("AGGREGATE
DEFECT DEDUCTIBLE"), AFTER WHICH POINT ADJUSTMENTS TO THE PURCHASE PRICE OR
OTHER REMEDIES SHALL BE MADE OR AVAILABLE TO PURCHASER ONLY WITH RESPECT TO
UNCURED TITLE DEFECTS AND UNCURED ENVIRONMENTAL DEFECTS WHERE THE AGGREGATE
TITLE DEFECT AMOUNTS AND ENVIRONMENTAL DEFECT AMOUNTS ATTRIBUTABLE THERETO ARE
IN EXCESS OF SUCH AGGREGATE DEFECT DEDUCTIBLE.
NOTWITHSTANDING ANYTHING TO THE
CONTRARY, (I) IN NO EVENT SHALL THERE BE ANY ADJUSTMENTS TO THE PURCHASE PRICE
FOR ANY INDIVIDUAL TITLE BENEFIT FOR WHICH THE TITLE BENEFIT AMOUNT DOES NOT
EXCEED $50,000 ("INDIVIDUAL BENEFIT DEDUCTIBLE"); AND (II) IN NO EVENT SHALL
THERE BE ANY ADJUSTMENTS TO THE PURCHASE PRICE FOR ANY TITLE BENEFIT UNLESS THE
AGGREGATE TITLE BENEFIT AMOUNTS ATTRIBUTABLE TO ALL SUCH TITLE BENEFITS, EXCEEDS
A DEDUCTIBLE IN AN AMOUNT EQUAL TO $17,000,000 ("AGGREGATE BENEFIT DEDUCTIBLE"),
AFTER WHICH POINT ADJUSTMENTS TO THE PURCHASE PRICE SHALL BE MADE ONLY WITH
RESPECT TO SUCH TITLE BENEFIT AMOUNTS IN EXCESS OF SUCH AGGREGATE BENEFIT
DEDUCTIBLE.
SECTION 3.5
CASUALTY OR CONDEMNATION LOSS.
(A)
FROM AND AFTER THE EFFECTIVE TIME, BUT SUBJECT TO THE PROVISIONS
OF SECTION 3.5(B) AND (C) BELOW, PURCHASER SHALL ASSUME ALL RISK OF LOSS WITH
RESPECT TO AND ANY CHANGE IN THE CONDITION OF THE ASSETS AND FOR PRODUCTION OF
HYDROCARBONS THROUGH NORMAL DEPLETION (INCLUDING BUT NOT LIMITED TO THE WATERING
OUT OF ANY WELL, COLLAPSED CASING OR SAND INFILTRATION OF ANY WELL) AND THE
DEPRECIATION OF PERSONAL PROPERTY DUE TO ORDINARY WEAR AND TEAR WITH RESPECT TO
THE ASSETS.
(B)
SUBJECT TO THE PROVISIONS OF SECTION 8.1(E) AND SECTION 8.2(E)
HEREOF, IF, AFTER THE DATE OF THIS AGREEMENT BUT PRIOR TO THE CLOSING DATE, ANY
PORTION OF THE ASSETS IS DESTROYED BY FIRE OR OTHER CASUALTY OR IS TAKEN IN
CONDEMNATION OR UNDER RIGHT OF EMINENT DOMAIN, AND THE LOSS AS A RESULT OF SUCH
INDIVIDUAL CASUALTY OR TAKING, TAKEN TOGETHER WITH ALL OTHER CASUALTY LOSSES AND
14
TAKINGS, EXCEEDS $2,600,000, THE TRANSACTIONS EVIDENCED BY THIS AGREEMENT SHALL
NEVERTHELESS BE CONSUMMATED AND PURCHASER SHALL ELECT BY WRITTEN NOTICE TO
SELLER PRIOR TO CLOSING EITHER (I) TO CAUSE THE ASSETS AFFECTED BY ANY CASUALTY
OR TAKING TO BE REPAIRED OR RESTORED TO AT LEAST ITS CONDITION PRIOR TO SUCH
CASUALTY, AT SELLER'S SOLE COST, AS PROMPTLY AS REASONABLY PRACTICABLE (WHICH
WORK MAY EXTEND AFTER THE CLOSING DATE), (II) TO HAVE SELLER INDEMNIFY PURCHASER
THROUGH A DOCUMENT REASONABLY ACCEPTABLE TO SELLER AND PURCHASER AGAINST ANY
COSTS OR EXPENSES THAT PURCHASER REASONABLY INCURS TO REPAIR THE ASSETS SUBJECT
TO ANY CASUALTY OR TAKING OR (III) TO TREAT SUCH CASUALTY OR TAKING AS A TITLE
DEFECT WITH RESPECT TO THE AFFECTED PROPERTY OR PROPERTIES UNDER SECTION 3.4;
PROVIDED, HOWEVER, THAT NOTWITHSTANDING ANYTHING HEREIN PROVIDED TO THE
CONTRARY, PURCHASER CANNOT REQUIRE SELLER TO COMPLY WITH THE REMEDY SET FORTH IN
ITEM (I) OF THIS SECTION 3.5(B) WITHOUT SELLER'S PRIOR WRITTEN CONSENT.
IN EACH
CASE, SELLER SHALL RETAIN ALL RIGHTS TO INSURANCE AND OTHER CLAIMS AGAINST THIRD
PARTIES WITH RESPECT TO THE CASUALTY OR TAKING EXCEPT TO THE EXTENT THE PARTIES