SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 24, 1996
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
(Exact name of registrant as specified in its charter)
Delaware 0-13260 13-3174553
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
Two World Trade Center, New York, New York 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-1054
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
In May 1996, 1718 Connecticut Ltd. (in which the Partnership owns a
99.9% General Partnership interest) entered into an agreement with Vasilios
Papadopoulos, an unaffiliated party, to sell the land and building which
comprise the 1718 Connecticut Avenue property for a negotiated sale price
of $5,438,000.
The closing of the sale took place on June 24, 1996. The purchase
price was paid in cash at closing.
<PAGE>
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
(1) Pro Forma Balance Sheet as of October 31, 1995.
(2) Pro Forma Statements of Operations for the year ended October
31, 1995 and the six months ended April 30, 1996.
(c) Exhibits
(1) Purchase Agreement, dated May 31, 1996, with respect to the sale
of the 1718 Connecticut Avenue property.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DEAN WITTER REALTY INCOME PARTNERSHIP I, L.P.
By: Dean Witter Realty Income Properties I Inc.
Managing General Partner
By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: July 9, 1996
<PAGE>
Dean Witter Realty Income Partnership I, L.P.
Pro Forma Consolidated Balance Sheet
As of April 30, 1996
The following unaudited pro forma balance sheet has been presented as if the
1718 Connecticut Avenue property was sold as of April 30, 1996. The pro forma
adjustments reflect a) the cash proceeds from the sale; b) the elimination of
the net carrying value of the property from real estate held for sale and the
elimination of other assets and liabilities relating to the property
sold; c) and repayment of the Loan from affiliate.
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
ASSETS
<S> <C> <C> <C>
Real estate
Land $ 10,367,200 - $ 10,367,200
Building and building
improvements 42,495,649 - 42,495,649
52,862,849 - 52,862,849
Accumulated depreciation 21,860,876 - 21,860,876
31,001,973 - 31,001,973
Real estate held for sale 4,319,478 (4,319,478) -
Investment in joint venture 8,390,596 - 8,390,596
Cash and cash equivalents 3,999,218 1,018,665 5,017,883
Other assets 1,803,583 (139,302) 1,664,281
$ 49,514,848 $ (3,440,115) $ 46,074,733
LIABILITIES AND PARTNERS' CAPTIAL
Accounts payable and other
liabilities $ 752,488 $ (68,980) $ 683,508
Loan from affiliate 4,032,527 (4,032,527) -
Deferred distributions 2,467,674 - 2,467,674
7,252,689 (4,101,507) 3,151,182
Total partner's captial 42,262,159 661,392 42,923,551
$ 49,514,848 $ (3,440,115) $ 46,074,733
/TABLE
<PAGE>
Dean Witter Realty Income Partnership I, L.P.
Pro Forma Consolidated Statement of Income
For the year ended October 31, 1995
The following unaudited pro forma consolidated statement of operations has
been presented as if the 1718 Connecticut Avenue property was sold as of
November 1, 1994. The pro forma adjustments reflect the elimination of
rental and other revenues, property operating expenses and
depreciation expense relating to the property sold. The pro forma
adjustments do not reflect the Partnership's non recurring gain on the sale
of the property.
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Revenues:
Rental $ 7,110,106 $ (975,970) $ 6,134,136
Equity in earnings of
joint venture 474,263 - 474,263
Interest and other 416,197 (9,398) 406,799
8,000,566 (985,368) 7,015,198
Expenses:
Property operating 2,963,316 (288,375) 2,674,941
Interest 342,221 - 342,221
Depreciation 2,534,549 (291,220) 2,243,329
Amortization 219,225 - 219,225
General and administrative 406,118 - 406,118
6,465,429 (579,595) 5,885,834
Net income $ 1,535,137 $ (405,773) $ 1,129,364
Net income per
Unit of Limited
Partnership interest $ 14.89 $ (3.93) $ 10.96
/TABLE
<PAGE>
Dean Witter Realty Income Partnership I, L.P.
Pro Forma Consolidated Statement of Operations
Six months ended April 30, 1996
The following unaudited pro forma consolidated statement of operations has
been presented as if the 1718 Connecticut Avenue property was sold as of
November 1, 1995. The pro forma adjustments reflect the elimination of
rental and other revenues, property operating expenses and depreciation
expense relating to the property sold. The pro forma adjustments do not
reflect the Partnership's nonrecurring gain on the sale of the property.
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
<S> (c> <C> <C>
Revenues:
Rental $ 3,639,941 $ (500,179) $ 3,139,762
Equity in earnings of
joint venture 305,105 - 305,105
Interest and other 108,761 (1,709) 107,052
4,053,807 (501,888) 3,551,919
Expenses:
Property operating 1,573,993 (174,631) 1,399,362
Interest 171,856 - 171,856
Depreciation 1,008,090 (153,943) 854,147
Amortization 84,406 - 84,406
General and administrative 189,533 - 189,533
Losses on impairment of
real estate 8,510,000 (1,742,000) 6,768,000
11,537,878 (2,070,574) 9,467,304
Net loss $ (7,484,071) $ 1,568,686 $ (5,915,385)
Net loss per
Unit of Limited
Partnership interest $ (72.60) $ 15.22 $ (57.38)
/TABLE
<PAGE>
Exhibit Index for Dean Witter Realty Income Partnership I, L.P.
Exhibit Description Sequential
No Page No.
(2) Purchase Agreement dated May 31,
1996 with respect to the sale of
the 1718 Connecticut Avenue property.
<PAGE>
PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 31st day of May,
1996, by and between 1718 CONNECTICUT LTD., a District of Columbia
Limited Partnership ("Seller"), and Vasilios Papadopoulos
("Purchaser").
