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)April 1, 1998
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
(Exact name of registrant as specified in its charter)
Delaware 0-18150 13-
3244091
(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
February 10, 1998, as amended (the "Agreement"), the
Partnership sold the Glenhardie Corporate Center I and II
properties ("Glenhardie I and II") to FV Office Partners,
L.P., an unaffiliated party. As part of the Agreement,
affiliates of the Partnership and of the Managing General
Partner agreed to sell their interests in the remaining
properties at the Glenhardie Corporate Center and another
office park. The aggregate negotiated sale price of the
properties sold was approximately $168 million, of which
approximately $19.7 million was allocated in the Agreement
to Glenhardie I and II.
Pursuant to the Agreement, escrows were established for the
costs of certain building improvements and tenant
improvements (the "Improvements"). In addition to payment
of the purchase price, at closing the Purchaser deposited
into these escrows approximately $3.9 million, of which
approximately $1.6 million relates to Glenhardie II. Any
balance remaining in the escrows relating to the
Partnership's properties after the Improvements are
completed will be delivered to the Partnership. If the
costs of Improvements at Glenhardie II exceed the escrow
established therefor, the Partnership will be required to
fund the excess costs.
The purchase price was paid in cash at closing on April 1,
1998. At closing, the Partnership received proceeds, net of
closing costs and other deductions, of approximately $19.3
million.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
(1) Pro Forma Consolidated Balance Sheet as of January
31, 1998.
(2) Pro Forma Consolidated Statements of Operations
for the fiscal year ended October 31, 1997 and
for the three months ended January 31, 1998.
(c) Exhibit
(2) Purchase and Sale Agreement dated as of February
10, 1998 between DWR Chesterbrook Associates,
Glenhardie Corporation, Dean Witter Realty Income
Partnership II, L.P., Dean Witter Realty Income
Partnership III, L.P. and Part Six Associates as
Sellers and FV Office Partners, L.P. as Purchaser and
amendments thereto.
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.
By: Dean Witter Realty Income
Partnership II, L.P.
General Partner
By: Dean Witter Realty Income
Properties II, Inc.
Managing General Partner
Date: April 16, 1998 By: /s/E. Davisson
Hardman, Jr.
E. Davisson Hardman, Jr.
President
Dean Witter Realty Income Partnership II, L.P.
Pro Forma Consolidated Balance Sheet
As of January 31, 1998
The following unaudited pro forma balance sheet has been
presented as if Glenhardie I and II were sold as of January
31, 1998. The pro forma adjustments reflect a) the cash
proceeds from the sale, b) the elimination of the net
carrying value of the property, and c) the elimination of
deferred leasing commissions and other assets and
liabilities relating to the property sold.
<TABLE>
<CAPTION>
Pro Forma
Historical
Adjustments Pro Forma
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 1,108,124 $
19,348,236 $20,456,360
Real estate 10,446,103 -
10,446,103
Real estate held for sale 10,570,126
(10,570,126) -
Investments in joint venture 2,552,654 -
2,552,654
Deferred leasing commissions, net 408,938
(209,177) 199,761
Other assets 579,629
(372,972) 206,657
25,665,574
8,195,961 33,861,535
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $
721,542 $ (177,431) $
544,111
Security deposits 94,857
(43,004) 51,853
816,399
(220,435) 595,964
Partners' capital 24,849,175
8,416,396 33,265,571
$25,665,574 $
8,195,961 $33,861,535
</TABLE>
Dean Witter Realty Income Partnership II, L.P.
Pro Forma Consolidated Statement of Income
For the year ended October 31, 1997
The following unaudited pro forma consolidated statement of
income has been presented as if Glenhardie I and II were
sold as of beginning of fiscal year 1997. The pro forma
adjustments reflect elimination of rental and other
revenues, property operating expenses, depreciation and
amortization 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 $11,331,966
$(2,466,086) $ 8,865,880
Gain on sales of real estate 17,232,823 -
17,232,823
Equity in earnings of joint venture 209,663 -
209,663
Interest and other 445,521
(5,009) 440,512
29,219,973
(2,471,095) 26,748,878
Expenses:
Property operating 4,483,709
(866,329) 3,617,380
Depreciation 2,204,761
(655,119) 1,549,642
Amortization 310,960
(81,622) 229,338
General and administrative 715,929 -
715,929
7,715,359
(1,603,070) 6,112,289
Net income before minority interest 21,504,614
(868,025) 20,636,589
Minority interest 2,483,485 -
2,483,485
Net income 19,021,129
(868,025) 18,153,104
Net income per Unit of Limited
Partnership interest $ 105.21 $
(4.41) $ 100.80
</TABLE>
Dean Witter Realty Income Partnership II, L.P.
Pro Forma Consolidated Statement of Income
For the three months ended January 31, 1998
The following unaudited pro forma consolidated statement of
income has been presented as if Glenhardie I and II were
sold as of the beginning of fiscal year 1997. The pro forma
adjustments reflect elimination of rental and other
revenues, property operating expenses, depreciation and
amortization 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 $ 1,158,921 $(647,096)
$ 511,825
Gain on sales of real estate 11,048,285 -
11,048,285
Equity in earnings of joint ventures 59,521 -
59,521
Interest and other 113,379 (2,344)
111,035
12,380,106 (649,440)
11,730,666
Expenses:
Property operating 520,925 (196,548)
324,377
Depreciation 221,703 (114,577)
107,126
Amortization 43,328 (24,330)
18,998
General and administrative 168,887 -
168,887
954,843 (335,455)
619,388
Net income 11,425,263 (313,985)
11,111,278
Net income per Unit of Limited
Partnership interest $ 64.33 $ (1.60)
$ 62.73
</TABLE>
Exhibit Index for Dean Witter Realty Income Partnership II,
L.P.
Exhibit Sequential
No. Description Page No.
(2) Purchase and Sale Agreement dated as of
February 10, 1998 between DWR Chesterbrook
Associates, Glenhardie Corporation, Dean WItter
Realty Income Partnership II, L.P., Dean Witter Realty
Income Partnership III, L.P. and Part Six Associates
as Sellers and FV Office Partners, L.P. as Purchaser
and amendments thereto.
E-1
4
- 73 -
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement"), dated
as of the 10th day of February, 1998, by and among DWR
CHESTERBROOK ASSOCIATES, a Pennsylvania general partnership,
GLENHARDIE CORPORATION, a Pennsylvania corporation, DEAN
WITTER REALTY INCOME PARTNERSHIP II, L.P., a Delaware
limited partnership, DEAN WITTER REALTY INCOME PARTNERSHIP
III, L.P., a Delaware limited partnership, and PART SIX
ASSOCIATES, a Pennsylvania limited partnership, each having
offices c/o Dean Witter Realty Inc., Two World Trade Center,
64th Floor, New York, New York 10048 (collectively, the
"Sellers" and, individually, a "Seller"), and FV OFFICE
PARTNERS, L.P., a Delaware limited partnership, having an
office c/o The Fox Companies at 1325 Morris Drive, Wayne,
Pennsylvania 19087 (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Sellers are the owners of real property
located within what is commonly referred to as the
Chesterbrook Corporate Center and Glenhardie Corporate
Center, each in Wayne, Pennsylvania, as follows:
LOCATION OWNER
A. CHESTERBROOK CORPORATE CENTER
1325 Morris Drive, Wayne, Pennsylvania
DWR Chesterbrook Associates
1400 Morris Drive, Wayne, Pennsylvania
DWR Chesterbrook Associates
1300 Morris Drive, Wayne, Pennsylvania
DWR Chesterbrook Associates
955 Chesterbrook Boulevard, Wayne,
Pennsylvania (Condominium Unit 1 in DWR Chesterbrook Associates
Parcel 9 Condominium)
965 Chesterbrook Boulevard, Wayne,
Pennsylvania (Condominium Unit 2 in DWR Chesterbrook Associates
Parcel 9 Condominium)
701 Lee Road, Wayne, Pennsylvania
DWR Chesterbrook Associates
600 Lee Road, Wayne, Pennsylvania
(Condominium Unit 2 in Parcel 6-3 DWR Chesterbrook Associates
Condominium)
620 Lee Road, Wayne, Pennsylvania
(Condominium Unit 1 in Parcel 6-3 DWR Chesterbrook Associates
Condominium)
Parcel 11 (Parking Area), Wayne,
Pennsylvania DWR Chesterbrook Associates
B. GLENHARDIE CORPORATE CENTER
I. 1275 Drummers Lane, Wayne, Glenhardie Corporation
Pennsylvania (ground lessor)
(One Glenhardie Corporate Center) Dean Witter Realty Income
Partnership II, L.P. (ground
lessee)
II. 1285 Drummers Lane, Wayne, Glenhardie Corporation
Pennsylvania (ground lessor)
(Two Glenhardie Corporate Center) Dean Witter Realty Income
Partnership II, L.P. (ground
lessee)
III.1265 Drummers Lane, Wayne, Dean Witter Realty Income
Pennsylvania Partnership III, L.P.
(Three Glenhardie Corporate
Center)
(Unit 1 in Glenhardie Corporate
Center Condominium)
IV. 1255 Drummers Lane, Wayne, Part Six Associates
Pennsylvania
(Four Glenhardie Corporate Center)
(Unit 2 in Glenhardie Corporate
Center Condominium)
WHEREAS, the Sellers and the Purchaser have entered into
negotiations wherein the Purchaser expressed its intent to
purchase the Properties (as defined herein) from the Sellers
and the Sellers expressed their intent to sell the
Properties to the Purchaser; and
WHEREAS, the Sellers and the Purchaser now desire to
enter into an agreement whereby, subject to the terms and
conditions contained herein, the Sellers shall sell the
Properties to the Purchaser and the Purchaser shall purchase
the Properties from the Sellers.
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 Properties.
Each Seller agrees to sell and convey to the Purchaser, and
the Purchaser agrees to purchase from each Seller, at the
price and upon the terms and conditions set forth in this
Agreement, all those certain plots, pieces and parcels of
land or condominium units 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 relating thereto (collectively, the "Buildings"),
(ii) all easements, rights of way, reservations, privileges,
appurtenances, and other estates and rights of such Seller
pertaining to the Land and the Buildings, including, in the
context of condominium units, such Seller's appurtenant
percentage interest in the common elements of the applicable
condominium and all rights as owner thereof under the
applicable declaration of condominium, and including any
Seller's rights and estate under any ground lease affecting
the Land or the Buildings, (iii) all right, title and
interest of such Seller in and to all fixtures, machinery,
equipment, supplies and other articles of personal property
attached or appurtenant to the Land or the Buildings, 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 Buildings
for use in common with others entitled to use such trade
names (the Land, together with all of the foregoing items
listed in clauses (i)-(iv) above being hereinafter sometimes
referred to as to each location listed on Schedule 1 as a
"Property" and, collectively, as the "Properties").
Excluded Property.
Specifically excluded from the Properties 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 Deeds and the consummation of
the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Wolf,
Block, Schorr and Solis-Cohen, 111 South 15th Street,
Philadelphia, Pennsylvania, at 10:00 A.M. on the date
which is fifteen days after the end of the Due
Diligence Period unless such day is not a day on which
the Recorder of Deeds of Chester County, Pennsylvania
is open for business, in which case, the Closing shall
take place on the next day on which such Recorder of
Deeds is open (the "Closing Date") or such earlier or
later date as the Sellers and Purchaser may agree in
writing.
Purchase Price.
The purchase price to be paid by the Purchaser to the
Sellers for the Properties (the "Purchase Price") is One
Hundred Seventy Two Million Eight Hundred Twelve Thousand
Five Hundred and 00/100 Dollars ($172,812,500) payable as
follows:
(a) Two Million and 00/100 Dollars ($2,000,000)
(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 Sellers 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, to 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.
