Common use of Environmental Dispute Resolution Clause in Contracts

Environmental Dispute Resolution. (i) Seller and Buyer shall attempt in good faith to agree on all Environmental Defects and Remediation Amounts (collectively, the “Environmental Disputes”) prior to Closing. If Seller and Buyer are unable to agree by Closing, (i) the Environmental Disputes will be exclusively and finally resolved by arbitration pursuant to this Section 6.1(e), (ii) the Closing Cash Amount shall be adjusted downwards by the Allocated Value of each Conveyed Interest affected by such Environmental Disputes (together with all associated Conveyed Interests) and such Conveyed Interests shall be deemed to be Excluded Assets until such disputes are finally resolved (including, for the avoidance of doubt, for the purposes of calculating the Adjusted Closing Cash Amount and the Interim Period Carried Costs Amount) and (iii) promptly after such Environmental Disputes are finally resolved, Seller shall, at its sole option with respect to each such Conveyed Interest, elect to either: (a) convey such Conveyed Interest to Buyer in a form substantially similar to the Assignment and cause Buyer to pay to Seller an amount equal to (x) the Allocated Value minus the Environmental Defect Amount, if any (provided that Seller has not elected to assume responsibility for the Remediation of the underlying Environmental Defect, in which case, such deduction will not be made and Seller shall implement and promptly complete such Remediation in a manner which is consistent with the requirements of Environmental Laws), with respect to such Conveyed Interest, subject to Section 6.1(d), plus (y) the sum of all amounts Buyer would have been required to pay to Seller with respect to the development of such Conveyed Interests pursuant to the Development Agreement and any related operating agreements (including any Carried Costs that exceed the portion of the Allocated Value for such Title Defect Property that is attributable to the Carried Costs Obligation) had such Conveyed Interest been conveyed to Buyer at Closing; or (b) retain such Conveyed Interest, in which case such Conveyed Interest will be deemed permanently to be an Excluded Asset.

Environmental Dispute Resolution. (i) Seller Whitehorse, on behalf of the Whitehorse Sellers, Siltstone II, on behalf of the Siltstone Sellers, and Buyer shall attempt in good faith to agree on all Environmental Defects and Remediation Amounts (collectively, the “Environmental Disputes”) prior to Closing. If Seller Whitehorse, on behalf of the Whitehorse Sellers, Siltstone II, on behalf of the Siltstone Sellers, and Buyer are unable to agree by Closing, (i) subject to Buyer’s rights pursuant to Section 10.3(b)(ii), all affected Assets shall be conveyed to Buyer at Closing and Buyer shall pay the amount equal to Buyer’s estimate of the Remediation Amount attributable to such unresolved Environmental Defects claimed by Buyer into the Escrow Account and the Environmental Disputes will Defects and/or Remediation Amounts in dispute shall be exclusively and finally resolved by arbitration pursuant to this Section 6.1(e10.4. There shall be a single arbitrator, who shall be an environmental attorney with at least fifteen (15) years’ experience in environmental matters involving oil and gas producing properties in the regional area in which the affected Assets are located and shall not have worked as an employee or outside counsel for any Party or its Affiliates during the five (5) year period preceding the arbitration or have any financial interest in the dispute, as selected by mutual agreement of Buyer, on the one hand, and Whitehorse (on behalf of the Whitehorse Sellers) and Siltstone II (on behalf of the Siltstone Sellers), jointly, on the other hand, within fifteen (ii15) days after the Closing Cash Amount Date, and absent such agreement, by the Houston, Texas office of the American Arbitration Association (the “Environmental Arbitrator”). The arbitration proceeding shall be adjusted downwards by held in Houston, Texas and shall be conducted in accordance with the Allocated Value Commercial Arbitration Rules of each Conveyed Interest affected by the American Arbitration Association, to the extent such Environmental Disputes rules do not conflict with the terms of Section 10.3. Each of Buyer, on the one hand, and Whitehorse (together with all associated Conveyed Interestson behalf of the Whitehorse Sellers) and such Conveyed Interests Siltstone II (on behalf of the Siltstone Sellers), jointly, on the other hand, shall submit their respective positions and evidence to the Environmental Arbitrator within fifteen (15) days after selection of the Environmental Arbitrator. The Environmental Arbitrator’s determination shall be deemed to made within twenty (20) days after submission of the matters in dispute and shall be Excluded Assets until such disputes are finally resolved (includingfinal and binding upon the Parties, for the avoidance without right of