Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified: (a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto. (b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing. (c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date. (d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing. (e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser. (f) Assignable license and permit fees paid on an annual or other periodic basis. (g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof. (h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller. (i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 7 contracts
Samples: Purchase and Sale Agreement (Grubb & Ellis Apartment REIT, Inc.), Purchase and Sale Agreement (Grubb & Ellis Apartment REIT, Inc.), Purchase and Sale Agreement (Grubb & Ellis Apartment REIT, Inc.)
Prorations and Adjustments. The following At Closing, interest on the Existing Indebtedness (if being assumed by Purchaser), rents, all real property taxes, water rents, sewer charges, electric and other utility charges, fuel if any, operating expenses, special assessments, if any, and other similar charges affecting the Property shall be adjusted and prorated as of midnight of the day prior to the Closing Date, the day of Closing being a day of income and expense for the Purchaser. If Purchaser elects to assume the Existing Indebtedness, Seller shall assign to Purchaser at Closing all of Seller’s right, title and interest in and to the reserves held by the Lender as of the Closing Date, as described on Exhibit D hereto. The amount of reserves so assigned will be credited to Seller and paid by Purchaser on the Closing Date. To the extent practicable, Seller shall attempt to have utility providers read the meters for the Property on the day prior to Closing for purposes of making such prorations and adjustments. All other charges or fees customarily prorated and adjusted between Seller and in similar transactions shall be adjusted at Closing. All security deposits under the Leases (together with any accrued interest thereon as may be required by law or contract) shall be paid or credited to Purchaser as of the day date of Closing, and to the extent Seller has any security deposits held in the form of a letter of credit, such letters of credit shall be assigned to Purchaser as of the Closing Date, with any costs associated with assigning the letters of credit to the Purchaser to be borne by the Seller. All rent (other than prepaid rent) payable by the Tenants of the Property shall be adjusted (prorated) as of the Closing Date and paid in accordance with the following provisions:
(i) Any Basic Rent and any monthly estimated common area maintenance (“CAM”) and real estate tax payments, and any other monthly charges under any of the Leases which are attributable to the month in which the Closing occurs, shall be adjusted as of the Closing, except as otherwise specified:with Seller being entitled to the portion thereof attributable to the period of the month immediately preceding the Closing Date and Purchaser entitled to the balance of such monthly installment. The party receiving such payment after Closing shall pay over to the other party within five (5) Business Days following receipt, the portion of the installment to which the other party is entitled.
(ii) Purchaser shall be entitled to all Basic Rent and other sums due under the Leases to the extent collected on any date after the Closing, with the exception of (a) Collected Rents any common area maintenance (CAM), tax and insurance adjustment payments by Tenants attributable to periods prior to the Closing, as described in this Subsection (ii) below; (b) the Basic Rent, estimated CAM charge payments and other chargesmonthly charges for the Closing month to which Seller is entitled under (i) above, other than and (c) to the extent specified in Subsection (iii) below, rentals paid by the Tenants on account of rental arrearages for periods preceding the Closing. Any CAM, tax or insurance adjustment payments by Tenants who owe Delinquent Rents which are payable on an annual basis after the conclusion of each calendar year will be adjusted as of Closing, with Seller being entitled to the portion thereof attributable to the period of the year immediately preceding the Closing Date and Purchaser being entitled to the balance of such payment. Purchaser shall pay over to Seller within five (as hereinafter defined), 5) Business Days following receipt the portion of the installment to which the Seller is entitled (which such payment shall be prorated accompanied by credit a statement showing Purchaser’s calculation of Seller’s pro rata portion). Purchaser agrees that adjustment xxxxxxxx to Purchaser. Prepaid rents and other charges Tenants for CAM, taxes or insurance premiums for the accounting year in which the Closing occurs shall be credited billed by Purchaser to PurchaserTenants on a timely basis in accordance with the respective Leases (and Seller hereby agrees to cooperate with Purchaser in determining the amount of such adjustment xxxxxxxx). The rent and all other sums Additionally, any post-Closing tenant payments of amounts for special services provided by Seller prior to the Closing Date which are due and payable were specifically billed by Seller prior to the Closing Date shall be remitted by Purchaser to Seller by any tenant within five (5) Business Days following Purchaser’s receipt thereof.
(iii) Rent which is due, but uncollected uncollected, as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, as and when collected (but collected, less any reasonable, out-of-pocket expenses incurred by Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closingcollection; provided, Seller shall deliver to Purchaser a schedule of all rentthat, charges and other amounts payable by tenants after the Closing except with respect to Basic Rental for the Closing month, which Seller is entitled shall be treated as specified in (i) above, all rents collected subsequent to receive a share under this Agreement, Closing by Purchaser shall first be applied to current rentals then due which have accrued subsequent to Closing and any amount due and owing remaining amounts shall be applied to rental arrearages as of Closing. Similarly, if Seller before the Closing by tenants receives any Basic Rent or other sums under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed payable to Purchaser for periods after the Closingunder this Section 9.2, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, then Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect promptly deliver such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred sums to Purchaser. Purchaser shall assume Purchaser, at Closing the obligationSeller’s request, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless will use reasonable efforts for the amounts, if material, by which a period of ninety (i90) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing days after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual to collect past due rental amounts or other periodic basis.
payments owed to Seller in accordance with this Section 9.2. Seller shall have no right to take any collection actions against Tenants. All adjustment items to the extent they cannot be precisely determined at Closing (g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with or to the Assumed Loan and those held by Seller, if anyextent found to be erroneous after the Closing), shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) estimated at Closing and shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel resolved by the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance parties in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments good faith no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerClosing.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Columbia Equity Trust, Inc.), Purchase and Sale Agreement (Columbia Equity Trust, Inc.)
Prorations and Adjustments. The following At Closing, interest on the Existing Indebtedness, rents, all real property taxes, water rents, sewer charges, electric and other utility charges, fuel if any, operating expenses, special assessments, if any, and other similar charges affecting the Property shall be adjusted and prorated as of midnight of the day prior to the Closing Date, the day of Closing being a day of income and expense for the Purchaser. Seller shall assign to Purchaser at Closing all of Seller’s right, title and interest in and to the reserves held by the Lender as of the Closing Date, as described on Exhibit D hereto. The amount of reserves so assigned will be credited to Seller and paid by Purchaser on the Closing Date. To the extent practicable, Seller shall attempt to have utility providers read the meters for the Property on the day prior to Closing for purposes of making such prorations and adjustments. All other charges or fees customarily prorated and adjusted between Seller and in similar transactions shall be adjusted at Closing. All security deposits under the Leases (together with any accrued interest thereon as may be required by law or contract) shall be paid or credited to Purchaser as of the day date of Closing, and to the extent Seller has any security deposits held in the form of a letter of credit, such letters of credit shall be assigned to Purchaser as of the Closing Date, with any costs associated with assigning the letters of credit to the Purchaser to be borne by the Seller. All rent (other than prepaid rent) payable by the Tenants of the Property shall be adjusted (prorated) as of the Closing Date and paid in accordance with the following provisions:
(i) Any Basic Rent and any monthly estimated common area maintenance (“CAM”) and real estate tax payments, and any other monthly charges under any of the Leases which are attributable to the month in which the Closing occurs, shall be adjusted as of the Closing, except as otherwise specified:with Seller being entitled to the portion thereof attributable to the period of the month immediately preceding the Closing Date and Purchaser entitled to the balance of such monthly installment. The party receiving such payment after Closing shall pay over to the other party within five (5) Business Days following receipt, the portion of the installment to which the other party is entitled.
(ii) Purchaser shall be entitled to all Basic Rent and other sums due under the Leases to the extent collected on any date after the Closing, with the exception of (a) Collected Rents any common area maintenance (CAM), tax and insurance adjustment payments by Tenants attributable to periods prior to the Closing, as described in this Subsection (ii) below; (b) the Basic Rent, estimated CAM charge payments and other chargesmonthly charges for the Closing month to which Seller is entitled under (i) above, other than and (c) to the extent specified in Subsection (iii) below, rentals paid by the Tenants on account of rental arrearages for periods preceding the Closing. Any CAM, tax or insurance adjustment payments by Tenants who owe Delinquent Rents which are payable on an annual basis after the conclusion of each calendar year will be adjusted as of Closing, with Seller being entitled to the portion thereof attributable to the period of the year immediately preceding the Closing Date and Purchaser being entitled to the balance of such payment. Purchaser shall pay over to Seller within five (as hereinafter defined), 5) Business Days following receipt the portion of the installment to which the Seller is entitled (which such payment shall be prorated accompanied by credit a statement showing Purchaser’s calculation of Seller’s pro rata portion). Purchaser agrees that adjustment xxxxxxxx to Purchaser. Prepaid rents and other charges Tenants for CAM, taxes or insurance premiums for the accounting year in which the Closing occurs shall be credited billed by Purchaser to PurchaserTenants on a timely basis in accordance with the respective Leases (and Seller hereby agrees to cooperate with Purchaser in determining the amount of such adjustment xxxxxxxx). The rent and all other sums Additionally, any post-Closing tenant payments of amounts for special services provided by Seller prior to the Closing Date which are due and payable were specifically billed by Seller prior to the Closing Date shall be remitted by Purchaser to Seller by any tenant within five (5) Business Days following Purchaser’s receipt thereof.
(iii) Rent which is due, but uncollected uncollected, as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, as and when collected (but collected, less any reasonable, out-of-pocket expenses incurred by Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closingcollection; provided, Seller shall deliver to Purchaser a schedule of all rentthat, charges and other amounts payable by tenants after the Closing except with respect to Basic Rental for the Closing month, which Seller is entitled shall be treated as specified in (i) above, all rents collected subsequent to receive a share under this Agreement, Closing by Purchaser shall first be applied to current rentals then due which have accrued subsequent to Closing and any amount due and owing remaining amounts shall be applied to rental arrearages as of Closing. Similarly, if Seller before the Closing by tenants receives any Basic Rent or other sums under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed payable to Purchaser for periods after the Closingunder this Section 9.2, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, then Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect promptly deliver such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred sums to Purchaser. Purchaser shall assume Purchaser, at Closing the obligationSeller’s request, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless will use reasonable efforts for the amounts, if material, by which a period of ninety (i90) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing days after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual to collect past due rental amounts or other periodic basis.
payments owed to Seller in accordance with this Section 9.2. Seller shall have no right to take any collection actions against Tenants. All adjustment items to the extent they cannot be precisely determined at Closing (g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with or to the Assumed Loan and those held by Seller, if anyextent found to be erroneous after the Closing), shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) estimated at Closing and shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel resolved by the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance parties in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments good faith no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerClosing.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Columbia Equity Trust, Inc.), Purchase and Sale Agreement (Columbia Equity Trust, Inc.)
Prorations and Adjustments. (a) Municipal improvement liens where the work has been completed or has physically commenced as of the Effective Date (certified liens) shall be paid by Seller or a credit shall be provided to Buyer on the closing statements at Closing; and municipal improvement liens which have been authorized but where the work has not commenced as of the Effective Date (pending liens) shall be assumed by Purchaser.
(b) The following items as applicable shall be apportioned between the Seller and Purchaser as of midnight on the day immediately preceding the Closing Date.
(i) Real property taxes shall be prorated on the basis of the current year's taxes, if known, at the highest allowable discount. If the Closing shall occur before the amount of current taxes shall have been determined, such taxes shall be apportioned upon the basis of the taxes for the most recent calendar year available.
(ii) Fees for licenses and permits which are transferable to the Purchaser, if any.
(iii) Fees for service and maintenance contracts assumed by Purchaser, if any.
(iv) All current rent, common area maintenance charges ("CAM Charges"), operating expenses and real estate tax pass through (the "Operating Expense Charges") and prepaid rents shall be prorated and adjusted between Seller and Purchaser as of the day Midnight of the Closingdate prior to the Closing Date, except as otherwise specified:
(a) Collected Rents provided, however, all rents, CAM Charges and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums Operating Expense Charges which are due and payable to Seller by any tenant but uncollected delinquent more than fifteen (15) days (the "Delinquent Rents") as of the Closing Date shall not be adjustedprorated. Purchaser agrees to use its best efforts, but Purchaser shall cause the rent and other sums for the a reasonable period prior of time after closing, to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants collect Delinquent Rents after the Closing with respect to which Seller is entitled to receive a share under this Agreement, Date and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of party owing Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs rents shall first be applied to all Purchaser's costs of collection incurred, second, to rents and other charges due for the months in which such payment is received by Purchaser, third, to rents and to the charges attributable to any period after closing, which are past due on the date of such tenants’ receipt, and then to Delinquent AmountsRents, which amounts, if any, with respect shall be paid to Seller. Purchaser shall not be obligated to file suit to collect Delinquent rents, if after good faith effort to collect, it determines, in its sole discretion, that said suit will either be unsuccessful or any judgment obtained therefrom will be uncollectible. Seller shall be entitled to continue to prosecute any and all legal actions commenced by Seller prior to the month date of closing but not against any tenant which remain in which possession as tenant after closing. Purchaser and Seller acknowledge that CAM Charges and Operating Expense Charges are estimated. Nevertheless, Purchaser and Seller agree not to readjust the Closing occurs, CAM Charges and not toward the payment of rent Operating Expense Charges for the year 1997 when the actual charges are determined.
(v) All security and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share deposits of charges or amountsexisting tenants, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefortogether with all interests accrued thereon, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property if any, as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred and assigned to Purchaser. Purchaser or Purchaser shall assume receive a credit at Closing closing, for the obligation, if any, to pay security amount of said deposits and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser Seller harmless from any claims for damages by tenants in regard to said deposits paid to Purchaser.
(vi) At the amountsoption of the parties, if materialthe premiums on any transferable insurance policies relating to the Property.
(vii) Water and garbage collection charges and all other similar charges.
(viii) Seller shall pay for, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required cause to be held under paid for, all utilities furnished to the terms Property through the date immediately preceding the Closing Date: Purchaser shall assume payment of such utilities from the Leases exceeds (ii) the amount actually transferred to Closing Date. Seller shall withdraw all utility deposits made by it, and Purchaser at Closingshall make its own deposits for utilities.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the After Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water Purchaser will assume full responsibility for all unapplied security deposits and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all advance rental deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those currently held by Seller, if any, shall be assigned and transferred and paid over to Purchaser but there will be no adjustment to the Purchase Price or proration thereofat closing.
(hd) Such other items that are customarily prorated in transactions The provisions of this nature (including, without limitation, any utilities paid by Seller under the Leases) Section 7 shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of survive the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Certified Diabetic Services Inc), Purchase and Sale Agreement (Certified Diabetic Services Inc)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing based on the periods to which they relate and are applicable (regardless of when payable), except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued Non-delinquent general real estate, personal property and ad valorem taxes and assessments assessments, and any improvement or other bonds encumbering the Property, for the current tax year shall be prorated on for the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateProperty.
(dii) Fuel, water and sewer service Non-delinquent utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature shall be ratably prorated.
(including, without limitation, any utilities paid by Seller iii) Rent and other charges under the Leases) Leases shall be prorated. Rents and other charges under the Leases which are unpaid or delinquent as of the Closing shall not be prorated, and rents and other amounts received by Purchaser after the Closing from a tenant owing such delinquent rent or other charges shall be applied (A) first, to rents due from such tenant for the month in which such payment is received by Purchaser; (B) second, to rents attributable to any period after the Closing which are past due on the date of receipt; and (C) finally, to rents and other charges delinquent as of the Closing (and Purchaser promptly shall remit such amounts to Seller). Purchaser agrees that it shall use commercially reasonable efforts to collect any such delinquent rents by continuing to xxxx tenants for any delinquent rents (provided, however, that Purchaser shall have no obligation to terminate the Lease or to institute legal proceedings, including an action for unlawful detainer, against a tenant owing delinquent rents).
(iv) The amount of all unapplied security deposits under the Leases shall be credited to Purchaser; provided, however, that if any insurance premiums tenant security deposit is in the form of a letter of credit, there shall not be proratedno credit against the Purchase Price with respect to any such tenant security deposit. At Closing, but rather Seller shall cancel deliver an original of each letter of credit serving as a tenant security deposit to Purchaser through escrow along with the Existing Insurance Policies documents executed by Seller that are required to be executed by Seller to transfer such letter of credit to Purchaser. Following Closing, Purchaser shall, at Purchaser’s cost and expense, deliver the same, along with any required fees paid by Purchaser, to the issuing bank so that the same can be processed and transferred to Purchaser.
(v) Seller is responsible for the tenant improvement costs and/or tenant improvement allowances (including space planning and architectural costs) and leasing commissions due in connection with the current term of all of the Leases entered into on or before November 29, 2012, and those remaining to be paid are identified on Exhibit N attached hereto, and to the extent that any of the same have not been paid as of the Closing, Seller shall provide Purchaser a credit at Closing (and seek a separate refund from its insurer Purchaser shall, to the extent of any unearned premiums) and thereafter such credit, be responsible for the same after the Closing. Purchaser shall obtain its own property insurance be responsible for all leasing commissions and tenant improvement costs due in conformance connection with any extensions, renewals or expansions by any tenants after the Assumed Loan Documentsdate of this Agreement to the extent the amount of such commissions and costs were disclosed to Purchaser in writing prior to expiration of the Due Diligence Period.
(vi) Purchaser shall be entitled to a credit at Closing for any remaining abated rent after Closing reflected on Exhibit G attached hereto.
(vii) Purchaser shall be credited at Closing for the amount of all amounts which are unsatisfied amounts under all capital contracts and contracts pertaining to works of improvement entered into by Seller prior to the date of this Agreement with respect to the Property including, without limitation, the costs identified on Exhibit O attached hereto. Seller shall remain responsible for satisfying any of such costs which were not credited (but were supposed to be credited) to Purchaser at Closing.
(b) For purposes of calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing and based upon the actual number of days in the month and a three hundred sixty-five (365) day year. Seller shall prepare a schedule of prorations and deliver it to Purchaser not less than two (2) business days prior to Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the .
(c) The amount of such prorations shall be initially performed by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty six (606) months after the Closing (except with respect to property taxes, which shall be adjusted within ninety (90) days after the tax bills for the applicable period are received). Without limiting the generality of the foregoing, Seller and Purchaser agree that:
(i) with respect to any year-end reconciliations of reimbursable expenses under the Leases, Seller and Purchaser shall cooperate to complete such reconciliations as soon as possible after the Closing but in no event later than May 31, 2013, with Seller responsible for amounts owing to tenants under the Leases, and entitled to amounts payable by tenants under the Leases (as the case may be), with respect to all items except tax prorations, subject periods prior to mutual agreement to extend such sixty (60) day periodthe Closing, and with Purchaser responsible for amounts owing to tenants under the Leases, and entitled to amounts payable by tenants under the Leases (as the case may be), with respect to periods from and after the Closing (and, with respect to any such amounts payable to Seller, Purchaser agrees that it shall use commercially reasonable efforts to collect such amounts by billing tenants for such amounts; provided, however, that Purchaser shall have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing any such amounts);
(ii) with respect to any property tax prorationsappeals or reassessments filed by Seller for tax years prior to 2012, Seller shall be entitled to the full amount of any refund or rebate resulting therefrom (subject to any requirement under the Leases to pay to the tenants thereunder a share of any such refund or rebate, which shall be Seller’s sole obligation). Purchaser acknowledges having been advised by Seller that Seller is currently appealing property taxes for 2012. If Seller does not diligently pursue such appeal to completion following Closing, Seller shall assign its right to continue such tax appeal to Purchaser, and Purchaser shall have the right, but not the obligation, to continue the appeal. Seller and Purchaser shall share the amount of any rebate or refund resulting from the tax appeal for property taxes for 2012 (after first paying to Seller all costs and expenses incurred by Seller in pursuing such appeal or reassessment and, if the right to continue such claim is assigned to Purchaser as provided for in the immediately preceding sentence, after paying to Purchaser all costs and expenses incurred by Purchaser in pursuing such appeal or reassessment) in proportion to their respective periods of ownership of the Property for such tax year (with Seller and Purchaser each obligated for any amount of such refund or rebate required to be paid to the tenants under the Leases for its respective period of ownership of the Property for such tax year). To the extent not covered already approved by Seller prior to the date hereof, the settlement of any tax escrows appeals or settlements for the year in which the Closing occurs (including, without limitation, any stipulation of settlement document) shall be subject to Purchaser’s prior written approval which approval shall not be unreasonably withheld, conditioned or denied; and
(iii) in no event will there be any proration of insurance premiums under Seller’s existing policies of insurance relating to the Property, and Purchaser acknowledges and agrees that none of Seller’s insurance policies (or any proceeds payable thereunder, except as expressly provided for in Section 16 below) will be assigned to Purchaser at Closing pursuant the Closing, and Purchaser shall be solely obligated to Section 12(gobtain any and all insurance that it deems necessary or desirable.
(d) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 1213, all items of income and expense which accrue for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense which accrue for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method . The provisions of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date this Section 13 shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 2 contracts
Samples: Purchase and Sale Agreement, Purchase and Sale Agreement (KBS Real Estate Investment Trust III, Inc.)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing based on the periods to which they relate and are applicable (regardless of when payable), except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued Non-delinquent general real estate, personal property and ad valorem taxes and assessments assessments, and any improvement or other bonds encumbering the Property, for the current tax year shall be prorated on for the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateProperty.
(dii) Fuel, water and sewer service Non-delinquent utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature shall be ratably prorated.
(including, without limitation, any utilities paid by Seller iii) Rent and other charges under the Leases) Leases shall be prorated. Rents and other charges under the Leases which are unpaid or delinquent as of the Closing shall not be prorated, and rents and other amounts received by Purchaser after the Closing from a tenant owing such delinquent rent or other charges shall be applied (A) first, to rents due from such tenant for the month in which such payment is received by Purchaser; (B) second, to rents attributable to any period after the Closing which are past due on the date of receipt; and (C) finally, to rents and other charges delinquent as of the Closing (and Purchaser promptly shall remit such amounts to Seller). Purchaser agrees that it shall use commercially reasonable efforts to collect any such delinquent rents by continuing to xxxx tenants for any delinquent rents (provided, however, that Purchaser shall have no obligation to terminate the Lease or to institute legal proceedings, including an action for unlawful detainer, against a tenant owing delinquent rents).
(iv) The amount of all unapplied security deposits under the Leases shall be credited to Purchaser; provided, however, that if any insurance premiums tenant security deposit is in the form of a letter of credit, there shall not be proratedno credit against the Purchase Price with respect to any such tenant security deposit. At Closing, but rather Seller shall cancel deliver an original of each letter of credit serving as a tenant security deposit to Purchaser through escrow along with the Existing Insurance Policies documents executed by Seller that are required to be executed by Seller to transfer such letter of credit to Purchaser. Following Closing, Purchaser shall, at Seller’s cost and expense, deliver the same, along with any required fees paid by Seller, to the issuing bank so that the same can be processed and transferred to Purchaser.
(v) Except as hereinbelow expressly provided, Seller is responsible for the tenant improvement costs and/or tenant improvement allowances (including space planning and architectural costs) and leasing commissions due in connection with the current term of all of the Leases entered into on or before April 30, 2013, and those remaining to be paid are identified on Exhibit N attached hereto. To the extent that any of the same have not been paid as of Closing the Closing, Seller shall provide Purchaser a credit against the Purchase Price at Closing, and Purchaser shall, to the extent of such credit, be responsible for the same after the Closing. Purchaser shall be responsible, without a credit against the Purchase Price, for (i) all leasing commissions and seek a separate refund from its insurer tenant improvement costs due in connection with new leases or any extensions, renewals or expansions by any tenants after April 30, 2013, to the extent the amount of such commissions and tenant improvement costs were disclosed to Purchaser in writing prior to the expiration of the Due Diligence Period or otherwise approved by Purchaser in connection with Purchaser’s approval of any unearned premiumssuch new lease, lease extension, renewal or expansion, and (ii) the leasing commissions and thereafter tenant improvement costs due in connection with the leases or potential leases or lease renewals or expansions with the parties described on Exhibit S attached hereto to the extent such tenant improvement costs and leasing commissions are disclosed in Exhibit S attached hereto or are otherwise hereafter approved (or deemed approved) by Purchaser pursuant to Section 10(a). At Closing, Purchaser will pay to Seller (or the credit from Seller to Purchaser shall obtain its own property insurance be reduced by) an amount equal to the sum of (x) the portion of any leasing commissions, tenant improvement costs and other expenses, including reasonable attorneys’ fees, actually paid by Seller after the Effective Date and prior to Closing pursuant to the negotiation and execution of any new leases or renewal or expansion of any Lease approved (or deemed approved) by Purchaser pursuant to Section 10(a), and only to the extent such amounts were disclosed to Purchaser in conformance writing and approved (or deemed approved) by Purchaser pursuant to Section 10(a), plus (y) an amount equal to any leasing commissions and tenant improvement costs disclosed on Exhibit S that are paid by Seller prior to Closing.
(vi) Purchaser shall be entitled to a credit against the Purchase Price at Closing for any and all remaining abated rent after Closing, reflected on Exhibit G attached hereto.
(vii) Purchaser shall be credited at Closing for all unsatisfied amounts under all capital contracts and contracts pertaining to works of improvement entered into by Seller prior to the date of this Agreement with respect to the Assumed Loan DocumentsProperty including, without limitation, the costs identified on Exhibit O attached hereto. Seller shall remain responsible for satisfying any of such costs which were not credited (but were supposed to be credited) to Purchaser at Closing.
(b) For purposes of calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing and based upon the actual number of days in the month and a three hundred sixty-five (365) day year. Seller shall prepare a schedule of prorations and deliver it to Purchaser not less than two (2) business days prior to Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the .
(c) The amount of such prorations shall be initially performed by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty six (606) months after the Closing (except as provided in clause (B) below and with respect to property taxes, which shall be adjusted within ninety (90) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to bills for the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, applicable period are received). Without limiting the parties shall make such adjustments upon receipt generality of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12foregoing, all items of income Seller and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.Purchaser agree that:
(i) Amounts on deposit (A) Seller has completed and sent to the tenants under the Leases year-end reconciliations of reimbursable expenses under the Leases for the year ending December 31, 2012. Seller is responsible for providing Purchaser with utility companies shall be a credit against the Purchase Price at Closing for any amounts that the tenants under Leases overpaid during 2012, but only to the extent such amounts have not been paid to such tenants prior to Closing or credited to Seller at Closing, and promptly following the Closingsuch tenants’ rent obligations attributable to any period accruing prior to Closing (with respect to any such amounts that have been paid to tenants prior to Closing or credited to such tenants’ rent obligations, Purchaser shall inform such utilities of such change in ownership of be entitled to written evidence thereof reasonably satisfactory to Purchaser confirming the Property. same), and Seller shallis entitled to any amounts (if, and when, received from and after the Closingtenants) that tenants under the Leases underpaid during 2012 (and, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as with respect to any such appeals.amounts payable to Seller, Purchaser agrees that it shall use commercially reasonable efforts to collect such amounts by billing tenants for such amounts, provided, however, that Purchaser shall have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing any such amounts);
Appears in 2 contracts
Samples: Purchase and Sale Agreement (KBS Real Estate Investment Trust III, Inc.), Purchase and Sale Agreement (KBS Real Estate Investment Trust III, Inc.)
Prorations and Adjustments. The following This Section 8.04 applies to the Merger Closing Properties. At Closing, accounts payable, rents (to the extent prepaid), all real and personal property taxes, water rents, sewer charges, electric and other utility charges, fuel if any, operating expenses, wages, any special assessments, if any, and other similar charges affecting the Merger Closing Properties and all utility charges, if any, shall be adjusted and prorated as of midnight of the day prior to the Closing Date (the “Closing Adjustment Time”). All other charges or fees customarily prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), in similar transactions shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected adjusted as of the Closing Adjustment Time. All rent (other than prepaid rent) received from the tenants of the Merger Closing Properties shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected adjusted (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule prorated) as of all rent, charges and other amounts payable by tenants after the Closing Adjustment Time and paid in accordance with respect to which Seller is entitled to receive a share the following provisions, together with the following adjustments:
(i) Following receipt of the monthly installment of basic rent under this Agreement, and any amount due and owing to Seller before of the Merger Closing by tenants under the Properties Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect attributable to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller such installment shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property be adjusted as of the date of ClosingClosing Adjustment Time, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing with the obligation, if any, to pay security and other deposits to tenants under the Leases, Target Stockholders being entitled to the extent that such deposits are transferred portion thereof attributable to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms period of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after month immediately preceding the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, Acquiror entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount balance of such prorations monthly installment. Acquiror shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best commercially reasonable efforts to make such adjustments no later than sixty (60) days after the Closing as seek to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, collect unpaid rents and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable attributable to the period prior to the Closing Date shall be paid by SellerAdjustment Time.
(ii) Acquiror shall be entitled to all basic rent and other sums due under any of the Merger Closing Properties Leases as of the Closing Adjustment Time with the exception of (a) common area maintenance (CAM) and real estate tax reimbursements attributable to periods prior to the Closing Adjustment Time; (b) the basic rent for the Closing month to which an Acquiror is entitled under (i) Amounts above, and (c) rental arrearages for periods preceding the Closing Adjustment Time, and (d) rents received from tenants prior to the Closing Adjustment Time which relate to periods prior to the Closing Adjustment Time. Annual CAM and tax reimbursements, which are payable by the tenant on deposit an annual basis after the conclusion of each calendar year, will be adjusted as of the Closing Adjustment Time, with utility companies the Target Stockholders being entitled to the portion thereof attributable to the period of the year immediately preceding the Closing Adjustment Time and the Acquiror being entitled to the balance of such payment. Additionally, any tenant payments for special services which were specifically billed by Target or one of its Affiliates prior to the Closing Adjustment Time shall be owed to the Target Stockholders. All CAM payments from tenants received by Target or Target Subsidiaries which relate to periods after the Closing Adjustment Time shall be credited to Seller Acquiror at Closing, and promptly following .
(iii) All security deposits under the Closing, Purchaser shall inform such utilities Merger Closing Properties Leases (excluding letters of such change credit posted as security deposits as listed in ownership Section 8.04(iii) of the PropertyTarget Disclosure Letter) and rents received by Target and Target Subsidiaries which relate to periods after the Closing Adjustment Time shall be credited to Acquiror at Closing. Seller shallLetters of credit posted as security deposits as listed in Section 8.04(iii) of the Target Disclosure Letter shall be assigned to Acquiror at Closing.
(iv) All Leasing Commissions and tenant improvements with respect to the Target Properties Leases signed after September 6, from 2006 shall be assumed by Acquiror. All Pre-LOI Leasing Commissions and Pre-LOI TI Work shall be the obligation of the Target. Any such unpaid amounts with regard to the Pre-LOI Leases as of the Closing Date, together with the estimated cost to complete the Pre-LOI TI Work after the Closing, shall be credited to Acquiror at Seller’s sole cost Closing. To the extent Target has paid the Leasing Commissions and expensetenant improvements for leases signed after September 6, 2006, Target Stockholders shall receive a credit at Closing.
(v) Acquiror will be credited at Closing for an amount equal to any casualty insurance deductibles and uninsured losses relating to casualties which may have control over any ongoing tax appeals as occurred at the Merger Closing Properties prior to the Property that were commenced Closing.
(vi) If Acquiror collects any unpaid or delinquent rents relating to the Merger Closing Properties after the Closing Adjustment Time, Acquiror shall deliver to the Liquidating Trust the rent to which the Liquidating Trust is entitled relating to the period prior to the Closing and that pertain solely Adjustment Time. All rents relating to the periods that Seller owned Merger Closing Properties received by Acquiror after the Property. Seller shallClosing Adjustment Time shall be applied first to current and then delinquent rent in the inverse order of maturity.
(vii) An amount equal to the Retained LC Amount shall be credited to Acquiror at Closing pursuant to Section 8.08.
(viii) Acquiror shall credit to Target Stockholders at Closing any money spent by Target with respect to the Sewer System (as such term is defined in the Acquisition Agreement) on or after September 6, 2006.
(ix) Intentionally Deleted.
(x) If there are any liens or encumbrances applicable to Target Properties other than Permitted Liens, as applicableof Closing, retain all proceeds the amount to discharge such liens and encumbrances shall be credited to Acquiror at Closing.
