Apportionments. With respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply: (a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser. (b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents. (c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser. (d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date. (e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date. (f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder. (g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser. (h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date. (i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits. (j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a). (k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date. (l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals. (m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure. (n) Except as otherwise expressly provided in this Agreement, all apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Date, such prorations and apportionments shall be tentatively prorated on the basis of the best data then available and re-prorated when the information is available. Notwithstanding the foregoing, any adjustment or re-proration pursuant to the two immediately preceding sentences shall be made, if at all, within ninety (90) days after the Closing Date (except with respect to taxes and assessments, in which case such re-proration shall be made within sixty (60) days after the information necessary to perform such re-proration is available). All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for its own insurance as of the Closing Date. (o) On the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold Amount. (p) Except as expressly set forth in Section 7(l) and Section 7(m
Appears in 1 contract
Sources: Portfolio Acquisition Agreement (NorthStar Healthcare Income, Inc.)
Apportionments. With respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the A. The following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated apportioned between the applicable Seller and Purchaser as of the Closing Apportionment Date:
a. real estate taxes, personal property taxes, sewer rents and taxes, fire service charges, and any other governmental tax, including, but not limited to, branch taxes, capital taxes and income taxes, if applicable, or charge levied or assessed whatsoever against the Properties (collectively, the "Properties Taxes"), on the basis of the respective periods for which each is assessed or imposed, to be apportioned in accordance with Section B hereof;
b. water charges to be apportioned in accordance with Section C hereof;
c. charges for electricity, telephone, television, cable television, steam, gas and any other utilities (collectively, "Utilities") made by the utility companies servicing the Properties to be apportioned based on a meter reading obtained by Seller on or near to the Apportionment Date or on the basis of the most recent bills that are available, and transferable utility and other deposits, if any, for which Seller shall be reimbursed if same be assigned, but all amounts refundable under unassigned or unassignable utility and other arrangements shall be delivered to Purchaser for application against deposits for such utilities required of Purchaser;
d. amounts paid or payable (but only the current portion thereof to the extent properly apportionable) under the Franchise Agreements, Service Contracts, Equipment Leases, and Billboard Leases;
e. room charges and other guest charges incurred on or before the Apportionment Date to be apportioned and collected in accordance with Section D hereof;
f. travel agents' commissions, if any;
g. all amounts payable by the Seller in respect of the Employees which require apportionment including, without limiting the generality of the foregoing, accrued but unpaid vacation pay earned prior to the Apportionment Date, premiums for unemployment insurance, premiums for worker's compensation, provincial health taxes, Canada Pension Plan and Quebec Pension Plan premiums and accrued but unpaid wages, salaries, benefits, commissions and other remuneration and shall be reflected in the Working Capital Adjustment; rent and all other charges due under the Space Leases shall be apportioned in accordance with Section F;
h. all rents and other obligations and charges under the Ground Lease, and all prepaid rents and security and other deposits under the Ground Lease, to be apportioned in accordance with Section G hereof;
i. amounts paid for transferable licenses, if any; and
j. value of fuel stored on the Properties, at the price then charged by Seller's supplier, including any taxes, based on their respective days a tank reading obtained by Seller on the Apportionment Date.
B. Properties Taxes shall be apportioned on the basis of ownership of such Property during such assessment yearthe fiscal period for which assessed. If the exact amount of taxes Closing Date shall occur either before an assessment is not known at Closingmade or a tax rate is fixed for the tax period in which the Closing occurs, the proration will apportionment of such Properties Taxes shall be based calculated on an amount equal to 100% the basis of the prior year's Properties Taxes, but, after the assessment year’s taxes and tax rate for the current year are fixed, the apportionment thereof shall be recalculated and the Working Capital Adjustment shall be increased or decreased based on such recalculation.
C. If there are water meters at the Properties, Seller shall endeavor to have the water company servicing each Properties read the meters on or immediately prior to the Apportionment Date. All charges based on such final reading shall be reflected in the Working Capital Adjustment and Purchaser shall be responsible for all charges thereafter. If such readings are not obtainable, then the calculation of Working Capital Adjustment shall be -CC-4- C/M: 11752.0002 350869.22 postponed until such time as actual readings are obtained or in the alternative, Purchaser and Seller may read the meters themselves and adjust the amount based on usage over the billing period that includes the Closing Date. All unpaid water bills in Seller's possession shall be turned over to Purchaser at the Closing and shall be adjusted paid by Purchaser at the Closing, which shall be reflected in the Working Capital Adjustment.
D. Income from the rental of rooms shall be properly credited to Seller to the extent attributable to any period through the Apportionment Date. Room charges for the night commencing on the Apportionment Date and reconciled directly between ending on the applicable Seller morning of the Closing Date shall belong to Purchaser. Any lost revenues suffered by Purchaser in connection with Seller's "Eleventh Night Free" program or other similar marketing schemes shall be properly reflected in the Working Capital Adjustment. Income from food and Purchaser once actual figures become available after Closingbeverage and other sales or services through midnight of the Apportionment Date shall be properly credited to Seller. All such prorations Income from food and beverage and other sales or services on the Closing Date shall belong to Purchaser. No cash adjustment shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after at the Closing Date with respect to any agreements relating to the appealing on account of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchasersuch income.
(b) With respect to each JV Property, E. Prepaid minimum rents and other payments fixed charges payable under the Residency Agreements, the Space Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to for the month in which the Closing occurs shall be prorated based upon apportioned and reflected in the actual number Working Capital Adjustment. If any tenant is in arrears in the payment of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents rent or other fixed charges due for periods months prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment any payments on account of Rents rent or such other fixed charges received by Purchaser from such tenant after the Closing shall be applied first to rent and other charges due for the month immediately preceding the month in which such payments are received and then to preceding months for which there are arrearages (always to the most recent first). If any payments of rent or other fixed charges received by Seller or Purchaser after the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over payable to the other party any Rents collected to which the other is entitled pursuant to the terms by reason of this Agreementallocation, the appropriate sum (less a proportionate share of any reasonable lawyers' fees, costs and other expenses incurred in the collection thereof) shall be promptly reflected in the Working Capital Adjustment. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following At the Closing, Seller shall furnish to Purchaser a complete and correct schedule of all minimum rents and other fixed charges which are then due and payable but which have not been paid. Percentage rents and other variable charges under the right Space Leases, such as payments for real estate taxes and other expenses, which are not fixed in amount, shall be adjusted when and as received based upon the number of days in the payment period that each party owned the Properties. Any security deposits or advance payments of rent held by Seller under the Space Leases shall be assigned to pursue remedies against any resident or tenant of Purchaser at the JV Properties Closing and reflected in the Working Capital Adjustment.
F. Seller shall be responsible for all accrued but unpaid vacation pay, premiums for unemployment insurance, premiums for workers compensation, provincial health taxes, Canada Pension Plan and Quebec Pension Plan premiums, termination pay, severance pay and accrued but unpaid wages, salaries, bonuses, commissions and other remuneration and benefits (a) with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period Employees terminated prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property (b) with respect to its respective JV Property that are transferred or made available to PurchaserEmployees retained after Closing (collectively "Accrued Benefits") and shall be reflected in the Working Capital Adjustment.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies G. All rent and other materials and services paid, incurred or ordered shall be prorated between fixed charges under the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, Ground Lease shall be prorated as of the Closing Apportionment Date. Each Seller will be credited for that portion of taxes Any prepaid rent, security and fees paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, other deposits under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
Ground Lease (g) With respect to each JV Propertyincluding interest thereon, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant payable under the Ground Lease) shall be assigned to clause (i), (ii) or (iii) (as applicable) of Section 8(a)Purchaser and reflected in the Working Capital Adjustment at the Closing.
(k) Salaries, wages H. Any errors or omissions in computing apportionments at Closing shall be promptly corrected as soon as they are discovered and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect any dispute as to the then-current employees (“Facility Employees”) treatment of Seller any errors or WRC at each JV Property omissions shall be prorated between Seller and Purchaser as dealt with in accordance with Section 6.D of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”)Agreement. Purchaser shall applyagrees to indemnify and hold Seller harmless from and against any liability, cost or cause WRC expense resulting from Purchaser's failure to apply, make any such Accrued PTO payment for which it has received a credit pursuant to this Section 7(k) to its intended purpose Section.
I. It is the intent and agreement of the parties that all costs and expenses of operating the Properties and the Business, and all liabilities and revenues therein be for the benefit account of each applicable Facility Employee. Solely as between Seller through the Apportionment Date, and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation Purchaser thereafter. CONTRACT OF SALE by and among CAPITAL PROPERTIES LIMITED PARTNERSHIP, SELLER, SYNDICATED CAPITAL PROPERTIES, INC. SYNCAP PROPERTIES INC. TEGRAD PROPERTIES (WINNIPEG) INC. TEGRAD MONTREAL I INC. 1002370 ONTARIO, INC. and CHARTWELL CANADA CORP., PURCHASER. Properties: DATED AS OF JULY 17, 1996 C/M: 11752.0002 350869.22 TABLE OF CONTENTS Page 1. Sale and Purchase, Description of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January ...................... 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Date, such prorations and apportionments shall be tentatively prorated on the basis of the best data then available and re-prorated when the information is available. Notwithstanding the foregoing, any adjustment or re-proration pursuant to the two immediately preceding sentences shall be made, if at all, within ninety (90) days after the Closing Date (except with respect to taxes and assessments, in which case such re-proration shall be made within sixty (60) days after the information necessary to perform such re-proration is available). All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for its own insurance as of the Closing Date.
(o) On the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold Amount.
