Common use of Notice of Intent to Exercise Clause in Contracts

Notice of Intent to Exercise. In accordance with the Option Agreement and pursuant to certain terms and conditions, BUYER is entitled to purchase the Mineral Rights on an all or none basis for; (i) $400,000 as a cash down payment; (ii) quarterly installment payments consisting of a principle payment in the amount of Thirty Thousand ($30,000) Dollars for Eight (8) consecutive years or thirty two (32) quarters, beginning ninety (90) days after the exercise of the Option Agreement and interest combined with the principle on a quarterly installment payments will be calculated on the unpaid principle balance at a rate equal to five (5%) percent per annum and a balloon payment in the amount of Two Hundred Eighty Nine Thousand ($289,000) due at the end of the Thirty Two (32) quarterly payments; or (iii) pursuant to the accelerated payment provision as defined in Option Agreement, whichever shall occur first. BUYER and SELLER agree that in the event commercial ▇▇▇▇▇ are drilled on the property covering the said mineral rights and if Thirty Five (35%) of the revenue attributed to the undivided Fifty Percent (50%) of the mineral rights ownership exceeds Thirty Thousand ($30,000) per quarter, the BUYER will pay this amount to the SELLER, which will apply to the principle due SELLER from BUYER. BUYER shall promptly provide notice to the Escrow Agent and to SELLER informing them of its intent to purchase the Mineral Rights. Within five (5) business days after the issuance of the Notice of Intent to Exercise (Exhibit “B”), BUYER or its assign will transfer Four Hundred Thousand ($400,000) Dollars to the trust account of the Escrow Agent for the benefit of SELLER. The Mineral Deed will continue to be held by the Escrow Agent until such time as full payment in the amount of One Million Six Hundred Forty Nine Thousand ($1,649,000) in principal payments have been made by the BUYER to the SELLER, excluding all interest payments. Within five (5) business days after receipt of the principal amount of $1,649,000 and all interest due the SELLER, the Escrow Agent will deliver an executed and notarize Mineral Deed to the BUYER. BUYER and SELLER agree that the One Million Six Hundred Forty Nine Thousand ($1,649,000) purchase price is predicated on the SELLER conveying Eight Hundred Twenty Four and One Half (824.5) net mineral acres at Two Thousand ($2,000) dollars on a net mineral per acre basis and in the event it is determined pursuant to a comprehensive mineral title search that the net acres owned by the SELLER is greater than or less than Eight Hundred Twenty Four and a Half (824.5) net mineral acres, the purchase price shall be adjust accordingly using $2,000 per net mineral acres as the amount to be adjusted on a per acre basis.