas Property or a Lignite Asset which (A) represents a discrepancy between (1) the Net Revenue Interest to which the Property Owners are entitled to receive from such Property and (2) the Net Revenue Interest stated on Exhibit B, and (B) there is a Working Interest change proportionate to the change in the Net Revenue Interest resulting from the Asserted Defect, then the amount of the adjustment shall be the product of the Allocated Value to such Property as set forth on Exhibit A multiplied by a fraction, the numerator of which shall be the change in the Net Revenue Interest and the denominator of which shall be the Net Revenue Interest set forth on Exhibit B; (iii) If there shall be an Asserted Defect affecting the interest of DFR in the Gathering Joint Venture or the interest of the Gathering Joint Venture in the Gathering System which represents a discrepancy between the ownership interest of DFR or the Gathering Joint Venture in such property and that interest as set forth on Exhibit B, then the amount of the adjustment shall be such amount as may be agreed upon by Buyer elects and Seller to waive refer to such diminution in value; (iv) If the Asserted Defect represents an obligation, encumbrance, burden, discrepancy or charge upon or other defect in title to the affected Basic Property of a type not described in paragraphs (i), (ii) or (iii) above, the adjustment amount shall be determined by taking into account the Allocated Value of the Basic Property so affected, the portion of the Basic Property affected by the Asserted Defect, the legal effect of the Asserted Defect, the potential economic effect of the Asserted Defect over the life of the affected Basic Property and such other factors as are necessary to make a proper evaluation of the value of the Asserted Defect; (v) Notwithstanding any other provision contained herein, the aggregate adjustment attributable to the effect of all Asserted Defects with respect related to such Property prior to Closing) such Property will be excluded from the transaction contemplated hereby, and the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any given Basic Property shall not exceed the amount Allocated Value of such Property, provided, however, that Buyer may elect to exclude a property affected by an environmental claim if the value adjustments would exceed the Allocated Value of such property; (vi) Should the parties be unable to agree upon an appropriate adjustment, in light of the factors set forth above, within 30 days after the delivery of the Defect Notice, either party may refer the matter for resolution by arbitration conducted in Schedule I the City of Houston, Texas, in accordance with respect the further provisions hereof by giving notice to the other party of its election to do so (an "Arbitration Notice"). Such arbitration shall be before a panel of three persons experienced in oil and gas title issues in accordance with the then applicable rules of the AAA. Such arbitrators shall be authorized to retain whatever experts they may deem necessary to adequately decide the matters to be presented. Within 20 days after receipt of such PropertyArbitration Notice, each of Buyer and Seller will appoint one arbitrator, and those two arbitrators will appoint a third arbitrator. In the event that the two arbitrators cannot agree on a third arbitrator within 10 days following the appointment of the second arbitrator, then the third arbitrator shall be appointed by the AAA in accordance with its then applicable rules. If either Buyer or Seller fails to appoint an arbitrator within the 20 day period provided for such appointment, the arbitrator chosen by that other party shall act as the sole arbitrator. All determinations made by a majority of the arbitrators (or the sole arbitrator) shall be final, conclusive and binding on Buyer and Seller. Each of Buyer and Seller will pay one-half of the fees of the third arbitrator and all other arbitration fees and expenses and the fees of their respective arbitrators and experts retained by same (if required). If the Closing occurs prior to the resolution of the matter, the Assets affected by the Defect shall not be excluded from the transaction, and the Purchase Price at Closing shall be reduced by the adjustment amount proposed by Seller in good faith after consultation with Buyer, subject to revision in the Final Settlement. (c) Should Seller determine (or should the title opinions or other title review conducted by Buyer reflect ) that the ownership of the Basic Properties by the applicable Property Owner entitles such Property Owner to a decimal share of the production from a well, unit or lands listed on Exhibit B greater than the decimal share shown for such well, unit or lands under the column headed "Net Revenue Interest" on Exhibit B, then such increase in NRI may be offset against any decrease in NRI alleged hereunder in order to determine whether a Defect has occurred. (d) If the Purchase Price reduction which would result from the above provided for procedure does not exceed two hundred thousand dollars ($200,000) in the aggregate, then the Purchase Price shall not be adjusted. If the Purchase Price reduction which would result from the above provided for procedure exceeds two hundred thousand dollars ($200,000), the Purchase Price shall be adjusted by the amount by which such reduction exceeds two hundred thousand dollars ($200,000).

