GAS PROPERTY RECEIVED BY SELLER ATTRIBUTABLE
TO THE PERIOD OF TIME AFTER THE EFFECTIVE TIME (CALCULATED IN ACCORDANCE WITH
SECTION 2.3).
IF SUCH CONSENT HAS NOT BEEN OBTAINED OR HAS NOT BEEN WAIVED BY
BUYER AS OF THE DATE ON WHICH THE POST-CLOSING ADJUSTMENT STATEMENT BECOMES
FINAL, SELLER SHALL ELECT EITHER TO (I) CHALLENGE IN COURT THE ENFORCEABILITY OF
SUCH CONSENT RIGHT, IN WHICH EVENT THE AFFECTED OIL AND GAS PROPERTY SHALL BE
ASSIGNED TO SELLER AS AN EXCLUDED ASSET AND A PORTION OF THE PURCHASE PRICE
EQUAL TO THE ALLOCATED VALUE OF THE AFFECTED OIL AND GAS PROPERTY SHALL BE
WITHHELD BY BUYER UNTIL SUCH LEGAL CHALLENGE IS FINALLY RESOLVED BY SETTLEMENT
OR NON-APPEALABLE COURT ORDER, AFTER WHICH SELLER SHALL CONVEY THE AFFECTED OIL
AND GAS PROPERTY TO THE COMPANY UNDER THE TERMS OF THIS AGREEMENT AND BUYER
SHALL PAY THE ALLOCATED VALUE FOR SUCH OIL AND GAS PROPERTY, LESS ANY PROCEEDS
RECEIVED BY SELLER ATTRIBUTABLE TO SUCH OIL AND GAS PROPERTY FOR THE PERIOD FROM
AND AFTER THE EFFECTIVE TIME (CALCULATED IN ACCORDANCE WITH SECTION 2.3) OR
(II)
DEEM THE AFFECTED OIL AND GAS PROPERTY AN EXCLUDED ASSET AND THE BASE
PURCHASE PRICE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE ALLOCATED VALUE OF THE
AFFECTED OIL AND GAS PROPERTY (WITH SUCH ADJUSTMENT BEING AN "EXCLUSION
ADJUSTMENT").
BUYER SHALL REASONABLY COOPERATE WITH SELLER IN OBTAINING ANY
REQUIRED CONSENT INCLUDING PROVIDING ASSURANCES OF REASONABLE FINANCIAL
CONDITIONS, BUT BUYER SHALL NOT BE REQUIRED TO EXPEND FUNDS OR MAKE ANY OTHER
TYPE OF FINANCIAL COMMITMENTS A CONDITION OF OBTAINING SUCH CONSENT.
6.
ENVIRONMENTAL ASSESSMENT.
6.1
PHYSICAL CONDITION OF THE OIL AND GAS
PROPERTIES.
(A)
BUYER ACKNOWLEDGES THAT THE OIL AND GAS
PROPERTIES HAVE BEEN USED FOR OIL AND GAS DRILLING AND PRODUCTION OPERATIONS AND
POSSIBLY FOR THE STORAGE AND DISPOSAL OF WASTE MATERIALS OR HAZARDOUS SUBSTANCES
RELATED TO STANDARD OIL FIELD OPERATIONS. PHYSICAL CHANGES IN OR UNDER THE OIL
AND GAS PROPERTIES OR ADJACENT LANDS MAY HAVE OCCURRED AS A RESULT OF SUCH
USES.
THE OIL AND GAS PROPERTIES ALSO MAY CONTAIN PREVIOUSLY PLUGGED AND
ABANDONED WELLS, BURIED PIPELINES, STORAGE TANKS AND OTHER EQUIPMENT, WHETHER OR
NOT OF A SIMILAR NATURE, THE LOCATIONS OF WHICH MAY NOT NOW BE KNOWN BY SELLER
OR BE READILY APPARENT BY A PHYSICAL INSPECTION OF THE OIL AND GAS PROPERTIES.
UPON CONSUMMATION OF THE CLOSING BUYER SHALL BE DEEMED TO HAVE ASSUMED THE RISK
OF EXPENSE, CLAIM, DAMAGE OR LIABILITY ARISING FROM ANY SUCH MATTER REFERRED TO
IN THIS SECTION, INCLUDING WITHOUT LIMITATION THE RISK THAT THE OIL AND GAS
PROPERTIES MAY CONTAIN WASTE OR CONTAMINANTS AND THAT ADVERSE PHYSICAL
CONDITIONS, INCLUDING THE PRESENCE OF WASTE OR CONTAMINANTS, MAY NOT HAVE BEEN
REVEALED BY BUYER'S INVESTIGATION.
UPON CONSUMMATION OF THE CLOSING THE COMPANY
SHALL RETAIN ALL RESPONSIBILITY AND LIABILITY RELATED TO DISPOSAL, SPILLS, WASTE
OR CONTAMINATION ON OR BELOW THE OIL AND GAS PROPERTIES.
(B)
IN ADDITION, BUYER ACKNOWLEDGES THAT SOME OIL
FIELD PRODUCTION EQUIPMENT LOCATED ON THE OIL AND GAS PROPERTIES MAY CONTAIN