Apportionments. (a) The following shall be apportioned between Purchaser and Owner as of 11:59 p.m. on the day immediately preceding the Closing Date (the "Apportionment Date") on the basis of the actual number of days of the month which shall have elapsed as of the Closing Date and based upon the actual number of days in the month and a 365 day year, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at Closing: (i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis; (ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property (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); (iii) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's cost therefor); (iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date; (v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date; (vi) business improvement district dues, if any; (vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New York. (i) Monthly base rents (collectively, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled. (ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser. (iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis. (iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof. (v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days. (vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled. (vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below. (viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002. (ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made. (x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. (xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above. (c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date. (d) If there are water meters at the Property, 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 two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment. (e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment. (f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing Date, all of which shall be the property of Owner. (g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on a
Appears in 2 contracts
Sources: Purchase Agreement (Metropolis Realty Trust Inc), Purchase Agreement (Metropolis Realty Holdings LLC)
Apportionments. (a) The following shall shall, to the extent applicable to the Unit or otherwise required under the Condominium Instruments to be paid by the owners of the Units, be apportioned between Purchaser Seller and Owner Purchaser, as of 11:59 p.m. on the day (the “Apportionment Date”) immediately preceding the Closing Date (the "Apportionment Date") on the basis of the actual number of days of the month which shall have elapsed as of the Closing Date and based upon the actual number of days in the month and a 365 day year, ; and reflected on a closing statement (shall be borne by Seller before the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at ClosingApportionment Date:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property Unit (collectively, "“Property Taxes"”) (it being understood that “Property Taxes” shall not include any fines or interest for late payment, Transfer Taxes or New York City Commercial Rent or Occupancy Taxes), on the basis of the respective periods for which each is assessed or imposed, to be apportioned in accordance with Section 7(c7(b);
(iiiii) fuel, if any, as reasonably estimated by Owner's Seller’s supplier, at Owner's current cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's Seller’s fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's the current cost therefor);
(iviii) prepaid fees, if any, fees for licenses and other permits which will be transferred by Owner assigned to Purchaser on at the Closing Date;
(viv) any amounts prepaid or payable by Owner the owner of all or a portion of the Property under the Contracts in effect as service, maintenance, supply and other agreements relating to the operation of the Closing DateProperty, together with all modifications and amendments thereof and supplements relating thereto (collectively, the “Contracts”);
(v) wages and fringe benefits (including, without limitation, vacation pay, sick days, health, welfare, pension and disability benefits) and other compensation payable to all employees (and any replacements thereof) who are being employed by CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Condominium;
(vi) business improvement district duesany common charges, if any;maintenance payments or other assessments assessed against the Unit pursuant to the Condominium Instruments on the basis of the respective periods for which such charges are assessed or imposed; and
(vii) such other items items, if any, as are customarily apportioned between sellers and purchasers in real estate closings of real commercial properties of a type similar to the Property and located in the CityCity of New York, County and State of New York.
(i) Monthly base rents (collectively, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(cb) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner Seller or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner Seller shall only be responsible for pay the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such the installments which are due on or after the Closing Date.
(dc) If there are water meters at the Property, 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 two thirty (230) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner Seller shall deliver to Purchaser, Purchaser or Purchaser shall deliver to OwnerSeller, as the case may be, the amount determined to be due upon such readjustment.
(ed) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "“Utilities"”) shall be for Owner's billed to Seller’s account up to the Apportionment Date and, from and after the Apportionment Date, all utilities Utilities serving the Unit shall be for billed to Purchaser's ’s account. Each If for any reason such changeover in billing is not practicable as of the Closing Date as to any Utility, such Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner Seller shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to OwnerSeller, as the case may be, the amount determined to be due upon such adjustment.
(e) [Intentionally Omitted].
(f) Purchaser shall have no right to receive any rental insurance proceeds proceeds, if any, which relate to the period prior to the Closing DateDate and, all of which shall be if any such proceeds are delivered to Purchaser, Purchaser shall, within six (6) business days following receipt thereof, pay the property of Ownersame to Seller.
(g) With respect to all tax years At or prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by PurchaserSeller and/or its agents or designees will prepare and furnish to Purchaser a preliminary closing statement which will show the net cash balance of the Purchase Price to be paid to Seller at the Closing pursuant to Section 4 (Purchase Price and Deposit), reflecting the adjustments and prorations provided for in this Agreement. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or Not later than ninety (90) days after the Closing Date, as may be necessary Seller and Purchaser will jointly prepare a final adjustment statement reasonably satisfactory to carry out Seller and Purchaser in form and substance (the intention “Final Adjustment Statement”) setting forth the final determination of the foregoingadjustments 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 as shown in the Final Adjustment Statement, shall be paid in cash by the party obligated therefor within ten (10) business days following that party’s receipt of the approved Final Adjustment Statement. The adjustments, prorations and determinations agreed to by Seller and Purchaser in the Final Adjustment Statement shall be conclusive and binding on the parties hereto except for any items which are not capable of being determined at the time the Final Adjustment Statement is agreed to by Seller and Purchaser, which items shall be determined and paid in the manner set forth in the Final Adjustment Statement and except for other amounts payable hereunder pursuant to provisions which survive the Closing Date. 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 delivery to any other party to this Agreementbooks, upon demand, of any relevant books and records, files, ledgers, information and data with respect to the Unit during normal business hours upon reasonable advance notice, but excluding Protected Information) in order to make the preliminary and final adjustments and prorations provided for herein. “Protected Information” means any one or more of the following: any internal valuation records, personnel records, all internal communications, including receipted tax bills projections and cancelled checks used in payment of such taxesinternal memoranda or materials, budgets, reports, strategic plans, concept or development plans or proposals, internal analyses, computer software, submissions relating to internal approvals, information that is considered privileged, confidential or proprietary by Seller, information protected by the execution of any and all consents attorney-client privilege or other documentswork product doctrine, and financial information pertaining to the taking of Seller, its members or any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on aaffiliates.
Appears in 2 contracts
Sources: Purchase and Sale Agreement, Purchase and Sale Agreement (SouFun Holdings LTD)
Apportionments. The terms and provisions of this Section 2.7 shall apply with respect to each of the Real Properties set forth on Schedule 2.7 (each, a “Golf Course Property” and collectively, the “Golf Course Properties”).
(a) The prorations and apportionments (the “Apportionments”) hereunder for each Golf Course Property shall be jointly prepared by OpCo and REIT on or before the Effective Date on the basis of actual and estimated amounts as provided in Section 2.7(b) of this Agreement. In the event any Apportionments made under this Agreement shall prove to be incorrect for any reason, then either party shall be entitled to an adjustment to correct the same during the ninety (90) day period after the Effective Date. To the extent it shall be determined that a party was initially allocated any amount of the Apportionments in excess of the amount to which it is entitled hereunder, such party shall remit such excess amount to the other party within ten (10) days after such determination. The Apportionments, as adjusted, if applicable, during said ninety (90) day period shall be conclusive and binding on OpCo and REIT.
(b) The following shall be apportioned between Purchaser and Owner as of 11:59 p.m. the close of business on the day immediately preceding the Closing Date (the "Apportionment Effective Date") on the basis of the actual number of days of the month which shall have elapsed as of the Closing Date and based upon the actual number of days in the month and a 365 day year, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at Closing:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis;
(ii) real estate property taxes, sewer rents taxes and taxes, water rates and chargesrents, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, taxes and charges or assessments levied or assessed against the applicable Golf Course Property (collectively, "Property Taxes")or the use thereof, on the basis of the respective periods fiscal years for which each is assessed or imposedassessed;
(ii) water rates and charges, to be apportioned in accordance with Section 7(c)unless the direct responsibility of any tenant of the applicable Golf Course Property;
(iii) fuelannual license, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand permit and Owner's cost therefor);
(iv) prepaid inspection fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
(viiiv) such fuel (as estimated by OpCo’s supplier, at OpCo’s cost, together with sales tax) and steam, gas, electricity charges and all other items as utilities which are customarily apportioned between sellers and purchasers of real properties of a type similar supplied to the applicable Golf Course Property and located in (except to the City, County and State extent the same are the direct responsibility of New York.any tenant of the applicable Golf Course Property);
(iv) Monthly base rents and all other charges (collectively, "Base Rents"including reimbursement payments) payable under any lease with a tenant of the Leases shall be adjusted and prorated on an if, applicable Golf Course Property as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenantscollected; provided, however, that Owner will not have if any rents under any leases shall be accrued and unpaid at the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Effective Date, but which shall be paid the rents collected by REIT on or after the Closing Date, such entire amount Effective Date shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall first be applied to Overage Rents then all rents due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Effective Date occurs, ; next to all rent due OpCo and payable for the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to month immediately preceding the calendar month in which the Closing Effective Date occurs and (z) Purchaser entitled occurs; next to all monthly installments after rents due and payable at the Closing. The parties shall make final reconciliation time of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent collection with respect to a the period that expires prior to or includes after the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period calendar month in which the Closing Effective Date occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing ; and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent balance shall be applied to the period(s) determined in accordance with paragraph (i) above in extent of delinquent rents for the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but month immediately preceding the calendar month in which the Effective Date occurs. Any sums received by REIT to which OpCo is entitled shall be paid after the Closing Dateheld in trust for OpCo on account of said past due rents payable to OpCo, the entire amount thereof and REIT shall belong remit any such sums to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner OpCo within ten (10) business daysdays after receipt thereof. Additional Rent payable for OpCo agrees that if OpCo receives any amounts after the Effective Date which are attributable, in whole or in part, to any period after the Effective Date, OpCo shall remit to REIT that portion of the monies so received by OpCo to which REIT is entitled within ten (10) days after receipt thereof;
(vi) all charges and payments under any service contracts in effect with respect to the applicable Golf Course Property; and
(vii) all other income from and expense relating to the applicable Golf Course Property of every type and nature as is customary with the closing of a commercial property transaction in the city and state in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense applicable Golf Course Property is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) abovelocated.
