First arms-length clarification

Please explain first arms-length and is it always needed in an exhibit? I was told to add it by my lawyer but the company I am trying to negotiate with has struck through it. Is that to their benefit and how? How is it detrimental to me? Thanks in advance.

In the past, certain operating companies have sold their oil and gas to their own subsidiary companies at questionably inflated prices. The parent company would have gained quite a benefit. If there were post production charges, then those were possibly inflated charges would have been passed on to the mineral owner.

Go back to your lawyer, if they struck portions then filed the lease you need to take some action to correct their malfeasance.

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

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