4
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) July 10,
1998
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)
Item 2. Acquisition or
Disposition of Assets
Pursuant to a Purchase and Sale Agreement dated as of
May 29, 1998, the Partnership agreed to sell the land
and building which comprise the Harborgate property to
Pacifica Capital Group LLC, an unaffiliated party, for
a negotiated sale price of $8.5 million.
The closing of the sale took place on July 10, 1998.
At closing, the Partnership received sales proceeds,
net of closing costs and other deductions, of
approximately $8.2 million.
Subsequent to the sale, the Partnership owns only one
property, the North Lake Plaza shopping center.
Item 7. Financial Statements and
Exhibits
(b) Pro Forma Financial Information
(1) Pro Forma Balance Sheet as of April 30,
1998.
(2) Pro Forma Income Statements for
the year ended October 31, 1997 and for the
six months ended April 30, 1998.
(c) Exhibits
(1) Purchase and Sale Agreement, dated as of May
29, 1998, with respect to the sale of the
Harborgate property.
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/Charles M. Charrow
Charles M. Charrow
Controller
Date: July 24, 1998
Dean Witter Realty Income Partnership I, L.P.
Pro Forma Consolidated Balance Sheet
As of April 30, 1998
The following unaudited pro forma consolidated balance sheet
has been presented as if the Harborgate property was sold as
of April 30, 1998. The pro forma adjustments reflect a) the
net cash proceeds from the sale, b) the elimination of the
net carrying value of the property from real estate held for
sale and c) the elimination of other assets and liabilities
relating to the property sold.
<TABLE>
<CAPTION>
Pro Forma
Historical
Adjustments Pro Forma
<S> <C> <C> <C>
ASSETS
Real estate $ 6,699,340 $ -
$ 6,699,340
Real estate held for sale 3,843,092
(3,843,092) -
Cash and cash equivalents 349,050
8,060,900 8,409,950
Other assets 817,043
(745,362) 71,681
$11,708,525 $
3,472,446 $15,180,971
LIABLIITES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 873,280 $
(693,115) $ 180,165
Total partner's capital 10,835,245
4,165,561 15,000,806
$11,708,525 $
3,472,446 $15,180,971
</TABLE>
Dean Witter Realty Income Partnership I, L.P.
Pro Forma Consolidated Income Statement
For the year ended October 31, 1997
The following unaudited pro forma consolidated income
statement has been presented as if the Harborgate property
was sold as of the beginning of fiscal year 1997. The pro
forma adjustments reflect the elimination of rental
revenues, property operating expenses, and depreciation and
amortization expenses 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 $ 6,325,230 $(701,091)
$5,624,139
Gain on sale of real estate 1,470,551 -
1,470,551
Equity in earnings of joint venture 2,483,485
- - 2,483,485
Interest and other 174,649 (8,952)
165,697
10,453,915 (710,043)
9,743,872
Expenses:
Property operating 2,851,534 (493,006)
2,358,528
Depreciation 1,220,659 (77,673)
1,142,986
Amortization 115,553 (29,940)
85,613
General and administrative 411,961 -
411,961
4,599,707 (600,619)
3,999,088
Net income $ 5,854,208 $(109,424)
$5,744,784
Net income per Unit of Limited
Partnership interest $ 60.72 $ (1.06)
$ 59.66
</TABLE>
Dean Witter Realty Income Partnership I, L.P.
Pro Forma Consolidated Income Statement
For the six months ended April 30, 1998
The following unaudited pro forma consolidated income
statement has been presented as if the Harborgate property
was sold as of the beginning of fiscal year 1998. The pro
forma adjustments reflect the elimination of rental
revenues, property operating expenses and depreciation and
amortization expenses 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 $ 1,197,131 $(309,159)
$ 887,972
Gain on sale of real estate 9,295,923 -
9,295,923
Interest and other 102,190 (2,658)
99,532
10,595,244 (311,817)
10,283,427
Expenses:
Property operating 563,531 (198,293)
365,238
Depreciation and amortization 142,624
(61,196) 81,428
General and administrative 206,453 -
206,453
912,608 (259,489)
653,119
Net income $ 9,682,636 $ (52,328)
$ 9,630,308
Net income per Unit of Limited
Partnership interest $ 103.94 $ (0.51)
$ 103.43
</TABLE>
Exhibit Index for Dean Witter Realty Income Partnership I, L.P.
Exhibit
No. Description
(10) Purchase and Sale Agreement,dated as of
May 29, 1998 with respect to the sale of
the Harborgate property.
E-1
BUSDOCS:533260.8
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
the 29th day of May, 1998, by and between DEAN WITTER REALTY
INCOME PARTNERSHIP I, L.P., a Delaware limited partnership,
having an office c/o Dean Witter Realty Inc., Two World
Trade Center, 64th Floor, New York, New York 10048 (the
"Seller"), and PACIFICA CAPITAL GROUP LLC, a California
limited liability company, having an office at 330
Washington Boulevard, Suite 300, Marina Del Ray, California
90292 (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Seller is the owner of the real property
known and numbered as 1025 West 190th Street, Los Angeles,
California consisting of a four-story office building
commonly referred to as the Harborgate Office Building;
WHEREAS, the Seller and the Purchaser have entered into
negotiations wherein the Purchaser expressed its intent to
purchase the Property (as defined herein) from the Seller
and the Seller expressed its intent to sell the Property to
the Purchaser; and
WHEREAS, the Seller and the Purchaser now desire to
enter into an agreement whereby, subject to the terms and
conditions contained herein, the Seller shall sell the
Property to the Purchaser and the Purchaser shall purchase
the Property from the Seller.
NOW, THEREFORE, in consideration of ten ($10.00)
dollars and the mutual covenants and agreements hereinafter
set forth, and intending to be legally bound hereby, it is
hereby agreed as follows:
Sale of the Property.
The Seller agrees to sell and convey to the Purchaser, and
the Purchaser agrees to purchase from the Seller, at the
price and upon the terms and conditions set forth in this
Agreement, all those certain plots, pieces and parcels of
land described in Schedule 1 hereto (the "Land") listed
thereon as owned by the Seller, together with (i) all
buildings and other improvements situated on the Land
(collectively, the "Building"), (ii) all easements, rights
of way, reservations, privileges, appurtenances, and other
estates and rights of the Seller pertaining to the Land and
the Building, (iii) all right, title and interest of the
Seller in and to all fixtures, machinery, equipment,
supplies and other articles of personal property attached or
appurtenant to the Land or the Building, or used in
connection therewith (collectively, the "Personal
Property"), and (iv) all right, title and interest of the
Seller, if any, in and to the trade names of the Building
(the Land, together with all of the foregoing items listed
in clauses (i)-(iv) above being hereinafter sometimes
referred to as the "Property").
Excluded Property.
Specifically excluded from the Property and this sale are
all items of personal property not described in Section 1
(and all personal property of tenants under the Leases) and
the items described in Schedule 2 annexed hereto and made a
part hereof.
Closing Date.
The delivery of the Deed and the consummation of the
transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of Bingham Dana LLP, Suite
1570, 333 South Grand Avenue, Los Angeles, California 90071-
1535, at 10:00 A.M., 1998 on the date which is fourteen (14)
days after the end of the Due Diligence Period unless such
day is not a day on which the Recorder's Office of Los
Angeles County, California is open for business, in which
case, the Closing shall take place on the next day on which
such Recorder's Office is open (the "Closing Date") or such
earlier or later date as the Seller and Purchaser may agree
in writing.
Purchase Price.
The purchase price to be paid by the Purchaser to the Seller
for the Property (the "Purchase Price") is Eight Million
Five Hundred Thousand Dollars ($8,500,000.00) payable as
follows:
(a) Four Hundred Twenty-Five Thousand
Dollars ($425,000.00) Dollars (the "Downpayment")
shall be payable simultaneously with the execution
and delivery of this Agreement, by delivery to
First American Title Insurance Company (the
"Escrow Agent") of a certified or bank check drawn
on or by a bank which is a member of the New York
Clearing House Association (a "Clearing House
Bank") or by wire transfer of immediately
available funds to the Escrow Agent's account as
set forth in the Escrow Agreement. The
Downpayment shall be held and disbursed by the
Escrow Agent in accordance with the terms of
Section 15. At the Closing, the Deposit shall be
delivered to the Seller and such amount shall be
credited against the portion of the Purchase Price
payable pursuant to Section 2(b);
(b) The balance of the Purchase Price (i.e.,
the Purchase Price minus the credit set forth in
Section 2(a) above), plus or minus the
apportionments set forth in Section 3, shall be
received not later than 3:00 p.m. on the day
preceding the Closing Date by the Escrow Agent to
be held in escrow pending the Closing and shall be
paid at the Closing by bank wire transfer of
immediately available funds to the Seller's
account or to the account or accounts of such
other party or parties as may be designated by the
Seller on or before the Closing Date.
Apportionments
The following shall be apportioned between the Seller and
the Purchaser at the Closing as of 11:59 p.m. of the day
preceding the Closing Date (the "Adjustment Date"):
(a) fixed or base rents ("Rents") which have
been prepaid, security deposits referred to in
Section 8(e), Rents for the month in which the
Closing occurs and Additional Rents and other
amounts paid by tenants applicable to periods
which expire after the Closing Date, which have
been received by Seller;
(b) real estate taxes, special assessments
(but only any installment relating to the period
in which the Adjustment Date occurs), water
charges, sewer rents and charges and vault
charges, if any, on the basis of the fiscal years
(or applicable billing period if other than a
fiscal year), respectively, for which same have
been assessed;
(c) charges and payments under Contracts
that are being assigned to the Purchaser pursuant
to the terms of this Agreement and listed on
Schedule 3 hereto or permitted renewals or
replacements thereof;
(d) any prepaid items, including, without
limitation, fees for licenses which are
transferred to the Purchaser at the Closing and
annual permit and inspection fees;
(e) utilities, to the extent required by
Section 3.4;
(f) deposits with telephone and other
utility companies, and any other persons or
entities who supply goods or services in
connection with the Property if same are assigned
to the Purchaser at the Closing;
(g) personal property taxes, if any, on the
basis of the fiscal year for which assessed;
(h) all other revenues from the operation of
the Property other than Rents and Additional Rents
(including, without limitation, parking charges,
tenant direct electrical reimbursements, HVAC
overtime charges, and telephone booth and vending
machine revenues);
(i) unpaid expenses incurred for any tenant
improvements, unpaid commissions and fees and
unused free base rent under the Lease with Nippon
Travel Agency Pacific, Inc. shall be a credit to
Purchaser;
(j) New Lease Expenses as provided in
Section 10.1.2; and
(k) such other items as are customarily
apportioned between sellers and purchasers of real
properties of a type similar to the Property and
located in Los Angeles County, California.
