Common use of Proration Calculation Principles Clause in Contracts

Proration Calculation Principles. The following items (collectively, the “Prorated Items”) shall be prorated between the Seller and Buyer as of the applicable Closing Date (on the basis of the actual number of days elapsed over the applicable period) in accordance with the calculation principles set forth below, with Buyer being deemed to be the owner of the Companies and the Purchased Subsidiaries transferred at any Closing during the entire day on the applicable Closing Date and being entitled to receive all operating income of the applicable Real Property, and being obligated to pay all operating expenses of the applicable Real Property, with respect to the applicable Closing Date: (a) All non-delinquent real estate and personal property Taxes and assessments in respect of the Owned Real Property for the current year (including any Taxes or assessments that are payable in installments) shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the year during which the applicable Closing Date occurs; provided, however, that if the Property Tenant under any Property Lease is responsible for such Taxes and assessments, there shall be no proration for any such Taxes or assessments in respect of such Property Lease. In no event shall Seller be charged with or be responsible for any increase in the Taxes on the Owned Real Property resulting from the sale of the Owned Real Property contemplated by this Agreement or from any improvements made or leases entered into on or after the applicable Closing Date. (b) All fixed and additional rentals under the Property Leases, Reimbursable Tenant Expenses and other charges owed by Property Tenants shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. The Prorated Items shall include a credit to Buyer in an amount equal to all prepaid rentals for periods after the applicable Closing Date and all security deposits (or remaining portions thereof) required to be returned under the applicable Property Lease, in each case, to the extent the foregoing were paid by Property Tenants and not otherwise paid or made available to Buyer. For a period of six (6) months after the Closing Date, all delinquent rentals for periods prior to the applicable Closing Date, to the extent any such delinquent rentals are paid by Property Tenants after such Closing Date, shall be paid by Buyer to Seller within ten (10) business days after receipt by Buyer; provided, that all Property Tenant payments received subsequent to the applicable Closing shall be applied first to current rents and any delinquencies arising after the Closing Date and then to pre-Closing delinquent rents (it being agreed and understood that Buyer may not use any amounts owed to Seller pursuant to this proviso as an offset against other amounts owed by Seller to Buyer under, or claims that Buyer may have against Seller in respect of, this Agreement); provided, further that from and after the applicable Closing, Seller shall have the express right to take all commercially reasonable actions necessary or desirable to, and Buyer shall cooperate with Seller in Seller’s efforts to, obtain delinquent rentals from any Property Tenants that owe such delinquent rentals. Notwithstanding the foregoing, at the applicable Closing, Seller shall be entitled to a credit in the amount of all delinquent rentals payable by the Property Tenant, as of such Closing, in respect of the Real Property set forth on Section 2.7(b) of the Disclosure Schedule. (c) Any other items of operating income or operating expense that are not payable by Property Tenants under Property Leases (including any water, gas, electricity and other utility or similar fees) which are customarily apportioned between the parties in real estate closings of comparable commercial properties in the metropolitan area where the applicable Real Property is located, and which are not included in the Reimbursable Tenant Expenses for any Property Lease, shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs; provided, that Seller shall be entitled to a credit for any and all deposits held by any utility company or other party on behalf of any Company or any Purchased Subsidiary as of the applicable Closing Date. (d) All rent payable under the Ground Leases which are not payable by any Property Tenant shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. Seller shall be responsible for all rent payable under the Ground Leases attributable to the period before the applicable Closing Date and Buyer shall be responsible for all rent payable under the Ground Leases attributable to the period on and after the applicable Closing Date. (e) In the event that, after taking into account all of the Real Properties being transferred at the Third Closing and the Real Properties transferred at each previous Closing, the Annualized Operating Expenses for all such transferred Real Properties exceeds the OpEx Target for all such transferred Real Properties, then Buyer shall be entitled to a credit at the Third Closing in an amount calculated pursuant to the methodology set forth in Section 1.1(e) of the Disclosure Schedule (such credit, the “Purchase Price Credit”). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, then the Purchase Price Credit (and the procedures for determining same), if any, shall be effected by the Parties after such termination, but only with respect to the Real Properties that were transferred at Closings that occurred prior to such termination. At least five (5) Business Days prior to the Third Closing, Seller shall deliver to Buyer a statement (the “OpEx Statement”) (together with the financial information upon which such statement was prepared) setting forth its calculations of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any. In the event that Buyer objects to all or any portion of the OpEx Statement, Buyer and Seller shall work together in good faith to agree upon the amounts set forth therein and the calculation of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any, prior to the Third Closing, but if the Parties are unable to resolve any such objection prior to the Third Closing, then Seller may elect to proceed to the Third Closing (applying a Purchase Price Credit equal to an amount determined on the basis of Buyer’s objections); provided, that at the Third Closing, Buyer shall deposit into an escrow account (pursuant to a joint instruction escrow agreement substantially similar to the Deposit Escrow Agreement) an amount in cash in immediately available funds equal to the Purchase Price Credit Escrow Amount (it being agreed and understood that, from and after the Third Closing, the Parties shall resolve the dispute with respect to the amounts set forth in the OpEx Statement in accordance with the dispute resolution provisions of Section 10.11(b), and the Purchase Price Credit Escrow Amount shall remain in the escrow account until resolution of such dispute); provided, further, that if the Purchase Price Credit Escrow Amount exceeds Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29) (the amount of such excess, the “Excess”), then Seller may elect to either (A) delay the Third Closing until the dispute has been resolved in accordance with the dispute resolution provisions of Section 10.11(b) or (B) proceed to the Third Closing as described above (without waiving its right to make a claim against the Purchase Price Credit Escrow Amount or the Excess) with Buyer being required to deposit into escrow an amount equal to Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29), and following the Third Closing the Parties shall resolve their dispute with respect to the Purchase Price Credit Escrow Amount (including the Excess) in accordance with the dispute resolution provisions of Section 10.11(b). Notwithstanding the foregoing, the references to “Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29)” in the immediately preceding sentence shall be reduced by the percentage that the Initial Purchase Price is decreased as a result of any Withheld Properties. (f) At the Third Closing, Buyer shall be entitled to a credit in the aggregate amount of the capital improvements that are recommended in good faith by the PCR (that are not reimbursable by the applicable Property Tenant) for any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule; provided, however, that (i) Buyer shall not be entitled to a credit for capital improvements with respect to any Real Property, unless the aggregate capital improvements recommended in good faith by the PCR for such Real Property are in excess of Thirty Five Thousand Dollars ($35,000) and (ii) in no event, shall Buyer’s aggregate credit pursuant to this Section 2.7(f) exceed Nineteen Million Dollars ($19,000,000). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, and any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule are transferred to Buyer at the Initial Closing or the Second Closing, then the credit described by the first sentence of this

