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Purchase_Sale Agmt w_ Arthur BerryPurchase and Sale Agreement COLLIERS PARAGON, LLC May l't . �e tl Date _ May, 2011 /1.- City of Meridian an Idaho Municipal Corporation, hereinafter called ("Buyer'), agrees to purchase and Doug Tamura and Arthur Berri, hereinafter called ("Seller"), agrees to sell the following described real estate, hereinafter referred to as ("Premises.") PREMISES ADDRESS AND LEGAL DESCRIPTION. The property commonly known as 1620 v E. Franklin Road, City of Meridian, County of Ada, State of Idaho, legally described as Ada County Tax Assessors Parcel Number: S1108336013 and as set forth in the attached Exhibit A (subject to Title Company's confirmation). Buyer and Seller authorize the Escrow Agent (as such term is defined in Section 5) to make corrections to the legal description at their request The failure to have a full or complete legal description shall not render this Agreement void. 3. REPRESENTATION CONFIRMATION. Colliers Paragon, LLC is representing the Buyer in this transaction. Check one (1) box in Section 1 below and one (1) box in Section 2 below to confirm that in this transaction, the brokerage(s) involved had the following relationship(s) with the BUYER(S) and SELLER(S). Section 1: A. 0 The broker working with the BUYER(S) is acting as an AGENT for the BUYER(S). B. ❑ The broker working with the BUYER(S) is acting as a LIMITED DUAL AGENT for the BUYER(S). C. ❑ The brokerage working with the BUYER(S) is acting as a LIMITED DUAL AGENT for the BUYER(S), and has an ASSIGNED AGENT acting solely on behalf of the BUYER(S). D. ❑ The broker working with the BUYER(S) is acting as a NONAGENT for the BUYER(S). Section 2: A. ❑ The broker working with the SELLER(S) is acting as an AGENT for the SELLER(S). B. ❑ The broker working with the SELLER(S) is acting as a LIMITED DUAL AGENT for the SELLER(S). C. ❑ The brokerage working with the SELLER(S) is acting as a LIMITED DUAL AGENT for the SELLER(S), and has an ASSIGNED AGENT acting solely on behalf of the SELLER(S) D. IT The broker working with the SELLER(S) is acting as a NONAGENT for the SELLER(S). Each party signing this document confirms that he or she has received read and understood the Agency Disclosure Brochure and has elected the relationship confirmed above. In addition, each party confirms that the broker's agency office policy was made available for inspection and review. EACH PARTY UNDERSTANDS THAT HE/SHE IS A "CUSTOMER" AND IS NOT REPRESENTED BY A BROKER UNLESS THERE IS A SIGNED WRITTEN AGREEMENT FOR AGENCY REPRESENTATION. 4. RESPONSIBLE BROKER. The Responsible Broker in this transaction is George Iliff, Designated Broker for Colliers Paragon LLC. EARNEST MONEY. (i) Within five (5) business days of the execution of this Agreement, Buyer shall deposit Ten Thousand Dollars and N0/100 ($10000.00) in the form of cash (the "Earnest Money Deposit") as earnest money with Title One Company (the "Title Company" and/or "Escrow Agent" as applicable). Subject only to the Buyer's Conditions Precedent set forth in Section 8 of this Agreement, and absent Seller's breach or inability to perform, the Earnest Money Deposit is non-refundable but such Earnest Money Deposit and the accumulated interest thereon shall be applied against the Purchase Price at closing and refunded to Buyer only in the event this Agreement is terminated as a result of the Seller's breach hereunder. In the event this Agreement is terminated after Buyer's Conditions Precedent have been waived or satisfied, or the sale fails to close, by reason of a breach by Buyer, The Earnest Money Deposit shall be paid to Seller. (ii) Earnest Money Deposit shall be deposited with the Escrow Agent upon acceptance by Seller and Buyer of this Agreement and shall be held in trust in accordance with the terms and conditions of this Agreement. 6. PRICE/TERMS. Total Purchase Price is l iOit_Hundred and 'Thirty "Thousand Dollars and NO 100 ($830,000.00). (i) $10,000.00 Earnest Money Deposit (ii) $820,000.00 Balance of the purchase price to be paid in cash at closing: 7. INCLUDED ITEMS. All easement rights, mineral rights, other appurtenances, water and water rights appurtenant to or used on the Premises including, but not limited to, any right Seller may have to receive natural flow and/or stored water delivered through any ditch, canal or water company's facilities, or under entitlements held by a third party for use on the Premises, and all shares, certificates, and other documents evidencing such water rights. 8. ADDITIONAL TERMS, CONDITIONS, AND CONTINGENCIES. Unless the parties otherwise agree in a written addendum to this Agreement, the date upon which all conditions and -2- contingencies must either be satisfied or waived shall be lim (30) days from the execution date of this Purchase and Sale Agreement (the "Satisfaction Date"), with the exception that such date may be extended pursuant to the procedure set forth in the addendum to this agreement under the title "Hazardous Substances." 