(xi) If there shall be a breach of any of the representations, warranties, covenants or reductions obtained agreements made by Target herein and Target fails to cure such breach by the Outside Date, or if there shall be any outstanding liabilities or obligations of Target, Target Subsidiaries, NPI Exchange Entities or NPI Entities as of the Effective Time other than the Office Assumed Loans, the Short Term Loan, the Scheduled Contracts and the Target Properties Leases, the amount of the aggregate Damages resulting from such appeals breach or pay all additional such outstanding liabilities or obligations in excess of Two Hundred Fifty Thousand Dollars ($250,000) shall be credited to Acquiror at Closing.
(xii) The fees payable to the Share Escrow Agent shall be equally split by Target Stockholders and Acquiror and paid at Closing.
(xiii) Any unpaid amounts due by Target as of the Effective Time as described in Section 6.02(i)(ii) of the Target Disclosure Letter shall be credited to Acquiror at Closing. Any refund of prior property taxes owed to Target as of the Effective Time (net of any attorneys’ fees), pursuant to a successful appeal, shall be credited to Target Stockholders at Closing.
(xiv) Any costs to rectify overstressed joints pursuant to, and in accordance with, paragraph three of Section 6.02(g)(iv) of the Target Disclosure Letter shall be credited to Acquiror at Closing, to the extent such costs were not paid by Target prior to Closing. All adjustment items (collectively, the “Closing Adjustments”) shall be resolved by the parties in good faith at least five (5) Business Days prior to the Closing Date. To the extent that the Closing Adjustments result in a net payment due to Target Stockholders, immediately prior to the Effective Time, the Merger Consideration shall be increased as set forth in Section 4.01. To the extent that the Closing Adjustments result in a net payment due by the Target Stockholders, immediately prior to the Effective Time, the Merger Consideration shall be decreased as set forth in Section 4.01. The net payment either due to or delinquencies imposed for such periods. Seller shall keep Purchaser informed due by the Target Stockholders is referred to as to any such appealsthe “Closing Adjustment Amount”.
Appears in 1 contract
Samples: Purchase Agreement and Agreement and Plan of Merger (Corporate Office Properties Trust)
Prorations and Adjustments. The following Prorations and adjustments shall be prorated -------------------------- made between Purchaser and adjusted between Seller Seller, and Purchaser as of shall be set forth in the day of Settlement Statement agreed to by the Closingparties on or prior to the Closing Date, except as otherwise specified:
in accordance with Sections 3.3(a) through (ae) Collected Rents and other chargesbelow, based upon the best evidence --------------------------- then available. All prorations, other than for Tenants who owe Delinquent Rents any proration relating to pass-throughs and other Tenant reimbursable amounts under the Leases ("Tenant Reimbursable Amounts ") or to Protest Proceedings as hereinafter defineddescribed in Section 3.3(f) below ("Protest Proceeding Amounts"), shall be prorated by credit to Purchaserdeemed final at Closing. Prepaid rents The Tenant Reimbursable Amounts and other charges the Protest Proceeding Amounts shall be credited finalized by the parties no later than six (6) months after the Closing Date. Notwithstanding the foregoing, the parties understand and agree that any prorations and adjustments to Purchaserthe Purchase Price as aforesaid shall not be deemed to relieve any party for obligations and liabilities retained, assumed or assigned pursuant to this Agreement or in any of the Conveyancing Documents, including the respective obligations and liabilities under this Section or Section 3.4. The rent Unless otherwise stated hereafter, all prorations and adjustments ----------- shall be made on a per diem basis, with Seller responsible for the number of days in the applicable period up to and including the Closing Date and Purchaser responsible for the period commencing on the day after the Closing Date and all other sums days thereafter. In addition to the foregoing and notwithstanding anything contained herein to the contrary, if Seller fails to receive the Purchase Price, as adjusted herein, before 3:00 p.m. Central Time on the Closing Date, the proration and adjustments set forth on the Settlement Statement shall be further adjusted so that all proration items shall be prorated as of the business day immediately following the Closing Date. Any amount which are due and payable Purchaser is obligated to pay in accordance with the prorations provided below: (A) which has been paid by Seller by any tenant but uncollected as of the Closing shall not Date, or will be adjusted, but Purchaser shall cause paid outside Closing by Seller in the rent and other sums event the invoices for same are received by Seller within the five (5) business day period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this AgreementDate, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of at Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any's election, shall be transferred to Purchaser. reimbursed by Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. or treated as a credit in favor of Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person thereafter Seller shall be prorated ratably on the basis solely responsible for making such payment; or (B) which has not been and will not be paid by Seller as of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be assumed by and become the sole responsibility of Purchaser.
(f) Assignable license Purchaser and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on at Closing for same. Any amount which Seller is obligated to pay in accordance with the basis of the actual number of days of the month prorations provided below which shall have elapsed has not been paid as of the day Closing Date shall: (1) be treated as a credit in favor of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which on the Closing Date occurs. Except as set forth and Purchaser shall assume and be solely responsible for making such payment; or (2) at Seller's option in this Section 12, all items of income and expense the event the invoices for same are received by Seller within the five (5) business day period prior to the Closing Date will be for the account of SellerDate, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies Seller outside Closing and Seller shall be credited solely responsible for timely making such payment. Each party agrees to provide the other with written evidence of payment of such amounts upon request. Seller agrees to indemnify, defend and hold Purchaser harmless from and against any and all claims, liens, damages, demands, causes of action, liabilities, lawsuits, judgments, losses, costs and expenses (including, but not limited to, attorneys' fees and expenses) asserted against or incurred by Purchaser by reason of or arising out of any failure by Seller to make the payments to be made by Seller in accordance with the prorations provided below, to the extent Purchaser was not given a credit therefor at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Wells Real Estate Investment Trust Inc)
Prorations and Adjustments. The following Within forty-five days after the -------------------------- Closing, Buyer shall pay to Sellers, or Sellers shall pay to Buyer, as may be prorated and adjusted between Seller and Purchaser as the case, cash in the net amount of the day following adjustments and prorations relating to the Assets and/or the operation of the Closing, except as otherwise specified:Mesquite Mine (the "Cash ---- Adjustment Amount"): -----------------
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), There shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall Date all prepaid expenses (including but not be adjustedlimited to prepaid rent, but Purchaser shall cause the rent fees and other sums for amounts under the period prior Leases, Acquired Contracts and Acquired Governmental Permits, or with respect to Closing to be remitted to Seller if, asthe Acquired Properties, and when collected real and personal property Taxes paid in advance) and accrued expenses (including but Purchaser shall not be required limited to take legal action for such amounts accruing prior to the Closing). At Closingreal and personal property Taxes, Seller shall deliver to Purchaser a schedule of all rent, charges fees and other amounts payable by tenants after in respect of the Closing with respect to which Seller is entitled to receive a share under this AgreementAcquired Properties, and any amount due and owing utility charges payable in arrears), all as determined in accordance with generally accepted accounting principles consistently applied, in such a manner as to Seller before reflect the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, principle that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied all expenses relating to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, ownership and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants operation of the Property as of Assets and the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense Mesquite Mine for the period prior to the Closing Date will be are for the account of SellerSellers, and all items EXECUTION COPY expenses relating to the ownership and operation of income the Assets and expense the Mesquite Mine for the period on and after the Closing Date will be are for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerBuyer.
(ib) Amounts on deposit with utility companies There shall be credited to the account of Sellers and become the property of Buyer all deposits relating to the operation of the Mesquite Mine that are held by third parties as of the Closing Date for the account of Sellers or as security for Sellers' performance of their obligations (other than with respect to Excluded Assets and any other deposits the full benefit of which will not be available to Buyer following the Closing Date), including deposits on leases and deposits for utilities but excluding Sellers' Bonds.
(c) There shall be credited to Sellers an amount equal to Sellers' actual cost of the Consumables Inventory on hand at the Mesquite Mine on the Closing Date.
(d) There shall be credited to Sellers U.S Department of Interior Bureau of Land Management maintenance fees with respect to the Unpatented Claims paid by Seller at Closingin August of 2003, in the amount of $25,750, and promptly following Imperial County, California recording costs in the Closingamount of $1,921, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller maintenance filings.
(e) There shall keep Purchaser informed as be credited to any such appealsSellers the amount determined in accordance with Section 3.1.
Appears in 1 contract
Prorations and Adjustments. A. The following shall be prorated and adjusted between Seller and Purchaser against or as a credit to the Purchase Price to be paid by Purchaser to Seller on the Closing Date; Seller being charged or credited, as appropriate, for all of same attributable to the period through midnight of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on preceding the date of Closing (such i.e. 11:59 P.M. on the date before Closing) (and credited for any amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received paid by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied Seller attributable to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous period on or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service chargesPurchaser being responsible for, and charges for gas, electricity, telephone and all other utility and fuel chargescredited or charged, as well as the case may be, for all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) same attributable to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be (i.e. after 11:59 P.M. on the date before Closing):
(1) rents and additional charges actually collected. Uncollected rents and additional charges, if any, for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period periods prior to the Closing Date shall be within ten (10) days of receipt by Purchaser be transmitted and paid to Seller (or vice versa in the event Seller receives rents from the Property from and after Closing), subject to the following sentence. From and after the Closing Date, all rent and additional charges received by Seller.
(i) Amounts on deposit with utility companies Purchaser shall be credited first applied as follows: a) to the month of closing; b) to the then current obligations of the tenant; and c) to any past due rent obligations of such tenant with same being first applied to the most recent past due obligations of such tenant. Purchaser shall use good faith efforts to collect for Seller at Closingany delinquent rents or additional charges under the Leases but Purchaser shall have no obligation to commence any legal action or proceeding against any tenant with respect to such delinquencies or expend any amounts to do so. Purchaser shall, and promptly following ninety (90) days after the Closing, Purchaser account to Seller for any pre-Closing arrearages collected, including the appropriate proportion of rent for the month in which the Closing occurs and shall inform such utilities of such change remit the same to Seller. From and after Closing, Seller shall have no right to pursue any tenants for rents or any other amounts; provided, however, Seller be entitled to institute legal proceedings and otherwise attempt to collect any delinquent rents from tenants who are no longer in ownership possession of the Property. The terms and provisions of this paragraph shall survive Closing hereunder.
(2) the Seller shallshall credit to the Purchaser the amount of the security deposits, if any, held by the Seller, and all prepaid rents, if applicable.
(3) Real Estate, ad valorem and personal property taxes, sewer rents and charges and other state, county, school, district, municipal and other governmental and quasi-governmental taxes, charges and assessments, both general and special shall be prorated using the latest available millage rates and valuation, with Seller responsible for payment of all such taxes, assessments and charges accruing prior to Closing and Purchaser responsible for payment of all such taxes, assessments and charges accruing from and after Closing. If, on the Closing Date, the Premises or any part thereof shall be or shall have been affected by assessments which are, or which may become payable in annual installments, of which the first installment is then a charge or lien, or has been paid, then for the purposes of this Agreement Seller shall pay all installments to the extent accruing through the day of Closing and Purchaser shall pay all installments to the extent accruing subsequent to the day of Closing. This sub-section shall survive Closing.
(4) Charges and payments under the Contracts to the extent that Purchaser assumes, is deemed to have assumed, or is required hereunder to assume, same pursuant to the terms of this Agreement. On or before the expiration of the Inspection Period, Purchaser may deliver written notice to Seller (the “Service Contracts Notice”) specifying any Contracts which Purchaser desires Seller to terminate at the Closing (the “Terminated Contracts”) and Seller shall deliver termination notices to such vendors within ten (10) business days after receipt of the Service Contracts Notice (such termination notices to include express instructions that such vendor shall not be permitted to enter upon or have access to the Property from and after the ClosingClosing Date); provided that (a) the effective date of such termination on or after Closing shall be subject to the express terms of such Terminated Contracts, at Seller’s sole cost and expenseand, to the extent that the effective date of termination of any Terminated Contract is after the Closing Date, such vendor shall not be permitted to enter upon or have control over any ongoing tax appeals as access to the Property that were commenced from and after the Closing Date and shall look to Seller for payment for any amounts due and owing under such Terminated Contract), and (b) if any such Contract cannot by its terms be terminated at Closing without payment of any premium or penalty, it shall be assumed by Purchaser and not be a Terminated Contract (unless Purchaser agrees to pay such premium or penalty at Closing). If Purchaser fails to deliver the Service Contracts Notice on or before the expiration of the Inspection Period, there shall be no Terminated Contracts and Purchaser shall assume all Contracts set forth on Exhibit D at the Closing.
(5) All charges for utilities servicing the Premises, including, without limitation, charges for gas, electricity, water and sewerage. Seller shall endeavor to obtain meter readings of such utilities on or within seven (7) days prior to the Closing and that pertain solely Date (other than meters measuring exclusively utility consumption which is to be paid in full by tenants under the Leases). Utility deposits, if any, shall belong to the periods Seller, and Purchaser will establish its own Utility deposits with utility providers as may be required.
(6) all other income and ordinary and customarily prorated operating expenses for or pertaining to the Premises.
B. In the event that the amount of any prorated item is not known on the Closing Date, the parties agree that such items shall be prorated at closing upon the basis of the best information available, and shall be adjusted when the actual amount(s) of such items are known, with appropriate charges and credits to be made. In the event any adjustment pursuant to this subparagraph 7.B., subsequent to the Closing Date, shall be necessitated, then either party hereto who is entitled to additional monies shall invoice the other party for such additional amounts as may be owing, and such amount shall be paid within ten (10) days from receipt of the invoice. The provisions of this subparagraph 7 shall survive the Closing Date for a period of one year, other than those provisions related to real property taxes and assessments which shall survive until ninety (90) days after the applicable tax xxxx is delivered to Purchaser and/or Seller. .
C. Not more than forty-eight (48) hours prior to Closing (“Walk Through Date”), a representative of Purchaser and a representative of Seller shall conduct an onsite walk-through of the unoccupied rental units on the Property to determine whether such unoccupied rental units are in “rent ready condition”, defined below. With respect to any rental unit that is vacated more than five (5) days prior to Closing that Seller owned has not placed in a “rent ready condition” Purchaser shall receive a credit against the PropertyPurchase Price at Closing in the amount of $750 per such unit. Seller shallAs used herein, “rent ready condition” means Seller’s practice and procedures, as applicableof the date of this Agreement, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periodsplacing units in “rent ready condition”. Nothing contained in this Section 7(C) shall be construed as limiting Purchaser’s rights and Seller’s obligations under the other provisions of this Agreement.
D. Seller shall keep pay (a) all State, County and City real estate transfer taxes, if any, (b) the cost for a standard ALTA Owner’s Policy of Title Insurance, (c) one half (1/2) of the recording fees required in connection with recording the Special Warranty Deed, and (d) one half (1/2) of the Escrow Holder’s escrow fee. Purchaser informed as shall pay (a) one half (1/2) of the recording fees required in connection with the recording the Special Warranty Deed, (b) one half (1/2) of the Escrow Holder’s escrow fee, (c) the premium associated with the issuance of the Title Policy for any extended ALTA coverage and the cost of any endorsements to the Title Policy, (d) any such appeals.costs of an updated survey, and (e) all of Purchaser’s financing costs. Each party shall pay its own attorney’s
Appears in 1 contract
Samples: Sale Purchase Agreement (Steadfast Apartment REIT III, Inc.)
Prorations and Adjustments. The following (i) All revenues (including but not limited to rent due from the residents of the Facilities) and expenses (including but not limited to payroll and employee benefits) related to the ownership or operation of the Sellers' Assets shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjustedDate, but Purchaser shall cause the rent and other sums with Sellers responsible therefor for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing Date and with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless responsible therefor for the amounts, if material, by which (i) the amount of security period from and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(dii) Fuel, water Real and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person personal property taxes shall be prorated ratably as of the Closing on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) that Sellers shall be charged for any taxes which are to be paid by Purchaser after Closing but which relate to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day period prior to Closing (whether or not the date of Closingamounts subject to such proration are included in the Reserves for which payment is made by Purchaser or NHP pursuant to Section 2(a)(i)) and that Sellers shall get a credit at Closing for any taxes paid by Sellers prior to Closing but which relate to the period from and after Closing(whether or not the amounts subject to such proration are included in the Reserves for which payment is made by Purchaser or NHP pursuant to Section 2(a)(i)).
(eiii) Amounts due, commissions, up-front revenues Sellers shall cause the managers of the Facilities to arrange for a final statement with respect to all utilities serving the Real Property and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after Facilities as of the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than within sixty (60) days after the Closing as Date or earlier if required to avoid the imposition of any liens against the Facilities, shall pay all items except tax prorations, subject to mutual agreement to extend fees identified thereon and Purchaser shall arrange for all such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows utilities to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period billed in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on its name from and after the Closing Date will be and shall pay all fees due therefor as of the Closing Date. Purchaser shall pay to Seller at Closing an amount equal to the outstanding utilities deposits paid by Seller to utility providers with respect to the Facilities as set forth more fully in Exhibit E hereto. ----------
(iv) In the event Purchaser receives a credit against its license application fees for any amounts paid by Sellers for the account of period covered by Purchaser's license, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate Purchaser shall remit to expenses incurred, services performed or other amounts allocable Sellers at closing an amount equal to the period prior to the Closing Date shall be paid by Sellersuch credit.
(iv) Amounts All amounts due and owing between each of the Sellers, on deposit with utility companies shall be credited to Seller at Closingthe one hand, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shallor ESC, as applicable, retain all proceeds on the other hand, under the Management Agreements including, but not limited to, management fees due to Purchaser or reductions obtained ESC, the reimbursement by the applicable Seller of any expenses advanced by Purchaser or ESC on behalf of such Seller during the course of the management of the Facility owned by such Seller, the reimbursement by Purchaser or ESC, as applicable, of any expenses paid by the applicable Seller that relate to the period after Closing and any amounts owing from Sellers under the Emeritus Pooled Liability and Workers Compensation/Occupational Injury Insurance Programs (the "Programs") with respect to the participation of the Facilities, other than the Essington Manor Facility, in the Programs (but specifically excluding the Termination Security Payment or amounts due with respect to tail insurance, which amounts Purchaser has agreed to waive in its capacity as the administrator of the Programs) shall be reconciled on a Facility by Facility basis and a final payment shall be due from Purchaser to the applicable Seller or from the applicable Seller to Purchaser, as applicable, within sixty (60) days after the Closing which includes such appeals or pay all additional taxes or delinquencies imposed Facility.
(vi) Purchaser shall receive a credit at each applicable Closing against the Purchaser Cash Payment for such periods. the amounts due to Purchaser from the applicable Seller shall keep Purchaser informed for the cost of certain repairs to the Facilities as to any such appeals.set forth more fully in Exhibit G. -----------
Appears in 1 contract
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as (i) Revenues (including but not limited to rent due from the residents of the day Facilities) and expenses (including but not limited to real and personal property taxes or payroll and employee benefits) related to the ownership or operation of the Closing, except as otherwise specified:
(a) Collected Rents and other chargesCPM Facilities, other than for Tenants who owe Delinquent Rents (as hereinafter defined)the Grand Terrace Facility, shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Date with Purchaser shall cause entitled to such revenues and responsible for such expenses for the rent period from and other sums after the Closing Date and with Seller entitled to such revenues and responsible for such expenses for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(dii) Fuel, water In furtherance and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis not in limitation of the last ascertainable bills (and reprorated upon receipt foregoing, the applicable Seller shall, or in the case of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller Hunters Xxxx Facility shall cause meters for utilities to be read not more than one XL within thirty (130) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing days after the Closing Date shall be to, arrange for a final statement with respect to all utilities serving the responsibility of Purchaser.
CPM Facilities (fother than the Grand Terrace Facility) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after ClosingDate and, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than within sixty (60) days after the Closing as Date or earlier if required to avoid the imposition of any liens against such CPM Facilities, shall pay all items except tax prorations, subject to mutual agreement to extend fees identified thereon and Purchaser shall arrange for all such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows utilities to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period billed in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on its name from and after the Closing Date will be for the account and shall pay all fees due therefor as of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerDate.
(iiii) Amounts on deposit Purchaser shall pay to Sellers at Closing an amount equal to the outstanding utilities deposits paid by Sellers to utility providers with utility companies shall be credited respect to Seller at Closingthe CPM Facilities, and promptly following other than Grand Terrace Facility, as set forth more fully in Exhibit F hereto.
(iv) In the Closingevent Purchaser receives a credit against its license application fees for any amounts paid by Sellers or the Owners for the period covered by Purchaser’s license, Purchaser shall inform such utilities of such change in ownership of remit to Sellers or the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shallOwners, as applicable, retain all proceeds at Closing an amount equal to such credit.
(v) All amounts due and owing between each of the Sellers, on the one hand, and the Purchaser, on the other hand, under the Management Agreements related to the Emeritus Managed CPM Facilities including, but not limited to, management fees due to Purchaser, the reimbursement by the applicable Seller of any expenses advanced by Purchaser on behalf of such Seller during the course of the management of the CPM Facility owned by such Seller, the reimbursement by Purchaser of any expenses paid by the applicable Seller that relate to the period after Closing and any amounts owing from Sellers under the Emeritus Pooled Liability and Workers Compensation/Occupational Injury Insurance Programs (the "Programs") with respect to the participation of the Emeritus Managed CPM Facilities in the Programs (but specifically excluding the Termination Security Payment or reductions obtained amounts due with respect to tail insurance, which amounts Purchaser has agreed to waive in its capacity as the administrator of the Programs) shall be reconciled on a facility by facility basis and a final payment shall be due from Purchaser to the applicable Seller or from the applicable Seller to Purchaser, as applicable, within sixty (60) days after the Closing which includes such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsManaged CPM Facility.
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Prorations and Adjustments. The following shall be prorated and -------------------------- adjusted between Seller Sellers and Purchaser Buyer, as if the transaction contemplated hereby involved one buyer and one seller, all as of the day Close of the Closing, Escrow (except as otherwise specified:):
(a) Collected A. Rents and other chargescharges under the Leases ("RENTS"), other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges Buyer's share of such Rents shall be credited to Purchaser. The rent and all other sums which against the appropriate Individual Real Property Purchase Price if such Rents are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjustedClose of Escrow, but Purchaser shall cause without regard to whether such Rents have actually been collected by the rent and other sums for the period prior to Closing to be remitted to appropriate Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, time. Prepaid Rents together with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due earned thereon, if any, shall be transferred to Purchasercredited against the appropriate Individual Real Property Purchase Price. Purchaser shall assume Rents that, at Closing the obligationClose of Escrow, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which thirty (i30) the amount of security and other deposits or more days past due (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases"DELINQUENT RENTS") shall not be prorated. Buyer will cooperate with Sellers in the collection of Delinquent Rents at Sellers' expense; provided, however, that any insurance premiums Buyer shall not in no way be prorated, but rather Seller shall cancel obligated to collect or be ----------------- responsible for collecting such Delinquent Rents. Any Rents collected by Buyer after the Existing Insurance Policies as Close of Closing (Escrow will apply first to Rents that accrue after the Close of Escrow and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled then to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall Rents that have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period accrued prior to the Closing Date will be for Close of Escrow. Notwithstanding the account of Sellerforegoing, and all items of income and expense for the period on and if Buyer receives Rents after the Closing Date will be for the account Close of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which Escrow that relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date Close of Escrow to which Seller is entitled under this Section 8, Buyer shall --------- promptly remit to Seller all of such amounts. Likewise, Seller shall promptly remit to Buyer all Rents received by Seller after the Close of Escrow to which Buyer is entitled under this Section 8. ---------
B. Sellers for such CAM Charges if, for any reason, the tenants do not pay such CAM Charges to Buyer. If any tenants are entitled to reimbursement due to overpayment of CAM Charges previously paid to Sellers resulting from estimated CAM Charges, Sellers shall pay such tenants, within ten (10) days of notice thereof from Buyer and confirmation thereof by Sellers with the tenant, the amount of any such overpayment for the period through the date of the Close of Escrow. Buyer shall be responsible for any such overpayment for the period after the Close of Escrow, provided said CAM Charges were paid by Seller.
(i) Amounts on deposit with utility companies to Buyer. To the extent that Sellers have collected CAM Charges from tenants prior to the Close of Escrow, but have not, prior to such date, paid the expenses of the Property relating to such CAM Charges, such CAM Charges shall be credited to Seller against the appropriate Individual Real Property Purchase Price at Closing, and promptly following the Closing, Purchaser shall inform such utilities Close of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsEscrow.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Corinthian Colleges Inc)
Prorations and Adjustments. The following prorations and adjustments to the Purchase Price set forth in this Section 10.3 shall be prorated and adjusted made between Seller and Purchaser and included in the closing statement. All prorations shall be made on a per diem basis as of the day Apportionment Time (as defined above).
10.3.1 Current rents, advance rentals, operating expenses, additional rent and other charges actually paid by tenants under the Leases, and charges under the Property Agreements to be assumed by Purchaser shall be prorated as of the Apportionment Time.
10.3.2 The parties shall use commercially reasonable efforts to cause all utility providers to perform a meter reading as close to the Closing Date as is practicable. Purchaser shall arrange for the provision of all utility services in Purchaser's name from and after the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), so that such utility services are no longer provided in Seller's name. Seller shall be prorated entitled to a refund of all utility deposits made by or on behalf Seller, and Purchaser shall make its own deposits directly with the utility provider. Seller shall receive a credit for all deposits made by or on behalf of Seller to the extent the same remain on deposit for the benefit of Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected .
10.3.3 Unapplied security deposits existing under the Leases as of the Closing shall be credited to Purchaser at Closing.
10.3.4 Subject to the last sentence of this Section 10.3.4, any tenant improvements, allowances, third party leasing commissions and all costs and reimbursements payable by the landlord to or on behalf of the tenant that are paid or incurred by Seller after the Effective Date of this Contract with respect to leases, lease renewals, lease expansions, lease modifications or other rental agreements executed after the Effective Date in accordance with Section 7.1.3, excluding the Additional Leases, shall be paid by Purchaser at or after Closing. All of the foregoing amounts are called the "Purchaser Leasing Costs." The Purchaser Leasing Costs shall not include any tenant improvements, allowances or third party leasing commissions that, in each case, relate to the primary term of the Additional Leases or of the Lease with Peachtree Providence Partners, LLC (the "Peachtree Lease"), all of which shall be adjustedSeller Leasing Costs (but the Purchaser Leasing Costs shall include any and all costs, but fees or expenses that are payable under or in connection with any of the Leases (including, without limitation, the Additional Leases and the Peachtree Lease) after the Closing that relate to any election by the landlord under any Lease to move the tenant or that relate to any extension or renewal option under such Leases). Seller shall receive a credit at Closing for such Purchaser Leasing Costs paid by Seller on or prior to the Closing Date. At the Closing, Purchaser shall cause execute and deliver to Seller a document pursuant to which Purchaser assumes liability for all unpaid amounts of the rent Purchaser Leasing Costs and other sums for the period indemnifies Seller with respect thereto. Any tenant improvements, allowances and third party leasing commissions that relate to Leases executed prior to the Effective Date (as the same may have been modified by any lease renewals, lease expansions, lease modifications or other rental agreements executed prior to the Effective Date) and the Additional Leases, exclusive of the Purchaser Leasing Costs and any costs, fees or expenses relating to extensions or renewal terms not exercised prior to the Effective Date, shall be paid for by Seller at or prior to the Closing. All of the foregoing amounts payable by Seller are called the "Seller Leasing Costs." At the Closing, Seller shall execute and deliver to Purchaser a document pursuant to which Purchaser confirms it liability for all unpaid amounts of the Seller Leasing Costs and indemnifies Purchaser with respect thereto. The terms of this Section 10.3.4 shall survive Closing.
10.3.5 If on the Closing Date, any Tenant is delinquent in the payment of rent, including any additional rent billed but unpaid at the time of Closing, said delinquent rent shall remain the property of Seller and no proration with respect thereto shall be made at Closing. Purchaser will use its reasonable efforts to be remitted to Seller ifcollect such delinquent rent; provided, ashowever, and when collected (but that Purchaser shall not be required to take commence any legal action to collect such sums. If Purchaser does not elect to file a lawsuit on Seller's behalf (in which event all matters in such lawsuit relating to any sums due to Seller will be controlled solely by Seller), then Seller reserves the right to file a lawsuit for damages against the applicable tenant for any delinquent rent, and Purchaser shall reasonably cooperate with Seller in connection therewith at no expense to Purchaser. For a period of six (6) months following the Closing (or such amounts accruing prior additional period of time during which Seller is pursuing a claim in court against the applicable tenant, if such claim is commenced during the 6 month period), Purchaser shall not modify any Lease in any way that affects any sums that may be due to the Closing)Seller. At Closing, Seller shall deliver have the right to Purchaser a schedule contact tenants to request payment of all rent, charges and other amounts payable by tenants delinquent rentals after the Closing with respect Date and to which Seller is entitled institute legal proceedings, at Seller’s sole expense, to receive a share under this Agreementcollect and retain such delinquent rentals. If Purchaser collects any sums from Tenants, and following the application of any amount due and owing sums collected from any Tenant to Seller before the monthly rental obligations accruing on or after the Closing by tenants under Date, Purchaser shall remit the Leases which are unpaid on the date of Closing (such amounts are collectively referred balance thereof, if any, to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual Seller, less all reasonable direct out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received collection actually incurred by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner collection of the Property and, therefore, entitled sums due to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occursSeller. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the sums received by Purchaser after Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by from any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable tenants attributable to the period prior to the Closing Date shall be paid deemed to be held in trust by SellerPurchaser for Seller for application as provided in this Section.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, 10.3.6 Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, will obtain its own insurance from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as be entitled to any such appealscancel its insurance at Closing and shall be entitled to all unearned premiums thereon.
Appears in 1 contract
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred credited to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred credited to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued Accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorationsClosing, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(ih) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Grubb & Ellis Apartment REIT, Inc.)
Prorations and Adjustments. The following items shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specifiedClosing Date:
(a) Collected Rents Unpaid general real estate taxes, and all other charges, other than levies and charges against the Property for Tenants who owe Delinquent Rents (as hereinafter defined), the year prior to the year in which the Closing Date occurs and for the then current year which are accrued but not yet due and payable. Such taxes shall be prorated on the basis of one hundred percent (100%) of the most recent ascertainable tax bills.
(b) All rents, accruals and income from all leases, contracts and agreements, and all utility charges and expenses regarding the Property shall be prorated as of the Closing Date, and any and all security deposits held by credit to Purchaser. Prepaid rents and other charges Seller or as shown on the rent roll shall be credited to and assigned to Purchaser. The Any monies collected by Purchaser or Seller from a tenant who is delinquent in payment of rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing Date shall not be adjustedapplied in the following order of priority, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled the applicable lease: (i) first, to receive a share under this Agreement, and any amount rent then due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied or any subsequent months; (ii) second, to pay reasonable outside collection costs incurred by the party collecting such rent; and (iii) third, to Seller to the payment extent of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property rents delinquent as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the year and month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accountingDate. Bills received after the Closing Date which relate to expenses incurred, incurred or services performed or other amounts allocable to the period prior to the Closing Date for which no proration credit was given to Purchaser at Closing, shall be paid by Seller.
(i) Amounts on deposit with utility companies Seller or, at Purchaser's option, may be paid by Purchaser, in which case Purchaser shall be credited reimbursed by Seller. Seller's obligations as to Seller at Closing, and promptly following such matters shall survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Real Estate Purchase Agreement (Chrisken Partners Cash Income Fund L P)
Prorations and Adjustments. The following (a) Expect as otherwise expressly set forth in this Agreement, the operation of the Station and the income and normal operating expenses, including, without limitation, accrued liabilities and prepaid expenses, attributable thereto through the Valuation Date shall be for the account of Seller and thereafter for the account of Buyer. Expenses for goods or services received both before and after the Valuation Date, real and personal property Taxes and assessments, power and utilities charges, and rents and similar prepaid and deferred items shall be prorated and adjusted between Seller and Purchaser Buyer as of the day Valuation Date. All special assessments and similar charges or liens imposed against the Station in respect of any period of time through the ClosingValuation Date, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined)whether payable in installments or otherwise, shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as the responsibility of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, asSeller, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreementsuch special assessments, and charges or liens in respect of any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date period of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods time after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Valuation Date shall be the responsibility of Purchaser.