(c) Property Taxes shall be apportioned on the basis If any refund of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made real property taxes or a tax rate is fixed for the tax period in which the Closing Date occursassessments, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, the unfixed water rates and charges or sewer taxes and sewer rents shall be made after the Effective Date and taxes covered is received by metersREIT or OpCo, the same shall be held in trust by the receiving party, and shall first be applied to the unreimbursed costs incurred in obtaining the same, and the balance, if any, shall be apportioned paid to OpCo (i) on the basis of an actual reading done within two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing Effective Date, all of which shall be the property of Owner.
) and to REIT (g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate period commencing with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing Effective Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on a).
Appears in 2 contracts
Sources: Separation Agreement (CAESARS ENTERTAINMENT Corp), Separation Agreement (Vici Properties Inc.)
Apportionments. (a) The following items shall be apportioned between Purchaser and Owner as of 11:59 p.m. on PM of the day immediately preceding the Closing Date (the "Apportionment Date") on the basis of the actual number of days of the month which shall have elapsed as of the Closing Date and based upon the actual number of days in the month and a 365 day year, and reflected on a closing statement (the "Closing Statement") to be agreed upon by though Purchaser and Owner and executed at Closing:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant held title to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property (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);
(iii) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's cost therefor);
(iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on Properties during the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
(vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New York.
(i) Monthly base Fixed rents, additional rents, percentage rents (collectively, "Base Rents") and all other sums and credits due or payable under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) secondor, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent additional rents, percentage rents and Additional Rent arrearages in respect of any other sums, the applicable period prior to the Closing without the prior written consent of Purchaser.
(iiirelating thereto) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between to the extent collected under the Leases, subject to part (b) of this Section 8.1;
(ii) Real estate taxes and personal property taxes (if any), on the basis of the fiscal year for which the same are levied, imposed or assessed, subject to part (c) of this Section 8.1;
(iii) Fees and charges under the Service Contracts that are being assigned to and assumed by Purchaser at the Closing, on the basis of the periods to which such Service Contracts relate; and
(iv) Charges for water, sewer rents, electricity, steam, and Owner based upon gas, which are not metered or otherwise charged directly to tenants by the ratio provider; provided that if the portion consumption of any of such accounting utilities is measured by meters, the Seller on the Closing Date shall furnish a current reading of each meter; and provided further, that if there is not a meter or if the current ▇▇▇▇ for any of such utilities has not been issued prior to the Closing Date, the charges therefor shall be adjusted on the basis of the charges for the prior period for which bills were issued and shall be further adjusted when the bills for the current period are issued.
(b) If any additional rents, percentage rents or other sums under the Leases (including expense reimbursement payments) (collectively, the “Lease Obligations”) are payable or accruable under the Leases on the basis of estimates or formulae and are subject to adjustment after the Closing Date, such rents shall be apportioned on the Closing Date on the basis of the sums actually paid by the Tenants under the Leases to Seller on account of such rents and/or expenses prior to the Closing Date, and will be subject to reapportionment on the basis of the rents and expenses as finally determined to be owing and collected under the Leases. If Leases contain Lease Obligations payable by Tenants which have accrued as of the Closing Date but are not then due and payable, the amount of such Lease Obligations shall not be prorated as of the Closing Date but shall be allocated and paid as hereinafter provided. No later than five (5) Business Days before Closing, Seller shall deliver to Purchaser its good faith calculation of the Lease Obligations incurred and collections received for the period prior to the Closing Date bears (the “Pre-Closing Reconciliation”) and provide such Pre-Closing Reconciliation to Purchaser, including but not limited to an estimated reconciliation of charges for 2021, together with supporting documentation. All prorations and reconciliations shall be subject to Purchaser’s review and approval. Any overpayments shown on the entire Pre-Closing Reconciliation shall be credited to Purchaser at Closing. Any underpayments shall be remitted to Seller as and when collected by Purchaser as hereinafter provided. In the event the 2021 reconciliations shall not have been finalized as of Closing, Seller shall continue to be responsible for the preparation thereof in accordance with the Leases by not later than ninety (90) days after Closing, and any additional underpayments or overpayments determined based on such accounting periodfinal reconciliation shall then be reconciled between Seller and Purchaser as hereinabove and hereinafter provided. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods All amounts collected by Purchaser or Seller from and Tenants after the Closing DateDate will be applied pursuant to Section 8.1(d). Either party may inspect, such sums during normal business hours and upon reasonable prior written notice, the other’s records related to the Properties to confirm the calculations contemplated hereby. If the Closing shall occur before the real estate tax rate is fixed, the apportionment of real estate taxes shall be apportioned at based upon the Closing Date. Any installments of Overage Rent attributable to Overage Rent tax rate for periods prior the next preceding year applied to the Closing Date, subject to latest assessed valuation. Final adjustment will be made upon the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such actual tax amount (less reasonable collection costs) to Owner within ten (10) business dayswhen determined.
(vic) Any payment rents or other Lease Obligations collected by tenants of Overage Rent the Seller or Purchaser after the Closing Date shall be applied first to Overage Rents the calendar month in which they are collected, then to the rentals due and payable in the following order of priority: (A) first, in payment of Overage Rents for the calendar month in which received; (Bor, with respect to additional rents, percentage rents and other sums, the applicable period relating thereto) second, in payment of Overage Rents for the month in which the Closing Date occurs; , if unpaid, then to any months (Cor other applicable periods if past due) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior subsequent to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten month (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or taxperiod if past due) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, and then to any rents or other Lease Obligations past due for the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such calendar months (or other applicable periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to preceding the calendar month (or other applicable period) in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)“Arrears”). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled Any rents or other Lease Obligations collected by Purchaser in accordance with the applicable existing Lease. Any amounts required that are to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined Arrears pursuant to the preceding sentence shall be held by the Purchaser for the account of the Seller, and, after deducting therefrom all reasonable third-party expenses incurred in accordance connection with paragraph (i) above in the collection thereof, the Purchaser shall remit the same order of priority as Base Rentto the Seller. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid of one hundred fifty (150) days after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive make good faith efforts to collect any Arrears from the sameTenants; provided, however, Purchaser will pay not be required to institute any proceeding to collect any such amount Arrears. Seller agrees not to Owner within ten (10) business days. Additional Rent payable commence any collection action or to terminate any Lease after the Effective Date without Purchaser’s consent, not to be unreasonably withheld, and Seller further agrees not to attempt to collect Arrears from any Tenant with a Lease that remains in effect as of Closing, provided, however, that, the foregoing prohibition shall not apply to Gold’s Gym, Jem Industries and any other Tenant that has vacated or vacates its premises or the Lease for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, has expired or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period been terminated prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessedClosing. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, 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 two (2) days prior not waive any amounts owing with respect to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters Arrears owing for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing nor modify any Lease so as to reduce any base rents or charges owed under such Lease for the period prior to the Closing without first obtaining Seller’s prior written consent.
(d) All assessments (other than real estate taxes) imposed by any governmental agency for improvements to benefit the Properties (“Assessments”) that are completed or imposed before the Effective Date shall be paid by Seller to the extent allocable to the period prior to Closing. All other Assessments shall be paid by Purchaser.
(e) Except for those amounts being retained in the Post-Closing Lease Escrow, all leasing commissions, finders’ fees, Tenant allowances and credits shall be paid in full by Seller or credited to Purchaser at Closing to the extent allocable to the period prior to Closing.
(f) With respect to any residential units that (a) are not in “made-ready” condition on the Closing Date, and (b) have been vacant for more than five (5) Business Days prior to Closing, Purchaser shall receive a credit against the Purchase Price of Five Hundred Fifty and 00/100 Dollars ($550.00) per unit. For purposes hereof “made-ready” shall mean that vacant apartments have been thoroughly cleaned (including steam cleaning or similar deep cleaning of all carpeted areas, or carpet replacement if replacement would have been performed by Seller in the ordinary course of which shall be business prior to Closing if Seller was not selling the property Property), walls cleaned or repainted consistent with Seller's past practices and that all apartments contain the following: (1) refrigerator-freezer unit in working condition; (2) dishwasher, garbage disposal, stove, oven, washer and dryer in working condition; (3) plumbing, heating, air conditioning, and electrical systems, all in good working order; (4) floors fully covered with a combination of Ownertile or linoleum and carpeting; (5) blinds and/or drapes on all windows in good operating condition or better, and (6) there is no material damage to the doors, walls, ceilings, fixtures, floors or windows, such that the apartment unit is in a condition (consistent with the standards of similar units in the Property) for immediate rental and occupancy.
