Page
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1.
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DEFINITIONS
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2
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2.
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SALE
OF THE PROPERTIES
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9
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3.
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ESCROW
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9
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4.
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PURCHASE
PRICE; ALLOCATION OF PURCHASE PRICE
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9
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5.
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CONDITIONS
TO CLOSING; AS IS PURCHASE
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11
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6.
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CLOSING
OF ESCROW
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13
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7.
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TERMINATION
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20
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8.
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REPRESENTATIONS
AND WARRANTIES
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22
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9.
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CERTAIN
EVENTS PRIOR TO CLOSING
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25
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10.
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POST-CLOSING
MATTERS
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25
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11.
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BROKERS
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26
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12.
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MISCELLANEOUS
PROVISIONS
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26
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EXHIBITS
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A-1
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Description
of Emeritus Master Lease
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A-2
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Description
of Summerville Master Lease
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A-3
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Description
of Painted Post Lease
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B
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Escrow
General Provisions
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C
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[RESERVED]
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D
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Form
of Bill of Sale
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E
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Form
of Summerville Lease Amendment
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F
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Form
of Release of Claims
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G
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List
of Sellers, Nominees, Properties/Facilities and Purchase Price
Allocation
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H
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Form
of Emeritus Master Lease Termination
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I
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Form
of Painted Post Lease Termination
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J
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Form
of New Emeritus Guaranty of the Summerville Master
Lease
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K
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Form
of New Emeritus Guaranty of the Summerville Loan
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SCHEDULE
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1
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Related
Purchase Agreements
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AMENDED AND RESTATED PURCHASE AND SALE
AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS
AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT AND JOINT
ESCROW INSTRUCTIONS (this “Agreement”) is made and
entered into as of July 31, 2007, to be effective as of June
14, 2007 (the “Effective Date”), by and among
HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation
(“HCP”), HCPI TRUST, a Maryland real estate trust
(“HCP Trust”), EMERITUS REALTY V, LLC, a Delaware
limited liability company (“ER-V”), ESC-LA CASA
GRANDE, LLC, a Delaware limited liability company
(“ESC-La Casa Grande”), and TEXAS HCP HOLDING,
L.P., a Delaware limited partnership (“Texas HCP”)
(each, a “Seller,” and collectively,
“Sellers”) and EMERITUS CORPORATION, a Washington
corporation (“Buyer”), as follows:
RECITALS
A. Each
Seller is the owner (fee or leasehold, as applicable) of one
or more the Properties (as defined below) as indicated
opposite the name of such Property on Exhibit
G attached hereto.
B. The
Properties comprising the Emeritus Properties (as defined
below) are currently leased by the applicable Seller or
Sellers to Buyer and/or certain Affiliates (as defined below)
of Buyer pursuant to the Emeritus Master Lease (as defined
below).
C. The
Property also described herein as the Painted Post Property
(as defined below) is currently leased by the applicable
Seller to an Affiliate of Buyer pursuant to the Painted Post
Lease (as defined below).
D. The
Properties comprising the Summerville Properties (as defined
below) are currently leased, together with certain other
property, by the applicable Seller or Sellers to Summerville
Lessee (as defined below) pursuant to the Summerville Master
Lease (as defined below).
E. Buyer
desires to purchase the Properties from Sellers and Sellers
desire to sell the Properties to Buyer on the terms and
subject to the conditions set forth herein.
F. This
Agreement, together with the Amended and Restated (Membership
Purchase) Addendum to Purchase and Sale Agreement and Joint
Escrow Instructions dated of even date herewith and attached
hereto, amends and restates, in their entireties, that certain
Purchase and Sale Agreement and Joint Escrow Instructions made
and entered into as of June 14, 2007 (the “Original
Agreement”), as supplemented by that certain (Membership
Purchase) Addendum to Purchase and Sale and Joint Escrow
Instructions dated June 14, 2007 attached thereto (the
“Original Addendum,” and together the Original
Agreement, collectively, the “Original Purchase
Agreement”) for the sale by Sellers to Buyer of the
Properties. To the extent the Original Purchase
Agreement covered properties in addition to the Properties
described herein, this Agreement shall no longer cover such
other properties.
AGREEMENT
NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Buyer and
Sellers agree as follows:
For
all purposes of this Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, (i)
the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular; (ii) all references in this Agreement to designated
“Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and
other subdivisions of this Agreement; (iii) the word
“including” shall have the same meaning as the
phrase “including, without limitation,” and other
phrases of similar import; and (iv) the words
“herein,” “hereof” and
“hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
1.1
1031 Exchange
: As defined in Section
6.8.
1.2
Additional Charges
: With respect to each applicable
Property, “Additional Charges,” as defined in the
applicable Master Lease and allocable to such
Property.
1.3
Additional Rent
: With respect to each applicable
Emeritus Property and the Painted Post
Property, “Additional Rent,” as defined in
the Emeritus Master Lease or the Painted Post Lease, respectively
(including “Percentage Rent” and “CPI
Rent,” as each are defined in the Emeritus Master Lease or
the Painted Post Lease, respectively) and allocable to such
Property.
1.4
Affiliate
: “Affiliate,” as defined
in the Emeritus Master Lease.
1.5
Allocated Purchase
Price : As defined in Section
4.1
1.6
Base Gross Revenues
: With respect to each applicable
Emeritus Property and the Painted Post
Property, “Base Gross Revenues,” as defined
in the Emeritus Master Lease or the Painted Post Lease,
respectively, with respect to such Property.