Buyer, and such charges shall be adjusted as required hereunder. Three (f3) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitationdays prior to the Closing Date, Seller shall estimate in good faith, all capital improvement reserves apportionments pursuant to this Section 3.6 and taxes shall deliver a certified statement of its estimates to Buyer (which statement shall set forth in reasonable detail the basis for those estimates) (the "Estimated Prorations Certificate"). At the Closing, Buyer shall pay to Seller (through an increase in the Closing Date Payment), or Seller shall pay to Buyer (through a reduction in the Closing Date Payment), as the case may be, the net amount due as a result of the estimated apportionments (excluding any item that is in dispute) (the "Estimated Prorations"). Within forty-five (45) days after the Closing, Buyer shall deliver to Seller a statement of any adjustments to Seller's estimate of the apportionments, and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Buyer shall pay to Seller, or Seller shall pay to Buyer, as the case may be, pursuant to Section 3.7 any amount due as a result of the adjustment (or, if anythere is any dispute, the undisputed amount). If Seller disputes Buyer's determinations, or if at any time after delivery of Buyer's statement of determinations, Buyer or Seller determine that any item included in the apportionments is inaccurate, or that an additional item should be included in the apportionments, the parties shall be assigned to Purchaser but there will be no adjustment confer with regard to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (matter and seek a separate refund from its insurer of any unearned premiums) an appropriate adjustment and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations payment shall be made on as agreed upon by the basis parties (or, if they are unable to resolve the matter within 15 days of Seller's receipt of Buyer's statement of adjustments (the actual number of "Dispute Date"), they shall within 15 days of the month which Dispute Date mutually select a firm of independent certified public accountants to resolve the items of disagreement alone, whose decision on the matter shall have elapsed as be made within 30 days of the day their selection and shall be binding and whose fees and expenses shall be borne by each of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after ClosingSeller and Buyer, proportionately, in an amount equal the amount of such prorations shall fees and expenses multiplied by a fraction, the numerator of which is the difference (with such difference being deemed in all cases hereunder to be subject a positive number without regard to adjustment in cash after whether such difference is a positive or negative amount) between the Closing as final determination of the independent accountant and when complete the final position taken by such party upon submission to the independent accountant and accurate information becomes availablethe denominator of which is the difference between the Seller's and Buyer's positions upon submission to the independent accountant. All prorations shall otherwise If the amount of Taxes which are to be final. Seller and Purchaser agree prorated pursuant to cooperate and use their best efforts to make such adjustments no later than sixty this Section is not known by forty-five (6045) days after the Closing Date, then the amount of such Taxes will be estimated as of such date and once the amount of such Taxes is known, Buyer shall pay to Seller, or Seller shall pay to Buyer, as the case may be, the net amount due as a result of the actual apportionment of such Taxes.
(b) Consistent with Sections 6.16, 7.7 and 7.8 herein, all items except tax prorationsintercompany obligations between the Company, subject to mutual agreement to extend such sixty (60) day periodon the one hand, and any ACME Entity or its Affiliates (other than the Company), on the other hand, and any of the other agreements referenced in such Sections or in the Schedules referenced in such Sections shall, with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, Company and the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expenseStation, have control over any ongoing tax appeals as to the Property that were commenced been cancelled prior to the Closing and that pertain solely to shall not be taken into account in the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsadjustments contemplated by this Section 3.6.
Appears in 1 contract
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing Date, except as otherwise specified:
(a) Collected Rents There is no security deposit or other Tenant deposits under the Lease and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), therefore such shall be prorated by credit to Purchaser. Prepaid rents and other charges shall not be credited to Purchaser. The rent However, Tenant reimburses Landlord monthly for Landlord’s insurance premiums. To the extent Tenant has reimbursed Landlord for any premiums for periods after the Closing Date, Purchaser shall receive a credit therefor.
(b) Purchaser and Seller shall divide the cost of any escrows hereunder equally between them.
(c) Water, electricity, sewer, gas, telephone and other utility charges will not be prorated as same are paid directly by Tenant.
(d) Amounts paid or payable under the Assigned Contracts shall be prorated.
(e) Real estate taxes and all assessments, general or special, will not be prorated as same are paid directly by Tenant.
(f) All base rents shall be prorated at Closing. The tenant improvement allowance payable under the Sixth Amendment in the amount of $753,864.00 (to the extent not previously paid to Tenant), shall be paid at Closing by Seller to Purchaser, and the amount of Tenant’s participation in sale proceeds (as provided in the Sixth Amendment) shall be the sole obligation of Seller and shall be paid at Closing by Seller to Tenant by Escrowee in the amount agreed by Seller and Tenant, which amount shall be agreed to in writing by Tenant in favor of Purchaser, Seller (either in the Estoppel Certificate or other writing) and Title Company (if so required) confirming that said agreed upon payment from Seller satisfies in full Tenant’s participation in sale proceeds (as provided in the Sixth Amendment). Purchaser shall receive a credit at Closing for any such sums which that have not been actually paid by Seller to Tenant as of the Closing. At the Closing, no “Delinquent Rents” (rents or other charges that are due and payable as of the Closing) shall be prorated in favor of Seller; provided, however, if there shall be any such Delinquent Rents, Purchaser shall have the right to Seller by any tenant but uncollected terminate this transaction effective as of the Closing shall not be adjustedDate and receive a full refund of the Xxxxxxx Money and any interest earned thereon. Notwithstanding the foregoing, but Purchaser shall cause use reasonable efforts after the rent and other sums for Closing Date to collect any Delinquent Rents due to the period prior to Closing to be remitted to Seller iffrom Tenant, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to xxx the Closing)Tenant. At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges All rents and other amounts payable charges received by tenants (or for the benefit of) Purchaser from Tenant after the Closing shall be first applied against current and past-due obligations owed to, or for the benefit of, Purchaser [with respect to which Seller is entitled those obligations accruing subsequent to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the ClosingDate], and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied delivered to the payment of such tenants’ Delinquent AmountsSeller, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, but only to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify of amounts in default and hold Purchaser harmless owed to, and for the amountsbenefit of, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments Seller for the current tax year shall be prorated on the basis of bills, if available period prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be ratably prorated; provided. For purposes of calculating prorations, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be in title to the owner of the Property andProject, therefore, and therefore entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof, for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the year and month which that shall have elapsed as of the day of the ClosingClosing Date. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the The amount of such prorations shall be subject to adjustment adjusted in cash after the Closing Closing, as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best good faith and diligent efforts to make such adjustments no later than sixty thirty (6030) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occursClosing. Except as set forth in this Section 12, all items Items of income and expense for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which that relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (RREEF Property Trust, Inc.)
Prorations and Adjustments. The following 9.1 Collected rents, operating expenses, ad valorem taxes on the property for the current year, charges under the Approved Service Contracts and utility charges shall be prorated and adjusted between Seller and Purchaser as of the day of at the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected effective as of the Closing shall not be adjustedDate, but Purchaser shall cause utilizing the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for best available computations of such amounts accruing prior to the Closing)terms. At If current ad valorem tax assessments are unavailable at Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received said ad valorem taxes shall be applied toward adjusted based upon the payment of Delinquent Amountstaxes paid in the tax year 1997; providedprovided further, however, that all special tax assessments made by any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, taxing authority with respect to the month Project prior to Closing shall be the sole responsibility of Seller and shall be paid by Seller at Closing unless payable (or may be payable) in installments, in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect case such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year installment payments shall be prorated on in the basis of bills, if available prior same manner as any other operating expense. All special tax assessments made by any taxing authority with respect to the Closing, which shall be re-prorated after Project subsequent to Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the sole responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on subject to readjustment in the basis event it is determined that any prorated item may not have been prorated correctly and in connection therewith Seller and Purchaser shall each execute at Closing a copy of the actual number of days of Proration Adjustment Letters. Purchaser shall receive a credit against the month Purchase Price for all tenant security deposits and prepaid rents in Seller's possession that are not yet forfeited. Purchaser shall assume responsibility for such deposits for which Purchaser received a credit against the Purchase Price, and shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, determine the amount of such prorations deposits to refund, and any balance not refunded shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes availableretained by Purchaser. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to Any or all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts utility deposits on deposit with utility companies will be retained by the Seller. With respect to rents which at Closing are thirty (30) days or more past due ("Delinquent Rents"), Seller shall have no right to initiate any type of collection proceeding to collect those Delinquent Rents from tenants of the Property, however such Delinquent Rents shall remain the property of the Seller and shall be credited assigned by the Purchaser to Seller at Closing. If, and promptly following the Closing, Purchaser shall inform receive a rent payment from a tenant owing Delinquent Rents, then, if such utilities tenant is current in its obligations under its lease, such rent payment (or the portion thereof that is attributable to Seller's period of ownership) shall be remitted to Seller by Purchaser promptly after receipt by Purchaser. Purchaser hereby agrees to use diligent efforts to collect the Delinquent Rents due and owing to Seller.
9.2 Seller and Purchaser agree as follows with respect to leasing fees, leasing commissions, location fees or similar charges payable to any person or entity in regard to the Property:
9.2.1 As such fees are applicable to any lease(s) under which a unit(s) was occupied prior to or as of the Closing, Seller shall be totally responsible for such fees as of the Closing, shall pay such fees and shall indemnify and hold harmless Purchaser against all losses, including court costs and attorney fees, arising out of any claims or causes of action for the non-payment of such change in ownership fees;
9.2.2 As such fees are applicable to any lease(s) under which a unit(s) is occupied as of the Property. Seller shall, from and Closing or after the Closing, at Seller’s sole cost Purchaser shall be totally responsible for all such fees. Purchaser shall indemnify and expensehold harmless Seller against all losses, have control over including court costs and attorney fees, arising out of any ongoing tax appeals as to claims or causes of action for the Property that were commenced prior to non-payment of such fees by Purchaser; and
9.2.3 Paragraphs 9.2.1, 9.2.2 and 9.2.3 of this section 9.2 shall survive the Closing and that pertain solely to the periods that Seller owned execution and delivery of the Property. Seller shall, as applicable, retain all proceeds or reductions obtained limited warranty deed for a period of six (6) months from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsthe date of Closing.
Appears in 1 contract
Samples: Agreement of Sale and Purchase (Lincam Properties LTD Series 85)
Prorations and Adjustments. The following shall items will be prorated and adjusted between Seller and Purchaser adjusted, as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected applicable as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if anyDate, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which intent that Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect will bear such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, expenses to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which they relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at ClosingDate, and promptly following Buyer will bear such expenses to the Closing, Purchaser shall inform such utilities of such change in ownership of extent they relate to the Property. Seller shall, period from and after the ClosingClosing Date:
(a) to the extent not metered directly to a third party tenant, all charges and payments for utilities, water, vault charges, sewer charges and rents and other charges by Governmental Entities that constitute Liens shall be prorated as of the Closing Date;
(b) all expenses incurred pursuant to leases included in the Assumed Liabilities shall be prorated as of the Closing Date.
(c) all real and personal property Taxes shall be prorated as of the Closing Date;
(d) all fees or charges under Licenses that are assigned to Buyer at Closing shall be prorated as of the Closing Date;
(e) all prepaid rents and other prepaid charges or credits with respect to the period from and after the Closing Date paid by Seller or its Subsidiaries under the Leases or Utility Contracts shall be transferred to Buyer, and Buyer shall pay Seller therefore in addition to the Purchase Price, at Seller’s sole cost Closing (the "Prepaids");
(f) the Texas franchise tax due from any Subsidiary for the 2005 report year (which will be based on the period from January 1 through December 31, 2004) (the "Texas Franchise Tax") shall be allocated between Buyer and expenseSeller as follows: (i) if the Texas Franchise Tax is determined on the net taxable earned surplus basis, have control over Seller shall be liable for the amount of such Tax which would be payable if the period upon which the tax is based ended on the Closing Date; and (ii) if the Texas Franchise Tax is determined on the net taxable capital basis, then such Tax shall be allocated between Seller and Buyer based on the number of respective days of ownership of the Subsidiaries by Seller and Buyer during the period from January 1 through December 31, 2004;
(g) all Taxes (other than Taxes prorated pursuant to Section 2.12(c), (d) or (f)) that are due from or that relate to any ongoing tax appeals Subsidiary with respect to any taxable period that begins before and ends after the Closing Date shall be allocated between Buyer and Seller as follows: (i) in the case of such Taxes that are based upon or related to income or receipts, Seller shall be liable for the amount of such Tax which would be payable if the period upon which the Tax is based ended on the Closing Date (and for this purpose, the taxable period of any partnership or other pass through entity in which a Subsidiary holds a beneficial interest shall be deemed to terminate at such time); and (ii) in the case of Taxes not described in clause (i) above that are imposed on a periodic basis with respect to the business or assets of the Subsidiaries or otherwise measured by the level of any item, such Taxes shall be allocated between Seller and Buyer based on the number of respective days of ownership of the Subsidiaries by Seller and Buyer during the relevant taxable period; and
(h) all other income and expense of the Real Property, Surplus Leased Real Property that were commenced prior to and Surplus Owned Real Property shall also be prorated as of the Closing Date and that pertain solely to the periods that appropriate payments or credits made at Closing. Appropriate cash payments shall be made, by Seller owned the Property. Seller shallor Buyer, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed after the facts giving rise to the obligation for such periods. payments are known to Seller shall keep Purchaser informed and Buyer, in the amounts necessary once a quarter for as long as such obligations may arise as a net settlement beginning on the last day of the calendar quarter immediately following the Closing after the Closing Date, to any such appealsgive effect to the allocations provided for in this Section 2.12.
Appears in 1 contract
Prorations and Adjustments. The following items shall be prorated and adjusted between Buyer and Seller and Purchaser as at the Close of Escrow based upon the actual number of days in the calendar month in which the Close of Escrow occurs, the date of the Close of Escrow being an income and expense day for Buyer, all such obligations to survive Close of the Closing, except as otherwise specifiedEscrow:
(a) Collected Rents 12.1.1 Real property taxes and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), assessments with respect to the Property shall be prorated by credit to Purchaser. Prepaid rents and adjusted between Buyer and Seller at the Close of Escrow, based upon the most recent official real property tax information available from the District Assessor’s office where the Property is located or other charges assessing authorities, such that Seller shall be credited responsible for all taxes and assessments levied against the Property and applicable to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, through and when collected (but Purchaser shall not be required to take legal action for such amounts accruing including the day prior to the Closing)Close of Escrow, and Buyer shall be responsible for all taxes and assessments levied against the Property and applicable to the period from and after the date of Close of Escrow. At ClosingFollowing the Close of Escrow, Seller shall deliver continue to Purchaser control the property tax appeal that relates to a schedule of all renttax year prior to the year in which Closing occurs (the “Pre-Closing Tax Appeal”). Any rebates or refunds resulting from such Pre-Closing Tax Appeal (collectively, charges and other amounts payable by tenants after the Closing with respect “Refunds”) shall first be refunded to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on in accordance with and pursuant to the date terms of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the ClosingLeases, and any excess monies received shall Refunds that are not required to be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied delivered to the payment of such tenants’ Delinquent Amounts, if any, with respect tenants pursuant to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereonLeases, if any, shall be transferred the property of Seller and delivered by Buyer to PurchaserSeller to the extent Buyer receives same. Purchaser Notwithstanding the foregoing, in the event that the GSA deducts from the rent owed to Buyer following the Close of Escrow pursuant to one or more Government Leases on account of the portion of any Refunds due to the GSA, then in lieu of refunding such amount(s) to the GSA as aforesaid, Seller shall assume at pay to Buyer from the Refunds (or Buyer shall retain if the Refunds are received by Buyer) the portion of such Refunds that would otherwise be payable to the GSA. With respect to any property tax appeal that is pending as of the Close of Escrow that relates to the year in which the Closing occurs (the obligation“Closing Year Tax Appeal”) Seller shall continue to control the Closing Year Tax Appeal from and after Closing; provided that (i) Seller shall not settle such Closing Year Tax Appeal without the consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed, and (ii) any rebates or refunds resulting from the Closing Year Tax Appeal (“Closing Year Refunds”) shall first be refunded to the tenants under the Leases in accordance with and pursuant to the terms of the Leases, and any Closing Year Refunds that are not required to be delivered to the tenants pursuant to the Leases, if any, shall be prorated between Seller and Buyer in accordance with the first sentence of this Section 12.1.1. Seller shall have no rights with respect to pay security and other deposits any tax appeals for years following the current tax year and, at the Close of Escrow, Seller shall assign to Buyer any such tax appeal that is pending as of the Close of Escrow.
12.1.2 Monthly rents of tenants under the Leases, as and when collected. No credit shall be given the Seller for accrued and unpaid rent or any other non-current sums due from tenants until these sums are paid. Buyer shall cooperate with Seller after Close of Escrow to collect any rent under the Leases that has accrued as of the Close of Escrow by doing the following. For a period of ninety (90) days after the Closing, Buyer shall xxxx tenants for all amounts due under their Leases accruing prior to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless Closing (including, without limitation, base rent, additional rent, or other tenant charges for the amountsyear in which the Closing occurs) (collectively, if material“Delinquent Rents”) and shall use reasonable efforts to collect from tenants any base rent, additional rent, or other tenant charges owing with respect to the period prior to the Closing; provided, however, Buyer shall not be obligated to xxx any tenants or exercise any legal remedies under the Leases (including, but not limited to, the termination of Leases or the recovery of possession of the leased premises) or to incur any expense over and above its own regular collection expenses or any other liability. After the Close of Escrow, Seller may not pursue or commence legal proceedings against any tenant after the Closing for Delinquent Rents or other matters for as long as such tenant is a tenant at the Property. All payments collected from tenants after Close of Escrow shall first be applied to any rent due to Buyer for the period after the end of the month in which Close of Escrow occurs, then to any costs incurred by Buyer in collecting Delinquent Rents, then to rent due in the month in which (i) the amount Close of security Escrow occurs, then to any costs incurred by Buyer in collecting Delinquent Rents and finally, to any rent due to Seller for the period prior to Close of Escrow. Notwithstanding the foregoing provisions of this Section 12.1.2, the parties acknowledge that rent and other deposits (together with interest due thereon as may be required by law or amounts payable by the Lease)GSA under the Government Leases are paid in arrears, required and, therefore, certain payments to be held under made by the terms of the Leases exceeds (ii) the amount actually transferred GSA following Closing will relate to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available a period prior to the Closing, which shall be reso any such amounts received by Buyer or its agents or Seller or its agents on account of non-prorated after delinquent rent subsequent to the Closing on shall, to the basis of actual bills received covering the extent applicable to a period which includes the Closing Date.
, be prorated between Seller and Buyer as of Close of Escrow and Seller’s portion thereof shall be remitted promptly to Seller by Buyer, if received by Buyer, or, if received by Seller, retained by Seller with Buyer’s portion thereof being promptly remitted to Buyer by Seller. In addition, Buyer shall be given a credit for the amount of any unapplied security deposits (dincluding any interest required under any Leases or by law) Fuel, water and sewer service chargesplaced by tenants pursuant to their Leases. Such credit shall be deemed a transfer by Seller to Buyer, and charges for gasacceptance by Buyer from Seller, electricityof such security deposits. At the Close of Escrow, telephone and all other utility and fuel charges, as well as all deposits at no cost to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicableSeller, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date will assign over any letters of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) credit held by Assumed Loan Lender Seller in connection with the Assumed Loan Leases. If such letters of credit are transferable by their terms, Seller shall deliver to Buyer at Closing such original letters of credit, together with all necessary transfer documentation completed and those held signed by Seller, if anyas applicable, so that Buyer and the applicable tenants can arrange to have the letters of credit reissued in favor of, or assigned or endorsed to, Buyer. Seller agrees to cooperate with Buyer post-Closing in connection with the reissuance or endorsement of any security deposit letters of credit and subject to indemnification by Buyer, act at the reasonable discretion of Buyer with respect thereto until the letters of credit are re-issued or assigned or endorsed to Buyer. Seller and Buyer shall each pay one-half (1/2) all transfer and/or other fees relating to such transfers of letters of credit. Buyer shall indemnify, defend and hold harmless Seller and Seller’s agents and representatives with respect to and to the extent of any and all claims made with respect to tenant security deposits which have been credited to Buyer in accordance with the preceding sentence. Seller shall indemnify, defend and hold harmless Buyer and Buyer’s agents and representatives with respect to and to the extent of any and all claims made with respect to tenant security deposits which were not properly applied by Seller.
12.1.3 Until the Final Adjustment Date (as defined below), when the adjustment described in Section 12.1.5 is made, all amounts received by Seller as interim payments of charges to tenants for maintenance and operating costs, real estate taxes, insurance and similar amounts (collectively, “Tenant Expense Charges”) before the Close of Escrow shall be assigned retained by Seller, except that all interim payments of Tenant Expense Charges received by either party for the month in which the Close of Escrow occurs shall be prorated as between Seller and Buyer based upon the number of days in that month and the party receiving the interim payment shall remit to Purchaser but there will (if received on or after the Close of Escrow) or credit (if received before the Close of Escrow) the other party its proportionate share. All amounts received by Buyer from tenants as interim payments of Tenant Expense Charges on or after the Close of Escrow shall be no retained by Buyer until the year-end adjustment and determination of Seller’s allocable share thereof as of the Final Adjustment Date. No later than the Final Adjustment Date, Seller’s allocable share of actual Tenant Expense Charges for Leases in effect and pursuant to which tenants are required to pay Tenant Expense Charges as of the Close of Escrow shall be determined by multiplying the total payments due from each tenant for such fiscal year (the sum of estimated payments plus or minus year-end adjustments) by a fraction, the numerator of which is Seller’s actual cost of providing common area maintenance services and taxes (as the case may be) prior to the Purchase Price or proration thereof.
Close of Escrow (h) Such other items within that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner portion of the Property and, therefore, entitled fiscal year prior to the income from Close of Escrow in which the Property applicable Lease is in effect and responsible for the expenses tenant thereunder is required to pay Tenant Expense Charges), and the denominator of which is the Property cost of providing such services and paying such taxes for the entire day upon which the Closing occurs. All such prorations shall be made on the basis fiscal year (or that portion of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period fiscal year in which the Closing Date occursapplicable Lease is in effect and the tenant thereunder is required to pay Tenant Expense Charges). Except as set forth in this Section 12, Seller shall promptly provide Buyer all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable information relating to the period prior to the Closing Close of Escrow requested by Buyer in preparing the reconciliation of Tenant Expense Charges for the year in which the Close of Escrow occurs. Seller shall not be entitled to Tenant Expense Charges under Leases with respect to which tenants are not required to pay Tenant Expense Charges prior to the Close of Escrow, provided that Seller shall remain entitled to its portion of any payment made by the GSA for real estate taxes paid after Close of Escrow related to time periods prior to Close of Escrow. If, on the basis of amounts actually incurred and the estimated payments received by Seller, Seller has retained amounts in excess of its allocable share, Seller shall remit, within thirty (30) days after notice from Buyer of the excess owed Buyer, such excess to Buyer. If, on the basis of the foregoing amounts, Seller has retained less than its allocable share (the “Seller Shortfall”), Buyer shall use reasonable efforts for a period of ninety (90) days after the Final Adjustment Date to collect the Seller Shortfall from the tenants of the Property and, to the extent collected by Buyer, Buyer shall promptly remit the Seller Shortfall, net of reasonable costs of collection, including without limitation, reasonable attorney’s fees, to Seller, subject to the priority of application of amounts collected by Buyer set forth in Section 12.1.2 above. Buyer shall not be obligated to expend any funds or commence legal proceedings to collect any Seller Shortfall. Seller may not commence legal proceedings against any tenant after the Close of Escrow with respect to any Seller Shortfall.
12.1.4 No later than April 30 in the calendar year following the Close of Escrow (the “Final Adjustment Date”), Seller and Buyer shall make a final adjustment in accordance with the provisions of this Section 12.1.4 of Tenant Expense Charges and other items of additional rents for which final adjustments or prorations could not be determined at the Closing, if any, because of the lack of actual statements, bills or invoices for the current period, the year-end adjustment of common area maintenance, taxes and like items, the unavailability of final sales figures or amounts for any other reason. Except to the extent otherwise provided in Section 12.1.3, any net adjustment in favor of Buyer or Seller is to be paid by Sellerthe other no later than thirty (30) days after such final adjustment has been made.
12.1.5 Seller shall endeavor to have all meters for utilities servicing the Property and not billed directly to any tenant or other third party, including (iwithout limitation) Amounts on deposit with utility companies shall be credited water, sewer, gas and electricity, read for the period to Seller at Closing, and promptly following including the Closing, Purchaser shall inform such utilities of such change in ownership day of the PropertyClose of Escrow. To the extent this is unavailable, Seller shallshall credit Buyer based on the average utility expense of the previous three (3) months prior to closing.
12.1.6 All amounts payable under the Assumed Service Contracts.
12.1.7 All other items customarily prorated and/or adjusted at closing in the locality in which the Property is situated, except that Seller’s insurance policies with respect to the Property shall not apply to protect Buyer from and after the ClosingClose of Escrow, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to Buyer shall procure its own insurance from and after the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsClose of Escrow.
Appears in 1 contract
Samples: Purchase and Sale Agreement (CIM Commercial Trust Corp)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing based on the periods to which they relate and are applicable (regardless of when payable), except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued Non-delinquent general real estate, personal property and ad valorem taxes and assessments assessments, and any improvement or other bonds encumbering the Property, for the current tax year shall be prorated on 2013 Calendar Year (and that are payable in 2014), and any other assessments payable for 2013 and prior years to any quasi-public or private association, including, without limitation, amounts payable under that certain Exclusion and Service Agreement respecting the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateCountrydale Metropolitan District.
(dii) Fuel, water and sewer service Non-delinquent utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature shall be ratably prorated.
(including, without limitation, any utilities paid by Seller iii) Rent and other charges under the Leases) Leases shall be prorated. Rents and other charges under the Leases which are unpaid or delinquent as of the Closing shall not be prorated, and rents and other amounts received by Purchaser after the Closing from a tenant owing such delinquent rent or other charges shall be applied (A) first, to rents due from such tenant for the month in which such payment is received by Purchaser; (B) second, to rents attributable to any period after the Closing which are past due on the date of receipt; and (C) finally, to rents and other charges delinquent as of the Closing (and Purchaser promptly shall remit such amounts to Seller). Purchaser agrees that it shall use commercially reasonable efforts to collect any such delinquent rents by continuing to xxxx tenants for any delinquent rents (provided, however, that Purchaser shall have no obligation to terminate the Lease or to institute legal proceedings, including an action for unlawful detainer, against a tenant owing delinquent rents).
(iv) The amount of all unapplied security deposits under the Leases shall be credited to Purchaser; provided, however, that if any insurance premiums tenant security deposit is in the form of a letter of credit, there shall not be proratedno credit against the Purchase Price with respect to any such tenant security deposit. At Closing, but rather Seller shall cancel deliver an original of each letter of credit serving as a tenant security deposit to Purchaser through escrow along with the Existing Insurance Policies documents executed by Seller that are required to be executed by Seller to transfer such letter of credit to Purchaser. Following Closing, Purchaser shall, at Seller’s cost and expense, deliver the same, along with any required fees paid by Seller, to the issuing bank so that the same can be processed and transferred to Purchaser.
(v) Except as hereinbelow expressly provided, Seller is responsible for the tenant improvement costs and/or tenant improvement allowances (including space planning and architectural costs) and leasing commissions due in connection with the current term of all of the Leases entered into on or before May 22, 2013, and those remaining to be paid are identified on Exhibit N attached hereto. To the extent that any of the same have not been paid as of Closing the Closing, Seller shall provide Purchaser a credit against the Purchase Price at Closing, and Purchaser shall, to the extent of such credit, be responsible for the same after the Closing. Purchaser shall be responsible, without a credit against the Purchase Price, for (i) all leasing commissions and seek a separate refund from its insurer tenant improvement costs due in connection with new leases or any extensions, renewals or expansions by any tenants after May 22, 2013, to the extent the amount of such commissions and tenant improvement costs were disclosed to Purchaser in writing prior to the expiration of the Due Diligence Period or otherwise approved by Purchaser in connection with Purchaser’s approval of any unearned premiumssuch new lease, lease extension, renewal or expansion, and (ii) the leasing commissions and thereafter tenant improvement costs due in connection with the leases or potential leases or lease renewals or expansions with the parties described on Exhibit S attached hereto to the extent such tenant improvement costs and leasing commissions are disclosed in Exhibit S attached hereto or are otherwise hereafter approved (or deemed approved) by Purchaser pursuant to Section 10(a). At Closing, Purchaser will pay to Seller (or the credit from Seller to Purchaser shall obtain its own property insurance be reduced by) an amount equal to the sum of (x) the portion of any leasing commissions, tenant improvement costs and other expenses, including reasonable attorneys' fees, actually paid by Seller after the Effective Date and prior to Closing pursuant to the negotiation and execution of any new leases or renewal or expansion of any Lease approved (or deemed approved) by Purchaser pursuant to Section 10(a), and only to the extent such amounts were disclosed to Purchaser in conformance writing and approved (or deemed approved) by Purchaser pursuant to Section 10(a), plus (y) an amount equal to any leasing commissions and tenant improvement costs disclosed on Exhibit S that are paid by Seller to Closing.
(vi) Purchaser shall be entitled to a credit against the Purchase Price at Closing for any and all remaining abated rent after Closing, reflected on Exhibit G attached hereto.
(vii) Purchaser shall be credited at Closing for all unsatisfied amounts under all capital contracts and contracts pertaining to works of improvement entered into by Seller prior to the date of this Agreement with respect to the Assumed Loan DocumentsProperty including, without limitation, the costs identified on Exhibit O attached hereto. Seller shall remain responsible for satisfying any of such costs which were not credited (but were supposed to be credited) to Purchaser at Closing.
(b) For purposes of calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing and based upon the actual number of days in the month and a three hundred sixty-five (365) day year. Seller shall prepare a schedule of prorations and deliver it to Purchaser not less than two (2) business days prior to Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the .
(c) The amount of such prorations shall be initially performed by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty six (606) months after the Closing (except as provided in clause (B) below and with respect to property taxes, which shall be adjusted within ninety (90) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to bills for the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, applicable period are received). Without limiting the parties shall make such adjustments upon receipt generality of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12foregoing, all items of income Seller and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.Purchaser agree that:
(i) Amounts on deposit (A) Seller has completed and sent to the tenants under the Leases year-end reconciliations of reimbursable expenses under the Leases for the year ending December 31, 2012. Seller is responsible for providing Purchaser with utility companies shall be a credit against the Purchase Price at Closing for any amounts that the tenants under Leases overpaid during 2012, but only to the extent such amounts have not been paid to such tenants prior to Closing or credited to Seller at Closing, and promptly following the Closingsuch tenants' rent obligations attributable to any period accruing prior to Closing (with respect to any such amounts that have been paid to tenants prior to Closing or credited to such tenants' rent obligations, Purchaser shall inform such utilities of such change in ownership of be entitled to written evidence thereof reasonably satisfactory to Purchaser confirming the Property. same), and Seller shallis entitled to any amounts (if, and when, received from and after the Closingtenants) that tenants under the Leases underpaid during 2012 (and, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as with respect to any such appeals.amounts payable to Seller, Purchaser agrees that it shall use commercially reasonable efforts to collect such amounts by billing tenants for such amounts, provided, however, that Purchaser shall have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing any such amounts);
Appears in 1 contract
Samples: Purchase and Sale Agreement (KBS Strategic Opportunity REIT, Inc.)
Prorations and Adjustments. The Unless otherwise provided, the following items shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specifiedparties or paid at closing:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereonA. All late listing penalties, if any, shall be transferred paid by Seller.