Certain Price Adjustments. In the event that, as a part of the due diligence reviews provided for in Section 6 above, Asserted Defects are raised by Buyer and Seller is unable (or unwilling) to cure such Asserted Defects prior to Closing, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was Property affected by an Asserted Defect, then: (a) Buyer and Seller shall, with respect to each Property affected by such matters, for a period of five (5) business days, attempt, in good faith, to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, in the case of a Title Benefit) adjustment of the Base Purchase Price to account for such matters; provided that if (i) the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amount, then the downward adjustment to the Base Purchase Price shall be the amount necessary to be paid to remove the Alleged Defect from the affected Property, (ii) the Alleged Defect represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the downward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be excluded from the transaction contemplated hereby, and the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx wxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed the amount set forth in Schedule I with respect to such Property.

Certain Price Adjustments. (a) In the event that, as a part of the due diligence reviews review provided for in Section 6 7.1 above, Asserted Defects are raised by Buyer presented to Seller and Seller is unable (or unwilling) to cure such Asserted Defects prior to ClosingDefects, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was an Oil and Gas Property affected by an Asserted DefectDefect (as provided in Section 7.4), then: (a) then Buyer and Seller shall, with respect to each Oil and Gas Property affected by such mattersone or more Asserted Defects, for a period of five (5) business days, attempt, attempt in good faith, faith to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward adjustment to the Purchase Price to account for such Asserted Defects. Notwithstanding the foregoing or anything herein to the contrary, Seller may elect to specify as an appropriate adjustment to the Purchase Price for a Defect of the type specified in Section 7.1(b)(ii), the ------------------ amount required to discharge the lien. (b) Should Seller determine (or upwardshould Buyer, in the case course of its due diligence review contemplated by Section 7.1, determine) that the ownership of Properties by a Title BenefitPartnership entitles such Partnership to a share of the production from a well listed in Section 7.1(b)(i) of the Seller Disclosure Schedule greater than the share shown for such well under the column headed "NRI" on Schedule 7.1(b)(i) of the Seller Disclosure Schedule, then Seller may propose an upward adjustment of to the Base Purchase Price to account for such mattersfact, in which case such adjustment shall be handled in a similar manner as provided above with respect to adjustments for Asserted Defects; provided that if the party making such determination shall notify the other party no later than ten business days prior to the Closing. (ic) If the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amountNet Title Adjustments (as defined below) do not exceed $100,000, then the downward adjustment to Base Purchase Price shall not be adjusted. If the Net Title Adjustments do exceed $100,000, the Base Purchase Price shall be adjusted as provided in subsection (d) or subsection (e) below by the amount necessary to be paid to remove the Alleged Defect from the affected Property, (ii) the Alleged Defect represents a discrepancy between (A) by which the Net Revenue Interest for any well or unit and Title Adjustments exceed $100,000. As used in this subsection (B) c), the term "Net Revenue Interest stated in Schedule I for such well or unit, then Title Adjustments" means the downward adjustment net amount of the adjustments to the Base Purchase Price shall be resulting from the product procedures provided for above or Section 7.5 and attributable to any of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator Defects referenced in subsections (i) through (iv) of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and Section 7.1(b). (iiid) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment Any reduction to the Base Purchase Price under subsection (c) shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied effected by a fractiondecrease in the number of Preferred Shares equal to A minus B, where "A" equals the numerator number of which is shares of Buyer's Series A Convertible Preferred Stock specified in Article III, where "B" equals C divided by D, where "C" equals the Net Revenue Interest increase Title Adjustments minus $100,000, and the denominator of which is the Net Revenue Interest stated in Schedule I; orwhere "D" equals $50.00. (be) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be excluded from the transaction contemplated hereby, and Any increase in the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and under subsection (c) notwithstanding anything shall be effected by an increase in the number of Preferred Shares equal to the contrary A plus B, with "A" and "B" being determined as provided in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed the amount set forth in Schedule I with respect to such Propertysubsection (d) above.