RECITALS
R-1. Seller is the owner of certain real property situated in
the District of Columbia and more fully described on Exhibit "A"
attached hereto, together with the improvements located thereon,
known as 1718 Connecticut Avenue (the "Real Property").
R-2. Seller has agreed to sell to Purchaser, and Purchaser
has agreed to purchase from Seller, the Real Property, together with
Seller's personalty located thereat or thereon and used by it in
connection with the ownership, management and operation of the Real
Property (the "Personalty"), including the furniture, furnishings,
fixtures, equipment and other tangible assets owned by Seller listed
on Exhibit B attached hereto. The Real Property and the Personal
Property are hereinafter referred to as the "Property".
NOW THEREFORE, in consideration of the mutual promises
hereinafter set forth and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Purchase and Sale of Property.
On the Closing Date (as defined in Section 7 hereof), and
subject to the terms and conditions set forth in this Agreement,
Seller agrees to sell, assign, transfer and deliver to Purchaser,
and Purchaser agrees to purchase, acquire and accept from Seller,
the Property. It is specifically understood and agreed that the
Property shall not include any trade fixtures, equipment or other
personalty belonging to tenants of the Real Property and items of
personalty belonging to Seller which are not used in connection with
the management, or operation of the Real Property and located
thereat or thereon.
2. Purchase Price and Terms of Payment.
(a) The purchase price of the Property shall be Five
Million Four Hundred Thirty Eight Thousand and no/100 Dollars
($5,438,000.00) (the "Purchase Price").
(b) The Purchase Price of the Property shall be paid
as follows:
(1) A deposit of One Hundred Thousand and no/100
Dollars ($100,000.00) has heretofore been paid by Purchaser to
Commercial Settlements, Inc., (the "Escrow Agent"), and an
additional deposit of One Hundred Thousand and no/100 Dollars
($100,000.00) is being paid upon the execution of this Agreement by
a check, subject to collection, or by wire transfer of federal funds
to the Escrow Agent, payable to the order of Escrow Agent. The
aggregate deposit, in the amount of Two Hundred Thousand and no/100
Dollars ($200,000.00), is hereinafter referred to as the "Deposit".
The Deposit shall be held, pursuant to an Escrow Agreement (a copy
of which is attached hereto as Exhibit "C") and the terms hereof, by
the Escrow Agent in an interest bearing escrow account until the
closing of the purchase and sale of the Property. The Deposit,
including
accrued interest thereon, shall be applied to the cash payment
required to be
paid to Seller on the Closing Date. If the transaction hereby
contemplated is not consummated, the Deposit, including accrued
interest thereon, shall be disbursed in accordance with Section 8 or
10, as the case may be.
(2) The balance of the Purchase Price (that is,
the Purchase price reduced by the amount of the Deposit and accrued
interest thereon) shall be paid to Seller on the Closing Date, by
wire transfer of federal funds as Seller may direct in writing.
3. Purchaser Financing.
(a) Purchaser shall have thirty (30) days from the date
hereof to obtain a firm, written commitment from the Riggs National
Bank of Washington, D.C., to provide funding for a portion of the
Purchase Price not to exceed Three Million Five Hundred Thousand and
no/100 Dollars ($3,500,000.00), providing an amortization schedule
of no less than 25 years and upon such other terms as are
commercially and readily available from such Bank (including an
initial term no longer than five (5) years from the date of
Closing), to be secured by a first deed of trust upon the Property.
Purchaser shall promptly provide Seller with written evidence that:
(i) it has initiated the financing commitment within five (5) days
hereof; and (ii) it is diligently pursuing the financing commitment.
Seller shall also provide Seller with a copy of the commitment once
obtained. Purchaser shall pay all costs and expenses incurred by
Purchaser in connection with, or related to, obtaining the aforesaid
loan, and Seller shall not be liable for any such costs or expenses.
(b) In the event that Purchaser is unable to obtain a
commitment as above-described within the thirty (30) day period,
this Agreement shall be rendered null and void ab initio, except
that Purchaser shall receive a prompt refund of his deposit plus
accrued interest. Unless Purchaser notifies Seller on or before
expiration of said thirty (30) day period that Purchaser has been
unable to obtain said commitment, then, upon expiration of said
thirty (30) period, this Agreement and Purchaser's obligations
hereunder shall no longer be conditioned upon obtaining said
commitment, or otherwise having sufficient funds to pay the Purchase
Price at Closing.
4. Representations and Warranties of Seller (and
Limitations Thereon).
(a) Seller represents and warrants to Purchaser, which
warranties and representations shall be true and correct as of the
date hereof and at the Closing, as follows:
(1) Seller is a limited partnership formed under
the laws of the District of Columbia. It has full authority to
enter into this Agreement; and this Agreement is legally binding on,
and enforceable against, Seller in accordance with its terms.
Seller does not need the consent of any other party to enter into
this Agreement and/or to consummate the transactions required of it
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein will not
violate any agreement or understanding to which Seller is bound,
including without limitation, its articles or other documents of
formation or any document or agreement effectuating its operations
or governance.
(2) Seller is the owner of the fee simple title
to the Property. Seller's title to the Property is marketable and
good of record and in fact, subject only to the matters set forth on
Exhibit "D" attached hereto (the "Permitted Exceptions").
