FORTH EACH ADJUSTMENT TO THE BASE
PURCHASE PRICE SUBMITTED BY SELLER.
SELLER SHALL SUBMIT THE CLOSING ADJUSTMENT
STATEMENT TO BUYER, TOGETHER WITH ALL RECORDS OR DATA SUPPORTING THE CALCULATION
OF AMOUNTS PRESENTED ON THE CLOSING ADJUSTMENT STATEMENT, NO LATER THAN THREE
(3) BUSINESS DAYS PRIOR TO THE SCHEDULED CLOSING DATE.
PRIOR TO THE CLOSING,
BUYER AND SELLER SHALL REVIEW THE ADJUSTMENTS PROPOSED BY SELLER IN THE CLOSING
ADJUSTMENT STATEMENT.
AGREED ADJUSTMENTS SHALL BE TAKEN INTO ACCOUNT IN
COMPUTING ANY ADJUSTMENTS TO BE MADE TO THE BASE PURCHASE PRICE AT THE CLOSING.
WHEN AVAILABLE, ACTUAL FIGURES WILL BE USED FOR THE ADJUSTMENTS AT CLOSING.
TO
THE EXTENT ACTUAL FIGURES ARE NOT AVAILABLE, ESTIMATES SHALL BE USED SUBJECT TO
FINAL ADJUSTMENTS AS DESCRIBED IN SECTION 4.4 BELOW.
4.2
STRAPPING AND GAUGING.
SELLER CAUSED THE OIL AND GAS IN THE
STORAGE FACILITIES LOCATED ON, OR UTILIZED IN CONNECTION WITH, THE LEASES TO BE
MEASURED, GAUGED OR STRAPPED AS OF THE EFFECTIVE TIME.
SELLER CAUSED THE
PRODUCTION METER CHARTS (OR IF SUCH DO NOT EXIST, THE SALES METER CHARTS) ON THE
PIPELINES TRANSPORTING OIL AND GAS FROM THE LEASES TO BE READ AS OF SUCH TIME.
THE OIL AND GAS IN SUCH STORAGE FACILITIES ABOVE SIX INCHES OR THROUGH THE
METERS ON THE PIPELINES AS OF THE EFFECTIVE TIME SHALL BE ALLOCATED TO THE
SELLER AND SHALL BE VALUED BASED ON THE PRICE ACTUALLY PAID FOR OIL AND GAS
PRODUCED FROM THE OIL AND GAS PROPERTIES FOR THE MONTH PRIOR TO THE EFFECTIVE
TIME, AND THE OIL AND GAS PLACED IN SUCH STORAGE FACILITIES AFTER THE EFFECTIVE
TIME AND PRODUCTION UPSTREAM OF THE AFORESAID METERS SHALL BELONG TO THE COMPANY
AND BECOME PART OF THE OIL AND GAS PROPERTIES.
BUYER OR BUYER'S REPRESENTATIVE
SHALL HAVE THE OPTION TO WITNESS THE GAUGING BY SELLER.
TO THE EXTENT, BUT ONLY
TO THE EXTENT, THE COMPANY DOES NOT RECEIVE THE SALES PROCEEDS FROM THE SALE OF
SUCH STORED OIL AND GAS PRIOR TO CLOSING, THE VALUE OF SUCH SHARED OIL AND GAS
SHALL BE AN UPWARD ADJUSTMENT TO THE BASE PURCHASE PRICE AS PROVIDED IN
SECTION 2.4(A).
THIS PROVISION SHOULD NOT APPLY TO ANY OIL AND GAS PROPERTIES
THAT ARE NOT OPERATED BY THE COMPANY.
THERE SHALL BE NO SETTLEMENT FOR STOCK IN
TANKS ON NON-OPERATED OIL AND GAS PROPERTIES.
4.3
TAXES.
(A)
PROPERTY TAXES.
ALL AD VALOREM TAXES, REAL PROPERTY TAXES,
PERSONAL PROPERTY TAXES AND SIMILAR OBLIGATIONS ASSESSED ON THE OIL AND GAS
PROPERTIES ("PROPERTY TAXES") SHALL BE APPORTIONED AS OF THE EFFECTIVE TIME
BETWEEN BUYER AND SELLER.
BUYER SHALL CAUSE THE COMPANY TO FILE ALL REQUIRED
REPORTS AND RETURNS INCIDENT TO PROPERTY TAXES WHICH ARE DUE ON OR AFTER THE
CLOSING, AND THE COMPANY SHALL PAY OR CAUSE TO BE PAID TO THE TAXING AUTHORITIES
ALL SUCH TAXES REFLECTED ON SUCH REPORTS AND RETURNS.
THE POST-CLOSING
9
ADJUSTMENT STATEMENT SHALL SETTLE ALL LIABILITY FOR PROPERTY TAXES, USING
ESTIMATES BASED ON PREVIOUS ASSESSMENTS TO THE EXTENT CURRENT ASSESSMENTS ARE
NOT KNOWN.
(B)
SALES TAXES, FILING