8.1 BUYER CONDITIONS: The closing of this transaction is contingent upon satisfaction or waiver by Buyer of the following conditions: Inspection: Upon mutual execution of this Purchase Agreement Buyer shall be given full opportunity to inspect and investigate and to accept to Buyer's satisfaction, each and every aspect of the Property independently or through agent(s) of Buyer including, but without limitation with regard to: i. All matters relating to title together with all governmental and other legal requirements such as taxes, assessments, coning, environmental studies, use permit requirements and codes. ii. Buyer shall further be granted access to inspect the physical condition of the Premises and all matters relating to the internal and external maintenance of any improvements of the structures and/or grounds related to the Premises. 2. Financing: N/A If any of the foregoing conditions remain unsatisfied and unwaived by Buyer on the Satisfaction Date, this Agreement shall terminate, provided Buyer has given written notice of such unsatisfied and unwaived conditions with a reasonable opportunity to cure to Seller by the Satisfaction Date, and the Earnest Money shall be returned to Buyer. 9. TITLE COMPANY/ESCROW AGENT. The parties agree that the TITLE COMPANY/Escrow Agent as defined in Section 5 shall provide any required title policy and preliminary report or commitment. Each party agrees to pay one-half of the Escrow Agent's fees. 10. TITLE INSURANCE. Seller shall provide and pay for a Purchaser's Standard Coverage Title Policy insuring the Buyer for the amount of the purchase price. Extended coverage required X Yes _ No. Additional premiums for extended coverage and any survey required by the Title Company shall be paid by Buyer. Seller shall cause the Title Company to provide Buyer with a preliminary title report or commitment together with copies of all underlying documents giving rise to any exceptions listed therein on or within five (5) days of the execution of this Agreement. Buyer shall have until the Satisfaction Date to object, by written notice to Seller, to the condition of title as set forth in the report. In the event the Buyer makes written objection to any exception to tide, Seller shall have a reasonable time, not to exceed seven (2) business days, to remove any such objection to exception or provide affirmative title insurance coverage, and in the event the Seller cannot remove, or is unwilling to remove, such objected to exceptions or provide affirmative title insurance coverage, the Buyer may elect, as its sole remedy, to (a) either terminate this Agreement or (b) proceed to closing, taking title subject to such exceptions. If the Buyer does not object within the time frame set out above, the Buyer shall be deemed to have accepted the condition of the title. In the event Buyer elects to terminate this Agreement as provided herein, the Buyer shall be entitled to the return of all refundable deposits made by Buyer. The final title insurance policy shall be -3- delivered to the Buyer by the Title Company as soon as possible after closing. 11. CLOSING DATE. On or before "Closing" ("Closing" shall be deemed to be the date on which the deed is recorded and the sales proceeds are available for disbursement to Seller and as otherwise directed by the parties) Buyer and Seller shall deposit with the Escrow Agent all funds and instruments necessary to complete the sale. Closing shall occur no later than Five 5) days from the Satisfaction Date. 12. DOCUMENTS TO BE DELIVERED AT CLOSING. On the date of Closing, Seller shall have executed, or caused to be executed, and delivered to the Closing Agent the following documents, if required by Buyer, in a form reasonably acceptable to Buyer and Seller: (a) General Warranty Deed (b) An Assignment and assumption of all leases, warranties, contracts, and guarantees that effect the Premises in a form mutually agreed to between the parties (if applicable) (c) Bill of Sale (if applicable) (d) Other, such as Estoppels, SNDA's, Affidavits, Original Lease Documents, Etc. (if applicable) (e) Any other instruments or documents reasonably requested by Buyer 13. POSSESSION/PRORATION. Buyer shall be entitled to possession on the day of Closing. Taxes and water assessments (using the last available assessment as a basis), rents, insurance premiums, interest and reserves on obligations assumed and utilities shall be prorated as of Closing. Any tenant deposits held by Seller shall be credited to Buyer at Closing. 14. ACCEPTANCE. Buyer has engaged in preliminary negotiations with Seller regarding the terms and conditions to be contained in this Agreement and Buyer has presented this Agreement to Seller for execution pursuant to the procedure set forth in Section 29 of this Agreement. Seller's execution of this Agreement is subject to written revocation by Seller in the event that Buyer has not approved the terms and conditions of this agreement and authorized the Mayor of the City of Meridian to execute this agreement on or before 11 o'clock PM on the 17`s day of May, 2011. 