Exhibit
2.2
REAL ESTATE PURCHASE AND SALE
AGREEMENT
No.
510-2.05-0070-B
(WITH EARNEST MONEY
PROVISION)
Soterra Florida
Timberlands
THIS
REAL ESTATE PURCHASE AND SALE AGREEMENT (“Agreement”)
is made and entered into this 28th day of March, 2005, by and
between Soterra LLC, a Delaware limited liability company, whose
street address is 439A Katherine Drive, Flowood, Mississippi 39232,
and whose mailing address is Post Office Box 18, Jackson, MS 39205
(hereinafter collectively “Seller”), and Plum Creek
Timberlands, L.P., a Delaware limited partnership whose address is
999 Third Avenue, Suite 4300, Seattle, Washington 98104
(“Purchaser”).
The
parties agree to the following terms and conditions:
1.
Timberlands and Other Property to be Acquired .
1.1
Description of Assets. In consideration of the mutual
covenants set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are
acknowledged, and subject to all terms of this Agreement, Seller
agrees to sell and convey to the Purchaser and the Purchaser agrees
to purchase from the Seller and take title to the
following:
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(a)
Real Property . That certain real property situated in
Holmes, Gadsden, Jackson, Calhoun and Liberty Counties, State of
Florida, as shown on Exhibit “A-1, A-2, A-3,
A-4” and incorporated herein by this reference as
though fully set forth, being a portion of the Florida Timberlands
of Seller (the “Property”), including Seller’s
rights, privileges, advantages, and appurtenances thereunto
belonging or in any way appertaining thereto, but only to the
extent belonging or appertaining to the Property, including but not
limited to all of Seller’s right, title, and interest (i) in
and to the reproduction, merchantable, pre-merchantable and
unmerchantable timber, growing, lying, standing or felled, timber
interests and timber rights located on or appurtenant to the
Property; (ii) in and to any mineral, sand, oil, gas, hydrocarbon
substances and gravel and other rights on and under the Property
which have not previously been reserved, severed or conveyed by
Seller or Seller’s predecessors in interest; and (iii) all
rights of Seller in and to any development rights, air rights,
water, water rights, ditch and ditch rights appurtenant to the
Property but subject to the exceptions and reservations described
in this Agreement.
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(b)
Contracts . All contracts relating to the operation of the
Property, including without limitation operating contracts,
stumpage contracts, leases, permits, licenses, governmental
consents and agreements, approvals and clearances, agreements for
construction of roads or other improvements, rights under any
payment, performance, or bonds relating to or associated with the
Property, to the extent assignable (hereinafter, the
“Contracts”). A schedule of timber cutting contracts
that were “open contracts” as of July 2, 2004 and
thereafter including deeds conveying real property, other than
easements and rights of way, since July 2, 2004 is attached as
Schedule 1.1(b ) and incorporated herein by this
reference as though fully set forth (the “Timber Cutting
Contracts”).
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(c)
Access Rights and Easements . All rights of Seller in and to
any access rights, rights-of-way and easements appurtenant to the
Property, to the extent assignable (hereinafter, “Access
Rights and Easements”).
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(d)
Personal Property . Seller’s maps, property books,
aerial photos, plans, drawings, specifications, renderings,
engineering studies, biological studies particular to the Property,
grading or drainage studies, environmental and hazardous waste
studies and reports and related data and materials in
Seller’s possession relating to the Property, furniture or
office equipment (other than electronic equipment including, but
not limited to, televisions, refrigerators and computers, which
shall remain property of the Seller, but Seller shall remove said
property from the Buildings prior to the closing of parcel A-4)
located within the Buildings, other personal property and equipment
used by Seller in its Florida operations, and timber inventory, GIS
and IFMS data with respect to the Property (not including
proprietary software) and one (1) truck selected by Seller
(“Personal Property”). Purchaser agrees to make all
forest management (silvicultural) records available to Seller upon
Seller’s request and to not destroy the same for five (5)
years from the date of the Closing without the prior written
permission of Seller.
