Common use of Adjusted Consideration; Risk of Loss Clause in Contracts

Adjusted Consideration; Risk of Loss. (a) At the Closing, (i) real estate taxes and assessments (including special assessments and, personal property taxes, if any), (ii) rental income (including base rents, additional rents, escalation charges, common area maintenance charges, imposition charges, heating and cooling charges, insurance charges, charges for utilities, percentage rent, and all other rents, charges and commissions paid by tenants to the Participating Entities), (iii) interest payable under loans secured by Permitted Liens, (iv) insurance premiums, (v) utilities serving the Properties, (vi) property management fees, (vii) prepaid charges, payment and accrued charges under any contracts entered into by Holdings or any Participating Entity with respect to the Properties and (viii) all other items of income and expense with respect to the Properties shall be prorated between the Contributor, on the one hand, and the Operating Partnership, on the other hand, with all such items attributable to the period prior to the Closing Date (as defined in Section 2.2) to be credited or charged to Contributor, and all such items attributable to the period commencing on the Closing Date to be credited or charged to the Operating Partnership. Except as otherwise provided in this Section 1.3, income and expenses shall be prorated on the basis of a 30-day month and on the basis of the accrual method of accounting. In addition, at Closing, the Contributor shall receive a credit equal to the amount of any reserves (other than any cash reserves established with the lender with respect to the Allocated Debt (the “Lender Reserves”)) established by Holdings or any Participating Entity with respect to the Properties (the “Reserves”). Notwithstanding the generality of the foregoing, to the extent that any tenant of a Property pays any of the expenses described in clauses (i), (iv), (v), (vi), (vii) or (viii) above directly to an applicable third party (and not as a reimbursement to a Participating Entity), such amounts shall not be prorated at Closing. The prorations to be performed hereunder shall be completed by the Company based on the parties’ estimates as of the Closing, shall be evidenced by a closing statement prepared by the Company, shall be reconciled based on actual amounts when available, but in all events within ninety (90) days of Closing (the “Reconciliation Period”), and shall be implemented through a cash payment from the Operating Partnership to the Contributor to the extent the prorations result in a net credit to the Contributor and a cash payment from the Contributor to the Operating Partnership to the extent the prorations result in a net charge to the Contributor. In addition, immediately prior to Closing, Holdings shall distribute to the Contributor any cash (other than Reserves and any security deposits then held by the Participating Entities under Leases for the Properties) then held by Holdings or any Participating Entity (to the extent not being transferred with the Contributed Assets as a proration in accordance with this Section 1.3(a)) and such cash shall not be contributed to the Operating Partnership with the Contributed Assets. On the Closing Date, in addition to the Consideration, the Operating Partnership shall pay to the Contributor by wire transfer of immediately available federal funds an amount equal to the Lender Reserves (but only to the extent the Lender Reserves and the obligation to maintain such Lender Reserves are not being released by the lender to the Contributor in connection with the Closing). The parties acknowledge that preparation of the closing statement will involve substantial time and effort because of the number of Properties and hereby agree that the closing statement shall be prepared by the Company based on an assumption that the Closing takes place on the Estimated Closing Date. If the Closing actually takes place on a day other than the Estimated Closing Date, then, during the Reconciliation Period, the prorations shall be recalculated as of the actual Closing Date based on actual amounts and the Company shall prepare a revised closing statement, and to the extent such revised closing statement reveals that the Contributor received more or less cash than it should have received had the prorations included in the original closing statement not been based on estimated amounts and the Closing occurring on the Estimated Closing Date, then the Operating Partnership (if the Contributor received less cash than it should have received) or the Contributor (if the Contributor received more cash than it should have received), as applicable, shall make a cash payment to the other as necessary to make the cash received by the Contributor correct based on the revised closing statement. Finally, if the Allocated Debt is greater than or less than the Estimated Allocated Debt Amount, the difference (as well as any interest accruals or other charges or payments of the Allocated Debt for the period after December 31, 2010 and until the Closing Date) will be a proration item credited (to the extent the Allocated Debt is less than the Estimated Allocated