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EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Agreement") is made and entered into as of the 22nd day of March, 1996, by and
between K. PHILIP HWANG and C. GEMMA HWANG, husband and wife, jointly and
severally (collectively, "Seller"), and BAY APARTMENT COMMUNITIES, INC., a
Maryland corporation, or its nominee ("Buyer").
IN CONSIDERATION of the respective agreements hereinafter set forth,
Seller and Buyer hereby agree as follows:
1. Property. Seller hereby agrees to sell and convey to Buyer, and
Buyer hereby agrees to purchase from Seller, subject to the terms and conditions
set forth herein, the following:
(a) that certain real property located at 2175 Decoto Road,
Union City, California, more particularly described in Schedule 1 to the "Deed"
(as hereinafter defined) attached hereto as Exhibit A and incorporated herein by
this reference (the "Land");
(b) all rights, privileges and easements appurtenant to the
Land, including, without limitation, all minerals, oil, gas and other
hydrocarbon substances on and under and that may be produced from the Land, as
well as all development rights, land use entitlements, including without
limitation building permits, licenses, permits and certificates, utilities
commitments, air rights, water, water rights, riparian rights, and water stock
relating to the Land and any rights-of-way or other appurtenances used in
connection with the beneficial use and enjoyment of the Land and all of Seller's
right, title and interest in and to all roads, easements, rights of way and
alleys adjoining or servicing the Land (collectively, the "Appurtenances");
(c) all improvements and fixtures located on the Land and
Appurtenances, including, without limitation, the building(s) located on the
Land, containing two hundred eight (208) units, and all apparatus, equipment and
appliances used in connection with the operation or occupancy of the Land and
Appurtenances, such as heating and air conditioning systems and facilities used
to provide any utility, refrigeration, ventilation, garbage disposal, recreation
or other services on the Land and Appurtenances, and along with all on-site
parking (collectively, the "Improvements", and together with the Land and
Appurtenances, the "Real Property");
(d) all tangible personal property owned by Seller located on
or in or used in connection with the Real Property as of the date hereof and as
of the "Closing Date" (as defined in Para graph 8(b) below) including, without
limitation, (i) all laundry equipment, recreation equipment, pool and spa
furniture and equipment, furnishings in the on-site leasing facility, clubhouse
and fitness center, and all air conditioners, refrigerators, dishwashers,
ovens/ranges, microwaves and washer/dryer units located in the rental units, and
(ii) all those items described in Schedule 2 to the "Bill of Sale" (as
hereinafter defined) attached hereto as Exhibit B (collectively, the "Tangible
Personal Property"); and
(e) any intangible personal property now or hereafter owned by
Seller and used in the ownership, use or operation or development of the Real
Property, and Tangible Personal Property, including, without limitation, the
right to use the names "Park Centre Apartments" and "Cherrywood Apartments" and
any other trade name now used in connection with the Real Property and, to the
extent approved by Buyer pursuant to this Agreement, any contract or lease
rights (including, without limitation,
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the lessor's interest in and to all tenant leases, rental agreements, subleases
and tenancies, including all amendments, modifications, agreements, records,
substantive correspondence, and other documents affecting in any way a right to
occupy any portion of the Real Property (individually and collectively, the
"Leases"), and Seller's interest in all security deposits and prepaid rent, if
any, under the Leases (provided that Seller's interest in such security deposits
and prepaid rent shall not be paid in cash to Buyer upon the Closing but instead
shall be transferred in the form of a credit against the Purchase Price pursuant
to Paragraph 8(f) below) and any and all guaranties of the Leases, utility
contracts or other agreements or rights relating to the ownership, use and
operation of the Real Property or Tangible Personal Property (collectively, the
"Intangible Property", and together with the Tangible Personal Property, the
"Personal Property").
All of the items referred to in Subparagraphs (a), (b), (c), (d) and
(e) above are collectively referred to herein as the "Property".
2. Purchase Price.
(a) The purchase price of the Property is Eleven Million Four
Hundred Thousand Dollars ($11,400,000.00), subject to reduction by any credits
due Buyer hereunder (the "Purchase Price").
(b) The Purchase Price shall be paid as follows:
(i) Concurrently with the execution of this Agreement
and the opening of an escrow in connection herewith ("Escrow"), which will be
opened at Commonwealth Land Title Company, 888 W. 6th Street, Los Angeles, CA
90017 ("Escrow Holder"), Buyer shall deposit into Escrow cash in the amount of
One Hundred Thousand Dollars ($100,000.00) (the "Initial Deposit"). The Initial
Deposit shall be held by Escrow Holder in an interest-bearing account for
Buyer's benefit. Upon the expiration of the Due Diligence Period, if this
Agreement is not earlier terminated, Buyer shall deposit into Escrow cash in the
amount of Fifty Thousand Dollars ($50,000.00) (the "Additional Deposit"). The
Additional Deposit shall be held by Escrow Holder in an interest-bearing account
for Buyer's benefit. As used in this Agreement, the "Deposit" shall mean the
Initial Deposit, plus, if and when made pursuant hereto, the Additional Deposit.
The Deposit and all interest earned thereon shall be applied towards the
Purchase Price at Closing; provided, however, if this Agreement is terminated
for any reason other than a default by Buyer, the Deposit along with all
interest earned thereon shall be returned to Buyer.
(ii) On or before the Closing, if this Agreement has
not been earlier terminated, Buyer shall deposit into Escrow cash in the amount
of the balance of the Purchase price, less any credits due Buyer hereunder (the
"Closing Amount"). The Closing Amount shall be applied towards the Purchase
Price at Closing; provided, however, that if this Agreement is terminated for
any reason other than a default by Buyer, the Closing Amount shall be returned
to Buyer.
3. Title to the Property.
(a) At the Closing, Seller shall convey to Buyer marketable
and insurable fee simple title to the Real Property and Improvements, by duly
executed and acknowledged grant deed substantially in the form attached hereto
as Exhibit A and incorporated herein by this reference (the "Deed"). Evidence of
delivery of marketable and insurable fee simple title shall be the issuance by
Commonwealth Land Title Company (the "Title Company") to Buyer of an ALTA
Owner's Policy of Title Insurance (Form B, rev. 10/17/70) in the amount of the
Purchase Price, insuring fee simple title to the Real Property and Improvements
in Buyer, subject only to such exceptions as Buyer shall have approved pursuant
to
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Paragraph 4 below and without boundary, encroachment or survey exceptions (the
"Title Policy"). The Title Policy shall provide full coverage against mechanics'
and materialmen's liens and shall contain such special endorsements as Buyer may
reasonably require, including, without limitation, any endorsements required as
a condition to Buyer's approval of any title exceptions pursuant to Paragraph 4
below (the "Endorsements").
