Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived. (b) With respect to each Conveyed Property (other than a Buyer Operated Property) for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed Property, an “Environmental Defect Property”), Seller shall have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply: (i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Properties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto); (ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or (iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property. (c) With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or (B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”). (d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) (the “Environmental Threshold”) or (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect Deductible, and then only with respect to the amount of such Environmental Defect Amounts that exceed the Defect Deductible.
Appears in 2 contracts
Samples: Purchase and Sale Agreement, Purchase and Sale Agreement (WildHorse Resource Development Corp)
Notice of Environmental Defects; Remedies. (a) If Buyer Purchaser discovers any Environmental Defect, then Buyer Purchaser may (but shall have no obligation to) deliver to SellerSeller prior to 5:00 p.m., Central Time, on or prior to the thirtieth (30th) day after the Execution Date (the “Environmental Defect Deadline”), an Environmental Notice with respect to such Environmental Defect. Buyer To assert a claim with respect to an Environmental Defect, and for such claim to be effective, Purchaser must deliver an Environmental Notice which substantially satisfies the requirements set forth in the definition of Environmental Notice on or before the Environmental Defect Deadline. Notwithstanding any other provision in this Agreement, Purchaser shall be deemed to have waived, and Seller shall have no liability Damages for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which that substantially satisfies the requirements set forth in the definition of Environmental Notice, then Notice on or before the relevant Environmental Defect(s) shall be deemed waivedDefect Deadline.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) Company Asset for which Buyer Purchaser has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice in substantial compliance with the definition of Environmental Notice (each such Conveyed PropertyCompany Asset, an “Environmental Defect Property”), Seller may elect (in its sole and absolute discretion, and in addition to Seller’s rights under Section 6.6(c)) to complete the cure of such Environmental Defect Property prior to Closing in accordance with Section 6.6(c), in which event any adjustment to the Cash Purchase Price with respect to such Environmental Defect Property shall be made, if applicable, at the time of Closing in accordance with Section 6.6(c).
(c) With respect to any Environmental Defect Property, until the time of Closing, Seller may, but shall have until no obligation to, (i) dispute the existence of the Environmental Defect Response Date and/or the Environmental Defect Amount asserted with respect to notify Buyer such Environmental Defect Property pursuant to the provisions of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes Section 6.7 (each, an “Environmental Dispute Election”). At Closing ) or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Properties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such cure any Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election asserted with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) Closing. With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property Disputed Amount shall be released from the Escrow Account delivered to Seller or Buyer, as applicable, Purchaser pursuant to the decision of the ArbitratorDefect Arbitrator pursuant to Section 6.7. IfSubject to Seller’s continuing right to dispute the existence of an Environmental Defect or the Environmental Defect Amount with respect thereto, as with respect to each Environmental Defect Property timely reported under Section 6.6(a), if, at the time of the expiration of the Cure PeriodClosing, Seller has cured (or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicablecured) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from Property, then the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Cash Purchase Price shall not be increased adjusted (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of and if such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, the Cash Purchase Price shall be increased decreased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured uncured portion of such Environmental Defect) or (B) ), or, if the applicable such Environmental Defect was only partially cured and not cured, the Cash Purchase Price shall be decreased by an amount equal to such Environmental Defect Amount that relates to such Environmental Defect. Notwithstanding anything set forth in this Section 6.6(c), if at the time of Closing, any Environmental Defect Property has an Environmental Defect, the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds which is sixty percent (60%) or more of the Allocated Value of such Environmental Defect Property, then, at Purchaser’s election and upon written notice given to Seller prior to the Closing, Seller shall cause to be conveyed by the Company to Seller or its designee immediately prior to the Closing, as applicable, such Environmental Defect Property (and, in each case, all related or associated Company Assets), in which case, (A) such Environmental Defect Property (and related or associated Company Assets), as applicable shall be excluded from the Closing, (B) if excluded, such Environmental Defect Property (and related or associated Company Assets) shall become “Excluded Assets” for all purposes hereunder, and (C) the Cash Purchase Price shall be decreased reduced by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”).
(d) Notwithstanding anything herein to the contrary set forth hereincontrary, in addition, there shall be no event shall there be any remedies provided by Seller, and Seller shall not be responsible for nor shall or any adjustments to the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) (the “Environmental Threshold”) or (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts for Environmental Defects that remain uncured by Closing and that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to one percent (1%) of the Unadjusted Purchase Price (the “Environmental Deductible”), and then only with respect to the amount extent that the aggregate of such Environmental Defect Amounts that exceed exceeds the Defect Environmental Deductible.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Talos Energy Inc.), Purchase and Sale Agreement (Talos Energy Inc.)
Notice of Environmental Defects; Remedies. (a) If Buyer Purchaser discovers any Environmental Defect, then Buyer Purchaser may (but shall have no obligation to) deliver to SellerSeller prior to 5:00 p.m., Central Time, on or prior to the thirtieth (30th) day after the Execution Date (the “Environmental Defect Deadline”), an Environmental Notice with respect to such Environmental Defect. Buyer To assert a claim with respect to an Environmental Defect, and for such claim to be effective, Purchaser must deliver an Environmental Notice which substantially satisfies the requirements set forth in the definition of Environmental Notice on or before the Environmental Defect Deadline. Notwithstanding any other provision in this Agreement, Purchaser shall be deemed to have waived, and Seller shall have no liability Damages for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which that substantially satisfies the requirements set forth in the definition of Environmental Notice, then Notice on or before the relevant Environmental Defect(s) shall be deemed waivedDefect Deadline.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) Company Asset for which Buyer Purchaser has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice in substantial compliance with the definition of Environmental Notice (each such Conveyed PropertyCompany Asset, an “Environmental Defect Property”), Seller shall have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure may elect (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole and absolute discretion, exclude and in addition to Seller’s rights under Section 6.6(c)) to complete the cure of such Environmental Defect Property (and all related or associated Conveyed Properties) from the Conveyed Properties conveyed by Seller prior to Buyer pursuant to this AgreementClosing in accordance with Section 6.6(c), in which case, event any adjustment to the Cash Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties)made, (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Dateapplicable, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the time of Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitratorin accordance with Section 6.6(c); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) With respect to any Included Environmental Defect Property, until the time of Closing, Seller may, but shall have no obligation to, (i) dispute the existence of the Environmental Defect and/or the Environmental Defect Amount asserted with respect to such Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, pursuant to the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7(each, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or (B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”).
