Common use of Adverse Environmental Condition Disputes Clause in Contracts

Adverse Environmental Condition Disputes. (a) Without prejudice to either party’s position as to the existence or nature of an Adverse Environmental Condition or the cost to remediate an Adverse Environmental Condition to the Standard, Seller and Buyer shall attempt to agree prior to the Closing Date on: (i) the existence of any Adverse Environmental Condition; (ii) Seller’s remediation of any Adverse Environmental Condition to the Standard; and (iii) the Environmental Defect Value associated with any Adverse Environmental Conditions. If Seller and Buyer are unable to agree on any of the above (collectively or individually, as applicable, the “Disputed Environmental Matters”) prior to the Closing Date, an amount equal to the average of (A) the Environmental Defect Value claimed in good faith by Seller and (B) the Environmental Defect Value claimed in good faith by Buyer, shall be used to determine the Purchase Price to be paid at Closing, and the Disputed Environmental Matters shall be exclusively and finally resolved by expert determination pursuant to Section 5.3.5(b). (b) Within ten (10) days following the Closing Date, all Disputed Environmental Matters shall be submitted to an environmental consultant with at least ten (10) years’ experience in oil and gas environmental matters as selected by: (i) mutual agreement of Buyer and Seller; or (ii) absent such agreement during such ten (10) day period, by the Dallas office of the American Arbitration Association (the “Environmental Consultant”). The Environmental Consultant shall not have been employed by any party or its Affiliates within the five (5) year period preceding the arbitration. The Environmental Consultant, once appointed, shall have no ex parte communications with any of the parties concerning the determination required hereunder. All communications between any party or its Affiliates and the Environmental Consultant shall be conducted in writing, with copies sent simultaneously to the other party in the same manner, or at a meeting or conference call to which the representatives of both Seller and Buyer have been invited and of which such parties have been provided at least five (5) days’ notice. Within ten (10) days of appointment of the Environmental Consultant, each of Seller and Buyer shall present the Environmental Consultant with a written statement of its position on the Disputed Environmental Matters, including a written statement of its position with respect to any disputes regarding: (x) the existence of any Adverse Environmental Condition; (y) the proposed remediation of any Adverse Environmental Condition to the Standard; and (z) the estimated Environmental Defect Value, in each case, as applicable, together with all other supporting information that it deems relevant, with a copy to the other party. The Environmental Consultant shall also be provided with a copy of this Agreement. Within forty-five (45) days after receipt of such materials and after receipt of any additional information required by the Environmental Consultant, the Environmental Consultant shall make its determination, which shall be final and binding upon all parties, without right of appeal, absent manifest error. In making its determination, the Environmental Consultant shall be bound by the rules set forth in this Section 5.3. In no event shall the Environmental Consultant select an amount lower than the amount proposed by Seller nor higher than the amount proposed by Buyer, as applicable. The Environmental Consultant shall act as an expert for the limited purpose of determining: (A) the existence of any Adverse Environmental Condition in dispute; (B) whether any Adverse Environmental Condition has been remediated to the Standard; and (C) the specific disputed Environmental Defect Values. The Environmental Consultant may not award damages, interest or penalties to any party with respect to any matter. Seller and Buyer shall each bear its own legal fees and other costs of presenting its case. Seller shall bear one-half (1/2) and Buyer shall bear one-half (1/2) of the costs and expenses of the Environmental Consultant.

