Common use of Sale Price Adjustments Clause in Contracts

Sale Price Adjustments. Buyer may, by delivery of written notice to Seller of the existence of a Title Defect, request reduction of the sale price for the property affected. Seller may request an increase in the sale price of a property by delivery to Buyer of written notice that the net revenue interest actually owned by Seller therein is greater than that shown on Exhibit "A". Any such notice by Buyer or Seller shall include appropriate evidence to substantiate its position and shall be delivered to the other party on or before twenty (20) days after closing. In the event any such notice is not timely delivered, the claimant shall thereafter have no right to claim a Title Defect or different revenue interest. Upon timely delivery of a notice either by Buyer of a Title Defect or by Seller of an increase or decrease in net revenue interest, Buyer and Seller shall meet and use their best efforts to agree on the validity of the claim and the amount of any required price adjustment based on the following formula: (i) If both the Working Interest and the Net Revenue Interest for any property are incorrectly stated on Exhibit "A", but the ratio of Net Revenue Interest to Working Interest is correctly stated, then the adjustment to the Purchase Price shall be the product of the value listed on Exhibit "A" multiplied by a fraction, the numerator of which is the Net Revenue Interest increase or decrease and the denominator of which is the Net Revenue Interest listed on Exhibit "A". (ii) If either the Working Interest or the Net Revenue Interest for any property is incorrectly stated on Exhibit "A" and the ratio of Net Revenue Interest to Working Interest is incorrectly stated, then the Purchase Price shall be adjusted as follows: Buyer shall recalculate the value of the property affected using precisely the same economic model, formula and assumptions used by it in calculating its values shown on Exhibit "A" but inserting the correct Working Interest and Net Revenue Interest percentage for the incorrect percentages. The difference between the recalculated value and the value shown on Exhibit "A" shall be the dollar value of the adjustment to the Purchase Price. The additional payment due conditioned upon production increases per section 2(c) shall be considered an upward adjustment to the purchase price as and if earned.

Sale Price Adjustments. Buyer may, in good faith, by delivery of written notice to Seller of the existence of a Title DefectDefect pursuant to the terms of Paragraphs 9 and 10 (a "Defect Notice"), request reduction of an adjustment to the sale price Sale Price for the property affected. Seller may may, in good faith, request an increase in adjustment to the sale price of a property Sale Price by delivery to Buyer of written notice to Buyer that the net revenue interest actually owned by Seller therein is greater than that shown on Exhibit "AA-2". Any such notice Defect Notices submitted by Buyer before Closing shall be delivered no later than two (2) business days prior to Closing. Either Buyer or Seller shall include appropriate evidence to substantiate its position and shall be may also provide such a notice seeking a post-Closing Sale Price adjustment if such notice is delivered to the other party on or before twenty (20) days after closingJanuary 31, 2004. In the event any such notice is not timely deliveredThe parties, the claimant acting diligently and in good faith, shall thereafter have no right to claim a Title Defect or different revenue interest. Upon timely delivery of a notice either by Buyer of a Title Defect or by Seller of an increase or decrease in net revenue interest, Buyer and Seller shall meet and use their best reasonable efforts to agree on the validity existence of any asserted Defects, and the value of the claim asserted Defects as hereafter provided (the "Defect Value"). With respect to a Defect Notice submitted by Buyer prior to Closing, Seller shall, by written notice delivered to Buyer no later than the day before Closing, either (i) elect to retain the affected Property and the Sale Price shall be reduced by the Allocated Value thereof, (ii) waive its right to cure such