EXHIBIT 10-B
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OPTION AGREEMENT
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This Option Agreement (this "AGREEMENT") is made as of October 1,
1996, by and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation ("PRUDENTIAL") and XXXXXX-XXXXXXX PARTNERS, a California
general partnership, ("WCP"), comprised of Carlyle Real Estate Limited
Partnership-IX, an Illinois limited partnership ("CARLYLE"), and Medical
Office Buildings, Ltd., a Washington limited partnership ("MOB").
RECITALS
A. Prudential owns fee title to certain real property (the "LAND")
located in Los Angeles, California, which Land is described in EXHIBIT A
attached hereto and incorporated herein by this reference.
B. WCP is currently the ground lessee and Prudential is the ground
lessor of the Land pursuant to that certain Lease, dated as of February 1,
1977, by and between Prudential's predecessor-in-interest, Xxxxxx X. Xxxxxx
Development Co., a Washington corporation, and WCP's predecessor-in-
interest, MOB, as amended by that certain First Amendment to Lease, dated
as of July 16, 1979, by and between Prudential and MOB, as further amended
by that certain Second Amendment of Lease, dated as of December 19, 1985,
by and between Prudential and WCP, as further amended by that certain Third
Amendment to Lease, dated as of even date herewith, by and between
Prudential and WCP (as so amended, the "LEASE"). WCP, or its predecessor
in interest, has constructed two (2) medical office buildings and attendant
parking garages (the "IMPROVEMENTS") on the Land.
C. The interests of WCP in the Lease (the "LEASEHOLD ESTATE") as well as
the Improvements are encumbered by that certain Deed of Trust, dated as of
January 15, 1991, and recorded in the Official Records of Los Angeles
County (the "OFFICIAL RECORDS") on January 15, 1991, as Instrument No. 91-
63945, as amended by that certain First Amendment to Deed of Trust, dated
as of January 24, 1996, and recorded in the Official Records on January 25,
1996, as Instrument No. 96-146121, as further amended by that certain
Second Amendment to Deed of Trust, dated as of even date herewith (as so
amended, the "DEED OF TRUST"), which secures repayment of that certain loan
("LOAN") evidenced by that certain Note Secured by Deed of Trust, dated as
of January 15, 1991, made by WCP in favor of Prudential, in the original
principal amount of Eighty-Six Million Dollars ($86,000,000), as amended by
that certain First Amendment to Loan Documents (the "FIRST AMENDMENT"),
dated as of January 24, 1996, and as further amended by that Second
Amendment to Loan Documents (the "SECOND AMENDMENT") dated as of even date
herewith (as so amended, the "NOTE"). The Deed of Trust and the Note as
well as the other documents, executed by WCP, evidencing or securing the
Loan, as amended to date, are collectively referred to as the "LOAN
DOCUMENTS". The Note was originally due and payable in full on January 14,
1996 (the "ORIGINAL MATURITY DATE").
D. WCP, in order to realize on the value, if any, it has in the
Leasehold Estate and Improvements (the "PROJECT") requested that Prudential
grant WCP an option to purchase Prudential's fee interest in the Land and
grant WCP an extension on the Loan to provide WCP the opportunity to find a
purchaser for the Land and the Project.
E. Prudential granted WCP an option to purchase the Land, pursuant to
that certain Option to Purchase (the "ORIGINAL OPTION"), dated as of
January 24, 1996, by and between Prudential and WCP, and extended the
Maturity Date pursuant to the First Amendment. In consideration of the
grant of the Original Option, WCP paid Prudential One Hundred Thousand
Dollars ($100,000). The Original Option expired on September 30, 1996, and
is of no further force or effect.
F. WCP, thus far, has been unable to find a purchaser for the Land and
the Project and has now requested that Prudential grant it an additional
option to purchase Prudential's fee interest in the Land and an additional
extension of the Loan to provide WCP additional time in which to find a
purchaser for the Land and the Project.
G. Prudential has agreed to grant WCP an additional option provided that
WCP pays an additional option fee and satisfies certain other conditions.
AGREEMENT
NOW THEREFORE, In consideration of the foregoing recitals and other
good and valuable consideration the parties hereby agree as follows:
1. OPTION. Commencing on the date hereof and ending at 5:00
p.m. (Eastern Daylight Time) on September 30, 1997, WCP is granted an
exclusive option (the "OPTION") to purchase Prudential's fee simple
interest in the Land for the Purchase Price (as defined in Paragraph 5,
below), on the terms and conditions set forth in the Purchase and Sale
Agreement (the "SALES CONTRACT") in the form of EXHIBIT B attached hereto.
2. EXERCISE OF OPTION. WCP can exercise the Option only by
unconditionally delivering to Prudential three (3) fully executed,
completed and dated counterparts of the Sales Contract on or before
September 30, 1997. Provided the executed copies of the Sales Contract are
in the proper form and further provided that they are timely delivered to
Prudential on or before 5:00 P.M. (Eastern Daylight Time) on September 30,
1997, Prudential shall, within three (3) business days of receipt, execute
all three (3) counterpart copies of the Sales Contract and open escrow with
the Escrow Agent (as defined below) by delivering one (1) fully executed
copy of the Sales Contract to Ticor Title Insurance Company, 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx
XxXxxxxx ("ESCROW AGENT") and delivering one (1) executed counterpart Sales
Contract to WCP. Escrow shall be deemed opened on delivery of an executed
counterpart Sales Agreement to Escrow Agent.
3. THIRD-PARTY TRANSACTION. WCP's exercise of the Option
shall be deemed to have been ineffective unless one of the following
conditions is satisfied on or before the date of closing of the acquisition
pursuant to the Option: (1) WCP has entered into a purchase and sale
agreement with a third-party purchaser unaffiliated with WCP whereby WCP is
selling the Land and Project to such third-party purchaser concurrently
with WCP's acquisition of the Land from Prudential; (2) WCP has entered
into such a third-party purchase and sale agreement but MOB has exercised
its right of first opportunity under the partnership agreement of WCP and
is purchasing the interest of Carlyle based on the purchase price
established by such third party purchase and sale agreement; (3) WCP and
Prudential have agreed in writing as to the fair market value of the
Project as of a date no earlier than sixty (60) days prior to the date of
the closing of the acquisition pursuant to the Option. WCP and Prudential
agree to act reasonably in reaching the agreement described in clause (3)
above. As used herein, "THIRD-PARTY AGREEMENT" means a third-party
agreement as described in any of clauses (1) or (2) above and "GROSS
CONSIDERATION" means the purchase price under the third-party agreement, as
amended from time-to-time, described in clause (1) and (2) above or the
agreed-upon value of the Project pursuant to clause (3) above.
4. OPTION FEE. WCP, as a condition precedent to the
effectiveness of this Agreement, shall pay Prudential Twenty-Five Thousand
Dollars ($25,000) (the "OPTION FEE"). If WCP timely delivers the Sales
Contract to Prudential as required under Paragraph 2 above, then the Option
Fee shall be deemed the Deposit (as defined in the Sales Contract) and
shall be credited against the Purchase Price due at closing of escrow or
otherwise paid or distributed as provided in the Sales Contract. The
Option Fee shall be retained by Prudential and not deposited with Escrow
Agent. Should WCP fail to deliver the executed Sales Contracts to
Prudential on or before September 30, 1997, or, if having delivered the
Sales Contract and before Prudential's deposit of the Sales Contract in
escrow, attempt to revoke the delivery of the Sales Contract, the Option
shall automatically be deemed terminated and void and of no force and
effect without the necessity of any action by either party or notice by
either party to the other, neither party shall thereafter have any further
rights or obligations to the other hereunder, and Prudential may retain the
Option Fee which shall have been fully earned unless Prudential defaults
under the Sales Contract.