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) (the “Environmental Threshold”) or (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect Deductible, and then only with respect to the amount of such Environmental Defect Amounts that exceed the Defect Deductible.an
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Talos Energy Inc.), Purchase and Sale Agreement (Talos Energy Inc.)
Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With On or before 5:00 p.m. Central time on the date that is two (2) business days prior to the Closing Date, with respect to each Conveyed Property (other than a Buyer Operated Property) Listed Interest for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed Property, an “Environmental Defect Property”), Seller shall have until the Defect Response Date elect (in its sole and absolute discretion) to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Lease(s) and other Properties) from the Conveyed Properties conveyed by Seller to Buyer at the Closing pursuant to this Agreement, in which case, subject to the application of the Environmental Threshold and the Environmental Deductible, the Purchase Price shall be reduced adjusted downward by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause in accordance with Section 2.2(b)(iv) or (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Propertyafter the Closing, together with all other such included Environmental Defect Propertiesdispute the existence of, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreementor, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior subject to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by application of the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by Threshold and the Environmental Defect Amount for Deductible, cure such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution in either of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Datewhich case, such Environmental Defect Property shall be excluded from included in the Conveyed Properties conveyed by Seller to Buyer at the Closing (eachpursuant to this Agreement, a “Subject Environmental Defect Property”) and without any reduction to the Purchase Price payable at the Closing shall be reduced by the Allocated Value of such Environmental Defect Propertywith respect thereto.
(c) With respect to any Environmental Defect Property included in the conveyance of the Properties to Buyer at the Closing (an “Included Environmental Defect Property for which there is a timely delivered Environmental Dispute ElectionProperty”), Seller shall have until the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion end of the Allocated Value Cure Period to (i) dispute the existence of the Environmental Defect asserted with respect to such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision provisions of Section 5.7, (ii) subject to the application of the ArbitratorEnvironmental Threshold and the Environmental Deductible, cure the Environmental Defect asserted with respect to such Included Environmental Defect Property or (iii) indemnify and hold Buyer harmless from and against any actual Liabilities Buyer may suffer as a result of a third party claim based on the Environmental Defect asserted with respect to such Included Environmental Defect Property. If, as of the expiration of the Cure Period, Seller has cured or partially not cured (as determined by mutual agreement of the Parties or the Arbitratorand has not elected to provide an indemnity pursuant to Section 5.6(c)(iii) with respect to), as applicable) any Environmental Defect affecting any Subject Included Environmental Defect Property, and such Included Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from is not the Conveyed Properties conveyed by Seller to Buyer at the Closingsubject of a Disputed Matter, then, (i) (A) the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal subject to the Allocated Value application of such the Environmental Defect Property (or, if Threshold and the applicable Environmental Defect was only partially curedDeductible, the Purchase Price shall be increased decreased, pursuant to Section 2.2(b)(vi) by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or (B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable determined with respect to such un-cured portion of each such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”)Defect.
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b5.6(c)(ii) or with respect to which Seller provides the indemnity contemplated in Section 5.6(c)(iii)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to five percent (5%) of the Purchase Price (the “Environmental Deductible”), and then only with respect to the amount of such Environmental Defect Amounts that exceed the Environmental Deductible and that (when aggregated with all Title Defect Amounts that exceed the Title Deductible and amounts of all indemnity claims that exceed the Indemnity Deductible), do not exceed the Indemnity Cap.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Abraxas Petroleum Corp)
Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) Listed Interest for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed PropertyListed Interest, an “Environmental Defect Property”), Seller shall have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing)) on or before March 29, the following 2011, Seller shall applyelect (in its sole and absolute discretion) to:
(i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Lease(s) and other Properties) from the Conveyed Properties conveyed by Seller to Buyer at the Closing pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);; or
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Lease(s) and other Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Propertypursuant to this Agreement.
(c) With respect to any Included Environmental Defect Property for which there is and any Environmental Defect Property excluded from the Properties conveyed by Seller to Buyer at the Closing pursuant to Section 5.6(b)(i) (each, a timely delivered “Subject Environmental Dispute ElectionDefect Property”), until the expiration of the Cure Period Seller may, but shall have no obligation to, (i) dispute the existence of the Environmental Defect asserted with respect to such Subject Environmental Defect Property pursuant to the provisions of Section 6.7 shall apply and at 5.7 or (ii) cure the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account asserted with respect to Seller or Buyer, as applicable, pursuant to the decision of the Arbitratorsuch Subject Environmental Defect Property. If, as of the expiration of the Cure Period, Seller has (A) (1) cured (or partially cured (as determined by mutual agreement of cured) any Environmental Defect affecting any Included Environmental Defect Property, then the Parties shall jointly instruct the Escrow Agent to release to Seller from the Escrowed Environmental Amount an amount equal to the Environmental Defect Amount relating to such Included Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, an amount equal to the portion of such Environmental Defect Amount that relates to such cured portion of such Environmental Defect) or the Arbitrator, as applicable(2) cured any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii5.6(b)(i)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, then the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less (such amount, the “ED Purchase Price Adjustment Amount”) and Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property or (B) not cured (or only partially cured) any Environmental Defect affecting any Included Environmental Defect Property, then the Parties shall jointly instruct the Escrow Agent to release to Buyer from the Escrowed Environmental Amount an amount equal to the Environmental Defect Amount relating to such Included Environmental Defect Property (or, if the applicable Environmental Defect was partially cured, an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or (B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”).
