THIS DOCUMENT IS A COPY OF THE FORM
10-Q FILED ON MARCH 18, 1999 PURSUANT
TO A RULE 201 TEMPORARY HARDSHIP
EXEMPTION
UNITED
STATES SECURITIES AND
EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 10-Q
[ X ]QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended
January 31, 1999
OR
[ ]TRANSITION REPORT PURSUANT
TO SECTION 13
OR 15(d) OF
THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
________
to ________.
Commission File
Number: 0-
18150
DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P.
(Exact name of registrant as specified
in governing
instrument)
Delaware
13-
3244091
(State of organization)
(IRS Employer
Identification No.)
2 World Trade Center, New York, NY
10048 (Address of principal executive
offices)
(Zip Code)
Registrant's telephone number, including
area code: (212) 392-1054
Former name, former address and former
fiscal year, if changed since last
report: not applicable
Indicate by check mark whether the
registrant (1)
has filed all
reports required to be filed by
Section 13 or 15(d) of the
Securities Exchange Act of 1934
during the preceding 12 months (or
for such shorter period that the
registrant was required to file
such reports), and (2) has been
subject to
such filing
requirements for the past 90 days. Yes
X No
Page 1
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P.
CONSOLIDATED BALANCE
SHEETS <CAPTION>
ASSETS
<S>
January 31, October 31,
1999 1998
<C> <C>
Cash and cash equivalents $
811,731 $
624,315
Real estate held for sale
10,406,475 -
Real estate:
Land
-
1,900,300
Buildings and improvements -
13,173,398
Accumulated depreciation -
4,727,834
Investment in joint venture
2,338,114
2,373,176
Deferred leasing commissions, net 227,652
223,878
Other assets 229,951
229,999
$14,013,923
$13,797,232
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 366,888
$ 375,900
Partners' capital (deficiency):
General partners
(5,440,170)
(5,462,740)
Limited partners ($1,000 per Unit, 177,023 Units
issued) 19,087,205
18,884,072
Total partners' capital 13,647,035
13,421,332
$14,013,923
$13,797,232
See accompanying notes to consolidated financial
statements
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P.
CONSOLIDATED INCOME STATEMENTS
Three months ended January 31, 1999 and 1998
<CAPTION>
1999
1998
<S>
<C> <C>
Revenues:
Rental $ 404,772
$1,158,921
Gain on sale of real estate -
11,048,285
Equity in earnings of joint venture 68,769
59,521
Interest and other 33,987
113,379
507,528
12,380,106
Expenses:
Property operating 78,842
520,925
Depreciation and amortization 125,879
265,031
General and administrative 77,104
168,887
281,825
954,843
Net income $ 225,703
$11,425,263
Net income allocated to:
Limited partners $ 203,133
$11,387,565
General partners 22,570
37,698
$ 225,703
$11,425,263
Net income per Unit of limited partnership interest $
1.15 $ 64.33
See accompanying notes to consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Three months ended January 31, 1999
<CAPTION>
Limited
General
Partners
Partners Total
<S>
<C> <C>
<C>
Partners' capital (deficiency)
at November 1, 1998 $
18,884,072 $(5,462,740) $ 13,421,332
Net income
203,133
22,570
225,703
Partners' capital (deficiency)
at January 31, 1999 $
19,087,205 $(5,440,170) $ 13,647,035
See accompanying notes to consolidated
financial
statements. </TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME
PARTNERSHIP II,
L.P.
CONSOLIDATED STATEMENTS OF
CASH
FLOWS
Three months ended January 31,
1999 and
1998 <CAPTION>
1999 1998
<S> <C>
<C>
Cash flows from operating activities:
Net income $
225,703 $
11,425,263
Adjustments to reconcile net income
to net cash
provided
by operating activities:
Depreciation and amortization
125,879
265,031
Equity in earnings of Taxter joint
venture
(68,769)
(59,521)
Gain on sale of real estate 0
(11,048,285)
(Increase) decrease in operating assets:
Deferred leasing commissions
(16,258)
(169,499)
Other assets
48
338,729
Decrease in accounts payable and other
liabilities
(9,012)
(297,147)
Net cash provided by operating
activities
257,591
454,571
Cash flows from investing activities:
Additions to real estate
(174,006)
(79,154)
Distributions from Taxter
joint
venture
108,780
99,160
Investments in Taxter
joint
venture
(4,949)
(19,493)
Proceeds from sale of real estate 0
25,337,971
Net cash (used in) provided by investing
activities (70,175)
25,338,484
Cash flows from financing activities:
Cash distributions to partners 0
(26,426,387)
Increase (decrease) in cash and cash equivalents
187,416
(633,332)
Cash and cash equivalents at beginning of period
624,315
1,741,456
Cash and cash equivalents at end of period $
811,731 $ 1,108,124
Supplemental disclosure of non-cash investing
activities:
Real estate:
Land
$
1,900,300 $
1,645,000
Buildings and improvements
13,347,404
17,503,727
Accumulated depreciation
(4,841,229)
(8,578,601)
Real estate held for sale
$
10,406,475 $
10,570,126
See accompanying notes to
consolidated financial statements.
</TABLE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP
II, L.P.
Notes to Consolidated Financial
Statements
1.
The
Partnership
Dean Witter Realty Income
Partnership II, L.P. (the
"Partnership") is a limited
partnership organized under the laws
of the State of Delaware in 1984.
The Partnership's fiscal year ends on
October 31.
The financial statements include
the accounts of the
Partnership and the Framingham
Corporate
Center joint venture (sold in the
first quarter of fiscal 1998) on a
consolidated basis. The equity
method of accounting has been applied
to the Partnership's 14.8% interest in
the Taxter Corporate Park property
because of the Partnership's continuing
ability to exert significant influence
over Taxter.
The Partnership's records are
maintained on the accrual basis of
accounting for financial reporting
and tax reporting purposes.
Net income per Unit of limited
partnership interest amounts are
calculated by dividing net income
allocated to Limited Partners, in
accordance with the Partnership
Agreement, by the weighted average
number of Units outstanding.
In the opinion of management, the
accompanying
financial statements, which have
not been audited, include all
adjustments necessary to present
fairly the results for the interim
period. Except for the reclassification
of real estate held for sale and the
1998 gain on sale of real estate, such
adjustments consist only of normal
recurring accruals.
These financial statements should be
read in conjunction with the annual
financial statements and notes thereto
included in the Partnership's annual
report on Form 10-K filed with the
Securities and Exchange Commission for
the year ended October 31,
1998. Operating
results of interim periods may not
be
indicative of the operating results
for the entire year.
6
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP
II, L.P.
Notes to Consolidated Financial
Statements
2. Real Estate Held for Sale
On February 16, 1999, the
Partnership entered into an
agreement with New Plan Excel
Realty Trust, Inc., an
unaffiliated party, to sell the
land and building which comprise
the Pavilions at East Lake property.
As part of the Agreement, Dean
Witter Realty Income Partnership III,
L.P., an affiliate, also agreed to
sell a retail property to New Plan.
The aggregate negotiated sales price
of the properties sold was
approximately $24.1 million, of which
$14 million was allocated in the
agreement to the Pavilions at East
Lake property. The purchase price was
paid in cash at closing on March 1,
1999. At closing, the Partnership
received proceeds, net of closing
costs, an escrow deposit (described
below) and other deductions, of
approximately $13.3 million. Such
proceeds ($75.13 per Unit) were
distributed 100% to the Limited
partners on March 12, 1999.
Partnership sale proceeds of $250,000
are being held in an escrow account
to secure the Partnership's
obligations if any, pursuant to
its representations and warranties
in the agreement. If
the buyer has not made any claims
against the Partnership by September
1, 1999, the escrow deposit will be
released to the Partnership.
The Partnership has reclassified the
net carrying value of the Pavilions at
East Lake property to real estate held
for sale as of January 31, 1999. The
Partnership's consolidated balance
sheet at January 31, 1999 also
included the following amounts related
to the property: deferred leasing
commissions of approximately
$228,000, other assets of $190,000,
and accounts payable and other
liabilities of $159,000.
On the consolidated income statement
for the three months ended January
31, 1999, all of the Partnership's
rental income, property operating
expenses and depreciation and
amortization expenses were
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP
II, L.P.
Notes to Consolidated Financial
Statements
generated by the Pavilions at East
Lake property. On the consolidated
income statement
for the year ended October 31, 1998,
the property generated the following income and
expenses: rental income of approximately
$1,412,000, property operating expenses of
$390,000 and depreciation and amortization
expenses of $478,000.
3. Investment in Joint Venture
In 1987, the joint venture which owns Taxter
Corporate Park sold a leasehold interest in
approximately 20% of
the property's space to KLM. In 1998, KLM
accepted a $6.75 million purchase
offer for the leasehold interest,
which the
joint venture had the right to
match. The partners of the joint
venture believe that inclusion of the
KLM space improves the value and
salability of the property; however,
the joint venturers did not have
sufficient cash to fund the purchase.
Therefore, an affiliate of the
Managing General Partner, (the
"Affiliate") as an accommodation,
purchased the leasehold interest on
February 8, 1999 for $6.75 million and
assumed the rights and obligations of
KLM thereunder.
On February 4, 1999, the joint venture
and KLM entered into a new lease
which allows KLM to continue to occupy
50% of the space subject to the
leasehold interest. On February 8,
1999, the Affiliate also assumed the
rights and obligations of the joint
venture under this new lease.
As part of the purchase of the leasehold
interest, the joint venture received an option
to purchase the leasehold interest and assume the
new lease from the Affiliate for a purchase
price of $6.75 million plus any tenant
improvements, leasing commissions and capital
expenditures incurred by the Affiliate in
connection with the leasehold interest
(collectively, the "Resale Price"). The joint
venture also granted the Affiliate an option to
require the joint venture to purchase the
leasehold interest and assume the new lease for
the Resale price. When the property is sold,
the joint venture will be obligated to purchase
the leasehold interest and assume the new lease
from the Affiliate for the Resale Price.
<PAGE>
4. Related Party Transactions
An affiliate of the Managing General Partner
provided property management services for
Taxter Corporate Park (through December 31,
1998), Glenhardie I and II (sold April 1998) and
Framingham Corporate Center (sold December
1997).
The
Partnership incurred management fees of
approximately $3,000 and $31,000
for the three months ended January 31,
1999 and 1998, respectively.
Another affiliate of the Managing
General Partner performs
administrative functions, processes
investor transactions and prepares
tax
information for the Partnership. For
the three months ended January 31,
1999 nd 1998, the Partnership
incurred approximately $65,000 and
$87,000, respectively, for these
services. These amounts have been
recorded in general and
administrative expenses.
As of January 31, 1999, the affiliates
were owed a total of approximately
$11,000 for these services.
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Liquidity and Capital Resources
The Partnership raised $177,023,000 in
a public offering which was terminated
in 1985. The Partnership has no plans
to raise additional capital.
The Partnership purchased five
properties and made three
investments in partnerships on an
all-cash basis. The
Partnership's acquisition program
has been completed.
No
additional investments are planned.
As a result of property sales in
fiscal 1998, Partnership cash flow
from operations decreased during the
three months ended January 31, 1999
as compared to 1998.
The Pavilions at East Lake property
was sold on March 1, 1999 (see Note
2 to the
Consolidated Financial Statements).
Subsequently, the Partnership's
interest in the Taxter
Corporate Park office property
is the Partnership's sole property
interest. The joint venture which
owns the Taxter property is currently
marketing the property for sale,
with the objective of completing the
sale in fiscal year 1999. However,
there can be no assurance the
Partnership will be able to achieve
this objective.
During the first quarter of fiscal
1999, the overall vacancy levels in
the office market in Westchester
County, New York, and the west
Westchester sub-market in which Taxter
Corporate Park is
located remained at approximately 18%
and 14%, respectively. Also during the
first quarter of fiscal 1999,
occupancy at the property increased
slightly to more than 99%. However,
in February 1999, total occupancy at
the property decreased to
approximately 83% because KLM vacated
approximately 10% of the property's
space and
another tenant vacated approximately
7% of the space. Also, the ability
of Cityscape, which occupies
approximately 12% of the property's
space, to satisfy its future
obligations under its leases (which
expire in 2000) is uncertain because
Cityscape filed for bankruptcy
protection in 1998. Leases
aggregating approximately 39% of the
space expire in 2001. As described
in Note 3 to the consolidated
financial statements, in February
1999,
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP
II, L.P.
an affiliate of the Managing General
Partner acquired KLM's leasehold
interest in the property and assumed
a new lease between the joint
venture and KLM.
During the three months ended January
31, 1999, both of the Partnership's
remaining properties generated
positive cash flow from operations,
and it is anticipated that the Taxter
property will continue to do so in
fiscal 1999.
During the three months ended
January 31, 1999, the
Partnership's cash flow from
operations and distributions received
from the Taxter joint venture exceeded
its capital expenditures for tenant
improvements and leasing commissions
at the Pavilions at East Lake
property.
The Partnership did not pay any cash
distributions during the three months
ended January 31, 1999. In March
1999, the Partnership will
distribute approximately $13.3
million ($75.13 per Unit), the net
proceeds from the sale of the
Pavilions at East Lake property. The
distribution will be paid 100% to
the Limited Partner(see Note
2 to the
Consolidated Financial Statements).
The Partnership expects to pay for
its share of the purchase price of
the former KLM leasehold interest from
its share of the proceeds from the
sale of the Taxter property.
The
Partnership may also be required to
fund the costs of capital
expenditures at the Glenhardie
buildings pursuant to commitments
made prior to the sale of the
buildings, if the aggregate of
such costs, when all projects have
been completed, exceeds the escrow
deposit made in 1998 at closing of
the sale of the property. Generally,
future cash distributions will be
paid from the remaining proceeds
from the sale of the Taxter property,
the receipt, if any, of the escrow
deposit relating to the sale of the
Pavilions at East Lake property and
cash reserves. The Partnership
believes that its cash reserves are
adequate for its need in fiscal 1999.
Except as discussed above and in the
consolidated financial statements, the
Managing General Partners is not aware
of any trends or events, commitments
or uncertainties that may have a
material impact on liquidity.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP
II, L.P.
Operations
Fluctuations in the Partnership's
operating results for the three-
month period ended January 31, 1999
compared to 1998 are primarily
attributable to the following:
During the three months ended January
31, 1999, rental income, property
operating expenses, and general and
administrative expenses decreased
as a result of the 1998 sales of
the Framingham Corporate Center
and Glenhardie I and II
properties.
The 1998 gain on sale of real estate
resulted from the sale of the
Framingham Corporate Center.
Interest and other income decreased
in fiscal 1999 primarily because the
Partnership earned interest in 1998
on the proceeds from the sale of the
Framingham property, until such
proceeds were distributed to Limited
Partners.
Depreciation and amortization
expenses decreased in fiscal 1999
due to the sale of the Glenhardie
buildings in April 1998.
There were no other individually
significant factors which caused
changes in revenues or expenses.
Inflation
Inflation has been consistently
low during the periods presented
in the financial statements and, as a
result, has not had a significant
effect on the operations of the
Partnership or its properties.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP
II, L.P.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form
8-K
a) Exhibits
An exhibit index
has been filed as
part of this
Report on Page
E1.
b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the
registrant has duly caused this report
to be signed on its behalf by the
undersigned there unto duly
authorized. <CAPTION>
<S> <C>
DEAN
WITTER
REALTY
INCOME
Partne
rship
II,
L.P.
By:
Dean Witter Realty Income
Properti
es II
Inc.
Managing
General
Partner
Date: March 16 ,1999 By:
/s/E.
Davisson Hardman,
Jr.
