1
<PAGE>
IN ACCORDANCE WITH RULE 201 OF REGULATION S-T, THIS REPORT ON
FORM 10-Q IS BEING FILED IN PAPER PURSUANT TO A TEMPORARY
HARDSHIP EXEMPTION.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period ended January 31, 1999
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission File Number: 0-18146
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
(Exact name of registrant as specified in governing instrument)
Delaware 13-3293754
(State of organization) (IRS Employer
Identification No.)
2 World Trade Center, New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212)
392-1054
Former name, former address and former fiscal year, if changed
since last report: not applicable
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Page 1
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
January 31, October
31,
1999 1998
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 3,487,313 $
1,919,694
Real estate, at cost:
Land 7,800,000
8,823,904
Buildings and improvements 46,110,667
55,274,320
53,910,667
64,098,224
Accumulated depreciation (13,680,338)
(14,356,686)
40,230,329
49,741,538
Real estate held for sale 9,199,543
Investments in joint ventures 6,982,954
7,095,604
Deferred leasing commissions, net 383,745
333,488
Other assets 1,613,930
1,923,155
$61,897,814 $
61,013,479
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 269,149 $
274,748
Security deposits 74,344
75,844
343,493
350,592
Partners' capital (deficiency):
General partners (8,387,088)
(8,476,231)
Limited partners ($500 per Unit, 534,020 Units issued)
69,941,409 69,139,118
Total partners' capital 61,554,321
60,662,887
$61,897,814 $
61,013,479
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED INCOME STATEMENTS
Three months ended January 31, 1999 and 1998
<CAPTION>
1999 1998
<S> <C>
<C>
Revenues:
Rental $1,624,001
$2,279,633
Equity in earnings of joint ventures 208,102
610,901
Interest 29,223
69,327
Other 48,447
230,221
Gain on sale of real estate - 6,190,263
1,909,773
9,380,345
Expenses:
Property operating 477,588
807,092
Depreciation 374,760
644,094
Amortization 14,948
41,524
General and administrative 151,043
204,470
1,018,339
1,697,180
Net income $ 891,434
$7,683,165
Net income allocated to:
Limited partners $ 802,291
$7,533,875
General partners 89,143
149,290
$ 891,434
$7,683,165
Net income per Unit of limited partnership interest $ 1.50
$ 14.11
,,
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Three months ended January 31, 1999
<CAPTION>
Limited General
Partners Partners Total
<S> <C> <C>
<C>
Partners' capital (deficiency)
at November 1, 1998 $ 69,139,118
$(8,476,231) $ 60,662,887
Net income 802,291
89,143 891,434
Partners' capital (deficiency)
at January 31, 1999 $ 69,941,409
$(8,387,088) $ 61,554,321
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended January 31, 1999 and 1998
<CAPTION>
1999 1998
<S> <C>
<C>
Cash flows from operating activities:
Net income $ 891,434 $
7,683,165
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 374,760
644,094
Amortization 14,948
41,524
Gain on sale of real estate -
(6,190,263)
Equity in earnings of joint ventures (208,102)
(610,901)
(Increase) decrease in operating assets:
Deferred expenses (65,205)
(185,848)
Other assets 309,225
592,381
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities
(5,599) (296,290)
Security deposits (1,500)
(63,507)
Net cash provided by operating activities
1,309,961 1,614,355
Cash flows from investing activities:
Proceeds from disposition of real estate held for sale -
18,497,771 Additions to real
estate (63,094) (387,197)
Investments in joint ventures (14,910)
(154,770)
Distributions from joint ventures 335,662
983,108
Net cash provided by investing activities
257,658 18,938,912
Cash flows from financing activities:
Cash distributions -
(20,087,436)
Increase in cash and cash equivalents 1,567,619
465,831
Cash and cash equivalents at beginning of period
1,919,694 1,967,110
Cash and cash equivalents at end of period $ 3,487,313 $
2,432,941
Supplemental disclosure of non-cash investing activities:
Reclassification of real estate to real estate held for sale:
Real estate, at cost
Land $ 1,023,904
$ 1,200,000
Buildings and improvements 9,226,747
17,721,448
Accumulated depreciation (1,051,108)
(7,505,026)
Real estate held for sale 9,199,543
$11,416,422
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
1. The Partnership
Dean Witter Realty Income Partnership III, L.P. (the
"Partnership") is a limited partnership organized under
the laws of the State of Delaware in 1985. The
Partnership's fiscal year ends on October 31.
The financial statements include the accounts of the
Partnership, Part Six Associates and Laurel-Vincent
Place Associates Limited Partnership on a consolidated
basis. The Partnership's interests in Taxter Corporate
Park and the partnership which owns interests in
Chesterbrook Corporate Center (sold in April 1998) were
accounted for using the equity method.
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
reporting purposes.
Net income per Unit of limited partnership interest
amounts are calculated by dividing net income allocated
to Limited Partners, in accordance with the Partnership
Agreement, by the weighted average number of Units
outstanding.
In the opinion of management, the accompanying
financial statements, which have not been audited,
include all adjustments necessary to present fairly the
results for the interim period. Except for the
reclassification of real estate held for sale and gains
on sales of real estate (see Note 2), such adjustments
consist only of normal recurring accruals.
These financial statements should be read in
conjunction with the annual financial statements and
notes thereto included in the Partnership's annual
report on Form 10-K filed with the Securities and
Exchange Commission for the year ended October 31,
1998, Operating results of interim periods may not be
indicative of the operating results for the entire
year.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
2. Real Estate
On February 16, 1999, the Partnership entered into an
agreement with New Plan Excel Realty Trust Inc., an
unaffiliated party, to sell the land and building that
comprise the Westland Crossing retail property. As
part of the same agreement, Dean Witter Realty Income
Partnership II, L.P., an affiliate, agreed to sell a
retail property to New Plan. The aggregate negotiated
sales price of the properties sold was approximately
$24.1 million, of which $10.1 million was allocated in
the agreement to Westland Crossing. The sale of the
Westland Crossing property will close upon the
completion of construction at the Michaels Stores, Inc.
space, which should occur during the second quarter of
fiscal 1999.
The Partnership has reclassified the net carrying value
of the Westland Crossing property to real estate held
for sale as of January 31, 1999. The Partnership's
consolidated balance sheet at January 31, 1999 also
included the following amounts related to the property:
net deferred leasing commissions of approximately
$85,000; other assets of approximately $205,000;
accounts payable and accrued liabilities of
approximately $9,000; and security deposits of
approximately $17,000.
During the fiscal quarter ended January 31, 1999, the
Westland Crossing property generated approximately
$283,000 of rental revenue, $128,000 of operating
expenses, and $85,000 of depreciation and amortization
expenses. Net income and cash from operations from the
property during the quarter approximated $90,000 and
$175,000, respectively. During the year ended October
31, 1998, the Westland Crossing property generated
approximately $1,080,000 of rental revenue, $461,000 of
operating expenses, and $340,000 of depreciation and
amortization expenses.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
3. Investment in Joint Venture
In 1987, the joint venture which owns Taxter Corporate
Park sold a leasehold interest in approximately 20% of
the property's space to KLM. In 1998, KLM accepted a
$6.75 million purchase offer for the leasehold
interest, which the joint venture had the right to
match. The partners of the joint venture believe that
inclusion of the KLM space improves the value and
salability of the property; however, the joint
venturers did not have sufficient cash to fund the
purchase. Therefore, an affiliate of the Managing
General Partner (the "Affiliate"), as an accommodation,
purchased the leasehold interest on February 8, 1999
for $6.75 million and assumed the rights and
obligations of KLM thereunder.
On February 4, 1999, the joint venture and KLM entered
into a new lease which allows KLM to continue to occupy
50% of the space subject to the leasehold interest. On
February 8, 1999, the Affiliate also assumed the rights
and obligations of the joint venture under this new
lease.
As part of the purchase of the leasehold interest, the
joint venture received an option to purchase the
leasehold interest and assume the new lease from the
Affiliate for a purchase price of $6.75 million plus
any tenant improvements, leasing commissions and
capital expenditures incurred by the Affiliate in
connection with the leasehold interest (collectively,
the "Resale Price"). The joint venture also granted
the Affiliate an option to require the joint venture to
purchase the leasehold interest and assume the new
lease for the Resale Price. When the property is sold,
the joint venture will be obligated to purchase the
leasehold interest and assume the new lease from the
Affiliate for the Resale Price.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
4. Related Party Transactions
In fiscal 1998, an affiliate of the Managing General
Partner provided property management services for five
properties (until the sales of the Holcomb Woods and
Glenhardie III and IV properties in November 1997 and
April 1998, respectively), and for five buildings at
the Chesterbrook Corporate Center (until its sale in
April 1998). In fiscal 1999, the affiliate managed the
Taxter property through December 1998 and the Westland
Crossing property through January 1999. The Partnership
incurred management fees of approximately $41,000 and
$67,000 for the three months ended January 31, 1999 and
1998, respectively. These amounts are included in
property operating expenses.
Another affiliate of the Managing General partner
performs administrative functions, processes investor
transactions and prepares tax information for the
Partnership. For the three months ended January 31,
1999 and 1998, the Partnership incurred approximately
$116,000 and $143,000, respectively, for these
services. These amount are included in general and
administrative expenses.
As of January 31, 1999, the affiliates were owed a
total of approximately $39,000 for these services.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership raised $267,010,000 in a public
offering of 534,020 Units which was terminated in 1987.
The Partnership has no plans to raise additional
capital.
The Partnership purchased, directly or through a
partnership interest, six office properties and five
retail properties. Through January 31, 1999, five
office properties and three retail properties were
sold. The Partnership's acquisition program has been
completed. No additional investments are planned.
As the result of the sales of three office properties
and a partnership interest in a fourth during fiscal
1998, Partnership cash flow from operations decreased
during the three months ended January 31, 1999 as
compared 1998.
In February 1999, the Partnership entered into an
agreement to sell the Westland Crossing retail property
(see Note 2 to the consolidated financial statements).
Following such sale, the Partnership's remaining
investments will consist of the Laurel Lakes retail
property and its interest in the Taxter office
property. The Managing General Partner currently is
marketing for sale both of these properties with the
objective of completing sales during 1999. However,
there can be no assurance that the Partnership will be
able to achieve these objectives.
Laurel Lakes Centre is located in a suburb of Baltimore
and Washington, D.C., where retail centers continue to
experience strong competition. The market vacancy rate
is currently approximately 16% with stable rental
rates. During the first quarter of 1999, occupancy at
the property decreased slightly to approximately 70%.
As of January 31, 1999, the property was leased to 25
tenants. No lease for significant amounts of space
expire until 2005. The partnership may incur material
capital expenditures to lease vacant space at the
Laurel Lakes Centre shopping center. The amount of
such expenditures is uncertain at this time. To the
extent that the vacant space at the property is not re-
leased, the Partnership's cash flow will be reduced.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
During the first quarter of fiscal 1999, the overall
vacancy levels in the office market in Westchester
County, New York, and the west Westchester sub-market
in which Taxter Corporate Park is
located remained at approximately 18% and 14%,
respectively. Also during the first quarter of fiscal
1999, occupancy at the property increased slightly to
more than 99%. However, in February 1999, total
occupancy at the property decreased to approximately
83% because KLM vacated approximately 10% of the
property's space and another tenant vacated
approximately 7% of the space. Also, the ability of
Cityscape, which occupies approximately 12% of the
property's space, to satisfy its future obligations
under its leases (which expire in 2000) is uncertain
because Cityscape filed for bankruptcy protection in
1998. Leases aggregating approximately 39% of the
space expire in 2001. As described in Note 3 to the
consolidated financial statements, in February 1999, an
affiliate of the Managing General Partner acquired
KLM's leasehold interest in the property and assumed a
new lease between the joint venture and KLM.
During the three months ended January 31, 1999, all of
the Partnership's properties generated positive cash
flow from operations, and it is anticipated that the
Laurel Lakes and Taxter properties will continue to do
so during the remainder of fiscal year 1999.
During the three months ended January 31, 1999, the
Partnership's cash flow from operations and the
distributions received from its joint venture exceeded
its capital expenditures and contributions to the joint
venture.
The Partnership did not pay any distributions during
the three months ended January 31, 1999. Generally,
future cash distributions will be paid from proceeds
received from the sale of the Westland property and the
future sales of the Laurel Lakes and Taxter properties.
The Partnership expects to pay for its share of the
purchase price of the former KLM leasehold interest
from its share of the proceeds from the sale of the
Taxter property. As of January 31, 1999, the
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
Partnership has commitments to fund approximately
$42,000 for its share of capital expenditures and
leasing commissions at the Taxter property. The
Partnership, through DWR Chesterbrook Associates, may
also be required to fund costs of capital expenditures
at the Chesterbrook property, pursuant to commitments
made prior to its sale, if the aggregate of such costs,
when all projects have been completed, exceeds the
escrow deposit made in 1998 when the property was sold.
In August 1998, the Partnership signed a new lease with
Michaels Stores, Inc., for approximately 18% of the
space at Westland Crossing. Under the terms of the
lease, the Partnership has commitments to fund
approximately $1,100,000 of tenant-related capital
expenditures and leasing commissions. As of January
31, 1999, the Partnership had funded only approximately
$85,000 of these expenditures. The Partnership expects
to fund a portion of the commitments from cash
reserves and the remainder from proceeds from the sale
of the property.
Except as described above and in the consolidated
financial statements, the Managing General Partner is
not aware of any trends or events, commitments or
uncertainties that may impact liquidity in a material
way.
Operations
Fluctuations in the Partnership's operating results for
the three months January 31, 1999 compared to 1998 were
primarily attributable following:
Rental revenues, operating expenses, and depreciation
and amortization expenses decreased in 1999 compared to
1998 primarily due to the sales of the Holcomb Woods
and the Glenhardie III and IV properties in December
1997 and April 1998, respectively. The gain on sale of
real estate in the first quarter of fiscal 1998 was
attributable to the sale of the Holcomb Woods property.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Notes to Consolidated Financial Statements
The decrease in equity in earnings of joint ventures in
1999 compared to 1998 is primarily due to the sale of
the Chesterbrook Corporate Park in April 1998.
Other income during the three months ended January 31,
1998 exceeded that in 1999 primarily due to a lease
termination fee of approximately $110,000 received at
the Glenhardie properties in fiscal 1998.
No individual factor accounted for a significant
portion of the decrease in general and administrative
expenses from 1998 to 1999.
Inflation
Inflation has been consistently low during the periods
presented in the financial statements and, as a result,
has not had a significant effect on the operations of
the Partnership or its properties.
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
PART II - OTHER INFORMATION
<CAPTION>
<S> <C>
Item 6. Exhibits & Reports on form 8-K
(a) Exhibits.
An exhibit index has been filed as
part of this Report on Page E1.
(b) Reports on Form 8-K
None
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
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 thereunto
duly authorized.
<CAPTION>
<S> <C>
DEAN WITTER REALTY INCOME
PARTNERSHIP III, L.P.
By: Dean Witter Realty Income
Properties III Inc.
Managing General Partner
Date: March , 1999 By: /s/E. Davisson Hardman,
Jr.
E. Davisson Hardman, Jr.
President
Date: March , 1999 By: /s/Charles Charrow
Charles Charrow
Controller
(Principal Financial and
Accounting Officer)
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
Quarter Ended January 31, 1999
Exhibit Index
<CAPTION>
Exhibit No. Description
<S> <C>
10(g) Purchase and Sale Agreement Dated as of
February 16, 1999 between Dean Witter
Realty Income Partnership II, L.P., Dean
Witter Realty Income Partnership III,
L.P., and New Plan
Excel Realty Trust, Inc
10(h) Assignment and Option Agreement dated
February 8, 1999 between Taxter Park
Associates and DW Taxter Special Corp.
27 Financial Data Schedule
</TABLE>
E1
<PAGE>
<TABLE>
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
the 16th day of February, 1999, by and between Dean Witter Realty
Income Partnership II, L.P., a Delaware limited partnership, and
Dean Witter Realty Income Partnership III, L.P., a Delaware limited
partnership, each having offices c/o Dean Witter Realty Inc., Two
World Trade Center, 64th Floor, New York, New York 10048
(collectively, the "Sellers" and, individually, a "Seller"), and
New Plan Excel Realty Trust, Inc., a Maryland corporation, having
an office at 1120 Avenue of the Americas, 12th Floor, New York, New
York 10036 (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Sellers are the owners of the following shopping
centers:
<CAPTION>
LOCATION OWNER
<S> <C>
Pavilions at East Lake, Dean Witter Realty Income
Marietta, Georgia Partnership II, L.P.
Westland Crossing, Dean Witter Realty Income
Westland, Michigan Partnership III, L.P.
