7
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported)September 24, 1998
DEAN WITTER REALTY INCOME PARTNERSHIP
III, L.P. (Exact name of registrant as
specified in its charter)
Delaware 0-18146
13-
3293754
(State or other jurisdiction (Commission
(I.R.S. Employer of incorporation)
File Number) Identification
No.)
Two World Trade Center, New
York, New York 10048 (Address of
principal executive offices)
(Zip Code)
Registrant's telephone number, including area
code(212) 3921054
(Former name or former address, if
changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Pursuant to a Purchase and Sale Agreement dated
as of
June
2, 1999, Laurel-Vincent Place Associates,
L.P., which is owned 99.999% by
Dean Witter Realty Income
Partnership III,
L.P. and 0.001% by the Managing
General Partner,
entered into an
agreement, as amended,
to sell the land and
building which comprise
the Laurel Lakes Centre
property, for a
negotiated sale price
of $37.5 million, to
Urban Investment
Group, Inc, an
unaffiliated party. The closing of the
sale took place
on September 24, 1999.
At closing, the Partnership
received proceeds of
approximately $35.6
million, net of closing
costs and other
deductions.
<PAGE>
Item 7. Financial
Statements and Exhibits
(b) Pro Forma Financial
Information
(1) Pro Forma Balance
Sheet as
of July 31,
1999.
(2) Pro Forma
Statements
of
Operations
for the fiscal
year ended
October 31,
1998 and the
nine months
ended July 31,
1999.
(c) Exhibits
(1) Purchase and
Sale
Agreement,
dated as of
June 2, 1999,
with respect
to the sale of
the Laurel
Lakes Centre
property.
<PAGE>
SIGNATURES
Pursuant to the
requirements of the
Securities Exchange Act
of 1934, the registrant
has duly caused this
report to be signed on
its behalf by the
undersigned hereunto
duly authorized.
DEAN WITTER
REALTY INCOME PARTNERSHIP III,
L.P.
By: Dean Witter
Realty Income Properties
III,
Inc.
Managing General
Partner
Date: October 6,
1999 By:
/s/Charles
M. Charrow
C
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s
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.
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<PAGE>
<TABLE>
Dean Witter Realty
Income
Partnership III, L.P.
Pro Forma Consolidated
Balance
Sheet As
of July
31, 1999
The following
unaudited pro forma
balance sheet has been
presented as if the
Laurel
Lakes Centre property
was sold as
of July 31, 1999. The
pro forma adjustments
reflect a) the net
cash proceeds from the
sale, b) the
elimination of the net
carrying value of the
property from real
estate held for sale,
and c) the elimination
of other assets and
liabilities relating to
the property sold.
<CAPTION>
Pro Forma
Historical
Adjustments Pro Forma
ASSETS
<S> <C> <C> <C>
Real estate held for $45,945,98
$(36,426,49 $
sale 6 1) 9,519,495
Investment in joint -
venture 6,983,517 6,983,517
Cash and cash
35,629,246
equivalents 5,109,407 40,738,65
3
Other assets (270,046)
846,125
576,079
$58,885,03 $ $57,817,7
5
(1,067,291) 44
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and $ $ $
other 520,986
(141,779) 379,207
liabilities
Total partners'
capital 58,364,049 (925,512) 57,438,53
7
$ $ $57,817,7
58,885,035
(1,067,291) 44
</TABLE>
<PAGE>
<TABLE>
Dean Witter Realty Income
Partnership
III, L.P.
Pro Forma Consolidated
Statement of
Operations For
the year ended
October 31, 1998
The following unaudited
pro forma consolidated
statement of operations
has been presented as if
the Laurel Lakes Centre
property was sold as of
November 1, 1997. The pro forma
adjustments reflect
the elimination of
rental and other
revenues, property
operating expenses, and
depreciation and
amortization expenses
relating to the property
sold. The pro forma
adjustments do not
reflect the
Partnership's
nonrecurring loss on the
sale of the property.
<CAPTION>
Pro
Forma Historical Adjustments Pro
Forma
<S> <C> <C>
<C>
Revenues:
Rental $ 6,945,820
$(4,768,099) $
2,177,721
Equity in earnings of
joint venture
18,538,476 -
18,538,476
Interest and other 482,885
(95,740)
387,145
Gain on sale of real
estate
15,727,536 -
15,727,536
41,694,717 (4,863,839) 36,830,878
Expenses:
Property operating 2,129,425
(1,209,934) 919,491
Depreciation
1,778,077
(1,214,265) 563,812
Amortization
95,786
(38,117) 57,669
General and
administrative
853,375
-
853,375
4,856,663
(2,462,316) 2,394,347
Net income
$36,838,054
$(2,401,523)
$34,436,531
Net income per Unit of
Limited
Partnership
interest
$
68.22
$
(4.05) $
64.17
</TABLE>
<PAGE>
<TABLE>
Dean
Witter
Realty
Income
Partnershi
p III,
L.P. Pro
Forma
Consolidat
ed
Statement
of
Operations
For
the
nine
months
ended
July
31,
1999
The following unaudited
pro forma consolidated
statement of operations
has been presented as if
the Laurel Lakes Centre
property was sold as of
November 1, 1998. The
pro forma adjustments
reflect the elimination
of rental and
other revenues,
property operating
expenses and
depreciation and
amortization expenses
relating to the property
sold. The pro forma
adjustments do not
reflect the
Partnership's
nonrecurring loss on the
sale of the property.
<CAPTION>
Pro
Forma Historical Adjustments
Pro
Forma
<S> <C>
<C>
<C>
Revenues:
Rental $
4,363,331
$(3,509,165)
$ 854,166
Equity in earnings of joint
ventures
595,116 -
595,116
Interest and other
147,404
(40,150) 107,254
Losses on real estate
(4,900,000)
-
(4,900,000)
205,851
(3,549,315) (3,343,464)
Expenses:
Property operating
1,543,032
(1,228,153) 314,879
Depreciation
669,855
(589,638) 80,217
Amortization
30,229
(19.503) 10,726
General and administrativ
e
261,573
-
261,573
2,504,689 (1,837,294)
667,395
Net income $
(2,298,838)
$(1,712,021) $
(4,010,859)
Net income per Unit of Limited
Partnership interest
$
(4.79) $
(2.89)
$ (7.68)
</TABLE>
<PAGE>
Exhibit Index for Dean Witter
R
e
a
l
t
y
I
n
c
o
m
e
P
a
r
t
n
e
r
s
h
i
p
I
I
I
,
L
.
P
.
Exhibit
Sequential
No. Description
Page No.
(2)
Purchase
and Sale
Agreement,
dated as of
June 2, 1999
between
LaurelVincent
Place
Associates
L.P., as
seller and
Urban
Investment
Group, Inc.,
as Purchaser
for the
Property
known as
Laurel Lakes
Centre.
<PAGE>
PUR
CH
AS
E
AN
D
SA
LE
AG
RE
EM
EN
T
DA
TE
D
as
of
Ju
ne
2,
19
99
b
e
t
w
e
e
n
LAUREL-
VINCENT
PLACE
ASSOCI
ATES
LIMITE
D
PARTNE
RSHIP
as
Seller
and
URBAN INVESTMENT
GROUP, INC.
as Purchaser for the
Property known as Laurel
Lakes Centre, Laurel,
Maryland
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
1. Sale of the Property. 1
1.1 Excluded Property. 2
1.2 Closing Date. 2
2. Purchase Price. 2
3. Apportionments 3
3.1. Taxes. 4
3.2. Arrearages. 4
3.2.1. Rents. 4
3.2.2. Additional Rents. 5
3.2.3. Collection After
the
Closing. 5
3.3. Water. 6
3.4. Utilities. 6
3.5. Post-Closing Adjustments. 6
4. Due Diligence Period. 7
4.1. Access to the Property. 7
4.2. Purchaser's Termination
Notice. 9
4.3. Estoppel Certificates. 9
5. Title. 10
5.1. Unacceptable Encumbrances. 10
5.2. Removal of Unacceptable
Encumbrances. 11
5.3. Options Upon Failure to
Remove
Unacceptable
Liens. 11
5.4. Use of Purchase Price. 12
5.5. Franchise Taxes. 12
5.6. Transfer Taxes; Title
Insurance
Premiums. 12
6. Representations and Warranties of
the
Seller. 13
6.1. Survival of
Representations. 15
6.2. Discovery of Untrue
Representation. 15
6.3. Limited Nature of
Representations. 16
7. Representations and Warranties of
the
Purchaser. 17
8. Documents to be Delivered by the
Seller at
Closing. 18
9. Documents to be Delivered by
the
Purchaser at
Closing. 20
10. Operation of the Property prior
to the
Closing
Date. 21
10.1. New Leases. 21
10.1.1. New Lease
Expenses. 22
10.1.2. Allocation of New
Lease
Expenses. 22
10.2. Intentionally Deleted 23
10.3. Contracts. 23
11. Broker. 24
12. Casualty; Condemnation. 24
12.1. Damage or Destruction. 24
12.2. Condemnation. 25
12.3. Termination. 26
13. Conditions Precedent to Closing. 26
13.1. Conditions Precedent to
the
Purchaser's
Obligations to Perform. 26
13.2. Conditions Precedent
to the
Seller's
Obligations to Perform. 26
13.3. 27
Remedies Upon Failure to Satisfy
Conditions. 27
14. Remedies. 27
14.1. Seller's Inability to
Perform. 27
14.2. Purchaser's Failure to
Perform. 27
14.3. Seller's Failure to
Perform. 28
15. Escrow. 28
16. Notices. 29
17. Property Information and
Confidentiality. 30
17.1. Press Releases. 30
17.2. Return of Property
Information. 31
17.3. Property Information
Defined. 31
17.4. Remedies. 32
18. Access to Records. 32
19. Assignments. 32
20. Entire Agreement, Amendments. 32
21. Merger. 33
22. Limited Recourse. 33
23. Miscellaneous. 33
24. Time of the Essence. 34
25. IRS Form 1099-S Designation. 34
26. Attorneys' Fees. 34
27. Counterparts. 34
28. Restructuring. 34
</TABLE>
<PAGE>
TABLE OF DEFINED TERMS
The following capitalized terms
are
defined in the respective Section of
the Agreement identified below and are
used in this Agreement as so
defined:
"A & A Agreements" - as such term is
defined in Section 8(d) hereof.
"Additional Rents" - as such term
is defined in Section 3.2.2 hereof.
"Adjustment Date" - as such term is
defined
in Section 3 hereof.
"Agreement" - as such term is
defined in
the opening paragraph hereof.
"Applicable Environmental Law" as
such term is defined in Section 6(f)
hereof.
"Bill of Sale" - as such term is
defined in
Section 8(f) hereof.
"Broker" - as such term is defined
in Section 11 hereof.
"Buildings" - as such term is
defined in Section 1 hereof.
"Clearing House Bank" - as such
term is defined in Section 2(a)
hereof.
"Closing" - as such term is
defined in
Section 1.2 hereof.
