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PURCHASE AND SALE
AGREEMENT
AND
JOINT ESCROW
INSTRUCTIONS
By and Between
HCPI TRUST,
a Maryland real estate investment
trust,
“Seller”
and
EMERITUS CORPORATION,
a Washington corporation,
as “Buyer”
TABLE OF
CONTENTS
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Page
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1
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DEFINITIONS
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1
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2
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SALE OF THE
PROPERTIES
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4
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3
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ESCROW
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4
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4
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PURCHASE PRICE;
ALLOCATION OF PURCHASE PRICE
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5
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5
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CONDITIONS TO
CLOSING
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6
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6
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CLOSING OF
ESCROW
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10
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7
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TERMINATION
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15
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8
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REPRESENTATIONS
AND WARRANTIES
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18
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9
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CERTAIN EVENTS
PRIOR TO CLOSING
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20
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10
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POST-CLOSING
MATTERS
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20
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11
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BROKERS
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21
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12
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MISCELLANEOUS
PROVISIONS
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21
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EXHIBITS
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Master
Lease
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Escrow General
Provisions
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Form of
Deed
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Form of Bill of
Sale
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Form of
Amendment to Master Lease
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Release of
Claims
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Purchase Price
Allocation
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PURCHASE AND SALE
AGREEMENT
AND JOINT ESCROW
INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT
ESCROW INSTRUCTIONS (this “Agreement”) is made and
entered into as of March __, 2007 (the “Effective
Date”), by and between HCPI TRUST, a Maryland real estate
investment trust (“Seller”), and EMERITUS CORPORATION,
a Washington corporation (“Buyer”), as
follows:
RECITALS
A. Seller is the owner of the Properties (as
defined below), which are currently leased, together with certain
other property, to Buyer and certain Affiliates (as defined below)
of Buyer pursuant to the Master Lease (as defined
below).
B. Buyer desires to purchase the Properties from
Seller and Seller desires to sell the Properties to Buyer on the
terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller 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 : As defined in the Master Lease.
1.3
Additional
Rent : As defined in the Master Lease (including
Percentage Rent and CPI Rent, as each are defined in the Master
Lease).
1.4
Affiliate
:
As defined in the Master
Lease.
1.5
ALTA
Survey : As defined in Section 5.1.1.1(c).
1.6
Base Gross
Revenues : As defined in the Master Lease.
1.7
Bill of
Sale : As defined in Section 6.2.2.
1.8
Cash Security
Deposit : As defined in the Master Lease.
1.9
Cash Security Deposit
Credit . As
defined in Section 4.2.
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 4.3.
1.13
Condemnation
:
As defined in the Master
Lease.
1.14
Condemnor
:
As defined in the Master
Lease.
1.15
Contingency
Period : The period commencing on the Effective Date and
expiring on March 15, 2007.
1.16
Cost of Living
Index : As
defined in the Master Lease.
1.17
Deed
:
As defined in Section
6.2.1.
1.18
Effective
Date : As defined in the preface to this
Agreement.
1.19
Escrow
Holder : As defined in Section 3.1.
1.20
Event of
Default : As defined in the Master Lease.
1.21
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.
1.22
Gross
Revenues : As defined in the Master Lease.
1.23
Guarantor
:
As defined in the Master
Lease.
1.24
Hazardous
Substance : As defined in the Master Lease.
1.25
Impositions
:
As defined in the Master
Lease.
1.26
Intervening
Liens : As defined in Section 5.1.1.1.
1.27
Laws
:
All applicable governmental laws,
codes, ordinances, regulations, judgments, permits, approvals or
other requirements.
1.28
Lease
Year : As defined in the Master Lease.
1.29
Lessee : As defined in the Master Lease.
1.30
Lessor : As defined in the Master Lease.
1.31
Liabilities
:
Any claim, liability, loss, cost,
action, damage, expense or fees, including but not limited to
reasonable attorney’s fees and costs of defense.
1.32
Lien and Litigation
Reports : As defined in Section 5.1.1.4.
1.33
Major
Loss : shall mean, as to any Property, a casualty loss
or damage to such Property or any loss due to a Condemnation which,
in either such event, results in a loss of Buyer’s financing
for the transactions contemplated hereby.