(p) Except as expressly set forth in Section 7(l) and Section 7(m
Appears in 1 contract
Apportionments. With respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all income and expenses of the Hotel and the Golf Course with respect to the period prior to the Closing Date shall be for the account of Owner, and all income and expenses of the Hotel and the Golf Course with respect to the period from and after the Closing Date shall be for the account of Buyer. The following specific apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation between the Parties at the Closing as of midnight on the adjustments day immediately preceding the Closing Date (the “Apportionment Time”):
(i) Property taxes shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Date, such prorations and apportionments shall be tentatively prorated apportioned on the basis of the best data then available and re-prorated when fiscal period for which assessed; provided that if a tax ▇▇▇▇ for the information current period has not yet been issued, the apportionment shall be based on Owner’s reasonable estimate of such items based on the assessed value of the Asset taxed for the fiscal year which it is available. Notwithstanding being assessed, or the foregoingprior year’s tax ▇▇▇▇, any adjustment or in either case with a re-proration pursuant subsequent to the two immediately preceding sentences shall be made, if at all, Closing within ninety thirty (9030) days after a current tax ▇▇▇▇ has been received by either Owner or Buyer. Any property tax in respect of periods prior to the Closing Date will be the responsibility of Owner. Taxes for any taxable period that includes (except with respect to taxes and assessments, in which case such re-proration but does not end on the day immediately preceding the Closing Date) shall be made within sixty allocated to the period prior to the Closing Date based on the amount of such taxes for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the portion of such period ending on the day immediately preceding the Closing Date and the denominator of which is the total number days in such period.
(60ii) days after Water and sewer service charges and charges for gas, electricity, telephone and all other public utilities shall be apportioned between Owner and Buyer based on the information necessary to perform such re-proration is available)time at which the corresponding services are consumed. All payments If there are meters measuring the consumption of water, gas or electric current to be made apportioned hereunder, then Owner shall endeavor to cause such meters to be read as a result of the final results of the adjustments Closing Date, and Owner shall be paid pay all utility charges relating to the party entitled to the same within fifteen (15) days after the final determination thereofperiod before such meter reading upon receipt of statements therefor. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser Buyer shall be responsible for arranging causing such utilities and services to be charged to Buyer effective as of the Closing Date, and Buyer shall be liable for its own insurance and shall pay all utility charges for such services rendered from and after the Closing Date. To the extent any such meters are not read as of the Closing Date, the corresponding charges with respect to the Hotel and the Golf Course shall be prorated effective as of the Closing Date by utilizing an estimate of such charges reasonably approved by both Buyer and Owner based on prior bills with respect thereto. Any deposits or credits made or issued with respect to the foregoing services relating to the period prior to the Closing Date shall be credited to Owner. Any apportionment made pursuant to this Section 14.1(iii) shall be subject to adjustment as provided in Section 14.10 below.
(iii) Amounts which have been prepaid or are payable under (a) the Golf Course Lease; (b) the Power Plant Equipment Lease; and (c) the other Assumed Contracts, shall be apportioned between Owner and Buyer as of the Closing Date.
(oiv) On All prepaid operating expenses shall be apportioned between Owner and Buyer as of the Closing Date.
(v) Buyer shall receive a credit at Closing for the reasonable, documented cost to be incurred by Buyer for replacing the items at the Hotel and the Golf Course bearing the Ritz Carlton name and/or logo and used in the operation of the Hotel as of the Closing Date (collectively, the “Ritz Carlton Name Property”) with comparable items without such name and logo; provided, however, that (a) the Buyer’s total credit for such costs shall in no event exceed an amount equal to the lesser of (1) the Hotel’s cost of acquisition of the Ritz Carlton Name Property being replaced; or (2) Two Hundred Fifty Thousand United States Dollars (US$250,000) and (b) merchandise offered for sale at the Hotel and/or the Golf Course as of the Closing Date and bearing the Ritz Carlton name or logo (the “Ritz Carlton Merchandise”) shall not be deemed to constitute part of the Ritz Carlton Name Property. Owner shall, at its sole cost and expense, cause all of the Ritz Carlton Name Property and all such Ritz Carlton Merchandise to be removed from the Hotel and the Golf Course on or before the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community feesif practical, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties if not practical within seven (“Resident Trust Funds”7) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before following the Closing Date; provided, however, that Buyer shall receive reasonable prior written notice of such removal and such removal shall (x) be undertaken during reasonable business hours, (y) not interfere with Buyer’s renovation of the Hotel and (z) be undertaken in a manner that does not damage the Hotel and/or the Golf Course. Purchaser will indemnifyOwner shall have the right to store during such period, defend at Owner’s sole cost, expense and hold Seller harmless from all liabilitiesrisk, claims any Ritz Carlton Name Property and demandsRitz Carlton Merchandise remaining at the Hotel or Golf Course after the Closing Date; provided, including reasonable attorneys’ feeshowever, in that Buyer shall have the event a claim is made against Seller with respect right to reasonably direct Owner where at the Resident Trust Funds with respect Hotel and/or the Golf Course to store such remaining Ritz Carlton Name Property or Ritz Carlton Merchandise, and Buyer shall have no liability to Owner or Operator for any loss, damage or destruction of or to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold Amountremaining Ritz Carlton Name Property or Ritz Carlton Merchandise.
(pvi) Except All other income, expense, charges and fees shall be apportioned between Owner and Buyer as expressly set forth of the Apportionment Time and in Section 7(l) and Section 7(mthe manner customary for apportionment of similar items for similar transactions.
Appears in 1 contract
Sources: Hotel Asset Purchase Agreement (Playa Hotels & Resorts B.V.)
Apportionments. With respect to each JV Property, all revenues (a) The following shall be apportioned between Seller and expenses related to the JV Property operations accruing or relating to the period up to and including Purchaser as of 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong Date, provided that to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating extent any such amount to be apportioned is the period after obligation of Seller as tenant under the Cut-Off Time shall belong to Purchaser. Without limiting the foregoingLease, the following apportionment shall applyoccur as of the date Seller ceases to be required to pay the same under the Lease and, to that extent, no payment shall be due in respect thereof on the Closing Date:
(ai) With respect to each JV Propertyreal estate taxes, all non-delinquent ad valorem real property payments in lieu of taxes, sewer rents and personal property general taxes, water rates and special charges, vault charges and taxes, business improvement district taxes and assessments for such and any other governmental taxes, charges or assessments levied or assessed against the Twenty First Floor Unit (collectively, “Property for Taxes”), on the current assessment year basis of the applicable taxing authority respective periods for which each is assessed or imposed, to be apportioned in which accordance with paragraphs (b) and (c) of Article 11 hereof;
(ii) all other Common Charges (as defined in the Closing Date occurs shall be prorated between the applicable Seller Declaration) and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is any other prepaid utility charges not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date included in Common Charges with respect to any agreements relating to the appealing of Twenty First Floor Unit; and
(iii) such other items as are customarily apportioned in accordance with real estate taxes or real estate tax assessments, including closings of commercial properties in the obligation to pay portions City and State of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of PurchaserNew York.
(b) With Property Taxes shall be apportioned on the basis of the tax period for which assessed. If as of the Closing Date the Twenty First Floor Unit 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, Seller shall pay the unpaid installments of such assessment which are due prior to the Closing Date and Purchaser shall pay the installments which are due on or after the Closing Date.
(c) In the event of any conflict between the foregoing paragraph (b) and the terms and provisions of the Condominium Documents and the Lease with respect to each JV Property, rents and other payments under the Residency Agreementsthis subject, the Leases terms and provisions of the Condominium Documents and the Lease shall govern.
(d) At or prior to the Closing, Seller and Purchaser and/or their respective agents or designees will jointly prepare a preliminary closing statement (the “Preliminary Closing Statement”) which will show the net amount due either to Seller or to Purchaser as the result of the adjustments and prorations provided for herein, and such net due amount will be added to or subtracted from the Balance of the Purchase Price to be paid to Seller at the Closing. Within one hundred twenty (120) days following the Closing Date, Seller and Purchaser will jointly prepare a final closing statement reasonably satisfactory in form and substance to Seller and Purchaser (the “Final Closing Statement”) setting forth the final determination of the adjustments and prorations provided for herein and setting forth any items which are not capable of being determined at such time (and the manner in which such items shall be determined and paid). The net amount due Seller or Purchaser, if any, by reason of adjustments to the Preliminary Closing Statement as shown in the Final Closing Statement, shall be paid in cash by the party obligated therefor within thirty (30) days following that party’s receipt of the approved Final Closing Statement. The adjustments, prorations and determinations agreed to by Seller and Purchaser in the Final Closing Statement shall be conclusive and binding on the parties hereto, except for (i) any items which are not capable of being determined at the time the Final Closing Statement, which items shall be determined and paid in the manner set forth in the Final Closing Statement when such items may be determined, (ii) any amounts payable in respect of the Leaseback Premises and (iii) other amounts payable hereunder pursuant to provisions of this Agreement which expressly survive the Closing. Prior to and following the Closing Date, each party shall provide the other (and shall cause the Condominium to provide the other) with such information as the other shall reasonably request (including, without limitation, access to the Boca Ciega Bay Lease books, records, files, ledgers, information and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing data with respect to the month Property during normal business hours upon reasonable advance notice) in which order to make the Closing occurs preliminary and final adjustments and prorations provided for herein. If the parties are unable to agree on these adjustments and prorations, then any dispute with respect thereto shall be prorated based upon the actual number of days in such month. Any payments of Rents collected resolved by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable arbitration before a single arbitrator in the following order Borough of priority: (i) firstManhattan, City of New York, in payment of Rents for accordance with the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each Commercial Arbitration Rules of the parties hereto American Arbitration Association (“AAA”) (Expedited Procedures). No arbitrator shall be obligated have the power to pay over add to, subtract from, or otherwise have the power to modify the other party any Rents collected to which the other is entitled pursuant to the terms provisions of this Agreement. For a period The decision in any such arbitration shall be binding and conclusive on Seller and Purchaser. Judgment and equitable relief may be had on the decision and award of one hundred eighty (180) days after Closingthe arbitrator so rendered in any court of competent jurisdiction. Notwithstanding anything to the contrary contained in the Commercial Arbitration Rules, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit notices to Seller and Purchaser will be given in accordance with the Rents for each JV Property notice provisions of this Agreement. In no event will either party be entitled to consequential or punitive damages with respect to all periods prior any matter to be resolved by arbitration. Each party shall pay its own costs, fees and expenses in accordance with any arbitration. The fees and expenses of the Closing. Following arbitrator and AAA shall be shared equally by Seller and Purchaser, except if the arbitrator shall determine that one party was the prevailing party and that its share of such fees and expenses should be paid by the non-prevailing party, then the non-prevailing party shall pay such fees and expenses.