(b) At the Closing, Seller shall transfer title to the
Tangible Personal Property by a bill of sale in the form attached hereto as
Exhibit B and incorporated herein by this reference (the "Bill of Sale"), such
title to be free of any liens, encumbrances or interests.
(c) At the Closing (i) Seller shall transfer title to the
Intangible Property, the "Assigned Contracts" (as hereinafter defined) and the
"Permits" (as hereinafter defined) by an assignment of intangible property in
the form attached hereto as Exhibit C and incorporated herein by this reference
(the "Assignment of Intangible Property") and (ii) Seller shall transfer title
to the Leases by an assignment of Leases in the form attached hereto as Exhibit
D and incorporated herein by this reference (the "Assignment of Leases"), such
title in each case to be free of any liens, encumbrances or interests.
4. Due Diligence. As used herein, the term "Due Diligence Period" shall
refer to a period of time to expire thirty (30) days after the date of this
Agreement, provided that such thirty (30) day period shall be extended on a day
for day basis for each day following the date of this Agreement until the
delivery by Seller to Buyer of all of the items specified for Seller's delivery
in Paragraph 5 below (excluding the Other Documents referenced in the last
paragraph of Paragraph 5 below). Buyer may elect, by written notice to Seller at
any time prior to the expiration of the Due Diligence Period, to terminate this
Agreement, which election shall be in Buyer's sole and absolute discretion. If
Buyer desires to proceed with the purchase of the Property subject to the
remaining conditions set forth in this Agreement (including, without limitation,
pursuant to Paragraph 6 below), then on or before the expiration of the Due
Diligence Period, Buyer shall deliver written notice to Seller of such election
to proceed (the "Buyer's Notice to Proceed"), electing to waive Buyer's right of
termination pursuant to this Paragraph 4 and proceed with the Closing subject to
the remaining conditions set forth in this Agreement. Buyer's Notice to Proceed
shall specify in writing the requirements for the Title Policy (including,
without limitation, approved exceptions and any required Endorsements), and
Title Company's unconditional commitment to issue the Title Policy in such
approved form at the Closing shall be a Condition Precedent to Buyer's
obligation to proceed with the Closing in addition to the other Conditions
Precedent set forth in Paragraph 6 below. In any event, Seller, at Seller's sole
cost (including, without limitation, costs of any prepayment and/or yield
maintenance fees), covenants to cause to be released and reconveyed from the
Property, and to remove as exceptions to title prior to the Closing, any
mortgages, deeds of trust, or other monetary encumbrances, assessments or
indebtedness shown on the Preliminary Report except for real property taxes not
delinquent. In addition, Seller shall reasonably cooperate with Buyer and use
Seller's reasonable efforts to cause the removal as exceptions to the Title
Policy of any items identified in the Preliminary Report or any survey and
specified by Buyer to Seller during the Due Diligence Period as items which
shall be disapproved by Buyer. If Buyer fails to deliver Buyer's Notice to
Proceed to Seller prior to the expiration of the Due Diligence Period electing
to waive Buyer's right of termination pursuant to this Paragraph 4, then Buyer
shall be deemed to have elected to terminate this Agreement. In the event of the
termination of this Agreement pursuant to this Paragraph 4, the Deposit plus all
interest accrued thereon shall be returned to Buyer and neither party shall have
any further obligations to the other hereunder (except under provisions of this
Agreement which specifically state that they survive termination).
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5. Seller's Deliveries. Seller shall deliver or cause to be delivered
to Buyer all of the following (collectively, the "Due Diligence Materials") at
Seller's sole cost and expense prior to the date of this Agreement:
(a) a current extended coverage preliminary title report on
the Real Property, issued by Title Company, accompanied by copies of all
documents referred to in the report (collectively, the "Preliminary Report");
(b) copies of any and all existing and proposed easements,
covenants, restrictions, agreements or other documents which affect title to the
Property and which are not disclosed by the Preliminary Report;
(c) to the extent in Seller's possession or control: any
existing survey(s) of the Real Property (including, without limitation, any
"as-built" survey of the Real Property;
(d) copies of the most recent property tax bills and
assessments for the Property;
(e) to the extent in Seller's possession or control: all
presently effective warranties or guaranties from any contractors,
subcontractors, suppliers, servicemen or materialmen in connection with any of
the Tangible Personal Property or any construction, renovation, repairs or
alterations of the Improvements or any tenant improvements (collectively, the
"Warranties");
(f) a schedule (the "Schedule of Agreements") setting forth a
list of all of the service contracts, utility contracts, maintenance contracts,
management contracts, leasing contracts, equipment leases, and brokerage and
leasing commission agreements in any way related to the Property (collectively,
the "Service Contracts"), together with copies of all such Service Contracts.