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(e)
Buildings . The buildings located at 4962 Old Spanish Trail,
Marianna, Florida, 32448, being the location of Seller’s
Florida Timberlands operations (hereinafter, the
“Buildings”).
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1.2
Assets. The Property, Contracts, Access Rights and
Easements, Personal Property and Buildings are sometimes
collectively referred to as the “Assets.” Before
Closing, Seller and Purchaser shall agree upon an allocation of the
Purchase Price among the Assets (land, timber, and personal
property) and shall utilize the agreed upon allocation for all
income tax purposes for this transaction.
2.
Purchase Price .
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(a)
The purchase price for the Assets is Thirty Eight Million Nine
Hundred Fifty-Three Thousand Fifty-Five Dollars ($38,953,055)
(“Total Purchase Price”). The Total Purchase Price is
subject to adjustment pursuant to Paragraphs 5(b), 5(d), 6(d), 6(f)
and 10 hereof. The Assets may be purchased in more than one phase
(each, a “Closing”) and will consist of sales of four
(4) tracts, with a specified value for each tract being the
purchase price (“Purchase Price”) for that tract, (as
mentioned above and legally described on Exhibit “A-1, A-2,
A-3, A-4” attached). The Purchase Price shall be payable in
immediately available funds on the Closing Date for the sale and
the acquisition of the Assets as follows:
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(i)
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Each Closing
will consist of Assets valued according to Schedule
5(b).
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(ii)
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CASH
TRANSACTION. Purchaser shall wire transfer the funds consistent
with the Escrow Instructions.
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(iii)
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NOTICE OF
CLOSING. Closings on each of the four (4) tracts are scheduled to
occur on the following dates (unless accelerated as provided
herein): November 15, 2005, February 15, 2006, May 15, 2006, and
August 16, 2006 (respectively, the “Closing Dates”).
Seller has the right, in its sole discretion, to accelerate one or
more of the Closing Dates and advance a Closing Date by providing
Purchaser with a written Notice of Closing, at least sixty (60)
days prior to said Closing. Seller’s Notice of Closing shall
be sent to Purchaser, with a copy to the Escrow Agent,
substantially in the form attached as Exhibit B . The
four (4) tracts, described on Exhibit “A-1, A-2, A-3, A-4",
will be closed in the order indicated on the Exhibit. The foregoing
notwithstanding, parties may mutually agree to hold a Closing on an
agreed upon date prior to any initially scheduled Closing Date.
While Closings on the four (4) tracts may take place before the
scheduled Closing Date, all Closings shall occur on or before
August 16, 2006 unless otherwise mutually agreed.
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3.
Earnest Money Receipt . Purchaser hereby deposits with the
escrow described in Paragraph 4 herein, the amount of Seven Hundred
Seventy-Nine Thousand Sixty-One Dollars ($779,061.00), in cash,
paid or delivered as earnest money (together with any interest
earned thereon, the “Earnest Money”), being 2% of the
Purchase Price. One-Fourth (1/4) of the Earnest Money shall be
applied at each Closing (described below).
4.
Time and Place of Phased Closings; Escrow .
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(a)
Upon mutual execution, the parties shall deposit a copy of this
Agreement, and such other documents and monies, including Earnest
Money, as are required hereby into escrow established with Stewart
Title Guaranty Company, 1000 Second Avenue, Suite 1620, Seattle,
Washington 98104 (the “Escrow Agent”) pursuant to an
escrow agreement (“Escrow Agreement”) attached as
Exhibit B-1 . At each Closing of each of the 4
tracts, the Earnest Money (prorated as described in Section 3)
shall be returned to Purchaser.
