Common use of Capital Expenditure Reserves Clause in Contracts

Capital Expenditure Reserves. (a) The Base Purchase Price was agreed upon between Seller and Acquiror on the assumption that none of the Real Property Assets is in need of significant deferred maintenance expenditures, and that the annual capital expenditure requirement of $450 per unit, which will be set forth in and calculated pursuant to the Agreement Regarding Leases, is sufficient to provide for anticipated future capital expenditures to maintain each of the Real Property Assets in their current condition. If, during the course of the Due Diligence Review in respect of any Real Property Asset, Acquiror determines, pursuant to third party reports received by Acquiror (each, an "Acquiror Cap Ex Report"), that the anticipated costs to perform deferred maintenance and previously unidentified future capital expenditures reasonably necessary to be performed during the twelve (12) month period following the Closing Date will exceed the amount of the capital expenditure requirement for such period as set forth in and calculated pursuant to the form of Agreement Regarding Leases (the amount of such excess, with reference to any Real Property Asset, being hereinafter referred to as the "Cap Ex Reserve Shortfall"), then Acquiror shall provide to Seller not later than five (5) Business Days after the Due Diligence Expiration Date a written statement specifying the Cap Ex Reserve Shortfall, if any, for each of the Real Property Assets, including copies of all Acquiror Cap Ex Reports supporting such determination. Acquiror shall provide copies of each Acquiror Cap Ex Report as promptly as practicable after such report shall have been received by Acquiror. If Acquiror does not timely notify Seller of any Cap Ex Reserve Shortfall in respect of a Real Property Asset as provided above, Acquiror shall be deemed to have agreed that the amount of the Cap Ex Reserve Shortfall in respect of such Real Property Asset is zero.

Capital Expenditure Reserves. (a) The Base Purchase Price was agreed upon between Seller and Acquiror on the assumption that none of the Real Property Assets is in need of significant deferred maintenance expenditures, and that the annual capital expenditure requirement of $450 400 per unit, which will be set forth in and calculated pursuant to the Agreement Regarding Leases, is sufficient to provide for anticipated future capital expenditures to maintain each of the Real Property Assets in their current condition. If, during the course of the Due Diligence Review in respect of any Real Property Asset, Acquiror determines, pursuant to third party reports received by Acquiror (each, an "Acquiror Cap Ex Report"), that the anticipated costs to perform deferred maintenance and previously unidentified future capital expenditures reasonably necessary to be performed during the twelve (12) month period following the each Closing Date will exceed the amount of the capital expenditure requirement for such period as set forth in and calculated pursuant to the form of Agreement Regarding Leases (the amount of such excess, with reference to any Real Property Asset, being hereinafter referred to as the "Cap Ex Reserve Shortfall"), then Acquiror shall provide to Seller not later than five (5) Business Days after the Due Diligence Expiration Date a written statement specifying the Cap Ex Reserve Shortfall, if any, for each of the Real Property Assets, including copies of all Acquiror Cap Ex Reports supporting such determination. Acquiror shall provide copies of each Acquiror Cap Ex Report as promptly as practicable after such report shall have been received by Acquiror. If Acquiror does not timely notify Seller of any Cap Ex Reserve Shortfall in respect of a Real Property Asset as provided above, Acquiror shall be deemed to have agreed that the amount of the Cap Ex Reserve Shortfall in respect of such Real Property Asset is zero.