WHEREAS, the Sellers and the Purchaser desire to enter into an
agreement whereby, subject to the terms and conditions contained
herein, the Sellers shall sell the Shopping Centers to the
Purchaser and the Purchaser shall purchase the Shopping Centers
from the Sellers.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and intending to be legally bound
hereby, the parties hereby agree as follows:
1. Sale of Shopping Centers.
Each Seller agrees to sell and convey to the Purchaser, and
the Purchaser agrees to purchase from each Seller, at the price and
upon the terms and conditions set forth in
</TABLE>
<PAGE>
this Agreement, all those certain plots, pieces and parcels of land
described in Schedule 1 hereto (the "Land") listed thereon as owned
by
such Seller, together with (i) all buildings, structures,
attached fixtures and landscaping and other improvements situated
on the Land (collectively, the "Buildings"), (ii) all easements,
rights of way, reservations, privileges, appurtenances, mineral,
oil and gas rights, development, air and water rights, and other
estates and rights of such Seller pertaining to the Land and the
Buildings, (iii) all right, title and interest of such Seller in
and to all signs, fixtures, machinery, equipment, supplies and
other articles of personal property attached or appurtenant to the
Land or the Buildings, or used in connection therewith
(collectively, the "Personal Property"), (iv) all right, title and
interest of such Seller, if any, in and to the trade names of the
Land and/or the Buildings, (v) all right, title and interest of
such Seller, if any, in and to all strips and gores, all alleys
adjoining the Land, and the land lying in the bed of any street,
road or avenue, opened or proposed, in front of or adjoining the
Land to the center line thereof, and all right, title and interest
of such Seller, if any, in and to any award made or to be made in
lieu thereof and in and to any unpaid award for any taking by
condemnation or any damages to the Land or the Buildings (the Land,
together with all of the foregoing items listed in clauses (i)-(v)
above being hereinafter sometimes referred to as to each separate
location listed on Schedule 1 as a "Shopping Center"; collectively,
as the "Shopping Centers"; with respect to the property located in
Michigan, the "Michigan Shopping Center"; and with respect to the
property located in Georgia, the "Georgia Shopping Center"), (vi)
all Leases, Licenses, Contracts and any warranties or guaranties
relating thereto, and relating to the Shopping Centers, and (vii)
any plans and specifications, books, records and files of such
Seller, whether maintained by the Sellers or by any agent of the
Sellers, relating solely to any of the foregoing.
1.1. Excluded Property.
Specifically excluded from the Shopping Centers and this
sale are all items of personal property not described in
Section 1 and the items described in Schedule 2 annexed hereto
and made a part hereof.
1.2. Closing Date.
The delivery of the Deeds and the consummation of the
transactions contemplated by this Agreement
<PAGE>
(the "Closing") shall take place in the following
locations on the following dates (each, a "Closing Date"), or
by mail or on such earlier dates as the Sellers and the
Purchaser may agree to in writing:
(a) Georgia Shopping Center: two (2) business days after
delivery to the Purchaser of the Kroger and ACE Hardware
parking estoppels described in Section 4.3, but in any event
no later than March 31, 1999. The Closing shall occur at the
offices of Bingham Dana LLP in Boston at 10:00 a.m.
(b) Michigan Shopping Center: five (5) business days
after the Purchaser gives the Sellers notice that it is
satisfied that the construction at the Michaels Stores, Inc.
has been completed, if such be the case, which notice by the
Purchaser shall be given within three (3) business days after
receipt by the Purchaser of the Estoppel Certificate provided
by Michaels Stores, Inc., but in any event, the Closing shall
occur, if such be the case, no later than April 30, 1999,
unless extended by agreement of the Sellers and the Purchaser.
The Closing is to occur at the offices of Bingham Dana LLP in
Boston at 10:00 a.m.
2. Purchase Price.
The purchase price to be paid by the Purchaser to the Sellers
for the Shopping Centers (the "Purchase Price") is Twenty-Four
Million One Hundred Thousand Dollars ($24,100,000.00) payable as
follows:
(a) Five Hundred Thousand ($500,000.00) Dollars (the
"Downpayment"), shall be payable simultaneously with the
execution and delivery of this Agreement, by delivery to
Lawyers Title Insurance Corporation (the "Escrow Agent") by a
bank wire transfer of immediately available funds to an
account designated in writing by the Escrow Agent. For the
purposes of this Agreement, Three Hundred Thousand Dollars
($300,000) of the Downpayment shall be attributed to the
Georgia Shopping Center (the "Georgia Downpayment"), and Two
Hundred Thousand Dollars ($200,000) of the Downpayment shall
be attributed to the Michigan Shopping Center (the "Michigan
Downpayment").
The Downpayment shall be held and disbursed by the Escrow
<PAGE>
Agent in accordance with the terms of Section 16. At the Closing
for the Georgia Shopping Center, the Georgia Downpayment
and any interest accrued thereon shall be applied against the
Purchase Price, i.e., the Purchaser shall receive a credit of
Three Hundred Thousand Dollars plus applicable interest
against the portion of the Purchase Price payable pursuant to
Section 2(b) and only the Michigan Downpayment and any
interest accrued thereon shall continue to be held by the
Escrow Agent. If the Closing shall occur with respect to the
Michigan Shopping Center, the Sellers shall be entitled to
receive the Michigan Downpayment and any interest accrued
thereon, and the Michigan Downpayment and such interest shall
be credited, in Purchaser's favor, against the portion of the
Purchase Price payable pursuant to Section 2(b) solely to the
extent that such interest accrues up to and including the
Adjustment Date.
(b) The balance of the Purchase Price (i.e., the Purchase
Price minus the credit set forth in Section 2(a) above, plus
or minus the apportionments set forth in Section 3, shall be
delivered to the Escrow Agent on the day prior to Closing to
be paid at the Closing by bank wire transfer of immediately
available funds to Sellers' account or to the account or
accounts of such other party or parties as may be designated
by the Sellers on or before the Closing Date.
(c) The Purchase Price for each individual Shopping Center is as
follows:
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Shopping Center Purchase Price
1. Pavilions at East $14,000,000.00
Lake
2. Westland Crossing $10,100,000.00
(d) Because the Closings occur with respect to the
Shopping Centers on different dates (i) the Purchase Price to
be paid at each such Closing shall be the applicable Purchase
Price as set forth in Section 2(c) for the applicable Shopping
Center being closed and (ii) the apportionments to be
performed pursuant to Section 3 shall be calculated only with
respect to that Shopping Center being closed.
3. Apportionments
The following shall be apportioned between the Sellers and the
Purchaser for all Closings as of 11:59 P.M. on the day preceding
the Closing Date (the "Adjustment Date"), in the manner set forth
in Section 3.1:
(a) prepaid rents, rents for the month in which the
Closing occurs and Additional Rents and other amounts payable
by tenants, if, as and when received, subject to Section 3.3,
together with a reduction to the Purchase Price equal to the
net present value of any free occupancy period, free tenant
improvements, or other similar concessions to any tenant under
any Lease in effect as of the date hereof which, by the terms
of such Lease, are to occur on or after the Adjustment Date;
(b) real estate taxes, special assessments (but only any
installment relating to the period in which the Adjustment Date
occurs), water charges, sewer rents and vault charges, if any, on
</TABLE>
<PAGE>
(c) the basis of the fiscal years (or applicable billing period if
other than a fiscal year), respectively, for which same have been
assessed, subject to Section 3.2;
(c) value of prepaid fuel belonging to Seller stored on
the Shopping Centers, at the Sellers' cost, including any
taxes, on the basis of a statement from the Sellers'
suppliers;
(d) charges and payments under Contracts that are being
assigned to the Purchaser pursuant to the terms of the
agreements listed on Schedule 3 or permitted renewals or
replacements thereof;
(e) any prepaid items, including, without limitation,
fees for licenses which are transferred to the Purchaser at
the Closing and annual permit and inspection fees;
(f) utilities, including, without limitation, telephone,
steam, electricity and gas companies, on the basis of the most
recently issued bills therefor, subject to adjustment after
the Closing when the next bills are available, or if current
meter readings are available, on the basis of such readings
(provided, that the foregoing shall specifically exclude any
deposits of the Sellers with respect to such utilities);
(g) personal property taxes payable by the owner of a
Shopping Center regardless of identity, if any, on the basis
of the fiscal year for which assessed;
(h) all other expenses and revenues from the operation
of the Shopping Centers other than rents and Additional Rents
(including, without limitation, parking charges, tenant direct
electrical reimbursements, HVAC overtime charges, and
telephone booth and vending machine revenues);
(i) New Lease Expenses as provided in Section 11.1.2;
(j) at the Closing of the Michigan Shopping Center, to
the extent not already paid by the Sellers, the Purchaser
shall receive a credit (i) in the amount of $373,800 for the
tenant allowance granted to Michaels Stores, Inc., and (ii)
for any unpaid brokerage fees due under the Michaels Stores,
Inc. lease;
(k) at the Closing of the Michigan Shopping Center, to the extent
not already paid by the Sellers, the Purchaser shall receive a
credit for any amounts due pursuant to Exhibit D-
<PAGE>
1, Paragraph G.4 of the Michaels Stores, Inc. lease
regarding a payment of One Thousand
(l) Dollars ($1,000.00) for each day subsequent to February 28,
1999 extending to the Completion Date (as defined in the Michaels
Stores, Inc. lease);
(l) at the Closing of the Michigan Shopping Center, the
Purchaser shall receive a credit equal to the amount of
Minimum Rent, Common Area Charges and Real Estate Taxes (all
as defined in the Michaels Stores, Inc. lease) for the period
commencing on the day after the Adjustment Date continuing up
to the Rental Commencement Date (as defined in the Michaels
Stores, Inc. lease), during which period Michaels Stores, Inc.
is not required under its lease to pay such costs. If such
amount cannot be definitively determined at the Closing, the
parties agree to use the estimated amount of Ninety Thousand
Twenty-Four Dollars ($90,024), which amount represents ninety
(90) days of payments of Minimum Rent, Common Area Charges and
Real Estate Taxes and which amount is to be adjusted after the
Closing within thirty (30) days of the final amount being
determined; and
(m) such other items as are customarily apportioned
between sellers and purchasers of real properties of a type
similar to the respective Shopping Centers and located in the
County in which the respective Shopping Centers are located.
3.1. Taxes.
If the amount of water charges, sewer rents, personal
property taxes or real estate taxes for any Shopping Center
for the fiscal year during which the Closing occurs is not
finally determined at the Adjustment Date, such taxes and
other charges shall be apportioned on the basis of the full
amount of the assessment for such period (or the assessment
for the prior tax or other period if the assessment for the
current tax period or other period is not then known) and the
rate for the immediately prior tax year, notwithstanding any
provisions of law which permit reduced payment pending final
determination, and shall be reapportioned as soon as the new
tax rate and/or rate for other charges and valuation, if any,
has been finally determined and the tax bill or other bill has
been received. If any taxes which have been apportioned shall
subsequently be reduced by abatement, the amount of such
abatement, less the cost of obtaining the same and after
deduction of sums payable to tenants under Leases or expired
or terminated Leases, shall be equitably apportioned between
the parties hereto.
<PAGE>
3.2. Rents.
3.2.1. Arrearages.
If on the Closing Date any tenant is in arrears in
the payment of rent or has not paid the rent payable by
it for the month in which the Closing occurs (whether or
not it is in arrears for such month on the Closing Date),
any rents received by the Purchaser from such tenant
after the Closing shall be applied to amounts due and
payable by such tenant during the following periods in
the following order of priority: (i) first, to the
month(s) following the month in which the Closing
occurred, (ii) second, to the month in which the Closing
occurred, and (iii) third, to the month(s) preceding the
month in which the Closing occurred. If rents or any
portion thereof received by the Sellers or the Purchaser
after the Closing are due and payable to the other party
by reason of this allocation, the appropriate sum, less a
proportionate share of any reasonable attorneys' fees and
costs and expenses expended by the Purchaser in
connection with the collection thereof, shall be promptly
paid to the other party. The obligations of this Section
3.2.1 shall survive the Closing.
3.2.2. Additional Rents.
If any tenants are required to pay percentage rent,
escalation charges for real estate taxes, parking
charges, operating expenses and maintenance escalation
rents or charges, cost-of-living increases or other
charges of a similar nature ("Additional Rents") and any
Additional Rents are received from a tenant after the
Closing Date, then the Purchaser and/or Sellers shall
apply such Additional Rents (i) first, to the applicable
rental period(s) following the period in which the
Closing occurred, to the extent of any Additional Rents
due and owing for such period, (ii) second, to the
applicable rental period in which the Closing occurred,
to the extent of any Additional Rents due and owing for
such period, and (iii) third, to the applicable rental
period(s) preceding the period in which the Closing
occurred, to the extent of any Additional Rents due and
owing for such period, less, in the case of rents
received by the Purchaser, a proportionate share of any
reasonable attorneys' fees and costs and expenses
expended by the Purchaser in connection with collection
thereof.
<PAGE>
Notwithstanding the foregoing allocation, if and to
the extent that any remittance of Additional Rents is
accompanied by express directions from a tenant that such
Additional Rents are allocable to a specific rental
period, such Additional Rents shall be applied first to
the rental period so specified, and the remainder shall
be applied in accordance with the immediately preceding
sentence. To the extent that such Additional Rents
consist of percentage rents, such Additional Rents shall
be allocated under this Section 3.2.2 based on the
assumption that such Additional Rents are earned at a
constant rate during the course of the period for which
such Additional Rents are paid. The obligations of this
Section 3.2.2 shall survive the Closing.
3.2.3. Collection After the Closing.
After the Closing, each Seller shall continue to
have the right, in its own name, to demand payment of and
to collect rent and Additional Rent arrearages owed to
such Seller by any tenant, which right shall include,
without limitation, the right to continue (subject to the
next sentence following) or commence legal actions or
proceedings against any tenant, and delivery of the Lease
Assignment shall not constitute a waiver by the Sellers
of such right. The Sellers shall not disturb or
otherwise interfere with any tenant in its occupancy and
use of its leased portion of the Shopping Centers in the
exercise of its rights under this Section 3.2.3. Subject
to the preceding sentence, the Purchaser agrees to
cooperate with the Sellers in connection with all
reasonable efforts by the Sellers to collect such rents
and Additional Rents and to take all reasonable steps as
may be necessary to carry out the intention of the
foregoing without out-of-pocket third party costs to the
Purchaser.
3.2.4. Settlements by Sellers.
In the case of amounts payable by tenants to any
Seller for periods of time ending before the Adjustment
Date but to become payable thereafter when bills are
rendered (such as annual computations of Additional
Rents) the Sellers shall after settlement prepare and
promptly deliver to the Purchaser the information
necessary to prepare the bills to the tenants. Each
Seller warrants and represents that such information
<PAGE>
will be true, complete and correct. All such charges shall be paid
to the Purchaser and adjusted and applied as provided herein.
3.3. Water.
If there is a water meter on the Shopping Centers, the
Sellers shall furnish a reading to a date not more than thirty
(30) days prior to the Closing Date, and the unfixed water
charges and sewer rent, if any, based thereon for the
intervening time shall be apportioned on the basis of such
last reading. In addition, if there are any such charges
submetered to tenants and payable by them directly to the
Sellers, Sellers shall use reasonable efforts to obtain
readings thereof as of the Adjustment Date on or before the
date specified in Section 3.1, and such items shall be
prorated, and adjusted and applied in mode and manner as with
respect to Additional Rents.
3.4. Utilities.
The Sellers will obtain final cut-off readings of fuel,
telephone, electricity, and gas as of the Adjustment Date on
or before the Adjustment Date. The Sellers shall pay the
bills based on such readings promptly after the same are
rendered. If arrangements cannot be made for any such cut-off
reading, the parties shall apportion the charges for such
services on the basis of the bill therefor for the most recent
billing period prior to the Adjustment Date, and the Sellers
and Purchaser shall promptly readjust the apportionments in
accordance with the actual bills upon their receipt by the
Purchaser or the Sellers. In addition, if there are any such
charges submetered to tenants and payable by them directly to
the Sellers, Sellers shall use reasonable efforts to obtain
readings thereof at the Adjustment Date, and such items shall
be prorated, and adjusted and applied in mode and manner as
with respect to Additional Rents. The Sellers shall retain
all of their deposits with the providers of utility services,
and the Purchaser shall have no rights to such deposits.
3.5. Post-Closing Adjustments.
If any of the items subject to apportionment under the
foregoing provisions of this Section 3 cannot finally be
apportioned at the Adjustment Date because of the
unavailability of the information necessary to compute such
apportionment, or if any errors or omissions in computing
apportionments are discovered subsequent to the Closing, then
such item shall be reapportioned and such errors and omissions
corrected as soon as practicable after the Closing Date and
the
<PAGE>
proper party reimbursed, which obligation shall survive
the Closing, in the case of errors or omissions, for a period
of sixty (60) days after the Closing Date. Notwithstanding
any of the foregoing provisions of this Section 3.5 to the
contrary, the Purchaser and the Sellers agree that the sixty
(60) day limitation set forth in this Section 3.5 shall not
apply to an inability to calculate apportionments as a result
of the unavailability of information necessary to compute such
apportionment, and that the obligation to reapportion in such
circumstance shall survive the Closing forever.