(c) The allocation of the Purchase Price as to
each individual Property for governmental regulatory,
disclosure, tax and reporting requirements only is as
follows:
LOCATION PURCHASE PRICE
A. CHESTERBROOK CORPORATE CENTER
1325 Morris Drive, Wayne, Pennsylvania
1400 Morris Drive, Wayne, Pennsylvania
$19,750,000
1300 Morris Drive, Wayne, Pennsylvania
$17,182,500
955 Chesterbrook Boulevard, Wayne, $26,070,000
Pennsylvania
(Condominium Unit 1 in Parcel 9
Condominium)
965 Chesterbrook Boulevard, Wayne, $26,070,000
Pennsylvania
(Condominium Unit 2 in Parcel 9
Condominium)
701 Lee Road, Wayne, Pennsylvania
$14,022,500
600 Lee Road, Wayne, Pennsylvania
(Condominium Unit 2 in Parcel 6-3 $7,505,000
Condominium)
620 Lee Road, Wayne, Pennsylvania
(Condominium Unit 1 in Parcel 6-3 $5,530,000
Condominium)
Parcel 11 (Parking Area), Wayne,
Pennsylvania $98,750
B. GLENHARDIE CORPORATE CENTER
1275 Drummers Lane, Wayne, Pennsylvania
(One Glenhardie Corporate Center)
Ground Lessor Estate: $9,875
Ground Lessee Estate: $10,655,125
1285 Drummers Lane, Wayne, Pennsylvania
(Two Glenhardie Corporate Center)
Ground Lessor Estate: $9,875
Ground Lessee Estate: $10,655,125
1265 Drummers Lane, Wayne, Pennsylvania
(Three Glenhardie Corporate Center) $11,060,000
(Unit 1 in Glenhardie Corporate
Center Condominium)
1255 Drummers Lane, Wayne, Pennsylvania
(Four Glenhardie Corporate Center) $11,060,000
(Unit 2 in Glenhardie Corporate
Center Condominium)
Apportionments
The following shall be apportioned between the Sellers
and the Purchaser on a Property by Property basis 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 or on behalf of any
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; and
(c) New Lease Expenses as provided in Section
10.1.2.
Taxes.
If the amount of real estate taxes, special
assessments or other taxes for any Property for the
fiscal year during which 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 any of the Sellers
from such tenant after the Closing shall be
applied to amounts due and payable by such tenant
as may be specifically designated by such tenant
in writing or, in lieu thereof, 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
preceding the month in which the Closing occurred,
and (iii) third, to the months following the month
in which the Closing occurred. If Rents or any
portion thereof received by the Sellers 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 apply the
amount of such Additional Rents as may be
specifically designated by such tenant in writing
or, in lieu thereof, the Purchaser shall promptly
pay to the Sellers 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, each 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 Sellers in connection
with all efforts by the Sellers 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 Sellers, 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 Sellers. If for any fiscal period which
includes the Adjustment Date tenants are paying
Additional Rent based upon estimates prepared by
the Sellers, such Additional Rents shall be
reapportioned when the actual expenses for the
fiscal period are known.
Water.
If there is a water meter on any Property, the
Seller of such Property shall furnish the most recent
reading, 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 Sellers will attempt to obtain final cut-off
readings of fuel, telephone, electricity, and gas to be
made as of the Adjustment Date. The Sellers 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
Sellers and Purchaser shall promptly readjust the
apportionments in accordance with such final bills.
Post-Closing Adjustments.
The items set forth in Section 3(a), (b) and (c)
shall be apportioned at the Closing by payment of the
net amount of such apportionments to the Sellers in the
manner set forth herein for the payment of the Purchase
Price if the net apportionment is in favor of the
Sellers or by a credit against the Purchase Price if
the net apportionment is in favor of the Purchaser.
The Sellers and the Purchaser agree that the
following items shall not be apportioned at Closing but
rather shall be subject to a reconciliation occurring
no later than sixty (60) days after the Closing Date
(the "Reconciliation Date") and shall be apportioned
between the Sellers and the Purchaser on a Property by
Property basis as of 11:59 p.m. on the Adjustment Date:
(i) value of prepaid fuel belonging to the
Sellers stored on the Property, at the Sellers' cost,
including any taxes, on the basis of a statement from
the Sellers' suppliers;
(ii) 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;
(iii) any prepaid items, including, without
limitation, fees for licenses which are transferred to
the Purchaser at the Closing and annual permit and
inspection fees;
(iv) utilities, to the extent required by Section
3.4;
(v) deposits with telephone and other utility
companies, and any other persons or entities who supply
goods or services in connection with the Properties if
same are assigned to the Purchaser at the Closing;
(vi) personal property taxes, if any, on the basis
of the fiscal year for which assessed;
(vii) all other revenues from the operation of
the Properties 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);
(viii) monthly common expense assessments
levied by any condominium association with respect to
condominium units constituting a portion of the
Properties;
(ix) assessments levied by the membership
corporation or lot owner's association of Chesterbrook
Corporate Center and/or Glenhardie Corporate Center
with respect to the Properties; and
(x) such other items as are customarily
apportioned between sellers and purchasers of real
properties of a type similar to the respective
Properties and located in the general Wayne, Chester
County, Pennsylvania area.
However, if any of the items subject to
apportionment under the foregoing provisions of this
Section 3 cannot be apportioned at the Closing or on or
before the Reconciliation Date, as applicable, because
of the unavailability of the information necessary to
compute such apportionment, or if any errors or
omissions in computing apportionments at the Closing or
on the Reconciliation Date, are discovered subsequent
to the Closing or the Reconciliation Date, as
applicable, then such item shall be reapportioned and
such errors and omissions corrected as soon as
practicable after the Closing Date or Reconciliation
Date, as applicable, and the proper party reimbursed,
which obligation shall survive the Closing for a period
of six months after the Closing Date. Notwithstanding
any of the foregoing provisions of this Section 3.5 to
the contrary, the Purchaser and the Sellers agree that
the six month 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 for one year.
Due Diligence Period.
Notwithstanding anything to the contrary contained
herein, the Purchaser shall have a thirty-five (35) day
period commencing on the date hereof (the "Due Diligence
Period") to examine title to the Properties, to inspect the
physical and financial condition of the Properties and to
review the Property Information. Neither the Purchaser nor
the Purchaser's Representatives shall contact any
governmental authority or any of the Sellers' tenants,
vendors, employees, consultants or contractors prior to the
Closing without obtaining the Sellers' prior consent in each
instance.
Access to the Properties.
During the Due Diligence Period, the Purchaser and
the Purchaser's Representatives shall have the right to
enter upon the Properties for the sole purpose of
inspecting the Properties and making surveys, soil
borings, engineering tests and other investigations,
inspections and tests (collectively, "Investigations"),
provided (i) the Purchaser shall give the Sellers not
less than one (1) business days' prior written notice
before each entry, (ii) the first such notice shall
include sufficient information to permit the Sellers 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
Sellers' prior written consent. Any entry upon the
Property and all Investigations shall be during such
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 Properties of the Sellers,
their tenants and their employees and invitees. The
Purchaser shall:
(a) promptly repair any damage to the
Properties resulting from any such Investigations
and replace, refill and regrade any holes made in,
or excavations of, any portion of the Properties
used for such Investigations so that the
Properties 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 Sellers 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 Properties
pose no threat to the safety or health of persons
or the environment, and cause no damage to the
Properties or other property of the Sellers or
other persons;
(e) if requested by the Sellers, furnish to
the Sellers, at no cost or expense to the Sellers,
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 Properties 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 $5,000,000, insuring the
Purchaser and the Sellers and certain of Sellers'
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
Properties, (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 Properties, and deliver
evidence of such insurance policy to the Sellers
at the earlier of five (5) days after the date of
this Agreement or the first entry on the
Properties;
(g) indemnify the Sellers and the Sellers'
Affiliates and hold the Sellers and the Sellers'
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
Sellers or any of the Sellers' Affiliates and
arising out of or in connection with (i) the
Purchaser and/or the Purchaser's Representatives'
entry upon the Properties, (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 Properties 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 any Property for any reason
whatsoever without the prior written approval of
the Sellers, which communications, whether by
telephone, in writing or in person, Sellers 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 two
paragraphs 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 Sellers 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 Dames & Moore or any
other qualified engineering firm proposed by
Purchaser and approved by Sellers that there is
oil, hazardous substances, hazardous materials,
hazardous or toxic waste, or friable and
accessible asbestos-containing materials present
on any Property in an amount which would require
remediation under Applicable Environmental Law.
(b) The Purchaser shall have determined,
based upon a final engineering study covering the
Buildings and any other existing structures on any
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
of the construction thereof) in any roof,
foundation, sprinkler mains, structural elements
and masonry walls of any of the Buildings or
related heating, ventilating and air-conditioning,
electrical, sanitation, water, or mechanical
systems.
(c) The Purchaser shall have determined,
based upon a legal opinion from its special
counsel, that any of the Buildings 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 any Property do not conform in all
material respects to the information contained in
the original Confidential Offering Memorandum or
any subsequent supplemental information provided
by the Broker.
(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 Sellers
which Contracts are not acceptable to the
Purchaser and the reasons therefor. Any so
identified Contracts which Sellers agree to
terminate or accept financial responsibility for
on the Closing Date shall not give rise to a right
of termination by Purchaser hereunder.
Waiver.
If for any reason whatsoever the Sellers 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.
Materiality.
The Purchaser shall be entitled to elect to
terminate this Agreement by delivering a Purchaser's
Termination Notice only if the matters giving rise to
the Purchaser's Termination Notice as provided in
subparagraphs (a)-(e) above result or have resulted in
a reduction of the fair market value of the Properties
in an amount in excess of $250,000 in the aggregate.
Matters which satisfy the requirements of subparagraphs
(a)-(e) without regard to the materiality standards set
forth therein but do not satisfy such $250,000
aggregate threshold shall not be deemed "material", as
such term is used in subparagraphs (b), (c) and (d)
above. Matters which satisfy the requirements of
subparagraphs (a)-(e) without regard to the materiality
standards set forth therein and which satisfy such
$250,000 aggregate threshold shall be deemed
"material", as such term is used in subparagraphs (b),
(c) and (d) above.
Purchase Price Reduction.
In the event that there are conditions which
satisfy the requirements of any of subparagraphs (a)-
(e) above without regard to the materiality standard
set forth in subparagraphs (b), (c) or (d) above, (i)
the Purchaser shall not be entitled to a reduction of
the Purchase Price for the first $50,000, in the
aggregate, of conditions under any of subparagraphs (a)-
(e); and (ii) the Purchaser shall be entitled to a
dollar for dollar reduction of the Purchase Price for
the next $200,000, in the aggregate, of conditions
under any of subparagraphs (a)-(e). In no event shall
the Purchaser be entitled to any of the $200,000 dollar
for dollar reduction of the Purchase Price under (ii)
above if the Purchaser delivers a Purchaser's
Termination Notice, unless, pursuant to Section 4.2.5,
Sellers correct the conditions set forth in the
Purchaser's Termination Notice.
Valuation Disputes.
In the event that the Sellers have not received a
Purchaser's Termination Notice prior to the expiration
of the Due Diligence Period, but the Sellers have
received notice from the Purchaser of any conditions
under any of subparagraphs (a)-(e) without regard to
the materiality standard set forth in subparagraphs
(b), (c) or (d) above and for which the Purchaser is
seeking a dollar for dollar reduction of the Purchase
Price of up to $200,000 as provided in Section 4.2.3,
and there is a dispute among the Purchaser and the
Sellers as to the Purchaser's valuation of the
conditions giving rise to the Purchaser's requested
reduction of the Purchase Price, the Purchaser and the
Sellers agree, at the Purchaser's and Sellers' equally
shared cost, to retain an independent professional
selected by the President of the Philadelphia chapter
of the American Arbitration Association to review the
disputed Purchaser's valuation, and such professional's
determination as to the valuation of such conditions
shall be conclusive and binding on the Purchaser and
the Sellers as to the amount of the dollar for dollar
reduction of the Purchase Price due to such conditions.
Sellers' Cure Rights.