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(b)
The Closings shall occur on November 15, 2005, February 15, 2006,
May 15, 2006 and August 16, 2006, with Seller having the right, in
its sole discretion, to accelerate a Closing and advance a Closing
Date by providing Purchaser with a written Notice of Closing, at
least sixty (60) days prior to said Closing, indicating
Seller’s intention to advance a particular Closing. Each
Closing shall take place at the offices of the Escrow Agent.
Closing shall mean the point at which all executed documentation
and monies required to close the transaction have been delivered to
escrow, including signed escrow instructions.
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5.
Condition of Title and Title Insurance .
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(a)
As of the Closing Date, title to the Property is to be free of all
encumbrances or defects except those listed in the preliminary
commitments for title insurance acceptable to Purchaser as
described herein.
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(b)
Seller shall provide one set of global title commitments issued by
Stewart Title Guaranty Company to the Property (A-1, A-2, A-3, and
A-4) to Purchaser at Seller’s expense within 60 days of
execution of this Agreement. Seller shall provide Purchaser with
one updated title commitment at Seller’s expense, which shall
accompany Seller’s Notice of Closing. Purchaser shall pay any
fees to update title from the date of the updated title
commitments. Seller and Purchaser shall each pay one-half of the
title insurance premiums for a standard owner’s title
insurance policy. Should Purchaser acquire an extended
Owner’s or Lender’s policy of title insurance,
Purchaser must acquire these title insurance policies from Stewart
Title Guaranty Company or if Purchaser elects to decline title
insurance or to acquire title insurance from another company other
than Stewart, Purchaser agrees to reimburse Seller all fees and
expenses incurred by Seller in providing the title commitments
including but not limited to search and exam fees, commitment fees
and cancellation fees. Purchaser shall have until close of business
on the thirtieth (30th) day after Purchaser’s receipt of the
global title commitments and copies of substantially all of the
exception documents referenced therein to notify Seller in writing
of any objections Purchaser has to any matters shown or referred to
in the title commitments. As to any updated title commitments,
Purchaser shall have until close of business on the thirtieth (30
th ) day after Purchaser’s receipt of the updated
title commitments and copies of substantially all of the updated
exception documents referenced therein to notify Seller in writing
of any objections Purchaser has to any new matters and/or changes
shown or referred to in the updated title commitments that were not
reflected on the global title commitment. Purchaser shall have
until the close of business on the tenth (10 th ) day
after Purchaser’s receipt of any missing exception documents
to notify Seller in writing of any objections Purchaser has to
those updated documents. Monetary encumbrances to be discharged by
Seller shall be paid from Seller’s funds at the Closing and
shall not be subject to the “Floor” as hereinafter
described. Purchaser shall not object to and shall accept the
following matters which shall be deemed to be permitted
exceptions:
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(i)
liens for taxes,
assessments and other governmental charges which are not yet due
and payable as of the Closing;
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(ii)
all land use (including
but not limited to forestry, environmental and wetlands), building
and zoning laws, regulations, codes and ordinances affecting the
Property;
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(iii)
any rights of the United
States of America, the State in which the Property is located or
others in the use and continuous flow of any brooks, streams or
other natural water courses or water bodies within, crossing or
abutting the Property, or title to the submerged lands including,
without limitation, riparian rights and navigational
servitudes;
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(iv)
title to that portion of
the Property, if any, lying below the mean high water mark of
abutting tidal waters;
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(v)
all easements,
rights-of-way, licenses and other such similar encumbrances
apparent or of record;
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(vi)
all existing public and
private roads and streets and all railroad and utility lines,
pipelines, service lines and facilities;
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(vii)
all encroachments,
overlaps, boundary line disputes, shortages in area, persons in
possession, cemeteries and burial grounds and other matters not of
record which would be disclosed by an accurate survey of the
Property;
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(viii)
prior reservations or
conveyances of mineral rights or mineral leases of every kind and
character; and
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(ix)
any loss or claim due to
lack of access to any portion of the Property, provided that lack
of access does not affect more than ten percent (10%) of the acres
of the Property with lack of access being limited to tracts or
parcels identified by Purchaser where the Seller has neither legal
access nor permissive access (although unrecorded).. Seller shall
on or before the delivery of the title commitments furnish
Purchaser information to Seller’s knowledge on all tracts
lacking legal access identifying the tract, any recorded easements
or rights-of-way, any unrecorded written or verbal consents to
access the tract and whether or not access has been refused
attaching a map for each tract identified by Seller.