5. PURCHASE PRICE. The Purchase Price shall be calculated
as follows:
a. If the Gross Consideration (as defined in Paragraph
3, above) is less than One Hundred Three Million Dollars ($103,000,000),
the "PURCHASE PRICE" shall be Sixteen Million Five Hundred Thousand Dollars
($16,500,000).
b. If the Gross Consideration is equal to or greater
than One Hundred Three Million Dollars ($103,000,000), the "PURCHASE PRICE"
shall be the greater of (1) Sixteen Million Dollars ($16,000,000) plus
fifteen percent (15%) of the Net Sales Proceeds (as defined in Paragraph
5.c, below), or (2) Sixteen Million Five Hundred Thousand Dollars
($16,500,000).
c. The term "NET SALES PROCEEDS" shall mean the Gross
Consideration less the sum of the following (the "AUTHORIZED DEDUCTIONS")
(1) all reasonable costs incurred by WCP in connection with acquiring the
Land from Prudential, (2) all reasonable costs incurred by WCP in
satisfying and discharging the Loan, and (3) all reasonable costs incurred
by WCP in selling the Land and Project (the "SALE EXPENSES"). No sums,
other than the Authorized Deductions, shall be deducted from the Gross
Consideration in determining the Net Sales Proceeds. WCP shall not incur
Sale Expenses (including transfer taxes and other payments associated with
the transfer of the title to the Land) in the in excess of two percent (2%)
of the Gross Consideration, without Prudential's prior written consent.
Any Sale Expenses incurred by WCP in excess of two percent (2%) of the
Gross Consideration, without Prudential's prior written consent, shall be
disregarded in determining the Net Sales Proceeds.
6. EVENTS OF DEFAULT. This Agreement shall be deemed
terminated and of no force and effect without the necessity of any action
by either party or notice by either party to the other and Prudential shall
be entitled to retain the Option Fee should an Event of Default occur under
any of the Loan Documents.
7. NOTICES. If either party hereto shall desire to give or
serve upon the other or Escrow Agent any notice, demand, request, or other
communication, each such notice, demand, request , or other communication
shall be in writing and shall be given or served upon the other party or
Escrow Agent by personal service or by certified, registered or express
mail postage prepaid or by prepaid commercial overnight express service or
other commercial courier, or telefacsimile, addressed as follows:
TO WCP: Carlyle Real Estate Limited Partnership-IX
c/o JMB Realty Corporation
Attn: Xxxxx Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxxxxx X. Xxxxx, Esq.
Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
FAX (000) 000-0000
Medical Office Buildings, Ltd.
c/o Wright Runstad & Company
Attn: Xxxxx Xxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxx Xxxxx, Esq.
Xxxxx Xxxxxxxxxx
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
FAX (000) 000-0000
TO PRUDENTIAL: The Prudential Insurance Company
of America
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Associate Regional Counsel
Telephone (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxxxxx X. Xxxxx, Esq.
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
FAX (000) 000-0000
Any notice, demand, request or other communication shall be deemed to have
been received upon the earlier of personal delivery thereof or two (2)
business days after having been deposited in the mail, as the case may be.
8. ASSIGNMENT. This Agreement and the Option are not
transferrable or assignable and any attempt to transfer, assign, grant or
otherwise convey this Agreement or the Option shall be null and void and shall
automatically terminate this Agreement and the Option without the necessity of
notice or any action by Prudential and in any such event, Prudential may
retain the Option Fee and such attempted transfer, assignment, grant or other
attempted conveyance shall constitute an Event of Default under the Loan
Documents.
9. INTERPRETATION. The parties acknowledge that each party and
its counsel have reviewed and revised this Agreement and that the normal rule
of construction that ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendment
or exhibit hereto.
10. RECORDATION. This Agreement shall not be recorded and shall
not be a lien against the Land or Project. In consideration of the grant of
the Option, WCP hereby waives any right to file a lis pendens action against
the Land and Project.
11. COUNTERPARTS. This Agreement may be executed in several
counterparts each of which shall be an original, but all of such counterparts
shall constitute one such agreement.
12. INTEGRATION. THIS AGREEMENT EMBODIES THE ENTIRE AGREEMENT
AMONG THE PARTIES IN CONNECTION WITH THE OPTION AND THERE ARE NO ORAL OR PAROL
AGREEMENTS, REPRESENTATIONS OR WARRANTIES EXISTING BETWEEN THE PARTIES
RELATING TO THE OPTION WHICH ARE NOT EXPRESSLY SET FORTH HEREIN AND COVERED
HEREBY. THIS AGREEMENT CANNOT BE MODIFIED EXCEPT IN WRITING ASSIGNED BY ALL
PARTIES.
13. DEFINED TERMS. Capitalized terms used, but not defined
herein, shall have the meaning provided for such terms in the Sales Contract.
14. EXCULPATION. Notwithstanding anything to the contrary
contained herein, in no event shall any present or future partner of Carlyle
or of Xxxxxx Runstad Associates Limited Partnership, a Washington limited
partnership ("WRALP"), which is a General Partner of MOB (or of any
partnership having a direct or indirect interest in Carlyle or WRALP), have
any personal liability under or in connection with this Agreement or the
Option (recourse against Carlyle or WRALP and persons having a direct or
indirect interest in Carlyle or WRALP being limited to the assets of Carlyle
or WRALP, respectively, excluding any negative capital account of any such
person).
15. MODIFICATIONS. This Agreement may be modified only by a
written agreement signed by each of the parties hereto.
16. DESCRIPTIONS; HEADINGS; CONSTRUCTION. The headings in this
Agreement are intended as references only and shall not in any way limit,
amplify or be used in interpreting the terms of this Agreement. The
masculine, feminine or neuter gender in the singular or plural shall be deemed
to include the other wherever the context of this Agreement so requires. This
Agreement shall not be construed against any party hereto as the drafters of
this Agreement.
17. GOVERNING LAWS. THIS AGREEMENT SHALL BE DEEMED TO BE MADE
UNDER THE LAWS OF THE STATE OF CALIFORNIA AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS THEREOF.
18. ATTORNEYS' FEES. If any party to this Agreement shall bring
any action or proceeding for any relief against the other, declaratory or
otherwise, arising out of this Agreement, the losing party shall pay to the
prevailing party a reasonable sum for attorneys' fees and costs incurred in
bringing or defending such action or proceeding and/or enforcing any judgment
granted therein, all of which shall be deemed to have accrued upon the
commencement of such action or proceeding and shall be paid whether or not
such action or proceeding is prosecuted to final judgment. Any judgment or
order entered in such action or proceeding shall contain a specific provision
providing for the recovery of attorneys' fees and costs, separate from the
judgment, incurred in enforcing such judgment. The prevailing party shall be
determined by the trier of fact based upon an assessment of which party's
major arguments or positions taken in the proceedings could fairly be said to
have prevailed over the other party's major arguments or positions on major
disputed issues. For the purposes of this section, attorneys' fees shall
include, without limitation, fees incurred in the following: (1)
post-judgment motions; (2) contempt proceedings; (3) garnishment, levy, and
debtor and third party examinations; (4) discovery; and (5) bankruptcy
litigation. This section is intended to be expressly severable from the other
provisions of this Agreement, is intended to survive any judgment and is not
to be deemed merged into the judgment.
19. SEVERABILITY. If any of the provisions of this Agreement
shall be held by any court of competent jurisdiction to be unlawful, void or
unenforceable for any reason as to any person or circumstance, such provision
or provisions shall be deemed severable from and shall in no way affect the
enforceability and validity of the remaining provisions of this Agreement.