Adverse Environmental Condition Disputes. (a) Without prejudice to either partySeller’s position as to the existence or nature of an a timely and properly asserted Adverse Environmental Condition or the cost to remediate an a timely and properly asserted Adverse Environmental Condition to the Standard, Seller and Buyer shall attempt to agree prior to the Closing Date on: (ia) the existence of any an Adverse Environmental Condition; (iib) Seller’s remediation of any Adverse Environmental Condition to the Standard; and (iiic) the Environmental Defect Value associated with any all timely and properly asserted Adverse Environmental Conditions. If Seller and Buyer are unable to agree on any of the above (collectively or individually, as applicable, the “Disputed Environmental Matters”) prior to the Closing Date, an amount equal (i) the affected Conveyed Interests will be conveyed to the average of Buyer at Closing, (Aii) the Environmental Defect Value claimed Escrow Amount will be deposited into the escrow account described in good faith by Seller the Escrow Agreement in accordance with Section 5.3.2, and (Biii) the Environmental Defect Value claimed in good faith by Buyer, shall be used to determine the Purchase Price to be paid at Closing, and the Disputed Environmental Matters shall be exclusively and finally resolved by expert determination to be conducted in Houston, Texas pursuant to this Section 5.3.5(b). (b5.3.5. If the Parties agree on the amount due with respect to any disputed items or a final determination is made by the Environmental Consultant, and a payment adjustment is required, the Parties shall instruct the Escrow Agent to remit the applicable amount(s) Within in the Defect Escrow to the applicable Party within ten (10) days after the Parties reach agreement or the Environmental Consultant makes its determination. During the ten (10) day period following the Closing DateDate or following the Cure Deadline, as applicable, all Disputed Environmental Matters shall be submitted to an environmental consultant with at least ten fifteen (1015) years’ experience in oil and gas environmental matters as selected by: (i) mutual agreement of Buyer and Seller; or (ii) absent such agreement during such ten (10) day period, by the Dallas office of the American Arbitration Association (the “Environmental Consultant”). The Environmental Consultant shall not have been employed by any party or its Affiliates within the five (5) year period preceding the arbitration. The Environmental Consultant, once appointed, shall have no ex parte communications with any of the parties concerning the determination required hereunder. All communications between any party or its Affiliates and the Environmental Consultant shall be conducted in writing, with copies sent simultaneously to the other party in the same manner, or at a meeting or conference call to which the representatives of both Seller and Buyer have been invited and of which such parties have been provided at least five (5) days’ notice. Within ten (10) days of appointment of the Environmental Consultant, each of Seller and Buyer shall present the Environmental Consultant with a written statement of its position on the Disputed Environmental Matters, including a written statement of its position with respect to any disputes regarding: (x) the existence of any Adverse Environmental Condition; (y) the proposed remediation of any Adverse Environmental Condition to the Standard; and (z) the estimated Environmental Defect Value, in each case, as applicable, together with all other supporting information that it deems relevant, with a copy to the other party. The Environmental Consultant shall also be provided with a copy of this Agreement. Within forty-five (45) days after receipt of such materials and after receipt of any additional information required by the Environmental Consultant, the Environmental Consultant shall make its determination, which shall be final and binding upon all parties, without right of appeal, absent manifest error. In making its determination, the Environmental Consultant shall be bound by the rules set forth in this Section 5.3. In no event shall the Environmental Consultant select an amount lower than the amount proposed by Seller nor higher than the amount proposed by Buyer, as applicable. The Environmental Consultant shall act as an expert for the limited purpose of determining: (A) the existence of any Adverse Environmental Condition in dispute; (B) whether any Adverse Environmental Condition has been remediated to the Standard; and (C) the specific disputed Environmental Defect Values. The Environmental Consultant may not award damages, interest or penalties to any party with respect to any matter. Seller and Buyer shall each bear its own legal fees and other costs of presenting its case. Seller shall bear one-half (1/2) and Buyer shall bear one-half (1/2) of the costs and expenses of the Environmental Consultant.or