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b5.6(c)(ii)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to two percent (2%) of the Purchase Price (the “Environmental Deductible”), and then only with respect to the amount of such Environmental Defect Amounts that exceed the Defect Environmental Deductible.
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Notice of Environmental Defects; Remedies. (a) If Buyer Purchaser discovers any Environmental Defect, then Buyer Purchaser may (but shall have no obligation to) deliver to Seller, on or Sellers prior to 5:00 p.m. Central time on the thirtieth (30th) day after the Execution Date (the “Environmental Defect Deadline”), an Environmental Notice with respect to such Environmental Defect. Buyer Notwithstanding any other provision in this Agreement, Purchaser shall be deemed to have waived, and Seller Sellers shall have no liability Liability for, any Environmental Defect for which Seller has Sellers have not received an Environmental Notice on or before the Environmental Defect Deadline. For the avoidance of doubt, if Buyer to the extent Purchaser fails to provide an Environmental Notice which substantially satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With respect to each Conveyed Company Property (other than a Buyer Operated Property) for which Buyer Purchaser has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice in substantial compliance with Section 1.2(hh) (each such Conveyed PropertyCompany Well or Company Earned Lease, an “Environmental Defect Property”), Seller shall have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure Sellers may elect (each, an “Environmental Cure Election”) in their sole and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole absolute discretion, exclude and in addition to Sellers’ rights under Section 6.6(c)) to complete the cure of such Environmental Defect Property (and all related or associated Conveyed Properties) from the Conveyed Properties conveyed by Seller prior to Buyer pursuant to this AgreementClosing in accordance with Section 6.6(c), in which case, event any adjustment to the Cash Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties)made, (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Dateapplicable, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the time of Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitratorin accordance with Section 6.6(c); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) With respect to any Included Environmental Defect Property, until the time of Closing, Sellers may, but shall have no obligation to, elect to dispute (each, a “Environmental Dispute Election”) the existence of the Environmental Defect asserted with respect to such Environmental Defect Property pursuant to the provisions of Section 6.7, in which case the Environmental Defect Amount shall be delivered by Purchaser into the Escrow Account at Closing (the “Disputed Environmental Amount”). With respect to any Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, Election the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter Matters pursuant to Section 6.7, the portion of the Allocated Value of such Included Disputed Environmental Defect Property Amount shall be released from the Escrow Account delivered to Seller Sellers or Buyer, as applicable, Purchaser pursuant to the decision of the ArbitratorDefect Arbitrators pursuant to Section 6.7. IfSubject to the 75% Uncured Provision, as if, at the time of Closing, Sellers have cured the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) Environmental Defects affecting any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from Property, then the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Cash Purchase Price shall not be increased (as reflected on the Final Settlement Statement) by an amount equal adjusted with respect to the Allocated Value of such Environmental Defect Property (Property, or, if the applicable Environmental Defects affecting any Environmental Defect was Property were only partially cured, the Cash Purchase Price shall be increased decreased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured uncured portion of such Environmental Defect) or (B) Defects, or, if such Environmental Defects were not cured, the applicable Cash Purchase Price shall be decreased by an amount equal to such Environmental Defect was only partially cured and Amount that relates to such Environmental Defects. Notwithstanding anything set forth in this Section 6.6(c), if, at the time of Closing, any Environmental Defect Property has an Environmental Defect, the Environmental Defect Amount attributable to such unof which is seventy-cured portion five percent (75%) or more of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, then, at the election of either Sellers or Purchaser and upon written notice given to the other Party prior to the Closing, such Environmental Defect Property (and all related or associated Company Earned Lease(s) and other Company Properties) will be excluded from the transaction contemplated hereby, in which event such Environmental Defect Property shall be conveyed by Company Parties to Sellers or their designee immediately prior to the Closing and the Cash Purchase Price shall be decreased reduced by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount75% Uncured Provision”).
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by SellerSellers, and Seller Sellers shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars Seventy-Five Thousand Dollars ($50,00075,000) (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until (X) the aggregate of (1) all such Environmental Defect Amounts that remain uncured by Closing and that exceed the applicable Environmental Threshold plus (excluding Y) the amount aggregate of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant prior to Section 6.4(cthe expiration of the Cure Period) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds the Defect Deductible, and then only with respect to the amount extent that the aggregate of such Environmental Defect Amounts that exceed exceeds the Defect Deductible.
Appears in 1 contract
Samples: Purchase and Sale Agreement (EnCap Energy Capital Fund X, L.P.)
Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) Listed Interest for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed PropertyListed Interest, an “Environmental Defect Property”), Seller shall have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing)) on or before the Defect Response Date, the following Seller shall applyelect (in its sole and absolute discretion) to:
(i) if reduce the Purchase Price by a mutually agreed amount in respect of such Environmental Defect Amount is equal to or greater than the greater of Property;
(Aii) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Lease(s) and other Properties) from the Conveyed Properties conveyed by Seller to Buyer at the Closing pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);Property; or
(iiiii) Seller shall include execute and date as of the Closing Date, but not deliver, all documentation to be delivered at Closing with respect to such Environmental Defect Property (and all related or associated Conveyed Lease(s) and other Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Affected Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement(including a separate Assignment transferring each such Affected Environmental Defect Property), in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, case the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced adjusted downward by the Allocated Value of any such Affected Environmental Defect Property.