Certain Price Adjustments. (a) In the event that, as a part of the due diligence reviews review provided for in Section 6 7.1 above, Asserted Defects are raised by Buyer presented to Seller and Seller is unable (or unwilling) to cure such Asserted Defects prior to ClosingDefects, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was an Oil and Gas Property affected by an Asserted DefectDefect (as provided in Section 7.4), then: (a) then Buyer and Seller shall, with respect to each Oil and Gas Property affected by such mattersone or more Asserted Defects, for a period of five (5) business days, attempt, attempt in good faith, faith to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward adjustment to the Purchase Price to account for such Asserted Defects. Notwithstanding the foregoing or anything herein to the contrary, Seller may elect to specify as an appropriate adjustment to the Purchase Price for a Defect of the type specified in Section 7.1(b)(ii), the ------------------ amount required to discharge the lien. (b) Should Seller determine (or upwardshould Buyer, in the case course of its due diligence review contemplated by Section 7.1, determine) that the ownership of Properties by a Title BenefitPartnership entitles such Partnership to a share of the production from a well listed in Section 7.1(b)(i) of the Seller Disclosure Schedule greater than the share shown for such well under the column headed "NRI" on Schedule 7.1(b)(i) of the Seller Disclosure Schedule, then Seller may propose an upward adjustment of to the Base Purchase Price to account for such mattersfact, in which case such adjustment shall be handled in a similar manner as provided above with respect to adjustments for Asserted Defects; provided that if the party making such determination shall notify the other party no later than ten business days prior to the Closing. (ic) If the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amountNet Title Adjustments (as defined below) do not exceed $100,000, then the downward adjustment to Base Purchase Price shall not be adjusted. If the Net Title Adjustments do exceed $100,000, the Base Purchase Price shall be the amount necessary to be paid to remove the Alleged Defect from the affected Property, adjusted as provided in subsection (iid) the Alleged Defect represents a discrepancy between or subsection (Ae) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the downward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied below by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be excluded from the transaction contemplated hereby, and the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed the amount set forth in Schedule I with respect to such Property.the

Certain Price Adjustments. (a) In the event that, as a part of the due diligence reviews provided for in Section 6 8 above, Asserted Defects are raised by Buyer presented to Sellers and Seller is Sellers are unable (or unwilling) to cure such Asserted Defects prior to Closing, or then the following shall apply: (1) If the Defect consists of a failure of title to the entirety of a Seller’s interest in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property, such Oil and Gas Property affected by a casualty loss as if it was Property affected by shall become an Asserted DefectExcluded Asset, then: (a) Buyer and Seller shall, with respect to each Property affected by such matters, for a period of five (5) business days, attempt, in good faith, to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, in the case of a Title Benefit) adjustment of the Base Purchase Price to account for such matters; provided that if (i) the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amount, then the downward adjustment to the Base Purchase Price shall be reduced by the amount necessary Allocated Value for that Oil and Gas Property. (2) If the Defect consists of a lien, including a lien asserted by any suppliers of material or labor which is not barred from enforcement by limitations and which is not satisfied prior to be paid to remove the Alleged Defect from the affected PropertyClosing, or a security interest, pledge, or collateral assignment of one or more Oil and Gas Properties (ii) the Alleged Defect represents or a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unitportion thereof), then the downward adjustment to the Base Purchase Price shall be reduced by the amount necessary to remove such lien, security interest, pledge, collateral assignment or other encumbrance, not to exceed, in any case, the Allocated Value therefor; provided, however, that in the event the amount necessary to remove such lien, security interest, pledge, collateral assignment or other encumbrance does exceed the Allocated Value therefor and Seller has confirmed in writing not less than four (4) business days prior to Closing to Buyer that Seller does not intend to remove (or cause to be removed) such lien, security interest, pledge, collateral assignment or other encumbrance at or prior to Closing, then, at Buyer’s written election to Seller (not less than two (2) business days prior to Closing) to cause the affected Oil and Gas Properties to be excluded from this sale, in which case, such Oil and Gas Properties shall thereafter be deemed Excluded Assets and the Base Purchase Price shall be reduced by the Allocated Value for any such excluded Oil and Gas Property. (3) If the Defect consists of a lesser Net Revenue Interest or a lesser amount of net or gross mineral acres in an Oil and Gas Property than that specified for such Property on Exhibit D, the Base Purchase Price shall be reduced by an amount equal to the product of obtained by multiplying the amount set forth on Schedule I with respect to Allocated Value for each such well or unit multiplied Oil and Gas Property by a fraction, the numerator of which is the amount of the reduction of the Net Revenue Interest decrease interest (or, as applicable, the net or gross mineral acres) and the denominator of which is the Net Revenue Interest stated (or, as applicable, the net or gross mineral acres) specified for such Oil and Gas Property on Exhibit D. (4) If the Defect consists of a greater Working