Purchaser's Termination Notice shall state with
sufficient particularity the conditions precedent to
the Purchaser's obligation to purchase the Properties
which have not been satisfied and the Sellers shall
have the option, exercisable by giving written notice
of such exercise to the Purchaser within seven (7) days
of the Sellers' 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 and
would be in excess of the $250,000 aggregate sum
described in Section 4.2.2) to cause the satisfaction
of such unsatisfied conditions precedent specified in
Purchaser's Termination Notice. This Agreement shall
not terminate as a result of the Purchaser delivery of
the Purchaser's Termination Notice if Seller corrects
the conditions set forth in the Purchaser's Termination
Notice not later than 60 days after the date of the
Purchaser's Termination Notice.
Estoppel Certificates from Tenants.
Promptly after execution and delivery of this
Agreement, the Sellers agree 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
Sellers under this Agreement to obtain executed
Estoppel Certificates except for Estoppel Certificates
from (i) all tenants who lease space in excess of
10,000 square feet of the net rentable area in any of
the Buildings, (ii) tenants, exclusive of the tenants
described in (i) above, whose leases of space, when
aggregated, represent at least sixty percent (60%) of
the remaining net rentable area in all of the
Buildings, and (iii) tenants, inclusive of the tenants
described in (i) above, whose leases of space, when
aggregated, represent at least sixty percent (60%) of
the net rentable area in the Building known as Three
Glenhardie Corporate Center (1265 Drummers Lane, Wayne,
Pennsylvania), provided, however, that the Sellers
shall not be obligated to obtain or deliver an Estoppel
Certificate from (a) SAP America, Inc., a tenant at 701
Lee Road, Wayne, Pennsylvania, (b) Graphic Packaging, a
tenant at 955 Chesterbrook Boulevard, Wayne,
Pennsylvania, or (c) Advanced Analytical, a tenant at
955 Chesterbrook Boulevard, Wayne, Pennsylvania.
Notwithstanding the foregoing, the Sellers shall use
reasonable efforts to obtain an Estoppel Certificate
from SAP America, Inc. and, in the event the Sellers
are unable to obtain such an Estoppel Certificate, the
Sellers shall substitute therefor a Seller estoppel as
provided in this Section 4.3. 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 Sellers 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 that leases less
than 10,000 square feet of net rentable area or, when
taken together with all other tenants of Three
Glenhardie Corporate Center from whom Estoppel
Certificates are not obtained, leases less than 60% of
the net rentable area of Three Glenhardie Corporate
Center fails to deliver an Estoppel Certificate in the
form required by this Agreement, the Seller which is
the landlord of such failing tenant shall substitute in
lieu thereof an estoppel certificate substantially in
such form executed by such Seller and such estoppel
certificate shall be treated for all purposes as an
Estoppel Certificate from such failing tenant,
provided, however, that Purchaser shall not be
obligated to accept Estoppel Certificates executed by
the Sellers, which Estoppel Certificates, in the
aggregate, relate to Leases in which the leased
premises aggregate more than forty percent (40%) of the
net rentable area in the Buildings collectively. In
the event that after the Closing any Seller obtains and
delivers to Purchaser an Estoppel Certificate from any
tenant in the form required by this Section 4.3 for
which such Seller has substituted an estoppel executed
by such Seller at the Closing, then such Seller
estoppel shall be of no further force and effect and
Sellers shall thereafter have no liability under such
Seller estoppel.
Estoppel Certificate from Membership
Corporation.
Promptly after execution and delivery of this
Agreement, the Sellers agree to request an Estoppel
Certificate from Chesterbrook Office Corporation, the
non-profit membership corporation of Chesterbrook
Corporate Center, which shall set forth (i) the amount
of any unpaid assessments charged against the
Properties or the Sellers owed to such corporation and
(ii) to the best of the knowledge, information and
belief of the corporation, any violation of the
covenants contained in the Declaration of Covenants
relating to Chesterbrook Corporate Center by the
Sellers. If such corporation fails to deliver such
estoppel certificate in the form required by this
Agreement, Sellers shall have the right to substitute
in lieu thereof an estoppel certificate substantially
in such form executed by the Sellers and such estoppel
certificate shall be treated for all purposes as an
Estoppel Certificate from such failing corporation.
Title.
The Sellers shall convey and the Purchaser shall accept
title to the Properties subject to those matters set forth
on Schedule 5 hereto (collectively the "Permitted
Encumbrances"). The Sellers have delivered to the
Purchaser, at the Purchaser's expense, commitments for
owner's fee title insurance policies with respect to the
Properties (collectively, 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
Properties. The Sellers have delivered to the Purchaser, at
the Purchaser's expense, as-built surveys (collectively, the
"Survey") of the Land and Buildings dated January 20, 29,
and 30, 1998 and February 2, 1998, respectively, and
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 Properties other than the Permitted Encumbrances
which result or have resulted in a reduction of the
fair market value of the Properties in an amount in
excess of $50,000 in the aggregate (collectively, the
"Unacceptable Encumbrances") subject to which the
Purchaser is unwilling to accept title and the
Purchaser gives the Sellers notice of the same within
ten (10) days after the date of this Agreement, the
Sellers shall undertake to eliminate the same 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 Sellers 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 Sellers of the same within
five (5) days after the Purchaser first becomes aware
of such Unacceptable Encumbrance. The Sellers, in
their sole discretion, may adjourn the Closing one or
more times for up to sixty (60) days in the aggregate
in order to eliminate any Unacceptable Encumbrances.
Removal of Unacceptable Encumbrances.
The Sellers 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; except that
the Sellers shall satisfy Unacceptable Encumbrances
which are (i) mortgages and past due real estate taxes
and assessments secured by or affecting the Properties,
and (ii) judgments against the Sellers or other Liens
secured by or affecting the Properties 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
Sellers 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.
Options Upon Failure to Remove Unacceptable
Liens.
If the Sellers are unable or 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, 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 Sellers, either (i) to terminate this
Agreement by notice given to the Sellers 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 Sellers must pay or
discharge in order to convey to the Purchaser such
title as is herein provided to be conveyed, the Sellers
may use any portion of the Purchase Price to satisfy
the same, provided:
(a) the Sellers 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 Sellers, 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 Sellers 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
Properties.
Transfer Taxes; Title Insurance Premiums.
At the Closing, the Purchaser shall pay all state,
county or local transfer and recording taxes (the
"Transfer Tax Payments") imposed pursuant to the Laws
of the Commonwealth of Pennsylvania 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 Sellers 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 Sellers 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 Sellers.
Each Seller represents and warrants to the Purchaser as
follows:
(a)(i) DWR Chesterbrook Associates is a duly
formed and validly existing general partnership
organized under the laws of the Commonwealth of
Pennsylvania.
(ii) Glenhardie Corporation is a duly formed and
validly existing corporation organized under the laws
of the Commonwealth of Pennsylvania.
(iii) Dean Witter Realty Income Partnership
II, L.P. 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
Commonwealth of Pennsylvania to conduct business
therein.
(iv) Dean Witter Realty Income Partnership III,
L.P. 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
Commonwealth of Pennsylvania to conduct business
therein.
(v) Part Six Associates is a duly formed and
validly existing limited partnership organized under
the laws of the Commonwealth of Pennsylvania.
(b) Each 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
Sellers 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
partnership agreement or articles of incorporation or
by-laws, as applicable, of each Seller, any judgment,
order, decree, writ or injunction issued against any
Seller, or, to the Sellers' actual knowledge, any
provision of any laws or governmental ordinances,
rules, regulations, orders or requirements
(collectively, the "Laws") applicable to any Seller.
The consummation of the transactions contemplated
hereby will not result in a breach or constitute a
default or event of default by any Seller under any
agreement to which any Seller or any of their
respective assets are subject or bound and will not
result in a violation of any Laws applicable to any
Seller.
(d) There are no 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. 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 or the tenant
thereunder. 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. There are no management, leasing or
brokerage agreements affecting any portion of the
Property, except as listed on Schedule 7B hereto. The
copies of such management, leasing or brokerage
agreements furnished by the Sellers to the Purchaser
are true and complete.
(e) To each of 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.
(f) Except as disclosed on Schedule 9 hereto,
since the date each Seller acquired legal and
beneficial title to the Property owned by the Seller
(i) neither Seller, nor, to each Seller's actual
knowledge, 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) neither any Seller nor, to any Seller's actual
knowledge, 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
any 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 Sellers
set forth in this Section 6 shall (i) 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) 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 any of the Sellers is untrue,
inaccurate or incorrect in any material respect and
shall give the Sellers notice thereof at or prior to
the Closing, or (ii) the Sellers shall notify the
Purchaser that a representation or warranty made herein
by the Sellers is untrue, inaccurate or incorrect, then
the Sellers may, in their 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 Sellers 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
Sellers, 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
Sellers 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 Sellers for
damages that the Purchaser may incur, or to rescind
this Agreement and the transactions contemplated
hereby, as the result of any of the Sellers'
representations or warranties being untrue, inaccurate
or incorrect if the Purchaser knew 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
Sellers nor any of the Sellers' 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 Sellers, pursuant to the terms of
this Agreement, will afford 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 Sellers or the Sellers'
Affiliates, or any of their agents or representatives
may have been prepared by third parties and may not be
the work product of the Sellers and/or any of the
Sellers' Affiliates; (ii) except as expressly
represented or warranted by any Seller in this
Agreement, neither the Sellers nor any of the Sellers'
Affiliates has made any independent investigation or
verification of, or has any knowledge of, the accuracy
or completeness of, the Property Information; (iii)
except as expressly represented or warranted by any
Seller in this Agreement, the Purchaser is relying
solely on its own investigations, examinations and
inspections of the Properties and those of the
Purchaser's Representatives and is not relying in any
way on the Property Information furnished by the
Sellers or any of the Sellers' Affiliates, or any of
their agents or representatives; and (iv) except as
expressly represented or warranted by any Seller in
this Agreement, the Sellers expressly disclaim any
representations or warranties with respect to the
accuracy or completeness of the Property Information,
and the Purchaser releases the Sellers and the Sellers'
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
Sellers and the Sellers' 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 Properties, except
for claims against the Sellers based upon any
obligations and liabilities of the Sellers expressly
provided in this Agreement, including, without limit
thereto, any misrepresentation or breach of warranty by
Sellers under 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 partnership organized under the laws
of the State of Delaware, and is qualified under the
laws of the Commonwealth of Pennsylvania 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
partnership agreement 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.
Documents to be Delivered by the Sellers at Closing.
At the Closing, each of the Sellers shall execute,
acknowledge and/or deliver, as applicable, the following to
the Purchaser for each Property:
(a) Special warranty deeds (the "Deeds")
conveying title to each of the Properties in the form
of Exhibit A annexed hereto and made a part hereof.
(b) An Assignment and Assumption of Leases and
Security Deposits in the form of Exhibit B annexed
hereto and made a part hereof assigning all of the
landlords' right, title and interest in and to the
Leases in effect on the Closing Date, all guarantees
thereof and the security deposits thereunder, if any,
free and clear of all liens, encumbrances and rights of
any other person or entity except for item number 5 on
the list of Permitted Encumbrances attached as Schedule
5 (the "Lease Assignment").
(c) An 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 Sellers' 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 each of the Properties 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 Properties (collectively, the "Contracts") not
terminated by Sellers pursuant to the terms of this
Agreement.
(d) An 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 Sellers' right, title and
interest, if any, in and to all intangible property
owned by each Seller with respect to the operation of
each of the Properties listed on Schedule 10 annexed
hereto and made a part hereof, including, without
limitation, the trade names "Chesterbrook Corporate
Center" and "Glenhardie Corporate Center", as
applicable (the "Intangible Property Assignment") (the
Lease Assignment, the Ground Lessor Assignment, the
Ground Lessee 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 Sellers' possession or
the possession of any of their respective agents,
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 any of the Sellers
or any of their respective agents.
(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 each of the Sellers in and to all
Personal Property.
(g) Notices to the tenants of each of the
Properties in the form of Exhibit F annexed hereto and
made a part hereof advising the tenants of the sale of
the Properties 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 each
Seller that such 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 Section 4.4
and any other Estoppel Certificates, received by the
Sellers from tenants prior to the Closing Date and not
previously delivered to the Purchaser.
(j) To the extent in any of the Sellers'
possession and not already located at the Properties,
keys to all entrance doors to, and equipment and
utility rooms located in, the Property.