20. PRUDENTIAL'S EXPENSES. WCP shall pay all of Prudential's
fees, charges and expenses incurred in connection with the negotiation and
preparation of this Agreement; provided, however, that Prudential shall pay
for all of the fees, charges and expenses incurred by Prudential in connection
with the consummation of the transactions contemplated hereby, and WCP shall
pay (i) all of the fees, charges and expenses incurred by WCP in connection
with the consummation of the transactions contemplated hereby, and (ii) all
title insurance costs, and recording fees.
21. TIME. Time is of the essence in the performance of the
parties' respective obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have authorized the
execution of this Agreement as of the date first written above.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation
By: ________________________________________
Xxxxxxx Xxxxxx
Vice President
XXXXXX-XXXXXXX PARTNERS,
a California general partnership
By: Carlyle Real Estate Limited Partnership-IX, an
Illinois limited partnership
General Partner
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: ______________________________
Xxxxx X. Xxxxxxxxx
Vice President
By: Medical Office Buildings, Ltd.,
a Washington limited partnership,
General Partner
By: Xxxxxx Runstad Associates Limited
Partnership, a Washington limited partnership,
Its General Partner
By: Xxxxxx Runstad & Company,
a Washington corporation,
Its General Partner
By: _________________________
Xxxxxxx X. Xxxxxxx
President
EXHIBIT A
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LEGAL DESCRIPTION
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EXHIBIT B
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PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
XXXXXX-XXXXXXX PARTNERS
"PURCHASER"
AND
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
"SELLER"
Dated: _______________, 1997
PURCHASE AND SALE AGREEMENT
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THIS PURCHASE AND SALE AGREEMENT (this "SALES CONTRACT") made this
_________day of ______________, 1997, by and between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey corporation ("SELLER"), and XXXXXX-XXXXXXX
PARTNERS, a California general partnership ("PURCHASER").
ARTICLE I
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TERMS OF SALE
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1.01 DEFINITIONS. The following terms are used in this Sales Contract:
H. "Closing" or "Closing Date" shall mean the date that the Deed is
recorded transferring title to the Land from the Seller to the Purchaser, or
its designee, and the Purchase Price and Loan Balance is paid to the Seller.
I. "Deed" shall mean a Grant Deed substantially in the form attached
hereto as EXHIBIT X.
X. "Deed of Trust" shall mean that certain Deed of Trust dated as of
July 15, 1991, executed by Purchaser for the benefit of Seller, as modified by
the First Amendment to Loan Documents dated as of January 15, 1996, as amended
further by that certain Second Amendment to Deed of Trust, dated as of October
1, 1996, which secures repayment of the Loan.
K. "Effective Date" shall mean the date on which Purchaser
unconditionally delivers a fully executed and completed counterpart of this
Sales Contract to each of Seller and the Escrow Agent together with the
Deposit.
L. "Escrow Agent" shall mean Ticor Title Insurance Company.
M. "Gross Consideration" is defined in Section 1.09.
N. "Ground Lease" shall mean that certain lease by and between
Seller, as lessor, and Purchaser, as lessee, dated February 1, 1977, as
amended by the First Amendment of Lease dated July 16, 1979, the Second
Amendment of Lease dated December 19, 1985, and the Third Amendment to Lease,
dated as of October 1, 1996.
O. "Land" shall mean that certain land located at 8631 and 0000 Xxxx
Xxxxx Xxxxxx in the City and County of Los Angeles, State of California, as
more particularly described on EXHIBIT A attached hereto and forming a part
hereof.
P. "Law" shall mean federal, state or municipal statute, regulation
or ordinance.
Q. "Lease Termination Agreement" shall mean an agreement by and
between Seller and Purchaser terminating the Ground Lease, including, without
limitation, Purchaser's interests in the Project, and concurrently releasing
both Seller and Purchaser from any liability under the Ground Lease and in a
form reasonably satisfactory to Seller and Purchaser.
R. "Loan" shall mean that certain loan from Seller to Purchaser
evidenced by that certain Note Secured by Deed of Trust, made by Purchaser, as
maker, in favor of Seller, as holder, dated as of July 15, 1991 in the
original principal amount of Eighty-Six Million Dollars ($86,000,000).
S. "Loan Balance" shall mean the total of the outstanding principal
balance of the Loan and all unpaid interest thereon as of the Closing.
T. "Loan Documents" shall mean those documents executed by Borrower
evidencing and securing the Loan.
U. "Preliminary Title Report" is defined in Section 1.06.
V. "Project" shall mean all of the improvements constructed on the
Land.
W. "Purchase Price" is defined in Section 1.03.
X. "Second Amendment to Loan Documents" shall mean that agreement
between Seller and Buyer dated as of October 1, 1996, with respect to the Loan
Documents.
Y. "Third-Party Agreement" is defined in Section 1.09.
Z. "Title Company" shall mean Ticor Title Insurance Company.
AA. "Title Insurance Policy" shall mean an ALTA Form B (1970) Owner's
Policy.
1.02 AGREEMENT OF SALE AND PURCHASE. Seller agrees to sell and convey to
Purchaser, and Purchaser agrees to purchase from Seller, in fee simple, under
the terms and conditions hereinafter set forth, all of the Seller's right,
title, and interest in and to the Land, together with Seller's reversionary
interest in the Improvements and all appurtenances, rights, privileges, and
easements benefiting, belonging, or pertaining thereto.
1.03 DETERMINATION OF PURCHASE PRICE. The "Purchase Price" shall be
calculated as follows:
A) If the Gross Consideration is less than One Hundred Three
Million Dollars ($103,000,000), the "Purchase Price" shall be Sixteen Million
Five Hundred Thousand Dollars ($16,500,000).
B) If the Gross Consideration is equal to or greater than One
Hundred Three Million Dollars ($103,000,000), the "Purchase Price" shall be
the greater of (1) Sixteen Million Dollars ($16,000,000) plus fifteen percent
(15%) of the Net Sales Proceeds (as defined in Section 1.03.C, below), or (2)
Sixteen Million Five Hundred Thousand Dollars ($16,500,000).
C) The term "NET SALES PROCEEDS" shall mean the Gross
Consideration less the sum of the following (the "AUTHORIZED DEDUCTIONS") (1)
all reasonable costs incurred by Purchaser in connection with acquiring the
Land from Seller, (2) all reasonable costs incurred by Purchaser in satisfying
and discharging the Loan, and (3) all reasonable costs incurred by Purchaser
in selling the Land and Project (the "SALE EXPENSES"). No sums, other than
the Authorized Deductions, shall be deducted from the Gross Consideration in
determining the Net Sales Proceeds. Purchaser shall not incur Sale Expenses
(including transfer taxes and other payments associated with the transfer of
the title to the Land) in the in excess of two percent (2%) of the Gross
Consideration, without Seller's prior written consent. Any Sale Expenses
incurred by Purchaser in excess of two percent (2%) of the Gross
Consideration, without Seller's prior written consent, shall be disregarded in
determining the Net Sales Proceeds.
1.04 PAYMENT OF PURCHASE PRICE. The Purchase Price is payable as follows:
A) Twenty-Five Thousand Dollars ($25,000) (the "DEPOSIT") paid to and
to be held by Seller. The Deposit, which has been paid and will be applied
against the Purchase Price if the transaction contemplated by this Sales
Contract closes, is fully earned and is nonrefundable to Purchaser unless
Seller fails to close hereunder.
B) The balance of the Purchase Price, after deducting the Deposit and
other credits and adjustments, as provided herein, shall be delivered to the
Escrow Agent prior to Closing, by cash, cashier's check drawn on a California
bank, or wire transfer, at Purchaser's option.
Purchaser acknowledges that while not a part of the Purchase Price, but
as a condition precedent to the Closing, at Closing Purchaser shall deposit
additional sums with Escrow Agent which are sufficient to pay the outstanding
unpaid principal balance and accrued interest on the Loan (the "Loan
Balance").