(3) The service contracts described on Exhibit
"E" attached hereto (the "Service Contracts") are the only such
contracts affecting the Property as of the date hereof, and true
correct and complete copies of the Service Contracts have been
provided to Purchaser on or before the date of execution and
delivery of this Agreement. Except for periodic payments currently
due which are to be adjusted at Closing, Seller is not in default in
the performance of any obligation, act or duty to be performed or
observed by it in accordance with the terms of any Service Contract,
and there is no fact, event or condition that with the passage of
time or giving of notice or both would constitute a default by
Seller.
The representations in this Section 4(a) shall survive Closing
for a period of six (6) months, and then shall expire; provided,
however, that the foregoing shall not affect the warranties
contained in the deed of conveyance, or Seller's liability pursuant
to Section 4(c)(3) for fraudulent misrepresentations, both of which
shall survive Closing.
(b) Seller represents and warrants to Purchaser that,
as of the date hereof, to the actual knowledge of Seller:
(1) With the exception of any defects identified
or noted on those reports concerning the condition of the Property,
listed on Exhibit F attached hereto, there are no material defects
in the Property not previously disclosed to Purchaser (whether by
Seller or through Purchaser's own investigation or otherwise) nor
apparent based on visual inspection. The foregoing representation
is subject to, and limited by, all matters set forth in Subsection
4(d)(1) below.
(2) Seller has received no outstanding notice or
order of any governmental authority having jurisdiction over the
Property not fully and duly complied with affecting the condition,
use, ownership, or operation of any part of the Property, or
requiring, as of the date hereof or in the future, any repairs,
renovations, alterations, additions or improvements thereto.
(3) There are no condemnation or eminent domain
proceedings pending or contemplated against the Property or any part
thereof, and Seller has received no written notice of the desire of
any public authority or other entity to take or use the Property or
any part thereof.
(4) Seller is the sole owner of good and
marketable title to all of the Personal Property listed on Exhibit
B, free and clear of all Encumbrances other than those Encumbrances
enumerated on Exhibit D attached hereto. All of the tangible
Personal Property shall be maintained through the Closing Date in a
state of good repair, normal wear and tear and casualty excepted.
(5) As of the date hereof, the Property is
subject to no written leases between Seller and any tenant, except
as set forth on the rent roll attached hereto as Exhibit G (the
"Leases"). Except as otherwise set forth on Exhibit G, all of said
Leases are in full force and effect as of the date hereof. Exhibit
G provides the date of each Lease, including all amendments,
supplements to or modifications of any lease. No person is, or
prior to Closing will be, occupying any portion of the Property for
residential purposes. Except as specifically set forth in each
Lease, there are no concessions to any tenant and there have been no
claims asserted by any tenant for offsets against rent, or any other
monetary claim made against Seller as landlord.
On or before the date hereof, Seller has provided Purchaser
with true, correct and complete copies of all the Leases, including
all amendments, modifications or changes thereto. Except as
otherwise disclosed on Exhibit G, each Lease is in full force and
effect in accordance with its terms, and there is no modification,
amendment, supplement, change or understanding with reference to any
Lease. The Seller is not in default in the performance of any
obligation, act or duty to be performed or observed by it in
accordance with the terms of any Lease, and there is no fact, event
or condition that with the passage of time or giving of notice or
both would constitute a default by Seller. Except as otherwise
disclosed on Exhibit G, no tenant is in default in the performance
of any obligation, act or duty to be performed or observed by it in
accordance with the terms of its applicable Lease, and there is no
fact, event or condition that with the passage of time or giving of
notice or both would constitute a default by a tenant with reference
to its particular lease. Except as otherwise disclosed on Exhibit
G, no tenant has notified Seller that it intends or desires to
terminate or modify any Lease or that it intends or may file any
proceedings in bankruptcy or any creditor rights to avoid or delay
the payment of its debts.
(6) No leasing or other commissions or fees are
due in connection with the leasing of the Property other than
commissions or fees set forth in Exhibit H attached hereto.
(7) There are no actions, suits, claims,
arbitrations, proceedings, orders, judgments or investigations
pending or threatened in writing against or affecting Seller, the
Property or the operation thereof, or which questions the validity
of this Agreement or any action taken or to be taken in, under or in
connection with any of the provisions of this Agreement, at law or
in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality.
(8) For the purposes of this Agreement,
"Hazardous Materials" means any of the following: asbestos-
containing materials, polychlorinated biphenyls (PCBs), flammable
materials, explosives, radioactive materials, petroleum products and
any materials, wastes, substances, or chemicals that are deemed
hazardous, toxic, a pollutant or a contaminant under the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the
Hazardous Materials Transportation Act as amended (49 U.S.C. Section
1801, et seq.), the Resource Conservation and Recovery Act of 1976,
as amended (42 U.S.C. Section 6901, et seq.), in the regulations
adopted or publications promulgated pursuant thereto, or in any
other applicable federal, state or local laws, ordinances, rules or
regulations in effect on the Closing Date relating to the protection
of public health, safety or the environment.
Except as set forth on Exhibit I attached hereto, Seller has
not used, stored, disposed of or released, and no other party
including any tenant, has used, stored, disposed of or released, any
Hazardous Materials in, on or about the Property in a manner which
would result in any material liability to Purchaser or in derogation
of law.
(9) In the event that Seller becomes aware of a
fact, event or condition which fact, event or condition makes or
renders any representation or warranty untrue or incorrect, Seller
shall, within two (2) business days after becoming aware of such
fact, event or condition, notify Purchaser in writing of such fact,
event or condition.
(10) The representations and warranties in
Subsections 4(b)(2)(4)(5)(6)(7) and (8) shall also be true and
correct at the Closing. Provided, however, that if Seller is
unable, in good faith, to make any of such warranties or
representations as of the Closing and so notifies Purchaser in
writing at or before Closing, then the facts or circumstances giving
rise to Seller's inability to make the warranty or representation as
of Closing shall be construed as, and considered to be, a
Nonquantifiable Title Defect (whether or not such fact or
circumstance is, in fact, quantifiable), and shall be addressed
pursuant to, and governed by, Section 6(d) of this Agreement.