B. Xxxxx and Seller by their execution hereof, represent that they know of no realtor, agent or other party involved in the transaction who is entitled to Purchaseror has a claim for a real estate commission or fee and neither Seller nor Xxxxx has employed any such party. Purchaser shall assume at Closing the obligation, if any, Each agrees to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser the other harmless for the amounts, if material, against any real estate commission claimed by which (i) the amount any third-party in violation of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closingthis representation.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and C. Any ad valorem taxes and general assessments for affecting the current tax year Property shall be prorated on the basis between Buyer and Seller as of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) FuelDate based on a 365 day year. All delinquent taxes, water and sewer service chargesdeferred or rollback taxes, and charges for gas, electricity, telephone assessments and all other utility special liens and fuel charges, as well as all deposits to utility companies, governmental entities assessments for prior years shall be paid in full by Seller at or any other person before the Closing. All non-delinquent ad valorem taxes and general assessments on the Property shall be prorated ratably based on the basis of actual current tax bill, but if such tax bill has not yet been received by Seller by the last ascertainable bills (and reprorated upon receipt of the actual bills Closing Date or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing if supplemental taxes are assessed after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for Closing, the account of Seller, and all items of income and expense for the period on and parties shall make any necessary adjustment after the Closing Date will be for by cash payment to the account of Purchaserparty entitled thereto so that Seller shall have borne all ad valorem taxes and general assessments, including all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurredsupplemental taxes, services performed or other amounts allocable to the period prior to the Closing Date and Buyer shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited bear all ad valorem taxes and general assessments, including all supplemental taxes, allocable to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, period from and after the Closing, at Seller’s sole cost and expense, have control over . If any ongoing tax appeals as expenses attributable to the Property and allocable to the period prior to the Closing are discovered or billed after the Closing, the parties shall make any necessary adjustment after the Closing by cash payment to the party entitled thereto so that were commenced Seller shall have borne all expenses allocable to the period prior to the Closing and that pertain solely Buyer shall bear all expenses allocable to the periods that Seller owned period from and after the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsClosing.
Appears in 1 contract
Samples: Offer to Purchase and Contract
Prorations and Adjustments. The following This Section 8.04 applies to the Merger Closing Properties. At Closing, accounts payable, rents (to the extent prepaid), all real and personal property taxes, water rents, sewer charges, electric and other utility charges, fuel if any, operating expenses, wages, any special assessments, if any, and other similar charges affecting the Merger Closing Properties and all utility charges, if any, shall be adjusted and prorated as of midnight of the day prior to the Closing Date (the “Closing Adjustment Time”). All other charges or fees customarily prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), in similar transactions shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected adjusted as of the Closing Adjustment Time. All rent (other than prepaid rent) received from the tenants of the Merger Closing Properties shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected adjusted (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule prorated) as of all rent, charges and other amounts payable by tenants after the Closing Adjustment Time and paid in accordance with respect to which Seller is entitled to receive a share the following provisions, together with the following adjustments:
(i) Following receipt of the monthly installment of basic rent under this Agreement, and any amount due and owing to Seller before of the Merger Closing by tenants under the Properties Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect attributable to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller such installment shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property be adjusted as of the date of ClosingClosing Adjustment Time, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing with the obligation, if any, to pay security and other deposits to tenants under the Leases, Target Stockholders being entitled to the extent that such deposits are transferred portion thereof attributable to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms period of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after month immediately preceding the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, Acquiror entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount balance of such prorations monthly installment. Acquiror shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best commercially reasonable efforts to make such adjustments no later than sixty (60) days after the Closing as seek to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, collect unpaid rents and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable attributable to the period prior to the Closing Date shall be paid by SellerAdjustment Time.
(ii) Acquiror shall be entitled to all basic rent and other sums due under any of the Merger Closing Properties Leases as of the Closing Adjustment Time with the exception of (a) common area maintenance (CAM) and real estate tax reimbursements attributable to periods prior to the Closing Adjustment Time; (b) the basic rent for the Closing month to which an Acquiror is entitled under (i) Amounts above, and (c) rental arrearages for periods preceding the Closing Adjustment Time, and (d) rents received from tenants prior to the Closing Adjustment Time which relate to periods prior to the Closing Adjustment Time. Annual CAM and tax reimbursements, which are payable by the tenant on deposit an annual basis after the conclusion of each calendar year, will be adjusted as of the Closing Adjustment Time, with utility companies the Target Stockholders being entitled to the portion thereof attributable to the period of the year immediately preceding the Closing Adjustment Time and the Acquiror being entitled to the balance of such payment. Additionally, any tenant payments for special services which were specifically billed by Target or one of its Affiliates prior to the Closing Adjustment Time shall be owed to the Target Stockholders. All CAM payments from tenants received by Target or Target Subsidiaries which relate to periods after the Closing Adjustment Time shall be credited to Seller Acquiror at Closing, and promptly following .
(iii) All security deposits under the Closing, Purchaser shall inform such utilities Merger Closing Properties Leases (excluding letters of such change credit posted as security deposits as listed in ownership Section 8.04(iii) of the PropertyTarget Disclosure Letter) and rents received by Target and Target Subsidiaries which relate to periods after the Closing Adjustment Time shall be credited to Acquiror at Closing. Seller shallLetters of credit posted as security deposits as listed in Section 8.04(iii) of the Target Disclosure Letter shall be assigned to Acquiror at Closing.
(iv) All Leasing Commissions and tenant improvements with respect to the Target Properties Leases signed after September 6, from 2006 shall be assumed by Acquiror. All Pre-LOI Leasing Commissions and Pre-LOI TI Work shall be the obligation of the Target. Any such unpaid amounts with regard to the Pre-LOI Leases as of the Closing Date, together with the estimated cost to complete the Pre-LOI TI Work after the Closing, shall be credited to Acquiror at Seller’s sole cost Closing. To the extent Target has paid the Leasing Commissions and expensetenant improvements for leases signed after September 6, 2006, Target Stockholders shall receive a credit at Closing.
(v) Acquiror will be credited at Closing for an amount equal to any casualty insurance deductibles and uninsured losses relating to casualties which may have control over any ongoing tax appeals as occurred at the Merger Closing Properties prior to the Property that were commenced Closing.
(vi) If Acquiror collects any unpaid or delinquent rents relating to the Merger Closing Properties after the Closing Adjustment Time, Acquiror shall deliver to the Liquidating Trust the rent to which the Liquidating Trust is entitled relating to the period prior to the Closing and that pertain solely Adjustment Time. All rents relating to the periods that Seller owned Merger Closing Properties received by Acquiror after the Property. Seller shallClosing Adjustment Time shall be applied first to current and then delinquent rent in the inverse order of maturity.
(vii) An amount equal to the Retained LC Amount shall be credited to Acquiror at Closing pursuant to Section 8.08.
(viii) Acquiror shall credit to Target Stockholders at Closing any money spent by Target with respect to the Sewer System (as such term is defined in the Acquisition Agreement) on or after September 6, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals2006.
Appears in 1 contract
Samples: Purchase Agreement (Corporate Office Properties Trust)
Prorations and Adjustments. The following All rentals, revenues and other income generated by the Property and (except to the extent such items are to paid directly by Tenant pursuant to the terms of the Lease) all utilities, real estate taxes, maintenance charges and other operating expenses incurred in connection with the ownership, management and operation of the Property shall be paid or shall be prorated and adjusted between Seller and Purchaser in accordance with the provisions set forth below. For purposes of such prorations and adjustments, Purchaser shall be deemed to own the Property as of 12:00 a.m. on the day Closing Date and therefore be entitled to any revenues and be responsible for any expenses for the entire Closing Date. Any apportionments and prorations which are not expressly provided for below shall be made in accordance with the customary practice in the area in which the Property is located. Seller and Purchaser shall prepare a schedule of adjustments at least three (3) business days prior to the Closing Date and shall be part of the settlement statement for the transaction (the "Closing Statement"). Any net adjustment in favor of Purchaser shall be credited against the Purchase Price at the Closing, except as otherwise specified:. Any net adjustment in favor of Seller shall be paid in cash at the Closing by Purchaser to Seller. A copy of the Closing Statement agreed upon by Seller and Purchaser shall be executed and delivered by Seller and Purchaser at the Closing.
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid Monthly rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ feesfixed and additional rent paid on a monthly basis) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the a cash basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days in the month during which the Closing occurs.
(b) Ad valorem taxes (real and personal) for the tax year during which the Closing occurs shall be prorated and adjusted at Closing on a cash basis (it being understood and agreed that Seller has paid such taxes for the tax year in which Closing will occur, and, accordingly, if Tenant and the owner of Parcel B reimburse Seller for such taxes paid by Seller, then, in such event, there shall not be a proration for such taxes at Closing). Any refund or credit of real property taxes for the year prior to the year of Closing shall remain the sole property of Seller (except to the extent such refund or credit is the property of a Tenant or Owner of Parcel B pursuant to the terms of the month applicable Lease) and, if paid or credited to Purchaser, shall be promptly paid to Seller. Seller shall be entitled to its pro rata share of any refund or credit of real property taxes for the year in which the Closing occurs, and Purchaser shall have elapsed pay same promptly following receipt of such refund or credit.
(i) To the extent Tenants are reimbursing Seller for common area maintenance, parking and other operating expenses (collectively, "CAM Charges"), CAM Charges that will become due and payable with respect to the year in which the Closing occurs (the "CAM Lease Year"), including quarterly or annual payments, reconciliations and so called "rebillings" or "true ups", shall be prorated at Closing on an accrual basis. If the amounts of such additional rent cannot be determined as of the day Closing Date or have not yet been billed to Tenants or the owner of Parcel B, then the proration shall be done on the basis of actual amounts to the extent available, and otherwise on the basis of a reasonable estimate by Seller and Purchaser of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined amount expected to be inaccurate or incomplete after Closingdue thereon. If proration is based upon estimates, the amount of such prorations then a further adjustment shall be subject to adjustment in cash made after the Closing as and when complete and accurate information becomes availableactual amounts are known. All prorations In the event that Seller has received CAM Charges payments in excess of its actual CAM Charges for the CAM Lease Year, Purchaser shall otherwise be finalentitled to receive a credit against the Purchase Price for the excess. In the event that the Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later has received CAM Charges payments less than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorationsits actual CAM Charges, to the extent not covered that the Leases provide for a "true up" at the end of the CAM Lease Year, Seller shall be entitled to receive any deficit, but only after Purchaser has received any true up payment from Tenant or the owner of Parcel B, as the case may be. Upon receipt by either party of any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) aboveCAM Charges true up payment from Tenant or the owner of Parcel B, as the case may be, the parties party receiving the same shall make such adjustments upon receipt provide to the other party its allocable share of the actual tax bills covering true up payment within five (5) business days of the receipt thereof.
(ii) Purchaser and Seller acknowledge and agree that (w) Seller has paid for insurance at the Property for period in which the Closing will occur, (x) Tenant and the owner of Parcel B have reimbursed Seller for the cost of such insurance, (y) accordingly, there shall be no proration for insurance at Closing, and (z) Seller (not Purchaser) shall reimburse within ninety (90) days of the Closing Tenant and the owner of Parcel B their proportionate share of any refund received by Seller on account of any insurance coverage cancelled at Closing, to the extent required under the Lease and/or the REA.
(d) Additional rent for services provided or damages, including electricity, HVAC, steam, water, cleaning, overtime services, sundry charges, indemnity payments and similar charges, shall be prorated based on the period during which such additional rent accrued.
(e) All costs, expenses, charges and fees relating to the ownership, management, operation, maintenance and repair of the Property, including electricity, gas, water and sewer charges, telephone and other public utilities, common area maintenance charges, personal property taxes, excise taxes on rent, business occupational taxes, charges payable under Operating Agreements, fees payable under transferable licenses for the operation of the Property and other items (except to the extent Tenant is responsible for paying same directly), shall be prorated on a cash basis as of the Closing Date based upon the actual number of days in the month during which the Closing occurs. Except as set forth To the extent feasible, utility meters (except to the extent accounts are in this Section 12, all items the name of income and expense for Tenant) shall be read on the period date prior to the date of Closing Date will be for the account of Seller, and all items of income utilities thereafter used shall be paid for by Purchaser and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date utilities theretofore used shall be paid by Seller.
(if) Amounts on deposit Purchaser shall pay Seller a sum equal to all outstanding cash utility deposits, if any, paid by Seller in connection with utility companies the Property upon delivery by Seller of satisfactory evidence of same and Seller shall assign all of its rights to those deposits to Purchaser.
(g) Any post-Closing adjustments shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and made as soon as practicable after the Closing. Purchaser shall provide an accounting, accompanied by reasonable documentary evidence of the rents, revenues and expenses in question.
(h) Payments under the REA shall be prorated at Seller’s sole cost and expense, Closing on an accrual basis. If the amounts of such payments under the REA have control over any ongoing tax appeals not been determined as of the Closing Date or have not yet been billed to the Property that were commenced prior owner of Parcel B under the REA, then the proration shall be done on the basis of actual amounts to the extent available, and otherwise on the basis of a reasonable estimate by Seller of the amount expected to be due thereon. If proration is based upon estimates, then a further adjustment shall be made after the Closing when actual amounts are known.
(i) A final reconciliation of the prorated items shall be made by Purchaser and that pertain solely to Seller no later than six (6) months after Closing. The provisions of this Section 7.2.6 shall survive the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed Closing for such periods. Seller shall keep Purchaser informed as to any such appealsa period of six (6) months.
Appears in 1 contract
Samples: Contract of Sale and Purchase (Hines Global REIT, Inc.)
Prorations and Adjustments. The following (a) Subject to subpart (e) below, real estate taxes and assessments relating to the Property shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjustedDate in accordance with Custom, but Purchaser shall cause the rent and other sums for the period prior to including Custom regarding any post-Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid true ups based on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating theretomore accurate information.
(b) The amount of Subject to subpart (e) below, all expenses (that are Customarily prorated, such as but not limited to utility costs) and income for the Property or portions thereof, including rent payable under the Lease (excluding Delinquent Rents, defined below, and security and other Tenant deposits and interest due thereon, if any, deposit) shall be transferred prorated as of 11:59 P.M. local time (for the locality in which the Property is situated) on the day prior to Purchaserthe Closing Date, so that all income and expenses attributable to the Closing Date are for the benefit/cost of Buyer. Purchaser If the Closing Date shall assume occur early enough in a month that Seller has not yet received the applicable month’s rent from the Tenant, or if the Closing Date occurs within ten (10) days of the end of a month then Buyer shall be credited at Closing with the obligationcurrent month’s rent (for a Closing early in the month) or following month’s rent (for a Closing later in the month) and Seller shall be entitled to retain any rents received by Seller that are attributable to the month of the Closing or the following month, if anyas the case may be, to pay security and other deposits to tenants under the Leases, Buyer agrees that to the extent that it receives any rent attributable to such deposits are transferred to Purchaser month which was adjusted at Closing, it will refund such amount to Seller as soon as reasonably possible. Seller More generally, any rent or other income received by either party after Closing which is owed to the other party shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under in trust and promptly remitted to the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closingother party.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(gWithout limiting subpart (b) belowabove, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year no proration or adjustment shall be prorated on the basis of billsmade for rent, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Sellerbase rent, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day periodpercentage rent, and with respect to tax prorationsadditional rent, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable attributable to the period prior to the Closing Date, but not received by Seller as of the Closing Date due to the delinquency of Tenant (hereinafter called the “Delinquent Rents”). Buyer shall have no liability to Seller for the Delinquent Rents except to the extent actually collected by Buyer, and Buyer shall have no obligation to make efforts to collect such Delinquent Rents, and also, Seller shall not have the right to pursue collection of any outstanding Delinquent Rents post-Closing. Delinquent Rents that may end up being collected from Tenant by Buyer (but, as stated above, Buyer shall have no obligation to make efforts to collect Delinquent Rents) shall be paid applied first to (i) Seller and Buyer in an amount equal to their proportionate share of such rents owing by Sellersuch Tenant in respect of the Closing Month, (ii) next to the then-current amounts owed by Tenant and accruing on or after the Closing Date, (iii) then to any Delinquent Rents owing for the rent period prior to the Closing Month, and (iv) the balance, if any, to Buyer, all the foregoing being regardless of how Tenant may characterize such rent payments. Any such amounts applicable to Delinquent Rents pursuant to the foregoing formula and received by Buyer shall be promptly forwarded to Seller as provided herein.
(id) Amounts To the extent that real estate taxes, landlord maintenance costs, and the like may be included in the Tenant’s rent (i.e., so-called “additional rent”) under the Lease, whether as estimated monthly payments to Seller subject to reconciliation, or as reimbursements to Seller based on deposit with Seller’s presentation of an invoice or the like, then the parties shall adjust the above mentioned prorations so that Seller is not reimbursed twice for the same expenditure, taking into account whether Seller has yet received an applicable reimbursement, and similar Customary factors. Notwithstanding anything in the foregoing that may be expressed or implied to the contrary, if there is an expense that Tenant pays directly to an applicable third party (for example, but without limitation, if Tenant pays utilities directly to the utility companies provider, or if Tenant obtains and maintains the property insurance at its sole cost), then there shall be credited no proration of such expense. Furthermore, any and all payments to Seller for prorations hereunder that are based on the expectation of receiving an applicable reimbursement from Tenant post-Closing shall be made on an “if and when” collected (from Tenant) basis, meaning that rather than giving Seller a credit at Closingthe Closing the Buyer shall instead remit the applicable amounts to Seller within thirty (30) days of receiving such reimbursements from Tenant. For the avoidance of doubt, and promptly following if Tenant is responsible to reimburse landlord for any capital expenses or the Closinglike on an amortized basis, Purchaser shall inform such utilities then the future payments of such change in ownership of the Propertyamounts shall belong to Buyer and not Seller. Seller shall, from and Buyer shall cooperate with respect to any rents or other charges that are to be adjusted between Tenant and “Landlord” at a date after the Closing, and any funds due to or from Tenant as a result thereof shall be allocated accordingly. Buyer and Seller shall cooperate with respect to the collection of same from Tenant after the Closing.
(e) Subject to subpart (e) above, if there are CAM or similar payments under an REA that need to be prorated, then they shall be prorated at the Closing in accordance with Custom.
(f) There will be no proration of insurance. If the landlord is required to carry the property insurance under the terms of the Lease then Buyer shall be responsible to obtain its own insurance as of the Closing Date.
(g) To the extent that Buyer, as the new owner, may need any receipts, invoices, or other materials from Seller (relating to Seller’s sole cost and expenseperiod of ownership) in order to perform any reconciliations, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shallor otherwise obtain reimbursements from Tenant, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. then Seller shall keep Purchaser informed as provide such materials to any such appealsBuyer at the Closing. The provisions of this Section shall survive the Closing.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Aei Net Lease Income & Growth Fund Xx Limited Partnership)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general General real estate, personal property and ad valorem taxes and assessments assessments, and any improvement or other bonds encumbering the Property, for the current tax year shall be prorated on for the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateProperty.
(dii) Fuel, water and sewer service Utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature shall be ratably prorated.
(including, without limitation, any utilities paid by Seller iii) Rent and other charges under the Leases) Leases (to the extent such monies have actually been collected by Seller). Rents and other charges under the Leases which are delinquent as of the Closing shall not be prorated, and rents and other amounts received by Purchaser after the Closing from a tenant owing such delinquent rent or other charges shall be proratedapplied (A) first, to Purchaser's actual out-of-pocket costs of collection incurred with respect to such tenant; (B) second, to rents due from such tenant for the month in which such payment is received by Purchaser; (C) third, to rents attributable to any period after the Closing which are past due on the date of receipt; and (D) finally, to rents and other charges delinquent as of the Closing (and Purchaser promptly shall remit such amounts to Seller). Seller retains the right to pursue and collect (through any lawful proceeding) delinquent rents pertaining to Seller's period of ownership. Purchaser agrees that it shall use commercially reasonable efforts to collect any such delinquent rents and will not compromise or settle any of Seller's claims regarding delinquent rent without Seller's written consent (provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing delinquent rents).
(iv) The amount of all unapplied security deposits under the Assumed Loan DocumentsLeases shall be credited to Purchaser. For purposes of calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the ClosingClosing and based upon the actual number of days in the month and a three hundred sixty-five (365) day year. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the The amount of such prorations shall be initially performed by the Escrow Company at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as (except with respect to all items except tax prorationsproperty taxes, subject to mutual agreement to extend such which shall be adjusted within sixty (60) day perioddays after the tax bills for the applicable period are received). Without limiting the generality of the foregoing, Seller and Purchaser hereby agree that (i) with respect to any year-end reconciliations of reimbursable expenses under the Leases, Seller and Purchaser shall cooperate to complete such reconciliations as soon as possible after the Closing, with Seller responsible for amounts owing to tenants under the Leases, and entitled to amounts payable by tenants under the Leases (as the case may be), with respect to periods prior to the Closing, and with Purchaser responsible for amounts owing to tenants under the Leases, and entitled to amounts payable by tenants under the Leases (as the case may be), with respect to periods from and after the Closing (and, with respect to any such amounts payable to Seller, Purchaser agrees that it shall use commercially reasonable efforts to collect such amounts, provided, however, that Purchaser shall have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing any such amounts), and (ii) with respect to any property tax appeals or reassessments filed by Seller for tax years prior to the year in which the Closing occurs, Seller shall be entitled to the full amount of any refund or rebate resulting therefrom (subject to any requirement under the Leases to pay to the tenants thereunder a share of any such refund or rebate, which shall be Seller's sole obligation), and with respect to any property tax prorationsappeals or reassessments filed by Seller for the tax year in which the Closing occurs, Seller and Purchaser shall share the amount of any rebate or refund resulting therefrom (after first paying to Seller all costs and expenses incurred by Seller in pursuing such appeal or reassessment) in proportion to their respective periods of ownership of the Property for such tax year (with Seller and Purchaser each obligated for any amount of such refund or rebate required to be paid to the extent not covered by tenants under the Leases for its respective period of ownership of the Property for such tax year), and (iii) in no event will there be any tax escrows proration of insurance premiums under Seller's existing policies of insurance relating to the Property, and Purchaser acknowledges and agrees that none of Seller's insurance policies (or any proceeds payable thereunder, except as expressly provided for in Section 17 below) will be assigned to Purchaser at Closing pursuant the Closing, and Purchaser shall be solely obligated to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occursobtain any and all insurance that it deems necessary or desirable. Except as set forth in this Section 1214, all items of income and expense which accrue for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense which accrue for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method . The provisions of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date this Section 14 shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Prorations and Adjustments. The following items shall be prorated and adjusted between Seller and Purchaser as of the day date of the Closing, except as otherwise specifiedclosing:
(a) Collected Rents and other chargesRents, other than delinquent rents under the Lease. If the Lease provides for Tenants who owe Delinquent Rents (as hereinafter defined)a minimum basic rent, additional rent or expense reimbursement plus percentage rent to be computed on the basis of a stated percentage of the tenant’s monthly or annual revenue or volume of business, then for the purpose of prorating such percentage rents, it shall be prorated by credit assumed the revenue for each month or each year for which percentage rent is to Purchaserbe computed is the same as the revenue for the last calendar month or last calendar year, as the case may be, immediately before the close of escrow. Prepaid Delinquent rents and other charges shall be credited to Purchaser. The rent and all other sums are rents which are due and payable to Seller by any tenant but uncollected as of the Closing not paid within ten days after they are due. Delinquent rents shall not be adjustedprorated and shall remain the property of the Seller, but except that the Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreementand retain all rents allowable to the period after closing. To the extent Purchaser receives delinquent rents following the closing and provided Purchaser has received current rents from the Existing Tenant, and any amount due and owing Purchaser shall remit to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments delinquent rents received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward following the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating theretoclosing.
(b) The amount of all All security and other Tenant deposits and interest due thereon, if any, lease considerations held by Seller shall be transferred to Purchaser. delivered by Seller at closing (or Purchaser shall assume at Closing receive a credit against the obligation, if any, to pay security and other deposits to tenants under Purchase Price on the Leases, to the extent that applicable settlement statement in such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Leaseamount), required to and shall be held under represented and warranted by Seller as the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closingonly security deposits or lease considerations in its possession.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem Real estate taxes and installments of special assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Dateyear.
(d) FuelCharges under the Service Contracts. The net balance of the foregoing prorations, water and sewer service chargesif in favor of Seller, shall be added to the cash required to be paid by Purchaser, before closing; or, if in favor of Purchaser, shall be deducted from such cash required. No prorations will be made of public utilities, but, in lieu thereof, Seller will cause the respective utility companies to read the gas, water, electric, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably power meters on the basis morning of the last ascertainable bills (closing, and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final will pay such invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closingwhen rendered.
(e) Amounts due, commissions, upSeller and Purchaser will each pay one-front revenues half of any reasonable and incentives, and prepayments under customary closing fee or charge imposed by any closing agent designated by the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of PurchaserTitle Company.
(f) Assignable license and permit fees paid on an annual or Seller will pay the cost of recording all documents necessary to place record title in the condition warranted by Seller in this Agreement. Purchaser will pay the cost of recording all other periodic basisdocuments.
(g) All escrow Each of the parties will pay its own attorney’s fees, except that a party defaulting under this Agreement or any closing document will pay the reasonable attorney’s fees and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held court costs incurred by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned nondefaulting party to Purchaser but there will be no adjustment to the Purchase Price or proration thereofenforce its rights regarding such default.
(h) Such All other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) costs shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner allocated by written agreement of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.Parties
Appears in 1 contract
Samples: Commercial Real Estate Sale Contract (US Alliance Corp)
Prorations and Adjustments. The following At Closing, interest on the Existing Indebtedness, rents (to the extent prepaid), all real and personal property taxes, water rents, sewer charges, electric and other utility charges, operating expenses, any special assessments, if any, owner's association assessments, and other similar charges affecting the Property shall be adjusted and prorated as of midnight of the day prior to the Closing Date, the day of Closing being a day of income and expense for the Purchaser. Seller shall assign to Purchaser at Closing all of Seller's right, title and interest in and to reserves, if any, held by the holder of the Existing Indebtedness as of the Closing Date. Such amount of reserves will be credited to Seller and paid by Purchaser on the Closing Date. To the extent practicable, Seller shall attempt to have utility providers read the meters for the Property on the day prior to Closing for purposes of making such prorations and adjustments. All other charges or fees customarily prorated and adjusted in similar transactions shall be adjusted at Closing. All rent (other than prepaid rent, which shall be paid by Seller to Purchaser) payable by the tenant of the Property shall be adjusted (prorated) as of the Closing Date and paid in accordance with the following provisions:
a. Base Rent (as defined in the Lease) and Additional Rent (as defined in the Lease) under the Lease attributable to the month in which the Closing occurs, shall be adjusted as of the Closing, with Seller being entitled to the portion thereof attributable to the period of the month immediately preceding the Closing Date and Purchaser entitled to the balance of such monthly installment.
b. Purchaser shall be entitled to all Base Rent and other sums due under the Lease to the extent collected on any date after the Closing with the exception of (a) common area maintenance ("CAM") and real estate tax reimbursements attributable to periods prior to the Closing; (b) the Base Rent for the Closing month to which Seller is entitled under (i) above, and (c) to the extent specified in Subsection c. below, rentals paid by the tenant on account of rental arrearages for periods preceding the Closing. Annual CAM and tax reimbursements which are payable by the tenant on an annual basis for the year of Closing after the conclusion of the calendar year, will be adjusted with the tenant within ninety (90) days after the expiration of such calendar year and shall be apportioned between Seller and Purchaser as of the day date of Closing, with Seller being entitled to the portion thereof attributable to the period of the Closingyear immediately preceding the Closing Date and Purchaser being entitled to the balance of such payment. Purchaser shall pay over to Seller within two (2) business days following receipt the portion of the installment to which the Seller is entitled. Additionally, except as otherwise specified:
(a) Collected Rents and other charges, other than any post-Closing tenant payments of amounts for Tenants who owe Delinquent Rents (as hereinafter defined), special services which were specifically billed by Seller prior to the Closing Date shall be prorated remitted by credit Purchaser to Seller within two (2) business days following Purchaser. Prepaid rents 's receipt thereof.
c. Base Rent and other charges shall be credited to Purchaser. The rent and all other sums Additional Rent which are due and payable to Seller by any tenant due, but uncollected uncollected, as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, as and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closingcollected, Seller shall deliver to Purchaser a schedule of all rentless any reasonable, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to expenses incurred by Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amountssuch collection; provided, howeverthat, that any rent received except with respect to Base Rent and Additional Rent for the Closing month, which shall be treated as specified in (i) above, all rents collected subsequent to Closing by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to current rentals then due which have accrued subsequent to Closing and any remaining amounts shall be applied to rental arrearages as of Closing. Similarly, if Seller receives any Base Rent or other sums under the payment Lease which are payable to Purchaser under this Section 10.2, then Seller shall promptly deliver such sums to Purchaser. Purchaser, at Seller's request, will use reasonable efforts for six (6) months after the Closing Date to collect past due rental amounts or other payments owed to Seller in accordance with this Section 10.2, except that Purchaser has no obligation to incur any out-of-pocket expenses in the course of such tenants’ Delinquent Amounts, if any, collection efforts.
d. Seller agrees to pay in full as of the Closing Date the following amounts with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which Effective Date: (i) all leasing commissions and brokerage fees owing in connection with the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the current terms of the Leases exceeds such Lease, (ii) the amount actually transferred tenant improvement allowance (if any) due and payable under such Lease, (iii) the cost of completing any commenced tenant improvements (if any) even if completion is to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the occur after Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
and (d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoicesiv) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicableapplicable, Seller shall cause meters for utilities to be read not more than one (1) day prior any relocation, rent subsidies or other expenses or incentives offered to the date tenant under such Lease in order to satisfy or terminate the obligations of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments the tenant to a landlord under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documentsanother lease. Purchaser shall be deemed responsible for any commissions, tenant improvements or other such expenses accruing in connection with leases entered into by Purchaser after Closing. All adjustment items to the extent they cannot be precisely determined at Closing (or to the extent found to be erroneous after the owner of the Property andClosing), therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available estimated at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations and shall be subject to adjustment resolved by the parties in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments good faith no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerClosing.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Columbia Equity Trust, Inc.)