With respect to the Michigan Shopping Center, after the
Closing the Purchaser will pay to the Seller One Hundred
Fifteen Thousand Four Hundred Dollars ($115,400) if the
following conditions are satisfied: (i) the Seller has entered
into a triple net lease with J.R. Holcomb & Co. for 4,400
leaseable square feet at an annual rental of not less than
$11.50 per square foot for a minimum 5 year term, and (ii) the
other provisions of said lease are substantially similar to
those contained in the Seller's standard lease form and per
the term sheet provided to Purchaser. Said credit will be due
and payable to the Seller within five (5) business days of the
date on which the tenant commences paying rent under the
lease. The Seller shall pay directly to the broker any
commission for said lease when such amount is due. The
Purchaser shall be responsible for all build-out and other
costs as per the term sheet, excluding legal fees, required to
move the tenant into its space.
4. Due Diligence Period.
Notwithstanding anything to the contrary contained herein, the
Purchaser shall have until the date of this Agreement for the
Georgia Shopping Center and for the Michigan Shopping Center, or
such shorter periods as the Purchaser may elect (each, a "Due
Diligence Period"), to examine title to the respective Shopping
Center, to inspect the physical and financial condition of the
respective Shopping Center and to review the Property Information.
4.1. Access to the Shopping Centers.
During the Due Diligence Period, and subsequent to the
end of such period until the termination of this Agreement or
the Closing, the Purchaser and the Purchaser's Representatives
shall have the right to enter upon the Shopping Centers and
their books, records and files for
<PAGE>
the sole purpose of inspecting the Shopping Centers
(including, without limitation, interviewing tenants, and
speaking to one individual at each Shopping Center location
designated by the Sellers as representing the on-site property
manager, such person to have knowledge of the management and
operations of such Shopping Centers) and making surveys, soil
borings, engineering tests and other investigations,
inspections and tests (collectively, "Investigations"),
provided (i) as to each Shopping Center, the Purchaser shall
give the Sellers not less than one (1) business day's prior
notice (which notice may be telephonic) before each entry, and
(ii) neither the Purchaser nor the Purchaser's Representatives
shall permit any borings, drillings or samplings (other than
asbestos samplings) to be done on the Shopping Centers without
the Sellers' prior consent, which consent shall not be
unreasonably withheld or delayed. Any entry upon the Shopping
Centers and all Investigations shall be conducted during the
Sellers' normal business hours and at the sole risk and
expense of the Purchaser and the Purchaser's Representatives,
and shall not unreasonably interfere with the activities on or
about the Shopping Centers of the Sellers, its tenants and
their employees and invitees. The Purchaser shall:
(a) if the Closing does not occur on the Closing
Date, promptly repair any damage to the Shopping Centers
resulting from any such Investigations and replace,
refill and regrade any holes made in, or excavations of,
any portion of the Shopping Centers used for such
Investigations so that the Shopping Centers shall be in
substantially the same condition that they existed in
prior to such Investigations. Until the Purchaser either
repairs such damage or closes on the acquisition of the
Shopping Centers, it shall take all steps necessary to
ensure that such unrepaired conditions shall not further
deteriorate or cause any harm to persons or property;
(b) fully comply with all Laws applicable to the
Investigations;
(d) permit the Sellers to have a representative present during all
Investigations at any Shopping Center undertaken hereunder,
provided the presence of such a
<PAGE>
[c] representative shall not be a condition to the
Purchaser's ability to conduct Investigations;
(d) furnish to the Sellers, at the Sellers'
election and at no cost or expense to the Sellers other
than reimbursement for the actual out-of-pocket expenses
of the Purchaser evidenced by copies of third party
invoices, copies of all surveys, soil test results,
engineering, asbestos, environmental and other studies
and reports relating to the Investigations prepared by
third parties (other than work product of counsel) which
the Purchaser shall obtain with respect to the Shopping
Centers promptly after the Purchaser's receipt of same;
(e) not allow the Investigations to result in any
liens, judgments or other encumbrances being filed or
recorded against the Shopping Centers, and the Purchaser
shall, at its sole cost and expense, promptly discharge
of record, by bond or otherwise, any such liens or
encumbrances that are so filed or recorded (including,
without limitation, liens for services, labor or
materials furnished); and
(f) indemnify the Sellers and the Sellers'
Affiliates and hold the Sellers and the Sellers'
Affiliates harmless from and against any and all claims,
demands, causes of action, losses, damages, liabilities,
costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) suffered or
incurred by the Sellers or any of the Sellers' Affiliates
and arising out of or in connection with (i) the
Purchaser's and/or the Purchaser's Representatives' entry
upon the Shopping Centers for the Investigations, and/or
(ii) any liens or encumbrances filed or recorded against
the Shopping Centers as a consequence of the
Investigations. The foregoing indemnity shall not be
deemed to apply to claims, demands, causes of action,
losses, damages, liabilities, costs or expenses arising
solely out of the Purchaser and the Purchaser's
Representatives discovering a pre-existing environmental
contamination or violation of Applicable Environmental
Laws. However, if the Purchaser's or the Purchaser's
Representatives' physical conduct in investigating any
pre-existing environmental
<PAGE>
contamination is performed in a commercially
unreasonable manner and such performance physically
worsens such contamination, then the foregoing indemnity
shall apply only to such worsened condition (but
specifically excluding any consequential damages), but
shall not apply to such pre-existing contamination.
The provisions of this Section 4.1 shall survive the
termination of this Agreement and the Closing.
4.2. Purchaser's Termination Notice.
The Purchaser shall have the right in its sole and
absolute discretion to elect to terminate this Agreement in
respect of any Shopping Center (subject to the last sentence
of this Section 4.2) by giving written notice (the
"Purchaser's Termination Notice") of such election to the
Sellers at any time prior to 5:00 P.M. New York time on the
last day of the Due Diligence Period for the applicable
Shopping Center. If for any reason whatsoever the Sellers
shall not have actually received the Purchaser's Termination
Notice for a Shopping Center prior to the expiration of the
Due Diligence Period for such Shopping Center, the Purchaser
shall be deemed to have irrevocably waived its right of
termination under this Section 4.2 for only such Shopping
Center, and such right of termination shall be of no further
force or effect. If the Purchaser exercises its right to
terminate this Agreement with respect to the Georgia Shopping
Center, this Agreement shall terminate altogether, and the
Purchaser shall not retain the right to purchase the Michigan
Shopping Center.
4.3. Estoppel Certificates.
Promptly after execution and delivery of this Agreement,
the Sellers agree to request an estoppel certificate
(collectively, the "Estoppel Certificates") from each tenant
under a Lease. The Sellers shall deliver to the Purchaser, on
or before the Closing Date, Estoppel Certificates for each
tenant under a lease for more than 5,000 square feet of
rentable space in any Shopping Center, and for not less than
seventy-five percent (75%) of the other tenants on an
individual Shopping Center basis (collectively, the "Required
Estoppel Certificates"). The Estoppel Certificates shall be
in the form annexed hereto as Exhibit G and made a part hereof
(except for the Estoppel Certificate for Michaels Stores, Inc.
at the Michigan Shopping Center which shall be in the
<PAGE>
form annexed hereto as Exhibit G-1 and made a part
hereof, and except for the Estoppel Certificates for ACE
Hardware and Kroger at the Georgia Shopping Center each of
which shall contain a statement by said tenant approving
existing parking, including existing layout and number of
spaces and further stating that they will not require future
changes in layout and number (alternatively, said approval by
tenant of existing parking may be reflected in a separate
letter)), and when returned by tenant, shall not contain any
discrepancy, adverse claim or exception; provided, however, if
any tenant (except ACE Hardware, Kroger and Michaels Stores,
Inc.) is required or permitted under its Lease to deliver an
Estoppel Certificate different from Exhibit G, Purchaser shall
accept from the tenant the form so required or permitted under
the Lease, if any such Estoppel Certificate is obtained,
provided, that such Estoppel Certificates shall be delivered
without discrepancy, adverse claim or exception. The Sellers
shall be obligated to satisfy, prior to Closing,
discrepancies, adverse claims or exceptions contained on
Estoppel Certificates, provided such discrepancies, adverse
claims or exceptions can be satisfied by payment of liquidated
amounts not to exceed $75,000 on an individual Shopping Center
basis. The Sellers will deliver each Estoppel Certificate
received by the Sellers to the Purchaser promptly following
the Sellers' receipt thereof. The Sellers may, in their sole
discretion, adjourn the Closing one or more times for up to
thirty (30) days in the aggregate in order to address
discrepancies, adverse claims or exceptions on the Estoppel
Certificates, including the Estoppel Certificate for Michaels
Stores, Inc. In the event one or more Estoppel Certificates
are returned containing discrepancies, adverse claims or
exceptions that cannot be satisfied by payment of $75,000 as
set forth above, and the Sellers do not resolve such matters
by paying liquidated amounts, the Purchaser shall have the
right to terminate this Agreement.
In the event the Seller does not deliver both the Kroger
and the ACE Hardware parking Estoppel Certificates (or
separate agreements) described above by March 31, 1999, the
Purchaser shall receive a credit at the Closing for the
Georgia Shopping Center in the amount of One Hundred Thirty-
Five Thousand Dollars ($135,000).
<PAGE>
4.4 Termination of Contracts.
On or before the Closing Date, the Sellers will terminate
each property management agreement or leasing agreement to
which such Seller is a party with respect to any Shopping
Center. The provisions of this Section 4.4 shall survive the
Closing.
5. Title
Subject to the provisions of this Section 5, the Sellers shall
convey and the Purchaser shall accept title to the Shopping Centers
subject to those matters set forth on Schedule 5 hereto
(collectively the "Permitted Encumbrances"). The Sellers have
delivered to the Purchaser (i) commitments (collectively, the
"Title Commitment") for owner's fee title insurance policies dated
as of a recent date with respect to the Shopping Centers from
Lawyers Title Insurance Corporation (the "Title Company"), and (ii)
a current as-built survey ("Surveys") by a licensed surveyor of
each of the Shopping Centers which describes such Shopping Center
and contains a surveyor's certificate in favor of Purchaser, which
will be amended to include such other parties as Purchaser shall
designate. The final title insurance policies shall include the
endorsements set forth on Schedule 4 hereto.
The Sellers have ordered, and will deliver to the Purchaser
once received, (A) UCC lien searches for each Seller and for each
Shopping Center for each state and local filing office where
filings must be made to obtain perfected security interests in the
personal property at the Shopping Center, and (B) judgment
searches, bankruptcy court searches and federal tax lien searches
for each Seller for each state in which such Seller owns a Shopping
Center (collectively, the "Lien Searches").
5.1 Unacceptable Encumbrances.
If the Title Commitment, the Lien Searches, or the
Surveys indicate the existence of any liens, encumbrances or
other defects or exceptions in or to title to the Shopping
Centers (collectively, the "Unacceptable Encumbrances")
subject to which the Purchaser is unwilling to accept title
and the Purchaser gives the Sellers notice of the same within
fourteen (14) days after receipt of the later of the Title
Commitment, the Lien Searches, the Survey, the underlying
exception documents or all pro forma endorsements, as
applicable, the Sellers shall undertake to eliminate the same
subject to Section 5.2. The Purchaser hereby waives any right
the Purchaser may have to advance as objections to title or as
grounds for the Purchaser's refusal to close this transaction
any Unacceptable
<PAGE>
Encumbrance which the Purchaser does not notify the
Sellers of within such fourteen (14) day period unless (i)
such Unacceptable Encumbrance was first raised by the Title
Company or surveyor subsequent to the date of the Title
Commitment or the Survey, or such Unacceptable Encumbrance was
first reflected in the Lien Searches, or the Purchaser shall
otherwise first discover same or be advised of same subsequent
to the date of the Title Commitment, the Lien Searches, or the
Survey, and (ii) the Purchaser shall notify the Sellers of the
same within five (5) business days after the Purchaser first
becomes aware of such Unacceptable Encumbrance. The Sellers
may, in their sole discretion, adjourn the Closing one or more
times for up to thirty (30) days in the aggregate in order to
eliminate Unacceptable Encumbrances.
5.2 Removal of Unacceptable Encumbrances.
The Sellers shall not be obligated to bring any action or
proceeding, to make any payments or otherwise to incur any
expense in order to eliminate Unacceptable Encumbrances not
waived by the Purchaser or to arrange for title insurance
insuring against enforcement of such Unacceptable Encumbrances
against, or collection of the same out of, the Shopping
Centers; except that the Sellers shall satisfy (i) mortgages,
taxes and any (Sellers' voluntarily created) liens secured by
or affecting the Property, and (ii) judgments against the
Sellers or other liens (collectively, "Liens") secured by or
affecting the Shopping Centers which can be satisfied by
payment of liquidated amounts not to exceed $100,000 in the
aggregate for all such other Liens. Sellers may eliminate any
such Unacceptable Encumbrance by the payment of amounts
necessary to cause the removal thereof of record or by
arranging for title insurance reasonably satisfactory to the
Purchaser insuring against enforcement of such Unacceptable
Encumbrance against, or collection of the same out of, the
Property.
5.3 Options Upon Failure to Remove Unacceptable Encumbrances.
If the Sellers are unable or, pursuant to the limitations
on expenditures set forth in Section 5.2, not otherwise
obligated to eliminate all Unacceptable Encumbrances not
waived by the Purchaser, or to arrange for title insurance
acceptable to the Purchaser insuring against enforcement of
such Unacceptable Encumbrances against, or collection of the
same out of, the
<PAGE>
Shopping Centers, and to convey title in accordance with
the terms of this Agreement on or before the Closing Date
(whether or not the Closing is adjourned as provided in
Section 5.1), the Purchaser shall elect on the Closing Date,
as its sole remedy for such inability of the Sellers, either
(i) to terminate this Agreement as to the Shopping Centers
affected by such Unacceptable Encumbrances by notice given to
the Sellers pursuant to Section 14.1, in which event the
provisions of Section 14.1 shall apply, or (ii) to accept
title subject to such Unacceptable Encumbrances and receive no
credit against, or reduction of, the Purchase Price.
5.4 Use of Purchase Price.
If on the Closing Date there may be any Liens or other
liens or encumbrances which the Sellers must pay or discharge
in order to convey to the Purchaser such title as is herein
provided to be conveyed, the Sellers may use any portion of
the Purchase Price to satisfy the same, provided:
(a) the Sellers shall deliver to the Purchaser or
the Title Company, at the Closing, instruments in
recordable form and sufficient to satisfy such Liens or
other encumbrances of record together with the cost of
recording or filing said instruments; or
(b) the Sellers, having made arrangements with the
Title Company, shall deposit with said company sufficient
moneys acceptable to said company to insure the obtaining
and the recording of such satisfactions.
5.5 Franchise Taxes.
Any franchise or corporate tax open, levied or imposed
against the Sellers or other owners in the chain of title that
may be a Lien on the Closing Date or for which the Purchaser
may become personally liable therefor on or after the Closing
Date, shall not be an objection to title if the Title Company
omits same from the title policy issued pursuant to the Title
Commitment or excepts same but in either event insures the
Purchaser against collection thereof out of the Shopping
Centers or from the Purchaser personally.
5.6 Transfer Taxes; Title Insurance Premiums.
At the Closing, the Sellers shall pay all local, state
and county transfer taxes, transfer gains taxes and recording
taxes (the "Transfer Tax Payments") imposed pursuant to the
Laws of the States of Michigan
<PAGE>
and Georgia (or counties or municipalities therein) in
respect of the transactions contemplated by this Agreement, by
delivery to the Title Company of sufficient funds to pay such
taxes together with any return (the "Transfer Tax Return")
required thereby which shall be duly executed by the Sellers
and the Purchaser to the extent required by applicable law.
To the extent required under Georgia withholding tax laws, the
Sellers agree to deposit a portion of the Purchase Price with
the proper agency. At the Closing, the title, survey and
other Closing-related expenses shall be paid in the manner set
forth on Schedule 6.
6. Representations and Warranties of the Sellers.
Each Seller represents and warrants to the Purchaser as
follows:
(a) (i) Dean Witter Realty Income Partnership II, L.P.
is a duly formed and validly existing limited partnership
organized under the laws of the State of Delaware.
(ii) Dean Witter Realty Income Partnership III, L.P.
is a duly formed and validly existing limited partnership
organized under the laws of the State of Delaware and is
qualified under the laws of the State of Michigan to
conduct business therein.
(b) Each Seller has the full legal right, power and
authority to execute and deliver this Agreement and all
documents now or hereafter to be executed by the Seller
pursuant to this Agreement (collectively, the "Sellers'
Documents"), to consummate the transaction contemplated
hereby, and to perform its obligations hereunder and under the
Seller's Documents. The execution and delivery of this
Agreement and the Seller Documents and the consummation of the
transaction contemplated hereby have been duly authorized by
all necessary action and parties and no other proceedings on
the part of the Seller are necessary in order to permit it to
consummate the transaction contemplated hereby. This
Agreement and the Seller Documents have been duly executed and
delivered by the Seller and (assuming valid execution and
delivery by Purchaser) are legal, valid and binding
obligations of the Seller enforceable against each of them in
accordance with their respective terms. Robert B. Austin is
an officer of a general partner of each Seller.
