Common use of Purchase Price Adjustments for Title Defects Clause in Contracts

Purchase Price Adjustments for Title Defects. (a) Buyer may, by delivery of written notice to Sellers of the existence of an alleged Title Defect, request reduction of the purchase price for the Interest affected. The Title Defect notice shall clearly indicate the nature of the Title Defect, the Interest to which it relates, an explanation of the Title Defect including the supporting legal theories, the allocated value of the Interest as to which all or some portion of which is affected by the Title Defect, and the amount by which Buyer believes the value of the affected Interest has been reduced because of the Title Defect, with the computation and information upon which Buyer's belief is based. In determining whether a portion of an Interest contains a Title Defect, it is the intent of the parties to include, when possible, only that portion of such Interest materially and adversely affected. If the value properly allocated to a Title Defect cannot be determined directly from Exhibit "B" because the Title Defect is included within, but does not totally comprise, the Interest to which the allocated value relates, Buyer and Sellers shall attempt, where feasible, to proportionately reduce the allocated value in Exhibit "B". (b) The Title Defect notice by Buyer shall be delivered to Sellers on or before 5:00 p.m., March 13, 1997, except that Buyer shall, to the extent reasonably practicable and in addition to the Title Defect notice, notify Sellers immediately as it becomes aware of Title Defects while performing its due diligence review of the Interests. In the event any such notice is not timely delivered, all Title Defects shall be deemed waived for all purposes and Buyer shall thereafter have no right to claim Title Defects; and in the event the Title Defect notice is timely delivered, all Title Defects not claimed in such notice shall be deemed waived for all purposes. Sellers shall have the right, but not the obligation, to attempt to cure any alleged Title Defect prior to Closing. In the event Sellers are unable or unwilling to cure an alleged Title Defect, Buyer and Sellers shall meet and use their reasonable efforts to agree on the validity of the claim of Title Defect and the amount of any required purchase price adjustment. In evaluating the significance of a fact, circumstance or condition for purposes of determining an alleged Title Defect, due consideration shall be given to the length of time that the particular Lease has been producing hydrocarbon substances and whether such fact, circumstance or condition is of the type expected to be encountered in the area involved, and is usual and customarily acceptable to reasonable and prudent persons engaged in the business of the ownership, development, and operation of oil and gas properties with knowledge of all of the facts and appreciation of their legal significance. (c) In the event the parties cannot mutually agree on a purchase price adjustment for an alleged Title Defect, Buyer shall have the right to (i) proceed to Closing and accept the Interest with the alleged Title Defect with no purchase price adjustment, or (ii) terminate this Agreement as to the Interest affected by the alleged Title Defect and receive a purchase price adjustment for such Interest as set forth in Exhibit "B", or, where feasible, the proportionate allocated value. (d) There shall be no purchase price adjustment for Title Defects unless the aggregate total of all purchase price adjustments for Title Defects exceeds $200,000.00. (e) If Buyer shall determine that Sellers' net revenue interests in the Interests are greater than the Net Revenue Interests set forth on Exhibit "B", Buyer shall notify Sellers and Sellers shall be entitled to a mutually agreeable purchase price adjustment.

