Common use of Defect Adjustments Clause in Contracts

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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either (1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such Title Defect. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value). (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible.

Defect Adjustments. Upon delivery of a timely Environmental Defect Notice, the Parties shall proceed as follows: (ia) Subject With respect to Sections 4.2(aeach Environmental Defect timely asserted by Buyer, Seller may, at its sole discretion, elect, on or before the date that is two (2) days prior to the Closing Date, to (1) reach agreement with Buyer on the existence of the Environmental Defect and an adjustment to the Purchase Price which shall be reflected on the Preliminary Settlement Statement, which adjustment shall reflect the cost to Remediate such Environmental Defect (b“Environmental Defect Value”); (2) with the consent of the Buyer, if a Wellremove the affected Asset(s) from this Agreement and reduce the Purchase Price by the Allocated Value of such Asset(s) (an “Environmental Defect Exclusion”); or (3) elect to challenge the existence and/or scope of the Environmental Defect and/or Environmental Defect Value asserted by Buyer pursuant to Section 5.6. If Buyer is unwilling to consent or Seller elects to challenge the existence of an Environmental Defect and/or Environmental Defect Value and such dispute has not been resolved as of the Closing Date, Well Location or Other at the Closing the affected Asset is a Defective Interestwill be excluded from the Closing, 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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either (1) receive the Allocated Value of the Excluded Asset as a credit to affected Asset, and in the event that the Buyer in and the Seller can complete the arbitration or otherwise reach agreement on or before the Final Settlement Statement prepared pursuant to Section 13.1Date, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat and there is a positive Allocated Value for the affected Property as an Excluded Asset, the Seller will convey the affected Asset to the Buyer pursuant to the terms and conditions of this Agreement at the Allocated Value less the Environmental Defect Value with respect to such Title DefectValue. (Cb) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 There shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value). (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments reduction to the Purchase Price or other remedies provided except to the extent that the total of all amounts of Environmental Defect Values exceed Two Million Dollars ($2,000,000), which amount shall be a deductible not a threshold. The amount by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of which the Purchase Price (is reduced pursuant to this Article 5 shall be deemed the “Aggregate Environmental Defect DeductibleAdjustment.”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible.

Defect Adjustments. (i) Subject to Sections 4.2(a) and (b), if a Well, Well Location or Other 1. If an Asset is affected by a Defective InterestTitle Defect, the Purchase Price will be reduced under Section 2.7(b)(iv2.4 and as set forth below, unless, at Seller’s election: (i) by Seller cures the corresponding Title 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, (Bii) Buyer agrees to waive the relevant Title Defect, or (Ciii) Seller elects not later than two on or before the third business days day prior to Closing closing to cure such Title Defect title defect no later than 90 days after Closingclosing (iv) Seller, with Buyer’s consent, which Buyer may withhold in its sole discretion, elects on or before Closing to indemnify Buyer against any loss attributable to the relevant Title Defect or (Dv) Buyer and Seller to agree to exclude the portion of the Asset affected by the Title Defect from the transaction and reduce the Purchase Price pursuant to Section 2.4.D.4; if, in the absence of such agreement by Buyer and Seller, Seller elects nonetheless to exclude the portion of the Asset affected by the Title Defect, then, in such event, Buyer may terminate this Agreement pursuant to Section 11.1.E The Purchase Price shall be adjusted only for Title Defects that exceed the Individual Title Threshold (with the amount of such adjustment being the “Title Defect Adjustment”). 2. If Seller elects to retain cure the entirety of relevant Title Defect post Closing, Seller shall assign the Wellaffected Asset to Buyer at Closing, Well Location or Other Asset that is subject the Purchase Price will not be adjusted downward pursuant to Section 2.4.D.4 at Closing for such Title Defect and treat it as the Title Defect Value will be paid into and held in an Excluded Assetescrow account established for this purpose with the Escrow Agent, in which case the Purchase Price escrow account shall be reduced by under the joint control of both the Buyer and the Seller; provided, however, that in the event Seller or either of them should voluntarily file for protection under the Bankruptcy laws of the United States, have a petition in bankruptcy initiated against it or either of them or should either of them make an amount equal to assignment of some or all of their respective assets for the Allocated Value benefit of creditors, then Buyer shall have sole and exclusive authority over such Well, Well Location or Other Asset. Any Purchase Price reduction under clause (D) shall also constitute a Defect Adjustment for purposes escrow account and of this Agreementthe disposition of the funds contained therein. If Seller and Buyer elect not to pursue any within 90 days 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) Seller cures 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 relevant Title Defect that Seller has elected to cure is cured to the reasonable satisfaction of Buyer on or before 90 days after ClosingBuyer, 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 agrees to its reasonable satisfaction, the parties shall instruct the Escrow Agent to distribute to Seller out of release the Escrow Account the Title Defect Value for such Title Defectincluding all interest earned thereon to Seller. If Buyer disputes the adequacy within 90 days of Seller’s curative material with respect to, or that Closing Seller has adequately cured, any Title Defect, Buyer shall so notify Seller within 15 days after receipt of such curative materials. (B) If Seller provides no curative materials fails to cure a the relevant Title Defect within to the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as reasonable satisfaction of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option Seller agrees to either (1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such Title Defect. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for release the Title Defect as determined under Section 4.4 shall be distributed Value including all interest earned thereon to Buyer on the Final Settlement Date (or later determination of the Defect Value)Buyer. (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible.