Taxes.
If the amount of real estate taxes, special assessments or
other taxes for the Property for the fiscal year during
which the Closing occurs is not finally determined at the
Adjustment Date, such taxes shall be apportioned on the
basis of the full amount of the assessment for such period
(or the assessment for the prior tax period if the
assessment for the current tax period is not then known) and
the rate for the immediately prior tax year, and shall be
reapportioned as soon as the new tax rate and valuation, if
any, has been finally determined. If any taxes which have
been apportioned shall subsequently be reduced by abatement,
the amount of such abatement, less the cost of obtaining the
same and after deduction of sums payable to tenants under
Leases or expired or terminated Leases, shall be equitably
apportioned between the parties hereto.
Rents.
Arrearages.
If on the Closing Date any tenant is in arrears in the
payment of Rent or has not paid the Rent payable by it for
the month in which the Closing occurs (whether or not it is
in arrears for such month on the Closing Date), any Rents
received by the Purchaser or the Seller from such tenant
after the Closing shall be applied to amounts due and
payable by such tenant during the following periods in the
following order of priority: (i) first, to the month in
which the Closing occurred, (ii) second, to the month
following the month in which the Closing occurred, and
(iii) third, to the month preceding the month in which the
Closing occurred. If Rents or any portion thereof received
by the Seller or the Purchaser after the Closing are due and
payable to the other party by reason of this allocation, the
appropriate sum, less a proportionate share of any
reasonable attorneys' fees and costs and expenses expended
in connection with the collection thereof, shall be promptly
paid to the other party (to the extent not collected from or
reimbursed by tenants).
Additional Rents.
If any tenants are required to pay percentage rent,
escalation charges for real estate taxes, parking charges,
operating expenses and maintenance escalation charges, cost-
of-living increases or other charges of a similar nature
("Additional Rents") and any Additional Rents are collected
by the Purchaser from a tenant after the Closing Date, then
the Purchaser shall promptly pay to the Seller out of the
first such sums received from such tenant the amount of all
Additional Rents which are due and payable by such tenant
with respect to any period prior to the Closing Date
(whether or not such Additional Rents first became due and
payable on or after the Closing Date), less a proportionate
share of any reasonable attorneys' fees and costs and
expenses of collection thereof (to the extent not collected
from or reimbursed by tenants).
Collection After the Closing.
After the Closing, the Seller shall continue to have the
right, in its own name, to demand payment of and to collect
Rent and Additional Rent arrearages owed to the Seller by
any tenant, which right shall include, without limitation,
the right to continue or commence legal actions or
proceedings against any tenant. The Purchaser agrees to
cooperate with the Seller in connection with all efforts by
the Seller to collect such Rents and Additional Rents and to
take all steps, whether before or after the Closing Date, as
may be reasonably necessary to carry out the intention of
the foregoing, including, without limitation, the delivery
to the Seller, upon demand, of any relevant books and
records (including any Rent or Additional Rent statements,
receipted bills and copies of tenant checks used in payment
of such Rent or Additional Rent), the execution of any and
all consents or other documents, and the undertaking of any
act reasonably necessary for the collection of such Rents
and Additional Rents by the Seller. If for any fiscal
period which includes the Adjustment Date tenants are paying
Additional Rent based upon estimates prepared by the Seller,
such Additional Rents shall be reapportioned when the actual
expenses for the fiscal period are known.
Water.
If there is a water meter on the Property, the Seller shall
furnish a reading to a date not more than thirty (30) days
prior to the Closing Date, and the unfixed water charges and
sewer rent, if any, based thereon for the intervening time
shall be apportioned on the basis of such last reading.
Utilities.
The Seller will attempt to obtain final cut-off readings of
fuel, telephone, electricity, and gas to be made as of the
Adjustment Date. The Seller shall pay the bills based on
such readings promptly after the same are rendered. If
arrangements cannot be made for any such cut-off reading,
the parties shall apportion the charges for such services on
the basis of the bill therefor for the most recent billing
period prior to the Adjustment Date, and when final bills
are rendered for the period which includes the Adjustment
Date the Seller and Purchaser shall promptly readjust the
apportionments in accordance with such final bills.
Post-Closing Adjustments.
The items set forth in this Section 3 shall be apportioned
at the Closing by payment of the net amount of such
apportionments to the Seller in the manner set forth herein
for the payment of the Purchase Price if the net
apportionment is in favor of the Seller or by a credit
against the Purchase Price if the net apportionment is in
favor of the Purchaser. However, if any of the items
subject to apportionment under the foregoing provisions of
this Section 3 cannot be apportioned at the Closing because
of the unavailability of the information necessary to
compute such apportionment, or if any errors or omissions in
computing apportionments at the Closing are discovered
subsequent to the Closing, then such item shall be
reapportioned and such errors and omissions corrected as
soon as practicable after the Closing Date and the proper
party reimbursed, which obligation shall survive the Closing
for a period of one year after the Closing Date.
Notwithstanding any of the foregoing provisions of this
Section 3.5 to the contrary, the Purchaser and the Seller
agree that the one year limitation set forth in this Section
3.5 shall not apply to the parties' obligations under
Sections 3.1 and 3.2 and that such obligations shall survive
the Closing forever.
Due Diligence Period.
Notwithstanding anything to the contrary contained herein,
the Purchaser shall have a twenty-one (21) day period
commencing on the date hereof (the "Due Diligence Period")
to examine title to the Property, to inspect the physical
and financial condition of the Property and to review the
Property Information. Neither the Purchaser nor the
Purchaser's Representatives shall contact any governmental
authority or any of the Seller's tenants, vendors,
employees, consultants or contractors prior to the Closing
without first giving the Seller two (2) business days' prior
written notice in each instance, provided that the Seller or
its designee shall have the right to be present at or
otherwise participate in any such communications, whether by
telephone, in writing or in person.
Access to the Property.
During the Due Diligence Period, the Purchaser and the
Purchaser's Representatives shall have the right to enter
upon the Property for the sole purpose of inspecting the
Property and making surveys, soil borings, engineering tests
and other investigations, inspections and tests
(collectively, "Investigations"), provided (i) the Purchaser
shall give the Seller not less than five (5) business days'
prior written notice before each entry, (ii) the first such
notice shall include sufficient information to permit the
Seller to review the scope of the proposed Investigations,
and (iii) neither the Purchaser nor the Purchaser's
Representatives shall permit any borings, drillings or
samplings to be done on the Property without the Seller's
prior written consent. Any entry upon the Property and all
Investigations shall be during the Seller's normal business
hours and at the sole risk and expense of the Purchaser and
the Purchaser's Representatives, and shall not interfere
with the activities on or about the Property of the Seller,
its tenants and their employees and invitees. The Purchaser
shall:
(a) promptly repair any damage to the
Property resulting from any such Investigations
and replace, refill and regrade any holes made in,
or excavations of, any portion of the Property
used for such Investigations so that the Property
shall be in the same condition as that which
existed prior to such Investigations;
(b) fully comply with all Laws applicable to
the Investigations and all other activities
undertaken in connection therewith;
(c) permit the Seller to have a
representative present during all Investigations
undertaken hereunder;
(d) take all actions and implement all
protections necessary to ensure that all actions
taken in connection with the Investigations, and
the equipment, materials, and substances
generated, used or brought onto the Property pose
no threat to the safety or health of persons or
the environment, and cause no damage to the
Property or other property of the Seller or other
persons;
(e) if requested by the Seller, furnish to
the Seller, at no cost or expense to the Seller,
copies of all surveys, soil test results,
engineering, asbestos, environmental and other
studies and reports relating to the Investigations
which the Purchaser shall obtain with respect to
the Property promptly after the Purchaser's
receipt of same;
(f) maintain or cause to be maintained, at
the Purchaser's expense, a policy of comprehensive
general public liability insurance with a combined
single limit of not less than $1,000,000 per
occurrence for bodily injury and property damage,
automobile liability coverage including owned and
hired vehicles with a combined single limit of
$1,000,000 per occurrence for bodily injury and
property damage, and an excess umbrella liability
policy for bodily injury and property damage in
the minimum amount of $3,000,000, insuring the
Purchaser and the Seller and certain of Seller's
Affiliates listed on Schedule 4, as additional
insureds, against any injuries or damages to
persons or property that may result from or are
related to (i) the Purchaser's and/or the
Purchaser's Representatives' entry upon the
Property, (ii) any Investigations or other
activities conducted thereon, and (iii) any and
all other activities undertaken by the Purchaser
and/or the Purchaser's Representatives in
connection with the Property, and deliver evidence
of such insurance policy to the Seller at the
earlier of ten (10) days after the date of this
Agreement or the first entry on the Property;
(g) indemnify the Seller and the Seller's
Affiliates and hold the Seller and the Seller's
Affiliates harmless from and against any and all
claims, demands, causes of action, losses,
damages, liabilities, costs and expenses
(including without limitation attorneys' fees and
disbursements), suffered or incurred by the Seller
or any of the Seller's Affiliates and arising out
of or in connection with (i) the Purchaser and/or
the Purchaser's Representatives' entry upon the
Property, (ii) any Investigations or other
activities conducted thereon by the Purchaser or
the Purchaser's Representatives, and (iii) any
liens or encumbrances filed or recorded against
the Property as a consequence of the
Investigations or any other activities conducted
thereon by the Purchaser or the Purchaser's
Representatives; and
(h) not, at any time, contact or communicate
with any tenant of the Property for any reason
whatsoever without first giving the Seller two (2)
business days' prior written notice, which
communications, whether by telephone, in writing
or in person, Seller or its designee shall have
the right to be present at or otherwise
participate in.
