Common use of Defect Adjustments Clause in Contracts

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) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to 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 without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 at Closing by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) 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 cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to Treaty.

Defect Adjustments. No Upon delivery of a timely Environmental Defect Notice, the Parties shall proceed as follows: (a) With respect to each Environmental Defect timely asserted by Buyer, Seller may, at its sole discretion, elect, on or 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 (“Environmental Defect Amount”); or (2) elect to challenge the existence and/or scope of the Environmental Defect and/or Environmental Defect Amount asserted by Buyer pursuant to this Section 5.4(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 Seller elects to challenge the existence and/or scope of the Environmental Defect and/or the Environmental Defect Amount pursuant to this Section 5.4 (the “Environmental Disputed Matters”), and such dispute has not been resolved as of the Closing 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 Purchase Price shall be reduced by the Allocated Value of such Environmental Defect Property (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 final decision may be reflected in the Final Settlement Statement. Upon final resolution of any Environmental Disputed Matter, the Escrow Agent shall, pursuant to Section 2.5, deliver the applicable Environmental Escrow Amount out of the Additional Escrow Amount in accordance with the decision of the arbitrator. (b) Except as otherwise provided herein, (i) there shall be no adjustments to the 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 made no adjustments to the Purchase Price for any Environmental Defect that exceeds the Individual Environmental Threshold unless and until the aggregate Title Environmental Defect Value Amount of all such Environmental Defects, in the aggregate, excluding any Environmental Defects cured by Seller, exceeds $30,000. In its Title Defect Notice, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects a deductible in an amount equal to $9,900,000 (the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround “Aggregate Environmental Deductible”), after which point Buyer shall be under no obligation entitled to cure Title Defects in the Included Leases; instead, HighGround’s entire interest in all of the Included Leases shall be assigned adjustments to Treaty at Closing, without any reduction in the Purchase Price and without any continuing liability or responsibility on the part of HighGround other remedies only with respect to such Environmental Defect Amounts in respect excess of such Title Defects. IfAggregate Environmental Deductible (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 value of all uncured Title Defects exceeds $30,000, then, only as to Leases suffering from Title Defects Environmental Adjustment Amount below the percentage that are not Included Leases, each such Lease will not be assigned to Treaty at Closing and the Purchase Price will be reduced at Closing by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) 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 cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms would prevent termination of this Agreement. If HighGround cures the applicable Title Defect Agreement pursuant to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to TreatySection 11.1.

Defect Adjustments. No adjustments to the Purchase Price shall be made unless and until the aggregate Title Defect Value exceeds $30,000150,000.00. In its Title Defect Notice, Treaty Enerplus shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000150,000.00. HighGround American shall be under no obligation to cure Title Defects in the Included Leases; instead, HighGroundAmerican’s entire interest in all of the Included Leases shall be assigned to Treaty Enerplus at Closing, without any reduction in the Purchase Price and without any continuing liability liabilitry or responsibility on the part of HighGround American in respect of such Title Defects. If, however, the aggregate value of all uncured Title Defects exceeds $30,000150,000.00, then, only as to Leases suffering from Title Defects that are not Included Leases, each such Lease will not be assigned to Treaty Enerplus at Closing and the Purchase Price will be reduced at Closing by the Title Defect Value, unless (i) HighGround American elects to cure the Title Defect prior to Closing, (ii) Treaty Enerplus agrees to waive the relevant Title Defect, (iii) HighGround American elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) HighGroundAmerican, with TreatyEnerplus’s consent, elects on or before Closing to indemnify Treaty Enerplus against any loss attributable to the relevant Title Defect. (c) Post-Closing Cure. (1) If HighGround elects to cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to Treaty.

