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Pepsico / Citizens Communications Company - Building Purchase Agreement
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Exhibit 10.15
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PURCHASE AGREEMENT
by and between
CITIZENS TELECOM SERVICES COMPANY LLC,
as Seller,
and
PEPSICO, INC.,
as Purchaser
Premises: 5600 Headquarters Drive
Plano, Texas
Date: January 31, 2003
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PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT (this "Contract") is made and entered into as of this 31st day of January, 2003 (the "Effective Date") by and between CITIZENS TELECOM SERVICES COMPANY llc, a Delaware limited liability company ("Seller"), whose principal place of business is located at Three High Ridge Park, Stamford, Connecticut 06905 and PEPSICO, INC., a North Carolina corporation and/or its permitted successors, affiliates and assigns ("Purchaser"), whose principal place of business is located at 700 Anderson Hill Road, Purchase, New York 10577-1444.
ARTICLE I
PROPERTY
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Section 1.01. Property. Seller hereby agrees to sell and convey to Purchaser, and Purchaser hereby agrees to purchase from Seller, upon the terms and conditions set forth herein, the following properties and assets:
(a) That certain tract of real property located in Plano, Texas, more
particularly described in Exhibit A attached hereto and made a part hereof
for all purposes, together with (i) all and singular the rights and
appurtenances pertaining to such real property, including all right, title
and interest of Seller, if any, in and to any easements, adjacent streets,
alleys and rights-of-way and all oil and mineral rights and reservations,
and (ii) all of Seller's right, title and interest in any and all water,
water rights or similar rights or privileges (including tap rights), if
any, appurtenant to or used in connection with the ownership or operation
of such real property (all of the foregoing being hereinafter collectively
referred to as the "Real Property").
(b) All improvements, structures and fixtures now constructed and
completed with respect to and situated on the Real Property and owned by
Seller, including without limitation that certain building and related
facilities (containing approximately 254,653 rentable square feet/285,000
gross square feet (without any representation or warranty as to such square
footage)) located at 5600 Headquarters Drive, Plano, Texas, together with
all of Seller's right, title and interest in all parking areas, loading
dock facilities, landscaping and other improvements, structures and
fixtures owned by Seller located on the Real Property (all of the foregoing
being hereinafter collectively referred to as the "Improvements").
(c) All of Seller's interest in all leases covering all or any portion
of the Real Property and/or the Improvements (collectively, the "Leases"),
together with all security deposits, prepaid rents and similar items
attributable to periods after Closing, any receivables attributable to
periods after Closing for common area maintenance, taxes, insurance and/or
other items, if any, due and payable under any lease for all or any portion
of the Real Property and/or the Improvements, and to the extent assignable,
all of Seller's right, title and interest in all parking agreements, all
contract rights approved by Purchaser (including service contracts) and all
other intangible rights which are appurtenant to the Real Property and/or
the Improvements (all of the foregoing being hereinafter collectively
referred to as the "Intangible Property").
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(d) All of Seller's right, title and interest, if any, in all plans
and specifications, equipment, furniture, furnishings, machinery, heating,
plumbing, ventilation and air conditioning systems and equipment, carpet,
tile, floor coverings, security devices, sprinkler systems, office
supplies, telephone exchange numbers, leasing files and records, tenant
credit reports, PBX Systems, audio systems, keys, computers, servers,
cables, modems, maintenance equipment and supplies and all other tangible
personal property situated on the Real Property and used in connection
therewith or with the Improvements along with Seller's interest as lessee
in any rented or leased personal property, to the extent approved by
Purchaser, including without limitation, all of the personal property
listed on Exhibit G attached hereto and made a part hereof for all purposes
(all of the foregoing being hereinafter collectively referred to as the
"Personal Property").
All of the foregoing items purchased under this Contract are collectively referred to as the "Property".