doubt, for the purposes of calculating the Adjusted Closing Cash Amount and the Interim Period Carried Costs Amount) and (iii) promptly after such appeal. The Environmental Disputes are finally resolved, Seller shall, at its sole option Arbitrator shall make a separate determination with respect to the existence of each asserted Environmental Defect and/or Remediation Amount, and shall be limited to awarding only Whitehorse and Siltstone II’s joint or Buyer’s final proposed Remediation Amounts exchanged by the Parties as provided above. In making his or her determination, the Environmental Arbitrator shall be bound by the relevant rules set forth in this Article X and, subject to the foregoing, may consider such Conveyed Interestother matters as in the opinion of the Environmental Arbitrator are necessary or helpful to make a proper determination. The Environmental Arbitrator shall act as an expert for the limited purpose of determining the specific disputed Environmental Defects and/or Remediation Amounts submitted by either Buyer or Whitehorse (on behalf of the Whitehorse Sellers) and Siltstone II (on behalf of the Siltstone Sellers) jointly, elect and may not award damages, interest or penalties to either: (a) convey such Conveyed Interest either Party with respect to any matter, but shall award to the prevailing Party its arbitration costs and attorneys’ fees. Sellers, jointly, on the one hand, and Buyer, on the other hand, shall each bear one-half of the costs and expenses of the Environmental Arbitrator. Within ten days of the final resolution of any dispute submitted to the Environmental Arbitrator, Buyer shall be entitled to withdraw from the Escrow Account the amount, if any, so awarded by the Environmental Arbitrator to Buyer in a form substantially similar to the Assignment and cause Buyer to pay to Seller an amount equal to (x) the Allocated Value minus the Environmental Defect Amount, if any (provided that Seller has not elected to assume responsibility for the Remediation of the underlying Environmental Defect, in which case, such deduction will not be made and Seller shall implement and promptly complete such Remediation in a manner which is consistent with the requirements of Environmental Laws)plus all earnings thereof, with respect to such Conveyed Interest, subject to Section 6.1(d), plus (y) any Environmental Defect resolved in Buyer’s favor and the sum of all amounts Buyer would have been required to pay to Seller with respect to the development of such Conveyed Interests pursuant to the Development Agreement and any related operating agreements (including any Carried Costs that exceed the portion balance of the Allocated Value for such Title Defect Property that is escrow attributable to the Carried Costs Obligation) had such Conveyed Interest been conveyed resolved Environmental Defect shall be paid to Buyer at Closing; or (b) retain such Conveyed Interest, in which case such Conveyed Interest will be deemed permanently to be an Excluded AssetSellers.

Environmental Dispute Resolution. (ia) Seller and Buyer shall attempt in good faith to agree on all Environmental Defects and Remediation Amounts (collectivelyIf, the “Environmental Disputes”) prior to Closing. If Seller and Buyer , the Parties are unable to agree on a resolution associated with any dispute regarding the existence, cure or remediation of any alleged Environmental Defect that was timely and properly asserted by ClosingBuyer under Section 9.2(a) or any Environmental Defect Amount with respect to such an alleged Environmental Defect (each, a “Disputed Environmental Matter”), then (i) the Assets subject to the Disputed Environmental Disputes will Matter shall not be exclusively assigned to Buyer at Closing, (ii) such Assets shall be retained by Seller and finally deemed to be “Excluded Assets” for all purposes hereunder unless and until such Disputed Environmental Matter is agreed upon by the Parties or is resolved by arbitration pursuant to this Section 6.1(e9.3, (iii) subject to Section 9.4(a), the Closing Payment shall be reduced by the aggregate Allocated Values of such Assets at Closing and (iv) subject to Section 10.1 and Section 10.3, the Closing will occur as to the remainder of the Assets. Upon the agreement with respect to or final resolution of any Disputed Environmental Matter pursuant to this Section 9.3, subject to Buyer’s right pursuant to Section 9.2(d), (iiA) all such affected Assets that were not assigned to Buyer at Closing pursuant to subpart (i) of this Section 9.3 shall again be considered “Assets” hereunder (and no longer considered “Excluded Assets”) and Seller shall convey such affected Assets to Buyer at an agreed upon time and location (but not later than three (3) Business Days after such resolution) (a “Subsequent Closing”) in a manner consistent with the Closing Cash Amount provisions of Section 10.2 and Section 10.4 applicable to the Assets to be conveyed to Buyer in such Subsequent Closing, and (B) contemporaneously with such