15. DEFAULT. If Seller executes this Agreement and title to the Premises is marketable and insurable in the conditions approved under Section 10 hereof and all Buyer's contingencies have been removed or waived, and Buyer or refuses to comply with the terms of or any condition of sale by the date on which such term or condition is to be complied with, then the Earnest Money Deposit shall be forfeited to Seller and Buyer's interest in the Premises shall be immediately terminated. The parties declare it to be their intent that the payment of the earnest money deposited by Buyer shall be Seller's sole and exclusive remedy as liquidated damages. SELLER AND BUYER AGREE THAT IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX THE ACTUAL DAMAGES TO SELLER IN THE EVENT OF BUYER'S DEFAULT UNDER THIS AGREEMENT. THE PARTIES HEREBY AGREE THAT A REASONABLE ESTIMATE OF SUCH DAMAGES IS AN AMOUNT EQUAL TO THE EARNEST MONEY DEPOSITED BY BUYER WITH ESCROW HOLDER HEREUNDER, AND IN THE EVENT OF BUYER'S DEFAULT UNDER THIS AGREEMENT, SELLER SHALL BE ENTITLED TO RECEIVE AND RETAIN AS FULLY AGREED LIQUIDATED DAMAGES THE ENTIRE EARNEST MONEY DEPOSIT HELD BY ESCROW HOLDER HEREUNDER, ALL OTHER REMEDIES -4- HEREIN BEING EXPRESSLY WAIVED BY SELLER In the event of a default by Seller, Buyer may, at its option, (i) terminate this Agreement upon written notice to Seller and direct Escrow Holder to refund to Buyer all earnest money deposited by Buyer hereunder, or (ii) pursue the remedy of specific performance. In the event either party initiates or defends any legal action or proceeding connected with and not otherwise precluded by the terms of this Agreement, the prevailing party in any such action or proceeding (in addition to any other relief which may be granted, whether legal or equitable), shall be entitled to recover from the losing party in any such action or proceeding its reasonable costs and attorney's fees (including, without limitation, its reasonable costs and attorney's fees on any appeal). All such costs and attorney's fees shall be deemed to have accrued on commencement of any legal action or proceeding and shall be enforceable whether or not such legal action or proceeding is prosecuted to judgment. In the event of a dispute between the parties as to the Earnest Money Deposit deposited hereunder by Buyer, the Escrow Agent holding the Earnest Money Deposit may file an interpleader action in a court of competent jurisdiction to resolve any dispute between the parties. The Buyer and Seller authorize the Escrow Agent holding the Earnest Money Deposit to utilize as much of the Earnest Money Deposit as may be necessary to advance the costs and fees required for filing of any such action. The cost of such action shall be paid by the Party which is not the prevailing party. 16. TITLE CONVEYANCE. Title to the Premises is to be conveyed by warranty deed and is to be marketable and insurable except for rights reserved in federal patents, building or use restriction, building and zoning regulations and ordinances of any governmental unit, rights of way and easements established or of record, and any other liens, encumbrances or defects approved by Buyer. In the event any personal property is included as part of the contemplated sale, it shall be conveyed by bill of sale and shall be free and clear of all liens, claims and encumbrances. 17. RISK OF LOSS. Seller shall keep the Premises insured against loss by fire and other casualty usually insured against in the market area of the Premises until the Closing. Should the Premises be materially damaged by fire or other cause prior to closing and such damage is ten percent (101/0) of the Purchase Price or less, then Seller shall pay or assign the proceeds of the insurance to Buyer (and pay to Buyer the amount of any deductible in cash) at Closing and Seller and Buyer shall proceed with Closing without adjustment to the Purchase Price. If such damage exceeds ten percent (10%) of the Purchase Price, then this Agreement shall be voidable at the option of the Buyer by written notice to Seller within ten (10) days of the date Buyer receives notice of such damage, however, Buyer may elect to proceed with Closing without adjustment to the Purchase Price (either by written notice of such election or by failure to timely send written notice of the voiding of this Agreement as provided above) and Seller shall pay or assign the proceeds of the insurance to Buyer (and pay to Buyer the amount of any deductible in cash) at Closing. 