From this Schedule of Agree ments, Buyer shall designate those contracts that
Seller shall assign to Buyer as of Closing (such designated Service Contracts
together with the Warranties and any "Other Documents" (as hereinafter defined)
designated by Buyer for assignment are collectively referred to herein as the
"Assigned Contracts"). Without limiting the effectiveness of the foregoing
general provisions with respect to such Service Contracts, unless Buyer
specifically provides Seller with "written notice to the contrary" (as
hereinafter defined), in the event of the Closing of the purchase of the
Property, Buyer shall not retain the existing employees and management agents of
Seller for the Property, and, accordingly, on or prior to the Closing, Seller
shall (i) cause all employment and management agreements respecting the Property
to be terminated, and deliver evidence of such termination to Buyer, (ii) remove
all employees and management personnel from the Property, and (iii) deliver any
rental units within the Property previously occupied by such employees and/or
management personnel in a vacant and tenant-ready condition. Buyer's "written
notice to the contrary" pursuant hereto shall be made only by delivery to Seller
of a copy of a written agreement or letter of employment with or to such
employee and/or management agent executed by Buyer;
(g) to the extent in Seller's possession or control: reports
of insurance carriers insuring the Property, and each portion thereof,
respecting the claims history of the Property, if any, certificates of insurance
and insurance policies; insurance claims history for the three (3) most recent
calendar years prior to Closing and, to the extent available, for the current
year;
(h) to the extent in Seller's possession or control:
environmental reports, environmental audits, soils reports, site plans (with
dimensions), engineering reports and plans, traffic reports, demographic
information, landscape plans, structural calculations, floor plans (identifying
tenant and vacancy locations), certified copies of the as-built plans and
specifications, without limiting any of the
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foregoing, all items with respect to any remodeling or renovation of the
Property, construction contracts, a current inspection report by a licensed
Structural Pest Control Operator, and other reports or documents of significance
to the Property, copies of the zoning description applicable to the Property,
and copies of final certificates of occupancy for all improvements;
(i) a complete inventory of all Tangible Personal Property
used at or in connection with the Property;
(j) a complete list of Seller's and/or Seller's property
manager's employees at the Property, specifying the current compensation of
each;
(k) all income and expense statements, year-end financial and
monthly operating statements and year to date statements for the three (3) most
recent calendar years prior to Closing and, to the extent available, the current
year, all of which shall either be (i) certified by an independent certified
public accountant as having been prepared in accordance with generally accepted
accounting principles (except to the extent specified as prepared on a cash
basis), or (ii) certified by Seller as true and correct and an accurate
representation of the financial condition of the Property;
(l) a copy of the budget for the current year;
(m) (i) copies of all existing and pending Leases, and, to the
extent in Seller's possession or control, lease files and tenant correspondence;
(ii) a schedule of leasing commissions on a space by space basis; (iii) a copy
of the current standard lease form; and (iv) a current rent roll of the
Property, listing for each tenant the name, location of leased premises, rent,
obligation for reimbursement of expenses, amount of security deposit and rent
paid more than thirty (30) days in advance, lease commencement date, lease
termination date, lease extension options, any free rent, or other unexpired
concessions, if any, any refurbishment or renovation obligations owed to
tenants, and a description of any uncured defaults (the "Rent Roll"),
specifically identifying any changes from the Rent Roll attached hereto as
Exhibit E and incorporated herein by this reference, or a certificate of Seller
that there have been no such changes; and
(n) to the extent in Seller's possession or control: all
governmental permits and approvals relating to the construction, operation, use
or occupancy of the Property, including without limitation, all certificates of
occupancy (individually and collectively "Permits").
In addition, Seller shall promptly deliver to Buyer such other
information relating to the Property that is specifically requested by Buyer of
Seller in writing during the Due Diligence Period to the extent such information
either is in the possession or control of Seller, or any affiliate of Seller, or
may be obtained by Seller, or any affiliate of Seller, through the exercise of
commercially reasonable efforts (collectively, the "Other Documents").
6. Conditions Precedent to Closing. The following are conditions
precedent to Buyer's obligation to purchase the Property (the "Conditions
Precedent"). The Conditions Precedent are intended solely for the benefit of
Buyer and may be waived only by Buyer in writing. In the event any condition
precedent is not satisfied, Buyer may, in its sole and absolute discretion,
terminate this Agreement, and, subject to the provisions of Paragraphs 4 and 7,
all obligations of Buyer and Seller hereunder (except provisions of this
Agreement which recite that they survive termination) shall terminate and be of
no further force or effect.
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(a) Buyer's inspection, review and approval, within the Due
Diligence Period, of all of the following:
(i) The structural, mechanical, electrical and other
physical characteristics and condition of the Property (including without
limitation the condition of the soils);
(ii) The Due Diligence Materials and the Other
Documents;
(iii) An examination for the presence or absence of
"Hazardous Materials" (as hereinafter defined), which shall be performed or
arranged by Buyer at Buyer's sole expense;
(iv) All housing, zoning, land-use, subdivision,
environmental, life safety, handicapped codes (including without limitation the
Americans With Disabilities Act of 1990 ("ADA") and the Fair Housing Amendments
Act of 1988 ("FHAA")), building and construction laws and regulations
restricting or regulating or otherwise affecting the use, occupancy or enjoyment
of the Property; and
(v) Three (3) years' audited financial statements of
the Seller, which (if the same do not exist) may, at Buyer's option, be
performed or arranged at Buyer's cost (provided that Seller shall and hereby
agrees to fully cooperate with Buyer and its representatives and provide them
with all necessary or desirable information and materials in connection
therewith).
(b) All of Seller's representations and warranties contained
in or made pursuant to this Agreement shall have been true and correct when made
and shall be true and correct as of the Closing Date.
(c) The physical condition of the Property shall be
substantially the same on the day of Closing as on the date of Buyer's execution
of this Agreement, reasonable wear and tear and loss by casualty (subject to the
provisions of Paragraph 13 below) excepted.
(d) As of the Closing Date, there shall be no litigation or
administrative agency or other governmental proceeding of any kind whatsoever,
pending or threatened, which after Closing would, in Buyer's sole discretion,
materially adversely affect the value of the Property or the ability of Buyer to
operate the Property in the manner in which it is currently being operated, and
no proceedings shall be pending or threatened which could or would cause the
redesignation or other modification of the zoning classification of, or of any
building or environmental code requirements applicable to, any of the Property.
(e) Seller shall have provided Buyer with an accurate and
current updated Rent Roll dated within five (5) days prior to Closing, which
updated Rent Roll will be used to identify all Leases of space at the Property
for purposes of this Agreement Seller shall specifically identify any changes
from the Rent Roll attached hereto as Exhibit E, and a certificate executed by
Seller and the property manager for the Property certifying that such updated
Rent Roll is true and correct (including, without limitation, the amount of
Security Deposits and description of uncured tenant defaults and delinquencies
listed thereon), and stating whether there exist any events which with the
passage of time and/or the giving of notice would constitute a tenant default
under a Lease.
(f) Seller shall have fully complied with all of Seller's
duties and obligations contained in this Agreement.
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(g) There shall have been no material adverse change, in
Buyer's determination, in the information or items reviewed and approved by
Buyer during the Due Diligence Period.
(h) Buyer shall have confirmed that at least ninety percent
(90%) of the apartment units on the Property are physically occupied by tenants
("Qualified Tenants") who (1) are not in default under their respective Leases,
(2) meet Seller's reasonable credit standards for tenancy at the Property, and
(3) are paying rental at commercially reasonable rates without any special
concessions.