E. Davisson
Hardman,
Jr.
President
Date: March 16 ,1999 By:
/s/Charles
M. Charrow
Charles M.
Charro
w
Contro
ller
(Princ
ipal
Financ
ial
and
Accoun
ting
Office
r)
<PAGE>
</TABLE>
<TABLE>
Dean Witter Realty Income
Partnership
II, L.P.
Quarter Ended January
31, 1999
Exhibit
Index
<CAPTION>
<S> <C>
Exhibit
No.
Description
10(h) Purchase and Sale
Agreement
Dated as of
February 16, 1999
between Dean Witter
Realty Income
Partnership II, L.P.,
Dean Witter Realty
Income Partnership
III, L.P.,
and New Plan Excel
Realty Trust, Inc.
10(i) Assignment and
Option Agreement
dated
February 8, 1999
between Taxter Park
Associates and DW
Taxter Special Corp
27 Financial Date Schedule
</TABLE>
E1
<PAGE>
<TABLE>
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this
"Agreement"), dated as of the 16th day of
February, 1999, by and between Dean Witter
Realty Income Partnership II, L.P., a
Delaware limited partnership, and Dean
Witter Realty Income Partnership III, L.P., a
Delaware 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 New Plan
Excel Realty Trust, Inc., a Maryland
corporation, having an office at 1120 Avenue
of the Americas, 12th Floor, New York, New
York 10036 (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Sellers are the owners of
the following shopping centers:
<CAPTION>
LOCATION OWNER
<S> <C>
Pavilions at East Lake, Dean Witter Realty
Income Marietta, Georgia Partnership
II, L.P.
Westland Crossing, Dean Witter
Realty Income
Westland, Michigan Partnership
III, L.P.
WHEREAS, the Sellers and the Purchaser
desire to enter into an agreement whereby,
subject to the terms and conditions contained
herein, the Sellers shall sell the Shopping
Centers to the Purchaser and the Purchaser
shall purchase the Shopping Centers from the
Sellers.
NOW, THEREFORE, in consideration of the
mutual covenants and agreements hereinafter
set forth, and intending to be legally
bound hereby, the parties hereby agree as
follows:
1. Sale of Shopping Centers.
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
</TABLE>
<PAGE>
this Agreement, all those certain plots,
pieces and parcels of land described in
Schedule 1 hereto (the "Land") listed
thereon as owned by
such Seller, together with (i) all
buildings, structures, attached fixtures and
landscaping and other improvements situated
on the Land (collectively, the "Buildings"),
(ii) all easements, rights of way,
reservations, privileges,
appurtenances, mineral, oil and gas rights,
development, air and water rights, and other
estates and rights of such Seller pertaining
to the Land and the Buildings, (iii) all
right, title and interest of such Seller
in and to all signs, 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"), (iv) all right, title
and interest of such Seller, if any, in and
to the trade names of the Land and/or the
Buildings, (v) all right, title and interest
of such Seller, if any, in and to all strips
and
gores, all alleys adjoining the Land, and
the land lying in the bed of any street,
road or avenue, opened or proposed, in front
of or adjoining the Land to the center line
thereof, and all right, title and interest of
such Seller, if any, in and to any award made
or to be made in lieu thereof and in and to
any unpaid award for any taking by
condemnation or any damages to the Land or
the Buildings (the Land, together with all of
the foregoing items listed in
clauses (i)-(v) above being hereinafter
sometimes referred to as to each separate
location listed on Schedule 1 as a "Shopping
Center"; collectively, as the "Shopping
Centers"; with respect to the property
located in Michigan, the "Michigan Shopping
Center"; and with respect to the property
located in Georgia, the "Georgia Shopping
Center"), (vi) all Leases, Licenses,
Contracts and any
warranties or guaranties relating thereto, and
relating to the Shopping Centers, and (vii)
any plans and specifications, books, records
and files of such Seller, whether maintained
by the Sellers or by any agent of the Sellers,
relating solely to any of the foregoing.
1.1. Excluded Property.
Specifically excluded from the
Shopping Centers and this sale are
all items of
personal property
not
described in Section 1 and the
items
described in Schedule 2 annexed hereto and made a
part hereof.
1.2. Closing Date.
The delivery of the Deeds and the
consummation of the transactions contemplated by
this Agreement
<PAGE>
(the "Closing") shall take place in the
following locations on the following dates
(each, a "Closing Date"), or by mail or on such
earlier dates as the Sellers and the Purchaser
may agree to in writing:
(a) Georgia Shopping Center: two (2) business
days after delivery to the Purchaser of the Kroger
and ACE Hardware parking estoppels described in
Section 4.3, but in any event no later than March
31, 1999. The Closing shall occur at the offices
of Bingham Dana LLP in Boston at 10:00 a.m.
(b) Michigan Shopping Center: five (5) business
days after the Purchaser gives the Sellers notice
that it is satisfied that the construction at the
Michaels Stores, Inc. has been completed, if
such be the case, which notice by the Purchaser
shall be given within three (3) business days
after receipt by the Purchaser of the Estoppel
Certificate provided by Michaels Stores, Inc., but
in any event, the Closing shall occur, if such be
the case, no later than April 30, 1999, unless
extended by agreement of the Sellers and the
Purchaser. The Closing is to occur at the offices
of Bingham Dana LLP in Boston at 10:00 a.m.
2. Purchase Price.
The purchase price to be paid by the Purchaser to
the Sellers for the Shopping
Centers (the "Purchase Price") is Twenty-Four
Million One Hundred Thousand
Dollars
($24,100,000.00) payable as follows:
(a) Five Hundred Thousand
($500,000.00) Dollars (the "Downpayment"),
shall be payable simultaneously with the
execution and delivery of this Agreement, by
delivery to Lawyers Title Insurance
Corporation (the "Escrow Agent") by a bank
wire transfer of immediately available funds
to an account designated in writing by the
Escrow Agent. For the purposes of this
Agreement, Three Hundred Thousand Dollars
($300,000) of the Downpayment shall be
attributed to the Georgia Shopping Center
(the "Georgia Downpayment"), and Two
Hundred Thousand
Dollars ($200,000) of the Downpayment shall be
attributed to the Michigan Shopping Center
(the "Michigan Downpayment").
The Downpayment shall be held and
disbursed by the Escrow
<PAGE>
Agent in accordance with the terms of Section
16. At the
Closing
for the Georgia Shopping Center,
the Georgia Downpayment and any interest
accrued thereon shall be applied against
the Purchase Price, i.e., the Purchaser
shall receive a credit of Three Hundred
Thousand Dollars plus applicable interest
against the portion of the Purchase Price
payable pursuant to Section 2(b) and only
the Michigan Downpayment and any interest
accrued thereon shall continue to be held by
the Escrow Agent.
If the Closing shall occur with respect to the
Michigan Shopping Center, the
Sellers shall be entitled to
receive the Michigan Downpayment
and any interest accrued
thereon, and the Michigan
Downpayment and such interest
shall be credited, in
Purchaser's favor, against the
portion of the Purchase Price
payable pursuant to Section
2(b) solely to the extent that
such interest accrues up to and
including the Adjustment Date.
(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 delivered to the Escrow Agent
on the day prior to Closing to
be paid at the Closing by bank
wire transfer of immediately
available funds to Sellers'
account or to the account or
accounts of such other party or
parties as may be designated by
the Sellers on or before the
Closing Date.
(c) The Purchase Price for
each individual
Shopping
Center is
as follows:
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Shopping Center
Purchase Price
1. Pavilions at East
$14,000,000.00
Lake
2. Westland Crossing $10,100,000.00
(d) Because the Closings
occur with respect to the
Shopping Centers on different
dates (i) the Purchase Price
to be paid at each such
Closing shall be the
applicable Purchase Price as set
forth in Section 2(c) for the
applicable Shopping Center being
closed and (ii) the
apportionments to be performed
pursuant to Section 3 shall be
calculated only with respect to
that
Shopping Center being closed.
3. Apportionments
The following shall be
apportioned between the Sellers and
the Purchaser for all Closings as of
11:59 P.M. on the day preceding the
Closing Date (the "Adjustment Date"),
in the manner set forth in Section
3.1:
(a) prepaid rents, rents
for the month in which the
Closing occurs and Additional
Rents and other amounts payable
by tenants, if, as and when
received, subject to Section
3.3, together with a reduction
to the Purchase
Price equal to the net
present value
of any free occupancy period, free
tenant improvements, or other
similar concessions to any tenant
under any Lease in effect as of
the date hereof which, by the
terms of such Lease, are to
occur on or after the Adjustment
Date;
(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 vault charges, if any, on
</TABLE>
<PAGE>
(c) the basis of the fiscal years (or applicable
billing
period if other than a fiscal year),
respectively, for which same have been
assessed, subject to Section 3.2;
(c) value of prepaid fuel belonging
to Seller stored on the Shopping Centers, at
the Sellers' cost, including any taxes, on the
basis of a
statement from the Sellers' suppliers;
(d) charges and payments
under Contracts that are being
assigned to the Purchaser
pursuant to the terms of the
agreements listed on Schedule 3
or permitted renewals or
replacements thereof;
(e) any prepaid
items, including, without
limitation, fees for licenses
which are transferred to the
Purchaser at the Closing and
annual permit and inspection
fees;
(f) utilities,
including, without
limitation, telephone, steam,
electricity and gas companies, on
the basis of the most recently issued
bills therefor, subject to adjustment
after the Closing when the next bills
are available, or if current meter
readings are available, on the basis
of such readings (provided, that the
foregoing shall specifically exclude
any deposits of the Sellers with
respect to such utilities);
(g) personal property taxes
payable by the owner of a
Shopping Center regardless of
identity, if any, on the basis of
the fiscal year for which
assessed;
(h) all other expenses and
revenues from the operation of
the Shopping Centers other than
rents and Additional Rents
(including, without limitation,
parking charges, tenant direct
electrical reimbursements, HVAC
overtime charges, and telephone
booth and vending machine
revenues);
(i) New Lease Expenses
as provided in Section 11.1.2;
(j) at the Closing of the
Michigan Shopping Center, to the
extent not
already paid by the Sellers,
the Purchaser shall receive a
credit (i) in the amount
of $373,800 for the tenant
allowance
granted to Michaels Stores,
Inc., and (ii) for any unpaid
brokerage fees due under the
Michaels Stores, Inc. lease;
(k) at the Closing of the Michigan
Shopping Center, to the extent not
already paid by the Sellers, the
Purchaser shall receive a credit
for any amounts due pursuant to
Exhibit D-
<PAGE>
1, Paragraph G.4 of the Michaels Stores, Inc.
lease
regarding a payment of One Thousand
(l) Dollars ($1,000.00) for each day
subsequent to February
28, 1999 extending to the
Completion Date (as defined in the
Michaels Stores, Inc. lease);
(l) at the Closing of the Michigan Shopping
Center,
the Purchaser shall receive a credit equal
to the amount of Minimum Rent, Common Area
Charges and
Real Estate Taxes (all as defined in
the
Michaels Stores, Inc. lease) for
the period commencing on the day
after the Adjustment Date
continuing up to the Rental
Commencement Date (as defined
in the Michaels Stores, Inc.
lease), during which period
Michaels Stores, Inc. is not
required
under its lease to pay such
costs. If
such amount cannot be
definitively determined at the
Closing, the parties agree to
use the estimated amount of
Ninety Thousand TwentyFour
Dollars ($90,024), which amount
represents ninety
(90) days of payments of
Minimum Rent,
Common Area
Charges and Real Estate Taxes and
which amount is to be adjusted
after the Closing within thirty
(30) days of the final amount
being determined; and
(m) such other items as are
customarily apportioned between
sellers and purchasers of real
properties of a type similar
to the respective Shopping
Centers and located in the
County in which the respective
Shopping Centers are located.
3.1. Taxes.
If the amount of water
charges,
sewer rents,
personal property taxes or real
estate taxes for any
Shopping Center for the
fiscal year during which the Closing
occurs is not finally determined
at the
Adjustment Date, such taxes and other
charges shall be
apportioned on the basis of the full
amount of the
assessment for such period (or the
assessment for the
prior tax or other period if the
assessment for the
current tax period or other period is not
then known) and the rate
for the
immediately prior tax year,
notwithstanding any provisions of law
which permit
reduced payment pending final determination,
and shall be reapportioned as soon as the
new tax rate and/or rate for other charges
and
valuation, if any, has been
finally determined and the tax bill
or other
bill has been
received. 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.
<PAGE>
3.2. Rents.
3.2.1. 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 from such tenant after the
Closing
shall be applied to amounts due and payable by
such tenant during the
following periods in the following order of priority:
(i) first, to the month(s)
following the month in which the
Closing occurred, (ii) second, to
the month in which the
Closing occurred, and (iii) third, to the
month(s) preceding 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 by
the Purchaser in connection with
the collection thereof, shall be
promptly paid to the
other party. The obligations of
this Section 3.2.1
shall survive the Closing.
3.2.2. Additional Rents.
If any tenants are required
to pay percentage rent, escalation
charges for real estate taxes,
parking charges, operating expenses
and maintenance escalation rents
or charges, cost-of-living
increases or other charges of a
similar nature ("Additional
Rents") and any Additional Rents
are received from a tenant after the
Closing Date, then the Purchaser
and/or Sellers shall apply such
Additional Rents (i) first, to the
applicable rental period(s)
following the period in which the
Closing occurred, to the extent of
any Additional Rents due and owing
for such period, (ii) second, to
the applicable rental period in
which the Closing
occurred, to the extent of any
Additional Rents due and owing for
such period, and (iii) third, to
the applicable rental period(s)
preceding the period in which the
Closing occurred, to the extent of
any Additional Rents due and owing
for such period, less, in the
case of
rents received by
the Purchaser, a proportionate share of any
reasonable attorneys' fees and costs
and expenses expended by
the Purchaser in connection
with collection thereof.
<PAGE>
Notwithstanding the
foregoing
allocation, if and to the extent that
any remittance of Additional Rents is
accompanied by express directions from
a tenant that such Additional Rents are
allocable to a specific rental period,
such Additional Rents shall be applied
first to the rental period so specified,
and the remainder shall be applied in
accordance with the immediately
preceding sentence. To
the extent that such Additional Rents
consist of
percentage rents, such Additional
Rents shall be allocated under
this Section 3.2.2 based on the
assumption
that such Additional Rents are
earned
at a constant rate during the
course of the period for which
such Additional
Rents are paid.
The
obligations of this Section 3.2.2 shall
survive the Closing.
3.2.3. 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 such Seller
by
any tenant, which right shall include, without limitation,
the right to continue (subject to the next sentence
following) or commence legal actions or proceedings against
any tenant, and delivery of the Lease Assignment shall not
constitute a waiver by the
Sellers of such right. The Sellers
shall not disturb or otherwise
interfere with any tenant in its
occupancy and use of its leased portion of
the Shopping Centers in the exercise of its
rights under this Section 3.2.3. Subject to
the preceding sentence, the Purchaser agrees
to cooperate with the Sellers in connection
with all reasonable efforts by the Sellers
to collect such rents and Additional Rents and
to take all reasonable steps as may be
necessary to carry out the intention of the
foregoing without out-ofpocket third party
costs to the Purchaser.
3.2.4. Settlements by Sellers.
In the case of amounts payable by
tenants to any Seller for periods of time
ending before the Adjustment
Date but to become payable thereafter when
bills are rendered (such as annual
computations of Additional
Rents) the Sellers shall after
settlement prepare and promptly deliver
to the Purchaser the information necessary
to prepare the
bills to the tenants. Each Seller
warrants and represents that such
information
<PAGE>
will be true, complete and correct. All such charges
shall be paid to the Purchaser and adjusted and
applied as provided herein.