(c) It is expressly understood and agreed that:
(1) Purchaser has fully examined the Property,
and is familiar and satisfied with the content and condition
thereof. Purchaser has also fully reviewed, and is familiar and
satisfied with, all leases, title policies, environmental
assessments, architectural and engineering plans, service and
maintenance contracts, books, records, and financial statements
relating to the condition, maintenance, operations, title or
finances of the Property. Except as expressly and specifically set
forth herein, or in any schedule or exhibit hereto or document
referenced in this Agreement and provided to Purchaser, Seller has
not made and does not make any warranties or representations as to
the condition, management, maintenance, rents, leases, income,
expenses, operations, value of the Property, title, adequacy or
fitness for use of any equipment, validity of any contracts relating
to the Property or compliance of any parties thereto, or any other
matter or thing affecting or related to the Property or this
transaction that might be pertinent in considering the purchase of
the Property or entering into this Agreement; and Purchaser hereby
expressly acknowledges that no such representations or warranties
have been made.
Purchaser hereby represents and warrants that all reports made
by or on behalf of Purchaser concerning the physical and
environmental condition of the Property are listed on Exhibit F
attached hereto and that true, accurate and complete copies of all
such reports have been delivered to Seller by Purchaser. Purchaser
further represents and warrants that it has no actual knowledge of
any physical or environmental problems or defects at or in the
Property with the exception of any problems or defects listed on
Exhibit F.
Purchaser further acknowledges that it has thoroughly
inspected the Property and agrees to take the Property "as is", in
such condition as the same may be on the date hereof, provided that,
Seller agrees that it shall maintain the Property in substantially
the same condition as exists on the date hereof, subject to Section
9 hereof and normal wear and tear excepted. Seller shall have no
obligation to perform any maintenance or repair in the premises of
any tenant of the Property, unless (i) such maintenance or repair is
an obligation of Seller as landlord under the leases for such
premises, and (ii) the tenant (of any such premises) has given
Seller written notice prior to the Closing Date that such
maintenance or repair is needed, or as provided hereinbefore or
pursuant to Section 7 hereinbelow. Seller also agrees to provide
Purchaser with monthly operating statements for the Property until
the Closing Date.
(2) Seller is not liable for or bound in any
manner by any expressed or implied warranties, guaranties, promises,
statements, representations or information pertaining to the
Property, made or furnished by any person, including, but not
limited to, any real estate broker, agent, employee, servant,
architect, engineer, contractor or subcontractor or any other person
representing or purporting to represent Seller, unless such
warranties, guaranties, promises, statements, representations or
information are expressly and specifically set forth herein. The
provisions of this paragraph shall survive the closing of title and
delivery of the deed hereunder.
(3) The acceptance of a deed by Purchaser shall be
deemed to be a full performance and discharge of every agreement and
obligation on the part of Seller to be performed pursuant to the
provisions of this Agreement, subject to the terms of Subsection
4(a), 8(j) and Section 10 hereof. Provided, however, that Seller
shall remain liable to Purchaser for damages or liabilities incurred
by Purchaser as a result of any material representation set forth in
Subsections 4(a) and (b) above, which was known by Seller to have
been materially false when made and which was fraudulently made to
induce Purchaser to enter into and consummate this Agreement.
Except as otherwise specifically set forth in Subsection 4(a), this
Subsection 4(c)(3), Subsection 8(j) and Section 10, no agreement,
representation or warranty made herein by Seller shall survive the
closing of title and the delivery of the deed hereunder.
5. Representations and Warranties of Purchaser.
Purchaser represents and warrants to Seller as follows:
(a) Purchaser is a citizen of Greece, and a resident
of Greece; and that any entity formed (or being formed) by Purchaser
to acquire title to the Premises is, or will be at Closing, in good
standing under the laws of the District of Columbia; and that any
such entity is (or, when formed, will be) a single asset entity,
controlled and owned in the majority by Purchaser. Purchaser has
full authority to enter into this Agreement, including, but without
limitation, specific approval necessary under applicable law for
Purchaser to enter into this Agreement and purchase the Property;
and this Agreement is legally binding on, and enforceable against,
Purchaser in accordance with its terms.
(b) Purchaser has sufficient funds available to
purchase the Property, including, but not limited to, payment of all
costs of closing described in paragraph 8. Within ten (10) business
days of execution of this Agreement, Purchaser shall provide Seller
with reasonable documentation evidencing the availability and
sufficiency of said funds. Seller shall hold all such documentation
in strict confidence, and shall not disclose such information
without the prior written consent of Purchaser.
6. Seller's Duties Prior to Closing.
Between the date hereof and Closing:
(a) Seller reserves the right, between the date hereof
and the Closing Date, to enter into, amend or terminate leases
covering the Premises (or any portion thereof), in the ordinary
course of business; provided, however, that Purchaser shall have the
right to approve any new lease or lease termination, which approval
shall not be unreasonably withheld, conditioned or delayed. Seller
further agrees to perform and observe all of its covenants, duties
and obligations to be performed and/or observed by it pursuant to
the terms of any Lease. In the event Seller receives a notice from
a tenant or provides a notice to a tenant, Seller shall provide
Purchaser with a copy of said notice within two (2) business days of
receipt or providing of the same as the case may be.