Purchase Price Adjustments for Title Defects. (a) Buyer may, by delivery of written notice to Sellers Seller of the existence of an alleged a Title Defect, request reduction of the purchase price for the Interest affected. The Any such notice by Buyer shall include appropriate evidence to substantiate its position and shall be delivered to Seller on or before May 10, 1998. In the event any such notice is not timely delivered, Buyer shall thereafter have no right to claim a Title Defect notice Defect; provided, however, Buyer shall clearly indicate the nature retain its right to claim breaches of the special warranty of title contained in Section 22 hereof and the Assignment and Xxxx of Sale delivered at Closing. Seller shall have until May 15, 1998, to cure any Title Defects. In the event Seller is unable to cure a Title Defect, Buyer and Seller shall meet and use their best efforts to agree on the Interest to which it relates, an explanation validity of the Title Defect including claim and the supporting legal theories, amount of any required purchase price adjustment utilizing the allocated value of Allocated Value for the Interest as to which all or some portion of which is affected by the Title Defect, and the amount by which Buyer believes the value of the affected Interest has been reduced because of the Title Defect, with the computation and information upon which Buyer's belief is basedset forth on Exhibit "A-1". In determining whether a portion of an Interest contains a Title Defectany required purchase price adjustment, it is the intent of the parties to include, when possible, only that portion of such the Interest materially and adversely affectedaffected by the Title Defect. If the value properly allocated to a Title Defect Allocated Value of the affected Interest cannot be determined directly from Exhibit "BA-1" because the Title Defect is included within, but does not totally comprise, the Interest to which the allocated value Allocated Value relates, Buyer and Sellers Seller shall attempt, where feasible, to proportionately reduce the allocated value in Exhibit "B". (b) The Title Defect notice by Buyer shall be delivered to Sellers on or before 5:00 p.m., March 13, 1997, except that Buyer shall, to the extent reasonably practicable and in addition to the Title Defect notice, notify Sellers immediately as it becomes aware of Title Defects while performing its due diligence review of the Interests. In the event any such notice is not timely delivered, all Title Defects shall be deemed waived for all purposes and Buyer shall thereafter have no right to claim Title Defects; and in the event the Title Defect notice is timely delivered, all Title Defects not claimed in such notice shall be deemed waived for all purposes. Sellers shall have the right, but not the obligation, to attempt to cure any alleged Title Defect prior to Closing. In the event Sellers are unable or unwilling to cure an alleged Title Defect, Buyer and Sellers shall meet and use their reasonable efforts to agree on the validity a proportionate reduction of the claim of Title Defect and the amount of any required purchase price adjustmentAllocated Value. In evaluating the significance of a fact, circumstance or condition for purposes of determining an alleged Title Defect, due consideration shall be given to the length of time that the particular Lease has been producing hydrocarbon substances and whether such fact, circumstance or condition is of the type expected to be encountered in the area involved, and is usual and customarily acceptable to reasonable and prudent persons engaged in the business of the ownership, development, and operation of oil and gas properties with knowledge of all of the facts and appreciation of their legal significance. (c) In the event the parties cannot mutually agree on the amount of a purchase price adjustment for an alleged Title Defectadjustment, Buyer shall have the right to (i) proceed to Closing and accept the Interest with the alleged Title Defect with no purchase price adjustmentDefect, or (ii) terminate this Agreement as to the Interest affected by the alleged Title Defect and receive a purchase price adjustment equal to the Allocated Value for such the affected Interest as set forth (iii) Buyer and Seller shall have the right to terminate this Agreement in Exhibit "B", or, where feasible, the proportionate allocated valueits entirety. (d) There shall be no purchase price adjustment for Title Defects unless the aggregate total of all purchase price adjustments for Title Defects exceeds $200,000.00. (e) If Buyer shall determine that Sellers' net revenue interests in the Interests are greater than the Net Revenue Interests set forth on Exhibit "B", Buyer shall notify Sellers and Sellers shall be entitled to a mutually agreeable purchase price adjustment.