Defect, convey the affected Property to Buyer in its current condition at Closing and accept a reduction in the Sale Price in an amount equal to the Defect Value therefore, or (iii) notify Buyer of its intent to cure such Defect after Closing without adjustment to the Sale Price at Closing; provided that Seller shall be under no obligation to affect such post-Closing cure. Seller's failure to timely make such an election shall be deemed an election to convey the affected Property under clause (iii) above. Notwithstanding the forgoing, Seller may not make (nor be deemed to have made) an election under clause (iii) above with respect to any Defect not reasonably susceptible to cure within 120 days after the date of the Defect Notice. With respect to Defects not so susceptible to cure, the affected Property shall, at Seller's option, either be retained by Seller or conveyed to Buyer at Closing, and the Sale Price shall be reduced at Closing by the Allocated Value of such Property or the applicable Defect Value, as appropriate. Subject to the forgoing, upon timely delivery of a Defect Notice by Buyer, whether before or after Closing, Seller, at Seller's option, may attempt to cure the applicable Defect at Seller's sole risk, cost and expense within one hundred twenty (120) days after the notice. If within such 120 day period Buyer and Seller cannot agree upon the existence of a Defect or its Defect Value, or if Seller is unable to cure the applicable Defect to Buyer's satisfaction with one hundred twenty (120) days after receipt of notice of such Defect, then Seller shall have the option to have the subject property(ies) reconveyed to it and, in such event and concurrently with such reconveyance, shall pay to Buyer the Allocated Value applicable to the reconveyed Property. If Seller shall fail to elect to accept a reconveyance, Seller shall pay within two business days after the expiration of the above-referenced one hundred twenty (120) day period, to Buyer the Defect Value attributable thereto as asserted by Buyer. In the event that on or before Closing Buyer notifies Seller of Defects (including without limitation Defects identified by notice to Seller during the 2-day period before Closing) and (i) the value of which (as specified in such notice) exceeds 5% of the Sale Price, Seller may terminate this Agreement and the Earnest Money shall promptly be refunded to Buyer or (ii) the value ox xxxxx (as specified in such notice) exceeds 15% of the Sale Price, Buyer may terminate this Agreement and the Earnest Money shall promptly be refunded to Buyer. ANY REASSIXXXXXX INSTRUMENT SHALL PROVIDE THAT SELLER SHALL DEFEND AND INDEMNIFY BUYER AND ITS SUCCESSORS AND ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS, COSTS (INCLUDING, WITHOUT LIMITATION ATTORNEYS' FEES, COURT COSTS, AND OTHER COSTS OF SUIT, INVESTIGATION OR ACTION), EXPENSES, DAMAGES, COSTS OF SETTLEMENT, FINES, PENALTIES, SUITS, CAUSES OF ACTION, INJURY TO PERSONS OR DAMAGE TO PROPERTY (INCLUDING WITHOUT LIMITATION TO THAT OF SELLER'S AND BUYER'S EMPLOYEES, AGENTS, CONTRACTORS, SUBCONTRACTORS OR INVITEES) WHICH MAY ARISE DIRECTLY OR INDIRECTLY FROM OUT OF OR IN CONNECTION WITH SUCH PROPERTY, THE CONDITION THEREOF, OR BUYER'S OWNERSHIP OR OPERATION THEREOF, AND WITHOUT REGARD TO WHETHER SAME ARISE FROM OR OUT OF SELLER'S ACTIVITIES ON THE REASSIGNED PROPERTIES. IF SELLER SHALL ATTEMPT TO CURE ANY DEFECT AFTER CLOSING, SELLER SHALL DEFEND AND INDEMNIFY BUYER FROM ANY AND ALL LIABILITY, CLAIMS, CAUSES OF ACTION, INJURY TO SELLER'S EMPLOYEES, AGENTS, CONTRACTORS, SUBCONTRACTORS OR INVITEES OR TO SELLER'S PROPERTY, AND/OR DAMAGE OR INJURY TO BUYER'S PROPERTY (INCLUDING WITHOUT LIMITATION THE PROPERTY AS SUCH TERM IS DEFINED HEREIN), EMPLOYEES, AGENTS OR CONTRACTORS, WHICH MAY ARISE OUT OF SUCH ACTIVITIES, REGARDLESS OF BUYER'S NEGLIGENCE OR FAULT (INCLUDING STRICT LIABILITY). The Defect Value of Defects shall be determined in good faith and in accordance with the following guidelines: (a) If a Sale Price adjustment is based upon Buyer's or Seller's notice that Seller owns a different net revenue interest or working interest than that shown on Exhibit "A-2", then the value for the portion of the Properties affected