"Closing Date" - as such term is
defined in Section 1.2 hereof.
"Contract and License
Assignment" - as such term is
defined in Section 8(c) hereof.
"Contracts" - as such term is
defined in
Section 8(c) hereof.
"Deed" - as such term is defined in
Section
8(a) hereof.
"Deposit" - as such term is defined in
Section 15 hereof.
"Downpayment" - as such term is
defined in
Section 2(a) hereof.
"Due Diligence Materials" - as
such term is defined in Section 4
hereof.
"Due Diligence Period" - as such
term is defined in Section 4 hereof.
"Escrow Agent" - as such term is
defined in
Section 2(a) hereof.
"Escrow Agreement" - as such
term is defined in Section
15 hereof.
"Hazardous Substances" - as such
term is defined in Section 6(f)
hereof.
"Intangible Property
Assignment" - as such term is
defined in Section 8(d) hereof.
"Investigations" - as such term is
defined in
Section
4.1
hereof.
"Land" - as such term is defined in
Section 1 hereof.
"Laws" - as such term is defined in
Section
6(c) hereof.
"Lease Assignment" - as such term is
defined
in Section 8(b) hereof.
"Leases" - as such term is defined in
Section 6(d) hereof.
"Licenses" - as such term is defined in
Section 8(c) hereof.
"Liens" - as such term is defined in Section
5.1 hereof. "New Lease" - as such term is
defined in
Section 10.1.1 hereof.
"New Lease Expenses" - as such term is
defined in Section 10.1.1 hereof.
"Permitted Encumbrances" - as such term is
defined in Section 5 hereof.
"Personal Property" - as such
term is defined in Section 1 hereof.
"Property" - as such term is defined
in
Section 1 hereof.
"Property Information" - as
such term is defined in Section
17.3 hereof.
"Purchase Price" - as such term is
defined
in Section 2 hereof.
"Purchaser" - as such term is
defined in
the opening paragraph hereof.
"Purchaser's Documents" - as
such term is defined in Section
7(b) hereof.
"Purchaser's Representatives" as
such term is defined in Section 17.3
hereof.
"Purchaser's Termination
Notice" - as such term is defined
in Section 4.2 hereof.
"Rent Commencement Date" - as
such term is
defined in Section 10.1.2 hereof.
"Rents" - as such term is defined in
Section 3 hereof.
"Sales Tax Return" - as such
term is defined in Section 8(f)
hereof.
"Second Downpayment" - as such term is
defined in Section 1.2 hereof.
"Seller" - as such
term is defined in
the opening paragraph hereof.
"Seller's Affiliates" - as
such term is defined in Section 22
hereof.
"Seller's Documents" - as such term is
defined in Section 6(b) hereof.
"Seller's Knowledge" - as such term is
defined in Section 6(d) hereof.
"Survey" - as
such term is
defined in
Section 5 hereof.
"Survival Period" - as such term
is defined in Section 6.1 hereof.
"Surviving Obligations" - as
such term is defined in Section
14.1 hereof.
"Title Commitment" - as such term
is defined in Section 5 hereof.
"Title Company" - as such term
is defined in Section 5 hereof.
"Transfer Tax Payments" - as
such term is defined in Section 5.6 hereof.
"Transfer Tax Return" - as
such term is defined in Section 5.6 hereof.
"Unacceptable Encumbrances" - as
such term is defined in Section 5.1 hereof.
<PAGE>
PURCHASE AND SALE AGREEMENT
(this "Agreement"), dated as of the 2nd day
of June, 1999, by and between LaurelVincent
Place Associates Limited Partnership, a
Virginia limited partnership, having an office
c/o Dean Witter Realty Inc., Two World Trade
Center, 64th Floor, New York, New York 10048,
(the "Seller") and Urban Investment
Group, Inc., an Illinois corporation, having
an office at 401 North Michigan Avenue, Suite
2900,
Chicago, Illinois 60611 (the
"Purchaser").
W I T N E S S E T H
WHEREAS, the Seller is the
owner of the real property known as
Laurel Lakes Centre, Laurel, Maryland;
WHEREAS, the Seller and the
Purchaser have entered into
negotiations wherein the Purchaser
expressed its intent to purchase
the Property (as defined herein) from
the Seller and the Seller expressed
its intent to sell the Property to the
Purchaser; and
WHEREAS, the Seller and the
Purchaser now desire to enter into
an agreement whereby, subject to the
terms and conditions contained
herein, the Seller shall sell
the
Property to the Purchaser and the
Purchaser shall purchase
the Property from the Seller.
NOW, THEREFORE, in consideration
of
ten ($10.00)
dollars and the mutual covenants
and agreements hereinafter
set forth, and intending to be
legally bound hereby, it is
hereby agreed as follows:
1. Sale of the Property.
The Seller agrees to sell and convey
to the Purchaser, and
the Purchaser agrees to Purchase
from the Seller, at the price and
upon the terms and conditions set
forth in this
Agreement, all those certain plots,
pieces and parcels of
land described in Schedule 1 hereto (the
"Land") listed thereon as owned by the Seller,
together with (i) all
buildings and other improvements situated on
the Land (collectively, the "Buildings"), (ii)
all easements, rights of way, reservations,
privileges, appurtenances, and other estates and
rights of the Seller pertaining to the Land and
the Buildings, (iii) all right, title and
interest of the Seller in and to all fixtures,
machinery, equipment,
supplies and other articles of personal property
attached or
appurtenant to the Land or the Buildings, or
used in
connection therewith (collectively, the
"Personal
Property"), (iv) all right, title and
interest of the
Seller, if any, in and to the trade names of the
Buildings
and any other intangible property listed on
Schedule 10, (v) all interest of
the Seller in the Contracts and
Licenses, and (vi) all interest of the
Seller in the Leases (the Land,
together with all of the foregoing
items listed in clauses (i)-(vi)
above being hereinafter sometimes
referred to as
the "Property").
<PAGE>
1.1 Excluded Property.
Specifically excluded from
the Property and this sale are
all items of personal property
not described
in Section 1 (and all personal
property of tenants under the
Leases) and the items described in
Schedule 2
annexed hereto and made a part hereof.
1.2 Closing Date.
The delivery of the Deed
and the consummation of
the transactions contemplated
by this
Agreement (the "Closing") shall
take place at the offices of Bingham
Dana
LLP, 1200 19th Street, N.W., Suite
400, Washington, D.C. 20036-2400, at 10:00
A.M.
on the date which is thirty (30) days
after the end of the Due
Diligence Period (the "Closing Date")
unless the
parties hereto agree to a different date or
to close by
mail via escrow. At any time prior to
the Closing
Date, Purchaser shall have the right to
extend the
Closing Date for a period of up to thirty
(30) days
upon condition that Purchaser first pay
Two Hundred
Thousand Dollars ($200,000.00) (the
"Second Downpayment") in good and
immediately
available funds to the
Escrow Agent. The Second Downpayment shall
be
paid to and held by Escrow Agent in
accordance with the
terms set forth in Section 2(a) below. In
the event
that the Closing Date, whether it shall
have been
extended or not, falls upon a day on which
the Circuit Court Clerk's Office
of
Prince George's County,
Maryland is not open for
business, the Closing shall take
place on the next day on which
such Circuit Court
Clerk's Office is open or such
earlier or
later date as
the Seller and Purchaser may agree in
writing.
2. Purchase Price.
The purchase price to be paid
by the Purchaser to the Seller for
the Property (the "Purchase Price") is
ThirtySeven Million Five Hundred
Thousand Dollars ($37,500,000.00)
payable as follows:
<PAGE>
(a) Two Hundred Thousand
Dollars
($200,000.00)
(the "Downpayment") shall be
payable by Purchaser within three
(3) business days after the
execution and delivery
of this Agreement, by delivery to
First
American Title Insurance Company
(the "Escrow Agent") of a
certified or bank check drawn on
or by a bank which is a
member of the New York
Clearing House Association (a
"Clearing House Bank") or by
wire
transfer of immediately
available funds to the Escrow
Agent's account as set forth in
the Escrow Agreement. The
Downpayment shall be held and
disbursed by the Escrow Agent
in accordance with the terms of
Section 15. At the Closing, the
Deposit shall be delivered
to the Seller and such amount
shall be credited against the
portion of the Purchase Price
payable pursuant to Section 2(b);
(b) The balance of the
Purchase Price
(i.e., the
Purchase Price minus the credit
set forth in Section 2(a)
above), plus or minus the
apportionments set forth in
Section 3, shall be paid at the
Closing by bank wire transfer
of immediately available funds to
the Seller's account or to
the account or accounts of such
other party or parties as may be
designated by the Seller on or
before the Closing Date.
3. Apportionments
The following shall be
apportioned between the Seller and
the Purchaser at the Closing as of
11:59 p.m. of the day preceding the
Closing Date (the "Adjustment Date"):
(a) fixed or base rents
("Rents")
which have been
prepaid, security deposits
referred to in Section 8(e),
Rents for the month in which
the Closing occurs and
Additional Rents and other
amounts paid by tenants
applicable to periods which
expire after the Closing Date,
which have been received by
Seller;
(b) real estate taxes,
special
assessments (but
only any installment relating
to the
period in which the
Adjustment Date occurs), water
charges, sewer rents and
charges and vault charges, if
any, on the basis of the
fiscal years (or applicable
billing period if other than a
fiscal year), respectively, for
which same have been assessed;
<PAGE>
(c) value of prepaid fuel belonging to
the Seller
stored on the Property, at the Seller's
cost, including any taxes, on the basis
of a statement from the Seller's
suppliers;
(d) charges and payments under
Contracts that are
being assigned to the Purchaser pursuant to
the terms of this Agreement and listed on
Schedule 3 hereto or permitted renewals or
replacements thereof;
(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, to the extent required
by Section
3.4;
(g) deposits with telephone and
other utility
companies, and any other persons or entities
who supply goods or services in connection
with the Property if same are assigned to
the Purchaser at the Closing;
(h) personal property taxes, if any,
on the basis
of the fiscal year for which assessed;
(i) all other revenues from the
operation of the
Property other than Rents and
Additional Rents
(including, without limitation, parking
charges, tenant direct electrical
reimbursements, HVAC overtime charges,
and telephone booth and vending machine
revenues);
(j) New Lease Expenses as provided
in Section
10.1.2;
(k) fees payable to shopping center
association,
if any; and
(l) such other items as are
customarily
apportioned between sellers and
purchasers of real properties of a type
similar to the Property and located in
the State of Maryland.
3.1. Taxes.
If the amount of real estate taxes, special
<PAGE>
assessments or other taxes for the
Property for the fiscal year during which
Closing occurs is not finally determined
at the Adjustment Date, such taxes shall be
apportioned on the basis of the full amount
of the assessment for such period (or the
assessment for the prior tax period if the
assessment for the current tax period is
not then known) and the rate for the
immediately prior tax year, and shall be
reapportioned as soon as the new
tax rate and valuation, if any, has been
finally determined.