Purchase Price Adjustments for Title Defects. (a) Buyer may, by delivery of written notice to Sellers Seller of the existence of an alleged Title Defect, request reduction of the purchase price for the Interest affected. The Title Defect notice shall clearly indicate the nature of the Title Defect, the Interest to which it relates, an explanation of the Title Defect including the supporting legal theories, the allocated value of the Interest as to which all or some portion of which is affected by the Title Defect, and the amount by which Buyer believes the value of the affected Interest has been reduced because of the Title Defect, with the computation and information upon which Buyer's belief is based. In determining whether a portion of an Interest contains a Title Defect, it is the intent of the parties to include, when possible, only that portion of such Interest materially and adversely affected. If the value properly allocated to a Title Defect cannot be determined directly from Exhibit "B" because the Title Defect is included within, but does not totally comprise, the Interest to which the allocated value relates, Buyer and Sellers Seller shall attempt, where feasible, to proportionately reduce the allocated value in Exhibit "B". (b) The Title Defect notice by Buyer shall be delivered to Sellers Seller on or before 5:00 p.m., March 13, 1997the Termination Date (as hereinafter defined), except that Buyer shall, to the extent reasonably practicable and in addition to the Title Defect notice, notify Sellers Seller immediately as it becomes aware of Title Defects while performing its due diligence review of the Interests. In the event any such Title Defect for which notice is not timely delivered, all Title Defects delivered on or before the Termination Date shall be deemed waived for all purposes purposes, and Buyer shall thereafter have no right to claim Title DefectsDefects for which notice has not been so provided; and in the event the any Title Defect notice is timely delivered, all other Title Defects relating to the same Interest which are not claimed in such notice on or before the Termination Date shall be deemed waived for all purposes. Sellers Seller shall have the right, but not the obligation, to attempt to cure any alleged Title Defect prior to Closing. In the event Sellers are Seller is unable or unwilling to cure an alleged Title Defect, Buyer and Sellers Seller shall meet and use their reasonable efforts to agree on the validity of the claim of Title Defect and the amount of any required purchase price adjustmentadjustment to the Base Purchase Price. In evaluating the significance of a fact, circumstance or condition for purposes of determining an alleged Title Defect, due consideration shall be given to the length of time that the particular Lease has been producing hydrocarbon substances and whether such fact, circumstance or condition is of the type expected to be encountered in the area involved, and is usual and customarily acceptable to reasonable and prudent persons engaged in the business of the ownership, development, and operation of oil and gas properties with knowledge of all of the facts and appreciation of their legal significance. (c) In the event the parties cannot mutually agree on a purchase price an adjustment to the Base Purchase Price for an alleged Title Defect, either Buyer or Seller shall have give the right other written notice of intention to refer the matter to a mutually agreeable third party independent reservoir engineer (ithe "Determiner") proceed to Closing resolve the dispute in light of all relevant circumstances. In the event Seller and accept Buyer are unable to agree within five (5) business days after receipt of such notice, then the Interest with matter shall be so referred and the alleged Title Defect with no purchase price adjustment, or (ii) terminate this Agreement as amount of the appropriate adjustment to the Interest affected Base Purchase Price shall be determined solely by the alleged Title Defect Determiner. The parties shall submit all relevant information available to the Determiner within fifteen (15) days after the date of such referral and receive a purchase price adjustment for may submit position papers on the subject to the Determiner within such Interest period, but not thereafter. Both parties shall be bound by the decision of the Determiner. The Base Purchase Price shall be reduced by the amount agreed upon by the parties or established by the Determiner, as set forth in Exhibit "B", or, where feasible, the proportionate allocated valuecase may be. The fees and expenses of such third party determination shall be borne equally by Buyer and Seller. (d) There shall be no purchase price adjustment to the Base Purchase Price for Title Defects unless the aggregate total of all purchase price adjustments to the Base Purchase Price for Title Defects exceeds FIFTY THOUSAND DOLLARS ($200,000.0050,000) and thereafter, only to the extent of such excess. (e) If In the event that Buyer shall determine that Sellers' net revenue interests Seller's Net Revenue Interests in the Interests are greater than the Net Revenue Interests set forth on Exhibit "B", Buyer shall notify Sellers Seller and Sellers Seller shall be entitled to a mutually agreeable purchase price adjustmentupward adjustment to the Base Purchase Price.