7. Remedies.
(a) IN THE EVENT THE SALE OF THE PROPERTY IS NOT CONSUMMATED
BECAUSE OF THE FAILURE OF ANY CONDITION OR ANY OTHER REASON EXCEPT A DEFAULT
UNDER THIS AGREEMENT SOLELY ON THE PART OF BUYER, THE DEPOSIT PLUS INTEREST
ACCRUED THEREON SHALL IMMEDIATELY BE RETURNED TO BUYER. IF SAID SALE IS NOT
CONSUMMATED SOLELY BECAUSE OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF
BUYER, THE DEPOSIT (BUT NOT THE INTEREST ACCRUED THEREON) SHALL BE PAID TO AND
RETAINED BY SELLER AS LIQUIDATED DAMAGES (WITH ANY ACCRUED INTEREST THEREON TO
BE PAID TO BUYER). THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE
EVENT OF A DEFAULT BY BUYER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE
THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS SELLER'S SOLE AND EXCLUSIVE
REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN THE EVENT OF A DEFAULT UNDER THIS
AGREEMENT ON THE PART OF BUYER. SELLER HEREBY WAIVES ANY AND ALL BENEFITS IT MAY
HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3389.
INITIALS: Seller _________ Buyer __________
(b) In the event the sale of the Property is not consummated
due to Seller's default under this Agreement, Buyer may, in its sole and
absolute discretion, avail itself of any and all other legal and equitable
remedies available under California law to a buyer of real property upon a
default by a seller, including, without limitation, the right to terminate the
contract and recover all damages and the right to continue this Agreement
pending Buyer's action for specific performance and/or damages hereunder, and no
such remedy shall be deemed exclusive or to preclude the pursuit of any other
remedy.
8. Escrow; Closing.
(a) Upon mutual execution of this Agreement, the parties
hereto shall deposit an executed counterpart of this Agreement with Escrow
Holder and this Agreement shall serve as instructions to Escrow Holder for
consummation of the purchase and sale contemplated hereby. Seller and Buyer
shall execute such supplemental Escrow instructions as may be appropriate to
enable Escrow Holder to comply with the terms of this Agreement, provided such
supplemental Escrow instructions are not in conflict with this Agreement as it
may be amended in writing from time to time. In the event of any conflict
between the provisions of this Agreement and any supplementary Escrow
instructions signed by Buyer and Seller, the terms of this Agreement shall
control.
(b) The parties intend for the Closing to take place on a date
mutually reasonably agreed upon by the parties within twenty (20) days following
the expiration of the Due Diligence Period
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(the "Closing Date"). In the event the Closing does not occur on or before the
Closing Date, Escrow Holder shall, unless it is notified by both parties to the
contrary within five (5) days after the Closing Date, return to the depositor
thereof items which were deposited hereunder. Any such return shall not,
however, relieve either party of any liability it may have for its wrongful
failure to Close.
(c) At or before the Closing, Seller shall deliver to Escrow
Holder or Buyer the following:
(i) a duly executed and acknowledged Deed;
(ii) a duly executed Bill of Sale;
(iii) originals of all Leases and a duly executed and
acknowledged Assignment of Leases;
(iv) originals of the Assigned Contracts and a duly
executed Assignment of Intangible Property;
(v) a duly executed affidavit that Seller is not a
"foreign person" within the meaning of Section 1445(e)(3) of the Internal
Revenue Code of 1986 in the form attached as Exhibit F and incorporated herein
by this reference together with a duly executed California Franchise Tax Board
Form 590;
(vi) originals of the building permits and
certificates of occupancy for the Improvements and all tenant-occupied space
included within the Improvements not previously delivered to Buyer;
(vii) notices to the Tenants of the occurrence of the
sale of the Property in a form designated by Buyer and reasonably approved by
Seller during the Due Diligence Period;
(viii) such resolutions, authorizations, bylaws or
other corporate and/or partnership documents or agreements relating to Seller
and its partners as shall be reasonably required by Buyer;
(ix) a full release and reconveyance of all monetary
encumbrances affecting the Property and of any mechanics' liens, and such bond,
indemnity or other arrangements as shall be necessary to cause the Title Company
to insure title to the Property as vested in Buyer without any exception for
such matters;
(x) a closing statement in form and content
satisfactory to Buyer and Seller (the "Closing Statement") duly executed by
Seller;
(xi) any documents or agreements required by the
Title Company to issue the Title Policy; and
(xii) any other instruments, records or
correspondence called for hereunder which have not previously been delivered.
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(xiii) Buyer may waive compliance on Seller's part
under any of the foregoing items by an instrument in writing.
(d) At or before the Closing, Buyer shall deliver to Escrow
Holder or Seller the following:
(i) the Closing Statement, duly executed by Buyer;
and
(ii) the Closing Amount.
(e) Seller and Buyer shall each deposit such other instruments
as are reasonably required by Escrow Holder or otherwise required to close the
escrow and consummate the purchase of the Property in accordance with the terms
hereof.
(f) (i) The following are to be apportioned as of the
Closing Date, as follows:
(1) Rent. Rent under the Leases shall be
apportioned as of the Closing Date, regardless of whether or not such rent has
been received by Seller. With respect to any rent arrearages arising under the
Leases, after Closing, Buyer shall pay to Seller any rent actually collected
which is applicable to the period preceding the Closing Date; provided, however,
that all rent collected by Buyer shall be applied first to all unpaid rent
accruing after the Closing Date, and then to unpaid rent accruing prior to the
Closing Date. Buyer shall not be obligated to take any steps to recover any rent
arrearages. Seller shall be permitted to pursue its own remedies for collection
of any rent arrearages applicable to the period prior to the Closing Date
against tenants no longer in occupancy of the Property provided that Buyer shall
incur no cost, expense or liability in connection therewith, but Seller shall
not be permitted to take any action or enforce any legal or equitable remedies
(specifically including com mencing eviction procedures) against tenants
remaining in occupancy of the Property.
(2) Leasing Costs. Seller shall pay as of the
Closing all leasing commission and tenant improvement costs, if any, in
connection with any Lease executed on or before the Closing that are or will
become due and payable as of the Closing. Buyer shall be entitled to a credit
against the Purchase Price for any such commissions or costs incurred in
connection with any lease executed on or before the Closing.