3.2. Arrearages.
3.2.1. Rents.
If on the Closing Date any
tenant is in arrears in the payment of
Rent or has not paid the Rent payable
by it for the month in which the
Closing occurs (whether or
not it is in arrears for such month on
the Closing Date), any Rents received by
the Purchaser or the Seller from such tenant
after the Closing shall be applied
to
amounts due and payable by such
tenant in the manner specified by such
tenant, and if the tenant does
not so specify, such Rents shall be
applied during
the following periods in the
following
order of priority: (i) first, to the
month in which the Closing occurred, (ii)
second, to the months following the month
in which the Closing occurred, and (iii)
third, to the months preceding the month in
which the Closing occurred. If Rents
or any portion thereof received by the Seller or
the
Purchaser after the Closing are due and
payable to the other party by
reason of this allocation, the
appropriate sum, less a
proportionate share of any reasonable
attorneys' fees and costs and expenses
expended in connection with the
collection thereof, shall be
promptly paid to the other party
(to the extent not
collected from or reimbursed by
tenants).
<PAGE>
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 charges,
cost-of-living
increases or other charges of a similar nature
("Additional Rents")
and any Additional Rents are collected by the Purchaser from a
tenant after
the Closing Date, such Additional
Rents shall be
applied to amounts due and payable by such tenant in the
manner specified by such tenant, and if the tenant does not
so specify, such Additional Rents shall be applied
in the following
order of
priority: (i) first, to the month in
which the closing occurred, (ii) second, to the
months
following the month in which the Closing occurred, and (iii)
third, to the months preceding the month in
which the Closing occurred. 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, the Seller
shall continue
to have the right, in its own name,
to demand payment of and to collect
Rent and Additional Rent arrearages
owed to the Seller by any tenant, which right shall
include, without
limitation, the right to continue or
commence legal actions or
proceedings against any tenant.
Seller shall
promptly provide to Purchaser
copies of all
correspondence sent to tenants
owing rent
arrearages to Seller and shall keep Purchaser
regularly informed as to the status
of Seller's
collection efforts. The Purchaser
agrees to
cooperate with the Seller in
connection with all efforts by the Seller to
collect such Rents and Additional Rents and to
take all steps, whether before or after the
Closing Date, as may be
reasonably necessary to carry out the
intention of the foregoing,
including, without limitation, the
delivery to the Seller, upon
demand, of any
relevant books and records (including
any Rent or
Additional Rent statements, receipted
bills and copies of tenant checks used
in payment of such
Rent or Additional Rent), the execution
of any and all consents or other
documents, and the
<PAGE>
undertaking of any act reasonably
necessary for the collection of such
Rents and Additional Rents by the Seller. If for any
fiscal period
which includes the Adjustment Date tenants are paying
Additional Rent
based upon estimates prepared by the Seller, such
Additional Rents shall be
reapportioned when the actual
expenses for the
fiscal period are known.
Notwithstanding anything
else set forth in this Section 3.2.3
Seller shall not have the right to
evict, attempt to evict or demand the
eviction of any tenant in connection
with its efforts to collect arrearages
of Rent and Additional Rent.
3.3. Water.
If there is a water meter on the
Property, the Seller shall furnish a reading
to a date not more than thirty
(30) days prior to the Closing Date,
and the unfixed water charges and sewer
rent, if
any, based thereon for the intervening time
shall be apportioned on the basis of such
last reading.
3.4. Utilities.
The Seller will attempt to obtain
final cut-off readings of fuel, telephone,
electricity, and gas to be made as of the
Adjustment Date. The Seller shall pay the
bills based on such readings promptly after
the same are rendered. If arrangements
cannot be made for any such cut-off reading,
the parties shall
apportion the charges for such services on the basis of
the bill therefor for the most recent billing period
prior to the
Adjustment Date, and when final bills are rendered
for the period which includes the
Adjustment Date the
Seller and Purchaser shall promptly
readjust the
apportionments in accordance with such final
bills. 3.5. Post-Closing Adjustments. The items set
forth in this Section
3 shall be apportioned at the Closing by payment of the
net amount of such apportionments to the Seller in the
manner set forth herein for the payment of the
Purchase Price if the net apportionment is in favor of the
Seller or by a credit
against the Purchase Price if the net
apportionment is in favor of the
Purchaser. However, if any of the items
subject to apportionment under the foregoing provisions
of this Section 3 cannot be
apportioned at the Closing because of the
unavailability of the information necessary
to compute such apportionment, or if any
errors or omissions in computing
apportionments at the Closing are
discovered subsequent to the Closing, then such
item shall be reapportioned and
such errors and omissions corrected as
soon as practicable after the Closing Date
and the proper party reimbursed, which
obligation shall survive the Closing for a
period of one year after the Closing Date.
<PAGE>
4. Due Diligence Period.
Notwithstanding anything to the contrary contained
herein, the Purchaser shall have a thirty (30)
day period commencing on May 26, 1999 (the "Due Diligence
Period") to examine title to the Property, to inspect the
physical and financial condition of the Property and to
review
the
Property Information and due diligence materials set forth
on Schedule 12 hereto, to the extent they are in Seller's
possession (the "Due Diligence Materials").
Neither the
Purchaser nor the Purchaser's Representatives shall contact
any governmental authority or any of the Seller's tenants,
vendors, employees, consultants or contractors prior to the
Closing without notifying Seller in each instance.
4.1. Access to the Property.
During the Due Diligence Period, the Purchaser and
the Purchaser's Representatives shall have the right to
enter upon the Property for the sole purpose
of
inspecting the Property and making surveys,
soil borings, engineering tests
and other investigations, inspections and tests
(collectively, "Investigations"), provided (i) the
Purchaser shall give the Seller not less than one (1)
business days' prior written notice before each entry,
(ii) the first such notice shall include sufficient
information to permit the Seller to review the scope
of the proposed Investigations, and (iii) neither
the Purchaser nor the Purchaser's
Representatives shall permit any borings,
drillings or samplings to be done on the Property without
the
Seller's prior written consent. Any entry upon the Property
and all Investigations shall be during the Seller's normal
business hours and at the
sole risk and expense of the Purchaser and
the Purchaser's
Representatives, and shall not interfere
with the
activities on or about the Property of the
Seller, its tenants
and their employees and invitees.
The
Purchaser shall:
(a) promptly repair any
damage to the
Property resulting from any such
Investigations and replace, refill and
regrade any holes made in,
or excavations of, any portion of
the Property used for such
Investigations so that the Property
shall be in the same condition as
that which existed prior to such
Investigations;
(b) fully comply with all Laws
applicable to
the Investigations and all other activities
undertaken in connection therewith;
<PAGE>
(c) permit the Seller to have a
representative present during all
Investigations undertaken hereunder;
(d) take all actions and
implement all
protections necessary to ensure that
all actions taken in connection with
the Investigations, and the
equipment, materials, and substances
generated, used or brought onto the
Property pose
no threat to the safety or health of
persons or
the environment, and cause no
damage to the
Property or other property of the
Seller or other persons;
(e) if requested by the Seller,
and provided
the transaction has been terminated by
Purchaser, furnish to the Seller, at no
cost or expense to the Seller,
copies of all surveys, soil test
results, engineering, asbestos,
environmental and other studies and
reports prepared by third
parties relating to the Investigations
which the Purchaser
shall obtain with respect to the
Property promptly after the Purchaser's
receipt of same;
(f) maintain or cause to be
maintained, at
the Purchaser's expense, a policy of
comprehensive general public liability
insurance with a combined single limit
of not less than $1,000,000 per
occurrence for bodily injury and
property damage,
automobile liability coverage including
owned and
hired vehicles with a combined
single limit of $1,000,000 per
occurrence for bodily injury and
property damage, and an excess umbrella
liability policy for bodily injury and
property damage in the minimum amount
of $3,000,000, insuring the Purchaser
and the Seller
and certain of Seller's Affiliates
listed on Schedule 4, as additional
insureds, against any injuries or
damages to
persons or property that may result
from or are related to
(i) the Purchaser's and/or the
Purchaser's Representatives' entry
upon the
Property, (ii) any Investigations or other
activities conducted thereon, and
(iii) any and
all other activities undertaken by
the Purchaser
and/or the Purchaser's
Representatives in
connection with the Property, and
deliver evidence
of such insurance policy to the
Seller at the earlier of ten (10)
days after the date of this Agreement
or the first entry on the Property;
(g) indemnify the Seller and the
Seller's Affiliates and
hold the Seller and the Seller's
Affiliates harmless from and against
any and all
claims, demands, causes of
action, losses,
damages, liabilities, costs and
expenses
(including without limitation attorneys' fees
and disbursements), suffered or incurred by
the Seller or any of the Seller's
Affiliates and arising out of or in
connection with (i) the Purchaser and/or the
Purchaser's Representatives' entry upon the
Property, (ii) any
investigations or other
activities conducted thereon by the
Purchaser or the
Purchaser's Representatives, and (iii)
any
liens or encumbrances filed or recorded
against the Property
as a consequence of the
Investigations; and
(h) not, at any time, contact or
communicate with any tenant of the
Property for any reason whatsoever
without notifying Seller in
each
instance.
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, exercisable in its sole discretion, to
terminate this Agreement by giving written
notice (the "Purchaser's Termination Notice")
of such election to the Seller at any time
prior to the expiration of the Due Diligence
Period (which shall be June 25, 1999) in which
instance the Deposit shall be promptly returned to
Purchaser and the parties hereto shall have no
further obligations under this Agreement
except as otherwise expressly stated herein. If
for any reason whatsoever the Seller shall
not have received the Purchaser's Termination
Notice prior to the expiration of the Due
Diligence Period, the
Purchaser shall be deemed to
have
irrevocably waived the right of termination
granted under this Section 4.2, and such right of
termination shall be of no further force or effect.
<PAGE>
4.3. Estoppel Certificates.
Promptly after execution and delivery of
this Agreement, the Seller agrees to request an
Estoppel Certificate from each tenant under a
Lease, but in no event shall it be deemed to
be an obligation of the Seller under this
Agreement to obtain executed Estoppel Certificates
except for Estoppel Certificates from (i) all
tenants who lease space in excess of five
percent (5%) of the net rentable area of the
Buildings, (ii) seventy-five percent (75%) of
those "outparcel" tenants identified on the
Survey as "Bennigan's", "Shoney's", "Crestar
Bank", "Wendy's", and "First National Bank", and
(iii) one-half of all other tenants
at the
Buildings. The Estoppel Certificates shall be
in the
form annexed hereto as Exhibit G and made a
part hereof; provided, however, if any tenant is
required or permitted under its Lease to make
different statements in a certificate of such
nature than are set forth in Exhibit G, prior
to requesting an Estoppel Certificate from such
tenant, the Seller may modify the Estoppel
Certificate for such tenant to set forth
only the
statements required under such tenant's Lease
to be
made by such tenant in such a
certificate. If any
tenant fails to deliver an Estoppel
Certificate in the form required by
this Agreement, Seller shall substitute in lieu thereof
an estoppel certificate
substantially in such form executed by
Seller and such
estoppel certificate shall be treated for
all purposes as an Estoppel Certificate from such
failing tenant. If Purchaser exercises its right to
extend the Closing Date pursuant to Section 1.2, no
Estoppel Certificate held by Seller at the time of such
extension shall be
deemed to become invalid, stale or otherwise
ineffective due to such extension.