18. CONDEMNATION. Should any entity having the power of condemnation decide prior to Closing to acquire any portion of, or interest in, the Premises with a value of ten percent (10%) or less of the Purchase Price, Seller shall pay or assign the proceeds of the taking to Buyer at Closing and Seller and Buyer shall proceed with Closing without adjustment to the Purchase Price. If such taking -S- exceeds ten percent (101/6) of the Purchase Price, Buyer at Buyer's sole option may either (a) elect to terminate Buyer's obligation to purchase the Premises by giving written notice to Seller at any time prior to Closing and Seller shall promptly return the Earnest Money Deposit or (b) elect to complete the purchase of Premises and require Seller to immediately appoint Buyer as its attorney-in-fact to negotiate with said condemning entity, and, in such event, Buyer shall receive all sums awarded in such condemnation proceeding of the Premises, excluding any amounts attributable to adverse impacts on other property owned by Seller. Seller hereby agrees to immediately give notice to Buyer of any condemnation or contemplated condemnation of the Premises and Buyer hereby agrees to, within ten days of such notice, give written notice to Seller of Buyer's election with respect thereto. 19. CONDITION OF PREMISES AT CLOSING. Buyer agrees to purchase the Premises in as is (existing) condition, where is, with all faults. Buyer will assume those obligations with respect to the Premises as are expressly stated in Section 8. Buyer does not agree to assume any other obligations with respect to the Premises except for those obligations stated in Section 8. Seller shall maintain the premises until the closing in its present condition, ordinary wear and tear excepted, subject to the provisions of Sections 17 and 18 on casualty and condemnation. 20. INSPECTION. The Buyer hereby acknowledges further that Buyer is not relying upon any statement or representations by the Broker or Broker's representatives or by the Seller which are not herein expressed. The Buyer has entered into this Agreement relying upon information and knowledge obtained or to be obtained from Buyer's own investigation or personal inspection of the Premises. 21. ADDITIONAL PROVISIONS. Additional provisions of this Agreement are attached hereto by an addendum consisting of 3 pages under the heading "Hazardous Substances." 22. COMMISSION. Pursuant to a separate agreement between Seller and Colliers Paragon, LLC. 23. CONSENT TO LIMITED DUAL REPRESENTATION: The undersigned have received, real and understand the Agency Disclosure Brochure. The undersigned understand that the brokerage involved in this transaction will be or may be providing agency representation to both Purchaser(s) and the Seller(s). The undersigned each understand that as agents for both Purchaser and Seller, the brokerage(s) will be limited dual agents and negotiations, terms or factors motivating the Purchaser to buy or the Seller to sell without specific written permission of the disclosing party. The specific duties, obligations and limitations of a limited dual agent are contained in the Agency Disclosure Brochure as required by Section 54, 2063, Idaho Code. The undersigned each understand that a limited dual agent does not have a duty of undivided loyalty to either client. 24. ESCROW INSTRUCTIONS. The Escrow Agent is instructed to, in a manner consistent with the terms hereof: receive and hold deposits and other funds; disburse such funds in accordance with separate authorization signed by Buyer and Seller; prepare closing statements for execution by Buyer and Seller; receive documents, secure their execution and acknowledgement, record them in the proper sequence, deliver originals to the appropriate parties, and deliver copies of all documents signed by either party to that party. If a dispute arises regarding any funds held by the closing agent, such agent shall have no obligation to resolve such dispute but shall hold the same pending resolution of such dispute, and may at its option bring an action in interpleader. 25. LEGAL REPRESENTATION. The parties expressly acknowledge they have been represented by -6- counsel of their own choice in connection with this Agreement and have discussed the terms of this Agreement with such counsel to the extent each party believes it to have been necessary to fully understand the terms hereof. In entering into this Agreement, the parties represent and declare that each of them fully understands the terms and effect of this Agreement. 26. ENTIRE AGREEMENT. This Agreement, including any addenda or exhibits, constitutes the entire Agreement between the parties and no warranties, including any warranty of habitability, Agreements or representations have been made or shall be binding upon either party unless herein set forth. 27. SURVIVAL. All of the representations and warranties set forth in this Agreement shall constitute continuing representations and warranties, shall be deemed to be true and correct as of the date of closing of Buyer's purchase of the Subject Property from Seller, and shall (along with all indemnification, defense and hold harmless obligations related thereto) survive the closing of Buyer's purchase of the Subject Property from Seller. 