(e) At the Closing, Seller shall have the right to pursue remedies against prepay any resident or tenant of amounts payable by Seller under the JV Properties with respect to pre-Closing deficiencies Lease for such period, if any, as Seller may elect in payment of Rents.
(c) With respect to each JV Propertyits sole discretion. If Seller exercises such right, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller then Purchaser shall receive a credit at Closing for against the Balance in the amount of such prepayment. Seller shall give Purchaser not less than three (3) Business Days’ notice of any deposits made intention by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to prepay amounts under the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing DateLease.
(f) With respect to each JV PropertyAll prorations shall be complete and final no later than six (6) months after Closing or, all payments and receipts, as if applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Lease Expiration Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms provisions of this Section 7(n). To Article 11 shall survive the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Date, such prorations and apportionments shall be tentatively prorated on the basis of the best data then available and re-prorated when the information is available. Notwithstanding the foregoing, any adjustment or re-proration pursuant to the two immediately preceding sentences shall be made, if at all, within ninety (90) days after the Closing Date (except with respect to taxes and assessments, in which case such re-proration shall be made within sixty (60) days after the information necessary to perform such re-proration is available). All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for its own insurance as of the Closing Date.
(o) On the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold AmountARTICLE 12.
(p) Except as expressly set forth in Section 7(l) and Section 7(m
Appears in 1 contract
Sources: Contract of Sale
Apportionments. With respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all income and expenses of the facilities operating on the Real Property with respect to the period prior to the Closing Date shall be for the account of Seller, and all income and expenses of the facilities operating on the Real Property with respect to the period from and after the Closing Date shall be for the account of Purchaser. The following specific apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation between the parties at the Closing as of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined 11:59 p.m. Arizona time on the day immediately prior to the Closing DateDate (the “Apportionment Time”):
10.1.1 real estate taxes, such prorations personal property taxes, special assessments and apportionments shall be tentatively prorated vault charges, if any, on the basis of the best data then available and re-prorated when fiscal period for which assessed; provided that if a tax ▇▇▇▇ for the information current period has not yet been issued, the apportionment shall be based on Seller’s estimate of such taxes based on the assessed value of the Property for the fiscal year which is available. Notwithstanding being assessed, or the foregoingprior year’s tax ▇▇▇▇, any adjustment or in either case with a re-proration pursuant subsequent to Closing promptly after a current tax ▇▇▇▇ has been issued. Any tax refunds or abatements in respect of periods prior to the two immediately preceding sentences Closing Date will belong to Seller, and any tax refunds or abatements in respect of periods subsequent to the Closing Date will belong to Purchaser. Purchaser shall be madehave the right to commence, if at all, within ninety (90) days continue and settle any proceeding to contest real estate taxes and other assessments which include any period of time from and after the Closing Date Date; provided, however, that (except with respect to taxes and assessments, in which case such re-proration shall be made within sixty (60a) days after the information necessary to perform such re-proration is available). All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree extent that none any proceeding includes any period of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for its own insurance as of the Closing Date.
(o) On the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on time before the Closing Date and the commencement, continuation or settlement of such proceeding could reasonably be expected to result in an increase in real estate taxes (including interest and penalties) and other assessments for residents at JV Properties which Seller would be liable, Purchaser shall not commence, continue or settle such proceeding without the prior express, written consent of Seller, which consent may be withheld in Seller’s sole and absolute discretion; and (“Resident Trust Funds”b) (which for the avoidance Seller shall be entitled to that portion of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, any refund or tax benefit relating to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds period occurring before the Closing Date. after payment to Purchaser will indemnifyof all costs and expenses, defend and hold Seller harmless from all liabilitiesincluding, claims and demandswithout limitation, including reasonable attorneys’ feesfees and disbursements, actually incurred by Purchaser in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to obtaining such refund or in obtaining any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth tax benefits including benefits based on decreases in this Section 7(o) shall not be subject to the Threshold Amount.
(p) Except as expressly set forth in Section 7(l) and Section 7(massessed valuation; 10
Appears in 1 contract
Sources: Purchase and Sale Agreement
Apportionments. With respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all income and expenses of the facilities operating on the Real Property with respect to the period prior to the Closing Date shall be for the account of Seller, and all income and expenses of the facilities operating on the Real Property with respect to the period from and after the Closing Date shall be for the account of Purchaser. The following specific apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation between the parties at the Closing as of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined 11:59 p.m. Arizona time on the day immediately prior to the Closing DateDate (the “Apportionment Time”):
10.1.1 real estate taxes, such prorations personal property taxes, special assessments and apportionments shall be tentatively prorated vault charges, if any, on the basis of the best data then available and re-prorated when fiscal period for which assessed; provided that if a tax ▇▇▇▇ for the information current period has not yet been issued, the apportionment shall be based on Seller’s estimate of such taxes based on the assessed value of the Property for the fiscal year which is available. Notwithstanding being assessed, or the foregoingprior year’s tax ▇▇▇▇, any adjustment or in either case with a re-proration pursuant subsequent to Closing promptly after a current tax ▇▇▇▇ has been issued. Any tax refunds or abatements in respect of periods prior to the two immediately preceding sentences Closing Date will belong to Seller, and any tax refunds or abatements in respect of periods subsequent to the Closing Date will belong to Purchaser. Purchaser shall be madehave the right to commence, if at all, within ninety (90) days continue and settle any proceeding to contest real estate taxes and other assessments which include any period of time from and after the Closing Date; provided, however, that (a) to the extent that any proceeding includes any period of time before the Closing Date and the commencement, continuation or settlement of such proceeding could reasonably be expected to result in an increase in real estate taxes (except with respect to taxes including interest and assessmentspenalties) and other assessments for which Seller would be liable, Purchaser shall not commence, continue or settle such proceeding without the prior express, written consent of Seller, which consent may be withheld in which case such re-proration Seller’s sole and absolute discretion; and (b) Seller shall be made within sixty (60) days entitled to that portion of any refund or tax benefit relating to the period occurring before the Closing after payment to Purchaser of all costs and expenses, including, without limitation, reasonable attorneys’ fees and disbursements, actually incurred by Purchaser in obtaining such refund or in obtaining any tax benefits including benefits based on decreases in assessed valuation;
10.1.2 water and sewer service charges and charges for gas, electricity, telephone and all other public utilities. If there are meters measuring the information necessary consumption of water, gas or electric current, Seller, not more than one day prior to perform the Apportionment Time, if possible, shall endeavor to cause such re-proration is available). All payments meters to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller read, and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination all utility bills for which Seller is liable upon receipt of the policies relating to its respective Property), and statements therefor. Purchaser shall be responsible for arranging for causing such utilities and services to be changed to its own insurance name effective as of the Closing Date.Date and shall be liable for and shall pay all utility bills for services rendered from and after the Closing Date and Seller shall receive a credit at Closing for all utility deposits held by any utilities on the Closing Date that are transferred to Purchaser and provided such deposit remains on deposit for the benefit of Purchaser;
10.1.3 amounts which have been paid or are payable under the Contracts assigned to and assumed by Purchaser at Closing, except as otherwise set forth in Section 10.1.7 below, amounts which have been paid or are payable under the Property Leases, and amounts which have been received under the Space Leases;
10.1.4 prepaid operating and advertising expenses (o) On excluding expenses for advertising that is aired, mailed or published on or after the Closing Date, which shall be Purchaser’s sole expense) to the extent the item for which such expense was incurred is transferred to Purchaser;
10.1.5 commissions of credit and referral organizations related to Bookings;
10.1.6 all other charges and fees customarily prorated and adjusted in similar transactions. Purchaser shall receive a credit at Closing for the face amount of any gift certificates or vouchers for free or reduced rate rooms (or if no face amount is given an amount equal to $150 per room per night), and 50% of the face amount of any gift certificates or vouchers for free or reduced food and beverage or other services which have been issued but not redeemed prior to Closing; and
10.1.7 from and after the Apportionment Time Purchaser shall pay for all work performed under any Construction Contracts assigned to and assumed by Purchaser at Closing, and at Closing, Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, credit equal to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller retainage then held by or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions on behalf of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect work to the Resident Trust Funds with respect to be performed under any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold AmountConstruction Contract.
(p) Except as expressly set forth in Section 7(l) and Section 7(m
Appears in 1 contract
Apportionments. With respect to each JV Property, all revenues (a) The following shall be apportioned between Seller and expenses related to the JV Property operations accruing or relating to the period up to and including Purchaser as of 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”the "Apportionment Date") shall belong to on the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year basis of the applicable taxing authority in actual number of days of the month which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser have elapsed as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes Date and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in the month and a 365 day year:
(i) real estate taxes, sewer rents and taxes, water rates and charges (to the extent not accounted for pursuant to clause (i) above), vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Premises (collectively, "Property Taxes"), on the basis of the respective periods for which each is assessed or imposed, to be apportioned in accordance with Section 7(c); and
(ii) such monthother items as are customarily apportioned in accordance with real estate closings of commercial properties in the City of New York, State of New York.