5. Title.
The Seller shall convey and the Purchaser
shall accept title to the Property subject to
those matters set forth on Schedule 5 hereto
(collectively the "Permitted
Encumbrances"). The Seller has delivered to the Purchaser, a
commitment for an owner's fee title insurance
policy with respect to the Property (the "Title
Commitment") from
Lawyer's Title Insurance Company, together
with true,
complete and legible copies of all instruments
giving rise to any defects or exceptions to
title to the Property. The Seller has
delivered to the Purchaser, an as-built survey
("Survey") of the Land and Building dated
December 4, 1998 and prepared in accordance with
the "Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys"
jointly
established and adopted by ALTA, ACSM and NSPS in
1997. The Survey shall be revised to contain a
surveyor's certificate in favor of
Purchaser, Purchaser's Mortgagee
and First
American Title Insurance Company (the "Title
Company") in form and substance satisfactory for
deletion of the standard survey exception from the
title insurance policy.
<PAGE>
5.1. Unacceptable Encumbrances.
If the Title Commitment or the
Survey indicates
the existence of any liens or
encumbrances
(collectively, "Liens") or other defects or exceptions in
or to title to the Property other than
the Permitted Encumbrances (collectively,
the "Unacceptable
Encumbrances") subject to which the
Purchaser is unwilling to accept title and the Purchaser
gives
the
Seller notice of the same within ten (10) days after receipt
of the Title Commitment or the
Survey,
respectively, the Seller shall undertake to eliminate
the same (or to arrange for title insurance insuring against
enforcement of
such Unacceptable Encumbrances against, or collection of the
same out of, the
Property) subject to Section 5.2. The
Purchaser hereby waives any right the
Purchaser may have to advance as objections
to title or as grounds for the Purchaser's
refusal to close this transaction any
Unacceptable Encumbrance which the Purchaser
does not notify the Seller of within such
ten (10) day period unless (i)
such Unacceptable Encumbrance was first
raised by the Title Company subsequent to
the date of the
Title
Commitment or the Purchaser shall
otherwise first
discover same or be advised of same
subsequent to the date of the Title
Commitment or the
Survey,
respectively, and (ii) the Purchaser shall
notify the Seller of the same within
five (5) days after the
Purchaser first becomes aware of such
Unacceptable Encumbrance. The Seller, in
its sole discretion, may adjourn the
Closing one or more times for up
to sixty
(60) days in the aggregate in order to
eliminate Unacceptable Encumbrances.
5.2. Removal of Unacceptable Encumbrances.
The Seller shall not be obligated to bring any
action or proceeding, to make any payments or otherwise to
incur any expense in order to eliminate Unacceptable
Encumbrances not waived by the Purchaser or to arrange for
title insurance insuring against enforcement of such
Unacceptable Encumbrances against, or collection of the
same out of, the Property; except that the
Seller shall satisfy Unacceptable
Encumbrances which
are (i) mortgages and past due real estate taxes and
assessments secured by or affecting the Property, and (ii)
judgments against the Seller or other
Liens secured by or affecting the Property
which judgments and other Liens can be
satisfied by payment of
liquidated amounts not to exceed
$250,000 in the
aggregate for all such judgments and other
Liens. The
Seller may eliminate any such Unacceptable
Encumbrance by the payment of amounts
necessary to cause the
removal thereof of record, by bonding
over such Unacceptable Encumbrance in
a manner reasonably
satisfactory to the Purchaser or by arranging
for title insurance reasonably
satisfactory to the Purchaser
insuring against enforcement of such
Unacceptable
Encumbrance against, or collection of the
same out of,
the Property.
<PAGE>
5.3. Options Upon Failure to Remove Unacceptable
Liens.
If the Seller is unable or is not
otherwise obligated (pursuant to Section 5.2) to
eliminate all Unacceptable
Encumbrances not waived by the Purchaser,
or to bond
over in a manner reasonably
satisfactory to the
Purchaser any Unacceptable Encumbrances not waived by the
Purchaser, or to arrange for title insurance
reasonably acceptable to the Purchaser insuring against
enforcement of such
Unacceptable Encumbrances against,
or collection of the same out of, the
Property, and to convey title in accordance with
the terms of this
Agreement on or before the Closing Date
(whether or not the Closing is adjourned
as provided in Section 5.1), the Purchaser
shall elect on the Closing Date, as its
sole remedy for such inability of the
Seller, either (i) to terminate this
Agreement by notice given to the Seller
pursuant to Section 14.1, in which event
the provisions of Section 14.1 shall apply,
or (ii) to
accept title subject to such Unacceptable
Encumbrances
and receive no credit against, or
reduction of, the
Purchase Price.
5.4. Use of Purchase Price.
If on the Closing Date there may be
any Liens or other
encumbrances which the Seller must pay or
discharge in order to convey to the
Purchaser such
title as is herein provided to be conveyed,
the Seller may use any portion of the
Purchase Price to satisfy
the same, provided:
(a) the Seller shall deliver to the Purchaser or
the Title
Company, at the Closing, instruments in
recordable form and sufficient to satisfy such
Liens or other encumbrances of record together
with the cost of recording or filing said
instruments; or
<PAGE>
(b) the Seller, having made
arrangements
with the Title Company, shall deposit
with said company sufficient moneys
acceptable to said
company to insure the obtaining and the
recording of such satisfactions. 5.5.
Franchise Taxes.
Any franchise or corporate tax open,
levied or imposed against the Seller or
other owners in the chain of title that may
be a Lien on the Closing Date shall not be
an objection to title if the Title Company
omits same from the title policy issued
pursuant to the Title Commitment or
excepts same but insures the Purchaser
against collection thereof out of the
Property.
5.6. Transfer Taxes; Title Insurance
Premiums.
At the Closing, the Purchaser and the
Seller shall each pay one-half of all
transfer and recording taxes (the "Transfer
Tax Payments") imposed pursuant to the Laws
of the State of Maryland or
any other governmental authority in respect of
the transactions contemplated by this Agreement
by delivery to the Title Company of sufficient
funds to pay such taxes together with any return
(the "Transfer Tax Return") required thereby
which shall be duly executed by the Seller and
the Purchaser to the extent required by applicable
law. The Purchaser shall not be entitled to
receive a credit against
or abatement of the Purchase Price payable
to the Seller at the Closing as a
result of the
Purchaser's Transfer Tax Payments. At the
Closing, the premiums due
the Title Company to obtain title
insurance policies in the form
contemplated by the Title Commitment (as
the same may be amended pursuant to this
Agreement), the cost of obtaining the
Survey and other Closing-related expenses
shall be paid in the manner set forth on
Schedule 6 hereto.
6. Representations and Warranties of the Seller.
The Seller represents and warrants to the
Purchaser as follows:
(a) The Seller is a duly formed
and validly
existing limited partnership organized under
the laws of the Commonwealth of Virginia
and is qualified under the laws of the
State of Maryland to conduct business
therein.
(b) The Seller has the full, legal
right, power
and authority to execute and deliver this
Agreement and all documents now or
hereafter to be executed by the Seller
pursuant to this Agreement (collectively,
the "Seller's Documents"), to consummate
the transaction contemplated hereby, and
to perform its obligations hereunder and
under the Seller's Documents.
<PAGE>
(c) This Agreement and the Seller's
Documents do
not and will not contravene any
provision of the
limited partnership agreement of the
Seller, any
judgment, order, decree, writ or
injunction issued against the
Seller, or, to the Seller's actual
knowledge, any provision of any laws or
governmental ordinances, rules, regulations,
orders or requirements (collectively, the
"Laws") applicable to the Seller. The
consummation of the transactions
contemplated
hereby will not result in a breach or
constitute a
default or event of default by the Seller
under any
agreement to which the Seller or any of its
assets are
subject or bound and will not result in a
violation of
any Laws applicable to the Seller.
(d) To the current actual knowledge
of Robert B.
Austin, Vice President, Dean Witter
Realty Income
Properties III, Inc., but not to the
knowledge of any
other trustee, partner, officer,
director, agent,
employee or representative of Seller
or Seller's
Affiliates (which standard of knowledge
is herein
referred to as "Seller's Knowledge"),
there are no
leases, licenses or other occupancy agreements
affecting any portion of the Property
(collectively,
the "Leases") on the date hereof, except for
the Leases
listed in Schedule 7 annexed hereto and
made a part
hereof. To Seller's Knowledge, the
copies of the
Leases furnished by the Seller to the
Purchaser are true and
complete. To Seller's Knowledge, the
Leases
are in full force and effect, without
any material default by the Seller
thereunder. To Seller's
Knowledge, except as listed on Schedule 7,
the Seller
has not given or received any notice of
default which remains uncured or
unsatisfied, with respect to any of the
Leases.
(e) To the Seller's Knowledge,
there are no
Contracts or Licenses affecting any
portion of the
Property on the date hereof other than those
set forth in Schedule 3.
(f) To the Seller's Knowledge,
there are no
pending or threatened actions, suits,
proceedings or
investigations to which the Seller is a
party before
any court or other governmental authority
with respect
to the Property owned by the Seller, or
otherwise with respect to the Property,
except as set forth on
Schedule 8 hereto.
<PAGE>
(g) Except as disclosed on Schedule
9 hereto,
since the date the Seller acquired legal
and beneficial
title to the Property (i) to Seller's
actual knowledge,
neither Seller nor any third party has
engaged in the generation,
use, manufacture, treatment, storage
or
disposal of any Hazardous Substance (as
hereinafter
defined) on the Property in violation of
Applicable
Environmental Law (as hereinafter defined),
the cost of correction
or remediation of which would have a
material adverse effect upon the value of
the Property, and (ii) to Seller's Knowledge, neither
Seller nor any third party has received any written
notice
from any
governmental authority having jurisdiction over the
Property of any violation of Applicable
Environmental
Law with respect to the Property
which requires
corrective action, the cost of which
would have a
material adverse effect upon the value of the Property.
Disclosure of any matter on Schedule 9 hereto shall not
constitute
any admission by Seller that such matter was material or
a violation of Applicable
Environmental
Law. As used in this Agreement, the term "Hazardous
Substance" shall mean any substance, chemical or waste
that is currently listed as hazardous, toxic or
dangerous under Applicable Environmental
Law. As used
in this Agreement, the term "Applicable
Environmental Law" shall mean the
Comprehensive Environmental
Response, Compensation and Liability Act
("CERCLA"), 42
U.S.C. 9601 et seq.; the Resource
Conservation and
Recovery Act ("RCRA"), 42 U.S.C. 6901, et
seq.; the Water
Pollution Control Act, 33 U.S.C. 1251 et seq.;
the Clean Air Act, 42 U.S.C. 7401 et
seq.; and the
Toxic Substances Control Act, 15 U.S.C. 2601 et
seq.; as the foregoing have been amended
from time to
time to the date of this Agreement; and
any similar state
and local laws and ordinances and the
regulations
implementing such statutes in effect on the
date hereof imposing liability or establishing standards of
conduct for environmental protection.