The provisions of this Section 4.1 shall survive
the termination of this Agreement and the Closing.
Purchaser's Termination Notice.
Subject to the provisions of the last paragraph of this
Section 4.2, the Purchaser shall have the right to elect to
terminate this Agreement by giving written notice (the
"Purchaser's Termination Notice") of such election to the
Seller at any time prior to the expiration of the Due
Diligence Period if the Purchaser shall determine (in the
exercise of its reasonable discretion) that any of the
following conditions to termination are met as of the date
of the Purchaser's Termination Notice, in which event the
provisions of Section 14.1 shall apply:
(a) The Purchaser shall have determined,
based upon a site assessment study conducted at
Purchaser's sole expense by S&S Environmental
Consultants or any other qualified engineering
firm proposed by Purchaser and approved by Seller
that there is oil, hazardous substances, hazardous
materials, hazardous or toxic waste, or friable
and accessible asbestos-containing materials
present on the Property except as otherwise
disclosed in those reports entitled Phase I
Environmental Site Assessment Update, Harbor Gate,
1025 West 190th Street, Gardena, California, ATC
Project Number 84052.0001, dated January 26, 1998,
by ATC Associates Inc. and Groundwater Well
Sampling Report, Harbor Gate, 1025 West 190th
Street, Gardena, California, ATC Project Number
84052.0002 by ATC Associates Inc., each of which
has been delivered to the Purchaser prior to the
date of this Agreement.
(b) The Purchaser shall have determined,
based upon a final engineering study covering the
Building and any other existing structures on the
Property, that there are material defects (as
opposed to ordinary wear and tear given the age of
such Property and the materials used at the time
in the construction thereof) in any roof,
foundation, sprinkler mains, structural elements
and masonry walls of any of the Building or
related heating, ventilating and air-conditioning,
electrical, sanitation, water, or mechanical
systems, except as otherwise disclosed in the
report entitled Building Evaluation Report, 1025
West 190th Street, Gardena, California, dated
April 6, 1998, by Building Technics, which has
been delivered to the Purchaser prior to the date
of this Agreement.
(c) The Purchaser shall have determined,
based upon a legal opinion from its special
counsel, that the Building as presently
constructed and used violate in a material respect
applicable federal or state law or governmental
regulation, or local ordinance, order or
regulation, including but not limited to laws,
regulations or ordinances relating to land use,
zoning, building use and occupancy, subdivision
control, fire protection, public health and
safety, wetlands protection and protection of the
environment.
(d) The Purchaser shall have determined that
the Leases, the income and expenses and property
tax bills for the Property do not conform in any
material respect to the information contained in
the Harborgate Office Building Offering
Memorandum, prepared by the Broker.
Notwithstanding the foregoing, the Purchaser
acknowledges and agrees that (i) expenses for the
Property do not necessarily conform in all
material respects to the information contained in
the Harborgate Office Building Offering
Memorandum, (ii) the Purchaser has been notified
of such non-conformance and (iii) the Purchaser
shall have no right of any kind or for any reason
whatsoever to terminate this Agreement due to any
such non-conformance or variance of expenses for
the Property with the information contained in the
Harborgate Office Building Offering Memorandum.
(e) The Purchaser shall have determined that
the Contracts are not in form and substance
reasonably acceptable to the Purchaser. If any
Contracts are not reasonably acceptable to the
Purchaser, the Purchaser shall notify the Seller
which Contracts are not acceptable to the
Purchaser and the reasons therefor. Any so
identified Contracts which Seller agrees to
terminate or accept financial responsibility for
on the Closing Date shall not give rise to a right
of termination by Purchaser hereunder.
(f) The Purchaser shall have conducted a
Probable Maximum Loss study for the Buildings by Building
Technics, which Probable Maximum Loss study (i) is conducted
with classifications at a modified Mercalli Intensity of IX
(on a scale of V-XII); and (ii) is consistent with the
Uniform Building Code (i.e. defining a probable earthquake
as one which would have only a ten percent (10%) chance of
exceedence in fifty (50) years or a return period of four
hundred and seventy-five (475) years; and (iii) concludes
that the probable Maximum Loss for the Buildings is equal to
or in excess of forty percent (40%).
If for any reason whatsoever the Seller shall not
have received the Purchaser's Termination Notice prior
to the expiration of the Due Diligence Period, the
Purchaser shall be deemed to have irrevocably waived
the right of termination granted under this Section
4.2, and such right of termination shall be of no
further force or effect.
Purchaser's Termination Notice shall state with
sufficient particularity the conditions precedent to
the Purchaser's obligation to purchase the Property
which have not been satisfied and the Seller shall have
the option, exercisable by giving written notice of
such exercise to the Purchaser within seven (7) days of
the Seller's receipt of the Purchaser's Termination
Notice, to elect to use reasonable efforts (the cost of
which shall not exceed $25,000 in the aggregate) to
cause the satisfaction of such unsatisfied conditions
precedent specified in Purchaser's Termination Notice,
in which event this Agreement shall not terminate as a
result of the Purchaser delivery of the Purchaser's
Termination Notice.
Estoppel Certificates.
Promptly after execution and delivery of this Agreement, the
Seller agrees to request an Estoppel Certificate from each
tenant under a Lease, but in no event shall it be deemed to
be an obligation of the Seller under this Agreement to
obtain executed Estoppel Certificates except for Estoppel
Certificates from all tenants who lease space in excess of
5% of the net rentable area of the Building plus one-half of
all other tenants at the Building. The Estoppel
Certificates shall be in the form annexed hereto as Exhibit
G and made a part hereof; provided, however, if any tenant
is required or permitted under its Lease to make different
statements in a certificate of such nature than are set
forth in Exhibit G, prior to requesting an Estoppel
Certificate from such tenant, the Seller may modify the
Estoppel Certificate for such tenant to set forth only the
statements required under such tenant's Lease to be made by
such tenant in such a certificate. If any tenant who is
required to deliver an Estoppel Certificate pursuant to this
Section 4.3 fails to deliver an Estoppel Certificate in the
form required by this Agreement, Seller shall have the right
to substitute in lieu thereof an estoppel certificate
substantially in such form executed by Seller and such
estoppel certificate shall be treated for all purposes as an
Estoppel Certificate from such failing tenant. In the event
that after the Closing the Seller obtains and delivers to
the Purchaser an Estoppel Certificate from any tenant in the
form required by this Section 4.3 for which the Seller has
substituted an estoppel certificate executed by it at the
Closing, then such Seller estoppel shall be of no further
force and effect and the Seller shall thereafter have no
liability under such Seller estoppel certificate.
Title.
The Seller shall convey and the Purchaser shall accept title
to the Property subject to those matters set forth on
Schedule 5 hereto (collectively the "Permitted
Encumbrances"). The Seller shall deliver to the Purchaser,
at the Purchaser's expense, within five (5) days after the
execution of this Agreement a commitment for an owner's fee
title insurance policy with respect to the Property (the
"Title Commitment") from First American Title Insurance
Company (the "Title Company"), together with true and
complete copies of all instruments giving rise to any
defects or exceptions to title to the Property. The Seller
shall deliver to the Purchaser, at the Purchaser's expense,
within thirty (30) days after the execution of this
Agreement an as-built survey ("Survey") of the Land and
Building prepared in accordance with the "Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys"
jointly established and adopted by ALTA and ACSM in 1992.
Unacceptable Encumbrances.
If the Title Commitment or the Survey indicate the existence
of any liens or encumbrances (collectively, "Liens") or
other defects or exceptions in or to title to the Property
other than the Permitted Encumbrances (collectively, the
"Unacceptable Encumbrances") subject to which the Purchaser
is unwilling to accept title and the Purchaser gives the
Seller notice of the same within ten (10) days after receipt
of the Title Commitment or the Survey, respectively, the
Seller shall undertake to eliminate the same (or to arrange
for title insurance insuring against enforcement of such
Unacceptable Encumbrances against, or collection of the same
out of, the Property) subject to Section 5.2. The Purchaser
hereby waives any right the Purchaser may have to advance as
objections to title or as grounds for the Purchaser's
refusal to close this transaction any Unacceptable
Encumbrance which the Purchaser does not notify the Seller
of within such ten (10) day period unless (i) such
Unacceptable Encumbrance was first raised by the Title
Company subsequent to the date of the Title Commitment or
the Purchaser shall otherwise first discover same or be
advised of same subsequent to the date of the Title
Commitment or the Survey, respectively, and (ii) the
Purchaser shall notify the Seller of the same within five
(5) days after the Purchaser first becomes aware of such
Unacceptable Encumbrance. The Seller, in its sole
discretion, may adjourn the Closing one or more times for up
to sixty (60) days in the aggregate in order to eliminate
Unacceptable Encumbrances.
Removal of Unacceptable Encumbrances.