(k) To the extent in any of the Sellers'
possession and not already located at the Properties,
all Licenses.
(l) To the extent in any of the Sellers'
possession and not located at the Buildings, 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 Sellers.
(m) To the extent in any of the Sellers'
possession and not located at the Buildings, plans and
specifications of the Buildings.
(n) The Transfer Tax Returns, if any.
(o) A "FIRPTA" affidavit sworn to by each of the
Sellers 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) For each Seller which is a corporation, (i)
copies of the certificate of incorporation of each such
Seller and of the resolutions of the board of directors
of each such Seller 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 each such Seller; (ii) a good
standing certificate issued by the state of
incorporation of each such Seller, dated within thirty
(30) days of the Closing Date; (iii) a qualification to
do business certificate issued by the Commonwealth of
Pennsylvania, dated within thirty (30) days of the
Closing Date; and (iv) an incumbency certificate
executed by the Secretary or Assistant Secretary of
each such Seller with respect to those officers of each
such Seller executing any documents or instruments in
connection with the transactions contemplated herein.
(q) For each Seller which is a partnership, (i)
copies of each such Seller's 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 each
such Seller, or in the absence thereof, then by all of
each such Seller's general partners; (ii) a legal
existence certificate issued by the state of formation
of the Seller, dated within thirty (30) days of the
Closing Date; and (iii) a qualification to do business
certificate issued by the Commonwealth of Pennsylvania,
dated within thirty (30) days of the Closing Date.
(r) An Assignment and Assumption of Ground Lease
in the form of Exhibit M annexed hereto and made a part
hereof assigning all of the ground landlord's right,
title and interest in and to the ground leases for One
Glenhardie Corporate Center and Two Glenhardie
Corporate Center, respectively, free and clear of all
liens, encumbrances and rights of any other person or
entity except for item number 5 on the list of
Permitted Encumbrances attached as Schedule 5 (the
"Ground Lessor Assignment").
(s) An Assignment and Assumption of Ground Lease
in the form of Exhibit N annexed hereto and made a part
hereof assigning all of the ground tenant's right,
title and interest in and to the ground leases for One
Glenhardie Corporate Center and Two Glenhardie
Corporate Center, respectively, free and clear of all
liens, encumbrances and rights of any other person or
entity except for item number 5 on the list of
Permitted Encumbrances attached as Schedule 5 (the
"Ground Lessee Assignment").
(t) All other documents and other items which any
of the Sellers are required to deliver pursuant to the
provisions of this Agreement together with any item
which the Title Company may reasonably request as a
condition of issuing a title insurance policy to the
Purchaser consistent with the Permitted Encumbrances
and the terms 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 Sellers:
(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) The Sales Tax Return, if required, together
with a good, unendorsed certified or official bank
check drawn on or by a Clearing House Bank payable to
the order of the appropriate collection officer in the
amount of the sales tax due thereon.
(d) 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 Commonwealth of
Pennsylvania, 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.
(e) If the Purchaser is a partnership, (i) copies
of the Purchaser's 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 formation of the Purchaser, dated within
thirty (30) days of the Closing Date; and (iii) a
qualification to do business certificate issued by the
Commonwealth of Pennsylvania, dated within thirty (30)
days of the Closing Date.
(f) 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
formation of the Purchaser, dated within thirty (30)
days of the Closing Date; and (iii) a qualification to
do business certificate issued by the Commonwealth of
Pennsylvania, dated within thirty (30) days of the
Closing Date.
(g) The A & A Agreements.
(h) The Transfer Tax Payments together with the
Transfer Tax Return, if any.
(i) 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
Sellers shall have the right to continue to operate and
maintain the Properties.
New Leases.
Except as hereinafter provided in this Section
10.1, the Sellers 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 Properties
without the Purchaser's consent; provided, however,
that such Lease is on Sellers' standard form with such
changes as Sellers deem appropriate in the exercise of
their reasonable discretion or, in the case of an
amendment or modification of any lease, such amendment
or modification is in a form commonly used by landlords
operating properties similar to the applicable
Property. After the expiration of the Due Diligence
Period, the Sellers 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 any
Property if such then existing or proposed Lease
demises more than 5,000 rentable square feet 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 Sellers' 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 Sellers' request for consent in a
notice given within such period or if the Purchaser
expressly denies its consent but fails to provide the
Sellers 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
Sellers enter 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 Sellers 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 Properties).
Allocation of New Lease Expenses.
The New Lease Expenses for each New Lease
allocable to and payable by any of the Sellers
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 been obligated to
commence 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 or
optional 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.
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 Sellers reserve the right, but
are 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. Except for the representations expressly
set forth in this Agreement, the Sellers make no
representations and assume no responsibility with
respect to (i) the continued occupancy of the
Properties or any part thereof by any tenant and (ii)
the fulfillment by any tenant of its obligations under
any Lease. Except in the event that it may result from
any condition as to which Sellers shall have made a
misrepresentation or breached a warranty under this
Agreement, 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 except
in the event that it may result from any condition as
to which Sellers shall have made a misrepresentation or
breached a warranty under this Agreement, 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 Sellers 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, none
of the Sellers shall modify, extend, renew or cancel
(except as a result of a default by the other party
thereunder or if Purchaser 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
Sellers a notice stating the reasons therefor. If the
Purchaser fails to reply within five (5) days to the
Sellers' 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 Sellers
with the reasons for such denial, the Purchaser's
consent shall be deemed to have been granted.
Broker.
The Purchaser and the Sellers represent and warrant to
each other that Eastdil Realty, LLC (the "Broker") is the
sole broker with whom they have dealt in connection with the
Property and the transactions described herein. The Sellers
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 Sellers 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, 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
any Property is damaged or destroyed by fire or other
casualty, the Sellers shall notify the Purchaser of
such fact and the Purchaser shall have the option to
terminate this Agreement upon notice to the Sellers
given not later than ten (10) days after receipt of the
Sellers' notice; provided, however, that the
Purchaser's election shall be ineffective if within ten
(10) days after the Sellers' receipt of the Purchaser's
election notice, the Sellers 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 Sellers make such
election to repair, the Sellers 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 Sellers may be entitled to receive
as a result of such damage or destruction. Purchaser
shall not be obligated to complete Closing unless such
repairs shall have been completed within such ninety
(90) day period. If (i) the Purchaser does not elect
to terminate this Agreement due to the damaged
Property, (ii) the Purchaser elects to terminate this
Agreement due to the damaged Property but such election
is ineffective because the Sellers elect 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
Sellers shall, unless the Sellers have repaired such
damage or destruction prior to the Closing, (x) pay
over to the Purchaser the proceeds of any insurance
collected by the Sellers, together with an amount equal
to any deductible under the relevant insurance
policies, less the amount of all costs incurred by the
Sellers in connection with the repair of such damage or
destruction, and (y) assign and transfer to the
Purchaser all right, title and interest of each of the
Sellers in and to any uncollected insurance proceeds
which any of the Sellers may be entitled to receive
from such damage or destruction. A "material" part of
a 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
allocable to such Property.
Condemnation.
If, prior to the Closing Date, all or any
"significant" portion (as hereinafter defined) of a
Property is taken by eminent domain or condemnation (or
is the subject of a pending taking which has not been
consummated), the Sellers shall notify the Purchaser of
such fact and the Purchaser shall have the option to
terminate this Agreement upon notice to the Sellers
given not later than ten (10) days after receipt of the
Sellers' 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 a Property is taken by eminent
domain or condemnation, at the Closing the Sellers
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 a Property
means (i) 10% or more of the rentable area of the
Building(s) on such 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 such Land.
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 Properties is subject to the
fulfillment of each of the following conditions: (i)
the representations and warranties of each 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 Sellers
shall be ready, willing and able to deliver title to
the Properties 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 Sellers 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 Sellers at or prior
to the Closing.
Conditions Precedent to the Sellers'
Obligations to Perform.
The Sellers' 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; and (iii) the additional matters set
forth in Schedule 11 annexed hereto and made a part
hereof shall have occurred or been delivered to the
Sellers, 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.
Sellers' Inability to Perform.
If the Closing fails to occur by reason of the
Sellers' inability to perform its obligations under
this Agreement (i.e., the terms and conditions of any
of Section 4.2, 5.3, 6.2, or 12.3 direct the
application of the provisions of this Section 14.1 have
occurred or any Seller is otherwise unable after the
exercise of good faith efforts to perform its
obligations or covenants hereunder) which has not been
waived pursuant to Section 13.3, then the Purchaser, as
its sole remedy for such inability of the Sellers, may
terminate this Agreement by notice to the Sellers. 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 within
six months of such termination date, subject to the
terms and provisions of Section 23 hereof. 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 Sellers' inability to
perform its obligations hereunder. Notwithstanding
anything to the contrary herein, if the Sellers'
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 Sellers may terminate
this Agreement by notice to the Purchaser. If the
Sellers elect to terminate this Agreement, then this
Agreement shall be terminated and, as its sole remedy
for the Purchaser's failure or refusal to complete the
Closing or perform its obligations hereunder (except
for the Surviving Obligations), the Sellers may retain
the Deposit as liquidated damages for all loss, damage
and expenses suffered by the Sellers, it being agreed
that the Sellers' 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 Sellers' 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 Sellers hereby expressly waive,
relinquish and release 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 Sellers or any of
the Sellers' Affiliates, the Sellers shall not be
relieved of its obligations under this Agreement and
the Sellers shall not be entitled to any right or
remedy provided in this Section 14.2 or elsewhere in
this Agreement.
Sellers' Failure to Perform.
If the Closing fails to occur by reason of any of
the Sellers' 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 Sellers or (ii) seek specific performance from
the Sellers. As a condition precedent to the Purchaser
exercising any right it may have to bring an action for
specific performance as the result of any of the
Sellers' 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 any of the Sellers' 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 Sellers relating to the
Properties (the "Escrow Agreement") in the form of Exhibit I
hereto, subject to the terms and conditions of Section 23
hereof. Simultaneously with their execution and delivery of
this Agreement, the Purchaser and the Sellers 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
Sellers 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 Sellers:
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:
c/o The Fox Companies
1325 Morris Drive
Wayne, Pennsylvania 19087
Attention: James W. Hovey
with a copy to:
Wolf, Block, Schorr and Solis-Cohen
12th Floor, Packard Building
Philadelphia, Pennsylvania 19102
Attention: Louis Coffey, Esq.
and
c/o The State Board of Administration
Suite 100
1801 Hermitage Boulevard
Tallahassee, Florida 32308
Attention: Ron Carey
and
c/o The State Board of Administration
Suite 100
1801 Hermitage Boulevard
Tallahassee, Florida 32308
Attention: Douglas W. Bennett
and
Sutherland, Asbill & Brennan
999 Peachtree Street, NE
Atlanta, Georgia 30309-3996
Attention: H. Edward Hales, Jr., Esq.
The Sellers 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 Sellers, 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 Properties. 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 Properties,
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) except for attorneys, who have executed and delivered
to the Sellers 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 Sellers, 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 provisions of Section
17 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 Sellers 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 in all material
respects. Within two days of Purchaser's request for a
return of the Downpayment, the Sellers shall furnish
the Purchaser with a list of material items of Property
Information which the Purchaser or the Purchaser's
Representatives have failed to deliver to any of the
Sellers. An affidavit of a Purchaser or any of
Purchaser's Representatives certifying to the Sellers
that an item of Property Information has been destroyed
or lost despite a diligent search of such affiant's
files shall be conclusive evidence of the Purchaser's
performance of its obligations under this Section 17.2
as to the item certified to therein.
Property Information Defined.
As used in this Agreement, the term "Property
Information" shall mean (i) all information and
documents in any way relating to any of the Properties,
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,
prospective lenders, attorneys, accountants,
contractors, consultants, engineers and financial
advisors (collectively, the "Purchaser's
Representatives"), by the Sellers or any of the
Sellers' Affiliates, or their agents or
representatives, including, without limitation, their
contractors, engineers, attorneys, accountants,
consultants, brokers or advisors, and (ii) except for
attorney work product, 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 any of the Properties.