3.3. Water.
If there is a water meter on the Shopping
Centers, the Sellers shall furnish a reading to
a date not more than thirty (30) days prior to
the Closing Date, and the unfixed water
charges and sewer rent, if any, based thereon
for the intervening time shall be apportioned on
the basis of such last reading. In addition,
if there are any such charges submetered to
tenants and payable by them directly to the
Sellers, Sellers shall use
reasonable efforts to obtain readings thereof as
of the Adjustment Date on or before
the date specified in Section 3.1,
and such items shall be prorated, and
adjusted and applied in mode and manner as
with respect to Additional Rents.
3.4. Utilities.
The Sellers will obtain final cut-off
readings of fuel, telephone, electricity,
and gas as of the
Adjustment Date on or before 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 the Sellers
and Purchaser shall promptly readjust the
apportionments in accordance with the
actual bills upon their receipt by the
Purchaser or the Sellers. In addition, if
there are any such charges submetered to
tenants and payable by them directly to
the Sellers, Sellers
shall use reasonable efforts to obtain
readings
thereof at the Adjustment Date, and
such
items shall be prorated, and
adjusted and applied in mode and
manner as with respect to
Additional Rents. The Sellers
shall retain all of their
deposits with the providers of
utility services, and the
Purchaser shall have no rights to
such deposits.
3.5. Post-Closing Adjustments.
If any of the items subject
to apportionment under the
foregoing provisions of this
Section 3 cannot finally be
apportioned at the Adjustment
Date because of the
unavailability of the
information necessary to
compute such apportionment, or
if any errors or omissions in
computing apportionments are
discovered subsequent to the
Closing, then such item shall be
reapportioned and such errors
and
omissions corrected as soon as practicable
after the Closing Date and the
<PAGE>
proper party reimbursed, which
obligation shall survive the Closing, in the
case of errors or omissions, for a period of
sixty (60) days 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 sixty (60) day limitation
set forth in this Section 3.5 shall not apply
to an inability to
calculate apportionments as a result
of the unavailability of information necessary to
compute such apportionment, and that the
obligation to reapportion in such
circumstance shall survive the Closing
forever.
With respect to the Michigan
Shopping Center, after the Closing the
Purchaser will pay to the Seller One
Hundred Fifteen Thousand Four Hundred
Dollars ($115,400) if the following
conditions are satisfied: (i) the Seller
has entered into a triple net lease
with J.R. Holcomb & Co. for 4,400
leaseable square feet at an annual
rental of not less than $11.50 per
square foot for a minimum 5 year term,
and (ii) the other provisions of said
lease are substantially similar to
those contained in the Seller's
standard lease form and per the term
sheet provided to Purchaser. Said credit
will be due and payable to the
Seller within five (5) business days
of the date on which the tenant
commences paying rent under the lease.
The Seller shall pay directly to the
broker any commission for said lease
when such amount is due. The Purchaser
shall be responsible for all buildout
and other costs as per the term sheet,
excluding legal fees, required to move
the tenant into its space.
4. Due Diligence Period.
Notwithstanding anything to the
contrary contained herein, the Purchaser
shall have until the date of this
Agreement for the Georgia Shopping Center and
for the Michigan Shopping Center, or such
shorter periods as the Purchaser may elect
(each, a "Due Diligence Period"), to examine
title to the respective Shopping Center, to
inspect the physical and financial
condition of the respective Shopping Center
and to review the Property Information.
4.1. Access to the Shopping
Centers.
During the Due Diligence Period,
and subsequent to the end of such
period until the termination of this
Agreement or the
Closing, the Purchaser and
the Purchaser's Representatives shall have
the
right to enter upon the Shopping
Centers and their books, records
and files for
<PAGE>
the sole purpose of inspecting
the Shopping Centers (including,
without limitation, interviewing
tenants, and speaking to one
individual at each Shopping
Center location designated by the
Sellers as representing the
onsite property manager, such
person to have knowledge of the
management and operations of such
Shopping Centers) and making
surveys, soil borings,
engineering tests and
other investigations,
inspections
and tests
(collectively, "Investigations"),
provided (i) as to each Shopping
Center, the Purchaser shall give
the Sellers not less than one
(1) business day's prior notice
(which notice may be
telephonic) before each entry,
and (ii) neither the Purchaser
nor the Purchaser's
Representatives shall permit any
borings, drillings or samplings
(other than asbestos samplings)
to be done on the Shopping
Centers without the Sellers'
prior consent, which consent
shall not be unreasonably
withheld or delayed. Any entry
upon the Shopping Centers and all
Investigations shall be conducted
during the Sellers' normal
business hours and at the sole
risk and expense of the Purchaser
and the Purchaser's
Representatives, and shall not
unreasonably interfere with the
activities on or about the
Shopping Centers of the Sellers,
its tenants and their employees
and invitees. The Purchaser
shall:
(a) if the Closing
does not occur on the
Closing Date, promptly
repair any damage to the
Shopping Centers resulting
from any such
Investigations and replace,
refill and regrade any
holes made in, or
excavations of, any portion
of the Shopping Centers
used for such Investigations
so that the Shopping
Centers shall be in
substantially the same
condition that they existed
in prior to such
Investigations. Until the
Purchaser either repairs
such damage or closes on the
acquisition of the
Shopping Centers, it
shall take all steps
necessary to ensure that
such unrepaired conditions
shall not further
deteriorate or cause any
harm
to persons or property;
(b) fully comply with all Laws
applicable to the Investigations;
(d) permit the Sellers to have a representative
present
during all Investigations at any
Shopping Center undertaken
hereunder, provided the presence of
such a
<PAGE>
[c] representative shall not be a condition to
the Purchaser's ability
to conduct Investigations;
(d) furnish to the Sellers, at the Sellers'
election and at no cost or expense to
the Sellers other than
reimbursement for
the actual out-of-pocket expenses of
the Purchaser evidenced by copies of
third party invoices, copies of all
surveys, soil test results,
engineering, asbestos, environmental
and other studies and reports relating
to the Investigations prepared by
third parties (other than work
product of counsel) which the
Purchaser shall obtain with respect to
the Shopping Centers promptly after
the Purchaser's receipt of same;
(e) not allow the Investigations
to result in any liens, judgments or
other encumbrances being filed or
recorded against the Shopping Centers,
and the Purchaser shall, at its sole
cost and expense, promptly discharge
of record, by bond or otherwise, any
such liens or encumbrances that are so
filed or recorded (including, without
limitation, liens for
services, labor or materials furnished); and
(f) 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, reasonable 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's
and/or the Purchaser's Representatives'
entry upon the Shopping Centers for
the Investigations, and/or (ii) any
liens or encumbrances filed or recorded
against the Shopping Centers as a
consequence of
the Investigations. The foregoing indemnity
shall not be deemed to apply to
claims, demands, causes of action,
losses, damages, liabilities, costs
or expenses arising solely out of the
Purchaser and the Purchaser's
Representatives discovering
a preexisting environmental
contamination
or violation of Applicable
Environmental Laws. However, if the
Purchaser's or the Purchaser's
Representatives' physical conduct in
investigating any pre-existing
environmental
<PAGE>
contamination is performed in a
commercially unreasonable manner and
such performance physically worsens
such contamination, then the
foregoing indemnity shall apply only
to such
worsened
condition (but specifically
excluding any
consequential damages), but shall not
apply to such pre-existing
contamination.
The provisions of this Section 4.1
shall survive the termination of this
Agreement and the Closing.
4.2. Purchaser's Termination Notice.
The Purchaser shall have the
right in its sole and absolute
discretion to elect to terminate this
Agreement in respect of any Shopping
Center (subject to the last sentence
of this Section 4.2) by giving written
notice (the "Purchaser's Termination
Notice") of such election to
the Sellers at any time prior to 5:00 P.M.
New York time on the last day of the
Due Diligence Period for the
applicable Shopping Center. If for any
reason whatsoever the
Sellers shall not have actually
received the Purchaser's Termination
Notice for a
Shopping Center prior to the expiration of the Due
Diligence Period for such Shopping Center, the
Purchaser shall be deemed to have irrevocably
waived its right of termination under this Section
4.2 for only such Shopping Center, and such right of
termination shall be of no further force
or effect. If
the Purchaser exercises its right to
terminate this Agreement with respect to
the Georgia Shopping Center, this
Agreement shall
terminate altogether, and the Purchaser shall
not
retain the right to purchase
the Michigan Shopping Center.
4.3. Estoppel Certificates.
Promptly after execution
and delivery of this
Agreement, the Sellers agree
to request an estoppel
certificate (collectively, the
"Estoppel
Certificates") from each
tenant under a
Lease. The Sellers shall deliver to the
Purchaser, on or before the Closing Date, Estoppel
Certificates for each tenant under a lease for
more than 5,000 square feet of rentable space
in any Shopping Center, and for not less than
seventy-five percent (75%) of the other tenants
on an
individual Shopping Center
basis (collectively, the "Required
Estoppel Certificates"). The Estoppel
Certificates shall be in the
form annexed hereto as Exhibit G
and made a part hereof (except
for the Estoppel Certificate
for Michaels Stores, Inc. at
the Michigan Shopping Center
which shall be in the
<PAGE>
form annexed hereto as
Exhibit G-1 and made a part
hereof, and except for the
Estoppel Certificates for ACE
Hardware and Kroger at the
Georgia Shopping Center each of
which shall contain a
statement by said tenant
approving existing parking,
including existing layout and
number of spaces and further
stating that they will
not require
future changes
in layout and
number
(alternatively, said approval by tenant
of existing parking may be reflected in a separate
letter)), and when returned by tenant, shall not contain
any discrepancy, adverse claim or exception; provided,
however, if any tenant (except ACE Hardware, Kroger
and Michaels Stores, Inc.) is required or permitted under
its Lease to deliver an Estoppel Certificate different
from Exhibit G,
Purchaser shall accept from the tenant the form so
required or permitted under the Lease, if any such
Estoppel Certificate is obtained, provided, that
such Estoppel Certificates
shall
be delivered without
discrepancy, adverse claim or exception.
The Sellers
shall be obligated to satisfy, prior
to Closing, discrepancies, adverse claims or
exceptions contained on Estoppel
Certificates, provided such discrepancies,
adverse claims or exceptions can be
satisfied by payment of liquidated amounts not to
exceed $75,000 on an individual Shopping Center
basis. The Sellers will deliver each Estoppel
Certificate received by the Sellers to the Purchaser
promptly
following the Sellers' receipt thereof. The
Sellers may, in their sole discretion,
adjourn the Closing one or more times for up
to thirty (30) days in the
aggregate
in order to
address
discrepancies, adverse claims
or exceptions on the
Estoppel Certificates, including
the Estoppel Certificate for
Michaels Stores, Inc. In
the event one or more Estoppel
Certificates are returned containing
discrepancies, adverse claims or exceptions
that cannot be satisfied by
payment of $75,000 as set forth
above, and the Sellers do not
resolve such matters by paying
liquidated amounts, the Purchaser
shall have the right to terminate
this Agreement.
In the event the Seller
does not
deliver both the Kroger and the ACE
Hardware parking Estoppel Certificates
(or separate agreements) described
above by March 31, 1999, the
Purchaser shall receive a credit at
the Closing for the Georgia Shopping
Center in the amount of One Hundred
Thirty-Five Thousand Dollars
($135,000).
<PAGE>
4.4 Termination of Contracts.
On or before the Closing
Date, the Sellers will terminate
each property management
agreement or leasing agreement
to which such Seller is a party
with respect to any Shopping
Center. The provisions of this
Section 4.4 shall survive the
Closing.
5. Title
Subject to the provisions of this
Section 5, the Sellers shall convey
and the Purchaser shall accept title
to the Shopping Centers subject to
those matters set forth on Schedule 5
hereto (collectively the "Permitted
Encumbrances"). The Sellers have
delivered to the Purchaser (i)
commitments (collectively, the "Title
Commitment") for owner's fee title
insurance policies dated as of a
recent date with respect to the
Shopping Centers from Lawyers Title
Insurance Corporation (the "Title
Company"), and (ii) a current as-built
survey ("Surveys") by a licensed
surveyor of each of the Shopping
Centers which describes such Shopping
Center and contains a surveyor's
certificate in favor of Purchaser,
which will be amended to include such
other parties as Purchaser shall
designate. The final title insurance
policies shall include the
endorsements set forth on Schedule 4
hereto.
The Sellers have ordered, and
will deliver to the Purchaser once
received, (A) UCC lien searches for
each Seller and for each Shopping
Center for each state and local filing
office where filings must be made to
obtain perfected security interests in
the personal property at the Shopping
Center, and (B) judgment searches,
bankruptcy court searches and federal
tax lien searches for each Seller for
each state in which such Seller owns a
Shopping Center (collectively, the
"Lien Searches").
5.1 Unacceptable Encumbrances.
If the Title Commitment,
the Lien Searches, or the
Surveys indicate the existence of
any liens, encumbrances or other
defects or exceptions in or to
title to the Shopping Centers
(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 fourteen (14)
days after receipt of the later of
the Title Commitment, the Lien
Searches, the Survey, the
underlying exception documents or all
pro forma endorsements, as
applicable, 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
<PAGE>
Encumbrance which the
Purchaser does not notify the
Sellers of within such fourteen
(14) day period unless (i) such
Unacceptable Encumbrance was
first raised by the Title Company
or surveyor subsequent to the
date of the Title Commitment or
the Survey, or such Unacceptable
Encumbrance was first reflected
in the Lien Searches, or the
Purchaser shall otherwise first
discover same or be advised of
same subsequent to the date of
the Title Commitment, the Lien
Searches, or the Survey, and
(ii) the Purchaser shall notify
the Sellers of the same within
five (5) business days after the
Purchaser first becomes aware of
such Unacceptable Encumbrance.
The Sellers may, in their sole
discretion, adjourn the Closing
one or more times for up to
thirty (30) days in the aggregate
in order to eliminate
Unacceptable Encumbrances.
5.2 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 or to
arrange for title insurance
insuring against enforcement of
such Unacceptable Encumbrances
against, or collection of the
same out of, the Shopping
Centers;
except that the Sellers shall satisfy
(i) mortgages, taxes and any
(Sellers' voluntarily created) liens
secured by or affecting the Property,
and (ii) judgments against the Sellers
or other liens (collectively, "Liens")
secured by or affecting the Shopping
Centers which can be satisfied by
payment of liquidated amounts
not to exceed $100,000 in the aggregate for
all such other Liens. Sellers may eliminate
any such Unacceptable Encumbrance by
the
payment of amounts necessary to cause the
removal thereof of record or by arranging
for title insurance reasonably satisfactory
to the Purchaser insuring
against
enforcement of such Unacceptable Encumbrance
against, or collection of the same out of,
the Property.
5.3 Options Upon Failure to Remove Unacceptable
Encumbrances.
If the Sellers are unable or,
pursuant to the limitations on expenditures
set forth in Section
5.2, not otherwise obligated to eliminate
all
Unacceptable Encumbrances not waived by the
Purchaser, or to arrange for title insurance
acceptable to the Purchaser insuring against
enforcement of such Unacceptable Encumbrances
against, or collection of the same out of, the
<PAGE>
Shopping Centers, 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 as
to
the Shopping
Centers affected by such Unacceptable
Encumbrances 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.
5.4 Use of Purchase Price.
If on the Closing Date
there may be any Liens or other
liens or 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.
5.5 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 or for which the
Purchaser may become personally
liable therefor on or after 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 in either event
insures the Purchaser against
collection thereof out of the
Shopping Centers or from the
Purchaser personally.