1.05 TITLE. At Closing, Seller shall deliver through escrow the Deed,
conveying to the Purchaser (or its nominee) title to the Land in fee simple
and containing only those matters identified in the Title Documents, as
defined in Section 1.06, below, and those matters set out in EXHIBIT B hereto
(collectively, the "Permitted Exceptions"). Seller agrees not to cause or
permit any new title exceptions to encumber the Land after the Effective Date
which would remain in effect at Closing unless agreed to in writing by the
Purchaser. Purchaser agrees that any matter of title that first appears of
record subsequent to October 1, 1996, which matter was consented to or entered
into by Purchaser in writing or which matter results from Purchaser's
operation or management of the Improvements shall constitute a Permitted
Exception.
1.06 PRELIMINARY TITLE REPORT. Purchaser acknowledges that it has received a
Preliminary Title Report prepared by Ticor Title Insurance Company bearing
Order No. 96-00325B and dated as of October 7, 1996 together with complete and
legible copies of all exception instruments referred to therein (referred to
collectively as "Title Documents").
1.07 POSSESSION. On Closing, Seller shall convey and deliver the Land to
Purchaser (or its designee) subject only to the Permitted Exceptions, the
Ground Lease, the Improvements, exceptions waived by Purchaser and the rights
of possession of all tenants or subtenants.
1.08 SEPARATE LEGAL PARCEL. At Closing Seller shall convey and deliver the
Land to the Purchaser as a separate legal parcel or parcels in full compliance
with all subdivision laws.
1.09 THIRD-PARTY PURCHASER. This Sales Contract shall be deemed ineffective
unless one of the following conditions is satisfied on or before the Closing:
(1) Purchaser has entered into a purchase and sale agreement with a third-
party purchaser unaffiliated with Purchaser whereby Purchaser is selling the
Land and Project to such third-party purchaser concurrently with Purchaser's
acquisition of the Land from Seller; (2) Purchaser has entered into such a
third-party purchase and sale agreement but MOB has exercised its right of
first opportunity under the partnership agreement of Purchaser and is
purchasing the interest of Carlyle based on the purchase price established by
such third party purchase and sale agreement; (3) Purchaser and Seller have
agreed in writing as to the fair market value of the Project as of a date no
earlier than sixty (60) days prior to the date of the closing of the
acquisition pursuant to the Option. Purchaser and Seller agree to act
reasonably in reaching the agreement described in clause (3) above. AS USED
HEREIN, "THIRD-PARTY AGREEMENT" means a third-party agreement, as amended from
time-to-time, as described in any of clauses (1) or (2) above and "GROSS
CONSIDERATION" means the purchase price under the third-party agreement
described in clause (1) and (2) above or the agreed-upon value of the Project
pursuant to clause (3) above.
1.10 HAZARDOUS MATERIALS INDEMNITY AGREEMENT. The effectiveness of this
Sales Contract, is conditioned on Purchaser's execution of a Hazardous
Materials Indemnity Agreement in the form attached hereto as EXHIBIT D (the
"HAZARDOUS MATERIALS INDEMNITY AGREEMENT").
ARTICLE II
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CONDITIONS OF SALE
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2.01 PURCHASER'S CLOSING CONDITIONS. Purchaser's obligation to purchase the
Land is subject to the following conditions being satisfied at the Closing,
each of which is for the benefit of Purchaser and any or all of which may be
waived by Purchaser:
A) the Seller is not in material breach of any covenants, warranties,
or representations under this Sales Contract; and
B) at Closing, the Title Company is ready, willing, and able to issue
the Title Insurance Policy in the amount of the Purchase Price insuring that
fee title to the Land is vested in the Purchaser in such condition as provided
in Section 1.05.
2.02 SELLER'S CLOSING CONDITIONS. Seller's obligation to sell the Land to
Purchaser is subject the following conditions being satisfied at the Closing:
A) the Purchaser is not in material breach of any covenants,
warranties or representations set forth in this Sales Contract; and
B) the Loan Balance is paid in full.
ARTICLE III
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ESCROW - CLOSING MATTERS
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3.01 ESCROW HOLDER. This Sales Contract constitutes joint escrow
instructions to the Escrow Agent, instructing it to consummate this sale upon
the terms and conditions set forth herein.
3.02 OPENING OF ESCROW. Within three (3) business days after the Effective
Date, Seller shall open an escrow with Escrow Agent and shall deposit with
Escrow Agent a fully executed counterpart of this Sales Contract for use as
escrow instructions.
3.03 PURCHASER'S DELIVERIES TO ESCROW. Purchaser shall, on or before the
Closing, deliver to Escrow Agent:
A) the balance of the Purchase Price pursuant to Section 1.04.B and
all of Purchaser's closing costs;
B) an executed counterpart of the Lease Termination Agreement in
recordable form; and
C) sums, in the form of cash, wire transfer or certified check drawn
on a California bank necessary to satisfy the entire Loan Balance, as the same
may be reduced by the Prepayment Credit (as defined in the Second Amendment to
Loan Documents), if any.
3.04 SELLER'S DELIVERIES TO ESCROW. Seller shall, on or before two (2)
business days before the Closing, deliver or cause to be delivered to Escrow
Agent:
A) the Deed, executed and duly acknowledged by Seller and acceptable
for recording;
B) such evidence or documents as may be reasonably required by the
Purchaser or the title company evidencing the status and capacity of Seller
and the authority of the person or persons who are executing the various
documents on behalf of the Seller in connection with the sale of the Land;
C) a Federal and California Certification of Non-Foreign Status
executed by Seller;
D) a full reconveyance of the Deed of Trust (the "FULL
RECONVEYANCE"); and
E) an executed counterpart of the Lease Termination Agreement in
recordable form.
3.05 CLOSING.
A) Provided the Closing Conditions of Sections 2.01 and 2.02 have
been satisfied or waived by the Purchaser and Seller, respectively, Closing
under this Sales Contract shall take place on a business day specified by
Purchaser upon three (3) business days notice provided, however, Purchaser
shall have the unilateral right to extend such date (Purchaser shall provide
Seller with at least three (3) business days notice of such extended date for
Closing), but in any event on or before September 30, 1997 (the "CLOSING
DATE").
B) Upon Closing, the Escrow Agent shall:
1. cause the Deed to be recorded in the County where the Land is
located;
2. cause the Full Reconveyance to be delivered;
3. cause the Lease Termination Agreement to be recorded;
4. cause Title Company to deliver to Purchaser the title
insurance policy referred to in Section 2.01.B); and
5. after any necessary adjustments to reflect the proration of
rent payable under the Ground Lease, as provided herein, disburse to Seller
the balance of the Purchase Price and the entire Loan Balance.
3.06 PRORATIONS. There shall be no prorations other than for the ground rent
paid or payable under the Ground Lease, and only to the extent ground rent
under the Ground Lease has been paid or is due and payable. Without limiting
the generality of the foregoing, the October 1, 1997 installment shall not be
prorated if the Closing occurs before October 1, 1997.
3.07 PURCHASER'S CLOSING COSTS. Purchaser shall pay all costs of closing
including, but not limited to, the following: (a) all escrow fees or escrow
termination charges; (b) all recording and reconveyance fees; (c) any transfer
fees or taxes; (d) encumbrance or reconveyance fees; and (e) all title
insurance premiums. Seller shall pay all of its own attorney's fees and
expenses incurred in connection with the transaction contemplated hereby.