Defect Adjustments. No adjustments Upon timely delivery of written notice of an Environmental Defect, the Parties shall proceed as follows: (i) Transferor shall have the option to attempt to remediate such Environmental Defect to the Purchase Price 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) days after the end of the Transfer Period. If Transferor does not elect to cure or is unable to cure such Environmental Defects to the reasonable satisfaction of Transferee on or before the end of the Transfer Period or such later date as is mutually agreed to by the Parties, 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 (as determined by agreement of the Parties or, failing such agreement, by a mutually acceptable third party environmental consultant) shall be made unless and until included in the aggregate Title Defect Value exceeds $30,000Final Adjustment Certificate. In its Title Defect NoticeIf CNX elects to exclude such of the Peabody Assets affected by Environmental Defects, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Allocated Value of all uncured the 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 or (ii) $30,000. HighGround Amount owed by Peabody, shall be under no obligation to cure Title Defects included in the Included Leases; insteadFinal Adjustment Certificate. Such remediation cost, HighGround’s entire interest in all or aggregate Allocated Value, is referred to herein as the “CNX Environmental Defects Amount.” If Peabody elects to exclude such of the Included Leases shall be assigned to Treaty at ClosingCNX Assets affected by Environmental Defects, without any reduction in the Purchase Price and without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 at Closing by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) 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 cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect aggregate Allocated Value of the CNX Assets affected Lease by such Environmental Defect, but in accordance with no event more than the terms difference, if any, between Six Million Two Hundred Thousand Dollars ($6,200,000.00) and the Excess Title Defects Amount owed by CNX, shall be included in the Final Adjustment Certificate. Such remediation cost, or aggregate Allocated Value, is referred to herein as the “Peabody Environmental Defects Amount.” (ii) Notwithstanding anything in clause (ii) hereof to the contrary, in the event Peabody is the Transferor and receives a timely written notice of this AgreementEnvironmental Defects from CNX, Peabody shall have the right but not the obligation, in lieu of the 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 (“Replacement Interests”). If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period Replacement Interests include, without limitation, an Oil and Gas (or CBM and/or CMM) lease or leases with a minimum primary term of five (5) years (which primary term must begin no earlier than the date of substitution of such longer period as may be agreed Replacement Interest), with no development commitments during the primary term and covering a total number of Net Mineral Acres equivalent to the number of Net Mineral Acres affected by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to TreatyEnvironmental Defect.

Defect Adjustments. No adjustments to the Purchase Price shall be made unless and until the aggregate 1. If an Asset is affected by a Title Defect Value exceeds $30,000. In its Title Defect NoticeDefect, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to 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 without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 2.4 and as set forth below, unless, at Closing by the Title Defect Value, unless Seller’s election: (i) HighGround elects to cure Seller cures the Title Defect prior to Closing, (ii) Treaty Buyer agrees to waive the relevant Title Defect, or (iii) HighGround Seller elects on or before Closing the third business day prior to closing to cure such Title Defect title defect no later than 90 days after Closing, or closing (iv) HighGroundSeller, with TreatyBuyer’s consent, which Buyer may withhold in its sole discretion, elects on or before Closing to indemnify Treaty Buyer against any loss attributable to the relevant Title Defect. Defect or (cv) Post-Closing Cure. (1) If HighGround elects Buyer and Seller to cure agree to exclude the applicable portion of the Asset affected by the Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold from the transaction and retain from reduce the Purchase Price payable at Closing an amount equal pursuant to Section 2.4.D.4; if, in the Title Defect Value attributable absence of such agreement by Buyer and Seller, Seller elects nonetheless to exclude the portion of the Asset 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the 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 cure the relevant Title Defect post Closing, Seller shall assign the affected Asset to Buyer at Closing, the Purchase Price will not be adjusted downward pursuant to Section 2.4.D.4 at Closing for such Title Defect and the Title Defect Value will be paid into and held in an escrow account established for this purpose with the Escrow Agent, which escrow account shall be 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 affected Lease United States, have a petition in accordance with bankruptcy initiated against it or either of them or should either of them make an assignment of some or all of their respective assets for the terms benefit of this Agreementcreditors, then Buyer shall have sole and exclusive authority over such escrow account and of the disposition of the funds contained therein. If HighGround within 90 days of Closing, Seller cures the applicable relevant Title Defect to Treaty’s the reasonable satisfaction within of Buyer, Buyer agrees to instruct the 90-day time period (or such longer period as may be agreed Escrow Agent to by the Parties), Treaty shall pay to HighGround release the Title Defect Value attributable including all interest earned thereon to Seller. If within 90 days of Closing Seller fails to cure the relevant Title Defect to the affected Lease and HighGround shall assign such Lease reasonable satisfaction of Buyer, Seller agrees to Treatyinstruct the Escrow Agent to release the Title Defect Value including all interest earned thereon to Buyer.