(g) With respect In addition, if any obvious error in either the calculations or amount of final figures used in any closing adjustment is discovered after Closing, Purchaser and Seller agree to correct such error promptly upon notice from the other party and to use commercially reasonable efforts to correct such adjustment, provided, that, in all tax years prior to events, the tax parties shall make such adjustments, or confirm in writing that no such adjustments are necessary, within one hundred twenty (120) days after the end of the calendar year in which the Closing closing occurs, Purchaser shall be entitled to commence, continue and control . Notwithstanding the progress of, and shall be entitled to make all decisions with respect toforegoing, any proceeding or proceedings, whether or party hereto not now pending, for bringing to the reduction attention of the assessed valuation of the Property, andother party, in its sole discretion, to try or settle writing within the same. Any such proceeding or proceedings with respect to period of one hundred twenty (120) days following the tax calendar year in which the Closing closing occurs, and all decisions regarding the commencementa potential claim for a re-adjustment in prorations based on error, continuation, trial miscalculation or settlement of such proceeding or proceedings, omission shall be controlled, subsequent deemed to the Closing, by Purchaser. Each have automatically waived and relinquished such claim.
(h) The provisions of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the this Section 8.1 shall survive Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on aSurvival Period.
Appears in 1 contract
Sources: Purchase and Sale Agreement (First Real Estate Investment Trust of New Jersey)
Apportionments. (a) The following shall be apportioned between Purchaser and Owner as of 11:59 p.m. on the day immediately preceding the Closing Date (the "Apportionment Date") on the basis charges relating to each of the actual number of days of the month which shall have elapsed as of Leased Real Properties, except those Leased Real Properties that are not retail stores, that relate to a period that begins prior to the Closing Date and based upon ends after the actual number of days in Closing Date are to be apportioned between the month and a 365 day yearCompany, on the one hand, and reflected Purchaser, on a closing statement (the "other hand, as of midnight of the day preceding the Closing Statement") to be agreed upon by Purchaser and Owner and executed at ClosingDate:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property (collectively, "Property Taxes"), on the basis of the respective periods for which each is assessed or imposed, to be rent apportioned in accordance with Section 7(c);
(iii) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's cost therefor);
(iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
(vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New York.
(i) Monthly base rents (collectively, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.;
(ii) Purchaser will use commercially reasonable effortsassessments, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current periodwater meter charges, and at the end of each calendar year (orsewer rents, if applicableany, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of the fiscal period year for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed ;
(iii) charges and fees payable for the tax period in which the Closing Date occurstelephone services, the apportionment of such Property Taxes based thereon shall be made water, heat, steam, electric power, gas and other utilities, at the Closing Date price charged by applying the tax rate for the preceding year to the latest assessed valuationsuppliers, butincluding any taxes thereon and based upon applicable meter readings, promptly after the assessment and/or tax rate for the current year are fixedwhere available, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due made on or after the Closing Date.
(d) If there are water meters at the Property, 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 two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just immediately prior to the Closing Date. Charges ; and
(iv) amounts due to the landlords for all electricityexpense adjustments for property, steamincome or other taxes, gas “CAM” and other utility services obligations under the Lease. Items (collectively, "Utilities"i) shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 through (10iv) business days following notice of the determination of such actual reading, readjust such apportionment and Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds above which relate to the period prior pre-Closing obligations of the Company are hereinafter referred to as the Closing Date, all of which shall be the property of Owner“Company Apportionment Obligations.
(gb) With respect The parties hereto acknowledge and agree that the landlords of Leases that are assumed and assigned to Purchaser or its Designee must submit all tax years Company Apportionment Obligations prior to the tax year in which the Closing occursSeptember 15, Purchaser 2006 or such expenses shall not be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documentsallowed against, and the taking landlord shall be barred from collecting such charges from Purchaser, Purchaser’s Designee, the Company or its estate.”
4. Amendment to Section 4.8(b). Section 4.8(b) of any act necessary for the collection of such refund by Purchase Agreement is hereby deleted in its entirety and the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently following is inserted in occupancy on alieu thereof:
Appears in 1 contract
Sources: Purchase Agreement (Gadzooks Inc)
Apportionments. (a) The following following, shall be apportioned between Purchaser AZIW and Owner Green as of 11:59 p.m. on the day immediately preceding the Closing Date (the "Apportionment Date") on the basis of the actual number of days of the month which shall have elapsed as of the Closing Date and based upon the actual number of days in the month and a 365 day year, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at Closing:)
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived to be apportioned in accordance with respect to the Property, all on an if, as and when collected basis;Section 7(b) hereof,
(ii) real estate taxes, sewer rents and taxes, water rates and chargescharges (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 Property 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)) hereof;
(iii) administrative charges on security deposits held pursuant to the Leases;
(iv) fuel, if any, based on a reading completed within five (5) days prior to the Closing Date or, if not so completed, as reasonably estimated by Owner's supplierthe supplier to the Premises, at Owner's current cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's such fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's the current cost therefor);
(ivv) prepaid fees, if any, fees for licenses and other permits which will be transferred by Owner assigned to Purchaser on Green at the Closing DateClosing;
(vvi) any amounts prepaid or payable by Owner the owner of the Property under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if anyContracts;
(vii) wages and fringe benefits (including, without limitation, vacation pay, sick days, health, welfare, pension and disability benefits) and other compensation payable to all personnel employed at the Building, (including without limitation, all employees employed by Owner's property manager); and
(viii) such other items as are customarily apportioned between sellers and purchasers in accordance with real estate closings of real commercial office properties of a type similar to the Property and located in the City, County and State Borough of New York.Manhattan. (
(i) Monthly base rents (collectivelyIf, "Base Rents") under on the Leases Apportionment Date, there are any past due Rents owing by any tenant for a period through the Apportionment Date, Green shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected use its commercially reasonable efforts to collect the same after the Closing Date from tenants who owe Base Rents for periods prior (provided Green shall not be obligated to institute legal proceedings against any tenant with regard to the Closing Date, same and AZIW shall not be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which permitted thereafter to institute legal proceedings against such tenant). Any Rent received from any such tenant after the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for to Rent arrearages with respect to the month in which the Closing Date occurs; shall occur (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior subject to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay apportionment pursuant to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (viSection 7(a) above), (B) second, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts arrearages with respect to the calendar month following the month in which the Closing Date occurs and (zC) Purchaser entitled third, provided all rent payable to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent Green with respect to a the applicable tenant for the period that expires prior post-Closing is current, to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating arrearages with respect to the Rent Audit which are period preceding the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period month in which the Closing Date occurs shall be apportioned in occur, provided neither AZIW nor Owner has been reimbursed for the same manner pursuant to Section 10(b) hereof, and (D) all other Rent collected shall belong to Green.
(ii) If, as Overage Rent. Rent Audits for accounting periods commencing after of the Closing Date shall each be settled by Purchaser Date, any Rents other than fixed rents (including, without limitation, operating, expense escalations, real estate tax escalations and percentage rent) (collectively, "Lease Additional Rent") have not been billed or have not been determined in accordance with the applicable existing Lease. Any amounts required provisions of the Leases or, if billed (and to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any such amounts are paid or payable reflected on Schedule 8), have not been collected by a tenant under a the landlord thereunder, Green shall (A) ▇▇▇▇ the same when billable, (B) cooperate with AZIW to determine the correct amount of Lease in advance Additional Rent and (C) diligently pursue and use all commercially reasonable efforts to achieve the collection of the period same (provided Green shall not be obligated to which institute legal proceedings against any tenant with regard to the same, and AZIW shall not thereafter institute legal proceedings against such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was providedtenants). If the period to which a payment final determination of Lease Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order Leases shows that a net amount is owed by AZIW to Green, the portion of priority as Base Rent. For any Lease Additional Rent payable for a period that expired prior attributable to the Closing Date, but which period following the Apportionment Date shall be paid after the Closing Date, the entire amount thereof shall belong by AZIW to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner Green within ten (10) business daysBusiness Days of such final determination under the Leases. If the final determination of Lease Additional Rent payable for in accordance with the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used Leases shows that a net amount is owed by Green to apportion the underlying expense being billed to such tenantAZIW, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior Lease Additional Rent attributable to the Closing period up to and including the Apportionment Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date paid by applying the tax rate for the preceding year Green to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, 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 two (2) days prior to the Apportionment DateAZIW, or (ii) if such reading has not been madeat AZIW's written direction, on the basis 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 shallto AZIW's designee, within ten (10) business days following notice of the determination Business Days of such actual reading, readjust such apportionment and Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustmentfinal determination.
(eiii) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on Any Rents received by AZIW or just prior to Green following the Closing Date. Charges for all electricity, steam, gas and Date which are the property of the other utility services (collectively, "Utilities"as determined in accordance with this Section 7(b)) shall be for Owner's account up paid to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. If any apportionment is not based on an actual current reading, then upon the taking of a subsequent actual reading, the parties shall, other within ten five (105) business days Business Days following notice of the determination of such actual reading, readjust such apportionment and Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustmentreceipt thereof.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing Date, all of which shall be the property of Owner.
