EXISTING INDEBTEDNESS), INCLUDING MECHANICS'
AND MATERIALMEN'S LIENS FILED AGAINST THE EXTRA SPACE AND JUDGMENT LIENS FILED
AGAINST THE PROPERTY WITH RESPECT TO JUDGMENTS OBTAINED AGAINST EXTRA SPACE,
WHICH LIENS EXTRA SPACE SHALL CAUSE TO BE REMOVED AS EXCEPTIONS TO THE TITLE
POLICY AT CLOSING (AND IF EXTRA SPACE FAILS TO REMOVE SUCH MATTERS AS
EXCEPTIONS, BY BONDING OVER SUCH MATTERS OR OTHERWISE, HSRE MAY DIRECT THAT A
PORTION OF THE EXTRA SPACE DISTRIBUTION AMOUNT BE APPLIED TO REMOVE SAME).
EXTRA SPACE FURTHER AGREES TO REMOVE ANY EXCEPTIONS OR ENCUMBRANCES TO TITLE
WHICH ARE CREATED BY EXTRA SPACE AFTER THE DATE OF THIS AGREEMENT WITHOUT HSRE'S
CONSENT.
HSRE MAY TERMINATE THIS AGREEMENT IF THE TITLE COMPANY REVISES THE
TITLE REPORT AFTER THE EXPIRATION OF THE DUE DILIGENCE PERIOD TO ADD EXCEPTIONS
IF SUCH ADDITIONS ARE NOT REASONABLY ACCEPTABLE TO HSRE AND ARE NOT REMOVED AS
EXCEPTIONS TO THE TITLE POLICY AT CLOSING.
8.3
TERMINATION DURING DUE DILIGENCE PERIOD.
IF HSRE DETERMINES, IN
ITS SOLE DISCRETION, BEFORE THE EXPIRATION OF THE DUE DILIGENCE PERIOD THAT THE
PROPERTY IS
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UNACCEPTABLE FOR HSRE'S PURPOSES, HSRE SHALL HAVE THE RIGHT TO TERMINATE THIS
AGREEMENT BY GIVING TO EXTRA SPACE WRITTEN NOTICE OF TERMINATION BEFORE THE
EXPIRATION OF THE DUE DILIGENCE PERIOD, AND NEITHER PARTY SHALL HAVE ANY FURTHER
RIGHTS OR LIABILITIES HEREUNDER EXCEPT FOR THOSE PROVISIONS WHICH EXPRESSLY
SURVIVE THE TERMINATION OF THIS AGREEMENT.
8.4
APPROVAL OF ANNUAL BUSINESS PLAN AND ANNUAL OPERATING BUDGET.
AT
LEAST TEN BUSINESS DAYS PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE PERIOD,
EXTRA SPACE SHALL PREPARE AND SUBMIT TO HSRE, AN ANNUAL BUSINESS PLAN AND ANNUAL
OPERATING BUDGET (AS DEFINED IN THE HSRE-ESP OPERATING AGREEMENT) FOR REVIEW AND
APPROVAL BY HSRE.
9.
DAMAGE TO PROPERTY.
If before the Closing one or more of the Facilities is materially or adversely
affected in any way as a result of any fire, flood, earthquake, similar acts of
nature or other acts of destruction which involves damage requiring repair and
restoration costs of less than or equal to Five Hundred Thousand and No/100
Dollars ($500,000.00), the parties shall be obligated to proceed with the
Closing.
In that event, if (A) the amount of the insurance proceeds available
for such loss have been determined prior to the Closing Date, then the
difference between (i) the cost of repairing and restoring such Facilities and
(ii) the total amount of insurance proceeds payable with respect to such
material adverse change (the "Casualty Adjustment Amount") shall be treated as a
"cost" which is charged to Extra Space for purposes of determining the Extra
Space Distribution Amount pursuant to Section 2.2.2 above, or (B) the amount of
the insurance proceeds available for such loss have not been determined prior to
the Closing Date, then the right to receive such insurance proceeds shall be
assigned to HSRE-ESP or the title holder of the applicable property, and Extra
Space shall pay the Casualty Adjustment Amount to HSRE-ESP within ten (10) days
after such amount has been determined.
If