1.7
Bill of Sale
: As defined in Section
6.2.2.
1.8 Cash
Security Deposit :
“Cash Security Deposit,” as defined in the
Emeritus Master Lease and the Painted Post Master
Lease.
1.9 Cash
Security Deposit Credit . As defined in
Section 4.3.
1.10
Close of Escrow, Closing Date and/or
Closing : As defined in Section
6.1.
1.11 Closing
Breakpoint : As defined
in Section 6.5.2 below.
1.12
Closing Funds
: As defined in Section
4.4.
1.13
Condemnation
: “Condemnation,” as
defined in the Emeritus Master Lease.
1.14
Condemnor
: “Condemnor,” as defined
in the Emeritus Master Lease.
1.15
Cost of Living Index
: With respect to each applicable Property, “Cost
of Living Index,” as defined in the applicable Master
Lease.
1.16
Deed
: As defined in Section
6.2.1.
1.17
Earnest Money
Deposit : As defined in
Section 4.2.
1.18
Effective Date
: As defined in the preface to this
Agreement.
1.19
Emeritus Lessee
: “Lessee,” as defined in
the Emeritus Master Lease
1.20
Emeritus Lessor
: “Lessor,” as defined in
the Emeritus Master Lease.
1.21
Emeritus Master
Lease : That Amended and
Restated Master Lease identified on Exhibit
“A-1” attached hereto among the Emeritus
Lessor and the Emeritus Lessee covering, among other properties,
the Emeritus Properties, as more particularly described therein, as
the same may have been amended or modified from time to time in
accordance with the terms thereof.
1.22
Emeritus Properties
: Collectively, the “Leased
Property” (as defined in the Emeritus Master Lease) of each
“Facility” (as defined in the Emeritus Master Lease)
listed on Exhibit G attached hereto as
“Emeritus Properties,” less any portion of any which
has been taken by reason of any Condemnation or other exercise of
the power of eminent domain (each, an “Emeritus
Property”). The parties acknowledge that the
Emeritus Properties for purposes of this Agreement include only the
“Leased Property” of the “Facilities”
listed on Exhibit G attached
hereto, and that the balance of the “Leased Property”
of each “Facility” covered by the Emeritus Master
Lease, but not covered by this Agreement is being sold and conveyed
to Buyer pursuant to a Related Purchase Agreement. In
other words, pursuant to this Agreement and the Related Purchase
Agreements Sellers and/or their Affiliates are selling and Buyer is
purchasing all of the respective Seller’s and/or its
Affiliates’ right, title and interest in and to the
“Leased Property” of all of the
“Facilities” covered by the Emeritus Master Lease upon
the Closing hereunder and the Related Purchase Agreement Closing
under each applicable Related Purchase Agreement, but this
Agreement is intended to and only covers the “Leased
Property” of each Facility listed on Exhibit
G attached hereto.
1.23
Emeritus/Summerville
Merger : The acquisition by Emeritus of all
of the outstanding stock of Summerville pursuant to an Agreement
and Plan of Merger between Emeritus and Summerville and pursuant to
which SSL and each Summerville Lessee will become a direct or
indirect wholly-owned subsidiary of Emeritus.
1.24
Emeritus/Summerville Merger
Closing : The closing of the Emeritus/Summerville
Merger.
1.25
ER-V
: As defined in the preface to this
Agreement. As of the Effective Date, ER-V is the owner
of the Emeritus Properties located in Englewood, Florida and
Altamonte Springs, Florida. Prior to the Closing, HCP
will convey to ER-V all of its right, title and interest in and to
the Summerville Property located in (West) Ocala, Florida to ER-V
so that as of the Closing, ER-V shall own the Emeritus Properties
located in Englewood, Florida and Altamonte Springs, Florida and
the Summerville Property located in (West Ocala,
Florida).
1.26
ESC- La Casa Grande
: As defined in the preface to this
Agreement. ESC-La Casa Grande is the owner of the
Emeritus Property located in New Port Richey, Florida.
1.27
Escrow Holder
: As defined in Section
3.1.
1.28
Event of Default
: “Event of Default,” as defined in
the applicable Master Lease with respect to such
Property.
1.29
Funds
: Immediately available funds in the
form of cash, wire transfer of funds, or a certified or bank
cashier’s check drawn on a reputable financial institution
acceptable to Escrow Holder.
1.30
Gross Revenues
: With respect to each applicable
Property, “Gross Revenues,” as defined in the
applicable Master Lease with respect to such Property.
1.31
Hazardous Substance
: With respect to each applicable
Property, “Hazardous Substance,” as defined in the
applicable Master Lease with respect to such Property.
1.32
HCP
: As defined in the preface to this
Agreement.
1.33
HCP AL
: HCP AL of Florida, LLC, a Delaware
limited liability company. As of the
Effective Date, HCP AL is the owner of certain properties located
in (East) Ocala, Florida, New Port Richey, Florida, Lakeland,
Florida and Venice, Florida that are leased pursuant to the
Summerville Master Lease and that are also being sold to Buyer or
its Affiliate pursuant to a Related Purchase Agreement as more
particularly described therein. Prior to the Closing and
the applicable Related Purchase Agreement Closing, HCP AL will
transfer and convey the real property (including improvements
thereon and its interest in any personal property related thereto),
of such properties to HCP AL Sub.
1.34
HCP AL Sub
: AL of Florida Sub, LLC, a Delaware limited liability
company, the sole member of which shall be HCP AL prior to the
Closing.