Defect Adjustments. No adjustments to the Purchase Price shall be made unless and until the aggregate Title Defect Value exceeds $150,000.00. In its Title Defect Notice, Enerplus shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) Subject the aggregate Title Defect Value of all uncured Title Defects or (ii) $150,000.00. American shall be under no obligation to Sections 4.2(a) cure Title Defects in the Included Leases; instead, American’s entire interest in all of the Included Leases shall be assigned to Enerplus at Closing, without any reduction in the Purchase Price and (b)without any continuing liabilitry or responsibility on the part of American in respect of such Title Defects. If, if a Wellhowever, Well Location or Other Asset is a Defective Interestthe aggregate value of all uncured Title Defects exceeds $150,000.00, then, only as to Leases suffering from Title Defects that are not Included Leases, each such Lease will not be assigned to Enerplus at Closing and the Purchase Price will be reduced under Section 2.7(b)(iv) at Closing by the corresponding Title Defect Value (which reduction is called a “Defect Adjustment”) Value, unless (Ai) American elects to cure 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 Title Defect prior to Closing, (Bii) Buyer Enerplus agrees to waive the relevant Title Defect, (Ciii) Seller American elects not later than two business days prior to on or before Closing to cure such Title Defect no later than 90 days after Closing, or (Div) Seller American, with Enerplus’s consent, 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 Closing to its reasonable satisfaction, indemnify Enerplus against any loss attributable to 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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either (1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such relevant Title Defect. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value). (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible.

Defect Adjustments. (i) Subject to Sections 4.2(a) and (b), if a Well, Well Location or Other 1. If an Asset is affected by a Defective InterestTitle Defect, the Purchase Price will be reduced under Section 2.7(b)(iv2.4 and as set forth below, unless, at BBC’s election: (i) by BBC cures the corresponding Title 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, (Bii) Buyer SCE agrees to waive the relevant Title Defect, (Ciii) Seller BBC elects not later than two business days prior to on or before Closing to cure such Title Defect no later than 90 days after Closing; (iv) BBC, with SCE’s consent, which SCE may withhold in its sole discretion, elects on or before Closing to indemnify SCE against any loss attributable to the relevant Title Defect or (Dv) Seller BBC elects to retain exclude the entirety affected portion of the Well, Well Location or Other Asset that is subject to such Title Defect from the transaction and treat it as an Excluded Asset, in which case reduce 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 The Purchase Price shall be reduced pursuant to Section 2.7(b)(iv). (ii) In order to provide security for adjusted only if 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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either (1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such Title Defect. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value). (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) Threshold exceed 5% of the Purchase Price (the “Aggregate Defect Title Deductible”), after which point Buyer and then the Purchase Price shall be entitled adjusted only for the amount exceeding the Title Deductible, with such adjustment being the “Title Defect Adjustment.” The Title Deductible and the Environmental Deductible are separate and distinct and operate independently. 2. If BBC elects to adjustments cure the relevant Title Defect post-Closing, BBC shall assign the affected Asset to SCE at Closing and the Purchase Price will not be reduced at Closing for such Title Defect. If BBC cures the relevant Title Defect to SCE’s reasonable satisfaction, there shall be no adjustment to the Purchase Price; subject to the Individual Title Threshold, if BBC does not cure the relevant Title Defect to SCE’s reasonable satisfaction, the Purchase Price only with respect shall be adjusted by an amount equal to aggregate the Title Defect Adjustments Value attributable to the applicable Title Defect, such adjustment and Environmental Defects in excess payment by BBC to SCE to be made within 15 days of the Aggregate determination that the alleged Title Defect Deductiblewill not be cured to SCE’s reasonable satisfaction subject to BBC’s right to dispute such determination in accordance with the provisions of Section 4.4.