(b) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to If the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents occur either before an assessment is made or a tax rate is fixed for the month tax period in which the Closing Date occurs, with the apportionment of such amounts being prorated between Seller and Purchaser Property Taxes based upon the number of days each owned the applicable JV Property during the month in which thereon shall be made at the Closing occurs; (ii) second, in payment of Rents Date by applying the tax rate for the month immediately preceding year to the month in which the Closing occurs; (iii) thirdlatest assessed valuation, in payment of Rents for any month which commenced but, promptly after the Closingassessment and/or tax rate for the current year are fixed, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto apportionment thereof shall be obligated to pay over recalculated and Seller or Purchaser, as the case may be, shall make an appropriate payment to the other party within five (5) business days based on such recalculation. If as of the Closing Date the Premises or any Rents collected to portion thereof shall be affected by any special or general assessments which are or may become payable in installments of which the other first installment is entitled pursuant to then a lien and has become payable, Seller shall pay the terms unpaid installments of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods such assessments which are due prior to the Closing. Following Closing Date and Purchaser shall pay the Closinginstallments which are due on or after the Closing Date, Seller shall have the right to pursue remedies against any resident or tenant with apportionment as of the JV Properties with respect to pre-Closing deficiencies in payment of RentsApportionment Date.
(c) With respect to each JV PropertyPromptly following the execution of this Agreement, the applicable Seller shall request each utility company providing utility service prepare and file with the New York City Department of Finance (and any other required governmental authority) all required applications needed to separate Lot 58 into two separate tax parcels, one of which will consist of the applicable JV Property to cause all utility L▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, that portion of the Lot 58 Land below the Fee Above a Plane and the Owner Utilized Development Rights (the “Owner Tax Parcel”), and the - 12 – other of which will consist of the real property rights and interests contemplated by this Agreement to be closed sold by Seller to Purchaser, and billed as consisting of the Closing Date in order that utility charges may Fee Above a Plane and the Excess Development Rights, (the “Sale Tax Parcel”). All costs and expenses of such separation shall be separately billed borne solely by the Seller, and Purchaser shall have the right to approve (such approval not to be unreasonably withheld) all such filings and applications by Seller. The purpose of such separation is (i) for the period prior to the Closing Date and the period on Property, from and after the Closing Date. In Closing, to be burdened with the event any such utility charges are not separately billedobligations of the Sale Tax Parcel, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing and (ii) for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property Seller’s taxes obligation with respect to its respective JV Property Lot 58, from and after the closing, to be reduced as a result of the conveyance to Purchaser of the Fee Above a Plane and the Excess Development Rights, and further to insure that Seller’s real property tax obligations with respect to Lot 58 are transferred not increased as a result of the construction of any improvements on or made available within the Fee Above a Plane or otherwise utilizing any of the Excess Development Rights. Notwithstanding anything to Purchaserthe contrary contained herein, (x) if Seller is unable to create such separate tax parcels by the Scheduled Closing Date (as defined below), Seller may, upon at least ten (10) business days' prior notice to Seller, adjourn the Scheduled Closing Date for a period of up to thirty (30) days, and (y) in no event shall Seller be required to finalize the creation of such separate tax parcels until such time that Purchaser delivers to Seller the Termination Waiver Notice (as defined below). Notwithstanding anything contained herein to the contrary, in the event Seller is unable to obtain the New York City Department of Finance’s approval for the Sale Tax Parcel as currently contemplated herein, (i) the Fee Above a Plane shall be revised to include that portion of Lot 58 containing the volume of space which lies above a horizontal plane having an elevation commencing fifteen (15) feet above the existing roof of the L▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (▇▇) the parties shall make such modifications to the ZLDA as reasonably necessary to reflect the revised Fee Above a Plane and (ii) the parties shall make such other modifications to the ZLDA as reasonably necessary to achieve the purpose and intent of the three dimensional Fee Above a Plane as currently contemplated herein.
(d) With respect If there are water meters at the Premises, the unfixed water rates and charges and sewer rents and taxes covered by meters, if any, shall be apportioned (i) on the basis of an actual reading done within ten (10) days prior to each JV Propertythe Apportionment Date, or (ii) if such reading has not been made, on the basis of 110% of the last available reading. If the apportionment is not based on an actual current reading, then upon the taking of a subsequent actual reading, the Parties shall, within ten (10) business days following notice of the determination of such actual reading, readjust such apportionment and Seller shall deliver to Purchaser or Purchaser shall deliver to Seller, as the case may be, the amount determined to be due upon such readjustment. Seller shall endeavor to obtain and deliver to Purchaser at Closing a current water meter reading.
(e) Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be billed to Seller's account up to the Apportionment Date and, from and after the Apportionment Date, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered utilities shall be prorated between the applicable Seller and Purchaser billed to Purchaser's account. If for any reason such changeover in billing is not practicable as of the Closing Date.
(e) Except , as covered by the terms of Section 7(a) aboveto any Utility, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, such Utility shall be prorated as apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the Closing Datemost recent bills that are available. Each If any apportionment is not based on an actual current reading, then upon the taking of a subsequent actual reading, the Parties shall, within ten (10) business days following notice of the determination of such actual reading, readjust such apportionment and Seller will shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Seller, as the case may be, the amount determined to be credited for that portion of taxes and fees paid by due upon such Seller allocable to the period after the Closing Dateadjustment.
(f) With respect Not more than ten (10) nor fewer than seven (7) business days prior to each JV Propertythe Closing, all payments Escrow Agent will prepare a preliminary closing statement (the "Preliminary Closing Statement") which will show the net amount due either to Seller or to Purchaser as the result of the adjustments and receiptsprorations provided for herein, and such net due amount will be added to or subtracted from the cash balance of the Purchase Price to be paid to Seller at the Closing pursuant to Section 4, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of . Within sixty (60) days following the Closing Date, Seller and Purchaser will jointly prepare a final closing statement reasonably satisfactory to Seller and Purchaser in form and substance (the "Final Closing Statement") setting forth the final determination of the adjustments and prorations provided for herein and setting forth any items which are not capable of being determined at such time (and the manner in which such items shall be determined and paid), if any. If no adjustments or prorations are required, then the Preliminary Closing Statement shall be deemed to be the Final Closing Statement. The applicable net amount due Seller or Purchaser, if any, by reason of adjustments to the Preliminary Closing Statement as shown in the Final Closing Statement, shall receive a credit be paid in cash by the Party obligated therefor within five (5) business days following that Party's receipt of the approved Final Closing Statement. The adjustments, prorations and determinations agreed to by Seller and Purchaser in the Final Closing Statement shall be conclusive and binding on the Parties hereto except for all prepayments any items which are not capable of being determined at the time the Final Closing Statement is agreed to by Seller and deposits thereunderPurchaser, which items shall be determined and paid in the manner set forth in this Section 7 and except for other amounts payable pursuant to this Agreement pursuant to provisions which survive the Closing other than this Section 7. Prior to and following the Closing Date, each Party shall provide the other with such information as the other shall reasonably request (including, without limitation, access to the books, records, files, ledgers, information and data with respect to the Property and the Excess Development Rights during normal business hours upon reasonable advance notice) in order to make the preliminary and final adjustments and prorations provided for herein.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership The provisions of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct survive the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Date, such prorations and apportionments shall be tentatively prorated on the basis of the best data then available and re-prorated when the information is available. Notwithstanding the foregoing, any adjustment or re-proration pursuant to the two immediately preceding sentences shall be made, if at all, within ninety (90) days after the Closing Date (except with respect to taxes and assessments, in which case such re-proration shall be made within sixty (60) days after the information necessary to perform such re-proration is available). All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for its own insurance as of the Closing DateClosing.
(o) On the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold Amount.
(p) Except as expressly set forth in Section 7(l) and Section 7(m
Appears in 1 contract
Apportionments. With respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all income and expenses of the Hotel with respect to the period prior to the Closing Date shall be for the account of Hotel Seller, and all income and expenses of the Hotel with respect to the period from and after the Closing Date shall be for the account of Purchaser. The following specific apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation between the parties at the Closing as of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined 11:59 p.m. on the day immediately prior to the Closing Date (the “Apportionment Date”).
(a) real estate taxes, such prorations personal property taxes, special assessments and apportionments shall be tentatively prorated vault charges, if any, on the basis of the best data then available and re-prorated when fiscal period for which assessed; provided that if a tax ▇▇▇▇ for the information is available. Notwithstanding current period has not yet been issued, the foregoing, any adjustment or apportionment shall be based on the prior year’s tax ▇▇▇▇ with a re-proration pursuant subsequent to Closing promptly after a current tax ▇▇▇▇ has been issued. The parties acknowledge that the Hotel and the Land are not assessed for real estate taxes separately from other property owned by the Land Seller; therefore, the parties agree that the share of real estate taxes fairly allocated to the two immediately preceding sentences Hotel and the Land for purposes of the Closing and Pro-Ration Statement shall be madeagreed upon by the parties before the end of the Feasability Period. At the request of either party to this Agreement, if the other party shall cooperate, at allno cost to itself, within ninety (90) days after with any application for tax refunds or abatements for the Property. Any tax refunds or abatements in respect of periods prior to the Closing Date will belong to Seller;
(except with respect to taxes b) water and assessmentssewer service charges and charges for gas, in which case such re-proration electricity, telephone and all other public utilities (provided that no adjustment shall be made within sixty (60) for unmetered gas or fuel oil stored on the Land, all of which shall be transferred with the Hotel at no additional cost to Purchaser). If there are meters measuring the consumption of water, gas or electric current, Seller, not more than one day prior to the Apportionment Date, shall cause such meters to be read, and shall pay all utility bills for which Seller is liable upon receipt of statements therefor; where there are no such meters, or where the applicable utility is unable or unwilling to read the meters prior to Closing, such charges for utilities shall be apportioned between the parties based upon the number of days in the then current billing period before and after the information necessary to perform such re-proration is available)Apportionment Date. All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for causing such utilities and services to be changed to its own insurance name effective as of the Closing Date.