(3) Security Deposits. Buyer shall be entitled
to a credit against the Purchase Price for the total sum of all security
deposits paid to Seller by tenants under any Leases, and any interest earned
thereon.
(4) Free Rent, Abatements or Other Unexpired
Concessions. Buyer shall be entitled to a credit against the Purchase Price for
any free rent, abatements, or other unexpired concessions under any Leases to
the extent they apply to any period after the Closing.
(5) Utility Charges. Seller shall provide
written notice to the utility companies of the pending change of ownership of
the Property not less five (5) days prior to the Closing and shall concurrently
therewith delivery copies of such notices to Buyer. Seller shall cause all the
utility meters to be read on the Closing Date, and will be responsible for the
cost of all utilities used prior to the Closing Date, except to the extent such
utility charges are billed to and paid by tenants directly.
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(6) Real Estate Taxes and Special Assessments.
General real estate taxes payable for the fiscal year in which the Closing
occurs shall be prorated by Seller and Buyer as of the day following the Closing
Date. Seller shall pay on or before Closing the full amount of any bonds or
assessments against the Property including interest payable therewith, including
any bonds or assessments that may be payable after the Closing Date as a result
of or in relation to the construction or operation of any Improvements or any
public improvements that took place or for which any assessment was levied prior
to the Closing Date. Buyer shall pay the full amount of any bonds or assessments
incurred after the Closing Date that are not subject to the immediately
preceding sentence.
(7) Other Apportionments. Amounts payable
under the Assigned Contracts, annual or periodic permit and/or inspection fees
(calculated on the basis of the period covered), and liability for other
Property operation and maintenance expenses and other recurring costs shall be
apportioned as of the Closing Date. Seller shall provide Buyer with written
notice of amounts to be so apportioned not less than five (5) days prior to the
Closing.
(8) Preliminary Closing Statement. Not less
than two (2) business days prior to the Closing, Seller and Buyer shall jointly
prepare and approve a preliminary Closing Statement on the basis of the Leases
and other sources of income and expenses, and shall deliver such computation to
Escrow Holder prior to Closing.
(9) Post-Closing Reconciliation. If any of the
aforesaid prorations cannot be definitely calculated on the Closing Date, then
they shall be estimated at the Closing and definitely calculated as soon after
the Closing Date as feasible. As soon as the necessary information is available,
Buyer shall conduct a post-Closing audit to determine the accuracy of all
prorations made to the Purchase Price (the "Post-Closing Audit"). Either party
owing the other party a sum of money based on such subsequent proration(s) or
the Post-Closing Audit shall promptly pay said sum to the other party, together
with interest thereon at the rate of two percent over the "prime rate" (as
announced from time to time in the Wall Street Journal) per annum from the
Closing Date to the date of payment if payment is not made within ten (10) days
after delivery of a bill therefor.
(ii) Closing Costs. Seller shall pay any City and/or
County transfer taxes and/or transfer fees applicable to the sale of the
Property. In addition, Seller shall be liable for any prepayment fee or other
charge payable in connection with the payoff of any existing indebtedness. Buyer
shall pay the premium for the Title Policy, the cost of the ALTA survey,
recording fees for recording of the Deed and fees of Escrow Holder. All other
costs and charges in connection with the purchase and sale of the Property
contemplated by this Agreement not otherwise provided for in this Agreement
shall be allo cated in accordance with the closing customs for the County where
the Property is located. Buyer and Seller shall each be responsible for their
respective legal fees to negotiate and execute this Agreement.
(iii) Occupancy Credit. In the event that the "Actual
Occupancy Level" (as hereinafter defined) of the Property as of the Closing is
less than ninety-three percent (93%) (193 units), Buyer shall be entitled to a
credit (the "Occupancy Credit") against the Purchase Price in an amount equal to
the product obtained by multiplying the "Vacant Unit Rental Amount" (as
hereinafter defined) by a fraction, the numerator of which is the amount by
which the Actual Occupancy Level is less than ninety-three percent (93%) and the
denominator of which is the amount by which the Actual Occupancy Level is less
than one hundred percent (100%). As used herein, the "Actual Occupancy Level"
shall mean the percentage of the total apartment units on the Property that as
of the Closing are physically occupied by Qualified Tenants. As used herein, the
"Vacant Unit Rental Amount" shall mean the aggregate sum of one month's rental
for each apartment unit on the Property that as of the Closing is not physically
occupied by
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a Qualified Tenant, which rental amount shall be based on the monthly rental
last payable under a lease for each such apartment unit.
(iv) Survival. The provisions of this Subparagraph
(f) shall survive the Closing.
9. Representations, Warranties and Covenants of Seller. As of the date
hereof and again as of Closing, Seller represents and warrants to, and covenants
with, Buyer as follows:
(a) Seller has not received written notice of, and otherwise
has no actual knowledge of, any material physical or mechanical defects of the
Property, including, without limitation, the structural and load-bearing
components of the Property, the parking lots, the plumbing, heating, air
conditioning and electrical and life safety systems and building roofs.
(b) Seller has not received written notice of, and otherwise
has no actual knowledge of, (i) any non-compliance of the Property or the
operation thereof with applicable housing and building codes, environmental,
zoning, life safety, laws, rules and regulations related to handicapped or
disabled (including without limitation the ADA and the FHAA), land use laws and
regulations, and other applicable local, state and federal laws and regulations
(collectively, the "Laws"), or (ii) any order or directive of the applicable
Department of Building and Safety, Health Department or any other municipal,
county, state or federal authority that any work or repair, maintenance or
improvement is required to be performed on the Property.
(c) To Seller's actual knowledge, the Property is not subject
to any applicable rent control ordinance or law and no such ordinance or law is
pending by any governmental authority, agency or quasi-governmental entity with
jurisdiction over the Property.
(d) Seller has not received written notice of, and otherwise
has no actual knowledge of, any inaccuracy or misstatement contained in any of
the Due Diligence Materials or Other Documents. Seller has not received written
notice of, and otherwise has no actual knowledge of, any defaults by any of the
parties to any of the contracts or agreements respecting the Property to be
assigned to Buyer at Closing, except as set forth on Exhibit G attached hereto.
(e) Seller has not received written notice of, and otherwise
has no actual knowledge of, (i) any condemnation, environmental, zoning or other
land-use regulation proceedings, either instituted or planned to be instituted,
which would materially and adversely affect the use, operation or value of the
Property, or (ii) any special assessment proceedings affecting the Property.
