Common use of Defects, Environmental Conditions and Related Adjustments Clause in Contracts

Defects, Environmental Conditions and Related Adjustments. (a) From time to time on or before 5:00 p.m., Central Time, on the fifteenth (15th) day prior to the Scheduled Closing Date, Buyer may give to Seller and the Company written notice of any claimed Defect or Environmental Condition discovered by Buyer in its due diligence review of the Assets. Each such notice shall set forth (i) a detailed description of the relevant Defect or Environmental Condition and, as applicable, the Asset affected thereby, (ii) the Defect Amount or Remediation Estimate applicable thereto as determined by Buyer, and (iii) the specific documentation or action that Buyer requests to cure or remedy such Defect or Environmental Condition. In addition, if Seller or the Company acquires Knowledge, between the date of execution of this Agreement and the Closing Date, of any new and material Environmental Condition affecting any Asset, Seller or the Company, as applicable, shall provide to Buyer written notice of such fact no later than three (3) Business Days after Seller’s or the Company’s discovery of such Environmental Condition. Any Environmental Condition thus brought to Buyer’s attention by Seller or the Company shall be deemed to have been asserted by Buyer in a timely manner as provided in this Section 5.3(a). Defects and Environmental Conditions discovered by Buyer in its due diligence pertaining to the Assets but not asserted in a timely manner as provided in this Section 5.3(a) shall be deemed to have been waived by Buyer. (b) The Company shall have the first right and option, but not the obligation, to cure or remedy all such Defects or Environmental Conditions at the Company’s sole cost, risk, and expense and, in the case of an Environmental Condition, in accordance with applicable Environmental Laws. If the Company elects not to cure or remedy a Defect or Environmental Condition, Seller shall have the right, but not the obligation, to cure or remedy such Defect or Environmental Condition at Seller’s sole cost, risk, and expense and, in the case of an Environmental Condition, in accordance with applicable Environmental Laws. If Seller or the Company elects to cure or remedy a Defect or Environmental Condition, such Party shall provide to Buyer written notice of such fact as soon as reasonably practical after its receipt of Buyer’s notice. (c) If Seller or the Company elects to cure or remedy a Defect or Environmental Condition, the relevant Party will commence such curative activities or remediation as soon as reasonably practicable after their receipt of Buyer’s notice and shall promptly and diligently continue such efforts until such Defect or Environmental Condition has been fully cured or remediated (in the case of an Environmental Condition, in accordance with applicable Environmental Laws). If Seller or the Company does not complete such curative activities or remediation prior to the Closing Date, the Closing Date may be extended, at Buyer’s option upon written notice to Seller and the Company, for a period of up to sixty (60) days to permit Seller or the Company to complete such curative activities or remediation. If Seller completes such curative activities or remediation within such sixty-day period, the Parties shall close the transactions contemplated herein at such time and place as the Parties may agree. If Seller or the Company does not complete such curative activities or remediation prior to the expiration of such sixty-day period, (i) Buyer may elect to offer Seller and the Company an additional extension of time within which to complete such curative or remedial actions; or (ii) in the absence of such an extension, Sections 5.3(d) or Section 5.3(e), as applicable, will govern. (d) If Seller or the Company elects, or is deemed to have elected, not to cure a Defect asserted in a timely manner under Section 5.3(a), or if Seller or the Company is unable to cure a Defect in a timely manner as provided in Section 5.3(c), then Buyer shall accept the affected Asset subject to such uncured Defect, purchase the Shares at the Closing, and, subject to the terms of Section 5.3(f), receive a reduction in the Cash Portion in an amount equal to the Defect Amount for such uncured Defect agreed to by Seller, the Company, and Buyer or determined by arbitration as provided in Section 5.3(g). (e) If Seller or the Company elects, or is deemed to have elected, not to remedy an Environmental