Material Casualty Clause Samples
The Material Casualty clause defines the rights and obligations of parties in the event that significant damage or destruction occurs to a property before the transaction is completed. Typically, this clause sets a threshold for what constitutes "material" damage—such as a percentage of the property's value or a specific dollar amount—and outlines the procedures to follow if such damage occurs, including the buyer's right to terminate the agreement or negotiate repairs. Its core practical function is to allocate risk between the parties and provide a clear process for addressing substantial property loss prior to closing, thereby preventing disputes and uncertainty.
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Material Casualty. If the amount of the repair restoration of the Property required by a Casualty equals or exceeds three percent (3%) of the Purchase Price (a “Material Casualty”) and such Material Casualty was not caused by Purchaser or Purchaser’s Inspectors, or their respective employees or agents, then Purchaser shall have the right to elect, by providing written notice to Seller within ten (10) days after Purchaser’s receipt of Seller’s written notice of such Material Casualty, to (a) terminate this Agreement, in which case the Deposit shall be refunded to Purchaser in accordance with Section 3.2.4, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination, or (b) proceed to Closing, without terminating this Agreement, in which case Seller shall (i) provide Purchaser with a credit against the Purchase Price in an amount equal to the lesser of: (A) the applicable insurance deductible, and (B) the reasonable estimated costs for the repair or restoration of the Property required by such Material Casualty, and (ii) transfer and assign to Purchaser all of Seller’s right, title and interest in and to all insurance proceeds (including, but not limited to, casualty, lost profits and business interruption proceeds) payable under Seller’s insurance policies maintained by Seller with respect to the Property and any Seller or its Affiliate-owned business(es) operating therein, except those proceeds allocable to lost profits and costs incurred by Seller for the period prior to the Closing. If Purchaser fails to provide written notice of its election to Seller within such time period, then Purchaser shall be deemed to have elected to proceed to Closing pursuant to clause (b) of the preceding sentence. If the Closing is scheduled to occur within Purchaser’s ten (10) day election period, the Closing Date shall be postponed until the date which is five (5) Business Days after the expiration of such ten (10) day election period.
Material Casualty. Within 60 days of a Material Casualty at any Property, Lessee shall have the option, but not the obligation, to either:
(i) deliver a rejectable offer to Lessor (a "Casualty Substitution Offer") to substitute a Substitute Property for the affected Property pursuant to the terms and conditions of Section 55 of this Lease; or
(ii) make a payment (a "Casualty Termination Payment") to Lessor to terminate this Lease with respect to the affected Property in an amount equal to the sum of (x) the Applicable Percentage for the affected Property multiplied by the aggregate Base Annual Rental and Additional Rental for the remaining Initial Term, and (y) the Prepayment Charge corresponding to the affected Property. All Casualty Termination Payments shall be made on a regularly scheduled Base Monthly Rental payment date upon no less than 30 days prior written notice from Lessee to Lessor. Lessor shall have 120 days from the delivery of a Casualty Substitution Offer satisfying the requirements of Section 55 to accept or reject that offer in its sole discretion. Lessor's failure to deliver notice of acceptance or rejection of the offer within such time period shall be deemed to constitute Lessor's acceptance of that Casualty Substitution Offer. If the Mortgage corresponding to the affected Property is still outstanding, any rejection of the Casualty Substitution Offer by Lessor shall not be effective unless it is consented to in writing by Lender and such written consent is delivered to Lessee within that 120-day period (Lender shall be deemed to have objected to Lessor's rejection of such Casualty Substitution Offer if Lender does not consent to or object to Lessor's rejection of such Casualty Substitution Offer within such 120-day period).
Material Casualty. The absence of any material damage by casualty to the Improvements which has not been repaired by the Closing Date. For the purposes hereof, a "material damage by casualty" shall be deemed any damage by fire or other casualty which has not been repaired and paid for by Seller by the Closing Date and for which the estimated cost of the remaining repairs equals or exceeds Two Million Dollars ($2,000,000). If the Improvements suffer any material damage by casualty, Purchaser shall have the right and option, as its sole remedy, to terminate this Agreement within ten (10) days after the date of the casualty or by the Closing, whichever first occurs (unless Seller restores the Property to its prior condition before the Closing Date). If the estimated cost to repair any damage by casualty as of the Closing Date is less than Two Million Dollars ($2,000,000), Purchaser shall not have the right to terminate this Agreement. If Purchaser does not elect timely to terminate this Agreement or does not have the right to terminate this Agreement, this transaction shall close without increase or decrease in the Purchase Price. Seller shall proceed to effect such repairs as are reasonably possible prior to Closing unless otherwise agreed to in writing by Purchaser, and Purchaser shall be entitled at Closing to an assignment of all insurance proceeds which are not used to pay the costs of such repairs or to pay Seller's reasonable out-of-pocket expenses in connection therewith (insurance proceeds received by Purchaser shall be remitted to Seller, as tenant under the New Lease (hereafter defined), for repair and reconstruction of the Property). No termination of this Agreement under this Section shall affect any Post Termination Obligations.