The Seller shall not be obligated to bring any action or
proceeding, to make any payments or otherwise to incur any
expense in order to eliminate Unacceptable Encumbrances not
waived by the Purchaser or to arrange for title insurance
insuring against enforcement of such Unacceptable
Encumbrances against, or collection of the same out of, the
Property; except that the Seller shall satisfy Unacceptable
Encumbrances which are (i) mortgages and past due real
estate taxes and assessments secured by or affecting the
Property, and (ii) judgments against the Seller or other
Liens secured by or affecting the Property which judgments
and other Liens can be satisfied by payment of liquidated
amounts not to exceed $50,000 in the aggregate for all such
judgments and other Liens. The Seller may eliminate any
such Unacceptable Encumbrance by the payment of amounts
necessary to cause the removal thereof of record, by bonding
over such Unacceptable Encumbrance in a manner reasonably
satisfactory to the Purchaser or by arranging for title
insurance reasonably satisfactory to the Purchaser insuring
against enforcement of such Unacceptable Encumbrance
against, or collection of the same out of, the Property.
Options Upon Failure to Remove Unacceptable Liens.
If the Seller is unable or is not otherwise obligated
(pursuant to Section 5.2) to eliminate all Unacceptable
Encumbrances not waived by the Purchaser, or to bond over in
a manner reasonably satisfactory to the Purchaser any
Unacceptable Encumbrances not waived by the Purchaser, or to
arrange for title insurance reasonably acceptable to the
Purchaser insuring against enforcement of such Unacceptable
Encumbrances against, or collection of the same out of, the
Property, and to convey title in accordance with the terms
of this Agreement on or before the Closing Date (whether or
not the Closing is adjourned as provided in Section 5.1),
the Purchaser shall elect on the Closing Date, as its sole
remedy for such inability of the Seller, either (i) to
terminate this Agreement by notice given to the Seller
pursuant to Section 14.1, in which event the provisions of
Section 14.1 shall apply, or (ii) to accept title subject to
such Unacceptable Encumbrances and receive no credit
against, or reduction of, the Purchase Price.
Use of Purchase Price.
If on the Closing Date there may be any Liens or other
encumbrances which the Seller must pay or discharge in order
to convey to the Purchaser such title as is herein provided
to be conveyed, the Seller may use any portion of the
Purchase Price to satisfy the same, provided:
(a) the Seller shall deliver to the
Purchaser or the Title Company, at the Closing,
instruments in recordable form and sufficient to
satisfy such Liens or other encumbrances of record
together with the cost of recording or filing said
instruments; or
(b) the Seller, having made arrangements
with the Title Company, shall deposit with said
company sufficient moneys acceptable to said
company to insure the obtaining and the recording
of such satisfactions.
Franchise Taxes.
Any franchise or corporate tax open, levied or imposed
against the Seller or other owners in the chain of title
that may be a Lien on the Closing Date shall not be an
objection to title if the Title Company omits same from the
title policy issued pursuant to the Title Commitment or
excepts same but insures the Purchaser against collection
thereof out of the Property.
Transfer Taxes; Title Insurance Premiums.
At the Closing, the Purchaser shall pay all transfer and
recording taxes (the "Transfer Tax Payments") imposed
pursuant to the Laws of the State of California or any other
governmental authority in respect of the transactions
contemplated by this Agreement by delivery to the Title
Company of sufficient funds to pay such taxes together with
any return (the "Transfer Tax Return") required thereby
which shall be duly executed by the Seller and the Purchaser
to the extent required by applicable law. The Purchaser
shall not be entitled to receive a credit against or
abatement of the Purchase Price payable to the Seller at the
Closing as a result of the Purchaser's Transfer Tax
Payments. At the Closing, the premiums due the Title
Company to obtain title insurance policies in the form
contemplated by the Title Commitment (as the same may be
amended pursuant to this Agreement), the cost of obtaining
the survey and other Closing-related expenses shall be paid
in the manner set forth on Schedule 6 hereto.
Representations and Warranties of the Seller.
The Seller represents and warrants to the Purchaser as
follows:
(a) The Seller is a duly formed and validly
existing limited partnership organized under the
laws of the State of Delaware and is qualified
under the laws of the State of California to
conduct business therein.
(b) The Seller has the full, legal right,
power and authority to execute and deliver this
Agreement and all documents now or hereafter to be
executed by the Seller pursuant to this Agreement
(collectively, the "Seller's Documents"), to
consummate the transaction contemplated hereby,
and to perform its obligations hereunder and under
the Seller's Documents.
(c) This Agreement and the Seller's
Documents do not and will not contravene any
provision of the limited partnership agreement of
the Seller, any judgment, order, decree, writ or
injunction issued against the Seller, or, to the
Seller's actual knowledge, any provision of any
laws or governmental ordinances, rules,
regulations, orders or requirements (collectively,
the "Laws") applicable to the Seller. The
consummation of the transactions contemplated
hereby will not result in a breach or constitute a
default or event of default by the Seller under
any agreement to which the Seller or any of its
assets are subject or bound and will not result in
a violation of any Laws applicable to the Seller.
(d) The Seller has no actual knowledge of
any leases, licenses or other occupancy agreements
affecting any portion of the Property
(collectively, the "Leases") on the date hereof,
except for the Leases listed in Schedule 7 annexed
hereto and made a part hereof. To the Seller's
actual knowledge, the copies of the Leases
furnished by the Seller to the Purchaser are true
and complete. To the Seller's actual knowledge,
the Leases are in full force and effect, without
any material default by the Seller thereunder. To
the Seller's actual knowledge, except as listed on
Schedule 7, the Seller has not given or received
any notice of default which remains uncured or
unsatisfied, with respect to any of the Leases.
(e) To the Seller's actual knowledge, there
are no pending actions, suits, proceedings or
investigations to which the Seller is a party
before any court or other governmental authority
with respect to the Property owned by the Seller
except as set forth on Schedule 8 hereto. Seller
agrees to indemnify and hold Purchaser harmless
from and against any and all liability arising
directly from the matters set forth on Schedule 8
hereto.
(f) Except as disclosed on Schedule 9
hereto, since the date the Seller acquired legal
and beneficial title to the Property (i) to
Seller's actual knowledge, neither Seller nor any
third party has engaged in the generation, use,
manufacture, treatment, storage or disposal of any
Hazardous Substance (as hereinafter defined) on
the Property in violation of Applicable
Environmental Law (as hereinafter defined), the
cost of correction or remediation of which would
have a material adverse effect upon the value of
the Property, and (ii) to Seller's actual
knowledge, neither Seller nor any third party has
received any written notice from any governmental
authority having jurisdiction over the Property of
any violation of Applicable Environmental Law with
respect to the Property which requires corrective
action, the cost of which would have a material
adverse effect upon the value of the Property.
Disclosure of any matter on Schedule 9 hereto
shall not constitute any admission by Seller that
such matter was material or a violation of
Applicable Environmental Law. As used in this
Agreement, the term "Hazardous Substance" shall
mean any substance, chemical or waste that is
currently listed as hazardous, toxic or dangerous
under Applicable Environmental Law. As used in
this Agreement, the term "Applicable Environmental
Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. 9601 et seq.; the
Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. 6901, et seq.; the Water Pollution
Control Act, 33 U.S.C. 1251 et seq.; the Clean
Air Act, 42 U.S.C. 7401 et seq.; and the Toxic
Substances Control Act, 15 U.S.C. 2601 et seq.;
as the foregoing have been amended from time to
time to the date of this Agreement; and any
similar state and local laws and ordinances and
the regulations implementing such statutes in
effect on the date hereof imposing liability or
establishing standards of conduct for
environmental protection.
Survival of Representations.
The representations and warranties of the Seller set forth
in this Section 6 (i) shall be true, accurate and correct in
all material respects upon the execution of this Agreement
and shall be deemed to be repeated on and as of the Closing
Date (except as they relate only to an earlier date), and
(ii) shall remain operative and shall survive the Closing
and the execution and delivery of the Deed for a period of
six months following the Closing Date and then shall expire,
and no action or claim based thereon shall be commenced
after such period.
Discovery of Untrue Representation.
If at or prior to the Closing, (i) the Purchaser shall
become aware that any of the representations or warranties
made herein by the Seller is untrue, inaccurate or incorrect
in any material respect and shall give the Seller notice
thereof at or prior to the Closing, or (ii) the Seller shall
notify the Purchaser that a representation or warranty made
herein by the Seller is untrue, inaccurate or incorrect,
then the Seller may, in its sole discretion, elect by notice
to the Purchaser to adjourn the Closing one or more times
for up to sixty (60) days in the aggregate in order to cure
or correct such untrue, inaccurate or incorrect
representation or warranty. If any such representation or
warranty is not cured or corrected by the Seller on or
before the Closing Date (whether or not the Closing is
adjourned as provided above), then the Purchaser, as its
sole remedy for such inability of Seller, shall elect either
(i) to waive such misrepresentations or breaches of
warranties and consummate the transactions contemplated
hereby without any reduction of or credit against the
Purchase Price, or (ii) to terminate this Agreement by
notice given to Seller pursuant to the provisions of Section
14.1. In the event the Closing occurs, the Purchaser hereby
expressly waives, relinquishes and releases any right or
remedy available to it at law, in equity or under this
Agreement to make a claim against the Seller for damages
that the Purchaser may incur, or to rescind this Agreement
and the transactions contemplated hereby, as the result of
any of the Seller's representations or warranties being
untrue, inaccurate or incorrect if the Purchaser knew,
should have known or is deemed to have known that such
representation or warranty was untrue, inaccurate or
incorrect at the time of the Closing and the Purchaser
nevertheless closes title hereunder.
Limited Nature of Representations.
The Purchaser acknowledges that neither the Seller nor any
of the Seller's Affiliates, nor any of their agents or
representatives, nor Broker has made any representations or
held out any inducements to the Purchaser other than those
specifically set forth in this Section 6 and Section 11.
