P15-Financing Contingency

                        
Objective Form:

15.1  Buyer's obligation to close the purchase of the premises is
expressly conditioned upon its obtaining financing for the
purchase of the premises upon the following terms and conditions:
         (a)  The total amount to be financed shall be no more
              than (______% of the purchase price) $__________.
         (b)  The interest rate shall be at a quoted rate no 
              greater than ________% per annum at the inception
              of the loan and which may (may not) increase over
              the term of the loan by no more than ________%.
         (c)  Financing or closing points shall not exceed ___%.
         (d)  The term of the loan shall not exceed _____ years.
         (e)  The loan may (may not) be secured by a mortgage on
              the premises upon such reasonable terms and condi-
              tions as are acceptable to Buyer.




15.2  If, within ______ days of the date hereof, Buyer fails to
deliver notice to Seller of its inability to obtain such
financing, then this contingency shall be considered waived and
the transaction shall proceed to closing.
    If such notice is delivered to Seller within the time set
forth above, then this agreement shall be rendered null and void
and all sums paid or deposited by Buyer shall be returned to
Buyer.

15.3  Buyer agrees to use its best efforts to obtain such
financing.

15.4  The contingency period set forth above may not be extended
except by express written consent of the Seller.

Comments:
    The objective format compels the Buyer to, in advance, commit
to the financing terms which are agreeable.  Thus, the Seller is
assured that so long as such terms are objectively reasonable,
the Buyer must complete the purchase if it is able to obtain such


terms.  This form also places the burden upon the Buyer to notify
the Seller of its inability to obtain such financing and
eliminates the situation where the contigency period has expired
and the Seller is unaware of whether the Buyer has obtained the
loan.

Alternatives
    Obviously, the terms and conditions of financing upon which
the sale is contingent are many and varied, particularly in
recent years where participations, variable rates and other even
more elaborate financing vehicles are commonly found.  Most
often, in such situations, the Buyer and Seller are unable to
predetermine those terms which are acceptable.  In such event the
form may be changed as follows:
         "Buyer's obligation to close the purchase of the
         premises is expressly conditioned upon its obtaining
         a loan, not to exceed ________% of the purchase price,
         upon such other terms and conditions as are acceptable
         to Buyer."



    Such a provision may be prone to abuse where the Buyer is
looking for a reason to back away from the deal. The obligation
in #3 to use its "best efforts to obtain financing is a
constraint on a recalcitrant Buyer, but a Seller may further
limit its exposure to such abuse by inserting the word
"reasonably" as follows:
                                 or
         "...upon such other terms and conditions as are not
         unreasonable in regard to the financing terms and con-
         ditions available for transactions of this nature in
         the relevant area during the contingency period."
    Following is an example of a financing contingency clause
where the Buyer is obtaining Revenue Bond Financing:
         "The obligations of the Buyer under this agreement are
         expressly contingent upon the Buyer's receipt of a bind-
         ing commitment for industrial revenue bond financing in
         the amount of at least _______% of the purchase price at
       Y  an interest rate not to exceed _______% per annum for
         the premises from the ____________________ Development
         Authority and a lending institution.  Buyer shall deliver


         notice of such commitment to the Seller within three
         days after the Authority's adoption of a resolution 
	 to that effect or the Buyer's receipt of other
         evidence of a binding commitment for such financing.
         The Buyer agrees to file promptly and prosecute dili-
         gently an aplication for such financing with the
         Authority and with an appropriate lending institution.
         If the Authority fails to adopt the resolution or
         otherwise fails to issue a commitment or if the
         lending institution denies the Buyer's application
         for financing prior to _________________, the Buyer
         at its option may elect to terminate this Agreement
         upon notice to the Seller, in which event the sum
         paid or deposited shall be returned to the Buyer and
         both the Seller and the Buyer shall be released from
         any further liability under this Agreement.  In the
         absence of Seller's receipt of such notice by __________
         this Agreement shall remain in full force and effect.




         The Buyer agrees that the time limits set forth above
         shall not be extended because of circumstances beyond
         its control unless the Seller also agrees in writing."
    Finally, where the Buyer is unable or unwilling to precommit
itself to the financing terms which may be acceptable and the
Seller is unwilling to rely on the Buyer's good faith, an
alternative is to have at risk an amount of money in the event
the contingency fails.  This may be easily be done by use of an
option or, alternatively, the following provision may be used:
         "Buyer's obligation to close the purchase of the
         premises is expressly conditioned upon its obtaining a
         loan, not to exceed ________% of the purchase price,
         upon such terms and conditions as are acceptable to
         Buyer.  If however, Buyer fails to obtain such financing
         and terminates this agreement, then $__________ of its
         deposit will be retained by Seller as payment for the
         costs of keeping the property off of the market during
         the contingency period."