Defect Adjustments. Upon timely delivery of written notice of an Environmental Defect, the Parties shall proceed as follows: (i) Subject Transferor shall have the option to Sections 4.2(aattempt to remediate such Environmental Defect to the satisfaction of Transferee on or before the end of the Transfer Period, or by mutual consent of the Parties, Transferor shall have the option to attempt to remediate such Environmental Defects to the satisfaction of Transferee within thirty (30) and (b), if a Well, Well Location days after the end of the Transfer Period. If Transferor does not elect to cure 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 unable to cure such Well, Well Location or Other Asset as a Defective Interest has been removed by Seller at its sole cost and expense Environmental Defects 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 Transferee 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 end of the Escrow Account Transfer Period or such later date as is mutually agreed to by the Defect Value for such Title Defect. If Buyer disputes the adequacy of Seller’s curative material with respect toParties, or that Seller has adequately cured, any Title Defect, Buyer shall so notify Seller within 15 days after receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer Transferee shall have the option to either accept assignment of the Assets affected by such Environmental Defects or to exclude such Assets from this Agreement. If Transferee elects to accept assignment of the Assets affected by such Environmental Defects, the cost to remediate such Environmental Defects (1as determined by agreement of the Parties or, failing such agreement, by a mutually acceptable third party environmental consultant) receive shall be included in the Final Adjustment Certificate. If CNX elects to exclude such of the Peabody Assets affected by Environmental Defects, an amount equal to the aggregate Allocated Value of the Excluded Asset as a credit to Buyer Peabody Assets affected by such Environmental Defect, but in no event more than the difference, if any, between Four Million Eight Hundred Thousand Dollars ($4,800,000.00) and the Excess Title Defects Amount owed by Peabody, shall be included in the Final Settlement Statement prepared pursuant to Section 13.1Adjustment Certificate. Such remediation cost, or aggregate Allocated Value, is referred to herein as the “CNX Environmental Defects Amount.” If Peabody elects to exclude such of the CNX Assets affected by Environmental Defects, an amount equal to the aggregate Allocated Value of the CNX Assets affected by such Environmental Defect, but in no event more than the difference, if any, between Six Million Two Hundred Thousand Dollars (2$6,200,000.00) have and the parties instruct Excess Title Defects Amount owed by CNX, shall be included in the Escrow Agent Final Adjustment Certificate. Such remediation cost, or aggregate Allocated Value, is referred to distribute to Buyer, promptly after Buyer’s election to treat herein as the affected Property as an Excluded Asset, the Defect Value with respect to such Title Defect“Peabody Environmental Defects Amount.” (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value). (iiiii) Notwithstanding anything in clause (ii) hereof to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defectscontrary, in the aggregateevent Peabody is the Transferor and receives a timely written notice of Environmental Defects from CNX, excluding any Title Defects cured by SellerPeabody shall have the right but not the obligation, exceeds one and one-half percent (1.5%) in lieu of the Purchase Price remedies available to CNX under such clause (ii), to offer CNX mutually acceptable replacement Oil and Gas Interests reasonably proximate, and similar in kind and nature, to the Peabody Oil and Gas Interests affected by the Environmental Defect (“Aggregate Defect DeductibleReplacement Interests”). Replacement Interests include, after without limitation, an Oil and Gas (or CBM and/or CMM) lease or leases with a minimum primary term of five (5) years (which point Buyer shall be entitled to adjustments primary term must begin no earlier than the date of substitution of such Replacement Interest), with no development commitments during the primary term and covering a total number of Net Mineral Acres equivalent to the Purchase Price only with respect to aggregate Defect Adjustments and number of Net Mineral Acres affected by the Environmental Defects in excess of the Aggregate Defect DeductibleDefect.