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Furthermore, any title
encumbrances or exceptions that are set forth in the title
commitment to which Purchaser does not object during the Title
Review Period (as may be extended with respect to missing documents
as described above) shall be deemed to be permitted exceptions to
the status of Seller’s title (together with the items listed
above shall be the “Permitted Exceptions”). With regard
to items to which Purchaser does object in writing within the
period specified, Seller shall attempt to cure and remove such
items. If Seller is unable or fails to cure or remove such items
within ten (10) business days of Seller’s receipt of
Purchaser’s written objections, Purchaser may either: (i)
waive its objection and proceed with closing of the affected tract
or parcel; or, (ii) give Seller notice to delete the affected tract
or parcel and adjust the Purchase Price as set forth herein. Any
notice to Seller shall be in writing and shall be given no later
than five (5) business days after expiration of Seller’s
10-day cure period. If Purchaser fails to give such notice to
Seller within the time specified, the objection(s) shall be deemed
waived by the Purchaser. The value of any adjustment to the
Purchase Price will be determined by a computation of the number of
acres utilizing the specific values reflected on the chart attached
hereto as Schedule 5 (b) and incorporated herein by
this reference as though fully set forth. Any such excluded acreage
shall be aggregated with such surrounding acreage not to exceed
forty (40) acres unless the excluded tract exceeds forty (40) acres
or Seller establishes that a larger tract is reasonably necessary
to create an economically marketable parcel, as reasonably
determined by Seller and Purchaser. In the event Seller and
Purchaser are unable to agree upon the specific acreage to be
excluded, the parties agree to resolve the dispute through
arbitration with Larson & McGowan, Inc. making a final
determination as sole arbitrator, to which the parties agree to be
bound. The parties shall close as scheduled on the transaction
contemplated by this Agreement, adjusting the purchase price by the
disputed amount, escrowing the disputed amount and close on the
disputed amount and Property upon the conclusion of arbitration
(the “Arbitration Process”). In the event of any such
carve-outs, Seller shall reserve or Purchaser shall grant such
rights for ingress, egress and utilities as may be required to
access such parcel. For the purposes of all adjustments to Purchase
Price arising out of title claims or defects and environmental
claims or defects, Purchaser shall not be entitled to request and
obtain an adjustment to the Purchase Price until the claims, or
defects, arising from title and environmental claims or defects
individually or collectively could lessen the value of the Assets
by, or cause damage of, at least six/tenths of onepercent (0.6%) of
the Purchase Price of each tract (the “Floor”). If
title or environmental claims individually or in the aggregate do
not exceed the Floor, there shall be no adjustment to the Purchase
Price. If title or environmental claims exceed the Floor, the
Purchase Price shall be adjusted for title and environmental claims
by reducing the Purchase Price by the amount of the claims above
the Floor subject to the Ceiling for claims of ten percent (10%) of
the Purchase Price of each tract (“Title and Environmental
Claim Ceiling”). If the total title and environmental claims
exceed the Claim Ceiling, either Seller or Purchaser may terminate
this Agreement, the Earnest Money shall be returned to Purchaser
with neither Seller nor Purchaser having any further liability to
each other.
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(c)
Seller has provided Purchaser with copies of all encumbrances not
of record that affect the Property that Seller anticipates would
survive each Closing (the “Temporary Encumbrances”).