1.34
Master
Lease : That Amended and Restated Master Lease
identified on Exhibit “A”
attached hereto among Seller and certain Affiliates of Seller,
collectively as “Lessor,” and Buyer and certain
Affiliates of Buyer, collectively as “Lessee” covering
the Properties and certain other property as more particularly
described therein, as the same may have been amended or modified
from time to time in accordance with the terms thereof .
1.35
Master Lease
Amendment : A certain Sixth Amendment to Amended and
Restated Master Lease among the Lessor and the Lessee, and
consented to by the Guarantor, in the form attached hereto as
Exhibit “E” , to be executed
and delivered by Lessor, Lessee and Guarantor, on the Closing
Date.
1.36
Minimum
Rent : As defined in the Master Lease.
1.37
Opening of
Escrow : As defined in Section 3.3.
1.38
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.
1.39
Outside Closing
Date : Subject to extension as provided in the last
sentence of Section 5.1.1.1(b) and in Section 6.8 below, March 31,
2007.
1.40
Permitted
Exceptions : As defined in Section 5.1.1.1.
1.41
Properties
:
Collectively, the “Leased
Property” as defined in the Master Lease of each of the
“Easley, SC (Countryside) Facility,” the “Easley,
SC (Summit Place) Facility,” and the “Spartanburg, SC
Facility,” 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 “Property”).
1.42
Purchase
Price : As defined in Section 4.1.
1.43
Release of
Claim: As
defined in Section 6.3.2.
1.44
Rent and
Charges : All accrued and unpaid Minimum Rent, Additional
Rent and any Additional Charges (whether or not billed) payable by
the Lessee under the Master Lease with respect to the Properties,
through and including the day prior to Closing Date (prorated to
the extent applicable for the month during which the Closing
occurs).
1.45
Seller’s Legal
Costs : Collectively, the legal fees, expenses and
disbursements to counsel incurred by Seller in connection with the
preparation and negotiation of this Agreement and the Exhibits
hereto and the consummation of the transactions contemplated
hereunder and thereunder.
1.46
Seller’s
Transaction Costs : Collectively, Seller’s Legal Costs and the
other fees and expenses of and disbursements made by Seller in
connection with the transactions contemplated by this Agreement and
the Exhibits hereto, including accountants and other professional
fees and travel expenses, excluding , however , any
third-party escrow and accommodator costs incurred by Seller and
attributable solely to the 1031 Exchange.
1.47
Title
Company : Old Republic Title, 2201 Sixth Avenue, Ste.
1110, Seattle, Washington 98121, Attn: Cathrin Weis, Fax No.: (206)
441-1953.
1.48
Title
Documents : As defined in Section 5.1.1.1.
1.49
Title
Policies : As defined in Section 6.4.
1.50
Title
Reports : As defined in Section 5.1.1.1.
2.
SALE OF THE
PROPERTIES
Buyer agrees to purchase from Seller, and Seller
agrees to sell 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, 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, the provisions of this Agreement shall control. Buyer
and Seller each shall 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.
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, fully signed by all parties either together or in
counterparts, are delivered to Escrow Holder (the “Opening of
Escrow”), which shall occur within two (2) business days
after execution of this Agreement by Buyer and Seller. Escrow
Holder shall immediately notify Buyer, Seller and their respective
attorneys in writing of the official date of the Opening of
Escrow.
4.
PURCHASE PRICE;
ALLOCATION OF PURCHASE PRICE
4.1
Purchase
Price . The
purchase price for the Properties shall be Twenty-Eight Million Six
Hundred Fifty Thousand Dollars ($28,650,000.00) (the
“Purchase Price”). The Purchase Price shall be
allocated among the Properties and the various components thereof
as set forth on Exhibit “G”
attached hereto and incorporated herein by this reference. Such
allocation is final and conclusive for all purposes and neither
Seller nor Buyer shall use a different allocation, including in any
state or federal tax returns filed by such party.