Debt Amount) or charged (to the extent the Allocated Debt is greater than the Estimated Allocated Debt Amount) to the Contributor and adjusted in cash during the proration reconciliation process. (b) The risk of loss relating to the Holdings Interests and the underlying Properties contributed hereunder prior to Closing shall be borne by the Contributor to the extent set forth in this Section 1.3(b). If, prior to the Closing, any Property is destroyed or materially damaged by fire or other casualty or taken by condemnation or similar proceeding, then the Company shall (a) cause the Operating Partnership to acquire the Holdings Interests (including, the Contributor’s indirect interests in any such Participating Entity that directly or indirectly owns the affected Property), (b) direct the Contributor to cause the Participating Entity or Participating Entities, as applicable, to pay or cause to be paid to the Operating Partnership any sums collected under any policies of insurance relating to such casualty or condemnation proceeds, as applicable, and otherwise assign to the Operating Partnership all rights to collect such sums as may then be uncollected, and (c) adjust or settle any insurance claim or condemnation proceeding. Under such circumstances, the pro rata share of the amount of any deductibles under the applicable insurance policies or award (except to the extent such deductibles are the responsibility of tenants under leases), plus all reasonable costs of collection shall be a proration item charged to the Contributor and adjusted in cash after the Closing during the proration reconciliation process in accordance with Section 1.3(a).

Adjusted Consideration; Risk of Loss. (a) At the Closing, (i) real estate taxes and assessments (including special assessments and, personal property taxes, if any), (ii) rental income (including base rents, additional rents, escalation charges, common area maintenance charges, imposition charges, heating and cooling charges, insurance charges, charges for utilities, percentage rent, and all other rents, charges and commissions paid by tenants to the Participating Entities), (iii) interest payable under loans secured by Permitted Liens, (iv) insurance premiums, (v) utilities serving the Properties, (vi) property management fees, (vii) prepaid charges, payment and accrued charges under any contracts entered into by Holdings or any Participating Entity with respect to the Properties Properties, and (viii) all other items of income and expense with respect to the Properties shall be prorated between the Contributor, on the one hand, and the Operating Partnership, on the other hand, with all such items attributable to the period prior to the Closing Date (as defined in Section 2.2) to be credited or charged to Contributor, and all such items attributable to the period commencing on the Closing Date to be credited or charged to the Operating Partnership. Except as otherwise provided in this Section 1.3, income and expenses shall be prorated on the basis of a 30-day month and on the basis of the accrual method of accounting. In addition, at Closing, the Contributor shall receive a credit equal to the amount of any reserves (other than any cash reserves established with the lender with respect to the Allocated Debt (the “Lender Reserves”)) established by Holdings or any Participating Entity with respect to the Properties (the “Reserves”). Notwithstanding the generality of the foregoing, to the extent that any tenant of a Property pays any of the expenses described in clauses (i), (iv), (v), (vi), (vii) or (viii) above directly to an applicable third party (and not as a reimbursement to a Participating Entity), such amounts shall not be prorated at Closing. The prorations to be performed hereunder shall be completed by the Company based on the parties’ estimates as of the Closing, shall be evidenced by a closing statement prepared by the Company, shall be reconciled based on actual amounts when available, but in all events within ninety (90) days of Closing (the “Reconciliation Period”), ) and shall be implemented through a cash payment from the Operating Partnership to the Contributor to the extent the prorations result in a net credit to the Contributor and a cash payment from the Contributor to the Operating Partnership to the extent the prorations result in a net charge to the Contributor. In addition, immediately prior to Closing, Holdings shall distribute to the Contributor any cash (other than Reserves and Reserves, any security deposits then held by the Participating Entities under Leases for the PropertiesProperties and any Acquisition Cash) then held by Holdings or any Participating Entity (to the extent not being transferred with the Contributed Assets as a proration in accordance with this Section 1.3(a)) and such cash shall not be contributed to the Operating Partnership with the Contributed Assets. On the Closing Date, in addition to the Consideration, the Operating Partnership shall pay to the Contributor by wire transfer of immediately available federal funds an amount equal to the Lender Reserves (but only to the extent the Lender Reserves and the obligation to maintain such Lender Reserves are not