<PAGE>
(c) This Agreement and the Seller's Documents and the
execution, delivery and performance thereof do not and will
not contravene any provision of the partnership agreement of
the Seller or any other Seller Parties, any judgment, order,
decree, writ or injunction issued against the Seller or any
other Seller Parties, or any provision of any laws or
governmental ordinances, rules, regulations, orders or
requirements (collectively, the "Laws") applicable to the
Seller or any other Seller Parties. The consummation of the
transactions contemplated hereby will not result in a breach
or constitute a default or event of default by the Seller or
any other Seller Parties under any agreement to which the
Seller or any of its assets are subject or bound and will not
result in a violation of any Laws applicable to the Seller or
any other Seller Parties. "Seller Parties" means collectively
with respect to each Seller any person or entity owning or
controlling such Seller or owned or controlled by such Seller
in whole or in part, directly or indirectly, and the
successors and assigns of each and all of the foregoing.
(d) There are no leases or other occupancy agreements,
and the Seller has no knowledge of any licenses, affecting any
portion of the Shopping Center owned by such Seller
(collectively, the "Leases") on the date hereof, except for
the Leases listed in the rent rolls annexed hereto as Schedule
7 and made a part hereof. Other than the Leases, the Seller
has no other agreements with any Tenant regarding such
Tenant's occupancy of the Shopping Center. The copies of the
Leases furnished by the Seller to the Purchaser are true,
accurate and complete. All of the information set forth in
Schedule 7 is true, accurate and complete in all respects. To
the Seller's knowledge, the Leases are in full force and
effect, without any default by the Seller thereunder. Except
as listed on Schedule 7, the Seller has not given or received
any written notice of default from any tenant under any Lease
which remains uncured or unsatisfied, with respect to any of
the Leases. All work and materials, if any, required to be
performed or furnished, as applicable, prior to the date
hereof by landlord under each of the Leases has been performed
and furnished in accordance with the terms of such Leases and
fully paid for, except as set forth on Schedule 7.
<PAGE>
(e) To the Seller's knowledge, there are no pending
actions, suits, proceedings or investigations to which the
Seller or the Shopping Center is a party before any court or
other governmental authority with respect to the Shopping
Center owned by the Seller, except as set forth on Schedule 8
hereto.
(e) Except as disclosed on Schedule 9 hereto, since the date
Seller acquired legal and beneficial title to the Shopping Center
owned by the Seller (i) to Seller's knowledge, neither Seller nor
any third party has engaged in the generation, use, manufacture,
treatment, transportation, storage or disposal of any Hazardous
Substance (as hereinafter defined) on the Shopping Center in
violation of Applicable Environmental Law (as hereinafter defined)
or which requires remediation under Applicable Environmental Law,
and (ii) to Seller's knowledge, neither Seller nor any third party
has received any written notice from any governmental authority
having jurisdiction over the Shopping Center of any violation of
Applicable Environmental Law with respect to the Shopping Center
which requires corrective action, or any notices relating to any
such corrective action. Disclosure of any matter on Schedule 9
hereto shall not constitute any admission by Seller that such
matter was material or a violation of Applicable Environmental Law
but this sentence shall not obviate or vitiate the validity of any
representation or warranty set forth herein. As used in this
Agreement, the term "Hazardous Substance" shall mean any substance
chemical or waste that is currently listed as hazardous, toxic or
dangerous under Applicable Environmental Law. As used in this
Agreement, the term "Applicable Environmental Law" shall mean the
Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. 9601 et seq.; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901, et seq.;
the Water Pollution Control Act, 33 U.S.C. 1251 et seq.; the
Clean Air Act, 42 U.S.C. 7401 et seq.; and the Toxic Substances
Control Act, 15 U.S.C. 2601 et seq.; as the foregoing have been
amended from time to
<PAGE>
(f) time to the date of this Agreement; and any similar state and
local laws and ordinances and the regulations implementing such
statutes or otherwise in effect on the date hereof imposing
liability or establishing standards of conduct for environmental
protection. The Sellers have delivered to the Purchaser true and
complete copies of all environmental reports
(g)
with respect to the Shopping Centers in the Sellers'
possession as of the date hereof. The Sellers know of no
fact or circumstance that would make any matter relating
to the environmental condition of the Shopping Centers
set forth in the environmental reports that the Sellers
have delivered to the Purchaser false or misleading.
(g) Schedule 10 contains a list of the Licenses. To the
Seller's knowledge, the Licenses are in full force and effect
and are sufficient for the operation of the Shopping Center as
currently operated.
(h) The Sellers have not received written notice of:
(i) pending grievances or arbitration proceedings
or unsatisfied arbitration awards, or judicial
proceedings or orders respecting awards, relating to the
Shopping Centers or their ownership, operation or
occupancy;
(ii) outstanding unfulfilled requirements or
recommendations of any insurance company, any inspection
or rating bureau or any board of underwriters concerning
the Shopping Centers or any operation, condition, repair
or alteration thereof; or
(iii) any violation of any Laws from any federal,
state or local governmental authority.
(h) The Sellers are not aware of (i) any notice to them announcing
an increase in the assessed value of the Shopping Centers for real
estate tax purposes since the date of the most recent real estate
tax bill issued for the Shopping Centers, or (ii) except for the
construction at the Michaels Stores, Inc. at the Michigan Shopping
Center, any new construction with respect to
<PAGE>
theShopping Centers since the most recent assessment of
the
value of the Shopping Centers for real property tax
purposes that could increase the assessed value of the
Shopping Centers. None of Sellers has received any
assessment notices against the Shopping Centers with
respect to any governmental improvements which have been
substantially completed prior to the date hereof and for
the cost of which the Shopping Center can be assessed.
The Sellers have delivered to the Purchaser true,
accurate and complete copies of the real estate tax bills
for the Shopping Centers for the most recent tax periods.
(j) None of Sellers owns, directly or indirectly, any
other real estate located within one mile of the boundaries of
any of the Shopping Centers.
(k) The Sellers are not currently a party to any
condemnation proceeding (including any proceeding for
widening, change of grade or limitation on use of streets
abutting the Premises) pending with regard to or affecting all
or any part of the Premises (including any such abutting
streets) and the Sellers have received no written notice
threatening any such proceeding.
(l) The Sellers have no employees.
(m) The operating statement for the Shopping Centers for
the period from July 1, 1998 to December 31, 1998, a copy of
which has been delivered to the Purchaser prior to the date
hereof, is true, accurate and complete.
(n) The Sellers have no knowledge of any Contracts on
the date hereof, except for the Contracts listed on Schedule 3
annexed hereto and made a part hereof. The copies of the
Contracts furnished by the Sellers to the Purchaser are true
and complete. To the Sellers' knowledge, the Contracts are in
full force and effect.
(o) To the best knowledge of the Sellers, there are no
brokerage fees payable by the landlord under any Leases in
effect as of the date hereof upon the extension or renewal of
any such Leases.
<PAGE>
(p) To the best knowledge of the Sellers, since the date
of the Purchaser's inspection of the Improvements (to wit,
January 12, 1999) (i) at the Georgia Shopping Center, there
has been no material adverse change in the physical condition
of the Improvements, and (ii) at the Michigan Shopping Center,
there has been no material adverse change with respect to the
ownership, operation, occupancy, or the financial or physical
condition of the Michigan Shopping Center, other than relating
to the required construction under the Michaels Stores, Inc.
lease.
6.1 Survival of Representations.
The representations and warranties of the Sellers set
forth in this Section 6 and elsewhere in this Agreement (i)
shall be true, accurate and correct in all material respects,
individually and in the aggregate, upon the execution of this
Agreement and shall be deemed to be repeated on and as of the
Closing Date, (ii) shall be deemed the joint and several
representations and warranties of the Sellers, and (iii) shall
remain operative and shall survive the Closing and the
execution and delivery of the Deeds for a period of six (6)
months following the Closing Date, and no action or claim
based thereon shall be commenced after such period.
6.2 Waiver of Claims for Untrue Representation.
In the event the Closing occurs, the Purchaser hereby
expressly waives, relinquishes and releases any right or
remedy available to it at law, in equity or under this
Agreement to make a claim against the Sellers for damages that
the Purchaser may incur, or to rescind this Agreement and the
transactions contemplated hereby, as the result of any of
Seller's representations or warranties being untrue,
inaccurate or incorrect in any material respect, either
individually or in the aggregate if the Purchaser knew that
such representation or warranty was so untrue, inaccurate or
incorrect at the time of the Closing and the Purchaser
nevertheless closes title hereunder.
6.3 Limited Nature of Representations.
This Agreement, as written, contains all the terms of the
agreement entered into between the parties as of the date
hereof, and the Purchaser acknowledges that neither the
Sellers nor any of the Sellers' Affiliates, nor any of their
agents or representatives, nor Broker has made any
representations or held out any inducements to the Purchaser,
and the Sellers hereby specifically disclaim any
representation, oral or written, past, present or future,
other than those specifically set forth in this Section 6,
Section 12 or
<PAGE>
elsewhere in this Agreement or the Conveyance Documents.
The Purchaser acknowledges that the Sellers have afforded the
Purchaser the opportunity for full and complete
investigations, examinations and inspections of the Shopping
Centers and all Property Information. The Purchaser
acknowledges and agrees that, subject to the representations
and warranties set forth elsewhere in this Agreement or the
Conveyance Documents, (i) the Property Information delivered
or made available to the Purchaser and the Purchaser's
Representatives by the Sellers or the Sellers' Affiliates, or
any of their agents or representatives may have been prepared
by third parties and may not be the work product of the
Sellers and/or any of the Sellers' Affiliates; (ii) neither
the Sellers nor any of the Sellers' Affiliates has made any
independent investigation or verification of, or has any
knowledge of, the accuracy or completeness of, the Property
Information; (iii) the Property Information delivered or made
available to the Purchaser and the Purchaser's Representatives
is furnished to each of them at the request, and for the
convenience of, the Purchaser; (iv) the Purchaser is relying
solely on its own investigations, examinations and inspections
of the Shopping Centers and those of the Purchaser's
Representatives and is not relying in any way on the Property
Information furnished by the Sellers or any of the Sellers'
Affiliates, or any of their agents or representatives; and (v)
the Sellers expressly disclaim any representations or
warranties with respect to the accuracy or completeness of the
Property Information, and, subject to the representations and
warranties set forth in this Agreement and the Conveyance
Documents, the Purchaser releases the Sellers and the Sellers'
Affiliates, and their agents and representatives, from any and
all liability with respect to the Property Information. The
Purchaser or anyone claiming by, through or under the
Purchaser, hereby fully and irrevocably releases the Sellers
and the Sellers' Affiliates, and their agents and
representatives, from any and all claims that it may now have
or hereafter acquire against any of the Sellers or the
Sellers' Affiliates, or their agents or representatives for
any cost, loss, liability, damage, expense, action or cause of
action, whether foreseen or unforeseen, arising from or
related to any construction defects, errors or omissions on or
in the Shopping Centers, the presence of environmentally
hazardous, toxic or dangerous substances, or any other
conditions (whether patent, latent or otherwise) affecting the
Shopping Centers, except for claims against a Seller based
upon
<PAGE>
any obligations and liabilities of such Seller expressly
provided in this Agreement and the documents to be delivered
to the Purchaser pursuant to Sections 9(a), 9(b), 9(c), 9(d),
9(f), 9(h) (to the extent that such deliveries under Section
9(h) consist of Landlord Estoppel Certificates), 9(n), 9(p),
9(x) and any other documents delivered at the Closing that by
their terms contain provisions that survive the Closing
(collectively, the "Conveyance Documents"). The Purchaser
acknowledges that any covenants, agreements, representations
or warranties set forth in this Agreement are being made by
each Seller individually and that in no event (except as
expressly set forth in Section 14.1 and Section 14.3) will the
Purchaser have recourse against any Seller for any breach of
this Agreement by any other Seller.
The provisions of this Section 6 shall survive the Closing.
7. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Sellers as
follows:
(a) The Purchaser is a duly formed and validly existing
corporation organized under the laws of the State of Maryland
and is qualified or registered under the laws of the State of
Michigan to conduct business therein on the Closing Date.
(b) The Purchaser has the full, legal right, power and
authority to execute and deliver this Agreement and all
documents now or hereafter to be executed by it pursuant to
this Agreement (collectively, the "Purchaser's Documents"), to
consummate the transactions contemplated hereby, and to
perform its obligations hereunder and under the Purchaser's
Documents.
(c) This Agreement and the Purchaser's Documents do not
and will not contravene any provision of the charter or by-
laws of the Purchaser, any judgment, order, decree, writ or
injunction issued against the Purchaser, or any provision of
any Laws applicable to the Purchaser. The consummation of the
transactions contemplated hereby will not result in a breach
or constitute a default or event of default by the Purchaser
under any agreement to which the Purchaser or any of its
assets are subject or bound and will not result in a violation
of any Laws applicable to the Purchaser.
<PAGE>
(d) The Purchaser has not received written notice of any
pending actions, suits, proceedings or investigations to which
the Purchaser is a party before any court or other
governmental authority which may have an adverse impact on the
transactions contemplated hereby or the rights or ability of
the Purchaser to fully perform the same.
The representations and warranties of the Purchaser set forth
in this Section 7 and elsewhere in this Agreement shall be true,
accurate and correct in all material respects upon the execution of
this Agreement, shall be deemed to be repeated on and as of the
Closing Date and shall survive the Closing for a period of six (6)
months.
8. Conditions Precedent to Closing.
8.1 Conditions Precedent to Purchaser's Obligations.
The Purchaser's obligation under this Agreement to purchase
the Shopping Centers is subject to the fulfillment of each of
the following conditions: (i) the representations and
warranties of the Sellers contained herein shall be true,
accurate and correct in all material respects, individually
and in the aggregate, as of the Closing Date, subject to
changes to matters discussed in such representations and
warranties in connection with the operation of the Shopping
Centers in compliance with Section 11 hereof (other than
Section 11.5); (ii) the Sellers shall be ready, willing and
able to deliver title to such Shopping Center in accordance
with the terms and conditions of this Agreement (including
without limitation insured title pursuant to the Title
Commitments and the absence of any Unacceptable Encumbrances);
(iii) no casualty with respect to a "material" part of such
Shopping Center, as described in Section 13.1 shall have
occurred, (iv) no condemnation or eminent domain taking of any
"significant" portion of such Shopping Center, as described in
Section 13.2, shall have occurred, (v) the Sellers shall have
delivered all the documents and other items required pursuant
to Section 9, and shall have performed all other covenants,
undertakings and obligations, and complied with all conditions
required by this Agreement to be performed or satisfied by the
Sellers at or prior to the Closing, (vi) there shall have been
no violation of any of the Permitted Encumbrances since the
date of this Agreement, (vii) the condition to Sellers'
obligations set forth in Sections 8.2(iii) shall have been
satisfied other than by the Sellers'
<PAGE>
waiver thereof, and (viii) the Purchaser shall not have
delivered a Purchaser's Termination Notice.
With respect to the Michigan Shopping Center only, it
shall be a condition precedent to the Purchaser's obligation
to purchase that the Sellers deliver an Estoppel Certificate
from Michaels Stores, Inc. satisfactory to the Purchaser
stating, among other things, that all required construction
under the Michaels Stores, Inc. lease has been completed.
8.2 Conditions Precedent to Sellers' Obligations.
The Sellers' obligation under this Agreement to sell the
Shopping Centers to the Purchaser is subject to the
fulfillment of each of the following conditions: (i) the
representations and warranties of the Purchaser contained
herein shall be materially true, accurate and correct as of
the Closing Date; (ii) the Purchaser shall have delivered the
funds required hereunder and all the documents to be executed
by the Purchaser set forth in Section 10 and is not otherwise
in default of its obligations hereunder in any material
respect; and (iii) all consents and approvals of governmental
authorities and parties to agreements to which the Purchaser
is a party or by which the Purchaser's assets are bound that
are required with respect to the consummation of the
transactions contemplated by this Agreement shall have been
obtained and copies thereof shall have been delivered to the
Sellers at or prior to the Closing.
9. Documents to be Delivered by the Sellers at Closing.
At the Closing of each Shopping Center, the Sellers shall
execute, acknowledge and/or deliver, as applicable, the following
to the Purchaser:
(a) Deeds (collectively, the "Deeds") conveying title to
the Shopping Centers in the form of Exhibit A annexed hereto
and made a part hereof.
(b) The Assignment and Assumption of Leases and Security
Deposits in the form of Exhibit B annexed hereto and made a
part hereof assigning all of the Sellers' right, title and
interest, if any, in and to the Leases, all warranties and
guarantees thereof and the security deposits thereunder in the
Sellers' possession, if any (the "Lease Assignment").
<PAGE>
(c) The Assignment and Assumption of Contracts and
Licenses in the form of Exhibit C annexed hereto and made a
part hereof (the "Contract and License Assignment") assigning
all of the Sellers' (and any person managing a Shopping Center
on behalf of the Sellers) right, title and interest, if any,
in and to (i) all of the assignable licenses, permits,
certificates, approvals, authorizations and variances issued
for or with respect to the Shopping Centers by any
governmental authority of which the Sellers are aware and
which are in the Sellers' (or such other person's) possession
or control as of the Closing (collectively, the "Licenses"),
and (ii) all assignable purchase orders, equipment leases,
advertising agreements, franchise agreements, license
agreements and other service contracts relating to the
operation of the Shopping Centers (collectively, the
"Contracts").