The Purchaser acknowledges that the Seller, pursuant to the
terms of this Agreement, has afforded the Purchaser the
opportunity for full and complete investigations,
examinations and inspections of the Property and all
Property Information. The Purchaser acknowledges and agrees
that (i) the Property Information delivered or made
available to the Purchaser and the Purchaser's
Representatives by the Seller or the Seller's Affiliates, or
any of their agents or representatives may have been
prepared by third parties and may not be the work product of
the Seller and/or any of the Seller's Affiliates; (ii)
neither the Seller nor any of the Seller's Affiliates has
made any independent investigation or verification of, or
has any knowledge of, the accuracy or completeness of, the
Property Information; (iii) the Purchaser is relying solely
on its own investigations, examinations and inspections of
the Property and those of the Purchaser's Representatives
and is not relying in any way on the Property Information
furnished by the Seller or any of the Seller's Affiliates,
or any of their agents or representatives; and (iv) the
Seller expressly disclaims any representations or warranties
with respect to the accuracy or completeness of the Property
Information, and the Purchaser releases the Seller and the
Seller's Affiliates, and their agents and representatives,
from any and all liability with respect thereto. The
Purchaser or anyone claiming by, through or under the
Purchaser, hereby fully and irrevocably releases the Seller
and the Seller's Affiliates from any and all claims that it
may now have or hereafter acquire against any of the Seller
or the Seller's Affiliates for any cost, loss, liability,
damage, expense, action or cause of action, whether foreseen
or unforeseen, arising from or related to the presence of
environmentally hazardous, toxic or dangerous substances, or
any other conditions (whether patent, latent or otherwise)
affecting the Property, except for claims against the Seller
based upon any obligations and liabilities of the Seller
expressly provided in this Agreement.
The provisions of this Section 6 shall survive the
Closing.
Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Seller as
follows:
(a) The Purchaser is a duly formed and
validly existing limited liability company
organized under the laws of the State of
California, and is qualified under the laws of the
State of California to conduct business therein on
the date hereof.
(b) The Purchaser has the full, legal right,
power, authority and financial ability to execute
and deliver this Agreement and all documents now
or hereafter to be executed by it pursuant to this
Agreement (collectively, the "Purchaser's
Documents"), to consummate the transactions
contemplated hereby, and to perform its
obligations hereunder and under the Purchaser's
Documents.
(c) This Agreement and the Purchaser's
Documents do not and will not contravene any
provision of the Purchaser's operating agreement
or the certificate of organization of the
Purchaser, any judgment, order, decree, writ or
injunction issued against the Purchaser, or any
provision of any Laws applicable to the Purchaser.
The consummation of the transactions contemplated
hereby will not result in a breach or constitute a
default or event of default by the Purchaser under
any agreement to which the Purchaser or any of its
assets are subject or bound and will not result in
a violation of any Laws applicable to the
Purchaser.
(d) There are no pending actions, suits,
proceedings or investigations to which the
Purchaser is a party before any court or other
governmental authority which may have an adverse
impact on the transactions contemplated hereby.
The representations and warranties of the
Purchaser set forth in this Section 7 and elsewhere in
this Agreement shall be true, accurate and correct in
all material respects upon the execution of this
Agreement, shall be deemed to be repeated on and as of
the Closing Date (except as they relate only to an
earlier date) and shall survive the Closing.
In the event that any condition contained in
Sections 13.1, 13.2 or 13.3 is not satisfied, the party
entitled to the satisfaction of such condition as a
condition to its obligation to close title thereunder
shall have as its sole remedy hereunder the right to
elect to (i) waive such unsatisfied condition whereupon
title shall close as provided in this Agreement or (ii)
proceed as provided in Section 14 hereof.
Documents to be Delivered by the Seller at
Closing.
At the Closing, the Seller shall execute, acknowledge and/or
deliver, as applicable, the following to the Purchaser:
(a) A grant deed or its equivalent (the
"Deed") conveying title to the Property in the
form of Exhibit A annexed hereto and made a part
hereof.
(b) The Assignment and Assumption of Leases
and Security Deposits in the form of Exhibit B
annexed hereto and made a part hereof assigning
without warranty or representation all of the
Seller's right, title and interest, if any, in and
to the Leases in effect on the Closing Date, all
guarantees thereof and the security deposits
thereunder in the Seller's possession, if any (the
"Lease Assignment").
(c) The Assignment and Assumption of
Contracts and Licenses in the form of Exhibit C
annexed hereto and made a part hereof (the
"Contract and License Assignment") assigning
without warranty or representation all of the
Seller's right, title and interest, if any, in and
to (i) all of the assignable licenses, permits,
certificates, approvals, authorizations and
variances issued for or with respect to the
Property by any governmental authority
(collectively, the "Licenses"), and (ii) all
assignable purchase orders, equipment leases,
advertising agreements, franchise agreements,
license agreements, management agreements, leasing
and brokerage agreements and other service
contracts relating to the operation of the
Property (collectively, the "Contracts") not
terminated by Seller pursuant to the terms of this
Agreement.
(d) The Assignment and Assumption of
Intangible Property in the form of Exhibit D
annexed hereto and made part hereof assigning
without warranty or representation all of the
Seller's right, title and interest, if any, in and
to all intangible property owned by the Seller
with respect to the operation of the Property
listed on Schedule 10 annexed hereto and made a
part hereof, including, without limitation, the
trade name "Harborgate Office Building" (the
"Intangible Property Assignment") (the Lease
Assignment, the Contract and License Assignment
and the Intangible Property Assignment are herein
referred to collectively as the "A & A
Agreements").
(e) To the extent in the Seller's
possession, executed counterparts of all Leases
and New Leases and any amendments, guarantees and
other documents relating thereto, together with a
schedule of all tenant security deposits
thereunder and the accrued interest on such
security deposits payable to tenants which are in
the possession of or received by the Seller.
(f) A bill of sale in the form of Exhibit E
annexed hereto and made a part hereof (the "Bill
of Sale") conveying, transferring and selling to
the Purchaser without warranty or representation
all right, title and interest of the Seller in and
to all Personal Property.
(g) Notices to the tenants of the Property
in the form of Exhibit F annexed hereto and made a
part hereof advising the tenants of the sale of
the Property to the Purchaser and directing that
rents and other payments thereafter be sent to the
Purchaser or as the Purchaser may direct.
(h) A certificate of a general partner of
the Seller that the Seller has taken all necessary
partnership action to authorize the execution,
delivery and performance of this Agreement and the
consummation of the transaction contemplated
hereby.
(i) Executed originals of all Estoppel
Certificates required by Section 4.3 and any other
Estoppel Certificates, received by the Seller from
tenants prior to the Closing Date and not
previously delivered to the Purchaser.
(j) To the extent in the Seller's possession
and not already located at the Property, keys to
all entrance doors to, and equipment and utility
rooms located in, the Property.
(k) To the extent in the Seller's possession
and not already located at the Property, all
Licenses.
(l) To the extent in the Seller's
possession, executed counterparts of all Contracts
and all warranties in connection therewith which
are in effect on the Closing Date and which are
assigned by the Seller.
(m) To the extent in the Seller's possession
and not located at the Building, plans and
specifications of the Building.
(n) The Transfer Tax Returns, if any.
(o) A "FIRPTA" affidavit sworn to by the
Seller in the form of Exhibit H annexed hereto and
made a part hereof. The Purchaser acknowledges and
agrees that upon the Seller's delivery of such
affidavit, the Purchaser shall not withhold any
portion of the Purchase Price pursuant to Section
1445 of the Internal Revenue Code of 1986, as
amended, and the regulations promulgated
thereunder.
(p) A California Form 590.
(q) All other documents the Seller are
required to deliver pursuant to the provisions of
this Agreement.
Documents to be Delivered by the Purchaser at
Closing.
At the Closing, the Purchaser shall execute, acknowledge
and/or deliver, as applicable, the following to the Seller:
(a) The cash portion of the Purchase Price
payable at the Closing pursuant to Section 2,
subject to apportionments, credits and adjustments
as provided in this Agreement.
(b) The Bill of Sale.
(c) If the Purchaser is a corporation, (i)
copies of the certificate of incorporation and by-
laws of the Purchaser and of the resolutions of
the board of directors of the Purchaser
authorizing the execution, delivery and
performance of this Agreement and the consummation
of the transactions contemplated by this Agreement
certified as true and correct by the Secretary or
Assistant Secretary of the Purchaser; (ii) a good
standing certificate issued by the state of
incorporation of the Purchaser, dated within
thirty (30) days of the Closing Date; (iii) a
qualification to do business certificate issued by
the State of California, dated within thirty (30)
days of the Closing Date; and (iv) an incumbency
certificate executed by the Secretary or Assistant
Secretary of the Purchaser with respect to those
officers of the Purchaser executing any documents
or instruments in connection with the transactions
contemplated herein.
(d) If the Purchaser is a partnership, (i)
copies of the Purchaser's partnership agreement
and partnership certificate (if applicable) and,
if required by law or its partnership agreement,
copies of partnership resolutions and/or consents
of the partners authorizing the execution,
delivery and performance of this Agreement and the
consummation of the transactions contemplated by
this Agreement, all certified as true and correct
by the managing general partner of the Purchaser,
or in the absence thereof, then by all of the
Purchaser's general partners; (ii) a legal
existence certificate issued by the state of
organization of the Purchaser, dated within thirty
(30) days of the Closing Date; and (iii) a
qualification to do business certificate issued by
the State of California, dated within thirty (30)
days of the Closing Date.
(e) If the Purchaser is a limited liability
company, (i) copies of the Purchaser's operating
agreement and, if required by law or its operating
agreement, copies of resolutions of the manager
authorizing the execution, delivery and
performance of this Agreement and the consummation
of the transactions contemplated by this
Agreement, all certified as true and correct by
the manager of the Purchaser; (ii) a good standing
certificate issued by the state of organization of
the Purchaser, dated within thirty (30) days of
the Closing Date; and (iii) a qualification to do
business certificate issued by the State of
California, dated within thirty (30) days of the
Closing Date.
(f) The A & A Agreements.
(g) The Transfer Tax Payments together with
the Transfer Tax Return, if any.
(h) All other documents the Purchaser is
required to deliver pursuant to the provisions of
this Agreement.