Defect Adjustments. Upon receipt of the Environmental Defect Notice: A. Seller shall give written counter notice to Buyer within five (5) business days of receipt of the Environmental Defect Notice stating: (i) Subject whether it agrees or disagrees that each alleged Environmental Defect exists; (ii) whether it agrees or disagrees with the Environmental Defect Value attributed to Sections 4.2(athe Environmental Defect; and (iii) that it will either (a) attempt to correct any Environmental Defect, or (b) will not attempt to correct any Environmental Defect. B. If Seller gives counter notice that it disagrees with an Environmental Defect, or that it disagrees with the Environmental Defect Value attributed to the Environmental Defect, the existence of the Environmental Defect and the associated Environmental Defect Value will be determined in accordance with Article 5.6. C. The failure of Seller to deliver written counter notice within five (5) business days of the receipt of Environmental Defect Notice shall be deemed notice by the Seller that it: (i) agrees with each of the Environmental Defects asserted in the Environmental Defects Notice; (ii) agrees with the Environmental Defect Value attributed to each Environmental Defect; and (iii) will not attempt to remediate of correct any Environmental Defect. D. If Seller gives notice that it agrees with an Environmental Defect asserted in the Environmental Defect Notice and the associated Environmental Defect Value, but that it will not attempt to remediate or correct the Environmental Defect, Buyer shall have the right to elect to (i) exclude the affected Asset from the Transaction (which Asset shall thereupon be deemed to be a Retained Asset of the Seller) and (b), if a Well, Well Location or Other Asset is a Defective Interest, reduce 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 (Cii) in the previous sentence with respect to any Defective Interests, reduce the Purchase Price shall be reduced pursuant by an amount equal to Section 2.7(b)(ivthe Environmental Defect Value (the “Environmental Defect Adjustment”). (ii) In order . However, if Buyer elects 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 reduce the Purchase Price shall be deposited by Buyer into an amount equal to the Escrow Account Environmental Defect Value, then if, but only if, the Environmental Defect Value exceeds fifty percent (in case 50%) of the Shares, by delivery Allocated Value of the certificate representing affected Asset, Seller shall have the Shares accompanied right to exclude such affected Asset from the Transaction (which Asset shall thereupon be deemed to be a Retained Asset of Seller) and reduce the Purchase Price by a properly completed undated stock power, duly executed in blank by an amount equal to the record holder and in the case Allocated Value of the amount specified in clause (ii), by wire transfer)Retained Asset. (A) E. If any Title Seller gives counter notice that it agrees with an Environmental Defect that Seller has elected asserted in Environmental Defect Notice and the associated Environmental Defect Value, and elects to correct the asserted Environmental Defect, but fails to cure is cured such Environmental Defect to the Buyer’s 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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option right to either elect to: (1i) receive exclude the affected Asset from the Transaction (which Asset shall thereupon be deemed to be a Retained Asset of Seller) and reduce the Purchase Price by an amount equal to the Allocated Value of such Asset; or (ii) allow Seller to cure such Environmental Defect after Closing. F. If Buyer agrees to allow Seller to cure an Environmental Defect after Closing, the Excluded affected Asset as a credit will be excluded from the Closing and the Purchase Price payable at Closing shall be reduced by the Allocated Value of such Asset. Seller shall then have one hundred eighty (180) calendar days after Closing to attempt to cure the Environmental Defect (“Environmental Cure Period”). If Seller cures the Environmental Defect to Buyer’s reasonable satisfaction within the Environmental Cure Period, then Buyer will tender to Seller the Allocated Value (subject to appropriate adjustments to the Allocated Value to reflect: (i) any revenues and expenses attributable to the Asset which is the subject of the Environmental Defect between the Effective Date and the date the subject Asset is assigned to Buyer; and (ii) the Party which received or paid said revenues and/or expenses) in exchange for the simultaneous delivery of an assignment of the subject Asset from Seller to Buyer in using an assignment form similar to that attached as Exhibit E. If Seller does not cure the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute Environmental Defect to Buyer’s reasonable satisfaction within the Environmental Cure Period, promptly after Buyer’s election to treat the affected Property as an Excluded Asset shall be a Retained Asset. G. Notwithstanding the foregoing, no adjustment to the Purchase Price will be made unless the aggregate Environmental Defect Values of all uncured Environmental Defects exceeding the Individual Environmental Defect Threshold exceeds Six Hundred Fifteen Thousand Dollars (the “Environmental Defect Deductible”). In which case, the Defect Value with respect Purchase Price may be adjusted downward to such Title Defect. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes extent the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the cumulative amount of all for all Environmental Defect Values exceeding the Individual Environmental Defect Value will be deemed submitted for resolution under Section 4.4Threshold exceeds the Environmental Defect Deductible. The actual In order to provide Seller a reasonable opportunity to cure any Environmental Defects prior to Closing, Buyer shall use reasonable efforts to provide the Environmental Defect Value for the Title Defect Notice as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (soon as reasonably possible after becoming aware of or later making its determination of the Defect Value). (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be Environmental Defect. Buyer waives any Defect Adjustment or other remedies provided by remedy against Seller for any Title Defect for which the Defect Value does individual Environmental Defects that do not exceed the Individual Title Environmental Defect Threshold, Threshold and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate event the Environmental Defect DeductibleDeductible has not been met or for which adjustment is made as provided herein.