Seller shall notify Buyer promptly of any such proceedings of which Seller
becomes aware.
(f) To Seller's actual knowledge, all water, sewer, gas,
electric, telephone, and drainage facilities and all other utilities required by
law or by the normal use and operation of the Property are installed to the
property lines of the Land pursuant to valid permits.
(g) There is no litigation pending or, to Seller's actual
knowledge, threatened in writing, against Seller arising out of the ownership or
operation of the Property or that might detrimentally affect the value or the
use or operation of the Property for its intended purpose or the ability of
Seller to perform its obligations under this Agreement. Seller shall notify
Buyer promptly of any such litigation of which Seller becomes aware.
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(h) There are no outstanding written or oral contracts made by
Seller for any improvements to the Property which have not been fully paid.
(i) Seller has disclosed to Buyer that there was previously
located at the Property an underground diesel fuel storage tank (the "Tank")
toward the creek side of the Property, which Tank has been removed by Seller.
The parties agree that the indemnity and hold harmless provisions of this
Agreement shall not apply with respect to any further investigative or curative
action required (whether by individual or governmental action) with respect to
the Tank, provided that the parties shall retain and rights and remedies with
respect thereto at law and/or in equity. Except as provided above with respect
to the Tank, neither Seller nor, to Seller's actual knowledge, any prior owner
or occupant of the Property has engaged in or permitted any activity on the
Property involving the handling, manufacture, treatment, storage, use, release,
or disposal of any "Hazardous Materials" (as hereinafter defined). Seller has
not received written notice, and otherwise has no actual knowledge, that removal
or other remedial action with respect to Hazardous Materials in, on, under or
about the Property is required by any governmental authority having jurisdiction
over the Property. For purposes of this Agreement, the term "Hazardous
Materials" shall mean any toxic or hazardous waste, material or substance,
including, without limitation, asbestos, petroleum, petroleum products,
underground storage tanks now or previously containing any other Hazardous
Materials, substances defined as "hazardous substances", "hazardous waste" or
"toxic substances" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq.; Hazardous
Materials Transportation Act, 49 U.S.C. Sec. 1801; and Resource Conservation and
Recovery Act, 42 U.S.C. Sec. 6901 et seq.; and other substances defined as
hazardous waste and hazardous substances in applicable state or local laws
and/or in any regulations and publications promulgated pursuant to said laws.
(j) Seller has not received written notice of, and otherwise
has no actual knowledge of any existing or proposed easements, covenants,
restrictions, agreements or other documents which affect title to the Property
and which are not disclosed by the Preliminary Report.
(k) The Land is a separate and distinct legal parcel. Such
parcel has been created by way of a subdivision of land completed in accordance
with all applicable laws, rules and regulations. Such parcel contains no
property which is part of a real property tax parcel which is not entirely
included in the Real Property.
(l) There are no free rent, abatements, incomplete tenant
improvements, rebates, allowances, or other unexpired concessions or rights
under any existing or pending Leases (with the exception of those specifically
excepted in Exhibit E attached hereto and incorporated herein by this
reference). Seller has paid in full any of landlord's leasing costs or
obligations.
(m) No brokerage, finder's fee or commission or similar fee or
commission is due or unpaid by Seller with respect to any Lease.
(n) The copies of the Leases delivered by Seller to Buyer
contain all of the information pertaining to any rights of any parties to occupy
the Property, including without limitation all information regarding any rent
concessions, tenant improvements, or other inducements to lease.
(o) The Rent Roll is true, complete and accurate and there
exist no defaults or events which, with the giving of notice or passage of time,
or both, would constitute a default by Seller as landlord under the Leases
listed thereon. To Seller's actual knowledge, except as specifically provided in
Exhibit
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E, there exist no defaults and no events which, with the giving of notice or
passage of time, or both, would constitute a default by any tenants thereon.
(p) To Seller's actual knowledge, the Property is properly
zoned for its intended use, all Improvements comply with applicable building
codes, all final certificates of occupancy for the Improvements have been
issued, and the Property is not dependent on any other property for compliance
with zoning regulations.
(q) This Agreement and all documents executed by Seller which
are to be delivered to Buyer at the Closing are and at the time of Closing will
be duly executed and delivered by Seller, are and at the time of Closing will be
legal, valid and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, are and at the time of Closing will be
sufficient to convey title (if they purport to do so), and do not and at the
time of Closing will not violate any provision of any agreement or judicial
order to which Seller or the Property is subject. Seller has obtained all
necessary authorizations, approvals and consents to the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
(r) Seller is the legal and equitable owner of the Property,
with full right to convey the same, and without limiting the generality of the
foregoing, Seller has not granted any option or right of first refusal or first
opportunity to any party to acquire any interest in any of the Property.
For purposes of this Agreement, whenever the phrase "to
Seller's actual knowledge" or words of similar import are used, they shall be
deemed to refer to the actual knowledge, after due inquiry, of K. Philip Hwang
and Gemma Hwang, and such of Seller's and its property manager's employees,
agents and management personnel who would, in the ordinary course of their
responsibilities, receive notice from other persons of any of the matters
described in the representations and warranties in this Agreement which are
limited by the knowledge of Seller.
10. Representations and Warranties of Buyer. Buyer hereby represents
and warrants to Seller as follows: Buyer is a corporation duly organized and
validly existing and in good standing under the laws of the State of Maryland
and in good standing under the laws of the State of California; this Agreement
and all documents executed by Buyer which are to be delivered to Seller at the
Closing are or at the time of Closing will be duly authorized, executed and
delivered by Buyer, and are or at the Closing will be legal, valid and binding
obligations of Buyer, and do not and at the time of Closing will not violate any
provisions of any agreement or judicial order to which Buyer is subject.
11. Continuation and Survival. All representations, warranties and
covenants by the respective parties contained herein or made in writing pursuant
to this Agreement are intended to and shall be deemed made as of the date of
this Agreement or such writing and again at the Closing, shall be deemed to be
material, and unless expressly provided to the contrary shall survive the
execution and delivery of this Agreement, the Deed and the Closing.