4.2
Cash Security Deposit
Credit . Buyer
and Seller acknowledge and agree that, as of the Effective Date,
the Lessee has deposited with the Lessor pursuant to Article XXI of
the Master Lease a Cash Security Deposit in the approximate amount
of $5,554,524, of which approximately $1,401,195 is allocable to
the Properties. In addition, as of the Effective Date, accrued and
unpaid interest on such Cash Security Deposit is approximately
$1,925,637. Pursuant to the Master Lease Amendment, the Lessor has
agreed the Lessee may cause the Lessor to apply all or a portion of
the sum of the following to the Purchase Price payable hereunder:
(i) that portion of the Cash Security Deposit allocable to the
Properties, plus (ii) all accrued and unpaid interest on the entire
Cash Security Deposit as of the Closing Date, plus (iii) up to an
additional $1,158,000 of the Cash Security Deposit. The amount of
the forgoing that Buyer elects to cause the Lessee to apply towards
the Purchase Price shall be referred to herein as the “Cash
Security Deposit Credit.” No later than 2:00 p.m., Pacific
Standard Time, on the day prior to the Closing Date, Buyer shall
cause the Lessee to deliver to the Lessor written instructions as
to the amount of Cash Security Deposit Credit, and at the Closing,
the Lessor shall deliver outside of Escrow the Cash Security
Deposit Credit from the Cash Security Deposit under the Master
Lease.
4.3
Closing
Funds . No later
than 10:00 a.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”).
5.1.1
Contingency Period
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 5.1.1 within the
Contingency Period. Seller and Buyer expressly acknowledge and
agree that each of the conditions in this Section 5.1.1 is for the
benefit of and may be waived only by Buyer as hereinafter
provided.
5.1.1.1
Title and Survey
Approval.
(a) Buyer shall have reasonably approved the
condition of title to each Property as provided in this Section
5.1.1.1. As soon as practicable following the Opening of Escrow,
Buyer shall order and shall cause to be delivered to Buyer and
Seller, at Buyer’s sole cost and expense, a current
preliminary title report or title commitment for each Property
(each, a “Title Report,” and collectively, the
“Title Reports”) prepared by Title Company, together
with legible copies of all documents (the “Title
Documents”) shown on each Title Report as exceptions
affecting title to the applicable Property. Buyer shall take title
to each Property subject to (collectively, the “Permitted
Exceptions”): (a) all matters described in
Section 6.4 and (b) all other items shown on the
applicable Title Report, excepting only such other items or matters
as Buyer disapproves in writing within the time and in the manner
provided in Section 5.2.1 below. Buyer shall be deemed to have
approved each Title Report and all such other items or matters
referenced therein, unless Buyer has delivered written notice of
its disapproval thereof within the time and in the manner provided
in Section 5.2.1 below and all such matters so deemed approved
shall become additional “Permitted Exceptions”
hereunder.
(b) Any liens, encumbrances, easements,
restrictions, conditions, covenants, rights, rights-of-way, and
other matters materially affecting title to any Property which are
created or which may appear of record after the date of the
applicable Title Report for such Property but before the Closing
Date and which are not Permitted Exceptions (collectively,
the “Intervening Liens”) shall also be subject to
Buyer’s reasonable approval and Buyer shall have until the
later of (i) the expiration of the Contingency Period and
(ii) five (5) days after notice from Seller or Title Company
of any Intervening Lien to submit written reasonable objections
thereto in the manner set forth herein. If Buyer fails to submit
any such objections in the manner and within the time herein
provided then Buyer shall be deemed to have approved the
Intervening Lien with respect to such Property and the same shall
become an additional “Permitted Exception” hereunder
with respect to such Property. If, on the other hand, Buyer makes
any such reasonable objection in the manner and within the time
herein provided, then the provisions of Section 5.2.2 shall
apply with respect to Seller’s right to cure the same and
Buyer’s right to terminate the Agreement. The Outside Closing
Date will be extended, if necessary, to provide the parties with
the time needed to review, object and respond to any Intervening
Lien in accordance with the provisions of this Section 5.1.1.1(b)
and Section 5.2.2. below.