conveyance, Buyer shall be adjusted downwards by pay to Seller the Allocated Value of each Conveyed Interest affected by such Environmental Disputes Assets (together with all associated Conveyed Interests) and such Conveyed Interests shall be deemed to be Excluded Assets until such disputes are finally resolved (including, for the avoidance of doubt, for the purposes of calculating the Adjusted Closing Cash Amount and the Interim Period Carried Costs Amount) and (iii) promptly after such Environmental Disputes are finally resolved, Seller shall, at its sole option with respect to each such Conveyed Interest, elect to either: (a) convey such Conveyed Interest to Buyer in a form substantially similar to the Assignment and cause Buyer to pay to Seller an amount equal to (x) the Allocated Value minus the Environmental Defect Amount, if any (provided that Seller has not elected to assume responsibility for the Remediation of the underlying Environmental Defect, in which case, such deduction will not be made and Seller shall implement and promptly complete such Remediation in a manner which is consistent with the requirements of Environmental Laws), with respect to such Conveyed Interest, subject as adjusted pursuant to Section 6.1(d), plus (y3.2 and Section 3.3) the sum by wire transfer of all amounts Buyer would have been required to pay to Seller with respect to the development of such Conveyed Interests pursuant to the Development Agreement and any related operating agreements (including any Carried Costs that exceed the portion of the Allocated Value for such Title Defect Property that is attributable to the Carried Costs Obligation) had such Conveyed Interest been conveyed to Buyer at Closing; or (b) retain such Conveyed Interest, in which case such Conveyed Interest will be deemed permanently to be an Excluded Assetimmediately available funds.

Environmental Dispute Resolution. The Parties agree to resolve disputes concerning the existence and scope of an Environmental Defect and/or Remediation Amount (i) Seller and Buyer shall attempt in good faith to agree on all Environmental Defects and Remediation Amounts (collectively, the “Environmental DisputesDisputed Matters”) prior to Closing. If Seller and Buyer are unable to agree by Closing, (i) the Environmental Disputes will be exclusively and finally resolved by arbitration pursuant to this Section 6.1(e9.4(d). The Parties agree to attempt to initially resolve all disputes through good faith negotiations. If the Parties cannot resolve disputes regarding Environmental Disputed Matters on or before Closing and Seller elects the remedy in Section 9.4(c)(iii), (ii) the Closing Cash Amount shall be adjusted downwards by proceed and the Allocated Value of each Conveyed Interest all or that portion of the Purchased Asset alleged to be affected by such the Environmental Disputes Defect (together with all associated Conveyed Interests“Environmental Disputed Amount”) shall be placed in escrow pursuant to Section 11.2. If arbitration to resolve Environmental Disputed Matters pursuant to ARTICLE XVI is not initiated by Purchaser within fifteen (15) Business Days after Closing, no downward adjustment shall be made for the Environmental Disputed Amounts in the Final Settlement Statement and such Conveyed Interests Purchaser shall be deemed to be Excluded Assets until such disputes are finally resolved have assumed responsibility for all costs and expenses attributable to the Remediation of the applicable Environmental Defect (including, for net to the avoidance of doubt, for the purposes of calculating the Adjusted Closing Cash Amount and the Interim Period Carried Costs AmountPurchased Assets) and all Liabilities (iiinet to the Purchased Assets), including Environmental Liabilities, with respect thereto, and Purchaser’s obligations with respect to the foregoing shall be deemed to constitute part of the Assumed Obligations. Within five (5) promptly Business Days after such the Arbitrator’s decision as to the existence and scope of an Environmental Disputes are finally resolvedDefect and/or Remediation Amount, Seller shallshall elect, at its sole option with respect to each option, the remedy in either subparagraph (i) or (ii) of Section 9.4(c) of this Agreement and notify Purchaser in writing of such Conveyed Interest, elect to either: (a) convey such Conveyed Interest to Buyer in a form substantially similar to the Assignment and cause Buyer to pay to Seller an amount equal to (x) the Allocated Value minus election. Any post-Closing resolution of the Environmental Defect Amount, if any (provided that Seller has not elected to assume responsibility for Disputed Matters shall be reflected in the Remediation of the underlying Environmental Defect, in which case, such deduction will not be made and Seller shall implement and promptly complete such Remediation in a manner which is consistent with the requirements of Environmental Laws), with respect to such Conveyed Interest, subject to Section 6.1(d), plus (y) the sum of all amounts Buyer would have been required to pay to Seller with respect to the development of such Conveyed Interests pursuant to the Development Agreement and any related operating agreements (including any Carried Costs that exceed the portion of the Allocated Value for such Title Defect Property that is attributable to the Carried Costs Obligation) had such Conveyed Interest been conveyed to Buyer at Closing; or (b) retain such Conveyed Interest, in which case such Conveyed Interest will be deemed permanently to be an Excluded AssetFinal Settlement Statement.