Purchaser agrees to accept the Temporary Encumbrances provided the
Temporary Encumbrances are of the type and nature customarily
accepted by a purchaser in a large timberland transaction. At
Closing, Seller shall assign and Purchaser shall assume
Seller’s rights, duties, obligations and liabilities under
the Temporary Encumbrances accepted by Purchaser pursuant to an
Assignment and Assumption Agreement substantially in the form
attached hereto as Exhibit C . Any income from the
Temporary Encumbrances shall be pro-rated to the Date of Closing.
Notices of the assignment shall be executed by Seller and Purchaser
at Closing and mailed to the third party benefiting from the
Temporary Encumbrances.
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(d)
Purchaser and Seller agree to amend this Agreement with formal
legal descriptions as Exhibit “A-1, A-2, A-3, A-4”
prior to Closing. During the Title Review Period, Purchaser has the
right to verify the maps attached hereto as Exhibit “A-1,
A-2, A-3, A-4” against the legal descriptions contained in
the title commitments and the acres contained within the Timber
Inventory. In the event of discrepancies causing Purchaser to
believe acres depicted as owned by Seller on the maps are not
included within deed acres from the legal descriptions
(“Missing Acres”), then Purchaser shall have the right
to treat the Missing Acres as a title claim for the applicable
tract pursuant to the procedures and subject to the limitations set
forth in the immediately preceding paragraph, provided
however, Seller shall have the right to offset any title claim
of Missing Acres by any additional acres Seller believes are
included in deed acres from the legal descriptions that are not
depicted on the maps for the applicable tract (“Additional
Acres”). In the event the total Additional Acres exceed
six/tenths of onepercent (0.6%) of the Purchase Price (“the
Floor”), then the Purchase Price shall be adjusted upward for
amount of the Additional acreage above the Floor pursuant to the
prices set forth on Schedule 5(b) . If Additional
Acreage does not exceed the Floor, there shall be no adjustment to
the Purchase Price.
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(e)
At each Closing, the Seller shall execute and deliver to Purchaser
a Special Warranty Deed (the “Deed”) for each county in
which the Property is located, warranting title against the claims
of all persons claiming by, through or under Seller, but against
none other. All mineral rights shall be conveyed by quitclaim
rather than special warranty. The Deed shall be free of
encumbrances or defects except (i) such encumbrances or defects
that may attach after the applicable Closing Date through any
person other than the Seller, and (ii) the Permitted Exceptions.
The Deeds shall be in the form attached hereto as Composite
Exhibit D and incorporated herein by this reference as
though fully set forth and shall be delivered to Purchaser, or a
person or entity designated by Purchaser.
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6.
Inspection; Condition of Property; Subsequent Acts
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(a)
Subject to Seller’s representations and warranties set forth
herein and in the Deeds and Assignment and Assumption Agreement,
Purchaser accepts the Assets “as is” and “where
is,” subject to the risks of all defects and conditions.
Seller has no obligation to repair or make any improvements to the
Premises. The Purchaser acknowledges that full inspection of the
Property has been made or will have been made by the Closing Date
and that neither the Seller nor its agents, officers, employees or
assigns shall be held to any covenant respecting the condition of
the Property or any improvements thereon nor shall the Purchaser or
Seller or the assigns of either be held to any covenant or
agreement for alterations, improvements or repairs unless the
covenant or agreement relied on is contained herein or is in
writing and attached to and made a part of this Agreement.
Purchaser acknowledges and agrees that any documents, cruises,
compilations, timber inventories, environmental audits,
assessments, surveys, plans, specifications, reports and studies
(the “Information”) made available to Purchaser by
Seller are or have been provided as information only and Seller
makes no warranty whatsoever with respect to the accuracy or
completeness of the Information. Without limiting the generality of
the foregoing, SELLER EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OF
MERCHANTABILITY, AS WELL AS ANY WARRANTY WHATSOEVER WITH RESPECT TO
THE MARKETABILITY, HARVEST ABILITY, AGE, SPECIES MIX, SITE
CLASSIFICATION, BOUNDARIES OF THE TIMBER OR THE PROPERTY,
QUANTITIES, TIMBER GRDS, OR QUALITY OF ANY TIMBER ON THE PROPERTY
OR SOILS STABILITY OR CONDITIONS.
