Defect Adjustments. (i) Subject to Sections 4.2(a) and (b), if a Well, Well Location or Other Asset is a Defective Interest, the Purchase Price will be reduced under Section 2.7(b)(iv) by the corresponding Defect Value (which reduction is called a “Defect Adjustment”) unless (A) the basis for treating such Well, Well Location or Other Asset as a Defective Interest has been removed by Seller at its sole cost and expense to the reasonable satisfaction of Buyer prior to Closing, (B) Buyer agrees to waive the relevant Title Defect, (C) Seller elects not later than two business days prior to Closing to cure such Title Defect no later than 90 days after Closing, or (D) Seller elects to retain the entirety of the Well, Well Location or Other Asset that is subject to such Title Defect and treat it as an Excluded Asset, in which case the Purchase Price shall be reduced by an amount equal to the Allocated Value of such Well, Well Location or Other Asset. Any Purchase Price reduction under clause (D) shall also constitute a Defect Adjustment for purposes of this Agreement. If Seller and Buyer elect not to pursue any of the options in clauses (A), (B), or (C) in the previous sentence with respect to any Defective Interests, the Purchase Price shall be reduced pursuant to Section 2.7(b)(iv).
(ii) In order to provide security for Title Defects to be cured after Closing, for Environmental Defects resolved under Section 5.5, and for indemnity claims under Section 14.1, at Closing (i) the Shares and (ii) $12,500,000 of the Purchase Price shall be deposited by Buyer into the Escrow Account (in case of the Shares, by delivery of the certificate representing the Shares accompanied by a properly completed undated stock power, duly executed in blank by the record holder and in the case of the amount specified in clause (ii), by wire transfer).
(A) If any Title Defect that Seller has elected to cure is cured to the reasonable satisfaction of Buyer on or before 90 days after Closing, Buyer shall so notify Seller within 15 days after receipt of such curative materials. Within five days after Buyer has notified Seller that such Title Defect has been cured to its reasonable satisfaction, the parties shall instruct the Escrow Agent to distribute to Seller out of the Escrow Account the Defect Value for such Title Defect. If Buyer disputes the adequacy of Seller’s curative material with respect to, or that Seller has adequately cured, any Title Defect, Buyer shall so notify Seller within 15 days after rec...
Defect Adjustments. If the Assets are affected by Title Defects (excluding any Leases excluded pursuant to Section 4.7), the Purchase Price will be reduced under Section 2.3 by the amount of the Defect Values unless with respect to a Title Defect: (i) Buyer agrees to waive the Title Defect, or (ii) Sellers cure the Title Defect on or before 5:00 p.m. Mountain Time three (3) days before Closing.
Defect Adjustments. Upon delivery of a timely Environmental Defect Notice, the Parties shall proceed as follows:
(a) With respect to each Environmental Defect asserted by either Party on or before the Defect Notice Date, Laramie or Delta, as applicable, may elect, on or before the date that is two (2) days prior to the Closing Date, to:
(1) reach agreement with other Party on the existence of the Environmental Defect and, subject to Section 5.6(b), adjust the Laramie Payment or Delta Payment, as applicable, by the Environmental Defect Value of the Environmental Defect Property (the “Environmental Defect Adjustment”), whereupon Laramie or Delta, as applicable, shall convey the Environmental Defect Property to the Company at Closing and the Company shall thereafter assume all liability for Remediation of the Environmental Defect Property; or
(2) challenge the existence and/or scope of the Environmental Defect and/or Environmental Defect Value asserted by the other Party pursuant to Section 5.3. If Laramie or Delta, as applicable, elects under Section 5.6 to challenge the existence of an Environmental Defect and/or Environmental Defect Value or challenges the adequacy of any Remediation by the other Party under Section 5.4, and such dispute has not been resolved as of the Closing, then the Environmental Defect Properties affected by the dispute shall not be conveyed at Closing, the Laramie Payment or Delta Payment shall be reduced by the Allocated Values of such Environmental Defect Properties, and the Dispute will be determined pursuant to Section 5.6.
(b) Notwithstanding anything herein provided to the contrary, in no event shall there be any adjustments to the Laramie Payment or Delta Payment, as applicable, or other remedies provided by Laramie or Delta, as applicable, for any Environmental Defect unless the Environmental Defect Values of all Environmental Defects applicable to the Laramie Assets or the Delta Assets, in the aggregate, excluding any Environmental Defects cured by Laramie or Delta, respectively, as applicable, exceed a deductible in an amount equal to $2,500,000 (the “Aggregate Environmental Deductible”). Once the Aggregate Environmental Deductible has been reached as to the Laramie Assets or the Delta Assets, the Company shall be entitled to adjustments to the Laramie Payment or the Delta Payment, as applicable, only with respect to such Environmental Defects in excess of the Aggregate Environmental Deductible.
Defect Adjustments. With respect to adjustments to the Purchase Price for Title Defects, the Parties agree as follows:
Defect Adjustments. If an Asset is affected by an undisputed Title Defect and the Parties have agreed upon the Defect Value attributable thereto, the Purchase Price will be reduced by the Defect Value attributable thereto unless Sellers cure the Title Defect on or before 5:00 p.m. Central Time three (3) days before Closing.