Defect Adjustments. No adjustments to the Purchase Price shall be made unless and until the aggregate 1. If an Asset is affected by a Title Defect Value exceeds $30,000. In its Title Defect NoticeDefect, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to 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 without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 2.4 and as set forth below, unless, at Closing by the Title Defect Value, unless BBC’s election: (i) HighGround elects to cure BBC cures the Title Defect prior to Closing, (ii) Treaty SCE agrees to waive the relevant Title Defect, (iii) HighGround BBC elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or ; (iv) HighGroundBBC, with TreatySCE’s consent, which SCE may withhold in its sole discretion, elects on or before Closing to indemnify Treaty SCE against any loss attributable to the relevant Title DefectDefect or (v) BBC elects to exclude the affected portion of the Asset from the transaction and reduce the Purchase Price by the Allocated Value of such Asset. The Purchase Price shall be adjusted only if Title Defects that exceed the Individual Title Threshold exceed 5% of the Purchase Price (c) Post-Closing Curethe “Title Deductible”), and then the Purchase Price shall be 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. (1) 2. If HighGround BBC elects to cure the applicable relevant Title Defect post-Closing, then Treaty shall, pending such post BBC shall assign the affected Asset to SCE at Closing period, withhold and retain from the Purchase Price payable 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 shall be adjusted by an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive such adjustment and payment by BBC to SCE to be made within 15 days of the Title Defect, then, determination that the Purchase Price shall be adjusted for the alleged Title Defect Value of the affected Lease will not be cured to SCE’s reasonable satisfaction subject to BBC’s right to dispute such determination in accordance with the terms provisions of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to TreatySection 4.4.

Defect Adjustments. No adjustments to the Purchase Price shall be made unless and until the aggregate Title Defect Value exceeds $30,000150,000.00. In its Title Defect Notice, Treaty Enerplus shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000150,000.00. HighGround American shall be under no obligation to cure Title Defects in the Included Leases; instead, HighGroundAmerican’s entire interest in all of the Included Leases shall be assigned to Treaty Enerplus at Closing, without any reduction in the Purchase Price and without any continuing liability or responsibility on the part of HighGround American in respect of such Title Defects. If, however, the aggregate value of all uncured Title Defects exceeds $30,000150,000.00, then, only as to Leases suffering from Title Defects that are not Included Leases, each such Lease will not be assigned to Treaty Enerplus at Closing and the Purchase Price will be reduced at Closing by the Title Defect Value, unless (i) HighGround American elects to cure the Title Defect prior to Closing, (ii) Treaty Enerplus agrees to waive the relevant Title Defect, (iii) HighGround American elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) HighGroundAmerican, with TreatyEnerplus’s consent, elects on or before Closing to indemnify Treaty Enerplus against any loss attributable to the relevant Title Defect. (c) Post-Closing Cure. (1) If HighGround elects to cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to Treaty.