(o) On Date and shall be liable for and shall pay all utility bills for services rendered from and after the Closing Date;
(c) amounts which have been paid or are payable under the Service Contracts, the Seller will provide Equipment Leases and Space Leases assigned to and assumed by Purchaser a true, correct, at Closing;
(d) Advance Deposits and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held other amounts received by Seller (whether paid in cash or by credit card) in respect of Rooms Agreements and Bookings to be fulfilled on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before after the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold Amount.;
(pe) Except as expressly set forth prepaid operating and advertising expenses;
(f) commissions of credit and referral organizations related to bookings for which Purchaser shall receive payment;
(g) outstanding gift certificates; and
(h) all other charges and fees customarily prorated and adjusted in Section 7(l) and Section 7(msimilar transactions.
Appears in 1 contract
Sources: Purchase and Sale Agreement
Apportionments. With 7.01 The following shall be apportioned with respect to each JV Propertythe Property as of 12:01 a.m., all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong of closing, as if Purchaser were vested with title to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to during the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall applyentire day upon which closing occurs:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments levied against the Property;
(b) gas, electricity and other utility charges for which Seller is liable, if any, such Property for charges to be apportioned at closing on the current assessment year basis of the applicable taxing authority most recent meter reading occurring prior to closing; and
(c) any other operating expenses or other items pertaining to the Property which are customarily prorated between a purchaser and a seller in the area in which the Closing Date occurs shall be prorated between Property is located.
(d) Notwithstanding the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Propertyforegoing, Purchaser shall be solely responsible forfor all taxes and assessments, gas, electric and shall report other utilities charge and payall operating expenses or items pertaining to the Property during the period of its post-Closing possession, all state pursuant to a Surrender Agreement to be executed and local sales or use taxes imposed in connection with delivered at the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of PurchaserClosing.
7.02 Notwithstanding anything contained in the foregoing provisions:
(ba) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected Any taxes paid at or prior to Closing with respect to the month in which the Closing occurs closing shall be prorated based upon the actual number of days in such monthamounts actually paid. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due If taxes and payable in the following order of priority: (i) first, in payment of Rents assessments for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall current year have not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees been paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoingbefore closing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC charged at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser closing an amount equal to that portion of such taxes and assessments which relates to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, period before closing and Purchaser shall pay Seller an amount equal the taxes and assessments prior to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of their becoming delinquent. Any such difference is equal to or exceeds $250,000, and Seller shall not be entitled apportionment made with respect to a credit tax year for which the tax rate or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreementassessed valuation, all apportionments and adjustments or both, have not yet been fixed shall be made in accordance with generally accepted accounting principles. The computation of based upon the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n)tax rate and/or assessed valuation last fixed. To the extent that the exact actual taxes and assessments for the current year differ from the amount apportioned at closing, the parties shall make all necessary adjustments by appropriate payments between themselves following closing.
7.03 If on the date hereof the Property or any part thereof shall be or shall have been affected by a special assessment or assessments which are or 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 all the unpaid installments of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Datesuch assessment, such prorations including those which are to become due and apportionments payable after closing, shall be tentatively prorated on payable by the basis of the best data then available and re-prorated when the information is available. Notwithstanding the foregoing, any adjustment Purchaser at or re-proration pursuant subsequent to the two immediately preceding sentences shall be madeclosing (subject, if at all, within ninety (90) days after the Closing Date (except with respect to taxes and assessments, in which case such re-proration shall be made within sixty (60) days after the information necessary to perform such re-proration is available). All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for its own insurance as of the Closing Date.
(o) On the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicablehowever, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, adjustment as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold Amount.
(p) Except as expressly set forth provided in Section 7(l) and Section 7(m7.01 hereof).
Appears in 1 contract
Apportionments. With (a) At the Closing, the following items shall, with respect to each JV Propertythe Properties, all revenues be apportioned between Sellers and expenses related Purchaser on a per diem basis, so that, except as provided in this Section 4.02, Sellers shall be responsible for those items of expense and credited with those items of income that are attributable to the JV period prior to 12:01 A.M. of the Closing Date and Purchaser shall be responsible for those items of expense and credited with those items of income that are attributable to the period on or after 12:01 A.M. of the Closing Date: rents (including without limitation Ground Lease rent (if applicable), base rent, percentage rent (if any), additional rent, common area maintenance reimbursements, marketing fund contributions, operating expense and tax reimbursements, and other additional rent) (collectively "Rents"); prepaid and accrued expenses (including, without limitation, interest, payments with respect to Existing Secured Indebtedness, ground rent, utility charges, water and sewer charges (unless such payment is to be made directly by any Tenant), fees for licenses and permits, fuel, steam, gas and electricity charges, annual license, permit and inspection fees, payments under reciprocal easement agreements and payments to merchants associations and/or promotional funds maintained by Sellers, and obligations under the Contracts assumed by Purchaser; and real and personal ad valorem and other taxes and assessments ("Ad Valorem Taxes") against such Property; provided that:
(i) If the Ad Valorem Taxes for the tax year in which the Closing Date occurs are not known or cannot reasonably be estimated, they shall be adjusted based on an estimate obtained using the then current assessed value of such Property operations accruing as of the Closing Date and the tax rate and multiplier reflected by the most recent Ad Valorem Taxes due. Within sixty (60) days after the Ad Valorem Taxes for the year in which the Closing occurs are known, adjustments shall be made between the parties. Seller shall be responsible for any "recoupment" or similar taxes or assessments payable with respect to any period prior to Closing.
(ii) MOP shall have the right to control all tax certiorari and tax reduction proceedings relating to the period up Properties for tax years prior to and including 11:59 p.m. (New York time) on the day immediately preceding tax year in which the Closing Date occurs and shall keep Purchaser informed with respect thereto. Any tax refund or credit obtained by any Seller or MOP (“Cut-Off Time”net of any costs of obtaining such refund) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating attributable (A) to the period after prior to the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment tax year of the applicable taxing authority in which the Closing Date occurs shall be prorated between paid, FIRST, to Tenants entitled thereto and SECOND, to the applicable respective Seller or MOP, and Purchaser as of (B) to the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after tax year in which the Closing Date occurs shall be apportioned between such Seller or MOP, as applicable, and Purchaser, with respect the portion allocable to any agreements relating such Seller or MOP to be applied as provided in clause (A) and the appealing of real estate taxes or real estate tax assessments, including the obligation balance paid to pay portions of amounts of real estate tax savings and costs and expenses related theretoPurchaser. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed any proceeding in connection with the sale and transfer respect of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month a tax year in which the Closing Date occurs, Purchaser shall coordinate its efforts with such amounts being prorated between Seller MOP, shall keep MOP reasonably informed with respect thereto and Purchaser based upon shall not settle the number same without the consent of days each owned the applicable JV Property during the month in MOP, which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; consent shall not be unreasonably withheld or delayed.
(iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto Sellers shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period accrued prior to the Closing Date and all utilities thereafter shall be paid for by Purchaser. Sellers and MOP shall be entitled to a credit on the Settlement Statement for all deposits held by utility companies as of the Closing Date, and Sellers' deposits shall be assigned to Purchaser.
(iv) The parties agree that, except as otherwise specifically stated elsewhere in this Agreement, all income and expenses (including, without limitation, owners' association or similar dues, fees and assessments) of the Conveyed Property are intended to be prorated as of 12:01 A.M. of the Closing Date. It is the intent of the parties that, unless otherwise specified in this Agreement, income generated from or by the Conveyed Property on the date of Closing shall be payable to Purchaser and expenses attributable to the Conveyed Property on the date of Closing shall be paid by Purchaser. Purchaser shall be deemed the owner of the Conveyed Property, for the purpose of such calculation, for the entire Closing Date. Income shall include all revenue of Seller derived from the operation of the Conveyed Property, including all rents and pass-throughs collected from Tenants. Expenses shall include all expenses from the operation of the Conveyed Property, and, for purposes of this paragraph, including debt service on Existing Secured Indebtedness. Any income received by Seller attributable to any period on and or after the Closing Date shall appear on the closing statement as a credit to Purchaser. Subsequent to the Closing Date, any income received by Seller attributable to any period after the Closing Date. In the event , and any such utility charges are not separately billedincome received by Purchaser attributable to any period before, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date (unless, in either case, credits were received or taken at Closing) shall promptly be reimbursed by the party receiving said income to the party entitled to said income. Expenses actually paid by Seller prior to the Closing in payment for any period on or after the Closing Date shall appear on the closing statement as a credit to Seller. Expenses paid by Purchaser which are attributable to the period before the Closing Date shall be repaid by Seller to Purchaser.
(v) Notwithstanding anything to the contrary in subsection (iv) above, rents under the Leases, including, without limitation, fixed rent and additional rent, including operating expenses and real estate tax pass-throughs and other reimbursements payable by Tenants (collectively, "Rents"), shall be addressed in the manner set forth in this subsection (v). All Rents collected prior to Closing shall be prorated as of 12:01 A.M. of the Closing Date based on the actual number of days in the month that the Closing occurs. Each All prepaid Rents (for periods following the Closing) paid to or in possession of Seller shall receive appear on the closing statement as a credit to Purchaser at the Closing. No proration shall be made for Rents from Tenants that are delinquent as of the Closing Date (the "Tenant Delinquent Rents"). Any Rents paid to any Seller or MOP by the Tenants on or after the Closing Date, other than Tenant Delinquent Rents described in clause (d) of the definition of Excluded Assets, shall be held in trust and forth with paid by such Seller or MOP to Purchaser or applicable Property Transferee. Seller shall be entitled, after Closing, to pursue an action for any deposits made damages against Tenants for Tenant's Delinquent Rents.
(vi) All unpaid Lease commissions, tenant improvement costs, and other concessions, including but not limited to all Lease related costs, free rent, moving allowances, and cash payments incurred by Seller in connection with providing water, sewer, gas, electricity, telephone the current term (but not any renewal term) of all Leases that were executed and other public utilities delivered prior to the JV Property with respect Effective Date, and which are due during the current term of the subject Lease, and which are not paid by Seller on or before Closing shall be the responsibility of Seller and shall be paid or credited to its respective JV Property that are transferred or made available to PurchaserPurchaser at the Closing.