5.6 Transfer Taxes; Title Insurance
Premiums.
At the Closing, the
Sellers shall pay all local,
state and county transfer taxes,
transfer gains taxes and
recording taxes (the "Transfer
Tax Payments") imposed pursuant
to the Laws of the States of
Michigan
<PAGE>
and Georgia (or counties or
municipalities therein) 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.
To the extent required under
Georgia withholding tax laws, the
Sellers agree to deposit a
portion of the Purchase Price
with the proper agency. At the
Closing, the title, survey and
other Closing-related expenses
shall be paid in the manner
set forth on Schedule 6.
6. Representations and Warranties of
the Sellers.
Each Seller represents and warrants
to the
Purchaser as follows:
(a) (i) 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.
(ii) 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
State of Michigan to conduct
business therein.
(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 Seller pursuant to this
Agreement (collectively, the
"Sellers'
Documents"), to consummate the
transaction
contemplated hereby, and to
perform its obligations
hereunder and under the Seller's
Documents. The execution and
delivery of this Agreement and
the Seller Documents and the
consummation of the transaction
contemplated hereby have been
duly authorized by all necessary
action and parties and no other
proceedings on the part of the
Seller are necessary in order
to permit it to consummate
the transaction contemplated
hereby. This Agreement and the
Seller Documents have been duly
executed and delivered by the
Seller and (assuming valid
execution and delivery by
Purchaser) are legal, valid and
binding obligations of the
Seller enforceable against each
of them in accordance with
their respective terms. Robert
B. Austin is an officer of a
general partner of each Seller.
<PAGE>
(c) This Agreement and
the Seller's Documents and the
execution, delivery and
performance thereof do not and
will not contravene any
provision of the partnership
agreement of the Seller or any
other Seller Parties, any
judgment, order, decree, writ
or injunction issued against
the Seller or any other Seller
Parties, or any provision of
any laws or governmental
ordinances, rules, regulations,
orders or requirements
(collectively, the "Laws")
applicable to the Seller or
any other Seller Parties.
The consummation of
the transactions contemplated
hereby will not result in a
breach or constitute a default
or event of default by the Seller
or any other Seller Parties under
any agreement to which the Seller
or any of its assets are subject
or bound and will not result in
a violation of any Laws
applicable to the Seller or
any other Seller Parties.
"Seller Parties" means
collectively with respect to each
Seller any person or entity
owning or controlling such Seller
or owned
or controlled by such Seller in
whole or in part, directly or
indirectly, and the successors
and assigns of each and all of
the foregoing.
(d) There are no
leases or
other occupancy agreements, and
the
Seller has no knowledge of
any licenses, affecting any
portion of the Shopping Center
owned by such Seller
(collectively, the "Leases") on
the date hereof, except for the
Leases listed in the rent
rolls annexed hereto as Schedule
7 and made a part hereof.
Other than the Leases, the Seller
has no other agreements with
any Tenant regarding such
Tenant's occupancy
of the Shopping Center. The
copies of the Leases furnished
by the Seller to the Purchaser
are true, accurate and complete.
All of the information set forth
in Schedule 7 is true, accurate
and complete
in all respects. To the Seller's
knowledge, the Leases are in full
force and effect, without any default
by the Seller thereunder. Except as
listed on Schedule 7, the Seller has
not given or received any written
notice of default from any tenant
under any Lease which remains uncured
or unsatisfied, with respect to any of
the Leases. All work and materials,
if any, required to be performed
or furnished, as applicable, prior
to the date hereof by landlord under
each of the Leases has been performed
and furnished in accordance with the
terms of such Leases and fully paid
for, except as set forth on Schedule
7.
<PAGE>
(e) To the Seller's
knowledge, there are no pending
actions, suits, proceedings or
investigations to which the
Seller or the Shopping Center is
a party before any court or
other governmental authority with
respect to the Shopping Center
owned by the Seller, except as
set forth on Schedule 8 hereto.
(e) Except as disclosed on Schedule 9
hereto, since the date Seller acquired
legal and beneficial title to the
Shopping Center owned by the Seller
(i) to Seller's knowledge, neither
Seller nor any third party has engaged
in the generation, use, manufacture,
treatment, transportation, storage or
disposal of any Hazardous Substance
(as hereinafter defined) on the
Shopping Center in violation of
Applicable Environmental Law (as
hereinafter defined) or which requires
remediation under Applicable
Environmental Law, and (ii) to
Seller's knowledge, neither Seller nor
any third party has received any
written notice from any governmental
authority having jurisdiction over the
Shopping Center of any violation of
Applicable Environmental Law with
respect to the Shopping Center which
requires corrective action, or any
notices relating to any such
corrective action. Disclosure of any
matter on Schedule 9 hereto shall not
constitute any admission by Seller
that such matter was material or a
violation of Applicable Environmental
Law, but this sentence shall not
obviate or vitiate the validity of any
representation or warranty set forth
herein. 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
<PAGE>
(f) time to the date of this Agreement;
and any similar state
and local laws and ordinances and the regulations
implementing such statutes or otherwise in effect on
the date hereof imposing liability or establishing
standards of conduct for environmental protection.
The Sellers have delivered to the Purchaser true and
complete copies of all environmental reports
(g)
with respect to the Shopping Centers in the
Sellers' possession as of the date hereof.
The
Sellers know of no fact or
circumstance that would
make any matter relating
to the environmental
condition of the Shopping
Centers set forth in the
environmental reports that
the Sellers have delivered
to the Purchaser false or
misleading.
(g) Schedule 10 contains
a list of the Licenses. To the
Seller's knowledge, the Licenses
are in full force and effect and
are sufficient for the operation
of the Shopping Center as
currently operated.
(h) The Sellers have not
received written notice of:
(i) pending
grievances or arbitration
proceedings or unsatisfied
arbitration awards, or
judicial proceedings or
orders respecting awards,
relating to the Shopping
Centers or their ownership,
operation or occupancy;
(ii) outstanding
unfulfilled requirements or
recommendations of
any insurance company,
any inspection or rating bureau or
any
board of
underwriters concerning the Shopping
Centers or any operation,
condition, repair or
alteration thereof; or
(iii) any violation
of any Laws from any
federal, state or local
governmental authority.
(h) The Sellers are not aware of (i) any notice to
them
announcing an increase in the
assessed value of the Shopping
Centers for real estate tax purposes
since the date of the most recent
real estate tax bill issued for the
Shopping Centers, or (ii) except for
the construction at the Michaels
Stores, Inc. at the Michigan
Shopping Center, any new
construction with respect to
<PAGE>
theShopping Centers since the most recent
assessment
of the
value of the Shopping Centers for real
property tax purposes that could
increase the
assessed value of the Shopping
Centers. None of Sellers has received
any assessment notices against the
Shopping Centers with respect to any
governmental improvements which have
been substantially completed prior to
the date hereof and for the cost of
which the Shopping Center can be
assessed. The Sellers have delivered to
the Purchaser true, accurate and
complete copies of the real estate tax
bills for the Shopping Centers for the
most recent tax periods.
(j) None of Sellers owns, directly or
indirectly,
any other real estate located within one
mile of the boundaries of any of the
Shopping Centers.
(k) The Sellers are not currently a
party to any
condemnation proceeding (including any
proceeding for widening, change of grade or
limitation on use of streets abutting the
Premises) pending with regard to
or affecting all or any part of the Premises
(including any such abutting streets) and
the Sellers have received no written notice
threatening any such proceeding.
(l) The Sellers have no employees.
(m) The operating statement for
the Shopping
Centers for the period from July 1, 1998 to
December 31, 1998, a copy of which has been
delivered to the Purchaser prior to the date
hereof, is true, accurate and complete.
(n) The Sellers have no knowledge of
any Contracts
on the date hereof, except for the
Contracts listed on Schedule 3 annexed
hereto and made a part hereof.
The copies of the Contracts furnished by the
Sellers to the Purchaser are true
and
complete. To the Sellers'
knowledge, the Contracts are in
full force and effect.
(o) To the best knowledge of the
Sellers, there are no brokerage
fees payable by the landlord
under any Leases in effect as of
the date hereof upon the
extension or renewal of any such
Leases.
<PAGE>
(p) To the best knowledge
of the Sellers, since the date
of the Purchaser's inspection
of the Improvements (to wit,
January 12, 1999) (i) at the
Georgia
Shopping Center, there has been
no material adverse change in
the physical condition of the
Improvements, and (ii) at the
Michigan
Shopping Center, there has
been no material adverse
change with respect to the
ownership, operation, occupancy,
or the financial or physical
condition of the Michigan
Shopping Center, other than
relating to the required
construction under the Michaels
Stores, Inc. lease.
6.1 Survival of Representations.
The representations and
warranties of the Sellers set
forth in this Section 6 and
elsewhere in this Agreement (i)
shall be true, accurate and
correct in all material
respects, individually and in
the aggregate, upon the
execution of this Agreement and
shall be deemed to be repeated
on and as of the Closing Date,
(ii) shall be deemed the joint
and several representations and
warranties of the Sellers, and
(iii) shall remain operative
and shall survive the Closing and
the execution and delivery of
the Deeds for a period of six (6)
months following the Closing
Date, and no action or claim
based thereon shall be commenced
after such period.
6.2 Waiver of Claims for Untrue
Representation. 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 Seller's representations or
warranties being untrue,
inaccurate or incorrect in any
material respect, either
individually or in the aggregate
if the Purchaser knew
that such representation or
warranty was so untrue, inaccurate or
incorrect at the time of the
Closing and the Purchaser
nevertheless closes title
hereunder.
6.3 Limited Nature of
Representations.
This Agreement, as written,
contains all the terms of the
agreement entered into between
the parties as of the date
hereof, and 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,
and the Sellers hereby
specifically disclaim any
representation, oral or
written, past, present or
future, other than those specifically set
forth in this Section 6, Section 12 or
<PAGE>
elsewhere in this Agreement or the
Conveyance
Documents. The Purchaser acknowledges that the
Sellers have afforded the Purchaser the
opportunity for full and
complete investigations, examinations and
inspections of the Shopping Centers and all
Property Information. The
Purchaser acknowledges and agrees that, subject
to the representations and warranties set forth
elsewhere in this Agreement or the Conveyance
Documents, (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) 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) the Property Information delivered or
made available to the Purchaser and the
Purchaser's Representatives is furnished to each
of them at the request, and for the
convenience of, the
Purchaser; (iv) the Purchaser is relying solely
on its own investigations, examinations and
inspections of the Shopping
Centers 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
(v) the Sellers expressly disclaim any
representations or warranties with respect to
the accuracy or completeness of the Property
Information, and, subject to the representations
and warranties set forth in this Agreement and
the Conveyance Documents, the Purchaser releases
the Sellers and the Sellers'
Affiliates, and their agents and
representatives, from any and all liability
with respect to the Property Information.
The Purchaser or anyone claiming
by,
through or under the Purchaser, hereby
fully and
irrevocably releases the Sellers and the
Sellers'
Affiliates, and their agents and
representatives, from any and all claims that
it may now have or hereafter acquire against
any of the Sellers or the Sellers'
Affiliates, or their agents or representatives
for any cost, loss, liability, damage, expense,
action or cause of action, whether foreseen or
unforeseen, arising from or related to
any construction defects, errors or
omissions on or in the Shopping Centers, the
presence of environmentally hazardous, toxic or
dangerous substances, or any other conditions
(whether patent, latent or otherwise)
affecting the Shopping Centers, except for
claims against a Seller based upon
<PAGE>
any obligations and liabilities of such Seller
expressly provided in this Agreement and the
documents to be delivered to the Purchaser
pursuant to Sections 9(a), 9(b), 9(c), 9(d),
9(f), 9(h) (to the extent that such deliveries
under Section 9(h) consist of Landlord
Estoppel Certificates), 9(n), 9(p), 9(x) and any
other documents delivered at the Closing that by
their terms contain
provisions that survive the
Closing
(collectively, the "Conveyance Documents"). The
Purchaser acknowledges that any covenants,
agreements, representations or warranties set
forth in this Agreement are being made by each
Seller individually and that in no event (except
as expressly set forth in Section 14.1 and
Section 14.3) will the Purchaser have recourse
against
any Seller for any breach of this Agreement by
any other Seller.
The provisions of this Section 6 shall
survive the Closing.
7. Representations and Warranties of the
Purchaser.
The Purchaser represents and warrants to the
Sellers as follows:
(a) The Purchaser is a duly formed
and validly
existing corporation organized under the
laws of the State of Maryland and is
qualified or registered under the laws of
the State of Michigan to conduct business
therein on the Closing Date.
(b) The Purchaser has the full, legal
right, power
and authority 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 charter or by-laws 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.
<PAGE>
(d) The Purchaser has not received
written notice
of any 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 or the rights or
ability of the Purchaser to fully perform
the same.
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 and shall survive the Closing for a
period of six (6) months.
8. Conditions Precedent to Closing.
8.1 Conditions Precedent to Purchaser's
Obligations.
The Purchaser's obligation under this
Agreement to
purchase the Shopping Centers is
subject to the
fulfillment of each of the following
conditions: (i) the representations and
warranties of the Sellers contained herein
shall be true, accurate and correct in
all material respects, individually and in
the aggregate, as of the Closing Date,
subject to changes to matters discussed
in such representations and warranties
in connection with the operation of the
Shopping Centers in compliance with
Section 11 hereof (other than Section
11.5); (ii) the Sellers shall be ready,
willing and able to deliver title to such
Shopping Center in accordance with the
terms and conditions of this Agreement
(including without limitation insured title
pursuant to
the Title Commitments and the absence of any
Unacceptable Encumbrances); (iii) no
casualty with respect to a "material"
part of such Shopping Center, as described
in Section 13.1 shall have occurred, (iv) no
condemnation or eminent domain taking of
any "significant" portion of such Shopping
Center, as described in Section 13.2, shall
have occurred, (v) the Sellers shall have
delivered all the documents and other
items required pursuant to 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 satisfied
by the Sellers at or prior to the
Closing, (vi) there shall have been no
violation of any of the Permitted
Encumbrances since the date of this
Agreement, (vii) the condition to Sellers'
obligations set forth in Sections 8.2(iii)
shall have been satisfied other than by the
Sellers'
<PAGE>
waiver thereof, and (viii) the Purchaser
shall not have delivered a Purchaser's
Termination Notice.
With respect to the Michigan Shopping
Center only, it shall be a condition
precedent to the Purchaser's obligation to
purchase that the Sellers deliver an
Estoppel Certificate from Michaels
Stores, Inc.
satisfactory to the Purchaser stating,
among other things, that all required
construction under the Michaels Stores, Inc.
lease has been completed.
8.2 Conditions Precedent to Sellers'
Obligations.
The Sellers' obligation under this
Agreement to sell the Shopping Centers 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 10 and is not otherwise in
default of its obligations hereunder in any
material respect; and (iii) all consents
and approvals of governmental authorities
and parties to agreements to which the
Purchaser is a party or by which the
Purchaser's assets are bound that are
required with respect to the consummation
of the transactions contemplated by this
Agreement shall have been obtained and
copies thereof shall have been delivered
to the Sellers at or prior to the Closing.
9. Documents to be Delivered by the Sellers
at Closing.
At the Closing of each Shopping Center, the
Sellers shall execute, acknowledge and/or
deliver, as applicable, the
following to the Purchaser:
(a) Deeds (collectively, the
"Deeds") conveying
title to the Shopping Centers in the form
of Exhibit A annexed hereto and made a part
hereof.