shall be reduced or increased (as the case may be) to reflect the changes in the net revenue and working interest from those shown on Exhibit "A-2", and the Sale Price shall be reduced or increased accordingly. (b) In the event a third party exercises an applicable preferential right to purchase, the subject property(ies) shall be removed from the sale and the Sale Price shall be reduced by the Allocated Value of the affected Property. (c) In the event a third party fails to give a necessary consent or approval to assign the subject Lease or well in a form reasonably acceptable to Seller and Buyer, the subject property(ies) shall be removed from the sale and the Sale Price shall be reduced by the Allocated Value thereof. (d) If a Defect is a lien, encumbrance or other charge upon a property which is liquidated in amount, then the sum necessary to be paid to the obligee to remove the Defect from the affected property shall be deducted from the Sale Price. If there is a lien or encumbrance in the form of a judgment secured by a supersedes bond or other security approved by the court issuing such order, it shall not be considered a Defect under this Agreement; provided that in such event Seller hereby covenants and agrees to maintain such bond or security in full force and effect for all relevant periods. (e) If the Defect is an adverse environmental condition, the adjustment shall be, subject to the provisions of subparagraph (f) below and the provisions of Paragraph 23 below, the cost of remediating the affected property and the amount of any required price adjustment based on the following formula:penalties, fines, or other monetary assessments associated with or arising from such adverse environmental condition. (f) The post-Closing Sale Price adjustments under this Paragraph 13 relating to Defects shall not be made: (i) If both with respect to the Working Interest Defects described in subparagraphs 9(a) - 9(d) above (and the Net Revenue Interest for any property are incorrectly stated on Exhibit "A", but the ratio of Net Revenue Interest to Working Interest is correctly stated, then the adjustment to the Purchase Price shall be the product of the value listed on Exhibit "A" multiplied by a fraction, the numerator Defect Value of which is to be determined in accordance with subparagraphs (a) - (d) above), unless and until the Net Revenue Interest increase aggregate Defect Value for all such Defects exceed $250,000.00, at which time, to the extent Buyer is otherwise entitled to such adjustments under the other provisions of this Agreement, Buyer shall be entitled to an adjustment for the Defect Value for all such Defects, on a dollar-for-dollar basis, including, without limitation, those constituting the initial $250,000.00 threshold, or decrease (ii) with respect to Defects described in subparagraph 9(e) above (and the denominator Defect Value of which is to be determined in accordance with subparagraph (e) above), unless and until the Net Revenue Interest listed on Exhibit "A". (ii) If either aggregate Defect Value for all such Defects exceed $2,000,000.00, at which time, to the Working Interest or extent Buyer is otherwise entitled to such adjustments under the Net Revenue Interest for any property is incorrectly stated on Exhibit "A" and the ratio other provisions of Net Revenue Interest to Working Interest is incorrectly statedthis Agreement, then the Purchase Price Buyer shall be adjusted as follows: Buyer shall recalculate the value of the property affected using precisely the same economic model, formula and assumptions used by it in calculating its values shown on Exhibit "A" but inserting the correct Working Interest and Net Revenue Interest percentage entitled to an adjustment for the incorrect percentages. The difference between Defect Value for all such Defects, on a dollar-for-dollar basis, including, without limitation, those constituting the recalculated value and the value shown on Exhibit "A" shall be the dollar value of the adjustment to the Purchase Price. The additional payment due conditioned upon production increases per section 2(c) shall be considered an upward adjustment to the purchase price as and if earnedinitial $2,000,000.00 threshold.