Interest in Schedule I an Oil and (iii) Gas Property, or the Title Benefit represents burdens attributable to such Working Interest, than that specified for such Property on Exhibit D without a discrepancy between (A) proportionate increase in the associated Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unitProperty, then the upward adjustment to the Base Purchase Price shall be reduced by the product difference in the Allocated Value of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase Oil and Gas Property without such Defect and the denominator of which recalculated Allocated Value for such Oil and Gas Property with such Defect, as agreed by Sellers and Buyer or, if no agreement is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Propertyreached, then the affected Oil and Gas Property shall be deemed an Excluded Assets (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be and excluded from the transaction contemplated herebythis Agreement), and the Base Purchase Price will shall be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; andAllocated Value therefor). (c5) notwithstanding anything If the Defect is of the type specified in Section 8(b)(4), unless Buyer waives such Defect, then at Sellers’ option (and Sellers shall deliver such election to the contrary Buyer in this Agreement, the aggregate downward adjustment writing prior to Closing) either (i) the Base Purchase Price shall be reduced by the amount which Buyer and Sellers mutually agree is reasonably required to remediate the affected Properties (net to the applicable Seller’s interest) and such Properties shall be conveyed to Buyer in accordance with the provisions of this Agreement, or (ii) the Properties to which such Defect pertains shall become Excluded Assets and the Base Purchase Price shall be reduced by the Allocated Value for such Properties; provided, however, that notwithstanding Sellers’ election of (ii) above, Buyer, subsequent to Closing and pursuant to a written election delivered to Sellers, may elect to waive the Defect at any title time on or prior to the date the Post-Closing adjustments are made pursuant to Section 13(c), and, in that event, the affected Properties shall be conveyed to Buyer and the Allocated Value thereof paid to Seller in accordance with Section 9(b) below. (6) If the Defect attributable is cured by Sellers, subject to any the reasonable satisfaction of Buyer (or waived by Buyer), after Closing but on or before the date the Post-Closing adjustments are made pursuant to Section 13(c), and such Defect pertains to a Property not conveyed to Buyer at Closing, then in conjunction with the Post-Closing adjustments made pursuant to Section 13(c), such Property shall not exceed be conveyed to Buyer and the amount set forth in Schedule I with respect Allocated Value thereof paid to such PropertySeller.

Certain Price Adjustments. In the event that, (a) If Buyer presents Asserted Defects to Seller as a part of the due diligence reviews provided for in Section 6 7 above, Asserted Defects are raised by Buyer and if Seller is unable (or unwilling) unwilling to cure such Asserted Defects prior to Closing, or in the event that Seller or if Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas a Property affected by a casualty loss pursuant to Section 16 as if it was were a Property affected by an Asserted Defect, then: (ai) Buyer and Seller shall, with respect to each Property affected by such matters, for a period of five (5) business days, attempt, in good faith, attempt to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, adjustment to the valuation placed upon such Property in the case of a Title Benefit) adjustment of the Base Purchase Price Exhibit B to account for such matters; provided that if (i) the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amount, then the downward adjustment to the Base Purchase Price shall be the amount necessary to be paid to remove the Alleged Defect from the affected Property, and (ii) the Alleged Defect represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the downward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with With respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will shall be excluded from the transaction contemplated hereby, and the Base Purchase Price will shall be reduced (or increased in the case of a Title Benefit) by the amount set forth attributed on Schedule I Exhibit B to the xxxxx plus the amount set forth wells loxxxxx on Schedule I to such Property and the units in which such Property participates; and. (b) The Properties with Asserted Defects for which Seller and Buyer agree on a valuation adjustment pursuant to Section 8(a)(i) shall be divided into two groups. The first group ("Major Defects") shall contain the Properties with valuation adjustments which individually are in an amount greater than or equal to $250,000. The second group ("Minor Defects") shall contain the Properties with valuation adjustments which individually are in an amount less than $250,000. The Base Purchase Price shall be reduced by the total amount of the Major Defects. If the total of all Minor Defects is greater than $2,375,000, the Base Purchase Price shall be reduced by the total amount of the Minor Defects. If the total of all Minor Defects is less than $2,375,000, the Base Purchase Price shall not be reduced. (c) notwithstanding anything If Seller is shown to be entitled to a share of the contrary production from a well or unit listed on Exhibit B greater than the share shown for such well or unit under the column headed "Net Revenue Interest" on Exhibit B, then Seller may propose an increase in this Agreementthe Purchase Price, in which case such increase shall be handled in the aggregate downward adjustment same manner as provided in Sections 8 (a) and (b) above with respect to adjustments for Asserted Defects except that the Base Purchase Price for any title Defect attributable shall be increased; and, provided that the party making such determination shall notify the other party of such adjustment no later than five (5) days prior to any Property shall not exceed the amount set forth in Schedule I with respect to such PropertyClosing Date.