Purchase Price Adjustments for Title Defects. (a) No adjustment to the Purchase Price for Title Defects (other than Liens) shall be made unless and until the aggregate of all Title Defect Amounts exceeds one percent of the Purchase Price, and then only to the extent and in the amount that the aggregate of such Title Defect Amounts exceeds one percent of the Purchase Price (it being expressly agreed that such one percent is a deductible). (b) Buyer may, by delivery of shall give Seller written notice to Sellers of the existence of an alleged Title Defect, request reduction of the purchase price for the Interest affected. The any Title Defect promptly after the discovery of such Title Defect but in no event later than September 19, 2008. Such notice shall clearly indicate the nature be in writing and shall include: (x) a description of the Title Defect, (y) the Interest to which it relates, an explanation Allocated Value of the Title Defect including the supporting legal theories, the allocated value of the Interest as to which all Well or some portion of which is location affected by the Title Defect, and (z) the Title Defect Amount determined in good faith by the Buyer. With respect to a Well or location subject to a Title Defect, the amount by which Buyer believes such Well or location is impaired as a result of the existence of one or more Title Defects shall be the “Title Defect Amount”, which amount shall be determined as follows: (i) The Title Defect Amount with respect to a Well or location shall be determined by taking into consideration the Allocated Value of the Well or location subject to such Title Defect, the portion of the Well or location subject to such Title Defect, and the legal effect of such Title Defect on the Well or location affected thereby; provided, however, that: (A) if such Title Defect is in the nature of Seller’s Net Revenue Interest in a Well or location being less than the Net Revenue Interest set forth in Schedule I and the Working Interest remains the same, then the Title Defect Amount shall equal the Allocated Value for the relevant Well or location multiplied by the percentage reduction in such Net Revenue Interest as a result of such Title Defect or (B) if such Title Defect is in the nature of a Lien, then the Title Defect Amount shall equal the amount required to fully discharge such Lien; and (ii) If the Title Defect results from any matter not described in Section 8.2(b)(i), the Title Defect Amount shall be an amount equal to the difference between the value of the Well or location affected Interest has been reduced because of the Title Defect, with the computation and information upon which Buyer's belief is based. In determining whether a portion of an Interest contains a Title Defect, it is the intent of the parties to include, when possible, only that portion of by such Interest materially and adversely affected. If the value properly allocated to a Title Defect cannot be determined directly from Exhibit "B" because the Title Defect is included within, but does not totally comprise, the Interest to which the allocated value relates, Buyer and Sellers shall attempt, where feasible, to proportionately reduce the allocated value in Exhibit "B". (b) The Title Defect notice by Buyer shall be delivered to Sellers on or before 5:00 p.m., March 13, 1997, except that Buyer shall, to the extent reasonably practicable and in addition to the Title Defect notice, notify Sellers immediately as it becomes aware of Title Defects while performing its due diligence review of the Interests. In the event any with such notice is not timely delivered, all Title Defects shall be deemed waived for all purposes and Buyer shall thereafter have no right to claim Title Defects; and in the event the Title Defect notice is timely delivered, all Title Defects not claimed in such notice shall be deemed waived for all purposes. Sellers shall have the right, but not the obligation, to attempt to cure any alleged Title Defect prior to Closing. In the event Sellers are unable or unwilling to cure an alleged Title Defect, Buyer and Sellers shall meet and use their reasonable efforts to agree on the validity of the claim of Title Defect and the amount value of any required purchase price adjustment. In evaluating such Well or location without such Title Defect (taking into account the significance of a fact, circumstance or condition for purposes of determining an alleged Title Defect, due consideration shall be given to the length of time that the particular Lease has been producing hydrocarbon substances and whether such fact, circumstance or condition is portion of the type expected to be encountered in the area involved, and is usual and customarily acceptable to reasonable and prudent persons engaged in the business Allocated Value of the ownership, development, and operation of oil and gas properties with knowledge of all of the facts and appreciation of their legal significancerelevant Well or location). (c) In Notwithstanding anything herein to the event contrary, if Seller does not cure a Title Defect on or prior to the parties cannot mutually agree on a purchase price adjustment for an alleged Title DefectClosing, Buyer Seller shall have the right option, by notice in writing to Buyer on or before the Closing, to (i) proceed keep the Well or location affected by the Title Defect, in which event such Well or location shall become an Excluded Asset and the Cash Consideration shall be reduced by the Allocated Value of the affected Well or location, (ii) take no remedial or corrective action with respect to Closing the Title Defect, in which event Seller agrees to indemnify Buyer against all costs and accept expenses that Buyer may incur in connection with same, (iii) convey the Interest with Well or location affected by the alleged Title Defect with no purchase price adjustmentto Buyer and, subject to Section 8.2(a), reduce the Cash Consideration by the relevant Title Defect Amount, or (iiiv) terminate this Agreement as attempt to cure such defect (a “Post-Closing Title Defect”) prior to December 31, 2008 (the Interest affected by the alleged Title Defect and receive a purchase price adjustment for such Interest as set forth in Exhibit "B", or, where feasible, the proportionate allocated value“Cure Period”). (d) There shall be no purchase price adjustment for Title Defects unless the aggregate total of all purchase price adjustments for Title Defects exceeds $200,000.00. If Seller determines (e) If Buyer shall determine that Sellers' net revenue interests or should Buyer, in the Interests are course of Buyer’s Title Review, determine) that Seller’s Net Revenue Interest in a Well or location is greater than the Net Revenue Interests Interest set forth on Exhibit "B"in Schedule I, then the parties agree that the Cash Consideration shall be increased in an amount equal to the Allocated Value for the relevant Well multiplied by the percentage increase in such Net Revenue Interest, except to the extent the Working Interest increases. Buyer shall notify Sellers and Sellers shall be entitled to a mutually agreeable purchase price adjustmentgive Seller written notice of any such title discrepancy it discovers promptly after the discovery of such title discrepancy.