Adverse Environmental Condition Disputes. (a) Without prejudice to either party’s position as to the existence or nature of an Adverse Environmental Condition or the cost to remediate an Adverse Environmental Condition to the Standard, Seller Sellers and Buyer Purchaser shall attempt to agree on all asserted Adverse Environmental Conditions and Remediation Amounts prior to the Pre-Closing Date on: (i) Cure Deadline. If, by the existence of any Adverse Environmental Condition; (ii) Seller’s remediation of any Adverse Environmental Condition to the Standard; Pre-Closing Cure Deadline, Sellers and (iii) the Environmental Defect Value associated with any Adverse Environmental Conditions. If Seller and Buyer Purchaser are unable to agree on an alleged Adverse Environmental Condition, on the completion of Remediation or on an alleged Remediation Amount (including, in each case, the adequacy of any of the above Remediation actions with respect thereto) (collectively or individually, as applicable, the “Disputed Environmental Matters”) prior to the Closing Date, an amount equal to the average of (A) the Environmental Defect Value claimed in good faith by Seller and (B) the Environmental Defect Value claimed in good faith by Buyer, shall be used to determine the Purchase Price to be paid at Closingsuch disputes, and the Disputed Environmental Matters only such disputes, shall be exclusively and finally resolved by in accordance with the following provisions of this Section 6.3. Any initiation of an expert determination pursuant to Section 5.3.5(b)of any Disputed Environmental Matter shall only be in accordance with the following subsections (b) through (j) below. (b) No later than 10 days following the Closing, a representative of Sellers and a representative of Purchaser shall meet to attempt to resolve any Disputed Environmental Matters. In the event that the Parties are not able to reach agreement with respect to any Disputed Environmental Matters, then either Sellers or Purchaser may submit any Disputed Environmental Matter to expert determination pursuant to this Section 6.3 by written notice to the other Party within 20 days following the Closing, together with all supporting documentation of such Disputed Environmental Matter. If a Party does not submit a notice of expert determination to the other Party in accordance with this Section 6.3(b) within 20 days following the Closing, such Party shall be deemed to have waived all such Disputed Environmental Matters, which shall be deemed conclusively resolved in accordance with the other Party’s written position or subsequent agreement between the Parties pursuant to this Section 6.3(b). (c) By not later than 15 days after a Party’s receipt of a written description of any Disputed Environmental Matters, such Party shall provide to the initiating Party a written response setting forth its position with respect to such Disputed Environmental Matters, together with all supporting documentation. (d) The environmental expert (the “Environmental Expert”) shall be selected by Sellers and Purchaser in accordance with this Section 6.3(d). Sellers and Purchaser shall each exchange lists of three (3) acceptable, qualified environmental experts (who shall be an environmental engineer or environmental attorney with at least 10 years of experience in investigations, remediation and examining environmental matters involving oil and gas producing properties in the State(s) where the Assets subject to the Disputed Environmental Matters are located), and shall certify that each potential environmental expert set forth on its list has not, and such environmental expert’s firm has not, represented the certifying Party or any of its Affiliates within the previous three (3) years. Within ten five (105) days following the Closing Dateexchange of lists of environmental experts, all Disputed Environmental Matters Sellers and Purchaser shall be submitted to an environmental consultant with at least ten (10) years’ experience in oil and gas environmental matters as selected by: (i) select by mutual agreement the Environmental Expert from their lists of Buyer and Seller; or three (ii3) absent acceptable environmental experts. If no such agreement during such ten (10) day periodis reached, by the Dallas Lexington, Kentucky office of the American Arbitration Association shall select an environmental expert from the lists provided by Sellers and Purchaser to serve as the Environmental Expert (but only to the “extent such listed environmental experts satisfy the conditions and qualifications set forth herein). (e) Within 10 days following the engagement of the Environmental Consultant”Expert, the Parties shall submit to the Environmental Expert one copy of (i) this Agreement, (ii) the initiating Party’s written description of the Disputed Environmental Matters provided pursuant to Section 6.3(b), together with the supporting documents that were provided to the other Party and (iii) the other Party’s written response to the initiating party’s written description of the Disputed Environmental Matters, together with the supporting documents that were provided to the initiating Party. The Environmental Consultant Expert shall not resolve the Disputed Environmental Matters based only on the foregoing submissions. Neither the Purchaser nor the Sellers shall have been employed by the right to submit any party