Certain Price Adjustments. (a) In the event that, as a part of the due diligence reviews review provided for in Section 6 7.1 above, Asserted Defects are raised by Buyer presented to Seller and Seller is unable (or unwilling) to cure such Asserted Defects prior to ClosingDefects, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was an Oil and Gas Property affected by an Asserted DefectDefect (as provided in Section 7.4), then: (a) then Buyer and Seller shall, with respect to each Oil and Gas Property affected by such mattersone or more Asserted Defects, for a period of five (5) business days, attempt, attempt in good faith, faith to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward adjustment to the Purchase Price to account for such Asserted Defects. Notwithstanding the foregoing or anything herein to the contrary, Seller may elect to specify as an appropriate adjustment to the Purchase Price for a Defect of the type specified in Section 7.1(b)(ii), the ------------------ amount required to discharge the lien. (b) Should Seller determine (or upwardshould Buyer, in the case course of its due diligence review contemplated by Section 7.1, determine) that the ownership of Properties by a Title BenefitPartnership entitles such Partnership to a share of the production from a well listed in Section 7.1(b)(i) of the Seller Disclosure Schedule greater than the share shown for such well under the column headed "NRI" on Schedule 7.1(b)(i) of the Seller Disclosure Schedule, then Seller may propose an upward adjustment of to the Base Purchase Price to account for such mattersfact, in which case such adjustment shall be handled in a similar manner as provided above with respect to adjustments for Asserted Defects; provided that if the party making such determination shall notify the other party no later than ten business days prior to the Closing. (ic) If the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amountNet Title Adjustments (as defined below) do not exceed $100,000, then the downward adjustment to Base Purchase Price shall not be adjusted. If the Net Title Adjustments do exceed $100,000, the Base Purchase Price shall be adjusted as provided in subsection (d) or subsection (e) below by the amount necessary to be paid to remove the Alleged Defect from the affected Property, (ii) the Alleged Defect represents a discrepancy between (A) by which the Net Revenue Interest for any well or unit and Title Adjustments exceed $100,000. As used in this subsection (B) c), the term "Net Revenue Interest stated in Schedule I for such well or unit, then Title Adjustments" means the downward adjustment net amount of the adjustments to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well or unit and (B) the Net Revenue Interest stated in Schedule I for such well or unit, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well or unit multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be excluded resulting from the transaction contemplated hereby, procedures provided for above or Section 7.5 and the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed of the amount set forth Defects referenced in Schedule I with respect to such Propertysubsections (i) through (iv) of Section 7.1(b).