Purchase Price Adjustments for Title Defects. (a) Buyer may, by delivery of written notice to Sellers Seller of the existence of an alleged Title Defect, request reduction of the purchase price for the Interest affected. The Title Defect notice shall clearly indicate the nature of the Title Defect, the Interest to which it relates, an explanation of the Title Defect including the supporting legal theories, the allocated value of the Interest as to which all or some portion of which is affected by the Title Defect, and the amount by which Buyer believes the value of the affected Interest has been reduced because of the Title Defect, with the computation and information upon which Buyer's belief is based. In determining whether a portion of an Interest contains a Title Defect, it is the intent of the parties to include, when possible, only that portion of such Interest materially and adversely affected. If the value properly allocated to a Title Defect cannot be determined directly from Exhibit "B" because the Title Defect is included within, but does not totally comprise, the Interest to which the allocated value relates, Buyer and Sellers Seller shall attempt, where feasible, to proportionately reduce the allocated value in Exhibit "B". (b) The Title Defect notice by Buyer shall be delivered to Sellers Seller on or before 5:00 p.m., March 13April 18, 1997, except that Buyer shall, to the extent reasonably practicable and in addition to the Title Defect notice, notify Sellers immediately as it becomes aware of Title Defects while performing its due diligence review of the Interests. In the event any such notice is not timely delivered, all Title Defects shall be deemed waived for all purposes and Buyer shall thereafter have no right to claim Title Defects; and in the event the Title Defect notice is timely delivered, all Title Defects not claimed in such notice shall be deemed waived for all purposes. Sellers Seller shall have the right, but not the obligation, to attempt to cure any alleged Title Defect prior to Closing. In the event Sellers are Seller is unable or unwilling to cure an alleged Title Defect, Buyer and Sellers Seller shall meet and use their reasonable efforts to agree on the validity of the claim of Title Defect and the amount of any required purchase price adjustment. In evaluating the significance of a fact, circumstance or condition for purposes of determining an alleged Title Defect, due consideration shall be given to the length of time that the particular Lease has been producing hydrocarbon substances and whether such fact, circumstance or condition is of the type expected to be encountered in the area involved, and is usual and customarily acceptable to reasonable and prudent persons engaged in the business of the ownership, development, and operation of oil and gas properties with knowledge of all of the facts and appreciation of their legal significance. (c) In the event the parties cannot mutually agree on a purchase price adjustment for an alleged Title Defect, Buyer shall have the right to (i) proceed to Closing and accept the Interest with the alleged Title Defect with no purchase price adjustment, or (ii) terminate this Agreement as to the Interest affected by the alleged Title Defect and receive a purchase price adjustment for such Interest as set forth in Exhibit "B", or, where feasible, the proportionate allocated value. (d) There shall be no purchase price adjustment for Title Defects unless the aggregate total of all purchase price adjustments for Title Defects exceeds SEVEN HUNDRED SEVENTEEN THOUSAND AND FIVE HUNDRED DOLLARS ($200,000.00717,500). (e) If In the event that Buyer shall determine that Sellers' Seller's net revenue interests in the Interests are greater than the Net Revenue Interests set forth on Exhibit "B", Buyer shall notify Sellers Seller and Sellers Seller shall be entitled to a mutually agreeable purchase price adjustment.