Defect Adjustments. No adjustments to the Purchase Price shall be made unless and until the aggregate Title Defect Value exceeds $150,000.00. In its Title Defect Notice, Enerplus shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) Subject the aggregate Title Defect Value of all uncured Title Defects or (ii) $150,000.00. American shall be under no obligation to Sections 4.2(a) cure Title Defects in the Included Leases; instead, American’s entire interest in all of the Included Leases shall be assigned to Enerplus at Closing, without any reduction in the Purchase Price and (b)without any continuing liability or responsibility on the part of American in respect of such Title Defects. If, if a Wellhowever, Well Location or Other Asset is a Defective Interestthe aggregate value of all uncured Title Defects exceeds $150,000.00, then, only as to Leases suffering from Title Defects that are not Included Leases, each such Lease will not be assigned to Enerplus at Closing and the Purchase Price will be reduced under Section 2.7(b)(iv) at Closing by the corresponding Title Defect Value (which reduction is called a “Defect Adjustment”) Value, unless (Ai) American elects to cure 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 Title Defect prior to Closing, (Bii) Buyer Enerplus agrees to waive the relevant Title Defect, (Ciii) Seller American elects not later than two business days prior to on or before Closing to cure such Title Defect no later than 90 days after Closing, or (Div) Seller American, with Enerplus’s consent, 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 Closing to its reasonable satisfaction, indemnify Enerplus against any loss attributable to 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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either (1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such relevant Title Defect. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value). (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible.

Defect Adjustments. (i1) Subject to Sections 4.2(a) and (b), if If a Well, Well Location or Other Asset PGR Lease is a Defective Interest, the Purchase Price will be reduced under Section 2.7(b)(iv2.3(c)(ii) by the corresponding Defect Value (which reduction is called a “Title Defect Adjustment”) unless prior to the Closing Date: (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 Company either cures the Title Defect to the Buyer’s reasonable satisfaction of Buyer prior to Closing, (B) Buyer agrees to waive the relevant Title Defect, (C) Seller or elects not later than two business days prior to Closing to cure such the Title Defect no later than 90 days after Closing, or ; or (DB) Seller Buyer elects to retain waive the entirety of the Well, Well Location or Other Asset that is subject to such relevant Title Defect and treat it as an Excluded Asset, in which case the Defect. The Purchase Price shall be reduced by an amount equal adjusted pursuant to Section 2.3 for Defective Interests only if the Allocated aggregate of all Defect Values, net of the Value of such Wellall Interest Additions, 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 all of the options in clauses (A), (B), or (C) in the previous sentence with respect to any Defective Interests, PGR Leases exceeds 3% of the Purchase Price shall be reduced pursuant to Section 2.7(b)(iv(the “Title Threshold Amount”). (ii2) In order If a PGR Lease is a Defective Interest for which an adjustment to provide security for Title Defects the Purchase Price would otherwise be required and the Company elects to be cured cure the defect after Closing, for Environmental Defects resolved under Section 5.5, Buyer and for indemnity claims under Section 14.1, the Company shall at Closing (i) the Shares and (ii) $12,500,000 in good faith agree to place a portion of the Purchase Price shall be deposited by Buyer into an escrow account (the “Escrow Account”) established pursuant to an escrow agreement in substantially the form attached hereto as Exhibit F (the “Escrow Agreement”) with Xxxxx Fargo Bank or another mutually acceptable financial institution (“Escrow Agent”) until Buyer’s receipt of the Company’s curative materials. The amount of the Escrow Account (in case shall be the aggregate of all Defect Values net of the Shares, by delivery Value 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).Interest Additions. Exhibit 10.17 (A3) If any Title Defect that Seller the Company has elected to cure a Title Defect and such Title Defect is cured to the reasonable satisfaction of Buyer on or before 90 days after Closing, Buyer the Escrow Agent shall so notify Seller within 15 days after distribute to the Company, immediately upon Buyer’s receipt of such curative materials. Within five days after Buyer has notified Seller that materials reasonably satisfactory to Buyer, the amount placed in the Escrow Account with respect to 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, (and any Title Defect, Buyer shall so notify Seller within 15 days after receipt of such curative materialsaccount interest accrued thereon). (B4) If