1.35
HCP Trust
: As defined in the preface to this
Agreement.
1.36
Impositions
: With respect to each applicable
Property, “Impositions,” as defined in the applicable
Master Lease with respect to such Property.
1.37
Land Lease
Facilities : “Land Lease
Facilities,” as defined in the Emeritus Lease (i.e., the
Allentown, PN Facility and the Latrobe, PN Facility).
1.38
Land Lease Rent
: “Land Lease Rent,” as
defined in the Emeritus Master Lease.
1.39
Laws
: All applicable governmental laws,
codes, ordinances, regulations, judgments, permits, approvals or
other requirements.
1.40
Lease Year
: With respect to each applicable
Property, “Lease Year,” as defined in the applicable
Master Lease with respect to such Property.
1.41
Lessee
: With respect to (i) the Emeritus
Master Lease, the Emeritus Lessee, (ii) the Painted Post Lease, the
Painted Post Lessee, and (iii) the Summerville Master Lease, the
Summerville Lessee.
1.42
Lessor
: With respect to (i) the Emeritus
Master Lease, the Emeritus Lessor, (ii) the Painted Post Lease, the
Painted Post Lessor, and (iii) the Summerville Master Lease, the
Summerville Lessor.
1.43
Liabilities
: Any claim, liability, loss, cost, action,
damage, expense or fees, including but not limited to reasonable
attorney’s and paralegals’ fees and costs of defense
(each, a “Liability”).
1.44
Master Lease
Termination : With
respect to (a) the Emeritus Master Lease, a Master Lease
Termination Agreement among the applicable Lessor and Lessee, in
the form attached hereto as Exhibit
“H” , to be executed and delivered by such
Lessor and Lessee on the Closing Date, and (b) the Painted Post
Lease, a Lease Termination Agreement between the applicable Lessor
and Lessee, in the form attached hereto as Exhibit
“I” , to be executed and delivered by such
Lessor and Lessee on the Closing Date.
1.45
Master Leases
: Collectively, the Emeritus Master
Lease, the Summerville Master Lease and the Painted Post Lease
(each, a “Master Lease”).
1.46
Memorandum of
Termination : With
respect to each Master Lease and Property (or property covered by a
Related Purchase Agreement) for which a written memorandum or other
evidence of such Master Lease with respect to such Property (or
property covered by a Related Purchase Agreement) has been recorded
in the applicable land records office where such Property (or
property covered by a Related Purchase Agreement) is located, a
memorandum of termination of such Master Lease in form and
substance reasonably satisfactory to Buyer and Sellers, to be
executed, acknowledged and delivered by the applicable Lessor and
Lessee.
1.47
Minimum Rent
: With respect to each applicable
Property, “Minimum Rent,” as defined in the applicable
Master Lease with respect to such Property.
1.48
New Emeritus
Guaranty . With respect to any and all
Summerville Obligations, a written guaranty in form and substance
reasonably acceptable to Sellers to be executed and delivered by
Emeritus upon the later to occur of (i) the Closing hereunder or
(ii) the Emeritus/Summerville Merger Closing. For
purposes of the foregoing, with respect to (a) the Summerville
Master Lease, the form of such New Emeritus Guaranty shall be in
the form of Exhibit “J”
attached hereto and (b) the Summerville Loan, the form of such New
Emeritus Guaranty shall be in the form of Exhibit
“K” attached
hereto. Notwithstanding the foregoing, in the event that
the Summerville Loan is paid off at or prior to the
Emeritus/Summerville Merger Closing, then Emeritus shall not be
required to deliver a New Emeritus Guaranty of the Summerville
Loan.
1.49
Opening of Escrow
: As defined in Section
3.3.
1.50
Organizational
Documents : Collectively,
as applicable, the articles or certificate of incorporation,
certificate of limited partnership or certificate of limited
liability company, bylaws, partnership agreement, operating company
agreement, trust agreement, statements of partnership, fictitious
business name filings and all other organizational documents
relating to the creation, formation and/or existence of a business
entity, together with resolutions of the board of directors,
partner or member consents, trustee certificates, incumbency
certificates and all other documents or instruments approving or
authorizing the transactions contemplated by this
Agreement.
1.51
Original Purchase
Agreement : As defined in
the Recitals hereto.
1.52
Outside Closing Date
: Subject to extension as provided
Section 6.8 below, August 15, 2007.
1.53
Painted Post Lease
: That Lease identified on
Exhibit “A-3” attached hereto
between the Painted Post Lessor and the Painted Post Lessee
covering the Painted Post Property, as the same may have been
amended or modified from time to time in accordance with the terms
thereof.
1.54
Painted Post Lessee
: “Lessee,” as defined in
the Painted Post Lease.
1.55
Painted Post Lessor
: “Lessor,” as defined in
the Painted Post Lease.
1.56
Painted Post
Property : The
“Leased Property” (as defined in the Painted Post
Lease) of the “Facility” (as defined in the Painted
Post Lease), less any portion of any which has been taken by reason
of any Condemnation or other exercise of the power of eminent
domain.
1.57
Pennsylvania Land
Leases :
“Pennsylvania Land Leases,” as defined in the Emeritus
Master Lease.
1.58
Permitted Exceptions
: With respect to each Property, as
defined in Section 6.2.1.
1.59
Person
: Any individual, corporation,
partnership, joint venture, limited liability partnership, limited
liability company, association, joint stock company, trust,
unincorporated organization, whether or not a legal entity, or
other business or governmental entity or authority (or any
department, agency, or political subdivision thereof).