(c) With respect to any Included Affected Environmental Defect Property for which there is a timely delivered Environmental Dispute ElectionProperty, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of until the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitratormay, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, thenbut shall have no obligation to, (i) dispute the existence of the Environmental Defect asserted with respect to such Affected Environmental Defect Property pursuant to the provisions of Section 5.7 or (ii) cure the Environmental Defect asserted with respect to such Affected Environmental Defect Property. At the end of the Cure Period, Seller shall have the option to either (A) permanently exclude any Affected Environmental Defect Property from the Properties subject to this Agreement or (B) unless such Affected Environmental Property is the subject of a Disputed Matter, deliver all documentation executed at Closing with respect to such Affected Environmental Defect Property but not previously delivered to Buyer in which case the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of such Affected Environmental Defect Property Property, as reduced (or, if which may be to an amount below zero) by the final Environmental Defect Amount for the applicable Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect(taking into account any cure or partial cure) or (B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentenceSection 5.4(c), the “ED Purchase Price Adjustment Amount”). Notwithstanding anything to the contrary included in this Section 5.6, Buyer shall at any time have the option to exclude any Environmental Defect Property (and all related or associated Lease(s) and other Properties) subject to any Environmental Defect for which the Environmental Defect Amount exceeds fifty percent (50%) of the Allocated Value of such Environmental Defect Property.
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty one hundred thousand dollars ($50,000100,000) (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b5.6(c)(ii)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to two percent (2%) of the Purchase Price (the “Environmental Deductible”), and then only with respect to the amount of such Environmental Defect Amounts that exceed the Defect Environmental Deductible.
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Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect; provided that Buyer agrees to regularly update Seller concerning the progress of Buyer’s environmental due diligence and deliver a preliminary notice with respect to any Environmental Defect Buyer reasonably believes it will assert as soon as reasonably practicable before the Defect Deadline. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With On or before the Closing, with respect to each Conveyed Property (other than a Buyer Operated Property) Lease or DSU for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed PropertyLease or DSU, an “Environmental Defect Property”), Seller shall have until the Defect Response Date subject to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the continuing right of Seller to dispute the existence of an asserted Environmental Defect and/or the Environmental Defect Amount asserted with respect thereto, (ii) the rights of the Parties pursuant to Section 13.1(d), (iii) the Environmental Threshold and (iv) the Title & Environmental Deductible, if such Environmental Defect is equal not waived in writing by Buyer or cured prior to or greater than the greater of Closing, then, Seller shall elect (in its sole and absolute discretion) to (A) Allocated Value of reduce the applicable Purchase Price by the Environmental Defect Property and Amount for such Environmental Defect in accordance with Section 3.2(b)(vi); (B) one hundred thousand dollars ($100,000), then either Seller exclude all or Buyer shall have the option, in its sole discretion, exclude affected portion of such Environmental Defect Property (and all related or associated Conveyed Propertiesproperties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) this Agreement and the Purchase Price shall be increased (as reflected on the Final Settlement Statement) adjusted downward by an amount equal to the Allocated Value (or a pro-rata portion thereof) of such Environmental Defect Property (or, if or the applicable affected portion thereof) in accordance with Section 3.2(b)(iv) or (C) indemnify and hold Buyer harmless from and against any actual Liabilities Buyer may suffer as a result the Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal asserted with respect to the Allocated Value of such Environmental Defect Property less pursuant to an amount equal indemnity agreement in a form mutually agreeable to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or Parties.
(B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (iic) Seller shall assign have the right, but not the obligation, to Buyer pursuant attempt, at Seller’s sole cost, to an assignment in substantially the same form as the Assignment, such cure any claimed Environmental Defect Property (such aggregate increase on or decrease to before the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”)Closing.
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies remedy provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars Forty Thousand Dollars ($50,00040,000) (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1A) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects related to Properties that were retained by Seller pursuant to Section 6.6(b)(B), that are cured by Seller prior to Closing pursuant to Section 6.6(b6.6(c)) or with respect to which Seller provides the indemnity contemplated in Section 6.6(b)(C)), and (2B) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts related to Properties that are retained by Seller pursuant to Section 6.4(b) (B), attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less or with respect to which Seller provides the aggregate of all Title Benefit Amounts that exceed indemnity contemplated in Section 6.4(b)(C)) exceeds the Title Threshold), exceeds Defect & Environmental Deductible, and then only with respect to the amount of such Environmental Defect Amounts and Title Defect Amounts that exceed the Defect DeductibleTitle & Environmental Deductible and that do not exceed the Indemnity Cap.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Kodiak Oil & Gas Corp)
Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to SellerSellers’ Representative, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect. Except for Sellers’ representations and warranties in Sections 3.1(h) and 3.1(aa) of this Agreement and the Retained Liabilities, Buyer shall be deemed to have waived, and Seller Sellers shall have no liability for, any Environmental Defect for which Seller Sellers’ Representative has not received an Environmental Notice on or before the Defect Deadline. For Except for Sellers’ representations and warranties in Sections 3.1(h) and 3.1(aa) of this Agreement and the Retained Liabilities, for the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered an Environmental Notice (each such Conveyed Property, an “Environmental Defect Property”), Seller shall ) that Sellers have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing)) on or before the Defect Response Date, unless a Party chooses to submit a Disputed Environmental Matter to arbitration pursuant to ARTICLE XI, Sellers and Buyer shall elect by mutual agreement prior to Closing one of the following shall applyoptions with respect to such Environmental Defect:
(i) if reduce the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Properties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Base Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or (B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds Properties (the Allocated Value aggregate amount of all such Environmental Defect Property, reductions to the Base Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to under this sentenceSection 5.6(b)(i), the “ED Purchase Price Adjustment Amount”);
(ii) exclude the Environmental Defect Properties subject to such Environmental Defect and any related Properties from the Transactions and reduce the Base Purchase Price by the Allocated Value(s) of such excluded Properties; or
(iii) have Sellers indemnify Buyer against all Liabilities resulting from such Environmental Defect and associated remediation pursuant to an indemnity agreement mutually agreed by the Parties (each, an “Environmental Indemnity Agreement”); provided, however, in the absence of mutual agreement, the Parties will be deemed to have elected (ii) above.