being released by the lender to the Contributor in connection with the Closing). The parties acknowledge that preparation of the closing statement will involve substantial time and effort because of the number of Properties and hereby agree that the closing statement shall be prepared by the Company based on an assumption assumptions that the Closing takes place on the Estimated Closing DateDate and that all of the Committed Properties that are, under the terms of the applicable Purchase Contracts, scheduled to close by the Estimated Closing Date are in fact owned or ground leased by Holdings or the Participating Entities on said date. If the Closing actually takes place on a day other than the Estimated Closing Date and/or not all of such Committed Properties are owned or ground leased by Holdings or the Participating Entities on the Closing Date, then, during the Reconciliation Period, the prorations shall be recalculated as of the actual Closing Date, with respect to the Properties owned or ground leased by Holdings or the Participating Entities as of the actual Closing Date based on actual amounts and the Company shall prepare a revised closing statement, and to the extent such revised closing statement reveals that the Contributor received more or less cash than it should have received had the prorations included in the original closing statement not been based on estimated amounts and the Closing occurring on the Estimated Closing Date, then the Operating Partnership (if the Contributor received less cash than it should have received) or the Contributor (if the Contributor received more cash than it should have received), as applicable, shall make a cash payment to the other as necessary to make the cash received by the Contributor correct based on the revised closing statement. Finally, if If the Allocated Debt is greater than or less than the Estimated Allocated Debt Amount, the difference (as well as any interest accruals or other charges or payments of the Allocated Debt for the period after December 31, 2010 the Allocated Debt Determination Date and until the Closing Date) will be a proration item prorated and credited (to the extent the Allocated Debt is less than the Estimated Allocated Debt Amount) or charged (to the extent the Allocated Debt is greater than the Estimated Allocated Debt Amount) to the Contributor and adjusted in cash during the proration reconciliation process. Finally, the Contributor shall receive a credit in the amount of any refundable deposits made by Holdings or a Participating Entity under any non-binding purchase agreement as well as a credit for any third party costs paid by Holdings or a Participating Entity in connection with due-diligence on any property subject to any such non-binding purchase agreement. For the avoidance of doubt, any such non-binding purchase agreement shall not be deemed a “Purchase Contract” for purposes of this Agreement. As used herein, “Acquisition Cash” means an amount equal to the gross purchase price for each Committed Property, plus the estimated transaction costs and closing costs payable by Holdings or its subsidiary, as purchaser, for such Committed Property to the extent incurred and not paid as of Closing and/or expected to be incurred from and after the Closing, less the amount of the purchase price to be financed. On the Closing Date, in addition to the Consideration, the Operating Partnership shall pay to the Contributor by wire transfer of immediately available federal funds an amount equal to the refundable deposit paid under any purchase contracts with respect to real properties that are not Committed Properties, together with all due diligence and transaction costs with respect to such purchase contracts and real properties. (b) The risk of loss relating to the Holdings Interests and the underlying Properties contributed hereunder prior to Closing shall be borne by the Contributor to the extent set forth in this Section 1.3(b). If, prior to the Closing, any Property is destroyed or materially damaged by fire or other casualty or taken by condemnation or similar proceeding, then the Company shall (a) cause the Operating Partnership to acquire the Holdings Interests (including, the Contributor’s indirect interests in any such Participating Entity that directly or indirectly owns the affected Property), (b) direct the Contributor to cause the Participating Entity or Participating Entities, as applicable, to pay or cause to be paid to the Operating Partnership any sums collected under any policies of insurance relating to such casualty or condemnation proceeds, as applicable, and otherwise assign to the Operating Partnership all rights to collect such sums as may then be uncollected, and (c) adjust or settle any insurance claim or condemnation proceeding. Under such circumstances, the pro rata share of the amount of any deductibles under the applicable insurance policies or award (except to the extent such deductibles are the responsibility of tenants under leases), plus all reasonable costs of collection shall be a proration item charged to the Contributor and adjusted in cash after the Closing during the proration reconciliation process in accordance with Section 1.3(a).