(c) Buyer shall have received, at Buyer’s
sole cost and expense, and reasonably approved an ALTA survey of
each Property completed in accordance with the current Minimum
Standard Detail requirements for ALTA/ACSM Land Title Surveys,
jointly established and adopted by ALTA and ACSM that meet the
requirements of a Class A Survey as defined therein, certified to
Buyer, any lender of Buyer, Seller and Title Company as being true
and accurate (each, an “ALTA Survey”). As soon as
practicable following the Opening of Escrow, Buyer shall order an
ALTA Survey of each Property and upon receipt thereof shall furnish
copies of the same to Seller. Buyer shall be deemed to have
approved each ALTA Survey for a Property unless Buyer has delivered
written notice of its disapproval thereof within the time and in
the manner provided in Section 5.2.1. For purposes of Buyer’s
approval of each ALTA Survey, it is agreed that Buyer shall not be
entitled to disapprove any matter disclosed by such ALTA Survey if
the same (i) was previously disclosed on the survey of the
applicable Property at the time Seller acquired the same or
otherwise relates to a Permitted Exception, or (ii) was created or
suffered after the date of Seller’s acquisition of such
Property either by the Lessee or at the request or with the consent
of the Lessee.
5.1.1.2
Approval of
Financing .
Buyer shall have obtained a satisfactory loan commitment from a
lender satisfactory to Buyer in its sole and absolute discretion in
order to finance Buyer’s purchase of the Properties (the
“Loan Commitment”). Buyer shall be fully and solely
responsible for compliance with all lender requirements, and for
payment of all fees and charges imposed by Escrow Holder, Title
Company, lender or others in connection with such loan. Buyer shall
be deemed to have approved the Loan Commitment, unless Buyer has
delivered written notice of its disapproval thereof within the time
and in the manner provided in Section 5.2.1 below.
5.1.1.3
Phase 1 Environmental
Report . Buyer
shall have received, at Buyer’s sole cost and expense, and
reasonably approved a written Phase 1 environmental assessment
for each Property from one or more qualified geotechnical or
engineering firms acceptable to and retained by Buyer, concerning
the presence, handling, treatment and disposal of Hazardous
Substances on, in or under each Property. As soon as practicable
following the Opening of Escrow, Buyer shall order such Phase 1
assessments for each Property and upon receipt thereof shall
furnish copies of the same to Seller. Buyer shall be deemed to have
approved each Phase 1 environmental assessment for a Property
unless Buyer has delivered written notice of its reasonable
disapproval thereof within the time and in the manner provided in
Section 5.2.1.
5.1.1.4
Liens
. Buyer shall have received, at
Buyer’s sole cost and expense, and reasonably approved UCC,
tax lien and judgment search reports on Seller and each of the
Properties (the “Lien and Litigation Reports”) from a
reputable search firm (e.g., CT Corporation or Prentice-Hall
Corporation) showing no liens or judgments affecting any of the
Properties created or suffered by reason of any acts or omissions
of Seller or any Affiliate thereof. As soon as reasonably
practicable following the Opening of Escrow, Buyer shall order such
Lien and Litigation Reports, and upon receipt thereof shall furnish
copies of the same to Seller. Buyer shall be deemed to have
approved the Lien and Litigation Reports unless Buyer has delivered
written notice of its disapproval thereof within the time and in
the manner provided in Section 5.2.1 below.
5.1.2
Additional
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 also be subject to satisfaction of each of the
conditions set forth in this Section 5.1.2 on and as of the Closing
Date. Seller and Buyer expressly acknowledge and agree that each of
the conditions set forth in this Section 5.1.2 is for the benefit
of and may be waived only by Buyer as herein provided.
5.1.2.1
Seller’s
Representations and Warranties . Seller’s representations and warranties
set forth in Section 8 below shall be true and correct in all
material respects on the Closing Date as if made again on the
Closing Date.
5.1.2.2
Seller’s
Performance .
Seller shall have performed all of its obligations under this
Agreement which by the terms of this Agreement are required to be
performed by Seller as of or prior to the Closing Date.
5.1.2.3
Purchase of All the
Properties . The
Closing hereunder shall occur simultaneous with respect to all of
the Properties.
5.1.2.4
Occurrence of the Closing
by the Outside Date . The Closing shall occur on or before the
Outside Closing Date.