Operation of the Property prior to the Closing
Date.
Between the date hereof and the Closing Date, the Seller
shall have the right to continue to operate and maintain the
Property.
New Leases.
Except as hereinafter provided in this Section 10.1, the
Seller may modify, extend, renew, cancel or permit the
expiration of any Lease or enter into any proposed Lease of
all or any portion of the Property without the Purchaser's
consent; provided, however, that such Lease is on Seller's
standard form with such changes as Seller deems appropriate
in the exercise of its reasonable discretion and on the
terms set forth on Schedule 11. After the expiration of the
Due Diligence Period, the Seller shall not modify, extend,
renew or cancel (subject to Section 10.2) any Lease or enter
into any proposed Lease of all or any portion of the
Property without the Purchaser's prior consent in each
instance, which consent shall not be unreasonably withheld
and shall be given or denied, with the reasons for any such
denial, within five (5) days after receipt by the Purchaser
of the Seller's notice requesting the Purchaser's consent to
the proposed action relating to such existing or proposed
Lease. If the Purchaser fails to reply to the Seller's
request for consent in a notice given within such period or
if the Purchaser expressly denies its consent but fails to
provide the Seller with the reasons for such denial, the
Purchaser's consent shall be deemed to have been granted.
New Lease Expenses.
If after the date of this Agreement the Seller enters into
any Leases, or if there is any extension or renewal of any
Leases, whether or not such Leases provide for their
extension or renewal, or any expansion or modification of
any Leases (each, a "New Lease"), the Seller shall keep
accurate records of all expenses (collectively, "New Lease
Expenses") incurred in connection with each New Lease,
including, without limitation, the following: (i) brokerage
commissions and fees relating to such leasing transaction,
(ii) expenses incurred for repairs, improvements, equipment,
painting, decorating, partitioning and other items to
satisfy the tenant's requirements with regard to such
leasing transaction, (iii) reimbursements to the tenant for
the cost of any of the items described in the preceding
clause (ii), (iv) legal fees for services in connection with
the preparation of documents and other services rendered in
connection with the effectuation of the leasing transaction,
(v) rent concessions relating to the demised space provided
the tenant has the right to take possession of such demised
space during the period of such rent concessions, and (vi)
expenses incurred for the purpose of satisfying or
terminating the obligations of a tenant under a New Lease to
the landlord under another lease (whether or not such other
lease covers space in the Property).
Allocation of New Lease Expenses.
The New Lease Expenses for each New Lease allocable to and
payable by the Seller shall be determined by multiplying the
amount of such New Lease Expenses by a fraction, the
numerator of which shall be the number of days contained in
that portion, if any, of the term of such New Lease
commencing on the date on which the tenant thereunder shall
have commenced to pay fixed rent ("Rent Commencement Date")
and expiring on the date immediately preceding the Closing
Date, and the denominator of which shall be the total number
of days contained in the period commencing on the Rent
Commencement Date and expiring on the date of the scheduled
expiration of the term of such New Lease, without provision
for any optional extensions or renewals, and the remaining
balance of the New Lease Expenses for each New Lease shall
be allocable to and payable by the Purchaser by addition to
the Purchase Price. At the Closing, the Purchaser shall
reimburse the Seller for all New Lease Expenses theretofore
paid by the Seller, if any, in excess of the portion of the
New Lease Expenses allocated to the Seller pursuant to the
provisions of the preceding sentence. For purposes of this
Section 10.1.2, the Rent Commencement Date under a renewal,
extension, expansion or modification of a Lease shall be
deemed to be (i) in the case of a renewal or extension
(whether effective prior to or after the Closing, or in the
form of an option exercisable in the future), the first date
during such renewal or extension period after the originally
scheduled expiration of the term of such Lease on which the
tenant under such Lease commences to pay fixed rent, (ii) in
the case of an expansion (whether effective prior to or
after the Closing, or in the form of an option exercisable
in the future), the date on which the tenant under such
Lease commences to pay fixed rent for the additional space,
and (iii) in the case of a modification not also involving a
renewal, extension or expansion of such Lease, the effective
date of such modification agreement. The provisions of this
Section 10.1.2 shall survive the Closing.
Termination of Existing Leases.
Notwithstanding anything to the contrary contained in this
Agreement, the Seller reserves the right, but is not
obligated, to institute summary proceedings against any
tenant or terminate any Lease as a result of a default by
the tenant thereunder prior to the Closing Date. The Seller
makes no representations and assumes no responsibility with
respect to (i) the continued occupancy of the Property or
any part thereof by any tenant and (ii) the fulfillment by
any tenant of its obligations under any Lease. The removal
of a tenant whether by summary proceedings or otherwise
prior to the Closing Date shall not give rise to any claim
on the part of the Purchaser. Further, the Purchaser agrees
that it shall not be grounds for the Purchaser's refusal to
close this transaction that any tenant is a holdover tenant
or in default under its Lease pursuant to any economic or
non-economic terms of its Lease on the Closing Date and the
Purchaser shall accept title subject to such holding over or
default without credit against, or reduction of, the
Purchase Price.
Contracts.
Except as hereinafter provided in this Section 10.3, the
Seller may cancel, modify, extend, renew or permit the
expiration of Contracts or enter into any new Contract
without the Purchaser's prior consent. After the expiration
of the Due Diligence Period, the Seller shall not modify,
extend, renew or cancel (except as a result of a default by
the other party thereunder or if the Purchasers has given
notice pursuant to Section 4.2(e) that a Contract is
unacceptable) any Contracts, or enter into any new Contract
without the Purchaser's prior consent in each instance,
which consent shall not be unreasonably withheld or delayed,
and if withheld, the Purchaser shall promptly give the
Seller a notice stating the reasons therefor. If the
Purchasers fails to reply within five (5) days to the
Seller's request for consent in a notice given pursuant to
this Section 10.3 or if the Purchaser expressly denies its
consent but fails to provide the Seller with the reasons for
such denial, the Purchaser's consent shall be deemed to have
been granted.
Broker. The Purchaser and the Seller represent
and warrant to each other that The Seeley Company (the
"Broker") is the sole broker with whom they have dealt in
connection with the Property and the transactions described
herein. The Seller shall be liable for, and shall indemnify
the Purchaser against, all brokerage commissions or other
compensation due to the Broker arising out of the
transaction contemplated in this Agreement, which
compensation shall be paid subject and pursuant to a
separate agreement between the Seller and the Broker. Each
party hereto agrees to indemnify, defend and hold the other
harmless from and against any and all claims, causes of
action, losses, costs, expenses, damages or liabilities,
including reasonable attorneys' fees and disbursements,
which the other may sustain, incur or be exposed to, by
reason of any claim or claims by any broker, finder or other
person, except (in the case of the Purchaser as indemnitor
hereunder) the Broker and (in the case of the Seller as
indemnitor hereunder) CB Commercial Real Estate Group, Inc.,
for fees, commissions or other compensation arising out of
the transactions contemplated in this Agreement if such
claim or claims are based in whole or in part on dealings or
agreements with the indemnifying party. The obligations and
representations and warranties contained in this Section 11
shall survive the termination of this Agreement and the
Closing.
Casualty; Condemnation.
Damage or Destruction.
If a "material" part (as hereinafter defined) of the
Property is damaged or destroyed by fire or other casualty,
the Seller shall notify the Purchaser of such fact and the
Purchaser shall have the option to terminate this Agreement
upon notice to the Seller given not later than ten (10) days
after receipt of the Seller's notice; provided, however,
that the Purchaser's election shall be ineffective if within
ten (10) days after the Seller's receipt of the Purchaser's
election notice, the Seller shall elect by notice to the
Purchaser to repair such damage or destruction and shall
thereafter complete such repair within 90 days after the
then scheduled Closing Date at the time of the Purchaser's
election. If the Seller makes such election to repair, the
Seller shall have the right to adjourn the Closing Date one
or more times for up to 90 days in the aggregate in order to
complete such repairs and shall have the right to retain all
insurance proceeds which the Seller may be entitled to
receive as a result of such damage or destruction. If
(i) the Purchaser does not elect to terminate this Agreement
as to the damaged Property, (ii) the Purchaser elects to
terminate this Agreement as to the damaged Property but such
election is ineffective because the Seller elects to repair
such damage and completes such repair within such 90-day
period provided above, or (iii) there is damage to or
destruction of an "immaterial" part ("immaterial" is herein
deemed to be any damage or destruction which is not
"material", as such term is hereinafter defined) of the
Property, the Purchaser shall close title as provided in
this Agreement and, at the Closing, the Seller shall, unless
the Seller has repaired such damage or destruction prior to
the Closing, (x) pay over to the Purchaser the proceeds of
any insurance collected by the Seller less the amount of all
costs incurred by the Seller in connection with the repair
of such damage or destruction, and (y) assign and transfer
to the Purchaser all right, title and interest of the Seller
in and to any uncollected insurance proceeds which the
Seller may be entitled to receive from such damage or
destruction. A "material" part of the Property shall be
deemed to have been damaged or destroyed if the cost of
repair or replacement shall be fifteen percent (15%) or more
of the Purchase Price.
Condemnation.
If, prior to the Closing Date, all or any "significant"
portion (as hereinafter defined) of the Property is taken by
eminent domain or condemnation (or is the subject of a
pending taking which has not been consummated), the Seller
shall notify the Purchaser of such fact and the Purchaser
shall have the option to terminate this Agreement upon
notice to the Seller given not later than ten (10) days
after receipt of the Seller's notice. If the Purchaser does
not elect to terminate this Agreement, or if an
"insignificant" portion ("insignificant" is herein deemed to
be any taking which is not "significant", as such term is
herein defined) of the Property is taken by eminent domain
or condemnation, at the Closing the Seller shall assign and
turnover, and the Purchaser shall be entitled to receive and
keep, all awards or other proceeds for such taking by
eminent domain or condemnation. A "significant" portion of
the Property means (i) 10% or more of the main office
building on the Land, (ii) a portion of the parking areas if
the taking thereof reduces the remaining available number of
parking spaces below the minimum legally required, or
(iii) a legally required driveway on the Land if such
driveway is the predominant means of ingress thereto or
egress therefrom.