ARTICLE II
PURCHASE PRICE
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Section 2.01. Purchase Price. The purchase price (the "Purchase Price") is an amount equal to TWENTY-SIX MILLION FIVE HUNDRED THIRTY-TWO THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($26,532,500.00). The sum of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00) (the "Cash Portion") will be paid by Purchaser to Seller at the Closing (as hereinafter defined) in cash or other immediately available wire transferred funds. The balance of the Purchase Price shall be evidenced by a promissory note (the "Note"). The Note shall be secured by a deed of trust (the "Deed of Trust"). In the event PepsiCo, Inc. assigns the Contract pursuant to Section 12.05 hereof, PepsiCo, Inc. shall execute and deliver at the Closing a guaranty (the "Guaranty"). The forms of the Note, the Deed of Trust and the Guaranty shall be as set forth in Exhibits H, I and J, respectively, attached hereto and made a part hereof for all purposes.
Section 2.02. Earnest Money. Purchaser will, within two (2) business days after the Effective Date, deposit the amount of ONE HUNDRED fifty THOUSAND AND NO/100 DOLLARS ($150,000.00) as earnest money hereunder (the "Purchaser's Deposit"), with Republic Title of Texas, Inc. (the "Title Company"). As used herein, the term "Earnest Money Deposit" means the Purchaser's Deposit, together with all interest accrued from time to time thereon. The Purchaser's Deposit may, at the option of Purchaser, be in the form of cash, certified check, cashier's check or other immediately available funds. The Title Company must hold the Earnest Money Deposit in an interest-bearing account, with all interest being paid to Purchaser or Seller, as the case may be, in accordance with the terms of this Contract. At the Closing, the Earnest Money Deposit will be applied toward the Cash Portion of the Purchase Price, but otherwise the Earnest Money Deposit will be held by the Title Company, and returned to Purchaser, or delivered to Seller, in accordance with the terms of this Contract. In addition to the Earnest Money Deposit, Purchaser has, concurrently with its execution hereof, delivered to Seller a check in the amount of FIFTY AND NO/100 DOLLARS ($50.00) (the "Independent Contract Consideration"), which amount Seller and Purchaser agree has been bargained for as consideration for Seller's execution and delivery of this Contract. The Independent Contract Consideration is in addition to and independent of any other consideration or payment provided for in this Contract and is non-refundable in all events.
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ARTICLE III
REVIEW ITEMS
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Section 3.01. Survey. Seller shall deliver to Purchaser, within twenty (20) days following the Effective Date, a new or recertified survey of the Property (the "Survey") dated no earlier than thirty (30) days prior to the Effective Date. The Survey must comply with the "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys" as adopted in 1992 (revised 1999) and meet the accuracy requirements of an Urban Survey, as defined therein, and include items 1-4, 6 (setbacks only), 7(a), 7(b)(1), and 8-10, 11(a) (visible evidence of utilities only), 12-14 and 16 of Table A thereof. The surveyor shall show all building set-back lines as shown on the recorded subdivision plats which define the boundaries of the Survey and all building set-back lines required under applicable zoning regulations. Further, the surveyor must certify to Seller, Purchaser and the Title Company, by the surveyor's placement and execution on the face of the Survey of a surveyor's certificate in the form attached hereto as Exhibit F and made a part hereof. If the legal description on the Survey differs from that attached hereto as Exhibit A, Seller agrees to execute a quitclaim deed to Purchaser transferring whatever right, interest and interest Seller might own in the legal description contained on the Survey.