(g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on a
Appears in 1 contract
Apportionments. (a) The following Real estate charges and assessments (other than Taxes addressed in Section 6.8(a)) affecting the Real Property, water and sewer rentals, prepaid license fees and other charges for licenses and permits with respect to the operation of the Real Property, municipal rubbish removal charges and other similar charges shall be apportioned pro rata between the Seller and the Purchaser and Owner on a per diem basis as of 11:59 p.m. on the day immediately preceding the Closing Date (Date. If bills for such charges have not been issued as of the "Apportionment Closing Date") , and if the amount of such charges for the then current year is not then known, the apportionment of such charges shall be made at Closing on the basis of the actual number of days prior year's charges. After the Closing, upon receipt of the month which bills for the current year, the Seller and the Purchaser shall have elapsed as of the Closing Date and based upon apportion the actual number amount of days in the month and a 365 day yearsuch charges, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at Closing:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rentand, if anyeither party paid more than its proper share thereof at the Closing, payable under the Leasesother party shall promptly reimburse such party for the amount so expended. The provisions of this Section 2.8(a) (collectively, "Rents") and all other revenue or income derived with respect to shall survive the Property, all on an if, as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property (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);
(iii) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's cost therefor);
(iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
(vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New YorkClosing.
(ib) Monthly base rents (collectivelyThe Seller shall use commercially reasonable efforts to cause, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods not more than five Business Days prior to the Closing Date, to the extent reasonably practical, all meters measuring the consumption of water, gas, steam, electricity or other utilities to be read, and the apportionment to be made on account of such utilities pursuant to this Section 2.8 shall be applied, made pursuant to such readings (Awith a reasonable adjustment to bring down such readings to the midnight immediately preceding the Closing Date) first, in payment of Base Rents for on a per diem basis with respect to the month in which received; (B) second, in payment of Base Rents for the month in which days elapsed through the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior as related to the Closing Date. Each fiscal year or billing period of the authority, utility or other person levying or charging for such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenantsutilities or other items; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromisethat, waive or settle any claim against a tenant with respect to rent if and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l extent meter readings cannot be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired obtained prior to the Closing Date, but which the Closing shall be paid after completed on the Closing Datebasis of estimates therefor prepared by the applicable utility company, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing DateClosing, when such sums shall be apportioned meter readings have been obtained, if either party paid more than its proper share thereof at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing DateClosing, subject to the other party shall promptly reimburse such party for the amount so expended. The provisions of this Section, Section 2.8(b) shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after survive the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes All amounts of rent, additional rent paid and other charges shall be apportioned on the a per diem basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, 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 two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities"The provisions of this Section 2.8(c) shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing Date, all of which shall be the property of Owner.
(g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to survive the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on a.
Appears in 1 contract
Sources: Asset Purchase Agreement (Mine Safety Appliances Co)
Apportionments. (a) The following shall be apportioned between Purchaser and Owner as of 11:59 p.m. on the day immediately preceding the Closing Date (the "Apportionment Date") on the basis of the actual number of days of the month which shall have elapsed as of the Closing Date and based upon the actual number of days in the month and a 365 day yearReal Property Taxes, utility charges, rents, income from leases, easements, licenses, permits, agreements, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at Closing:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rentprivileges, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against revenues and expenses pertaining to the Property Credit Card Assets (collectively, "Property Taxes"), on the basis other than revenue realized in respect of the respective periods for which each is assessed or imposed, to be apportioned in accordance with Section 7(c);
(iiiAccount Assets and the Securitization Assets and other than the costs of the Consumable Inventory) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand prorated between Buyers and Owner's cost therefor);
(iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect Sellers as of the Closing Date;
Cut-Off Time (viwith Sellers being responsible for such expenses and entitled to such revenues through and including the Cut-Off Time), regardless of the date assessed, paid or payable. Any special Taxes or assessments on the Credit Card Assets relating to taxable periods (or portions thereof) business improvement district dues, if any;
(vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New York.
(i) Monthly base rents (collectively, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods ending prior to the Closing Date, Cut-Off Time shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Datepaid by Sellers. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject payments made by either Party to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Datetaxing authority, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of by any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third taxing authority to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, 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 two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing Date, all of which shall be the property of Owner.
(g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all stepsParty, whether before or after Cut-Off Time, appropriate remittances shall be made promptly between the Closing DateParties to assure that such items are apportioned as of the Cut-Off Time in accordance with this Section 2.6. Each of GE Capital and the Company shall have the right, for a period of one (1) year after Closing, to audit (at its own expense) the books and records of the other party which pertain to expenses and revenues to be apportioned hereunder. Except as may otherwise provided in Section 7.5, Buyers shall not be obligated to pay any of Sellers' Taxes or Income Taxes attributable to the sale. To the extent that it is necessary to carry out pay applicable Taxes or Income Taxes before deeds can be recorded, Sellers will promptly pay such Taxes or Income Taxes, except that Sellers shall not be responsible for any Taxes for which Buyer is responsible pursuant to Section 7.5.
(b) At Closing, Sellers shall prepare and deliver to GE Capital, and GE Capital shall sign and deliver to Sellers for mailing, a joint letter in the intention of the foregoingform attached hereto as Exhibit K, includingrequesting all Persons as identified in said letter providing electric, without limitationgas, the delivery to any other party to this Agreementwater, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents telephone or other documentsutility services to the Real Property or any part thereof, to transfer such services and billing therefor to GE Capital, effective at Closing, and the taking of to issue a final ▇▇▇▇ to Sellers for such utility service. Buyers shall refund to Sellers any act necessary payments previously made by Sellers for the collection of such refund by the requesting party. During its period of ownershiputility services furnished or to be furnished after Closing, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on aother than deposits.
Appears in 1 contract
Sources: Credit Card Asset Purchase and Sale Agreement (Penney J C Co Inc)
Apportionments. The following items shall be prorated as of 12:01 A.M. on the Closing and the net amount thereof shall be added to or deducted from, as the case may be, the amount of the Purchase Price to be paid at the Closing;
(a) The following general real estate, personal property and ad valorem taxes and assessments for the current tax year of the Project. If any such taxes or assessments are payable in installments all installments due through the Closing together with the accrued but unpaid portion of any other installments not yet due as of the Closing shall be apportioned between Purchaser paid for by the Seller;
(b) taxes, water, sewer and Owner as front foot benefit charges, and charges for electricity, gas, telephone and other utilities and license fees;
(c) rent and other charges under the Leases (to the extent monies have actually been collected therefor);
(d) all other income and expenses relating to the Project, including principal and interest payable under each of 11:59 p.m. on the Loans; and
(e) any other items that are customarily prorated in transactions of this nature excluding, however, insurance premiums under the Insurance Policies. Any and all security deposits, prepaid rent and all interest earned thereon shall be a credit to Buyer at Closing. Seller shall be fully liable for any wages and other amounts due and owing any employees at the Project. Seller shall retain, and shall not be entitled to any credit for, the deposits, if any, made by Seller in connection with the provision of electric, sewer, water, telephone and other utility services to the Project. Seller shall retain any and all deposits and escrows relating to the Loans. For purposes of calculating prorations, Buyer shall be deemed to be in title to the Project, and, therefore, entitled to the income therefrom and responsible for the expenses thereof for the entire day immediately preceding upon which the Closing Date (the "Apportionment Date") occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing Date and based upon the actual number of days in the month and a 365 three hundred sixty-five (365) day year, and reflected on a closing statement (the ". The amount of such prorations shall be initially performed by Title Company at Closing Statement") to but shall be agreed upon by Purchaser and Owner and executed at Closing:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property (collectively, "Property Taxes"), on the basis of the respective periods for which each is assessed or imposed, to be apportioned adjustment in accordance with Section 7(c);
(iii) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's cost therefor);
(iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
(vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New York.
(i) Monthly base rents (collectively, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected cash after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, 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 two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing Date, all of which shall be the property of Owner.
(g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on aoutside
Appears in 1 contract
Sources: Purchase and Sale Agreement (American Industrial Properties Reit Inc)
Apportionments. The following items shall be prorated as of 12:01 A.M. on the Closing and the net amount thereof shall be added to or deducted from, as the case may be, the amount of the Purchase Price to be paid at the Closing;
(a) The following general real estate, personal property and ad valorem taxes and assessments for the current tax year of the Project. If any such taxes or assessments are payable in installments all installments due through the Closing together with the accrued but unpaid portion of any other installments not yet due as of the Closing shall be apportioned between Purchaser paid for by the Seller;
(b) taxes, water, sewer and Owner as front foot benefit charges, and charges for electricity, gas, telephone and other utilities and license fees;
(c) rent and other charges under the Leases (to the extent monies have actually been collected therefor);
(d) all other income and expenses relating to the Project, including principal and interest payable under each of 11:59 p.m. on the Loans; and
(e) any other items that are customarily prorated in transactions of this nature excluding, however, insurance premium under the Insurance Policies. Any and all security deposits, prepaid rent and all interest earned thereon shall be a credit to Buyer at Closing. Seller shall be fully liable for any wages and other amounts due and owing any employees at the Project. Seller shall retain, and shall not be entitled to any credit for, the deposits, if any, made by Seller in connection with the provision of electric, sewer, water, telephone and other utility services to the Project. Seller shall retain any and all deposits and escrows relating to the Loans. For purposes of calculating prorations, Buyer shall be deemed to be in title to the Project, and, therefore, entitled to the income therefrom and responsible for the expenses thereof for the entire day immediately preceding upon which the Closing Date (the "Apportionment Date") occurs. All such prorations shall be made on the basis of the actual number of days of the month which shall shalt have elapsed as of the day of the Closing Date and based upon the actual number of days in the month and a 365 three hundred sixty-five (365) day year, and reflected on a closing statement (the ". The amount of such prorations shall be initially performed by Title Company at Closing Statement") to but shall be agreed upon by Purchaser and Owner and executed at Closing:
(i) subject to Section 7(b), prepaid rents, fixed rents adjustment in cash after the Closing outside of escrow as and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments when complete and percentage rentaccurate information becomes available, if anysuch information is not available at the Closing. Seller and Buyer agree to cooperate and use their best efforts to make such adjustments no later than sixty (60) days after the Closing (except with respect to property taxes, payable which shall be adjusted within sixty (60) days after the tax bills for the applicable period are received). Without limiting the generality of the foregoing, Seller and Buyer hereby agree that with respect to any year-end reconciliations of reimbursable expenses under the Leases) (collectively, "Rents") Seller and all other revenue or income derived with respect Buyer shall cooperate to the Property, all on an if, complete such reconciliations as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water rates and charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property (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);
(iii) fuel, if any, soon as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's cost therefor);
(iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
(vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New York.