(b) In the event that any tenant under any lease
defaults in the performance of any of its duties, covenants or
obligations to be performed by it pursuant to the terms of the
lease, including without limitation the payment of rent, Seller may
take such actions as are commercially reasonable. Provided,
however, Seller may not agree to the termination of any lease or to
any concessions which would cause any material loss to Purchaser,
including without limitation delays in the payment of rent, without
the prior written consent of Purchaser, which consent shall not be
unreasonably withheld. For purposes of this Subparagraph 5(b) the
term "material loss" shall be construed to mean any loss exceeding
Five Thousand and no/100 Dollars ($5,000.00) on an annualized basis.
(c) Seller agrees to use its reasonable best efforts
to obtain and provide to Purchaser at the Closing Estoppel
Certificates from each tenant of the Property, in form substantially
as set forth in Exhibit K attached hereto. Provided, however, that
no tenant shall be required to provide in any such Estoppel
Certificate any information it is not required to provide under
terms of its Lease. If any Tenant fails to provide an Estoppel
Certificate, Seller shall have the right to substitute, and
Purchaser shall accept, a Landlord Estoppel Certificate, executed by
Seller and containing substantially equivalent information as the
tenant Estoppel Certificate.
(d) If Purchaser becomes aware of any title defect or
encumbrance on the Real Property other than the Permitted Exceptions
set forth on Exhibit D ("Title Defect"), then Purchaser shall,
within five (5) business days of becoming aware of same, provide
Seller with written notice of such Title Defect, together with a
copy of any documents evidencing or concerning same.
If (i) the Title Defect is in the nature of a mechanic's or
tax lien or other encumbrance reasonably quantifiable as a sum
certain ("Quantifiable Title Defect"), or (ii) the Title Defect is
not readily quantifiable as a sum certain ("Nonquantifiable Title
Defect"), but the cost of correcting the Nonquantifiable Title
Defect is less than or equal to Fifty Thousand and no/100 Dollars
($50,000.00), then Seller shall promptly proceed to correct such
Title Defect (or obtain title insurance with respect to same), at
its expense and to Purchaser's reasonable satisfaction, and the
Closing Date shall be extended for a reasonable period to permit
completion of the correction of such Title Defect.
If the cost of correcting a Nonquantifiable Title Defect
exceeds Fifty Thousand and no/100 Dollars ($50,000.00), then Seller
shall have no obligation to correct such Nonquantifiable Title
Defect, but shall (by written notice to Purchaser within ten (10)
business days of its prompt determination of the cost of remedying
such Title Defect) elect whether or not it will correct (or obtain
title insurance with respect to) such Title Defect (it being agreed
that Seller's failure to send such notice of election shall
constitute Seller's election not to cure such Title Defect), and if
Seller does elect to correct the Title Defect, the Closing Date
shall be extended for a reasonable period to permit completion of
the correction. If Seller elects to correct (or obtain title
insurance with respect to) such Title Defect and such correction
would delay the Closing Date by more than sixty (60) days, then
Purchaser shall have the option (upon delivery to Seller of its
written notice within ten (10) business days of receipt of Seller's
notice as to its intention to correct such Title Defect) to proceed
to closing with such Title Defect uncorrected, with the Purchase
Price to be reduced by Fifty Thousand and no/100 Dollars
($50,000.00). Notwithstanding the foregoing, if Seller elects to
correct such Title Defect, and if the time period necessary to
complete the correction will, in the reasonable judgment of
Purchaser's title insurance company, exceed one (1) year, then
Purchaser may terminate this Agreement by written notice to Seller
delivered within ten (10) business days of the determination of the
cost and time necessary to cure the Title Defect.
If Seller elects not to correct such Title Defect, then
Purchaser may (by delivery of written notice to Seller within ten
(10) business days of receipt of Seller's aforementioned election
notice) elect to terminate this Agreement. If Purchaser fails to
make such election to terminate, the parties shall proceed to
closing with such Title Defect uncorrected, except that the Purchase
Price shall be reduced by Fifty Thousand and no/100 Dollars
($50,000.00).
If either party elects to terminate this Agreement pursuant to
this Subsection (d), such termination shall be considered, for
purposes of Section 10, as being without fault of either party.
Purchaser's failure to provide Seller with the aforementioned ten
(10) business days notice as to a Title Defect, or its election or
agreement to proceed to closing with the Title Defect uncorrected,
shall constitute a waiver of any rights Purchaser may have against
Seller with respect to such Title Defect, either hereunder or
otherwise, and this Agreement shall remain in full force and effect
notwithstanding such Title Defect.
If the parties cannot agree, in good faith, as to whether the
cost of correction of a Title Defect under this Subsection (d) shall
exceed Fifty Thousand and no/100 Dollars ($50,000.00), for purposes
only of exercising any rights or options available to either party
under this Subsection (d), the cost of correction shall be deemed to
be in excess of Fifty Thousand and no/100 Dollars ($50,000.00).
7. Conditions Precedent to the Performance of Obligations
Hereunder.
(a) The obligations of Seller to sell the Property and
to perform the other covenants and obligations to be performed by it
on the Closing Date shall be subject to the condition (which may be
waived, in writing, in whole or in part, by Seller) that Purchaser
shall have materially performed all obligations and complied with
all conditions required by this Agreement to be performed or
complied with by it on or before the Closing Date, and that all
representations and warranties of Purchaser hereunder are materially
accurate as of the Closing Date.
