P13-Casualty

                        
Objective Form

13.1  Upon, and within _______ days following any partial or
total casualty destruction of the Premises, SelYler shall deliver
to Buyer written notice thereof.  Thereupon, the Premises shall
be inspected by a certified or registered engineer, agreeable to
both parties, who shall, within _______ days of such destruction,
render an opinion as to the cost of restoration of the Premises
to its condition prior to the destruction.

13.2  If such opinion as to the cost of restoration is under      
$________ this following provision (13.2) shall apply, and
transaction shall close within _______ days after the closing
date set forth in this agreement and Seller shall assign to Buyer
the proceeds of any insurance policies regarding the destruction.
All restoration work to the Premises, if any, begun prior to
closing shall be made by the Seller but only with the Buyer's
prior approval of restoration plans, contractors and the work to


be performed.  If, by the date of closing, the aforestated
engineer has not certified that the restoration is complete and
if the proceeds of insurance (to which the insurer has then
commited) remaining are insufficient to complete the restoration
then, at closing, the amount of such insufficiency shall be
retained in escrow by the escrowee and, to the extent required,
paid by the escrowee for completion of such restoration.  In no
event shall the amount of such insufficiency be greater than the
amount of the engineer's opinion of restoration cost.  Any funds
remaining in escrow following completion of such restoration,
shall be returned to the Seller.

13.3  If such opinion as to the cost of restoration is $_________
or more the following provision shall apply.  Within _______ days
of the destruction, Buyer shall notify Sseller of its election
whether to (i) terminate the transaction and have returned to it
all funds theretofore paid or deposited or (ii) complete the
transaction and have assigned to it all proceeds of insurance
carried by Seller upon the premises.  Such assignment of
insurance proceeds shall constitute full performance by Seller.


13.4  The parties agree that all negotiations with any insurance
carrier, both before and after closing, with respect to all
rights and proceeds related to the Premises, will be conducted
jointly by and with full cooperation of the parties.  Seller
agrees that as of the date hereof it is the named insured on an
insurance policy covering standard and extended casualty risks in
an amount of at least $_________ of casualty destruction with    
__________________________ insurance company; a true copy of
which policy has been tendered to Buyer.

13.5  Notwithstanding any of the foregoing, the Seller shall
remain fully liable for all damage to the persons and property of
others (including tenants on the premises) arising from all
causes whatsoever (other than the negligence or intentionally
tortious conduct of Buyer, its agents, employees and contractors)
and shall indemnify, defend and hold Buyer harmless of and from
all damages, liabilities and costs (including reasonable attorney
fees) arising out of any such damage or claimed damage to persons
or property.



Comments
    Where improved premises are damaged by fire or other casualty
prior to closing, the Buyer will obviously not wish to pay the
full purchase price unless those improvements were otherwise
unsuitable for its uses.  As between Buyer and Seller the issues
of risk regarding casualty destruction are:
         (i)  Should the Buyer be able to terminate and have its
              deposit returned?
        (ii)  Should the Buyer or Seller have the duty of repair 
              or risk of loss?
       (iii)  How much insurance, if any, should the Seller
              carry, which proceeds may be used to restore the
              destruction?
        (iv)  If insurance is insufficient, which party should
              be at risk for the insufficiency?

Objective Form
    The objective form recognizes the difference in position
between Buyer and Seller where casualty damage is small as
opposed to substantial.  GenerallyY, the form compels the Seller


to accept the risk of loss prior to closing and to insure against
it.  Where, however, due to the uncooperativeness of the insurer
or the inadequacy of coverage, the funds for restoration are
unavailable, the Seller guarantees payment for repairs up to a
predetermined amount.  The Seller knows, in advance, the extent
of its potential risk.   At the same time, the Buyer is not
relieved of its obligation to close.  Where the damage, however,
exceeds a predetermined level the Buyer is not obligated to
close.  If it does close, however, it does so with the under or
uninsured portion of the insurance claim at its risk.

Alternatives
    The ultimate position for the Buyer is to have, at its sole
option, either the unrestricted right to terminate the
transaction in the event of casualty or to compel the Seller to
fund the restoration of the premises to its former condition,
regardless of the amount of destruction or the adequacy of the
insurance settlement.
         "The risk of loss, damage to or destruction of im-
         provements on the Premises shall rest with Seller until


         the closing.  In the event of loss, damage to or de-
         struction of any improvements on the Premises between
         the date hereof and the closing, Buyer, at Buyer's 
         option, may: (i) terminate this agreement and
         receive back all money paid to Seller or  (ii)
         proceed with the closing and the purchase price
         stated above shall be reduced by the cost of
         repairing, restoring or replacing such loss, damage
         or destruction.  Seller shall, thereupon, be
         entitled to all insurance proceeds paid on account
         of such casualty destruction.
    The ultimate position for the Seller is to have the risk of
loss upon the Buyer.
              "The risk of loss, damage to or destruction of the
              improvements shall rest with the Buyer until and 
              after closing.  In the event of such loss, damage
              or destruction, this transaction may not be ter-
              minated and shall proceed the closing.  Buyer shall
              insure the premises to the extent desired and shall
              look only to itself and to such insurance proceeds


              in order to restore the premises.  Seller shall not
              be responsible and no credit or allowance in the
              purchase price shall be made in favor of Buyer for
              any insufficiency in the proceeds of Buyer's insur-
              ance coverage."
    Obviously, the situations in which the foregoing provision is
found occur mainly when the Buyer has effective control and/or
possession of the premises prior to closing.  In such situations
it is more common for the Seller, rather than shifting the
entire risk of loss to the Buyer, to simply limit its own
responsibility for loss where the casualty is the result of the
Buyer's actions or negligent omissions.  That may be accomplished
by the addition of the following proviso to the "Buyer's format."
         "Where, however, the destruction or loss is the
         proximate result of the acts or negligent omissions of
         the Buyer, its employees, agents, and contractors,
         buyer shall proceed to closing and Seller shall assign
         the proceeds of any applicable insurance policy to the
         Buyer.  Buyer, in such event, shall look only to itself,
         the proceeds of such policies and its own insurance


         coverage, if any, for any insufficiency in the proceeds
         of Seller's insurance coverage."
    Even where the risk of loss is generally upon the Buyer it
may be cost effective to allow the Seller's insurance coverage to
remain in effect, either naming Buyer an additional insured or by
assigning proceeds.
         "The risk of loss, damage to or destruction of the
         improvements shall rest with Buyer until and after
         closing.  In the event of such lYoss, damage or de-
         struction this transaction may not be terminated and
         shall proceed to closing.  Seller (shall assign the pro-
         ceeds of any applicable insurance coverage to Buyer) 
         (shall, at Buyer's expense, amend its policy of insur-
         ance, naming Buyer as an additional insured.)  Seller
         shall not be responsible and no credit or allowance in
         the purchase price shall be made in favor of Buyer for
         any insufficiency in the proceeds of such insurance coverage."
    Where the mortgage on the premises or a lease by a Tenant
disallows Seller from assigning insurance proceeds or naming
Buyer an additional insured, the following proviso may be added:


         "If a holder of a mortgage on said premises shall not
         permit the insurance proceeds, or a part thereof, to
         be used to restore the premises or to be so paid over
         or assigned to Buyer, Seller shall give Buyer a credit
         against the purchase price, at closing, equal to the
         amounts so recovered or recoverable and retained by the
         holder of said mortgage, less any amounts reasonably
         expended by the Seller for partial restoration."