Proration Calculation Principles. (a) The following items set forth on Annex B attached hereto (collectively, the “Prorated Items”) shall be prorated between the Buyer and the Seller and Buyer as of the applicable Closing Date (11:59 P.M. on the basis of day preceding the actual number of days elapsed over Closing (the applicable period) in accordance “Cutoff Time”), based upon a 365-day year, with the calculation principles set forth below, with Buyer being deemed to be the indirect owner of the Companies and the Purchased Subsidiaries transferred at any Closing Acquired Properties during the entire day on of the applicable Closing Date and being entitled to receive all operating income of the applicable Real PropertyAcquired Properties, and being obligated to pay all operating expenses of the applicable Real PropertyAcquired Properties, with respect to the applicable Closing Date: (a) All non-delinquent real estate and personal property Taxes and assessments in respect of the Owned Real Property for the current year (including any Taxes or assessments that are payable in installments) shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the year during which the applicable Closing Date occurs; provided, however, that if the Property Tenant under any Property Lease is responsible for such Taxes and assessments, there shall be no proration for any such Taxes or assessments in respect of such Property Lease. In no event shall Seller be charged with or be responsible for any increase in the Taxes on the Owned Real Property resulting from the sale of the Owned Real Property contemplated by this Agreement or from any improvements made or leases entered into on or after the applicable Closing Date. (b) All fixed and additional rentals under of the Property Leases, Reimbursable Tenant Expenses and other charges owed by Property Tenants shall Prorated Items that can be prorated between Seller and Buyer determined or estimated as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. The Prorated Items shall include a credit to Buyer in an amount equal to all prepaid rentals for periods after the applicable Closing Date and all security deposits (or remaining portions thereof) required to be returned under the applicable Property Lease, in each case, to the extent the foregoing were paid by Property Tenants and not otherwise paid or made available to Buyer. For a period of six (6) months after the Closing Date, all delinquent rentals for periods prior to the applicable Closing Date, to the extent any such delinquent rentals are paid by Property Tenants after such Closing Date, Cutoff Time shall be paid by Buyer to Seller within ten (10) business days after receipt by Buyer; provided, that all Property Tenant payments received subsequent to the applicable Closing shall be applied first to current rents and any delinquencies arising after the Closing Date and then to pre-Closing delinquent rents (it being agreed and understood that Buyer may not use any amounts owed to Seller pursuant to this proviso as an offset against other amounts owed so determined or estimated by Seller to Buyer under, or claims that Buyer may have against Seller in respect of, this Agreement); provided, further that from and after the applicable Closing, Seller shall have the express right to take all commercially reasonable actions necessary or desirable to, and Buyer shall cooperate with Seller in Seller’s efforts to, obtain delinquent rentals from any Property Tenants that owe such delinquent rentals. Notwithstanding the foregoing, at the applicable Closing, Seller shall be entitled to a credit in the amount of all delinquent rentals payable by the Property Tenant, as of such Closing, in respect of the Real Property set forth on Section 2.7(b) of the Disclosure Schedule. (c) Any other items of operating income or operating expense that are not payable by Property Tenants under Property Leases (including any water, gas, electricity and other utility or similar fees) which are customarily apportioned between the parties in real estate closings of comparable commercial properties in the metropolitan area where the applicable Real Property is located, and which are not included in the Reimbursable Tenant Expenses for any Property Lease, shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs; provided, that Seller shall be entitled to a credit for any and all deposits held by any utility company or other party on behalf of any Company or any Purchased Subsidiary as of the applicable Closing Date. (d) All rent payable under the Ground Leases which are not payable by any Property Tenant shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. Seller shall be responsible for all rent payable under the Ground Leases attributable to the period before the applicable Closing Date and Buyer shall be responsible for all rent payable under the Ground Leases attributable to the period on and after the applicable Closing Date. (e) In the event that, after taking into account all of the Real Properties being transferred at the Third Closing and the Real Properties transferred at each previous Closing, the Annualized Operating Expenses for all such transferred Real Properties exceeds the OpEx Target for all such transferred Real Properties, then Buyer shall be entitled to a credit at the Third Closing in an amount calculated pursuant to the methodology set forth in Section 1.1(e) of the Disclosure Schedule (such credit, the “Purchase Price Credit”). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, then the Purchase Price Credit (and the procedures for determining same), if any, shall be effected by the Parties after such termination, but only with respect to the Real Properties that were transferred at Closings that occurred prior to such termination. At least five (5) Business Days prior to the Third Closing, Seller shall deliver to Buyer Closing in a statement (the “OpEx Estimated Proration Statement”) (together which shall be attached to, and form a part of, the Closing Statement delivered by the Seller to Buyer pursuant to Section 3.3. The Estimated Proration Statement shall include a detailed breakdown of the Prorated Items and shall be prepared in a manner consistent with the financial information upon which such statement was prepared) setting forth its calculations of the Annualized Operating Expenses calculation principles and the resulting Purchase Price Credit, if any. In the event that Buyer objects to all or any portion of the OpEx Statement, Buyer and Seller shall work together in good faith to agree upon the amounts set forth therein and the calculation of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any, prior to the Third Closing, but if the Parties are unable to resolve any such objection prior to the Third Closing, then Seller may elect to proceed to the Third Closing (applying a Purchase Price Credit equal to an amount determined on the basis of Buyer’s objections); provided, that at the Third Closing, Buyer shall deposit into an escrow account (pursuant to a joint instruction escrow agreement substantially similar to the Deposit Escrow Agreement) an amount in cash in immediately available