(h) Seller has not received any
notice of any
outstanding building code or fire code
violation or violations of any municipal
ordinance or regulation,
including zoning requirements, or state,
federal or
municipal laws or regulations affecting the use,
occupation or maintenance of the Property.
<PAGE>
6.1. Survival of Representations.
The representations and warranties of
the Seller set forth in this Section 6 (i)
shall be true, accurate and correct in all
material respects upon the execution
of this Agreement and shall be deemed to be
repeated on and as of the Closing Date
(except as they relate only to an earlier
date), and (ii) shall remain operative
and shall survive the Closing and the
execution and
delivery of the Deed for a period of six
(6) months following the Closing Date
(the "Survival Period") and
then shall expire, and no action or claim
based thereon shall be commenced after
such period. In the event any
of Seller's representations or warranties
set forth in
this Section 6 are not true, accurate and
correct in all
material respects as set forth above
due to
Seller's fraud or intentional
misrepresentation, the Survival Period for
such representations or warranties shall be deemed to
be the applicable statutory period
for bringing a claim for fraud or intentional
misrepresentation under the law of the State of
Maryland. To secure Seller's obligations
during the
Survival Period, Seller shall at Seller's discretion, at the
Closing either (a)
deliver a guaranty of Dean Witter Realty, Inc. in
substantially the form of Exhibit
L attached hereto, or (b) deposit
the sum (the
"Post-Closing Escrow Amount") of Five
Hundred Thousand Dollars ($500,000) with
the Escrow Agent in accordance with the terms of the Escrow
Agreement attached hereto
as Exhibit M. Notwithstanding any other
provision set forth herein, Escrow
Agent shall release the Post-
Closing Escrow Amount to Seller upon the
expiration of the Survival Period unless a claim, demand or
order has been received by Escrow Agent in respect of the
Post Closing Escrow Amount pursuant to Sections
1 or 2 of
said Escrow Agreement.
6.2. Discovery of Untrue Representation.
If at or prior to the Closing, (i)
the Purchaser
shall become aware that any of the representations or
warranties made herein by the Seller
is untrue,
inaccurate or incorrect in any material respect and
shall give the Seller notice thereof at or prior to the
Closing, or (ii) the Seller shall notify the Purchaser that
a representation or warranty made herein
by the
Seller is untrue, inaccurate or incorrect, then, unless the
same is waived by the Purchaser, the Seller may, in its sole
discretion, elect by notice to the
Purchaser to adjourn the Closing one or more times for up
to sixty (60) days in
the aggregate in order to cure or correct such untrue,
inaccurate or incorrect
representation or warranty.
<PAGE>
If any such representation or warranty is
not cured or corrected by the Seller on or
before the Closing Date (whether or not
the Closing is adjourned as provided above),
then the Purchaser, as its sole remedy for
such inability of Seller, shall elect either
(i) to waive such misrepresentations or
breaches of
warranties and consummate the transactions
contemplated hereby
without
any reduction of or credit against the Purchase
Price, or (ii) to terminate this Agreement by
notice given to Seller
pursuant to the provisions of Section 14.1. In
the event the Closing occurs, the
Purchaser hereby expressly waives, relinquishes and releases
any right or remedy available to it at law, in equity or
under this Agreement to make a claim against the Seller for
damages that the Purchaser may incur, or to
rescind
this Agreement and the transactions
contemplated hereby, as the result of
any of the Seller's
representations or warranties being untrue,
inaccurate or incorrect if
the Purchaser knew
that such
representation or warranty was untrue,
inaccurate or incorrect at the time of the
Closing and the Purchaser nevertheless closes
title hereunder.
6.3. Limited Nature of Representations.
The Purchaser acknowledges that neither
the Seller nor any of the Seller's
Affiliates, nor any of their agents or
representatives, nor Broker has made any
representations or held out any
inducements to the
Purchaser other than those specifically
set forth in this Section 6 and Section
11 or set forth in
the
conveyance or transfer documents. The
Purchaser
acknowledges that the Seller, pursuant to the
terms of this Agreement, has afforded
the Purchaser the opportunity
for full and complete investigations,
examinations and inspections of the Property
and all Property Information.
The Purchaser acknowledges and agrees that
(i) the Property Information delivered or
made available to the Purchaser and the
Purchaser's Representatives by the
Seller or the
Seller's
Affiliates, or any of their agents or
representatives may have been prepared by
third parties and may
not be
the work product of the Seller and/or
any of the
Seller's Affiliates; (ii) neither the Seller
nor any of
the Seller's Affiliates has made any independent
investigation or verification of, or has
any knowledge of,
the accuracy or completeness of, the
Property
Information; (iii) the Purchaser is relying
solely on its own investigations,
examinations and inspections of the
Property and those of the
Purchaser's
Representatives and is not relying in any
way on the
Property Information furnished by the
Seller or <PAGE>
any of the Seller's Affiliates, or any of
their agents or
representatives; and (iv) the Seller
expressly
disclaims any representations or
warranties with
respect to the accuracy or completeness of
the Property Information, and the Purchaser
releases the Seller and the Seller's
Affiliates, and their agents
and
representatives, from any and all
liability with respect thereto. The
Purchaser or anyone claiming by, through or
under the Purchaser, hereby fully and
irrevocably releases the Seller and the
Seller's Affiliates from any and all claims
that it may now have or hereafter acquire
against any of the Seller or the
Seller's Affiliates for any cost, loss,
liability,
damage, expense, action or cause of
action, whether foreseen or unforeseen,
arising from or related to the presence
of environmentally hazardous, toxic or
dangerous substances, or any other
conditions (whether patent, latent or
otherwise) affecting the Property, except
for claims against the Seller based upon
any obligations and liabilities of the
Seller expressly provided in this Agreement.
<PAGE>
The provisions of this Section 6 shall
survive the Closing.
7. Representations and Warranties of the
Purchaser.
The Purchaser represents and warrants to the
Seller as follows:
(a) The Purchaser is a duly formed
and validly
existing corporation organized under the
laws of the State of Illinois, and
Purchaser, or its assignee which takes
title to the Property at the Closing,
shall be qualified under the laws of the
State of Maryland to conduct business
therein on the date hereof.
(b) The Purchaser has the full,
legal right,
power, authority and financial ability to
execute and deliver this Agreement and
all documents now
or
hereafter to be executed by it pursuant
to this Agreement (collectively, the
"Purchaser's
Documents"), to consummate the transactions
contemplated hereby, and to perform its
obligations hereunder and under the
Purchaser's Documents.
(c) This Agreement and the
Purchaser's Documents
do not and will not contravene any
provision of the charter of the Purchaser,
any judgment, order, decree, writ or
injunction issued against the Purchaser, or
any provision of any Laws applicable to the
Purchaser. The
consummation of the transactions
contemplated hereby will not result in a
breach or constitute a default or event of
default by the Purchaser under any agreement to which the
Purchaser or any of its assets are subject or bound and
will not result in a violation of any Laws applicable to
the Purchaser.
(d) There are no pending
actions, suits,
proceedings or investigations to which the
Purchaser is a party before any court or other
governmental
authority which may have an adverse impact on the
transactions contemplated hereby.
The representations and warranties of the
Purchaser set forth in this Section 7 and elsewhere in
this Agreement shall be true, accurate and correct in all
material respects upon the execution of this Agreement, shall be
deemed to be
repeated on and as of the Closing Date (except as they
relate only to an earlier date) and shall survive the
Closing.
<PAGE>
Documents to be Delivered by the Seller at Closing.
At the Closing, the Seller shall execute, acknowledge
and/or deliver, as
applicable, the following
to the
Purchaser:
(a) A special warranty deed or its
equivalent (the "Deed") conveying title to the Property
in the form of Exhibit A annexed hereto and made a
part hereof.
(b) The Assignment and Assumption of
Leases and Security Deposits in the form
of Exhibit B annexed hereto and made a part
hereof assigning without
warranty or representation all of the
Seller's right, title and interest, if
any, in and to the Leases in effect on
the Closing Date, all guarantees thereof and
the security deposits thereunder in
the Seller's
possession, if any (the "Lease Assignment").
(c) The Assignment and Assumption
of Contracts and Licenses in the form of
Exhibit C annexed hereto and made a part
hereof (the "Contract and License
Assignment") assigning without
warranty or
representation all of the Seller's right,
title and interest, if any, in and to (i)
all of the assignable licenses,
permits, certificates, approvals,
authorizations and variances issued for or
with respect to the
Property by any governmental
authority
(collectively, the "Licenses"), and (ii) all
assignable purchase orders, equipment
leases, advertising
agreements, franchise agreements, license
agreements, management agreements, leasing
and brokerage agreements and other service
contracts relating to the operation of the
Property (collectively, the "Contracts")
not terminated by Seller pursuant to the
terms of this Agreement.
(d) The Assignment and Assumption of
Intangible Property in the form of Exhibit
D annexed hereto and made part hereof
assigning without warranty or
representation all of the Seller's right,
title and interest, if any, in and to all
intangible property owned by the Seller
with respect to the operation of the
Property listed on Schedule 10 annexed hereto
and made a part hereof, including, without
limitation, the trade name
"Laurel Lakes Centre" (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").
<PAGE>
(e) Executed counterparts of all
Leases and New Leases and, to the extent in
Seller's possession, any amendments, guarantees
and other documents relating thereto,
together with a schedule of all tenant
security deposits thereunder and the accrued
interest
on such security deposits payable to
tenants which are in the possession of or received by the
Seller.
(f) A bill of sale in the form of Exhibit E
annexed hereto and made a part hereof
(the "Bill of Sale") conveying, transferring and selling
to the Purchaser without warranty or representation
all right, title and interest of the Seller in and to all
Personal Property.
(g) Notices to the tenants of the
Property in the
form of Exhibit F annexed hereto and made a part hereof
advising the tenants of the sale
of the Property to the
Purchaser and directing that rents and
other payments thereafter be sent to the
Purchaser or as the Purchaser
may direct.
(h) With respect to Seller's
authority to
execute, deliver and perform this
Agreement and to
consummate the transaction contemplated
thereby: (i)
copies of the limited partnership agreement
and limited
partnership certificate of the Seller and the Seller's
general partner and, if
required by applicable law or
their partnership agreements, copies of partnership
resolutions and/or consents of
the partners authorizing the execution, delivery and
performance of this
Agreement and the consummation of the transactions
contemplated by this Agreement, all certified as true and
correct by the respective general partners; (ii) legal
existence certificates issued by the
state of formation of the Seller
and the Seller's general partner,
dated within thirty (30) days of
the Closing
Date; and (iii) a qualification to
do business
certificate for the Seller issued by
the State of Maryland, dated within thirty
(30) days of the Closing
Date.