(b) The obligations of Purchaser to purchase the
Property and to perform the other covenants and obligations to be
performed by it on the Closing Date (or thereafter) shall be subject
to the condition (which may be waived, in writing, in whole or in
part, by Purchaser):
(i) that Seller shall have materially performed
all obligations and materially complied with all conditions required
by this Agreement to be performed or complied with by it on or
before the Closing Date;
(ii) that all representations and warranties of
Seller hereunder are accurate as of the date hereof and, subject to
Subsection 4(b)(10), as of the Closing Date;
(iii) the physical condition of the Property being
substantially the same condition that existed as of the date hereof,
normal wear and tear excepted;
(iv) Purchaser receiving the Estoppel Certificates
referred to in Section 6(c) hereof.
8. Closing.
(a) The closing of the purchase and sale of the
Property shall be held at the office designated by Purchaser and
situated in the Washington, D.C., metropolitan area, or such other
place as the parties may mutually agree, during normal business
hours. Closing shall occur within forty-five (45) days after
execution of this Agreement, or (ii) June 28, 1996, time being of
the essence. The date of closing is referred to in this Agreement
as the "Closing Date."
(b) On the Closing Date, Seller shall:
(i) Execute, acknowledge and deliver to
Purchaser a special warranty deed, in proper form for recording,
conveying the Property to Purchaser in fee simple, free and clear of
all liens, encumbrances, and other matters adversely affecting
title, except the Permitted Exceptions and any other matters that
have been waived by Purchaser.
(ii) Execute and deliver to Purchaser a bill or
bills of sale as to all of the Personalty.
(iii) Assign to Purchaser all of Seller's
right, title and interest in, to and under all leases and parking
agreements of any portion of the Property;
(iv) Assign to Purchaser all of Seller's right,
title and interest in, to and under any Service Contracts relating
to the Property, which are either noncancellable by their terms or
which Purchaser has agreed to assume in writing; and terminate all
other Service Contracts, and provide Purchaser with proof of the
same.
(v) Assign and convey to Purchaser all of
Seller's right, title and interest in and to all utility deposits,
security deposits, and future rents.
(vi) Deliver all the Estoppel Certificates
referred to in Section 6(c) hereof;
(c) On the Closing Date, Purchaser shall deliver to
Seller the payment required under Section 2, together with all
adjustments, reimbursements and other payments due hereunder, by
wire transfer of federal funds as Seller shall direct in writing.
(d) The following items of expense shall be adjusted
as of midnight of the day immediately preceding the Closing Date:
(1) Real estate and personal property taxes, if
any, with respect to the Property.
(2) Fuel, water and sewer service charges, and
charges for gas, electricity, telephone and all other public
utilities. Seller shall be liable for and shall pay all utility
bills for services provided before the Closing Date. Purchaser
shall be liable for and shall pay all utility bills for services
provided on and after the Closing Date.
(3) All costs and expenses of such Service
Contracts being assigned to Purchaser.
The adjustments described in the foregoing subparagraphs shall
be paid on the Closing Date, except that if the amount of any of the
adjustments described in such subparagraphs cannot be determined on
the Closing Date, a reasonably estimated amount of such adjustment
shall be held in escrow by the Escrow Agent pursuant to the Escrow
Agreement, and any such adjustment shall be paid as soon as
reasonably practical after the Closing Date. In making the
adjustments required by this Subsection, Seller shall be given
credit for all amounts prepaid as of the Closing Date with respect
to any period after the Closing Date, and Seller shall be charged
with any unpaid charges for the period prior to the Closing Date.
(e) The monthly rent payable by tenants under tenant
leases and fees payable under parking agreements shall be adjusted
as of midnight of the day immediately preceding the Closing Date,
and any such rent and parking fees prepaid to Seller (including a
pro rata portion of the rent and parking fees paid for the month in
which the closing occurs) shall be paid or credited to Purchaser at
closing. Rent which is due but uncollected as of the Closing Date
shall not be adjusted, but Purchaser shall cause the rent for the
period prior to the Closing Date to be remitted to Seller if, as and
when collected. On the Closing Date, Seller shall deliver to
Purchaser a schedule of all such past due but uncollected rent owed
by tenants. Purchaser agrees to cause the amount of such rental
arrears to be included in the first bills thereafter submitted by
Purchaser to such tenants after the Closing Date. Purchaser further
agrees to remit promptly to Seller any such arrears actually paid by
such tenants to Purchaser.
(f) At closing, Seller shall deliver to Purchaser a
schedule of all security deposits held by Seller on the Closing Date
which have been deposited by tenants including, but not limited to,
security deposits paid by tenants who owe rent on the Closing Date.
Seller shall also deliver to Purchaser any interest which has
actually accrued on security deposits as to which the Lease (or
applicable law) requires interest to be accrued. All such security
deposits and interest so held by Seller shall be transferred and
delivered to Purchaser and Purchaser shall give Seller a receipt
therefor.
(g) At closing, Purchaser shall reimburse Seller for
all utility deposits relating to the Property which can be
transferred to Purchaser.
(h) Expenses of escrow examination of title, tax
certificates, conveyancing, notary fees, recordation and other
transfer taxes (except the D.C. Transfer Tax) and fees, and any
other closing and recordation expenses, shall be paid by Purchaser.
Seller shall pay the D.C. Transfer Tax, due pursuant to D.C. Code,
Title 47 (1981 ed.). Each party agrees to pay its own attorney and
advisors fees that they incurred with reference to the execution and
delivery of this Agreement and/or the consummation of the
transactions contemplated herein.
(i) Seller and Purchaser expressly understand and
agree that: (A) all costs and expenses incurred prior to the Closing
Date in connection with ownership, management, leasing or
maintenance of the Property shall be paid by Seller and Purchaser
shall have no liability therefor; and (B) all costs and expenses
incurred on or after the Closing Date in connection with ownership,
management, leasing or maintenance of the Property shall be paid by
Purchaser and Seller shall have no liability therefor.