Seller provides no curative materials to the Company does not cure a Title Defect within the 90-90 day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have be entitled to an amount equal to the option to either (1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the corresponding Defect Value with respect to such Title Defectas provided in Section 4.1(b)(1). (C5) If Buyer disputes the adequacy of Sellerthe Company’s curative materials or that a Title Defect has been cured by Sellermaterial, or if Seller disputes Buyer must invoke the dispute resolution mechanism set forth in Section 4.3 within 30 days after receipt thereof. If the parties dispute the Defect Value asserted by Buyer for of a Title Defect covered by Defective Interest which is not timely cured, then the provisions of Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 4.3 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value)apply. (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible.

Defect Adjustments. (i) Subject to Sections subsections 4.2(a) and (b), if a Well, Well Location or Other an Asset is a Defective Interest, the Purchase Price will (so long as the Threshold Value is exceeded and subject to the limitation in the next succeeding sentence) be reduced under Section 2.7(b)(iv) 2.4 by the corresponding Defect Value (which reduction is called a “"Defect Adjustment”") unless unless, at Seller's election, (Ai) the basis for treating such Well, Well Location or Other Asset property as a Defective Interest has been removed by Seller at its sole cost and expense to the reasonable satisfaction of Buyer prior to Closing, (Bii) Buyer agrees to waive the relevant Title Defect, (Ciii) Seller elects not later than two business days prior to on or before Closing to cure such Title Defect no later than 90 days after Closing, or (Div) Seller elects on or before Closing to indemnify Buyer against any loss attributable to the relevant Title Defect, or (v) Seller elects on or before Closing to retain the entirety affected property (the "Excluded Asset") as of the Well, Well Location or Other Asset that is subject to such Title Defect and treat it as an Excluded Asset, Effective Time in which case the Purchase Price Defect Adjustment shall be reduced by an amount equal to the Allocated Value of such Well, Well Location or Other the Excluded Asset. Any Purchase Price reduction under clause (D) shall also constitute a Defect Adjustment for purposes of this Agreement. If Seller and Buyer elect elects not to pursue any of the its options in clauses (A), (B), or (C) in the previous sentence with respect to any Defective Interestssentence, the Purchase Price shall be reduced pursuant to Section 2.7(b)(ivadjusted in the amount of the aggregate of all Defect Adjustments (other than Defect Adjustments for Excluded Assets), net of Interest Addition Adjustments. (ii) In order If Seller elects to provide security for cure the applicable Title Defects to be cured after Defect post-Closing, for Environmental Defects resolved under Section 5.5then Buyer shall, pending such post-Closing period, withhold and for indemnity claims under Section 14.1, at Closing (i) the Shares and (ii) $12,500,000 of retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value attributable to the affected Asset and Seller shall be deposited by not assign the affected Asset to 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)at Closing. (A) If any Seller cures the applicable Title Defect that Seller has elected to cure is cured to the Buyer's reasonable satisfaction of Buyer on within the 90-day time period (or before 90 days after Closingsuch longer period as may be agreed to by the Parties), Buyer shall so notify pay to Seller within 15 days after receipt of such curative materials. Within five days after Buyer has notified Seller that such the Title Defect has been cured Value attributable to its reasonable satisfaction, the parties affected Asset and Seller shall instruct the Escrow Agent assign such Asset 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 receipt of such curative materialsBuyer. (B) If Seller provides no curative materials elects to cure a the applicable Title Defect post-Closing, but does not cure the applicable Title Defect to Buyer's reasonable satisfaction within the 90-90 day time period, subject period (or such longer period as may be agreed to Seller’s rights under Section 4.2(c)(ii)(C) belowby the Parties), Buyer may waive the applicable Title Defect, or if Buyer does not waive the Title Defect, then, at Seller's election, (i) the Purchase Price shall be adjusted for the Title Defect Value of the affected Asset in accordance with the terms of this Agreement or (ii) Seller may elect to treat the affected XxxxxAsset as an Excluded Asset. If Seller elects to treat the affected Asset as an Excluded Asset, Well Locations or Other Assets as Excluded Assets, in which case Buyer Seller will cause retain the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either (1) receive the Allocated Value of the Excluded Asset as will be a credit to Buyer in the Final Settlement Statement prepared pursuant Statement. If the Title Defect is not cured and Seller elects to Section 13.1, or (2) have adjust the parties instruct Purchase Price for the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, Title Defect and there is a dispute concerning the Defect Value with respect to such Title Defect. (C) If Buyer disputes Value, the adequacy of Seller’s 's title curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B)material, the issue of Parties agree to submit the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution dispute to arbitration under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value)15.17. (iii) Notwithstanding anything to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect Deductible.