12. Indemnity.
(a) Except for "Losses and Liabilities" (as hereinafter
defined) arising directly or indirectly from a breach of any of Buyer's
representations or warranties, Seller shall hold harmless, indemnify and defend
Buyer, its successors and assigns and their respective agents, employees,
officers and directors, and the Property from and against any and all
obligations, liabilities, claims, liens, encumbrances, demands, losses, damages,
causes of action, judgments, costs and expenses (including,
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without limitation, attorneys' fees and expenses), whether direct, contingent or
consequential and no matter how arising ("Losses and Liabilities") in any way
(i) related to the Property and arising or accruing with respect to the period
prior to the Closing (except to the extent arising as a result of the acts of
Buyer and/or any of Buyer's employees, agents or representatives); and/or (ii)
resulting from any misrepresentation of Seller or any inaccuracy in or breach of
any representations and warranties by Seller.
(b) Except for Losses and Liabilities arising directly or
indirectly from a breach of any of Seller's representations or warranties, Buyer
shall hold harmless, indemnify and defend Seller, its successors and assigns and
their respective agents, employees, officers and partners, from and against any
and all Losses and Liabilities in any way (i) related to the Property and
arising or accruing with respect to the period from and after the Closing during
Buyer's period of ownership of the Property (except to the extent arising as a
result of the acts of Seller and/or any of Seller's employees, agents or
representatives); or (ii) resulting from any misrepresentation of Buyer or any
inaccuracy in or breach of any representation or warranty of Buyer.
(c) The provisions of this Paragraph 12 shall survive the
Closing.
13. Casualty or Condemnation.
(a) In the event any of the Property is damaged and/or
destroyed by fire or other casualty prior to the Closing Date, and the cost to
repair and/or restore such damage and/or destruction (which cost, for purposes
of this Paragraph 13, shall be deemed to include reasonably anticipated
postClosing rental loss through to completion of such repair and/or restoration)
exceeds One Hundred Thousand Dollars ($100,000.00), then Buyer shall have the
right to terminate this Agreement by written notice to Seller within ten (10)
business days after Buyer's first learning of the occurrence of such casualty
and the cost of such repair and/or restoration. In the event of any such
termination, the Deposit, together with all interest accrued thereon, shall be
returned to Buyer, Buyer and Seller shall each be liable for one-half of any
escrow fees or charges, and neither party shall have any further liability or
obligation under this Agreement.
(b) In the event any of the Property is damaged and/or
destroyed by fire or other casualty prior to the Closing Date where (i) the cost
to repair and/or restore such damage and/or destruction does not exceed One
Hundred Thousand Dollars ($100,000.00), or (ii) the cost to repair and/or
restore such damage and/or destruction exceeds One Hundred Thousand Dollars
($100,000.00) but this Agreement is not terminated pursuant to Paragraph 13(a)
above as a result thereof, then the Closing Date shall occur as scheduled
notwithstanding such damage; provided, however, that Seller's interest in all
proceeds of insurance payable by reason of such casualty shall be assigned to
Buyer as of the Closing Date or credited to Buyer if previously received by
Seller, and Seller shall be responsible for any cost of repair not covered by
such insurance (whether by reason of insurance deductible, uninsured casualty or
otherwise). Seller's obligations pursuant to the immediately preceding sentence
shall survive the Closing.
(c) In the event a governmental entity commences eminent
domain proceedings to take any portion of the Property after the date hereof and
prior to the Closing Date, then Buyer shall have the option to terminate this
Agreement by written notice to Seller within ten (10) business days after Buyer
first learns of such commencement. In the event of any such termination, the
Deposit, together with all interest accrued thereon, shall be returned to Buyer,
Buyer and Seller shall each be liable for one-half of any escrow fees or
charges, and neither party shall have any further liability or obligation under
this Agreement.
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(d) In the event a governmental entity commences eminent
domain proceedings to take any part of the Property after the date hereof and
prior to the Closing Date and this Agreement is not terminated pursuant to
Paragraph 13(c) above as a result thereof, then the Closing Date shall occur as
scheduled notwithstanding such proceeding; provided, however, that Seller's
interest in all awards arising out of such proceedings shall be assigned to
Buyer as of the Closing Date or credited to Buyer if previously received by
Seller. Seller's obligations pursuant to the immediately preceding sentence
shall survive the Closing.
14. Possession. Possession of the Property (together with all keys to
the Property) shall be delivered to Buyer on the Closing Date, provided,
however, that prior to the Closing Date Seller shall afford authorized
representatives of Buyer access to the Property for purposes of satisfying Buyer
with respect to the representations, warranties and covenants of Seller
contained herein and with respect to satisfaction of any Conditions Precedent to
the Closing contained herein, including without limitation an environmental
investigation.
15. Maintenance of the Property and Property Personnel. Between
Seller's execution of this Agreement and the Closing, Seller shall maintain the
Property in good order, condition and repair, reasonable wear and tear excepted,
shall perform all work required to be performed by the landlord under the terms
of any Lease, and shall make all repairs, maintenance and replacements of the
Improvements and any Tangible Personal Property and otherwise operate the
Property in the same manner as before the making of this Agreement, as if Seller
were retaining the Property. Prior to and as of the Closing Date, Seller shall
cause all vacant units vacated more than five (5) days prior to the Closing to
be made tenant ready and available for occupancy, with carpet and vinyl
replaced, if appropriate in accordance with Seller's reasonable operating
policies. After full execution of this Agreement and until the Closing, Seller
shall maintain all existing personnel on the Property in their current
employment positions at their current (or an increased) rate of compensation.
Except as otherwise provided in this Agreement, the Property is being sold on an
"as is" basis, and the reference above to Seller's obligation to "otherwise
operate the Property in the same manner as before the making of this Agreement,
as if Seller were retaining the Property" shall be defined to mean usual daily
maintenance not involving capital expenditures for such items as roof
replacement or structural repairs.
16. Leasing; Buyer's Consent to New Contracts Affecting the Property;
Termination of Existing Contracts. Seller shall use commercially reasonable
efforts until Closing to lease any vacant space, or space becoming vacant, in
the Real Property to tenants utilizing the criteria Seller used prior to
execution of this Agreement. Seller shall not, after the date of Seller's
execution of this Agreement, enter into any lease (other than a lease of
apartment space in accordance with the immediately preceding sen tence) or
contract affecting the Property, or any amendment thereof, or permit any Tenant
to enter into any sublease, assignment or agreement pertaining to the Property,
or waive, compromise or settle any rights of Seller under any contract or Lease,
or agree to return any security deposit, or modify, amend, or terminate any
Assigned Contract, without in each case obtaining Buyer's prior written consent
thereto. Seller shall terminate prior to the Closing, at no cost or expense to
Buyer, any and all management agreements or contracts affecting the Property
that are not Assigned Contracts and deliver evidence of such termination to
Buyer.