Section 3.02. Title Review Items. Seller shall deliver to Purchaser, within five (5) days following the Effective Date, a Texas form commitment for title insurance (the "Title Commitment"), issued by the Title Company which shall set forth the state of title to the Real Property and the Improvements and shall list all exceptions, including all liens, easements, claims, encumbrances, rights-of-way, covenants, encroachments, reservations, restrictions, and other conditions or matters affecting the Real Property which would appear in an owner's policy of title insurance if one were issued, together with legible copies of all items, matters, and documents referred to in the Title Commitment. The Title Commitment must contain the expressed commitment of the Title Company to issue the Owner Policy to Purchaser in the amount of the Purchase Price, insuring the title to the Real Property as is specified in the Title Commitment. All items set forth or disclosed in the Title Commitment and Survey not objected to by Purchaser prior to the end of the Review Period or which Seller does not agree to remove, in Seller's sole discretion, shall be referred to herein as "Permitted Exceptions". Seller shall not have any obligation to remove any items reflected by the Title Commitment or Survey except as provided in Section 4.04 hereof and those matters which Seller agrees in writing to cure in response to a letter from Purchaser delivered prior to the end of the Review Period specifying matters to be cured by Seller.
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Section 3.03. Other Review Items. Seller must, within five (5) business days following the Effective Date, deliver to Purchaser copies of the items shown on Schedule 3.03 to this Contract to the extent in Seller's possession and control.
Section 3.04. Inspection/ Confidentiality. Purchaser has the right, at all reasonable times (after giving at least four (4) hours advance notice to Seller), to conduct on-site inspections of the Property and physical inspections and tests of the Property during the Review Period, including, without limitation, the right to enter and inspect all portions of the Property, to interview any service contractors and to inspect and audit all of Seller's books and records relating to the Property; provided, however, Purchaser agrees not to cause any damage to the Property. The parties agree that no invasive testing (other than test borings for environmental testings [provided, further, no borings shall be done within the Improvements or any paving improvements without Seller's prior consent], asbestos sampling or radon testing) may be conducted by Purchaser on the Property without the written consent of Seller, such consent not to be unreasonably withheld or delayed. Seller hereby directs the manager of the Property to cooperate with the reasonable requests of Purchaser. Seller's property manager or other designated Seller representative must be present during Purchaser's on-site inspections and service contractor interviews. Purchaser shall, at its sole cost and expense, repair any damage to the Property caused by Purchaser's inspection or testing thereof, and shall indemnify and hold harmless Seller from and against any and all claims, actions, suits, liens, damages, liabilities, losses and expenses, including, but not limited to, attorney fees, and damage to personal property or personal injury, to the extent directly attributable to any acts performed in exercising Purchaser's rights under this Article III. Purchaser further agrees to maintain the confidentiality of all matters disclosed therein or thereby, and not to disclose the same to any person, except (a) to potential investors; (b) to Purchaser's agents, attorneys, employees and contractors who are advising, consulting with or performing services for Purchaser in connection with its proposed acquisition of the Property; and (c) in response to a valid subpoena or court order. The provisions of this Section 3.04 shall survive the Closing and any termination of this Contract.
ARTICLE IV
REVIEW PERIOD
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Section 4.01. Review Period. Subject to extension as provided in Section 4.05 below, Purchaser has from the Effective Date until 5:00 p.m., Dallas, Texas time, on the forty-fifth (45th) day following the Effective Date, being March 17, 2003 (the "Review Period") to review and approve the due diligence items and to conduct such inspections, interviews, tests and audits as Purchaser, in its sole discretion, deems appropriate.
Section 4.02. Purchaser's Notice. Purchaser shall have the right to terminate this Contract for any or no reason, in its sole and absolute discretion, prior to the expiration of the Review Period. If Purchaser fails to deliver Seller written notice (the "Waiver Notice") waiving this termination right on or before the end of the Review Period, this Contract shall be deemed automatically terminated. Purchaser's failure to deliver the Waiver Notice on or before the expiration of the Review Period shall be deemed Purchaser's election to terminate this Contract under this Section 4.02.