1.60
Properties
: Collectively, the Emeritus
Properties, the Summerville Properties and the Painted Post
Property (each, a “Property”).
1.61
Purchase Price
: As defined in Section
4.1.
1.62
Related Purchase
Agreements : The agreements identified on
Schedule 1 attached hereto between and/or
among Sellers or certain Affiliates of Sellers, and Buyer, or
certain Affiliates of Buyer, relating to certain purchase and sale
transactions to be consummated concurrently with the Closing
hereunder, if at all (each, a “Related Purchase
Agreement”).
1.63
Related Purchase Agreement
Closing . The “Closing,” as
defined in each Related Purchase Agreement.
1.64
Related Purchase Agreement Buyer
Default . The occurrence of a default
(i.e., after any applicable notice or cure period) by Buyer or any
Affiliate of Buyer under any Related Purchase
Agreement.
1.65
Related Purchase Agreement Seller
Default : The occurrence
of a default (i.e., after any applicable notice or cure period) by
Seller or any Affiliate of Seller under any Related Purchase
Agreement.
1.66
Release of Claims:
As defined in Section 6.3.2.
1.67
Rent and Charges
: All accrued and unpaid Minimum Rent,
Additional Rent, Land Lease Rent and any Additional Charges
(whether or not billed) payable by the applicable Lessee under the
applicable Master Lease with respect to the applicable Properties,
through and including the day prior to Closing Date (prorated to
the extent applicable for the month during which the Closing
occurs).
1.68
Summerville
: Summerville Senior Living, Inc., a
Delaware corporation.
1.69
Summerville at
Cobbco : Summerville at
Cobbco, Inc., a California corporation.
1.70
Summerville Lessee
: “Lessee,” as defined in
the Summerville Master Lease.
1.71
Summerville Lessor
: “Lessor,” as defined in
the Summerville Master Lease; provided, however, that (i) upon the
transfer and conveyance by HCP to ER-V of all of HCP’s right,
title and interest in and to the Summerville Property located in
(West) Ocala, Florida, as provided in the definition of
“ER-V” above, ER-V shall be a
“Lessor” (as its interests may appear) under the
Summerville Master Lease for purposes of executing and delivering
the Summerville Master Lease Amedment (and any other documents to
be executed in connection therewith), and (ii) upon the
transfer and conveyance of the real and personal property of the
properties to HCP AL Sub as provided in the definition of
“HCP AL” above, HCP AL Sub shall be a
“Lessor” (as its interests may appear) under the
Summerville Master Lease for purposes of executing and delivering
the Summerville Master Lease Amendment (and any other documents to
be executed in connection therewith).
1.72
Summerville Loan
: That loan by HCP to Summerville at
Cobbco, in the original principal amount of Ten Million Dollars
($10,000,000.00), pursuant to that certain Loan Agreement dated as
of May 11, 1999 between Summerville at Cobbco and HCP as
amended by that certain First Amendment to Loan Agreement dated as
of July 26, 1999, that certain Second Amendment to Loan
Agreement dated as of July 25, 2003, that certain Third Amendment
to Loan Agreement dated as of June 29, 2005, and that certain
Fourth Amendment to Loan Agreement dated as of June 14, 2007, and
evidenced by that certain Second Amended and Restated Secured
Promissory Note dated June 14, 2007, executed by Summerville at
Cobbco in favor of HCP.
1.73
Summerville Master
Lease : That Amended and
Restated Master Lease identified on Exhibit
“A-2” attached hereto among the
Summerville Lessor and the Summerville Lessee covering the
Summerville Properties and certain other property as more
particularly described therein, as the same may have been or may
hereafter be further amended or modified from time to time in
accordance with the terms thereof.
1.74
Summerville Master Lease
Amendment : An amendment
to the Summerville Master Lease to be executed and delivered at
Closing among the Summerville Lessor and the Summerville Lessee,
and consented to by Summerville, as the existing Guarantor, in the
form attached hereto as Exhibit E
and incorporated herein by this
reference.
1.75
Summerville
Obligations : Any and all
obligations and other Liabilities of Summerville or any Affiliate
of Summerville under any existing or hereinafter executed lease
(including the Summerville Master Lease and the lease contemplated
to be executed by HCP or an Affiliate of HCP with Summerville or an
Affiliate of Summerville relating to a facility located in
Orangevale, California), agreement, guaranty, mortgage, deed of
trust or other instrument between or in favor of any Seller(s) or
any Affiliate of Seller(s), on the one hand, and with or made by
Summerville or an Affiliate of Summerville, on the other
hand.
1.76
Summerville
Properties :
Collectively, the “Leased Property” (as
defined in the Summerville Master Lease) of those
“Facilities” (as defined in the Summerville Master
Lease) listed on Exhibit G attached hereto
as “Summerville Properties,” less any portion of any
which has been taken by reason of any Condemnation or other
exercise of the power of eminent domain (each, a “Summerville
Property”). The parties acknowledge and agree that
the Summerville Properties for purposes of this Agreement do not
include the “Leased Property” of all of the Facilities
covered by the Summerville Master Lease and only includes those
Facilities identified on Exhibit G attached
hereto as “Summerville Properties,” and that the
“Leased Property” of certain other
“Facilities” (but not all other
“Facilities”) covered by the Summerville Master Lease
are being sold and conveyed by Sellers and/or their Affiliates to
Buyer pursuant to a Related Purchase Agreement as more particularly
described therein.
1.77
Texas HCP
: As defined in the preface to this
Agreement.