(dc) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by SellerSellers, and Seller Sellers shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) 50,000 (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller Sellers pursuant to Section 6.6(b5.6(b)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to $8,514,730.25 (the “Environmental Deductible”), and then only with respect to the amount of such Environmental Defect Amounts that exceed the Defect Environmental Deductible.
Appears in 1 contract
Samples: Asset Purchase and Sale Agreement (PDC Energy, Inc.)
Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect; provided that Buyer agrees to regularly update Seller concerning the progress of Buyer’s environmental due diligence and deliver a preliminary notice with respect to any Environmental Defect Buyer reasonably believes it will assert as soon as reasonably practicable before the Defect Deadline. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With On or before the Closing, with respect to each Conveyed Property (other than a Buyer Operated Property) Lease or DSU for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed PropertyLease or DSU, an “Environmental Defect Property”), Seller shall have until the Defect Response Date subject to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the continuing right of Seller to dispute the existence of an asserted Environmental Defect and/or the Environmental Defect Amount asserted with respect thereto, (ii) the rights of the Parties pursuant to Section 13.1(d), (iii) the Environmental Threshold and (iv) the Title & Environmental Deductible, if such Environmental Defect is equal not waived in writing by Buyer or cured prior to or greater than the greater of Closing, then, Seller shall elect (in its sole and absolute discretion) to (A) Allocated Value of reduce the applicable Purchase Price by the Environmental Defect Property and Amount for such Environmental Defect in accordance with Section 3.2(b)(vi); (B) one hundred thousand dollars ($100,000), then either Seller exclude all or Buyer shall have the option, in its sole discretion, exclude affected portion of such Environmental Defect Property (and all related or associated Conveyed Propertiesproperties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) this Agreement and the Purchase Price shall be increased (as reflected on the Final Settlement Statement) adjusted downward by an amount equal to the Allocated Value (or a pro-rata portion thereof) of such Environmental Defect Property (or, if or the applicable affected portion thereof) in accordance with Section 3.2(b)(iv) or (C) indemnify and hold Buyer harmless from and against any actual Liabilities Buyer may suffer as a result the Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal asserted with respect to the Allocated Value of such Environmental Defect Property less pursuant to an amount equal indemnity agreement in a form mutually agreeable to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or Parties.
(B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (iic) Seller shall assign have the right, but not the obligation, to Buyer pursuant attempt, at Seller’s sole cost, to an assignment in substantially the same form as the Assignment, such cure any claimed Environmental Defect Property (such aggregate increase on or decrease to before the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”)Closing.
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies remedy provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars Sixty Thousand Dollars ($50,00060,000) (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1A) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects related to Properties that were retained by Seller pursuant to Section 6.6(b)(B), that are cured by Seller prior to Closing pursuant to Section 6.6(b6.6(c)) or with respect to which Seller provides the indemnity contemplated in Section 6.6(b)(C)), and (2B) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts related to Properties that are retained by Seller pursuant to Section 6.4(b)(B), attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less or with respect to which Seller provides the aggregate of all Title Benefit Amounts that exceed indemnity contemplated in Section 6.4(b)(C)) exceeds the Title Threshold), exceeds Defect & Environmental Deductible, and then only with respect to the amount of such Environmental Defect Amounts and Title Defect Amounts that exceed the Defect DeductibleTitle & Environmental Deductible and that do not exceed the Indemnity Cap.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Kodiak Oil & Gas Corp)
Notice of Environmental Defects; Remedies. (a) If Buyer Purchaser discovers any Environmental Defect, then Buyer Purchaser may (but shall have no obligation to) deliver to SellerSeller prior to 5:00 p.m., Central Time, on or prior to the thirtieth (30th) day after the Execution Date (the “Environmental Defect Deadline”), an Environmental Notice with respect to such Environmental Defect. Buyer To assert a claim with respect to an Environmental Defect, and for such claim to be effective, Purchaser must deliver an Environmental Notice which substantially satisfies the requirements set forth in the definition of Environmental Notice on or before the Environmental Defect Deadline. Notwithstanding any other provision in this Agreement, Purchaser shall be deemed to have waived, and Seller shall have no liability Damages for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which that substantially satisfies the requirements set forth in the definition of Environmental Notice, then Notice on or before the relevant Environmental Defect(s) shall be deemed waivedDefect Deadline.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) Company Asset for which Buyer Purchaser has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice in substantial compliance with the definition of Environmental Notice (each such Conveyed PropertyCompany Asset, an “Environmental Defect Property”), Seller may elect (in its sole and absolute discretion, and in addition to Seller’s rights under Section 6.6(c)) to complete the cure of such Environmental Defect Property prior to Closing in accordance with Section 6.6(c), in which event any adjustment to the Cash Purchase Price with respect to such Environmental Defect Property shall be made, if applicable, at the time of Closing in accordance with Section 6.6(c).