Condition asserted in a timely manner under Section 5.3(a), or if Seller or the Company is unable to remedy an Environmental Condition in a timely manner as provided in Section 5.3(c), then except as provided hereinafter, Buyer shall accept the affected Asset subject to such unremedied Environmental Condition, purchase the Shares at the Closing, and, subject to the terms of Section 5.3(f), receive a reduction in the Cash Portion equal to the share allocable to the owner of the Assets of the actual costs, including, without limitation, Liabilities to Governmental Authorities and other Persons (or in the absence of actual costs, the Remediation Estimate agreed to by Seller, the Company and Buyer or determined by arbitration as provided in Section 5.3(g)), to remedy the relevant Environmental Condition. (f) Notwithstanding the terms of Section 5.3(d) or Section 5.3(e) to the contrary, Buyer shall not be entitled to a reduction in the Cash Portion under either Section 5.3(d) or Section 5.3(e) unless the sum of the aggregate Defect Amounts applicable to all uncured Defects as of the Closing Date plus the aggregate actual costs, including, without limitation, Liabilities to Governmental Authorities and other Persons (or in the absence of actual costs, the Remediation Estimate agreed to by Seller, the Company, and Buyer or determined by arbitration as provided in Section 5.3(g)) to remedy all unremedied Environmental Conditions as of the Closing Date, exceeds $400,000.00, and then only to the extent of such excess over $400,000.00. (g) Seller, the Company, and Buyer shall endeavor, in good faith, to agree on the existence of all claimed Defects or Environmental Conditions, the methods of curing or remedying such Defects or Environmental Conditions, and the Defect Amounts or Remediation Estimates applicable thereto. In the event of a dispute concerning any of such matters that is not resolved prior to the Closing, either Buyer or Seller may initiate arbitration of such dispute pursuant to the terms of Section 12.10. In that event, the Closing shall be deferred until three (3) Business Days after the issuance of the decision of the arbitrators as to such dispute. Following the issuance of the arbitrator’s decision, the Parties shall have the rights and options provided in Section 5.3(d) and Section 5.3(e), as applicable.

Defects, Environmental Conditions and Related Adjustments. (a) From time to time on or before 5:00 p.m.the Closing Date, Central Time, on the fifteenth but in no event later than five (15th5) day Business Days prior to the Scheduled Closing Date, Buyer may give to Seller and the Company Sellers written notice of any claimed Defect or Environmental Condition discovered by Buyer in its due diligence review of the Assets. Each such notice shall set forth (i) a detailed description of the relevant Defect or Environmental Condition and, as applicable, the Asset affected thereby, (ii) the Defect Amount or Remediation Estimate applicable thereto as determined by Buyer, and (iii) the specific documentation or action that Buyer requests to cure or remedy such Defect or Environmental Condition. In addition, if Seller Sellers are aware or the Company acquires Knowledgebecome aware, between the date of execution of this Agreement and the Closing Date, of any new and material Environmental Condition affecting any Asset, Seller or the Company, as applicable, Sellers shall provide to Buyer written notice of such fact no later than three (3) Business Days after Seller’s the execution of this Agreement or the Company’s Sellers’ discovery of such Environmental Condition, whichever comes first. If such three-Business Day period would expire after the Closing Date, the Closing Date shall be deferred, at a minimum, until the expiration of such three-Business Day period. Any Environmental Condition thus brought to Buyer’s attention by Seller or the Company Sellers shall be deemed to have been asserted by Buyer in a timely manner as provided in this Section 5.3(a4.3(a). Defects and Environmental Conditions discovered by Buyer in its due diligence pertaining to the Assets or those existing but not known to Seller at closing and not asserted in a timely manner as provided in this Section 5.3(a4.3(a) shall be deemed to have been waived by Buyer, and, together with all other Defects and Environmental Conditions other than Retained Environmental Liabilities (defined on Schedule 1.1) shall become Assumed Liabilities for purposes hereof. (b) The Company Sellers shall have the