(d) The Assignment and Assumption of Intangible Property
in the form of Exhibit D annexed hereto and made part hereof
assigning all of the Sellers' (and any person managing a
Shopping Center on behalf of the Sellers) right, title and
interest, if any, in and to all intangible property owned by
the Sellers with respect to the operation of the Shopping
Centers listed on Schedule 11 annexed hereto and made a part
hereof, including, without limitation, the trade names (the
"Intangible Property Assignment") (the Lease Assignment, the
Contract and License Assignment and the Intangible Property
Assignment are herein referred to collectively as the "A & A
Agreements").
(e) Executed counterparts or, if no such original
counterpart is available, a photocopy with all signatures, of
all Leases and New Leases and any amendments, warranties and
guarantees and other documents relating thereto, together with
a schedule of all tenant security deposits thereunder and the
accrued interest on such security deposits payable to tenants.
With respect to any lease securities which are other than
cash, the Sellers shall execute and deliver to the Purchaser
at the Closing any appropriate instruments of assignment or
transfer and such original security deposits to the extent
that they are in the possession of the Sellers.
(f) A bill of sale in the form of Exhibit E annexed hereto and
made a part hereof (the "Bill of Sale") conveying,
<PAGE>
transferring and selling to the Purchaser all right,
title and interest of the
Sellers in and to all Personal Property. It is agreed
that the value of such property is nominal.
(g) Notices to the tenants of the Shopping Centers in
the form of Exhibit F annexed hereto and made a part hereof
advising the tenants of the sale of the Shopping Centers to
the Purchaser and directing that rents and other payments
thereafter be sent to the Purchaser or as the Purchaser may
direct.
(h) Executed originals of the Required Estoppel
Certificates, without discrepancy, adverse claim or exception
(except for deviation as to form as described in Section 4.3)
and all other Estoppel Certificates, if any, received by the
Sellers from tenants prior to the Closing Date and not
previously delivered to the Purchaser. The Sellers shall also
deliver, for each Lease with respect to which an Estoppel
Certificate is not obtained, an estoppel certificate
(collectively "Landlord Estoppel Certificates") executed by
the Seller that is landlord under such Lease, each in the form
annexed hereto as Exhibit H and made a part hereof. If a
Seller delivers a Landlord Estoppel Certificate at the Closing
and subsequently receives an Estoppel Certificate from the
corresponding tenant, the Seller may substitute the Estoppel
Certificate for the Landlord Estoppel Certificate to the
extent the Estoppel Certificate covers the same matters as,
and does not contain additional adverse matters not contained
in, the Landlord Estoppel Certificate. In this event, the
Purchaser shall return the original Landlord Estoppel
Certificate to the Seller and it shall be considered null and
void. This Section 9(h) shall survive the Closing.
(i) To the extent in the possession or control of the
Sellers or their managers for each of the Shopping Centers and
not already located at the Shopping Centers, keys to all
entrance doors to, and equipment and utility rooms located in,
the Shopping Centers.
(j) To the extent in the possession or control of the
Sellers or their managers for each of the Shopping Centers and
not already located at the Shopping Centers, all Licenses.
<PAGE>
(k) To the extent in the possession or control of the
Sellers or their managers for each of the Shopping Centers,
executed counterparts of all Contracts and all warranties and
guaranties in connection therewith which are in effect on the
Closing Date and which are assigned by the Sellers.
(l) To the extent in the possession or control of the
Sellers or their managers for each of the Shopping Centers,
plans and specifications of the Buildings.
(m) The Transfer Tax Payments together with the Transfer
Tax Returns, if any.
(n) A "FIRPTA" affidavit sworn to by the Sellers in the
form of Exhibit I annexed hereto and made a part hereof. The
Purchaser acknowledges and agrees that upon the Sellers'
delivery of such affidavit, the Purchaser shall not withhold
any portion of the Purchase Price pursuant to Section 1445 of
the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
(o) A closing statement setting forth the adjustments
and apportionments required pursuant to the terms of this
Agreement, in form and substance satisfactory to the Sellers
and the Purchaser (the "Closing Statement").
(p) A certificate of the Sellers reaffirming all of
their representations and warranties set forth herein as of
the Closing Date, in the form annexed hereto as Exhibit J and
made a part hereof.
(q) All of the books, records and files in the
possession or control of the Sellers (including those in the
possession of any person managing a Shopping Center on behalf
of the Sellers) relating solely to the operation of the
Shopping Centers.
(r) A receipt executed by the Broker in favor of the
Purchaser, in the form annexed hereto as Exhibit K and made a
part hereof.
<PAGE>
Releases from liability executed by each manager of a
Shopping Center pursuant to a written management
agreement,
such release to be in favor of the Purchaser, and in the
form annexed hereto as Exhibit L and made a part hereof,
provided, that if such manager is not a Sellers'
Affiliate, Sellers shall only be required to use
reasonable efforts to obtain such release, and provided,
further, that if the Sellers are unable to obtain any
such release, the Sellers shall execute an
indemnification in favor of the Purchaser from and
against any liability the Purchaser may have to such
manager.
(t) Mechanics lien affidavits, parties in possession
affidavits and "gap" indemnities in favor of the Title
Company, together with a statement delineating any tenant
options or rights of first refusal for each of the Shopping
Centers, each in a form reasonably acceptable to the Sellers.
(u) The Sellers shall use reasonable efforts to obtain
from each person owning real property that is the subject of a
reciprocal easement agreement with any of the Shopping Centers
an estoppel certificate in the form of Exhibit M annexed
hereto, without discrepancy, adverse claim or exception.
(v) Notices to other parties subject to the REAs
advising them of the sale of the Shopping Centers to the
Purchaser.
(w) Withholding Tax Affidavit to be filed in the State
of Georgia.
(x) An assignment of the Sellers' rights, titles and interests,
including guarantees, warranties and indemnification undertakings
under the construction contract for the Michaels Stores, Inc. at
the Michigan Shopping Center. Such assignment shall include
representations and warranties that the contractor has received all
monies due under the contract, that there exist no defaults by the
Sellers or the contractor, and that there exist no claims or
demands by the Sellers or the contractor. Such assignment shall
include an indemnification from the Sellers in favor of the
Purchaser from and against any claims or demands
<PAGE>
under, arising out of or in respect of such contract.
The contractor shall expressly consent to said
(y) assignment and shall confirm that it has received all monies
due under the contract.
(y) All other documents the Sellers are required to
deliver pursuant to the provisions of this Agreement.
9.1 Further Assurances.
In addition to the obligations required to be performed
hereunder by the Sellers at Closing, from time to time subsequent
to the Closing the Sellers shall perform such other acts, and shall
execute, acknowledge and deliver such other agreements and
documents as the Purchaser may reasonably request in order to
effectuate the consummation of the transaction contemplated herein
consistent with the terms hereof; provided, that the taking of such
acts and/or the execution of such documents shall be at no out-of-
pocket third party cost or expense to the Sellers.
10. Documents to be Delivered by the Purchaser at Closing.
At the Closing, the Purchaser shall execute, acknowledge
and/or deliver, as applicable, the following to the Sellers:
(a) The cash portion of the Purchase Price payable at
the Closing pursuant to Section 2, subject to credits and
adjustments as provided in this Agreement.
(b) The A & A Agreements.
(c) The Transfer Tax Returns, if any.
(d) The Closing Statement.
(e) A certificate of the Purchaser reaffirming all of
its representations and warranties set forth herein as of the
Closing Date, in the form annexed hereto as Exhibit J and made
a part hereof.
(f) (i) copies of the charter and by-laws of the Purchaser and of
the resolutions of the board of directors of the Purchaser
authorizing the execution, delivery and performance of this
Agreement and the consummation
<PAGE>
of the transactions contemplated by this Agreement
certified as true and correct by the
(g) Secretary or Assistant Secretary of the Purchaser; (ii) a good
standing certificate issued by the state of organization of the
Purchaser, dated within thirty (30) days of the Closing Date and
(iii) certificates evidencing that the Purchaser is qualified to do
business in the State of Michigan.
(g) All other documents the Purchaser is required to
deliver pursuant to the provisions of this Agreement or is
otherwise reasonably required by the Title Company.
11. Operation of the Shopping Centers prior to the Closing
Date.
Between the date hereof and the Closing Date, the Sellers shall,
subject to this Section 11 continue to operate and maintain the
Shopping Centers in a manner consistent with past practices. In
connection therewith, the Sellers shall maintain their books of
account and records in the usual, regular and ordinary manner.
11.1 New Leases.
After the date hereof, the Sellers shall not modify,
extend or renew any Lease or enter into any proposed Lease of
any portion of the Shopping Centers without the Purchaser's
prior written consent (which may be delivered by telecopier)
in each instance, which consent shall be given or denied, in
Purchaser's sole discretion, except as otherwise set forth in
this Section 11.1, within three (3) business days after
receipt by the Purchaser of the Sellers' notice requesting the
Purchaser's consent to the proposed action relating to such
existing or proposed Lease. If the Purchaser fails to reply
to the Sellers' request for consent in writing within such
period, the Purchaser's consent shall be deemed to have been
granted. The Purchaser shall not unreasonably withhold or
delay its consent to any proposed Lease, or extension or
modification of an existing Lease, if each of the following is
true: (a) such Lease (as so proposed or modified) is for less
than 25,000 square feet of rentable floor space; (b) the
Sellers' request for such consent is delivered to the
Purchaser prior to the expiration of the Due Diligence Period,
and (c) such proposed Lease, or the modifications to an
existing Lease
<PAGE>
do not contain provisions (x) granting the tenant an
exclusive use as to such Shopping Center, (y) restricting the
tenants to whom the landlord may lease space in such Shopping
Center, or (z) providing a term (including all extensions) of
greater than ten (10) years from the Closing Date. The
Sellers shall have no obligation subsequent to the date hereof
to modify, extend, renew or cancel any Lease or enter into any
proposed Lease.
11.1.1 New Lease Expenses.
Subject to Section 11.1, if after the date of this
Agreement the Sellers enter into any Leases, or if there
is any extension or renewal of any Leases, whether or not
such Leases provide for their extension or renewal, or
any modification of any Leases (each, a "New Lease"), the
Sellers shall keep accurate records of all expenses
(collectively, "New Lease Expenses") incurred in
connection with each New Lease, including, without
limitation, the following: (i) brokerage commissions and
fees relating to such leasing transaction, (ii) expenses
incurred for repairs, improvements, equipment, painting,
decorating, partitioning and other items to satisfy the
tenant's requirements with regard to such leasing
transaction, (iii) reimbursements to the tenant for the
cost of any of the items described in the preceding
clause (ii), (iv) rent concessions relating to the
demised space provided the tenant has the right to take
possession of such demised space during the period of
such rent concessions, and (v) expenses incurred for the
purpose of satisfying or terminating the obligations of a
tenant under a New Lease to the landlord under another
lease (whether or not such other lease covers space in
the Shopping Centers).
11.1.2. Allocation of New Lease Expenses.
Subject to Section 11.1, the New Lease Expenses for
each New Lease allocable to and payable by the Sellers
shall be determined by multiplying the amount of such New
Lease Expenses by a fraction, the numerator of which
shall be the number of days contained in that portion, if
any, of the term of such New Lease commencing on the date
on which the tenant thereunder shall have commenced to
pay fixed rent ("Rent Commencement Date") and expiring on
the date immediately preceding the Closing Date, and the
denominator of which
<PAGE>
shall be the total number of days contained in the period
commencing on the Rent Commencement Date and expiring on
the date of the scheduled expiration of the term of such
New Lease, without provision for any optional extensions
or renewals, and the remaining balance of the New Lease
Expenses for each New Lease shall be allocable to and
payable by the Purchaser by addition to the Purchase
Price. At the Closing, the Purchaser shall reimburse the
Sellers for all New Lease Expenses theretofore paid by
the Sellers, if any, in excess of the portion of the New
Lease Expenses allocated to the Sellers pursuant to the
provisions of the preceding sentence. If the Purchaser
pays any such New Lease Expenses subsequent to the
Closing Date, the Sellers shall pay to the Purchaser
their pro rata share of such New Lease Expenses. For
purposes of this Section 11.1.2, the Rent Commencement
Date under a renewal, extension, expansion or
modification of a Lease shall be deemed to be (i) in the
case of a renewal or extension (whether effective prior
to or after the Closing, or in the form of an option
exercisable in the future), the first date during such
renewal or extension period after the originally
scheduled expiration of the term of such Lease on which
the tenant under such Lease commences to pay fixed rent,
(ii) in the case of an expansion (whether effective prior
to or after the Closing, or in the form of an option
exercisable in the future), the date on which the tenant
under such Lease commences to pay fixed rent for the
additional space, and (iii) in the case of a modification
not also involving a renewal, extension or expansion of
such Lease, the effective date of such modification
agreement. The provisions of this Section 11.1.2 shall
survive the Closing.
11.2 Termination of Existing Leases.
Notwithstanding anything to the contrary contained in
this Agreement, the Sellers shall not institute summary
proceedings against any tenant or terminate any Lease as a
result of a default by the tenant thereunder without the
Purchaser's prior written consent (which may be delivered via
telecopier) which shall be given or denied, in the Purchaser's
sole discretion, within three (3) business days after receipt
by the Purchaser of the Sellers' notice requesting the
Purchaser's consent to such proposed action. If the Purchaser
shall fail to reply to the Sellers' request for consent in
writing
<PAGE>
within such period, the Purchaser's consent shall be
deemed to have been granted. The Sellers shall not be
obligated to terminate any Lease or initiate such summary
proceedings. The Sellers make no representations and assume
no responsibility with respect to the continued occupancy of
the Shopping Centers or any part thereof by any tenant. The
removal of a tenant whether by summary proceedings or
otherwise pursuant to this Section 11.2 shall not give rise to
any claim on the part of the Purchaser. Further, the Purchaser
agrees that it shall not be grounds for the Purchaser's
refusal to close this transaction that any tenant is a
holdover tenant or in default under its Lease on the Closing
Date and the Purchaser shall accept title subject to such
holding over or default without credit against, or reduction
of, the Purchase Price.
11.3 Contracts.
Prior to the expiration of the Due Diligence Period the
Sellers may in a reasonable manner cancel, modify, extend,
renew or permit the expiration of Contracts or enter into any
new Contract without the Purchaser's consent, provided any
such Contract can be terminated by the Purchaser on thirty
(30) days' notice at no expense to the Purchaser. After the
termination of the Due Diligence Period,
the Sellers shall not modify, extend, renew or cancel
(except as a result of a default by the other party
thereunder) any Contracts, or enter into any new Contract
(other than those that are terminable on or before the Closing
Date) from and after the date hereof without the Purchaser's
prior consent in each instance, which consent shall be given
or denied in the Purchaser's sole discretion. The Purchaser's
rights with respect to Sections 11.1, 11.2 and 11.3 shall
survive the Closing for a period of six (6) months.
11.4 Tax Assessments.
With respect to the tax year in which the Closing occurs,
and all prior tax years, the Sellers are hereby authorized to
commence, continue and control the progress of, and to make
all decisions with respect to, any proceeding or proceedings,
whether or not now pending, for the reduction of the assessed
valuation of the Shopping Centers, and, in their sole
discretion, to try or settle the same and continue any such
action for the period following the Closing Date, provided,
that no settlement shall include an agreement respecting the
amount of taxes to be paid for the tax years commencing
subsequent to the Closing Date. All net (after costs, and
credits and refunds to
<PAGE>
tenants) tax refunds and credits attributable to any tax
year prior to the tax year in which the Closing occurs shall
belong to and be the property of the Sellers. All net tax
refunds and credits attributable to any tax year subsequent to
the tax year in which the Closing occurs shall belong to and
be the property of the Purchaser. All net tax refunds and
credits attributable to the tax year in which the Closing
occurs shall, after refunding or crediting to tenants any
portion of such amounts required to be refunded or credited to
tenants under the Leases, be divided between the Sellers and
the Purchaser in accordance with the apportionment of taxes
pursuant to the provisions of this Agreement, after deducting
therefrom a pro rata share of all expenses, including, without
limitation, counsel fees and disbursements and consultant's
fees, incurred in obtaining such refund, the allocation of
such expenses to be based upon the total refund obtained in
such proceeding and in any other proceeding simultaneously
involved in the trial or settlement. The Purchaser agrees to
cooperate with the Sellers in connection with the prosecution
of any such proceedings for the tax year in which the Closing
occurs and to take all reasonable steps, whether before or
after the Closing Date, as may be necessary to carry out the
intention of the foregoing, including, without limitation, the
delivery to the Sellers, upon demand, of any relevant books
and records, including receipted tax bills and canceled checks
used in payment of such taxes, the execution of any and all
consents or other documents, and the undertaking of any act
necessary for the collection of such refund by the Sellers.
The provisions of this Section 11.4 shall survive the Closing.
11.5 Copies of Notices.
The Sellers shall use reasonable efforts to provide
copies to the Purchaser, promptly following the Sellers'
receipt, of (a) any correspondence received from any tenant
under any Lease, (b) any notice from any other person that
would make any representation or warranty by the Sellers
hereunder untrue, (c) monthly operating statements for each of
the Shopping Centers, and (d) any notices from any federal,
state or local governmental entity. The obligations of this
Section 11.5 shall survive the Closing.