(dvii) All security deposits (including any interest thereon to the extent payable to the applicable Tenants) not theretofore properly applied to obligations under the applicable Leases shall be delivered by MOP or Sellers to Purchaser at the Closing, or, in the alternative, MOP may elect to give Purchaser a credit in the amount of such security deposits. At no cost to Sellers or MOP, effective as of the Closing Date, MOP and Sellers shall either assign their rights under all letters of credit serving as security deposits to Purchaser or, if any such letters of credit are not assignable, shall cooperate with Purchaser in arranging for the transfer thereof to Purchaser, and, pending such transfer, MOP shall act as Purchaser's agents in (without any fiduciary obligation thereto) presenting any draws under, and in otherwise administering such letters of credit.
(viii) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise any taxes due in the ordinary course of business) and accounts payable connection with Rent for the JV Property owing as month in which Closing occurs, Seller shall provide Purchaser with an estimate of such amount no later than three (3) days prior to the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered Date. Seller shall be prorated liable for the pro rata portion of such monthly amount that is attributable to the time period between the applicable Seller first day of such calendar month and the Closing Date, and Purchaser as shall receive a credit for same on the Settlement Statement. In the event the actual amount of said taxes due in connection with Rent for such month differs from such estimated amount, the parties shall adjust such credit accordingly within sixty (60) days of the Closing Date.
(eix) Except Attached hereto as covered Exhibit D-2 is the schedule and allocation of reserves and escrows for and relating to the Properties, which, Sellers represent and warrant, is a true, accurate and complete schedule of all such reserves and escrows paid to any third parties or held by Seller. Other than the terms of Section 7(aamounts and purposes for which said sums have been paid and/or collected as shown on Exhibit D-2, there are (or prior to Closing will be) above, no other reserves or escrows payable for or with respect to each JV Property, all water the Properties. The representation and sewer charges, taxes warranty in this subsection (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost ix) shall be true and have a value which will survive correct at Closing, save and any unpaid taxes payable except for changes in arrearsline item amounts resulting from payments made prior to Closing. Exhibit D-2 sets forth whether a party hereto is receiving a credit at Closing for a particular reserve or escrow, and the credits due to Seller and Purchaser at Closing with respect to such reserves or escrows shall be prorated in the amounts shown on Exhibit D-2, as such amounts may be adjusted or updated prior to Closing as a result of payments into such reserves or escrows or any disbursements therefrom between the Effective Date and Closing.
(x) MOP's and Sellers' insurance policies on each Property shall not be assumed by Purchaser. The amount of the refunds payable to MOP or Sellers in respect of any early cancellation of insurance policies on any Property shall be Excluded Assets and shall be the sole property of Sellers and MOP. Purchaser shall be obligated to purchase and place its own insurance on or with respect to the applicable Property as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date.
(fxi) With MOP shall continue to fund unpaid tenant allowances (which shall include tenant improvement allowances, landlord contributions, lease takeover obligations and other payments to or for the benefit of Tenants) and lease commissions applicable to all Leases that were executed and delivered prior to the Effective Date. Any tenant allowances, improvement allowances, lease takeover obligations, landlord contributions or leasing commissions that first accrue after the Effective Date with respect to each JV Propertyany new Lease, all payments and receiptsor any renewals, as applicableamendments, under extensions, options or expansions of existing Leases entered into or exercised after the assumed Contracts Effective Date, shall be prorated between Purchaser Purchaser's responsibility and the applicable neither MOP nor any Seller as of shall have any responsibility for same.
(xii) At least 15 days prior to the Closing Date, Seller shall, in respect of each Property, provide its good faith estimates of the current calendar year's actual and accrued operating expenses, real estate taxes and other pass through costs due from the Tenants of each of the Properties attributable to the Seller's period of ownership (each an "Expense Estimate"). The applicable Each Expense Estimate shall be subject to Purchaser's approval, which approval shall not be unreasonably withheld or delayed. Seller will be entitled to or liable for any shortage or overage, as the case may be, of the difference between the pass through expenses actually collected from Tenants during Seller's period of ownership during the current calendar year and the Expense Estimate. If Seller is liable for an overage, Seller shall credit Purchaser at Closing. If Seller is entitled to reimbursement for the shortage, then if such shortage can be determined by the Closing, Sellers and MOP shall receive a credit for all prepayments such shortage or, if such shortage cannot be determined at Closing, Sellers and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time MOP shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Settlement Statement (and Purchaser or New Operator shall, or the parties shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to make an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Date, such prorations and apportionments shall be tentatively prorated on the basis of the best data then available and re-prorated when the information is available. Notwithstanding the foregoing, any adjustment or re-proration pursuant to the two immediately preceding sentences shall be made, if at all, within ninety (90) days after the Closing Date (except with respect to taxes and assessments, in which case such re-proration shall be made payment between them within sixty (60) days after the information necessary correct amounts can be determined following the Closing.
(xiii) Intentionally left blank
(b) Subject to perform Purchaser's right to exclude Excluded Properties up to the Closing Date, no later than three (3) Business Days prior to the Closing Date, the parties shall agree upon a settlement statement that has been approved by both parties (a "Settlement Statement"), and prepared by Escrow Agent to settle the Purchase Price and apportionments hereunder. The net credit to Sellers and MOP or Purchaser, as applicable, resulting from the apportionments made pursuant to subsection (a) of this Section 4.02 shall be paid to MOP or Purchaser, as applicable, at Closing. If the parties are unable to agree on a Settlement Statement, the matter in dispute shall be referred to one (1) of three (3) firms of independent accountants suggested by Purchaser (the "Accounting Firm") that does not have a present conflict of interest with respect to acting as a third party arbiter and which is mutually acceptable to Purchaser and MOP, whose determination as to such rematter shall be conclusive and binding on the parties. Pending a resolution by the Accounting Firm, the amount in dispute shall be deducted from or added to the Purchase Price, as the case may be, and held in escrow by a bank that is mutually acceptable to Purchaser and MOP in a non-proration is available). All payments interest bearing escrow account and the Closing shall proceed on the basis of the Settlement Statement agreed to by the parties.
(c) Purchaser shall be made responsible for the initial $375,000 of Transfer Taxes due or owed as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereoftransactions contemplated by this Agreement. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser MOP shall be responsible for arranging any Transfer Taxes due or owed as a result of the transactions contemplated by this Agreement in excess of $375,000, if any, which obligation shall survive Closing.
(d) In the event that any amounts to be prorated pursuant to Section 4.02(a) have not been finally determined on the Closing Date, a mutually satisfactory estimate of such amounts made on the basis of the records of the Sellers and MOP or public records shall be used as a basis for its own insurance settlement at the Closing, and the amounts finally determined will be prorated as of the Closing Date.
(o) On Date and appropriate settlement made as soon as practicable after such final determination, but in no event later than 60 days after the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that such longer period as may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, reasonably necessary in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall final determination cannot be subject to the Threshold Amountmade within such sixty (60) day period. This Section 4.02 shall survive Closing.
(p) Except as expressly set forth in Section 7(l) and Section 7(m
Appears in 1 contract
Sources: Purchase and Sale Agreement (CNL Retirement Properties Inc)
Apportionments. With A. The following shall be apportioned between Seller and Purchaser at the Closing with respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including Premises as of 11:59 p.m. (New York time) on of the day immediately preceding the Closing Date (“Cut-Off Time”) Date, and the net amount thereof either shall belong be paid by Purchaser to the applicable Seller. All revenues and expenses from JV Property operations accruing Seller or relating to the period after the Cut-Off Time shall belong credited to Purchaser. Without limiting , as the foregoingcase may be, at the following shall applyClosing:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessmentsi. Common Charges, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Propertyany special assessments then in effect, Purchaser shall be solely responsible forif any, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to for the month in which the Closing occurs and any other outstanding Common Charges or assessments;
ii. Real property taxes and assessments (or installments thereof), payments required to be made to any business improvement district (“BID taxes”) and vault charges, except those required by Leases to be paid by a Tenant directly to the entity imposing same;
iii. Water rates and charges, except those required by Leases to be paid by a Tenant directly to the entity imposing same;
iv. Sewer taxes and rents, except those required by Leases to be paid by a Tenant directly to the entity imposing same;
v. Rents (as hereinafter defined), if, as and when collected, in accordance with Section 7(F) hereof;
vi. Leasing Costs (hereinafter defined), in accordance with Section 20(B) hereof;
vii. Payments due under any Surviving Contracts;
viii. wages, sick days, vacation days and employee benefit fund contributions (other than and not including pension withdrawal liability, which is addressed in Article 11 hereof); and
ix. All other items customarily apportioned in connection with the sale of similar properties similarly located.
B. Apportionment of real property taxes, BID taxes, water rates and charges, sewer taxes and rents and vault charges shall be prorated made on the basis of the fiscal year for which assessed. If the Closing Date shall occur before the real property tax rate, BID taxes, water rates or charges, sewer taxes or rents or vault charges are fixed, apportionment for any item not yet fixed shall be made on the basis of the real property tax rate, BID taxes, water rates and charges, sewer taxes and rents or vault charges, as applicable, for the preceding year applied to the latest assessed valuation. After the real property taxes, BID taxes, water rates and charges, sewer taxes and rents and vault charges are finally fixed, Seller and Purchaser shall make a recalculation of the apportionment of same after the Closing, and Seller or Purchaser, as the case may be, shall make an appropriate payment to the other based upon such recalculation.
C. The amount of any of the actual number unpaid taxes, assessments, water rates or charges, sewer rents and vault charges which Seller is obligated to pay and discharge, with interest and penalties thereon (if any) to the Closing Date may, at Seller’s option, be allowed to Purchaser out of days in such month. Any payments the balance of Rents collected the Purchase Price, provided that official bills therefor with interest and penalties thereon (if any) are furnished by Seller at the parties hereto Closing and provided that the Title Insurer will omit same as exceptions from Purchaser’s title insurance policy, at no additional cost or expense to Purchaser.
