ITS SOLE OPTION, NOTIFY BUYER ON OR BEFORE THE
CLOSING THAT IT ELECTS TO CURE SOME OR ALL OF THE TITLE DEFECTS.
NO PRICE
ADJUSTMENT WILL BE MADE FOR TITLE DEFECTS THAT SELLER ELECTS TO CURE.
IF ANY
TITLE DEFECT IS NOT CURED PRIOR TO CLOSING, AN ADJUSTMENT TO THE BASE PURCHASE
PRICE WILL BE CALCULATED UNDER THE CRITERIA SET FORTH IN THIS SECTION, BUT ONLY
IF THE NET AMOUNT OF ALL ADJUSTMENTS BASED ON THE TITLE DEFECTS EXCEEDS THE
AGGREGATE TITLE DEFECT VALUE.
(G)
IF, PRIOR TO THE CLOSING, ANY PORTION OF THE OIL AND GAS
PROPERTIES OR RELATED EQUIPMENT IS DESTROYED OR IMPAIRED BY FIRE OR OTHER
CASUALTY, BUYER MAY ELECT:
(I)
TO TREAT SUCH DESTRUCTION OR IMPAIRMENT AS A TITLE DEFECT IN
ACCORDANCE WITH THIS SECTION 7.3, OR
(II)
TO PURCHASE THE MEMBERSHIP INTERESTS NOTWITHSTANDING ANY SUCH
DESTRUCTION (WITHOUT ADJUSTMENT TO THE PURCHASE PRICE THEREFOR), IN WHICH CASE,
SELLER SHALL, AT THE CLOSING, PAY TO BUYER ALL SUMS PAID TO THE COMPANY OR
SELLER
23
BY THIRD-PARTIES (INCLUDING INSURANCE PROCEEDS RELATING THERETO) AND ASSIGN TO
BUYER ALL SUMS TO WHICH SELLER IS ENTITLED, AS THE CASE MAY BE, BY REASON OF THE
DESTRUCTION OF SUCH OIL AND GAS PROPERTIES OR RELATED EQUIPMENT AND SHALL
ASSIGN, TRANSFER AND SET OVER UNTO THE COMPANY OR BUYER ALL OF THE RIGHT, TITLE
AND INTEREST OF SELLER IN AND TO ANY UNPAID AWARDS OR OTHER PAYMENTS FROM
THIRD-PARTIES ARISING OUT OF THE DESTRUCTION OF SUCH OIL AND GAS PROPERTIES OR
RELATED EQUIPMENT.
(H)
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 7.3, THE
ADJUSTMENTS ATTRIBUTABLE TO THE EFFECTS OF ALL TITLE DEFECTS UPON ANY OIL AND
GAS PROPERTY SHALL NOT EXCEED THE ALLOCATED VALUE OF SUCH PARTICULAR OIL AND GAS
PROPERTY.
(I)
ALL TITLE DEFECTS NOT RAISED WITHIN THE TIME PERIOD PROVIDED IN
PARAGRAPH (B) ABOVE SHALL BE WAIVED BY BUYER FOR ALL PURPOSES, INCLUDING BUT NOT
LIMITED TO ARTICLE XII.
7.4
ENVIRONMENTAL DEFECTS.
(A)
BUYER SHALL HAVE THE RIGHT TO CONDUCT AN ENVIRONMENTAL ASSESSMENT
OF THE OIL AND GAS PROPERTIES DURING THE PERIOD BEGINNING ON THE DATE OF THIS
AGREEMENT AND ENDING AT THE CLOSE OF BUSINESS ON THE NOTIFICATION DEADLINE.
THE
CONFIDENTIALITY OBLIGATIONS OF THE CONFIDENTIALITY AGREEMENT SHALL BE APPLICABLE
TO ALL INFORMATION ACQUIRED BY BUYER IN THE COURSE OF ITS ENVIRONMENTAL
ASSESSMENT.
DURING NORMAL BUSINESS HOURS AND AFTER PROVIDING THE COMPANY AND
SELLER REASONABLE PRIOR NOTICE OF ANY SUCH ACTIVITIES, BUYER AND ITS
REPRESENTATIVES SHALL BE PERMITTED TO ENTER UPON THE OIL AND GAS PROPERTIES AND
ALL BUILDINGS AND IMPROVEMENTS THEREON, INSPECT THE SAME, REVIEW FILES AND
GENERALLY CONDUCT SUCH TESTS, EXAMINATIONS, AND INVESTIGATIONS AS ARE CONSISTENT
WITH THE AMERICAN SOCIETY FOR TESTING AND MATERIALS STANDARD PHASE I
ENVIRONMENTAL AUDIT AND WHICH HAVE BEEN APPROVED BY COMPANY IN WRITING.
SELLER
WILL HAVE THE RIGHT TO (I) WITNESS SUCH INVESTIGATION AND (II) PROMPTLY RECEIVE
A COPY OF ALL RESULTS, ANALYSES AND REVIEWS.
(B)
BUYER WILL NOTIFY SELLER ON OR BEFORE THE NOTIFICATION DEADLINE OF
(I) THE EXISTENCE OF