Material Casualty. Transferors shall notify Transferee in writing on the next business day, and in no event later than 24 hours, if, after the date of this Agreement and prior to the Closing, all or any part of a Pipeline and Terminal Asset is damaged or destroyed by fire or other casualty and such damage or destruction, individually or in the aggregate, constitutes a Material Damage or Condemnation. Transferee shall have the option, exercisable within ten days after receipt of such written notice from Transferors (but before Closing), to elect ▇▇▇▇▇ ENERGY PARTNERS, L.P. CONTRIBUTION AGREEMENT by written notice to Transferors to terminate this Agreement; provided, however, that such election by Transferee to terminate this Agreement shall not be effective if:
(i) such damaged or destroyed Pipeline and Terminal Asset can be repaired or replaced to the state in which such asset existed immediately preceding such damage or destruction within 120 days from the date of Transferors' receipt of Transferee's notice of termination; and
(ii) within ten days after Transferors' receipt of Transferee's notice of termination, Transferors give Transferee written notice of Transferors' election to repair or replace such damaged or destroyed Pipeline and Terminal Asset at Transferors' sole expense (including any insurance proceeds attributable thereto under insurance policies of Transferors or any of their respective affiliates). If Transferors elect to repair or replace such damaged Pipeline and Terminal Asset pursuant to the foregoing, Transferors shall be obligated to proceed in good faith to diligently repair or replace such damaged or destroyed Pipeline and Terminal Asset to the state in which such asset existed immediately preceding such damage or destruction and the Closing Date shall be extended until the third business day following the date on which Transferors and Transferee mutually agree that such damaged Pipeline and Terminal Asset has been so repaired or replaced, such mutual agreement not to be unreasonably withheld, conditioned or delayed; provided, however, this Agreement shall terminate, at Transferee's option, if such damaged asset is not so repaired or replaced by the earlier of (x) 120 days from the date of Transferor's receipt of Transferee's aforesaid notice of termination or (y) the Termination Date.
Material Casualty. In the event of any material casualty to the Project, Lessee shall promptly give written notice to Lessor thereof. Except as set forth herein, Lessee shall be responsible for the Restoration of the Leased Property and Lessee shall be entitled to the use of all available proceeds from any insurance for purposes of completing the Restoration. In such event this Agreement shall continue in full force and effect, without abatement, unless otherwise set forth below. If the proceeds from any casualty insurance are insufficient to complete the Restoration, Lessee shall fund any excess required to complete the Restoration except for funds attributed to Lessor Capital Improvements. Lessor shall provide Lessee with the funds necessary to fund any costs to complete the Restoration for Lessor Capital Improvements. Absent receipt of Lessor’s agreement to fund such excess amounts within 30 days, Lessee may elect to terminate this Lease upon notice to Lessor within 20 days after the expiration of the 30 day period.
Material Casualty. The absence of any material damage by casualty to the Improvements which has not been repaired by the Closing Date. For the purposes hereof, a "MATERIAL DAMAGE BY CASUALTY" shall be deemed any damage by fire or other casualty which has not been repaired and paid for by the Closing Date and for which the estimated cost of the remaining repairs exceeds Fifty Thousand Dollars ($50,000). If the Improvements suffer any material damage by casualty Purchaser shall have the right and option to terminate this Agreement within fifteen (15) days after the date Purchaser is notified of the casualty in writing or by the Closing Date, whichever first occurs. Seller shall also have the right to cancel this Agreement if such material damage by casualty is not covered by existing insurance policies held by Seller, unless Purchaser is willing to reduce the purchase price by the amount estimated to be necessary to pay the labor and material costs to restore the damage. If Purchaser does not elect to terminate this Agreement by the Closing Date as a result of any material casualty damage, this transaction shall close without increase or decrease in the purchase price, and Seller shall assign to Purchaser all insurance proceeds which are paid because of the casualty. If the estimated cost to repair any damage by casualty as of the Closing Date is less than Fifty Thousand Dollars ($50,000), Purchaser shall not have the right to terminate this Agreement because of such casualty and Seller shall assign to Purchaser all insurance proceeds that are paid because of the casualty, as stated above. All repair cost estimates referred to in this paragraph shall be made by reference to a fixed price construction contract which Seller shall obtain as promptly as is reasonably possible after the date of the casualty.
Material Casualty. In the event that prior to the Close of Escrow the Real Property, or any material portion thereof, is destroyed or materially damaged, and no tenant is obligated by the terms of its Lease to repair such damage or destruction, Buyer shall have the right, exercisable by giving written notice to Seller within ten (10) days after receipt of written notice of such damage or destruction, either (i) to terminate this Agreement in which event the Deposit and all interest accrued thereon shall be promptly returned to Buyer, any other money or documents in Escrow shall be returned to the party depositing the same, and the provisions of Section 4.4 shall apply, or (ii) to accept the Real Property in its then condition and to proceed with the consummation of the transaction contemplated by this Agreement, with an abatement or reduction in the Purchase Price in the amount of the deductible for the applicable insurance coverage, and to receive an assignment of all of Seller’s rights to any insurance proceeds payable by reason of such damage or destruction, other than rental abatement/rent loss insurance attributable to the period of time prior to the Closing which shall be retained by or paid to Seller, and only if and to the extent such deductible is not any Tenant’s responsibility under any Lease. If Buyer fails to deliver written notice to Seller of Buyer’s election within the time period specified in this Section 13.1, Buyer shall be deemed to have elected to proceed under clause (ii) above. If Buyer elects (or is deemed to have elected) to proceed under clause (ii) above, Seller shall not compromise, settle or adjust any claims to such proceeds without Buyer’s prior written consent.