D. If any refund of real property taxes, BID taxes, water rates or charges, sewer taxes or rents or vault charges is made after the Closing who owe Rents for periods Date covering a period prior to and/or after the Closing Date, the same shall be applied first to the reasonable out-of-pocket costs incurred by Seller or Purchaser, as the case may be, in obtaining same and the balance, if any, of such refund, to the extent received by Purchaser, shall be paid to Seller to the extent that any portion thereof is attributable to the period prior to the Closing Date and, to the extent received by Seller, shall be applied paid to Rents Purchaser to the extent that any portion thereof is attributable to the period commencing on the Closing Date. Any payment to Seller pursuant to the immediately preceding sentence shall be net of any amount payable to a Tenant in accordance with its Lease (and any payment to Purchaser by Seller pursuant to the immediately preceding sentence shall include any amount payable to a Tenant in accordance with its Lease, and Purchaser shall pay any such amounts received by Purchaser from Seller to the extent owing to such Tenant). Purchaser hereby agrees to indemnify, defend and hold harmless Seller against any claims, losses, costs and expenses incurred by Seller to the extent resulting from Purchaser’s failure to remit such amount payable to such Tenant pursuant to its Lease promptly after receipt thereof from Seller by Purchaser (including, without limitation, any reasonable attorneys’ fees, disbursements and court costs). Purchaser’s indemnification obligations hereunder shall survive the Closing and delivery of the Deeds.
E. If there are meters measuring water consumption or sewer usage at the Property (other than meters measuring water consumption or sewer usage for which a Tenant is obligated to pay under its Lease directly to the taxing authority or utility), Seller shall attempt to obtain readings to a date not more than thirty (30) days prior to the Closing Date. If such readings are not obtained (and if such readings are obtained, then due with respect to any period between such reading and payable in the following order of priority: (i) firstClosing Date), in payment of Rents water rates and charges and sewer taxes and rents, if any, shall be apportioned based upon the last meter readings, subject to reapportionment when readings for the month in which relevant period are obtained after the Closing Date. If any of the Tenants pay electric charges based on a submeter for their electric consumption, then Seller shall cause any such submeter to be read as close as possible to the Closing Date occursand upon completion of such reading, with Seller shall ▇▇▇▇ each such amounts being prorated between Seller and Purchaser Tenant electric charges, based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for on such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occursreading. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following At the Closing, Seller shall have provide the right Purchaser with documentation as to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility such readings and ▇▇▇▇▇▇▇▇ to be closed and billed as of for submetered electric charges.
F. To the Closing Date in order extent that utility charges may be separately billed for the period prior to the Closing Date and the period on and Seller or Purchaser receives Rents after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period held in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made trust by Seller in connection with providing wateror Purchaser, sewer, gas, electricity, telephone and other public utilities to as the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closingcase may be, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount order of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined on the Closing Date, such prorations and apportionments shall be tentatively prorated on the basis of the best data then available and re-prorated when the information is available. Notwithstanding the foregoing, any adjustment or re-proration pursuant to the two immediately preceding sentences shall be made, if at all, within ninety (90) days after the Closing Date (except with respect to taxes and assessments, in which case such re-proration shall be made within sixty (60) days after the information necessary to perform such re-proration is available). All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for its own insurance as of the Closing Date.
(o) On the Closing Date, the Seller will provide to Purchaser a true, correct, and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held by Seller on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities priority set forth in this Section 7(o) 7(F).
i. The following terms shall be as defined herein: “Base Rents”: fixed rent, and other amounts of a fixed nature (which may include, without limitation, electric inclusion and supplemental water, HVAC and condenser water charges paid or payable by Tenants); “Overage Rents”: a percentage of the Tenant’s business during a specified annual or other period (sometimes referred to as “percentage rent”), so-called “escalation rent”, and additional rent based upon increases in or otherwise attributable to real estate and BID taxes, operating expenses, utility costs, a cost of living index or ▇▇▇▇▇▇’▇ wages or otherwise, but which shall in no event include Reimbursable Payments (as hereinafter defined); “Reimbursable Payments”: overtime heat, air conditioning or other utilities or services; freight elevator; electric inclusion and adjustments related to electric usage (such as rate and/or fuel adjustments and survey); submetered electric; supplemental water, HVAC, and condenser water charges; services or repairs, and labor costs associated therewith, to the extent to which a Tenant is obligated to reimburse the landlord under its Lease or for which a Tenant has separately contracted with Seller or its agent; true-ups on account of escalation and/or additional rent for years prior to the year in which the Closing occurs; amounts payable for above standard cleaning; and all other items that are payable to Seller as reimbursement or payment for above standard or overtime services (but which amounts shall not be subject to the Threshold Amounttreated as Reimbursable Payments if already included in a Tenant’s Base Rents); and “Rents”: all amounts due and owing from Tenants, however characterized, including, without limitation, Base Rents, Overage Rents and Reimbursable Payments.
(p) Except as expressly set forth in Section 7(l) and Section 7(m
Appears in 1 contract
Sources: Sale Purchase Agreement (American Realty Capital New York Recovery Reit Inc)
Apportionments. With respect to each JV Property, all revenues and expenses related to the JV Property operations accruing or relating to the period up to and including 11:59 p.m. (New York time) on the day immediately preceding the Closing Date (“Cut-Off Time”) shall belong to the applicable Seller. All revenues and expenses from JV Property operations accruing or relating to the period after the Cut-Off Time shall belong to Purchaser. Without limiting the foregoing, the following shall apply:
(a) With respect to each JV Property, all non-delinquent ad valorem real property and personal property general and special taxes and assessments for such Property for the current assessment year of the applicable taxing authority in which the Closing Date occurs shall be prorated between the applicable Seller and Purchaser as of the Closing Date, based on their respective days of ownership of such Property during such assessment year. If the exact amount of taxes is not known at Closing, the proration will be based on an amount equal to 100% of the prior assessment year’s taxes and shall be adjusted and reconciled directly between the applicable Seller and Purchaser once actual figures become available after Closing. All such prorations shall be made with due allowance for the maximum allowable discount and exemptions. Purchaser shall assume all obligations accruing from and after the Closing Date with respect to any agreements relating to the appealing of real estate taxes or real estate tax assessments, including the obligation to pay portions of amounts of real estate tax savings and costs and expenses related thereto. With respect to each JV Property, Purchaser shall be solely responsible for, and shall report and pay, all state and local sales or use taxes imposed in connection with the sale and transfer of any Personalty. Any state or local sales and use taxes, or other transfer taxes, registration, title or other fees payable in connection with registering or titling of any vehicle shall be the responsibility of Purchaser.
(b) With respect to each JV Property, rents and other payments under the Residency Agreements, the Leases (including, without limitation, the Boca Ciega Bay Lease and the NY Subleases), and other proceeds of the ownership and operations of such JV Property (collectively, “Rents”) collected prior to Closing with respect to the month in which the Closing occurs shall be prorated based upon the actual number of days in such month. Any payments of Rents collected by the parties hereto after the Closing who owe Rents for periods prior to the Closing Date shall be applied to Rents then due and payable in the following order of priority: (i) first, in payment of Rents for the month in which the Closing Date occurs, with such amounts being prorated between Seller and Purchaser based upon the number of days each owned the applicable JV Property during the month in which the Closing occurs; (ii) second, in payment of Rents for the month immediately preceding the month in which the Closing occurs; (iii) third, in payment of Rents for any month which commenced after the Closing, but only to the extent payments of rents for such month are then currently due; and (iv) fourth, in payment of Rents for months preceding the month in which the Closing occurs. Each of the parties hereto shall be obligated to pay over to the other party any Rents collected to which the other is entitled pursuant to the terms of this Agreement. For a period of one hundred eighty (180) days after Closing, Purchaser shall use commercially reasonable efforts (but shall not be obligated to institute legal proceedings) to collect and remit to Seller the Rents for each JV Property with respect to all periods prior to the Closing. Following the Closing, Seller shall have the right to pursue remedies against any resident or tenant of the JV Properties with respect to pre-Closing deficiencies in payment of Rents.
(c) With respect to each JV Property, the applicable Seller shall request each utility company providing utility service to the applicable JV Property to cause all utility ▇▇▇▇▇▇▇▇ to be closed and billed as of the Closing Date in order that utility charges may be separately billed for the period prior to the Closing Date and the period on and after the Closing Date. In the event any such utility charges are not separately billed, the same shall be prorated. In connection with any such proration, it shall be presumed that utility charges were uniformly incurred during the billing period in which the Closing Date occurs. Each Seller shall receive a credit at Closing for any deposits made by Seller in connection with providing water, sewer, gas, electricity, telephone and other public utilities to the JV Property with respect to its respective JV Property that are transferred or made available to Purchaser.
(d) With respect to each JV Property, all obligations and liabilities (for services and materials ordered, or otherwise in the ordinary course of business) and accounts payable for the JV Property owing as of the Closing Date for merchandise, equipment, supplies and other materials and services paid, incurred or ordered shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(e) Except as covered by the terms of Section 7(a) above, with respect to each JV Property, all water and sewer charges, taxes (other than ad valorem real property or business personal property taxes), including license taxes or fees for licenses which are assignable or transferable without added cost and have a value which will survive Closing, and any unpaid taxes payable in arrears, shall be prorated as of the Closing Date. Each Seller will be credited for that portion of taxes and fees paid by such Seller allocable to the period after the Closing Date.
(f) With respect to each JV Property, all payments and receipts, as applicable, under the assumed Contracts shall be prorated between Purchaser and the applicable Seller as of the Closing Date. The applicable Seller shall receive a credit for all prepayments and deposits thereunder.