Defect Adjustments. No adjustments The parties shall proceed as follows: i. Upon receipt of a notice of Environmental Defect, Seller may, at its sole election, either: (x) agree with Buyer on an adjustment to the Purchase Price, which adjustment shall reflect the cost to remediate such Environmental Defect; or (y) in the event of the failure of the parties to come to agreement under (x), remove the affected Asset(s) from the Assets being conveyed and adjust the Purchase Price accordingly. In no event will Seller have any obligation to remediate any Environmental Defect unless Seller expressly agrees in writing to do so. ii. There shall be no reduction to the Purchase Price under Section 5.4.b.i unless Seller's share of a proposed reduction as to any single incident exceeds $50,000.00; this shall be made unless and until determined on an incident by incident basis. In addition, if Seller's share of the aggregate Title Defect Value proposed reduction under Section 5.4.b.i as to any single incident exceeds $30,000. In its Title Defect Notice50,000.00, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround there shall be under no obligation reduction to 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 without any continuing liability or responsibility on until such time as the part total of HighGround in respect of such Title Defects. If, however, the aggregate value of all uncured Title Defects these excess amounts (over $50,000.00) exceeds $30,000500,000.00 (the "ENVIRONMENTAL THRESHOLD AMOUNT") but, then, only as to Leases suffering from Title Defects that are not Included Leases, each in such Lease will not be assigned to Treaty at Closing and the Purchase Price will be reduced at Closing by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) 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 cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, thenevent, the Purchase Price reduction shall be adjusted inclusive of the Environmental Threshold Amount. For the purposes of application of the foregoing thresholds, "single incident" shall be applicable on a well by well basis. iii. If Seller and Buyer agree to an adjustment of the Purchase Price, said adjustment shall be made only for the Title Defect Value net present value of the affected Lease most cost effective means to achieve the remediation required by applicable federal, state or local law or other governmental or judicial directive and not for any other cost. In addition, if Seller and Buyer agree to an adjustment of the Purchase Price, Seller's indemnity in Section 5.8 shall not apply to the Assets for which an adjustment is made and Buyer agrees to accept all responsibility and liability for and indemnify Seller against the then-existing and future environmental condition of the Lands and Assets, including but not limited to, all existing and prospective claims, causes of action, fines, losses, costs and expenses, including, but not limited to, costs to cleanup or remediate in accordance with the terms of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable and to the affected Lease extent required by applicable law or other directive. In the event Seller and HighGround Buyer cannot agree on the cost to remediate any Environmental Defect hereunder, the same shall assign such Lease to Treatybe determined by a mutually acceptable environmental engineering consulting firm.

Defect Adjustments. No adjustments Upon timely delivery of written notice of an Environmental Defect, the Parties shall proceed as follows: (i) Seller shall have the option to attempt to remediate such Environmental Defect to the Purchase Price satisfaction of Buyer on or before the end of the Transfer Period, or by mutual consent of the Parties, Seller shall have the option to attempt to remediate such Environmental Defects to the satisfaction of Buyer within thirty (30) days after the end of the Transfer Period. (ii) if Seller does not elect to cure or is unable to cure such Environmental Defects to the reasonable satisfaction of Buyer on or before the end of the Transfer Period or such later date as is mutually agreed to by the Parties, 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 (as determined by agreement of the Parties or, failing such agreement, by a mutually acceptable third party environmental consultant) shall be made unless and until included in the aggregate Title Defect Value exceeds $30,000Final Adjustment Certificate. In its Title Defect NoticeIf Buyer elects to exclude such Assets, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Allocated Value of all uncured the 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 Adjustment Certificate. Such remediation cost, or aggregate Allocated Value, is referred to herein as the “Environmental Defects Amount.” (iii) Notwithstanding anything in clause (ii) $30,000. HighGround shall be under no obligation to cure Title Defects the contrary, in the Included Leases; insteadevent Seller receives a timely written notice of Environmental Defects from Buyer, HighGround’s entire interest Seller shall have the right but not the obligation, in all lieu of the Included Leases shall be assigned remedies available to Treaty at ClosingBuyer 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 (“Replacement Interests”). Replacement Interests include, without any reduction in limitation, an Oil and Gas (or CBM and/or CMM) lease or leases with a minimum primary term of five (5) years (which primary term must begin no earlier than the Purchase Price and without any continuing liability or responsibility on the part date of HighGround in respect substitution of such Title Defects. IfReplacement Interest), however, with no development commitments during the aggregate value primary term and covering a total number of all uncured Title Defects exceeds $30,000, then, only as Net Mineral Acres equivalent to Leases suffering from Title Defects that are not Included Leases, each such Lease will not be assigned to Treaty at Closing the number of Net Mineral Acres of Oil and the Purchase Price will be reduced at Closing Gas Interests affected by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Environmental Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) 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 cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to Treaty.

