PCH » Topics » 2.8 Title Commitments and Title Insurance

These excerpts taken from the PCH 10-Q filed Oct 29, 2007.

2.8 Title Commitments and Title Insurance

(a) Seller has delivered to Buyer the commitments for ALTA owners standard coverage policies of title insurance described on attached Schedule 2.8(i) (the “Title Commitments”). The items listed on Schedule 2.8(ii) shall be “Permitted Exceptions”.

(b) If, after the date hereof and before the Closing, the Escrow Agent issues an updated title commitment (an “Update”) containing an exception to title not listed on a Title Commitment (an “Additional Exception”), then Buyer may, by notice to Seller no later than five (5) calendar days after receipt of the Update, advise Seller in writing of any Additional Exception reflected in such Update subject to which Buyer is unwilling to accept title (the ‘“Unacceptable Exceptions”). Failure of Buyer to provide such written notice within such five (5) calendar day period shall be deemed an election by Buyer to waive any Additional Exception disclosed in such Update and to accept title subject to the Additional Exception without any

 

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reduction in the Purchase Price for the Assets (in which case the Additional Exception will thereafter be a Permitted Exception). Within five (5) calendar days following Seller’s receipt of Buyer’s notice of Unacceptable Exceptions, if any, Seller shall advise Buyer in writing whether Seller intends to take action to correct such Unacceptable Exception, which corrective action may include, but is not limited to, taking steps to have the Unacceptable Exception removed or reducing the Purchase Price by an amount equal to the reduction in fair market value of the Assets resulting from the Unacceptable Exception. If Seller fails within such five (5) calendar day period to notify Buyer that Seller will cure the Unacceptable Exception (or following Seller’s timely notice, Seller fails to correct such Unacceptable Exception prior to the Closing Date), then Buyer shall have the option, as its sole remedy (except with respect to Unacceptable Exceptions created by Seller in violation of this Agreement) for the failure of Seller to eliminate any Unacceptable Exception, either to (i) accept title to the Real Property subject to such Unacceptable Exception (in which case the Unacceptable Exception will thereafter be a Permitted Exception) without any adjustment in the Purchase Price for the Assets, or (ii) eliminate the parcel or parcels of the Real Property affected by the Unacceptable Exception (each an “Affected Parcel”) from the transaction, in which event the Purchase Price shall be reduced by the fair market value of the Affected Parcel. Seller shall, in all events, be required to remove any Unacceptable Exceptions which are mortgages, deeds of trust, security interests or similar financial encumbrances created by Seller and any other Unacceptable Exceptions created by Seller in violation of this Agreement. If the parties are unable to agree upon the fair market value of the Affected Parcel, then value shall be determined pursuant to the procedure set forth in Section 10.3(c) of this Agreement.

(c) At the Closing, Seller shall furnish Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), to Buyer’s Affiliate), at Seller’s expense, an ALTA standard coverage policy of title insurance for the Real Property in the amount allocated to the Real Property under Section 2.7 containing no exceptions except Permitted Exceptions and the standard coverage form printed exceptions (the “Title Policy”). If Seller has not, by the Closing, acquired record title to the Omitted Parcel, the Title Policy issued at the Closing shall not include the Omitted Parcel, and following the Closing, upon Seller’s acquisition of title to the Omitted Parcel, Seller shall cause the Title Policy to be endorsed to add the Omitted Parcel.

(d) Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), Buyer’s Affiliate) may at its sole cost and expense obtain any endorsements to the Title Policy that are factually and legally available as it desires (“Additional Coverage”), so long as Buyer’s election to pursue Additional Coverage does not result in a delay of the Closing. Any additional expenses Buyer or Buyer’s Affiliate may elect to incur for surveys of the Real Property, extended coverage or Additional Coverage shall be borne solely by Buyer or Buyer’s Affiliate, as appropriate. Seller agrees to provide copies of any existing surveys of the Real Property to Buyer or Buyer’s Affiliate, as appropriate.

2.8 Title Commitments and Title Insurance

(a) Seller has delivered to Buyer the commitments for ALTA owners standard coverage policies of title insurance described on attached Schedule 2.8(i) (the “Title Commitments”). The items listed on Schedule 2.8(ii) shall be “Permitted Exceptions”.

 

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(b) If, after the date hereof and before the Closing, the Escrow Agent issues an updated title commitment (an “Update”) containing an exception to title not listed on a Title Commitment (an “Additional Exception”), then Buyer may, by notice to Seller no later than five (5) calendar days after receipt of the Update, advise Seller in writing of any Additional Exception reflected in such Update subject to which Buyer is unwilling to accept title (the ‘“Unacceptable Exceptions”). Failure of Buyer to provide such written notice within such five (5) calendar day period shall be deemed an election by Buyer to waive any Additional Exception disclosed in such Update and to accept title subject to the Additional Exception without any reduction in the Purchase Price for the Assets (in which case the Additional Exception will thereafter be a Permitted Exception). Within five (5) calendar days following Seller’s receipt of Buyer’s notice of Unacceptable Exceptions, if any, Seller shall advise Buyer in writing whether Seller intends to take action to correct such Unacceptable Exception, which corrective action may include, but is not limited to, taking steps to have the Unacceptable Exception removed or reducing the Purchase Price by an amount equal to the reduction in fair market value of the Assets resulting from the Unacceptable Exception. If Seller fails within such five (5) calendar day period to notify Buyer that Seller will cure the Unacceptable Exception (or following Seller’s timely notice, Seller fails to correct such Unacceptable Exception prior to the Closing Date), then Buyer shall have the option, as its sole remedy (except with respect to Unacceptable Exceptions created by Seller in violation of this Agreement) for the failure of Seller to eliminate any Unacceptable Exception, either to (i) accept title to the Real Property subject to such Unacceptable Exception (in which case the Unacceptable Exception will thereafter be a Permitted Exception) without any adjustment in the Purchase Price for the Assets, or (ii) eliminate the parcel or parcels of the Real Property affected by the Unacceptable Exception (each an “Affected Parcel”) from the transaction, in which event the Purchase Price shall be reduced by the fair market value of the Affected Parcel. Seller shall, in all events, be required to remove any Unacceptable Exceptions which are mortgages, deeds of trust, security interests or similar financial encumbrances created by Seller and any other Unacceptable Exceptions created by Seller in violation of this Agreement. If the parties are unable to agree upon the fair market value of the Affected Parcel, then value shall be determined pursuant to the procedure set forth in Section 10.3(c) of this Agreement.

(c) At the Closing, Seller shall furnish Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), to Buyer’s Affiliate), at Seller’s expense, an ALTA standard coverage policy of title insurance for the Real Property in the amount allocated to the Real Property under Section 2.7 containing no exceptions except Permitted Exceptions and the standard coverage form printed exceptions (the “Title Policy”).

(d) Buyer (or to the extent Buyer designates certain Assets pursuant to Section 2.6(e), Buyer’s Affiliate) may at its sole cost and expense obtain any endorsements to the Title Policy that are factually and legally available as it desires (“Additional Coverage”), so long as Buyer’s election to pursue Additional Coverage does not result in a delay of the Closing. Any additional expenses Buyer or Buyer’s Affiliate may elect to incur for surveys of the Real Property, extended coverage or Additional Coverage shall be borne solely by Buyer or Buyer’s Affiliate, as appropriate. Seller agrees to provide copies of any existing surveys of the Real Property to Buyer or Buyer’s Affiliate, as appropriate.

 

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EXCERPTS ON THIS PAGE:

10-Q (2 sections)
Oct 29, 2007
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