Common use of Risk of Physical Loss Clause in Contracts

Risk of Physical Loss. Prior to Seller’s delivery of possession of the Property to Buyer at the Close of Escrow, the risk of loss or damage to the Property shall remain upon Seller. If the Property suffers damages as a result of any casualty prior to the Close of Escrow, then Seller shall give written notice thereof to Buyer promptly after Seller obtains knowledge of the occurrence of the casualty. If such casualty is not “Material” (as hereinafter defined), Buyer shall accept the Property in its damaged condition, together with an assignment of Seller’s insurance proceeds and (1) at Closing Buyer shall receive a credit against the Purchase Price in an amount equal to any deductible (and Seller hereby agrees that it shall not sell or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed); and (2) Buyer shall thereafter be responsible for the repair of the damage to the Property caused by such fire or casualty. If such casualty is, however, Material, Buyer shall have the option to terminate this Agreement upon notice to Seller given not later than fifteen (15) days after receipt of Seller’s notice, and, in the event such Material casualty occurs within fifteen (15) days prior to the Closing Date, the Closing Date shall be so extended if necessary. If this Agreement is terminated, the Deposit shall be returned to Buyer and thereafter neither Seller nor Buyer shall have any further rights or obligations to the other hereunder except with respect to any obligations that expressly survive termination of the Agreement. If this Agreement is not terminated, Seller shall not be obligated to repair any damage or destruction but (x) Seller shall assign, without recourse, and turn over to Buyer all of the insurance proceeds, net of any costs of repairs previously expended by Seller and net of reasonable collection costs (or, if such have not been awarded, all of its right, title and interest therein (and Seller hereby agrees that it shall not sell or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed)) payable with respect to such fire or other casualty, and (y) the parties shall proceed to Close of Escrow pursuant to the terms hereof without abatement of the Purchase Price except for a credit in the amount of the applicable insurance deductible.

Risk of Physical Loss. Prior to Seller’s delivery Risk of possession of the Property to Buyer at the Close of Escrow, the risk of physical loss or damage to the Property shall remain upon Sellerwill be borne by Seller prior to the Closing Date. If the Property suffers damages as is damaged by fire, flood, earthquake or other casualty and the cost of repair is reasonably determined by estimate given by a result knowledgeable third party reasonably acceptable to Buyer and Seller to exceed One Million Dollars ($1,000,000.00), then Buyer may, at its option, elect not to acquire the Property by giving written notice of its intent not to purchase within the earlier of the Closing Date or the date that is thirty (30) calendar days after notice has been given to Buyer of such event (or, if it is not readily apparent that the cost of such repair will exceed the amount stated above, within thirty (30) calendar days after such determination has been communicated to Buyer), in which case this Agreement will be terminated and the Deposit shall be returned by Escrow Agent to Buyer without the need of any casualty prior to further authorization or consent of Seller. On receipt of the Close of EscrowDeposit, then Seller Buyer shall give written notice thereof to Buyer promptly after Seller obtains knowledge of have no further right, title or interest in the Property (or in any award, damages, insurance proceeds or other payment resulting from such damage or loss). If despite the occurrence of the casualty. If foregoing, Buyer does not so elect to terminate this transaction, or if the cost to repair the damage from such casualty and to restore the Property to a condition equal to that existing immediately prior to such casualty is not “Material” less than the amount stated in the second sentence hereof (as hereinafter defineddetermined in accordance with such sentence), then, providing the Property is insured at the time of such event and the damage is covered in whole or in part by insurance maintained by or for Seller (subject to reasonable and normal deductibles), Buyer shall accept will close the Property purchase in its damaged conditionaccordance with the terms and timetables herein stated, together with an assignment in which event, at Closing, Seller will assign to Buyer Seller’s interest in all insurance proceeds relating to such damage and the right to collect same (including all of Seller’s rights in any insurance maintained by any tenant of the Property or any contractor or subcontractor of Seller or of any tenant). Any deductible under such insurance policies as are maintained by Seller to cover such damage and destruction, as well as the amount of any uninsured damage, shall be credited to Buyer at Closing and offset against the Purchase Price to be paid hereunder. If the cost of repair is estimated to exceed the amount stated above in this Section but Buyer nonetheless elects to proceed with its acquisition of the Property, Buyer will close the purchase in accordance with the terms and timetables herein stated, in which event, at Closing, Seller will assign to Buyer Seller’s interest in all insurance proceeds relating to such damage and the right to collect same (1) at Closing including all of Seller’s rights in any insurance maintained by any tenant of the Property or any contractor or subcontractor