Defect Adjustments. No 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 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 made unless and until reflected on the aggregate Title Preliminary Settlement Statement, which adjustment shall reflect the cost to Remediate such Environmental Defect Value exceeds $30,000. In its Title (“Environmental Defect Notice, Treaty shall identify Leases of its choice Value”); (2) with the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to cure Title Defects in the Included Leases; instead, HighGround’s entire interest in all consent of the Included Leases shall be assigned to Treaty at ClosingBuyer, without any reduction in remove the affected Asset(s) from this Agreement and reduce the Purchase Price and without any continuing liability or responsibility on by the part of HighGround in respect Allocated Value of such Title DefectsAsset(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. IfIf 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, howeverat the Closing the affected Asset will be excluded from the Closing, the 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 at Closing by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) 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 cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Allocated Value of the affected Lease Asset, and in accordance with the event that the Buyer and the Seller can complete the arbitration or otherwise reach agreement on or before the Final Settlement Date, and there is a positive Allocated Value for the affected Asset, the Seller will convey the affected Asset to the Buyer pursuant to the terms and conditions of this Agreement. If HighGround cures Agreement at the applicable Title Allocated Value less the Environmental Defect Value. (b) There shall be no reduction to Treaty’s reasonable satisfaction within the 90-day time period Purchase Price except to the extent that the total of all amounts of Environmental Defect Values exceed Two Million Dollars (or such longer period as may be agreed to by the Parties$2,000,000), Treaty which amount shall pay be a deductible not a threshold. The amount by which the Purchase Price is reduced pursuant to HighGround this Article 5 shall be deemed the Title “Environmental Defect Value attributable to the affected Lease and HighGround shall assign such Lease to TreatyAdjustment.”

Defect Adjustments. No 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) whether it agrees or disagrees that each alleged Environmental Defect exists; (ii) whether it agrees or disagrees with the Environmental Defect Value attributed to the 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 reduce 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 by an amount equal to the lesser of (i) the aggregate Title Defect Allocated Value of all uncured Title Defects such Asset, or (ii) $30,000. HighGround shall be under no obligation to 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 reduce the Purchase Price and without any continuing liability or responsibility on by an amount equal to the part of HighGround in respect of such Title DefectsEnvironmental Defect Value (the “Environmental Defect Adjustment”). IfHowever, however, the aggregate value of all uncured Title Defects exceeds $30,000, then, only as if Buyer elects to Leases suffering from Title Defects that are not Included Leases, each such Lease will not be assigned to Treaty at Closing and reduce the Purchase Price will be reduced at Closing by an amount equal to the Title Environmental Defect Value, unless then if, but only if, the Environmental Defect Value exceeds fifty percent (50%) of the Allocated Value of the affected Asset, Seller shall have the 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 an amount equal to the Allocated Value of the Retained Asset. E. If Seller gives counter notice that it agrees with an Environmental Defect asserted in Environmental Defect Notice and the associated Environmental Defect Value, and elects to correct the asserted Environmental Defect, but fails to cure such Environmental Defect to Buyer’s reasonable satisfaction before Closing, Buyer shall have the right to elect to: (i) HighGround elects exclude the affected Asset from the Transaction (which Asset shall thereupon be deemed to cure be a Retained Asset of Seller) and reduce the Title Defect prior Purchase Price by an amount equal to Closing, the Allocated Value of such Asset; or (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing allow Seller to cure such Title Environmental Defect no later than 90 days after Closing. F. If Buyer agrees to allow Seller to cure an Environmental Defect after Closing, or (iv) HighGround, with Treaty’s consent, elects on or before the affected Asset will be excluded from the Closing to indemnify Treaty against any loss attributable to the relevant Title Defect. (c) Post-Closing Cure. (1) If HighGround elects to cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal shall be reduced by the Allocated Value of such Asset. Seller shall then have one hundred eighty (180) calendar days after Closing to the Title Defect Value attributable to the affected Lease and HighGround shall not assign the affected Lease to Treaty