funds equal to the Purchase Price Credit Escrow Amount (it being agreed and understood that, from and after the Third Closing, the Parties shall resolve the dispute with respect to the amounts set forth in the OpEx Statement in accordance with the dispute resolution provisions of Section 10.11(b), and the Purchase Price Credit Escrow Amount shall remain in the escrow account until resolution of such dispute); provided, further, that if the Purchase Price Credit Escrow Amount exceeds Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29) (the amount of such excess, the “Excess”), then Seller may elect to either (A) delay the Third Closing until the dispute has been resolved in accordance with the dispute resolution provisions of Section 10.11(b) or (B) proceed to the Third Closing as described above (without waiving its right to make a claim against the Purchase Price Credit Escrow Amount or the Excess) with Buyer being required to deposit into escrow an amount equal to Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29), and following the Third Closing the Parties shall resolve their dispute with respect to the Purchase Price Credit Escrow Amount (including the Excess) in accordance with the dispute resolution provisions of Section 10.11(b). Notwithstanding the foregoing, the references to “Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29)” in the immediately preceding sentence shall be reduced by the percentage that the Initial Purchase Price is decreased as a result of any Withheld Properties. (f) At the Third Closing, Buyer shall be entitled to a credit in the aggregate amount of the capital improvements that are recommended in good faith by the PCR (that are not reimbursable by the applicable Property Tenant) for any of the Real Properties procedures set forth in Section 2.7(f) of the Disclosure Schedule3.5(a); provided, however, the Estimated Proration Statement shall not include the final cash accounting described in Item (iii) of Annex B attached hereto, which shall be finalized and included on the Closing Statement on the Closing Date. On or prior to the date that is four (4) months following the Closing Date, the Buyer shall prepare and issue to the Seller an updated proration report and closing statement (the “Final Settlement Statement”) prepared in a manner consistent with the calculation principles and procedures set forth in Section 3.5(a), and which shall adjust those Prorated Items and other items on the Closing Statement (A) which were not apportioned on the Estimated Proration Statement or Closing Statement because of the unavailability of information, (B) which were apportioned on the Estimated Proration Statement or Closing Statement based upon estimated, inaccurate or incomplete information, or (C) for which manifest errors existed on the Estimated Proration Statement or Closing Statement. The Buyer and the Seller shall each have the right to have their respective accountants review drafts of the Final Settlement Statement such that the Final Settlement Statement accurately reflects the operations of the Acquired Properties on the Closing Date, and the Buyer shall provide the Seller and its Representatives reasonable access during normal business hours in such a manner as not unreasonably to interfere with the normal operations of the Acquired Properties or the Buyer’s principal place of business where such Books and Records are maintained to review such Books and Records to enable the Seller to audit the same with respect to the Final Settlement Statement. The Parties shall meet to come to a final determination of the accuracy of the Final Settlement Statement within thirty (30) days (“Final Proration Period”) after the issuance of the Final Settlement Statement. Unless any matters remain in dispute upon the expiration of the Final Proration Period, then within five (5) days of such expiration, the Seller or the Buyer, as the case may be, shall pay to the other the amount as may be required by the Final Settlement Statement (the “True-Up Amount”). If any matters remain in dispute (the “Unresolved Items”) at the expiration of any Final Proration Period, then the Accountant (or, if at the time of such dispute the Accountant is performing audit or other services for the Seller or the Buyer, then such other independent accounting firm of recognized national standing which is not providing such services to the Seller or the Buyer at such time and is otherwise mutually selected by the Seller and the Buyer) shall resolve such Unresolved Items, acting as an expert and not an arbitrator, but in no case shall they review or propose any resolution for any matters that are not Unresolved Items. If neither the Accountant nor any such mutually selected accounting firm is willing and able to serve in such capacity, then the Seller shall within ten (10) days deliver to the Buyer a listing of three other accounting firms of recognized national or regional standing and the Buyer shall within ten (10) days after receipt of such list, select one of such three accounting firms, provided that the firm ultimately selected may not be performing audit or other services for the Seller or the Buyer at such time (such firm as is ultimately selected pursuant to the aforementioned procedures being the “True-Up Accountant”). The Buyer and the Seller shall use commercially reasonable efforts to cause the True-Up Accountant to issue its written determination regarding the Unresolved Items within thirty (30) days after such Unresolved Items are submitted for review. The True-Up Accountant shall make a determination with respect to the Unresolved Items only and shall be limited to those adjustments, if any, that need to be made in order for the Final Settlement Statement to comply with the standards referred to in this Section 3.5. In no event shall the True-Up Accountant’s determination of any Unresolved Items be outside the range of the Buyer’s and the Seller’s disagreement. The determination of the True-Up Accountant shall be final, binding and conclusive for all purposes hereunder absent manifest error. Such amounts as finally determined by the True-Up Accountant shall be used to determine the True-Up Amount, which shall be paid by the applicable Party within five (5) days of the True-Up Accountant’s determination. Upon payment of the True-Up Amount pursuant to this Section 3.5(b), such True-Up Amount shall be deemed final and binding on the Parties and except as otherwise expressly set forth in this Agreement there shall be no further adjustment between the Seller and the Buyer for income and expenses. (c) The Buyer and the Seller shall share the fees and expenses of the True-Up Accountant in inverse proportion to the relative amounts of the Unresolved Items determined in favor of such Party, in accordance with the following formulas: (i) the Seller shall pay a portion of such fees and expenses equal to the total fees and expenses multiplied by a fraction, the numerator of which is the dollar amount of Unresolved Items resolved in favor of the Buyer shall not be entitled to a credit for capital improvements with respect to any Real Property, unless and the aggregate capital improvements recommended in good faith by denominator of which is the PCR for such Real Property are in excess total dollar amount of Thirty Five Thousand Dollars ($35,000) Unresolved Items and (ii) the Buyer shall pay a portion of such fees and expenses equal to the total fees and expenses multiplied by a fraction, the numerator of which is the dollar amount of Unresolved Items resolved in no event, shall Buyer’s aggregate credit pursuant to favor of the Seller and the denominator of which is the total dollar amount of Unresolved Items. The provisions of this Section 2.7(f) exceed Nineteen Million Dollars ($19,000,000). If this Agreement is terminated after 3.5 shall survive the Initial Closing but prior to the Third Closing, and any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule are transferred to Buyer at the Initial Closing or the Second Closing, then the credit described by the first sentence of this.