Purchase Price Adjustments for Title Defects. (a) Except as provided in Section 5.10(b) below, if, as a part of Buyer’s due diligence review, Title Defects are presented to Seller and Seller is unable (or unwilling) to cure such Title Defects prior to Closing, then: (i) Buyer mayand Seller shall, with respect to each Interests affected by delivery of written notice such matters, attempt to Sellers agree upon an appropriate adjustment of the existence of Purchase Price to account for such matters; and (ii) with respect to Interests as to which Buyer and Seller are unable to agree upon an alleged adjustment for an asserted Title Defect, request reduction such Interests will be excluded from the transaction contemplated hereby and the Purchase Price will be reduced by the Allocated Value attributed to such Interest on Exhibit A-6. (b) If an asserted Title Defect reflects (or Seller otherwise determines) that Seller’s share of Hydrocarbons produced and saved from the purchase price Leases comprising an Interest is less than, or greater than, the decimal share set forth as the Net Revenue Interest on Exhibit A-2 or causes Seller to be obligated to pay a share of costs of operations greater than the percentage share of Working Interest set forth on Exhibit A-2 (without at least a proportionate increase in the corresponding Net Revenue Interest) then the Purchase Price for the Interest affected. The Title Defect notice shall clearly indicate be adjusted downward, or upward as the nature case may be, proportionately, by multiplying the Allocated Value of such Interest by a fraction (A) the numerator of which is the amount of the actual Net Revenue Interest and (B) the denominator of which is the Net Revenue Interest set forth on Exhibit A-2. (c) If the aggregate Purchase Price reduction (or increase) with respect to a Title Defect, which would result from the Interest to which it relatesabove provided for procedure does not exceed $100,000, an explanation of the Title Defect including the supporting legal theories, the allocated value of the Interest as to which all or some portion of which is affected by the no adjustment shall me made for such Title Defect, and the Interest affected thereby will not be excluded as a result of the existence of such Title Defect. If the Purchase Price reduction (or increase) which would result from the above provided for procedure, as applied to all Title Defects for which an adjustment is to be made, does not exceed $2,500,000, then no adjustment of the Purchase Price shall occur, and none of the Interests which would be otherwise excluded by such procedure shall be excluded. If the Purchase Price reduction (or increase) which would result from the above provided for procedure exceeds $2,500,000, the Purchase Price shall be adjusted by the amount by which Buyer believes the value of the affected Interest has been reduced because of the Title Defect, with the computation and information upon which Buyer's belief is based. In determining whether a portion of an Interest contains a Title Defect, it is the intent of the parties to include, when possible, only that portion of such Interest materially and adversely affected. If the value properly allocated to a Title Defect cannot be determined directly from Exhibit "B" because the Title Defect is included within, but does not totally comprise, the Interest to which the allocated value relates, Buyer and Sellers shall attempt, where feasible, to proportionately reduce the allocated value in Exhibit "B". reduction (bor increase) The Title Defect notice by Buyer shall be delivered to Sellers on or before 5:00 p.m., March 13, 1997, except that Buyer shall, to the extent reasonably practicable and in addition to the Title Defect notice, notify Sellers immediately as it becomes aware of Title Defects while performing its due diligence review of the Interests. In the event any such notice is not timely delivered, all Title Defects shall be deemed waived for all purposes and Buyer shall thereafter have no right to claim Title Defects; and in the event the Title Defect notice is timely delivered, all Title Defects not claimed in such notice shall be deemed waived for all purposes. Sellers shall have the right, but not the obligation, to attempt to cure any alleged Title Defect prior to Closing. In the event Sellers are unable or unwilling to cure an alleged Title Defect, Buyer and Sellers shall meet and use their reasonable efforts to agree on the validity of the claim of Title Defect and the amount of any required purchase price adjustment. In evaluating the significance of a fact, circumstance or condition for purposes of determining an alleged Title Defect, due consideration shall be given to the length of time that the particular Lease has been producing hydrocarbon substances and whether such fact, circumstance or condition is of the type expected to be encountered in the area involved, and is usual and customarily acceptable to reasonable and prudent persons engaged in the business of the ownership, development, and operation of oil and gas properties with knowledge of all of the facts and appreciation of their legal significance. (c) In the event the parties cannot mutually agree on a purchase price adjustment for an alleged Title Defect, Buyer shall have the right to (i) proceed to Closing and accept the Interest with the alleged Title Defect with no purchase price adjustment, or (ii) terminate this Agreement as to the Interest affected by the alleged Title Defect and receive a purchase price adjustment for such Interest as set forth in Exhibit "B", or, where feasible, the proportionate allocated value. (d) There shall be no purchase price adjustment for Title Defects unless the aggregate total of all purchase price adjustments for Title Defects exceeds $200,000.002,500,000. (e) If Buyer shall determine that Sellers' net revenue interests in the Interests are greater than the Net Revenue Interests set forth on Exhibit "B", Buyer shall notify Sellers and Sellers shall be entitled to a mutually agreeable purchase price adjustment.