Termination.
If the Purchaser effectively terminates this Agreement
pursuant to Section 12.1 or 12.2, this Agreement shall be
terminated and the rights of the parties shall be the same
as if notice of termination were given pursuant to Section
14.1.
Conditions Precedent to Closing.
Conditions Precedent to the Purchaser's
Obligations to Perform.
The Purchaser's obligation under this Agreement to purchase
the Property is subject to the fulfillment of each of the
following conditions: (i) the representations and warranties
of the Seller contained herein shall be materially true,
accurate and correct as of the Closing Date except to the
extent they relate only to an earlier date; (ii) the Seller
shall be ready, willing and able to deliver title to the
Property in accordance with the terms and conditions of this
Agreement; (iii) any conditions precedent to the Purchaser's
obligation to purchase the Property which is validly listed
in the Purchaser's Termination Notice as being unsatisfied
has been satisfied; and (iv) the Seller shall have delivered
all the documents and other items required pursuant to
Section 8, and shall have performed all other covenants,
undertakings and obligations, and complied with all
conditions required by this Agreement to be performed or
complied with by the Seller at or prior to the Closing.
Conditions Precedent to the Seller's Obligations
to Perform.
The Seller's obligation under this Agreement to sell the
Property to the Purchaser is subject to the fulfillment of
each of the following conditions: (i) the representations
and warranties of the Purchaser contained herein shall be
materially true, accurate and correct as of the Closing
Date; (ii) the Purchaser shall have delivered the funds
required hereunder and all the documents to be executed by
the Purchaser set forth in Section 9 and shall have
performed all other covenants, undertakings and obligations,
and complied with all conditions required by this Agreement
to be performed or complied with by the Purchaser at or
prior to the Closing; (iii) all consents and approvals of
governmental authorities and parties to agreements to which
the Purchaser is a party or by which the Purchaser's assets
are bound that are required with respect to the consummation
of the transactions contemplated by this Agreement shall
have been obtained and copies thereof shall have been
delivered to the Seller at or prior to the Closing; and (iv)
the additional matters set forth in Schedule 12 annexed
hereto and made a part hereof shall have occurred or been
delivered to the Seller, as applicable, at or prior to the
Closing.
Remedies Upon Failure to Satisfy Conditions.
In the event that any condition contained in Sections 13.1
or 13.2 is not satisfied, the party entitled to the
satisfaction of such condition as a condition to its
obligation to close title shall have as its sole remedy
hereunder the right to elect to (i) waive such unsatisfied
condition whereupon title shall close as provided in this
Agreement or (ii) proceed as provided in Section 14 hereof.
Remedies.
Seller's Inability to Perform.
If the Closing fails to occur by reason of the Seller's
inability to perform its obligations under this Agreement
which has not been waived pursuant to Section 13.3, then the
Purchaser, as its sole remedy for such inability of the
Seller, may terminate this Agreement by notice to the
Seller. If the Purchaser elects to terminate this
Agreement, then this Agreement shall be terminated and
neither party shall have any further rights, obligations or
liabilities hereunder, except as otherwise expressly
provided herein (collectively, the "Surviving Obligations"),
and except that the Purchaser shall be entitled to a return
of the Deposit provided the Purchaser is not otherwise in
default hereunder. Except as set forth in this Section 14.1,
the Purchaser hereby expressly waives, relinquishes and
releases any other right or remedy available to it at law,
in equity or otherwise by reason of the Seller's inability
to perform its obligations hereunder. Notwithstanding
anything to the contrary herein, if the Seller's inability
to perform its obligations under this Agreement is a result
of any action of, or failure to act by, the Purchaser or any
of the Purchaser's Representatives, the Purchaser shall not
be relieved of its obligations under this Agreement and
Purchaser shall not be entitled to any right or remedy
provided in this Section 14.1 or elsewhere in this
Agreement.
Purchaser's Failure to Perform.
In the event of a default hereunder by the Purchaser or if
the Closing fails to occur by reason of the Purchaser's
failure or refusal to perform its obligations hereunder,
then the Seller may terminate this Agreement by notice to
the Purchaser. If the Seller elects to terminate this
Agreement, then this Agreement shall be terminated and the
Seller may retain the Deposit as liquidated damages for all
loss, damage and expenses suffered by the Seller, it being
agreed that the Seller's damages are impossible to
ascertain, and neither party shall have any further rights,
obligations or liabilities hereunder, except for the
Surviving Obligations. Nothing contained herein shall limit
or restrict the Seller's ability to pursue any rights or
remedies it may have against the Purchaser with respect to
the Surviving Obligations. Except as set forth in this
Section 14.2 and the Surviving Obligations, the Seller
hereby expressly waives, relinquishes and releases any other
right or remedy available to them at law, in equity or
otherwise by reason of the Purchaser's default hereunder or
the Purchaser's failure or refusal to perform its
obligations hereunder. Notwithstanding anything to the
contrary herein, if the Purchaser's default or the
Purchaser's failure or refusal to perform its obligations
under this Agreement is a result of any action of, or
failure to act by, the Seller or any of the Seller's
Affiliates, the Seller shall not be relieved of its
obligations under this Agreement and the Seller shall not be
entitled to any right or remedy provided in this Section
14.2 or elsewhere in this Agreement.
Seller's Failure to Perform.
If the Closing fails to occur by reason of the Seller's
failure or refusal to perform its obligations hereunder
which has not been waived by the Purchaser, then the
Purchaser, as its sole remedy hereunder, may (i) terminate
this Agreement by notice to the Seller or (ii) seek specific
performance from the Seller. As a condition precedent to
the Purchaser exercising any right it may have to bring an
action for specific performance as the result of the
Seller's failure or refusal to perform their obligations
hereunder, the Purchaser must commence such an action within
ninety (90) days after the occurrence of such default. The
Purchaser agrees that its failure to timely commence such an
action for specific performance within such ninety (90) day
period shall be deemed a waiver by it of its right to
commence such an action. Notwithstanding anything to the
contrary herein, if the Seller's failure or refusal to
perform its obligations under this Agreement is a result of
any action of, or failure to act by, the Purchaser or any of
the Purchaser's Representatives, the Purchaser shall not be
relieved of its obligations under this Agreement and
Purchaser shall not be entitled to any right or remedy
provided in this Section 14.3 or elsewhere in this
Agreement.
Escrow.
The Escrow Agent shall hold the Downpayment and all interest
accrued thereon, if any (collectively, the "Deposit") in
escrow and shall dispose of the Deposit only in accordance
with the provisions of that certain Escrow Agreement of even
date herewith by and among the Escrow Agent, the Purchaser
and the Seller relating to the Property (the "Escrow
Agreement") in the form of Exhibit I hereto. Simultaneously
with their execution and delivery of this Agreement, the
Purchaser and the Seller shall furnish the Escrow Agent with
their true Federal Taxpayer Identification Numbers so that
the Escrow Agent may file appropriate income tax information
returns with respect to any interest earned on or credited
to the Deposit. The party entitled to the economic benefit
of the Deposit representing interest earned on the
Downpayment shall be the party responsible for the payment
of any tax due thereon.
The provisions of the Escrow Agreement shall
survive the termination of this Agreement and the
Closing.
Notices.
All notices, elections, consents, approvals, demands,
objections, requests or other communications which the
Seller or the Purchaser may be required or desire to give
pursuant to, under or by virtue of this Agreement must be in
writing and (i) delivered by hand to the addresses set forth
below, or (ii) (a) sent by express mail or courier (for next
business day delivery), or (b) sent by certified or
registered mail, return receipt requested with proper
postage prepaid, addressed as follows:
If to the Seller:
Dean Witter Realty Income Partnership I, L.P.
c/o Dean Witter Realty Inc.
Two World Trade Center
64th Floor
New York, NY 10048
Attention: Robert B. Austin
with copies to:
Vincent M. Sacchetti, Esq.
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
If to the Purchaser:
Pacifica Capital Group LLC
330 Washington Boulevard, Suite 300
Marina Del Ray, California 90292
Attention: Steven Ohren
The Seller or the Purchaser may designate another
addressee or change its address for notices and other
communications hereunder by a notice given to the other
parties in the manner provided in this Section 16. A notice
or other communication sent in compliance with the
provisions of this Section 16 shall be deemed given and
received (i) if by hand, at the time of the delivery thereof
to the receiving party at the address of such party set
forth above (or to such other address as such party has
designated as provided above), (ii) if sent by express mail
or overnight courier, on the date it is delivered to the
other party, or (iii) if sent by registered or certified
mail, on the third business day following the day such
mailing is made.
Property Information and Confidentiality.
The Purchaser agrees that, prior to the Closing, all
Property Information shall be kept strictly confidential and
shall not, without the prior consent of the Seller, be
disclosed by the Purchaser or the Purchaser's
Representatives, in any manner whatsoever, in whole or in
part, and will not be used by the Purchaser or the
Purchaser's Representatives, directly or indirectly, for any
purpose other than evaluating the Property. Moreover, the
Purchaser agrees that, prior to the Closing, the Property
Information will be transmitted only to the Purchaser's
Representatives (i) who need to know the Property
Information for the purpose of evaluating the Property, and
who are informed by the Purchaser of the confidential nature
of the Property Information, (ii) who agree to be bound by
the terms of this Section 17 and Section 6.3 and (iii) who
have executed and delivered to the Seller the letter
regarding use of the Property Information in the form of
Exhibit J hereto. The provisions of this Section 17 shall
in no event apply to Property Information which is a matter
of public record and shall not prevent the Purchaser from
complying with Laws, including, without limitation,
governmental regulatory, disclosure, tax and reporting
requirements.