17. Insurance. Through the Closing Date, Seller shall maintain or cause
to be maintained, at Seller's sole cost and expense:
(a) a policy or policies of insurance in amounts equal to the
full replacement value of the Improvements and the Tangible Personal Property,
insuring against all insurable risks, including,
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without limitation, fire, vandalism, malicious mischief, lightning, windstorm,
water, earthquake and other perils customarily covered by casualty insurance and
the costs of demolition and debris removal; and
(b) a policy or policies of workers' compensation and
employers' liability insurance, commercial general liability insurance, and
automobile liability insurance, each in the amount and form maintained by Seller
prior to the date of this Agreement.
18. Cooperation with Buyer. Seller shall cooperate and do all acts as
may be reasonably required or requested by Buyer with regard to the fulfillment
of any Condition Precedent but Seller's representations and warranties to Buyer
shall not be affected or released by Buyer's waiver or fulfillment of any
Condition Precedent. Seller hereby irrevocably authorizes Buyer and its agents
to make all inquiries with and applications to any third party, including any
governmental authority, as Buyer may reasonably require to complete its due
diligence.
19. Brokers and Finders. Neither party has had any contact or dealings
regarding the Property, or any communication in connection with the subject
matter of this transaction, through any real estate broker or other person who
can claim a right to a commission or finder's fee in connection with the sale
contemplated herein except for Realty Investments ("Broker"), whose entire
commission shall be the responsibility of Seller (pursuant to separate agreement
between Seller and Broker). In the event that any other broker or finder claims
a commission or finder's fee based upon any contact, dealings or communication,
the party through whom the broker or finder makes its claim shall be responsible
for said commission or fee and all costs and expenses (including, without
limitation, reasonable attorneys' fees) in curred by the other party in
defending against the same. The party through whom any other broker or finder
makes a claim shall hold harmless, indemnify and defend the other party hereto,
its successors and assigns, agents, employees, officers and directors, and the
Property from and against any and all obliga tions, liabilities, claims,
demands, liens, encumbrances and losses (including, without limitation,
attorneys' fees), whether direct, contingent or consequential, arising out of,
based on, or incurred as a result of such claim. The provisions of this
Paragraph shall survive the Closing or termination of this Agreement.
20. Marketing. Seller agrees not to market or show the Property to any
other prospective purchasers during the term of this Agreement.
21. Publicity and Confidentiality. Seller and the Title Company each
agree that the terms of the transaction contemplated by this Agreement, the
identity of Buyer and all information made available by Buyer to Seller or the
Title Company or in any way relating to the Buyer's interest in that
transaction, shall be maintained in strict confidence and no disclosure of such
information will be made by Seller or the Title Company, whether or not the
transaction contemplated by this Agreement shall close, except to such
attorneys, accountants, investment advisors, lenders and others as are
reasonably required to evaluate and consummate that transaction. Seller and the
Title Company for themselves each further agree that nothing in this Paragraph
shall prevent Buyer, Seller or the Title Company from disclosing or accessing
any information otherwise deemed confidential under this Paragraph (a) in
connection with that party's enforcement of its rights hereunder; (b) pursuant
to any legal requirement, any statutory reporting requirement or any accounting
or auditing disclosure requirement; (c) in connection with performance by either
party of its obligations under this Agreement (including, but not limited to,
the delivery and recordation of instruments, notices or other documents required
hereunder); or (d) to potential investors, participants or assignees in or of
the transaction contemplated by this Agreement or such party's rights therein.
22. Miscellaneous.
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(a) Notices. Any notice, consent or approval required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given upon (i) hand delivery, (ii) one business day after
being deposited with Federal Express or another reliable overnight courier
service or next day delivery or transmitted by facsimile transmission, or (iii)
two business days after being deposited in the United States mail, registered or
certified mail, postage prepaid, return receipt required, and ad dressed as
follows:
If to Seller: K. Philip Hwang and C. Gemma Hwang
- ------------ 21070 Homestead Road, Suite 105
Cupertino, CA 95014
Attention:____________________
Phone: ( ) -
Fax: ( ) -
If to Buyer: Bay Apartment Communities, Inc.
- ------------ 4340 Stevens Creek Boulevard, Suite 275
San Jose, California 95129
Attention: Mr. Gilbert M. Meyer, President
Phone: (408) 983-1500
Fax: (408) 984-7060
With a copy to: Cox, Castle & Nicholson
2049 Century Park East, Suite 2800
Los Angeles, California 90067
Attention: Scott D. Brooks, Esq.
Phone: (310) 284-2295
Fax: (310) 277-7889
or such other address as either party may from time to time specify in writing
to the other.
(b) Successors and Assigns. Buyer shall have the right to
assign this Agreement without the consent or approval of Seller. This Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors, heirs, administrators and assigns.
(c) Amendments. Except as otherwise provided herein, this
Agreement may be amended or modified only by a written instrument executed by
Seller and Buyer.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(e) Merger of Prior Agreements. This Agreement and the
exhibits hereto constitute the entire agreement between the parties and
supersede all prior agreements and understandings between the parties relating
to the subject matter hereof, including without limitation, that certain Letter
of Intent dated February 6, 1996 (the "Letter of Intent") which shall be of no
further force or effect upon execution of this Agreement by Buyer.
(f) Time of the Essence. Time is of the essence of this
Agreement.
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(g) Severability. If any provision of this Agreement, or the
application thereof to any person, place, or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
(h) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but any number
of which, taken together, shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BUYER: SELLER:
BAY APARTMENT COMMUNITIES, INC., /s/ K. Philip Hwang
a Maryland corporation -----------------------------------
K. PHILIP HWANG
By:/s/ Geoffrey L. Baker /s/ C. Gemma Hwang
- ---------------------------------- -----------------------------------
GEOFFREY L. BAKER, C. GEMMA HWANG
Chief Development & Acquisition Officer
[BUYER AND SELLER TO INITIAL SUB-PARAGRAPH 7(a)]
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