3.08 DELAY IN CLOSING; AUTHORITY TO CLOSE. Subject to Purchaser's right to
specifically enforce this Sales Contract or xxx for damages, or both, if
Escrow Agent is unable to close the transaction contemplated by this Sales
Contract on or before September 30, 1997, then this Sales Contract shall be
automatically terminated and be of no force and effect without the necessity
of any action by either party or notice by either party to the other and
Seller may retain the Deposit unless the Closing fails to occur by reason of
Seller's default, in which case the Deposit shall be returned to Buyer.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
------------------------------
4.01 SELLER'S REPRESENTATIONS AND WARRANTIES.
A) Seller represents and warrants now and as of the Closing Date the
persons executing this Sales Contract on behalf of Seller are authorized to
execute the same on behalf of Seller and Seller's obligations hereunder this
Sales Contract are legally binding, do not require the consent of any other
parties and do not violate the provisions of any agreement to which Seller is
a party.
B) Seller represents that, to Seller's Actual Knowledge, the Land is
not subject to liens, encumbrances or other exceptions to title, other than
(i) those exceptions evidenced by the Preliminary Title Report and (ii) any
exceptions relating to unpaid real estate taxes, whether or not identified on
the Preliminary Title Report. For the purposes of this Sales Contract,
"Seller's Actual Knowledge" shall mean the actual knowledge of Xxxxxxx Xxxxxx.
4.02 PURCHASER'S REPRESENTATIONS AND WARRANTIES. The persons executing this
Sales Contract on behalf of Purchaser are authorized to execute the same on
behalf of Purchaser. Purchaser's obligations hereunder are legally binding,
do not require the consent of any other parties and do not violate the
provisions of any agreement to which Purchaser is a party.
ARTICLE V
---------
REMEDIES
--------
5.01 PURCHASER'S DEFAULT. LIQUIDATED DAMAGES. IT IS AGREED BY AND BETWEEN
SELLER AND PURCHASER THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL, IF
NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY THE AMOUNT OF
DAMAGES WHICH WOULD BE SUFFERED BY SELLER IN THE EVENT OF PURCHASER'S DEFAULT
AND FAILURE TO CLOSE ESCROW UNDER THE TERMS OF THIS SALES CONTRACT.
ACCORDINGLY, PURCHASER AND SELLER AGREE THAT IN THE EVENT THAT, AFTER ALL
CONDITIONS ARE SATISFIED OR WAIVED, PURCHASER SHOULD DEFAULT AND FAIL TO CLOSE
ESCROW UNDER THE TERMS OF THIS SALES CONTRACT, THEN AS SELLER'S SOLE AND
EXCLUSIVE REMEDY UNDER THIS SALES CONTRACT, SELLER MAY RETAIN THE DEPOSIT AS
LIQUIDATED DAMAGES. PURCHASER AND SELLER AGREE THAT SAID AMOUNT IS REASONABLE
UNDER THE CIRCUMSTANCES OF THIS TRANSACTION.
THE PRUDENTIAL INSURANCE XXXXXX-XXXXXXX PARTNERS
COMPANY OF AMERICA
By:____________________ By: ____________________
General Partner
By: ____________________
General Partner
5.02 SELLER'S DEFAULT. If Seller materially defaults hereunder then Purchaser
shall be entitled to the remedy of specific performance or damages, or both.
Purchaser agrees that the remedy of specific performance shall be specifically
conditioned on Purchaser's paying the entire Loan Balance as well as the
Purchase Price; provided, however, that in no event shall Seller be obligated
to remove any title exceptions that were not recorded or entered into by
Seller.
ARTICLE VI
----------
DISCLAIMERS
-----------
6.01 AS IS; DISCLAIMER OF WARRANTIES. PURCHASER HEREBY COVENANTS AND AGREES
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
SALES CONTRACT OR THE DEED, THERE ARE NO REPRESENTATIONS OR WARRANTIES OF ANY
KIND WHATSOEVER, EXPRESS OR IMPLIED, MADE BY SELLER IN CONNECTION WITH THIS
SALES CONTRACT, PURCHASER'S ACQUISITION OF THE LAND, THE LAND'S CONDITION OR
THE LAND'S SUITABILITY FOR PURCHASER'S INTENDED USE; (B) PURCHASER HAS OR
PRIOR TO THE CLOSING WILL HAVE FULLY INVESTIGATED THE LAND AND ALL MATTERS
PERTAINING THERETO; (C) SELLER IS NOT MAKING ANY REPRESENTATION OR WARRANTY
(INCLUDING AS TO ACCURACY OR COMPLETENESS) REGARDING ANY OF SELLER'S MATERIALS
OR OTHER DUE DILIGENCE MATERIALS PROVIDED TO PURCHASER; (D) PURCHASER, IN
ENTERING INTO THIS SALES CONTRACT AND IN COMPLETING ITS PURCHASE OF THE LAND,
IS RELYING ENTIRELY ON ITS OWN KNOWLEDGE AND INVESTIGATION OF THE LAND BASED
ON ITS EXTENSIVE EXPERIENCE IN AND KNOWLEDGE OF THE LAND; (E) PURCHASER IS, OR
PRIOR TO CLOSING WILL BE, AWARE OF ALL ZONING AND LAND USE REGULATIONS, OTHER
GOVERNMENTAL REQUIREMENTS, SITE AND PHYSICAL CONDITIONS, AND OTHER MATTERS
AFFECTING THE USE AND CONDITION OF THE LAND; AND (F) PURCHASER SHALL PURCHASE
THE LAND IN "AS IS" CONDITION AS OF THE DATE OF CLOSING. EXCEPT AS EXPRESSLY
PROVIDED IN SECTION 4.01 OF THIS SALES CONTRACT OR THE DEED, SELLER HEREBY
DISCLAIMS ALL WARRANTIES OF ANY KIND OR NATURE WHATSOEVER (INCLUDING
WARRANTIES OF HABITABILITY AND FITNESS FOR PARTICULAR PURPOSE), WHETHER
EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES WITH RESPECT TO
THE LAND, OR ITS CONDITION OR SUITABILITY FOR PURCHASER'S INTENDED USE.
PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER HAS, OR PRIOR TO CLOSING WILL
HAVE, CONDUCTED A DILIGENT INVESTIGATION OF THE LAND WITH REGARD TO ITS
CONDITION, PERMITTED USE, AND SUITABILITY FOR PURCHASER'S INTENDED USE
THEREOF, AS WELL AS ALL OTHER FACTORS DEEMED MATERIAL TO PURCHASER AND HAS
EMPLOYED SUCH INDEPENDENT PROFESSIONALS IN CONNECTION THEREWITH AS DEEMED
NECESSARY BY PURCHASER.
FURTHER, AND WITHOUT IN ANY WAY LIMITING ANY OTHER PROVISION OF THIS
SALES CONTRACT, SELLER MAKES NO WARRANTY WITH RESPECT TO THE PRESENCE ON OR
BENEATH THE LAND (OR ANY PARCEL IN PROXIMITY THERETO) OF HAZARDOUS SUBSTANCES
OR MATERIALS WHICH ARE CATEGORIZED AS HAZARDOUS OR TOXIC UNDER ANY LOCAL,
STATE OR FEDERAL LAW, STATUTE, ORDINANCE RULE, OR REGULATION PERTAINING TO
ENVIRONMENTAL OR SUBSTANCE REGULATION, CONTAMINATION, CLEANUP OR DISCLOSURE.
BY ACCEPTANCE OF THIS SALES CONTRACT AND THE DEED, PURCHASER ACKNOWLEDGES AND
AGREES THAT PURCHASER'S OPPORTUNITY FOR INSPECTION AND INVESTIGATION OF SUCH
LAND (AND OTHER PARCELS IN PROXIMITY THERETO) HAS BEEN ADEQUATE TO ENABLE
PURCHASER TO MAKE PURCHASER'S OWN DETERMINATION WITH RESPECT TO THE PRESENCE
ON OR BENEATH THE LAND (AND OTHER PARCELS IN PROXIMITY THERETO) OF SUCH
HAZARDOUS SUBSTANCES OR MATERIALS.