at Closing. (2) If HighGround elects attempt to cure the applicable Title Environmental Defect post-Closing, but does not cure (“Environmental Cure Period”). If Seller cures the applicable Title Environmental Defect to TreatyBuyer’s reasonable satisfaction within the 90 day time period 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 such longer period paid said revenues and/or expenses) in exchange for the simultaneous delivery of an assignment of the subject Asset from Seller to Buyer using an assignment form similar to that attached as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty Exhibit E. If Seller does not waive cure the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms of this Agreement. If HighGround cures the applicable Title Environmental Defect to TreatyBuyer’s reasonable satisfaction within the 90-day time period Environmental Cure Period, the affected 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 (or such longer period as the “Environmental Defect Deductible”). In which case, the Purchase Price may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable adjusted downward to the affected Lease extent the cumulative amount of all for all Environmental Defect Values exceeding the Individual Environmental Defect Threshold exceeds the Environmental Defect Deductible. 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 Notice as soon as reasonably possible after becoming aware of or making its determination of the Environmental Defect. Buyer waives any remedy against Seller for individual Environmental Defects that do not exceed the Individual Environmental Defect Threshold and HighGround shall assign such Lease to Treatyfor all Environmental Defects in the event the Environmental Defect Deductible has not been met or for which adjustment is made as provided herein.

Defect Adjustments. No adjustments (i) Subject to subsections 4.2(a) and (b), if an Asset is a Defective Interest, the Purchase Price shall will (so long as the Threshold Value is exceeded and subject to the limitation in the next succeeding sentence) be made unless and until reduced under Section 2.4 by the aggregate Title corresponding Defect Value exceeds $30,000. In its Title (which reduction is called a "Defect NoticeAdjustment") unless, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of at Seller's election, (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to cure Title Defects in the Included Leases; instead, HighGround’s entire interest in all of the Included Leases shall be assigned to Treaty basis for treating such property as a Defective Interest has been removed by Seller at Closing, without any reduction in the Purchase Price its sole cost and without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 at Closing by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect expense prior to Closing, (ii) Treaty Buyer agrees to waive the relevant Title Defect, (iii) HighGround Seller elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) HighGround, with Treaty’s consent, Seller elects on or before Closing to indemnify Treaty Buyer against any loss attributable to the relevant Title Defect, or (v) Seller elects on or before Closing to retain the affected property (the "Excluded Asset") as of the Effective Time in which case the Defect Adjustment shall equal the Allocated Value of the Excluded Asset. If Seller elects not to pursue any of its options in the previous sentence, the Purchase Price shall be adjusted in the amount of the aggregate of all Defect Adjustments (c) Post-Closing Cureother than Defect Adjustments for Excluded Assets), net of Interest Addition Adjustments. (1ii) If HighGround Seller elects to cure the applicable Title Defect post-Closing, then Treaty Buyer shall, pending such post post-Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value attributable to the affected Lease Asset and HighGround Seller shall not assign the affected Lease Asset to Treaty Buyer at Closing. (2A) 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 longer period as may be agreed to by the Parties), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms of this Agreement. If HighGround Seller cures the applicable Title Defect to Treaty’s Buyer's reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty Buyer shall pay to HighGround Seller the Title Defect Value attributable to the affected Lease Asset and HighGround Seller shall assign such Lease Asset to TreatyBuyer. (B) If Seller elects to cure the applicable Title Defect post-Closing, but does not cure the applicable Title Defect to Buyer's reasonable satisfaction within the 90 day time period (or such longer period as may be agreed to by 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 Asset as an Excluded Asset. If Seller elects to treat the affected Asset as an Excluded Asset, Seller will retain the Excluded Asset and the Allocated Value of the Excluded Asset will be a credit to Buyer in the Settlement Statement. If the Title Defect is not cured and Seller elects to adjust the Purchase Price for the Title Defect and there is a dispute concerning the Defect Value, the adequacy of Seller's title curative material, the Parties agree to submit the dispute to arbitration under Section 15.17.