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Section 4.03. Termination. If Purchaser elects to terminate this Contract in its entirety in accordance with, and subject to the terms of this Article IV, the parties hereto shall thereupon be relieved of all liabilities and obligations hereunder, unless a provision provided for herein provides that such liability shall continue notwithstanding the termination of this Contract and such provision shall therefore survive such termination, and the Earnest Money Deposit must be refunded fully and promptly to Purchaser. Seller expressly acknowledges and agrees that, if Purchaser requests the Title Company on or before the expiration of the Review Period to return the Earnest Money Deposit as a result of Purchaser's election to terminate this Contract under Section 4.02 and/or Section 4.05, then the Title Company shall have no obligation to independently determine whether Purchaser has the right to receive the Earnest Money Deposit, and the Title Company may rely solely upon the written instructions set forth in any written notice delivered by Purchaser in connection with such election, without the joinder, approval or consent of Seller. Purchaser will promptly return to Seller any due diligence materials delivered by Seller. Purchaser will also furnish Seller, promptly following Purchaser's receipt, with the final reports issued by any third party consultants retained at Purchaser's request. Such reports will be delivered without representation, warranty or recourse against Purchaser.
Section 4.04. Seller's Obligation to Remove Liens. Notwithstanding anything to the contrary in this Contract, Seller must remove at or prior to the Closing any mortgages, deeds of trust, notices of commencement, mechanics and materialman's liens created, suffered or incurred against the Property by Seller, and Seller's failure or refusal to remove same at or prior to Closing shall be a default under this Contract; provided, however, Seller shall not be in default under this Contract in the event Seller furnishes the Title Company with such bonds, indemnities or other assurances sufficient to cause the Title Company to issue the Owner Policy to Purchaser without exception to any such liens.
Section 4.05. Environmental Audit. Purchaser has the right, at Purchaser's cost, to have a Phase I environmental study of the Property performed during the Review Period. In addition, in the event the Phase I environmental study conducted on behalf of Purchaser recommends that a Phase II environmental study be performed on the Property because of any conditions discovered or reflected in the Phase I environmental study, Purchaser shall have the right, at Purchaser's cost, to have a Phase II environmental study of the Property performed during the Review Period. Any intrusive testing is subject to Seller's approval, such approval not to be unreasonably withheld, delayed or conditioned so long as such invasive testing is not performed within the Improvements. In the event (i) the Phase I environmental study recommends that a Phase II environmental study be performed on the Real Property because of any conditions discovered or reflected in the Phase I environmental study, (ii) Purchaser elects, in Purchaser's sole discretion, to conduct such Phase II environmental investigation, and (iii) Purchaser sends Seller written notice of such election prior to the end of the original Review Period, then the Review Period will automatically be extended one (1) time by an additional thirty (30) days.
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Section 4.06. Service Contracts. Seller agrees that all service, maintenance, and management contracts (collectively, the "Service Contracts") must be terminated by Seller, at Seller's sole cost, on or before the Closing Date unless Purchaser otherwise elects, by written notice delivered to Seller at least thirty (30) days prior to Closing, to assume same. On or before the Closing Date, Seller shall provide Purchaser with written evidence of the termination of such Service Contracts which Purchaser does not elect to assume.
ARTICLE V
GOOD AND MARKETABLE TITLE
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Section 5.01. Conveyance. At the Closing, Seller will convey fee simple title to the Real Property and the Improvements to Purchaser by the Deed (as hereinafter defined) and title to the Personal Property and the Intangible Property by the Bill of Sale (as hereinafter defined), free and clear of any and all deeds of trust, mortgages or other liens or indebtedness; subject, however, to the following (collectively, the "Permitted Exceptions"):
(a) General real estate taxes for the year in which the Closing occurs
and subsequent years not yet due and payable.
(b) All easements, restrictions, rights-of-way, party wall agreements,
encroachments, covenants, reservations, agreements, leases, tenancies,
licenses, conditions and other matters affecting all or any portion of the
Property to the extent defined as "Permitted Exceptions" under Section
3.02.
