DRH » Topics » IX. CLOSING CONDITIONS

This excerpt taken from the DRH 8-K filed Apr 27, 2006.

IX. CLOSING CONDITIONS

A.      Mutual Closing Conditions.

          1.          Satisfaction of Mutual Closing Conditions. The respective obligations of Seller and Purchaser to close the transaction contemplated in this Agreement are subject to the satisfaction at or prior to Closing of the following conditions precedent (the “Mutual Closing Conditions”):

                       a.          Adverse Proceedings. No litigation or other court action shall have been commenced seeking to obtain an injunction or other relief from such court to enjoin the consummation of the transaction described in this Agreement, and no preliminary or permanent injunction or other order, decree or ruling shall have been issued by a court of competent jurisdiction or by any Governmental Authority, would make illegal or invalid or otherwise prevent the consummation of the transaction described in this Agreement.

                       b.          Adverse Law. No Applicable Law shall have been enacted that would make illegal or invalid or otherwise prevent the consummation of the transaction described in this Agreement.

          2.          Failure of Mutual Closing Condition. If any of the Mutual Closing Conditions is not satisfied at Closing, then each Party shall have the right, by providing written notice to the other Party, to terminate this Agreement, in which case the Earnest Money shall be refunded to Purchaser in accordance with Section III.B.4, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination.

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B.      Purchaser Closing Conditions.

          1.          Satisfaction of Purchaser Closing Conditions. In addition to the Mutual Closing Conditions, Purchaser’s obligations to close the transactions described in this Agreement are subject to the satisfaction at or prior to Closing of the following conditions precedent (the “Purchaser Closing Conditions”):

                       a.          Seller’s Deliveries. All of the Seller Closing Deliveries shall have been delivered to Purchaser or deposited with Escrow Agent in the Closing Escrow to be delivered to Purchaser at Closing.

                       b.          Representations and Warranties. The representations or warranties of Seller in this Agreement (as qualified by any schedules to this Agreement and any amendments or supplements to such schedules, other than a Post-Due Diligence Disclosure) shall be true and correct as of the Closing (or as of such other date to which such representation or warranty expressly is made), except to the extent any breach of such representations or warranties would not have a material adverse effect on Purchaser’s ownership of the Property or the conduct of the Business upon Closing or prevent Seller from consummating the transaction described in this Agreement.

                       c.          Covenants and Obligations. The covenants and obligations of Seller in this Agreement shall have been performed in all material respects.

                       d.          Title Policy. The Title Company shall have committed to issue the Title Policy pursuant to Section V.D.

          2.          Failure of Purchaser Closing Condition. Except as expressly provided in Section IX.D, if any of the Purchaser Closing Conditions is not satisfied at Closing, then Purchaser shall, as Purchaser’s sole and exclusive remedy, have the right, by providing written notice to Seller, to (i) subject to Seller’s right to cure under Section XIII.B,  terminate this Agreement, in which case the Earnest Money shall be refunded to Purchaser in accordance with Section III.B.4, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination or (ii) to waive any of the Purchaser Closing Conditions at or prior to Closing.

C.      Seller Closing Conditions.

          1.          Satisfaction of Seller Closing Conditions. In addition to the Mutual Closing Conditions, Seller’s obligations to close the transactions contemplated in this Agreement are subject to the satisfaction at or prior to Closing of the following conditions precedent (the “Seller Closing Conditions”):

                       a.          Receipt of the Purchase Price. Purchaser shall have (A) paid to Seller or deposited with Escrow Agent with written direction to disburse the same to Seller, the Purchase Price (as adjusted pursuant to Section III.A), and (B) delivered written direction to Escrow Agent to disburse the Earnest Money to Seller.

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                       b.          Purchaser’s Deliveries. All of the Purchaser Closing Deliveries shall have been delivered to Purchaser or deposited with Escrow Agent in the Closing Escrow to be delivered to Seller at Closing.

                       c.          Representations and Warranties. The representations and warranties of Purchaser in this Agreement shall be true and correct in all material respects as of the Closing (or as of such other date to which such representation or warranty expressly is made).

                       d.          Covenants and Obligations. The covenants and obligations of Purchaser in this Agreement shall have been performed in all material respects.

          2.          Failure of Seller Closing Condition. Except as expressly provided in Section IX.D, if any of the Seller Closing Conditions is not satisfied at Closing, then Seller shall, as Seller’s sole and exclusive remedy, have the right, by providing written notice to the Purchaser, to (i) terminate this Agreement, in which case the Earnest Money shall be disbursed to Seller in accordance with Section III.B.3, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination or (ii) to waive any of the Seller Closing Conditions at or prior to Closing.

D.      Frustration of Closing Conditions. Seller and Purchaser may not rely on the failure of the Seller Closing Conditions or Purchaser Closing Conditions, respectively, if such failure was caused by such Party’s failure to act in good faith or to use its commercially reasonable efforts to cause the Closing to occur.

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