(i) Executed originals of all Estoppel
Certificates required by Section 4.3 and
any other Estoppel Certificates, received
by the Seller from tenants prior to the
Closing Date and not previously delivered
to the Purchaser.
<PAGE>
(j) To the extent in the Seller's
possession and
not already located at the Property,
keys to all
entrance doors to, and equipment and
utility rooms located in, the Property.
(k) To the extent in the Seller's
possession and
not already located at the Property, all
Licenses.
(l) To the extent in the Seller's
possession,
executed counterparts of all Contracts and all
warranties in connection therewith which are
in effect
on the Closing Date and which are
assigned by the
Seller.
(m) To the extent in the Seller's
possession and
not located at the Building, plans and
specifications of the Buildings.
(n) The Transfer Tax Returns, if any.
(o) A "FIRPTA" affidavit sworn to by
the Seller in the form of Exhibit H annexed
hereto and made a part hereof. The
Purchaser acknowledges and agrees that upon
the Seller's delivery of such affidavit, the
Purchaser
shall not withhold any portion of the
Purchase Price
pursuant to Section 1445 of the Internal
Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
(p) All other documents the Seller is
required to
deliver pursuant to the provisions of this
Agreement or as are customarily delivered
by sellers in
Maryland
commercial real estate transactions.
8. Documents to be Delivered by the Purchaser at
Closing.
At the Closing, the Purchaser
shall execute,
acknowledge and/or deliver, as applicable, the
following to the Seller:
(a) The cash portion of the
Purchase Price
payable at the Closing pursuant to Section
2, subject
to apportionments, credits and adjustments
as provided
in this Agreement.
(b) The Bill of Sale.
<PAGE>
(c) If the Purchaser is a corporation, (i)
copies of the certificate of
incorporation and by-laws of
the
Purchaser and of the resolutions of the
board of
directors of the Purchaser authorizing the
execution, delivery and performance of this
Agreement
and the
consummation of the transactions
contemplated by this
Agreement certified as true and
correct by the
Secretary or Assistant Secretary of the
Purchaser; (ii) a good standing
certificate issued by the state of
incorporation of the Purchaser, dated
within thirty (30) days of the Closing
Date; (iii) a qualification to do
business certificate issued by the
State of
Maryland, dated within thirty (30) days of
the Closing
Date; and (iv) an incumbency certificate
executed by
the Secretary or Assistant Secretary of
the Purchaser with respect to those
officers of the
Purchaser
executing any documents or instruments in
connection with the transactions contemplated
herein.
(d) If the Purchaser is a
limited liability
company, (i) copies of the Purchaser's operating
agreement and, if required by law or
its operating agreement,
copies of resolutions of the manager
authorizing the execution, delivery and
performance of this Agreement and the
consummation of the transactions contemplated
by this Agreement, all certified as true
and correct by the manager of the
Purchaser; (ii) a
good standing certificate issued by the
state of
incorporation of the Purchaser, dated
within thirty (30) days of the
Closing Date; and
(iii) a
qualification to do business certificate
issued by the
State of Maryland, dated within thirty (30)
days of the Closing Date.
(e) The A & A Agreements.
(f) The Transfer Tax Payments
together with the
Transfer Tax Return, if any.
(g) All other documents the Purchaser
is required
to deliver pursuant to the provisions
of this
Agreement.
9. Operation of the Property prior to the
Closing Date.
Between the date hereof and the Closing
Date, the Seller shall have the right and
obligation to continue to operate
and maintain the Property as
currently being
operated and maintained.
<PAGE>
9.1. New Leases.
Except as hereinafter provided in this Section 10.1, for
the first twenty
(20) days of the Due Diligence Period the Seller may
modify, extend, renew,
cancel or permit the expiration of any
Lease or enter into any proposed Lease of
all or any portion of the
Property without the Purchaser's
consent; provided,
however, that such Lease is on Seller's standard form
with such changes as Seller
deems appropriate in the exercise of its
reasonable discretion and notice
thereof is given to Purchaser at least ten
(10) days prior to
expiration of the Due Diligence Period,
along
with a complete copy of the proposed New
Lease. After the expiration of the first
twenty (20) days of the Due Diligence Period, the Seller
shall not modify, extend,
renew or cancel any Lease or enter into
any proposed
Lease of all or any portion of the Property
without the Purchaser's prior consent in each instance, which
consent shall not be
unreasonably withheld and shall be given or denied, with the
reasons for any such denial,
within five (5) days after receipt by the
Purchaser of the Seller's notice
requesting the Purchaser's consent to the
proposed action relating to such existing or proposed
Lease. If the Purchaser fails to reply to the Seller's
request for consent in a notice given within such period
or if the Purchaser expressly denies its consent but
fails to provide the Seller with the reasons for such
denial, the Purchaser's consent shall be deemed to have been
granted.
9.1.1. New Lease Expenses.
If after the date of this Agreement the
Seller enters into any Leases, or if there is any
extension or renewal of any Leases, whether or not such
Leases provide for their
extension or
renewal, or any expansion or modification of any
Leases (each, a
"New Lease"), the Seller shall keep accurate records
of all expenses
(collectively, "New Lease Expenses")
incurred in connection with each New
Lease, including, without limitation,
the following: (i) brokerage
commissions and fees relating to
such leasing
transaction, (ii) expenses incurred
for repairs, improvements,
equipment, painting, decorating,
partitioning and other items to satisfy the
tenant's requirements with regard to such leasing
transaction, (iii) reimbursements to the tenant for
the cost of any of the
items described in the
preceding clause (ii), (iv) legal fees for
services in connection with the
preparation of documents and other
services rendered in
connection with the effectuation of the
leasing
transaction, (v) rent concessions relating
to the
demised space provided the tenant has the right
to take possession of such demised space during
the period of
such rent concessions, and (vi) expenses
incurred for the purpose of
satisfying or
terminating the obligations of a
tenant under a
New Lease to the landlord under
another lease
(whether or not such other lease
covers space in the Property).
<PAGE>
9.1.2. Allocation of New Lease Expenses.
The New Lease Expenses for each
New Lease consented to by Purchaser
pursuant to Section 10.1 allocable to
and payable by the Seller shall be
determined by multiplying the amount
of such New
Lease Expenses by a fraction, the numerator of which
shall be the number of days contained in that portion, if
any, of the term of
such New Lease commencing on the date
on which the tenant thereunder shall have commenced
to pay fixed rent
("Rent Commencement Date") and
expiring on the
date immediately preceding the Closing
Date, and the denominator of which
shall be the total number of days
contained in the period commencing on the
Rent Commencement Date and expiring
on
the date of the scheduled expiration
of the term of such New Lease,
without provision for any optional
extensions or renewals, and the
remaining balance
of the New Lease Expenses for each New
Lease shall be allocable to and
payable by the Purchaser by addition
to the Purchase Price. At the Closing,
the Purchaser shall reimburse the
Seller for all
New Lease Expenses theretofore paid by
the Seller,
if any, in excess of the portion of
the New Lease Expenses allocated to
the Seller pursuant to the
provisions of the preceding
sentence. For
purposes of this Section 10.1.2, the Rent
Commencement Date under a renewal, extension,
expansion or modification of a
Lease shall be deemed to be (i) in the case
of a renewal or
extension (whether effective prior to
or after the Closing, or in the form of an option
exercisable in the future), the first date during such
renewal or extension period after the
originally scheduled expiration of the term of such Lease on
which the
tenant under such Lease commences to
pay fixed rent, (ii) in the case of
an expansion (whether
effective prior to or after the Closing,
or in the
form of an option exercisable in the
future), the date on which the tenant
under such Lease
commences to pay fixed rent for the
additional space, and (iii) in the case of a
modification not also involving
a renewal, extension or expansion of
such Lease, the effective date of such
modification agreement. The
provisions of this
Section 10.1.2 shall survive the
Closing.
<PAGE>
9.2.
Intentionally
Deleted
9.3. Contracts.
Except as hereinafter provided in
this Section 10.3, for the first twenty
(20) days of the
Due
Diligence Period the Seller may cancel,
modify, extend, renew or permit the
expiration of Contracts or enter into any
new Contract without the Purchaser's prior
consent, provided notice thereof is
given to Purchaser at least ten (10) days prior
to the expiration of the Due Diligence Period.
After the expiration of the first twenty (20)
days of the Due Diligence Period, the Seller
shall not modify, extend, renew or cancel
(except as a result of a default by the other
party thereunder or if Purchaser has given notice
pursuant to Section 4.2(e) that a Contract is
unacceptable) any Contracts, or enter into any
new Contract without the Purchaser's prior
consent in each instance, unless said Contract(s)
is terminable by Purchaser after
the
Closing upon not more than thirty (30)
days notice without penalty.
10. Broker.
The Purchaser and the Seller represent and
warrant to each other that Cushman and Wakefield
(the "Broker") is the sole broker with whom they
have dealt in connection with the Property and
the transactions described herein. The Seller
shall be liable for, and shall indemnify the
Purchaser against, all brokerage commissions or
other compensation due to the Broker arising out
of the transaction contemplated in this Agreement,
which compensation shall be paid subject and
pursuant to a separate agreement between the
Seller and the Broker. Each party hereto agrees
to indemnify, defend and
hold the other harmless from and against any and
all claims, causes of action, losses, costs,
expenses, damages or
liabilities, including reasonable attorneys'
fees and
disbursements, which the other may sustain,
incur or be exposed to, by reason of any claim
or claims by any broker, finder or other person,
except (in the case of the Purchaser as indemnitor
hereunder) the Broker, for fees, commissions or
other compensation arising out of the
transactions
contemplated in this Agreement if such claim or
claims are based in whole or in part on dealings
or agreements with the indemnifying party. The
obligations and representations and warranties
contained in this Section 11 shall survive the
termination of this Agreement and the Closing.
<PAGE>
11. Casualty; Condemnation.
11.1. Damage or Destruction.
If a "material" part (as hereinafter
defined) of the Property is damaged or
destroyed by fire or other casualty, the
Seller shall notify the Purchaser of such
fact and the Purchaser shall have the
option to
terminate this Agreement upon notice to
the Seller
given not later than ten (10) days after
receipt of the Seller's
notice; provided, however,
that the Purchaser's election shall be
ineffective if
within ten (10) days after the Seller's
receipt of the Purchaser's election notice,
the Seller shall elect by notice to the
Purchaser to repair such damage or
destruction and shall thereafter complete
such repair and restore the Property to
its existing or better condition as of the
date hereof within ninety (90) days
after the then scheduled Closing Date at the time
of the Purchaser's election. If the Seller makes
such election to
repair,
the Seller shall have the right to adjourn the
Closing
Date one or more times for up to ninety (90) days
in the aggregate in order to complete such
repairs and shall have the right to retain all
insurance proceeds which
the Seller may be entitled to receive as a result of
such damage or destruction. If (i)
the Purchaser does not elect to terminate this
Agreement as to the
damaged Property, (ii) the Purchaser elects to
terminate this Agreement as to the damaged
Property but such election is ineffective
because the Seller
elects
to repair such damage and completes such
repair within
such 90-day period provided above, or
(iii) there is damage to or destruction of
an "immaterial" part ("immaterial" is herein
deemed to be any damage or destruction which
is not "material", as such term is hereinafter
defined) of the Property, the Purchaser shall
close title as provided in this Agreement and, at
the Closing, the Seller shall, unless the Seller
has repaired such damage or
destruction prior to the
Closing, (x) pay over to the Purchaser the proceeds
of any insurance collected by the Seller less the
amount
of all costs incurred by the Seller in
connection with the
repair of such damage or destruction, and
(y) assign and transfer to the Purchaser
all right,
title and interest of the Seller in
and to any
uncollected insurance proceeds which the
Seller may be
entitled to receive from such damage or
destruction. A "material" part of the
Property shall be deemed to have been
damaged or destroyed if the cost of
repair or replacement shall be fifteen
percent (15%) or more of the Purchase
Price.