(g) With respect to each JV Property, all other income derived by the applicable Seller from the JV Property accruing or relating to the period up to and including the Cut-Off Time shall be paid to such Seller. All other income derived by such Seller from the JV Property accruing or relating to the period on and after the Cut-Off Time shall be paid to Purchaser.
(h) With respect to each JV Property, all other expenses and obligations not otherwise specified in this Section 7 incurred in the ownership of the JV Property and operation of the JV Property and which are customarily prorated in similar transactions shall be prorated between the applicable Seller and Purchaser as of the Closing Date.
(i) With respect to each JV Property, Purchaser shall receive a credit for any refundable security deposits (and if legal requirements or any agreements require a landlord to be accountable for interest on such refundable security deposits, any accrued interest owed thereon), which credit shall be applied against the allocated Purchase Price for the JV Property at which there exist prepaid rents and other resident charges or refundable security deposits.
(j) Except as set forth in Section 8(a)(xv), Seller shall have no obligation to remove any notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Properties (collectively, “Violations”); provided, that (i) at or prior to Closing, either (A) Seller shall pay or bond all monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations or (B) Purchaser shall receive a credit for any such monetary fines, fees or penalties accruing prior to the Closing Date with respect any such Violations that remain unpaid, and (ii) notwithstanding the foregoing, Seller shall be obligated to continue to perform, or cause to be performed, routine maintenance and repair of the Properties as and to the extent required pursuant to clause (i), (ii) or (iii) (as applicable) of Section 8(a).
(k) Salaries, wages and benefits (accrued and unpaid employee benefits, vacation time, and personal days) with respect to the then-current employees (“Facility Employees”) of Seller or WRC at each JV Property shall be prorated between Seller and Purchaser as of the Closing Date. On the Closing Date, Seller shall credit Purchaser on the Closing Statement (and Purchaser or New Operator shall, or shall cause WRC to, assume responsibility) for estimated accrued and unpaid employee benefits, vacation time, and personal days for all Facility Employees, based on the accrued amount calculated by Seller for the Property as of the Closing Date (“Accrued PTO”). Purchaser shall apply, or cause WRC to apply, any such Accrued PTO for which it has received a credit pursuant to this Section 7(k) to its intended purpose for the benefit of each applicable Facility Employee. Solely as between Seller and Purchaser, Purchaser shall be responsible for any severance pay due to any Facility Employees who Purchaser or New Operator or WRC elects to terminate on or after the Closing Date.
(l) With respect to each JV Property and each Master Lease Property, Seller shall receive a credit at Closing in the amount of any required reserves, escrows or other deposits maintained pursuant to any Law by or on behalf of any Seller, Master Tenant, or any of their respective affiliates, in each case as security for the operation of the applicable Property(ies) or obligations of the licensed operator thereof (the “Regulatory Deposits”). Purchaser shall not receive any credits hereunder in connection with any Regulatory Deposits made or required to be made in connection with obtaining any Licensure Approvals.
(m) At the Closing (or thereafter as provided in this Section 7(m)): (i) Purchaser shall receive a credit in the aggregate amount of $318,000 on account of the expected removal and/or remediation of underground storage tanks at certain of the Properties; (ii) within one hundred eighty (180) days after Closing, Seller shall reimburse Purchaser for all costs incurred by Purchaser, as reasonably determined by Purchaser and Seller based upon the written estimates obtained by Seller and/or Purchaser, to remediate certain moisture issues, including repair of any foundational cracks or leaks causing such issues, at certain of the Properties (provided, that such amount shall not to exceed $1,000,000); (iii) Purchaser shall receive a credit in the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from January 1, 2021 until October 31, 2021 is less than, or Seller shall receive a credit in the amount by which such aggregate capital expenditures exceed, in each case, Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for calendar year 2021 prorated through October 31, 2021; and (iv) within ninety (90) days after Closing, in the event that the amount by which Seller’s aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) from November 1, 2021 until the Closing Date is more or less than Seller’s budgeted aggregate capital expenditures for all Properties (excluding any capital expenditures on unit renovations at the Master Lease Properties) for such period, Seller and Purchaser shall prorate such amounts and, if the amount actually spent is less than the budgeted amount, Seller shall pay Purchaser an amount equal to the difference and, if the amount actually spent by Seller is greater that the budgeted amount, Purchaser shall pay Seller an amount equal to the difference; provided, that in the case of the foregoing clauses (iii) and (iv) that neither party shall receive any credit or payment thereunder unless the amount of such difference is equal to or exceeds $250,000, and Seller shall not be entitled to a credit or payment thereunder for any non-emergency capital expenditure in excess of $250,000 in the aggregate unless Purchaser has approved in writing such capital expenditure prior to Seller having incurred such capital expenditure.
(n) Except as otherwise expressly provided in this Agreement, all income and expenses of the Hotel with respect to the period prior to the Closing Date shall be for the account of Hotel Seller, and all income and expenses of the Hotel with respect to the period from and after the Closing Date shall be for the account of Purchaser. The following specific apportionments and adjustments shall be made in accordance with generally accepted accounting principles. The computation between the parties at the Closing as of the adjustments shall be jointly prepared by Seller and Purchaser. In the event any prorations or apportionments made under this Section 7 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same in accordance with the remaining terms of this Section 7(n). To the extent the exact amount of any adjustment item provided for in this Section 7 cannot be precisely determined 11:59 p.m. on the day immediately prior to the Closing Date (the “Apportionment Date”).
(a) real estate taxes, such prorations personal property taxes, special assessments and apportionments shall be tentatively prorated vault charges, if any, on the basis of the best data then available and re-prorated when fiscal period for which assessed; provided that if a tax b▇▇▇ for the information is available. Notwithstanding current period has not yet been issued, the foregoing, any adjustment or apportionment shall be based on the prior year’s tax b▇▇▇ with a re-proration pursuant subsequent to Closing promptly after a current tax b▇▇▇ has been issued. The parties acknowledge that the Hotel and the Land are not assessed for real estate taxes separately from other property owned by the Land Seller; therefore, the parties agree that the share of real estate taxes fairly allocated to the two immediately preceding sentences Hotel and the Land for purposes of the Closing and Pro-Ration Statement shall be madeagreed upon by the parties before the end of the Feasability Period. At the request of either party to this Agreement, if the other party shall cooperate, at allno cost to itself, within ninety (90) days after with any application for tax refunds or abatements for the Property. Any tax refunds or abatements in respect of periods prior to the Closing Date will belong to Seller;
(except with respect to taxes b) water and assessmentssewer service charges and charges for gas, in which case such re-proration electricity, telephone and all other public utilities (provided that no adjustment shall be made within sixty (60) for unmetered gas or fuel oil stored on the Land, all of which shall be transferred with the Hotel at no additional cost to Purchaser). If there are meters measuring the consumption of water, gas or electric current, Seller, not more than one day prior to the Apportionment Date, shall cause such meters to be read, and shall pay all utility bills for which Seller is liable upon receipt of statements therefor; where there are no such meters, or where the applicable utility is unable or unwilling to read the meters prior to Closing, such charges for utilities shall be apportioned between the parties based upon the number of days in the then current billing period before and after the information necessary to perform such re-proration is available)Apportionment Date. All payments to be made as a result of the final results of the adjustments shall be paid to the party entitled to the same within fifteen (15) days after the final determination thereof. Seller and Purchaser agree that none of the insurance policies relating to any Property will be assigned to Purchaser (and each Seller shall pay any cancellation fees or minimum earned premiums resulting from the termination of the policies relating to its respective Property), and Purchaser shall be responsible for arranging for causing such utilities and services to be changed to its own insurance name effective as of the Closing Date.
(o) On Date and shall be liable for and shall pay all utility bills for services rendered from and after the Closing Date;
(c) amounts which have been paid or are payable under the Service Contracts, the Seller will provide Equipment Leases and Space Leases assigned to and assumed by Purchaser a true, correct, at Closing;
(d) Advance Deposits and complete accounting (properly reconciled) of all resident trust funds, resident security deposits, patient deposits, refundable community fees, or any residents’ property that may be held other amounts received by Seller (whether paid in cash or by credit card) in respect of Rooms Agreements and Bookings to be fulfilled on the Closing Date for residents at JV Properties (“Resident Trust Funds”) (which for the avoidance of doubt excludes refundable entrance fees), if any, held by Seller. If applicable, to the extent permitted by applicable Laws, Seller will deliver such Resident Trust Funds to Purchaser within two (2) business days of Closing. Purchaser shall, or shall cause New Operator to, accept such Resident Trust Funds in trust for the residents of the JV Properties and will hold and disperse such Resident Trust Funds in accordance with applicable contractual, statutory and regulatory requirements. Seller will indemnify, defend, and hold the Purchaser harmless from all liabilities, claims and demands, including reasonable attorney’s fees, in the event the amount of the Resident Trust Funds, if any, transferred to Purchaser did not represent the full amount of any Resident Trust Funds shown to have been delivered to Seller or its affiliate, as custodian or with respect to any Resident Trust Funds delivered, or claimed to have been delivered, to Seller or its affiliate, but which were not delivered by Seller to Purchaser, or for claims that arise from actions or omissions of Seller with respect to the Resident Trust Funds before after the Closing Date. Purchaser will indemnify, defend and hold Seller harmless from all liabilities, claims and demands, including reasonable attorneys’ fees, in the event a claim is made against Seller with respect to the Resident Trust Funds with respect to any such funds that are transferred to Purchaser pursuant to this Section 7(o). For the avoidance of doubt, claims made pursuant to the indemnities set forth in this Section 7(o) shall not be subject to the Threshold Amount.;
(pe) Except as expressly set forth prepaid operating and advertising expenses;
(f) commissions of credit and referral organizations related to bookings for which Purchaser shall receive payment;
(g) outstanding gift certificates; and
(h) all other charges and fees customarily prorated and adjusted in Section 7(l) and Section 7(msimilar transactions.
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