Speculative Builder Tax Clause Samples

Speculative Builder Tax. Seller represents and warrants to Purchaser that the Property is presently located in an unincorporated portion of Maricopa County, Arizona, and, as such, the Builder’s Tax (defined below) is not applicable. If the Property is annexed into the City of ▇▇▇▇▇▇▇▇ before Closing or it is determined that the Builder Tax is applicable, Seller agrees that at Closing, Seller shall fund a cash escrow with the Escrow Agent for the benefit of Purchaser in an amount equal to 110% of the estimated speculative builder tax imposed by the City of Chandler, Arizona, on the construction and sale of the Property (the “Builder Tax”), if the definitive amount of the Builder Tax is not known at Closing and paid by Seller on or before Closing. In order to establish the projected Builder Tax, Seller agrees to provide Purchaser, at Purchaser’s request and for Purchaser’s review and approval, not later than five (5) business days prior to Closing, with Seller’s estimate of the Builder Tax, together with appropriate back-up for Seller’s calculation of same. The Escrow Agent shall hold 110% of the projected Builder Tax amount agreed to by Purchaser in escrow from and after Closing until such time as the actual Builder Tax is paid by Seller, or Seller requests that such funds be used to pay the Builder Tax, at which time the escrowed funds shall be either paid to the City of ▇▇▇▇▇▇▇▇ or released to Seller. The terms of the foregoing escrow shall be set forth in an escrow agreement, the form of which shall be reasonably acceptable to Seller, Purchaser and Escrow Agent, and which escrow agreement shall be executed and delivered by Seller, Purchaser and Escrow Agent at Closing. Seller shall indemnify, defend and hold Purchaser harmless for, from and against all claims for the Builder Tax which may be asserted against Purchaser, which obligation of indemnification shall survive the Closing or termination of this Agreement.