Common use of Casualty Loss Prior to Closing Clause in Contracts

Casualty Loss Prior to Closing. If, between the Execution Date and the Closing, any substantial portion of the Assets are materially damaged or destroyed by fire or other casualty (not including normal wear and tear, downhole mechanical failure or reservoir changes) or if any substantial portion of the Assets are taken by condemnation or under the right of eminent domain (all of which are herein called “Casualty Loss” and are limited to property damage or taking only), Sellers shall notify Purchaser promptly after Sellers learn of such event. Sellers shall have the right, but not the obligation, to cure a Casualty Loss that consists of property damage by repairing the affected Asset no later than the Closing Date. If any uncured Casualty Loss exists at the Closing, Purchaser shall proceed to purchase the Asset affected thereby, and upon receipt of the Purchase Price, Sellers shall pay to Purchaser all sums paid to Sellers by third Persons by reason of the damage or taking of such Asset, and to the extent Sellers are not contractually prohibited from doing so, Sellers shall assign, transfer and set over unto Purchaser all of the right, title and interest of Sellers in and to any claims, unpaid proceeds or other payments or rights to receive payments from third Persons arising out of such damage or taking. EXCEPT AS SET FORTH IN SECTION 6.1(P), EACH SELLER DISCLAIMS ANY REPRESENTATION OR WARRANTY AS TO THE EXISTENCE OF INSURANCE COVERING CASUALTY LOSS TO THE ASSETS, AND DISCLAIMS ANY OBLIGATION, COVENANT OR DUTY TO PURCHASER TO ASSERT OR PURSUE ANY CLAIM AGAINST ANY INSURER OR OTHER PERSON FOR CASUALTY LOSS TO THE ASSETS.

Casualty Loss Prior to Closing. (i) If, between the Execution Date and the Closing, any substantial portion of the Assets are materially damaged or destroyed by fire or other casualty (not including normal wear and tear, downhole mechanical failure or reservoir changes) or if any substantial portion of the Assets are taken by condemnation or under the right of eminent domain (all of which are herein called “Casualty Loss” and are limited to property damage or taking only), Sellers Seller shall notify Purchaser promptly after Sellers learn Seller learns of such event. Sellers Seller shall have the right, but not the obligation, to cure a Casualty Loss that consists of property damage by repairing the affected Asset to the state existing immediately preceding such Casualty Loss no later than the Closing Date. . (ii) If any uncured Casualty Loss exists at the Closing, Purchaser shall proceed to purchase and the loss as a result of such Casualty Loss exceeds Five Hundred Thousand Dollars ($500,000), the Asset affected therebyby such Casualty Loss shall be conveyed to Purchaser at Closing and Seller shall elect by written notice to Purchaser prior to Closing either (i) to cause the Unadjusted Purchase Price to be reduced at Closing by an amount equal to the loss resulting from such Casualty Loss, and upon receipt of the Purchase Price, Sellers shall (ii) pay to Purchaser all sums paid to Sellers Seller by third Persons Third Parties by reason of the damage or taking of such Asset, and to the extent Sellers are Seller is not contractually prohibited from doing so, Sellers Seller shall assign, transfer and set over unto Purchaser all of the right, title and interest of Sellers Seller in and to any insurance, claims, unpaid proceeds or other payments or rights to receive payments from third Persons Third Parties arising out of such damage or takingtaking or (iii) cure the Casualty Loss. EXCEPT AS SET FORTH IN SECTION 6.1(P), EACH SELLER DISCLAIMS ANY REPRESENTATION OR WARRANTY AS TO THE EXISTENCE OF INSURANCE COVERING CASUALTY LOSS TO THE ASSETS, AND DISCLAIMS ANY OBLIGATION, COVENANT OR DUTY TO PURCHASER TO ASSERT OR PURSUE ANY CLAIM AGAINST ANY INSURER OR OTHER PERSON FOR CASUALTY LOSS TO THE ASSETS.

Casualty Loss Prior to Closing. If, between Seller shall promptly notify Buyer of any Casualty Loss to the Execution Properties of which Seller is or becomes aware. In the event of a Casualty Loss to the Properties after the Effective Date and prior to the Closing, then this Agreement shall remain in full force and effect, and (unless Buyer and Seller shall otherwise agree) in such event: (a) With respect to any substantial portion of the Assets are materially damaged or destroyed by fire or other casualty (not including normal wear Oil and tear, downhole mechanical failure or reservoir changes) or if any substantial portion of the Assets are taken by condemnation or under the right of eminent domain (all of which are herein called “Gas Property that suffers a Casualty Loss” , at Buyer’s election (i) such Oil and are limited Gas Property shall be treated as if it were the subject of a properly asserted and undisputed Title Defect and the Purchase Price shall be reduced by the amount calculated pursuant to property damage Article VIII with respect thereto or taking only(ii) the Purchase Price shall not be reduced as a result of such Casualty Loss, and if Seller shall be entitled to make any claims under any insurance policy with respect to such Casualty Loss, at Buyer’s election, Seller shall either collect (and, when collected, pay to Buyer) insurance proceeds therefor, or assign to Buyer all Seller’s right, title, and interest in such insurance claims; and (b) With respect to any Property other than an Oil and Gas Property that suffers a Casualty Loss, Buyer may elect to (a) reduce the Purchase Price by an amount determined before the Closing by PriceWaterhouseCoopers (or, if such firm is unable or unwilling to serve, another independent public accounting firm mutually acceptable to Seller and Buyer), Sellers in which case Seller shall notify Purchaser promptly after Sellers learn retain, all insurance proceeds relating to such Casualty Loss, or (b) require Seller to (i) transfer to Buyer at Closing all unpaid insurance proceeds, claims, awards and other payments arising out of such event. Sellers shall have the right, but not the obligation, to cure a Casualty Loss that consists of property damage by repairing the affected Asset no later than the Closing Date. If any uncured Casualty Loss exists at the Closing, Purchaser shall proceed to purchase the Asset affected therebyLoss, and upon receipt of the Purchase Price, Sellers shall (ii) pay to Purchaser Buyer all sums paid to Sellers by third Persons by reason of the damage or taking of such AssetSeller as insurance proceeds, and to the extent Sellers are not contractually prohibited from doing so, Sellers shall assign, transfer and set over unto Purchaser all of the right, title and interest of Sellers in and to any claims, unpaid proceeds awards or other payments or rights to receive payments from third Persons arising out of such damage Casualty Loss, whether such sums are paid to Seller prior to or takingafter Closing. EXCEPT AS SET FORTH IN SECTION 6.1(P)There shall not be an adjustment to the Purchase Price if Buyer elects to proceed pursuant to subsection (b) of this Section 7.7. (c) Seller shall not voluntarily compromise, EACH SELLER DISCLAIMS ANY REPRESENTATION OR WARRANTY AS TO THE EXISTENCE OF INSURANCE COVERING CASUALTY LOSS TO THE ASSETSsettle, AND DISCLAIMS ANY OBLIGATION, COVENANT OR DUTY TO PURCHASER TO ASSERT OR PURSUE ANY CLAIM AGAINST ANY INSURER OR OTHER PERSON FOR CASUALTY LOSS TO THE ASSETSor adjust any amounts payable by reason of any Casualty Loss without first obtaining the written consent of Buyer.