1.78
Title Company
: Chicago Title Insurance Company,
Attn: Angie Koetters, Escrow Officer, Fax
No.:(312)223-5888.
1.79
Title Policies
: As defined in Section
6.4.
1.80
Title Endorsements
: As defined in Section
6.4.
1.81
Transaction
Documents : Collectively,
this Agreement, the Deeds, the Bills of Sale, the Summerville
Master Lease Amendment, each Master Lease Termination, each Related
Purchase Agreement, each New Emeritus Guaranty and all other
agreements, documents and/or instruments to be executed and/or
delivered pursuant to and in connection with this Agreement, the
Related Purchase Agreements and/or the Exhibits hereto or
thereto.
1.82
Transaction Taxes
. Any and all federal, state, municipal or other local
Law documentary transfer, stamp, sales, use, excise, privilege or
similar tax, fee or charge payable in connection with the delivery
of any instrument or document provided in or contemplated by this
Agreement , any Related Purchase Agreement or the Exhibits hereto
and thereto together with interest and penalties, if any, thereon,
including any sales or similar taxes payable in connection with the
transfer of any personal property comprising a part of any
Property.
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2.
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SALE OF THE PROPERTIES
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Subject
to the terms of the Addendum attached hereto, Buyer agrees to
purchase and accept from Sellers, and Sellers agree to sell,
convey and assign to Buyer, all of the Properties on the terms
and subject to the conditions set forth herein.
3.1
General Instructions
. Title Company is also hereby designated as escrow
holder (sometimes herein referred to as “Escrow
Holder”). Escrow Holder’s Escrow number,
Escrow Officer for the transactions contemplated hereby and under
the Related Purchase Agreements, address for notices and wiring
information is set forth below Title Company’s acceptance of
this Escrow. Escrow Holder’s general conditions or
provisions, which are attached hereto as Exhibit
“B” are incorporated by reference herein;
provided, however, that in the event of any inconsistency between
Exhibit “B” and any of the
provisions of this Agreement or any Related Purchase Agreement, the
provisions of this Agreement or the Related Purchase Agreement, as
applicable, shall control, respectively. Buyer and each
Seller shall each execute, deliver and be bound by such further
escrow instructions or other instruments as may be reasonably
requested by the other party or by Escrow Holder from time to time,
so long as the same are consistent with this
Agreement. Escrow Holder shall not comply with the
unilateral instructions of only one party without the consent of
the other party hereto unless otherwise expressly required to do so
in this Agreement or any Related Purchase Agreement.
3.2
Tax Reporting Person
. For purposes of complying with Internal Revenue Code
§ 6045(e), as amended effective January 1, 1991, Escrow
Holder is hereby designated as the “person responsible for
closing the transaction,” and also as the “reporting
person” for purposes of filing any information returns with
the Internal Revenue Service concerning this transaction, as
required by law.
3.3
Opening of Escrow
. Escrow shall be deemed open when not less than four
(4) originals of this Agreement and each Related Agreement, fully
signed by all parties hereto or thereto either together or in
counterparts, are delivered to Escrow Holder (the “Opening of
Escrow”), which shall occur within one (1) business day after
execution of this Agreement by Buyer and Sellers and each Related
Purchase Agreement by the Parties thereto. Escrow Holder
shall immediately notify Buyer, Sellers and their respective
attorneys in writing of the official date of the Opening of
Escrow.
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4.
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PURCHASE PRICE; ALLOCATION OF PURCHASE
PRICE
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4.1
Purchase Price
. The purchase price for the Properties shall be Three
Hundred Seventy-Seven Million Nine Hundred Seven Thousand Two
Hundred Forty-Six Dollars and 00/100ths ($377,907,246.00) (the
“Purchase Price”). The Purchase Price shall
be allocated among the Properties as set forth on
Exhibit “G” attached hereto and
incorporated herein by this reference (with respect each Property,
the “Allocated Purchase Price”).
4.2
Earnest Money
Deposit
. Concurrently with the execution hereof by Buyer, Buyer
shall deposit with the Escrow Holder the sum of Five Million
Dollars and 00/100ths ($5,000,000.00) (the “Earnest Money
Deposit”). Escrow Holder shall hold the Earnest
Money Deposit in United States Treasury obligations or
treasury-backed repurchase agreements, or such other investment as
may be selected by Buyer and reasonably approved by Sellers on a
funds investment form provided by Escrow Holder. All
interest or other amounts earned upon the Earnest Money Deposit
shall become part of the Earnest Money Deposit and shall be applied
with the Earnest Money Deposit in accordance with the terms and
provisions of this Agreement. If the Closing occurs
pursuant to the provisions of this Agreement and each Related
Purchase Agreement Closing occurs under each Related Purchase
Agreement, the Earnest Money Deposit, plus all accrued interest or
other amounts earned thereon, shall be applied against the Purchase
Price hereunder and/or against the purchase price payable under
each Related Purchase Agreement, as directed by
Buyer. If the Closing fails to occur under the
provisions of this Agreement or any Related Purchase Agreement
Closing fails to occur under any Related Purchase Agreement, the
Earnest Money Deposit, plus all accrued interest or other amounts
earned thereon, shall be either delivered to Buyer, or delivered to
Sellers as non-refundable liquidated damages (and not as a
penalty), as determined by the provisions of Sections 7
below. In the event that Sellers are entitled to retain
the Earnest Money Deposit plus accrued interest or other amounts
earned thereon pursuant to Section 7.2.1 below, the allocation of
Earnest Money Deposit plus accrued or other amounts earned interest
thereon among each Seller, shall be as determined by Sellers, and
neither Buyer nor Escrow Holder shall be concerned
therewith. Notwithstanding the foregoing or any other
provision hereof to the contrary, the sum of One Hundred Dollars
and 00/100ths ($100.00) out of the Earnest Money Deposit is
independent of any other consideration provided hereunder, shall be
fully earned by Sellers upon the Effective Date hereof, and is not
refundable to Buyer under any
circumstances. Accordingly, if this Agreement is
terminated for any reason by either party, such independent
consideration shall be paid by Escrow Holder to
Sellers.
