DUE TO NORMAL
PRODUCTION AND DEPRECIATION OR FAILURE OF EQUIPMENT OR CASING.
(B)
IF, PRIOR TO THE CLOSING, A CASUALTY OCCURS (OR
CASUALTIES OCCUR) WHICH RESULTS IN A REDUCTION IN THE VALUE OF ANY OF THE OIL
AND GAS PROPERTIES ("CASUALTY LOSS"), (I) SELLER SHALL RETAIN SUCH OIL AND GAS
PROPERTY AND SUCH OIL AND GAS PROPERTY SHALL BE THE SUBJECT OF AN ADJUSTMENT TO
THE BASE PURCHASE PRICE IN THE SAME MANNER SET FORTH IN SECTION 5.4 HEREOF, OR
(II) AT THE CLOSING, SELLER SHALL ASSIGN TO BUYER OR THE COMPANY, AT BUYER'S
ELECTION, THE RIGHT TO RECEIVE ALL INSURANCE PROCEEDS OR OTHER SUMS PAYABLE TO
SELLER OR ITS AFFILIATES BY REASON OF SUCH CASUALTY LOSS, THE BASE PURCHASE
PRICE SHALL NOT BE ADJUSTED BY REASON OF SUCH PAYMENT, AND THE AFFECTED OIL AND
GAS PROPERTY WILL CONTINUE TO BE OWNED BY THE COMPANY.
IN THE EVENT A CASUALTY
LOSS RESULTS IN A FIVE PERCENT (5%) OR GREATER REDUCTION IN THE VALUE OF AN
AFFECTED OIL AND GAS PROPERTY, BUYER SHALL HAVE THE RIGHT TO EXCLUDE SUCH OIL
AND GAS PROPERTY FROM THIS TRANSACTION, RECEIVE A REDUCTION OF THE BASE PURCHASE
PRICE BASED ON THE ALLOCATED VALUE OF SUCH OIL AND GAS PROPERTY, AND THE COMPANY
SHALL TRANSFER THE AFFECTED OIL AND GAS PROPERTY TO SELLER OR SELLER'S DESIGNEE
AS AN EXCLUDED ASSET.
(C)
FOR PURPOSES OF DETERMINING THE DIMINUTION IN
VALUE OF AN ASSET AS A RESULT OF A CASUALTY LOSS, THE PARTIES SHALL USE THE SAME
METHODOLOGY AS APPLIED IN DETERMINING THE DIMINUTION IN VALUE OF AN ASSET AS A
RESULT OF A TITLE DEFECT AS SET FORTH IN SECTION 5.4.
16.2
CONFIDENTIALITY.
(A)
PRIOR TO CLOSING, TO THE EXTENT NOT ALREADY
PUBLIC, BUYER SHALL NOT DISCLOSE TO ANY PARTY THAT IT IS CONDUCTING NEGOTIATIONS
WITH SELLER OR HAS ENTERED INTO THIS AGREEMENT OTHER THAN AS EXPRESSLY PROVIDED
HEREIN OR AS PERMITTED IN THE CONFIDENTIALITY AGREEMENT EXECUTED BY BUYER IN
SELLER'S FAVOR PRIOR TO THE EXECUTION OF THIS AGREEMENT, WHICH SHALL CONTINUE TO
APPLY UNTIL THE CLOSING AND THEREAFTER IN THE EVENT OF TERMINATION OF THIS
AGREEMENT PRIOR TO THE CLOSING. BUYER SHALL EXERCISE ALL DUE DILIGENCE IN
SAFEGUARDING AND MAINTAINING SECURE ALL ENGINEERING, GEOLOGICAL AND GEOPHYSICAL
DATA, SEISMIC DATA, REPORTS AND MAPS, THE RESULTS AND FINDINGS OF BUYER WITH
REGARD TO ITS DUE DILIGENCE ASSOCIATED WITH THE ASSETS (INCLUDING WITHOUT
LIMITATION WITH REGARD TO DUE DILIGENCE ASSOCIATED WITH ENVIRONMENTAL AND TITLE
MATTERS) AND OTHER DATA RELATING TO THE ASSETS (COLLECTIVELY, THE "CONFIDENTIAL
INFORMATION").
BUYER ACKNOWLEDGES THAT, PRIOR TO CLOSING, ALL CONFIDENTIAL
INFORMATION SHALL BE TREATED AS CONFIDENTIAL. NOTWITHSTANDING THE FOREGOING,
SELLER UNDERSTANDS THAT BUYER HAS PUBLIC REPORTING OBLIGATIONS THAT MAY REQUIRE
PUBLIC ANNOUNCEMENT OF CERTAIN INFORMATION RELATING TO THIS AGREEMENT.
SELLER
AND BUYER SHALL CONSULT WITH EACH OTHER WITH REGARD TO ALL PUBLICITY AND OTHER
RELEASES AT OR PRIOR TO THE CLOSING CONCERNING THIS AGREEMENT AND THE
TRANSACTION CONTEMPLATED HEREBY AND, EXCEPT AS PROVIDED HEREIN OR AS REQUIRED BY
APPLICABLE LAW OR OTHER APPLICABLE RULES OR