12. Broker.
<PAGE>
12.1. Broker for Sale of Shopping Centers.
The Purchaser and the Sellers represent and warrant to
each other that Cushman and Wakefield (the "Broker") is the
sole broker with whom they have dealt in connection with the
Property and the transactions described herein. The Sellers
shall be liable for, and shall indemnify and defend and hold
harmless the Purchaser against, all brokerage commissions or
other compensation due to the Broker arising out of the
transaction contemplated in this Agreement. Each party hereto
agrees to indemnify and defend and hold the other harmless
from and against any and all claims, causes of action, losses,
costs, expenses, damages or liabilities, including reasonable
attorneys' fees and disbursements, which the other may
sustain, incur or be exposed to, by reason of any claim or
claims by any broker, finder or other person, except (in the
case of the Purchaser as indemnitor hereunder) the Broker, for
fees, commissions or other compensation arising out of the
transactions contemplated in this Agreement if such claim or
claims are based in whole or in part on dealings or agreements
with the indemnifying party. The obligations and
representations and warranties contained in this Section 12.1
shall survive the termination of this Agreement and the
Closing.
12.2 Brokers' Fees for Extensions, Renewals of Leases.
Notwithstanding anything to the contrary set forth in any
Leases or any other documents, instruments or agreements,
subject to Section 6(o), if any fee or other amount becomes
due and payable to any broker upon the extension or renewal of
any Leases from and after the Closing Date, such fee or other
amount shall be the sole responsibility of the Purchaser, and
the Purchaser agrees to indemnify and hold the Sellers
harmless from and against any damages, claims or losses
arising as a result of any such extension or renewal of any
Lease occurring on or after the Closing Date. The obligations
of this Section 12.2 shall survive the Closing.
13. Casualty; Condemnation.
13.1 Damage or Destruction.
If a "material" part (as hereinafter defined) of any
Shopping Center is damaged or destroyed by fire or other
casualty, the Sellers shall notify the Purchaser of such fact.
Notwithstanding anything set forth in this Agreement to the
contrary, if (i) the Purchaser does not elect to
<PAGE>
terminate this Agreement as to the damaged Shopping
Center as provided in Section 14.1 or (ii) there is damage to
or destruction of an "immaterial" part ("immaterial" is herein
deemed to be any damage or destruction which is not
"material", as such term is hereinafter defined) of the
Shopping Center, the Purchaser shall close title as provided
in this Agreement and, at the Closing, the Seller which owns
the damaged Shopping Center shall, unless such Seller has
repaired or restored such damage or destruction in a manner
consistent with the structural condition of the Shopping
Center as currently constructed prior to the Closing, (x) pay
over to the Purchaser the proceeds of any insurance collected
by such Seller less the amount of all costs incurred by such
Seller in connection with the repair or restoration of such
damage or destruction (y) assign and transfer to the Purchaser
all right, title and interest of such Seller in and to any
uncollected insurance proceeds which such Seller may be
entitled to receive from such damage or destruction
(including, without limitation, rent insurance) and (z) the
Purchase Price for the Shopping Center that is the subject of
such casualty shall be reduced by an amount equal to the sum
of (1) the repair cost of any uninsured damages to such
Shopping Center (but not any REAs) caused by such casualty,
plus (2) the amounts of any deductibles with respect to
insurance policies covering such casualty. A "material" part
of a Shopping Center shall be deemed to have been damaged or
destroyed if (a) the cost of repair or replacement shall be
greater than 10% of the portion of the Purchase Price
allocated to such Shopping Center pursuant to Section 2(d), or
(b) tenants under Leases which represent more than 5% of the
basic rent for such Shopping Center may have a right to
terminate such Leases as a result of such casualty, or (c) any
tenant of any building constructed on real property subject to
any of the reciprocal easement agreements identified on
Schedule 12 annexed hereto (the "REAs") could terminate its
lease as a result of such casualty, or the owner of such
building has no obligation to repair or restore such damage or
destruction prior to the Closing Date. The Sellers shall
notify the Purchaser of any casualty to the Shopping Centers
that the Sellers report to their casualty insurer. The
provisions of this Section 13.1 shall survive the Closing to
the extent necessary to permit the Purchaser to collect any
insurance claim assigned to the Purchaser pursuant to this
Section 13.1.
<PAGE>
13.2 Condemnation.
If, prior to the Closing Date, all or any "significant"
portion (as hereinafter defined) of any Shopping Center is
taken by eminent domain or condemnation (or is the subject of
a pending taking which has not been consummated), the Sellers
shall notify the Purchaser of such fact. If the Purchaser
does not elect to terminate this Agreement as to the Shopping
Center subject to the taking as provided in Section 14.1, or
if an "insignificant" portion ("insignificant" is herein
deemed to be any taking which is not "significant", as such
term is herein defined) of any Shopping Center is taken by
eminent domain or condemnation, at the Closing the Seller
which owns the Shopping Center which is the subject of the
taking shall assign and turnover, and the Purchaser shall be
entitled to receive and keep, all awards or other proceeds for
such taking by eminent domain or condemnation. A "significant"
portion of a Shopping Center means (i) a portion of the
Buildings, (ii) a portion of the parking areas if the taking
thereof reduces the remaining available number of parking
spaces below the minimum number legally required, or the
number required by any Lease or any of the REAs, (iii) a
driveway on the Land if such driveway is the predominant means
of ingress thereto or egress therefrom, or (iv) a portion of
any Shopping Center the loss of which could result in the
right of termination or an abatement of rent under any of the
Leases or the REAs. If any such condemnation occurs following
the date hereof, the Purchaser shall have the right to
participate in the negotiation of any condemnation award. The
provisions of this Section 13.2 shall survive the Closing to
the extent necessary to permit the Purchaser to collect any
awards or other proceeds to which the Purchaser has a right
pursuant to this Section 13.2.
14. Remedies.
14.1 Sellers' Inability to Perform.
If the Closing fails to occur as to a Shopping Center by reason of
the Sellers' inability to perform their obligations under this
Agreement or by reason of failure of conditions to the Purchaser's
obligations under this Agreement being satisfied, then the
Purchaser, as its sole remedy for such inability of the Sellers,
may either (i) waive such Sellers' obligation or such failure of
condition, whereupon title shall close as provided in this
Agreement, or (ii) terminate this Agreement by notice to the
Sellers. If the Purchaser elects to terminate this
<PAGE>
Agreement, then neither party shall have any further
rights, obligations or liabilities hereunder, except as
provided in Sections 4.1 (Investigations), 12 (Broker), 16
(Escrow), and 18 (Property Information and Confidentiality)
(collectively, the "Surviving Obligations"). In the event of
such a Purchaser termination, the Sellers shall be obligated
to reimburse the Purchaser for its reasonable out of pocket
expenses in connection with its efforts to acquire the
Shopping Centers with respect to which this Agreement is
terminated to the date of the failed Closing, documented to
the reasonable satisfaction of the Sellers, in an amount not
to exceed $20,000 in the aggregate. Except as set forth in
this Section 14.1 and Section 14.5, the Purchaser hereby
expressly waives, relinquishes and releases any other right or
remedy available to it at law, in equity or otherwise by
reason of the Sellers' inability to perform its obligations
hereunder or the failure of any such condition. The Sellers'
payment obligation under this Section 14.1 shall survive the
termination of this Agreement. The Sellers' payment
obligation under this Section 14.1 shall be a joint and
several obligation of Dean Witter Realty Income Partnership
II, L.P. and Dean Witter Realty Income Partnership III, L.P.
14.2 Purchaser's Failure to Perform.
In the event of a material default hereunder (other than
under Section 18) by the Purchaser or if the Closing fails to
occur by reason of the Purchaser's failure or refusal to
perform its obligations hereunder in any material respect,
then the Sellers may terminate this Agreement by notice to the
Purchaser. If the Sellers elect to terminate this Agreement,
then this Agreement shall be terminated and the Sellers may,
as their sole and exclusive remedy for such material default,
or failure or refusal to perform, retain the Fund (as it then
exists) as liquidated damages for all loss, damage and
expenses suffered by the Sellers, it being agreed that the
Sellers' damages are impossible to ascertain, and neither
party shall have any further rights, obligations or
liabilities hereunder, except for the Surviving Obligations.
Nothing contained herein shall limit or restrict the Sellers'
ability to pursue any rights or remedies it may have against
the Purchaser with respect to the Surviving Obligations.
Except as set forth in this Section 14.2, and Section 18.2,
the Sellers hereby expressly waive, relinquish and release any
other right or remedy available to them at law, in equity or
otherwise by reason of the Purchaser's default (material or
<PAGE>
otherwise) hereunder or the Purchaser's failure or
refusal to perform its obligations hereunder.
14.3 Sellers' Failure to Perform.
If the Closing fails to occur (a) by reason of the
Sellers' failure or refusal to perform and/or observe their
obligations and covenants hereunder, or (b) due to the fact
that, as of the date of this Agreement, any of the
representations and warranties of the Seller set forth in
Section 6 hereof are untrue in any material respect, either
individually or in the aggregate, and the Purchaser notifies
the Sellers of such circumstances prior to the Closing, then
the Purchaser, as its sole remedy hereunder may (i) terminate
this Agreement by notice to the Sellers or (ii) seek specific
performance from the Sellers. If the Purchaser elects to
terminate this Agreement rather than seek specific performance
then the Purchaser shall, as its sole remedy for such failure
or refusal to perform, be entitled to liquidated damages from
the Sellers, in an aggregate amount equal to $100,000 for all
loss, damage and expenses suffered by the Purchaser, it being
agreed that the Purchaser's damages are impossible to
ascertain and neither party shall have any further rights,
obligations or liabilities hereunder, except for the Surviving
Obligations. As a condition precedent to the Purchaser
exercising any right it may have to bring an action for
specific performance as the result of the Sellers' failure or
refusal to perform their obligations hereunder, the Purchaser
must commence such an action within ninety (90) days after the
originally scheduled or any extended Closing Date. The
Purchaser agrees that its failure to timely commence such an
action for specific performance within such ninety (90) day
period shall be deemed a waiver by it of its right to commence
such an action. The Sellers' payment obligation under this
Section 14.3 shall survive the termination of this Agreement.
The Sellers' payment obligation under this Section 14.3 shall
be a joint and several obligation of Dean Witter Realty Income
Partnership II, L.P. and Dean Witter Realty Income Partnership
III, L.P.
14.4 Cure Obligations of Sellers.
If the Closing Date shall be extended pursuant to the
terms of this Agreement, the Sellers shall use reasonable good
faith efforts to remedy the circumstances giving rise to such
extension event. Reasonable good faith efforts
<PAGE>
shall mean the following actions with respect to the
following events:
(a) In the event of the existence of Unacceptable
Encumbrances, the actions set forth in Section 5.2
hereof; and
(b) In the event that the Tenant Estoppel
Certificates are returned reflecting any discrepancies,
adverse claims or exceptions, the actions set forth in
Section 4.3 hereof. So long as the Sellers agree to
indemnify the Purchaser with respect to discrepancies,
adverse claims or objections identified in Tenant
Estoppel Certificates (which the Sellers may elect to do
or decline to do in their sole discretion), such matters
shall not constitute an inability or failure to satisfy a
closing condition, provided, that if the estimated cost
of remedying such matter exceeds $75,000 in respect of
any Shopping Center, the Purchaser may, in its sole
discretion, refuse to accept such indemnity and elect to
terminate this Agreement in accordance with the terms
hereof.
14.5 Purchaser's Cure Rights.
With respect to any default by the Purchaser hereunder
(other than by reason of the failure to pay the Purchase Price
at the Closing), such default shall not give rise to the
Sellers' ability to exercise their rights under Section 14.2
hereof, and shall not be deemed a failure to satisfy a
condition precedent to the Sellers' obligations hereunder,
unless and until the Purchaser has received prior written
notice of such default from the Sellers and such default has
continued uncured for five (5) business days after Purchaser's
receipt of such notice.
15. Indemnities.
15.1 Purchaser's Indemnities.
The Purchaser hereby agrees, upon the occurrence of the
Closing, to indemnify and defend the Sellers and the Sellers'
Affiliates against, and to hold the Sellers and the Sellers'
Affiliates harmless from all claims, demands, causes of
action, losses, damages, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees and
disbursements) asserted against or incurred by the Sellers or
any of the Sellers' Affiliates in connection with or arising
out of acts or omissions of the Purchaser or the Purchaser's
Representatives,
<PAGE>
or other matters or occurrences that take place after the
Closing with respect to the Shopping Centers and relate to the
ownership, maintenance or operation of the Shopping Centers.
The Purchaser's obligations under this Section 15.1 shall
survive the Closing for a period of six (6) months.
15.2 Sellers' Indemnities.
Each of the Sellers agrees, upon the occurrence of the
Closing, to indemnify and defend the Purchaser and Purchaser's
affiliates against, and to hold the Purchaser and Purchaser's
affiliates harmless from all claims, demand, causes of action,
losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorney's fees and
disbursements) asserted against or incurred by the Purchaser
in connection with or arising out of any personal injury or
property damage suffered by any third person at the Shopping
Center owned by such Seller prior to the Closing Date. The
Sellers' obligations under this Section 15.2 shall survive the
Closing for a period of six (6) months.
16. Escrow.
The Escrow Agent shall hold the Downpayment and all interest
accrued thereon, if any (collectively, the "Fund") in escrow and
shall dispose of the Fund only in accordance with the provisions of
this Section 16. Simultaneously with their execution and delivery
of this Agreement, the Purchaser and the Sellers shall furnish the
Escrow Agent with their true Federal Taxpayer Identification
Numbers so that the Escrow Agent may file appropriate income tax
information returns with respect to any interest in the Fund or
other income from the Approved Investment. The party ultimately
entitled to the economic benefit of any accrued interest in the
Fund shall be the party responsible for the payment of any tax due
thereon.
16.1 Demand for Fund.
The Escrow Agent shall deliver the Georgia Downpayment
with any interest accrued thereon, or the Michigan Downpayment
with any interest accrued thereon, as the case may be, to the
Sellers or the Purchaser, as the case may be, as follows:
(a) to the Sellers, upon completion of the Closing with respect to
the corresponding Shopping Center, if such Shopping Center is
disposed of by the occurrence of the Closing with respect to such
Shopping Center rather than by
<PAGE>
the termination of this Agreement with respect to
such Shopping Center; or
(b) to the Sellers, after receipt of the Sellers'
demand in which the Sellers certify either that (i) the
Purchaser has defaulted under this Agreement, or (ii)
this Agreement has been otherwise terminated or canceled
with respect to all of the Shopping Centers (other than
those with respect to which the Closing has previously
occurred), and the Sellers are thereby entitled to
receive all or the stated portions of the Fund; but the
Escrow Agent shall not honor the Sellers' demand until
more than ten (10) days after the Escrow Agent has given
a copy of the Sellers' demand to the Purchaser in
accordance with Section 16.3, nor thereafter if the
Escrow Agent receives a Notice of Objection from the
Purchaser within such ten (10) day period; or
(c) to the Purchaser, after receipt of the
Purchaser's demand in which the Purchaser certifies
either that (i) any Seller has defaulted under this
Agreement, or (ii) this Agreement has been otherwise
terminated or canceled with respect to all of the
Shopping Centers (other than those with respect to which
the Closing has previously occurred), and the Purchaser
is thereby entitled to receive all or the stated portions
of the Fund; but the Escrow Agent shall not honor the
Purchaser's demand until more than ten (10) days after
the Escrow Agent has given a copy of the Purchaser's
demand to the Sellers in accordance with Section 16.3,
nor thereafter if the Escrow Agent receives a Notice of
Objection from the Sellers within such ten (10) day
period.
Upon delivery of the Fund, the Escrow Agent shall be relieved
of all liability hereunder and with respect to the Fund. The
Escrow Agent shall deliver the Fund, at the election of the
party entitled to receive the same, by (i) a good, unendorsed
certified check of the Escrow Agent payable to the order of
such party, (ii) an unendorsed official bank or cashier's
check payable to the order of such party, or (iii) a bank wire
transfer of immediately available funds to an account
designated by such party.
16.2 Status of Fund Upon Termination or Extension.
No portion of the Downpayment or any other portion of the
Fund shall
<PAGE>
be delivered to the Sellers or the Purchaser under this
Agreement until, with respect to any of the Shopping Centers,
either (i) the Closing has occurred, or (ii) this Agreement
has terminated. Upon each Closing hereunder, the applicable
portion of the Fund shall be delivered to the Sellers pursuant
to Section 16.1(a) and such portion shall be applied to the
Purchase Price for such Shopping Center. If this Agreement is
terminated with respect to any or all of the Shopping Centers
remaining to be disposed of under this Agreement, the Fund or
the remaining portion thereof shall be disposed of pursuant to
Section 16.1(b) or Section 16.1(c), as the case may be.