Defect Adjustments. No adjustments to the Purchase Price shall be made unless and until the aggregate Title Defect Value exceeds $30,000. In its Title Defect Notice, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) Subject the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to Sections 4.2(a) cure Title Defects in the Included Leases; instead, HighGround’s entire interest in all of the Included Leases shall be assigned to Treaty at Closing, without any reduction in the Purchase Price and (b)without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, if a Wellhowever, Well Location or Other Asset is a Defective Interestthe aggregate value of all uncured Title Defects exceeds $30,000, then, only as to Leases suffering from Title Defects that are not Included Leases, each such Lease will not be assigned to Treaty at Closing and the Purchase Price will be reduced under Section 2.7(b)(iv) at Closing by the corresponding Title Defect Value (which reduction is called a “Defect Adjustment”) Value, unless (Ai) HighGround elects to cure 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 Title Defect prior to Closing, (Bii) Buyer Treaty agrees to waive the relevant Title Defect, (Ciii) Seller HighGround elects not later than two business days prior to on or before Closing to cure such Title Defect no later than 90 days after Closing, or (Div) Seller HighGround, with Treaty’s consent, elects on or before Closing to indemnify Treaty against any loss attributable to the relevant Title Defect. (c) Post-Closing Cure. (1) If HighGround elects to retain cure the entirety of the Well, Well Location or Other Asset that is subject to such applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and treat it as an Excluded Asset, in which case retain from the Purchase Price shall be reduced by payable at Closing an amount equal to the Allocated Title Defect Value of attributable to the affected Lease and HighGround shall not assign the affected Lease to Treaty at Closing. (2) If HighGround elects to cure the applicable Title Defect post-Closing, but does not cure the applicable Title Defect to Treaty’s reasonable satisfaction within the 90 day time period (or 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 longer period as may be agreed to pursue any of by the options in clauses (AParties), (B)Treaty may waive the applicable Title Defect, or (C) in if Treaty does not waive the previous sentence with respect to any Defective InterestsTitle Defect, then, the Purchase Price shall be reduced pursuant to Section 2.7(b)(iv). (ii) In order to provide security adjusted for the 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 Defect Value of the Purchase Price shall be deposited by Buyer into affected Lease in accordance with the Escrow Account (in case terms of this Agreement. If HighGround cures 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 applicable Title Defect that Seller has elected to cure is cured to the Treaty’s 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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject period (or such longer period as may be agreed to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat by the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by Buyer, Buyer shall have the option to either (1) receive the Allocated Value of the Excluded Asset as a credit to Buyer in the Final Settlement Statement prepared pursuant to Section 13.1, or (2) have the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such Title Defect. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(BParties), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for Treaty shall pay to HighGround the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value). (iii) Notwithstanding anything Value attributable to the contrary in this Section 4.2, (A) in no event affected Lease and HighGround shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments assign such Lease to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defects, in the aggregate, excluding any Title Defects cured by Seller, exceeds one and one-half percent (1.5%) of the Purchase Price (the “Aggregate Defect Deductible”), after which point Buyer shall be entitled to adjustments to the Purchase Price only with respect to aggregate Defect Adjustments and Environmental Defects in excess of the Aggregate Defect DeductibleTreaty.