28. CONFIDENTIALITY. The parties agree that the terms and conditions of this Agreement and information regarding the Subject Property (hereinafter referred to as "Confidential Information's shall be held in confidence except as mutually agreed by the parties in writing. Notwithstanding the foregoing, Buyer may publicly disclose the fact that Buyer is under Agreement to purchase the Subject Property and Buyer may disclose Confidential Information to its employees, advisors, or consultants as necessary to complete the transaction contemplated by this Agreement. Until closing, Buyer shall make reasonable efforts to hold the Confidential Information to be exempt from public disclosure pursuant to applicable laws, unless required to do so by a court of competent jurisdiction. After closing, all records relating to this transaction held by Buyer may be subject to public disclosure upon request by the public. Except as provided above, neither party shall use for its own benefit or for the benefit of others, or divulge to others, any information, knowledge, or data of a confidential or proprietary nature or otherwise not readily available to members of the general public which concerns the business or affairs of the other party and which was acquired during the term of this Agreement. 29, BINDING AGREEMENT, COUNCIL APPROVAL REQUIRED. This Agreement shall not be binding or enforceable until both parties have executed an original (or a counterpart original) of this Agreement and have delivered to each other an original (or a counterpart original) of this Agreement fully executed by the delivering party. Seller acknowledges that this Agreement will be executed by the Seller before Buyer executes the Agreement and that the execution of the Agreement by the Buyer is contingent upon the approval of the terms and conditions of this Agreement by the Meridian City Council and the Council's authorization for the Meridian City Mayor to execute this Agreement on behalf of Buyer; the date upon which the Meridian City Council provides such authorization on the record at a regularly scheduled meeting of the Meridian City Council shall be considered the "Execution Date" of this Agreement. 30, TIME IS OF THE ESSENCE IN THIS AGREEMENT. -7- THIS IS A LEGALLY BINDING AGREEMENT. PRIOR TO SIGNING THIS AGREEMENT, BUYER AND SELLER ARE ADVISED TO SEEK THE ADVICE OF COMPETENT LEGAL COUNSEL. WRITTEN INFORMATION PROVIDED BY BROKER IS BELIEVED TO BE RELIABLE BUT INDEPENDENT VERIFICATION BY BUYER SHOULD BE UNDEWI'AKEN. Buyer Q�Lgf Meridian Seller: Zkrffiur Berry By: Tammy de W erd By: uner 0 ell Its: Mayor CIO ;Owvn A'�ITE Tamu Jaycee Holman,' 1U Address: 33 East Broadway Avenue Address: Meridian Idaho, 83642 Telephone Q01g- FTR - 4433 Telephone: 3cle, Fax: . )o'& - 4a l 3' Fax: Cl Date: t A Obpre) Date: -8- EXHIBIT A LEGAL DESCRIPTION OF PREMISES TO BE PROVIDED BY TITLE COMPANY. -9- Addendum Attached Per Section 21 -10- ADDENDUM PURSUANT TO SECTION 21 OF PURCHASE AND SALE AGREEMENT 1. Hazardous Substances.X,< al' 1.1 Definitions. The terms "hazardous substance," "release," andi,-'- oval" shall have the definition and meaning as set forth in Title 42 U.S. C. ' 9r the corresponding provision of any future law); provided, however that the term ardous substance" shall include "hazardous waste" as defined in Title 42 U.S.C. ' 6903 (or the corresponding provision of any future law) and "petroleum" as defined in Title 42 U.S.C. ' 6991 (or the corresponding provision of any future law). The term "superfund" shall mean the Comprehensive Environmental Response, Compensation and Liability Act, Title 42 U.S.C. ' ' 9601, et seq. (or the corresponding provision of any future law) and any similar statute, ordinance, rule or regulation of any state or local legislature, agency or body. The term "underground storage tank" shall have the definition and meaning as set forth in Title 42 U.S.C. ' 6991 (or the corresponding provision of any future law). 1.2 Representations and Warranties. The Seller represents and warrants to, and covenants with, the Buyer that: 1.2.1 the Real Property is not contaminated with any hazardous substance, 1.2.2 the Seller has not caused and will not cause the release of any hazardous substances on the Real Property, 1.2.3 the Seller has conducted a diligent investigation and inquiry, and to the best of the Seller's knowledge, there has never occurred a release of hazardous substances on the Real Property, 1.2.4 the Real Property is not subject to any pending, threatened, or likely federal, state, or local "superf ind" lien, proceedings, claim, liability, or action for the cleanup, removal, or remediation of any hazardous substance from the Real Property, 1.2.5 no other real property owned or controlled by the Seller or in which the Seller has any legal, equitable, or other interest is subject to any pending, threatened, or likely