Prorations and Adjustments. (a) The following items shall comprise prorations and adjustments to be prorated and adjusted between Seller and Purchaser determined as of 11:59 p.m. (local time where the day Real Property is located) of the Closingdate immediately preceding the Closing Date (such time and date referred to as the “Adjustment Date”), except and shall increase or decrease the cash portion of the Purchase Price payable at the Closing pursuant to Section 3, as otherwise specifiedthe case may be:
(ai) Collected Rents and other charges, other than income for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs Date occurs, received by Seller in good funds on or before the Closing Date, shall first be prorated on a per diem basis. Rents received by Buyer after the Closing Date shall be applied to as follows and in the following order: first, in payment of any rents for the first full month after the Closing Date; second, in payment of any rents actually due and payable as of the date of receipt of such tenants’ Delinquent Amountsrent payment (or that will be due and payable within five (5) Business Days of such receipt); third, if anyin payment of any rents due and payable for the month in which the Closing Date occurs; fourth, with respect in payment of any rents due and payable for the months prior to the month in which the Closing Date occurs; and fifth, and not toward the in payment of rent and other charges any rents for previous or periods subsequent monthsto the Closing Date not otherwise addressed above. Purchaser may not waive Buyer shall be under no obligation, after the Closing, to take any Delinquent Amounts or modify a Lease so as action to reduce amounts or charges owed under Leases collect any rents due to Seller for any period in which Seller is entitled prior to receive a share of charges the Closing Date. On or amounts, without first obtaining after the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing thereforDate, Seller shall have promptly remit to Buyer any rents received by Seller for any period after the right Closing Date, and Buyer shall promptly remit to attempt to effect collection Seller any rents received by litigation or otherwise so long Buyer for any period before the Closing Date which are due Seller after application as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closingset forth above. Seller shall indemnify and hold Purchaser harmless be prohibited from seeking, from any tenants, any rents due for the amounts, if material, by which (i) period of time before the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds Closing Date;
(ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by that any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature additional rent (including, without limitation, any utilities estimated payments for operating expenses and/or real estate taxes) (collectively, “Lease Expenses”) is paid by Seller Tenants under the LeasesLeases based on an estimated payment basis (monthly, quarterly, or otherwise) for which a future reconciliation of actual Lease Expenses to estimated payments is required to be performed at the end of a reconciliation period, Buyer and Seller shall make an adjustment at the Closing for the applicable reconciliation period (or periods, if the Leases do not have a common reconciliation period) based on a comparison of the actual Lease Expenses to the estimated payments at the Closing. If, as of the Closing, Seller has received additional rent payments in excess of the amount that Tenants will be required to pay, based on the actual Lease Expenses as of the Closing, Buyer shall receive a credit in the amount of such excess. If, as of the Closing, Seller has received additional rent payments that are less than the amount that Tenants would be required to pay based on the actual Lease Expenses as of the Closing, Buyer shall deliver to Seller the amount of such deficiency within thirty (30) days of the reconciliation pursuant to which the Tenants’ payments of such deficient amounts are received by Buyer;
(iii) Amounts due or prepaid under the Service Contracts to be assigned shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies prorated as of Closing the Adjustment Date on a per diem basis;
(and seek a separate refund from its insurer of any unearned premiumsiv) and thereafter Purchaser shall obtain its own Real estate taxes, personal property insurance in conformance with taxes, ad valorem taxes, sewer community association assessments (collectively, the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the “Property and, therefore, entitled to the income from the Property and responsible Taxes”) for the expenses of the Property for the entire day upon tax year during which the Closing occurs. All such prorations Date occurs shall be made prorated as of the Adjustment Date on the basis of the actual number of days most recent available tax xxxx and the then current assessed valuation of the month Real Property, Improvements and Personal Property for Property Tax purposes. If the rates for taxes or assessments for Property Taxes assessed or payable for the tax year in which shall the Closing Date occurs have elapsed not been determined as of the day Closing Date, the rates of taxes and the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined assessment for Property Taxes shall:
(A) be assumed to be inaccurate or incomplete after Closingthe same as the most recent rates for taxes and assessment for Property Taxes, the amount of such prorations shall and (B) be subject to adjustment in cash readjusted by Seller and Buyer after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty Date, within thirty (6030) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon Buyer’s receipt of the actual final bills for Property Taxes for the tax bills covering the period year in which the Closing Date occurs. Except Seller shall retain the right to contest any taxes, assessments or reassessments of the Real Property, Improvements and Personal Property (or any portion thereof) and/or attempt to obtain a reduction or refund for any taxes or assessments relating to the year of Closing or any prior years and shall be entitled to retain any reduction, refund or tax savings in connection therewith. Buyer shall have the right to contest any taxes, assessments or reassessments of the Real Property, Improvements and Personal Property (or any portion thereof) and/or attempt to obtain a reduction or refund for any taxes or assessments relating to the year following the year of Closing and any subsequent years. In the event that Seller elects to contest any taxes, assessments or reassessments of the Property (or any portion thereof) that relate to all or any portion of the year of Closing, then any reduction or tax savings received by Seller (net of any actual out of pocket costs incurred in connection with such reduction or tax savings) shall be prorated as set forth between Buyer and Seller in this Section 12accordance herewith;
(v) Buyer shall receive a credit for all tenant security deposits, held by Seller on the Closing Date;
(vi) Buyer shall receive a credit for any accrued but unpaid commissions or other fees (whether or not yet due and payable) to any person, entity or agent with regard to the execution of any Leases in effect as of the Effective Date;
(vii) Buyer shall receive a credit for any and all items tenant improvement work required to be done or paid by the landlord under the provisions of income any Lease, and expense any contributions payable by the landlord to any Tenant toward reimbursement of such Tenant’s cost of moving or tenant improvements;
(viii) Buyer shall be entitled to receive a credit against the Purchase Price at Closing for the period prior amount of any rental abatements or “free rent” periods attributable to the Closing Date will be for the account of Seller, and all items of income and expense for the period on periods from and after the Closing Date Date, if any;
(ix) All other costs of Closing shall be paid in accordance with the custom of the location in which the Property is located;
(x) All utility services, including, without limitation, oil, water, electric, telephone, gas and sewer, shall be prorated as of the Adjustment Date, or as soon as possible prior thereto, unless Seller elects to close its own applicable account, in which event Buyer shall open its own account and the applicable charges shall not be prorated and Seller shall pay final utility bills that are not billed directly to and paid by tenants through and including the Adjustment Date;
(xi) If any errors or omissions are made regarding adjustments and prorations, the Parties shall make appropriate corrections promptly upon the discovery thereof. To the extent that any adjustment set forth herein is based upon estimated bills, the amount of such adjustment will be for the account readjusted upon final determination of Purchaser, such amount; in all as determined events by the accrual method of accounting. Bills received that date which is one hundred fifty (150) days after the Closing Date which relate to expenses incurred, services performed Date. Any corrected adjustment or other amounts allocable to the period prior to the Closing Date proration shall be paid by Sellerin cash to the appropriate party within fifteen (15) Business Days of the correction or adjustment. The provisions of this Section 9(a) shall survive Closing.
(b) Seller shall be responsible for paying (i) Amounts on deposit with utility companies shall be credited its legal fees, (ii) any brokerage commissions due to Seller at ClosingBroker, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership (iii) 50% of the Property. Seller shallescrow and closing fees, from (iv) the costs of curing of any Title Objections and after the Closing, at Seller’s sole cost Supplemental Title Objections (subject to Section 5(c) and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.Section 5(d)),
Appears in 1 contract
Samples: Purchase and Sale Agreement
Prorations and Adjustments. The following 9.1 Collected rents, operating expenses, ad valorem taxes on the Property for the current year, utility charges and all other items (including prepaid items) of income and expense shall be prorated and adjusted between Seller and Purchaser as of the day of at the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected effective as of the Closing Date, utilizing the best available computations of such items. If current ad valorem tax assessments are unavailable at Closing, said ad valorem taxes shall not be adjusted, but Purchaser shall cause adjusted based on the rent and other sums tax rate for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior immediately preceding year applied to the Closing). At Closing, Seller shall deliver to Purchaser a schedule latest assessed value of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent AmountsProperty; provided, however, that all special tax assessments made by any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, taxing authority with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available Project prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the sole responsibility of Purchaser.
(f) Assignable license Seller and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and those assessed after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit Purchaser. If the taxes for the current year are more or less than the taxes for the preceding year, Seller and Purchaser shall adjust the proration of such taxes and Seller or Purchaser, as the case may be, shall pay to the other any amount required as a result of such adjustment, and this covenant shall not merge with utility companies the Deed delivered hereunder but shall survive the Closing. Purchaser shall receive a credit for tenant security deposits that are not yet forfeited. With respect to delinquent rents, Seller and Purchaser agree that only amounts paid in rent to Seller prior to Closing for periods after Closing shall be credited paid by Seller to Purchaser and that delinquent rents will not be prorated. In the event there are rents due but unpaid on the Closing Date which are collected after Closing by Purchaser, that portion of the rent paid for periods prior to Closing shall be delivered by Purchaser to Seller. Purchaser shall have the obligation to take all reasonable efforts to collect delinquent rents owing to Seller, provided that Purchaser shall not be obligated to file suit or incur any out-of-pocket expenses to collect delinquent rents. Any funds paid by any tenant after Closing shall be applied first to the current rents due and owing to Purchaser and the balance to the oldest outstanding delinquent rents. If Seller at receives any rents after Closing relating to periods of time after Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as remit such rents to any such appealsPurchaser.
Appears in 1 contract
Samples: Agreement of Sale and Purchase (Apple Residential Income Trust Inc)
Prorations and Adjustments. The following 7.1 Operating expenses, ad valorem taxes on the Property for the current year, and utility charges shall be prorated and adjusted between Seller and Purchaser at the Closing, effective as of the day Closing Date, utilizing the best available computations of such items. If any of the items subject to proration under the foregoing provisions of this Section 7.1 cannot be prorated at the Closing because of the unavailability of the information necessary to compute such proration, or if any errors or omissions in computing prorations at the Closing are discovered subsequent to the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), then such item shall be prorated by credit reapportioned and such errors and omissions corrected as soon as practicable after the Closing and the proper party promptly reimbursed in cash which obligation shall survive the Closing for a period (the "Proration Period") from the Closing until one (1) year after the Closing. Notwithstanding anything to Purchaserthe contrary contained herein, neither party hereto shall have the right to require a recomputation of a Closing proration or a correction of an error or omission in a Closing proration unless within the Proration Period one of the parties hereto (i) has obtained the previously unavailable information or has discovered the error or omission, and (ii) has given written notice thereof to the other party together with a copy of its good faith recomputation of the proration and copies of all substantiating information used in such recomputation. Prepaid rents The failure of a party to obtain any previously unavailable information or discover an error or omission with respect to an item subject to proration hereunder and other charges to give written notice thereof as provided above within the Proration Period shall be credited deemed a waiver of its right to Purchasercause a recomputation or a correction of an error or omission with respect to such item after the Closing. The rent Income and expenses for the Closing Date shall be allocated to Seller. Delinquent rents collected by Purchaser shall be first applied to any amounts due Purchaser by any such tenant and next to any amounts due to Seller. If current ad valorem tax assessments are unavailable at Closing, said ad valorem taxes shall be adjusted based on tax assessments for the immediately preceding tax year, with said tax proration to be adjusted in cash between the parties, based on actual taxes for the current year, at the time such actual taxes are determined; provided, however, all other sums special tax assessments made by any taxing authority with respect to the Project which are due and payable to Seller by any tenant but uncollected as of on or before the Closing shall not be adjusted, but the sole responsibility of Seller and shall be paid by Seller at Closing. Purchaser shall cause receive a credit against the rent and other sums Purchase Price for the period prior to Closing tenant security deposits that are not yet forfeited or due to be remitted refunded to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred prior to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller The provisions of this paragraph shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at survive Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Agreement of Sale and Purchase (Apple Residential Income Trust Inc)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser Buyer as of the day Close of the Closing, Escrow except as otherwise specified:
(a) Collected Rents and other charges, all as more particularly set forth in the Rental Schedule ("RENTS"), other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges Buyer's share of such Rents shall be credited to Purchaser. The rent and all other sums which against the Purchase Price if such Rents are due and payable to Seller by any tenant but uncollected as of the Closing shall Close of Escrow whether or not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to such Rents actually have been collected by Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, time. Prepaid Rents together with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due earned thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to credited against the Purchase Price Price. Rents which at the Close of Escrow are thirty (30) or proration thereof.
more days past due (h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases"DELINQUENT RENTS") shall not be prorated; . Buyer will cooperate with Seller in the collection of Delinquent Rents at Seller's expense, provided, however, that any insurance premiums Buyer shall not in no way be prorated, but rather Seller shall cancel obligated to collect or be responsible for collecting such Delinquent Rents. Any Rents collected by Buyer after the Existing Insurance Policies as Close of Closing (Escrow will apply first to Rents which accrue after the Close of Escrow and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled then to the income from the Property and responsible for the expenses of the Property for the entire day upon Rents which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period accrued prior to the Closing Date will be for Close of Escrow. Notwithstanding the account of Sellerforegoing, and all items of income and expense for the period on and if Buyer receives Rents after the Closing Date will be for the account Close of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date Escrow which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date Close of Escrow to which Seller is entitled under this Section 6, Buyer shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.remit to
Appears in 1 contract
Samples: Purchase and Sale Agreement (Irvine Apartment Communities L P)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents A statement of prorations and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), adjustments shall be prorated prepared by credit Seller for each Property being conveyed at Closing in conformity with the provisions of this Agreement and submitted to PurchaserPurchaser for review and approval not less than ten (10) Business Days prior to the Closing Date (the “Closing Statement”). Prepaid rents For purposes of prorations and other charges adjustments under this Section 5, Purchaser shall be credited deemed the owner of the Properties as of 12:00 a.m. on the Closing Date. Subject to Purchaser. The rent the foregoing, and all in addition to other sums which adjustments that may be provided for in this Agreement, the following items with respect to each Property are due and payable to Seller by any tenant but uncollected be prorated or adjusted, as the case may require, as of the Closing shall not be adjustedDate:
(i) With respect to each Property, but Purchaser shall cause the rent except any Leased Property:
A. real estate taxes and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected assessments (but Purchaser shall not be required to take legal action for such amounts accruing prior except to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after extent the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received same shall be applied toward the payment obligation of Delinquent Amountsa Space Lease Tenant under a Space Lease; provided, however, in the event that any rent the Space Lease Tenant fails to make applicable payments, Seller shall be responsible for the unpaid real estate taxes and assessments which relate to the period prior to the Closing and Purchaser shall be responsible for the unpaid real estate taxes and assessments which relate to the period after the Closing);
B. rents, additional rents, and all other charges and payments to be made by or received by Purchaser from tenants who owe Delinquent Amounts during Seller pursuant to any Space Lease encumbering or benefiting the month in which Property;
C. charges and payments to be made by or received by Seller pursuant to any REA encumbering or benefiting the Closing occurs shall first be applied to Property;
D. cash security deposits paid by Space Lease Tenants under the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occursSpace Leases, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if anytheretofore applied, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred credited by Seller to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.;
(d) FuelE. water, water and sewer service charges, and charges for gas, electricityelectric, telephone and all other utility and fuel chargescharges (except to the extent the same shall be the obligation of a Space Lease Tenant under a Space Lease; provided, as well as all however, in the event that the Space Lease Tenant fails to make applicable payments, Seller shall be responsible for the unpaid charges which relate to the period prior to the Closing and Purchaser shall be responsible for the unpaid charges which relate to the period after the Closing);
F. assignable license and permit fees;
G. deposits to made by Seller with utility companies, governmental entities authorities or any other person Person, which deposits shall be assigned to Purchaser at Closing and shall be credited to Seller; and
H. other operating expenses and any other customarily apportioned items.
(ii) Generally:
A. Real estate taxes shall be initially prorated on the basis of 100% of the most recent ascertainable xxxx, but subject to reproration upon issuance of the actual bills therefor to effectuate the actual proration. Real estate taxes shall be apportioned on the basis of the fiscal period for which assessed. If as of the Closing Date any of the Properties or any portion thereof shall be affected by any special or general assessments which are or may become payable in installments of which the first installment is then a lien and has become payable, responsibility for the payment of any unpaid installments of such assessments which are due prior to the Closing Date shall be allocated to Seller, and Purchaser shall be responsible to pay only the installments which are due on or after the Closing Date, and Purchaser or Seller shall make a payment to the other to the extent necessary so that the total amount of such special or general assessment is apportioned as provided above. Except with respect to general real estate taxes (which shall be reprorated upon the issuance of the actual bills, if necessary), any proration which must be estimated at a Closing shall be reprorated and finally adjusted as soon as practicable after the Closing, with any refunds payable to Seller or Purchaser to be made as soon as practicable. Seller shall have the right to prosecute and continue to prosecute subsequent to the Closing any tax certiorari proceedings for the tax year in which the Closing occurs and all prior tax years. Any refunds obtained, net of the reasonable expenses incurred in obtaining such refund, shall be paid to Purchaser to the extent of the amount thereof which is payable to the Space Lease Tenants under the Space Leases, and the balance thereof, if any, shall be apportioned to the date preceding the date of the Closing, with any portion thereof allocable to periods subsequent to the date preceding the date of the Closing to be paid to Purchaser and the remainder to be paid to Seller.
B. Water, electric, telephone and all other utility and fuel charges shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one ten (110) day Business Days prior to the date of ClosingClosing Date.
C. In the event that a Space Lease Tenant is owed any additional funds as a result of any deficiency shown in a reconciliation of percentage rents, taxes or other operating expenses for the period of time prior to the Closing, Seller shall deliver to Purchaser the overpaid funds within twenty (e20) Amounts due, commissions, up-front revenues days of receipt of notice from Purchaser; provided that Seller shall have a right to review any reconciliation and incentives, the related records prior to making any payments so long as such review is requested and prepayments under completed within twenty (20) days of receipt of the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of aforementioned notice from Purchaser.
(fb) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitationWith respect to any Leased Property, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, there shall be assigned no proration of any income or expenses at Closing, as Seller shall be responsible for all Additional Rent (as defined in the Leases) under the Leases. Additionally, Seller agrees to Purchaser but there will be no adjustment responsible for all Additional Rent with respect to the Purchase Price or proration thereof.
Leased Properties incurred prior to the Closing Date (h“Pre-Closing Impositions”) Such other items that are customarily prorated in transactions of this nature and indemnify, defend and hold Purchaser harmless from and against any and all claims, losses, damages, costs and expense (including, without limitation, reasonable attorneys fees' and court costs) suffered or incurred as a result of or in connection with any utilities paid failure by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather to pay Pre-Closing Impositions. Seller shall cancel the Existing Insurance Policies as of cause any past due Pre-Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed Impositions to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available paid at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerClosing.
(ic) Amounts on deposit with utility companies The provisions of this Section 5 shall be credited to Seller at Closing, and promptly following survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
5.1 Collected rents (a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter definedincluding CAM payments), shall be prorated by credit to Purchaser. Prepaid rents operating expenses, ad valorem taxes on the Property and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums personal property taxes for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month tax year in which the Closing occurs, and not toward utility charges shall be prorated at the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so Closing, effective as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as Closing Date with Purchaser receiving the rents and paying the expenses for the date of Closing provided Purchaser’s funds are received by the Escrow Agent on or before 3 pm, Lincoln, Nebraska time on the date of Closing, utilizing the best available computations of such items. Delinquent rents collected by Purchaser or Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, after Closing shall be transferred first delivered to PurchaserPurchaser and applied to any amounts due Purchaser by any such tenant, and next delivered to Seller. If current ad valorem tax assessments are unavailable at Closing, said ad valorem taxes shall be adjusted based on tax assessments for the immediately preceding tax year, with said tax proration to be adjusted in cash between the parties, based on actual taxes for the current year, at the time such actual taxes are determined; provided, however, all special tax assessments made by any taxing authority with respect to the Property shall be the sole responsibility of Seller and shall be paid by Seller at Closing. Purchaser shall assume at receive a credit for tenant security deposits that are not yet forfeited or due to be refunded to tenants of the Property. Seller and Purchaser shall consult and cooperate with each other concerning the billing and collection of operating expenses for calendar year of Closing from the obligationtenants. When collected, if anysuch operating expenses shall be prorated as of the Closing Date and the prorated portion paid to the other party by the party receiving such payments. Insurance costs shall not be prorated.
5.2 Tenant and related landlord improvement expenses (including all hard and soft construction costs, whether payable to pay security the contractor or the tenant), lease commissions, tenant allowances and other deposits out-of-pocket costs which are the obligation of the landlord under Leases shall be allocated between the parties as provided hereinbelow according to tenants under the Leases, to the extent that whether such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which obligations arise in connection with (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day executed prior to the date of Closing.
(e) Amounts duethis Agreement, commissions, up-front revenues and incentives, and prepayments including renewal or expansion rights under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing such Leases as properly exercised after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions date of this nature Agreement (includingcollectively, without limitation“Existing TI Obligations”), any utilities paid or (ii) new Leases entered into by Seller under during the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as pendency of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorationsthis Agreement, subject to mutual agreement to extend such sixty the terms and conditions of this Agreement (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller“New TI Obligations”).
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Prorations and Adjustments. The following At Closing, interest on the Existing Indebtedness, rents (to the extent prepaid), all real and personal property taxes, water rents, sewer charges, electric and other utility charges, fuel if any, operating expenses, wages, any special assessments, if any, and other similar charges affecting the Property and all utility charges, if any, shall be adjusted and prorated as of midnight of the day prior to the Closing Date. Seller shall assign to Purchaser at Closing all of Seller’s right, title and interest in and to the reserves held by the holder of the Existing Indebtedness as of the Closing Date, as described on Exhibit F hereto. Such amount of reserves will be credited to Seller and paid by Purchaser on the Closing Date. To the extent practicable, Seller shall attempt to have utility providers read the meters for the Property on the day prior to Closing for purposes of making such prorations and adjustments. All other charges or fees customarily prorated and adjusted between Seller and Purchaser in similar transactions shall be adjusted at Closing. All rent (other than prepaid rent) payable by the tenant of the Property (which is acknowledged by the parties to be paid in arrears under the Government Lease) shall be adjusted (prorated) as of the day Closing Date and paid in accordance with the following provisions:
(i) Following receipt of the monthly installment of Basic Rent under the Government Lease attributable to the month in which the Closing occurs, such installment shall be adjusted as of the Closing, except as otherwise specified:with Seller being entitled to the portion thereof attributable to the period of the month immediately preceding the Closing Date and Purchaser entitled to the balance of such monthly installment. The party receiving such installment shall pay over to the other party within five (5) business days following receipt the portion of the installment to which the other party is entitled.
(ii) Purchaser shall be entitled to all Basic Rent and other sums due under the Government Lease to the extent collected on any date after the Closing with the exception of (a) Collected Rents common area maintenance (CAM) and other chargesreal estate tax reimbursements attributable to periods prior to the Closing; (b) the Basic Rental for the Closing month to which Seller is entitled under (i) above, other than and (c) to the extent specified in Subsection (iii) below, rentals paid by the Government on account of rental arrearages for Tenants who owe Delinquent Rents periods preceding the Closing. Annual CAM and tax reimbursements, which are payable by the tenant on an annual basis after the conclusion of each calendar year, will be adjusted as of closing, with Seller being entitled to the portion thereof attributable to the period of the year immediately preceding the Closing Date and Purchaser being entitled to the balance of such payment. Purchaser shall pay over to Seller within five (as hereinafter defined)5) business days following receipt the portion of the installment to which the Seller is entitled. Additionally, any post-Closing tenant payments of amounts for special services which were specifically billed by Seller prior to the Closing Date shall be prorated remitted by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable Purchaser to Seller by any tenant within five (5) business days following Purchaser’s receipt thereof.
(iii) Rent which is due, but uncollected uncollected, as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, as and when collected (but collected, less any reasonable, out-of- pocket expenses incurred by Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closingcollection; provided, Seller shall deliver to Purchaser a schedule of all rentthat, charges and other amounts payable by tenants after the Closing except with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before Basic Rental for the Closing by tenants under the Leases month, which are unpaid on the date of shall be treated as specified in (i) above, all rents collected subsequent to Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment current rentals then due which have accrued subsequent to Closing and any remaining amounts shall be applied to rental arrearages as of such tenants’ Delinquent AmountsClosing. Similarly, if anySeller receives any Basic Rent or other sums under the Government Lease which is payable to Purchaser under this Section 9.2, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, then Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect promptly deliver such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred sums to Purchaser. Purchaser shall assume Purchaser, at Closing the obligationSeller’s request, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless will use reasonable efforts for the amounts, if material, by which a period of ninety (i90) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing days after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual to collect past due rental amounts or other periodic basis.
payments owed to Seller in accordance with this Section 9.2. All adjustment items to the extent they cannot be precisely determined at Closing (g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with or to the Assumed Loan and those held by Seller, if anyextent found to be erroneous after the Closing), shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) estimated at Closing and shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel resolved by the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance parties in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments good faith no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerClosing.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (First Potomac Realty Trust)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of midnight of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of preceding the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the date of Closing and based upon the actual number of days in the month and a 365 day year), with Purchaser receiving the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount for purposes of such prorations, and except as otherwise specified, which prorations shall be subject final:
(a) Utilities including, without limitation, water, electricity, gas, telephone, fuel and other utility charges, shall not be prorated (except to adjustment the extent set forth below). Seller shall use good-faith reasonable efforts to cause meters to be read as of the day prior to Closing and service to be turned over to Purchaser in cash after Purchaser’s name as of the Closing as and when complete and accurate information becomes available. All prorations Date, such that Seller shall otherwise be final. Seller responsible for charges incurred up to the date of Closing and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after shall be responsible for same commencing on the Closing as to all items except tax prorationsdate of Closing; provided, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorationshowever, to the extent such utility meters are not covered by any tax escrows read as of the day prior to Closing, such utilities shall be prorated based on the most recent xxxx for same, with such proration to be assigned to adjusted following Closing when the actual bills become available, which obligation shall survive Closing;
(b) All (i) general real estate and personal property taxes and (ii) all payments under the Contracts assumed by Purchaser at Closing, in each case paid in advance by Seller in respect of periods after the Closing pursuant to Section 12(gDate;
(c) aboveAll accrued but unpaid general real estate and personal property taxes, as well as all special and general assessments affecting the parties shall make such adjustments upon receipt Premises, will be prorated on the basis of the actual tax bills covering taxes for the period Premises for the calendar year in which the Closing Date occurs, and if the actual taxes are not known as of the Closing Date, then on the basis of the most recently ascertainable taxes for the Premises. Except Any tax proration based on an estimate shall be adjusted between Seller and Purchaser within thirty (30) days of the date that exact amounts are available, which obligation shall survive Closing. At Closing, Purchaser shall assume the obligations to pay all such taxes for the calendar year in which the Closing occurs;
(d) All rents, other amounts payable by the tenants under the Leases and the Tower Leases, and all other income with respect to the Property for the month in which the Closing occurs, shall be prorated to the Closing Date. If the Closing shall occur before rents and all other amounts payable by the tenants under the Leases and the Tower Leases and all other income from the Property have actually been paid for the month in which the Closing occurs, the apportionment of such rents and other amounts and other income shall be upon the basis of such rents, other amounts and other income actually received by Seller, with Purchaser receiving the portion of all such rentals attributable to the period from and after Closing. For a period of thirty (30) days following Closing, if any rents which are delinquent as set forth of Closing are actually received by Purchaser, in this Section 12good funds, all items such amounts shall first be applied to post-closing rents and other amounts due to Purchaser for the period from and after Closing, and the balance shall be paid by Purchaser to Seller within ten (10) days following Purchaser’s receipt thereof, to the extent, and only to the extent of income and expense any rental delinquencies owed by any such tenant to Seller for the period prior to Closing. Notwithstanding the foregoing provisions of this Section 11.1(d), all rentals that are received by Purchaser more than thirty (30) days following Closing Date will shall be for the account of Sellerretained by Purchaser, and all items of income and expense for the period on and after the Closing Date will be for the account of PurchaserSeller shall have no rights with respect thereto. If, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate subsequent to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser any rents or other income are actually received by Seller, Seller shall inform such utilities of such change in ownership of the Propertypromptly remit Purchaser’s pro-rata share thereof calculated as aforesaid, to Purchaser. Seller shallagrees that, from and after the Closing, at Seller’s sole cost it shall not file any eviction action in an effort to collect any outstanding rents that remain owing to Seller after the Closing;
(e) License and expensepermit fees, have control over if any, under assigned licenses and permits; and
(f) All other items customarily prorated in real estate closings in the States in which the Premises are located, or expressly required by any ongoing tax appeals as other provision of this Agreement to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds be prorated or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsadjusted.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Strategic Storage Trust, Inc.)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general General real estate, personal property and ad valorem taxes and assessments assessments, common area maintenance payments, if any, and similar payments under any declaration affecting the Property and any improvement or other bonds encumbering the Property, if any, for the current tax year shall be prorated on for the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateProperty.
(dii) Fuel, water and sewer service Utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be ratably prorated; provided.
(b) For purposes of calculating prorations, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the ClosingClosing and based upon the actual number of days in the month and a three-hundred-sixty-five (365) day year. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the The amount of such prorations shall be initially performed by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to shall cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as (except with respect to all items except tax prorationsproperty taxes, subject to mutual agreement to extend such which shall be adjusted within sixty (60) day perioddays after the tax bills for the applicable period are received). Without limiting the generality of the foregoing, Seller and Purchaser agree that:
(i) With respect to any property tax appeals or reassessments filed by Seller for tax years prior to the year in which the Closing occurs, Seller shall be entitled to the full amount of any refund or rebate resulting therefrom, and with respect to any property tax prorationsappeals or reassessments filed by Seller for the tax year in which the Closing occurs, Seller and Purchaser shall share the amount of any rebate or refund resulting therefrom (after first paying to Seller all costs and expenses incurred by Seller in pursuing such appeal or reassessment) in proportion to their respective periods of ownership of the Property for such tax year (with Seller and Purchaser each obligated for any amount of such refund or rebate required to be paid to any tenant for its respective period of ownership of the Property for such tax year, with Seller being responsible only for any amount owed to the extent not covered by any tax escrows to be assigned tenant in excess of that credited to Purchaser at Closing pursuant to Section 12(g12(a)(iv) aboveabove ); and
(ii) in no event will there be any proration of insurance premiums under Seller's existing policies of insurance relating to the Property, and none of Seller's insurance policies (or any proceeds payable thereunder, except as expressly provided for in Section 15 below) will be assigned to Purchaser at the parties Closing, and Purchaser shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occursbe solely obligated to obtain any and all insurance that it deems necessary or desirable. Except as set forth in this Section 12, all items of income and expense which accrue for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense which accrue for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method . The provisions of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date this Section 12 shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Golden Enterprises Inc)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the 8.1 Prior to Closing, except as otherwise specified:
the Owners and Cedar shall prepare a schedule of (ai) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), those expenses that shall be prorated have been paid by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing Owners prior to the Closing). At Closing, Seller shall deliver Closing Date but are attributable to Purchaser a schedule of all rent, charges period from and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date (the "Prepaid Expenses"), and (ii) those revenues that shall be have been received by the responsibility of PurchaserOwners prior to the Closing Date but are attributable to a period from and after the Closing Date (the "Prepaid Revenues").
8.2 To the extent that the Prepaid Expenses shall exceed the Prepaid Revenues (fsuch excess, the "Prepaid Expense Excess"), (i) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, at Closing Cedar shall be assigned to Purchaser but there will be no adjustment pay to the Purchase Price or proration thereof.
Owners an amount equal to the Prepaid Expense Excess, and (hii) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser Cedar shall be deemed to be have made a capital contribution to the owner Partnership (the "Closing Adjustment Capital Contribution") equal to the amount of the Property andPrepaid Expense Excess.
8.3 To the extent that the Prepaid Revenues shall exceed the Prepaid Expenses, therefore, entitled such excess shall be contributed by the Owners to the income from Partnership, and the Property Owners shall not receive capital account credit on account thereof.
8.4 The following prorations and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations adjustments shall be made between the parties as of 11:59 p.m. on the day preceding the Closing Date (the "Proration Date") on the basis of the actual number of days elapsed over the applicable period:
(i) All fixed rents under Leases which are collected on or prior to the Proration Date in respect of the month (or other applicable collection period) in which the Closing occurs (the "Current Month"), shall be adjusted on a per diem basis based upon the number of days in the Current Month prior to the Proration Date and the number of days in the Current Month on and after the Proration Date. Any such rents that are allocable to the period from and after the Proration Date shall be deemed to be Prepaid Revenues.
(ii) If, on the Proration Date, any fixed rents are past due by any Tenant, and provided the Owners have elapsed delivered to Cedar, in reasonable detail, a breakdown of all such past due amounts as of the day Proration Date, Cedar agrees that the first moneys received by the Partnership from each such Tenant shall be disbursed as follows:
(1) first, such moneys shall be applied to fixed rents in respect of the ClosingCurrent Month, it being agreed that one hundred percent (100%) of the fixed rent that is attributable to the portion of the Current Month prior to the Proration Date shall be paid to the Owners and the balance shall be retained by the Partnership;
(2) second, to the Partnership until all fixed rents owing by all such Tenants for any period after the Current Month through the month in which payment is received have been paid in full;
(3) third, to the Owners until all fixed rents owing by all such Tenants for periods prior to the Current Month have been paid in full; and
(4) fourth, the balance, if any, shall be paid to the Partnership. To Each party agrees to remit reasonably promptly to the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, other the amount of such prorations rents to which such party is so entitled and to account to the other party monthly in respect of same. The fixed rents received by the Partnership after the Proration Date shall be subject apportioned and remitted, if applicable, as hereinabove provided.
(iii) If the Proration Date shall occur prior to adjustment the time when any rental payments for fuel pass-alongs, so-called escalation rent or charges based upon real estate taxes, operating expenses, labor costs, cost of living increases, electrical charges, water and sewer charges or like items (collectively, "Overage Rent") are payable, then such Overage Rent for the applicable accounting period in cash after which the Closing as and when complete and accurate information becomes available. All prorations Proration Date occurs shall otherwise be final. Seller and Purchaser agree apportioned subsequent to cooperate and use their best efforts the Closing, based upon the portion of such accounting period which occurs prior to make such adjustments no later than sixty the Proration Date (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered theretofore collected by the Partnership, on account of such Overage Rent prior to the Proration Date), it being agreed that one hundred percent (100%) of the Overage Rent that is attributable to the portion of such accounting period that shall occur prior to the Proration Date shall be paid to the Owners and the balance shall be retained by the Partnership. In addition, the Partnership shall pay to the Owners one hundred percent (100%) of all Overage Rent that is paid subsequent to the Proration Date with respect to an accounting period which expired prior to the Proration Date, within thirty (30) days after receipt thereof by the Partnership. If, prior to the Closing, the Owners shall collect any tax escrows sums on account of Overage Rent or fixed rent for a year or other period, or any portion of such year or other period, beginning prior to but ending on or after the Proration Date, the portion of such sum allocable to the period from and after the Proration Date shall be deemed to be assigned a Prepaid Revenue.