16.3 Notice of Objection.
Upon receipt of a written demand from the Sellers or the
Purchaser under Section 16.1(b) or (c), the Escrow Agent shall
send a copy of such demand to the other party. Within ten (10)
days after the date of receiving same, but not thereafter, the
other party may object to delivery of the Fund to the party
making such demand by giving a notice of objection (a "Notice
of Objection") to the Escrow Agent. After receiving a Notice
of Objection, Escrow Agent shall send a copy of such Notice of
Objection to the party who made the demand; and thereafter, in
its sole and absolute discretion, the Escrow Agent may elect
either (i) to continue to hold the Fund until the Escrow Agent
receives a written agreement of the Purchaser and the Sellers
directing the disbursement of the Fund, in which event the
Escrow Agent shall disburse the Fund in accordance with such
agreement; and/or (ii) to take any and all actions as the
Escrow Agent deems necessary or desirable, in its sole and
absolute discretion, to discharge and terminate its duties
under this Agreement, including, without limitation,
depositing the Fund into any court of competent jurisdiction
and bringing any action of interpleader or any other
proceeding, provided, that the Escrow Agent shall not
distribute the Fund to the Purchaser or the Sellers following
receipt of a Notice of Objection without further direction
from both the Purchaser and the Sellers, or from a court of
competent jurisdiction; and/or (iii) in the event of any
litigation between the Sellers and the Purchaser, to deposit
the Fund with the clerk of the court in which such litigation
is pending.
16.4 Actions after Notice of Objection.
If the Escrow Agent is uncertain for any reason
whatsoever as to its duties or
<PAGE>
rights hereunder (and whether or not the Escrow Agent has
received any written demand under Section 16.1(b) or (c), or
Notice of Objection under Section 16.3), notwithstanding
anything to the contrary herein, the Escrow Agent may hold and
apply the Fund pursuant to Section 16.3 and may decline to
take any other action whatsoever. In the event the Fund is
deposited in a court by the Escrow Agent pursuant to Section
16.3(ii) or (iii), the Escrow Agent shall be entitled to rely
upon the decision of such court. In the event of any dispute
whatsoever among the parties with respect to disposition of
the Fund, the Purchaser and the Sellers shall pay the
attorney's fees and costs incurred by the Escrow Agent (which
said parties shall share equally, but for which said parties
shall be jointly and severally liable) for any litigation in
which the Escrow Agent is named as, or becomes, a party.
16.5 Investment of Fund.
Notwithstanding anything to the contrary in this
Agreement, within one (1) business day after the date of this
Agreement, the Escrow Agent shall place the Downpayment in an
Approved Investment. The interest, if any, which accrues on
such Approved Investment shall be deemed part of the Fund; and
the Escrow Agent shall dispose of such interest as and with
the Fund pursuant to this Agreement. The Escrow Agent may not
commingle the Fund with any other funds held by Escrow Agent.
The Escrow Agent may convert the Fund from the Approved
Investment into cash or a non-interest-bearing demand account
at an Approved Institution as follows:
(a) at any time within seven (7) days prior to the
Closing Date; or
(b) if the Closing Date is accelerated or extended,
at any time within seven (7) days prior to the
accelerated or extended Closing Date; provided, however,
that the Sellers and the Purchaser shall give the Escrow
Agent timely notice of any such acceleration or extension
and that the Escrow Agent may hold the Fund in cash or a
non-interest-bearing deposit account if the Sellers and
the Purchaser do not give the Escrow Agent timely notice
of any such adjournment.
As used herein, the term "Approved Investment" means
(i) any interest-bearing demand account or money market fund
in State Street Bank and Trust Company or in any other
institution
<PAGE>
otherwise approved by both the Sellers and the Purchaser
(collectively, an "Approved Institution"), or (ii) any other
investment approved by both the Sellers and the Purchaser.
The rate of interest or yield need not be the maximum
available and deposits, withdrawals, purchases, reinvestment
of any matured investment and sales shall be made in the sole
discretion of the Escrow Agent, which shall have no liability
whatsoever therefor. Discounts earned shall be deemed
interest for the purpose hereof.
16.6 Duties of Escrow Agent.
The Escrow Agent shall have no duties or responsibilities
except those set forth herein, which the parties hereto agree
are ministerial in nature. The Sellers and the Purchaser
acknowledge that the Escrow Agent is serving without
compensation, solely as an accommodation to the parties
hereto, and except for the Escrow Agent's own willful default,
misconduct or gross negligence, the Escrow Agent shall have no
liability of any kind whatsoever arising out of or in
connection with its activity as Escrow Agent. The Sellers and
the Purchaser jointly and severally agree to and do hereby
indemnify and hold harmless the Escrow Agent from all loss,
cost, claim, damage, liability, and expense (including,
without limitation, reasonable attorney's fees and
disbursements) which may be incurred by reason of its acting
as the Escrow Agent provided the same is not the result of the
Escrow Agent's willful default, misconduct or gross
negligence. The Escrow Agent may charge against the Fund any
amounts owed to it under the foregoing indemnity or may
withhold the delivery of the Fund as security for any
unliquidated claim, or both. Any amendment of this Agreement
which could alter or otherwise affect the Escrow Agent's
obligations hereunder will not be effective against or binding
upon the Escrow Agent without the Escrow Agent's prior
consent, which consent may be withheld in the Escrow Agent's
sole and absolute discretion.
The provisions of this Section 16 shall survive the
termination of this Agreement and the Closing.
17. Notices.
All notices, elections, consents, approvals, demands,
objections, requests or other communications which the Sellers, the
Purchaser or Escrow Agent may be required or desire to give
pursuant to, under or by virtue of this Agreement must be in
writing and sent by hand or by a nationally recognized overnight
courier (except where notice by
<PAGE>
telecopy is expressly permitted hereunder) (for next business
day delivery), addressed as follows:
If to the Sellers:
Dean Witter Realty Inc.
Two World Trade Center, 64th Floor
New York, NY 10048
Attention: Ronald DiPietro
Telephone: (212) 392-4578
Telecopier: (212) 392-3123
with copies to:
Vincent M. Sacchetti, Esq.
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
Telephone: (617) 951-8000
Telecopier: (617) 951-8736
If to the Purchaser:
New Plan Excel Realty Trust, Inc.
1120 Avenue of the Americas, 12th Floor
New York, New York 10036
Attention: Chief Executive Officer
Telephone: (212) 869-3000
Telecopier: (212) 869-3989
with a copy to:
Altheimer & Gray
10 South Wacker Drive, Suite 4000
Chicago, Illinois 60606
Attention: Robert M. Horwitch, Esq.
Telephone: (312) 715-4822
Telecopier: (312) 715-4800
If to Escrow Agent:
<PAGE>
LandAmerica
One Washington Mall
Boston, MA 02108
Attention: Carole Sawdon
Telephone: 617-619-4800
Telecopier: 617-619-4848
The Sellers, the Purchaser or Escrow Agent may designate
another addressee or change its address for notices and other
communications hereunder by a notice given to the other parties in
the manner provided in this Section 17. Any party's attorney may
give a notice in accordance with this Section 17 on behalf of such
party. A notice or other communication sent in compliance with the
provisions of this Section 17 shall be deemed given and received on
(i) the date of receipt of hand delivery, or (ii) the date of
receipt if sent by a nationally recognized overnight courier.
Notice to the address provided above for any Seller shall
constitute notice to all Sellers.
18. Property Information and Confidentiality.
The Purchaser agrees that, prior to the Closing, all Property
Information shall be kept strictly confidential and shall not,
without the prior consent of the Sellers, be disclosed by the
Purchaser or the Purchaser's Representatives, in any manner
whatsoever (other than to the title insurance company, Surveyor,
governmental authorities or tenants at the Shopping Centers), in
whole or in part, and will not be used by the Purchaser or the
Purchaser's Representatives, directly or indirectly, for any
purpose other than evaluating the Shopping Centers. Moreover, the
Purchaser agrees that, prior to the Closing, the Property
Information will be transmitted only to the Purchaser's
Representatives who need to know the Property Information for the
purpose of evaluating the Shopping Centers, and who are informed by
the Purchaser of the confidential nature of the Property
Information. Prior to the delivery or disclosure of any Property
Information to the Purchaser's Representatives at any time prior to
the Closing, the Purchaser agrees to notify the Sellers as to their
identity. The provisions of this Section 18 shall in no event
apply to (i) Property Information which is a matter of public
record, (ii) Property Information that is included by the Purchaser
in any filing made with the Securities Exchange Commission or the
New York Stock Exchange, or (iii) Property Information that is
received by the Purchaser from a source other than the Sellers or
Sellers' Affiliates. The provisions of this Section 18 shall not
prevent the Purchaser or Purchaser's Representatives from
<PAGE>
complying with Laws, including, without limitation,
governmental regulatory, disclosure, tax and reporting
requirements, and legal process.
18.1 Press Releases.
The Purchaser and Sellers, for the benefit of each other,
hereby agree that between the date hereof and the Closing
Date, they will not release or cause or permit to be released
any press notices, publicity (oral or written) or advertising
promotion relating to, or otherwise announce or disclose or
cause or permit to be announced or disclosed, in any manner
whatsoever, the terms, conditions or substance of this
Agreement or the transactions contemplated herein, without
first obtaining the written consent of the other party hereto.
It is understood that the foregoing shall not preclude either
party from discussing the substance or any relevant details of
the transactions contemplated in this Agreement with any of
its attorneys, accountants, professional consultants, investor
limited partners or potential lenders, as the case may be, or
prevent either party hereto from complying with Laws,
including, without limitation, governmental regulatory,
disclosure, securities, tax and reporting requirements.
18.2 Return of Property Information.
In the event that the Closing does not occur with respect
to any Shopping Center, the Purchaser and the Purchaser's
Representatives shall promptly deliver to the Sellers all
originals and copies of the Property Information pertaining to
such Shopping Center referred to in clause (i) of Section 18.3
in the possession of the Purchaser and the Purchaser's
Representatives. Notwithstanding anything contained herein to
the contrary, in no event shall the Purchaser be entitled to
receive a return of the Downpayment or the accrued interest
thereon, if any, if and when otherwise entitled thereto
pursuant to this Agreement until such time as the Purchaser
and the Purchaser's Representatives shall have performed the
obligations contained in the preceding sentence. Upon the
Purchaser's delivery to the Sellers of substantially all of
the materials described in the first sentence of this Section
18.2, the Purchaser shall be entitled to receive a return of
ninety percent (90%) of the Downpayment (or if the Closing on
the Georgia Shopping Center has occurred, ninety percent (90%)
of the Michigan Downpayment), together with accrued interest
upon such portion of the Downpayment (or Michigan Downpayment,
as the case may be). After their receipt of such delivery,
the Sellers shall
<PAGE>
review such materials and shall notify the Purchasers
within fifteen (15) days following such receipt if any of such
materials have not yet been delivered to the Sellers. The
Purchaser shall be entitled to receive a return of the
remaining amount of the Downpayment, together with accrued
interest thereon, if (i) the Sellers do not deliver the notice
described in the immediately preceding sentence within such
fifteen day period; or (ii) the Purchaser delivers to the
Sellers the materials specified in such notice, or (iii) the
Purchaser delivers to the Sellers a certificate that any such
materials not delivered by the Purchasers are lost, and
committing the Purchaser to deliver such materials to the
Sellers if they are subsequently discovered.
18.3 Property Information Defined.
As used in this Agreement, the term "Property
Information" shall mean (i) all information and documents in
any way relating to the Shopping Centers, the operation
thereof or the sale thereof (including, without limitation,
Leases, Contracts and Licenses) furnished to, or otherwise
made available for review by, the Purchaser or its directors,
officers, employees, affiliates, partners, brokers, agents or
other representatives, including, without limitation,
attorneys, accountants, contractors, consultants, engineers
and financial advisors (collectively, the "Purchaser's
Representatives"), by the Sellers or any of the Sellers'
Affiliates, or their agents or representatives, including,
without limitation, their contractors, engineers, attorneys,
accountants, consultants, brokers or advisors, and (ii) all
analyses, compilations, data, studies, reports or other
information or documents prepared or obtained by the Purchaser
or the Purchaser's Representatives containing or based, in
whole or in part, on the information or documents described in
the preceding clause (i), or the Investigations, or otherwise
reflecting their review or investigation of the Shopping
Centers.
18.4 Remedies.
The Sellers' sole remedy for enforcement or violation of
the provisions of this Section 18 and Section 6.3 shall be to
seek equitable relief, including, without limitation,
injunctive relief or specific performance, against the
Purchaser or the Purchaser's Representatives.
The provisions of this Section 18 shall survive the
termination of this Agreement and the Closing.
<PAGE>
19. Access to Records.
For a period of two (2) years
subsequent to the Closing Date, the Sellers, the Sellers'
Affiliates and their employees, agents and representatives shall be
entitled to access during business hours to all documents, books
and records given to the Purchaser by the Sellers at the Closing
for tax and audit purposes, regulatory compliance, and cooperation
with governmental investigations upon reasonable prior notice to
the Purchaser, and shall have the right, at their sole cost and
expense, to make copies of such documents, books and records.
Without limiting the foregoing, Purchaser shall have the right
after the Closing to audit the books and records of Sellers in
respect of the Shopping Centers for those last two entire fiscal
years of the Sellers ending prior to the Closing Date and the
portion of the Sellers' fiscal year in which the Closing occurs to
and including the Closing Date.
20. Assignments.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and to their respective heirs,
executors, administrators, successors and permitted assigns. This
Agreement may only be assigned by the Purchaser to an entity or
entities controlled by or under common control with the Purchaser,
provided, that the Purchaser shall remain liable for the
obligations and liabilities of the Purchaser hereunder. Any other
assignment or attempted assignment by the Purchaser shall
constitute a default by the Purchaser hereunder and shall be null
and void. The Sellers acknowledge that with respect to the
Shopping Center in Georgia the Purchaser intends to assign its
rights and obligations hereunder to, and to have such Shopping
Center transferred directly to, an affiliate in compliance with the
terms of this Section 20.
21. Entire Agreement, Amendments.
With the exception of the letter from the Purchaser to Sellers
dated January 6, 1999, prior statements, understandings,
representations and agreements between the parties, oral or
written, are superseded by and merged in this Agreement, which
alone fully and completely expresses the agreement between them in
connection with this transaction and which is entered into after
full investigation, neither party relying upon any statement,
understanding, representation or agreement made by the other not
embodied in this Agreement. This Agreement shall be given a fair
and reasonable construction in accordance with the intentions of
the parties hereto, and without regard to or aid of canons
requiring construction against the Sellers or the party drafting
this Agreement. This Agreement shall not be altered, amended,
changed, waived, terminated or otherwise
<PAGE>
modified in any respect or particular, and no consent or
approval required pursuant to this Agreement shall be effective,
unless the same shall be in writing and signed by or on behalf of
the party to be charged.
22. Merger.
Except as otherwise expressly provided herein or in the
Conveyance Documents, (i) the Purchaser's acceptance of the Deed
shall be deemed a discharge of all of the obligations of the
Sellers hereunder, and (ii) all of the Sellers' representations,
warranties, covenants and agreements herein shall merge in the
documents and agreements executed at the Closing and shall not
survive the Closing.
23. Limited Recourse.
The Purchaser agrees that it does not have and will not have
any claims or causes of action against any disclosed or undisclosed
officer, director, employee, trustee, shareholder, partner,
principal, parent, subsidiary or other affiliate of the Sellers,
including, without limitation, Dean Witter Realty Inc. and parents
and affiliates of Dean Witter Realty, Inc. (collectively, the
"Sellers' Affiliates"), arising out of or in connection with this
Agreement or the transactions contemplated hereby. The Purchaser
agrees to look solely to each Seller and such Seller's assets for
the satisfaction of such Seller's liability or obligation arising
under this Agreement or the transactions contemplated hereby, or
for the performance of any of the covenants, warranties or other
agreements of such Seller contained herein, and further agrees not
to sue or otherwise seek to enforce any personal obligation against
any of the Sellers' Affiliates with respect to any matters arising
out of or in connection with this Agreement or the transactions
contemplated hereby. The total liability of the Sellers hereunder
shall in no event exceed an amount equal to the Downpayment.
To secure its obligations under this Agreement, each Seller
agrees to deposit $250,000 with the Escrow Agent at its respective
Closing, which sum shall be held pursuant to the terms of the
Escrow Agreement attached hereto as Exhibit N.
24. Time of the Essence.
The Sellers and the Purchaser agree that, wherever this
Agreement provides that any party must send or give any notice,
make an election or take some other action within a specific time
period in order to exercise a right or remedy it may have
hereunder, time shall be of the essence with respect to the taking
of such action, and such party's failure to take such action within
the applicable time period shall be deemed to be an irrevocable
waiver by such party of such right or remedy.
<PAGE>
25. Waivers.
No failure or delay of either party in the exercise of any
right or remedy given to such party hereunder or the waiver by any
party of any condition hereunder for its benefit (unless the time
specified herein for exercise of such right or remedy has expired)
shall constitute a waiver of any other or further right or remedy
nor shall any single or partial exercise of any right or remedy
preclude other or further exercise thereof or any other right or
remedy. No waiver by either party of any breach hereunder or
failure or refusal by the other party to comply with its
obligations shall be deemed a waiver of any other or subsequent
breach, failure or refusal to so comply.