Environmental Dispute Resolution. The Parties shall resolve disputes concerning the following matters pursuant to this Section 5.4: (ia) Seller the existence and Buyer shall scope of an Environmental Defect or the Remediation Costs, (b) the Remediation Costs of that portion of the Emerald Asset affected by an Environmental Defect and (c) the adequacy of Emerald’s cure of an Environmental Defect and Kxxx’x reasonable satisfaction thereof (the “Environmental Disputed Matters”). The Parties agree to attempt in to initially resolve all disputes through good faith negotiations. If Emerald elects to agree on all challenge the existence and/or scope of the Environmental Defects Defect and/or the Remediation Cost pursuant to this Section 5.4 (the “Environmental Disputed Matters”), and Remediation Amounts such dispute has not been resolved as of the Closing Date, then the Emerald Purchase Price shall be reduced by the Value of such Environmental Defect Property (collectivelysuch amount, the “Environmental DisputesEscrow Amount”) prior ), and, at Closing, Kxxx shall pay such Environmental Escrow Amount to Closingthe Escrow Agent, as part of the Additional Escrow Amount. If Seller and Buyer are unable to agree by the Parties cannot resolve disputes regarding the Environmental Disputed Matters within forty-five (45) days following Closing, (i) the Environmental Disputes Disputed Matters will be exclusively finally determined by binding arbitration before an independent arbitrator appointed by the Parties, provided that the independent arbitrator shall be qualified by education, knowledge of, and finally resolved experience with environmental defects affecting the types of properties which are subject to or relate to the disputed Environmental Defect or Environmental Disputed Matters. The arbitrator shall employ such independent attorneys and/or other consultants as the arbitrator deems necessary, with the costs of such employment to be shared equally by arbitration Emerald and Kxxx. On or before thirty (30) days after Closing, Emerald and Kxxx shall present their respective positions in writing to the arbitrator, together with such evidence as each Party deems appropriate. The arbitrator shall be instructed to resolve the dispute through a final decision within twenty (20) days after submission of the matters in dispute. Each Party shall pay half of any costs or fees assessed or charged by the arbitrator acting pursuant to this Section 6.1(e)Article 5. Upon final resolution of any Environmental Disputed Matter, (ii) the Closing Cash Escrow Agent shall deliver the applicable Environmental Escrow Amount shall be adjusted downwards by the Allocated Value of each Conveyed Interest affected by such Environmental Disputes (together with all associated Conveyed Interests) and such Conveyed Interests shall be deemed to be Excluded Assets until such disputes are finally resolved (including, for the avoidance of doubt, for the purposes of calculating the Adjusted Closing Cash Amount and the Interim Period Carried Costs Amount) and (iii) promptly after such Environmental Disputes are finally resolved, Seller shall, at its sole option with respect to each such Conveyed Interest, elect to either: (a) convey such Conveyed Interest to Buyer in a form substantially similar to the Assignment and cause Buyer to pay to Seller an amount equal to (x) the Allocated Value minus the Environmental Defect Amount, if any (provided that Seller has not elected to assume responsibility for the Remediation out of the underlying Environmental Defect, Additional Escrow Amount in which case, such deduction will not be made and Seller shall implement and promptly complete such Remediation in a manner which is consistent accordance with the requirements of Environmental Laws), with respect to such Conveyed Interest, subject to Section 6.1(d), plus (y) the sum of all amounts Buyer would have been required to pay to Seller with respect to the development of such Conveyed Interests pursuant to the Development Agreement and any related operating agreements (including any Carried Costs that exceed the portion decision of the Allocated Value for such Title Defect Property that is attributable to the Carried Costs Obligation) had such Conveyed Interest been conveyed to Buyer at Closing; or (b) retain such Conveyed Interest, in which case such Conveyed Interest will be deemed permanently to be an Excluded Assetarbitrator.