Adjusted Consideration; Risk of Loss. (a) At the Closing, (i) real estate taxes and assessments (including special assessments and, personal property taxes, if any), (ii) rental income (including base rents, additional rents, escalation charges, common area maintenance charges, imposition charges, heating and cooling charges, insurance charges, charges for utilities, percentage rent, and all other rents, charges and commissions paid by tenants to the Participating Entities), (iii) interest payable under loans secured by Permitted Liens, (iv) insurance premiums, (v) utilities serving the Properties, (vi) property management fees, (vii) prepaid charges, payment and accrued charges under any contracts entered into by Holdings or any Participating Entity with respect to the Properties and (viii) all other items of income and expense with respect to the Properties shall be prorated between the Contributor, on the one hand, and the Operating Partnership, on the other hand, with all such items attributable to the period prior to the Closing Date (as defined in Section 2.2) to be credited or charged to Contributor, and all such items attributable to the period commencing on the Closing Date to be credited or charged to the Operating Partnership. Except as otherwise provided in this Section 1.3, income and expenses shall be prorated on the basis of a 30-day month and on the basis of the accrual method of accounting. In addition, at Closing, the Contributor shall receive a credit equal to the amount of any reserves (other than any cash reserves established with the lender with respect to the Allocated Debt (the “Lender Reserves”)) established by Holdings or any Participating Entity with respect to the Properties (the “Reserves”). Notwithstanding the generality of the foregoing, to the extent that any tenant of a Property pays any of the expenses described in clauses (i), (iv), (v), (vi), (vii) or (viii) above directly to an applicable third party (and not as a reimbursement to a Participating Entity), such amounts shall not be prorated at Closing. The prorations to be performed hereunder shall be completed by the Company based on the parties’ estimates as of the Closing, shall be evidenced by a closing statement prepared by the Company, shall be reconciled based on actual amounts when available, but in all events within ninety (90) days of Closing (the “Reconciliation Period”), and shall be implemented through a cash payment from the Operating Partnership to the Contributor to the extent the prorations result in a net credit to the Contributor and a cash payment from the Contributor to the Operating Partnership to the extent the prorations result in a net charge to the Contributor. In addition, immediately prior to Closing, Holdings shall distribute to the Contributor any cash (other than Reserves and any security deposits then held by the Participating Entities under Leases for the Properties) then held by Holdings or any Participating Entity (to the extent not being transferred with the Contributed Assets as a proration in accordance with this Section 1.3(a)) and such cash shall not be contributed to the Operating Partnership with the Contributed Assets. On the Closing Date, in addition to the Consideration, the Operating Partnership shall pay to the Contributor by wire transfer of immediately available federal funds an amount equal to the Lender Reserves (but only to the extent the Lender Reserves and the obligation to maintain such Lender Reserves are not being released by the lender to the Contributor in connection with the Closing). The parties acknowledge that preparation of the closing statement will involve substantial time and effort because of the number of Properties and hereby agree that the closing statement shall be prepared by the Company based on an assumption that the Closing takes place on the Estimated Closing Date. If the Closing actually takes place on a day other than the Estimated Closing Date, then, during the Reconciliation Period, the prorations shall be recalculated as of the actual Closing Date based on actual amounts and the Company shall prepare a revised closing statement, and to the extent such revised closing statement reveals that the Contributor received more or less cash than it should have received had the prorations included in the original closing statement not been based on estimated amounts and the Closing occurring on the Estimated Closing Date, then the Operating Partnership (if the Contributor received less cash than it should have received) or the Contributor (if the Contributor received more cash than it should have received), as applicable, shall make a cash payment to the other as necessary to make the cash received by the Contributor correct based on the revised closing statement. Finally, if the Allocated Debt is greater than or less than the Estimated Allocated Debt Amount, the difference (as well as any interest accruals or other charges or payments of the Allocated Debt for the period after December 31, 2010 Allocated Debt Determination Date and until the Closing Date) will be a proration item credited (to the extent