(b) The Assignment and Assumption of
Leases and
Security Deposits in the form of Exhibit B
annexed hereto and made a part hereof
assigning all of the Sellers' right, title
and interest, if any, in and to the Leases,
all warranties and guarantees thereof and
the security deposits thereunder in the
Sellers' possession, if any
(the "Lease Assignment").
<PAGE>
(c) The Assignment and Assumption of
Contracts and Licenses in the form of Exhibit
C annexed hereto and made a part hereof
(the "Contract and License Assignment")
assigning all of the Sellers' (and any person
managing a Shopping Center on behalf 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 the Shopping Centers by any
governmental authority of which the Sellers
are aware and which are in the Sellers' (or
such other person's) possession or control as
of the Closing (collectively, the
"Licenses"), and (ii) all assignable
purchase orders, equipment leases,
advertising agreements, franchise agreements,
license agreements and other service
contracts relating to the operation of the
Shopping Centers (collectively, the
"Contracts").
(d) The Assignment and Assumption of
Intangible Property in the form of Exhibit D
annexed hereto and made part hereof assigning
all of the Sellers' (and any person managing
a Shopping Center on behalf of the
Sellers) right, title and interest, if
any, in and to all intangible property
owned by the Sellers with respect to the
operation of the Shopping Centers listed on
Schedule 11 annexed hereto and made a part
hereof, including, without limitation, the
trade names (the "Intangible Property
Assignment") (the Lease Assignment, the
Contract and License Assignment and the
Intangible Property Assignment are herein
referred to collectively as the "A & A
Agreements").
(e) Executed counterparts or, if no
such original counterpart is available,
a photocopy with all
signatures, of all Leases and New
Leases and any
amendments, warranties and 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. With respect to any lease
securities which are other than cash, the
Sellers shall execute and deliver to the
Purchaser at the Closing any appropriate
instruments of assignment or transfer and
such original security deposits to the
extent that they are in the possession of the
Sellers.
(f) A bill of sale in the form of Exhibit E
annexed hereto and made a part hereof (the
"Bill of Sale") conveying,
<PAGE>
transferring and selling to the Purchaser all
right,
title and interest of the
Sellers in and to all Personal Property.
It is
agreed that the value of such property
is nominal.
(g) Notices to the tenants of the
Shopping Centers in the form of Exhibit F
annexed hereto and made a part hereof
advising the tenants of the sale of the
Shopping Centers to the Purchaser and
directing that rents and other payments
thereafter be sent to the Purchaser or as
the Purchaser may direct.
(h) Executed originals of the
Required Estoppel Certificates, without
discrepancy, adverse claim or
exception (except for deviation as to form
as described in Section 4.3) and all other
Estoppel Certificates, if any, received by
the Sellers from tenants prior to the
Closing Date and not previously
delivered to the
Purchaser. The Sellers shall also
deliver, for each Lease with respect to
which an Estoppel Certificate is not
obtained, an estoppel certificate
(collectively "Landlord Estoppel
Certificates") executed by the Seller that
is landlord under such Lease, each in the
form annexed hereto as Exhibit H and made a
part hereof. If a Seller delivers a
Landlord Estoppel Certificate at the
Closing and subsequently receives an Estoppel
Certificate from the corresponding tenant,
the Seller may substitute the Estoppel
Certificate for the Landlord Estoppel
Certificate to the extent the Estoppel
Certificate covers the same matters as,
and does not contain additional adverse
matters not contained in, the Landlord
Estoppel Certificate. In this event, the
Purchaser shall return the original
Landlord Estoppel Certificate to the Seller
and it shall be considered null and void.
This Section 9(h) shall survive the Closing.
(i) To the extent in the possession or
control of the Sellers or their managers
for each of the Shopping Centers and not
already located at the Shopping Centers, keys
to all entrance doors to, and equipment and
utility rooms located in, the Shopping
Centers.
(j) To the extent in the possession or
control of the Sellers or their managers
for each of the Shopping Centers and not
already located at the Shopping Centers, all
Licenses.
<PAGE>
(k) To the extent in the possession or
control of the Sellers or their managers
for each of the Shopping Centers, executed
counterparts of all Contracts and all
warranties and guaranties in connection
therewith which are in effect on the
Closing Date and which are assigned by the
Sellers.
(l) To the extent in the possession or
control of the Sellers or their managers
for each of the Shopping Centers, plans and
specifications of the Buildings.
(m) The Transfer Tax Payments
together with the Transfer Tax Returns, if
any.
(n) A "FIRPTA" affidavit sworn to by
the Sellers in the form of Exhibit I
annexed hereto and made a part hereof. The
Purchaser acknowledges and agrees that upon
the Sellers' 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.
(o) A closing statement setting
forth the
adjustments and apportionments required pursuant to the
terms of this Agreement, in form and substance
satisfactory to the Sellers and the Purchaser (the
"Closing Statement").
(p) A certificate of the Sellers reaffirming all of
their representations and warranties set forth herein as of
the Closing
Date, in the form annexed hereto as Exhibit J and made a part
hereof.
(q) All of the books, records and files in the
possession or control of the Sellers (including those in the
possession of any person
managing a Shopping Center on behalf
of the Sellers) relating solely to the
operation of the Shopping Centers.
(r) A receipt executed by the Broker in favor of the
Purchaser, in the form annexed hereto as Exhibit K and made
a part hereof.
<PAGE>
Releases from liability executed by each manager of a
Shopping Center pursuant to a written management
agreement,
such release to be in favor of the Purchaser, and in the
form annexed hereto as Exhibit L and made a part hereof,
provided, that if such manager is not a Sellers'
Affiliate, Sellers shall only be required to use
reasonable efforts to obtain such release, and
provided, further, that if the Sellers are unable
to obtain any such release, the Sellers shall execute an
indemnification in favor of the Purchaser from and
against any liability the Purchaser may have to such
manager.
(t) Mechanics lien affidavits, parties in
possession affidavits and "gap" indemnities in favor of the
Title
Company, together with a statement delineating any tenant
options or rights of first refusal for each of the Shopping
Centers, each in a form reasonably acceptable to the
Sellers.
(u) The Sellers shall use reasonable efforts to
obtain from each person owning real property that is the
subject of a reciprocal easement agreement with any of the
Shopping Centers an estoppel
certificate in the form of Exhibit M annexed hereto, without
discrepancy, adverse claim or exception.
(v) Notices to other parties subject to the REAs
advising them of the sale of the Shopping Centers to the
Purchaser.
(w) Withholding Tax Affidavit to be filed in the State of
Georgia.
(x) An assignment of the Sellers' rights, titles and
interests, including guarantees, warranties and
indemnification undertakings under the construction contract for
the Michaels Stores, Inc. at the Michigan Shopping Center. Such
assignment shall include representations and warranties
that the contractor has received all monies due
under the contract, that there exist no defaults
by the Sellers or the contractor, and that there
exist no claims or demands by the Sellers or the
contractor. Such assignment shall include an
indemnification from the Sellers in favor of the
Purchaser from and against any claims or demands
<PAGE>
under, arising out of or in respect of such
contract. The contractor shall expressly
consent to
said
(y) assignment and shall confirm that it has
received all monies due under the
contract.
(y) All other documents the Sellers are
required to deliver pursuant to the provisions of
this Agreement.
9.1 Further Assurances.
In addition to the obligations required to
be performed hereunder by the Sellers at
Closing, from time to time subsequent to the
Closing the Sellers shall perform such other acts,
and shall execute, acknowledge and deliver such
other agreements and documents as the Purchaser
may reasonably request in order to effectuate
the consummation of the transaction
contemplated herein consistent with the terms
hereof; provided, that the taking of such acts
and/or the execution of such documents shall be at
no out-of-pocket third party cost or expense to the
Sellers.
10. 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 credits and adjustments as provided in this
Agreement.
(b) The A & A Agreements.
(c) The Transfer Tax Returns, if any.
(d) The Closing Statement.
(e) A certificate of the Purchaser
reaffirming all of its representations and
warranties set forth herein as of the
Closing Date, in the form annexed hereto
as Exhibit J and made a part hereof.
(f) (i) copies of the charter 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
<PAGE>
of the transactions contemplated by this
Agreement certified as true and correct by the
(g) Secretary or Assistant Secretary of the Purchaser;
(ii) a
good standing certificate issued by the state of
organization of the Purchaser, dated within thirty
(30) days of the Closing Date and (iii)
certificates evidencing that the Purchaser is
qualified to do business in the State of Michigan.
(g) All other documents the
Purchaser is required to deliver pursuant to
the provisions of this Agreement
or is otherwise reasonably required by the
Title Company.
11. Operation of the Shopping Centers prior to
the
Closing Date.
Between the date hereof and the Closing Date,
the Sellers shall, subject to this Section 11
continue to operate and maintain the Shopping
Centers in a manner consistent with past
practices. In connection therewith, the
Sellers shall
maintain their books of account and records in
the usual, regular and ordinary manner.
11.1 New Leases.
After the date hereof, the Sellers shall
not modify, extend or renew any Lease or
enter into any proposed Lease of any
portion of the Shopping Centers without the
Purchaser's prior written consent (which may
be delivered by telecopier) in each
instance, which consent shall be given or
denied, in Purchaser's sole discretion,
except as otherwise set forth in this Section
11.1, within three (3) business 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 writing within such
period, the Purchaser's consent shall be
deemed to have been granted. The Purchaser
shall not unreasonably withhold or delay
its consent to any proposed Lease, or
extension or modification of an existing
Lease, if each of the following is
true: (a) such Lease (as so proposed or
modified) is for less than 25,000 square feet
of rentable floor space; (b) the Sellers'
request for such consent is delivered to the
Purchaser prior to the expiration of the Due
Diligence Period, and (c) such proposed
Lease, or the modifications to an existing
Lease
<PAGE>
do not contain provisions (x) granting
the tenant an exclusive use as to such
Shopping Center, (y) restricting the tenants
to whom the landlord may lease space in such
Shopping Center, or (z) providing a term
(including all extensions) of greater than
ten (10) years from the Closing Date.
The Sellers shall have no obligation
subsequent to the date hereof to modify,
extend, renew or cancel any Lease or enter
into any proposed Lease.
11.1.1 New Lease Expenses.
Subject to Section 11.1, 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 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)
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 (v)
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 Shopping
Centers).
11.1.2. Allocation of New Lease Expenses.
Subject to Section 11.1, the New
Lease Expenses for each New Lease
allocable to and payable by 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
commenced to pay fixed rent ("Rent
Commencement Date") and expiring on the
date immediately preceding the Closing
Date, and the denominator of which
<PAGE>
shall be the total number of days
contained in the period commencing on
the Rent Commencement Date and expiring
on the date of the scheduled expiration
of the term of such New Lease, without
provision for any optional
extensions or renewals, and the
remaining balance of the New Lease
Expenses for each New Lease shall be
allocable to and payable by the
Purchaser by addition to the Purchase
Price. At the Closing, the Purchaser
shall reimburse the Sellers for all
New Lease Expenses theretofore paid by
the Sellers, if any, in excess of the
portion of the New Lease Expenses
allocated to the Sellers pursuant to
the provisions of the preceding
sentence. If the Purchaser pays
any such New Lease Expenses
subsequent to the Closing Date, the
Sellers shall pay to the Purchaser
their pro rata share of such New Lease
Expenses. For purposes of this Section
11.1.2, 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 11.1.2 shall survive the
Closing.
11.2 Termination of Existing Leases.
Notwithstanding anything to the
contrary contained in this Agreement, the
Sellers shall not institute summary
proceedings against any tenant or terminate
any Lease as a result of a default by the
tenant thereunder without the Purchaser's
prior written consent (which may be
delivered via telecopier) which shall be
given or denied, in the Purchaser's sole
discretion, within three (3) business days
after receipt by the Purchaser of the
Sellers' notice requesting the Purchaser's
consent to such proposed action. If the
Purchaser shall fail to reply to the
Sellers' request for consent in writing
<PAGE>
within such period, the Purchaser's
consent shall be deemed to have been
granted. The Sellers shall not be
obligated to terminate any Lease or initiate
such summary proceedings. The Sellers make
no representations and assume no
responsibility with respect to the continued
occupancy of the Shopping Centers or any part
thereof by any tenant. The removal of a
tenant whether by summary proceedings or
otherwise pursuant to this Section 11.2
shall not give rise to any claim on the
part of the Purchaser. Further, the
Purchaser agrees that it shall
not be grounds for the Purchaser's refusal
to close this transaction that any tenant is
a holdover tenant or in default under its
Lease 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.
11.3 Contracts.
Prior to the expiration of the Due
Diligence Period the Sellers may in a
reasonable manner cancel, modify, extend,
renew or permit the expiration of Contracts
or enter into any new Contract without
the Purchaser's consent, provided any such
Contract can be terminated by the Purchaser
on thirty (30) days' notice at no expense to
the Purchaser. After the termination of
the Due Diligence Period,
the Sellers shall not modify,
extend, renew or cancel (except as a
result of a default by the other party
thereunder) any Contracts, or enter into any
new Contract (other than those that are
terminable on or before the Closing Date)
from and after the date hereof without the
Purchaser's prior consent in each instance,
which consent shall be given or denied in the
Purchaser's sole discretion. The Purchaser's
rights with respect to Sections 11.1, 11.2
and 11.3 shall survive the Closing for a
period of six (6) months.
11.4 Tax Assessments.
With respect to the tax year in which
the Closing occurs, and all prior tax
years, the Sellers are hereby authorized to
commence, continue and control the progress
of, and to make all decisions with
respect to, any proceeding or proceedings,
whether or not now pending, for the
reduction of the assessed valuation of
the Shopping Centers, and, in their sole
discretion, to try or settle the same and
continue any such action for the period
following the Closing Date, provided, that
no settlement shall include an agreement
respecting the amount of taxes to be paid
for the tax years commencing subsequent to
the Closing Date. All net (after costs, and
credits and refunds to
<PAGE>
tenants) tax refunds and credits
attributable to any tax year prior to the
tax year in which the Closing occurs shall
belong to and be the property of the
Sellers. All net tax refunds and credits
attributable to any tax year subsequent to
the tax year in which the Closing occurs
shall belong to and be the property of the
Purchaser. All net tax refunds and credits
attributable to the tax year in which the
Closing occurs shall, after refunding or
crediting to tenants any portion of such
amounts required to be refunded or credited
to tenants under the Leases, be divided
between the Sellers and the Purchaser in
accordance with the apportionment of taxes
pursuant to the provisions of this
Agreement, after deducting therefrom a pro
rata share of all expenses, including,
without limitation, counsel fees and
disbursements and consultant's fees,
incurred in
obtaining such refund, the allocation of such
expenses to be based upon the
total refund obtained in such
proceeding and in any other proceeding
simultaneously involved in the trial or
settlement. The Purchaser agrees to
cooperate with the Sellers in connection
with the prosecution of any such proceedings
for the tax year in which the Closing
occurs and to take all reasonable steps,
whether before or after the Closing Date, as
may be 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 receipted tax bills
and canceled checks used in payment of such
taxes, the execution of any and all
consents or other documents, and the
undertaking of any act necessary for the
collection of such refund by the Sellers.
The provisions of this Section 11.4 shall
survive the Closing.
11.5 Copies of Notices.
The Sellers shall use reasonable
efforts to provide copies to the Purchaser,
promptly following the Sellers' receipt, of
(a) any correspondence received from any
tenant under any Lease, (b) any notice from
any other person that would make any
representation or warranty by the Sellers
hereunder untrue, (c) monthly operating
statements for each of the Shopping Centers,
and (d) any notices from any federal,
state or local governmental entity.The obligations of this
Section 11.5 shall
survive the Closing.