additional documentation to the Environmental Expert or its Affiliates within to demand discovery on the five other Party. (5f) year period preceding the arbitration. The Environmental ConsultantExpert, once appointedappointed and engaged, shall have no ex parte communications with any of the parties Party concerning the determination required hereunder. All communications between any party or its Affiliates Party and the Environmental Consultant Expert shall be conducted in writing, with copies sent simultaneously to the other party Parties in the same manner, or at a meeting or conference call in Lexington, Kentucky, to which the representatives of both Seller and Buyer all Parties have been invited and of which such parties Parties have been provided at least five (5) days’ written notice. Within ten . (10g) days of appointment of The Parties will instruct the Environmental Consultant, each Expert to make his/her determination by written decision within 15 days following submission of Seller and Buyer shall present the Environmental Consultant with a written statement of its position on the Disputed Environmental Matters, including a written statement of its position with respect to any disputes regarding: (x) the existence of any Adverse Environmental Condition; (y) the proposed remediation of any Adverse Environmental Condition Matters to the Standard; and (z) the estimated Environmental Defect Value, in each case, as applicable, together with all other supporting information that it deems relevant, with a copy to the other party. The Environmental Consultant shall also be provided with a copy of this Agreement. Within forty-five (45) days after receipt of such materials and after receipt of any additional information required by the Environmental Consultant, the Environmental Consultant shall make its determinationExpert, which shall be final and binding upon all partiesthe Parties, without right of appeal, absent manifest error. In making its the determination, the Environmental Consultant Expert shall be bound by the rules set forth in this Section 5.3Article 6. In no event shall The Environmental Expert may consult with and engage disinterested third party consultants to advise the Environmental Consultant select Expert but shall disclose to the Parties the identities of such consultants. Any such consultant shall not have worked as an amount lower than employee of or consultant for the Parties or their respective Affiliates within the previous three (3) years and shall not have any financial interest in the dispute. The written finding of the Environmental Expert will set forth the Environmental Expert’s finding, if applicable, as to (i) whether the subject Adverse Environmental Condition exists or has been Remediated and, subject to the following sentence, the resulting Remediation Amount, (ii) the deficiencies in any notice of the foregoing and the specific supplemental information that, if provided, would cause such notice to be in compliance with the terms of Section 6.1 and/or (iii) the adequacy of any Remediation action, including any such additional Remediation actions necessary to Remediate properly any asserted Adverse Environmental Condition, as applicable, in each case, including the Environmental Expert’s rationale for the determination. With respect to a Remediation Amount, the Environmental Expert shall be limited to awarding only the final amount proposed by Seller nor higher than the amount proposed by Buyer, as applicableeither Sellers or Purchaser in their respective submissions provided pursuant to Section 6.3(e). The Environmental Consultant Expert shall make a separate and independent determination with respect to each Disputed Environmental Matter submitted and shall provide a detailed written finding supporting such determination. (h) The Environmental Expert shall act as an expert for the limited purpose of determining: (A) the existence of any Adverse Environmental Condition in dispute; (B) whether any Adverse Environmental Condition has been remediated to the Standard; and (C) determining the specific disputed Adverse Environmental Defect Values. The Environmental Consultant may Conditions and shall not be empowered to award damages, interest or penalties to any party Party with respect to any matter. Seller and Buyer . (i) Each Party shall each bear its own legal fees and other costs of preparing and presenting its case. Seller Sellers shall bear one-half (1/2) and Buyer Purchaser shall bear one-half (1/2) of the costs and expenses of the Environmental ConsultantExpert, including any costs incurred by the Environmental Expert that are attributable to the consultation of any third party. (j) Any dispute over the interpretation or application of this Section 6.3 shall be decided by the Environmental Expert with reference to the Laws of the State where the Environmental Defect Property is located. The Parties intend that the procedures set forth in this Section 6.3 shall not constitute or be handled as arbitration proceedings under the Federal Arbitration Act or any applicable state arbitration act, and that the provisions of this Section 6.3 shall be specifically enforceable.