Section 5.02. Owner Policy. At the Closing, Purchaser must be able to obtain a standard Texas form Owner Policy of Title Insurance (the "Owner Policy") issued by the Title Company in Purchaser's favor in the amount of the Purchase Price, insuring Purchaser's fee simple title to the Real Property and the Improvements in accordance with the provisions of Section 3.02 and subject only to the standard printed exceptions (as modified as hereinafter set forth) and the Permitted Exceptions. The Owner Policy must contain the following modifications: (i) the exception for taxes in the Owner Policy shall be limited to real estate taxes for the calendar year in which the Closing occurs and subsequent years to the extent not yet due and payable, and subsequent taxes and assessments by any taxing authority for prior years due to change of land usage or ownership (however, Purchaser shall have no liability for any rollback taxes); (ii) there shall be no exception for "visible and apparent easements" or words to that effect; and (iii) there shall be no exception for "rights of parties in possession".
ARTICLE VI
CLOSING
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Section 6.01. Closing. The purchase and sale of the Property (the "Closing") will be held through escrow at the offices of the Title Company and will occur, subject to satisfaction of all conditions precedent set forth in this Contract, at 11:00 a.m. Dallas, Texas time on the fifteenth (15th) day following the end of the Review Period, being April 1, 2003, or at such other time and place as the parties may agree.
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Section 6.02. Seller's Obligations. At the Closing, Seller shall execute and deliver to Purchaser, and/or cause the execution and delivery by all parties other than Purchaser of, the following with respect to the Property:
(a) That certain special warranty deed (the "Deed") in the form
attached hereto as Exhibit B and made a part hereof for all purposes.
(b) That certain bill of sale and assignment ("Bill of Sale") in the
form attached hereto as Exhibit C and made a part hereof for all purposes.
(c) That certain affidavit (the "FIRPTA Affidavit") in the form
attached hereto as Exhibit D and made a part hereof for all purposes.
(d) To the extent not previously delivered to Purchaser and to the
extent being assigned to Purchaser under this Contract, original
counterparts (to the extent available - otherwise copies certified by
Seller to be true and correct to Seller's knowledge) of all Leases, lease
files (including all correspondence, applications and credit reports),
currently effective letters of intent with prospective tenants, operating
agreements, reciprocal easement agreements, options, warranties,
guarantees, permits and other agreements related to the Property, including
all modifications, supplements or amendments to each of the foregoing.
(e) All keys to the Property in the possession of Seller.
(f) To the extent necessary to permit the Title Company to remove any
exception in the Owner Policy for mechanics' and materialmen's liens and
general rights of parties in possession, an affidavit as to debts and liens
and parties in possession executed by Seller, made to the Title Company and
in a form reasonably acceptable to the Title Company, along with a GAP
Affidavit and any other items reasonably required by the Title Company.
(g) Seller's certification that all representations and warranties
made by Seller under this Contract are true, complete and correct in all
material respects as of the Closing Date (if accurate or, if not accurate,
a description of the basis for such inaccuracy). Such certificate will
survive for a period of one (1) year following the Closing Date.
(h) Appropriate evidence of Seller's authority to consummate the
transactions contemplated by this Contract as may be required by the Title
Company or Purchaser.
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(i) Assignments of all warranties relating to the Property and all
improvements thereon, including those relating to the construction of the
building and all components thereof (to the extent same are assignable).
(j) Such disclosure form, affidavits and other instruments as may be
required (or which is otherwise customary) to be executed by a seller upon
any transfer of real estate in the state in which the Property is located.
Section 6.03. Purchaser's Obligations. At the Closing, Purchaser shall deliver the Cash Portion of the Purchase Price to Seller in cash or by wire transfer of immediately available funds, and shall execute and deliver to Seller the following with respect to the Property:
(a) The Note.
(b) The Deed of Trust.
(c) The Bill of Sale.
(d) Appropriate evidence of Purchaser's authority to consummate the
transactions contemplated by this Contract as may be required by the Title
Company or Seller, including a legal opinion from Purchaser's in-house or
outside counsel to Seller regarding the authority to enter into the loan
evidenced by the Note and execute all documents in connection therewith,
including without limitation, the Note, the Deed of Trust and the Guaranty
(if the Guaranty is executed).