Sale Price Adjustments. Buyer may, by delivery of written notice to Seller of the existence of a Title Defect, request reduction of the sale price for the property affected. Seller may request an increase in the sale price of a property by delivery to Buyer of written notice that the net revenue interest actually owned by Seller therein is greater than that shown on Exhibit "A". Any such notice by Buyer or Seller shall include appropriate evidence to substantiate its position and shall be delivered to the other party on or before twenty (20) days after closing. In the event any such notice is not timely delivered, the claimant shall thereafter have no right to claim a Title Defect or different revenue interest. Upon timely delivery of a notice either by Buyer of a Title Defect or by Seller of an increase or decrease in net revenue interest, Buyer and Seller shall meet and use their best efforts to agree on the validity of the claim and the amount of any required price adjustment based on the following formula: (i) If both the Working Interest and the Net Revenue Interest for any property are incorrectly stated on Exhibit "A", but the ratio of Net Revenue Interest to Working Interest is correctly stated, then the adjustment to the Purchase Price shall be the product of the value listed on Exhibit "A" multiplied by a fraction, the numerator of which is the Net Revenue Interest increase or decrease and the denominator of which is the Net Revenue Interest listed on Exhibit "A". (ii) If either the Working Interest or the Net Revenue Interest for any property is incorrectly stated on Exhibit "A" and the ratio of Net Revenue Interest to Working Interest is incorrectly stated, then the Purchase Price shall be adjusted as follows: Buyer shall recalculate the value of the property affected using precisely the same economic model, formula and assumptions used by it in calculating its values shown on Exhibit "A" but inserting the correct Working Interest and Net Revenue Interest percentage for the incorrect percentages. The difference between the recalculated value and the value shown on Exhibit "A" shall be the dollar value of the adjustment to the Purchase Price. The additional payment due conditioned upon production increases per section 2(c) shall be considered an upward adjustment to the purchase price as and if earned.

Sale Price Adjustments. Buyer may, by delivery of written notice to ----------------------- Seller of the existence of a Title Defect, request reduction of the sale price for the property affected. Seller may request an increase in the sale price of a property by delivery to Buyer of written notice that the net revenue interest actually owned by Seller therein is greater than that shown on Exhibit "A". Any such notice by Buyer or Seller shall include appropriate evidence to substantiate its position and shall be delivered to the other party on or before twenty (20) days after closing. In the event any such notice is not timely delivered, the claimant shall thereafter have no right to claim a Title Defect or different revenue interest. Upon timely delivery of a notice either by Buyer of a Title Defect or by Seller of an increase or decrease in net revenue interest, Buyer and Seller shall meet and use their best efforts to agree on the validity of the claim and the amount of any required price adjustment based on the following formula: (i) If both the Working Interest and the Net Revenue Interest for any property are incorrectly stated on Exhibit "A", but the ratio of Net Revenue Interest to Working Interest is correctly stated, then the adjustment to the Purchase Price shall be the product of the value listed on Exhibit "A" multiplied by a fraction, the numerator of which is the Net Revenue Interest increase or decrease and the denominator of which is the Net Revenue Interest listed on Exhibit "A". (ii) If either the Working Interest or the Net Revenue Interest for any property is incorrectly stated on Exhibit "A" and the ratio of Net Revenue Interest to Working Interest is incorrectly stated, then the Purchase Price shall be adjusted as follows: Buyer shall recalculate the value of the property affected using precisely the same economic model, formula and assumptions used by it in calculating its values shown on Exhibit "A" but inserting the correct Working Interest and Net Revenue Interest percentage for the incorrect percentages. The difference between the recalculated value and the value shown on Exhibit "A" shall be the dollar value of the adjustment to the Purchase Price. The additional payment due conditioned upon production increases per section 2(c) shall be considered an upward adjustment to the purchase price as and if earned.