(c) With respect to any Environmental Defect Property, until the time of Closing, Seller may, but shall have until no obligation to, (i) dispute the existence of the Environmental Defect Response Date and/or the Environmental Defect Amount asserted with respect to notify Buyer such Environmental Defect Property pursuant to the provisions of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes Section 6.7 (each, an “Environmental Dispute Election”). At Closing ) or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Properties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such cure any Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election asserted with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) Closing. With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property Disputed Amount shall be released from the Escrow Account delivered to Seller or Buyer, as applicable, Purchaser pursuant to the decision of the ArbitratorDefect Arbitrator pursuant to Section 6.7. IfSubject to Seller’s continuing right to dispute the existence of an Environmental Defect or the Environmental Defect Amount with respect thereto, as with respect to each Environmental Defect Property timely reported under Section 6.6(a), if, at the time of the expiration of the Cure PeriodClosing, Seller has cured (or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicablecured) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from Property, then the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Cash Purchase Price shall not be increased adjusted (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of and if such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, the Cash Purchase Price shall be increased decreased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured uncured portion of such Environmental Defect) or (B) ), or, if the applicable such Environmental Defect was only partially cured and not cured, the Cash Purchase Price shall be decreased by an amount equal to such Environmental Defect Amount that relates to such Environmental Defect. Notwithstanding anything set forth in this Section 6.6(c), if at the time of Closing, any Environmental Defect Property has an Environmental Defect, the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds which is sixty percent (60%) or more of the Allocated Value of such Environmental Defect Property, then, at Purchaser’s election and upon written notice given to Seller prior to the Closing, Seller may retain at Closing the applicable Company holding the affected Environmental Defect Property or cause to be conveyed by the applicable Company to Seller or its designee immediately prior to the Closing, as applicable, such Environmental Defect Property (and, in each case, all related or associated Company Assets), in which case, (A) such Company or Environmental Defect Property (and related or associated Company Assets), as applicable shall be excluded from the Closing, (B) if excluded, such Environmental Defect Property (and related or associated Company Assets) shall become “Excluded Assets” for all purposes hereunder, and (C) the Cash Purchase Price shall be decreased reduced by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect PropertyProperty or by the aggregate Allocated Values of all Company Assets held by such excluded Company, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”)applicable.
(d) Notwithstanding anything herein to the contrary set forth hereincontrary, in addition, there shall be no event shall there be any remedies provided by Seller, and Seller shall not be responsible for nor shall or any adjustments to the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) (the “Environmental Threshold”) or (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts for Environmental Defects that remain uncured by Closing and that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to one percent (1%) of the Unadjusted Purchase Price (the “Environmental Deductible”), and then only with respect to the amount extent that the aggregate of such Environmental Defect Amounts that exceed exceeds the Defect Environmental Deductible.
Appears in 1 contract
Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) Listed Interest for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed PropertyListed Interest, an “Environmental Defect Property”), Seller shall have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured to Buyer’s reasonable satisfaction (and Buyer has not elected to waive in writing)) on or before the Defect Response Date, the following Seller shall applyelect (in its sole and absolute discretion) to:
(i) if the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Lease(s) and other Properties) from the Conveyed Properties conveyed by Seller to Buyer at the Closing pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);Property; or
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Lease(s) and other Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer at the Closing pursuant to this Agreement, in which case, (AX) the aggregate of the Environmental Defect Amounts asserted by Buyer for the Included Environmental Defect Properties shall be deducted from the Closing Amount and deposited with the Escrow Agent, pending the curing of such Environmental Defects or, if applicable, the resolution of the Disputed Environmental Matters or (Y) the Parties may mutually agree in a separate writing to an indemnification from Seller has not made an for such Included Environmental Cure Election or an Environmental Dispute Election Defect Property and there shall be no deduction to the Closing Amount with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect PropertyAmounts.
(c) With respect to any Included Environmental Defect Property (other than those for which there is Buyer and Seller have agreed to an indemnification as provided for in Section 6.6(b)(ii)(X)) and any Environmental Defect Property excluded from the Properties conveyed by Seller to Buyer at the Closing pursuant to Section 6.6(b)(i) (each, a timely delivered “Subject Environmental Dispute ElectionDefect Property”), until the expiration of the Cure Period Seller may, but shall have no obligation to, (i) dispute the existence of the Environmental Defect asserted with respect to such Subject Environmental Defect Property pursuant to the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant or (ii) cure, to Section 6.7Buyer’s reasonable satisfaction, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account asserted with respect to Seller or Buyer, as applicable, pursuant to the decision of the Arbitratorsuch Subject Environmental Defect Property. If, as of the expiration of the Cure Period, Seller has (A) cured (or partially cured (as determined by mutual agreement of the Parties or the Arbitratorcured), as applicable) to Buyer’s reasonable satisfaction, any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii6.6(b)(i)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) then the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) ), plus or minus any other Purchase Price adjustments applicable to such Environmental Defect Property under this Agreement and Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property or (B) not cured (or only partially cured) any Environmental Defect affecting any Included Environmental Defect Property, then, unless such Included Environmental Defect Property is the subject of a Disputed Matter or an indemnification agreement as contemplated in Section 6.6(b)(ii), the Purchase Price shall be decreased (as reflected on the Final Settlement Statement) by an amount equal to the Environmental Defect Amount relating to such Included Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Propertycured, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (iiDefect) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to clauses (A) or (B) of this sentenceSection 6.4(c), the “ED Purchase Price Adjustment Amount”), and the applicable portions of the escrowed Environmental Defect Amounts shall be released to Seller or Buyer, as appropriate, pursuant to joint instructions from the Parties.
