Common use of Defect Adjustments Clause in Contracts

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. Upon delivery of a timely Environmental Defect Notice, the Parties shall proceed as follows: (a) With respect to each Environmental Defect timely asserted by either Party on or before the Defect Notice DateBuyer, Laramie or DeltaSeller may, as applicableat its sole discretion, may elect, on or before the date that is two (2) days prior to the Closing Date, to: to (1) reach agreement with other Party Buyer on the existence of the Environmental Defect andand an adjustment to the Purchase Price which shall be reflected on the Preliminary Settlement Statement, subject which adjustment shall reflect the cost to Section 5.6(b), adjust the Laramie Payment or Delta Payment, as applicable, by the Remediate such Environmental Defect Value of the Environmental Defect Property (the “Environmental Defect AdjustmentAmount”), 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) elect to challenge the existence and/or scope of the Environmental Defect and/or Environmental Defect Value Amount asserted by the other Party Buyer pursuant to this Section 5.35.4(a). Notwithstanding anything to the contrary contained herein, in the event the Environmental Defect Amount reasonably asserted by Buyer in the Environmental Defect Notice exceeds the Allocated Value for such Environmental Defect Property, Buyer or Seller may elect to exclude the Environmental Defect Property from the transaction and reduce to the Purchase Price by the amount of the Allocated Value for such Environmental Defect Property, without giving effect to the Individual Environmental Threshold and Aggregate Environmental Deductible. If Laramie or Delta, as applicable, Seller elects under Section 5.6 to challenge the existence and/or scope of an the Environmental Defect and/or the Environmental Defect Value or challenges Amount pursuant to this Section 5.4 (the adequacy of any Remediation by the other Party under Section 5.4“Environmental Disputed Matters”), and such dispute has not been resolved as of the ClosingClosing Date and the parties have not elected to exclude the Environmental Defect Property from the transaction contemplated hereunder as provided in the proceeding sentence, then the Environmental Defect Properties affected by the dispute shall not be conveyed at Closing, the Laramie Payment or Delta Payment Purchase Price shall be reduced by the Allocated Values Value of such Environmental Defect PropertiesProperty (such amount, the “Environmental Escrow Amount”), and, at Closing, Buyer shall pay such Environmental Escrow Amount to the Escrow Agent. Further, the Environmental Disputed Matters will be finally determined by binding arbitration in accordance with the procedures set forth in Section 15.13. With respect to disputes concerning Environmental Defects, the arbitrator shall be qualified by education, knowledge and experience with environmental defects affecting the types of properties which are subject to the disputed Environmental Defect or Environmental Defect Amount and have a minimum of ten (10) years experience with such types of defects and properties. The arbitrator shall employ such independent attorneys and/or other consultants as deemed necessary. On or before forty-five (45) days after Closing, Buyer and Seller shall present their respective positions in writing to the arbitrator, together with such evidence as each Party deems appropriate. The arbitrator shall be instructed to resolve the dispute through a final decision within twenty (20) days after submission of the matters in dispute, and the Dispute will final decision may be determined reflected in the Final Settlement Statement. Upon final resolution of any Environmental Disputed Matter, the Escrow Agent shall, pursuant to Section 5.62.5, deliver the applicable Environmental Escrow Amount out of the Additional Escrow Amount in accordance with the decision of the arbitrator. (b) Notwithstanding anything herein Except as otherwise provided to the contraryherein, in (i) there shall be 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, Purchase Price for any individual Environmental Defect unless for which the Environmental Defect Values of all Amount does not exceed $100,000 (“Individual 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 DeductibleThreshold”). 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.; and

