Common use of Sludge Clause in Contracts

Sludge. Seller shall be responsible and reimburse the Buyers for one-half of the Costs of Environmental Compliance and Damages related to Environmental Liabilities associated with the existence of sludge from petroleum storage tanks buried on the Owned Real Property prior to the Closing Date. Notwithstanding the foregoing, the Seller shall not be responsible for paying one-half of such Costs of Environmental Compliance and Damages to the extent such Costs of Environmental Compliance and Damages were not incurred or were not required to be performed: (i) pursuant to the order or directive of a Governmental Authority; or (ii) pursuant to any investigation, claim or proceeding initiated or instituted by any Governmental Authority or that results from or is attributable to a third party claim or Liability to a third party; or (iii) or as reasonably necessary to comply with the requirements of any Environmental Permit or applicable Laws. For avoidance of doubt, if in the exercise of the Prudent Businessman Standard the Buyers encounter sludge and incur Costs of Environmental Compliance in relation thereto, the Seller shall be responsible and reimburse the Buyers pursuant to the first sentence of this Section 6.7.6. The Seller’s reimbursement obligation pursuant to this Section 6.7.6 shall be limited to one-half of the lowest total cost response following a similar procedure as set forth in Section 6.16.