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) the aggregate Title Defect Value of all uncured Title Defects Subject to Sections 4.2(a) and (b), if a Well, Well Location or (ii) $30,000. HighGround shall be under no obligation to cure Title Defects in the Included Leases; insteadOther Asset is a Defective Interest, 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 without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 at Closing under Section 2.7(b)(iv) by the Title corresponding Defect Value, Value (which reduction is called a “Defect Adjustment”) unless (iA) HighGround elects 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 cure the Title Defect reasonable satisfaction of Buyer prior to Closing, (iiB) Treaty Buyer agrees to waive the relevant Title Defect, (iiiC) HighGround Seller elects on or before not later than two business days prior to Closing to cure such Title Defect no later than 90 days after Closing, or (ivD) 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 Seller elects to cure retain the applicable entirety of the Well, Well Location or Other Asset that is subject to such Title Defect post-Closingand treat it as an Excluded Asset, then Treaty shall, pending such post Closing period, withhold and retain from in which case the Purchase Price payable at Closing shall be reduced by an amount equal to the Title Allocated Value of such Well, Well Location or Other Asset. Any Purchase Price reduction under clause (D) shall also constitute a Defect Value attributable Adjustment for purposes of this Agreement. If Seller and Buyer elect not to pursue any of the affected Lease and HighGround shall not assign the affected Lease to Treaty at Closing. options in clauses (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 longer period as may be agreed to by the PartiesA), Treaty may waive the applicable Title Defect(B), or if Treaty does not waive (C) in the Title Defect, thenprevious sentence with respect to any Defective Interests, the Purchase Price shall be adjusted 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 Value 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 affected Lease in accordance with Escrow Account the terms of this AgreementDefect Value for such Title Defect. If HighGround cures Buyer disputes the applicable 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 to Treaty’s reasonable satisfaction within the 90-day time period period, subject to Seller’s rights under Section 4.2(c)(ii)(C) below, Buyer may elect to treat the affected ▇▇▇▇▇, 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 longer period as may be agreed to 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 PartiesDefect Value asserted by Buyer for a Title Defect covered by Section 4.2(c)(ii)(B), Treaty shall pay to HighGround 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 Value attributable 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 affected Lease 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 HighGround (B) in no event shall assign such Lease there be any adjustments to Treatythe 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 Upon delivery of a timely Environmental Defect Notice, the Parties shall proceed as follows: (a) With respect to each Environmental Defect timely asserted by Buyer, Seller may, at its sole discretion, elect, on or 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 (“Environmental Defect Amount”); or (2) elect to challenge the existence and/or scope of the Environmental Defect and/or Environmental Defect Amount asserted by Buyer pursuant to this Section 5.4(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 Seller elects to challenge the existence and/or scope of the Environmental Defect and/or the Environmental Defect Amount pursuant to this Section 5.4 (the “Environmental Disputed Matters”), and such dispute has not been resolved as of the Closing 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 Purchase Price shall be reduced by the Allocated Value of such Environmental Defect Property (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 final decision may be reflected in the Final Settlement Statement. Upon final resolution of any Environmental Disputed Matter, the Escrow Agent shall, pursuant to Section 2.5, deliver the applicable Environmental Escrow Amount out of the Additional Escrow Amount in accordance with the decision of the arbitrator. (b) Except as otherwise provided herein, (i) there shall be no adjustments to the Purchase Price shall be made unless and until for any individual Environmental Defect for which the aggregate Title Environmental 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) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to 