Defect Adjustments. If the Assets are affected by Title Defects (excluding any Leases excluded pursuant to the last sentence of this Section 4.6, Section 4.7 or Section 4.8) with an aggregate Defect Value in excess of five percent (5%) of the Purchase Price (the "Title Deductible"), the Purchase Price will be reduced under Section 2.3 by the amount by which such aggregate Defect Values exceed the Title Deductible unless with respect to a Title Defect: (i) Buyer agrees to waive the Title Defect, or (ii) Seller cures the Title Defect on or before 5:00 p.m. Mountain Time one (1) day before Closing. Seller shall have the right to elect (at or prior to Closing) to exclude and retain any Lease affected by Title Defects, in which event such Lease shall be excluded from the Assets to be assigned to Buyer at the Closing and the Purchase Price shall be reduced by an amount equal to the Per Acre Price multiplied by the number of Net Acres for such excluded Lease.
Defect Adjustments. The sum of (a) all reductions to the Purchase Price resulting from Title Defect adjustment amounts determined by the Parties prior to the Closing (or if not so determined prior to Closing, as determined by Seller in its reasonable, good faith opinion), less the sum of all Title Benefit adjustment amounts determined by the Parties prior to Closing (or if not so determined prior to Closing, as determined by Seller in its reasonable, good faith opinion), plus (b) all reductions to the Purchase Price resulting from Environmental Defect Adjustment amounts determined by the Parties prior to Closing (or if not so determined prior to Closing, as determined by Seller in its reasonable, good faith opinion), shall be no more than ten percent (10%) of the unadjusted Purchase Price; and
Defect Adjustments. 1. If an Asset is affected by a Title Defect, the Purchase Price will be reduced in the Final Settlement Statement and as set forth below, unless, at Sellers’ election: (i) Sellers cure the Title Defect prior to the Final Settlement Date, (ii) Buyer agrees to waive the relevant Title Defect, (iii) Sellers elect on or before the Final Settlement Date to cure such Title Defect no later than 990 days after closing; (iv) Sellers elect on or before the Settlement Date to indemnify Buyer against any loss attributable to the relevant Title Defect or (v) Sellers elect to exclude the affected Asset from the Transaction and reduce the Purchase Price accordingly.
2. The Purchase Price shall be adjusted only for Title Defects that exceed the Individual Title Threshold.
3. If Sellers elect to cure the relevant Title Defect after the Final Settlement Date, and if Sellers cure the relevant Title Defect to Buyer’s reasonable satisfaction, there shall be no adjustment to the Purchase Price. Subject to the Individual Title Threshold, if Sellers do not cure the relevant Title Defect to Buyer’s reasonable satisfaction, then at Sellers’ election, (i) the Purchase Price shall be adjusted for the Title Defect Value attributable to the applicable Title Defect, or (ii) the affected Asset shall be excluded from this Agreement and the Purchase Price shall be adjusted accordingly.
Defect Adjustments. The parties shall proceed as follows:
i. Upon receipt of a notice of Environmental Defect, Seller may, at its sole election, either: (x) agree with Buyer on an adjustment to the Purchase Price, which adjustment shall reflect the cost to remediate such Environmental Defect; or (y) in the event of the failure of the parties to come to agreement under (x), remove the affected Asset(s) from the Assets being conveyed and adjust the Purchase Price accordingly. In no event will Seller have any obligation to remediate any Environmental Defect unless Seller expressly agrees in writing to do so.
ii. There shall be no reduction to the Purchase Price under Section 5.4.b.i unless Seller's share of a proposed reduction as to any single incident exceeds $50,000.00; this shall be determined on an incident by incident basis. In addition, if Seller's share of the proposed reduction under Section 5.4.b.i as to any single incident exceeds $50,000.00, there shall be no reduction to the Purchase Price until such time as the total of these excess amounts (over $50,000.00) exceeds $500,000.00 (the "ENVIRONMENTAL THRESHOLD AMOUNT") but, in such event, the Purchase Price reduction shall be inclusive of the Environmental Threshold Amount. For the purposes of application of the foregoing thresholds, "single incident" shall be applicable on a well by well basis.
iii. If Seller and Buyer agree to an adjustment of the Purchase Price, said adjustment shall be made only for the net present value of the most cost effective means to achieve the remediation required by applicable federal, state or local law or other governmental or judicial directive and not for any other cost. In addition, if Seller and Buyer agree to an adjustment of the Purchase Price, Seller's indemnity in Section 5.8 shall not apply to the Assets for which an adjustment is made and Buyer agrees to accept all responsibility and liability for and indemnify Seller against the then-existing and future environmental condition of the Lands and Assets, including but not limited to, all existing and prospective claims, causes of action, fines, losses, costs and expenses, including, but not limited to, costs to cleanup or remediate in accordance with and to the extent required by applicable law or other directive. In the event Seller and Buyer cannot agree on the cost to remediate any Environmental Defect hereunder, the same shall be determined by a mutually acceptable environmental engineering consulting firm.
Defect Adjustments. If the Assets are affected by Title Defects (excluding any Leases excluded pursuant to Section 4.7), the Purchase Price will be reduced under Section 2.4 by the amount of the Defect Values unless with respect to a Title Defect Buyer agrees to waive the Title Defect.