Defect Adjustments. Upon delivery of a timely Environmental Defect Notice, the Parties shall proceed as follows: (a) With respect to each Environmental Defect timely asserted by either Party on or before the Defect Notice DateBuyer, Laramie or DeltaSeller may, as applicableat its sole discretion, may elect, on or before the date that is two (2) days prior to the Closing Date, to: to (1) reach agreement with other Party Buyer on the existence of the Environmental Defect andand an adjustment to the Purchase Price which shall be reflected on the Preliminary Settlement Statement, subject which adjustment shall reflect the cost to Section 5.6(b), adjust the Laramie Payment or Delta Payment, as applicable, by the Remediate such Environmental Defect Value of the Environmental Defect Property (the “Environmental Defect AdjustmentAmount”), 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) elect to challenge the existence and/or scope of the Environmental Defect and/or Environmental Defect Value Amount asserted by the other Party Buyer pursuant to this Section 5.35.4(a). Notwithstanding anything to the contrary contained herein, in the event the Environmental Defect Amount reasonably asserted by Buyer in the Environmental Defect Notice exceeds the Allocated Value for such Environmental Defect Property, Buyer or Seller may elect to exclude the Environmental Defect Property from the transaction and reduce to the Purchase Price by the amount of the Allocated Value for such Environmental Defect Property, without giving effect to the Individual Environmental Threshold and Aggregate Environmental Deductible. If Laramie or Delta, as applicable, Seller elects under Section 5.6 to challenge the existence and/or scope of an the Environmental Defect and/or the Environmental Defect Value or challenges Amount pursuant to this Section 5.4 (the adequacy of any Remediation by the other Party under Section 5.4“Environmental Disputed Matters”), and such dispute has not been resolved as of the ClosingClosing Date and the parties have not elected to exclude the Environmental Defect Property from the transaction contemplated hereunder as provided in the proceeding sentence, then the Environmental Defect Properties affected by the dispute shall not be conveyed at Closing, the Laramie Payment or Delta Payment Purchase Price shall be reduced by the Allocated Values Value of such Environmental Defect PropertiesProperty (such amount, the “Environmental Escrow Amount”), and, at Closing, Buyer shall pay such Environmental Escrow Amount to the Escrow Agent. Further, the Environmental Disputed Matters will be finally determined by binding arbitration in accordance with the procedures set forth in Section 15.13. With respect to disputes concerning Environmental Defects, the arbitrator shall be qualified by education, knowledge and experience with environmental defects affecting the types of properties which are subject to the disputed Environmental Defect or Environmental Defect Amount and have a minimum of ten (10) years experience with such types of defects and properties. The arbitrator shall employ such independent attorneys and/or other consultants as deemed necessary. On or before forty-five (45) days after Closing, Buyer and Seller shall present their respective positions in writing to the arbitrator, together with such evidence as each Party deems appropriate. The arbitrator shall be instructed to resolve the dispute through a final decision within twenty (20) days after submission of the matters in dispute, and the Dispute will final decision may be determined reflected in the Final Settlement Statement. Upon final resolution of any Environmental Disputed Matter, the Escrow Agent shall, pursuant to Section 5.62.5, deliver the applicable Environmental Escrow Amount out of the Additional Escrow Amount in accordance with the decision of the arbitrator. (b) Notwithstanding anything herein Except as otherwise provided to the contraryherein, in (i) there shall be 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, Purchase Price for any individual Environmental Defect for which the Environmental Defect Amount does not exceed $100,000 (“Individual Environmental Threshold”); and (ii) there shall be no adjustments to the Purchase Price for any Environmental Defect that exceeds the Individual Environmental Threshold unless the Environmental Defect Values Amount of all such Environmental Defects applicable to the Laramie Assets or the Delta AssetsDefects, in the aggregate, excluding any Environmental Defects cured by Laramie or DeltaSeller, respectively, as applicable, exceed exceeds a deductible in an amount equal to $2,500,000 9,900,000 (the “Aggregate Environmental Deductible”). Once the Aggregate Environmental Deductible has been reached as to the Laramie Assets or the Delta Assets, the Company after which point Buyer shall be entitled to adjustments to the Laramie Payment Purchase Price or the Delta Payment, as applicable, other remedies only with respect to such Environmental Defects Defect Amounts in excess of the such Aggregate Environmental DeductibleDeductible (the “Environmental Adjustment Amount”); provided, however, that Buyer, at its sole discretion, may elect to waive all or any portion of any Environmental Defect as to Buyer, so as to reduce the aggregate Environmental Adjustment Amount below the percentage that would prevent termination of this Agreement pursuant to Section 11.1.