(j) Seller agrees to maintain its liability insurance
in full force and effect until the Closing Date. Provided, however,
that nothing contained in Subsection 8(i) or this Subsection 8(j)
shall be construed as an assumption by Purchaser, or indemnification
of Seller by Purchaser, regarding actions of Sellers, its agents or
employees pertaining to the Property and occurring prior to the
Closing Date. The provisions of this Subsection 8(j) shall survive
closing of title and delivery of the deed hereunder.
(k) Delivery of the payments required under this
Section, the executed deed of conveyance and all other documents and
instruments required to be delivered by either party to the other by
the terms of this Agreement shall be deemed to be a good and
sufficient tender of performance of the terms hereof.
(l) Seller and Purchaser each agree to use their best
efforts to comply with all conditions to be complied with by them
under this Agreement, to take all other action necessary to complete
the transactions contemplated by this Agreement, to cause the
purchase and sale of the Property to be consummated with all
reasonable dispatch and to refrain from any action that is
inconsistent with that result.
9. Casualty/Condemnation.
(a) If prior to settlement the Property shall be
damaged by fire or other casualty, then (except as hereinafter
provided) Seller shall cause such damage to be repaired with all
reasonable diligence, at Seller's expense, and closing under this
Agreement shall be deferred until the 1st day of the month next
following completion of such repairs; provided, however, that if, in
the judgment of Seller, the cost of repairing such damage will
exceed Fifty Thousand Dollars ($50,000) (based on estimates of at
least two (2) contractors promptly retained by Seller after such
casualty), then Seller may elect (by written notice to Purchaser
within ten (10) business days of Seller's determination of the cost
of repairing such damage) not to make such repairs, in which case
Purchaser, at its election (to be exercised by written notice to
Seller within ten (10) business days of receipt of Seller's notice
not to repair) may terminate this Agreement (which termination shall
be considered without fault of either party for purposes of Section
10). If Purchaser does not elect to terminate this Agreement within
said ten (10) day period, then Purchaser shall close under this
Agreement, taking the damaged building in the damaged condition and
an assignment of any insurance proceeds theretofore received as to
the casualty and/or not yet paid. In the event Seller is required
or elects to perform repairs and such repairs are not substantially
completed within one hundred eighty (180) days after the date on
which the building is damaged, then Purchaser may, at its option,
deliver written notice to Seller of its intention to terminate this
Agreement not less than fifteen (15) days prior to the proposed
termination date. If Seller is still unable to substantially
complete the repairs within such notice period, then Purchaser may
terminate this Agreement by written notice to Seller (which
termination shall be considered without fault of either party for
purposes of Section 9). Furthermore, at any time prior to
completion of such repairs, Purchaser may, upon written notice to
Seller, proceed to closing, taking the damaged building and an
assignment of any insurance proceeds theretofore received and/or not
yet paid to Seller. The Closing Date shall be fifteen (15) days
after such written notice to Seller. The provisions of Section 4
hereof, including specifically but without limitation, the
provisions of Subsection 4(b) shall apply.
(b) Seller now carries fire and extended coverage
insurance policies on the Property; and Seller agrees that between
the date hereof and the Closing Date Seller will continue to keep
such insurance in force and effect.
(c) If prior to the Closing Date title of all or any
material portion of the Property is taken by eminent domain, either
party may, by written notice to the other, terminate this Agreement
prior to the Closing Date (which termination shall be considered
without fault of either party for purposes of Section 10); otherwise
this Agreement shall remain in full force and effect, and, at
closing, 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 such taking. Seller shall promptly notify Purchaser
if Seller receives notice of commencement of any eminent domain
proceedings as to any material portion of the Property.
10. Termination/Default.
(a) If Seller shall fail to materially perform any of
the covenants or agreements to be performed by it under this
Agreement on or before the Closing Date, which failure excuses
Purchaser from performance, Purchaser shall have as its sole and
exclusive right and remedy, the right to terminate this Agreement by
giving written notice to Seller. If Purchaser exercises its right
of termination, then the Deposit together with accrued interest
thereon shall be returned to Purchaser, and Purchaser shall be
entitled, as its agreed damages, its actual losses incurred in
connection with said breach or failure to perform by Seller, which
damages (including any and all costs, expenses and fees) shall not
exceed, in the aggregate, the sum of One Hundred Thousand and no/100
Dollars ($100,000.00); whereupon this Agreement shall be null and
void, and neither party shall have any further liability hereunder.
Purchaser shall not have any right to compel Seller, by suit for
specific performance, to settle on the transaction hereby
contemplated (and Seller shall be entitled to list, market, sell,
transfer and convey the property to any other party), unless and
until the Purchaser can establish, by final judgment in legal
proceedings before a Court of competent jurisdiction and to the
degree of certainty applicable in civil fraud claims, that Seller:
(i) solicited, entered into negotiations with, or received a written
offer from, another potential purchaser of the Property prior to
terminating this Agreement and that said third party subsequently
purchased the Property; or (ii) voluntarily created a Quantifiable
Title Defect with respect to the Property and thereafter failed to
correct same, in breach of Seller's duties under Section 6(d) of
this Agreement.
(b) If Purchaser shall fail to materially perform any
of the covenants or agreements to be performed by it under this
Agreement on or before the Closing Date, which failure excuses
Seller from performance, Seller shall have as its sole and exclusive
right and remedy, the right to terminate this Agreement by giving
written notice to Purchaser. If Seller exercises its right of
termination, then the Deposit together with accrued interest
thereon, shall be forfeited to Seller as fixed, agreed, and
liquidated damages for Purchaser's breach, whereupon this Agreement
shall be null and void, and neither party shall have any further
liability hereunder.