(iv) Overage Rent payable by Tenants based on an estimated amount and subject to Purchaser adjustment or reconciliation pursuant to the related Leases subsequent to the Proration Date shall be apportioned as provided in subsection (iii) above and shall be re-apportioned as and when the applicable Tenant's actual obligation for such Overage Rent is reconciled pursuant to the applicable Lease.
(v) One Hundred Fifty Thousand ($150,000) Dollars on account of percentage rent owing by UA Theatres shall be deemed to be a Prepaid Expense and the Owners shall be entitled to a credit on account thereof at Closing Closing, subject to adjustment or reconciliation subsequent to the Proration Date when such Tenant's actual obligation for such percentage rent is reconciled pursuant to the terms of such Tenant's Lease.
(vi) Without duplication of any adjustment made pursuant to Section 12(g8.4(A)(i) above, all prepaid fixed rent and Overage Rent that shall be received by the parties shall make such adjustments upon receipt Owners as of the actual tax bills covering Proration Date for periods on and after the period Proration Date shall be deemed to be Prepaid Revenues.
B. All real estate taxes, BID taxes, unmetered water and sewer charges, elevator inspection fees, pest control charges and vault charges, if any, and any and all other municipal or governmental assessments of any and every nature levied or imposed upon the Property (collectively, "Taxes") in respect of the current fiscal year of the applicable taxing authority in which the Closing occurs (the "Current Tax Year") (other than real estate taxes, water and sewer charges and any other municipal or governmental assessments payable by any Tenant directly to the taxing authority under any Lease), shall be allocated on a per diem basis based upon the number of days in the Current Tax Year prior to the Proration Date occursand the number of days in the Current Tax Year on and after the Proration Date. Except If, as set forth in this Section 12of the Proration Date, all items of income and expense Taxes for the Current Tax Year shall not have been paid with respect to the period prior to the Proration Date, the amount equal to the unpaid Taxes for the period prior to the Proration Date shall be paid by the Owners to the Partnership at the Closing, but the Owners shall not receive any capital account credit on account thereof. If, as of the Proration Date, Taxes with respect to any period from and after the Proration Date shall have been paid, the amount equal to the prepaid Taxes shall be deemed to be a Prepaid Expense. If the Closing Date will be shall occur before the tax rate for the account Current Tax Year is fixed, the apportionment of Seller, and all items Taxes shall be upon the basis of income and expense the tax rate for the next preceding fiscal period applied to the latest assessed valuation. Promptly after the new tax rate is fixed for the fiscal period in which the Closing takes place, the apportionment of Taxes shall be recomputed. In the event that any assessments levied or imposed upon the Property are payable in installments, the installment for the Current Tax Year shall be prorated in the manner set forth above.
C. All charges and fees due under contracts, that are not being terminated at the Closing, for the supply to the Property of heat, steam, electric power, gas and light and telephone (collectively, "Charges"), if any, in respect of the billing period of the related service provider in which the Closing occurs (the "Current Billing Period") shall be allocated on a per diem basis based upon the number of days in the Current Billing Period prior to the Proration Date and the number of days in the Current Billing Period on and after the Closing Proration Date will be and assuming that all charges are incurred uniformly during the Current Billing Period. If, as of the Proration Date, Charges for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable Current Billing Period shall not have been paid with respect to the period prior to the Closing Proration Date, the amount equal to the unpaid Charges for the period prior to the Proration Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited the Owners to Seller the Partnership at Closing, and promptly following the Closing, Purchaser but the Owners shall inform such utilities of such change in ownership not receive any capital account credit on account thereof. If, as of the Property. Seller shallProration Date, Charges with respect to any period from and after the ClosingProration Date shall have been paid, at Seller’s sole cost the amount of such prepaid Charges shall be deemed to be a Prepaid Expense.
D. Any charges or fees for transferable licenses and expense, have control over any ongoing tax appeals as permits relating to the Property that were commenced (but without duplication of items apportioned pursuant to any other provision of this Article VIII) (collectively, "Permit Charges") in respect of the Current Billing Period shall be allocated on a per diem basis based upon the number of days in the Current Billing Period prior to the Closing Proration Date and the number of days in the Current Billing Period on and after the Proration Date and assuming that pertain solely all charges are incurred uniformly during the Current Billing Period. If, as of the Proration Date, Permit Charges for the Current Billing Period shall not have been paid with respect to the periods period prior to the Proration Date, the unpaid Permit Charges for the period prior to the Proration Date shall be paid by the Owners to the Partnership at the Closing, but the Owners shall not receive any capital account credit on account thereof. If on the Proration Date, Permit Charges with respect to any period from and after the Proration Date shall have been paid, the amount equal to such prepaid Permit Charges shall be deemed to be a Prepaid Expense.
E. To the extent same are executed after the date hereof and approved by Cedar pursuant to Section 4.3 hereof, any charges payable under Service Contracts, Operating Agreements and other contracts relating to the Property (but without duplication of items apportioned pursuant to any other provision of this Article VIII) (collectively, "Service Contract Charges"), as applicable (including, without limitation, salary, bonuses, vacation and sick day allowances and pension or other benefit fund contributions), in respect of the Current Billing Period shall be allocated on a per diem basis based upon the number of days in the Current Billing Period prior to the Proration Date and the number of days in the Current Billing Period on and after the Proration Date and assuming that Seller owned all charges are incurred uniformly during the Current Billing Period. If, as of the Proration Date, Service Contract Charges for the Current Billing Period shall not have been paid with respect to the period prior to the Proration Date, an amount equal to the unpaid Service Contract Charges for the period prior to the Proration Date shall be paid by the Owners to the Partnership at the Closing, but the Owners shall not receive any capital account credit on account thereof. If, as of the Proration Date, Service Contract Charges with respect to any period from and after the Proration Date shall have been paid, the amount equal to such prepaid Service Contract Charges shall be deemed to be a Prepaid Expense.
F. If there is a fuel meter or meters on the Property (other than meters measuring consumption costs which are the obligation of any Tenants), the Owners shall endeavor to furnish a reading to a date not more than thirty (30) days prior to the Proration Date, and the unfixed meter charges, if any, based thereon for the intervening time shall be apportioned on the basis of such last reading. If the Owners fail or are unable to obtain such reading, the amount equal to the value of all fuel, if any, then stored at the Property shall be calculated on the basis of the Owners' last costs therefor, including sales tax, as evidenced by written statements of the fuel oil supplier(s) for the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller which statements shall keep Purchaser informed be conclusive as to quantity and cost, absent fraud. Any unpaid fuel charges attributable to the period prior to the Proration Date shall be paid by the Owners to the Partnership at the Closing, but the Owners shall not receive any capital account credit on account thereof, and the value of any prepaid fuel stored on the property shall be deemed to be a Prepaid Expense.
G. If there is a water meter or meters on the Property (other than meters measuring consumption costs which are the obligation of any Tenants), the Owners shall endeavor to furnish a reading to a date not more than thirty (30) days prior to the Proration Date, and the unfixed meter charges and the unfixed sewer rents, if any, based thereon for the intervening time shall be apportioned on the basis of such appealslast reading. If the Owners fail or are unable to obtain such reading, the amount of the meter charges and sewer rents shall be determined on the basis of the last readings and bills received by the Owners, and the same shall be appropriately readjusted after the Closing on the basis of the next subsequent bills. Any unpaid water or sewer charges attributable to the period prior to the Proration Date shall be paid by the Owners to the Partnership at the Closing, but the Owners shall not receive any capital account credit on account thereof.
H. All brokerage commissions and expenses for work to be done for tenant improvements in connection with any leases entered into on or prior to the Proration Date which commissions and expenses were not paid prior to the Proration Date shall be paid by the Owners to the Partnership at the Closing, but the Owners shall not receive any capital account credit on account thereof. The foregoing shall not apply to any commissions and expenses incurred between the date of this Agreement and Closing, pursuant to Cedar's prior written consent, in connection with new Lease executed (with the prior written consent of Cedar) during the period between the date of this Agreement and the Closing, for which Cedar shall be responsible and with respect to which Cedar shall receive capital account credit.
I. All accrued fees pursuant to the Existing Property Management Agreement shall be paid by the Owners at or prior to Closing, but the Owners shall not receive any capital account credit on account thereof.
J. The Prepayment Fee and servicer cost associated therewith shall be paid by Cedar and Cedar shall receive capital account credit on account thereof.
K. All security deposits held by the Owners under the Leases shall be paid by the Owners to the Partnership, but the Owners shall not receive any capital account credit on account thereof.
L. The amount of deposits held at the time of the Closing by the Mortgagee in connection with the Mortgage Loan, including reserves for capital improvements, tenant improvements or otherwise, and/or impounds for taxes and insurance (with respect to periods after the Closing), shall be deemed to be a Prepaid Expense.
M. Any other items customarily apportioned in connection with sales of similar property in the Commonwealth of Pennsylvania shall be so apportioned.
Appears in 1 contract
Samples: Contribution Agreement (Cedar Shopping Centers Inc)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specifiedspecified and provided that any expenses incurred in connection with the Property which are paid directly by Tenant under the Lease shall not be subject to proration and adjustment under this Agreement:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general General real estate, personal property and ad valorem taxes and assessments assessments, and any improvement or other bonds encumbering the Property, for the current tax year shall be prorated on for the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateProperty.
(dii) Fuel, water and sewer service Utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature shall be ratably prorated.
(including, without limitation, any utilities paid by Seller iii) Rent and other charges under the LeasesLease (other than Delinquent Rents (as hereinafter defined)) shall be prorated only to the extent collected as of Closing. Uncollected Rents and other charges under the Lease which are past due as of the Closing (“Delinquent Rents”) shall not be prorated, and rents and other amounts received by Purchaser after the Closing from Tenant owing such Delinquent Rents shall be applied (A) first, to Purchaser’s actual out-of-pocket costs of collection incurred with respect to thereto; (B) second, to rents due to Purchaser attributable to any period after the Closing which are due or past due; and (C) finally, to Delinquent Rents as of the Closing and Seller’s costs of collection incurred with respect to Tenant prior to the Closing (and Purchaser promptly shall remit such amounts to Seller). Purchaser agrees that it shall use commercially reasonable efforts to collect any such Delinquent Rents for a period of three (3) months following Closing (provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. have no obligation to expend any funds or institute legal proceedings, including an action for unlawful detainer, against Tenant if it owes any Delinquent Rents).
(b) For purposes of calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the ClosingClosing and based upon the actual number of days in the month and a three-hundred-sixty-five (365) day year. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the The amount of such prorations shall initially be calculated by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to shall cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as (except with respect to all items except tax prorationsproperty taxes, subject to mutual agreement to extend such which shall be adjusted within sixty (60) day perioddays after the tax bills for the applicable period are received). Without limiting the generality of the foregoing, Seller and Purchaser agree that:
(i) With respect to any property tax appeals or reassessments filed by Seller for tax years prior to the year in which the Closing occurs, Seller shall be entitled to the full amount of any refund or rebate resulting therefrom, and with respect to any property tax prorationsappeals or reassessments filed by Seller for the tax year in which the Closing occurs, Seller and Purchaser shall share the amount of any rebate or refund resulting therefrom (after first paying to Seller all costs and expenses incurred by Seller in pursuing such appeal or reassessment) in proportion to their respective periods of ownership of the Property for such tax year (with Seller and Purchaser each obligated for any amount of such refund or rebate required to be paid to Tenant for its respective period of ownership of the Property for such tax year); and
(ii) In no event will there be any proration of insurance premiums under Seller’s existing policies of insurance relating to the extent not covered by Property, and none of Seller’s insurance policies (or any tax escrows to proceeds payable thereunder, except as expressly provided for in Section 15 below) will be assigned to Purchaser at Closing pursuant the Closing, and Purchaser shall be solely obligated to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occursobtain any and all insurance that it deems necessary or desirable. Except as set forth in this Section 12, all items of income and expense which accrue for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense which accrue for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method . The provisions of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date this Section 12 shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Gc Net Lease Reit, Inc.)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing Date, except as otherwise specified:
(a) Collected Rents Mortgage principal balance and other charges, other than for Tenants who owe Delinquent Rents accrued and unpaid interest (in the event Purchaser takes title to the Project subject to Seller's existing first mortgage as hereinafter definedprovided in this Contract), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to collected by Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date month of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”and succeeding months). Rental , security deposits, prepaid service contracts, maintenance and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collectionoperating employees' wages, maintenance and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amountsoperating employees' accrued rights, if any, with respect under union contracts to the month in which the Closing occurspaid vacations, general real estate taxes, special assessments, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller similar items shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property be adjusted ratably as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general General real estate, personal property and ad valorem estate taxes and assessments for the current tax year shall be prorated on the basis of billsthe last ascertainable tax bill, xxt shall be reprorated when the actual tax bills therefor issue. Seller shall be entitled to all tax refunds, if available prior to any, obtained on account of taxes paid for the years preceding the Closing, which and a prorata portion of tax refunds for the year of Closing, less the amount, if any, of Seller's prorata share of such funds expended by Purchaser in obtaining such refunds. Purchaser shall receive credit for advance rents beyond the then current month and for security deposits under the Leases. None of the security deposits may be applied by Seller to delinquent rents. There shall be re-prorated no proration credit to Seller for delinquent rents and other charges (the "Delinquent Rents"), except that rents that are not more than thirty (30) days delinquent that are due from tenants who are not more than thirty (30) days delinquent in the payment of rent shall be prorated, but settlement between the parties shall be made only when such amounts have actually been collected. After Closing, Seller shall not take any action against any tenant owing Delinquent Rents. For a period of thirty (30) days after Closing, Purchaser shall use reasonable efforts to collect Delinquent Rents but such undertaking shall not 13 82 be deemed to obligate Purchaser to expend any funds or institute legal proceedings of any kind. Rents and other amounts received by Purchaser after Closing from a tenant owing Delinquent Rents shall be applied (i) first, to all of Purchaser's costs of collection incurred with respect to such tenant (including reasonable attorneys' fees), (ii) second, to rents due for the month in which such payment is received by Purchaser, (iii) third, to rents attributable to any period after Closing which are past due on the basis date of actual receipt, and (v) then to Delinquent Rents. Seller shall promptly remit to Purchaser and account for all sums received by Seller from tenants after Closing and Purchaser shall promptly remit to Seller and account for all sums received by Purchaser from tenants after closing which, pursuant to this subparagraph, are to be applied to Delinquent Rents or are otherwise to be paid to Seller. All percentage rents and additional rents, if any, payable under any of the Leases, shall be prorated as of the Closing based on respective periods of ownership during the lease year covered thereby, but reprorated and paid when and as received.
(b) In lieu of prorating electricity, gas, water and other public utilities due to the utility companies, Seller shall arrange for the rendition of final bills received covering as of the Closing Date or as near as possible thereto by the respective utility companies, and Seller shall pay such bills as and when rendered. As to charges to tenants for such public utilities, Seller shall also arrange for the rendition of bills to tenants as of the Closing Date or as near as possible thereto, and Seller shall be entitled to remittances from Purchaser of such charges as and when collected from tenants in accordance with the provisions of subparagraph (a) above. In any event, all master meters and submeters shall be read within a period which includes of three consecutive days.
(c) The Project shall be operated for the benefit of Seller until the Closing Date.
(d) Fuel. After Closing, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person the Project shall be prorated ratably operated for the benefit of Purchaser. Solely for purposes of the prorations to be made hereunder the Closing shall be deemed to occur at 11:59 p.m. on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occursDate. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accountingDate. Bills received after the Closing Date which relate to expenses incurred, incurred prior to Closing or services performed or other amounts allocable to at the period direction of Seller prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Sublease (SPR Inc)
Prorations and Adjustments. The following items shall be prorated and adjusted between Buyer and Seller at the Close of Escrow based upon the actual number of days in the calendar month in which the Close of Escrow occurs, the date of the Close of Escrow being an income and Purchaser expense day for Buyer, all such obligations to survive Close of Escrow:
12.1.1 Real property taxes and assessments with respect to the Property shall be prorated and adjusted between Buyer and Seller at the Close of Escrow, based upon the most recent official real property tax information available from the County Assessor’s office where the Property is located or other assessing authorities, such that Seller shall be responsible for all taxes and assessments levied against the Property and applicable to the period through and including the day prior to the Close of Escrow, and Buyer shall be responsible for all taxes and assessments levied against the Property and applicable to the period from and after the date of Close of Escrow. Seller reserves the right to meet with governmental officials and to contest with Buyer any assessment or reassessment concerning or affecting Seller’s obligations with respect to real property taxes and assessments on the Property, and Buyer promptly shall deliver to Seller any refund with respect to such real property taxes and assessments applicable to any period prior to the Close of Escrow, subject to any reimbursement to tenants required under the Leases and less the costs incurred by Buyer in obtaining any such refund.
12.1.2 Monthly rents of tenants under the Leases, as and when collected. No credit shall be given the Seller for accrued and unpaid rent or any other non-current sums due from tenants until these sums are paid. Buyer shall cooperate with Seller after Close of Escrow to attempt to collect any rent under the Leases that has accrued as of the day Close of Escrow. For a period of ninety (90) days after the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than Buyer shall xxxx tenants for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit all amounts due under their Leases accruing prior to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing (including, without limitation, base rent, percentage rent, additional rent, or other tenant charges for the year in which the Closing occurs) (collectively, “Delinquent Rents”) and shall not be adjusteduse reasonable efforts to collect from tenants any base rent, but Purchaser shall cause the rent and percentage rent, additional rent, or other sums for tenant charges owing with respect to the period prior to Closing to be remitted to Seller ifthe Closing; provided, ashowever, and when collected (but Purchaser Buyer shall not be required obligated to take xxx any tenants or exercise any legal action for remedies under the Leases (including, but not limited to, the termination of Leases or the recovery of possession of the leased premises) or to incur any expense over and above its own regular collection expenses or any other liability. After such amounts accruing prior to the Closing). At Closingninety day period, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants may commence legal proceedings against any tenant after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”)Rents. Rental and other All payments received by Purchaser collected from tenants after Close of Escrow shall first be applied toward Purchaser’s actual out-of-pocket to any rent due to Buyer for the period after the end of the month in which Close of Escrow occurs, then to any costs incurred by Buyer in collecting Delinquent Rents, then to rent due in the month in which the Close of Escrow occurs, and finally, to any rent due to Seller for the period prior to Close of Escrow. In addition, Buyer shall be given a credit for the amount of any unapplied security deposits (including reasonable attorneys’ feesany interest required under any Leases or by law) placed by tenants pursuant to their Leases. Such credit shall be deemed a transfer by Seller to Buyer to the extent of collection, and then toward the payment of current rent and other charges owed amount actually credited by Seller to Purchaser for periods after the Buyer at Closing, and acceptance by Buyer from Seller, of such security deposits to the extent of the amount actually credited by Seller to Buyer at Closing. At the Close of Escrow, at no cost to Seller, Seller will assign over any excess monies received shall be applied toward letters of credit held by Seller in connection with the payment of Delinquent Amounts; Leases, provided, however, that should Seller be unable to effectuate the assignment of any rent received such letter of credit by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment Close of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing thereforEscrow, Seller shall have the right a reasonable period of time not to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
exceed thirty (b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (6030) days after the Closing as Close of Escrow and until such letters of credit are transferred to Buyer, Seller agrees to take all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered actions required by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.10.1.10
Appears in 1 contract
Samples: Purchase and Sale Agreement (RREEF Property Trust, Inc.)
Prorations and Adjustments. The following 9.1. It is the general intention of Purchaser and Seller that income and expenses for the Property be prorated as follows: Rents, operating and common area maintenance expense reimbursements and ad valorem tax reimbursements on the property for the current year collected by Closing, percentage rentals actually collected by Closing, and prepaid common area maintenance and utility charges shall be prorated and adjusted between Seller and Purchaser as of the day of at the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected effective as of the Closing Date, utilizing the best available computations of such items. If current ad valorem tax assessments are unavailable at Closing, said ad valorem taxes shall not be adjusted, but Purchaser shall cause the rent and other sums adjusted based on tax figures for the period prior to Closing immediately preceding tax year, with said tax proration to be remitted to Seller ifadjusted in cash between the parties, asbased on actual taxes for the current year, and when collected (but Purchaser shall not be required to take legal action for at the time such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which actual taxes are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amountsdetermined; provided, however, that all special tax assessments made by any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, taxing authority with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable Project applicable to the period prior to the Closing Date shall be the sole responsibility of Seller and shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, . Purchaser shall inform such utilities of such change in ownership receive a credit for tenant security deposits that are not yet forfeited or due to be refunded to tenants of the Property. Tax appeal refund amounts received (after payment of costs associated therewith and applicable reimbursements to tenants, each of which shall be prorated between Purchaser and Seller shallbased on the Closing Date), from net insurance reimbursement amounts (subject to Section 12), and after the Closing, at Seller’s sole cost percentage rentals received by Purchaser and expense, have control over any ongoing tax appeals as allocable to the Property that were commenced a period of time prior to the Closing or by Seller and that pertain solely allocable to a period of time subsequent to the periods Closing, shall be adjusted between the parties when received (percentage rentals being adjusted based upon the ratio of sales before and after Closing rather than time periods).
9.2. To the extent any apportionments or adjustments made at closing are not based on final figures or there are any errors or omissions in the calculation or determination thereof, promptly after notice of such final figures or errors or omissions, Seller and Purchaser shall readjust or reapportion and make the payment required as a result thereof.
9.3. The following items are to be prorated or adjusted (as appropriate) as of the close of business on the Closing Date, it being understood that Seller owned the Property. Seller shallfor purposes of prorations, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep be deemed the owner of the Property on such day and Purchaser informed shall be deemed the owner of the Property as to any such appealsof the day after the Closing Date.
9.3.1. Real estate and personal property taxes and assessments (on the basis of the most recent ascertainable tax xxxx if the current xxxx is not then available).
Appears in 1 contract
Samples: Real Estate Purchase and Sale Agreement (First Capital Income Properties LTD Series X)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), for the month in which Closing occurs, shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums Rents unpaid for the month in which the Closing occurs, which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during within the month in which the Closing occurs shall first be prorated. Rents and other charges which at the Closing are thirty (30) or more days past due ("Delinquent Rents") shall not be prorated, but are the property of Seller, subject to the following: Rents and other amounts received by Purchaser within thirty (30) days after the Closing from a Tenant owing Delinquent Rents shall be applied (i) first, to the payment all Purchaser's costs of such tenants’ Delinquent Amounts, if any, collection incurred with respect to such Tenant (including reasonable attorneys' fees); (ii) second, to rents due for the month in which such payment is received by Purchaser; (iii) third, to rents attributable to any period after the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount are past due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of on the date of Closingreceipt; and (iv) then, to Delinquent Rents. Seller shall retain promptly remit to Purchaser all rights relating theretosums received by Seller from Tenants after the Closing other than for rents for which Purchaser received credit hereunder.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred credited to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued Accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on in accordance with custom in the basis City of billsOmaha, if available prior Nebraska; that is, due to the Closingfact that the County and City levy included in each year’s real estate tax assessment are for different years, which all real estate taxes that would first become delinquent in the event of non-payment in the year of closing shall be repro-prorated after Closing on the basis of actual bills received covering the period which includes rated to the Closing Date. Seller shall pay all prior year’s taxes and Purchaser shall pay all subsequent year’s taxes.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided. Seller shall pay documentary stamp taxes on the Deed.
(e) To the extent that Tenants are reimbursing the landlord for common area maintenance and other operating expenses (collectively, however“CAM Charges”), that any insurance premiums CAM Charges shall not be proratedprorated at Closing and again subsequent to Closing, as of the date of Closing on a lease-by-lease basis with each party being entitled to receive a portion of the CAM Charges payable under each Lease for the CAM Lease Year in which Closing occurs, which portion shall be equal to the actual CAM Charges incurred during the party’s respective periods of ownership of the Property during the CAM Lease Year. As used herein, the term “CAM Lease Year” means the twelve (12) month period as to which annual CAM Charges are owed under each Lease. Five (5) days prior to Closing the Seller shall submit to Purchaser an itemization of its actual CAM Charges operating expenses through such date and the amount of CAM Charges received by the Seller as of such date, together with an estimate of CAM Charges to be incurred to, but rather not including, the Closing Date. In the event that the Seller shall cancel has received CAM Charges payments in excess of its actual CAM Charges operating expenses, the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to receive a credit against the income from the Property and responsible Purchase Price for the expenses of excess. In the Property for event that the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the Seller has received CAM Charges payments less than its actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorationsCAM Charges operating expenses, to the extent not covered that the Leases provide for a “true up” at the end of the CAM Lease Year, the Seller shall be entitled to receive any deficit but only after the Purchaser has received any true up payment from the Tenant. Upon receipt by either party of any tax escrows CAM Charge true up payment from a Tenant, the party receiving the same shall provide to be assigned the other party its allocable share of the “true up” payment within five (5) days of the receipt thereof. To assist the Purchaser in preparing “true up” reconciliation at the end of the CAM Lease Year, the Seller shall deliver to the Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt records of all of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsCAM Charge expenditures.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser Buyer as of the day of the ClosingClosing Date, except as otherwise specified:
11.1. Seller shall credit to Buyer an amount equal to: (a) Collected Rents any and all reasonable legal fees paid or incurred by Buyer (or its joint venture partner) to negotiate this Agreement and the Lease (the “Buyer Legal Fees”) up to a maximum aggregate amount not to exceed $50,000; and (b) the actual cost of Buyer’s property appraisal, inspection and environmental reports (“Buyer Transaction Costs”), as evidenced by invoices for such services. Buyer Legal Fees and Buyer Transaction Costs shall not include any costs incurred by Buyer related to any financing of the acquisition hereby contemplated or future financing to be secured by the Property.
11.2. Water, electricity, sewer, gas, telephone and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other utility charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjustedprorated as the same shall be payable by Seller, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller ifas tenant, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior pursuant to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating theretoLease.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser11.3. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general General real estate, personal property and ad valorem taxes and assessments for applicable to the current tax year Property shall not be prorated as the same shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel chargespayable by Seller, as well as all deposits tenant, under the Lease. Prior to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicableat Closing, Seller shall cause meters for utilities to be read not more than one (1) day pay or have paid all tax bills that are due and payable prior to or on the date Closing Date (but not any such taxes not yet due and payable) and shall furnish evidence of such payment to Buyer and the Title Company.
11.4. All assessments, general or special, shall not be prorated as the same shall be payable by Seller, as tenant, under the Lease.
11.5. All base rents and other charges due and owing from Seller pursuant to the Lease for the month in which Closing occurs shall be credited to Buyer at Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser11.6. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be ratably prorated; provided. For purposes of calculating prorations, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser Buyer shall be deemed to be in title to the owner of the Property andProperty, therefore, and therefore entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof, for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the year and month which that shall have elapsed as of the day of the ClosingClosing Date. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the The amount of such prorations shall be subject to adjustment adjusted in cash after the Closing Closing, as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser Buyer agree to cooperate and use their best good faith and diligent efforts to make such adjustments no later than sixty (60) 30 days after the Closing Closing, or as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, soon as is reasonably practicable if and with respect to tax prorations, to the extent that the required final proration information is not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make available within such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs30 day period. Except as set forth in this Section 12, all items Items of income and expense for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense for the period on and after the Closing Date will be for the account of PurchaserBuyer, all as determined by the accrual method of accounting. Bills received after the Closing Date which that relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
. Any amounts not so paid by Seller may be set off against amounts (iif any) Amounts on deposit with utility companies shall be credited to otherwise due Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership hereunder. The obligations of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as parties pursuant to the Property that were commenced prior to this Section 11 shall survive the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to not merge into any such appealsdocuments of conveyance delivered at Closing.
Appears in 1 contract
Prorations and Adjustments. A. The following shall only items to be prorated and adjusted are as follows, with such prorations made between Seller and Purchaser as of the day of Buyer 18 at the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected computed as of the Closing shall not be adjustedDate, but Purchaser shall cause with income and expenses for the rent Closing Date itself being allocated to Buyer:
(1) Income. Rentals and, without limitation, other payments (other than percentage rent) payable by tenants, licensees, concessionaires and other sums persons using or occupying the Business Property or any part thereof, for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for or in connection with such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amountsuse or occupancy; provided, however, that Buyer shall not be obligated to make any rent payment or give any credit to Seller on account of or by reason of any rental or other payments which are unpaid as of the Closing Date, but shall be required merely to turn over to Seller its share of the same if, as and when received by Purchaser Buyer. All payments received by Buyer from tenants who owe Delinquent Amounts during a tenant, licensee, concessionaire or other person shall be applied first to Buyer's collection costs (if any) with respect thereto and then against the month most recently accrued obligation or obligations of the payor. In addition, in which the event that as of the Closing occurs Date there shall first be applied exist any rebate, rental concession, free-rent period, credit, set-off or rent reduction under or with respect to any Existing Lease which extends to or beyond the payment Closing Date, then Seller shall pay Buyer as of the Closing Date (and the prorations in favor of Buyer hereunder shall include an amount equal to) the aggregate amount of all such tenants’ Delinquent Amountsrebates, if anyrental concessions, free-rent periods, credits, setoffs or rent reductions applicable to any period or periods on or after the Closing Date. In the event that Buyer receives checks payable to Seller with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing thereforBusiness Property, Seller shall have the right hereby authorizes Buyer to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated endorse Seller's name on the basis of bills, if available prior to checks without recourse and apply the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender proceeds in connection accordance with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitationforegoing; similarly, any utilities paid checks received by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date Business Property shall be paid endorsed by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, without recourse and promptly following forwarded to Buyer, who shall apply the Closing, Purchaser shall inform such utilities of such change proceeds thereof in ownership of accordance with the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsforegoing.
Appears in 1 contract
Samples: Sale Agreement (Berkley W R Corp)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of midnight of the day of preceding the Closing, except as otherwise specified:
(a1) Collected Rents Tenant rents (including payments for taxes, utilities, common area maintenance, insurance and other chargesoperating costs ("Charges"). In the event that any refunds or credits are due and owing to a tenant at the end of a lease year for Charges, Seller shall promptly remit Seller's pro rata portion of such amount to Purchaser upon receipt of a notice from Purchaser that same shall be due and payable.
(2) Delinquent tenant rents (including payments for taxes, utilities, common area maintenance, insurance and other than for Tenants who owe Delinquent Rents (as hereinafter definedoperating costs), if and when collected by Purchaser, shall be paid to Seller to the extent of Seller's interest therein, and if not collected within one hundred twenty (120) days after Closing, the right to collect same will be assigned to Seller without recourse. For purposes of this Subparagraph (2), all rents received by Purchaser shall first be applied to the current months' rents, and then to delinquent rent in the inverse order of delinquency.
(3) Percentage rents shall be separately prorated by credit under each Lease on the basis of the lease year set forth in such Lease for the payment of percentage rents. All percentage rent payments for the lease year including Closing made prior to Purchaser. Prepaid rents and other charges Closing shall be credited to Purchaser. The All payments of percentage rent and all other sums which are due and payable to Seller for the lease year including Closing received by any tenant but uncollected as of the either party on or after Closing shall not be adjustedretained by, but or remitted to, Purchaser, as the case may be, until determination of Seller's allocable share thereof in each instance. Upon final determination of percentage rents owed by a tenant under its Lease for the lease year under such Lease in which Closing occurs, Seller and Purchaser shall cause adjust between themselves amounts owed for such lease year on account of percentage rents, and Seller's allocable share of such percentage rents shall be an amount equal to (A) the rent and other sums amount by which the tenant's sales for the period that portion of such lease year occurring prior to Closing exceeds (1) the amount specified in such tenant's Lease as being the amount of gross sales of such tenant for such year before such tenant shall be obligated to pay percentage rent for such lease year multiplied by (2) a fraction the numerator of which is the number of days in such lease year prior to Closing and the denominator of which is the total number of days in such lease year; multiplied by (B) the percentage specified in such tenant's Lease to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action used in determining such tenant's percentage rent for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating theretolease year.