12. Broker.
<PAGE>
12.1. Broker for Sale of Shopping Centers.
The Purchaser and the Sellers represent
and warrant to each other that Cushman and
Wakefield (the "Broker") isthe 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
and defend and hold harmless the
Purchaser against, all brokerage
commissions or other compensation due to
the Broker arising out of the
transaction contemplated in this Agreement.
Each party hereto agrees to indemnify and
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 12.1
shall survive the termination of this
Agreement and the Closing.
12.2 Brokers' Fees for Extensions, Renewals of
Leases.
Notwithstanding anything to the contrary
set forth in any Leases or any other
documents, instruments or agreements,
subject to Section 6(o), if any fee or other
amount becomes due and payable to any
broker upon the extension or renewal of
any Leases from and after the
Closing Date, such fee or other amount shall
be the sole responsibility of the Purchaser,
and the Purchaser agrees to indemnify and
hold the Sellers harmless from and against
any damages, claims or losses arising as a
result of any such extension or renewal of
any Lease occurring on or after the Closing
Date. The obligations of this Section 12.2 shall survive
the Closing.
13. Casualty; Condemnation.
13.1 Damage or Destruction.
If a "material" part (as hereinafter
defined) of any Shopping Center is damaged or
destroyed by fire or other casualty, the
Sellers shall notify the Purchaser of such
fact. Notwithstanding anything set
forth inthis
Agreement to the contrary, if (i) the
Purchaser does not elect to
<PAGE>
terminate this Agreement as to the
damaged Shopping Center as provided in
Section 14.1 or (ii) 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 Shopping
Center, the
Purchaser shall close title as provided in
this Agreement and, at the Closing, the
Seller which owns the damaged Shopping
Center shall, unless such Seller has repaired
or restored such damage or destruction
in a manner consistent with the
structural condition of the Shopping Center
as currently constructed prior to the
Closing, (x) pay over to the Purchaser
the proceeds of any insurance collected by
such Seller less the amount of all costs
incurred by such Seller in connection with
the repair or restoration of such damage
or destruction (y) assign and transfer to
the Purchaser all right, title and interest
of such Seller in and to any uncollected
insurance proceeds which such Seller may be
entitled to
receive from such damage or destruction
(including, without limitation, rent
insurance) and (z) the Purchase Price for the
Shopping Center that is the subject of such
casualty shall be reduced by an amount equal
to the sum of (1) the repair cost of any
uninsured damages to such Shopping Center
(but not any REAs) caused by such
casualty, plus (2) the amounts of any
deductibles with respect to insurance
policies covering such casualty. A
"material" part of a Shopping Center shall be
deemed to
have been damaged or destroyed if (a) the
cost of repair or replacement shall be
greater than 10% of the portion of the
Purchase Price allocated to such Shopping
Center pursuant to Section 2(d), or (b)
tenants under Leases which represent more
than 5% of the basic rent for such Shopping
Center may have a right to terminate such
Leases as a result of such casualty, or (c)
any tenant of any building constructed on
real property subject to any of
the reciprocal easement agreements identified
on Schedule 12 annexed hereto (the "REAs")
could terminate its lease as a result of
such casualty, or the owner of such
building has no obligation to repair or
restore such damage or destruction prior
to the Closing Date. The
Sellers shall notify the Purchaser of any
casualty to the Shopping Centers that the
Sellers report to their casualty
insurer. The provisions of this Section
13.1 shall survive the Closing to the
extent necessary to
permit the Purchaser to collect any
insurance claim assigned to the Purchaser
pursuant to this Section 13.1.
<PAGE>
13.2 Condemnation.
If, prior to the Closing Date,
all or any
"significant" portion (as hereinafter
defined) of any Shopping Center 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. If the Purchaser does not elect to
terminate this Agreement as to the Shopping
Center subject to the taking as provided in
Section 14.1, or if an "insignificant"
portion ("insignificant" is herein deemed
to be any taking which is not "significant",
as such term is herein defined) of any
Shopping Center is taken by eminent domain
or condemnation, at the Closing the Seller
which owns the Shopping Center which is the
subject of the taking 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 Shopping
Center means (i) a portion of the
Buildings, (ii) a portion of the parking
areas if the taking thereof reduces the
remaining available number of parking spaces
below the minimum number legally required,
or the number required by any Lease or any
of the REAs, (iii) a driveway on the
Land if such driveway is the predominant
means of ingress thereto or egress
therefrom, or (iv) a portion of any
Shopping Center the loss of which could
result in the right of termination or an
abatement of rent under any of the Leases
or the REAs. If any such condemnation
occurs following the date hereof, the
Purchaser shall have the right to
participate in the negotiation of any
condemnation award. The provisions of this
Section 13.2 shall survive the Closing to the
extent necessary to permit the Purchaser to
collect any awards or other proceeds to
which the Purchaser has a right pursuant
to this Section 13.2.
14. Remedies.
14.1 Sellers' Inability to Perform.
If the Closing fails to occur as to a Shopping
Center by reason of the Sellers' inability to
perform their obligations under this Agreement or
by reason of failure of conditions to the
Purchaser's obligations under this Agreement
being satisfied, then the Purchaser, as its sole
remedy for such inability of the Sellers, may
either (i) waive such Sellers' obligation or such
failure of condition, whereupon title shall close
as provided in this Agreement, or (ii) terminate
this Agreement by notice to the Sellers. If the
Purchaser elects to terminate this
<PAGE>
Agreement, then neither party shall have
any further rights, obligations or
liabilities hereunder, except as provided
in Sections 4.1 (Investigations), 12
(Broker), 16 (Escrow), and 18
(Property Information and
Confidentiality) (collectively, the
"Surviving Obligations"). In the event
of such a Purchaser termination, the
Sellers shall be obligated to reimburse the
Purchaser for its reasonable out of pocket
expenses in connection with its efforts to
acquire the Shopping Centers with
respect to which this Agreement is
terminated to the date of the failed
Closing, documented to the reasonable
satisfaction of the Sellers, in an amount
not to exceed $20,000 in the aggregate.
Except as set forth in this Section 14.1
and Section 14.5, 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 or the
failure of any such condition. The
Sellers' payment obligation under this
Section 14.1 shall survive the termination
of this Agreement. The Sellers' payment
obligation under this Section 14.1 shall be a
joint and several obligation of Dean
Witter Realty Income Partnership II,
L.P. and Dean Witter Realty Income
Partnership III, L.P.
14.2 Purchaser's Failure to Perform.
In the event of a material default
hereunder (other than under Section 18) by
the Purchaser or if the Closing fails to
occur by reason of the Purchaser's failure
or refusal to perform its obligations
hereunder in any material respect, 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 the Sellers may, as their sole and
exclusive remedy for such material
default, or failure or refusal to perform,
retain the Fund (as it then exists) 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 Section 18.2, 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 (material or
<PAGE>
otherwise) hereunder or the Purchaser's
failure or refusal to perform its
obligations hereunder.
14.3 Sellers' Failure to Perform.
If the Closing fails to occur (a) by
reason of the Sellers' failure or refusal
to perform and/or observe their obligations
and covenants hereunder, or (b) due to the
fact that, as of the date of this Agreement,
any of the representations and warranties
of the Seller set forth in Section 6
hereof are untrue in any material respect,
either individually or in the aggregate, and
the Purchaser notifies the Sellers of
such circumstances prior to the Closing,
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. If
the Purchaser elects to terminate this
Agreement rather than seek specific
performance then the Purchaser shall, as its
sole remedy for such failure or refusal to
perform, be entitled to liquidated damages
from the Sellers, in an aggregate
amount equal to $100,000 for all loss,
damage and expenses suffered by the
Purchaser, it being agreed that the
Purchaser's damages are impossible to
ascertain and neither party shall have any
further rights, obligations or liabilities
hereunder, except for the Surviving
Obligations. As a condition precedent to
the Purchaser exercising any right it may
have to bring an action for specific
performance as the result of the Sellers'
failure or refusal to perform their
obligations hereunder, the Purchaser must
commence such an action within ninety (90)
days after the originally scheduled or any
extended Closing Date. 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. The
Sellers' payment obligation under this
Section 14.3 shall survive the termination
of this Agreement. The Sellers' payment
obligation under this Section 14.3 shall be a
joint and several obligation of
Dean Witter Realty Income
Partnership II, L.P. and Dean Witter
Realty Income Partnership III, L.P.
14.4 Cure Obligations of Sellers.
If the Closing Date shall be extended
pursuant to the terms of this Agreement,
the Sellers shall use reasonable good
faith efforts to remedy the circumstances
giving rise to such extension event.
Reasonable good faith efforts
<PAGE>
shall mean the following actions with
respect to the following events:
(a) In the event of the
existence of
Unacceptable Encumbrances, the actions
set forth in Section 5.2 hereof; and
(b) In the event that the
Tenant Estoppel Certificates are
returned reflecting any
discrepancies, adverse claims or
exceptions, the actions set forth in
Section 4.3 hereof. So long as the
Sellers agree to indemnify the
Purchaser with respect to
discrepancies, adverse claims or
objections identified in Tenant
Estoppel Certificates (which the Sellers
may elect to do or decline to do in
their sole discretion), such matters
shall not constitute an inability or
failure to satisfy a closing condition,
provided, that if the estimated cost
of remedying such matter exceeds $75,000
in respect of any Shopping Center,
the Purchaser may, in its sole
discretion, refuse to accept such
indemnity and elect to terminate this
Agreement in accordance with the terms
hereof.
14.5 Purchaser's Cure Rights.
With respect to any default by
the Purchaser
hereunder (other than by reason of the
failure to pay the Purchase Price at the
Closing), such default shall not give rise
to the Sellers' ability to exercise their
rights under Section 14.2 hereof, and shall
not be deemed a failure to satisfy a
condition precedent to the Sellers'
obligations hereunder, unless and until
the Purchaser has received prior written
notice of such default from the Sellers
and such default has continued uncured for
five (5) business days after Purchaser's
receipt of such notice.
15. Indemnities.
15.1 Purchaser's Indemnities.
The Purchaser hereby agrees, upon the
occurrence of the Closing, to indemnify and
defend the Sellers and the Sellers'
Affiliates against, and to hold the Sellers
and the Sellers' Affiliates harmless
from all claims, demands, causes of
action, losses, damages, liabilities, costs
and expenses (including, without
limitation, reasonable attorneys' fees and
disbursements) asserted against or incurred
by the Sellers or any of the Sellers'
Affiliates in connection with or arising out
of acts or omissions of the Purchaser
or the Purchaser's Representatives,
<PAGE>
or other matters or occurrences that
take place after the Closing with respect
to the Shopping Centers and relate to the
ownership, maintenance or operation of the
Shopping Centers. The Purchaser's
obligations under this Section 15.1 shall
survive the Closing for a period of six (6)
months.
15.2 Sellers' Indemnities.
Each of the Sellers agrees, upon the
occurrence of the Closing, to indemnify
and defend the Purchaser and Purchaser's
affiliates against, and to hold the Purchaser
and Purchaser's affiliates harmless from
all claims, demand, causes of action,
losses, damages, liabilities, costs and
expenses (including, without limitation,
reasonable attorney's fees and
disbursements) asserted against or incurred
by the Purchaser in connection with or
arising out of any personal injury or
property damage suffered by any third person
at the Shopping Center owned by such Seller
prior to the Closing Date. The Sellers'
obligations under this Section 15.2 shall
survive the Closing for a period of six (6)
months.
16. Escrow.
The Escrow Agent shall hold the
Downpayment and all interest accrued thereon, if
any (collectively, the "Fund") in escrow and
shall dispose of the Fund only in accordance with
the provisions of this Section 16.
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
in the Fund or other income from the Approved
Investment. The party ultimately entitled to
the economic benefit of any accrued interest in
the Fund shall be the party responsible for the
payment of any tax due thereon. 16.1 Demand for
Fund.
The Escrow Agent shall deliver
the Georgia Downpayment with any interest
accrued thereon, or the Michigan
Downpayment with any interest accrued
thereon, as the case may be, to the Sellers
or the Purchaser, as the case may be, as
follows:
(a) to the Sellers, upon completion of the Closing
with respect to the corresponding Shopping
Center, if such Shopping Center is disposed of
by the occurrence of the
Closing with respect to such Shopping Center rather than by
<PAGE>
the termination of this Agreement with respect
to such Shopping Center; or
(b) to the Sellers, after
receipt of the
Sellers' demand in which the Sellers
certify either that (i) the
Purchaser has defaulted under this
Agreement, or (ii) this Agreement has
been otherwise terminated or canceled
with respect to all of the Shopping
Centers (other than those with respect
to which the Closing has previously
occurred), and the Sellers are thereby
entitled to receive all or the stated
portions of the Fund; but the Escrow
Agent shall not honor the Sellers'
demand until more than ten (10) days
after the Escrow Agent has given a
copy of the Sellers' demand to the
Purchaser in accordance with Section
16.3, nor thereafter if the Escrow
Agent receives a Notice of Objection
from the Purchaser within such ten (10)
day period; or
(c) to the Purchaser, after
receipt of the
Purchaser's demand in which the
Purchaser certifies either that (i) any
Seller has defaulted under this
Agreement, or (ii) this Agreement has
been otherwise terminated or canceled
with respect to all of the Shopping
Centers (other than those with respect
to which the Closing has previously
occurred), and the Purchaser is thereby
entitled to receive all or the stated
portions of the Fund; but the Escrow
Agent shall not honor the Purchaser's
demand until more than ten (10) days
after the Escrow Agent has given a copy
of the Purchaser's demand to the Sellers
in accordance with Section 16.3, nor
thereafter if the Escrow Agent receives
a Notice of Objection from the Sellers
within such ten (10) day period.
Upon delivery of the Fund, the Escrow
Agent shall be relieved of all liability
hereunder and with respect to the Fund.
The Escrow Agent shall deliver the Fund, at
the election of the party entitled to
receive the same, by (i) a good,
unendorsed certified check of the Escrow
Agent payable to the order of such
party, (ii) an unendorsed official bank or
cashier's check payable to the order of
such party, or (iii) a bank wire transfer of
immediately available funds to an account
designated by such party.
16.2 Status of Fund Upon Termination or
Extension.
No portion of the Downpayment or any
other portion of the Fund shall
<PAGE>
be delivered to the Sellers or the
Purchaser under this Agreement until, with
respect to any of the Shopping Centers,
either (i) the Closing has occurred, or
(ii) this Agreement has terminated.
Upon each Closing
hereunder, the applicable portion of the
Fund shall be delivered to the Sellers
pursuant to Section 16.1(a) and such
portion shall be applied to the Purchase
Price for such Shopping Center. If this
Agreement is terminated with respect to
any or all of the Shopping Centers
remaining to be disposed of under this
Agreement, the Fund or the remaining
portion thereof shall be disposed of pursuant
to Section 16.1(b) or Section 16.1(c), as the
case may be.
16.3 Notice of Objection.
Upon receipt of a written demand from
the Sellers or the Purchaser under Section
16.1(b) or (c), the Escrow Agent shall
send a copy of such demand to the other
party. Within ten (10) days after the date
of receiving same, but not thereafter, the
other party may object to
delivery of the Fund to the party making
such demand by giving a notice of objection
(a "Notice of Objection") to the Escrow
Agent. After receiving a Notice of
Objection, Escrow Agent shall send a
copy of such Notice of Objection to
the party who made the demand; and
thereafter, in its sole and absolute
discretion, the Escrow Agent may elect
either (i) to continue to hold the Fund
until the Escrow Agent receives a written
agreement of the Purchaser and
the Sellers directing the
disbursement of the Fund, in which event the
Escrow Agent shall disburse the Fund in
accordance with such
agreement; and/or (ii) to take any and all
actions as the Escrow Agent deems necessary
or desirable, in its sole and absolute
discretion, to discharge and terminate its
duties under this Agreement,
including, without limitation, depositing
the Fund into any court of
competent jurisdiction and bringing any
action of
interpleader or any other proceeding,
provided, that the Escrow Agent shall not
distribute the Fund to the Purchaser or
the Sellers following receipt of a Notice of
Objection without further direction from
both the
Purchaser and the Sellers, or from a court
of competent jurisdiction; and/or (iii) in
the event of any litigation between the
Sellers and the Purchaser, to deposit the
Fund with the clerk of the court in which
such litigation is pending.