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by SellerSeller for, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed a threshold (not a deductible) of one hundred fifty thousand dollars ($50,000150,000) (the each, an “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller pursuant to Section 6.6(b6.6(c)(ii)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to three percent (3%) of the Purchase Price (the “Environmental Deductible”), and then only with respect to the amount of such Environmental Defect Amounts that exceed the Environmental Deductible. An Environmental Defect Amount shall be deemed to meet the Environmental Threshold in either of the following cases: (x) taking into account all Properties affected by the applicable Environmental Defect, the Lowest Cost Response, net to Seller’s interest, to remediate such Environmental Defect exceeds the Environmental Threshold, or (y) with respect to any individual Property, the Lowest Cost Response, net to Seller’s interest, to remediate all Environmental Defects affecting such Property, exceeds the Environmental Threshold. For avoidance of doubt, for any Environmental Defect Amount which exceeds the Environmental Threshold, the entire amount of such Environmental Defect Amount shall apply, subject to the Environmental Deductible.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Diamondback Energy, Inc.)
Notice of Environmental Defects; Remedies. (a) If Buyer Xxxxx discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to Seller, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect; provided that Xxxxx agrees to regularly update Seller concerning the progress of Buyer’s environmental due diligence and deliver a preliminary notice with respect to any Environmental Defect Buyer reasonably believes it will assert as soon as reasonably practicable before the Defect Deadline. Buyer shall be deemed to have waived, and Seller shall have no liability for, any Environmental Defect for which Seller has not received an Environmental Notice on or before the Defect Deadline. For the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With On or before the Closing, with respect to each Conveyed Property (other than a Buyer Operated Property) Lease or DSU for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered Environmental Notice (each such Conveyed PropertyLease or DSU, an “Environmental Defect Property”), Seller shall have until the Defect Response Date subject to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing), the following shall apply:
(i) if the continuing right of Seller to dispute the existence of an asserted Environmental Defect and/or the Environmental Defect Amount asserted with respect thereto, (ii) the rights of the Parties pursuant to Section 13.1(d), (iii) the Environmental Threshold and (iv) the Title & Environmental Deductible, if such Environmental Defect is equal not waived in writing by Buyer or cured prior to or greater than the greater of Closing, then, Seller shall elect (in its sole and absolute discretion) to (A) Allocated Value of reduce the applicable Purchase Price by the Environmental Defect Property and Amount for such Environmental Defect in accordance with Section 3.2(b)(vi); (B) one hundred thousand dollars ($100,000), then either Seller exclude all or Buyer shall have the option, in its sole discretion, exclude affected portion of such Environmental Defect Property (and all related or associated Conveyed Propertiesproperties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) this Agreement and the Purchase Price shall be increased (as reflected on the Final Settlement Statement) adjusted downward by an amount equal to the Allocated Value (or a pro-rata portion thereof) of such Environmental Defect Property (or, if or the applicable Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the affected portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defectthereof) or in accordance with
(B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds the Allocated Value of such Environmental Defect Property, the Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (iic) Seller shall assign have the right, but not the obligation, to Buyer pursuant attempt, at Seller’s sole cost, to an assignment in substantially the same form as the Assignment, such cure any claimed Environmental Defect Property (such aggregate increase on or decrease to before the Purchase Price pursuant to this sentence, the “ED Purchase Price Adjustment Amount”)Closing.
(d) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies remedy provided by Seller, and Seller shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars Sixty Thousand Dollars ($50,00060,000) (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1A) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects related to Properties that were retained by Seller pursuant to Section 6.6(b)(B), that are cured by Seller prior to Closing pursuant to Section 6.6(b6.6(c)) or with respect to which Seller provides the indemnity contemplated in Section 6.6(b)(C)), and (2B) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts related to Properties that are retained by Seller pursuant to Section 6.4(b)(B), attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less or with respect to which Seller provides the aggregate of all Title Benefit Amounts that exceed indemnity contemplated in Section 6.4(b)(C)) exceeds the Title Threshold), exceeds Defect & Environmental Deductible, and then only with respect to the amount of such Environmental Defect Amounts and Title Defect Amounts that exceed the Defect DeductibleTitle & Environmental Deductible and that do not exceed the Indemnity Cap.
Appears in 1 contract
Samples: Purchase and Sale Agreement
Notice of Environmental Defects; Remedies. (a) If Buyer discovers any Environmental Defect, then Buyer may (but shall have no obligation to) deliver to SellerSellers’ Representative, on or prior to the Defect Deadline, an Environmental Notice with respect to such Environmental Defect. Except for the Company’s representations and warranties in Sections 3.2(o) and 3.2(kk) of this Agreement, Buyer shall be deemed to have waived, and Seller Sellers shall have no liability for, any Environmental Defect for which Seller Sellers’ Representative has not received an Environmental Notice on or before the Defect Deadline. For Except for the Company’s representations and warranties in Sections 3.2(o) and 3.2(kk) of this Agreement, for the avoidance of doubt, if Buyer fails to provide an Environmental Notice which satisfies the requirements set forth in the definition of Environmental Notice, then the relevant Environmental Defect(s) shall be deemed waived.