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 without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 at Closing by the Title Defect Value, unless (i) HighGround elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or (iv) 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 cure the applicable Title Defect post-Closing, then Treaty shall, pending such post Closing period, withhold and retain from the Purchase Price payable at Closing an amount equal to the Title Defect Value 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 Amount does not cure the applicable Title Defect to Treaty’s reasonable satisfaction within the 90 day time period exceed $100,000 (or such longer period as may be agreed to by the Parties“Individual Environmental Threshold”), Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price shall be adjusted for the Title Defect Value of the affected Lease in accordance with the terms of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to Treaty.; and

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(1) If a PGR Lease is a Defective Interest, Treaty shall identify Leases of its choice (the “Included Leases”) that suffer Title Defects in an amount equal to the lesser of (i) the aggregate Title Defect Value of all uncured Title Defects or (ii) $30,000. HighGround shall be under no obligation to 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 without any continuing liability or responsibility on the part of HighGround in respect of such Title Defects. If, however, the 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 at under Section 2.3(c)(ii) by the corresponding Defect Value (which reduction is called a “Title Defect Adjustment”) unless prior to the Closing by Date: (A) the Company either cures the Title Defect Value, unless (i) HighGround to Buyer’s reasonable satisfaction or elects to cure the Title Defect prior to Closing, (ii) Treaty agrees to waive the relevant Title Defect, (iii) HighGround elects on or before Closing to cure such Title Defect no later than 90 days after Closing, or ; or (ivB) HighGround, with Treaty’s consent, Buyer elects on or before Closing to indemnify Treaty against any loss attributable to waive the relevant Title Defect. (c) Post-Closing Cure. (1) If HighGround elects The Purchase Price shall be adjusted pursuant to cure Section 2.3 for Defective Interests only if the applicable Title aggregate of all Defect post-ClosingValues, then Treaty shallnet of the Value of all Interest Additions, pending such post Closing period, withhold and retain from for all of the PGR Leases exceeds 3% of the Purchase Price payable at Closing an amount equal to (the “Title Defect Value attributable to the affected Lease and HighGround shall not assign the affected Lease to Treaty at ClosingThreshold Amount”). (2) If HighGround a PGR Lease is a Defective Interest for which an adjustment to the Purchase Price would otherwise be required and the Company elects to cure the applicable defect after Closing, Buyer and the Company shall at Closing in good faith agree to place a portion of the Purchase Price 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 ▇▇▇▇▇ 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 shall be the aggregate of all Defect Values net of the Value of Interest Additions. Exhibit 10.17 (3) If the Company has elected to cure a Title Defect post-and such Title Defect is cured on or before 90 days after Closing, but the Escrow Agent shall distribute to the Company, immediately upon Buyer’s receipt of curative materials reasonably satisfactory to Buyer, the amount placed in the Escrow Account with respect to such Title Defect (and any account interest accrued thereon). (4) If the Company does not cure the applicable a Title Defect to Treaty’s reasonable satisfaction within the 90 day time period (or such longer period as may be agreed to by the Parties)period, Treaty may waive the applicable Title Defect, or if Treaty does not waive the Title Defect, then, the Purchase Price Buyer shall be adjusted for entitled to an amount equal to the Title corresponding Defect Value as provided in Section 4.1(b)(1). (5) If Buyer disputes the adequacy of the Company’s curative material, 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 of a Defective Interest which is not timely cured, then the affected Lease in accordance with the terms provisions of this Agreement. If HighGround cures the applicable Title Defect to Treaty’s reasonable satisfaction within the 90-day time period (or such longer period as may be agreed to by the Parties), Treaty Section 4.3 shall pay to HighGround the Title Defect Value attributable to the affected Lease and HighGround shall assign such Lease to Treatyapply.