federal, state, or local "superfund" lien, proceedings, claim, liability, or action for the cleanup, removal, or remediation of any hazardous substance from such property, 1.2.6 there is no asbestos on the Real Property, 1.2.7 there is no underground storage tank on the Real Property, 1.2.8 by acquiring the Real Property, the Buyer will not incur or be subject to any "superfund" liability for the cleanup, removal, or remediation of any hazardous substance from the Real Property, 1.2.9 by acquiring the Real Property, the Buyer will not incur or be subject to any liability, cost, or expense for the removal of any asbestos or underground storage tank from the Real Property, and 1.2.10 the Real Property and the uses conducted on the Real Property are in compliance with all applicable environmental laws, codes, and regulations, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended. 1.3 Phase I Environmental Audit. The obligations of the Buyer under this Agreement are, at Buyer's option, subject to the Buyer obtaining, at the Buyer's sole cost, a "Phase I" environmental audit and liability assessment indicating that the representations and warranties set forth in Section 3 are true and correct. The Phase I audit shall include, without limitation, the following elements: (a) recorded chain of title documents (going back 50 years) regarding the property, including all deeds, easements, leases, restrictions and covenants. (b) a review of historical and aerial photographs to uncover prior problems or uses that may now be concealed. (c) a review of federal, state, and local records which report incidents or activities which are likely to cause or contribute to a release or threatened release of hazardous substances, including landfill and other disposal records, underground storage tank records, hazardous waste handler and generator records, and spill reporting records. (d) interviews with past and present owners, employees, and neighbors. (e) a visual site inspection of the Real Property and all facilities and improvements on the Real Property and a visual inspection of immediately adjacent properties from the Real Property to check for the presence of hazardous substances, underground storage tanks, PCBs' and asbestos, including an investigation of any chemical use, storage, treatment and disposal practices on the Real Property and adjacent property. 1.4 Phase II Environmental Audit. If the Phase I environmental audit does not indicate that the representations and warranties set forth in Section 3 are true and correct, then the Buyer, in addition to any other remedy and without any waiver of rights, shall have the right to either (i) terminate the Buyer's obligations to close the transactions contemplated by this Agreement, or (ii) require that additional audits ("Phase II") be conducted on the Real Property at the sole cost of the Seller, and extend the date for Closing for a period of time reasonably necessary to complete and analyze the Phase II audit. 2 1.5 Holdback Amount for Environmental Audit. If the Phase II environmental audit does not indicate that the representations and warranties set forth in Section 3 are true and correct, then the Buyer, in addition to any other remedy and without any waiver of rights, shall have the right to either (i) terminate the Buyer's obligations to close the transactions contemplated by this Agreement, or (ii) proceed to close the transactions contemplated by this Agreement and implement the following procedures: 1.5.1 the Buyer shall have the absolute right to withhold from the Purchase Price an amount reasonably determined by the Buyer as necessary to hold the Buyer harmless from any loss or liability arising from or related to the failure of the "Phase I" or "Phase II" environmental audits to indicate that the representations and warranties set forth in Section 3 are true and correct ("Environmental Holdback Amount"), 1.5.2 the Buyer shall have the right to utilize all or any portion of the Environmental Holdback Amount for such acts (including additional "Phase II" studies, cleanup, removal, or remediation) as are reasonably necessary to ensure that the representations and warranties set forth in Section 3 are true and correct, 1.5.3 the Purchase Price and the amount of the Purchase Price allocated to the Real Property shall be reduced by that portion of the Environmental Holdback Amount utilized by the Buyer, 1.5.4 the balance of the Environmental Holdback Amount, if any, shall be disbursed to the Seller, 1.5.5 to the extent that the Environmental Holdback Amount is not sufficient to ensure that the representations and warranties set forth in Section 3 are true and correct, then the Buyer, in addition to any other rights, shall have the right to seek indemnification or offset under the provisions of Section 6.1 1.6 Cooperation with Environmental Audit. The Seller shall cooperate fully with the environmental audits referred to in this Agreement.