Press Releases.
The Purchaser and Seller, for the benefit of each other,
hereby agree that between the date hereof and the Closing
Date, they will not release or cause or permit to be
released any press notices, publicity (oral or written) or
advertising promotion relating to, or otherwise announce or
disclose or cause or permit to be announced or disclosed, in
any manner whatsoever, the terms, conditions or substance of
this Agreement or the transactions contemplated herein,
without first obtaining the written consent of the other
party hereto. It is understood that the foregoing shall not
preclude either party from discussing the substance or any
relevant details of the transactions contemplated in this
Agreement with any of its attorneys, accountants,
professional consultants or potential lenders, as the case
may be, or prevent either party hereto from complying with
Laws, including, without limitation, governmental
regulatory, disclosure, tax and reporting requirements.
Return of Property Information.
In the event this Agreement is terminated, the Purchaser and
the Purchaser's Representatives shall promptly deliver to
the Seller all originals and copies of the Property
Information in the possession of the Purchaser and the
Purchaser's Representatives. Notwithstanding anything
contained herein to the contrary, in no event shall the
Purchaser be entitled to receive a return of the Downpayment
or the accrued interest thereon, if any, if and when
otherwise entitled thereto pursuant to this Agreement until
such time as the Purchaser and the Purchaser's
Representatives shall have performed the obligations
contained in the preceding sentence.
Property Information Defined.
As used in this Agreement, the term "Property Information"
shall mean (i) all information and documents in any way
relating to the Property, the operation thereof or the sale
thereof (including, without limitation, Leases, Contracts
and Licenses) furnished to, or otherwise made available for
review by, the Purchaser or its directors, officers,
employees, affiliates, partners, brokers, agents or other
representatives, including, without limitation, attorneys,
accountants, contractors, consultants, engineers and
financial advisors (collectively, the "Purchaser's
Representatives"), by the Seller or any of the Seller's
Affiliates, or their agents or representatives, including,
without limitation, their contractors, engineers, attorneys,
accountants, consultants, brokers or advisors, and (ii) all
analyses, compilations, data, studies, reports or other
information or documents prepared or obtained by the
Purchaser or the Purchaser's Representatives containing or
based, in whole or in part, on the information or documents
described in the preceding clause (i), or the
Investigations, or otherwise reflecting their review or
investigation of the Property.
Remedies.
In addition to any other remedies available to the Seller,
the Seller shall have the right to seek equitable relief,
including, without limitation, injunctive relief or specific
performance, against the Purchaser or the Purchaser's
Representatives in order to enforce the provisions of this
Section 17 and 6.3.
The provisions of this Section 17 shall survive the
termination of this Agreement and the Closing.
Access to Records.
For a period of seven (7) years subsequent to the Closing
Date, the Seller, the Seller's Affiliates and their
employees, agents and representatives shall be entitled to
access during business hours to all documents, books and
records given to the Purchaser by the Seller at the Closing
for tax and audit purposes, regulatory compliance, and
cooperation with governmental investigations upon reasonable
prior notice to the Purchaser, and shall have the right, at
their sole cost and expense, to make copies of such
documents, books and records.
Assignments.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and to their respective heirs,
executors, administrators, successors and permitted assigns.
This Agreement may not be assigned by the Purchaser without
the prior written consent of the Seller and any assignment
or attempted assignment by the Purchaser without such prior
written consent shall constitute a default by the Purchaser
hereunder and shall be null and void. Notwithstanding the
foregoing, the Purchaser may assign this Agreement at
Closing to a limited liability company of which Steven Ohren
or Steven Leonard is the managing member or any other entity
which is majority owned by Steven Ohren or Steven Leonard,
provided that the Purchaser remains liable for all pre-
closing obligations of the Purchaser under this Agreement
and any of the Purchaser's deliveries listed in Section 9
and any assignee of this Agreement executes an assignment
and acceptance agreement in form and substance satisfactory
to the Seller in its sole discretion.
Entire Agreement, Amendments.
All prior statements, understandings, representations and
agreements between the parties, oral or written, are
superseded by and merged in this Agreement, which alone
fully and completely expresses the agreement between them in
connection with this transaction and which is entered into
after full investigation, neither party relying upon any
statement, understanding, representation or agreement made
by the other not embodied in this Agreement. This Agreement
shall be given a fair and reasonable construction in
accordance with the intentions of the parties hereto, and
without regard to or aid of canons requiring construction
against the Seller or the party drafting this Agreement.
This Agreement shall not be altered, amended, changed,
waived, terminated or otherwise modified in any respect or
particular, and no consent or approval required pursuant to
this Agreement shall be effective, unless the same shall be
in writing and signed by or on behalf of the party to be
charged.
Merger.
Except as otherwise expressly provided herein, the
Purchaser's acceptance of the Deed shall be deemed a
discharge of all of the obligations of the Seller hereunder
and all of the Seller's representations, warranties,
covenants and agreements herein shall merge in the documents
and agreements executed at the Closing and shall not survive
the Closing.
Limited Recourse.
The Purchaser agrees that it does not have and will not have
any claims or causes of action against any disclosed or
undisclosed officer, director, employee, trustee,
shareholder, partner, principal, parent, subsidiary or other
affiliate of the Seller, including, without limitation, Dean
Witter Realty Inc. and the parent and affiliates of Dean
Witter Realty Inc. (collectively, the "Seller's
Affiliates"), arising out of or in connection with this
Agreement or the transactions contemplated hereby. The
Purchaser agrees to look solely to the Seller and the
Seller's assets directly attributable to the Building for
the satisfaction of the Seller's liability or obligation
arising under this Agreement or the transactions
contemplated hereby, or for the performance of any of the
covenants, warranties or other agreements of the Seller
contained herein, and further agrees not to sue or otherwise
seek to enforce any personal obligation against any of the
Seller's Affiliates with respect to any matters arising out
of or in connection with this Agreement or the transactions
contemplated hereby. The total liability of the Seller
hereunder shall in no event exceed $425,000.00.
Miscellaneous.
Neither this Agreement nor any memorandum thereof shall be
recorded and any attempted recordation hereof shall be void
and shall constitute a default. Each of the Exhibits and
Schedules referred to herein and attached hereto is
incorporated herein by this reference. The caption headings
in this Agreement are for convenience only and are not
intended to be a part of this Agreement and shall not be
construed to modify, explain or alter any of the terms,
covenants or conditions herein contained. If any provision
of this Agreement shall be unenforceable or invalid, the
same shall not affect the remaining provisions of this
Agreement and to this end the provisions of this Agreement
are intended to be and shall be severable. This Agreement
shall be interpreted and enforced in accordance with the
laws of the State of California without reference to
principles of conflicts of laws.
Time of the Essence.
Time is of the essence with respect to this Agreement,
including but not limited to the occurrence of the Closing
as of the originally scheduled date.
IRS Form 1099-S Designation.
In order to comply with information reporting requirements
of Section 6045(e) of the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations thereunder, the
parties agree (i) to execute an IRS Form 1099-S Designation
Agreement in the form attached hereto as Exhibit K at or
prior to the Closing to designate the Title Company as the
party who shall be responsible for reporting the
contemplated sale of the Property to the Internal Revenue
Service (the "IRS") on IRS Form 1099-S; (ii) to provide the
Title Company with the information necessary to complete
Form 1099-S; (iii) that the Title Company shall not be
liable for the actions taken under this Section 25, or for
the consequences of those actions, except as they may be the
result of gross negligence or willful misconduct on the part
of the Title Company; and (iv) that the Title Company shall
be indemnified by the parties for any costs or expenses
incurred as a result of the actions taken under this Section
25, except as they may be the result of gross negligence or
willful misconduct on the part of the Title Company. The
Title Company shall provide all parties to this transaction
with copies of the IRS Forms 1099-S filed with the IRS and
with any other documents used to complete IRS Form 1099-S.
Attorney's Fees.
In any event that at any time Seller or Purchaser shall
institute any action or proceeding against the other
relating to this Agreement or any default hereunder, then
and in that event the prevailing party in such action or
proceeding shall be entitled to recover from the other party
its reasonable attorneys' fees which shall be deemed to have
accrued on the commencement of such action or proceeding and
shall be payable whether or not such action is prosecuted to
judgment.
Counterparts.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such
counterparts shall together constitute but one and the same
instrument.
Tax Free Exchange. Purchaser may consummate the
purchase of the Property as part of a so called like
kind exchange (the "Exchange") pursuant to 1031 of the
Internal Revenue Code of 1986, as amended (the "Code"),
provided that: (i) the Closing shall not be delayed or
affected by reason of the Exchange nor shall the
consummation or accomplishment of the Exchange be a
condition precedent or condition subsequent to
Purchaser's obligations under this Agreement; (ii)
Purchaser shall effect the Exchange through an
assignment of this Agreement, or its rights under this
Agreement, to a qualified intermediary; (iii) Seller
shall not be required to take an assignment of the
purchase agreement for the relinquished property or be
required to acquire or hold title to any real property
for purposes of consummating the Exchange; and (iv)
Purchaser shall pay any additional costs that would not
otherwise have been incurred by Purchaser or Seller had
Purchaser not consummated its purchase through the
Exchange. Seller shall not by this agreement or
acquiescence to the Exchange (1) have its rights under
this Agreement affected or diminished in any manner or
(2) be responsible for compliance with or be deemed to
have warranted to Purchaser that the Exchange in fact
complies with 1031 of the Code.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above
written.
SELLER:
DEAN WITTER REALTY INCOME
PARTNERSHIP I, L.P.
By: Dean Witter Realty Income
Properties I, Inc., its managing
general partner
By: /s/Robert B. Austin
Robert B. Austin
Vice President
PURCHASER:
PACIFICA CAPITAL GROUP LLC
By: /s/Steven Ohren
Steven Ohren
Member