FURTHER, AND WITHOUT IN ANY WAY LIMITING ANY OTHER PROVISION OF THIS
SALES CONTRACT, PURCHASER WAIVES ITS RIGHT TO RECOVER FROM SELLER OR SELLER'S
AFFILIATES OR SUBSIDIARIES OR THEIR RESPECTIVE DIRECTORS, OFFICERS,
PARTICIPANTS, EMPLOYEES, CONTRACTORS, CONSULTANTS, REPRESENTATIVES OR AGENTS,
AND RELEASES EACH OF THE FOREGOING FROM ANY AND ALL DAMAGES, LOSSES,
LIABILITY, COSTS OR EXPENSES WHATSOEVER (INCLUDING ATTORNEYS' FEES AND COSTS)
AND CLAIMS THEREFOR, WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR
UNFORESEEN, WHICH MAY ARISE FROM OR BE RELATED TO (A) THE CONDITION OF THE
LAND AND/OR (B) THE LAND'S COMPLIANCE, OR LACK OF COMPLIANCE WITH ANY LAW OR
REGULATION APPLICABLE THERETO INCLUDING, WITHOUT LIMITATION, THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED (42
U.S.C. SECTIONS 9601 ET SEQ.) THE CLEAN WATER ACT (33 U.S.C. SECTIONS 466 ET
SEQ.), THE SAFE DRINKING WATER ACT (14 U.S.C. SECTIONS 1401-1450), THE
HAZARDOUS MATERIALS TRANSACTION ACT (49 U.S.C. SECTIONS 1801 ET SEQ.), THE
TOXIC SUBSTANCE CONTROL ACT (15 U.S.C. SECTIONS 2601-2629), THE CALIFORNIA
HAZARDOUS SUBSTANCES ACT (HEALTH & SAFETY CODE SECTIONS 25100-25600), THE
CALIFORNIA XXXXXX-COLOGNE WATER QUALITY CONTROL ACT (WATER CODE SECTIONS 13020
ET SEQ.), AND ALL REGULATIONS, RULINGS, AND ORDERS PROMULGATED OR ADOPTED
PURSUANT THERETO (COLLECTIVELY, "ENVIRONMENTAL LAWS"). PURCHASER EXPRESSLY
WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH
PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
IN THIS CONNECTION AND TO THE EXTENT PERMITTED BY LAW, PURCHASER HEREBY
AGREES, REPRESENTS AND WARRANTS THAT PURCHASER REALIZES AND ACKNOWLEDGES THAT
FACTUAL MATTERS NOW UNKNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO
CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS,
LOSSES AND EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND
UNSUSPECTED, AND PURCHASER FURTHER AGREES REPRESENTS AND WARRANTS THAT THE
WAIVERS AND RELEASES HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF
THAT REALIZATION AND THAT PURCHASER NEVERTHELESS HEREBY INTENDS TO RELEASE,
DISCHARGE AND ACQUIT SELLER AND SELLER'S AFFILIATES AND SUBSIDIARIES AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, PARTICIPANTS, EMPLOYEES, CONTRACTORS,
CONSULTANTS, REPRESENTATIVES AND AGENTS FROM ANY SUCH UNKNOWN CAUSES OF
ACTION, CLAIMS DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND
EXPENSES WHICH MIGHT IN ANY WAY BE INCLUDED IN THE WAIVERS AND MATTERS
RELEASED AS SET FORTH IN THIS PARAGRAPH 6.01. THE PROVISIONS OF THIS
PARAGRAPH 6.01 ARE MATERIAL AND INCLUDED AS A MATERIAL PORTION OF THE
CONSIDERATION GIVEN TO SELLER BY PURCHASER IN EXCHANGE FOR SELLER'S
PERFORMANCE HEREUNDER.
SELLER HAS GIVEN PURCHASER MATERIAL CONCESSIONS REGARDING THIS
TRANSACTION IN EXCHANGE FOR PURCHASER AGREEING TO THE PROVISIONS OF THIS
PARAGRAPH 6.01 OF THIS SALES CONTRACT. THE PROVISIONS OF THIS PARAGRAPH 6.01
SHALL BE DEEMED REMADE AT CLOSING AND IF REQUESTED BY SELLER, PURCHASER SHALL
EXECUTE AND DELIVER TO SELLER A CERTIFICATE CONFIRMING THAT THESE PROVISIONS
HAVE BEEN REAFFIRMED AT CLOSING. SELLER AND PURCHASER HAVE EACH SIGNED THIS
PARAGRAPH 6.01 TO FURTHER INDICATE THEIR AWARENESS AND ACCEPTANCE OF EACH AND
EVERY PROVISION HEREOF.
THE PRUDENTIAL INSURANCE XXXXXX-XXXXXXX PARTNERS
COMPANY OF AMERICA
By:______________________ By: ________________________
General Partner
By: ________________________
General Partner
ARTICLE VII
-----------
MISCELLANEOUS
-------------
7.01 NOTICES. All waivers, elections, options, notices, demands, and
consents which either party may be required or may desire to give under this
Sales Contract ("Notice") shall be in writing and shall be effective when
telecopied to the fax numbers indicated below, when personally delivered, or
when deposited in an official United States Postal Service office or branch or
official depository maintained by the United States Postal Service, by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
TO SELLER AT: The Prudential Insurance Company of
America
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
Telephone (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: The Prudential Insurance Company of
America
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Xx.
Telephone (000) 000-0000
FAX (000) 000-0000
TO PURCHASER AT: Carlyle Real Estate Limited
Partnership-IX
c/o JMB Realty Corporation
Attn: Xxxxx Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxxxxx X. Xxxxx, Esq.
Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
FAX (000) 000-0000
Medical Office Buildings, Ltd.
c/o Wright Runstad & Company
Attn: Xxxxx Xxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxx Xxxxx, Esq.
Xxxxx Xxxxxxxxxx
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
FAX (000) 000-0000
or such other address as either party may hereafter indicate by written notice
to the other.
Notice also may be given by Federal Express or other overnight courier
service, in which event such Notice shall be deemed given on delivery.
7.02 CERTIFICATION OF NON-FOREIGN STATUS.
A) No later than one (1) business days before Closing, Seller
shall deliver to Purchaser a Certification of Non-Foreign Status under Federal
law and under California law duly executed.
B) Anything herein contained to the contrary notwithstanding,
in the event Seller is a "foreign person" (as defined in Internal Revenue Code
Section 1445 or under Sections 18805 and 26131 of the California Taxation and
Revenue Code or in the event Seller fails or refuses to deliver the
Certification of Non-Foreign Status described in (A) of this Section 7.02, or
in the event Purchaser receives notice from any seller-transferor's agent or
purchaser-transferee's agent (each as defined in Internal Revenue Code Section
1445 and the regulations issued thereunder) that, or Purchaser has actual
knowledge that, such Certification is false, Purchaser shall deduct and
withhold from the Purchase Price a tax equal to ten (10%) percent thereof, as
required by Internal Revenue Code Section 1445. In the event of any such
withholding, Seller's obligation to deliver title hereunder shall not be
excused or otherwise affected, and Purchaser shall pay over such withheld
amount to the Internal Revenue Service and shall file such form as may be
required thereby. In the event of any claimed over-withholding, Seller shall
be limited solely to an action against the Internal Revenue Service for a
refund, and Seller hereby waives any right of action against Purchaser on
account of such withholding.