(e) Such disclosure forms, affidavits and other instruments as may be
required (or which is otherwise customary) to be executed by buyers upon
any transfer of real estate in the State in which the Property is located.
(f) The Guaranty, if PepsiCo, Inc. has assigned the Contract pursuant
to Section 12.05 hereof, and evidence of PepsiCo's authority to enter into
the Guaranty.
Section 6.04. Management Transition. From and after the date hereof, Seller will provide Purchaser with copies of all management reports concerning the Property and any reports which are in the nature of capital appropriations or describe capital expenditures on the Property, as and when received by Seller. Seller agrees that Purchaser may contact Seller and its property manager to obtain copies of and to discuss any such reports and to discuss the operation and maintenance of the Property. Seller shall allow Purchaser's management personnel and agents to work with Seller's property manager commencing no earlier than five (5) days prior to the Closing Date for the purpose of installing a computer at the Property, loading information onto Purchaser's computer network, determining the exact amount of unpaid and prepaid bills and otherwise preparing to take over management of the Improvements. Seller shall also reasonably cooperate with Purchaser following the Closing to effectuate the transition in operation and management of the Property.
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Section 6.05. Possession. Possession of the Property must be delivered by Seller to Purchaser at the Closing, subject only to the Permitted Exceptions.
Section 6.06. Section 1031 Exchange. Either party ("exchanging party") may consummate the purchase of the Property as part of a so-called like kind exchange (the "Exchange") pursuant to ss. 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), provided that: (a) the Closing shall not be delayed or affected by reason of the Exchange nor shall the consummation or accomplishment of the Exchange be a condition precedent or condition subsequent to the exchanging party's obligations under this Contract; (b) the exchanging party shall effect the Exchange through an assignment of this Contract, or its rights under this Contract, to a qualified intermediary and the other party ("accommodating party") shall not be required to take an assignment of the purchase agreement for the relinquished property or be required to acquire or hold title to any real property for purposes of consummating the Exchange; and (c) the exchanging party shall pay any additional costs that would not otherwise have been incurred by the exchanging party or the accommodating party had the exchanging party not consummated its purchase through the Exchange. The accommodating party shall not by this agreement or acquiescence to the Exchange (i) have its rights under this Contract affected or diminished in any manner or (ii) be responsible for compliance with or be deemed to have warranted to the exchanging party that the Exchange in fact complies with ss. 1031 of the Code.
ARTICLE VII
CLOSING ADJUSTMENTS
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Section 7.01. General Prorations. The following will be apportioned at the Closing:
(a) Rents, if any, as and when collected (the term "rents" as used in
this Contract including base rent, percentage rent, common area
maintenance, parking, tax, insurance and other payments due and payable
under the Leases for all or any portion of the Improvements, together with
all taxes thereon) and all other income generated by all or any portion of
the Property, including parking revenue. There will be no proration of
rents accrued but not collected as of the Closing Date.
(b) Taxes and other assessments (including personal property taxes on
the Personal Property), for the current calendar year shall be prorated to
the Closing Date, and thus Purchaser shall receive a credit against the
Purchase Price at Closing equal to Seller's pro rata portion of such taxes
and standby fees, and Purchaser shall assume the liability to pay such
taxes (and Purchaser shall pay such taxes) on or before the delinquency
date thereof. Special assessments certified by any municipal utility
district or other taxing authority prior to the Closing Date, payable in
installments, must be paid in their entirety by Seller at or before the
Closing. If the tax rate or assessed valuation or both have not yet been
fixed, the proration shall be based on the prior year's assessment after
adjustment for any increase in value or tax rate reasonably expected by
Purchaser's tax consultant; provided that the parties hereto agree that to
the extent the actual taxes for the current year differ from the amount so
apportioned at the Closing, the parties hereto will make all necessary
adjustments by appropriate payments between themselves following the
Closing, and this provision shall survive delivery of the Deed.
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(c) Payments under any Service Contracts which Purchaser approves in
writing and agrees to assume at the Closing.