16.4 Actions after Notice of Objection.
If the Escrow Agent is uncertain for
any reason whatsoever as to its duties or
<PAGE>
rights hereunder (and whether or not
the Escrow Agent has received any written
demand under Section 16.1(b) or (c), or
Notice of Objection under Section 16.3),
notwithstanding anything to the contrary
herein, the Escrow Agent may hold and apply
the Fund pursuant to Section 16.3 and may
decline to take any other action
whatsoever. In the event the Fund is
deposited in a court by the Escrow Agent
pursuant to Section 16.3(ii) or (iii), the
Escrow Agent shall be entitled to rely upon
the decision of such court. In the event of
any dispute whatsoever among the parties
with respect to disposition of the Fund, the
Purchaser and the Sellers shall pay the
attorney's fees and costs incurred by the
Escrow Agent (which said parties shall
share equally, but for which said parties
shall be jointly and severally liable) for
any litigation in which the Escrow Agent is
named as, or becomes, a party.
16.5 Investment of Fund.
Notwithstanding anything to the
contrary in this Agreement, within one (1)
business day after the date of this
Agreement, the Escrow Agent shall place the
Downpayment in an Approved Investment. The
interest, if any, which accrues on such
Approved Investment shall be deemed part
of the Fund; and the Escrow Agent shall
dispose of such interest as and with the Fund
pursuant to this Agreement. The Escrow
Agent may not commingle the Fund with any
other funds held by Escrow Agent. The
Escrow Agent may convert the Fund from
the Approved Investment into cash or a
non-interest-bearing demand account at an
Approved Institution as follows:
(a) at any time within seven (7)
days prior to the Closing Date; or
(b) if the Closing Date is
accelerated or
extended, at any time within seven (7)
days prior to the accelerated or
extended Closing Date; provided,
however, that the Sellers and the
Purchaser shall give the Escrow Agent
timely notice of any such
acceleration or extension and that the
Escrow Agent may hold the Fund in cash
or a non-interest-bearing deposit
account if the Sellers and the Purchaser
do not give the Escrow Agent timely
notice of any such adjournment.
As used herein, the term "Approved
Investment" means (i) any interest-bearing
demand account or money market fund in
State Street Bank and Trust Company or in
any other institution
<PAGE>
otherwise approved by both the
Sellers and the Purchaser (collectively,
an "Approved Institution"), or (ii) any
other investment approved by both the
Sellers and the Purchaser. The rate of
interest or yield need not be the maximum
available and deposits, withdrawals,
purchases, reinvestment of any matured
investment and sales shall be made in the
sole discretion of the Escrow Agent, which
shall have no liability whatsoever therefor.
Discounts earned shall be deemed interest for
the purpose hereof.
16.6 Duties of Escrow Agent.
The Escrow Agent shall have no
duties or
responsibilities except those set forth
herein, which the parties hereto agree are
ministerial in nature. The
Sellers and the Purchaser acknowledge that
the Escrow Agent is serving without
compensation, solely as an accommodation
to the parties hereto, and except for the
Escrow Agent's own willful default,
misconduct or gross negligence, the Escrow
Agent shall have no liability of any kind
whatsoever arising out of or in connection
with its activity as Escrow Agent. The
Sellers and the Purchaser jointly and
severally agree to and do hereby indemnify
and hold harmless the Escrow Agent from
all loss, cost, claim, damage,
liability, and expense (including,
without limitation, reasonable attorney's
fees and disbursements) which may be
incurred by reason of its acting as the
Escrow Agent provided the same is not the
result of the Escrow Agent's willful
default, misconduct or gross negligence.
The Escrow Agent may charge against the
Fund any amounts owed to it under the
foregoing indemnity or may withhold the
delivery of the Fund as security for any
unliquidated claim, or both. Any amendment
of this Agreement which could alter or
otherwise affect the Escrow Agent's
obligations hereunder will not be effective
against or binding upon the Escrow Agent
without the Escrow Agent's prior consent,
which consent may be withheld in the Escrow
Agent's sole and absolute discretion.
The provisions of this Section 16 shall
survive the termination of this Agreement and the
Closing.
17. Notices.
All notices, elections, consents,
approvals, demands, objections, requests or
other communications which the
Sellers, the Purchaser or Escrow Agent may be
required or desire to give pursuant to, under
or by virtue of this Agreement must be in
writing and sent by hand or by a nationally
recognized overnight courier (except where notice
by
<PAGE>
telecopy is expressly permitted hereunder)
(for next business day delivery), addressed as
follows:
If to the Sellers:
Dean Witter Realty Inc.
Two World Trade Center, 64th Floor
New York, NY 10048
Attention:
Ronald DiPietro
Telephone:
(212) 392-4578
Telecopier:
(212) 392-3123
with copies to:
Vincent M.
Sacchetti, Esq.
Bingham Dana
LLP
150 Federal Street
Boston, Massachusetts
02110 Telephone: (617) 951-
8000 Telecopier: (617)
9518736
If to the Purchaser:
New Plan Excel Realty
Trust, Inc.
1120 Avenue of the Americas,
12th Floor New York, New York
10036
Attention: Chief
Executive Officer
Telephone: (212) 869-3000
Telecopier: (212) 869-3989
with a copy to:
Altheimer & Gray
10 South Wacker Drive, Suite
4000
Chicago, Illinois 60606
Attention: Robert M.
Horwitch, Esq.
Telephone: (312) 715-
4822 Telecopier: (312)
715-4800
If to Escrow Agent:
<PAGE>
LandAmerica
One Washington Mall
Boston, MA 02108
Attention:
Carole Sawdon
Telephone:
617-619-4800
Telecopier:
617-619-4848
The Sellers, the Purchaser or Escrow Agent
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 17. Any party's attorney may give a
notice in accordance with this Section 17 on
behalf of such party. A notice or other
communication sent in compliance with the
provisions of this Section 17 shall be deemed
given and received on (i) the date of receipt
of hand delivery, or (ii) the date of receipt if
sent by a nationally recognized overnight courier.
Notice to the address provided above for any
Seller shall constitute notice to all Sellers.
18. 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 (other than to the title insurance
company, Surveyor, governmental authorities or
tenants at the Shopping Centers), 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 Shopping Centers. Moreover, the
Purchaser agrees that, prior to the Closing,
the Property Information will be transmitted only
to the Purchaser's Representatives who need to
know the Property Information for the purpose
of evaluating the
Shopping Centers, and who are informed by the
Purchaser of the confidential nature of the
Property Information. Prior to the delivery or
disclosure of any Property Information to the
Purchaser's Representatives at any time prior to
the Closing, the Purchaser agrees to notify
the Sellers as to their identity. The
provisions of this Section 18 shall in no event
apply to (i) Property Information which is a
matter of public record, (ii) Property
Information that is included by the Purchaser
in any filing made with the Securities
Exchange Commission or the New York Stock
Exchange, or (iii) Property Information that is
received by the Purchaser from a source other
than the Sellers or Sellers' Affiliates. The
provisions of this Section 18 shall not
prevent the Purchaser or Purchaser's
Representatives from
<PAGE>
complying with Laws, including, without
limitation, governmental regulatory,
disclosure, tax and reporting
requirements, and legal process.
18.1 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 foregoing shall not preclude either
party from discussing the substance or
any relevant details of the
transactions contemplated in this
Agreement with any of its attorneys,
accountants, professional consultants,
investor limited partners or potential
lenders, as the case may be, or prevent
either party hereto from complying with Laws,
including, without limitation, governmental
regulatory, disclosure,
securities, tax and reporting requirements.
18.2 Return of Property Information.
In the event that the Closing does not
occur with respect to any Shopping Center,
the Purchaser and the Purchaser's
Representatives shall promptly deliver to the
Sellers all originals and copies of
the Property
Information pertaining to such Shopping
Center referred to in clause (i) of Section
18.3 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. Upon the
Purchaser's delivery to the Sellers of
substantially all of the materials described
in the first sentence of this Section 18.2,
the Purchaser shall be entitled to receive a
return of ninety percent (90%) of the
Downpayment (or if the Closing on the
Georgia Shopping Center has occurred, ninety
percent (90%) of the Michigan Downpayment),
together with accrued interest upon such
portion of the Downpayment (or Michigan
Downpayment, as the case may be). After
their receipt of such delivery, the Sellers
shall
<PAGE>
review such materials and shall
notify the
Purchasers within fifteen (15) days
following such receipt if any of such
materials have not yet been delivered to
the Sellers. The Purchaser shall be
entitled to receive a return of the
remaining amount of the Downpayment,
together with accrued interest thereon, if
(i) the Sellers do not deliver the notice
described in the immediately preceding
sentence within such fifteen day period; or
(ii) the Purchaser delivers to the Sellers
the materials specified in such notice, or
(iii) the Purchaser delivers to the Sellers
a certificate that any such materials not
delivered by the Purchasers are lost, and
committing the Purchaser to deliver such
materials to the Sellers if they are
subsequently discovered.
18.3 Property Information Defined.
As used in this Agreement, the
term "Property Information" shall mean (i)
all information and documents in any
way relating to the Shopping Centers,
the
operation thereof or the sale thereof
(including, without limitation, Leases,
Contracts and Licenses) furnished to, or
otherwise made available for review by, the
Purchaser or its
directors, officers, employees,
affiliates,
partners, brokers, agents or other
representatives, including, without
limitation, attorneys, accountants,
contractors, consultants, engineers and
financial advisors (collectively,
the "Purchaser's
Representatives"), by the 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) all analyses,
compilations, data, studies, reports or
other information or documents prepared
or obtained by the Purchaser or the
Purchaser's Representatives containing or
based, in whole or in part, on the
information or documents described in the
preceding clause (i), or the Investigations,
or otherwise reflecting their review or
investigation of the Shopping Centers.
18.4 Remedies.
The Sellers' sole remedy for
enforcement or violation of the
provisions of this Section 18 and Section
6.3 shall be to seek equitable relief,
including, without
limitation, injunctive relief or
specific
performance, against the Purchaser or the
Purchaser's Representatives.
The provisions of this Section 18 shall
survive the
termination of this Agreement and the Closing.
<PAGE>
19. Access to Records.
For a period of two (2) 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. Without limiting the
foregoing, Purchaser shall have the right after
the Closing to audit the books and records of
Sellers in respect of the Shopping Centers for
those last two entire fiscal years of the Sellers
ending prior to the Closing Date and the portion
of the Sellers' fiscal year in which the Closing
occurs to and including the Closing Date.
20. 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 only be
assigned by the Purchaser to an entity or entities
controlled by or under common control with the
Purchaser, provided, that the Purchaser shall
remain liable for the obligations and
liabilities of the Purchaser hereunder. Any
other assignment or attempted assignment by the
Purchaser shall constitute a default by the
Purchaser hereunder and shall be null and void.
The Sellers acknowledge that with respect to
the Shopping Center in Georgia the Purchaser
intends to assign its rights and obligations
hereunder to, and to have such Shopping Center
transferred directly to, an affiliate in
compliance with the terms of this Section 20.
21. Entire Agreement, Amendments.
With the exception of the letter from the
Purchaser to Sellers dated January 6,
1999, 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
<PAGE>
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.
22. Merger.
Except as otherwise expressly provided
herein or in the Conveyance Documents, (i) the
Purchaser's acceptance of the Deed shall be
deemed a discharge of all of the obligations of
the Sellers hereunder, and (ii) 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.
23. 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 parents 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 such Seller's assets
for the satisfaction of such Seller's liability
or obligation arising under this Agreement or
the transactions contemplated hereby, or for the
performance of any of the covenants,
warranties or other agreements of such Seller
contained herein, 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 or the
transactions contemplated hereby. The total
liability of the Sellers hereunder shall in no
event exceed an amount equal to the Downpayment.
To secure its obligations under this
Agreement, each Seller agrees to deposit $250,000
with the Escrow Agent at its respective Closing,
which sum shall be held pursuant to the
terms of the Escrow Agreement attached hereto
as Exhibit N. 24. Time of the Essence.
The Sellers and the Purchaser agree that,
wherever this Agreement provides that any party
must send or give any notice, make an
election or take some other action within a
specific time period in order to exercise a right
or remedy it may have hereunder, time shall be of
the essence with respect to the taking of such
action, and such party's failure to take such
action within the applicable time period shall be
deemed to be an irrevocable waiver by such
party of such right or remedy.
<PAGE>
25. Waivers.
No failure or delay of either party in the
exercise of
any right or remedy given to such party
hereunder or the waiver by any party of any
condition hereunder for its benefit (unless the
time specified herein for exercise of such right
or remedy has expired) shall constitute a waiver
of any other or further right or remedy nor
shall any single or partial exercise of any
right or remedy preclude other or further
exercise thereof or any other right or remedy.
No waiver by
either party of any breach hereunder or failure or
refusal by
the other party to comply with its obligations
shall be deemed a waiver of any other or
subsequent breach, failure or refusal to so
comply.
26. Miscellaneous.
Neither this Agreement nor any memorandum
thereof shall be recorded and any attempted
recordation hereof shall be void and shall
constitute a default. This Agreement may be
executed in one or more counterparts, each
of which so
executed and delivered shall be deemed an
original, but all of which taken together shall
constitute but one and the same instrument. Each of the
Exhibits and Schedules referred to
herein and attached hereto is incorporated
herein by this reference. The caption
headings in this Agreement are for
convenience only and are not intended to be a
part of this Agreement and shall not be
construed to modify, explain or
alter any of the terms, covenants or
conditions herein contained. If any provision
of this Agreement shall be
unenforceable or invalid, the same shall not
affect the remaining provisions of this
Agreement and to this end the provisions of
this Agreement are intended to be and shall be
severable. This Agreement shall be interpreted
and enforced
in accordance with the laws of the state in which
the Shopping Centers are located without
reference to principles of
conflicts of laws.
Sellers and Purchaser each hereby submit
itself to the jurisdiction of the State of
New York in any action or
proceeding arising out of or under this
Agreement. By
execution and delivery of this Agreement,
Sellers and
Purchaser accept, generally and
unconditionally, the
nonexclusive jurisdiction of the aforesaid
courts and
irrevocably agree to be bound by any final
judgment rendered thereby in connection with this
Agreement from which no appeal has been taken or
is available. Sellers and Purchaser each hereby
irrevocably waive any objection to the laying of
venue or based on the grounds of forum non
conveniens which it may now or hereafter have
to the bringing of any such action or
proceeding in
<PAGE>
any such jurisdiction. Nothing herein
shall limit the right of either Sellers or
Purchaser to bring any action, suit or proceeding
against the other in the courts of such
jurisdiction. Sellers and Purchaser each
acknowledge that final judgment against it in
any action, suit or proceeding referred to in
this Section 26 shall be conclusive and may be
enforced in any other jurisdiction, by suit on the
judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact
and of the amount of any such judgment. Purchaser
hereby irrevocably appoints, authorizes,
empowers and designates the chief executive
officer of the Purchaser, as its lawful agent
upon whom service of any legal process may be
made in the State of New York, in a like manner
and with
like effect as if the same were served
personally upon Purchaser within the
jurisdiction of the State of New York. Each of
the Sellers hereby irrevocably appoints,
authorizes, empowers and designates Dean Witter
Realty, Inc., as its lawful agent upon whom
service of any legal process may be made in the
State of New York, in a like manner and with like
effect as if the same were served personally
upon Sellers within the jurisdiction of the State
of New York.