first right and option, but not the obligation, to cure or remedy all such Defects or Environmental Conditions at the Company’s Sellers’ sole cost, risk, and expense and, (and in the case of an Environmental Condition, in accordance with applicable Environmental Laws, consistent with the current use of the Asset and in a manner reasonably acceptable to Buyer). If the Company elects not Sellers elect to cure or remedy a Defect or Environmental Condition, Seller Sellers shall have the right, but provide to Buyer written notice of such fact no later than three (3) Business Days after their receipt of Buyer’s notice. The failure of Sellers to give such notice to Buyer within such three-Business Day period shall constitute an election by Sellers not the obligation, to cure or remedy such the relevant Defect or Environmental Condition at Seller’s sole cost, risk, and expense and, in the case of an Environmental Condition, in accordance with applicable Environmental Laws. . (c) If Seller or the Company elects Sellers elect to cure or remedy a Defect or Environmental Condition, such Party shall provide to Buyer written notice of such fact as soon as reasonably practical after its receipt of Buyer’s notice. (c) If Seller or the Company elects to cure or remedy a Defect or Environmental Condition, the relevant Party Sellers will commence such curative activities or remediation as soon as reasonably practicable after their receipt of Buyer’s notice and shall promptly and diligently continue such efforts until such Defect or Environmental Condition has been fully cured or remediated (in the case of an Environmental Condition, in accordance with applicable Environmental Laws), consistent with the current use of the Asset and in a manner reasonably acceptable to Buyers. If Seller or the Company does Sellers do not complete such curative activities or remediation prior to the Closing Date, the Closing Date may shall be extended, at Buyer’s option upon written notice to Seller and without further action by the CompanyParties, for a period of up to sixty (60) days to permit Seller or the Company Sellers to complete such curative activities or remediation. If Seller completes Sellers complete such curative activities or remediation within such sixty-day period, the Parties Sellers and Buyer shall close the transactions contemplated herein at such time and place as the Parties may agree. If Seller or the Company does Sellers do not complete such curative activities or remediation prior to the expiration of such sixty-day period, (i) Buyer may elect to offer Seller and the Company Sellers an additional extension of time within which to complete such curative or remedial actions; or (ii) in the absence of such an extension, Sections 5.3(d4.3(d) and 4.3(e), or Section 5.3(e4.3(f), as applicable, will govern. (d) If Seller or the Company electsSellers elect, or is are deemed to have elected, not to cure a Defect asserted in a timely manner under Section 5.3(a4.3(a), or if Seller or the Company is Sellers are unable to cure a Defect in a timely manner as provided in Section 5.3(c4.3(c), then except as provided hereinafter, Buyer shall accept the affected Asset subject to such uncured Defect, purchase the Shares at the proceed to Closing, and, subject to the terms of Section 5.3(f), and receive a reduction in the Cash Portion in an amount Base Consideration equal to the Defect Amount for applicable to such uncured Defect as agreed to upon by Seller, the Company, Sellers and Buyer or determined by arbitration as provided in Section 5.3(g4.3(g), in which case, such Defect shall become an Assumed Liability for purposes hereof. Notwithstanding the preceding terms of this Section 4.3(d), if the applicable Defect Amount as agreed upon by Sellers and Buyer or determined by arbitration as provided in Section 4.3(g) is greater than or equal to twenty-five percent (25%) of the Allocated Value of the affected Asset, Buyer may elect to exclude the affected Asset from the Assets conveyed to Buyer at Closing, and the Base Consideration shall be reduced by an amount equal to the full Allocated Value of such Asset. (e) If Seller or the Company electsan Asset (including, without limitation, a Contract) is subject to a preferential right to purchase, right of first refusal, right of first offer, or similar right that is exercised prior to the Closing, or a third Person consent to assignment required to be obtained before the relevant Asset may be assigned and that is not obtained prior to the