5.2
Buyer’s Approval,
Disapproval or Waiver of Conditions and Seller’s Specific
Cure Rights .
5.2.1
Buyer’s Approval,
Disapproval or Waiver of Conditions
. On or before
5:00 p.m., Pacific Standard Time, on the day the
Contingency Period expires, Buyer shall approve, disapprove or
waive each of the conditions set forth in Section 5.1.1.1(a),
5.1.1.1(c), 5.1.1.2, 5.1.1.3 and 5.1.1.4 by delivery of a
reasonably detailed writing with respect to each such condition to
Seller and Escrow Holder, including the specific grounds for
disapproval thereof. In addition, prior to Closing Buyer shall
notify Seller and Escrow Holder in writing in the event that as of
the date of Closing, any of the conditions set forth in Section
5.1.2 have not been satisfied or waived by Buyer; provided,
however, that if either of the conditions set forth in Sections
5.1.2.3 or 5.1.2.4 have not been satisfied as a result of any act
or omission 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.
5.2.2
Seller’s Cure
Rights with Respect to Title and Liens
. If Buyer is entitled to and in
fact disapproves either of the conditions set forth in
Section 5.1.1.1(a), 5.1.1.1(c) or 5.1.1.4 within the time and
in the manner provided in Section 5.2.1 above or the condition in
Section 5.1.1.1(b) with respect to any Intervening Lien in the
manner and within the time therein provided, then Seller shall have
until 5:00 p.m., Pacific Standard Time, on the fifth
(5th) day
following the date of its receipt of Buyer’s written notice
of disapproval thereof in which to investigate the disapproved item
and to notify Buyer and Escrow Holder in writing that Seller in its
sole discretion either:
(a) Has cured or will cure the disapproved item
prior to the Close of Escrow; or
(b) Cannot or will not cure the disapproved item.
Seller’s inability or failure to elect to cure any item so
disapproved within the time and in the manner herein provided shall
be deemed to constitute Seller’s election not to cure the
same.
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 Seller of any kind
whatsoever, either express or implied, except as expressly set
forth in Section 8 below. In particular, except as expressly set
forth in Section 8 below, Seller makes 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 or its Affiliate
originally sold to Seller and/or developed on behalf of 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 Seller pursuant to §
25359.7 of the California Health & Safety Code or any other
similar and applicable Laws. If this Agreement is not terminated
but 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
Seller.
5.4
Seller’s
Conditions .
Provided that Seller is not in breach or default of any provision
of this Agreement, the obligation of 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. Seller 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 Seller as in writing.
5.4.1
No Default Under Master
Lease . 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 Lessee under the Master Lease shall have occurred and
(b) all Rent and Charges shall be paid as and when due under
the 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
Buyer’s
Representations and Warranties . Buyer’s representations and warranties
set forth in Section 8 below shall be true and correct in all
material respects on the Closing Date as if made again on the
Closing Date.
5.4.5
Buyer’s
Performance .
Buyer shall have performed all of its obligations under this
Agreement which by the terms of the Agreement are required to be
performed by Buyer as of or prior to the Closing Date.
5.5
Seller’s Approval,
Disapproval or Waiver of Conditions
.
Prior to the Closing, Seller 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 Seller; provided, however,
that if either of the conditions set forth in Sections 5.4.2 or
5.4.3 have not been satisfied as a result of any act or omission of
Seller, then Seller 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 Seller hereunder. In the event that Seller is not
entitled to disapprove a condition or Seller fails to approve,
disapprove or waive such condition, if applicable, prior to the
Closing, then such condition shall be deemed conclusively satisfied
or waived by Seller and thereafter shall not be a condition
precedent to the performance by Seller of its respective
obligations hereunder.