All the parties hereto and their attorneys
have had full opportunity to review and
participate in the drafting of the final form
of this Agreement. Accordingly, this Agreement
shall be construed without regard to any
presumption or other rule of construction
against the party causing the Agreement to be
drafted. As used in this Agreement, the masculine
shall include the feminine and
neuter, the singular shall include
the plural and the plural shall include the
singular, as the context may require.
27. Notice to or Knowledge of Sellers.
To the extent that any provision of this
Agreement or the Seller Documents relates to the
knowledge of any Seller or receipt of knowledge
by any Seller, such provision is intended to
relate solely to and shall be deemed to relate
solely to notices received and knowledge
obtained by the Sellers from and after the
date upon which an affiliate of Dean Witter
Realty, Inc. obtained either title to the
relevant Shopping Center or the general
partnership interest in the Seller with respect
to such Shopping Center. Knowledge of Sellers
shall include, without limitation, the actual
knowledge of Mr. Robert B. Austin.
28. Sellers' Representatives.
The Sellers hereby designate (i) Ronald
DiPietro as their representative to receive
notices on their behalf
<PAGE>
as contemplated by Section 17 of this
Agreement, and (ii) Robert B. Austin as their
representative (the
"Representative") to bind the Sellers with
respect to any agreements between any such
Seller and the Purchaser, to approve
amendments to this Agreement and to render
decisions and furnish information as may be
required of the Sellers pursuant to this
Agreement and the Purchaser shall have no
obligation to inquire into the authority of the
Representative with respect to any actions taken
by the Represenative with respect to this
Agreement on behalf of the Sellers.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties hereto as of the
day and year first above written.
SELLERS: 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
PURCHASER: NEW PLAN EXCEL
REALTY
TRUST, INC.
By:/s/Thomas J.
Farrell Name: Thomas J. Farrell
Title:
Senior Vice President
ESCROW AGENT: LAWYERS TITLE INSURANCE
CORPORATION
By:/s/ Carole
Sawdon
Name: Carole Sawdon
Title:
Assistant Vice President
<PAGE>
ASSIGNMENT AND OPTION AGREEMENT
ASSIGNMENT AND OPTION AGREEMENT (this
"Agreement")
dated as of February __, 1999, between
Taxter Park Associates, a New York
general partnership ("Taxter"), and DW
Taxter Special Corp., a Delaware
corporation ("DWTSC").
WHEREAS, Taxter is a general
partnership, the general partners of which
are Dean Witter Realty Income Partnership
II, L.P., a Delaware limited partnership
("DWR II"), Dean Witter Realty Income
Partnership III, L.P., a Delaware limited
partnership ("DWR III"), and Dean Witter
Realty Income Partnership IV, L.P., a
Delaware limited partnership ("DWR
IV" and,
collectively with DWR II and DWR
III, the "Partnerships");
WHEREAS, pursuant to Section
4.3(C) of the respective Agreement of
Limited Partnership of each of the
Partnerships, the Managing General Partner
of such Partnership or any of its
affiliates may make
investments for the purpose of facilitating
the making of such investment for such
Partnership;
WHEREAS, DWTSC is an affiliate of
the Managing General Partner of each
Partnership;
WHEREAS, Taxter, as successor in
interest to Dean Witter Realty Inc.,
is a party to that certain Agreement
Granting Lease, dated as of October 23,
1987 (the "Original Lease"), among Taxter,
KLM Royal Dutch Airlines, a Netherlands
corporation ("KLM"), and Urbco, Inc.
pursuant to which KLM was granted a
leasehold interest (the "Leasehold
Interest") in certain property within the
premises commonly known as 565 Taxter
Road, Elmsford, New York, located in
Taxter Corporate Park (the "Property");
WHEREAS, Taxter and KLM have entered
into (i) that certain Purchase and Sale
Agreement, dated February 9, 1999 (the
"Purchase Agreement"), pursuant to which
Taxter has agreed to assume from KLM and KLM
has agreed to assign to Taxter the Leasehold
Interest, and (ii) that certain Lease
Agreement, dated February 5, 1999 (the
"Lease"), pursuant to which KLM has agreed
to lease from Taxter and Taxter has agreed
to lease a certain portion of the
premises located at the
Property; and
WHEREAS, Taxter desires to assign (i)
its rights and obligations as Purchaser
under the Purchase
Agreement and (ii) its rights and obligations
as Lessor under the Lease to DWTSC and grant
to DWTSC an option to require Taxter to
purchase the Leasehold Interest and assume
the Lease at any time from and after August 9,
1999 upon the terms and subject to the
conditions contained herein, and DWTSC
desires to acquire the rights of Taxter
as Purchaser under the Purchase Agreement
and Lessor under the Lease and grant to
Taxter an option to purchase the Leasehold
Interest and assume the Lease at any time
from and after the date DWTSC acquires the
Leasehold Interest upon the terms and
subject to the conditions contained herein.
<PAGE>
NOW, THEREFORE, the parties hereto mutually
covenant and agree as follows:
1. Assignment and Assumption of
Taxter's Rights as Purchaser under the
Purchase Agreement and Lessor under the
Lease. Subject to the terms and conditions
set
forth in this Agreement, Taxter hereby assigns
its rights and obligations as Purchaser under
the Purchase Agreement and Lessor under the
Lease to DWTSC. DWTSC
hereby accepts such assignment and agrees to
be bound by the terms and conditions of the
Purchase Agreement and the Lease.
2. (a) Taxter Option. Subject to the terms
and
conditions set forth in this Agreement, in
the event that DWTSC acquires the Leasehold
Interest pursuant to the Purchase Agreement,
DWTSC hereby grants to Taxter an option (the
"Taxter Option"), at any time from and after
the date DWTSC acquires the Leasehold
Interest, to purchase from DWTSC the
Leasehold Interest and assume from DWTSC its
rights and obligations under the Lease for an
amount (the "Exercise Price") equal to the
amount paid by DWTSC to KLM for the Leasehold
Interest (excluding any interest and other
financing costs paid by DWTSC in connection
with money borrowed or financing obtained in
connection therewith), plus the out-ofpocket
costs incurred by DWTSC in connection with
leasing commissions, tenant improvements and
any other capital expenditures in connection
with the Leasehold Interest. In the event
that Taxter enters into an
agreement to sell the Property, in connection
with the consummation of such sale, the
Taxter Option shall be deemed to be
exercised subject to the other terms and
conditions of this Agreement (a "Mandatory
Purchase"); provided, however, that the
Exercise Date (as hereinafter defined)
shall be the date of such sale.
(b) DWTSC Put. Subject to the terms and
conditions set forth in this Agreement, in
the event that DWTSC acquires the Leasehold
Interest pursuant to the
Purchase agreement, Taxter hereby grants to DWTSC an
option (the "DWTSC Put") to require Taxter, at any time
from and after August 9,
1999, to purchase from DWTSC the Leasehold Interest and
assume from DWTSC its rights and obligations under the
Lease for an amount equal to the Exercise Price .
3. Exercise and Payment; Designation of
Purchaser; Termination.
(a) Taxter shall, at its sole discretion,
have the right to appoint a designated purchaser (the
"Taxter Designee") to purchase the Leasehold Interest
from DWTSC and assume DWTC's rights and obligations
under the Lease in accordance with the terms hereof
upon the exercise of the Taxter Option or the DWTSC Put
or in the event of a Mandatory Purchase.
(b) The Taxter Option or the DWTSC Put may be
exercised by Taxter or DWTSC, as the case may be,
delivering to the other party, on a date (the "Notice
Date") no less than ten (10) days prior to the date on
which such party wishes to exercise the Taxter Option or
DWTSC Put,
<PAGE>
(c) as the case may be (the "Exercise Date"),
written notice which shall <PAGE>
(d) specify that such party elects to exercise
the
Taxter Option or DWTSC Put, as the case may
(e) be, and, in the case of exercise of the Taxter
Option, the identity of the Taxter
Designee. In the event that DWTSC
exercises the DWTSC Put, Taxter shall
provide DWTSC with notice of the identity
of the Taxter Designee within the five day
period after the Notice Date. In the event
of a Mandatory Purchase, Taxter shall
provide DWTSC with notice of the identity
of the Taxter Designee not less than ten
(10) days prior to the consummation of the
sale resulting in the Mandatory Purchase.
(c) On the Exercise Date, Taxter or the
Taxter Designee shall deliver to DWTSC the applicable
Exercise Price by wire transfer of
immediately available funds to an account
designated by DWTSC no less than one (1)
day prior to the Exercise Date, and Taxter
and DWTSC shall enter into a mutually
acceptable agreement pursuant to which (i)
the Original Lease will be terminated or
the Leasehold Interest shall be
transferred to the Taxter Designee, and
(ii) DWTSC's rights and obligations under
the Lease will be assigned to the Taxter
Designee.
4. Representations of the Parties.
(a) Taxter hereby represents and
warrants to DWTSC as follows: This
Agreement has been duly executed and
delivered by Taxter and constitutes a
legal, valid and binding obligation
of Taxter enforceable against Taxter
in accordance with its terms. The
execution and delivery of this Agreement do
not, and the consummation of the
transactions contemplated hereby will not,
violate any provision of the partnership
agreement of Taxter, any agreement to
which Taxter is a party or by which Taxter
is bound and will not violate any other
restriction of any kind or character to
which Taxter is subject.
(b) DWTSC hereby represents and
warrants to Taxter as follows: This
Agreement has been duly
executed and delivered by DWTSC and
constitutes a legal, valid and
binding obligation of DWTSC
enforceable against DWTSC in accordance
with its terms. The execution and delivery
of this Agreement do not, and the
consummation of the transactions
contemplated hereby will not, violate
any provision of the Certificate of
Incorporation or By-laws of DWTSC, any
agreement to which DWTSC is a party or by
which DWTSC is bound and will not violate
any other restriction of any kind or
character to which DWTSC is subject.
5.
6.
<PAGE>
Restrictions on Transfer. Unless
this Agreement has been terminated in
accordance with its terms, DWTSC shall
not assign, transfer or otherwise
dispose of, or
7. grant any right or option to any
person to
purchase the Leasehold Interest or its
rights and obligations under the Lease,
except, if at all, to Taxter or the Taxter
Designee as and when the Taxter Option or
DWTSC Put has been exercised or in
connection with a Mandatory Purchase.
6. Term of Agreement. This Agreement shall
be
in effect from the date first set forth above
through
October 31, 2072 (the "Expiration Date").
7. Consent to Assignment of Leasehold
Interest.
Taxter hereby consents to the Assignment of the
Leasehold Interest to DWTSC pursuant to
Article 13 of the Original Lease.
8. Amendments. No amendment,
alteration,
change, or attempted waiver of any of the
provisions hereof shall be binding without
the written consent of both parties.
9. Assignment; Binding Effect.
Taxter shall
have the right to assign or sell its rights
and obligations under this Agreement to any
person, corporation, partnership, or other
legal entity. DWTSC
shall not assign this Agreement or its
respective rights and obligations under this
Agreement without the written consent of
Taxter, which consent may be withheld in
Taxter's sole discretion. The provisions of
this Agreement shall be binding upon and
shall inure to the benefit of the parties'
successors and assigns, respectively, but
this provision shall not constitute a
consent by Taxter to assignment by DWTSC
otherwise prohibited by the preceding
sentences.
10. Governing Law. The parties agree
that it shall be governed and construed in
accordance with the internal laws of the
State of New York to the fullest extent
permitted by law, without regard to the
application of conflict of laws rules. If
any portion of the provisions hereof shall
to any extent be invalid or unenforceable,
the remainder of this Agreement, or the
application of such portion or provisions in
circumstances other than those in which it
is held invalid or unenforceable, shall not
be affected thereby, and each portion or
provision of this Agreement shall be valid
and enforced to the fullest extent permitted
by law.
11. Additional Documents. The parties
hereto
shall execute such additional documents as
are reasonably required for the purpose of
carrying out the intent and purpose of this
Agreement.
12. Headings. Section and paragraph
headings are not part of this Agreement and
are included solely for convenience and are
not intended to be full or accurate
descriptions of the contents thereof.
<PAGE>
13. Counterparts. This Agreement may be
executed in any number of counterparts, each
of which shall be an original, but all which
together shall constitute one instrument.
14. Notices. Any notice which either
party hereto may be required or permitted to
give to the other shall be in writing and
may be delivered personally, by mail,
postage prepaid, or by facsimile addressed
as follows:
If to Taxter, to:
Taxter Park Associates
Two World Trade Center, 64th
Floor
New York, NY 10048
Attention: Robert
Austin
Facsimile: (212) 392-
3123
If to DWTSC, to:
Dean Witter Special
Taxter Corp. Two World
Trade Center, 64th
Floor New York, NY
10048
Attention: Robert Austin
Facsimile: (212) 392-3123
15. Remedies. The parties hereto will
be entitled to enforce their rights under
this Agreement specifically (without posting
a bond or other security), to recover
damages by reason of any breach of any
provision of this Agreement and to exercise
all other rights existing in their favor.
The parties hereto agree and acknowledge
that money damages may not be an adequate
remedy for any breach of the provisions of
this Agreement and that any party hereto may
in its sole discretion apply to any court of
law or equity of competent jurisdiction for
specific performance and/or injunctive
relief in order to enforce or prevent any
violation of the provisions of this
Agreement.
[Remainder of page intentionally left
blank.]
<PAGE>
IN WITNESS WHEREOF, the undersigned
have executed this Assignment and Option
Agreement as of the day and year first
above written.
DW TAXTER SPECIAL
CORP.
By:
Name:
Title:
TAXTER PARK
ASSOCIATES
By: Dean Witter
Realty Income
Partnership
II, L.P.,
general
partner
By: Dean
Witter Realty
Income
Propertie
s II,
Inc.,
managin
g
general
partner
By:
Name:
Title:
By: Dean Witter
Realty Income
Partnership
III, L.P.,
general partner
By: Dean
Witter Realty
Income
Propertie
s III,
Inc.,
managing
general
partner
By:
<PAGE>
Name:
Title:
By: Dean Witter
Realty Income
Partnership
IV, L.P.,
general partner
By: Dean
Witter
Realty
Fourth
Income
Propertie
s, Inc.,
managing
general
partner
By:
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in real estate, and real
estate joint ventures. In accordance with industry practive, its balance
sheet is unclassified. For full information, refer to the accompanying
unaudited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> JAN-31-1999
<CASH> 811,731
<SECURITIES> 0
<RECEIVABLES> 181,475
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,013,923<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,647,035<F2>
<TOTAL-LIABILITY-AND-EQUITY> 14,013,923<F3>
<SALES> 0
<TOTAL-REVENUES> 507,528<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 281,825
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 225,703
<INCOME-TAX> 0
<INCOME-CONTINUING> 225,703
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 225,703
<EPS-PRIMARY> 1.15<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivable, totoal assets include real estate held
for sale of $10,406,475, investment in joint venture of $2,338,114 net
deferred leasing commissions of $227,652 and other assets of $48,476.
<F2>Other Stockholders' Equity represents partners' capital.
<F3>Liabilities include account payable and other liabilities $366,888.
<F4>Total revenue includes rent of $404,772 equity earnings of joint venture of
$68,769 and other revenues of $33,987.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