Material Casualty. If the Assets or any portion thereof is damaged or destroyed by fire or any other casualty prior to Closing (a “Casualty”), Owner shall give written notice of such Casualty to Lender and Buyer promptly after the occurrence of such Casualty. If the amount of the repair, restoration or replacement required by a Casualty equals or exceeds Two Million Dollars United States Dollars (US$2,000,000) (a “Material Casualty”), then Buyer shall have the right, in its sole discretion, to (i) terminate this Agreement in which event MFG shall pay the balance of the Deposit then held by MFG to Buyer and, in the event of a termination of this Agreement occurring after the Additional Deposit Funding Date, HMF shall also release to MFG the original stamped Agreement duly marked “cancelled” together with the Original Transfer Tax Receipt so as to allow MFG to invoke the Unwind Procedure and upon recovery of the Stamp Duty and Tax Refund, the Stamp Duty and Tax Refund shall be paid to Buyer, less the Lender’s Deposit Refund Amount, if any, which MFG shall pay to Lender, and Lender, Owner and Buyer shall have no further rights or obligations under this Agreement, except those which expressly survive such termination, or (ii) proceed to Closing, without terminating this Agreement, in which case Owner shall (A) credit the amount of the applicable insurance deductible against the Purchase Price, and (B) transfer and assign to Buyer all of Owner’s right, title and interest in and to all proceeds from all casualty and lost profits insurance policies maintained by Owner with respect to the Assets affected by such Casualty, except those proceeds allocable to lost profits for the period prior to the Closing; provided, however, that until such time as Buyer receives written confirmation from the applicable insurer, reasonably satisfactory to Buyer, acknowledging the assignment of such claim and agreeing to acknowledge Buyer as the insured under such policies for purposes of such claim, Owner shall continue to use commercially reasonable efforts, but at no material cost to Owner, to pursue the insurance proceeds thereunder on behalf of Buyer. Buyer shall make an election under this Section 10.1 by giving written notice to Owner on or before twenty (20) days after Owner’s delivery to Buyer of written notice of such Casualty. If Buyer fails to make an election under this Section 10.1 within such twenty (20) day time period, Buyer shall be conclusively deemed to have elected to proceed to C...
Material Casualty. All risk of loss to the Property shall remain with Seller prior to Closing. If the Property is damaged by any casualty or other occurrence prior to the Closing, Seller shall promptly notify Buyer in writing (the “Casualty Notice”). The Casualty Notice shall include a description of the damage in reasonable detail, Seller’s estimate of the time and cost to repair the damage, and Seller’s good faith reasonable determination as to whether or not the casualty damage is covered by Seller’s insurance. If the Property is materially damaged prior to Closing and Seller is either unable or unwilling to restore the Property prior to Closing to substantially the same condition it was prior to the casualty, then at Buyer’s sole option, Buyer may (i) elect to terminate this Agreement by giving written notice of such election to Seller and the Title Company not later than the Closing Date, in which event all obligations of the parties hereunder shall terminate (other than those matters which expressly survive the early termination of this Agreement), and this Agreement shall otherwise have no further force and effect, or (ii) elect to take the Property as it then is, in which event the parties will proceed to Closing pursuant to the terms hereof without abatement of the Purchase Price. ▇▇▇▇▇’s failure to give timely notice to terminate this Agreement as provided above shall be deemed to be an election to proceed to close the transaction in accordance with the terms of this Agreement.
Material Casualty. If, prior to Closing, any part of the Subject Assets is damaged or destroyed by a Casualty and the amount of aggregate damage caused by one or more Casualties exceeds the Casualty Threshold, Seller shall promptly notify Buyer of such Casualty. Buyer will then have a right to terminate this Agreement by written notice to Seller. If Buyer does not elect to so terminate this Agreement, Buyer shall proceed to purchase the Subject Assets, and the Purchase Price shall be reduced by the repair cost or replacement cost, as applicable, of such damaged or destroyed Subject Assets. All repair and replacement costs shall be determined jointly by Seller and Buyer.
Section 12.5. Entire Agreement This Agreement (including the Confidentiality Agreement), the Transaction Agreements and the Appendices, Schedules, and Exhibits hereto contain the entire agreement between the parties with respect to the subject matter hereof and there are no agreements, understandings, representations, or warranties between the parties other than those set forth or referred to herein.
Section 12.6. Expenses Except as otherwise provided herein, all other costs and expenses incurred by each party hereto in connection with all things required to be done by it hereunder, including attorney’s fees, accountant fees and the expense of environmental and title examination, shall be borne by the party incurring such costs and expenses.