Proration Calculation Principles. (a) The following items (collectively, the “Prorated Items”) shall be prorated between the Seller Parent and Buyer Buyers as of the applicable Closing Date (on the basis of the actual number of days elapsed over the applicable period) in accordance with the calculation principles set forth below, with the applicable Buyer being deemed to be the owner of the Companies and the Purchased Subsidiaries applicable Hotel Assets transferred at any the Closing during the entire day on the applicable Closing Date and being entitled to receive all operating income of the applicable Real Propertysuch Hotel Assets, and being obligated to pay all operating expenses of the applicable Real Propertysuch Hotel Assets, with respect to the applicable Closing Date: (ai) Buyers shall give Parent a credit at the Closing for the amount of all accounts receivable, without discount, accruing or arising prior to the Closing as reflected in the books of Parent (or the applicable Selling Subsidiary or Manager) or the applicable Buyer that are between zero (0) and ninety (90) days outstanding (“Non-Stale A/R”). Parent shall be entitled to, and shall retain the right after the Closing to receive and/or collect, all accounts receivable for the Hotel Assets that are ninety (90) days or more outstanding (“Stale A/R”). Buyers shall have no obligation to collect any accounts receivable and credit card claims that remain ninety (90) days or more outstanding (all of which shall remain the property of Parent). If either Party receives any payments after the Closing for any accounts receivable in connection with the Hotel Assets, such payments shall be applied to the accounts receivable designated by the payers and, if the payers have not designated the accounts receivable to which the payments are to be applied, the payments shall be applied to accounts receivable in their order of maturity (with the earliest maturity having the highest priority). Periodically after the Closing (but no less frequently than monthly), (i) Buyers shall or shall cause the applicable Manager to submit to Parent all amounts received in respect of Stale A/R, together with an itemization of such accounts receivable, and (ii) if, after the Closing, any Non-Stale A/R is received by Parent, a Selling Subsidiary or the Manager under a Terminating Management Agreement, then Parent shall pay (or, if applicable, use Reasonable Efforts to cause such Manager to pay) such amounts to the applicable Buyer or its designee (it being agreed that Buyers shall be entitled to receive all amounts received by any Party after the Closing on account of the Non-Stale A/R). (ii) Buyers shall be entitled to all Hotel room, food service, bar, beverage and liquor revenues and charges and all revenues and charges from restaurant operations, Hotel banquet and conference facility operations, all revenues realized from the use of gift cards, gift certificates and similar instruments, and all other revenue of any kind attributable to any of the same for the period on and after the applicable Cut-off Time, and Parent shall be entitled to all such revenues and charges attributable to any period prior to such Cut-off Time. Notwithstanding the foregoing, the applicable Buyer and Parent shall each be entitled to one-half (1/2) of the revenue from hotel rooms at the Hotels being transferred at the Closing, including any parking charges related thereto, for the night preceding the Closing. Parent shall deliver to the applicable Buyer or provide the applicable Buyer a credit at the Closing in an amount equal to all guest reservation deposits held by the Hotels being transferred at the Closing for guests arriving or staying after check out time for such Hotels on the Closing Date, less credit card charges, travel company charges and similar commissions. (iii) Buyers shall give Parent a credit at the Closing for all xxxxx cash funds at the Hotels (whether in registers, vaults, safes (other than guest room safes) or otherwise). Buyers and Parent shall make mutually satisfactory arrangements for counting such cash and cash equivalents as of the Cut-Off Time. (iv) Parent agrees to pay (or cause the applicable Manager or Selling Subsidiary to pay), at or as of the Closing, all Trade Payables which have been invoiced and are due and owing as of the Closing. With respect to Trade Payables that are not yet due and payable as of the Closing but which have accrued or relate to that period on or prior to the Cut-Off Time, the applicable Buyer shall receive a credit at the Closing in the amount of such Trade Payables and such Buyer shall be obligated to pay such payables from and after the Closing. Buyers agree to pay, or cause the applicable Manager to pay, all Trade Payables from each Hotel which accrue and relate to that period after the Cut-Off Time, including any Trade Payables for Supplies ordered before the Closing but delivered to the Hotel on or after the Closing Date. (v) Any amounts prepaid or payable under any Assigned Contracts, and any advertising expenses, trade association dues and trade subscriptions shall be prorated at the Closing as of the Closing Date with Parent obligated for all sums accrued prior to the Cut-Off Time and the applicable Buyer obligated for all sums accrued after the Cut-Off Time. All nonother amounts owed or owing under the Assigned Contracts shall be apportioned between Parent and the applicable Buyer as of the Cut-delinquent Off Time. (vi) The applicable Buyer shall receive a credit for any accrued but unpaid sales, use, rooms, occupancy, excise and similar Taxes, personal property Taxes, ad valorem real estate Taxes, and personal property other Taxes and assessments imposed in respect of the Owned Hotels, the Real Property and the other Hotel Assets for the portion of the current year (including any Taxes or assessments that are payable in installments) shall be prorated between Seller and Buyer as of which has elapsed prior to the applicable Closing Date on an accrual basis(and to the extent unpaid, based on the actual number of days in the year during which the applicable Closing Date occurs; providedfor prior years), however, that if the Property Tenant under any Property Lease is responsible for such Taxes and assessments, there Parent shall be no proration receive a credit for any such Taxes or assessments imposed in respect of the Hotels, the Real Property and the other Hotel Assets for the portion of the period after the Closing to the extent such Taxes have been paid prior to the Closing. If the amount of any such Taxes have not been determined as of the Closing, such credit shall be based on the most recent ascertainable Taxes and shall be reprorated upon issuance of the final Tax xxxx. Any refunds of such Taxes shall be allocated between the applicable Buyer and Parent based on the portion of the year in which the Closing occurred that each of them owned (directly or indirectly) the applicable Hotel, Real Property Leaseor other Hotel Assets. In no event shall Seller Parent or any Selling Subsidiary be charged with or be responsible for any increase in the Taxes on the Owned Real Property or other Hotel Assets resulting from the sale of the Owned Real Property or other Hotel Assets contemplated by this Agreement or from any improvements made or leases entered into on or after the applicable Closing Date. If any assessments on the Real Property or other Hotel Assets are payable in installments, then the installment allocable to the current period shall be prorated (with the applicable Buyer being allocated the obligation to pay any installments due after the Closing Date). (bvii) All fixed Parent may appeal any Taxes imposed in respect of the applicable Hotel, Real Property or other Hotel Assets for any pre-Closing period, and additional rentals under the Property Leases, Reimbursable Tenant Expenses and any contingency fee charged by any consultant or other charges owed by Property Tenants third party pursuing such Tax appeal shall be reduced on a pro-rated basis from the refund payable to each of Parent and the applicable Buyer. If any appeal of any Taxes is pending as of the Closing Date with respect to any Tax period that has closed prior to the Closing Date, Parent shall be entitled to receive any rebate or credit resulting from such appeal, and shall pay all expenses of prosecuting such appeal. If