(i) Monthly base rents (collectively, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and possible after the Closing, with Seller responsible for amounts owing to demand payment of tenants under the Leases, and collect rent and Additional Rent entitled to Rents (as hereinafter defined) arrearages owed to Owner payable by any tenant for tenants under the benefit of Owner. Owner will have Leases (as the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"case may be), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which Closing, and with Buyer responsible for amounts owing to tenants under the Closing Date occursLeases, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due Rents payable by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord tenants under the lease in question Leases (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be), shall make an appropriate payment with respect to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, 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 two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be for Owner's account up to the Apportionment Date and, periods from and after the Apportionment DateClosing (and, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings orwith respect to any such amounts payable to Seller, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser Buyer shall have no right obligation to receive any rental insurance proceeds which relate collect such Rents, including having no obligation to the period prior to the Closing Date, all of which shall be the property of Owner.
(g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or institute legal proceedings, whether or not now pendingincluding any action for unlawful detainer, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of against a tenant owing any such proceedings and Rents, other than to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on ause
Appears in 1 contract
Sources: Purchase and Sale Agreement (American Industrial Properties Reit Inc)
Apportionments. (a) The following shall be apportioned between Seller and Purchaser (based on the periods to which they relate and Owner are applicable, and regardless when payable, except as otherwise expressly provided to the contrary) as of 11:59 p.m. on the day immediately preceding the Closing Date (the "“Apportionment Date") on ”), such that Purchaser shall be treated as the basis owner of the actual number Property for purposes of days prorations of income and expenses, on and after the month which shall have elapsed as day of the Closing Date and based upon the actual number of days in the month and a 365 day year, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at Closing:
(i) subject to Section 7(b), prepaid rents, all (x) fixed rents or so-called base rent payment obligations (“Fixed Rents”) and additional rents payable pursuant to the Leases (including, without limitation, y) reimbursement obligations or payment obligations in respect of operating expense escalation paymentsexpenses, real estate tax escalation payments and taxes, percentage rent, if anyapplicable, payable under the Leases) and other charges (collectively, "“Additional Rent,” and together with Fixed Rents", shall hereinafter be referred to collectively as, “Rents”) pursuant to Leases for the month in which the Closing occurs, shall, unless otherwise provided in Section 8(b) hereof, be apportioned between Purchaser and all other revenue or income derived with respect to Seller based upon the number of days during the month in which the Apportionment Date occurs that each party actually owned the Property, all on an if, as and when collected basis;
(ii) real estate taxes, sewer taxes are to be apportioned based on Section 8(c) hereof. Sewer rents and taxes, water rates and chargescharges (to the extent not accounted for pursuant to clause (i) above or (iii) below), vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property Premises (collectively, "with real estate taxes, “Property Taxes"”), on the basis of the respective periods for which each is assessed or imposed, are to be apportioned in accordance with Section 7(c)8(c) hereof;
(iii) fuel, if any, as reasonably estimated charges for all utilities (to the extent not paid directly by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier tenants under the Leases) and other due and unpaid operating expenses shall be conclusive evidence as to the quantity of fuel on hand paid by Seller (and Owner's cost therefor)apportioned if necessary) in accordance with Section 8(d) hereof;
(iv) prepaid fees, if any, fees for licenses and other permits which will be transferred by Owner permits, including, without limitation, any fees payable to the City of Chicago under the Pedestrian Bridge Agreement, assigned to Purchaser on at the Closing Date(which cover any period after the Closing);
(v) any amounts prepaid or payable by Owner under the Contracts in effect as owner of the Closing Date;Property under Contracts (if any) which are to be assumed by Purchaser at Closing; and
(vi) business improvement district dues, if any;the annual fee payable by Metra for the year in which Closing occurs relating to the “Commuter Facilities Easement” and other rights granted to Metra under the Metra Declaration; and
(vii) all other operating expenses with respect to the Premises to the extent such other items as matters are customarily apportioned between sellers and purchasers in connection with real estate closings of real commercial properties of a type similar to the Property and located in the Citydowntown Chicago, County and State of New YorkIllinois.
(i) Monthly base rents (collectivelyAny past due and delinquent Fixed Rents or Additional Rent owing by any tenant for any period through the Apportionment Date shall not be prorated. If, "Base Rents") under on the Leases Apportionment Date, there are any past due Fixed Rents or Additional Rent owing by any tenant for any period through the Apportionment Date, Purchaser shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected use its commercially reasonable efforts to collect the same after the Closing Date from tenants who owe Base Rents for periods prior by billing such tenant (provided Purchaser shall not be obligated to institute legal proceedings against any tenant or guarantor with regard to the same, but Seller shall retain its right to institute legal proceedings or pursue other remedies against such tenant or guarantor after the Closing Date, Date in the event payment has not been received within sixty (60) days after Closing so long as such proceeding does not seek a termination of the Lease or eviction of such tenant). Purchaser shall not compromise or settle any such rent arrearages without Seller’s prior written consent. Any Fixed Rent and Additional Rent received (net of Purchaser’s reasonable costs of collection) from any tenant or guarantor on or after the Closing Date shall be applied, applied in the following order of priority (without duplication):
(A) first, in payment of Base Rents for the month in which received; to current Fixed Rent and Additional Rent due and payable under such Lease, (B) second, to Fixed Rent and Additional Rent arrearages with respect to for the period following the month in payment of Base Rents which the Closing Date occurs and for all subsequent periods thereafter, (C) third, to Fixed Rent and Additional Rent arrearages with respect to the month in which the Closing Date occurs (subject to apportionment pursuant to Section 8(a) above), (D) fourth, to Fixed Rent and Additional Rent arrearages with respect to the period prior to the month in which the Closing Date occurs; , and (CE) thirdall other Fixed Rent and Additional Rent collected shall belong to Purchaser, provided, however, if any Fixed Rent and/or Additional Rent payment is specifically marked or readily ascertainable as payment for a particular month during which Seller owned the Property and (x) such tenant’s Fixed Rent and/or Additional Rent was, in payment of Base Rents fact, in arrears for any period after Closing Date for which Base Rent such month and (y) Seller has not been paid; received Fixed Rent and/or Additional Rent from said tenant for such month pursuant to this Section 8(b), then such Fixed Rent and/or Additional Rent payment shall belong to Seller (and (D) fourthif said Fixed Rent and/or Additional Rent payment is made by check payable to Purchaser, in payment Purchaser shall endorse the check and promptly deliver the same to Seller). Any Fixed Rents and/or Additional Rent received directly or indirectly by Seller or Purchaser following the Apportionment Date which are the property of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costsother, shall be adjusted held in trust and prorated as provided above and paid to the party receiving such amount shall, other within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitledBusiness Days following receipt thereof.
(ii) Purchaser will use commercially reasonable effortsExcept as is otherwise provided in the Leases, from and after certain tenants under Leases pay their proportionate share of Additional Rent, which in most cases, provides for payments of monthly estimates with an adjustment at the Closing, end of each fiscal year applicable to demand payment of and collect rent and such Additional Rent. Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the rightis determined, after the Closingin most cases, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent a fiscal year commencing January 1, and ending December 31. All amounts received by Seller as interim payments of Additional Rent arrearages in respect before the Closing Date shall be prorated between the Seller and Purchaser, based on a year-to-date reconciliation completed by Seller’s property manager, of any period prior the actual Additional Rent collected by Seller to the Closing without the prior written consent of Purchaser.
(iii) With respect underlying operating expenses to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an ifwhich they relate. If, as and when collected basis.
