Common use of Environmental Defect Clause in Contracts

Environmental Defect. An Asset shall be deemed to have an “Environmental Defect” if Buyer shows that such Asset is subject to a condition or occurrence constituting a violation of Environmental Laws (a “Condition”) with respect to which the Lowest Cost Response is reasonably estimated to require expenditure in excess of $20,000. In the event the Assets are located on, or use the surface estate of, real property in an area where other commercial activities are or have been conducted, including (but not limited to) oil and gas exploration activities, in no event shall a Condition form the basis for an Environmental Defect unless such Condition directly affects, or results from, an Asset, or the operation of an Asset including the drilling, completion and production operations reasonably anticipated to occur in the future. Further, each Environmental Defect shall be based on the analysis of each separate Condition as the same results from discrete individual events at a single continuous geographic location, even if multiple Conditions are located on or in close proximity to the same well location or pad, tank battery site, pump, meter or compressor location, pipeline easement, right of way or ditch line of the like. In no event shall any Condition that was previously remediated pursuant to, and in accordance with, Environmental Law in effect at the time of such remediation, including a former pit or earthen disposal site, whether lined or unlined, form the basis of an Environmental Defect if such Condition did not constitute a violation of an Environmental Law or regulation at the time the Condition was created or resulted from the operations utilizing such pit or disposal site; provided, however, if, as a result of a change in condition or operations utilizing such pit or disposal site subsequent to its prior remediation, a Condition exists, such may form the basis of an Environmental Defect. Further, no Condition involving naturally occurring radioactive material (“NORM”) shall constitute the basis of an Environmental Defect unless such NORM results in measured radioactivity in excess of (i) a level of 50 µR/hr (50 micro roentgen per hour) and more than 30 piC/gram for Radium 226 and Radium 228 or (ii) applicable Environmental Laws, whichever is more stringent. The fact that a well is no longer capable of producing sufficient quantities of oil or gas to continue to be classified as a producing well or that such a well should be temporarily abandoned or permanently plugged and abandoned shall not form the basis of a Condition.

Environmental Defect. An The Asset shall be deemed to have an “"Environmental Defect” " if Buyer shows that such the Asset is subject to a condition or occurrence constituting a violation of Environmental Laws (a “"Condition”") with respect to which the Lowest Cost Response is reasonably estimated to require expenditure in excess of $20,00050,000. In the event the Assets are Asset is located on, on or use uses the surface estate of, of real property in an area where other commercial activities are or have been conducted, including (but not limited to) oil and gas exploration activities, in no event shall a Condition form the basis for an Environmental Defect unless such Condition directly affects, condition arose from or results from, an Asset, or in connection with the operation of an Asset including the drilling, completion and production operations reasonably anticipated to occur in the futureAsset. Further, each Environmental Defect shall be based on the analysis of each separate Condition as the same results result from discrete individual events at a single continuous geographic location, even if multiple Conditions are located on or in close proximity to the same well location or pad, tank battery site, pump, meter or compressor location, pipeline easement, right of way or ditch line of or the like. In no event shall any Condition that was previously remediated pursuant to, and in accordance with, Environmental Law in effect at the time of such remediationCondition, including a former pit or earthen disposal site, whether lined or unlined, form the basis of an Environmental Defect if such Condition did not constitute a violation of an Environmental Law or regulation at the time the Condition was created or resulted from the operations utilizing such pit or disposal site; provided, however, if, as a result of a change in condition or operations utilizing such pit or disposal site subsequent to its prior remediation, a Condition exists, such may form the basis of an Environmental Defect. Further, no Condition involving naturally occurring radioactive material (“"NORM”") shall constitute the basis of an Environmental Defect unless such NORM results in measured radioactivity in excess of (i) a level of 50 µRuR/hr (50 micro roentgen per hour) and more than 30 piC/gram for Radium 226 and Radium 228 or (ii) applicable Environmental Laws, whichever is more stringent228. The fact that a well is no longer capable physical condition of producing sufficient quantities of any surface or subsurface production equipment, including water or oil tanks, separators or gas to continue to be classified as a producing well or that such a well should be temporarily abandoned or permanently plugged and abandoned other ancillary equipment shall not form the basis of a ConditionCondition provided that such equipment is useable for the purpose of operating the Asset with which such equipment is associated in its current condition.