Remedies.
In addition to any other remedies available to the
Sellers, the Sellers 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
Section 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 three (3) years subsequent to the
Closing Date, the Sellers, the Sellers' 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 Sellers 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 Sellers
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; provided, however, that the Purchaser may at the
Closing assign this Agreement to an entity controlled by the
pension fund of the Florida State Board of Administration,
but such assignment shall not release the Purchaser named
herein from its obligations under this Agreement, including,
without limitation, the obligation of the Purchaser named
herein to join in as a party with the Purchaser's permitted
assignee and execute originals of the A&A Agreements and
Bills of Sale at Closing, provided, however, that the
Purchaser shall be released from its obligations hereunder
and under the Purchaser's Documents at the Closing if the
Purchaser furnishes evidence satisfactory to the Sellers
that the Purchaser's assignee has an equity interest of
$40,000,000 or more in the Properties at the Closing and
such Purchaser's assignee executes an assumption agreement
in form and substance satisfactory to the Sellers whereby
such assignee agrees to assume and perform the covenants,
obligations and liabilities of the Purchaser named herein.
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 Sellers 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 Sellers hereunder
and all of the Sellers' 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 Sellers, including, without limitation,
Dean Witter Realty Inc. and the parent and affiliates of
Dean Witter Realty Inc. (collectively, the "Sellers'
Affiliates"), arising out of or in connection with this
Agreement or the transactions contemplated hereby. The
Purchaser agrees to look solely to each Seller and each
Seller's assets directly attributable to its Buildings for
the satisfaction of such Seller's liability or obligation
arising under this Agreement, the Seller's Documents to
which such Seller is now or hereafter becomes a party, or
the transactions contemplated hereby, or for the performance
of any of the covenants, warranties or other agreements of
the Sellers contained herein or in the Seller's Documents to
which such Seller is now or hereafter becomes a party, and
further agrees not to sue or otherwise seek to enforce any
personal obligation against any of the Sellers' Affiliates
with respect to any matters arising out of or in connection
with this Agreement, the Seller's Documents or the
transactions contemplated hereby. The liability of each
Seller hereunder and under the Seller's Documents is several
and not joint. The total liability of the Sellers hereunder
and under the Seller's Documents shall in no event exceed
$10,000,000 subject to the following additional provisos:
(i) the liability of DWR Chesterbrook Associates, as the
Seller of its Properties located at Chesterbrook Corporate
Center, for any of its obligations or liabilities to the
Purchaser under this Agreement or any of the Seller's
Documents to which DWR Chesterbrook Associates is now or
hereafter becomes a party, shall in no event exceed either
(a) $7,500,000 in the aggregate with respect to all of such
Seller's assets attributable to all of its Properties
located at Chesterbrook Corporate Center or (b) $2,000,000
with respect to all of such Seller's assets attributable to
any one of its eight Properties at Chesterbrook Corporate
Center; and (ii) the total liability of Glenhardie
Corporation, Dean Witter Realty Income Partnership II, L.P.,
Dean Witter Realty Income Partnership III, L.P., and Part
Six Associates, as the Sellers of their respective
Properties located at Glenhardie Corporate Center, for any
of such Seller's respective obligations or liabilities to
the Purchaser under this Agreement or any of the Seller's
Documents to which such Seller is now or hereafter becomes a
party, shall in no event exceed either (a) $2,500,000 in the
aggregate with respect to all of such Sellers' assets
attributable to all of their respective Properties located
at Glenhardie Corporate Center or (b) $1,250,000 with
respect to all of such Sellers' assets attributable to any
one of the four Buildings at Glenhardie Corporate Center and
the related Land, condominium interests or ground leasehold
interests and estates, and (iii) any indemnities, hold
harmless agreements, reimbursement provisions, post-Closing
adjustment obligations, certifications in estoppel
certificates, and covenants and obligations of any of the
Sellers, whether set forth in this Agreement or any of the
Seller's Documents, shall survive the Closing for a period
of six months (except in the case of the Sellers'
obligations under Sections 3.1 or 3.2, which shall survive
the Closing for a period of one year) and thereafter the
Sellers shall have no liability therefor. By way of
example, the maximum liability of Glenhardie Corporation and
Dean Witter Realty Income Partnership II, L.P. with respect
to their assets attributable to 1275 Drummers Lane, Wayne,
Pennsylvania (i.e., the Land and the Building thereon and
each such Seller's ground leasehold interests and estates)
is $1,250,000 in the aggregate. The following chart
illustrates the allocation of the Seller's liability
described above.
PROPERTY MAXIMUM TOTAL
LIABILITY PER PROPERTY
A. CHESTERBROOK CORPORATE CENTER
1325 Morris Drive, Wayne, Pennsylvania
$2,000,000
1400 Morris Drive, Wayne, Pennsylvania
$2,000,000
1300 Morris Drive, Wayne, Pennsylvania
$2,000,000
955 Chesterbrook Boulevard, Wayne, $2,000,000
Pennsylvania
(Condominium Unit 1 in Parcel 9
Condominium)
965 Chesterbrook Boulevard, Wayne, $2,000,000
Pennsylvania
(Condominium Unit 2 in Parcel 9
Condominium)
701 Lee Road, Wayne, Pennsylvania
$2,000,000
600 Lee Road, Wayne, Pennsylvania
(Condominium Unit 2 in Parcel 6-3 $2,000,000
Condominium)
620 Lee Road, Wayne, Pennsylvania
(Condominium Unit 1 in Parcel 6-3 $2,000,000
Condominium)
Parcel 11 (Parking Area), Wayne,
Pennsylvania $2,000,000
_________________________________________
______Maximum Total Liability for all of ____________
the Chesterbrook Corporate Center
Properties $7,500,000
B. GLENHARDIE CORPORATE CENTER
1275 Drummers Lane, Wayne, Pennsylvania
(One Glenhardie Corporate Center) $1,250,000
Ground Lessor Estate and Ground Lessee
Estate
1285 Drummers Lane, Wayne, Pennsylvania
(Two Glenhardie Corporate Center) $1,250,000
Ground Lessor Estate and Ground Lessee
Estate
1265 Drummers Lane, Wayne, Pennsylvania
(Three Glenhardie Corporate Center) $1,250,000
(Unit 1 in Glenhardie Corporate Center
Condominium)
1255 Drummers Lane, Wayne, Pennsylvania
(Four Glenhardie Corporate Center) $1,250,000
(Unit 2 in Glenhardie Corporate Center
Condominium)
_______________________________________________ ____
_____
Maximum Total Liability for all of the $2,500,000
Glenhardie Corporate Center Properties
In no event shall any Seller ever be liable to the
Purchaser or its officers, directors, employees, trustees,
shareholders, partners, principals, parents, subsidiaries or
other person or entity affiliated with Purchaser
("Purchaser's Affiliates") for any of the following suffered
by Purchaser or Purchaser's Affiliates from whatever cause:
loss of business or loss of profits (except for such loss
which is in the nature of direct damages), speculative
damages (i.e., prospective or anticipated damages from the
same acts or facts causing or constituting the present cause
of action, but which depend on future developments which are
contingent, conjectural or improbable), remote damages
(i.e., damages which are the unusual and unexpected result,
not reasonably to be anticipated from an accidental or
unusual combination of circumstances) or damages which are
not reasonably foreseeable as a result of any Seller's
breach, misrepresentation or default.
Each Seller covenants to retain from the Purchase Price
the following amounts specified for such Seller for a period
of six months following the Closing:
DWR Chesterbrook Associates $7,500,000
Glenhardie Corporation $2,500,000
Dean Witter Realty Income Partnership II, L.P.
$2,500,000
Dean Witter Realty Income Partnership III, L.P.
$1,250,000
Part Six Associates $1,250,000
Notwithstanding the exculpation on liability of
Seller's Affiliates set forth above, a Seller's Affiliate
which receives funds as a result of a breach of the
foregoing covenant shall be liable in the same manner as the
Seller which distributed the funds, but only to the extent
of funds so received in breach of such covenant.
Additional Collateral. Simultaneously with the
execution and delivery of this Agreement, the Purchaser
shall deposit with the Escrow Agent by a wire transfer of
immediately available funds to the Escrow Agent's account
the amount of Three Million and 00/100 Dollars ($3,000,000)
(the "Additional Collateral") to be held by the Escrow Agent
pursuant to the Additional Collateral Escrow Agreement of
even date herewith by and among the Escrow Agent, the
Purchaser and the Sellers in the form of Exhibit L attached
hereto and made a part hereof (the "Additional Collateral
Escrow Agreement"). Simultaneously with their execution and
delivery of this Agreement, the Sellers 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 Additional Collateral. The Additional
Collateral and the Deposit shall secure all of the
obligations, liabilities, covenants, indemnification
agreements and Surviving Obligations of the Purchaser under
this Agreement and the Purchaser's Documents (the "Secured
Obligations"). The Additional Collateral shall be released
by the Escrow Agent to the Purchaser only upon the
satisfaction of one of the following conditions: (i) in the
event the Closing has not occurred, none of the Sellers has
asserted a claim in writing against the Purchaser with
respect to any of the Surviving Obligations on or before the
date which is six months after any termination of this
Agreement; or (ii) the Closing has occurred and the
Purchaser has furnished evidence satisfactory to the Sellers
that the Purchaser's or its assignee's mortgage financing
with respect to the Properties for a six (6) month period
beginning on the Closing Date does not and will not exceed
seventy-five (75%) of the Purchase Price and, if the
Purchaser's assignee holds title to the Properties at the
Closing, such Purchaser's assignee has executed and
delivered an assumption agreement in form and substance
satisfactory to the Sellers whereby such assignee has agreed
to assume and perform all of the Secured Obligations of the
Purchaser named herein. Except in the event the Closing
fails to occur by reason of any of the Seller's failure or
refusal to perform its obligations hereunder as provided in
Section 14.3 hereof (in which case the Deposit and the
Additional Collateral shall be released to the Purchaser),
the Deposit shall not be released to the Purchaser unless
the condition set forth in (i) above has been satisfied; if
the Closing has occurred or if the Sellers have terminated
the Agreement in accordance with Section 14.2, the Sellers
shall be entitled to the Deposit immediately.
Notwithstanding anything to the contrary in this Agreement,
in the event that this Agreement is terminated for any
reason, except in the event the Closing fails to occur by
reason of any of the Seller's failure or refusal to perform
its obligations hereunder as provided in Section 14.3 hereof
(in which case the Deposit and the Additional Collateral
shall be released to the Purchaser), the Deposit
automatically shall be released from the Escrow Agreement,
shall thereupon become subject to the Additional Collateral
Escrow Agreement and shall be held in escrow in the same
manner as the Additional Collateral thereunder, provided,
however, that the Deposit shall not become subject to the
Additional Collateral Escrow Agreement but shall be released
to the Sellers on the date on which the Sellers have
terminated this Agreement in accordance with Section 14.2.
The total liability of the Purchaser with respect to
the Surviving Obligations shall in no event exceed
$5,000,000 in the aggregate, subject to the following
provisos: (i) the total liability of the Purchaser for
obligations, liabilities, covenants and indemnities set
forth in this Agreement (including, without limit hereto,
Purchaser's wrongful failure or refusal to complete the
Closing), other than the Surviving Obligations, shall in no
event exceed the Deposit; (ii) the total liability of the
Purchaser with respect to Surviving Obligations relating to
the Properties located at Chesterbrook Corporate Center
shall in no event exceed either (a) $3,750,000 in the
aggregate with respect to the Surviving Obligations relating
to all of the Properties located at Chesterbrook Corporate
Center or (b) $2,000,000 with respect to Surviving
Obligations relating to any one of the eight Properties at
Chesterbrook Corporate Center; and (iii) the total liability
of the Purchaser with respect to Surviving Obligations
relating to the Properties located at Glenhardie Corporate
Center shall in no event exceed either (a) $1,250,000 in the
aggregate with respect to Surviving Obligations relating to
all of the Properties located at Glenhardie Corporate Center
or (b) $1,250,000 with respect to Surviving Obligations
relating to any one of the four Buildings at Glenhardie
Corporate Center and the related Land, condominium interests
or ground leasehold interests and estates.