of Seller or of any tenant), and Buyer shall receive a credit against the Purchase Price in an amount equal to any deductible (and Seller hereby agrees that it shall not sell or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed); and (2) Buyer shall thereafter be responsible for the repair of the damage to the Property caused by such fire or casualty. If such casualty is, however, Material, Buyer shall have the option to terminate this Agreement upon notice to Seller given not later than fifteen (15) days after receipt of Seller’s notice, and, in the event such Material casualty occurs within fifteen (15) days prior to the Closing Date, the Closing Date shall be so extended if necessary. If this Agreement is terminated, the Deposit shall be returned to Buyer and thereafter neither Seller nor Buyer shall have any further rights or obligations to the other hereunder except with respect to any obligations that expressly survive termination of the Agreement. If this Agreement is not terminated, Seller shall not be obligated to repair any damage or destruction but (x) Seller shall assign, without recourse, and turn over to Buyer all of the insurance proceeds, net of any costs of repairs previously expended by Seller and net of reasonable collection costs (or, if such have not been awarded, all of its right, title and interest therein (and Seller hereby agrees that it shall not sell or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed)) payable with respect to such fire or other casualty, and (y) the parties shall proceed to Close of Escrow pursuant to the terms hereof without abatement of the Purchase Price except for a credit in the amount of any insurance deductible and the applicable insurance deductibleamount of any uninsured damage.

Risk of Physical Loss. Prior to Seller’s delivery of possession of the Property to Buyer at the Close of EscrowClosing, the risk of loss or damage to the Property shall remain upon Seller. If the Property suffers damages as a result of any casualty prior to the Close of EscrowClosing, then Seller shall give written notice thereof to Buyer promptly after Seller obtains knowledge of the occurrence of the casualty. If Buyer can elect to either (i) require Seller to repair and restore same, in which event, the Closing Date will be extended until such casualty is not “Material” date as may be reasonably required to complete the repair and restoration, in which case, Seller shall retain all insurance proceeds (as hereinafter definedprovided that in no event will the Closing be extended for more than ninety (90) days), Buyer shall ; or (ii) accept the Property in its damaged condition, together with an assignment of Seller’s insurance proceeds and (1) at Closing Buyer shall receive a credit against the Purchase Price in an for the amount equal to of any deductible and any difference between the available insurance proceeds and the anticipated cost of repairing the damage (and Seller hereby agrees that it shall not sell settle or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed); and (2) Buyer shall thereafter be responsible for the repair of the damage to the Property caused by such fire or casualty. If such casualty isprovided, however, Materialthat if as result of any casualty, Buyer shall have (i) the option to terminate this Agreement upon notice to Seller given not later than Property sustains damage in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) or (ii) fifteen (15) or more apartments are rendered uninhabitable for three (3) or more consecutive days after receipt (regardless of Seller’s noticethe replacement costs for such apartments), andthen Buyer can elect to either: (i) require Seller to repair and restore same, in the event such Material casualty occurs within fifteen (15) days prior to the Closing Datewhich event, the Closing Date shall will be so extended if necessary. If this Agreement is terminateduntil such date as may be reasonably required to complete the repair or restoration, the Deposit shall be returned to Buyer and thereafter neither Seller nor Buyer shall have any further rights or obligations to the other hereunder except with respect to any obligations that expressly survive termination of the Agreement. If this Agreement is not terminatedin which case, Seller shall not retain all insurance proceeds (provided that in no event will the Closing be obligated to repair any damage or destruction but extended more than ninety (x90) Seller shall assigndays); (ii) accept the Property in its damaged condition, without recourse, together with an assignment of Seller’s insurance proceeds and turn over to Buyer all of a credit against said Purchase Price for the insurance proceeds, net amount of any costs deductible and any difference between the available insurance proceeds and the anticipated cost of repairs previously expended by Seller and net of reasonable collection costs (or, if such have not been awarded, all of its right, title and interest therein repairing the damage (and Seller hereby agrees that it shall not sell settle or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed); or (iii) payable with respect terminate this Agreement upon notice to Seller served within twenty (20) business days of such fire casualty. In the event of such termination, the Deposit shall be promptly returned to Buyer and thereafter neither party will have any further rights, remedies or other casualty, and (y) the parties shall proceed to Close of Escrow pursuant to the terms hereof without abatement of the Purchase Price except for a credit in the amount of the applicable insurance deductibleobligations under this Agreement.