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(b)
Between the date of this Agreement and the Closing Date, the Seller
shall maintain and keep the Property in substantially the same
condition as existed on the date of this Agreement except Seller
shall have the right to cut timber pursuant to the Timber Cutting
Contracts and in accordance with Paragraph 6(f). Seller shall not
extend any Timber Cutting Contracts without the permission of
Purchaser. Further, Seller shall manage and maintain the Property
to a commercially reasonable standard and shall continue to conduct
silvicultural activities to a commercially reasonable standard,
subject to the provisions of this paragraph. The Seller shall not
and shall not allow others to remove or in any way permit the
removal of any timber, harvestable crops, improvements, or other
items from the Property other than as provided in the Timber
Cutting Contracts or as specifically agreed in writing by
Purchaser. Further, Seller may not encumber the Property without
the prior written consent of Purchaser, which consent cannot be
unreasonably withheld. Certain costs incurred by Seller may be
reimbursable at Closing as follows:
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(i)
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As site prep,
planting, herbicide treatment, or any other silvicultural activity
is planned to be performed on any portion of the Property prior to
Closing, Seller shall submit any plans for any site prep, planting,
herbicide treatment, or any other silvicultural activity to
Purchaser for prior approval, such approval to not be unreasonably
withheld. Seller must provide Purchaser at least ten (10) business
days’ notice of any such planned activity and its associated
costs to Purchaser. If Purchaser objects to such activity,
Purchaser must notify Seller in writing of the objection within
five (5) business days of receipt of the notice or Purchaser shall
be deemed to have approved the activity and Seller shall have the
right to undertake the planned activity. Seller shall pay for such
silvicultural activity conducted prior to Closing; provided,
however that Seller shall receive a credit at Closing for all costs
actually expended for reforestation and silvicultural activity that
has been approved by Purchaser.
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(ii)
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As capital
improvements (including without limitation road installation but
not ordinary repair and maintenance) are planned to be performed on
any portion of the Property prior to Closing, Seller shall submit
any plans for capital improvements to Purchaser for prior approval,
such approval to not be unreasonably withheld. Seller must provide
Purchaser at least ten (10) business days notice of any such
planned activity and its associated costs to Purchaser. The cost to
Purchaser shall be limited to the amount of the cost to be
amortized over the remaining beneficial life of the capital
improvement excluding the amortization amount for the current year
(the “Cost”). If Purchaser objects to such activity,
Purchaser must notify Seller in writing of the objection within
five (5) business days of receipt of the notice or Purchaser shall
be deemed to have approved the activity and Seller shall have the
right to undertake the planned activity. Seller shall pay for such
activity conducted prior to each Closing; provided, however, that
Seller shall receive a credit at Closing for the Cost of each
activity that has been approved by Purchaser excluding the
amortization amount for the current year.
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(c)
Seller is not aware of Seller being in possession of any
environmental audits, assessments or reports pertaining to the
Property.
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(d)
Purchaser, its agents and representatives, shall have the right,
from the date hereof until thirty (30) days from the date of this
Agreement to go on the Property and around and in the Buildings at
reasonable times to conduct an environmental audit and other land,
soil and engineering inspections, tests and feasibility studies
utilizing current ASTM standards (“Purchaser’s
Environmental Evaluation”). Seller agrees to cooperate with
Purchaser in the conduct of Purchaser’s Environmental
Evaluation. In the event the Purchaser’s Environmental
Evaluation reveals a commercially reasonable adverse environmental
condition (other than promiscuous dumps containing household refuse
and white goods of one-half acre or less for each dump site)
existing upon the Property, then Purchaser shall notify Seller in
writing of any such adverse environmental condition within ten (10)
days after the end of t
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