The following chart illustrates the allocation of the
Purchaser's liability for the Surviving Obligations as
described above.
PROPERTY MAXIMUM TOTAL
LIABILITY PER PROPERTY
(SURVIVING OBLIGATIONS)
A. CHESTERBROOK CORPORATE CENTER
1325 Morris Drive, Wayne, Pennsylvania
$2,000,000
1400 Morris Drive, Wayne, Pennsylvania
$2,000,000
1300 Morris Drive, Wayne, Pennsylvania
$2,000,000
955 Chesterbrook Boulevard, Wayne, $2,000,000
Pennsylvania
(Condominium Unit 1 in Parcel 9
Condominium)
965 Chesterbrook Boulevard, Wayne, $2,000,000
Pennsylvania
(Condominium Unit 2 in Parcel 9
Condominium)
701 Lee Road, Wayne, Pennsylvania
$2,000,000
600 Lee Road, Wayne, Pennsylvania
(Condominium Unit 2 in Parcel 6-3 $2,000,000
Condominium)
620 Lee Road, Wayne, Pennsylvania
(Condominium Unit 1 in Parcel 6-3 $2,000,000
Condominium)
Parcel 11 (Parking Area), Wayne,
Pennsylvania $2,000,000
_________________________________________
______Maximum Total Liability for all of ____________
the Chesterbrook Corporate Center
Properties $3,750,000
B. GLENHARDIE CORPORATE CENTER
1275 Drummers Lane, Wayne, Pennsylvania
(One Glenhardie Corporate Center) $1,250,000
Ground Lessor Estate and Ground Lessee
Estate
1285 Drummers Lane, Wayne, Pennsylvania
(Two Glenhardie Corporate Center) $1,250,000
Ground Lessor Estate and Ground Lessee
Estate
1265 Drummers Lane, Wayne, Pennsylvania
(Three Glenhardie Corporate Center) $1,250,000
(Unit 1 in Glenhardie Corporate Center
Condominium)
1255 Drummers Lane, Wayne, Pennsylvania
(Four Glenhardie Corporate Center) $1,250,000
(Unit 2 in Glenhardie Corporate Center
Condominium)
_______________________________________________ ____
_____
Maximum Total Liability for all of the $1,250,000
Glenhardie Corporate Center Properties
The total liability of the Purchaser with respect to
the Secured Obligations shall in no event exceed $10,000,000
in the aggregate, subject to the following provisos: (i) the
total liability of the Purchaser for obligations,
liabilities, covenants and indemnities set forth in this
Agreement (including, without limit hereto, Purchaser's
wrongful failure or refusal to complete the Closing), other
than the Surviving Obligations and obligations under the
Purchaser's Documents (other than this Agreement), shall in
no event exceed the Deposit; (ii) the total liability of the
Purchaser with respect to Secured Obligations relating to
the Properties located at Chesterbrook Corporate Center
shall in no event exceed either (a) $7,500,000 in the
aggregate with respect to the Secured Obligations relating
to all of the Properties located at Chesterbrook Corporate
Center or (b) $2,000,000 with respect to Secured Obligations
relating to any one of the eight Properties at Chesterbrook
Corporate Center; and (iii) the total liability of the
Purchaser with respect to Secured Obligations relating to
the Properties located at Glenhardie Corporate Center shall
in no event exceed either (a) $2,500,000 in the aggregate
with respect to Secured Obligations relating to all of the
Properties located at Glenhardie Corporate Center or (b)
$1,250,000 with respect to Secured Obligations relating to
any one of the four Buildings at Glenhardie Corporate Center
and the related Land, condominium interests or ground
leasehold interests and estates.
The following chart illustrates the allocation of the
Purchaser's liability for the Secured Obligations as
described above.
PROPERTY MAXIMUM TOTAL
LIABILITY PER PROPERTY
A. CHESTERBROOK CORPORATE CENTER
1325 Morris Drive, Wayne, Pennsylvania
$2,000,000
1400 Morris Drive, Wayne, Pennsylvania
$2,000,000
1300 Morris Drive, Wayne, Pennsylvania
$2,000,000
955 Chesterbrook Boulevard, Wayne, $2,000,000
Pennsylvania
(Condominium Unit 1 in Parcel 9
Condominium)
965 Chesterbrook Boulevard, Wayne, $2,000,000
Pennsylvania
(Condominium Unit 2 in Parcel 9
Condominium)
701 Lee Road, Wayne, Pennsylvania
$2,000,000
600 Lee Road, Wayne, Pennsylvania
(Condominium Unit 2 in Parcel 6-3 $2,000,000
Condominium)
620 Lee Road, Wayne, Pennsylvania
(Condominium Unit 1 in Parcel 6-3 $2,000,000
Condominium)
Parcel 11 (Parking Area), Wayne,
Pennsylvania $2,000,000
_________________________________________
______Maximum Total Liability for all of ____________
the Chesterbrook Corporate Center
Properties $7,500,000
B. GLENHARDIE CORPORATE CENTER
1275 Drummers Lane, Wayne, Pennsylvania
(One Glenhardie Corporate Center) $1,250,000
Ground Lessor Estate and Ground Lessee
Estate
1285 Drummers Lane, Wayne, Pennsylvania
(Two Glenhardie Corporate Center) $1,250,000
Ground Lessor Estate and Ground Lessee
Estate
1265 Drummers Lane, Wayne, Pennsylvania
(Three Glenhardie Corporate Center) $1,250,000
(Unit 1 in Glenhardie Corporate Center
Condominium)
1255 Drummers Lane, Wayne, Pennsylvania
(Four Glenhardie Corporate Center) $1,250,000
(Unit 2 in Glenhardie Corporate Center
Condominium)
_______________________________________________ ____
_____
Maximum Total Liability for all of the $2,500,000
Glenhardie Corporate Center Properties
The provisions of the Additional Collateral Escrow
Agreement and this Section 23 shall survive termination of
this Agreement and the Closing, except that in the event of
a termination of this Agreement pursuant to Section 14.3
hereof, the provisions of the Additional Collateral Escrow
Agreement and this Section 23 shall not survive.
In no event shall the Purchaser or Purchaser's
Affiliates ever be liable to any of the Sellers or Seller's
Affiliates for any of the following suffered by Seller or
Seller's Affiliates from whatever cause: loss of business
or loss of profits (except for such loss which is in the
nature of direct damages), speculative damages (i.e.,
prospective or anticipated damages from the same acts or
facts causing or constituting the present cause of action,
but which depend on future developments which are
contingent, conjectural or improbable), remote damages
(i.e., damages which are the unusual and unexpected result,
not reasonably to be anticipated from an accidental or
unusual combination of circumstances) or damages which are
not reasonably foreseeable as a result of the Purchaser's
breach, misrepresentation or default.
The Sellers agree that they do not have and will not
have any claims or causes of action against any of the
Purchaser's Affiliates arising out of or in connection with
this Agreement or the transactions contemplated hereby
except in the event of an express written assumption by such
Affiliate of the Purchaser's obligations as contemplated by
this Agreement or a transfer of any of the Property to an
Affiliate of Purchaser to the extent of the value of the
transferred Property. The Sellers agree to look to the
Deposit, the Additional Collateral, the Purchaser, and
Purchaser's assets directly attributable to the Properties
for the satisfaction of the Purchaser's liabilities or
obligations arising under this Agreement, the Purchaser's
Documents to which Purchaser is now or hereafter becomes a
party or the transactions contemplated hereby, or for the
performance of any of the covenants, warranties or other
agreements of the Purchaser contained herein or in the
Purchaser's Documents to which the Purchaser is now or
hereafter becomes a party, and further agrees not to sue or
otherwise seek or enforce any personal obligation against
any of the Purchaser's Affiliates with respect to any
matters arising out of or in connection with this Agreement,
the Purchaser's Documents or the transactions contemplated
hereby.
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 Commonwealth of Pennsylvania 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.
Waiver of Condominium Rights.
Seller and Purchaser agree that the provisions of
Chapter 34 of the Pennsylvania Uniform Condominium Act, 68
Pa. C.S.A. 3101, et seq. are hereby waived.
Attorney's Fees.
In any event that at any time Sellers 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 an original, but all such
counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above
written.
SELLERS:
DWR CHESTERBROOK ASSOCIATES
By: Chesterbrook Investment Partners,
L.P.,
a general partner
By: Dean Witter Realty Income
Partnership
IV, L.P., a general partner
By: Dean Witter Realty Fourth
Income Properties, Inc.,
its
general partner
By:
Name: Robert B. Austin
Title: Vice
President
By:Dean Witter Realty Income
Partnership III, L.P., a
general partner
By: Dean Witter Realty Income
Properties III Inc.,
its general partner
By:
Name: Robert B.
Austin
Title: Vice
President
By: Duportail Investment Partners, L.P.,
a general partner
By:DW Chesterbrook Investors Inc.,
its
general partner
By:
Name: Robert B. Austin
Title: Vice President
GLENHARDIE CORPORATION
By:
Name: Robert B. Austin
Title: Vice President
DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P.
By:Dean Witter Realty Income
Properties II Inc., its general partner
By:
Name: Robert B. Austin
Title: Vice President
DEAN WITTER REALTY INCOME
PARTNERSHIP III, L.P.
By:Dean Witter Realty Income
Properties III Inc., its general partner
By:
Name: Robert B. Austin
Title: Vice President
PART SIX ASSOCIATES
By:Dean Witter Realty Income
Partnership III, L.P., a
general partner
By: Dean Witter Realty Income
Properties III Inc.,
its general partner
By:
Name: Robert B. Austin
Title: Vice President
PURCHASER:
FV OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: FVGP, L.L.C.,
a Pennsylvania limited
liability company, its general partner
By:
_____________, a
Member
DEAN WITTER REALTY INC.
Two Word Trade Center
New York, New York 10048
(212) 392-4807
February 6, 1998
Mr. James W. Hovey
President
The Fox Companies
1325 Morris Drive, Suite 201
Wayne, PA 19087-5554
Re: Sale of the Glenhardie &
Chesterbrook Corporate Centers
Dear Jim:
You have inquired as to the role and function of the
Geis Realty Group, Inc. ("Geis") with regard to the above
referenced matter.
As you are aware the Geis organization was employed by
certain Dean Witter affiliates for the management and
leasing of eight of the twelve buildings included in the
Glenhardie/Chesterbrook portfolio sale. These functions
were governed by specific "management" and "exclusive
leasing" agreements. These agreements, specifically the
leasing contract, acknowledge that "Owner will not be liable
to Broker due to the sale of the Building(s) or Property".
Additionally, neither the various affiliates of Dean
Witter Realty or Realty itself has entered into any other
agreement with Geis with regard to the prospective sale to
Fox's affiliate, FV Office Partners, L.P. of the
Glenhardie/Chesterbrook portfolio. The "Broker" of record
for the prospective sale of the portfolio is Eastdil Realty,
LLC, as is outlined in the Purchase and Sale Agreement
covering the prospective transaction.
Mr. James W. Hovey
The Fox Companies
Page 2
We understand that certain members of the Geis
organization participated in various market and building
tours in conjunction with representatives from Eastdil.
Please note that from our experience it is ordinary and
customary for a property's current management/leasing teams
to participate in such tours during the marketing phase.
These tours, to the extent they occurred, were arranged
between Geis and Eastdil.
We note that you have raised a concern that Geis'
participation in such could lead to a claim for a "sales
commission" upon the closing of the sale of the portfolio.
It is my understanding that your main concern is that a
claim could be made by Geis which could result, under the
laws of the Commonwealth of Pennsylvania, in a lien being
placed on some or all of the assets that constitute the
portfolio and that your affiliate is not protected or
indemnified for this contingency.
Please be advised that Dean Witter Realty Inc., on
behalf of itself and its affiliates, agrees that it will
indemnify and hold harmless FV Office Partners, L.P., and
its affiliates plus The Fox Companies and its affiliates for
any claim(s) made by or on behalf of Geis Realty Group, Inc.
relating to any claim for a sales commission directly
related to the purchase of the Glenhardie/Chesterbrook
portfolio.