Defect Adjustments. Upon timely delivery of written notice of an Environmental Defect, the Parties shall proceed as follows: (i) Subject Seller shall have the option 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 attempt to remediate such Environmental 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 on or before the end of the Transfer Period, or by mutual consent of the Parties, Seller shall have the option to Closing, attempt to remediate such Environmental Defects to the satisfaction of Buyer within thirty (B30) 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 end 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)Transfer Period. (ii) In order if Seller does not elect to provide security for Title Defects cure or is unable to be cured after Closing, for cure such 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 end of the Escrow Account Transfer Period or such later date as is mutually agreed to by 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 receipt of such curative materials. (B) If Seller provides no curative materials to cure a Title Defect within the 90-day time period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected Xxxxx, Well Locations or Other Assets as Excluded Assets, in which case Buyer will cause the Excluded Asset to be assigned to Seller or Seller’s designee effective as of the Effective Time free of all liens, encumbrances and defects arising by, through or under Buyer. Upon such election by BuyerParties, Buyer shall have the option to either accept assignment of the Assets affected by such Environmental Defects or to exclude such Assets from this Agreement. If Buyer elects to accept assignment of the Assets affected by such Environmental Defects, the cost to remediate such Environmental Defects (1as determined by agreement of the Parties or, failing such agreement, by a mutually acceptable third party environmental consultant) receive shall be included in the Final Adjustment Certificate. If Buyer elects to exclude such Assets, an amount equal to the aggregate Allocated Value of the Excluded Asset as a credit to Buyer Assets affected by such Environmental Defect, but in no event more than the difference, if any, between Two Million Dollars ($2,000,000.00) and the Excess Title Defects Amount, shall be included in the Final Settlement Statement prepared pursuant to Section 13.1Adjustment Certificate. Such remediation cost, or (2) have aggregate Allocated Value, is referred to herein as the parties instruct the Escrow Agent to distribute to Buyer, promptly after Buyer’s election to treat the affected Property as an Excluded Asset, the Defect Value with respect to such Title Defect“Environmental Defects Amount. (C) If Buyer disputes the adequacy of Seller’s curative materials or that a Title Defect has been cured by Seller, or if Seller disputes the Defect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), the issue of the adequacy of the curative materials, the fact of the cure or the amount of the Defect Value will be deemed submitted for resolution under Section 4.4. The actual Defect Value for the Title Defect as determined under Section 4.4 shall be distributed to Buyer on the Final Settlement Date (or later determination of the Defect Value).” (iii) Notwithstanding anything in clause (ii) to the contrary in this Section 4.2, (A) in no event shall there be any Defect Adjustment or other remedies provided by Seller for any Title Defect for which the Defect Value does not exceed the Individual Title Defect Threshold, and (B) in no event shall there be any adjustments to the Purchase Price or other remedies provided by Seller for any Defective Interest, unless the sum of the Defect Adjustments for all Defective Interests and Environmental Defectscontrary, in the aggregateevent Seller receives a timely written notice of Environmental Defects from Buyer, excluding any Title Defects cured by SellerSeller shall have the right but not the obligation, exceeds one and one-half percent (1.5%) in lieu of the Purchase Price remedies available to Buyer under clause (ii), to offer Buyer mutually acceptable replacement Oil and Gas Interests reasonably proximate, and similar in kind and nature, to the Oil and Gas Interests effected by the Environmental Defect (“Aggregate Defect DeductibleReplacement Interests”). Replacement Interests include, after without limitation, an Oil and Gas (or CBM and/or CMM) lease or leases with a minimum primary term of five (5) years (which point Buyer shall be entitled to adjustments primary term must begin no earlier than the date of substitution of such Replacement Interest), with no development commitments during the primary term and covering a total number of Net Mineral Acres equivalent to the Purchase Price only with respect to aggregate Defect Adjustments number of Net Mineral Acres of Oil and Gas Interests affected by the Environmental Defects in excess of the Aggregate Defect DeductibleDefect.