(d) Gas, electricity and other utility charges, if any, to be
apportioned on the basis of the last meter reading.
(e) Other operating expenses of the Property actually paid by Seller
and accepted by Purchaser with respect to the month in which the Closing
occurs, to the extent not included in clause (a) above.
In making such apportionments, Purchaser will receive credit for all rents and other income paid with respect to the day of the Closing, and Purchaser will be charged for taxes and other expenses incurred with respect to the day of the Closing. All apportionments are to be subject to post-closing adjustments as necessary to reflect later relevant information not available at the Closing and to correct any errors made at the Closing with respect to such apportionments; provided, however, that such apportionments shall be deemed final and not subject to further post-closing adjustments if no such adjustments have been requested in writing after a period of sixty (60) days from such time as all necessary information is available to make a complete and accurate determination of such apportionments. All apportionments (regardless of whether all relevant information has been received or errors have been made) are final and not subject to further post-closing adjustment as of June 30 of the year following the year in which the Closing Date occurs.
Section 7.02. Specific Prorations. Anything hereinabove contained to the contrary notwithstanding:
(a) Seller shall retain and be entitled to receive any tax refunds
issued after Closing to the extent applicable to the period prior to the
Closing, but not otherwise. After Closing, Seller may not initiate nor
demand Purchaser initiate or continue any litigation to collect such tax
refunds.
(b) As to gas, electricity and other utility charges, Seller may on
written notice to Purchaser on or before the Closing Date elect to pay one
or more of said items accrued to the date hereinabove fixed for
apportionment directly to the person or entity entitled thereunto and to
the extent Seller so elects, such item shall not be apportioned hereunder,
and Seller's obligation to pay such item directly in such case shall
survive the delivery of the Deed; provided, however, that Seller will not
take any action or fail to take any action which would result in the
cessation or termination of utility service to the Property.
(c) Seller and Purchaser agree that all rents received after the
Closing after reasonable third party out-of-pocket costs of collection
(excluding any management fees or leasing expenses), if any, incurred by
Purchaser shall be applied first to current rentals, and then to delinquent
rentals, if any, in the inverse order of their maturity, and Purchaser will
promptly deliver to Seller any such delinquent rentals owed Seller and
received following the Closing. Seller may not initiate (nor demand that
Purchaser initiate) legal or other proceedings for collection of delinquent
rentals against tenants or any other tenants in occupancy at the Closing.
Seller will deliver to Purchaser, within five (5) business days following
receipt, any rents received by Seller after the Closing and attributable to
the period from and after the Closing.
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(d) At the Closing, Seller shall credit to the account of Purchaser
against the Purchase Price (i) any security deposit (to the extent not
properly applied against tenant delinquencies) reflected as being made
under any leases executed with respect to the Property or otherwise
actually collected by Seller, together with all interest, if any, which
must be paid thereon to any tenant thereunder; and (ii) all prepaid rents
and other charges paid in advance by any tenants of the Property and
attributable to the period from and after the Closing. Any security
deposits not in the form of cash (e.g., letters of credit) must be
transferred and reissued in Purchaser's name and delivered to Purchaser at
the Closing, at Seller's sole cost and, if not so reissued, Purchaser will
receive a cash credit at Closing which will be repaid by Purchaser to
Seller when the letters of credit are so reissued.
(e) Any leasing commissions and tenant improvement allowances due
under any Leases in effect as of the Effective Date shall be the sole
obligation of Seller. Any such leasing commissions and tenant improvement
allowances relating to leases executed between the Effective Date and the
Closing Date shall be the sole obligation of Seller unless Purchaser
approve such lease, in which event such expenses shall be the obligation of
Purchaser.
Section 7.03. Transaction Costs. Purchaser shall be responsible for (a) all attorneys' fees and expenses of Purchaser's counsel; (b) any inspection or other costs incurred by Purchaser as a result of Purchaser's due diligence investigations; ...
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