4.3
Cash Security Deposit
Credit . Buyer and Sellers acknowledge and
agree that, as of the Effective Date, the Emeritus Lessee and the
Painted Post Lessee have together deposited with the applicable
Lessor pursuant to Article XXI of the Emeritus Master Lease and
Article XXI of the Painted Post Lease, a Cash Security Deposit in
the approximate aggregate amount of $3,055,328.66. In
addition, as of the Effective Date, accrued and unpaid interest on
such aggregate Cash Security Deposit is approximately
$34,466.80. Pursuant to the each Master Lease
Termination, the applicable Lessor thereunder has agreed that the
applicable Lessee shall cause such Lessor to apply all of the sum
of the following to the Purchase Price payable
hereunder: (i) the entire aggregate Cash Security
Deposit, plus (ii) all accrued and unpaid interest on such Cash
Security Deposit as of the Closing Date. The forgoing shall be
referred to herein as the “Cash Security Deposit
Credit.”
4.4
Closing Funds
. No later than 2:00 p.m., Pacific Standard Time, on the
Closing Date, Escrow Holder shall calculate and Buyer shall wire
Funds into Escrow (using wiring instructions reasonably
satisfactory to Escrow Holder) in an amount which, when added to
the Cash Security Deposit Credit, shall equal the Purchase Price
plus any other sums payable by Buyer hereunder (the “Closing
Funds”).
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5.
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CONDITIONS TO CLOSING; AS IS PURCHASE
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5.1
Buyer’s
Conditions . Provided that Buyer is not in breach or
default of any provisions of this Agreement, the obligation of
Buyer to purchase the Properties shall be subject to satisfaction
of each of the conditions set forth in this Section 5.1 on and as
of the Closing Date. Sellers and Buyer expressly
acknowledge and agree that each of the conditions set forth in this
Section 5.1 is for the benefit of and may be waived only by Buyer
as herein provided.
5.1.1
Sellers’ Representations
and Warranties . The representations and
warranties of each Seller set forth in Section 8 below and of HCP
in the Addendum attached hereto shall be true and correct in all
material respects on the Closing Date as if made again on the
Closing Date.
5.1.2
Sellers’
Performance . Each Seller shall have
performed all of its obligations under this Agreement and the
Addendum hereto which by the terms of this Agreement are required
to be performed by such Seller as of or prior to the Closing
Date.
5.1.3
Purchase of All the
Properties . The Closing hereunder shall
occur simultaneous with respect to all of the
Properties.
5.1.4
Occurrence of the Closing by the
Outside Date . The Closing hereunder shall
occur on or before the Outside Closing Date.
5.1.5
Related Purchase
Agreements . The Related Purchase Agreement
Closing under each Related Purchase Agreement shall occur
simultaneous with the Closing. In addition, no Related
Purchase Agreement Seller Default under any Related Purchase
Agreement shall have occurred and be continuing.
5.2
Buyer’s Approval,
Disapproval or Waiver of Conditions
. Prior to Closing Buyer shall notify
Sellers and Escrow Holder in writing in the event that as of the
date of Closing, any of the conditions set forth in Section 5.1
have not been satisfied or waived by Buyer; provided, however, that
if any of the conditions set forth in Sections 5.1.3,
5.1.4 or 5.1.5 have not been satisfied as a result of
any act or omission of Buyer or any Affiliate of Buyer, then Buyer
shall not be entitled to disapprove such condition, but rather the
same shall, following any applicable notice and cure period
pursuant to Section 7.2 below, constitute a default by Buyer
hereunder. In the event that Buyer is not entitled to
disapprove a condition or Buyer fails to approve, disapprove or
waive such condition, if applicable, within the time and in the
manner herein specified, then such condition shall be deemed
conclusively satisfied or waived by Buyer and thereafter shall not
be a condition precedent to the performance by Buyer of its
respective obligations hereunder.