Environmental Dispute Resolution. The Parties agree to resolve disputes concerning the existence and scope of an Environmental Defect and/or Remediation Amount (i) Seller and Buyer shall attempt in good faith to agree on all Environmental Defects and Remediation Amounts (collectively, the “Environmental DisputesDisputed Matters”) prior to Closing. If Seller and Buyer are unable to agree by Closing, (i) the Environmental Disputes will be exclusively and finally resolved by arbitration pursuant to this Section 6.1(e5.4(d). The Parties agree to attempt to initially resolve all disputes through good faith negotiations. If the Parties cannot resolve disputes regarding Environmental Disputed Matters on or before Closing and Seller elects the remedy in Section 5.4(c)(iii), (ii) the Closing Cash Amount shall be adjusted downwards by proceed and the Allocated Value of each Conveyed Interest all or that portion of the Purchased Asset alleged to be affected by such the Environmental Disputes Defect (together with all associated Conveyed Interests“Environmental Disputed Amount”) shall be placed in escrow pursuant to Section 7.2. If arbitration to resolve Environmental Disputed Matters pursuant to Article XII is not initiated by Purchaser within fifteen (15) business days after Closing, no downward adjustment shall be made for the Environmental Disputed Amounts in the Final Settlement Statement and such Conveyed Interests Purchaser shall be deemed to be Excluded Assets until such disputes are finally resolved have assumed responsibility for all costs and expenses attributable to the Remediation of the applicable Environmental Defect (including, for net to the avoidance of doubt, for the purposes of calculating the Adjusted Closing Cash Amount and the Interim Period Carried Costs AmountPurchased Assets) and all Liabilities (iiinet to the Purchased Assets), including Environmental Liabilities, with respect thereto, and Purchaser’s obligations with respect to the foregoing shall be deemed to constitute part of the Assumed Obligations. Within five (5) promptly business days after such the Arbitrator’s decision as to the existence and scope of an Environmental Disputes are finally resolvedDefect and/or Remediation Amount, Seller shallshall elect, at its sole option with respect to each option, the remedy in either subparagraph (i) or (ii) of Section 5.4(d) of this Agreement and notify Purchaser in writing of such Conveyed Interest, elect to either: (a) convey such Conveyed Interest to Buyer in a form substantially similar to the Assignment and cause Buyer to pay to Seller an amount equal to (x) the Allocated Value minus election. Any post-Closing resolution of the Environmental Defect Amount, if any (provided that Seller has not elected to assume responsibility for Disputed Matters shall be reflected in the Remediation of the underlying Environmental Defect, in which case, such deduction will not be made and Seller shall implement and promptly complete such Remediation in a manner which is consistent with the requirements of Environmental Laws), with respect to such Conveyed Interest, subject to Section 6.1(d), plus (y) the sum of all amounts Buyer would have been required to pay to Seller with respect to the development of such Conveyed Interests pursuant to the Development Agreement and any related operating agreements (including any Carried Costs that exceed the portion of the Allocated Value for such Title Defect Property that is attributable to the Carried Costs Obligation) had such Conveyed Interest been conveyed to Buyer at Closing; or (b) retain such Conveyed Interest, in which case such Conveyed Interest will be deemed permanently to be an Excluded AssetFinal Settlement Statement.