Risk of Physical Loss. Prior Buyer shall be obligated to Seller’s delivery of possession acquire an Individual Property pursuant to this Agreement, notwithstanding that such Individual Property is damaged by fire or other casualty prior to the Closing Date, provided that (i) such Individual Property can be repaired for less than ONE MILLION DOLLARS ($1,000,000.00) and the applicable damage does not materially and adversely affect access to parking or any of the Property Improvements located on such Individual Property, (ii) the cost to repair such damage is covered by insurance maintained by or for Seller, (iii) Seller assigns to Buyer at all insurance proceeds, other than proceeds expended in restoration and repair by Seller and rental loss proceeds applied to rents accruing through the Close of Escrow, and (v) Seller credits to the risk account of loss or Buyer in Escrow, the amount of any deductible under Seller’s insurance (not to exceed the cost of repair). Any such casualty is hereinafter referred to as a “non-material insured casualty”. In the event of casualty damage to any Individual Property, other than a non-material insured casualty, Buyer may, at its option, either terminate this Agreement solely with respect to such Individual Property by giving written notice of such termination to Seller within ten (10) days of Buyer’s receipt of written notice of such casualty from Seller, in which event Buyer shall receive a return of a portion of the Deposit as calculated based upon a fraction the numerator of which is the Individual Property Allocation for the applicable Individual Property and the denominator of which is the Purchase Price, and this Agreement shall remain upon in full force and effect with respect to the remainder of the Property, or elect to proceed with its purchase of the Property, in which event Seller shall transfer and assign to Buyer all insurance proceeds and all rights to receive insurance proceeds by reason of such damage through Escrow, other than proceeds expended in restoration and repair by Seller and rental loss proceeds applied to rents accruing through the Closing Date and shall credit Buyer’s account in Escrow the amount of any deductible under Seller’s insurance (not to exceed the cost of repair). If the right to receive any such insurance proceeds to be assigned to Buyer is not assignable by Seller to Buyer, Buyer may either terminate this Agreement solely with respect to such Individual Property suffers damages by giving written notice of such termination to Seller within ten (10) days of Buyer’s receipt of written notice from Seller that such insurance proceeds are not assignable, in which event Buyer shall receive a return of a portion of the Deposit as calculated based upon a result fraction the numerator of which is the Individual Property Allocation for the applicable Individual Property and the denominator of which is the Purchase Price, or elect to close the Escrow, in which event Seller shall promptly deliver to Buyer the proceeds of any casualty such insurance received by it following the Close of Escrow, except to the extent such proceeds are in reimbursement for restoration and repair costs incurred or to be incurred by Seller prior to the Close of Escrow and/or rental loss proceeds for rents accruing prior to the Close of Escrow, then Seller shall give written notice thereof to Buyer promptly after Seller obtains knowledge of the occurrence of the casualty. If such casualty is not “Material” (as hereinafter defined), Buyer shall accept the Property in its damaged condition, together with an assignment of Seller’s insurance proceeds and (1) at Closing Buyer shall receive a credit against the Purchase Price in an amount equal to Notwithstanding any deductible (and Seller hereby agrees that it shall not sell or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed); and (2) Buyer shall thereafter be responsible for the repair of the damage provision to the Property caused by such fire or casualty. If such casualty is, however, Material, Buyer shall have the option to terminate contrary in this Agreement upon notice to Seller given not later than fifteen (15) days after receipt of Seller’s notice, and, in the event such Material casualty occurs within fifteen (15) days prior to the Closing DateSection 6.2, the Closing Date Non-Refundable Portion shall remain unaffected by a partial termination hereunder and shall continue to be so extended if necessary. If this Agreement is terminated, held by the Deposit shall be returned to Buyer and thereafter neither Seller nor Buyer shall have any further rights or obligations to the other hereunder except with respect to any obligations that expressly survive termination of the Agreement. If this Agreement is not terminated, Seller shall not be obligated to repair any damage or destruction but (x) Seller shall assign, without recourse, and turn over to Buyer all of the insurance proceeds, net of any costs of repairs previously expended by Seller and net of reasonable collection costs (or, if such have not been awarded, all of its right, title and interest therein (and Seller hereby agrees that it shall not sell or compromise any insurance claim affecting the Property without Buyer’s prior written consent, which consent shall not be unreasonably withheld or delayed)) payable with respect to such fire or other casualty, and (y) the parties shall proceed to Close of Escrow pursuant to the terms hereof without abatement of the Purchase Price except for a credit in the amount of the applicable insurance deductibleHolder.