Closing, Sellers shall be deemed to have suffered a complete failure of title with respect to the affected Asset, such Asset shall be excluded from the Assets conveyed to Buyer at the Closing, the Base Consideration shall be reduced by an amount equal to the full Allocated Value of the affected Asset, and, in the case of such a preferential right to purchase or similar right, Sellers shall be entitled to retain all proceeds paid for the affected Asset by the Person exercising such preferential right to purchase or similar right. If Buyer purchases at the Closing an Asset burdened by a preferential right to purchase or similar right that has not been exercised as of the Closing Date, regardless of whether the time period for the exercise of such right has expired, no reduction of the Adjusted Consideration paid at the Closing shall be made with respect thereto. If, for any reason, such preferential right to purchase or similar right is successfully exercised by the holder thereof after the Closing, Buyer shall be entitled to retain all proceeds paid for the affected Asset by the holder of the relevant preferential right to purchase or similar right, and Sellers shall pay to Buyer, in cash, an amount equal to the excess (if any) of the Allocated Value of such Asset (adjusted as provided in Sections 2.3(c)(ii) and 2.3(d)(ii) and net of applicable Property-Related Taxes) over the proceeds received by Buyer from the holder of such preferential right to purchase. (f) If Sellers elect, or are deemed to have elected, not to remedy an Environmental Condition asserted in a timely manner under Section 5.3(a4.3(a), or if Seller or the Company is Sellers are unable to remedy an Environmental Condition in a timely manner as provided in Section 5.3(c4.3(c), then except as provided hereinafter, Buyer shall accept the affected Asset subject to such unremedied Environmental Condition, purchase the Shares at the proceed to Closing, and, subject to the terms of Section 5.3(f), and receive a reduction in the Cash Portion Base Consideration equal to the share allocable to the owner of the Assets of the actual costs, including, without limitation, Liabilities to Governmental Authorities and other Persons (or in the absence of actual costs, the Remediation Estimate agreed to by Seller, the Company Sellers and Buyer or determined by arbitration as provided in Section 5.3(g4.3(g)), to remedy the relevant Environmental Condition. (f) , in which case, such unremediated Environmental Condition shall become an Assumed Liability for purposes hereof. Notwithstanding the preceding terms of this Section 5.3(d) or Section 5.3(e) to the contrary4.3(f), Buyer shall not be entitled to a reduction in the Cash Portion under either Section 5.3(d) or Section 5.3(e) unless the sum of the aggregate Defect Amounts applicable to all uncured Defects as of the Closing Date plus if the aggregate actual costs, including, without limitation, Liabilities to Governmental Authorities and other Persons (or in the absence of actual costs, the Remediation Estimate agreed to upon by Seller, the Company, Sellers and Buyer or determined by arbitration as provided in Section 5.3(g4.3(g)) ), to remedy all unremedied an Environmental Conditions as Condition asserted by Buyer in a timely manner under Section 4.3(a) is greater than or equal to twenty-five percent (25%) of the Closing DateAllocated Value of the affected Asset, exceeds $400,000.00Buyer may elect to exclude the affected Asset from the Assets conveyed to Buyer at Closing, and then only the Base Consideration shall be reduced by an amount equal to the extent full Allocated Value of such excess over $400,000.00Asset. (g) Seller, the Company, Sellers and Buyer shall endeavor, in good faith, to agree on the existence of all claimed Defects or Environmental Conditions, the methods of curing or remedying such Defects or Environmental Conditions, and the Defect Amounts or Remediation Estimates applicable thereto. In the event of a dispute concerning any of such matters that is not resolved prior to the Closing, either Buyer or Seller Sellers may initiate arbitration of such dispute pursuant to the terms of Section 12.1010.11. In that event, the Closing shall be deferred until three (3) Business Days after the issuance of the decision of the arbitrators as to such dispute. Following the issuance of the arbitrator’s decision, the Parties Sellers and Buyer shall have the rights and options provided in Section 5.3(d4.3(d) and Section 5.3(e4.3(e), or Section 4.3(f), as applicable.