Certain Price Adjustments. (a) In the event that, as a part of the due diligence reviews provided for in Section 6 8 above, Asserted Defects are raised by Buyer presented to Seller and Seller is unable (or unwilling) to cure such Asserted Defects prior to Closing, or then the following shall apply: (1) If the Defect consists of a failure of title to the entirety of Seller’s interest in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property, such Oil and Gas Property affected by a casualty loss as if it was Property affected by shall become an Asserted DefectExcluded Asset, then: (a) Buyer and Seller shall, with respect to each Property affected by such matters, for a period of five (5) business days, attempt, in good faith, to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, in the case of a Title Benefit) adjustment of the Base Purchase Price shall be reduced by the Allocated Value for that Oil and Gas Property. (2) If the Defect consists of a lien, including a lien asserted by any suppliers of material or labor which is not barred from enforcement by limitations and which is not satisfied prior to account for such matters; provided that if Closing, or a security interest, pledge, or collateral assignment of one or more Oil and Gas Properties (ior a portion thereof) the Alleged Defect is an encumbrance or lien that which is undisputed and liquidated in amount, then the downward adjustment to the Base Purchase Price shall be reduced by the amount necessary to be paid to remove such lien, security interest, pledge, collateral assignment or other encumbrance. (3) If the Alleged Defect from the affected Property, (ii) the Alleged Defect represents consists of a discrepancy between (A) the lesser Net Revenue Interest for any well or unit in an Oil and (B) the Net Revenue Interest stated in Schedule I Gas Property than that specified for such well or unitProperty on Exhibit D, then the downward adjustment to the Base Purchase Price shall be reduced by an amount equal to the product of obtained by multiplying the amount set forth on Schedule I with respect to Allocated Value for each such well or unit multiplied Oil and Gas Property by a fraction, the numerator of which is the amount of the reduction of the Net Revenue Interest decrease interest and the denominator of which is the Net Revenue Interest stated specified for such Oil and Gas Property on Exhibit D. (4) If the Defect consists of a greater Working Interest in Schedule I an Oil and (iii) Gas Property, or the Title Benefit represents burdens attributable to such Working Interest, than that specified for such Property on Exhibit D without a discrepancy between (A) proportionate increase in the associated Net Revenue Interest for any well or unit such Property, then the Base Purchase Price shall be reduced by the difference in the Allocated Value of such Oil and Gas Property without such Defect and the recalculated Allocated Value for such Oil and Gas Property with such Defect, as agreed by Seller and Buyer or, if no agreement is reached, then the affected Oil and Gas Property shall be deemed an Excluded Assets (Band excluded from this Agreement), and the Base Purchase Price shall be reduced by the Allocated Value therefor). (5) If the Defect is of the type specified in Section 8(b)(4), unless Buyer waives such Defect, then at Seller’s option (and Seller shall deliver such election to Buyer in writing prior to Closing) either (i) the Net Revenue Interest stated Base Purchase Price shall be reduced by the amount which Buyer and Seller mutually agree is reasonably required to remediate the affected Properties (net to Seller’s interest) and such Properties shall be conveyed to Buyer in Schedule I accordance with the provisions of this Agreement, or (ii) the Properties to which such Defect pertains shall become Excluded Assets and the Base Purchase Price shall be reduced by the Allocated Value for such Properties; provided, however, that notwithstanding Seller’s election of (ii) above, Buyer, subsequent to Closing and pursuant to a written election delivered to Seller, may elect to waive the Defect at any time on or prior to the date the Post-Closing adjustments are made pursuant to Section 13(c), and, in that event, the affected Properties shall be conveyed to Buyer and the Allocated Value thereof paid to Seller in accordance with Section 9(b) below. (6) If the Defect is cured by Seller, subject to the reasonable satisfaction of Buyer (or waived by Buyer), after Closing but on or before the date the Post-Closing adjustments are made pursuant to Section 13(c), and such Defect pertains to a Property not conveyed to Buyer at Closing, then in conjunction with the Post-Closing adjustments made pursuant to Section 13(c), such Property shall be conveyed to Buyer and the Allocated Value thereof paid to Seller. (b) If any Oil and Gas Property which becomes an Excluded Asset pursuant to the provisions of this Section 9 (and for which the Base Purchase Price has been reduced by the Allocated Value therefor) is inadvertently conveyed to Buyer at Closing (or if the last sentence of Section 7(d) applies), Buyer shall re-convey such Excluded Asset to Seller with similar warranty of title, with an effective date of January 1, 2007, and with corresponding expense and revenue adjustments and the Purchase Price reduced or refunded by the Allocated Value of such Oil and Gas Property. (c) Should Seller determine (or should Buyer, in the course of its due diligence reviews contemplated by Section 8 above, determine) that the ownership of the