any appeal of any Taxes is pending as of the Closing Date with respect to the period in which the Closing Date occurs (“Current Year Tax Appeal”), such Taxes shall be re-prorated between Seller Parent and the applicable Buyer as of the applicable Closing Date on an accrual basis, based on Cut-off Time in accordance with the actual number results of days such Current Year Tax Appeal. Parent and Buyers shall cooperate in the month (quarterprosecution of each Current Year Tax Appeal. All third party costs and fees incurred in connection with any Current Year Tax Appeal, year or other applicable period) during which the applicable Closing Date occurs. The Prorated Items including legal fees and expenses, shall include a credit to Buyer in an amount equal to all prepaid rentals for periods after the applicable Closing Date and all security deposits (or remaining portions thereof) required to be returned under the applicable Property Lease, in each case, paid by Parent to the extent due and payable prior to the foregoing were Closing Date, and shall be paid by Property Tenants the applicable Buyer to the extent due and not otherwise paid payable on or made available to Buyer. For a period of six (6) months after the Closing Date, but upon completion of the Current Year Tax Appeal, all delinquent rentals such costs and fees shall be prorated between the applicable Buyer and Parent in the same proportion as they bear re-prorated Taxes. (viii) Utilities and fuel, including, without limitation, steam, water, electricity, gas and oil shall be prorated as of the Closing. Parent shall cause the meters, if any, for periods utilities to be read the day on which the Closing Date occurs and to pay (or cause the applicable Selling Subsidiary to pay) the bills rendered on the basis of such readings. If any such meter reading for any utility is not available, then adjustment therefor shall be made on the basis of the most recently issued bills therefor which are based on meter readings no earlier than thirty (30) days prior to the applicable Closing Date, and such adjustment shall be reprorated when the next utility bills are received. Parent shall receive a credit for all deposits made by or on behalf of Parent, any Selling Subsidiary or any Manager as of the Cut-Off Time as security under any Assigned Contract, utility, public service or other arrangement to the extent the same remains on deposit for the benefit of the applicable Buyer. (ix) The applicable Buyer shall receive a credit at the Closing for the value of the Employee Benefit Payables (except to the extent Parent has made (directly or indirectly) payment therefor to any Manager prior to Closing and such delinquent rentals Buyer will receive the benefit of such payment after Closing), and shall assume all liability and responsibility for the Employee Benefit Payables for which such Buyer receives a credit. Buyers shall bear all liability and be solely responsible for all Employee related liabilities and obligations attributable to the period, or otherwise arising, from and after the Cut-off Time. To the extent Parent has, prior to the Closing, paid (directly or indirectly) for any Employee related liability or obligation that is attributable to the period, or otherwise arising, on or after the Cut-off Time, Parent shall receive a credit at the Closing for such payments. The applicable Buyer shall receive a credit for benefits, leave or performance bonuses that are earned by Employees prior to the Cut-off Time, but which have not yet been paid by Property Tenants after such Closing DateParent, shall be paid by Buyer to Seller within ten the applicable Selling Subsidiary (10or the applicable Manager on either of their behalves) business days after receipt by Buyer; provided, that all Property Tenant payments received subsequent prior to the applicable Closing shall be applied first to current rents and any delinquencies arising after the Closing Date and then to preCut-Closing delinquent rents off Time (it being agreed and understood that Buyer may not use any amounts owed to Seller such credit shall be based on the applicable Manager’s estimate thereof at the Closing, and shall be reconciled after the Closing pursuant to this proviso Section 2.7(b), giving effect to the actual amounts). (x) To the extent the applicable Selling Subsidiary is entitled to such revenues under the applicable Management Agreement or otherwise, Parent shall receive a credit for all vending machine revenues, and pay telephone and washroom and checkroom revenues at the Hotels as an offset against other amounts owed of the Closing and all such revenues following the Closing shall become the property of the applicable Buyer upon the Closing. (xi) Parent shall receive a credit for any recurring fees for any Real Property’s or any Hotel’s Permits which have been paid by Seller Parent (or the applicable Manager, Selling Subsidiary) prior to Buyer under, or claims that Buyer may have against Seller in respect of, this Agreement); provided, further that the Closing and relate to the period from and after the applicable Closing, Seller shall have the express right to take all commercially reasonable actions necessary or desirable toClosing Date, and the applicable Buyer shall cooperate with Seller in Seller’s efforts to, obtain delinquent rentals from any Property Tenants that owe such delinquent rentals. Notwithstanding the foregoing, at the applicable Closing, Seller shall be entitled to a credit in the amount of all delinquent rentals payable by the Property Tenant, as of such Closing, in respect of the Real Property set forth on Section 2.7(b) of the Disclosure Schedule. (c) Any other items of operating income or operating expense that are not payable by Property Tenants under Property Leases (including any water, gas, electricity and other utility or similar fees) which are customarily apportioned between the parties in real estate closings of comparable commercial properties in the metropolitan area where the applicable Real Property is located, and which are not included in the Reimbursable Tenant Expenses for any Property Lease, shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs; provided, that Seller shall be entitled to receive a credit for any and all deposits held by any utility company or other party on behalf of any Company or any Purchased Subsidiary such fees which have not been paid as of the applicable Closing and relate to the period prior to the Closing Date. (dxii) All rent fees, reimbursements and other amounts payable to Managers under the Ground Leases Management Agreements which are not payable by any Property Tenant shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days included in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. Seller shall be responsible for all rent payable under the Ground Leases attributable to the period before the applicable Closing Date and Buyer shall be responsible for all rent payable under the Ground Leases attributable to the period on and after the applicable Closing Date. (e) In the event that, after taking into account all of the Real Properties being transferred at the Third Closing and the Real Properties transferred at each previous Closing, the Annualized Operating Expenses for all such transferred Real Properties exceeds the OpEx Target for all such transferred Real Properties, then Buyer shall be entitled to a credit at the Third Closing in an amount calculated pursuant to the methodology set forth in Section 1.1(e) of the Disclosure Schedule (such credit, the “Purchase Price Credit”). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, then the Purchase Price Credit (and the procedures for determining same)Assigned Contracts, if any, shall be effected by apportioned between Parent and the Parties after applicable Buyer as of the Cut-off Time. Any incentive management or similar fee payable under any such terminationManagement Agreement (each, but only with respect an “IMF”) to the Real Properties that were transferred at Closings that occurred prior to Manager under such termination. At least Management Agreement shall be apportioned as follows: (A) Within five (5) Business Days days after issuance by the applicable Manager of a financial or other operating statement under the applicable Management Agreement (the “Final Accounting Period Statement”) for the accounting period in which the Closing occurs (the “Final Accounting Period”), Parent and the applicable Buyer shall calculate an adjustment to the IMF, representing the difference between (x) the aggregate IMF paid to the applicable Manager for the 2014 Fiscal Year prior to the Third Closing, Seller shall deliver to Buyer a statement (Cut-off Time as shown on the “OpEx Statement”) (together with the financial information upon which such statement was prepared) setting forth its calculations of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any. In the event that Buyer objects to all or any portion of the OpEx Final Accounting Period Statement, Buyer and Seller shall work together in good faith (y) the Actual IMF at the Closing as calculated below. If the Actual IMF at the applicable exceeds the IMF paid to agree upon the amounts set forth therein and the calculation of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any, applicable Manager prior to the Third ClosingCut-off Time as shown on the Final Accounting Period Statement, but if Parent shall pay the Parties are unable excess thereof to resolve any such objection Buyer within five (5) days of such determination. If the Actual IMF at the Closing is less than the IMF paid to the applicable Manager prior to the Third ClosingCut-off Time as shown on the Final Accounting Period Statement, then Seller may elect such Buyer shall pay the shortfall to proceed Parent within five (5) days of such determination. The “Actual IMF” shall be calculated as the sum of (a) 2014 fiscal year Operating Profit prior to the Third Closing (applying a Purchase Price Credit equal to an amount determined on the basis of Buyer’s objections); providedCut-off Time, that at the Third Closing, Buyer shall deposit into an escrow account (pursuant to a joint instruction escrow agreement substantially similar to the Deposit Escrow Agreement) an amount in cash in immediately available funds equal to the Purchase Price Credit Escrow Amount (it being agreed and understood that, from and after the Third Closing, the Parties shall resolve the dispute with respect to the amounts set forth in the OpEx Statement in accordance with the dispute resolution provisions of Section 10.11(b), and the Purchase Price Credit Escrow Amount shall remain in the escrow account until resolution of such dispute); provided, further, that if the Purchase Price Credit Escrow Amount exceeds Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29) (the amount of such excess, the “Excess”), then Seller may elect to either (A) delay the Third Closing until the dispute has been resolved in accordance with the dispute resolution provisions of Section 10.11(b) or (B) proceed to the Third Closing as described above (without waiving its right to make a claim against the Purchase Price Credit Escrow Amount or the Excess) with Buyer being required to deposit into escrow an amount equal to Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29), and following the Third Closing the Parties shall resolve their dispute with respect to the Purchase Price Credit Escrow Amount (including the Excess) in accordance with the dispute resolution provisions of Section 10.11(b). Notwithstanding the foregoing, the references to “Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29)” in the immediately preceding sentence shall be reduced by the percentage that the Initial Purchase Price is decreased as a result of any Withheld Properties. (f) At the Third Closing, Buyer shall be entitled to a credit in the aggregate amount of the capital improvements that are recommended in good faith by the PCR (that are not reimbursable divided by the applicable Property TenantManager’s most recent forecast of full 2014 fiscal year Operating Profit, multiplied by (b) for any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule; provided, however, that (i) Buyer shall not be entitled to a credit for capital improvements with respect to any Real Property, unless the aggregate capital improvements recommended in good faith by the PCR for such Real Property are in excess of Thirty Five Thousand Dollars ($35,000) and (ii) in no event, shall BuyerManager’s aggregate credit pursuant to this Section 2.7(f) exceed Nineteen Million Dollars ($19,000,000). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, and any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule are transferred to Buyer at the Initial Closing or the Second Closing, then the credit described by the first sentence of thisforecast of

Proration Calculation Principles. The following items (collectively, the “Prorated Items”) shall be prorated between the Seller and Buyer as of the applicable Closing Date (on the basis of the actual number of days elapsed over the applicable period) in accordance with the calculation principles set forth below, with Buyer being deemed to be the owner of the Companies and the Purchased Subsidiaries transferred at any Closing during the entire day on the applicable Closing Date and being entitled to receive all operating income of the applicable Real Property, and being obligated to pay all operating expenses of the applicable Real Property, with respect to the applicable Closing Date: (a) All non-delinquent real estate and personal property Taxes and assessments in respect of the Owned Real Property for the current year (including any Taxes or assessments that are payable in installments) shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the year during which the applicable Closing Date occurs; provided, however, that if the Property Tenant under any Property Lease is responsible for such Taxes and assessments, there shall be no proration for any such Taxes or assessments in respect of such Property Lease. In no event shall Seller be charged with or be responsible for any increase in the Taxes on the Owned Real Property resulting from the sale of the Owned Real Property contemplated by this Agreement or from any improvements made or leases entered into on or after the applicable Closing Date. (b) All fixed and additional rentals under the Property Leases, Reimbursable Tenant Expenses and other charges owed by Property Tenants shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. The Prorated Items shall include a credit to Buyer in an amount equal to all prepaid rentals for periods after the applicable Closing Date and all security deposits (or remaining portions thereof) required to be returned under the applicable Property Lease, in each case, to the extent the foregoing were paid by Property Tenants and not otherwise paid or made available to Buyer. For a period of six (6) months after the Closing Date, all delinquent rentals for periods prior to the applicable Closing Date, to the extent any such delinquent rentals are paid by Property Tenants after such Closing Date, shall be paid by Buyer to Seller within ten (10) business days after receipt by Buyer; provided, that all Property Tenant payments received subsequent to the applicable Closing shall be applied first to current rents and any delinquencies arising after the Closing Date and then to pre-Closing delinquent rents (it being agreed and understood that Buyer may not use any amounts owed to Seller pursuant to this proviso as an offset against other amounts owed by Seller to Buyer under, or claims that Buyer may have against Seller in respect of, this Agreement); provided, further that from and after the applicable Closing, Seller shall have the express right to take all commercially reasonable actions necessary or desirable to, and Buyer shall cooperate with Seller in Seller’s efforts to, obtain delinquent rentals from any Property Tenants that owe such delinquent rentals. Notwithstanding the foregoing, at the applicable Closing, Seller shall be entitled to a credit in the amount of all delinquent rentals payable by the Property Tenant, as of such Closing, in respect of the Real Property set forth on Section 2.7(b) of the Disclosure Schedule. (c) Any other items of operating income or operating expense that are not payable by Property Tenants under Property Leases (including any water, gas, electricity and other utility or similar fees) which are customarily apportioned between the parties in real estate closings of comparable commercial properties in the metropolitan area where the applicable Real Property is located, and which are not included in the Reimbursable Tenant Expenses for any Property Lease, shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs; provided, that Seller shall be entitled to a credit for any and all deposits held by any utility company or other party on behalf of any Company or any Purchased Subsidiary as of the applicable Closing Date. (d) All rent payable under the Ground Leases which are not payable by any Property Tenant shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. Seller shall be responsible for all rent payable under the Ground Leases attributable to the period before the applicable Closing Date and Buyer shall be responsible for all rent payable under the Ground Leases attributable to the period on and after the applicable Closing Date. (e) In the event that, after taking into account all of the Real Properties being transferred at the Third Closing and the Real Properties transferred at each previous Closing, the Annualized Operating Expenses for all such transferred Real Properties exceeds the OpEx Target for all such transferred Real Properties, then Buyer shall be entitled to a credit at the Third Closing in an amount calculated pursuant to the methodology set forth in Section 1.1(e) of the Disclosure Schedule (such credit, the “Purchase Price Credit”). