Legal Closing Cost Addendum

LEGAL CLOSING COST ADDENDUM

This Closing Cost Addendum ("Addendum") is made effective as of Effective Date: by and between Seller Name: and Buyer Name: concerning the real property located at Property Address: and incorporated into the Purchase Agreement dated Purchase Agreement Date: .

RECITALS

WHEREAS, Seller and Buyer entered into the Purchase Agreement referenced above, which contemplates a conveyance of the Property and allocation of customary closing costs; and

WHEREAS, Seller and Buyer desire to set forth the allocation of Closing Costs, any credits to be applied at Closing, and the procedure for prorations and adjustments to be made in connection with the Closing of the transaction; and

WHEREAS, the parties intend this Addendum to supplement and govern to the extent of any inconsistency with the Purchase Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. DEFINITIONS

For purposes of this Addendum: (a) "Closing" means the date on which title transfer of the Property is recorded; (b) "Closing Costs" means costs customarily paid at Closing including, but not limited to, title insurance premiums, escrow fees, recording fees, transfer taxes, lender fees, prorations, and any agreed credits; and (c) "Title Company" means the company designated to conduct the closing and issue title insurance as set forth in Section 6.

2. ALLOCATION OF CLOSING COSTS

The parties agree that Closing Costs shall be allocated as set forth below. The checkboxes indicate the party responsible for payment of each item at Closing. If neither box is checked for a particular item, the default allocation shall be determined by applicable law or the Purchase Agreement.

3. CREDITS AT CLOSING

4. PRORATIONS AND ADJUSTMENTS

Real property taxes, assessments, rents, HOA dues, utilities and other recurring charges shall be prorated as of the Closing Date: . Seller shall be responsible for all such charges accruing through the day immediately preceding Closing and Buyer shall be responsible for those accruing on and after Closing, except as otherwise set forth in this Addendum or the Purchase Agreement.

If the exact tax amounts for the current year are not ascertainable at Closing, proration shall be made on the basis of the most recent tax information available with an adjustment to be made upon receipt of final tax bills.

5. PAYMENT AT CLOSING

All sums to be paid by Seller or Buyer pursuant to this Addendum shall be paid in cleared funds at Closing through the Title Company as directed below. Net proceeds payable to Seller shall be subject to reductions for Seller's agreed closing obligations and credits set forth herein. Buyer shall deliver funds sufficient to satisfy Buyer obligations, including any lender requirements, no later than Closing.

6. ESCROW / TITLE COMPANY

7. REPRESENTATIONS AND WARRANTIES

Seller represents and warrants that Seller has full right, authority and capacity to enter into and perform this Addendum and to convey marketable title to the Property free and clear of liens and encumbrances except those expressly assumed or disclosed in writing. Buyer represents and warrants that Buyer has the authority and financial capacity to consummate the purchase and accept the allocation of Closing Costs set forth herein.

8. CONDITIONS PRECEDENT

The obligations of either party to perform their respective obligations under this Addendum are subject to the satisfaction or waiver of conditions precedent, including but not limited to: (a) receipt of clear title evidence acceptable to Buyer; (b) receipt of funds required at Closing; and (c) satisfaction of any lender conditions. If any condition precedent is not satisfied or waived prior to Closing, the non-breaching party may elect to delay Closing or terminate the Purchase Agreement in accordance with its terms.

9. INDEMNIFICATION

Each party shall indemnify, defend and hold harmless the other party from and against any losses, liabilities, claims or expenses (including reasonable attorneys’ fees) arising from the indemnifying party's breach of this Addendum or failure to pay any Closing Costs allocated to such party hereunder.

10. NOTICES

All notices required or permitted under this Addendum shall be in writing and delivered to the parties at the addresses set forth below or to such other address as a party designates in writing in accordance with this Section.

11. AMENDMENTS; WAIVER; COUNTERPARTS

This Addendum may be amended only by a written instrument signed by both parties. No waiver of any provision shall be effective unless in writing signed by the party waiving the provision. This Addendum may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument.

12. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

This Addendum shall be governed by and construed in accordance with the laws of the state in which the Property is located, without regard to conflict of laws principles. This Addendum, together with the Purchase Agreement, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations and agreements. If any provision of this Addendum is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

13. MISCELLANEOUS PROVISIONS

The parties acknowledge that the allocations of Closing Costs set forth herein are an essential inducement to the parties to proceed with the transaction. The parties agree to cooperate in good faith with the Title Company and each other to cause the Closing to occur in accordance with the terms of the Purchase Agreement and this Addendum.

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