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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

Real Estate Purchase and Sale Agreement

PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS | Document Parties: EMERITUS CORPORATION | TITLE COMPANY You are currently viewing:
This Real Estate Purchase and Sale Agreement involves

EMERITUS CORPORATION | TITLE COMPANY

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Title: PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
Governing Law: California     Date: 5/10/2007
Industry: Healthcare Facilities     Law Firm: Riddell Williams;Latham Watkins     Sector: Healthcare

PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS, Parties: emeritus corporation , title company
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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

 

 

 

 

 

Page

1

DEFINITIONS

1

2

SALE OF THE PROPERTIES

4

3

ESCROW

4

4

PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE

5

5

CONDITIONS TO CLOSING

6

6

CLOSING OF ESCROW

10

7

TERMINATION

15

8

REPRESENTATIONS AND WARRANTIES

18

9

CERTAIN EVENTS PRIOR TO CLOSING

20

10

POST-CLOSING MATTERS

20

11

BROKERS

21

12

MISCELLANEOUS PROVISIONS

21

 

EXHIBITS

 

 

 

A

 

 

Master Lease

 

 

B

 

 

Escrow General Provisions

 

 

C

 

 

Form of Deed

 

 

D

 

 

Form of Bill of Sale

 

 

E

 

 

Form of Amendment to Master Lease

 

 

F

 

 

Release of Claims

 

 

G

 

 

Purchase Price Allocation

 

 

 

 

i


 

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:

 

1.    DEFINITIONS

 

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.

 

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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.

 

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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.    ESCROW

 

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.

 

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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”).

 

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5.    CONDITIONS TO CLOSING

 

5.1    Buyer’s Conditions .

 

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.

 

 

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(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.

 

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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

 

 

8


 

(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.

 

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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.    CLOSING OF ESCROW

 

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:

 

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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:

 

11


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


 
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