<PAGE>
11.2. Condemnation.
If, prior to the Closing Date,
all or any
"significant" portion (as hereinafter
defined) of the
Property is taken by eminent domain or
condemnation (or is the subject of a
pending taking which has not been
consummated), the Seller shall notify the
Purchaser of such fact and the Purchaser
shall have the option to terminate this
Agreement upon notice to the
Seller
given not later than ten (10) days after
receipt of the Seller's notice. If the
Purchaser does not elect to terminate
this Agreement, or if an "insignificant"
portion ("insignificant" is herein deemed to
be any
taking which is not "significant", as
such term is herein defined) of the
Property is taken by
eminent
domain or condemnation, at the Closing the
Seller shall assign and turnover, and
the Purchaser shall be
entitled to receive and keep, all
awards or other proceeds
for such taking by eminent domain or
condemnation. A "significant" portion of
the Property means (i) 10% or more of
either of the buildings on the Land, (ii) a
portion of the parking areas if the taking
thereof reduces the remaining available
number of
parking spaces below the minimum
legally required,
(iii) a legally required driveway on the
Land if such driveway is the predominant
means of ingress thereto or egress
therefrom or (iv) any taking which would
in Purchaser's reasonable judgment have a
material adverse
effect on the value of the Property.
11.3. Termination.
If the Purchaser effectively
terminates this
Agreement pursuant to Section 12.1 or
12.2, this Agreement shall be terminated
and the rights of
the
parties shall be the same as if notice of
termination were given pursuant to Section
14.1.
12. Conditions Precedent to Closing.
12.1. Conditions Precedent to the Purchaser's
Obligations
to Perform.
The Purchaser's obligation under
this Agreement to purchase the Property is subject to
the fulfillment of each
of the following conditions: (i) the
representations and warranties of the
Seller contained herein shall be
materially true, accurate and
correct
as of the Closing Date except to the extent
they relate only to an earlier date; (ii)
the Seller shall be ready, willing and
able to deliver title to the
Property in accordance with the terms and
conditions of this Agreement; (iii) any
conditions precedent to
the
Purchaser's obligation to purchase the
Property which is validly listed in the
Purchaser's Termination Notice as being
unsatisfied has been satisfied; and (iv) the
Seller shall have delivered all the documents
and other items required pursuant to Section
8, and shall have performed all
other covenants,
undertakings and
obligations, and complied with all
conditions required by this Agreement to
be performed or complied with by the Seller at or
prior to the Closing.
<PAGE>
12.2. Conditions Precedent to the Seller's
Obligations to Perform.
The Seller's obligation under this
Agreement to sell the Property to the
Purchaser is subject to
the
fulfillment of each of the following
conditions: (i) the representations and
warranties of the Purchaser contained
herein shall be materially true, accurate
and correct as of the Closing Date; (ii)
the Purchaser shall have delivered the
funds required hereunder and all the
documents to be executed by the Purchaser set
forth in Section 9 and shall have performed
all other covenants,
undertakings and obligations, and complied
with all conditions required by this
Agreement to be performed or complied with
by the Purchaser at or prior to the
Closing; (iii) all consents and approvals
of governmental authorities and parties to
agreements to which the Purchaser is a
party or by which the
Purchaser's assets are bound that are
required with respect to
the consummation of the transactions
contemplated by this Agreement shall have
been obtained and copies thereof shall
have been delivered to
the
Seller at or prior to the Closing; and
(iv) the
additional matters set forth in Schedule
11 annexed
hereto and made a part hereof shall have
occurred or been delivered to the Seller,
as applicable, at or prior to the Closing.
12.3.
Remedies Upon Failure to Satisfy Conditions.
In the event that any condition
contained in Sections 13.1 or 13.2 is not
satisfied, the party entitled to the
satisfaction of such condition as a
condition to its obligation to close title
shall have as its
sole remedy hereunder the right to elect to
(i)
waive such unsatisfied condition whereupon
title shall close as provided in this
Agreement or (ii) proceed as provided in
Section 14 hereof.
<PAGE>
13. Remedies.
13.1. Seller's Inability to Perform.
If the Closing fails to occur by
reason of the
Seller's inability to perform its
obligations under this Agreement which has
not been waived pursuant to Section
13.3, then the Purchaser, as its sole
remedy
for such inability of the Seller, may
terminate this Agreement by notice to the
Seller. If the Purchaser
elects to terminate this Agreement, then
this Agreement shall be terminated and
neither party shall have any further
rights, obligations or liabilities
hereunder,
except as otherwise expressly
provided herein
(collectively, the "Surviving Obligations"),
and except that the Purchaser shall be
entitled to a return of the Deposit provided
the Purchaser is not otherwise in
default hereunder. Except as set forth in
this Section
14.1, the Purchaser hereby
expressly waives,
relinquishes and releases any other right or remedy available
to it at law, in equity or otherwise by reason
of the Seller's inability to perform
its
obligations hereunder. Notwithstanding anything to the contrary
herein, if the Seller's inability to perform its obligations
under this Agreement is a result of any action of, or failure
to act by, the Purchaser or any of the Purchaser's
Representatives, the Purchaser shall not be relieved of its
obligations under this Agreement
and Purchaser shall not be entitled to
any right or remedy provided in this
Section 14.1 or elsewhere in this
Agreement.
13.2. Purchaser's Failure to Perform.
In the event of a default
hereunder by the
Purchaser or if the Closing fails to occur
by reason of the Purchaser's failure or
refusal to perform its obligations
hereunder, then the Seller may terminate
this Agreement by notice to the
Purchaser. If the Seller elects to
terminate this Agreement, then this
Agreement shall be terminated and the
Seller shall retain the Deposit as
liquidated damages for all loss, damage and
expenses suffered by the Seller, it being
agreed that the Seller's damages
are impossible to ascertain, and neither
party shall have any further rights,
obligations or liabilities hereunder,
except
for the Surviving Obligations. Nothing contained
herein shall limit or restrict the Seller's
ability to pursue any rights or remedies
it may have against the Purchaser with
respect to the Surviving Obligations.
Except as set forth in this Section 14.2
and the Surviving Obligations, the Seller
hereby expressly
waives, relinquishes and releases any
other right or remedy available to them at
law, in equity or otherwise by reason of
the Purchaser's default hereunder or the
Purchaser's failure or refusal to
perform its
obligations hereunder. Notwithstanding
anything to the contrary herein, if the
Purchaser's default or the Purchaser's
failure or refusal to perform
its
obligations under this Agreement is a
result of any action of, or failure to act by,
the Seller or any of the Seller's
Affiliates, the Seller shall not be
relieved of its obligations under this
Agreement and the Seller shall not be
entitled to any right or remedy provided in this Section
14.2 or elsewhere in this Agreement.
<PAGE>
13.3. Seller's Failure to Perform.
If the Closing fails to occur by
reason of the Seller's failure or refusal to perform its
obligations hereunder which has not been waived by the
Purchaser, then the Purchaser, as its sole remedy
hereunder, may (i) terminate this Agreement by notice to
the Seller or (ii) seek specific performance from the
Seller. As a condition precedent to the Purchaser
exercising any right it may have to bring an action
for specific performance as the result of the Seller's
failure or refusal to perform their obligations
hereunder, the Purchaser must commence such an action
within one hundred twenty (120) days after
the
occurrence of such default. The Purchaser
agrees that its failure to
timely commence such an action for specific
performance within such one hundred twenty
(120) day period shall be deemed a waiver
by it of its right to commence such an
action. Notwithstanding anything to the
contrary
herein, if the Seller's failure or refusal
to perform its obligations under this
Agreement is a result of any action of, or
failure to act by, the Purchaser or any of
the Purchaser's Representatives, the Purchaser
shall not be relieved of its obligations
under this Agreement and Purchaser shall not
be entitled to any right or remedy
provided in this Section 14.3 or elsewhere
in this Agreement.
14. Escrow.
The Escrow Agent shall hold the Downpayment
and Second Downpayment (if applicable)
and all interest accrued
thereon, if any (collectively, the "Deposit") in
escrow and shall dispose of the Deposit only
in accordance with the provisions of that
certain Escrow Agreement of even date herewith
by and among the Escrow Agent, the Purchaser
and the Seller relating to the Property (the
"Escrow Agreement") in the form of Exhibit I
hereto. Simultaneously with their execution and
delivery of this Agreement, the Purchaser and the
Seller shall furnish the Escrow Agent with
their true Federal Taxpayer Identification
Numbers so that the Escrow Agent may file
appropriate income tax information returns with
respect to any interest earned on or credited to
the Deposit. The party entitled to the economic
benefit of the Deposit
representing interest earned on the
Downpayment
shall be the party responsible for the payment
of any tax due thereon.
<PAGE>
The provisions of the Escrow Agreement
shall survive the termination of this Agreement
and the Closing.
15. Notices.
All notices, elections, consents,
approvals, demands, objections, requests or
other communications which the Seller or
the Purchaser may be required or desire to
give pursuant to, under or by virtue of this
Agreement must be in writing and (i)
delivered by hand to the addresses set forth
below, or (ii) (a) sent by express mail or
courier (for next business
day delivery), or (b) sent by certified
or
registered mail, return receipt requested
with proper postage prepaid, addressed as
follows:
If to the Seller:
Laurel-Vincent Place Associates Limited
Partnership
c/o Dean Witter Realty Inc.
Two World Trade Center
64th Floor
New York, New York 10048
Attention: Mr.
Ronald DiPietro
with a copy to:
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts
02110
Attention: Vincent M.
Sacchetti, Esq.
If to the Purchaser:
c/o Urban Investment
Group, Inc.
401 North Michigan Avenue, Suite 2900
Chicago, Illinois 60611 Attention: Mr. John
F.
Quinn, President with a copy to:
Stahl Brashler LLC
20 East Jackson Blvd., Suite 1600
Chicago, Illinois 60604
Attention: Jeffrey J. Stahl, Esq.