(b4) The amount of all unapplied tenant security deposits, and other Tenant deposits and any accrued interest due tenants thereon, if any, shall be transferred credited to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c5) To the extent not covered by The amount of any tax escrows other credits due tenants shall be credited to Purchaser.
(6) Prepaid charges in connection with any Contracts that Purchaser elects to assume, or licenses or permits, shall be assigned credited to Purchaser at Closing pursuant Seller. Accrued charges in connection with such Contracts, or licenses or permits, shall be credited to Section 12(gPurchaser.
(7) below, accrued general All real estate, personal property and ad valorem taxes and assessments for the current tax year immediately preceding the year of Closing that are payable in the year of Closing, and for years prior thereto, shall be paid by Seller on or before the Closing. Real property taxes for the year of Closing shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water most recent assessment and sewer service charges, and charges for gas, electricity, telephone levy. Any and all claims or rights to appeal the amount of any real property taxes or other utility and fuel chargestaxes charged in connection with the Premises, as well as all deposits shall belong to utility companies, governmental entities or any other person shall be prorated ratably on Purchaser following the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under 8) Special assessments for work commenced as of the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date date of this Agreement shall be prorated between Seller and Purchaser such that Seller shall be responsible for all installment payments due prior to Closing and Purchaser shall be responsible for all installment payments due following the responsibility Closing. Special assessments for improvements as to which no work has commenced as of the date of this Agreement shall be paid exclusively by Purchaser.
(f9) Assignable license and permit fees paid on an annual or other periodic basisAny assessments imposed by private covenant.
(g10) All escrow Except to the extent such items are the responsibility of tenants, prepaid water, sewer, and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by other utility charges shall be credited to Seller, if anyand accrued water, sewer, and other utility charges shall be assigned credited to Purchaser but there will be no adjustment to the Purchase Price or proration thereofPurchaser.
(h11) Such other items that are customarily prorated Except as provided in transactions the last sentence of this nature (including, without limitationSubparagraph 8(x)(4), any utilities and all commissions of leasing and rental agents for any Lease entered into before the date of Closing shall be paid by Seller under the Leasesprior to Closing.
(12) shall be prorated; provided, however, that All other items customarily prorated or required by any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as other provision of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed this Agreement to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing prorated or is determined to be inaccurate or incomplete after adjusted.
(b) At Closing, the amount of such prorations and adjustments as aforesaid shall be subject determined or estimated to the extent practicable, and monetary adjustment shall be made between Seller and Purchaser. As the amounts of the respective items become finally ascertained, further adjustment shall be promptly made between the parties in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) within 180 days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerClosing.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Real Estate Sale Agreement (Price T Rowe Renaissance Fund LTD)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing Date, except as otherwise specified:
(a) Collected Rents Mortgage principal balance and other charges, other than for Tenants who owe Delinquent Rents accrued and unpaid interest (in the event Purchaser takes title to the Project subject to Seller's existing first mortgage as hereinafter definedprovided in this Contract), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to collected by Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date month of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”and succeeding months). Rental , security deposits, prepaid service contracts, maintenance and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collectionoperating employees' wages, maintenance and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amountsoperating employees' accrued rights, if any, with respect under union contracts to the month in which the Closing occurspaid vacations, general real estate taxes, special assessments, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller similar items shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property be adjusted ratably as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general General real estate, personal property and ad valorem estate taxes and assessments for the current tax year shall be prorated on the basis of billsthe last ascertainable tax bill, xxt shall be reprorated when the actual tax bills therefor issue. Seller shall be entitled to all tax refunds, if available prior to any, obtained on account of taxes paid for the years preceding the Closing, which and a prorata portion of tax refunds for the year of Closing, less the amount, if any, of Seller's prorata share of such funds expended by Purchaser in obtaining such refunds. Purchaser shall receive credit for advance rents beyond the then current month and for security deposits under the Leases. None of the security deposits may be applied by Seller to delinquent rents. There shall be re-prorated no proration credit to Seller for delinquent rents and other charges (the "Delinquent Rents"), except that rents that are not more than thirty (30) days delinquent that are due from tenants who are not more than thirty (30) days delinquent in the payment of rent shall be prorated, but settlement between the parties shall be made only when such amounts have actually been collected. After Closing, Seller shall not take any action against any tenant owing Delinquent Rents. For a period of thirty (30) days after Closing, Purchaser shall use reasonable efforts to collect Delinquent Rents but such undertaking shall not 13 81 be deemed to obligate Purchaser to expend any funds or institute legal proceedings of any kind. Rents and other amounts received by Purchaser after Closing from a tenant owing Delinquent Rents shall be applied (i) first, to all of Purchaser's costs of collection incurred with respect to such tenant (including reasonable attorneys' fees), (ii) second, to rents due for the month in which such payment is received by Purchaser, (iii) third, to rents attributable to any period after Closing which are past due on the basis date of actual receipt, and (v) then to Delinquent Rents. Seller shall promptly remit to Purchaser and account for all sums received by Seller from tenants after Closing and Purchaser shall promptly remit to Seller and account for all sums received by Purchaser from tenants after closing which, pursuant to this subparagraph, are to be applied to Delinquent Rents or are otherwise to be paid to Seller. All percentage rents and additional rents, if any, payable under any of the Leases, shall be prorated as of the Closing based on respective periods of ownership during the lease year covered thereby, but reprorated and paid when and as received.
(b) In lieu of prorating electricity, gas, water and other public utilities due to the utility companies, Seller shall arrange for the rendition of final bills received covering as of the Closing Date or as near as possible thereto by the respective utility companies, and Seller shall pay such bills as and when rendered. As to charges to tenants for such public utilities, Seller shall also arrange for the rendition of bills to tenants as of the Closing Date or as near as possible thereto, and Seller shall be entitled to remittances from Purchaser of such charges as and when collected from tenants in accordance with the provisions of subparagraph (a) above. In any event, all master meters and submeters shall be read within a period which includes of three consecutive days.
(c) The Project shall be operated for the benefit of Seller until the Closing Date.
(d) Fuel. After Closing, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person the Project shall be prorated ratably operated for the benefit of Purchaser. Solely for purposes of the prorations to be made hereunder the Closing shall be deemed to occur at 11:59 p.m. on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occursDate. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accountingDate. Bills received after the Closing Date which relate to expenses incurred, incurred prior to Closing or services performed or other amounts allocable to at the period direction of Seller prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Sublease (SPR Inc)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser Purchaser, on a per diem basis, as of the day of the ClosingClosing Date, except as otherwise specified:
(a) Collected Rents Minimum rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), monthly charges shall be prorated as follows: Purchaser shall receive a proration credit for all current minimum rents and monthly charges received by credit Seller prior to Purchaserthe Closing Date to the extent attributable to any period after the Closing Date. Prepaid rents and other prepaid charges shall be credited to PurchaserPurchaser to the extent attributable to any period after the Closing Date. The rent Past due rents (excluding percentage rents for the present period), past due percentage rents, past due tax contributions, past due common area maintenance, and all other sums which are past due and payable charges charged to Seller by any tenant but uncollected as tenants of the Closing Premises ("Tenants") which exist at time of closing (all hereinafter collectively called "Delinquent Rents") shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating theretoprorated.
(b) The amount of all unapplied security and other Tenant deposits deposits, or other monies collected by Seller wherein the Tenant is entitled to a refund of part or all of such amount collected, and interest due thereon, if any, shall be transferred credited to Purchaser. Seller hereby agrees that it shall remain liable to Purchaser for any security deposit or other Tenant deposits to rent due from any Tenant, except (i) where otherwise provided for in the subject Lease or (ii) where the Tenant is in default under the subject Lease, when such application is noted on the Rent Roll, or (iii) such Tenant has vacated the Premises and its security deposit has been applied against said Tenant's obligations to Seller, or (iv) where the application thereof is noted on the Rent Roll.
(c) The amount of any other credits due Tenants, as specifically provided for in any Lease, which have not already been credited to a particular Tenant shall be credited to Purchaser. Notwithstanding the foregoing sentence, with regard to all new leases entered into subsequent to the Effective Date, which leases have been approved by Purchaser, Purchaser shall assume at Closing the obligation, if any, be responsible for paying all leasing commissions (not to pay security exceed $4.00 per square foot) and other deposits all tenant improvement costs and concessions agreed to tenants under the Leases, be paid for by landlord pursuant to the extent that terms of such deposits are transferred Purchaser approved lease.
(d) Percentage rents shall be prorated as follows: If Seller has received any monthly, quarterly, or other advance payments of percentage rent for a Tenant's fiscal year ending after the Closing Date, the aggregate amount of such payments shall be credited to Purchaser at Closing. For each Tenant paying percentage rent, at the end of the Tenant's fiscal year within thirty (30) days, after the Tenant has paid percentage rent to Purchaser based on such Tenant's 1996 certified sales, Purchaser shall deliver written notice thereof to Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount along with copies of security and other deposits (together with interest due thereon as may be required by law or all supporting information provided by the Tenant and simultaneously therewith Purchaser shall pay to Seller, net of management fees, an amount determined by multiplying the percentage rent paid by a Tenant by a fraction, the numerator of which shall be the number of days during that Tenant's fiscal year for purposes of calculating percentage rent and for which the percentage rent is being paid that the Seller owned the Premises and the denominator of which shall be 365. If the Tenant paying percentage rent pays same based upon a reporting period of other than 365 days, then the figure used as the denominator in the formula provided above shall be the number of days in that Tenant's reporting period rather than 365 days. Purchaser shall exercise after Closing its reasonable efforts to collect all percentage rents to which Seller is entitled to a portion thereof.
(e) Should the Leases, or certain of the Leases, contain a provision obligating the Tenant thereunder to pay to the Landlord under the Lease), subsequent to the end of each calendar year, a portion of the real property taxes, assessments, common area maintenance costs, insurance, or operating costs required to be held under paid by Seller, excluding advertising and promotion costs (the terms "Tenant's Contribution"), the Tenant's Contribution relating to the calendar year in which the Closing Date occurred shall be prorated on a Tenant by Tenant basis and on an expense occurred basis. Purchaser shall pay to Seller, or Seller shall pay to Purchaser, as the case may be, within forty-five (45) days of the Leases exceeds date of receipt of such sums, an amount determined by multiplying the Tenant's Contribution paid by a Tenant by a fraction, the numerator of which shall be the total expenses paid by Seller prior to the Closing Date, and the denominator of which shall be the total expenses incurred for 1996. It is the intent of Seller and Purchaser that all Tenant Contributions collected by Purchaser from Tenants for the period prior to Closing shall be retained by Purchaser and all Tenant Contributions collected by Seller from Tenants for the period after Closing shall be retained by Seller and that after Closing Seller and Purchaser shall adjust and pay each other the amounts necessary to recover any surplus or deficiency in accordance with the underlying actual cost figures as they become known. For example, if the Closing Date occurs on June 30, 1996, and at such date common area maintenance costs, real property taxes, insurance, and operating expenses paid by the Seller total $100,000, of which Seller has received $100,000 from Tenants, and on December 31, 1996, such expenses total $300,000, of which Purchaser has received $150,000 from Tenants, the proration would be calculated as follows, such calculation to be performed on a Tenant by Tenant basis: Purchaser Seller Total Total Expenses 200,000 100,000 300,000 Recovery Amount 270,000 Prorated x 2/3 x 1/3 180,000 90,000 270,000 Received 150,000 100,000 250,000 ------- ------- -------4 Due from Tenants 20,000 Due from Seller 10,000 In the event Purchaser has not collected such Tenant's Contribution within ninety (ii90) days after the amount actually transferred Tenant's Contribution is billed to Tenant, and is not then making a good faith effort to collect the same, Seller shall have the right to pursue collection of Tenant's Contribution. Tenant's Contribution collected by either party shall be prorated between Purchaser and Seller as provided in this paragraph 9(e) after payment of reasonable costs of collection. In the event Seller has collected Tenant's Contribution prior to the Closing for any portion of the year 1996, Purchaser shall be credited at ClosingClosing with the portion, if any, of the Tenant's Contribution so collected applicable to the period after the Closing Date.
(cf) To the extent not covered by Prepaid premiums under any tax escrows assigned insurance policies shall be credited to Seller.
(g) Amounts paid or payable under assigned Service Contracts shall be assigned to Purchaser at Closing pursuant to Section 12(gprorated.
(h) below, accrued Accrued general real estate, personal property property, and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing. If such bills are not available, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person then such taxes shall be prorated ratably on the basis of the last most recent ascertainable bills taxes for the Premises (based on the maximum discount amount, then available at the time of Closing, for early payment) and promptly reprorated upon receipt the issuance of the actual final bills or invoices) therefor and any amounts due from one party to the extent not other shall be paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closingin cash at that time.
(ei) Amounts due, commissions, up-front revenues Special assessments which are certified or become a lien prior to Closing and incentives, and prepayments under pending special assessments in which the Contracts work has been substantially completed prior to Closing shall be assigned credited to PurchaserPurchaser at Closing. All amounts other pending liens for services rendered or materials furnished under special assessments, the Contracts assumed by Purchaser shall take subject to.
(j) Commissions of leasing and accruing after rental agents for any Lease entered into before the Closing Date shall be paid exclusively by Seller at or prior to Closing, pursuant to the responsibility of terms relating to such payment, except for those shown on EXHIBIT "J" or as described in Section 10(c) above which shall be assumed by Purchaser.
(fk) Assignable license and permit fees paid on an annual or other periodic basisThe amount of any unused maintenance reserve shall be credited to Purchaser.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(hl) Such other items and expenses that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, howeverprovided that such amounts shall be reprorated upon receipt of the actual bills. If possible, Seller will assign its utility deposits to Purchaser and receive a credit therefor.
(m) Seller shall pay over to Purchaser all unpaid funds, if any, collected by Seller from Tenants, to be used for promotion of the Real Estate and Improvements.
(n) Interest on the Existing Mortgage as of the Closing Date, and Purchaser shall be charged with, and Seller shall be credited with, all amounts held by the Mortgagee, as of the Closing Date, for tax, insurance, or other escrow purposes. In all instances in Section 10 hereinabove where Purchaser, after the Closing, collects monies from Tenants and the Seller is entitled to all or a portion thereof, Purchaser shall pay to Seller, within thirty (30) days from date of receipt by Purchaser, those sums to which the Seller is entitled to receive in accordance with the provisions of Section 10 hereinabove. As to the Delinquent Rents, after the Closing Purchaser shall, upon Seller's written request, assign to Seller Purchaser's interest in Delinquent Rents for the purpose of collection (which may include the filing of any lawsuit). If Seller intends to commence litigation in connection with such collection, Seller shall give Purchaser written notice of such intention prior to actually filing such litigation. If Purchaser attempts collection, Purchaser shall be entitled to recover from Seller all reasonable costs and expenses of such action against a delinquent Tenant that are not recovered and collected from such delinquent Tenant. Any Delinquent Rents collected by the Purchaser shall first be applied toward payment of costs of collection, then to current rent and other obligations due the Purchaser and, thereafter, said sum shall be applied to Delinquent Rents owed by that Tenant, with the earliest Delinquent Rents being paid first. At any insurance premiums time after six (6) months following the Closing, Seller shall have the right to pursue collections of such Delinquent Rents, and shall apply any Delinquent Rents collected first toward payment of the reasonable costs of collection, then to Delinquent Rents with the earliest Delinquent Rents being paid first and thereafter to rents due Purchaser from the Tenant owing such Delinquent Rents only through the month of the Closing. Seller and Purchaser agree to make end of year adjustments to the foregoing prorations, where the amounts prorated are based upon estimates as opposed to actual figures, said adjustments to be made within forty five (45) days of the date when the actual figures are available and based on actual collections. At Closing and for up to three (3) years after Closing, Seller shall direct the then property manager (the "Then Property Manager") to make available at the offices of the Then Property Manager, all contracts, leases and leasing correspondence, receipts for deposits, financial reports, xxxxxxxx to tenants, invoices from vendors, and unpaid bills which pertain to the Premises, together with all advertising materials, booklets, and keys, if any, used in the operation of the Premises. Seller makes no representations regarding the existence or adequacy of such documents or items for use in management or operation of the Premises. The foregoing shall not be proratedinclude the separate books, but rather records, correspondence and other documentation of Seller shall cancel the Existing Insurance Policies as relating exclusively to Seller's other properties located at its offices. For purposes of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property andPremises, therefore, and therefore entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof, for the entire day upon which the Closing occursis completed. All such prorations shall be made on the basis of the actual number of days of the month year and months which shall have elapsed as of the day of the ClosingClosing Date. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the The amount of such prorations shall be subject to adjustment adjusted in cash at or after the Closing Closing, as and when complete and accurate information becomes availableavailable and, as, and when the cash has been collected, if applicable. All prorations shall otherwise be final. If such information is not available as of the Closing, Seller and Purchaser agree to prorate based on a reasonable estimate of such taxes and to cooperate and use their best efforts to make such adjustments no later than sixty thirty (6030) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned figures become available to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed performed, or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
. If any claim is asserted against Purchaser or the Premises or any liability is incurred by Purchaser or the Premises at any time subsequent to the Closing Date, which was not adjusted hereunder, and, if any such claim or liability is based upon or arises out of any occurrence or state of facts or any act or omission of Seller existing at any time from the date Seller acquired the Premises to the Closing Date, Seller shall satisfy such claim or liability and shall indemnify, defend, protect, and hold Purchaser and the Premises harmless therefrom and from any costs and expenses (iincluding without limitation reasonable attorneys' fees) Amounts on deposit with utility companies shall be incurred by Purchaser in connection therewith. All items paid or credited to Seller in connection with this section shall be paid net of management fees applicable to those funds so collected and sales taxes and any other costs of collection incurred by the Purchaser. If any claim is asserted against Seller or any liability is incurred by Seller at Closingany time subsequent to the Closing Date, which was not adjusted hereunder, and promptly following if any such claim or liability is based upon or arises out of any occurrence or state of facts occurring after the ClosingClosing Date or as a result of any act of the Purchaser, Purchaser shall inform satisfy such utilities of such change liability and shall indemnify, defend, protect, and hold Seller harmless therefrom and from any costs and expenses (including without limitation reasonable attorneys' fees) incurred by Seller in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsconnect therewith.
Appears in 1 contract
Samples: Real Estate Purchase and Sale Agreement (Basic Us Reit Inc)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums Rents unpaid for the month in which the Closing occurs, which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during within the month in which the Closing occurs shall first be prorated. Rents and other charges which at the Closing are thirty (30) or more days past due (“Delinquent Rents”) shall not be prorated. Rents and other amounts received by Purchaser within thirty (30) days after the Closing from a Tenant owing Delinquent Rents shall be applied (i) first, to the payment all Purchaser’s costs of such tenants’ Delinquent Amounts, if any, collection incurred with respect to such Tenant (including reasonable attorneys’ fees); (ii) second, to rents due for the month in which such payment is received by Purchaser; (iii) third, to rents attributable to any period after the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount are past due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of on the date of Closingreceipt; and (iv) then, to Delinquent Rents. Seller shall retain promptly remit to Purchaser all rights relating theretosums received by Seller from Tenants after the Closing other than for rents for which Purchaser received credit hereunder.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred credited to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued Accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums . The provisions of this Section 12 shall not be prorated, but rather Seller shall cancel survive the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan DocumentsClosing. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occursClosing. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (NNN Apartment REIT, Inc.)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the 8.1 Prior to Closing, except as otherwise specified:
the Owners and Cedar shall prepare a schedule of (ai) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), those expenses that shall be prorated have been paid by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing Owners prior to the Closing). At Closing, Seller shall deliver Closing Date but are attributable to Purchaser a schedule of all rent, charges period from and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date (the "Prepaid Expenses"), and (ii) those revenues that shall be have been received by the responsibility of PurchaserOwners prior to the Closing Date but are attributable to a period from and after the Closing Date (the "Prepaid Revenues").
8.2 To the extent that the Prepaid Expenses shall exceed the Prepaid Revenues (fsuch excess, the "Prepaid Expense Excess"), (i) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, at Closing Cedar shall be assigned to Purchaser but there will be no adjustment pay to the Purchase Price or proration thereof.
Owners an amount equal to the Prepaid Expense Excess, and (hii) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser Cedar shall be deemed to be have made a capital contribution to the owner Partnership (the "Closing Adjustment Capital Contribution") equal to the amount of the Property andPrepaid Expense Excess.
8.3 To the extent that the Prepaid Revenues shall exceed the Prepaid Expenses, therefore, entitled such excess shall be contributed by the Owners to the income from Partnership, and the Property Owners shall not receive capital account credit on account thereof.
8.4 The following prorations and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations adjustments shall be made between the parties as of 11:59 p.m. on the day preceding the Closing Date (the "Proration Date") on the basis of the actual number of days elapsed over the applicable period:
(i) All fixed rents under Leases which are collected on or prior to the Proration Date in respect of the month (or other applicable collection period) in which the Closing occurs (the "Current Month"), shall be adjusted on a per diem basis based upon the number of days in the Current Month prior to the Proration Date and the number of days in the Current Month on and after the Proration Date. Any such rents that are allocable to the period from and after the Proration Date shall be deemed to be Prepaid Revenues.
(ii) If, on the Proration Date, any fixed rents are past due by any Tenant, and provided the Owners have elapsed delivered to Cedar, in reasonable detail, a breakdown of all such past due amounts as of the day Proration Date, Cedar agrees that the first moneys received by the Partnership from each such Tenant shall be disbursed as follows:
(1) first, such moneys shall be applied to fixed rents in respect of the ClosingCurrent Month, it being agreed that one hundred percent (100%) of the fixed rent that is attributable to the portion of the Current Month prior to the Proration Date shall be paid to the Owners and the balance shall be retained by the Partnership;
(2) second, to the Partnership until all fixed rents owing by all such Tenants for any period after the Current Month through the month in which payment is received have been paid in full;
(3) third, to the Owners until all fixed rents owing by all such Tenants for periods prior to the Current Month have been paid in full; and
(4) fourth, the balance, if any, shall be paid to the Partnership. To Each party agrees to remit reasonably promptly to the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, other the amount of such prorations rents to which such party is so entitled and to account to the other party monthly in respect of same. The fixed rents received by the Partnership after the Proration Date shall be subject apportioned and remitted, if applicable, as hereinabove provided.
(iii) If the Proration Date shall occur prior to adjustment the time when any rental payments for fuel pass-alongs, so-called escalation rent or charges based upon real estate taxes, operating expenses, labor costs, cost of living increases, electrical charges, water and sewer charges or like items (collectively, "Overage Rent") are payable, then such Overage Rent for the applicable accounting period in cash after which the Closing as and when complete and accurate information becomes available. All prorations Proration Date occurs shall otherwise be final. Seller and Purchaser agree apportioned subsequent to cooperate and use their best efforts the Closing, based upon the portion of such accounting period which occurs prior to make such adjustments no later than sixty the Proration Date (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered theretofore collected by the Partnership, on account of such Overage Rent prior to the Proration Date), it being agreed that one hundred percent (100%) of the Overage Rent that is attributable to the portion of such accounting period that shall occur prior to the Proration Date shall be paid to the Owners and the balance shall be retained by the Partnership. In addition, the Partnership shall pay to the Owners one hundred percent (100%) of all Overage Rent that is paid subsequent to the Proration Date with respect to an accounting period which expired prior to the Proration Date, within thirty (30) days after receipt thereof by the Partnership. If, prior to the Closing, the Owners shall collect any tax escrows sums on account of Overage Rent or fixed rent for a year or other period, or any portion of such year or other period, beginning prior to but ending on or after the Proration Date, the portion of such sum allocable to the period from and after the Proration Date shall be deemed to be assigned a Prepaid Revenue.
(iv) Overage Rent payable by Tenants based on an estimated amount and subject to Purchaser adjustment or reconciliation pursuant to the related Leases subsequent to the Proration Date shall be apportioned as provided in subsection (iii) above and shall be reapportioned as and when the applicable Tenant's actual obligation for such Overage Rent is reconciled pursuant to the applicable Lease.
(v) One Hundred Fifty Thousand ($150,000) Dollars on account of percentage rent owing by UA Theatres shall be deemed to be a Prepaid Expense and the Owners shall be entitled to a credit on account thereof at Closing Closing, subject to adjustment or reconciliation subsequent to the Proration Date when such Tenant's actual obligation for such percentage rent is reconciled pursuant to the terms of such Tenant's Lease.
(vi) Without duplication of any adjustment made pursuant to Section 12(g8.4(A)(i) above, all prepaid fixed rent and Overage Rent that shall be received by the parties shall make such adjustments upon receipt Owners as of the actual tax bills covering Proration Date for periods on and after the period Proration Date shall be deemed to be Prepaid Revenues.
B. All real estate taxes, BID taxes, unmetered water and sewer charges, elevator inspection fees, pest control charges and vault charges, if any, and any and all other municipal or governmental assessments of any and every nature levied or imposed upon the Property (collectively, "Taxes") in respect of the current fiscal year of the applicable taxing authority in which the Closing occurs (the "Current Tax Year") (other than real estate taxes, water and sewer charges and any other municipal or governmental assessments payable by any Tenant directly to the taxing authority under any Lease), shall be allocated on a per diem basis based upon the number of days in the Current Tax Year prior to the Proration Date occursand the number of days in the Current Tax Year on and after the Proration Date. Except If, as set forth in this Section 12of the Proration Date, all items of income and expense Taxes for the Current Tax Year shall not have been paid with respect to the period prior to the Proration Date, the amount equal to the unpaid Taxes for the period prior to the Proration Date shall be paid by the Owners to the Partnership at the Closing, but the Owners shall not receive any capital account credit on account thereof. If, as of the Proration Date, Taxes with respect to any period from and after the Proration Date shall have been paid, the amount equal to the prepaid Taxes shall be deemed to be a Prepaid Expense. If the Closing Date will be shall occur before the tax rate for the account Current Tax Year is fixed, the apportionment of Seller, and all items Taxes shall be upon the basis of income and expense the tax rate for the next preceding fiscal period applied to the latest assessed valuation. Promptly after the new tax rate is fixed for the fiscal period in which the Closing takes place, the apportionment of Taxes shall be recomputed. In the event that any assessments levied or imposed upon the Property are payable in installments, the installment for the Current Tax Year shall be prorated in the manner set forth above.
C. All charges and fees due under contracts, that are not being terminated at the Closing, for the supply to the Property of heat, steam, electric power, gas and light and telephone (collectively, "Charges"), if any, in respect of the billing period of the related service provider in which the Closing occurs (the "Current Billing Period") shall be allocated on a per diem basis based upon the number of days in the Current Billing Period prior to the Proration Date and the number of days in the Current Billing Period on and after the Closing Proration Date will be and assuming that all charges are incurred uniformly during the Current Billing Period. If, as of the Proration Date, Charges for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable Current Billing Period shall not have been paid with respect to the period prior to the Closing Proration Date, the amount equal to the unpaid Charges for the period prior to the Proration Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited the Owners to Seller the Partnership at Closing, and promptly following the Closing, Purchaser but the Owners shall inform such utilities of such change in ownership not receive any capital account credit on account thereof. If, as of the Property. Seller shallProration Date, Charges with respect to any period from and after the ClosingProration Date shall have been paid, at Seller’s sole cost the amount of such prepaid Charges shall be deemed to be a Prepaid Expense.
D. Any charges or fees for transferable licenses and expense, have control over any ongoing tax appeals as permits relating to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as (but without duplication of items apportioned pursuant to any such appeals.other provision of this
Appears in 1 contract
Samples: Contribution Agreement (Cedar Shopping Centers Inc)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general General real estate, personal property and ad valorem taxes and assessments assessments, and any improvement or other bonds encumbering the Property, for the current tax year shall be prorated on for the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateProperty.
(dii) Fuel, water and sewer service Utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature shall be ratably prorated.
(including, without limitation, any utilities paid by Seller iii) Rent and other charges under the LeasesLeases (other than Delinquent Rents (as hereinafter defined)). Rents and other charges under the Leases which are 30 days or more past due as of the Closing ("Delinquent Rents") shall not be prorated, and rents and other amounts received by Purchaser or Seller after the Closing from a tenant owing such Delinquent Rents shall be applied (A) first, to Purchaser's actual out-of-pocket costs of collection incurred with respect to such tenant; (B) second, to rents due from such tenant for the month in which such payment is received by Purchaser; (C) third, to rents attributable to any period after the Closing which are past due on the date of receipt; (D) fourth, to Delinquent Rents as of the Closing (and Purchaser promptly shall remit such amounts to Seller); and (E) finally, to Seller's costs of collection incurred with respect to such tenant prior to the Closing. Purchaser agrees that it shall use commercially reasonable efforts to collect any such Delinquent Rents (provided, however, that Purchaser shall have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing Delinquent Rents). Seller may pursue a tenant after the Closing for collection of Delinquent Rents but Seller shall not have the right to institute any action for unlawful detainer or eviction or termination of the Lease against such tenant.
(iv) The amount of all unapplied security deposits under the Leases shall be credited to Purchaser; provided, however, that if any insurance premiums shall not be proratedtenant security deposit is in the form of a letter of credit, but rather promissory note or similar instrument, Seller shall cancel use its best efforts to cause such letter of credit, promissory note or other instrument to be assigned and transferred to Purchaser no later than sixty (60) days after the Existing Insurance Policies as Closing, and there shall be no credit against the Purchase Price at the Closing with respect to any such tenant security deposit.
(b) For purposes of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To Closing and based upon the extent information necessary to make such prorations is not available at actual number of days in the Closing or is determined to be inaccurate or incomplete after Closing, the month and a three hundred sixty-five (365) day year.
(c) The amount of such prorations shall be initially performed by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as (except with respect to all items except tax prorationsproperty taxes, subject to mutual agreement to extend such which shall be adjusted within sixty (60) day perioddays after the tax bills for the applicable period are received). Without limiting the generality of the foregoing, Seller and Purchaser agree that:
(i) with respect to any year-end reconciliations of reimbursable expenses under the Leases, Seller and Purchaser shall cooperate to complete such reconciliations as soon as possible after the Closing, with Seller responsible for amounts owing to tenants under the Leases, and entitled to amounts payable by tenants under the Leases (as the case may be), with respect to periods prior to the Closing, and with Purchaser responsible for amounts owing to tenants under the Leases, and entitled to amounts payable by tenants under the Leases (as the case may be), with respect to periods from and after the Closing (and, with respect to any such amounts payable to Seller, Purchaser agrees that it shall use commercially reasonable efforts to collect such amounts, provided, however, that Purchaser shall have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing any such amounts);
(ii) with respect to any property tax appeals or reassessments filed by Seller for tax years prior to the year in which the Closing occurs, Seller shall be entitled to the full amount of any refund or rebate resulting therefrom (subject to any requirement under the Leases to pay to the tenants thereunder a share of any such refund or rebate, which shall be Seller's sole obligation), and with respect to any property tax prorationsappeals or reassessments filed by Seller for the tax year in which the Closing occurs, Seller and Purchaser shall share the amount of any rebate or refund resulting therefrom (after first paying to Seller all costs and expenses incurred by Seller in pursuing such appeal or reassessment) in proportion to their respective periods of ownership of the Property for such tax year (with Seller and Purchaser each obligated for any amount of such refund or rebate required to be paid to the extent not covered by tenants under the Leases for its respective period of ownership of the Property for such tax year); and
(iii) in no event will there be any tax escrows proration of insurance premiums under Seller's existing policies of insurance relating to the Property, and Purchaser acknowledges and agrees that none of Seller's insurance policies (or any proceeds payable thereunder, except as expressly provided for in Section 16 below) will be assigned to Purchaser at Closing pursuant the Closing, and Purchaser shall be solely obligated to Section 12(gobtain any and all insurance that it deems necessary or desirable.
(d) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 1213, all items of income and expense which accrue for the period prior to the Closing Date will be for the account of Seller, Seller and all items of income and expense which accrue for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method . The provisions of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date this Section 13 shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Brandywine Realty Trust)
Prorations and Adjustments. (a) The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing based on the periods to which they relate and are applicable (regardless of when payable), except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued Non-delinquent general real estate, personal property and ad valorem taxes and assessments assessments, and any improvement or other bonds encumbering the Property, for the current tax year shall be prorated on for the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing DateProperty.