(iv) Subject to of Closing, Seller has received Additional Rent in excess of the other provisions of this Section 7, for any Overage expenses incurred by Seller which are reimbursable as Additional Rent payable for an accounting period that expired prior to the Closing Date, but which Purchaser shall be paid after receive a credit in the amount of such excess at Closing. If, as of the Closing Date, such entire Seller has incurred expenses reimbursable as Additional Rent in excess of the amount shall belong to Owner and if Purchaser of Additional Rent actually received from tenants, Seller shall receive a credit in the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting perioddeficiency at Closing. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated As soon as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments practicable after the Closing. The parties , Seller and Purchaser shall make final reconciliation of fully cooperate with one another in good faith re-prorating such Additional Rent at the time that such estimates are actually adjusted or reconciled pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility term of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing LeaseLeases. Any amounts required due by Purchaser or Seller, as applicable, from such re-proration shall be paid within fifteen (15) Business Days after the same is determined (except that any amounts due by Purchaser that is to be paid by Owner under this paragraph (viii) tenants shall not be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in Seller until Purchaser collects the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay from such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amounttenants), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on a cash basis, such that Property Taxes for the Premises for the calendar year preceding the calendar year in which the Closing occurs (which are due and payable in the calendar year in which the Closing occurs) (the “Apportioned Property Taxes”) shall be prorated on the basis of 100% of the fiscal period most recent ascertainable full-year tax ▇▇▇▇ for the Premises, it being agreed that Property Taxes for the Premises for the calendar year in which assessedthe Closing occurs (which are due and payable in the calendar year following the calendar year in which the Closing occurs) and subsequent years shall not be prorated and shall be the sole responsibility of Purchaser. If the Closing Date shall occur either before an assessment is made or the issuance of a full-year tax rate is fixed ▇▇▇▇ for the tax period in which the Closing Date occursApportioned Property Taxes, the apportionment of such Property Taxes based thereon shall be made at reprorated by the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly parties within ten (10) Business Days after the assessment and/or issuance of the actual tax rate for the current year are fixed, the apportionment thereof shall be recalculated ▇▇▇▇ and Owner Seller or Purchaser, as the case may be, shall make an appropriate payment to the other based on such recalculation. Seller hereby expressly reserves the right to continue, commence and conduct any tax abatement or reduction proceedings relating to the Premises in respect of real estate taxes for the calendar year 2012 (due and payable in the calendar year 2013) (subject to apportionment as stated below) and for all prior real estate tax years, subject to Seller’s compliance under the Leases for reconciliation with the tenants of any amount of tax abatement or refunds obtained, and Purchaser shall have the right to commence and conduct any tax abatement or reduction proceedings relating to the Premises for the calendar year 2013 (due and payable in the calendar year 2014) and all subsequent years, subject to Purchaser’s compliance under the Leases for reconciliation with the tenants of any amount of tax abatement or refunds obtained. Seller shall not have the right to contest or appeal any assessments or real estate taxes for the year 2013 (due and payable in the calendar year 2014). Seller shall have the sole right and discretion to compromise or settle any tax certiorari or reduction proceedings relating to the Premises for the calendar year 2012 (due and payable in the calendar year 2013) and all prior real estate tax years, subject to Seller’s compliance under the Leases for reconciliation with the tenants of any amount of tax abatement or refunds obtained. Purchaser agrees to reasonably cooperate with Seller in all such proceedings at no cost, expense, liability or potential liability to Purchaser. As between Purchaser and Seller (subject to the rights, if any, of tenants under the Leases), real estate tax refunds for periods prior to the calendar year 2012 (due and payable in the calendar year 2013), shall be the sole property of Seller. As between Purchaser and Seller (subject to the rights, if any, of tenants under the Leases), real estate tax refunds for periods the calendar year 2013 (due and payable in the calendar year 2014) and subsequent calendar years shall be the sole property of Purchaser. Real estate tax refunds and credits received after the Closing Date which are attributable to the calendar year 2012 (due and payable in the calendar year 2013) shall be apportioned between Seller and Purchaser, after deducting the expenses of collection thereof. To the extent received by either party, sums payable to the other party hereunder shall be held by the receiving party as a trust fund, and remitted to the other party within ten (10) business days based on such recalculation. If as Business Days of the Closing Date the Property 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, Owner shall only be responsible for the unpaid installments of such assessments which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Datereceipt.
(d) If there To the extent the same are water meters at not paid directly by tenants under the PropertyLeases, Purchaser and Seller hereby acknowledge and agree that the unfixed water rates and charges and sewer rents and taxes covered by metersamounts of all telephone, if anyelectric, shall be apportioned (i) on the basis of an actual reading done within two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricitygas, steam, gas sewer, water bills, trash removal bills, and other utility services janitorial and maintenance service bills (collectively, "“Utilities"”) shall be for Owner's account up relating to the Apportionment Date and, from Property and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate allocable to the period prior to the Closing Date shall be determined and paid by Seller before Closing, if possible, or shall be paid thereafter by Seller or adjusted between Purchaser and Seller after the same have been determined. Seller shall attempt to have all utility meters read as of one (1) Business Day prior to the Closing Date. Seller shall promptly pay all unpaid bills, which obligation shall survive Closing. Seller shall further attempt to obtain from the provider of same, all other service statements and bills of which shall be the property of Owneraccount.
(ge) With Leasing Commissions (as defined below) and Tenant Inducement Costs (as defined below) payable with respect to any Leases shall be allocated as set forth in this Section 8(e) between Seller and Purchaser.
(i) Seller shall be responsible only for payment of (x) all tax years Leasing Commissions and Tenant Inducement Costs, including, without limitation, rent abatement concessions whether attributable to periods occurring prior to or after the Closing, under any Lease documents executed and in existence as of October 3, 2013 (lists of which are attached hereto as Schedules E and K), but expressly excluding the obligation to re-carpet, repaint or replace wall coverings under the GSA Leases if the GSA has not given written notice of the need thereof prior to the tax year Closing Date, and (y) all Leasing Commissions and/or Tenant Inducement Costs due and payable in connection with those Pending Lease Transactions (as hereinafter defined) listed on Schedule N attached hereto which have been finalized and completed pursuant to written Lease documentation as of the Closing occursDate (the “Finalized Pending Lease Transactions”). For the avoidance of doubt, in no event shall Seller be responsible for, or to pay or give Purchaser credit for, (A) the cost to re-carpet, repaint or replace wall coverings under the GSA leases if the GSA has not given written notice of the need thereof prior to the Closing Date, (B) Leasing Commissions and/or Tenant Improvement Costs, including, without limitation, rent abatement concessions, arising in connection with, or granted under, any new Leases, any amendments to existing Leases or any options, extensions, renewals, expansions or any other obligations of the landlord exercised or executed on or after October 3, 2013 under existing Leases other than for the Finalized Pending Lease Transactions, or (C) costs for any capital improvements and repairs to the Premises other than as may be set forth in the Finalized Pending Lease Transactions (and also subject to the terms of Sections 8(g) and 10(c) below). To the extent that Seller has not paid any of the Tenant Improvements Costs and/or Leasing Commission for which it is expressly responsible hereunder as of the Closing Date, then Purchaser shall receive a credit at Closing against the Purchase Price for any such unpaid amounts and Purchaser shall assume, in writing, the obligation to pay any such unpaid amounts.
(ii) Purchaser shall be entitled to commence, continue and control the progress ofresponsible for, and shall be entitled pay when due, the following Leasing Commissions and/or Tenant Inducement Costs (including rent abatement concessions) under the Leases: (1) the cost to make all decisions with respect tore-carpet, any proceeding repaint or proceedings, whether or not now pending, replace wall coverings under the GSA Leases for the reduction which written notice of the assessed valuation of need thereof has been given by the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before GSA on or after the Closing Date, as may be necessary to carry out the intention of the foregoing, (2) all Leasing Commissions and/or Tenant Inducement Costs (including, without limitation, rent abatement concessions,) arising under all new Leases or any amendments to existing Leases exercised or executed on or after October 3, 2013 and approved (or deemed approved) by Purchaser in accordance with the delivery to terms of Section 10(b)(i) of this Agreement other than for the Finalized Pending Lease Transactions and (3) all Leasing Commissions and/or Tenant Inducement Costs (including, without limitation, rent abatement concessions,) arising under any options, extensions, renewals, expansions or any other party obligations of the landlord exercised or executed on or after October 3, 2013 under existing Leases other than for the Finalized Pending Lease Transactions, but only to this Agreementthe extent the amounts of such Leasing Commissions and/or Tenant Inducement Costs are disclosed in the Due Diligence Materials (including, upon demandwithout limitation, Seller’s existing property management and leasing agreements for the Property) provided to Purchaser prior to the expiration of the Inspection Period or are otherwise disclosed in writing to Purchaser prior to the expiration of the Inspection Period. In connection therewith, Seller shall retain liability for the payment of any relevant books Leasing Commissions and/or Tenant Inducement Costs (x) due and recordspayable in connection with the Finalized Pending Lease Transactions, including receipted tax bills (y) contained in new Leases or any amendments to existing Leases exercised or executed on or after October 3, 2013 in violation of the terms of Section 10(b)(i) of this Agreement and cancelled checks used in payment (z) arising under any options, extensions, renewals, expansions or any other obligations of the landlord exercised or executed on or after October 3, 2013 under existing Leases, but only to the extent the amounts of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on aLeasing Commissions and/or Tenant Inducement Costs were not disclosed in
Appears in 1 contract
Sources: Purchase and Sale Agreement (KBS Real Estate Investment Trust III, Inc.)