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, then the Purchase Price Credit (and the procedures for determining same), if any, shall be effected by the Parties after such termination, but only with respect to the Real Properties that were transferred at Closings that occurred prior to such termination. At least five (5) Business Days prior to the Third Closing, Seller shall deliver to Buyer a statement (the “OpEx Statement”) (together with the financial information upon which such statement was prepared) setting forth its calculations of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any. In the event that Buyer objects to all or any portion of the OpEx Statement, Buyer and Seller shall work together in good faith to agree upon the amounts set forth therein and the calculation of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any, prior to the Third Closing, but if the Parties are unable to resolve any such objection prior to the Third Closing, then Seller may elect to proceed to the Third Closing (applying a Purchase Price Credit equal to an amount determined on the basis of Buyer’s objections); provided, that at the Third Closing, Buyer shall deposit into an escrow account (pursuant to a joint instruction escrow agreement substantially similar to the Deposit Escrow Agreement) an amount in cash in immediately available funds equal to the Purchase Price Credit Escrow Amount (it being agreed and understood that, from and after the Third Closing, the Parties shall resolve the dispute with respect to the amounts set forth in the OpEx Statement in accordance with the dispute resolution provisions of Section 10.11(b), and the Purchase Price Credit Escrow Amount shall remain in the escrow account until resolution of such dispute); provided, further, that if the Purchase Price Credit Escrow Amount exceeds Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29) (the amount of such excess, the “Excess”), then Seller may elect to either (A) delay the Third Closing until the dispute has been resolved in accordance with the dispute resolution provisions of Section 10.11(b) or (B) proceed to the Third Closing as described above (without waiving its right to make a claim against the Purchase Price Credit Escrow Amount or the Excess) with Buyer being required to deposit into escrow an amount equal to Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29), and following the Third Closing the Parties shall resolve their dispute with respect to the Purchase Price Credit Escrow Amount (including the Excess) in accordance with the dispute resolution provisions of Section 10.11(b). Notwithstanding the foregoing, the references to “Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29)” in the immediately preceding sentence shall be reduced by the percentage that the Initial Purchase Price is decreased as a result of any Withheld Properties. (f) At the Third Closing, Buyer shall be entitled to a credit in the aggregate amount of the capital improvements that are recommended in good faith by the PCR (that are not reimbursable by the applicable Property Tenant) for any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule; provided, however, that (i) Buyer shall not be entitled to a credit for capital improvements with respect to any Real Property, unless the aggregate capital improvements recommended in good faith by the PCR for such Real Property are in excess of Thirty Five Thousand Dollars ($35,000) and (ii) in no event, shall Buyer’s aggregate credit pursuant to this Section 2.7(f) exceed Nineteen Million Dollars ($19,000,000). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, and any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule are transferred to Buyer at the Initial Closing or the Second Closing, then the credit described by the first sentence of thisthis Section 2.7(f) shall be effected by the Parties after such termination, but only with respect to the Real Properties that were transferred at Closings that occurred prior to such termination. (g) In the event that any Real Property set forth on Section 2.7(g) of the Disclosure Schedule is transferred to Buyer at a Closing, Seller shall, at the Closing at which such Real Property is transferred, give to Buyer a releasing credit in the amount set forth across from such Real Property’s address in Section 2.7(g) of the Disclosure Schedule.

Proration Calculation Principles. (a) The following items (collectively, the “Prorated Items”) shall be prorated between the Seller Parent and Buyer Buyers as of the applicable Closing Date (on the basis of the actual number of days elapsed over the applicable period) in accordance with the calculation principles set forth below, with the applicable Buyer being deemed to be the owner of the Companies and the Purchased Subsidiaries applicable Hotel Assets transferred at any the Closing during the entire day on the applicable Closing Date and being entitled to receive all operating income of the applicable Real Propertysuch Hotel Assets, and being obligated to pay all operating expenses of the applicable Real Propertysuch Hotel Assets, with respect to the applicable Closing Date: i. Buyers shall give Parent a credit at the Closing for the amount of all accounts receivable, without discount, accruing or arising prior to the Closing as reflected in the books of Parent (aor the applicable Selling Subsidiary or Manager) All nonor the applicable Buyer that are between zero (0) and ninety (90) days outstanding (“Non-delinquent real estate Stale A/R”). Parent shall be entitled to, and personal shall retain the right after the Closing to receive and/or collect, all accounts receivable for the Hotel Assets that are ninety (90) days or more outstanding (“Stale A/R”). Buyers shall have no obligation to collect any accounts receivable and credit card claims that remain ninety (90) days or more outstanding (all of which shall remain the property Taxes and assessments of Parent). If either Party receives any payments after the Closing for any accounts receivable in connection with the Hotel Assets, such payments shall be applied to the accounts receivable designated by the payers and, if the payers have not designated the accounts receivable to which the payments are to be applied, the payments shall be applied to accounts receivable in their order of maturity (with the earliest maturity having the highest priority). Periodically after the Closing (but no less frequently than monthly), (i) Buyers shall or shall cause the applicable Manager to submit to Parent all amounts received in respect of the Owned Real Property for the current year (including any Taxes or assessments that are payable in installments) shall be prorated between Seller and Buyer as of the applicable Closing Date on Stale A/R, together with an accrual basis, based on the actual number of days in the year during which the applicable Closing Date occurs; provided, however, that if the Property Tenant under any Property Lease is responsible for such Taxes and assessments, there shall be no proration for any such Taxes or assessments in respect itemization of such Property Lease. In no