7.03 ATTORNEYS' FEES/WAIVER OF JURY TRIAL. If either party hereto files any
action or brings any proceeding against the other arising out of this Sales
Contract, or is made a party to any action or proceeding brought by the Escrow
Agent, then as between Purchaser and Seller, the prevailing party shall be
entitled to recover as an element of its costs of suit, and not as damages,
reasonable attorneys' fees to be fixed by the court. The "prevailing party"
shall be the party who is entitled to recover its costs of suit, whether or
not suit proceeds to final judgment. A party not entitled to recover costs
shall not be entitled to recover attorneys' fees. The parties each waive
their respective rights to trial by jury of any cause of action, claim,
counterclaim or cross-complaint in any action, proceeding and/or hearing
brought by either against the other, as to any matter whatsoever arising out
of or in any way connection with this Sales Contract.
7.04 BROKERS. Purchaser shall indemnify and hold Seller harmless from any and
all claims, demands, liabilities or damages arising out of a claim by any
party for a brokers fee or finders fee in connection with this transaction.
7.05 INTEGRATION. This Sales Contract and the exhibits attached hereto shall
constitute the entire agreement between Seller and Purchaser and supersede any
and all prior written or oral agreements, representations, and warranties
between and among the parties and their agents, all of which are merged into
or revoked by this Sales Contract, with respect to its subject matter.
7.06 MODIFICATION. No modification, approval, waiver, amendment, discharge,
or change of any condition or matter that may be approved or waived in this
Sales Contract shall be valid unless the same is in writing and signed by the
party against which the enforcement of such modification, waiver, approval,
amendment, discharge, or change is or may be sought.
7.07 SEVERABILITY. In the event any term, covenant, condition, provision, or
agreement contained herein is held to be invalid, void, or otherwise
unenforceable, by any court of competent jurisdiction, such holding shall in
no way affect the validity or enforceability of any other term, covenant,
condition, provision, or agreement contained herein.
7.08 GOVERNING LAW. This Sales Contract and the obligation of the parties
hereunder shall be interpreted, construed, and enforced in accordance with the
laws of the State of California.
7.09 TERMINOLOGY. All personal pronouns used in this Sales Contract, whether
used in the masculine, feminine, or neuter gender, shall include all other
genders; the singular shall include the plural and vice versa. "Business day"
means other than Saturday, Sunday, or holiday observed by nationally chartered
banks. In the event that the time for performance of an act under this Sales
Contract falls on a Saturday, Sunday, or holiday observed by nationally
chartered banks, the date for performance of such act shall be extended to the
next business day.
7.10 COUNTERPARTS. This Sales Contract may be executed in multiple
counterparts, each of which shall be deemed to be an original agreement, and
all of which shall constitute one agreement by each of the parties hereto to
be effective as of the Effective Date.
7.11 BINDING EFFECT. Except as otherwise herein provided, this Sales
Contract shall be binding upon and inure to the benefit of the parties hereto.
7.12 ASSIGNABILITY. Subject to the provisions of this Section 7.12, this
Sales Contract is transferrable or assignable only at close of escrow for the
purpose of avoiding multiple deeds of conveyance and the payment of multiple
transfer taxes and any attempt to transfer, assign, grant or otherwise convey
this Sales Contract other than as limited herein shall be null and void and
shall automatically terminate this Sales Contract without the necessity of
notice or any action by Seller and in any such event, Seller may retain the
Deposit and such attempted transfer, assignment, grant or other attempted
conveyance other than as limited herein shall constitute an Event of Default
under the Loan and Extension Agreement. Purchaser's right to transfer or
assign this Sales Contract at Closing as permitted above is conditional on
such assignee or transferee delivering to Seller a binding and enforceable
assumption, in form and content reasonably acceptable to Seller, of the
provisions of Article VI. Notwithstanding such Assignment, Purchaser shall
remain fully bound and obligated to Seller under the terms of the Hazardous
Materials Indemnity Agreement.
7.13 SURVIVAL OF PROVISIONS. Unless otherwise specifically so provided
herein, covenants, representations and warranties herein shall survive the
Closing, except for the representations set forth in Section 4.01(B), which
shall not survive Closing by reason of Purchaser's securing title insurance.
7.14 CAPTIONS. Article and section titles or captions contained herein are
inserted as a matter of convenience and for reference, and in no way define,
limit, extend, or describe the scope of this Sales Contract or any provisions
hereof. Unless the context indicates otherwise, all reference to section
numbers herein shall mean the sections of this Sales Contract.
7.15 NO DEFAULT. Notwithstanding anything in this Sales Contract to the
contrary, this Sales Contract shall be automatically terminated and be of no
force or effect without the necessity of any action by any party or any notice
by any party to the other hereto if Purchaser shall permit an Event of Default
to occur under the Loan.
7.16 DEFINED TERMS. Capitalized terms used, but not defined herein, shall
have the meaning provided for such terms in the Option To Purchase or Second
Amendment to Loan Documents, as the case may be.
7.17 TIME. Time is of the essence in the performance of the parties'
respective obligations hereunder.
7.18 EXCULPATION. Notwithstanding anything to the contrary contained herein,
in no event shall any present or future partner of Carlyle Real Estate Limited
Partnership-IX, an Illinois limited partnership ("Carlyle"), which is a
General Partner of Borrower, or of Xxxxxx Runstad Associates Limited
Partnership, a Washington limited partnership ("WRALP"), which is a General
Partner of Medical Office Buildings, Ltd., a General Partner of Borrower (or
of any partnership having a direct or indirect interest in Carlyle or WRALP),
have any personal liability under or in connection with this Sales Contract
(recourse against Carlyle or WRALP and persons having a direct or indirect
interest in Carlyle or WRALP being limited to the assets of Carlyle or WRALP,
respectively, excluding any negative capital account of any such person).
7.19 THIRD PARTIES. Nothing contained herein, express or implied, is
intended to or shall confer upon any person or entity, other than the parties
hereto, any rights or remedies under or by reason of this Sales Contract.
[continued on next page]
PURCHASER: XXXXXX-XXXXXXX PARTNERS,
a California general partnership,
by its general partners:
By: Carlyle Real Estate Limited Partnership-IX,
an Illinois limited partnership,
General Partner
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: ________________________
Name:
Title:
By: Medical Office Buildings, Ltd.,
a Washington limited partnership,
General Partner
By: Xxxxxx Runstad Associates Limited
Partnership, a Washington limited partnership,
Its General Partner
By: Xxxxxx Runstad & Company, a
Washington corporation, Its General Partner
By: ___________________
Name:
Title:
SELLER: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: ___________________________
Name:
Title:
EXHIBIT A
---------
Legal Description
EXHIBIT B
---------
Permitted Exceptions
EXHIBIT C
---------
Grant Deed
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
___________________________
___________________________
___________________________
___________________________
___________________________
______________________________________________________________________
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
corporation ("GRANTOR"), hereby GRANTS to XXXXXX-XXXXXXX PARTNERS, a
California general partnership ("GRANTEE") that certain real property located
in the County of Los Angeles, State of California and more particularly
described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "PROPERTY"), together with Grantor's reversionary interest in
all improvements located thereon and all rights, privileges, easements and
appurtenances of Grantor appertaining to the Property and all right, title and
interest of Grantor in, to and under adjoining streets, rights of way and
easements.
IN WITNESS WHEREOF, Grantor has caused its duly authorized
representatives to execute this instrument as of the date hereinafter written.
DATED: ___________ ___, 199__
GRANTOR:
THE PRUDENTIAL INSURANCE COMPANY OF
OF AMERICA, a New Jersey
Corporation
By: ____________________________
Name:
Title:
STATE OF CALIFORNIA )
)
COUNTY OF _____________)
On ___________ ___, 199___, before me __________________________, a
Notary Public in and for said State, personally appeared
___________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity on
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
Notary Public, State of California
EXHIBIT D
---------
HAZARDOUS MATERIALS INDEMNITY AGREEMENT
THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (this "AGREEMENT") MADE
this _________day of ______________, 1997, by XXXXXX-XXXXXXX PARTNERS, a
California general partnership ("INDEMNITOR"), in favor of THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("INDEMNITEE").