Apportionments. (a) The following shall be apportioned between Seller and Purchaser and Owner as of 11:59 p.m. on the day immediately preceding the Closing Date (the "“Apportionment Date") on ”), such that Purchaser shall be treated as the basis owner of the actual number Property for purposes of days prorations of income and expenses, on and after the month which shall have elapsed as day of the Closing Date and based upon the actual number of days in the month and a 365 day year, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at Closing:
(i) subject to Section 7(bexcept for non-refundable fees, and the non-refundable portion of similar deposits (cleaning fees, security deposits, and the like), prepaid rents, all fixed rents and additional rents payable pursuant to the Leases (including“Fixed Rents”), without limitation, together with any operating expense escalation paymentsexpenses, real estate tax escalation payments and taxes, percentage rent, if any, payable under the Leases) and other charges (collectively, "Rents"“Additional Rent”) and all other revenue rent or income derived with respect (Fixed Rents, Additional Rent and all other rent or income, collectively, “Rents”) paid pursuant to Leases for the month in which the Closing occurs, shall be apportioned between Purchaser and Seller based upon the number of days during the month in which the Closing Date occurs that each party actually owned the Property, all on an if, as and when collected basis. All other Rents will be apportioned in accordance with Section 8(b) hereof;
(ii) real estate taxes, sewer taxes are to be prorated based on Section 8(c) hereof Sewer rents and taxes, water rates and chargescharges (to the extent not accounted for pursuant to clause (i) above or (iii) below), vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property Premises (collectively, "“Property Taxes"”), on the basis of the respective periods for which each is assessed or imposed, are to be apportioned in accordance with Section 7(c)8(c) hereof;
(iii) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier charges for all utilities and other due and unpaid operating expenses shall be conclusive evidence as to the quantity of fuel on hand paid by Seller (and Owner's cost therefor)apportioned if necessary) in accordance with Sections 8(d) hereof;
(iv) prepaid fees, if any, fees for licenses and other permits which will be transferred by Owner assigned to Purchaser on at the Closing Date(which cover any period after the Closing);
(v) any amounts prepaid or payable by Owner under the Contracts in effect as owner of the Closing DateProperty under Contracts (if any) which are expressly to be assumed by Purchaser at Closing;
(vi) business improvement district duesall other operating expenses with respect to the Premises to the extent such matters are customarily apportioned in connection with real estate closings of commercial properties located in Orlando, if any;Florida; and
(vii) all Seller Capital Improvements/Repairs (as defined in Section 10(c)), based upon the number of days of the projected useful life of such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to Seller Capital Improvements/Repairs that each party actually owned the Property and located in the City, County and State of New YorkProperty.
(ib) Monthly base rents (collectivelyIf, "Base Rents") under on the Leases Apportionment Date, there are any past due Rents owing by any tenant for any period through the Apportionment Date, Purchaser shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected use its commercially reasonable efforts to collect the same after the Closing Date from tenants who owe Base Rents for periods prior (provided Purchaser shall not be obligated to institute legal proceedings against any tenant with regard to the Closing Datesame, but Seller shall be applied, retain its right to institute legal proceedings against such tenant in the event payment has not been received within thirty (A30) first, in payment days after Closing). Any Rent received (net of Base Rents for the month in which received; (BPurchaser’s reasonable costs of collection) second, in payment of Base Rents for the month in which from any tenant after the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; to current Rent, (B) second, to Rent arrearages with respect to the month in payment of Overage Rents for which the Closing Date occurs (subject to apportionment pursuant to Section 8(a) above), (C) third, to Rent arrearages with respect to the period prior to the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current period, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts arrearages with respect to periods prior to the calendar period following the month in which the Closing Date occursshall occur, and (E) all other Rent collected shall belong to Purchaser, provided, however, if any Rent payment is specifically marked as payment for a particular month during which Seller owned the extent Property and (x) such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner tenant’s Rent was, in fact, in arrears for such periods, month and (y) Owner and Purchaser apportioning all monthly installments of Seller has not received Rent from said tenant for such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of this Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount8(b), then such Rent payment will shall belong to Seller (and if said Rent payment is made by check payable to Purchaser, Purchaser shall endorse the check and promptly deliver the same to Seller). Any Rents received directly or indirectly by Seller or Purchaser following the Closing Date which are the property of the other, shall be applied paid to the other within five (x5) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) abovebusiness days following receipt thereof.
(c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated at the actual tax rate payable (taking into account any available discounts) and Owner Seller or Purchaser, as the case may be, shall promptly make an appropriate payment to the other within ten (10) business days based on such recalculation. If as .
(d) Purchaser and Seller hereby acknowledge and agree that the amounts of the Closing Date all telephone, electric, gas, steam, sewer, water bills, trash removal bills, and janitorial and maintenance service bills (collectively, “Utilities”) relating to the Property or any portion thereof shall be affected by any special or general assessments which are or may become payable in installments of which and allocable to the first installment is then a lien and has become payable, Owner shall only be responsible for the unpaid installments of such assessments which are due period prior to the Closing Date shall be determined and paid by Seller before Closing, if possible, or shall be paid thereafter by Seller or adjusted between Purchaser and Seller after the same have been determined. Seller shall attempt to have all utility meters read as of the Closing Date. Seller shall promptly pay all unpaid bills, which obligation shall survive Closing and the delivery of the deed. Seller shall further attempt to obtain from the provider of same, all other service statements and bills of account.
(e) Intentionally deleted.
(f) Purchaser shall pay to Seller at Closing all sums held in reserve or escrow accounts under the Existing Loan, including without limitation reserve accounts to pay for real property taxes, casualty insurance, capital repairs and replacements and similar items, Interest payments relating to the Existing Loan for the month in which the Closing occurs shall be prorated at Closing.
(g) 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 installments which are net due on amount will be added to or after subtracted from the cash balance of the Purchase Price to be paid to Seller at the Closing pursuant to Section 3 hereof, as applicable. Within ninety (90) 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 (dthe “Final Closing Statement”) If there setting forth the final determination of the adjustments and prorations provided for herein and setting forth any items which are water meters not capable of being determined at such time (and the Property, the unfixed water rates manner in which such items shall be determined and charges and sewer rents and taxes covered by meterspaid). 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 apportioned (i) on paid in cash by the basis of an actual reading done within two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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, party obligated therefore within ten (10) business days following notice that party’s receipt of the determination of 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 to the extent that any such actual reading, readjust such apportionment and Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined determinations are not able to be due upon finally determined until a later date (such readjustment.
(eas Additional Rent and Property Taxes) Owner will use commercially reasonable efforts or are expressly subject to have meters for other utilities (a longer survival period hereunder, Seller and Purchaser agree that any items which are not capable of being determined at the responsibility of tenants) read on or just prior to time the Final Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") Statement shall be for Owner's account up determined and paid in the manner set forth in the Final Closing Statement. Prior to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, on the basis of the most recent bills that are available. 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 Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate to the period prior to the Closing Date, all of which each party shall be the property of Owner.
(g) With respect to all tax years prior to the tax year in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with provide the other in connection with such information as the prosecution of any such proceedings and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, other shall reasonably request (including, without limitation, access to the books, records, files and ledgers) information and data with respect to the Property during normal business hours upon reasonable advance notice in order to make the preliminary and final adjustments and prorations provided for herein.
(h) The provisions of this Section 8 shall survive the Closing and the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on adeed.
Appears in 1 contract
Apportionments. (a) The following apportionments shall be apportioned made between Purchaser and Owner the parties at the Closing as of 11:59 p.m. pm local time at the Property on the day immediately preceding prior to the Closing Date (the "“Apportionment Date"”) on and the basis of apportionate adjustments shall be made to the actual number of days of the month which shall have elapsed as of the Closing Date and based upon the actual number of days in the month and a 365 day year, and reflected on a closing statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and executed at ClosingPurchase Price:
(i) subject to Section 7(b), prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including, without limitation, operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, "Rents") and all other revenue or income derived with respect to the Property, all on an if, as and when collected basis;
(iia) real estate taxes, sewer rents and personal property taxes, water rates special assessments and vault charges, vault charges and taxes, business improvement district taxes and assessments and any other governmental taxes, charges or assessments levied or assessed against the Property (collectively, "Property Taxes")if any, on the basis of the respective periods fiscal year for which each is assessed the same are levied, imposed or imposed, to be apportioned in accordance with Section 7(c);
(iii) fuel, if any, as reasonably estimated by Owner's supplier, at Owner's cost, together with any sales taxes payable in connection therewith, if any (a letter from Owner's fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and Owner's cost therefor);
(iv) prepaid fees, if any, for licenses and other permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
(vii) such other items as are customarily apportioned between sellers and purchasers of real properties of a type similar to the Property and located in the City, County and State of New York.
(i) Monthly base rents (collectively, "Base Rents") under the Leases shall be adjusted and prorated on an if, as and when collected basis. Base Rents collected after the Closing Date from tenants who owe Base Rents for periods prior to the Closing Date, shall be applied, (A) first, in payment of Base Rents for the month in which received; (B) second, in payment of Base Rents for the month in which the Closing Date occurs; (C) third, in payment of Base Rents for any period after Closing Date for which Base Rent has not been paid; and (D) fourth, in payment of Base Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable efforts, from and after the Closing, to demand payment of and collect rent and Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant for the benefit of Owner. Owner will have the right, after the Closing, to pursue any remedies against such tenants; provided, however, that Owner will not have the right to seek eviction of any tenant or otherwise commence any litigation against any tenant. Owner shall not compromise, waive or settle any claim against a tenant with respect to rent and Additional Rent arrearages in respect of any period prior to the Closing without the prior written consent of Purchaser.
(iii) With respect to any Lease that provides for the payment of additional or escalation rent based upon (A) a percentage of a tenant's gross sales during a specified annual or other period or (B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or porter's wages (collectively, "Overage Rent"), such Overage R▇▇▇ ▇▇▇▇l be adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section 7, for any Overage Rent payable for an accounting period that expired prior to the Closing Date, but which shall be paid after the Closing Date, such entire amount shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be apportioned between Purchaser and Owner based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period. If, prior to the Closing Date, Owner receives any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sums shall be apportioned at the Closing Date. Any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing Date, subject to the other provisions of this Section, shall belong to Owner and if Purchaser shall receive the same, Purchaser shall pay such amount (less reasonable collection costs) to Owner within ten (10) business days.
(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rents then due and payable in the following order of priority: (A) first, in payment of Overage Rents for the month in which received; (B) second, in payment of Overage Rents for the month in which the Closing Date occurs; (C) third, in payment of Overage Rents for any period after the Closing Date in which Overage Rents have not been paid; and (D) fourth, in payment of Overage Rents for the periods prior to the Closing Date. Each such amount, less reasonable collection costs, shall be adjusted and prorated as provided above and the party receiving such amount shall, within ten (10) business days, pay to the party entitled thereto the portion thereof to which it is entitled.
(vii) Subject to the payment priority set forth in clause (vi) above, to the extent any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for the current periodassessed, and at the end of each calendar year (or, if applicable, at the end of each lease year or tax year or any other applicable accounting period), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Purchaser and Owner on the Closing Date based on such estimated payments (i.e., with (x) Owner entitled to retain all monthly installments of such amounts with respect to periods prior to the calendar month in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated to equal the amounts ultimately due to Owner for such periods, (y) Owner and Purchaser apportioning all monthly installments of such amounts with respect to the calendar month in which the Closing Date occurs and (z) Purchaser entitled to all monthly installments after the Closing. The parties shall make final reconciliation of such estimates pursuant to the provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a right contained in an existing tenant lease, conducts an audit prior to December 26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent Audit") for an accounting period that expires prior to the Closing Date, or otherwise becomes entitled to a refund of Overage Rent or Additional Rent with respect to a period that expires prior to or includes the Closing Date, Owner shall be liable for its prorated share of any refunds due to such tenant or be the recipient of any additional payments due by such tenant as the result of such Rent Audit (and will bear all costs relating to the Rent Audit which are the responsibility of the landlord under the lease in question (or a pro-rata share thereof if also covering subsequent periods including any period in which the Closing occurs)). As an example, if the landlord is required to reimburse a tenant for an audit covering only the operating expenses for the operating year before the Closing, that obligation shall be solely Owner's, but if the audit covers both the operating year before the Closing and the operating year in which the Closing occurs, such audit cost shall first be split between the two years based on the relative dollar amount to be repaid to the tenant for each such year, with Owner bearing all of the costs allocated to the pre-closing operating year, and then the amount allocated to the year in which the Closing occurs shall be apportioned between Owner and Purchaser based on the ownership of the Property during such operating year. The results of any Rent Audit for any accounting period in which the Closing Date occurs shall be apportioned in the same manner as Overage Rent. Rent Audits for accounting periods commencing after the Closing Date shall each be settled by Purchaser in accordance with the applicable existing Lease. Any amounts required to be paid by Owner under this paragraph (viii) shall be paid on or before December 26, 2002.
(ix) To the extent that any amounts are paid or payable by a tenant under a Lease in advance of the period to which such expense applies, whether as a one time payment or in installments (e.g. for real property tax escalations), such amounts shall be apportioned as provided above but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which are not Base Rents or Overage Rents, such as charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges of a similar nature (collectively, "Additional Rent"), such rent shall be applied based on the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or service was provided). If the period to which a payment of Additional Rent applies cannot reasonably be determined based on the context of such payment, then such Additional Rent shall be applied to the period(s) determined in accordance with paragraph (i) above in the same order of priority as Base Rent. For any Additional Rent payable for a period that expired prior to the Closing Date, but which shall be paid after the Closing Date, the entire amount thereof shall belong to Owner and if Purchaser shall receive the same, Purchaser will pay such amount to Owner within ten (10) business days. Additional Rent payable for the period in which the Closing Date occurs shall be apportioned between Owner and Purchaser based upon the same method used to apportion the underlying expense being billed to such tenant, or if such expense is not being apportioned, then based upon the ratio that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period.
(xi) To the extent any payment received from a tenant after the Closing does not indicate whether the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same can not be clearly determined from the context of such payment (e.g., it is accompanied by an invoice for an item of Base Rent, Overage Rent or Additional Rent in such amount), then such payment will be applied (x) first to payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y) second to payment of any Additional Rent then due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage Rent then due or delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation, but, promptly after the assessment and/or tax rate for the current year are fixed, the apportionment thereof shall be recalculated and Owner or Purchaser, as the case may be, shall make an appropriate payment to the other within ten (10) business days based on such recalculation. If as of the Closing Date the Property or any portion thereof shall be affected by any special or general assessments which are or may become payable in installments regardless of which the first installment is then same become a lien and has become payable, Owner shall only be responsible for the unpaid installments of such assessments or are payable (which are due prior to the Closing Date and Purchaser shall pay such installments which are due on or after the Closing Date.
(d) If there are water meters at the Property, the unfixed water rates and charges and sewer rents and taxes covered by meters, if any, apportionments shall be apportioned (i) on the basis of an actual reading done within two (2) days prior to the Apportionment Date, or (ii) if such reading has not been made, on the basis 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 Owner shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to have meters for other utilities (not the responsibility of tenants) read on or just prior to the Closing Date. Charges for all electricity, steam, gas and other utility services (collectively, "Utilities") shall be for Owner's account up to the Apportionment Date and, from and after the Apportionment Date, all utilities shall be for Purchaser's account. Each Utility shall be apportioned on the basis of actual current readings or, if such readings have not been made, calculated on the basis of the most recent bills that are available. If any apportionment available tax ▇▇▇▇ if the current ▇▇▇▇ is not based on an actual current readingthen available); [NOTE: TAX PRORATIONS IN ▇▇▇▇ COUNTY, then upon the taking of a subsequent actual readingIL ARE GENERALLY HANDLED DIFFERENTLY: provided, however, the parties shallacknowledge that real estate taxes are paid one year in arrears in two installments, within ten (10) business days following notice with the final amount of taxes for a year being definitively determined when the determination second installment ▇▇▇▇ for such year is issued in the succeeding calendar year. If the 2014 second installment ▇▇▇▇ is not issued prior to the Closing, then the remaining unpaid 2014 taxes and the portion of such actual reading, readjust such apportionment and Owner shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Owner, as the case may be, the amount determined to be due upon such adjustment.
(f) Purchaser shall have no right to receive any rental insurance proceeds which relate 2015 taxes relating to the period from January 1, 2014 through the day immediately preceding the Closing shall be prorated at Closing based on the final 2013 taxes and shall be re-prorated when the 2014 second installment ▇▇▇▇ is issued based on the actual 2014 taxes, and then again re-prorated in 2016 when and at such time as each 2015 installment ▇▇▇▇ is issued. If the 2014 second installment ▇▇▇▇ is issued prior to the Closing, then Seller shall either pay such final installment prior to Closing or provide Buyer with a credit for the amount of the second installment, and the portion of 2015 taxes relating to the period from January 1, 2015 through the day immediately preceding the Closing shall be prorated at Closing based on the final 2014 taxes, and then again re-prorated in 2016 when and at such time as each 2015 installment ▇▇▇▇ is issued.]
(b) amounts which have been prepaid, accrued or are due and payable under the Contracts, Equipment Leases and Permits;
(c) all rental payments due for the month in which Closing occurs received by Seller from tenants under the Space Leases prior to the Closing Date. Buyer shall receive a credit for all assignable security deposits held by Seller under the Space Leases which are not transferred to Buyer, all of which and Buyer thereafter shall be obligated to refund or apply such deposits in accordance with the property terms of Owner.such Space Leases;
(gd) With respect to prepaid advertising expenses;
(e) commissions of credit and referral organizations; and
(f) all tax years prior to the tax year other charges and fees customarily prorated and adjusted in which the Closing occurs, Purchaser shall be entitled to commence, continue and control the progress of, and shall be entitled to make all decisions with respect to, any proceeding or proceedings, whether or not now pending, for the reduction of the assessed valuation of the Property, and, similar transactions in its sole discretion, to try or settle the same. Any such proceeding or proceedings with respect to the tax year in which the Closing occurs, and all decisions regarding the commencement, continuation, trial or settlement of such proceeding or proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each of Purchaser and Owner agrees to cooperate with the other in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing Date, as may be necessary to carry out the intention of the foregoing, including, without limitation, the delivery to any other party to this Agreement, upon demand, of any relevant books and records, including receipted tax bills and cancelled checks used in payment of such taxes, the execution of any and all consents or other documents, and the taking of any act necessary for the collection of such refund by the requesting party. During its period of ownership, Owner has challenged the Property assessments for tax years 1990-1991 through 2001-2002 and has settled and received payment on account of tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants presently in occupancy on a[State: _________________].
Appears in 1 contract
Sources: Purchase and Sale Agreement (American Realty Capital Hospitality Trust, Inc.)