<PAGE>
The Seller or the Purchaser may
designate another
addressee or change its address for notices
and other communications hereunder by a
notice given to the other parties in the
manner provided in this Section 16. A notice or
other communication sent in compliance
with the
provisions of this Section 16 shall be deemed given and
received (i) if by hand, at the time of the delivery thereof
to the receiving party at the address of such party set
forth above (or to such other address as such party has
designated as provided above), (ii) if sent by express mail
or overnight courier, on the date it is delivered to the
other party, or (iii) if sent by registered or certified
mail, on the third business day following the day such
mailing is made.
16. Property Information and Confidentiality.
The Purchaser agrees that, prior to the Closing, all
Property Information shall be kept strictly confidential and
shall not, without
the prior consent of the Seller, be disclosed by the
Purchaser or the Purchaser's
Representatives, in any manner whatsoever, in
whole or in part, and will not be used by the
Purchaser or the
Purchaser's Representatives, directly or indirectly, for any
purpose other than evaluating the Property. Moreover, the
Purchaser agrees that, prior to the Closing, the Property
Information will be transmitted only to the Purchaser's
Representatives (i) who need to know the Property
Information for the purpose of evaluating the Property, and
who are informed by the Purchaser of the confidential nature
of the Property Information, (ii) who agree to be bound by
the terms of this Section 17 and Section 6.3 and (iii) who
have executed and delivered to
the Seller the letter regarding use of the Property
Information in the form of Exhibit J hereto. The
provisions of this Section 17 shall in no event apply to
Property Information which is a matter of public record and
shall not
prevent the Purchaser from complying with Laws,
including, without limitation,
governmental regulatory, disclosure, tax and
reporting requirements.
16.1. Press Releases.
The Purchaser and Seller, for the
benefit of each other, hereby agree that
between the date hereof and the Closing
Date, they will not release or cause or
permit to be released any press notices,
publicity (oral or written) or advertising
promotion relating to, or otherwise announce
or disclose or cause or permit to be
announced or disclosed, in any manner
whatsoever, the terms,
conditions or substance of this Agreement or the
transactions contemplated herein, without first
obtaining the written consent of the other
party hereto. It is understood that the foregoing
shall not preclude either party from discussing
the substance or any relevant details of the
<PAGE>
transactions contemplated in this Agreement
with any of its attorneys, accountants,
professional consultants or potential lenders,
as the case may be, or prevent either party
hereto from complying with Laws, including,
without limitation, governmental regulatory,
disclosure, tax and reporting requirements.
16.2. Return of Property Information.
In the event this Agreement is
terminated, the Purchaser and the
Purchaser's Representatives shall promptly
deliver to the Seller all originals and copies
of the Property Information provided by
Seller 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 all or
substantially all of the obligations
contained in the
preceding sentence.
16.3. 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
Property, the operation thereof or the sale
thereof
(including,
without limitation, Leases, Contracts
and Licenses)
furnished to, or otherwise made available for review
by, the Purchaser or its
directors, officers,
employees, affiliates, partners, brokers,
agents or
other representatives, including, without limitation,
attorneys, accountants,
contractors, consultants,
engineers and financial advisors
(collectively, the "Purchaser's
Representatives"), by the Seller or any of
the Seller's Affiliates, or their
agents
or
representatives, including, without
limitation, their contractors,
engineers, attorneys,
accountants,
consultants, brokers or advisors, and (ii) all
analyses, compilations, data, studies,
reports or other
information or documents prepared or
obtained by the Purchaser or the
Purchaser's Representatives containing
or based, in whole or in part, on the
information or documents described in the
preceding clause (i), or the
Investigations, or otherwise reflecting their review or
investigation of the Property.
16.4. Remedies.
In addition to any other remedies
available to the Seller, the Seller
shall have the right to seek
equitable relief, including, without limitation,
injunctive relief or specific performance,
against the Purchaser or the Purchaser's
Representatives
in order to enforce the provisions of this
Section 17
and 6.3.
The provisions of this Section 17 shall
survive the termination of this Agreement and the
Closing.
17. Access to Records.
For a period of one (1) year subsequent to
the Closing Date, the
Seller, the Seller's Affiliates
and their employees, agents and representatives
shall be
entitled to access during normal business hours
to all documents, books and records given to
the Purchaser by the Seller at the Closing
for tax and audit purposes, regulatory
compliance, and cooperation
with governmental investigations upon
reasonable prior notice to the Purchaser, and
shall have the
right, at their sole cost and expense, to make copies of
such documents, books and records. In the event
that Seller or Seller's Affiliates are subject to any audit,
inquiry or other investigation by the Internal Revenue
Service, the Securities and Exchange Commission or any other
governmental agency, the one year limitation set forth
in
the first
sentence of this Section 18 shall not be applicable.
18. 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. Except as otherwise set forth in this
Section 19, this Agreement may not be assigned by the
Purchaser without the prior written
consent of the Seller and any assignment
or attempted assignment by the Purchaser without
such prior written consent shall constitute a default by the
Purchaser
hereunder and shall be null and void. This Agreement may be
assigned by the Purchaser to
an affiliate without the prior
written consent of the Seller provided the
Purchaser is in
no way released from any of its obligations under this
Agreement.
19. Entire Agreement, Amendments.
All prior statements, understandings,
representations and agreements between the
parties, oral or written, are superseded
by and merged in this Agreement, which alone
fully and completely expresses the agreement
between them in connection
with this transaction and which is entered into
after full investigation, neither party
relying upon any statement,
understanding, representation or agreement made
by the other not embodied in this Agreement. This
Agreement shall be
given a fair and reasonable construction
in
accordance with the intentions of the parties
hereto, and
without regard to or aid of canons requiring
construction against the Seller or the party
drafting this Agreement. This Agreement shall
not be altered, amended, changed, waived,
terminated or otherwise modified in any
respect or
particular, and no consent or approval required
pursuant to this Agreement shall be effective,
unless the same shall be in writing and
signed by or on behalf of the party to be
charged.
20. Merger.
Except as otherwise expressly provided
herein, the
Purchaser's acceptance of the Deed shall be deemed a
discharge of all of the obligations of the
Seller hereunder and all
of the Seller's representations,
warranties,
covenants and agreements herein shall merge in
the documents and agreements executed at the
Closing and shall not survive the Closing.
21. Limited Recourse.
The Purchaser agrees that it does not
have and will not have any claims or causes
of action against any disclosed or undisclosed
officer, director, employee,
trustee,
shareholder, partner, principal, parent,
subsidiary or other affiliate of the Seller,
including, without limitation, Dean Witter
Realty Inc. and the parent and affiliates of
Dean Witter Realty
Inc. (collectively, the
"Seller's
Affiliates"), arising out of or in connection
with this Agreement or the transactions
contemplated hereby. The
Purchaser agrees to look solely to the Seller
and the Seller's assets directly attributable to
the Building for the satisfaction of the
Seller's liability or obligation arising
under this Agreement or the
transactions
contemplated hereby, or for the performance of
any of the covenants,
warranties or other agreements of
the Seller
contained herein, and further agrees not to sue or
otherwise seek to enforce any personal obligation
against any of the Seller's Affiliates with
respect to any matters arising out of or in
connection with this Agreement or the transactions
contemplated hereby. The total liability of the Seller
hereunder shall in no event exceed an amount
equal to the Deposit.
The limitations on Seller's liability set forth
in
this Section 22 shall not apply to losses
or costs of Purchaser incurred due to
Seller's fraud or
intentional
misrepresentation.
22. Miscellaneous.
Neither this Agreement nor any memorandum
thereof shall be recorded and any attempted
recordation hereof shall be void and shall
constitute a default. Each of the Exhibits and
Schedules referred to herein and attached
hereto is incorporated herein by this reference.
The caption headings in this Agreement are
for convenience only and are not intended to be a part of
this Agreement and shall not be
construed to modify, explain or alter any of the terms,
covenants or conditions herein contained. If
any provision of this Agreement shall be unenforceable or invalid,
the same shall not affect the remaining provisions of this
Agreement and to this end the provisions of this Agreement are
intended to be and shall be
severable. This Agreement shall be interpreted
and enforced in accordance with the
laws of the State of Maryland without
reference to
principles of conflicts of laws.
23. Time of the Essence.
Time is of the essence with respect to this
Agreement, including but not limited to the
occurrence of the Closing as of the originally
scheduled date.
<PAGE>
24. IRS Form 1099-S Designation.
In order to comply with information reporting
requirements of Section 6045(e) of the Internal
Revenue Code of 1986, as
amended, and the Treasury Regulations
thereunder, the parties agree (i) to execute
an IRS Form 1099-S Designation
Agreement in the form attached hereto as
Exhibit K at or prior to the Closing to designate the Title Company
as the party who
shall be responsible for reporting the contemplated
sale of the Property to the Internal
Revenue Service (the "IRS") on IRS Form 1099-
S; (ii) to provide the Title Company with the information necessary
to complete Form 1099-S; (iii) that the Title Company shall not be
liable for the actions taken under this Section 25, or for the
consequences of those actions, except as they may be the result of
gross negligence or willful misconduct on the part of the Title
Company; and (iv) that the Title Company shall be indemnified
by the parties for any costs or
expenses incurred as a result of the actions
taken under this Section 25, except as they may be the result of
gross negligence or willful
misconduct on the part of the Title Company. The Title
Company shall provide all parties to
this transaction with copies of the IRS Forms
1099-S filed with the IRS and with any other documents used to
complete IRS Form 1099-S. 25. Attorneys' Fees.
In any event that at any time Seller
or Purchaser shall institute any
action or proceeding against the other
relating to this Agreement or any default hereunder, then and
in that event the prevailing party in such action or proceeding
shall be entitled to recover from the other party its reasonable
attorneys' fees which shall be deemed to have accrued on the
commencement of
such action or proceeding and shall be payable
whether or not such action is prosecuted to
judgment.
26. Counterparts.
This Agreement may be executed by
the parties hereto in separate
counterparts, each of which when so
executed and delivered shall be an original,
but all such counterparts shall together
constitute but one and the same instrument.
27. Restructuring.
Upon the agreement of both Seller and
Purchaser at any
time prior to Closing, which agreement may be
granted or
withheld by either party in its sole
discretion, this transaction will be
restructured as a sale of the partnership
interest in the Seller, instead of a transfer of
real property by deed, upon terms agreed to by the
parties.
<PAGE>
IN WITNESS WHEREOF, this Agreement has
been duly executed by the parties hereto as of
the day and year first above written.
SELLER: LAUREL-
VINCENT PLACE
ASSOCIATES LIMITED
PARTNERSHIP, a
Virginia
limited
partnership
By:DEAN WITTER REALTY
INCOME PARTNERSHIP
III, L.P., a
Delaware
limited
partnership,
its general
partner
By: DEAN
WITTER REALTY
INCOME
PROPERTIE
S III,
INC., a
Delaware
corporati on,
its general
partner
By:
Robert
B.
Austin
Vice
Presid ent
PURCHASER:
URBAN INVESTMENT
GROUP, INC.
By:
_____________
____________ ___
Name:
Title:
E-1