Purchase Price Adjustments for Title Defects. For purposes of this Section --------------------------------------------- 4, the term Interests or Interest shall also include any non-producing interval or undeveloped location specifically identified in Exhibit "B". (a) Buyer may, by delivery of written notice to Sellers Seller of the existence of an alleged Title Defect, request reduction of the purchase price for the Interest affected. The Title Defect notice shall clearly indicate the nature of the Title Defect, the Interest to which it relates, an explanation of the Title Defect including the supporting legal theories, the allocated value of the Interest as to which all or some portion of which is affected by the Title Defect, and the amount by which Buyer believes the value of the affected Interest has been reduced because of the Title Defect, with the computation and information upon which Buyer's belief is based. In determining whether a portion of an Interest contains a Title Defect, it is the intent of the parties to include, when possible, only that portion of such Interest materially and adversely affected. If the value properly allocated to a Title Defect cannot be determined directly from Exhibit "B" because the Title Defect is included within, but does not totally comprise, the Interest to which the allocated value relates, Buyer and Sellers Seller shall attempt, where feasible, to proportionately reduce the allocated value in Exhibit "B". (b) The Title Defect notice by Buyer shall be delivered to Sellers Seller on or before 5:00 p.m.November 18, March 13, 1997, except that Buyer shall, to the extent reasonably practicable and in addition to the Title Defect notice, notify Sellers immediately as it becomes aware of Title Defects while performing its due diligence review of the Interests2002. In the event any such notice is not timely delivered, all Title Defects shall be deemed waived for all purposes and Buyer shall thereafter have no right to claim Title Defects; and in the event the Title Defect notice is timely delivered, all Title Defects not claimed in such notice shall be deemed waived for all purposes. Sellers Seller shall have the right, but not the obligation, to attempt to cure any alleged Title Defect prior to Closing. In the event Sellers are Seller is unable or unwilling to cure an alleged Title Defect, Buyer and Sellers Seller shall meet and use their reasonable efforts to agree on the validity of the claim of Title Defect and the amount of any required purchase price adjustment. In evaluating the significance of a fact, circumstance or condition for purposes of determining an alleged Title Defect, due consideration shall be given to the length of time that the particular Lease has been producing hydrocarbon substances and whether such fact, circumstance or condition is of the type expected to be encountered in the area involved, and is usual and customarily acceptable to reasonable and prudent persons engaged in the business of the ownership, development, and operation of oil and gas properties with knowledge of all of the facts and appreciation of their legal significance. (c) In the event the parties cannot mutually agree on a purchase price adjustment for an alleged Title Defect, Buyer shall have the right to (i) proceed to Closing and accept the Interest with the alleged Title Defect with no purchase price adjustment, or (ii) terminate this Agreement as to the Interest affected by the alleged Title Defect and receive a purchase price adjustment for such Interest as set forth in Exhibit "B", or, where feasible, the proportionate allocated value. (d) There shall be no purchase price adjustment for Title Defects unless the aggregate total of all purchase price adjustments for Title Defects exceeds THREE HUNDRED EIGHTY THOUSAND DOLLARS ($200,000.00380,000) (which amount is a threshold, not a deductible). (e) If In the event that Buyer shall determine that Sellers' Seller's net revenue interests in the Interests are greater than the Net Revenue Interests set forth on Exhibit "B", Buyer shall notify Sellers Seller and Sellers Seller shall be entitled to a mutually agreeable purchase price adjustment; provided however, there shall be no purchase price adjustment related to such increase unless the aggregate total of all purchase price adjustments for the increases to Seller's increased Net Revenue Interests in the Interests exceeds THREE HUNDRED EIGHTY THOUSAND DOLLARS ($380,000) (which amount is a threshold, not a deductible). Any increase to the Base Purchase Price provided for by this Section 4(e) shall be determined independently of any decrease to the Base Purchase Price due to any Title Defect, and such amounts shall not be netted one against the other.