RECITALS
A. Indemnitor and Indemnitee have entered into that certain Purchase
and Sale Agreement (the "SALES CONTRACT"), dated as of even date herewith,
whereby Indemnitee has agreed to sell and Indemnitor has agreed to purchase
certain real property described in Exhibit A thereto (the "PROPERTY"), on the
terms and conditions set forth therein. All capitalized terms used herein and
not otherwise defined herein shall have the meanings set forth in the Sales
Contract.
B. In consideration for Indemnitee's agreement to convey the Property
to Indemnitor and as a condition precedent to the effectiveness of the Sales
Contract, Indemnitor has agreed to indemnify Indemnitee as set forth in this
Agreement.
AGREEMENT
1. INDEMNIFICATION. If, after Closing, Indemnitor discovers
any Hazardous Materials, asbestos or asbestos-bearing materials or any other
environmental condition subject to legal requirements for corrective action on
or affecting the land or any improvements thereon, Indemnitor shall
immediately notify Indemnitee, and cause the condition to be corrected in
accordance with applicable law. Indemnitor shall protect, defend, indemnify
and hold Indemnitee and Indemnitee's affiliates and subsidiaries and their
respective officers, directors, participants, employees, contractors,
consultants, representatives and agents free and harmless from and against and
all claims, demands, liability, damages, costs and expenses, including,
without limitation, investigatory expenses, clean-up costs and actual
reasonable attorneys' fees of whatever kind or nature, whether arising on,
before or after the date of this Sales Contract, that arise from or in any way
are connected with (a) the physical condition of the Property or the
improvements thereon or any other aspect of the Property or the improvements
thereon, no matter whether or not earlier discoverable and any efforts of
Indemnitor and/or its contractors to correct the same, or (b) in enforcing
this Agreement.
2. HAZARDOUS MATERIALS. For the purposes of this Agreement,
the term "Hazardous Materials" shall mean hazardous substances or materials
which are categorized as hazardous or toxic under any local, state or federal
law, statute, ordinance rule, or regulation pertaining to environmental or
substance regulation, contamination, cleanup or disclosure, including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601 ET SEQ.), the Clean
Water Act (33 U.S.C. Sections 466 ET SEQ.), the Safe Drinking Water Act (14
U.S.C. Sections 1401-1450), the Hazardous Materials Transaction Act (49 U.S.C.
Sections 1801 ET SEQ.), the Toxic Substance Control Act (15 U.S.C. Sections
2601-2629), the California Hazardous Substances Act (Health & Safety Code
Sections 25100-25600), the California Xxxxxx-Cologne Water Quality Control Act
(Water Code Sections 13020 ET SEQ.), and all regulations, rulings, and orders
promulgated or adopted pursuant thereto.
3. GENERAL PROVISIONS.
A. NOTICES. If either party hereto shall desire to give
or serve upon the other any notice, demand, request, or other communication,
each such notice, demand, request, or other communication shall be in writing
and shall be given or served upon the other party by personal service or by
certified, registered or express mail postage prepaid or by prepaid commercial
overnight express service or other commercial courier, or telefacsimile,
addressed as follows:
TO INDEMNITOR: Carlyle Real Estate Limited Partnership-IX
c/o JMB Realty Corporation
Attn: Xxxxx Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxxxxx X. Xxxxx, Esq.
Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
FAX (000) 000-0000
Medical Office Buildings, Ltd.
c/o Wright Runstad & Company
Attn: Xxxxx Xxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxx Xxxxx, Esq.
Xxxxx Xxxxxxxxxx
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
FAX (000) 000-0000
TO INDEMNITEE: The Prudential Insurance Company
of America
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Associate Regional Counsel
Telephone (000) 000-0000
FAX (000) 000-0000
WITH A COPY TO: Xxxxxxx X. Xxxxx, Esq.
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
FAX (000) 000-0000
Any notice, demand, request or other communication shall be deemed to have
been received upon the earlier of personal delivery thereof or two (2)
business days after having been deposited in the mail, as the case may be.
b. INTERPRETATION. The parties acknowledge that each
party and its counsel have reviewed and revised this Agreement and that the
normal rule of construction that ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement
or any amendment or exhibit hereto.
c. EXCULPATION. Notwithstanding anything to the contrary
contained herein, in no event shall any present or future partner of Carlyle
or of Xxxxxx Runstad Associates Limited Partnership, a Washington limited
partnership ("WRALP"), which is a General Partner of MOB (or of any
partnership having a direct or indirect interest in Carlyle or WRALP), have
any personal liability under or in connection with this Agreement (recourse
against Carlyle or WRALP and persons having a direct or indirect interest in
Carlyle or WRALP being limited to the assets of Carlyle or WRALP,
respectively, excluding any negative capital account of any such person).
d. MODIFICATIONS. This Agreement may be modified only by
a written agreement signed by each of the parties hereto.
e. DESCRIPTIONS; HEADINGS; CONSTRUCTION. The headings in
this Agreement are intended as references only and shall not in any way limit,
amplify or be used in interpreting the terms of this Agreement. The
masculine, feminine or neuter gender in the singular or plural shall be deemed
to include the other wherever the context of this Agreement so requires. This
Agreement shall not be construed against any party hereto as the drafters of
this Agreement.
f. GOVERNING LAWS. THIS AGREEMENT SHALL BE DEEMED TO BE
MADE UNDER THE LAWS OF THE STATE OF CALIFORNIA AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS THEREOF.
g. ATTORNEYS' FEES. If any party to this Agreement shall
bring any action or proceeding for any relief against the other, declaratory
or otherwise, arising out of this Agreement, the losing party shall pay to the
prevailing party a reasonable sum for attorneys' fees and costs incurred in
bringing or defending such action or proceeding and/or enforcing any judgment
granted therein, all of which shall be deemed to have accrued upon the
commencement of such action or proceeding and shall be paid whether or not
such action or proceeding is prosecuted to final judgment. Any judgment or
order entered in such action or proceeding shall contain a specific provision
providing for the recovery of attorneys' fees and costs, separate from the
judgment, incurred in enforcing such judgment. The prevailing party shall be
determined by the trier of fact based upon an assessment of which party's
major arguments or positions taken in the proceedings could fairly be said to
have prevailed over the other party's major arguments or positions on major
disputed issues. For the purposes of this section, attorneys' fees shall
include, without limitation, fees incurred in the following: (1)
post-judgment motions; (2) contempt proceedings; (3) garnishment, levy, and
debtor and third party examinations; (4) discovery; and (5) bankruptcy
litigation. This section is intended to be expressly severable from the other
provisions of this Agreement, is intended to survive any judgment and is not
to be deemed merged into the judgment.
h. SEVERABILITY. If any of the provisions of this
Agreement shall be held by any court of competent jurisdiction to be unlawful,
void or unenforceable for any reason as to any person or circumstance, such
provision or provisions shall be deemed severable from and shall in no way
affect the enforceability and validity of the remaining provisions of this
Agreement.
i. THIRD PARTIES. Nothing contained herein, express or
implied, is intended to or shall confer upon any person or entity, other than
the parties hereto, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have authorized the
execution of this Agreement as of the date first written above.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation
By: ________________________________________
Name:
Title:
XXXXXX-XXXXXXX PARTNERS,
a California general partnership
By: Carlyle Real Estate Limited Partnership-IX, an
Illinois limited partnership
General Partner
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: ______________________________
Name:
Title:
By: Medical Office Buildings, Ltd.,
a Washington limited partnership,
General Partner
By: Xxxxxx Runstad Associates Limited
Partnership, a Washington limited partnership,
Its General Partner
By: Xxxxxx Runstad & Company,
a Washington corporation,
Its General Partner
By: _________________________
Name:
Title:
