1
EXHIBIT 10.3
AGREEMENT FOR PURCHASE AND SALE
AGREEMENT made this day of April, 1996, between CONSOLIDATED SUNSET
LIMITED PARTNERSHIP, a California limited partnership, with offices at 10670
North Central Expressway, Dallas, Texas 75231 ("Seller"), and BAY APARTMENT
COMMUNITIES, INC., a Maryland corporation, with offices at 4340 Stevens Creek
Blvd., Ste. 275, San Jose, California 95129 ("Purchaser");
WITNESSETH THAT PURCHASER AND SELLER HAVE AGREED AS FOLLOWS:
ARTICLE I
AGREEMENT FOR PURCHASE AND SALE
Seller agrees to sell and cause to be conveyed to Purchaser, and Purchaser
agrees to purchase, the following property (collectively, the "Project"):
(a) The real property located in the City and County of San Francisco,
State of California, described on EXHIBIT 1.1 (the "Land") together with the
existing improvements thereon situated and all appurtenances thereto (together,
the "Property");
(b) The Seller's interest in any leases affecting the Property;
(c) Seller's right, if any, to the use of the name "Sunset Towers" in
connection with the Property; and
(d) All fixtures and articles of personal property attached or appurtenant
to or used in connection with the Property which are owned by Seller and located
at the Property.
ARTICLE 2
PURCHASE PRICE
2.1 The purchase price (the "Purchase Price") for the Project is Twenty
Four Million One Hundred Thousand AND 00/100 DOLLARS ($24,100,000.00), payable
in federal funds for immediate credit to Seller on the Closing Date, in such
manner, place and account as Seller may, by prior notice, instruct.
2.2 (a) Within three (3) business days after the execution of this
Agreement, Purchaser shall deliver the sum of $150,000 (the "Initial Deposit")
to the Title Company named in Article 5 below ("Escrow Agent") to be held in
escrow pursuant to the terms of this Agreement pending the Closing. Upon the
expiration of the Inspection Period, Purchaser shall deliver an additional
$250,000 (the "Additional Deposit") to the Escrow Agent to be held as part of
the Deposit pursuant to the terms of this Agreement pending the Closing.
(b) As used in this Agreement, the term "Deposit" shall mean, when made
pursuant hereto, the Initial Deposit and the Additional Deposit and accrued
interest thereon, if any, held by Escrow Agent hereunder. Except as otherwise
provided in this Agreement, if Purchaser desires to terminate this Agreement
pursuant to a specific right granted to Purchaser in any section of this
Agreement, Purchaser shall effect such termination by giving written notice
thereof to Seller and Escrow Agent within any applicable time period provided
therefore in this Agreement, and upon receipt of such notice, the Escrow Agent
shall return the Deposit to Purchaser, this Agreement shall wholly cease and
terminate, no party to this Agreement shall have any further claim against, or
obligation to, any other party to this Agreement, and the lien, if any, of
Purchaser against the Project shall automatically cease and terminate.
ARTICLE 3
PHYSICAL CONDITION OF PROJECT
Purchaser has inspected the Project and will continue to inspect the
Project during the hereinafter described Inspection Period to the extent
Purchaser deems necessary in connection with the transactions contemplated by
this Agreement. Purchaser acknowledges that Seller has not made and does not
make and is
2
unwilling to make any express or implied representations or warranties as to the
present, past or future physical condition, income, expenses, operation,
legality of occupancy or any other matter affecting or related to the Project
except as specifically set forth in this Agreement. No representation, warranty
or covenant made by Seller in this Agreement or any document delivered pursuant
hereto shall survive the Closing except as expressly provided in this Agreement.
Purchaser agrees to purchase the Project in its "AS IS" condition on the Closing
Date. Purchaser has not relied upon, and Seller is not liable or bound in any
manner, by any verbal or written statements, representations, real estate
brokers' "setups"or information pertaining to the Project furnished by any real
estate broker, agent, employee, servant or other persons unless the same are
expressly set forth in this Agreement. The delivery of the deed by Seller, and
the acceptance of the deed by Purchaser, shall be deemed to be the full
performance and discharge of every obligation of Seller to be performed under
this Agreement prior to the Closing Date and the truth or waiver of every
representation or warranty made by Seller in this Agreement or in any Exhibit
attached hereto or in any document, certificate, affidavit or other instrument
delivered by Seller or its agents at or in connection with the Closing, except
for those warranties, representations and obligations of Seller which this
Agreement expressly provides are to survive the Closing.
Seller represents to Purchaser as follows:
(a) to Seller's knowledge, the Project has no material structural
defects;
(b) to Seller's knowledge, Seller has not received any notices of
violation of any laws, statutes, ordinances, rules or regulations with
respect to the Project that remain uncured;
(c) the Project is not subject to any outstanding agreements of sale,
rights of first refusals, or other rights of third parties to acquire the
Project;
(d) Seller is the legal and equitable owner of fee simple title to the
Project;
(e) Seller is not a party to any litigation, arbitration or
administrative proceeding relating to the Project other than litigation
which has been turned over to Seller's insurance carrier and in which such
carrier has accepted defense of such action without reservation of right;
(f) Seller is duly organized, validly existing and in good standing
under the laws of the state of California;
(g) Seller has all requisite power and authority, has taken all
actions required by its organizational documents and applicable law, and
has obtained all consents which are necessary to authorize or enable it to
execute and deliver this Agreement, and upon obtaining the approval
described in Section 15.12 to consummate the transactions contemplated in
this Agreement, and to perform all of its obligations under this Agreement;
(h) to Seller's knowledge, Seller has not received any notices of
violation (and Seller has no knowledge of any violation) of any laws,
statutes, ordinances, rules or regulations with respect to the
environmental condition of the Project; and
(i) all management contracts and employment contracts with respect to
the Project will be terminated as of Closing.
As used herein, the term "Seller's knowledge" shall mean the current actual
knowledge, without investigation other than reasonable inquiry of the property
manager, of the Seller's "asset manager" for the Project, being the officer of
Seller's general partner with direct oversight responsibility for the Project.
ARTICLE 4
PERMITTED ENCUMBRANCES TO TITLE
Purchaser agrees to accept title to the Property subject to the following
matters (collectively, the "Permitted Encumbrances"):
(a) written leases for apartment space within the Property.
(b) Liens securing payment of all non-delinquent ad valorem,
intangible and other non-delinquent real and personal property taxes,
special and general assessments, school taxes, and water and sewer
2
3
charges against the Property or the personal property covered by this
Agreement for the tax year in which the Closing Date occurs and subsequent
years.
(c) Zoning ordinances and regulations and building restrictions and
regulations affecting the Property on the Closing Date.
ARTICLE 5
CONDITION OF TITLE, TITLE INSURANCE
5.1 Seller shall promptly deliver a copy of its existing survey for the
Project, if any, to Purchaser. Seller shall promptly obtain from Commonwealth
Land Title Insurance Company or its agent, (the "Title Company") a preliminary
title report or commitment (the "Title Commitment") to issue an ALTA Owner's
Extended Coverage Policy of Title Insurance (1970 Form B, Rev. 10/17/70) (the
"Title Policy") insuring Purchaser's title to the Property in the amount of the
Purchase Price, subject only to the Permitted Encumbrances and other liens and
encumbrances not constituting objections to title in accordance herewith. A copy
of the Title Commitment and the documents of record reflected therein shall be
furnished to the Purchaser. On or before the expiration of the Inspection
Period, Purchaser shall give written notice (the "Objection Notice"), which may
be included in Purchaser's Ratification Notice (defined in Article 14), to the
attorneys for Seller of any conditions of title which Purchaser is not obligated
to take the Property subject to pursuant to the provisions of this Agreement
(the "Objections") separately specifying and setting forth each of such
Objections. If Purchaser timely gives Seller an Objection Notice, then all
matters disclosed on the Title Commitment which are not objected to in such
Objection Notice shall be deemed to be Permitted Encumbrances. If Purchaser
fails to timely give Seller an Objection Notice, then all matters disclosed on
the Title Commitment shall be deemed to be Permitted Encumbrances.
5.2 Seller shall not be required, however, to expend any money or bring any
action or proceeding or do any other thing in order to deliver the Project or
title to the Property as required by this Agreement; provided, however, that
Seller agrees to pay off any deeds of trust and satisfy or caused to be released
any other monetary liens on or before Closing. If Seller gives Purchaser notice
(the "Response Notice") that Seller is unable to convey the Project or title to
the Property as required by this Agreement, Purchaser may, as its exclusive
remedy, elect by written notice given to Seller within five (5) days after the
Response Notice is given, either (a) to accept such title as Seller is able to
convey without any reduction or abatement of the Purchase Price, or (b) to
terminate this Agreement in which event the Deposit shall be returned to
Purchaser.
If Purchaser fails to give notice of its election to accept Seller's title
within such five (5) day period, Purchaser shall be deemed to have elected to
terminate this Agreement and the Deposit shall be returned to Purchaser.
5.3 The existence of liens or encumbrances other than the Permitted
Encumbrances or those which are permitted by this Agreement shall be deemed to
be Permitted Encumbrances if the Title Company will insure Purchaser's title
clear of the matter or will insure against the enforcement of such matter out of
the Property in a manner reasonably acceptable to Purchaser. Unpaid liens for
real estate and personal property taxes for years prior to the fiscal year in
which the Closing Date occurs and any other matter which Seller is obligated to
pay and discharge at the Closing shall not be deemed objections to title, but
the amount thereof chargeable to Seller, plus interest and penalties thereon, if
any, shall be deducted from the Purchase Price on the Closing Date and paid to
the Title Company for the payment of such matters.
5.4 Seller shall pay the deed transfer tax and one half of the escrow fees
of the Title Company. Purchaser shall pay the cost of obtaining the Title
Commitment, Title Policy, and the recording costs and expenses in connection
with the Closing.
ARTICLE 6
CLOSING
6.1 The consummation of the transactions described in this Agreement (the
"Closing") shall occur on June 14, 1996, provided, however, that if such date
falls on a Saturday, Sunday, or holiday on which banks
3
4
located in the vicinity of the Property are closed, the Closing shall occur on
the second business day thereafter (the "Closing Date") commencing at 10:00 A.M.
local time, at the offices of the Escrow Agent. TIME IS OF THE ESSENCE IN REGARD
TO THE PERFORMANCE BY PURCHASER AND SELLER OF ALL OF THE PROVISIONS Of THIS
AGREEMENT.
6.2 Upon Purchaser's delivery of all required documents and instruments and
its payment of the Purchase Price and other amounts required herein, Purchaser
and Seller shall prepare and sign a closing statement reflecting the adjustments
and payments made and agreements in connection therewith. The parties shall
deliver a copy of the closing statement and all of the aforesaid documents to
the Title Company which shall do the following:
(a) Record the deed.
(b) Deliver to Seller and Purchaser or other appropriate party the
documents and payments delivered to it as escrow holder for delivery to
such party.
(c) Pay all recording taxes and transfer fees and all filing fees
reflected on the closing statement.
6.3. It is a condition to Purchaser's obligation to close that at Closing
(i) the Purchaser receives the Title Company's commitment to insure Purchaser's
title subject only to the Permitted Encumbrances and other matters not deemed
objections to title hereunder, and (ii) Seller is not in default under this
Agreement.
ARTICLE 7
DOCUMENTS REQUIRED ON CLOSING DATE
7.1 At or prior to the Closing, Seller shall execute and/or deliver the
following to Purchaser:
(a) Grant Deed.
(b) Bill of Sale and Assignment of Leases, Warranties and Service
Contracts, pursuant to which Seller assigns and conveys to Purchaser (i)
all personal property covered by this Agreement, (ii) all service contracts
and all other service agreements relating to the Project, (iii) Seller's
interest as landlord in and to all tenant leases of portions of the
Property, and (iv) to the extent transferable, any warranties, operating
permits, and the Seller's right, if any, to the use of the name "Sunset
Towers" in connection with the Property.
(c) Plans and specifications for the Property, if in the possession of
Seller, which shall be delivered to Purchaser at the Property.
(d) A rent roll for the Property certified by Seller (the "Rent Roll")
listing each tenant, the monthly base rent payable, lease expiration date
and unapplied security deposit as of the Closing Date, and any unexpired
tenant concessions.
(e) The originals or copies (to the extent the originals cannot be
located) of the leases described in the Rent Roll, and all tenant files,
which shall be delivered to Purchaser at the Property.
(f) Authority documents of Seller authorizing the execution, delivery
and performance by Seller of this Agreement and each document to be
executed and delivered by Seller in connection with this Agreement and
designating one or more officers to execute documents in the Seller's name
in connection herewith, certified as correct and complete by Seller
together with an incumbency certificate for each person executing documents
on behalf of Seller.
(g) All costs and fees required to be paid by Seller pursuant to
ARTICLE 8.
(h) Such other documents and instruments as may be required by this
Agreement or by the Title Company in order to consummate the transactions
described in this Agreement and to issue the Title Policy to Purchaser.
(i) A non foreign affidavit for Seller complying with the requirements
of Internal Revenue Code Section 1445(f)(3) and the regulations promulgated
thereunder, and California withholding Form 590.
(j) A written notice of the acquisition of the Property by Purchaser,
originally executed by Seller and Purchaser, which Seller shall transmit to
all tenants and to other parties affected by the sale and
4
5
purchase of the Property. Such notice shall be prepared by the Seller and
shall be subject to Purchaser's reasonable approval, and shall inform the
addressees of the sale and transfer of the Property to Purchaser and
contain appropriate instructions relating to the payment of future rentals,
the giving of future notices, and other matters reasonably required by
Purchaser. The said notices shall specify that unapplied security deposits
under the tenant leases have been delivered to the Purchaser and that the
Purchaser is responsible for the refund thereof and shall be adequate under
local law to relieve Seller of all liability for return of such deposits.
7.2 At or prior to the Closing, Purchaser shall execute and/or deliver the
following to Seller:
(a) The Purchase Price.
(b) Assumption by Purchaser of Seller's obligations under the leases
and service contracts with respect to the period from and after Closing.
(c) Authority documents of Purchaser authorizing the execution,
delivery and performance by Purchaser of this Agreement and each document
to be executed and delivered by Purchaser in connection with this Agreement
and designating one or more officers to execute documents in the
Purchaser's name in connection herewith, certified as correct and complete
by Purchaser together with an incumbency certificate for each person
executing documents on behalf of Purchaser.
(d) All costs and fees required to be paid by Purchaser pursuant to
ARTICLE 8.
(e) A written notice of the acquisition of the Property by Purchaser,
originally executed by Seller and Purchaser, which Seller shall transmit to
all tenants and to other parties affected by the sale and purchase of the
Property. Such notice shall be prepared by the Seller and shall be subject
to Purchaser's reasonable approval, and shall inform the addressees of the
sale and transfer of the Property to Purchaser and contain appropriate
instructions relating to the payment of future rentals, the giving of
future notices, and other matters reasonably required by Purchaser. The
said notices shall specify that unapplied security deposits under the
tenant leases have been delivered to the Purchaser and that the Purchaser
is responsible for the refund thereof and shall be adequate under local law
to relieve Seller of all liability for return of such deposits.
(f) Such other documents and instruments as may be required in this
Agreement or by the Title Company in order to consummate the transactions
described in this Agreement.
(g) Such other instruments, affidavits and tax returns as are
customarily executed by the purchaser of an interest in real property in
connection with the recording of a deed.
ARTICLE 8
APPORTIONMENTS AND ADJUSTMENTS
8.1 Seller shall be responsible for and pay all accrued expenses with
respect to the Project accruing up to 11:59 P.M. on the day prior to the Closing
Date (the "Adjustment Date") and shall be entitled to receive and retain all
revenue from the Project with respect to the period accruing up to the
Adjustment Date. Purchaser shall be responsible for and pay all accrued expenses
with respect to the Project accruing after the Adjustment Date and shall be
entitled to receive and retain all revenue from the Project with respect to the
period accruing after the Adjustment Date.
8.2 On the Closing Date, the following adjustments and apportionments shall
be made in cash as of the Adjustment Date:
(a) (i) Rents for the month in which the Closing Date occurs (the
"Closing Month"). If past due rents are owing by tenants for any period
prior to the Closing Month (the "Rent Arrearages"), then promptly after
the Closing Date Purchaser shall bill all tenants for such sums and
shall use its reasonable efforts to collect all Rent Arrearages. Rents
collected by Purchaser after the Closing shall be applied first to
current rents due and then to Rent Arrearages. In determining the
amounts required to be paid to Seller, Purchaser shall not be permitted
to accept any rentals or other amounts from tenants in advance of the
due dates therefor. If, as and when the Purchaser collects payments
5
6
from a tenant on account of Rent Arrearages, Purchaser shall hold such
funds as trustee for Seller and shall pay an amount equal to the Rent
Arrearages collected during a given month to Seller on or before the
tenth day of the next following month.
(ii) After the Closing, Purchaser shall deliver to Seller a monthly
collection report for any month in which Rent Arrearages were collected
or after Seller's request, showing the sum, if any, paid by each tenant
at the Property and the unpaid balance owed by such tenant pursuant to
its lease through the end of such calendar month; such collection report
shall be delivered to Seller within ten (10) days after the last day of
any month in which Rent Arrearages, were collected or within ten days
after Seller's request until Seller has received all Rent Arrearages.
The Seller shall have the right to review and audit the Purchaser's
records with respect to the tenants who have Rent Arrearages at Closing.
(b) Real estate taxes, ad valorem taxes, school taxes, assessments and
personal property, intangible and use taxes, in any.
(c) Charges under service contracts affecting the Project on the
Closing Date and utility charges and deposits relating to the Project.
(d) Water and sewer charges on the basis of the period for which
assessed.
8.3 At the Closing, Purchaser will receive a credit against the Purchase
Price in an amount equal to all unapplied security deposits payable to tenants
and interest thereon, if required by applicable law or the terms of the leases,
and prepaid rents paid by tenants under leases in effect on the Closing Date
against Purchaser's receipt and indemnification therefor. Upon making such
credit, Purchaser will be deemed to have received all such security deposits and
shall be fully responsible for the same as if a cash amount equal to such
security deposits were actually delivered to Purchaser. Prior to the Closing,
Seller reserves the right to apply all security deposits as provided under the
respective leases.
8.4 The provisions of this ARTICLE 8 shall survive the Closing.
ARTICLE 9
REMEDIES
9.1 IN THE EVENT THE SALE OF THE PROJECT IS NOT CONSUMMATED BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF PURCHASER, THE DEPOSIT SHALL BE PAID
TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT
SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, 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 PURCHASER. SELLER HEREBY
WAIVES ANY AND ALL BENEFITS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION
3389.
/s/ BAE /s/ GMM
- ------------------------- -------------------------
Seller's Initials Purchaser's Initials
9.2 If the sale contemplated by this Agreement is not consummated because
of Seller's failure to perform its obligations hereunder, Purchaser shall be
entitled, as its exclusive remedies, to elect either (a) to terminate this
Agreement and have the Deposit returned to it or (b) to enforce specific
performance of Seller's obligations under this Agreement; provided, however,
that Seller shall not be required to expend any money other than the amounts
provided in ARTICLE 8, or take any action other than delivery of the items
provided in ARTICLE 7, in connection with such specific performance, or (c) to
terminate this Agreement
6
7
and have the Deposit returned to it and seek damages for reimbursement of
Purchaser's actual out-of-pocket expenses not in excess of $50,000.
9.3 The non breaching party shall also be entitled to recover against the
breaching party its costs and expenses, including reasonable attorneys fees and
court costs, incurred by such non breaching party in enforcing any of the its
remedies hereunder.
ARTICLE 10
DAMAGE, DESTRUCTION OR CONDEMNATION
10.1 Seller agrees to maintain its present policies of fire insurance
covering the Project in full force and effect from the date of this Agreement
through and including the Closing Date.
10.2 If on or before the Closing Date either (a) all or a substantial part
of the improvements on the Land is damaged or destroyed by fire or the elements
or by any other cause, or (b) all or a substantial part of the Property is taken
by condemnation or other power of eminent domain, Purchaser may, by written
notice given to the Seller within ten (10) days after Purchaser shall have
notice of the occurrence or the taking (but in no event after the Closing Date),
elect to terminate this Agreement.
10.3 If either (a) a substantial part of the improvements on the Land is
damaged or destroyed or a substantial part of the Property is taken by
condemnation or other power of eminent domain but this Agreement is not canceled
as provided in Section 10.2, or (b) on or before the Closing Date, an
insubstantial part of the improvements on the Land is damaged or destroyed or an
insubstantial part of the Property is so taken, then neither Seller nor
Purchaser shall have the right to terminate this Agreement based upon such
damage, destruction or taking, and on the Closing Date,
(i) Seller shall credit the Purchase Price with an amount equal to any
sums of money collected by Seller under its policies of insurance or
renewals thereof insuring against the loss in question (after deducting (1)
any expenses incurred by Seller in collecting such insurance and (2) any
amount that Seller shall have paid, agreed to pay, or shall have been
obligated to pay for repairs or restoration of the damage), and Seller
shall assign, transfer and set over to Purchaser all of Seller's right,
title and interest in and to said policies with respect to the Property and
any further sums payable under said policies, and
(ii) Seller shall assign, transfer and set over to Purchaser all of
Seller's right, title and interest in and to any awards that may be made
for any taking by condemnation or other power of eminent domain.
10.4 For the purposes of this Article, a substantial part of the Property
or the improvements on the Land shall be deemed to mean a portion having a value
of $100,000 or more or which would require expenditure of $100,000 or more for
repair or restoration.
ARTICLE 11
BROKER
11.1 Purchaser represents and warrants to Seller that neither Purchaser nor
any entity related to Purchaser has dealt with any broker or other person or
entity claiming by, through or under Purchaser, who would be entitled to a
commission or other brokerage fee from Seller in connection with the
transactions described in this Agreement. Purchaser agrees to indemnify, defend
and hold the Seller harmless of and from any loss, cost, damage or expense
(including reasonable attorneys' fees and court costs) arising out of any
inaccuracy in the representation or warranty made by Purchaser in this Section
11.1.
11.2 Seller represents and warrants to Purchaser that neither Seller nor
any entity related to Seller has dealt with any broker or other person or entity
claiming by, through or under Seller who would be entitled to a commission or
other brokerage fee from Purchaser in connection with the transactions described
in this Agreement. Seller agrees to indemnify, defend and hold the Purchaser
harmless of and from any loss, cost, damage or expense (including reasonable
attorneys' fees and court costs) arising out of any inaccuracy in the
representation or warranty made by Seller in this Section 11.2.
7
8
11.3 Notwithstanding any other provision of this Agreement to the contrary,
the provisions of this Article shall survive the Closing and any prior
termination of this Agreement for any reason whatsoever.
ARTICLE 12
NOTICES
Any notice given or required to be given pursuant to any provision of this
Agreement shall be in writing and shall either be personally delivered or sent
by facsimile or reputable commercial courier service guaranteeing overnight
delivery, and shall be deemed to have been given upon receipt if personally
delivered or sent by facsimile, or, upon delivery to such courier, with delivery
charges prepaid, if sent by such a courier, in either case addressed as follows:
Purchaser: Bay Apartment Communities, Inc.
4340 Stevens Creek Blvd., Ste. 275
San Jose, California 95129
Attn: Geoffrey Baker
Fax: 408-984-7060
Phone: 408-983-1500
with a copy to: Scott Brooks, Esq.
Cox, Castle & Nicholson
2327 Green Street, #2
San Francisco, California 94123
Fax: 415-775-5053
Phone: 415-775-3937
Seller: Consolidated Sunset Limited Partnership
10670 North Central Expressway
Dallas, Texas 75231
Attn: Mark Nardizzi
Fax: 214-696-2567
Phone: 214-692-4788
with a copy to: Cary L. Newburger, Esq.
333 East 49th Street, #3T
New York, New York 10017
Fax: 212-317-0725
Phone: 212-355-3135
Either party may, by giving notice to the other in the manner set forth
above, change the address to which notices shall be sent to it, provided that
any such change of address shall be effective three (3) days after it is given.
The attorney for each party to this Agreement may give notices on behalf of his
client with the same force and effect as if such notice was given directly by
such party.
ARTICLE 13
ASSIGNMENT
Neither the rights of Purchaser hereunder, nor any portion thereof, may be
assigned; provided, however, that upon not less than ten (10) days' prior
written notice, which notice to be effective must be accompanied by an executed
instrument of assignment and assumption, Purchaser may assign all of its
interest in this Agreement and the Deposit to a partnership, corporation or
limited liability company owned by the Purchaser.
8
9
ARTICLE 14
INSPECTION PERIOD
Purchaser intends to continue its physical inspection of the Project
through and including May 9, 1996 ("Inspection Period"), which inspection shall
be at the sole cost and expense of Purchaser. Seller shall assist with such
inspection and shall deliver to Purchaser copies of rent rolls, service
contracts, and other materials in Seller's possession that Purchaser reasonably
requests. Leases, tenant files and certain other information will be made
available for Purchaser's inspection at the Project or other place where such
information is maintained. Seller shall not be obligated to incur any material
cost or expense in obtaining items for Purchaser's inspection. All information
received by Purchaser relating to the Project, Seller or its affiliates shall be
kept in strict confidence and used solely for the purpose of determining the
advisability of proceeding with the transaction described in this Agreement.
Purchaser shall have the right to terminate this Agreement if Purchaser, in its
sole and absolute discretion, deems the Project or any aspect thereof, to be
unsatisfactory. Purchaser may exercise such right to terminate on or before the
last day of the Inspection Period (i) by giving Seller written notice of such
termination or (ii) by failing to give Seller notice that Purchaser has approved
the purchase of the Project and has elected to ratify this Agreement
("Ratification Notice").
If Purchaser does not give Seller a Ratification Notice on or before the
last day of the Inspection Period, Purchaser shall be deemed to have irrevocably
and absolutely terminated this Agreement pursuant to the provisions of this
Article.
ARTICLE 15
MISCELLANEOUS
15.1 This Agreement is binding upon and shall inure to the benefit of the
parties hereto, their respective heirs, successors, legal representatives and
permitted assigns.
15.2 Wherever under the terms and provisions of this Agreement the time for
performance falls upon a Saturday, Sunday or legal holiday, such time for
performance shall be extended to the second business day thereafter.
15.3 This Agreement may be executed in one or more counterparts, all of
which when taken together shall constitute one and the same agreement, and shall
become effective when one or more counterparts have been executed by each of the
parties hereto and delivered to each of the other parties hereto.
15.4 The captions at the beginning of the several paragraphs, Sections and
Articles are for convenience in locating the context, but are not part of the
context. Unless otherwise specifically set forth in this Agreement to the
contrary, all references to Exhibits contained in this Agreement refer to the
Exhibits which are attached to this Agreement, all of which Exhibits are
incorporated in, and made a part of, this Agreement by reference. Unless
otherwise specifically set forth in this Agreement to the contrary, all
references to Articles, Sections, paragraphs and clauses refer to portions of
this Agreement.
15.5 If any term or provision of this Agreement shall be held to be
illegal, invalid, unenforceable or inoperative as a matter of law, the remaining
terms and provisions of this Agreement shall not be affected thereby, but each
such remaining term and provision shall be valid and shall remain in full force
and effect.
15.6 This Agreement and the other writings referred to in, or delivered
pursuant to, this Agreement, embody the entire understanding and contract
between the parties hereto with respect to the Project and supersede any and all
prior agreements and understandings between the parties hereto, whether written
or oral, formal or informal, with respect to the subject matter of this
Agreement. This Agreement has been entered into after full investigation by each
party and its professional advisors, and neither party is relying upon any
statement, representation or warranty made by or on behalf of the other which is
not expressly set forth in this Agreement.
15.7 No extensions, changes, waivers, modifications or amendments to or of
this Agreement, of any kind whatsoever, shall be made or claimed by Seller or
Purchaser, and no notices of any extension, change, waiver, modification or
amendment made or claimed by Seller or Purchaser shall have any force or effect
whatsoever,
9
10
unless the same is contained in a writing and is fully executed by the party
against whom such matter is asserted.
15.8 This Agreement shall be governed and interpreted in accordance with
the laws of the State of California.
15.9 Each party hereto shall pay all charges specified to be paid by them
pursuant to the provisions of this Agreement and their own attorney's fees in
connection with the negotiation, drafting and closing of this Agreement.
15.10 Purchaser warrants and represents to Seller that, subject to any
provisions hereof to the contrary, Purchaser has full power and authority to
enter into this Agreement and to perform all of Purchaser's obligations under
this Agreement, and that the person executing this Agreement on Purchaser's
behalf has been duly authorized and is empowered to bind Purchaser to this
Agreement.
15.11 Purchaser and Seller agree that this Agreement has been entered into
solely for the benefit of Purchaser and Seller and no other person or entity, it
being the intention of Purchaser and Seller that no person or entity not a party
to this Agreement shall have any right or standing to (a) bring any action
against Purchaser or Seller based on this Agreement, or (b) assume that any
provision of this Agreement will be enforced or remain unmodified or unwaived,
or (c) assert that it or he is or should be or was intended to be a beneficiary
of any provision of this Agreement.
15.12 This Agreement is subject to the approval of the Board of Trustees of
Seller's general partner. If such approval is not obtained on or before April
26, 1996, then this Agreement shall be terminated and the Deposit returned to
Purchaser.
15.13 Seller agrees not to market or show the Project to any other
prospective purchasers during the term of this Agreement.
15.14 Purchaser and Seller each agree that prior to Closing, the terms of
the transaction contemplated by this Agreement, the identity of the parties and
all information made available by Purchaser to Seller or by Seller to Purchaser
or in any way relating to the Purchaser's or Seller's interest in the
transaction, shall be maintained in strict confidence and prior to Closing, no
disclosure of such information will be made by Purchaser or Seller, 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 this transaction. Purchaser and
Seller further agree that nothing in this Section shall prevent them from
disclosing or accessing any information otherwise deemed confidential under this
Section (a) in conjunction with that parties 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 permitted assignees in or of the transaction
contemplated by this Agreement or such party's rights therein.
10
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names by their respective duly authorized representatives on
the day and year first above written.
SELLER: Consolidated Sunset Limited Partnership,
a California limited partnership
By: Continental Mortgage and Equity Trust,
a California business trust,
its general partner
By: /s/ BRUCE A. ENDENDYLE
---------------------------------
Name: Bruce A. Endendyle
Title: Executive Vice President
PURCHASER: Bay Apartment Communities, Inc.,
a Maryland corporation
By: /s/ GILBERT M. MEYER
------------------------------------
Name: Gilbert M. Meyer
Title: President
11
12
SUNSET TOWER
FIRST AMENDMENT
TO
AGREEMENT FOR PURCHASE AND SALE
THIS FIRST AMENDMENT AGREEMENT (this "Amendment") dated effective as of
April 26, 1996, is made between CONSOLIDATED SUNSET LIMITED PARTNERSHIP, a
California limited partnership, with offices at 10670 North Central Expressway,
Dallas, Texas 75231 ("Seller"), and BAY APARTMENT COMMUNITIES, INC., a Maryland
corporation, with offices at 4340 Stevens Creek Blvd., Ste. 275, San Jose,
California 95129 ("Purchaser").
WITNESSETH:
Whereas, Purchaser and Seller have entered into a certain Agreement for
Purchase and Sale dated April , 1996 (the "Agreement") for the sale and
purchase of an apartment project known as Sunset Towers, San Francisco,
California (the "Project"); and
Whereas, the parties, have agreed to modify the Agreement, as set forth
herein.
Now, therefore, the Purchaser and Seller agree as follows:
1. Seller has received the approval of the Board of Trustees of
Seller's general partner pursuant to the provisions of Section 15.12.
2. At Purchaser's request, Seller agrees not to rent apartment units
at the Project to new tenants following May 9, 1996. Nothing herein shall
prohibit the renewal of any existing lease. Purchaser shall pay Seller the
market rent shown on Seller's Rent Roll for each such unrented unit
covering the period from the date the unit became available for rental to
the earlier of (a) the Closing Date, or (b) the termination of the
Agreement. Such payment shall be due and payable on the earlier of the
Closing Date or the date of termination of the Agreement. Purchaser's
obligations in this paragraph shall survive any termination of the
Agreement.
C-2
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names by their respective duly authorized representatives.
SELLER: Consolidated Sunset Limited Partnership,
a California limited partnership
By: Continental Mortgage and Equity Trust,
a California business trust,
its general partner
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
PURCHASER: Bay Apartment Communities, Inc.,
a Maryland corporation
By: /s/ GEOFFREY L. BAKER
-----------------------------------------
Name: Geoffrey L. Baker
Title: Chief Development and
Acquisition Officer
C-3
14
SECOND AMENDMENT
TO
AGREEMENT FOR PURCHASE AND SALE
THIS SECOND AMENDMENT TO AGREEMENT (this "Amendment") dated effective as of
May 7, 1996, is made between CONSOLIDATED SUNSET LIMITED PARTNERSHIP, a
California limited partnership, with offices at 10670 North Central Expressway,
Dallas, Texas 75231 ("Seller"), and BAY APARTMENT COMMUNITIES, INC., a Maryland
corporation, with offices at 4340 Stevens Creek Blvd., Ste. 275, San Jose,
California 95129 ("Purchaser").
WITNESSETH:
Whereas, Purchaser and Seller have entered into a certain Agreement for
Purchase and Sale dated April , 1996 as amended by First Amendment to
Agreement for Purchase and Sale (as amended, the "Agreement") for the sale and
purchase of an apartment project known as Sunset Towers, San Francisco,
California (the "Project"); and
Whereas, the parties have agreed to modify the Agreement, as set forth
herein.
Now, therefore, the Purchaser and Seller agree as follows:
1. The Inspection Period (as defined in Article 14 of the Agreement)
shall expire at 5:00 P.M. Dallas, Texas time on May 10, 1996.
IN WITNESS WEREOF, the parties hereto have caused this Agreement to be
executed in their names by their respective duly authorized representatives.
SELLER: Consolidated Sunset Limited Partnership,
a California limited partnership
By: Continental Mortgage and Equity Trust,
its general partner
By: /s/ BRUCE A. ENDENDYLE
----------------------------------
PURCHASER: Bay Apartment Communities, Inc.,
a Maryland corporation
By: /s/ GILBERT M. MEYERS
----------------------------------
President
C-4