event shall Seller be charged with or be responsible for any increase in the Taxes on the Owned Real Property resulting from the sale of the Owned Real Property contemplated by this Agreement or from any improvements made or leases entered into on or accounts receivable, and (ii) if, after the applicable Closing Date. Closing, any Non-Stale A/R is received by Parent, a Selling Subsidiary or the Manager under a Terminating Management Agreement, then Parent shall pay (bor, if applicable, use Reasonable Efforts to cause such Manager to pay) All fixed and additional rentals under the Property Leases, Reimbursable Tenant Expenses and other charges owed by Property Tenants shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. The Prorated Items shall include a credit to Buyer in an amount equal to all prepaid rentals for periods after the applicable Closing Date and all security deposits (or remaining portions thereof) required to be returned under the applicable Property Lease, in each case, to the extent the foregoing were paid by Property Tenants and not otherwise paid or made available to Buyer. For a period of six (6) months after the Closing Date, all delinquent rentals for periods prior such amounts to the applicable Closing Date, to the extent any such delinquent rentals are paid by Property Tenants after such Closing Date, shall be paid by Buyer to Seller within ten (10) business days after receipt by Buyer; provided, that all Property Tenant payments received subsequent to the applicable Closing shall be applied first to current rents and any delinquencies arising after the Closing Date and then to pre-Closing delinquent rents or its designee (it being agreed and understood that Buyer may not use any amounts owed to Seller pursuant to this proviso as an offset against other amounts owed by Seller to Buyer under, or claims that Buyer may have against Seller in respect of, this Agreement); provided, further that from and after the applicable Closing, Seller shall have the express right to take all commercially reasonable actions necessary or desirable to, and Buyer shall cooperate with Seller in Seller’s efforts to, obtain delinquent rentals from any Property Tenants that owe such delinquent rentals. Notwithstanding the foregoing, at the applicable Closing, Seller Buyers shall be entitled to a credit in receive all amounts received by any Party after the amount of all delinquent rentals payable by the Property Tenant, as of such Closing, in respect Closing on account of the Real Property set forth on Section 2.7(b) of the Disclosure ScheduleNon-Stale A/R). (c) Any other items of operating income or operating expense that are not payable by Property Tenants under Property Leases (including any water, gas, electricity and other utility or similar fees) which are customarily apportioned between the parties in real estate closings of comparable commercial properties in the metropolitan area where the applicable Real Property is located, and which are not included in the Reimbursable Tenant Expenses for any Property Lease, shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs; provided, that Seller shall be entitled to a credit for any and all deposits held by any utility company or other party on behalf of any Company or any Purchased Subsidiary as of the applicable Closing Date. (d) All rent payable under the Ground Leases which are not payable by any Property Tenant shall be prorated between Seller and Buyer as of the applicable Closing Date on an accrual basis, based on the actual number of days in the month (quarter, year or other applicable period) during which the applicable Closing Date occurs. Seller shall be responsible for all rent payable under the Ground Leases attributable to the period before the applicable Closing Date and Buyer shall be responsible for all rent payable under the Ground Leases attributable to the period on and after the applicable Closing Date. (e) In the event that, after taking into account all of the Real Properties being transferred at the Third Closing and the Real Properties transferred at each previous Closing, the Annualized Operating Expenses for all such transferred Real Properties exceeds the OpEx Target for all such transferred Real Properties, then Buyer shall be entitled to a credit at the Third Closing in an amount calculated pursuant to the methodology set forth in Section 1.1(e) of the Disclosure Schedule (such credit, the “Purchase Price Credit”). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, then the Purchase Price Credit (and the procedures for determining same), if any, shall be effected by the Parties after such termination, but only with respect to the Real Properties that were transferred at Closings that occurred prior to such termination. At least five (5) Business Days prior to the Third Closing, Seller shall deliver to Buyer a statement (the “OpEx Statement”) (together with the financial information upon which such statement was prepared) setting forth its calculations of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any. In the event that Buyer objects to all or any portion of the OpEx Statement, Buyer and Seller shall work together in good faith to agree upon the amounts set forth therein and the calculation of the Annualized Operating Expenses and the resulting Purchase Price Credit, if any, prior to the Third Closing, but if the Parties are unable to resolve any such objection prior to the Third Closing, then Seller may elect to proceed to the Third Closing (applying a Purchase Price Credit equal to an amount determined on the basis of Buyer’s objections); provided, that at the Third Closing, Buyer shall deposit into an escrow account (pursuant to a joint instruction escrow agreement substantially similar to the Deposit Escrow Agreement) an amount in cash in immediately available funds equal to the Purchase Price Credit Escrow Amount (it being agreed and understood that, from and after the Third Closing, the Parties shall resolve the dispute with respect to the amounts set forth in the OpEx Statement in accordance with the dispute resolution provisions of Section 10.11(b), and the Purchase Price Credit Escrow Amount shall remain in the escrow account until resolution of such dispute); provided, further, that if the Purchase Price Credit Escrow Amount exceeds Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29) (the amount of such excess, the “Excess”), then Seller may elect to either (A) delay the Third Closing until the dispute has been resolved in accordance with the dispute resolution provisions of Section 10.11(b) or (B) proceed to the Third Closing as described above (without waiving its right to make a claim against the Purchase Price Credit Escrow Amount or the Excess) with Buyer being required to deposit into escrow an amount equal to Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29), and following the Third Closing the Parties shall resolve their dispute with respect to the Purchase Price Credit Escrow Amount (including the Excess) in accordance with the dispute resolution provisions of Section 10.11(b). Notwithstanding the foregoing, the references to “Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty Nine cents ($9,668,508.29)” in the immediately preceding sentence shall be reduced by the percentage that the Initial Purchase Price is decreased as a result of any Withheld Properties. (f) At the Third Closing, Buyer shall be entitled to a credit in the aggregate amount of the capital improvements that are recommended in good faith by the PCR (that are not reimbursable by the applicable Property Tenant) for any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule; provided, however, that (i) Buyer shall not be entitled to a credit for capital improvements with respect to any Real Property, unless the aggregate capital improvements recommended in good faith by the PCR for such Real Property are in excess of Thirty Five Thousand Dollars ($35,000) and (ii) in no event, shall Buyer’s aggregate credit pursuant to this Section 2.7(f) exceed Nineteen Million Dollars ($19,000,000). If this Agreement is terminated after the Initial Closing but prior to the Third Closing, and any of the Real Properties set forth in Section 2.7(f) of the Disclosure Schedule are transferred to Buyer at the Initial Closing or the Second Closing, then the credit described by the first sentence of this