It is also acknowledged that this letter agreement
shall not be superseded by or merged into the Purchase and
Sale Agreement and that this letter shall represent a
separate agreement amongst the parties.
Sincerely,
/s/ Robert B. Austin
Robert B. Austin
RBA/sy
Enclosures
DEAN WITTER REALTY INC.
Two Word Trade Center
New York, New York 10048
(212) 392-4807
February 10, 1998
FV Office Partners, L.P.
c/o James W. Hovey
The Fox Companies
1325 Morris Drive
Wayne, PA 19087-5554
Re: Sale of the Glenhardie &
Chesterbrook Corporate Centers
Dear Jim:
We are writing this point of clarification on behalf of
the Sellers under and regarding the Purchase and Sale
Agreement of even date with this letter.
It is understood and agreed that any capital costs
incurred, or to be incurred by, any Seller regarding any
existing Lease as of the date of this letter, which costs
are not expressly stated to become the responsibility of the
Purchaser and the Confidential Offering Memorandum prepared
by Eastdil Realty Company, LLC regarding the Properties and
delivered to you with the letter dated November 10, 1997
from Eastdil, as such Memorandum was amended by the
enclosures to a letter dated January 7, 1998 from Eastdil to
you, shall be and remain the responsibility of the Sellers.
However, it is also acknowledged that Seller shall not be
responsible for any unexercised renewal, expansion or
extension options that may be contained within any Lease.
FV Office Partners, L.P.
c/o Mr. James W. Hovey
Page 2
Capital costs as used in this letter shall include
tenant improvement allowances, rent concessions, moving
allowances, leasing commissions and similar costs, charges
and allowances given to tenants or otherwise relating to
their leasing and/or occupying space in any Property.
Without limiting the generality of the foregoing, capital
costs shall include those costs relating to the February 4,
1998. Allstate lease at 701 Lee Road, the December 16,
1997; Crothall Healthcare lease at 995 Chesterbrook
Boulevard, the Aetna expansion of 15,090 square feet at 955
Chesterbrook Boulevard (their Seventh Amendment), the
Weyerhaeuser lease at 620 Lee Road, the SunGard Eighth
Amendment at Two Glenhardie Corporate Center, the New
England Life lease at Four Glenhardie Corporate Center and
The Fox Management Corporation Eighth Amendment at 1325
Morris Drive.
At Closing under the Purchase and Sale Agreement, the
Sellers will escrow sums and/or otherwise secure in a manner
and amount reasonably satisfactory to the Purchasers, the
Sellers' obligations for the capital costs. In the event
that the Allstate lease regarding 701 Lee Road shall have
been terminated, without any of the capital costs relating
to it having been incurred and paid, whether by reason of
the holding over in 701 Lee Road by SAP America, the present
tenant or otherwise, then it is agreed that the Seller of
said Property shall, as full satisfaction of this situation,
pay over to Purchaser the amount of $1,692,870.00
($30.00/RSF x 56,429 RSF).
The commitment of the Sellers to maintain an escrow
account shall be limited to six months from the Closing plus
the time necessary to quantify any remaining Unfunded
Obligations. At the end of said period the Sellers shall be
required to turnover to Purchaser in cash the equivalent of
any outstanding obligations (the "Unfunded Obligations").
To accomplish this Sellers, at the end of the six month
period, shall provide a schedule of remaining commitments
along with all necessary documentation (plans, working
drawings, constructing contracts, etc.) to certify the total
of such amounts as well as what has been paid to date for
said obligations. Upon receipt of said Unfunded Obligation
analysis Purchaser shall by written notice, either accept
Sellers representation or outline to Sellers any additional
amounts it believes may remain outstanding. Upon receipt of
any such notice the parties, using good faith, will attempt
to resolve any such differences over a fifteen day period.
FV Office Partners, L.P.
c/o Mr. James W. Hovey
Page 3
In the event that Purchaser and Seller are unable to
reach an agreement in a timely manner then the matter shall
be submitted to binding arbitration in accordance with rules
and regulations of the American Arbitration Association or
any similar or successor organization.
It is also acknowledged that this letter agreement
shall not be superseded by or merged into the Purchase and
Sale Agreement and that this letter shall represent a
separate agreement amongst the parties.
Capitalized terms used, but not defined in this letter,
and which are defined in the Purchase and Sale Agreement,
shall have the meaning attributed to them in the Purchase
and Sale Agreement.
Sincerely,
/s/ Robert B. Austin
Robert B. Austin
on behalf of Sellers
RBA/sy
DWR CHESTERBROOK ASSOCIATES
GLENHARDIE CORPORATION
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
PART SIX ASSOCIATES
c/o DEAN WITTER REALTY INC.
Two World Trade Center, 64th floor
New York, New York 10048
March 18, 1998
FV Office Partners, L.P.
c/o James W. Hovey
The Fox Companies
1325 Morris Drive
Wayne, Pennsylvania 19087-5594
re: Sale of the Glenhardie and
Chesterbrook Corporate Centers
Dear Jim:
Reference is made to the Purchase and Sale Agreement
between DWR Chesterbrook Associates ("DWR Chesterbrook"),
Glenhardie Corporation ("Glenhardie"), Dean Witter Realty
Income Partnership II, L.P. ("DWRIP II"), Dean Witter Realty
Income Partnership III, L.P. ("DWRIP III"), Part Six
Associates ("Part Six"), collectively the "Sellers", and FV
Office Partners, L.P. (the "Purchaser") with respect to the
sale of the Glenhardie Corporate Center and portions of the
Chesterbrook Corporate Center (collectively, the
"Properties") dated as of February 10, 1998 (the "Original
Agreement") as clarified by letter agreements between Dean
Witter Realty Inc. as agent for the Sellers ("DWR") dated
February 6, 1998 (the "2/6 Letter") and February 10, 1998
(the "2/10 Letter"), collectively the "Agreement". All
capitalized terms not defined herein shall have the meanings
specified in the Original Agreement.
1. Exhibit A, B and C
attached hereto and made a part hereof individually and
collectively are Purchaser's Due Diligence "lists" (the
"Lists"). Except for Exhibit A which is subject to change
as outlined therein and subject to the obligation of the
applicable Seller(s) to pay additional funds with respect to
certain underfunded Exhibit C Items as provided below in
this Paragraph 1, the amounts and items listed therein shall
be deemed "final" as Purchaser's findings during its Due
Diligence Period. The items set forth on Exhibit A are
various items (the "Exhibit A Items") as to which, except to
the extent that such items are performed and paid for by the
Sellers prior to the Closing, funds shall be deducted from
the Purchase Price and placed in escrow at the Closing (the
"Exhibit A Escrow"). The items set forth on Exhibit B are
various items (the "Exhibit B Items") as to which, except to
the extent that such items are performed and paid for by the
Sellers prior to the Closing, funds shall be deducted from
the Purchase Price and placed in escrow at the Closing (the
"Exhibit B Escrow"). Said Exhibit B Escrow funds shall
remain in escrow until the parties agree upon the work, if
any, that is required and the cost thereof and upon
completion of any work the remaining balance in the Exhibit
B Escrow shall be delivered to Sellers. The items set forth
on Exhibit C are various items (the "Exhibit C Items") as to
which, except to the extent that such items are performed
and paid for by the Sellers prior to the Closing, funds
shall be deducted from the Purchase Price and placed in
escrow at the Closing (the "Exhibit C Escrow") to be applied
to such items until such items are fully performed and paid
for whereupon any remaining balance in the Exhibit C Escrow
shall be delivered to the Seller(s); however if the funds in
the Exhibit C Escrow are insufficient to pay for the full
cost of such items then the appropriate Seller(s) shall be
responsible for any additional funds required to pay the
full cost of such items and shall within ten (10) days after
written request from the Purchaser accompanied by reasonable
supporting documentation, from time to time, pay into the
Exhibit C Escrow any excess costs until the Exhibit C Items
are fully performed and paid for.
2. Between the date hereof
and the date of the Closing, the Sellers and the Purchaser
shall review the Lists and shall determine if any of the
items set forth on any of the Lists have been paid for by
the Sellers and performed in whole, in which event such
items shall be deleted from the Final Lists (hereinafter
defined), or have been paid for and performed in part, in
which event the revised amounts shall be inserted in the
Final Lists.
Evidence of satisfaction and/or dollar reduction shall
be accomplished by the following items:
_ Waiver of Tenant Improvement items as evidenced by Item
#5 of the Estoppel Certificate(s) or other reasonably
acceptable certification by the tenant as to its receipt of
payment for any required tenant improvements.
_ Subsequent written confirmation by a tenant of
satisfaction of any outstanding obligation.
_ Reasonable alternative proof of satisfaction; such as
lien waivers, canceled checks, etc.
The Purchaser and Seller(s) also agree that if any
items are in dispute between the parties then the amount
requested by Purchaser (not to exceed the amount set forth
in the Lists attached hereto with respect to any such item)
shall be initially funded to escrow but Seller(s) and the
Purchaser will retain the right to submit such item to any
dispute resolution mechanism that may be contained in the
anticipated Escrow Agreement.
3. At or prior to the
Closing, the Sellers and the Purchaser shall agree as to
final lists (collectively, the "Final Lists") of the Exhibit
A Items, the Exhibit B Items and the Exhibit C Items which
shall set forth the final amounts of the Exhibit A Escrow,
the Exhibit B Escrow and the Exhibit C Escrow (collectively,
the "Escrows").
4. The Sellers and the
Purchaser agree that at the Closing, the amounts set forth
on the Final Lists as to each Property shall not be paid by
the Purchaser to the relevant Seller and shall instead be
placed in the appropriate Escrows.
5. The Escrows shall be
established pursuant to the escrow agreement (the "Escrow
Agreement") reasonably satisfactory to the Sellers and the
Purchaser to be executed at the Closing. Any interest earned
in the Escrows shall be deemed a part of the respective
Escrows.
6. Funds shall be advanced
from the Escrows as provided in the 2/10 Letter Agreement,
this letter agreement and the Escrow Agreement.
7. The provisions of the
2/10 Letter and of this letter agreement shall survive the
Closing until the date on which all of the Escrows have been
disbursed pursuant to this letter agreement, the 2/10 Letter
and the Escrow Agreement.
[SIGNATURES ON FOLLOWING PAGE]
DWR CHESTERBROOK ASSOCIATES,
a Pennsylvania General Partnership
By: Chesterbrook Investment Partners, L.P.,
a General Partner
By: Dean Witter Realty Income Partnership III, L.P.,
a General Partner
Dean Witter Realty Income Properties III, Inc.
its Managing General Partner
______________________________
Robert B. Austin
Vice President
By: Dean Witter Realty Income Partnership IV, L.P.
a General Partner
Dean Witter Realty Fourth Income Properties, Inc.
its Managing General Partner
______________________________
Robert B. Austin
Vice President
By: Duportail Investment Partners, L.P.
a General Partner
DW Chesterbrook Investors, Inc.
a General Partner
______________________________
Robert B. Austin
Vice President
DW Duportail Investors, Inc.
its Managing Partner
______________________________
Robert B. Austin
Vice President
GLENHARDIE CORPORATION
By: ____________________
Robert B. Austin
Vice President
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.,
a Delaware limited partnership
By: Dean Witter Realty Income Properties II, Inc.,
its General Partner
______________________
Robert B. Austin
Vice President
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.,
a Delaware limited partnership
By: Dean Witter Realty Income Properties III, Inc.,
its General Partner
______________________________
Robert B. Austin
Vice President
PART SIX ASSOCIATES
By: Dean Witter Realty Income Partnership III, L.P.,
a Delaware limited partnership
By: Dean Witter Realty Income Properties III, Inc.,
its General Partner
______________________________
Robert B. Austin
Vice President
AGREED TO:
FV OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: FVGP, L.L.C.,
a Pennsylvania limited liability company,
its general partner
_____________________________
James W. Hovey
a Member
EXHIBIT A
Allowances and Tenant Improvement Obligations per Lease
Agreements
Glenhardie Corporate Center
Glenhardie III:
Dean Witter Reynolds, Inc. $12,030.00
Medeva Americas, Inc. $23,741.00
Glenhardie IV:
New England Life $335,996.00
Triumph Group Operations, Inc. $43,628.00
Chesterbrook Corporate Center
600 Lee Road:
Weyerhaeuser - 6,888 sf $96,432.00
Weyerhaeuser - 11,527 sf $161,378.00
620 Lee Road:
Weyerhaeuser $392,560.00
701 Lee Road:
Manufacturers Life Insurance $51,915.00
955 Chesterbrook Boulevard:
Aetna Life Insurance Co. $75,450.00
Crothall Healthcare Services $193,292.00
Software Design Concepts $65,000.00
1325 Morris Drive:
Fox Management Co. $292,601.00
NOTE: Seller and Purchaser agree that this list is subject
to adjustments based upon review of any Estoppel
Certificates received by Purchaser subsequent to the date of
this Letter Agreement.
