EQIX » Topics » RISK OF LOSS

This excerpt taken from the EQIX 10-Q filed Oct 26, 2005.

RISK OF LOSS

 

7.1. Minor Damage. In the event of loss or damage to the Property or any portion thereof which is not “Major” (as hereinafter defined), this Agreement shall remain in full force and effect provided that Seller shall assign to Purchaser all of Seller’s right, title and interest in and to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question, which assignment shall be confirmed and agreed to by either the insurer or the condemning authority, as applicable if such confirmation or agreement is required to make the assignment legally effective. The Purchase Price shall be reduced by an amount equal to the lesser of the deductible amount under Seller’s insurance policy(s) or, if the loss is not covered by Seller’s insurance policy(s), then the Purchase Price shall be reduced by the cost of completing the repairs. Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.

 

7.2. Major Damage. In the event of a “Major” loss or damage, Purchaser may terminate this Agreement by written notice to the Seller, in which event the Deposit shall be returned to Purchaser. If Purchaser elects not to terminate this Agreement within ten (10) days after Seller sends Purchaser written notice of the occurrence of such Major loss or damage or threatened Major loss or damage in the case of condemnation or eminent domain proceedings (which notice shall state the cost of repair or restoration thereof as opined by an architect in accordance with Section 7.3 hereof), then Seller and Purchaser shall be deemed to have elected to proceed with Closing, in which event Seller shall assign to Purchaser all of Seller’s right, title and interest in and to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards and the proceeds of any rent loss insurance relating to the premises in question, which assignment shall be confirmed and agreed to by either the insurer(s) or the condemning authority, as applicable if such confirmation or agreement is required to make the assignment legally effective. The Purchase Price shall be reduced by an amount equal to the deductible amount under Seller’s insurance policy(s). Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.

 

7.3. Definition of “Major” Loss or Damage. For purposes of Sections 7.1 and 7.2, “Major” loss or damage refers to the following: (a) loss or damage to the Property hereof such that the cost of repairing or restoring the premises in question to substantially the same condition which existed prior to the event of damage, in the opinion of an architect selected by Seller and reasonably approved by Purchaser, either (i) would be equal to or greater than Six Million and

 

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No/100 Dollars ($6,000,000.00), or (ii) could not reasonably be repaired or restored within ninety (90) days after the date of casualty, or (b) any loss due to a condemnation or threatened condemnation which could or will permanently and materially impair the current and intended use of the Property. If Purchaser does not give written notice to Seller of Purchaser’s reasons for disapproving an architect within five (5) business days after receipt of notice of the proposed architect, Purchaser shall be deemed to have approved the architect selected by Seller.

 

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