Pro Rations Assumed Contracts Sample Clauses
The "Pro-rations & Assumed Contracts" clause defines how certain financial obligations and benefits are divided between parties, typically in the context of a transaction such as the sale of a business or property. It specifies how recurring expenses or revenues—like rent, utilities, or service contracts—are allocated between the buyer and seller based on the closing date, and identifies which ongoing contracts the buyer will take over after the transaction. This clause ensures a fair and clear distribution of costs and responsibilities, preventing disputes over who is liable for which payments and obligations before and after the transfer.
Pro Rations Assumed Contracts. (a) Prepaid Expenses & Pro-rations. NewCos shall accept from their corresponding Contributor, and Contributors shall contribute to their corresponding NewCos, the Dealerships’ prepaid expense items incurred in the ordinary course of business at the direct out-of-pocket cost to Contributors for such items and provided such prepaid expenses provide future benefit to NewCos. All deposits and prorations which are normal and reasonable will be made as of Closing, including but not limited to the pro-ration of personal property taxes and utilities. Contributors shall pay all sales taxes incurred as a result of the sale of the Assets pursuant to this Agreement.
Pro Rations Assumed Contracts