5.3
“ AS
IS” SALE . IT IS EXPRESSLY UNDERSTOOD
AND AGREED THAT BUYER IS ACQUIRING EACH OF THE PROPERTIES “AS
IS,” IN ITS PRESENT STATE AND CONDITION, WITHOUT ANY
REPRESENTATIONS OR WARRANTIES FROM SELLERS, OR ANY OF THEM, OF ANY
KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET
FORTH IN SECTION 8 BELOW AND THE ADDENDUM HERETO. IN
PARTICULAR, EXCEPT AS EXPRESSLY SET FORTH IN SECTION 8 BELOW AND
THE ADDENDUM HERETO, SELLERS MAKE NO REPRESENTATION OR WARRANTY
RESPECTING THE USE, CONDITION, TITLE, OPERATION OR MANAGEMENT OF
ANY OF THE PROPERTIES, OR COMPLIANCE WITH ANY APPLICABLE LAWS
RELATING TO ZONING, SUBDIVISION, PLANNING, BUILDINGS, FIRE, SAFETY,
EARTHQUAKE, HEALTH OR ENVIRONMENTAL MATTERS, THE PRESENCE OR
ABSENCE OF HAZARDOUS SUBSTANCES, OR COMPLIANCE WITH ANY OTHER
COVENANTS, CONDITIONS AND RESTRICTIONS (WHETHER OR NOT OF
RECORD). Buyer represents that it is knowledgeable in
real estate matters and is relying upon Buyer’s own
investigation and analysis in purchasing each of the Properties, as
well as the fact that Buyer, Summerville or their respective
Affiliates originally sold to and/or developed on behalf of each
applicable Seller each of the Properties and at all times
thereafter have leased and exclusively controlled the
same. Buyer further represents that it has had ample
opportunity to inspect and has, in fact, made all of the
investigations Buyer deems necessary in purchasing each of the
Properties. As a result, Buyer hereby expressly waives
any notice requirements which may be imposed upon any Seller
pursuant to § 25359.7 of the California Health & Safety
Code or any other similar and applicable Laws. If this
Agreement is not terminated and Buyer acquires the Properties as
provided herein, Buyer shall have thereby approved all aspects of
each of the Properties and this transaction and thereby waives any
claim or Liability against Sellers, and each of them. In
furtherance of the foregoing, at the Closing, Buyer shall and shall
cause each Lessee to execute and deliver to Sellers the Release of
Claims. The provisions of this Section 5.3 shall survive the
Closing.
5.4
Seller’s
Conditions . Provided that Sellers are not
in breach or default of any provision of this Agreement, the
obligation of each Seller to sell the Properties (and each of them)
shall be subject to satisfaction of each of the conditions set
forth in this Section 5.4. Sellers and Buyer expressly
acknowledge and agree that each of the conditions set forth in this
Section 5.4 is for the benefit of and may be waived only by Sellers
in writing.
5.4.1
No Default Under Master
Leases . Prior to the Closing, (a) no
Event of Default, or event which with notice and/or passage of time
would constitute an Event of Default by the applicable Lessee under
any Master Lease shall have occurred and be continuing and
(b) all Rent and Charges shall be paid as and when due under
each Master Lease, through but not including the Closing
Date.
5.4.2
Purchase of All
Properties . The Closing
hereunder shall occur simultaneously with respect to all of the
Properties.
5.4.3
Occurrence of Closing by the
Outside Closing Date . The Closing shall
occur on or before the Outside Closing Date.
5.4.4
Related Purchase
Agreements . The Related Purchase Agreement
Closing under each Related Purchase Agreement shall occur
simultaneous with the Closing. In addition, no Related
Purchase Agreement Buyer Default under any Related Purchase
Agreement shall have occurred and be continuing.
5.4.5
Buyer’s Representations and
Warranties . Buyer’s representations
and warranties set forth in Section 8 below and in the Addendum
attached hereto shall be true and correct in all material respects
on the Closing Date as if made again on the Closing
Date.
5.4.6
Buyer’s
Performance . Buyer shall have performed
all of its obligations under this Agreement and the Addendum hereto
which by the terms of the Agreement are required to be performed by
Buyer as of or prior to the Closing Date.
5.5
Sellers’ Approval,
Disapproval or Waiver of Conditions .
Prior to the Closing, Sellers shall notify Buyer and Escrow Holder
in writing in the event that as of the date of Closing, any of the
conditions set forth in Section 5.4 have not been satisfied or
waived by Sellers; provided, however, that if any of the conditions
set forth in Sections 5.4.2 , 5.4.3 or 5.4.4 have not been
satisfied as a result of any act or omission of Sellers or any
Affiliate of Sellers, then Sellers shall not be entitled to
disapprove such condition, but rather the same shall, following any
applicable notice and cure period pursuant to Section 7.2 below,
constitute a default by Sellers hereunder. In the event
that Sellers are not entitled to disapprove a condition or Sellers
fail to approve, disapprove or waive such condition, if applicable,
prior to the Closing, then such condition shall be deemed
conclusively satisfied or waived by Sellers and thereafter shall
not be a condition precedent to the performance by Sellers of their
respective obligations hereunder.
6.1
Closing Date
. Subject to extension in order to implement the
provisions of Section 6.8, and unless this Agreement has been
earlier terminated in accordance with the applicable provisions of
Section 7 below, Escrow shall close on the Outside Closing Date;
provided, however, that subject to satisfaction or waiver of each
of the conditions set forth in Sections 5.1 and 5.4, Buyer shall be
entitled to close Escrow prior to the Outside Closing Date upon not
less than five (5) days’ notice to Sellers and Escrow Holder;
provided further, however, that in no event shall the closing occur
prior to July 31, 2007. The terms “Close of
Escrow” and/or “Closing” are used in this
Agreement to mean the time and date the transactions contemplated
hereby are closed and the Deed or other applicable conveyance
instrument has been delivered to Buyer through Escrow, regardless
whether the applicable Deed or other applicable conveyance
instrument is actually recorded in the land records in which the
applicable Property is situated. The term “Closing
Date” as used in this Agreement means the date that the
Closing occurs.