the Allocated Debt is less than the Estimated Allocated Debt Amount) or charged (to the extent the Allocated Debt is greater than the Estimated Allocated Debt Amount) to the Contributor and adjusted in cash during the proration reconciliation process. The parties acknowledge that the Allocated Debt includes, inter alia, mezzanine debt secured in part by the Excluded Properties, which debt will be paid-off immediately upon Closing. (b) The risk of loss relating to the Holdings Interests and the underlying Properties contributed hereunder prior to Closing shall be borne by the Contributor to the extent set forth in this Section 1.3(b). If, prior to the Closing, any Property is destroyed or materially damaged by fire or other casualty or taken by condemnation or similar proceeding, then the Company shall (a) cause the Operating Partnership to acquire the Holdings Interests (including, the Contributor’s indirect interests in any such Participating Entity that directly or indirectly owns the affected Property), (b) direct the Contributor to cause the Participating Entity or Participating Entities, as applicable, to pay or cause to be paid to the Operating Partnership any sums collected under any policies of insurance relating to such casualty or condemnation proceeds, as applicable, and otherwise assign to the Operating Partnership all rights to collect such sums as may then be uncollected, and (c) adjust or settle any insurance claim or condemnation proceeding. Under such circumstances, the pro rata share of the amount of any deductibles under the applicable insurance policies or award (except to the extent such deductibles are the responsibility of tenants under leases), plus all reasonable costs of collection shall be a proration item charged to the Contributor and adjusted in cash after the Closing during the proration reconciliation process in accordance with Section 1.3(a).

Adjusted Consideration; Risk of Loss. (a) At the Closing, (i) real estate taxes and assessments (including special assessments and, personal property taxes, if any), (ii) rental income (including base rents, additional rents, escalation charges, common area maintenance charges, imposition charges, heating and cooling charges, insurance charges, charges for utilities, percentage rent, and all other rents, charges and commissions paid by tenants to the Participating Entities), (iii) interest payable under loans secured by Permitted Liens, (iv) insurance premiums, (v) utilities serving the Properties, (vi) property management fees, (vii) prepaid charges, payment and accrued charges under any contracts entered into by Holdings or any Participating Entity with respect to the Properties and (viii) all other items of income and expense with respect to the Properties shall be prorated between the Contributor, on the one hand, and the Operating Partnership, on the other hand, with all such items attributable to the period prior to the Closing Date (as defined in Section 2.2) to be credited or charged to Contributor, and all such items attributable to the period commencing on the Closing Date to be credited or charged to the Operating Partnership. Except as otherwise provided in this Section 1.3, income and expenses shall be prorated on the basis of a 30-day month and on the basis of the accrual method of accounting. In addition, at Closing, the Contributor shall receive a credit equal to the amount of any reserves (other than any cash reserves established with the lender with respect to the Allocated Debt (the “Lender Reserves”)) established by Holdings or any Participating Entity with respect to the Properties (the “Reserves”). Notwithstanding the generality of the foregoing, to the extent that any tenant of a Property pays any of the expenses described in clauses (i), (iv), (v), (vi), (vii) or (viii) above directly to an applicable third party (and not as a reimbursement to a Participating Entity), such amounts shall not be prorated at Closing. The prorations to be performed hereunder shall be completed by the Company based on the parties’ estimates as of the Closing, shall be evidenced by a closing statement prepared by the Company, shall be reconciled based on actual amounts when available, but in all events within ninety (90) days of Closing (the “Reconciliation Period”), and shall be implemented through a cash payment from the Operating Partnership to the Contributor to the extent the prorations result in a net credit to the Contributor and a cash payment from the Contributor to the Operating Partnership to the extent the prorations result in a net charge to the Contributor. In addition, immediately prior to Closing, Holdings shall distribute to the Contributor any cash (other than Reserves and any security deposits then held by the Participating Entities under Leases for the Properties) then held by Holdings or any Participating Entity (to the extent not being transferred with the Contributed Assets as a proration in accordance with this Section 1.3(a)) and such cash shall not be contributed to the Operating Partnership with the Contributed Assets. On the Closing Date, in addition to the