6.1
Closing
Date . Subject
to extension in order to implement the provisions of Sections
5.1.1.1(b) or 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 Seller and Escrow Holder;
provided further, however, that in no event shall the closing occur
prior to January 5, 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
title is insured in Buyer’s name in accordance with the
provisions of Section 6.4 below, regardless whether the applicable
Deed 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
Seller . At or
before 2:00 p.m., Pacific Standard Time, on that date which is not
less than one (1) business day before the Close of Escrow, Seller
shall deliver to Escrow Holder the following items for handling as
described below; provided , that Escrow need not be
concerned with the form or content but only with manual delivery of
all of the following other than items 6.2.1 and 6.2.3:
6.2.1
Deeds
. With respect to each Property, a
duly executed and acknowledged deed (each, a “Deed”)
conveying the real property comprising such Property to Buyer in
the form of (a) Exhibit “C”
attached;
6.2.2
Bill of
Sale . A duly
executed and acknowledged quit claim bill of sale conveying any
right, title and interest of 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” (the
“Bill of Sale”);
6.2.3
Master Lease
Amendment . The
Master Lease Amendment duly executed by the Lessor;
6.2.4
Seller’s
Certificate . If any express representation or warranty of
Seller set forth in Section 8 hereof needs to be modified due to
changes since the Effective Date, a certificate of Seller, dated as
of the Closing Date and executed on behalf of 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 Seller be liable 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 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
Seller to prevent. The occurrence of a change in a representation
or warranty which is permitted hereunder or is beyond the
reasonable control of Seller to prevent shall, if materially
adverse to Buyer, constitute the non-fulfillment of the conditions
set forth in Section 5.1.2.1 hereof. If, despite changes or other
matters described in such certificate, the Closing occurs,
Seller’s representations and warranties set forth in this
Agreement shall be deemed to have been modified by all statements
made in such certificate;
6.2.5
Evidence of
Authority . Such
certificates or documents as may be reasonably required by Escrow
Holder in order to cause each Title Policy to be issued and the
Close of Escrow to occur; provided, however, that in no event shall
Seller be required to execute a so-called owner’s
affidavit/indemnity or a mechanics’ lien indemnity with
respect to any Property;
6.2.6
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 Seller and Buyer (the “Closing
Statement”); and
6.2.7
Additional
Items . Any
additional funds and/or instruments, signed and properly
acknowledged by Seller, if appropriate, as may be necessary to
comply with Seller’s obligations under this
Agreement.
6.3
Deposits by
Buyer . At or
before 10:00 a.m., Pacific Standard Time, 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 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 and
the Lessee in the form attached hereto as Exhibit
“F” (the “Release of
Claims”);
6.3.3
Master Lease
Amendment : The Master Lease, duly executed by Buyer and
each Affiliate of Buyer as Lessee thereunder, and
Guarantor.
6.3.4
Buyer’s
Certificate . If any representation or warranty of Buyer set
forth in Section 8 hereof needs to be modified due to changes since
the Effective Date, a certificate of Buyer addressed to Seller,
dated as of the Closing Date and executed on behalf of Buyer 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 Buyer be liable to Seller 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 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 is beyond the reasonable control of
Buyer to prevent. The occurrence of a change in a representation or
warranty which is permitted hereunder or is beyond the reasonable
control of Buyer to prevent shall, if materially adverse to Seller,
constitute the non-fulfillment of the conditions set forth in
Section 5.4.4 hereof. If, despite changes or other matters
described in such certificate, the Closing occurs, Buyer’s
representations and warranties set forth in this Agreement shall be
deemed to have been modified by all statements made in such
certificate;
6.3.5
Evidence of
Authority . Such
certificates or documents as may be reasonably required by Escrow
Holder in order to cause each Title Policy to be issued and the
Close of Escrow to occur;
6.3.6
Closing
Statement . A
duly executed and acknowledged counterpart of the Closing
Statement; and
6.3.7
Additional
Items . Any
additional Funds and/or instruments, signed and properly
acknowledged by Buyer, if appropriate, as may be necessary to
comply with Buyer’s obligations under this
Agreement.
6.4
Issuance of Title
Policies . At
the Close of Escrow, Title Company shall be in a position to issue
to Buyer, with a copy to Seller, a policy of title insurance with
respect to each Property, insuring good and indefeasible title to
such Property vested in Buyer as of the Closing Date, free of all
encumbrances except: (a) liens for Impositions; (b) those liens or
encumbrances which were in effect on the date Seller or
Seller’s Affiliate(s) first acquired title to or an interest
in the Property; (c) those liens or encumbrances consented to by
the Lessee during the term o