6.2
Deposits by Sellers
. At or before 5:00 p.m., local time in Los Angeles,
California, on that date which is not less than one (1) business
day before the Close of Escrow, Sellers shall deliver or cause to
be delivered to Escrow Holder the following items for handling as
described below; provided, however, that Escrow need not be
concerned with the form or content but only with manual delivery of
all of the following other than item 6.2.1:
6.2.1
Deeds
. With respect to each Property, a duly executed and
acknowledged grant deed, special warranty deed or equivalent
thereof in the applicable State (each a “Deed”)
conveying the real property comprising such Property in such State
to Buyer, in each case subject to (collectively the
“Permitted Exceptions”): (i) all Impositions, whether
past due or delinquent, and (ii) all covenants, conditions,
restrictions, rights of way, easements and other matters of record
or which would be disclosed by an accurate survey or physical
inspection of such Property; provided, however, that with respect
to each Land Lease Facility, the term “Deed” shall mean
an assignment and assumption of the applicable Pennsylvania Land
Lease in form and substance reasonably acceptable to the applicable
Seller and Buyer, in each case subject to the Permitted
Exceptions;
6.2.2
Bill of Sale
. A duly executed and acknowledged quit claim bill of
sale conveying any right, title and interest of each applicable
Seller in and to any tangible personal property located on or
within each Property to Buyer, without warranty except as expressly
set forth therein, in the form of attached Exhibit
“D” or such other form as reasonably
acceptable to Sellers and Buyer (the “Bill of
Sale”);
6.2.3
Summerville Master Lease
Amendment and Master Lease Terminations
. The Summerville Master Lease Amendment duly executed
by the applicable Lessor thereunder and each Master Lease
Termination duly executed by the applicable Lessor
thereunder;
6.2.4
Memorandum of
Termination . As
required, each Memorandum of Termination duly executed and
acknowledged by the applicable Lessor;
6.2.5
Seller’s
Certificate . If any
express representation or warranty of any Seller set forth in
Section 8 hereof or by HCP in the Addendum hereto needs to be
modified due to changes since the Effective Date, a certificate of
such Seller, dated as of the Closing Date and executed on behalf of
such Seller by a duly authorized representative thereof,
identifying any such representation or warranty which is not, or no
longer is, true and correct and explaining the state of facts
giving rise to the change. In no event shall any Seller
have any Liability to Buyer for, or be deemed to be in default
hereunder by reason of any breach of a representation or warranty
set forth in Section 8 hereof or by HCP as set forth in the
Addendum attached hereto which results from any change that (i)
occurs between the Effective Date and the Closing Date, and (ii) is
either expressly permitted under the terms of this Agreement or
beyond the reasonable control of such Seller to
prevent. The occurrence of a change in a representation
or warranty which is permitted hereunder or is beyond the
reasonable control of any Seller to prevent shall, if materially
adverse to Buyer, constitute the non-fulfillment of the conditions
set forth in Section 5.1.1 hereof. If, despite changes
or other matters described in such certificate, the Closing occurs,
any applicable Seller’s representations and warranties set
forth in this Agreement or the Addendum hereto shall be deemed to
have been modified by all statements made in any certificate of
such Seller delivered pursuant to this Section 6.2.4;
6.2.6
Evidence of
Authority . Such certificates or documents
as may be reasonably required by Escrow Holder in order to cause
any Title Policy requested by Buyer as provided in Section 6.4
below to be issued and the Close of Escrow to occur; provided,
however, that in no event shall any Seller be required to execute
and deliver a so-called owner’s or ALTA affidavit or
indemnity or a mechanics’ lien indemnity with respect to any
Property, except in form and substance acceptable to such Seller in
its sole, but reasonable discretion, and in any event any such
affidavit shall be limited to (a) the actual knowledge of such
Seller (without investigation or the duty to investigate) and (b)
the direct actions of Seller;
6.2.7
Closing Statement
. A duly executed and acknowledged counterpart of a
joint buyer/seller estimated closing statement to be prepared by
Escrow Holder and delivered to Sellers and Buyer (the
“Closing Statement”); and
6.2.8
Additional Items
. Any additional funds and/or instruments, signed and
properly acknowledged by Sellers, if appropriate, as may be
necessary to comply with Sellers’ obligations under this
Agreement.
6.3
Deposits by Buyer
. At or before 1:00 p.m., local time in Los Angeles,
California, on the date of the Close of Escrow, Buyer shall deliver
or cause to be delivered to Escrow Holder:
6.3.1
Funds
. Immediately available Closing Funds by wire transfer
into Escrow Holder’s depository bank account in an amount
which, when added to the Earnest Money Deposit, and all interest
and other amounts earned thereon which Buyer instructs Escrow
Holder to apply to the Purchase Price hereunder, and the Cash
Security Deposit Credit shall equal the Purchase Price plus all
Closing costs, charges or prorations payable by Buyer hereunder, as
the same shall be more particularly set forth on the Closing
Statement;
6.3.2
Release of Claims
: A Release of Claims duly executed by
Buyer, each Lessee and any nominees of Buyer hereunder or under any
Related Purchase Agreement in the form attached hereto as
Exhibit “F” (the “Release
of Claims”);
6.3.3
Summerville Master Lease
Amendment and Master Lease Terminations
: The Summerville Master Lease
Amendment, duly executed by the applicable Lessee thereunder, and
Summerville, as existing Guarantor, and each Master Lease
Termination, duly executed by the applicable Lessee
thereunder.
6.3.4
Memorandum of
Termination . As
required, each Memorandum of Termination duly executed and
acknowledged by the applicable Lessee;
6.3.5
New Emeritus
Guaranty(ies) . If the
Emeritus/Summerville Merger Closing has occurred on or prior to the
Closing Date, each New Emeritus Guaranty, duly executed by
Emeritus; otherwise, the provisions of S