(c) If the transaction hereby contemplated is not
consummated without fault of either party, then the Deposit and
accrued interest shall be refunded to Purchaser, whereupon this
Agreement shall be null and void, and neither party shall have any
further liability hereunder.
11. Brokers.
Seller and Purchaser represent and warrant to each other that
Julien J. Studley, Inc., and Demetriou Realty, Inc., are the only
brokers employed by either of them in connection with this Agreement
and the transaction contemplated by this Agreement. Seller has
agreed, pursuant to a separate agreement, to pay said brokers a
commission with respect to services rendered in connection with this
transaction. Except as aforesaid, Seller and Purchaser represent
and warrant to each other that they have not authorized any broker
or agent to act on its behalf in this transaction or in carrying out
the negotiations relating to this Agreement, and Purchaser and
Seller agree to indemnify and hold harmless the other from and
against any claim for brokerage or other commission relating to this
Agreement arising by reason of a breach of the representation and
warranty contained herein. The provisions of this paragraph shall
survive the closing of title and the delivery of the deed hereunder.
12. Confidentiality.
In addition to the foregoing (and not in derogation thereof),
the parties acknowledge and agree that a Confidentiality Agreement
dated December 15, 1995, was executed by Purchaser's broker with
respect to his transaction (the "Confidentiality Agreement"), a copy
of which is attached hereto as Exhibit "K", and the terms of which
are incorporated herein by reference. Purchaser hereby acknowledges
and agrees to be fully bound under such Confidentiality Agreement
and responsible for all liabilities and obligations thereunder as if
Purchaser were the "Purchaser" defined in such Confidentiality
Agreement and that the provisions of paragraph 3 of the
Confidentiality Agreement shall survive the closing of title and the
delivery of the deed hereunder.
13. Miscellaneous Provisions.
(a) This Agreement, which includes the Confidentiality
Agreement, contains the entire agreement between the parties
relating to the Property; all prior negotiations, understandings and
agreements between the parties are merged in this Agreement and
there are no promises, understandings, agreements, conditions,
undertakings, warranties or representations, oral or written,
express or implied, between them other than as herein set forth; and
this Agreement has been entered into by Purchaser after full
investigation. No change or modification of this Agreement shall be
valid unless the same is in writing and signed by the parties
hereto. No waiver of any of the provisions of this Agreement and
other agreements referred to herein shall be valid unless in writing
and signed by the party against whom it is sought to be enforced.
The provisions of this paragraph shall survive the closing of title
and delivery of the deed hereunder.
(b) This Agreement shall be binding upon, and inure to
the benefit of and be enforceable by, the respective personal
representatives, heirs, successors and assigns or other legal
representatives of the parties hereto. Neither party may assign its
rights hereunder without the prior written consent of the other
party; provided, however the Purchaser shall be entitled to acquire
title to the Property from Seller in the name of a limited liability
company, corporation or similar entity controlled and owned in the
majority by Purchaser.
(c) Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered (i) when
delivered personally or (ii) when sent by recognized overnight
carrier, in either case with a copy by facsimile with confirmation
copy, addressed to the parties hereto at the respective addresses
and facsimile numbers set out below, or at such other address or
facsimile number as they have previously specified by written notice
delivered in accordance herewith. Notices hereunder shall be deemed
received on the date of actual receipt or refusal of receipt.
If to Seller, at:
1718 Connecticut Ltd.
c/o Dean Witter Realty, Inc.
Two World Trade Center
Sixty-fourth Floor
New York, NY 10048
Attention: James M. Thomson
Facsimile No. (212) 392-3123
With a copy to:
Michael R. McAdoo, Esquire
King & Nordlinger, L.L.P.
1000 Connecticut Avenue
Suite 311
Washington, D.C. 20036
Facsimile No. (202) 775-0513
If to Purchaser, at:
Vasilios Papadopoulos
c/o Nicholas Papadopoulos
1230 23rd Street, N.W.
Apartment 711
Washington, D.C. 20037
Facsimile No. 202-223-4898
With a copy to:
David E. Weisman, Esquire
Mayer, Faller, Weisman and Rosenberg, P.C.
440 Jenifer Street, N.W.
Suite 380
Washington, D.C. 20015
Facsimile No. (202) 362-9818
(d) The headings and captions contained in this
Agreement are solely for convenience of reference and shall not
affect its interpretation.
(e) This Agreement shall be governed by, and construed
in accordance with, the laws of the District of Columbia.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above stated.
WITNESS/ATTEST: SELLER:
1718 CONNECTICUT LTD.
By: Dean Witter Realty
Income Partnership I, L.P.,
General Partner
By: Dean Witter Realty
Income Properties I, Inc.,
Managing General Partner
/s/William J. O'Shaughnessy, Jr. By:/s/Matthew M. Horgan
William J. O'Shaughnessy, Jr. Matthew M. Horgan
Assistant Secretary its Vice President
PURCHASER:
/s/Nicholis B. Papadopoulos /s/Vasilios Papadopoulos
Vasilios Papadopoulos
List of Exhibits:
Exhibit A - Legal Description
Exhibit B - Personalty Included in Sale
Exhibit C - Copy of Escrow Agreement
Exhibit D - Permitted Exceptions
Exhibit E - Service Contracts
Exhibit F - Purchaser's Property Reports
Exhibit G - Rent Roll
Exhibit H - Leasing Commissions
Exhibit I - Environmental Exceptions
Exhibit J - Form of Tenant Estoppel Certificate
Exhibit K - Confidentiality Agreement