EXHIBIT B
1400 Morris Drive
Brick Facade Condition $202,500.00
Code Issues:
ADA Fire Panels/Horns & Strobes
Glenhardie I $25,000.00
Glenhardie II 25,000.00
Glenhardie III 25,000.00
Glenhardie IV 25,000.00
600 Lee Road 25,000.00
620 Lee Road 25,000.00
701 Lee Road 40,000.00
955 Chesterbrook Boulevard 25,000.00
965 Chesterbrook Boulevard 40,000.00
1300 Morris Drive 25,000.00
1400 Morris Drive 25,000.00
1325 Morris Drive 25,000.00
NOTE: Sellers and Purchaser acknowledge that the above
amounts reflect Purchaser's estimate of the maximum cost to
correct perceived deficiencies identified by Purchaser's
Engineers. It is further agreed between Seller and Purchaser
that the placing of the above amount into escrow is not an
indication by any Seller that it is in agreement with
Purchaser's position in these areas. Instead it is agreed
that the issues raised represent potential "Valuation
Adjustments" as such term in defined in the Original
Agreement. Purchaser and Sellers agree that for a period of
thirty (30) days subsequent to the Closing that they will
attempt in good faith to reach agreement as to the accuracy
of Purchaser's assertions that the work is required by law,
the appropriateness of the proposed solution and the
reasonableness of the cost to correct. It is further agreed
that should a mutually acceptable resolution not be
achieved, within the indicated time frame, then such items
shall be subject to resolution via Section 4.2.4 of the
Original Agreement.
EXHIBIT C
701 Lee Road
Tenant Improvements:
Allstate Insurance Turn-key Buildout$2,000,000.00
(which shall include all funds necessary to achieve a
certificate of occupancy for said tenant and to the extent
so required to address the PVC issue raised by Purchaser's
engineers. Plus; amount reflects funds to pay Fox Realty Co.
a Construction Management Fee @ 3% of contract value)
Glenhardie II
Building Improvements:
Restroom Renovation $50,000.00
Parking Lot Repairs 15,000.00
Exterior Entrance Doors 7,000.00
Firetower Renovations 15,000.00
Water Leak 1,000.00
Tenant Improvements:
SunGard Allowance $1,348,358.00
Restroom Installation in Cafe 7,500.00
Cafe Exit 7,000.00
Fox Realty Co. Construction Management Fee 16,200.00
(@ 3% of remaining unfunded balance of
$540,000.00 [estimated])
Additional Escrow Collateral (approx. 10%)
$150,000.00
$1,617,058.00
NOTE: It is agreed that the above represents good faith
estimates by the Seller(s) as to its obligations under
certain Leases at the Properties. The appropriate Seller
understands that it is obligated to provide sufficient funds
to complete all the work described above whether or not the
indicated estimates are sufficient.
DWR CHESTERBROOK ASSOCIATES
GLENHARDIE CORPORATION
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
PART SIX ASSOCIATES
Two World Trade Center
New York, New York 10048
April 1, 1998
FV Office Partners, L.P.
The Fox Companies
1325 Morris Drive
Wayne, Pennsylvania 19087-5594
re: Sale of the Glenhardie and
Chesterbrook Corporate Centers
Dear Jim:
Reference is made to the Purchase and Sale Agreement
between DWR Chesterbrook Associates ("DWR Chesterbrook"),
Glenhardie Corporation ("Glenhardie"), Dean Witter Realty
Income Partnership II, L.P. ("DWRIP II"), Dean Witter Realty
Income Partnership III, L.P. ("DWRIP III"), Part Six
Associates ("Part Six") and, together with DWR Chesterbrook,
Glenhardie, DWRIP II and DWRIP III, (collectively, the
"Sellers"), and FV Office Partners, L.P. (the "Purchaser")
with respect to the sale of the Glenhardie Corporate Center
and portions of the Chesterbrook Corporate Center
(collectively, the "Properties") dated as of February 10,
1998 (the "Original Agreement") as amended by letter
agreements between Dean Witter Realty Inc. on behalf of
itself and as agent for the Sellers dated February 6, 1998
(the "2/6 Letter") and February 10, 1998 (the "2/10 Letter")
and March 18, 1998 (the "3/18 Letter") and together with the
Original Agreement, the 2/6 Letter and the 2/10 Letter,
(collectively, the "Agreement"). All capitalized terms not
defined herein shall have the meangings specified in the
3/18 letter.
1. This letter agreement shall constitute the Escrow
Agreement as described in the 3/18 Letter and shall amend
the Agreement as set forth herein.
2. The Purchase Price is reduced by $4,915,008 to
$167,897,492. The adjusted Purchase Price is, as set forth
on Exhibit A hereto, allocated: (a) 18% to certain personal
property, tangible and intangible, including, but not
limited to, the intangible property described on Schedule 10
to the Original Agreement (including but not limited to the
good will associated therewith) and other personality as
more fully set forth in a valuation report of Marshall &
Stevens and (b) the balance to real property. All
references to the Exhibit A Escrow and the Exhibit A Items
shall be deemed deleted from the 3/18 Letter and the
relevant portions f the 2/10 Letter shall be of no force and
effect, provided that the Purchaser hereby assumes, and
agrees to perform, all of the Sellers' obligations with
respect to the performance of the Exhibit A Items. The
Sellers agree to take no position (financial or tax)
inconsistent with the allocations contained herein.
3. Attached hereto as Exhibits B and C, respectively,
are the Final Lists of the Exhibit B Items and the Exhibit C
Items and the final amounts of the Exhibit B Escrow and the
Exhibit C Escrow. Notwithstanding anything to the contrary
contained in the 3/18 letter, the Purchaser, and not the
Seller, shall fund the Exhibit B Escrow and the Exhibit C
Escrow at the Closing. Funds shall be advanced from the
Exhibit B Escrow and the Exhibit C Escrow based upon
requisitions submitted monthly by the Purchaser as to the
Exhibit B Escrow and by the Sellers as to the Exhibit C
Escrow in accordance with Paragraph 7 of the 3/18 letter and
Paragraph 9 of this letter agreement. As provided in
Paragraph 1 of the 3/18 letter: (a) upon the completion of
the Exhibit B Items and the Exhibit C Items, as the case may
be, the balance, if any, in the Exhibit B Escrow and/or the
Exhibit C Escrow shall be delivered to the Sellers and (b)
the Sellers shall be obligated to pay excess costs as to the
Exhibit C Items.
4. The proceeds of the Escrows shall be held in the
money market account of Fox Realty Co. at CoreStates Bank in
Philadelphia, Pennsylvania. Fox Realty Co. is executing
this letter agreement solely for the purposes of agreeing to
hold and apply the Escrows as provided in this letter
agreement.
5. Funds shall be withdrawn from the Escrows and
disbursed as provided in the 2/10 Letter, the 3/18 Letter
and this letter agreement.
6. The Purchaser indemnifies and holds harmless the
Sellers from any and all loss, costs, claim damage,
liability and expense (including, without limitation,
attorney's fees and disbursements) which may be incurred by
any of the Sellers by reason of any misapplication or misuse
of the escrowed amounts by, or any default, misconduct or
negligence of, Fox Realty Co., in its capacity as escrow
agent hereunder.
7. The Sellers shall be entitled to any interest
accrued on the Escrows and shall be the party responsible
for the payment of any tax due thereon. The Sellers shall
file appropriate income tax information returns with respect
to any interest earned on the Escrows.
8. If there is a dispute as to any disbursement from
any of the Escrows then either DWR or the Purchaser may
submit such dispute to arbitration in the City of
Philadelphia before one (1) arbitrator by giving a demand
for arbitration to the other.
Within three (3) business days after the giving of any
such demand for arbitration, the parties shall in good faith
seek to find a mutually acceptable arbitrator. If agreement
as to a mutually acceptable arbitrator is not reached within
such three (3) business day period, then either party may,
within three (3) business days thereafter submit such
dispute for arbitration before one (1) arbitrator under the
Expedited Procedures provisions of the Commercial
Arbitration Rules of the American Arbitration Association
("AAA") (presently rules 53 through 57 and, to the extent
applicable, Section 19); provided, however, that with
respect to any such arbitration: (I) the list of arbitrators
referred to in Rule 54 shall be returned within three (3)
business days from the date of receipt; (ii) the parties
shall notify the AAA by telephone, within two (2) business
days after receipt of notice of the arbitrator designated by
the AAA of any objections to the arbitrator appointed; (iii)
the Notice of Hearing referred to in Rule 55 shall be given
at least four (4) business days in advance of the hearing;
(iv) the hearing shall be held within five (5) business days
after the appointment of the arbitrator, and the additional
hearing, if any, shall beheld within two (2) business days
after the initial hearing; and (v) the decision and award
of the arbitrator shall be made within two (2) business days
of completion of the arbitration and shall be final and
conclusive on the parties. The parties shall pay equally
the costs of any such arbitration and each party shall pay
its own attorney's fees and disbursements and the fees of
all other persons engaged by it in connection with the
arbitration.
9. Paragraph 7 of the 3/18 Letter is amended to insert
at the end thereof the words "and: (a) all of the work or
any portion thereof required with respect to the Exhibit C
Items has been completed in full by the Sellers in full; (b)
all contractors, subcontractors and material men have been
paid in full and have executed lien waivers as to such work
or portion thereof which have been delivered to the
Purchaser; and (c) the relevant tenants have acknowledged in
writing that such work or portion thereof has been completed
in full in accordance with their leases; it being the intent
of the Sellers and the Purchaser that the funds in Exhibit C
Escrow shall be released on a monthly requisition basis."
10. The Agreement, as amended
hereby, is ratified and conformed and remains in full force
and effect.
DWR CHESTERBROOK ASSOCIATES
By: Chesterbrook Investment
Partners, L.P., a general
partner
By: Dean Witter Realty Income
Partnership IV, L.P., a general
partner
By: Dean Witter Realty Fourth
Income Properties, Inc., its general
partner
By: /s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
By: Dean Witter Realty Income
Partnership III, L.P., a general
partner
By: Dean Witter Realty Fourth
Income Properties III, Inc., its its
general partner
By: /s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
By: Duportail Investment
Partners, L.P., a general
partner
By: DW Chesterbrook Investors
Inc., its general partner
By: /s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
GLENHARDIE CORPORATION
By: /s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P.
By: Dean Witter Realty Income
Properties II Inc., its general
partner
By: /s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
DEAN WITTER REALTY INCOME
PARTNERSHIP III, L.P.
By: Dean Witter Realty Income
Properties III Inc., its general
partner
By: /s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
PART SIX ASSOCIATES
By: Dean Witter Realty Income
Partnership III, L.P., its
general partner
By: Dean Witter Realty Income
Properties III Inc., its general
partner
By: /s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
AGREED TO:
FV OFFICE PARTNERS, L.P.
a Delaware limited partnership
By: FVGP, L.L.C.
a Pennsylvania limited liability
company, its general partner
By: /s/ James W. Hovey
Name: James W. Hovey
Title: a Member
FOX REALTY CO.
By: /s/ James W. Hovey
Name: James W. Hovey
Title: Vice President