Consideration, the Operating Partnership shall pay to the Contributor by wire transfer of immediately available federal funds an amount equal to the Lender Reserves (but only to the extent the Lender Reserves and the obligation to maintain such Lender Reserves are not being released by the lender to the Contributor in connection with the Closing). The parties acknowledge that preparation of the closing statement will involve substantial time and effort because of the number of Properties and hereby agree that the closing statement shall be prepared by the Company based on an assumption that the Closing takes place on the Estimated Closing Date. If the Closing actually takes place on a day other than the Estimated Closing Date, then, during the Reconciliation Period, the prorations shall be recalculated as of the actual Closing Date based on actual amounts and the Company shall prepare a revised closing statement, and to the extent such revised closing statement reveals that the Contributor received more or less cash than it should have received had the prorations included in the original closing statement not been based on estimated amounts and the Closing occurring on the Estimated Closing Date, then the Operating Partnership (if the Contributor received less cash than it should have received) or the Contributor (if the Contributor received more cash than it should have received), as applicable, shall make a cash payment to the other as necessary to make the cash received by the Contributor correct based on the revised closing statement. Finally, if the Allocated Debt is greater than or less than the Estimated Allocated Debt Amount, the difference (as well as any interest accruals or other charges or payments of the Allocated Debt for the period after December 31, 2010 and until the Closing Date) will be a proration item credited (to the extent the Allocated Debt is less than the Estimated Allocated Debt Amount) or charged (to the extent the Allocated Debt is greater than the Estimated Allocated Debt Amount) to the Contributor and adjusted in cash during the proration reconciliation process. (b) The risk of loss relating to the Holdings Participating Entity Interests and the underlying Properties contributed hereunder prior to Closing shall be borne by the Contributor Contributors to the extent set forth in this Section 1.3(b)1.3. If, prior to the Closing, any Property is destroyed or materially damaged by fire or other casualty, or is taken by eminent domain or through condemnation proceedings, which casualty or taken by condemnation taking allows a tenant of such Property to terminate its Lease (as defined in Section 3.2(m)) and such right has not been waived in writing or similar proceedinga tenant does in fact terminate its Lease with respect to such Property (such casualty or taking, a “Termination Event”), then the Company shall may, at its option, determine to cause the Operating Partnership not to acquire the applicable Contributor’s direct or indirect interests in the Participating Entity that owns such Property. After the occurrence of any such Termination Event, the Company may also, at its option, elect to (ai) cause the Operating Partnership to acquire the Holdings Participating Entity Interests (including, the applicable Contributor’s direct or indirect interests in any such Participating Entity that directly or indirectly owns the affected Property), (bii) direct the applicable Contributor to cause the Participating Entity or Participating Entities, as applicable, to pay or cause to be paid to the Operating Partnership any sums collected under any policies of insurance relating to such casualty or condemnation proceeds, as applicable, and otherwise assign to the Operating Partnership all rights to collect such sums as may then be uncollecteduncollected (except to the extent that such sums are paid directly to the tenant of such Property and such tenant continues to be obligated to pay rent to the Participating Entity that owns such Property pursuant to the Lease for such Property), and (ciii) adjust or settle any insurance claim or condemnation proceeding. Under such circumstances, the Unit Consideration relating to such Participating Entity Interest shall be reduced by the pro rata share of the amount of any deductibles or shortfalls (including lack of insurance) under the applicable insurance policies or award (except to the extent such deductibles or shortfalls are the responsibility of tenants under leasesLeases), plus all reasonable costs of collection shall be a proration item charged collection. If Properties constituting more than 25% of the total value of the Properties are partially or totally damaged or condemned prior to the Contributor and adjusted in cash Closing, the Company may elect, by notice to the Contributors given within 20 days after the Closing during date of such damage or condemnation, to terminate this Agreement, in which case none of the proration reconciliation process in accordance with Section 1.3(a)Contributors, the Company or the Operating Partnership shall have any further rights or obligations under this Agreement.