Properties by Seller entitles Seller to a decimal share of the production from a well greater than the decimal share shown for such well under the column headed “NRI” on Exhibit D, or unitis burdened by a Working Interest that is lower than the decimal share shown for such well under the column headed “WI’ on Exhibit D without a proportionate reduction in Net Revenue Interest, then the Seller may propose an upward adjustment to the Base Purchase Price to account for such fact, in which case such adjustment shall be handled in the product of the amount set forth on Schedule I same manner as provided in Subsection (a) above with respect to adjustments for Asserted Defects; provided that the party making such well determination shall notify the other party no later than three (3) days prior to Closing. (d) If the reduction or unit multiplied increase in the Base Purchase Price or the Purchase Price (as the case may be), which would result from all of the adjustments arising out of the procedure provided for above does not exceed $10,000, then neither shall be adjusted pursuant to this Section, and none of the Properties which would be excluded by a fractionsuch procedure shall be excluded. If, however, the numerator reduction or increase in the Base Purchase Price, or the Purchase Price (as the case may be) which would result from all adjustments arising out of the procedure provided above exceeds $10,000, then the Base Purchase Price or the Purchase Price (as the case may be) shall be adjusted by the amount by which such reduction (or increase) exceeds $10,000. (e) If there is any dispute between the Net Revenue Interest increase Parties regarding either the nature, existence, value or adjustment of an Asserted Defect, or with regard to the Properties affected thereby, and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller Parties are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all resolve such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property dispute prior to Closing, then either Party shall have the right, upon written notice to the other Party not less than two (2) such Property will days prior to Closing, to cause the affected Properties to be deemed an Excluded Assets (and excluded from the transaction contemplated herebythis Agreement), and the Base Purchase Price will shall be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed the amount set forth in Schedule I with respect to such PropertyAllocated Value therefor.

Certain Price Adjustments. In the event that, as a part of the due diligence reviews provided for in Section 6 above, Asserted Defects are raised by Buyer and Seller is unable (or unwilling) to cure such Asserted Defects prior to Closing, or in the event that Seller or Buyer has asserted a Title Benefit, or in the event that Seller has elected (pursuant to Section 14) to treat an Oil and Gas Property affected by a casualty loss as if it was Property affected by an Asserted Defect, then: (a) Buyer and Seller shall, with respect to each Property affected by such matters, for a period of five (5) business days, attempt, in good faith, to agree upon the existence of any Asserted Defects and/or Title Benefits and, as applicable, an appropriate downward (or upward, in the case of a Title Benefit) adjustment of the Base Purchase Price to account for such matters; provided that if (i) the Alleged Defect is an encumbrance or lien that is undisputed and liquidated in amount, then the downward adjustment to the Base Purchase Price shall be the amount necessary to be paid to remove the Alleged Defect from the affected Property, (ii) the Alleged Defect represents a discrepancy between (A) the Net Revenue Interest for any well well, unit or unit Drilling Location and (B) the Net Revenue Interest stated in Schedule I for such well well, unit or unitDrilling Location, then the downward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well well, unit or unit Drilling Location multiplied by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest stated in Schedule I and (iii) the Title Benefit represents a discrepancy between (A) the Net Revenue Interest for any well well, unit or unit Drilling Location and (B) the Net Revenue Interest stated in Schedule I for such well well, unit or unitDrilling Location, then the upward adjustment to the Base Purchase Price shall be the product of the amount set forth on Schedule I with respect to such well well, unit or unit Drilling Location multiplied by a fraction, the numerator of which is the Net Revenue Interest increase and the denominator of which is the Net Revenue Interest stated in Schedule I; or (b) with respect to each Property as to which Buyer and Seller are unable to agree upon the existence of an Asserted Defect and/or Title Benefit and/or an appropriate adjustment with respect to all such matters affecting such Property, then (unless Buyer elects to waive all Asserted Defects with respect to such Property prior to Closing) such Property will be excluded from the transaction contemplated hereby, and the Base Purchase Price will be reduced (or increased in the case of a Title Benefit) by the amount set forth on Schedule I to the xxxxx and/or Drilling Locations plus the amount set forth on Schedule I to the units in which such Property participates; and (c) notwithstanding anything to the contrary in this Agreement, the aggregate downward adjustment to the Base Purchase Price for any title Defect attributable to any Property shall not exceed the amount set forth in Schedule I with respect to such Property.