26. Miscellaneous.
Neither this Agreement nor any memorandum thereof shall be
recorded and any attempted recordation hereof shall be void and
shall constitute a default. This Agreement may be executed in one
or more counterparts, each of which so executed and delivered shall
be deemed an original, but all of which taken together shall
constitute but one and the same instrument. Each of the Exhibits
and Schedules referred to herein and attached hereto is
incorporated herein by this reference. The caption headings in
this Agreement are for convenience only and are not intended to be
a part of this Agreement and shall not be construed to modify,
explain or alter any of the terms, covenants or conditions herein
contained. If any provision of this Agreement shall be
unenforceable or invalid, the same shall not affect the remaining
provisions of this Agreement and to this end the provisions of this
Agreement are intended to be and shall be severable. This
Agreement shall be interpreted and enforced in accordance with the
laws of the state in which the Shopping Centers are located without
reference to principles of conflicts of laws.
Sellers and Purchaser each hereby submit itself to the
jurisdiction of the State of New York in any action or proceeding
arising out of or under this Agreement. By execution and delivery
of this Agreement, Sellers and Purchaser accept, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and irrevocably agree to be bound by any final judgment
rendered thereby in connection with this Agreement from which no
appeal has been taken or is available. Sellers and Purchaser each
hereby irrevocably waive any objection to the laying of venue or
based on the grounds of forum non conveniens which it may now or
hereafter have to the bringing of any such action or proceeding in
<PAGE>
any such jurisdiction. Nothing herein shall limit the right
of either Sellers or Purchaser to bring any action, suit or
proceeding against the other in the courts of such jurisdiction.
Sellers and Purchaser each acknowledge that final judgment against
it in any action, suit or proceeding referred to in this Section 26
shall be conclusive and may be enforced in any other jurisdiction,
by suit on the judgment, a certified or exemplified copy of which
shall be conclusive evidence of the fact and of the amount of any
such judgment. Purchaser hereby irrevocably appoints, authorizes,
empowers and designates the chief executive officer of the
Purchaser, as its lawful agent upon whom service of any legal
process may be made in the State of New York, in a like manner and
with like effect as if the same were served personally upon
Purchaser within the jurisdiction of the State of New York. Each
of the Sellers hereby irrevocably appoints, authorizes, empowers
and designates Dean Witter Realty, Inc., as its lawful agent upon
whom service of any legal process may be made in the State of New
York, in a like manner and with like effect as if the same were
served personally upon Sellers within the jurisdiction of the State
of New York.
All the parties hereto and their attorneys have had full
opportunity to review and participate in the drafting of the final
form of this Agreement. Accordingly, this Agreement shall be
construed without regard to any presumption or other rule of
construction against the party causing the Agreement to be drafted.
As used in this Agreement, the masculine shall include the
feminine and neuter, the singular shall include the plural and the
plural shall include the singular, as the context may require.
27. Notice to or Knowledge of Sellers.
To the extent that any provision of this Agreement or the
Seller Documents relates to the knowledge of any Seller or receipt
of knowledge by any Seller, such provision is intended to relate
solely to and shall be deemed to relate solely to notices received
and knowledge obtained by the Sellers from and after the date upon
which an affiliate of Dean Witter Realty, Inc. obtained either
title to the relevant Shopping Center or the general partnership
interest in the Seller with respect to such Shopping Center.
Knowledge of Sellers shall include, without limitation, the actual
knowledge of Mr. Robert B. Austin.
28. Sellers' Representatives.
The Sellers hereby designate (i) Ronald DiPietro as their
representative to receive notices on their behalf
<PAGE>
as contemplated by Section 17 of this Agreement, and (ii)
Robert B. Austin as their representative (the "Representative") to
bind the Sellers with respect to any agreements between any such
Seller and the Purchaser, to approve amendments to this Agreement
and to render decisions and furnish information as may be required
of the Sellers pursuant to this Agreement and the Purchaser shall
have no obligation to inquire into the authority of the
Representative with respect to any actions taken by the
Represenative with respect to this Agreement on behalf of the
Sellers.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
SELLERS: DEAN WITTER REALTY INCOME
PARTNERSHIP II, L.P.
By: Dean Witter Realty Income
Properties II Inc., its general
partner
By: /s/Robert B. Austin
Name: Robert B. Austin
Title: Vice President
DEAN WITTER REALTY INCOME
PARTNERSHIP III, L.P.
By: Dean Witter Realty Income
Properties III, Inc., its
general
partner
By:/s/ Robert B. Austin
Name: Robert B. Austin
Title: Vice President
PURCHASER: NEW PLAN EXCEL REALTY
TRUST, INC.
By:/s/Thomas J. Farrell
Name: Thomas J. Farrell
Title: Senior Vice President
ESCROW AGENT: LAWYERS TITLE INSURANCE
CORPORATION
By:/s/ Carole Sawdon
Name: Carole Sawdon
Title: Assistant Vice
President
<PAGE>
ASSIGNMENT AND OPTION AGREEMENT
ASSIGNMENT AND OPTION AGREEMENT (this "Agreement")
dated as of February __, 1999, between Taxter Park
Associates, a New York general partnership ("Taxter"),
and DW Taxter Special Corp., a Delaware corporation
("DWTSC").
WHEREAS, Taxter is a general partnership, the
general partners of which are Dean Witter Realty Income
Partnership II, L.P., a Delaware limited partnership
("DWR II"), Dean Witter Realty Income Partnership III,
L.P., a Delaware limited partnership ("DWR III"), and
Dean Witter Realty Income Partnership IV, L.P., a
Delaware limited partnership ("DWR IV" and,
collectively with DWR II and DWR III, the
"Partnerships");
WHEREAS, pursuant to Section 4.3(C) of the
respective Agreement of Limited Partnership of each of
the Partnerships, the Managing General Partner of such
Partnership or any of its affiliates may make
investments for the purpose of facilitating the making
of such investment for such Partnership;
WHEREAS, DWTSC is an affiliate of the Managing
General Partner of each Partnership;
WHEREAS, Taxter, as successor in interest to Dean
Witter Realty Inc., is a party to that certain
Agreement Granting Lease, dated as of October 23, 1987
(the "Original Lease"), among Taxter, KLM Royal Dutch
Airlines, a Netherlands corporation ("KLM"), and Urbco,
Inc. pursuant to which KLM was granted a leasehold
interest (the "Leasehold Interest") in certain property
within the premises commonly known as 565 Taxter Road,
Elmsford, New York, located in Taxter Corporate Park
(the "Property");
WHEREAS, Taxter and KLM have entered into (i) that
certain Purchase and Sale Agreement, dated February 9,
1999 (the "Purchase Agreement"), pursuant to which
Taxter has agreed to assume from KLM and KLM has agreed
to assign to Taxter the Leasehold Interest, and (ii)
that certain Lease Agreement, dated February 5, 1999
(the "Lease"), pursuant to which KLM has agreed to
lease from Taxter and Taxter has agreed to lease a
certain portion of the premises located at the
Property; and
WHEREAS, Taxter desires to assign (i) its rights
and obligations as Purchaser under the Purchase
Agreement and (ii) its rights and obligations as Lessor
under the Lease to DWTSC and grant to DWTSC an option
to require Taxter to purchase the Leasehold Interest
and assume the Lease at any time from and after August
9, 1999 upon the terms and subject to the conditions
contained herein, and DWTSC desires to acquire the
rights of Taxter as Purchaser under the Purchase
Agreement and Lessor under the Lease and grant to
Taxter an option to purchase the Leasehold Interest and
assume the Lease at any time from and after the date
DWTSC acquires the Leasehold Interest upon the terms
and subject to the conditions contained herein.
<PAGE>
NOW, THEREFORE, the parties hereto mutually
covenant and agree as follows:
1. Assignment and Assumption of Taxter's Rights
as Purchaser under the Purchase Agreement and Lessor
under the Lease. Subject to the terms and conditions
set forth in this Agreement, Taxter hereby assigns its
rights and obligations as Purchaser under the Purchase
Agreement and Lessor under the Lease to DWTSC. DWTSC
hereby accepts such assignment and agrees to be bound
by the terms and conditions of the Purchase Agreement
and the Lease.
2. (a) Taxter Option. Subject to the terms and
conditions set forth in this Agreement, in the event
that DWTSC acquires the Leasehold Interest pursuant to
the Purchase Agreement, DWTSC hereby grants to Taxter
an option (the "Taxter Option"), at any time from and
after the date DWTSC acquires the Leasehold Interest,
to purchase from DWTSC the Leasehold Interest and
assume from DWTSC its rights and obligations under the
Lease for an amount (the "Exercise Price") equal to the
amount paid by DWTSC to KLM for the Leasehold Interest
(excluding any interest and other financing costs paid
by DWTSC in connection with money borrowed or financing
obtained in connection therewith), plus the out-of-
pocket costs incurred by DWTSC in connection with
leasing commissions, tenant improvements and any other
capital expenditures in connection with the Leasehold
Interest. In the event that Taxter enters into an
agreement to sell the Property, in connection with the
consummation of such sale, the Taxter Option shall be
deemed to be exercised subject to the other terms and
conditions of this Agreement (a "Mandatory Purchase");
provided, however, that the Exercise Date (as
hereinafter defined) shall be the date of such sale.
(b) DWTSC Put. Subject to the terms and conditions
set forth in this Agreement, in the event that DWTSC
acquires the Leasehold Interest pursuant to the
Purchase agreement, Taxter hereby grants to DWTSC an
option (the "DWTSC Put") to require Taxter, at any time
from and after August 9, 1999, to purchase from DWTSC
the Leasehold Interest and assume from DWTSC its rights
and obligations under the Lease for an amount equal to
the Exercise Price .
3. Exercise and Payment; Designation of
Purchaser; Termination.
(a) Taxter shall, at its sole discretion,
have the right to appoint a designated purchaser (the
"Taxter Designee") to purchase the Leasehold Interest
from DWTSC and assume DWTC's rights and obligations
under the Lease in accordance with the terms hereof
upon the exercise of the Taxter Option or the DWTSC Put
or in the event of a Mandatory Purchase.
(b) The Taxter Option or the DWTSC Put may be
exercised by Taxter or DWTSC, as the case may be,
delivering to the other party, on a date (the "Notice
Date") no less than ten (10) days prior to the date on
which such party wishes to exercise the Taxter Option
or DWTSC Put,
<PAGE>
(c) as the case may be (the "Exercise Date"), written
notice which shall <PAGE>
(d) specify that such party elects to exercise the
Taxter Option or DWTSC Put, as the case may
(e) be, and, in the case of exercise of the Taxter
Option, the identity of the Taxter Designee. In the
event that DWTSC exercises the DWTSC Put, Taxter shall
provide DWTSC with notice of the identity of the Taxter
Designee within the five day period after the Notice
Date. In the event of a Mandatory Purchase, Taxter
shall provide DWTSC with notice of the identity of the
Taxter Designee not less than ten (10) days prior to
the consummation of the sale resulting in the Mandatory
Purchase.
(c) On the Exercise Date, Taxter or the
Taxter Designee shall deliver to DWTSC the applicable
Exercise Price by wire transfer of immediately
available funds to an account designated by DWTSC no
less than one (1) day prior to the Exercise Date, and
Taxter and DWTSC shall enter into a mutually acceptable
agreement pursuant to which (i) the Original Lease will
be terminated or the Leasehold Interest shall be
transferred to the Taxter Designee, and (ii) DWTSC's
rights and obligations under the Lease will be assigned
to the Taxter Designee.
4. Representations of the Parties.
(a) Taxter hereby represents and warrants to
DWTSC as follows: This Agreement has been duly
executed and delivered by Taxter and constitutes a
legal, valid and binding obligation of Taxter
enforceable against Taxter in accordance with its
terms. The execution and delivery of this Agreement do
not, and the consummation of the transactions
contemplated hereby will not, violate any provision of
the partnership agreement of Taxter, any agreement to
which Taxter is a party or by which Taxter is bound and
will not violate any other restriction of any kind or
character to which Taxter is subject.
(b) DWTSC hereby represents and warrants to
Taxter as follows: This Agreement has been duly
executed and delivered by DWTSC and constitutes a
legal, valid and binding obligation of DWTSC
enforceable against DWTSC in accordance with its terms.
The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated
hereby will not, violate any provision of the
Certificate of Incorporation or By-laws of DWTSC, any
agreement to which DWTSC is a party or by which DWTSC
is bound and will not violate any other restriction of
any kind or character to which DWTSC is subject.
5.
6.
<PAGE>
Restrictions on Transfer. Unless this
Agreement has been terminated in accordance with
its terms, DWTSC shall not assign, transfer or
otherwise dispose of, or
7. grant any right or option to any person to
purchase the Leasehold Interest or its rights and
obligations under the Lease, except, if at all, to
Taxter or the Taxter Designee as and when the Taxter
Option or DWTSC Put has been exercised or in connection
with a Mandatory Purchase.
6. Term of Agreement. This Agreement shall be
in effect from the date first set forth above through
October 31, 2072 (the "Expiration Date").
7. Consent to Assignment of Leasehold Interest.
Taxter hereby consents to the Assignment of the
Leasehold Interest to DWTSC pursuant to Article 13 of
the Original Lease.
8. Amendments. No amendment, alteration,
change, or attempted waiver of any of the provisions
hereof shall be binding without the written consent of
both parties.
9. Assignment; Binding Effect. Taxter shall
have the right to assign or sell its rights and
obligations under this Agreement to any person,
corporation, partnership, or other legal entity. DWTSC
shall not assign this Agreement or its respective
rights and obligations under this Agreement without the
written consent of Taxter, which consent may be
withheld in Taxter's sole discretion. The provisions
of this Agreement shall be binding upon and shall inure
to the benefit of the parties' successors and assigns,
respectively, but this provision shall not constitute a
consent by Taxter to assignment by DWTSC otherwise
prohibited by the preceding sentences.
10. Governing Law. The parties agree that it
shall be governed and construed in accordance with the
internal laws of the State of New York to the fullest
extent permitted by law, without regard to the
application of conflict of laws rules. If any portion
of the provisions hereof shall to any extent be invalid
or unenforceable, the remainder of this Agreement, or
the application of such portion or provisions in
circumstances other than those in which it is held
invalid or unenforceable, shall not be affected
thereby, and each portion or provision of this
Agreement shall be valid and enforced to the fullest
extent permitted by law.
11. Additional Documents. The parties hereto
shall execute such additional documents as are
reasonably required for the purpose of carrying out the
intent and purpose of this Agreement.
12. Headings. Section and paragraph headings are
not part of this Agreement and are included solely for
convenience and are not intended to be full or accurate
descriptions of the contents thereof.
<PAGE>
13. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an
original, but all which together shall constitute one
instrument.
14. Notices. Any notice which either party
hereto may be required or permitted to give to the
other shall be in writing and may be delivered
personally, by mail, postage prepaid, or by facsimile
addressed as follows:
If to Taxter, to:
Taxter Park Associates
Two World Trade Center, 64th Floor
New York, NY 10048
Attention: Robert Austin
Facsimile: (212) 392-3123
If to DWTSC, to:
Dean Witter Special Taxter Corp.
Two World Trade Center, 64th Floor
New York, NY 10048
Attention: Robert Austin
Facsimile: (212) 392-3123
15. Remedies. The parties hereto will be
entitled to enforce their rights under this Agreement
specifically (without posting a bond or other
security), to recover damages by reason of any breach
of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions
of this Agreement and that any party hereto may in its
sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or
injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement.
[Remainder of page intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed
this Assignment and Option Agreement as of the day and
year first above written.
DW TAXTER SPECIAL CORP.
By:
Name:
Title:
TAXTER PARK ASSOCIATES
By: Dean Witter Realty Income
Partnership II, L.P.,
general partner
By: Dean Witter Realty
Income
Properties II, Inc.,
managing general
partner
By:
Name:
Title:
By: Dean Witter Realty Income
Partnership III, L.P.,
general partner
By: Dean Witter Realty
Income
Properties III,
Inc.,
managing general
partner
By:
<PAGE>
Name:
Title:
By: Dean Witter Realty Income
Partnership IV, L.P.,
general partner
By: Dean Witter Realty
Fourth
Income Properties,
Inc.,
managing general
partner
By:
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in real estate joint
ventures. In accordance with industry practive, its balance sheet is
unclassified. For full information, refer to the accompanying unaudited
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> JAN-31-1999
<CASH> 3,487,313
<SECURITIES> 0
<RECEIVABLES> 1,135,131
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 61,897,814<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 61,554,321<F2>
<TOTAL-LIABILITY-AND-EQUITY> 61,897,814<F3>
<SALES> 0
<TOTAL-REVENUES> 1,909,773<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,018,339
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 891,434
<INCOME-TAX> 0
<INCOME-CONTINUING> 891,434
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 891,434
<EPS-PRIMARY> 1.50<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include net investments
in real estate of $40,230,329, real estate held for sale of $9,199,543
investments in joint ventures of $6,982,954, net deferred expenses of
$383,745 and other assets of $478,799.
<F2>Other Stockholders Equity represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of $269,149,
and security deposits of $74,344.
<F4>Total revenue includes rent of $1,624,001, equity in earning of joint
ventures of $208,102, interest of $29,223, and other revenues of $48,447.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