(b) With respect to each Conveyed Property (other than a Buyer Operated Property) for which Buyer has asserted an Environmental Defect pursuant to a properly and timely delivered an Environmental Notice (each such Conveyed Property, an “Environmental Defect Property”), Seller shall ) that Sellers have until the Defect Response Date to notify Buyer of those asserted Environmental Defects Seller elects to attempt to cure (each, an “Environmental Cure Election”) and those asserted Environmental Defects Seller disputes (each, an “Environmental Dispute Election”). At Closing or upon resolution of a Disputed Environmental Matter, as applicable, with respect to each Environmental Defect Property that Seller has not cured (and Buyer has not elected to waive in writing)) on or before the Defect Response Date, unless a Party chooses to submit a Disputed Environmental Matter to arbitration pursuant to ARTICLE XI, Sellers and Buyer shall elect by mutual agreement prior to Closing one of the following shall applyoptions with respect to such Environmental Defect:
(i) if reduce the Environmental Defect Amount is equal to or greater than the greater of (A) Allocated Value of the applicable Environmental Defect Property and (B) one hundred thousand dollars ($100,000), then either Seller or Buyer shall have the option, in its sole discretion, exclude such Environmental Defect Property (and all related or associated Conveyed Properties) from the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, the Base Purchase Price shall be reduced by the Allocated Value of such Retained Property (provided, however, any Conveyed Property owned by Oakfield may not be excluded from the transactions contemplated hereby and clause (ii) below shall apply thereto);
(ii) Seller shall include such Environmental Defect Property (and all related or associated Conveyed Properties) (any such Environmental Defect Property, together with all other such included Environmental Defect Properties, the “Included Environmental Defect Properties”) in the Conveyed Properties conveyed by Seller to Buyer pursuant to this Agreement, in which case, (A) if Seller has not made an Environmental Cure Election or an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties), (B) if Seller has made an Environmental Dispute Election with respect to such Environmental Defect Property prior to the Defect Response Date, the Purchase Price payable at Closing shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by mutual agreement of the Parties or if the Parties cannot agree, by Buyer acting reasonably and in good faith) and at the Closing Buyer shall deposit such amount into the Escrow Account pending the resolution of the applicable Environmental Defect, or (C) upon resolution of a Disputed Environmental Matter, the Purchase Price shall be reduced by the Environmental Defect Amount for such Included Environmental Defect Property (as determined by the Arbitrator); or
(iii) if Seller has made an Environmental Cure Election with respect to any Environmental Defect Property prior to the Defect Response Date, such Environmental Defect Property shall be excluded from the Conveyed Properties conveyed by Seller to Buyer at the Closing (each, a “Subject Environmental Defect Property”) and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Environmental Defect Property.
(c) With respect to any Included Environmental Defect Property for which there is a timely delivered Environmental Dispute Election, the provisions of Section 6.7 shall apply and at the resolution of such Disputed Environmental Matter pursuant to Section 6.7, the portion of the Allocated Value of such Included Environmental Defect Property shall be released from the Escrow Account to Seller or Buyer, as applicable, pursuant to the decision of the Arbitrator. If, as of the expiration of the Cure Period, Seller has cured or partially cured (as determined by mutual agreement of the Parties or the Arbitrator, as applicable) any Environmental Defect affecting any Subject Environmental Defect Property that was excluded (pursuant to Section 6.6(b)(iii)) from the Conveyed Properties conveyed by Seller to Buyer at the Closing, then, (i) (A) the Purchase Price shall be increased (as reflected on the Final Settlement Statement) by an amount equal to the Allocated Value of such Environmental Defect Property (or, if the applicable Environmental Defect was only partially cured, the Purchase Price shall be increased by an amount equal to the Allocated Value of such Environmental Defect Property less an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect) or (B) if the applicable Environmental Defect was only partially cured and the Environmental Defect Amount attributable to such un-cured portion of such Environmental Defect exceeds Properties (the Allocated Value aggregate amount of all such Environmental Defect Property, reductions to the Base Purchase Price shall be decreased by the positive difference of an amount equal to the portion of such Environmental Defect Amount that relates to the un-cured portion of such Environmental Defect minus the Allocated Value of such Environmental Defect Property, and (ii) Seller shall assign to Buyer pursuant to an assignment in substantially the same form as the Assignment, such Environmental Defect Property (such aggregate increase or decrease to the Purchase Price pursuant to under this sentenceSection 5.6(b)(i), the “ED Purchase Price Adjustment Amount”); or
(ii) have Sellers indemnify Buyer against all Liabilities resulting from such Environmental Defect and associated remediation pursuant to an indemnity agreement mutually agreed by the Parties (each, an “Environmental Indemnity Agreement”).
(dc) Notwithstanding anything to the contrary set forth herein, in no event shall there be any remedies provided by SellerSellers, and Seller Sellers shall not be responsible for nor shall the Purchase Price be reduced for, (i) any individual Environmental Defect for which the Environmental Defect Amount does not exceed fifty thousand dollars ($50,000) 50,000 (the “Environmental Threshold”) or and (ii) any Environmental Defect with respect to which the Environmental Defect Amount exceeds the Environmental Threshold, unless and until the aggregate of (1) all such Environmental Defect Amounts that exceed the applicable Environmental Threshold (excluding the amount of Environmental Defect Amounts attributable to Environmental Defects that are cured by Seller Sellers pursuant to Section 6.6(b5.6(b)) and (2) all such Title Defect Amounts that exceed the applicable Title Threshold (excluding any Title Defect Amounts attributable to Title Defects that are cured by Seller pursuant to Section 6.4(c) and less the aggregate of all Title Benefit Amounts that exceed the Title Threshold), exceeds Defect an amount equal to $11,485,269.75 (the “Environmental Deductible”), and then only with respect to the amount of such Environmental Defect Amounts that exceed the Defect Environmental Deductible.
Appears in 1 contract
Samples: Stock Purchase and Sale Agreement (PDC Energy, Inc.)