(dii) Fuel, water and sewer service Non-delinquent utility charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such and such other items that are customarily prorated in transactions of this nature shall be ratably prorated.
(including, without limitation, any utilities paid by Seller iii) Rent and other charges under the Leases) Leases shall be prorated. Rents and other charges under the Leases which are unpaid or delinquent as of the Closing shall not be prorated, and rents and other amounts received by Purchaser after the Closing from a tenant owing such delinquent rent or other charges shall be applied (A) first, to rents due from such tenant for the month in which such payment is received by Purchaser; (B) second, to rents attributable to any period after the Closing which are past due on the date of receipt; and (C) finally, to rents and other charges delinquent as of the Closing (and Purchaser promptly shall remit such amounts to Seller). Purchaser agrees that it shall use commercially reasonable efforts to collect any such delinquent rents by continuing to xxxx tenants for any delinquent rents (provided, however, that Purchaser shall have no obligation to terminate the Lease or to institute legal proceedings, including an action for unlawful detainer, against a tenant owing delinquent rents). Percentage rents payable under the Milan Ventures Lease for the calendar or fiscal year in which the Closing occurs shall be prorated after Closing as provided below on an annualized basis as of the day of Closing. Purchaser will remit to Seller the portion of any such percentage rents within thirty (30) days after such percentage rents have been determined and paid by the tenant to Purchaser under the Milan Ventures Lease for such calendar or fiscal year’s sales.
(iv) The amount of all unapplied security deposits under the Leases shall be credited to Purchaser; provided, however, that if any insurance premiums tenant security deposit is in the form of a letter of credit, there shall not be proratedno credit against the Purchase Price with respect to any such tenant security deposit. At Closing, but rather Seller shall cancel deliver an original of each letter of credit serving as a tenant security deposit to Purchaser through escrow along with the Existing Insurance Policies documents executed by Seller that are required to be executed by Seller to transfer such letter of credit to Purchaser. Following Closing, Purchaser shall, at Seller’s cost and expense, deliver the same, along with any required fees paid by Seller, to the issuing bank so that the same can be processed and transferred to Purchaser.
(v) Except as hereinbelow expressly provided, Seller is responsible for the tenant improvement costs and/or tenant improvement allowances (including space planning and architectural costs) and leasing commissions due in connection with the current term of all of the Leases entered into on or before April 30, 2013, and those remaining to be paid are identified on Exhibit N attached hereto. To the extent that any of the same have not been paid as of Closing the Closing, Seller shall provide Purchaser a credit against the Purchase Price at Closing, and Purchaser shall, to the extent of such credit, be responsible for the same after the Closing. Purchaser shall be responsible, without a credit against the Purchase Price, for (i) all leasing commissions and seek a separate refund from its insurer tenant improvement costs due in connection with new leases or any extensions, renewals or expansions by any tenants after April 30, 2013, to the extent the amount of such commissions and tenant improvement costs were disclosed to Purchaser in writing prior to the expiration of the Due Diligence Period or otherwise approved by Purchaser in connection with Purchaser’s approval of any unearned premiumssuch new lease, lease extension, renewal or expansion, and (ii) the leasing commissions and thereafter tenant improvement costs due in connection with the leases or potential leases or lease renewals or expansions with the parties described on Exhibit S attached hereto to the extent such tenant improvement costs and leasing commissions are disclosed in Exhibit S attached hereto or are otherwise hereafter approved (or deemed approved) by Purchaser pursuant to Section 10(a). At Closing, Purchaser will pay to Seller (or the credit from Seller to Purchaser shall obtain its own property insurance be reduced by) an amount equal to the sum of (x) the portion of any leasing commissions, tenant improvement costs and other expenses, including reasonable attorneys’ fees, actually paid by Seller after the Effective Date and prior to Closing pursuant to the negotiation and execution of any new leases or renewal or expansion of any Lease approved (or deemed approved) by Purchaser pursuant to Section 10(a), and only to the extent such amounts were disclosed to Purchaser in conformance writing and approved (or deemed approved) by Purchaser pursuant to Section 10(a), plus an amount equal to any leasing commissions and tenant improvement costs disclosed on Exhibit S that are paid by Seller prior to Closing.
(vi) Purchaser shall be entitled to a credit against the Purchase Price at Closing for any and all remaining abated rent after Closing, reflected on Exhibit G attached hereto.
(vii) Purchaser shall be credited at Closing for all unsatisfied amounts under all capital contracts and contracts pertaining to works of improvement entered into by Seller prior to the date of this Agreement with respect to the Assumed Loan DocumentsProperty including, without limitation, the costs identified on Exhibit O attached hereto. Seller shall remain responsible for satisfying any of such costs which were not credited (but were supposed to be credited) to Purchaser at Closing.
(b) For purposes of calculating prorations, Purchaser shall be deemed to be in title to the owner of the Property Property, and, therefore, entitled to the income from the Property therefrom and responsible for the expenses of the Property thereof for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing and based upon the actual number of days in the month and a three hundred sixty-five (365) day year. Seller shall prepare a schedule of prorations and deliver it to Purchaser not less than two (2) business days prior to Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the .
(c) The amount of such prorations shall be initially performed by Seller and Purchaser at Closing but shall be subject to adjustment in cash after the Closing outside of escrow as and when complete and accurate information becomes available. All prorations shall otherwise be final, if such information is not available at the Closing. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty six (606) months after the Closing (except as provided in clause (B) below and with respect to property taxes, which shall be adjusted within ninety (90) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to bills for the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, applicable period are received). Without limiting the parties shall make such adjustments upon receipt generality of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12foregoing, all items of income Seller and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.Purchaser agree that:
(i) Amounts on deposit (A) Seller has completed and sent to the tenants under the Leases year-end reconciliations of reimbursable expenses under the Leases for the year ending December 31, 2012. Seller is responsible for providing Purchaser with utility companies shall be a credit against the Purchase Price at Closing for any amounts that the tenants under Leases overpaid during 2012, but only to the extent such amounts have not been paid to such tenants prior to Closing or credited to Seller at Closing, and promptly following the Closingsuch tenants’ rent obligations attributable to any period accruing prior to Closing (with respect to any such amounts that have been paid to tenants prior to Closing or credited to such tenants’ rent obligations, Purchaser shall inform such utilities of such change in ownership of be entitled to written evidence thereof reasonably satisfactory to Purchaser confirming the Property. same), and Seller shallis entitled to any amounts (if, and when, received from and after the Closingtenants) that tenants under the Leases underpaid during 2012 (and, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as with respect to any such appeals.amounts payable to Seller, Purchaser agrees that it shall use commercially reasonable efforts to collect such amounts by billing tenants for such amounts, provided, however, that Purchaser shall have no obligation to institute legal proceedings, including an action for unlawful detainer, against a tenant owing any such amounts);
Appears in 1 contract
Samples: Purchase and Sale Agreement (KBS Real Estate Investment Trust III, Inc.)
Prorations and Adjustments. The (i) A statement of prorations and adjustments (the “Closing Statement”) shall be prepared by Sellers in conformity with the provisions of this Agreement and submitted to Purchaser for review not less than three (3) days prior to each Closing Date. For purposes of prorations, Purchaser shall be deemed the owner of the Acquired Assets on the applicable Closing Date for such Acquired Assets. In addition to prorations and adjustments that may otherwise be provided for in this Agreement, the following items shall be prorated and or adjusted between Seller and Purchaser (as the case requires) as of the day of the Closing, except as otherwise specifiedeach Closing Date:
(a) Collected Rents and other chargesTo the extent covered by an Assignment of Inventory Homes Contract, other than all deposits held by the applicable Seller for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums any Inventory Homes for which are due and payable to Seller by any tenant but uncollected a sales contract is in effect as of the applicable Closing Date shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver assigned to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward or Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amountsdesignee; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.and
(b) The amount With respect to the Manufactured Home Loans, the Purchase Price will be adjusted as follows:
(1) All amounts of all security and other Tenant deposits principal and interest due thereon, if any, paid by Borrowers prior to the applicable Closing shall be transferred to Purchaser. retained by Seller and Purchaser shall be entitled to receive and retain all amounts of principal and interest paid by Borrowers from and after the applicable Closing Date. Notwithstanding anything in this Agreement to the contrary, the applicable Seller shall remit to Purchaser any payments of interest, principal or other funds related to the Manufactured Home Loans assumed by Purchaser received by Seller after the applicable Closing Date;
(2) Purchaser will assume at Closing the obligation, if any, to pay security and other deposits to tenants all obligations under the Leases, to the extent that such deposits are Manufactured Home Loans and all escrow amounts and escrow accounts transferred to Purchaser at Closing. Seller the applicable Closing (or for which Purchaser receives a credit) in accordance with the terms hereof;
(3) Purchaser shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) receive the amount of security and other deposits (together all escrow accounts held by Sellers which are associated with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.such Manufactured Home Loans; and
(c4) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing All rents received pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall any lease to own home transactions will be prorated on the basis as of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(dc) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities In the event any prorations or any other person shall be prorated ratably computations made under this Section 5(C)(i) are based on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills estimates or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities prove to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts incorrect (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned but not limited to Purchaser but there will be no any adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions based upon the inaccuracy of this nature (includingthe Acquisition Price calculation provided by Seller), without limitation, any utilities paid by Seller under the Leases) then either party shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to an adjustment to correct the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made same, provided that it makes written demand on the basis party from whom it is entitled to such adjustment on or before April 1 of each year for Closings which occurred the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occursprevious calendar year. Except as set forth in this Section 125(C)(i)(c), all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date prorations shall be paid by Sellerfinal.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Equity Lifestyle Properties Inc)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof, other than a credit to Seller equal to the amount, not to exceed $757,098.00, which is held by Seller on the Closing Date in its capital improvement reserve for the Property and which is transferred to Purchaser as required herein.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Grubb & Ellis Apartment REIT, Inc.)
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the Closing, except as otherwise specified:
(a) Collected Rents All operating income and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), operating expenses of the Station shall be prorated by credit to Purchaser. Prepaid rents adjusted and other charges allocated between the Emmis Entities and Buyer, and an adjustment in the Purchase Price shall be credited made as provided in this Section, to Purchaser. The rent the extent necessary to reflect the principle that all such income and expenses attributable to the operation of the Station on or before the date preceding the Closing Date shall be for the account of the Emmis Entities, and all other sums which are due such income and payable expenses attributable to Seller by any tenant but uncollected as the operation of the Closing shall not be adjusted, but Purchaser shall cause the rent Station on and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing Date shall be for the account of Buyer. The net amount by which the Purchase Price is to be increased or decreased in accordance with respect to which Seller this Section is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively herein referred to herein as the “Delinquent AmountsClosing Date Adjustments”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount Without limiting the generality of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which foregoing:
(i) The Emmis Entities shall receive a credit for the amount unapplied portion, as of Closing, of the security and other deposits (together with interest due thereon as may be required by law or made by the Lease), required to be held Emmis Entities under the terms of the Leases exceeds those Station Agreements assumed by Buyer at Closing in accordance with Section 2.3. -----------
(ii) With respect to each vacation or portion thereof earned but not taken before the amount actually transferred Closing Date by each Station employee hired by Buyer, Buyer shall receive a credit equal to Purchaser at Closingthe compensation equivalent thereof.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing inconsistent with the express provisions of this Agreement, the allocations made pursuant to this Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Datemade in accordance with GAAP.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills Three (and reprorated upon receipt of the actual bills or invoices3) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day business days prior to the date Closing Date, the Emmis Entities shall provide Buyer with a reasonably detailed statement (the “Preliminary Adjustment Report”) setting forth in reasonable detail the Emmis Entities’ reasonable and good faith estimate of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to PurchaserClosing Date Adjustments. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after The Purchase Price payable on the Closing Date shall be adjusted based on the responsibility Preliminary Adjustment Report. After the Closing Date, Buyer shall make its determination of Purchaser.
(f) Assignable license the Closing Date Adjustments and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment deliver a written report of such determination to the Purchase Price or proration thereof.
Emmis Entities within ninety (h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (6090) days after the Closing as to all Date. The items except tax prorations, subject to mutual agreement to extend such shown in the Buyer’s report shall be final and binding on the parties for purposes of determining the adjusted Purchase Price under this Section 2.10(d) unless within --------------- sixty (60) day periodbusiness days after receiving such report, the Emmis Entities object to such determination by giving to Buyer written notice setting forth their determination and with respect the basis for their determination. In the event of such an objection and the failure of the parties within twenty (20) business days thereafter to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) abovereach agreement, the parties shall promptly engage PriceWaterhouseCoopers LLP (the “Independent Accounting Firm”) to make such adjustments upon receipt a final determination of the actual tax bills covering the period in which adjusted Purchase Price based on its determination of the Closing Date occursAdjustments. Except as set forth The Emmis Entities and Buyer shall each inform the Independent Accounting Firm in this Section 12, all items writing of income and expense for the period prior to their respective determinations of the Closing Date will be for the account of SellerAdjustments, and all items shall cooperate as reasonably requested by the Independent Accounting Firm in its determination of income and expense for the period on and after the Closing Date will Adjustments. The Independent Accounting Firm shall be instructed to complete its determination of the adjusted Purchase Price within thirty (30) days from the date of its engagement and upon completion to inform the parties in writing of its determination, the basis for its determination and whether the account Emmis Entities’ or Buyer’s written statement of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate Adjustments is closer to expenses incurred, services performed or other amounts allocable to its own determination. The determination by the period prior to Independent Accounting Firm shall be final and binding upon the Closing Date parties for purposes of determining the adjusted Purchase Price under this Section 2.10. The fees of the Independent Accounting Firm shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited by Buyer if the ------------ Emmis Entities’ determination is closer to Seller at Closingthe Independent Accounting Firm’s determination, (ii) by the Emmis Entities if Buyer’s determination is closer to the Independent Accounting Firm’s determination, and promptly following (iii) otherwise 50% by the Closing, Purchaser shall inform such utilities of such change in ownership of Emmis Entities and 50% by Buyer. In the Property. Seller shall, from and after event the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals adjusted Purchase Price as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.finally determined under this Section -------- 2.10
Appears in 1 contract
Prorations and Adjustments. The following shall be prorated and adjusted between Seller and Purchaser as of the day of the ClosingClosing Date, except as otherwise specified:
(a) Collected Rents and other charges, other than for Tenants who owe Delinquent Rents (as hereinafter defined), shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) a. The amount of all security and other Tenant deposits deposits, and interest due thereon, if any, shall be transferred credited to Purchaser. .
b. Purchaser and Seller shall assume at Closing divide the obligationcost of any escrows hereunder equally between them.
c. Water, if anyelectricity, to pay security sewer, drainage, gas, telephone and other deposits to tenants under the Leasesutility charges based, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify practicable, on final meter readings and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law final invoices.
d. Amounts paid or by the Lease), required to be held payable under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at ClosingAssigned Contracts shall be prorated.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, e. All accrued general real estateestate (not recoverable from Tenants), personal property and ad valorem taxes and assessments for the current year applicable to the Project (not recoverable from Tenants)shall be prorated on an accrual basis, utilizing actual final tax year bills, if available prior to Closing. If such bills are not available, then such taxes shall be prorated on the basis of billsthe most currently available tax bills for the Project. Prior to or at Closing, if available Seller shall pay or have paid all tax bills that are due and payable prior to or on the Closing Date and shall furnish evidence of such payment to Purchaser and the Title Company. At Closing, Seller shall cause the Title Company to insure over the 2001 real estate taxes for the Project. Real estate taxes shall not be reprorated after Closing.
f. All assessments, general or special, shall be prorated as of the Closing Date, with Seller being responsible for any installments of assessments which are or have accrued due prior to the Closing, Closing Date and Purchaser being responsible for any installments of assessments which shall be re-prorated are due or will accrue on or after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water g. All Base Rents and sewer service other charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under all Additional Rent, shall be prorated at Closing and there shall be no reproration. At the LeasesClosing, no "Delinquent Rents" (rents or other charges that are due as of the Closing) shall be prorated; providedprorated in favor of Seller. Notwithstanding the foregoing, howeverPurchaser shall use reasonable efforts after the Closing Date to collect any Delinquent Rents (which shall include Base Rents and Additional Rents) due to the Seller from Tenants, that any insurance premiums but Purchaser shall not be prorated, but rather required to xxx any Tenants. At closing Seller shall cancel the Existing Insurance Policies as provide Purchaser with an itemized schedule of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occursDelinquent Rents. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash rents and other charges received by Purchaser from any Tenant after the Closing as shall be first applied to obligations then due which pertain to the period from and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorationsDate. Any excess shall be applied against delinquent and past due obligations owed to, subject to mutual agreement to extend such sixty (60) day periodor for the benefit of, and Seller [with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period those obligations accruing prior to the Closing Date will Date]. In no event, however, shall any sums be paid to the Seller to the extent the Seller has been previously reimbursed for such default out of any security deposit and security deposits have been appropriately prorated hereunder. On or before the account fifteenth (15th) day of Sellereach calendar month, and all items of income and expense for beginning with the period on and after first calendar month following the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by Seller.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the ClosingDate, Purchaser shall inform such utilities provide to Seller an accounting of such change in ownership all Delinquent Rents received by Purchaser during the prior calendar month. On the same date, Purchaser shall remit to Seller one-half (1/2) of the Propertyamount of Delinquent Rents received by Purchaser during the prior calendar month. Seller shall, from and after Purchaser shall retain the Closingbalance of the Delinquent Rents as its fee for collection of same. Seller, at Seller’s sole cost and 's expense, have control over any ongoing tax appeals as shall be entitled to audit on a periodic basis the Property that were commenced prior cash receipts of Purchaser in order to ascertain compliance with the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appealsforegoing.
Appears in 1 contract
Prorations and Adjustments. The following shall be prorated (i) All normal and adjusted between Seller and Purchaser as of customarily pro-ratable items relating to each Property, including, without limitation, Rents paid by the day of the ClosingTenants, except as otherwise specified:
(a) Collected Rents all rent and other chargesincome collected from occupants of each Property, property management fees, repair and maintenance costs, taxes, assessments, debt service payments and all other than for Tenants who owe Delinquent Rents (as hereinafter defined)operating expenses and fees, shall be prorated by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjustedTermination Date, but Purchaser Tenant and/or Aimco being charged or credited, as appropriate, for all of same attributable to the period up to the Termination Date (and credited for any amounts paid by Tenant attributable to the period on or after the Termination Date) and the Landlord and/or AIR being responsible for, and credited or charged, as the case may be, for all of the same attributable to the period on and after the Termination Date. AIR shall cause the rent property manager of each Property to prepare a proration schedule of the prorations described in this Section 4 and other sums for the period prior shall deliver such proration schedule to Closing to be remitted to Seller if, as, and when collected Aimco at least ten (but Purchaser shall not be required to take legal action for such amounts accruing 10) Business Days prior to the Closing)Termination Date. At ClosingNotwithstanding anything to the contrary contained herein or in any Master Lease, Seller each Tenant and Aimco shall deliver remain responsible for any and all costs, expenses and liabilities (including, without limitation, operating costs and expenses and costs and expenses relating to Purchaser a schedule development and leasing work) resulting from their activities under each Master Lease prior to the Termination Date. For the avoidance of all rentdoubt, charges AIR and other amounts payable by tenants Landlord shall be responsible for costs and expenses attributable to their own activities after the Closing Termination Date.
(ii) Except as otherwise provided herein, any revenue or expense amount which cannot be ascertained with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property certainty as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year Termination Date shall be prorated on the basis of billsthe parties’ reasonable estimates of such amount, if available prior and shall be the subject of a final proration ninety (90) days after the Termination Date, or as soon thereafter as the precise amounts can be ascertained. Aimco shall promptly notify AIR when it becomes aware that any such estimated amount has been ascertained. Once all revenue and expense amounts have been ascertained, AIR shall cause to the Closingbe prepared and certified as correct, a final proration statement which shall be re-prorated after Closing on in a form consistent with the basis of actual bills received covering proration statement delivered at the period Termination Date and which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on subject to Aimco’s review and approval. Upon Aimco’s acceptance and approval of any final proration statement submitted by AIR and/or the basis former property manager of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicableeach Property, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date such statement shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be conclusively deemed to be the owner accurate and final, and any payment due to any party as a result of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such final prorations shall be made on the basis of the actual number of within thirty (30) days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered approval by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerAimco.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Prorations and Adjustments. The following items shall be prorated and adjusted between Seller and Purchaser as of the day of parties on the Closing, except as otherwise specifiedProration Date in the following manner:
(a) Collected Rents All real estate taxes (if any), betterment assessments and other chargespersonal property taxes levied, other than imposed or assessed against the Property for Tenants who owe Delinquent Rents the Closing Year shall be prorated. In the event that the final actual real estate tax bill or personal property tax bill for the Closing Year is not available or the tax rate not set at the time of the Closing, the proration shall be based upon the final actual tax bill (as hereinafter defined), same may have been abated) for the immediately preceding year and shall be prorated by credit adjusted retroactively in the manner provided below in this Section when the final actual tax bill for the Closing Year is available. All real estate taxes and personal property taxes for all years prior to Purchaser. Prepaid rents and other charges the Closing Year shall be credited to Purchaserpaid by Seller. The rent All real estate taxes and all other sums personal property taxes for the Closing Year which are due and payable to Seller by any tenant but uncollected as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closing, Seller shall deliver to Purchaser a schedule of all rent, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amounts; provided, however, that any rent received by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment of such tenants’ Delinquent Amounts, if any, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred to Purchaser. Purchaser shall assume at Closing the obligation, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless for the amounts, if material, by which (i) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual or other periodic basis.
(g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with the Assumed Loan and those held by Seller, if any, shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerSeller and shall be pro-rated as provided in this subsection (a).
(ib) Amounts Seller shall cause the water, electricity, gas and other utility meters at the Buildings to be read on deposit with or after the third (3rd) day prior to the Closing Date, and shall pay at the Closing directly to the appropriate utility companies providers all final bills rendered pursuant to such meter readings. If Seller is unable to obtain a final reading of any utility meter on or after such 3rd day prior the Closing Date, then at the Closing the costs of such utility service shall be adjusted as of the Proration Date based on the last bill received by Seller from the supplier of such utility and re-prorated after the Closing.
(c) Collected rents shall be pro-rated as of the Closing Date. From and after the Closing, Seller shall not pursue any rights or remedies against the tenants to recover any rent, operating expense or other delinquencies, and without limitation of the foregoing, Seller shall not seek to dispossess such tenants, disturb their possession of the Property or seek any involuntary bankruptcy of any tenant. Purchaser shall promptly remit to Seller, less the cost of collection, any rent or payments for any charges received by Purchaser subsequent to Closing which are attributable to periods prior to Closing, to the extent such rent or payments were not credited to Seller at Closing.
(d) Collected Deposits, if any, shall be credited to the Purchaser, or if requested by Xxxxxxxxx transferred directly into an account designated by the Purchaser, as of the Closing Date.
(e) Premiums on insurance policies will not be adjusted. As of the Closing Date, Seller will terminate its insurance coverage and promptly following Purchaser will effect its own insurance coverage.
(f) If any such costs or expenses arise or become known to them on or before the Closing Date, they shall be equitably adjusted between the parties in accordance with customary practice in the Boston metropolitan area. The provisions of this Section 8.07 shall survive the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
Appears in 1 contract
Samples: Purchase and Sale Agreement
Prorations and Adjustments. The following At Closing, rents (to the extent prepaid), all real and personal property taxes, water rents, sewer charges, electric and other utility charges, fuel if any, operating expenses, wages, any special assessments, if any, and other similar charges affecting the Property and all utility charges, if any, shall be adjusted and prorated as of midnight of the day prior to the Closing Date. To the extent practicable Seller shall attempt to have utility providers read the meters for the Property on the day prior to Closing for purposes of making such prorations and adjustments. All other charges or fees customarily prorated and adjusted between Seller and Purchaser in similar transactions shall be adjusted at Closing. All rent (other than prepaid rent) payable by the tenant of the Property (which is acknowledged by the parties to be paid in arrears under the Government Lease) shall be adjusted (prorated) as of the day Closing Date and paid in accordance with the following provisions:
(i) Following receipt of the monthly installment of Basic Rent under the Government Lease attributable to the month in which the Closing occurs, such installment shall be adjusted as of the Closing, except as otherwise specified:with Seller being entitled to the portion thereof attributable to the period of the month immediately preceding the Closing Date and Purchaser entitled to the balance of such monthly installment. The party receiving such installment shall pay over to the other party within five (5) business days following receipt the portion of the installment to which the other party is entitled.
(ii) Purchaser shall be entitled to all Basic Rent and other sums due under the Government Lease to the extent collected on any date after the Closing with the exception of (a) Collected Rents common area maintenance (CAM) and other chargesreal estate tax reimbursements attributable to periods prior to the Closing; (b) the Basic Rental for the Closing month to which Seller is entitled under (i) above, other than and (c) to the extent specified in Subsection (iii) below, rentals paid by the Government on account of rental arrearages for Tenants who owe Delinquent Rents periods preceding the Closing. Annual CAM and tax reimbursements, which are payable by the tenant on an annual basis after the conclusion of each calendar year, will be adjusted as of closing, with Seller being entitled to the portion thereof attributable to the period of the year immediately preceding the Closing Date and Purchaser being entitled to the balance of such payment. Purchaser shall pay over to Seller within five (as hereinafter defined)5) business days following receipt the portion of the installment to which the Seller is entitled. Additionally, any post-Closing tenant payments of amounts for special services which were specifically billed by Seller prior to the Closing Date shall be prorated remitted by credit to Purchaser. Prepaid rents and other charges shall be credited to Purchaser. The rent and all other sums which are due and payable Purchaser to Seller by any tenant within five (5) business days following Purchaser’s receipt thereof.
(iii) Rent which is due, but uncollected uncollected, as of the Closing shall not be adjusted, but Purchaser shall cause the rent and other sums for the period prior to Closing to be remitted to Seller if, as, as and when collected (but Purchaser shall not be required to take legal action for such amounts accruing prior to the Closing). At Closingcollected, Seller shall deliver to Purchaser a schedule of all rentless any reasonable, charges and other amounts payable by tenants after the Closing with respect to which Seller is entitled to receive a share under this Agreement, and any amount due and owing to Seller before the Closing by tenants under the Leases which are unpaid on the date of Closing (such amounts are collectively referred to herein as the “Delinquent Amounts”). Rental and other payments received by Purchaser from tenants shall first be applied toward Purchaser’s actual out-of-pocket costs (including reasonable attorneys’ fees) of collection, and then toward the payment of current rent and other charges owed to expenses incurred by Purchaser for periods after the Closing, and any excess monies received shall be applied toward the payment of Delinquent Amountssuch collection; provided, howeverthat, that any rent received except with respect to Basic Rental for the Closing month, which shall be treated as specified in (i) above, all rents collected subsequent to Closing by Purchaser from tenants who owe Delinquent Amounts during the month in which the Closing occurs shall first be applied to the payment current rentals then due which have accrued subsequent to Closing and any remaining amounts shall be applied to rental arrearages as of such tenants’ Delinquent AmountsClosing. Similarly, if anySeller receives any Basic Rent or other sums under the Government Lease which is payable to Purchaser under this Section 9.2, with respect to the month in which the Closing occurs, and not toward the payment of rent and other charges for previous or subsequent months. Purchaser may not waive any Delinquent Amounts or modify a Lease so as to reduce amounts or charges owed under Leases for any period in which Seller is entitled to receive a share of charges or amounts, without first obtaining the written consent of Seller. If a Delinquent Amount due Seller is not paid by a tenant within the later of (x) sixty (60) days after Closing or (y) sixty (60) days after billing therefor, then Seller shall have the right to attempt to effect collection by litigation or otherwise so long as Seller does not take any action which would affect promptly deliver such tenant’s right to occupy its leased premises or terminate its lease. With respect to Delinquent Amounts owed by tenants that are no longer tenants of the Property as of the date of Closing, Seller shall retain all rights relating thereto.
(b) The amount of all security and other Tenant deposits and interest due thereon, if any, shall be transferred sums to Purchaser. Purchaser shall assume Purchaser, at Closing the obligationSeller’s request, if any, to pay security and other deposits to tenants under the Leases, to the extent that such deposits are transferred to Purchaser at Closing. Seller shall indemnify and hold Purchaser harmless will use reasonable efforts for the amounts, if material, by which a period of ninety (i90) the amount of security and other deposits (together with interest due thereon as may be required by law or by the Lease), required to be held under the terms of the Leases exceeds (ii) the amount actually transferred to Purchaser at Closing.
(c) To the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) below, accrued general real estate, personal property and ad valorem taxes and assessments for the current tax year shall be prorated on the basis of bills, if available prior to the Closing, which shall be re-prorated after Closing on the basis of actual bills received covering the period which includes the Closing Date.
(d) Fuel, water and sewer service charges, and charges for gas, electricity, telephone and all other utility and fuel charges, as well as all deposits to utility companies, governmental entities or any other person shall be prorated ratably on the basis of the last ascertainable bills (and reprorated upon receipt of the actual bills or invoices) to the extent not paid directly by tenants under their respective Leases unless final meter readings and final invoices can be obtained. To the extent practicable, Seller shall cause meters for utilities to be read not more than one (1) day prior to the date of Closing.
(e) Amounts due, commissions, up-front revenues and incentives, and prepayments under the Contracts to be assigned to Purchaser. All amounts for services rendered or materials furnished under the Contracts assumed by Purchaser and accruing days after the Closing Date shall be the responsibility of Purchaser.
(f) Assignable license and permit fees paid on an annual to collect past due rental amounts or other periodic basis.
payments owed to Seller in accordance with this Section 9.2. All adjustment items to the extent they cannot be precisely determined at Closing (g) All escrow and reserve accounts (including without limitation, all capital improvement reserves and taxes and insurance escrows) held by Assumed Loan Lender in connection with or to the Assumed Loan and those held by Seller, if anyextent found to be erroneous after the Closing), shall be assigned to Purchaser but there will be no adjustment to the Purchase Price or proration thereof.
(h) Such other items that are customarily prorated in transactions of this nature (including, without limitation, any utilities paid by Seller under the Leases) estimated at Closing and shall be prorated; provided, however, that any insurance premiums shall not be prorated, but rather Seller shall cancel resolved by the Existing Insurance Policies as of Closing (and seek a separate refund from its insurer of any unearned premiums) and thereafter Purchaser shall obtain its own property insurance parties in conformance with the Assumed Loan Documents. Purchaser shall be deemed to be the owner of the Property and, therefore, entitled to the income from the Property and responsible for the expenses of the Property for the entire day upon which the Closing occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing. To the extent information necessary to make such prorations is not available at the Closing or is determined to be inaccurate or incomplete after Closing, the amount of such prorations shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available. All prorations shall otherwise be final. Seller and Purchaser agree to cooperate and use their best efforts to make such adjustments good faith no later than sixty (60) days after the Closing as to all items except tax prorations, subject to mutual agreement to extend such sixty (60) day period, and with respect to tax prorations, to the extent not covered by any tax escrows to be assigned to Purchaser at Closing pursuant to Section 12(g) above, the parties shall make such adjustments upon receipt of the actual tax bills covering the period in which the Closing Date occurs. Except as set forth in this Section 12, all items of income and expense for the period prior to the Closing Date will be for the account of Seller, and all items of income and expense for the period on and after the Closing Date will be for the account of Purchaser, all as determined by the accrual method of accounting. Bills received after the Closing Date which relate to expenses incurred, services performed or other amounts allocable to the period prior to the Closing Date shall be paid by SellerClosing.
(i) Amounts on deposit with utility companies shall be credited to Seller at Closing, and promptly following the Closing, Purchaser shall inform such utilities of such change in ownership of the Property. Seller shall, from and after the Closing, at Seller’s sole cost and expense, have control over any ongoing tax appeals as to the Property that were commenced prior to the Closing and that pertain solely to the periods that Seller owned the Property. Seller shall, as applicable, retain all proceeds or reductions obtained from such appeals or pay all additional taxes or delinquencies imposed for such periods. Seller shall keep Purchaser informed as to any such appeals.
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Samples: Purchase and Sale Agreement (First Potomac Realty Trust)
