5
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)November 16, 1999
DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P.
(Exact name of registrant as specified in its charter)
Delaware 0-18146 13-
3293754
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification
No.)
Two World Trade Center, New York, New York 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code(212) 392-1054
(Former name or former address, if changed since
last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Pursuant to a Purchase and Sale Agreement dated as of
February 16, 1999, Dean Witter Realty Income Partnership
III, L.P., entered into an agreement, as amended, to sell
the land and building which comprise the Westland Crossing
property, for a negotiated sale price of $10.2 million, to
New Plan Excel Realty Trust, Inc., an unaffiliated party.
As permitted by the contract, New Plan assigned its purchase
rights to its affiliate, Landamerica Exchange Company. As
part of the Agreement, Dean Witter Realty Income Partnership
II, L.P., an affiliate of the Partnership, sold a property
to New Plan. The aggregate purchase price of the properties
sold was approximately $24.2 million, of which $10.2 million
was allocated in the Agreement to the Westland Crossing
Property.
The closing of the sale took place on November 16, 1999. At
closing, the Partnership received proceeds of approximately
$9.2 million, net of closing costs, a $250,000 escrow to
secure the Partnership's obligations, if any, pursuant to
representations and warranties in the Agreement, and other
deductions.
<PAGE>
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
(1) Pro Forma Balance Sheet as of July 31, 1999.
(2) Pro Forma Statements of Operations for the fiscal
year ended October 31, 1998 and the nine months
ended July 31, 1999.
(c) Exhibits
(1) Purchase and Sale Agreement, dated as of 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. with respect to the sale of the
Westland Crossing property.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
DEAN WITTER REALTY INCOME
PARTNERSHIP III, L.P.
By: Dean Witter Realty Income
Properties III, Inc.
Managing General Partner
Date: November 30, 1999 By: /s/Charles
M. Charrow
Charles M. Charrow
Controller
(Principal Financial and
Accounting Officer)
<PAGE>
<TABLE>
Dean Witter Realty Income Partnership III, L.P.
Pro Forma Consolidated Balance Sheet
As of July 31, 1999
The following unaudited pro forma balance sheet has been
presented as if the Westland Crossing property was sold as
of July 31, 1999. The pro forma adjustments reflect a) the
net cash proceeds from the sale, b) the elimination of the
net carrying value of the property from real estate held for
sale, and c) the elimination of other assets and liabilities
relating to the property sold.
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
ASSETS
<S> <C> <C> <C>
Real estate held for $45,945,98 $ $36,426,4
sale 6 (9,519,495) 91
Investment in joint -
venture 6,983,517 6,983,517
Cash and cash 9,215,696
equivalents 5,109,407 14,325,10
3
Other assets (348,885)
846,125
497,240
$58,885,03 $ $58,232,3
5 (652,684) 51
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and $ $ $
other 520,986 (226,899) 294,087
Liabilities
Total partners'
capital 58,364,049 (425,785) 57,938,26
4
$ $ $58,232,3
58,885,035 (652,684) 51
</TABLE>
<PAGE>
<TABLE>
Dean Witter Realty Income Partnership III, L.P.
Pro Forma Consolidated Statement of Operations
For the year ended October 31, 1998
The following unaudited pro forma consolidated statement of
operations has been presented as if the Westland Crossing
property was sold as of November 1, 1997. The pro forma
adjustments reflect the elimination of rental and other
revenues, property operating expenses, and depreciation and
amortization expenses relating to the property sold. The
pro forma adjustments do not reflect the Partnership's
nonrecurring loss on the sale of the property.
<CAPTION>
Pro Forma
Historical
Adjustments Pro Forma
<S> <C> <C> <C>
Revenues:
Rental $ 6,945,820
$(1,080,124) $ 5,865,696
Equity in earnings of joint venture 18,538,476 -
18,538,476
Interest and other 482,885
(6,703) 476,182
Gain on sale of real estate 15,727,536 -
15,727,536
41,694,717
(1,086,827) 40,607,890
Expenses:
Property operating 2,129,425
(461,052) 1,668,373
Depreciation 1,778,077
(321,497) 1,456,580
Amortization 95,786
(18,066) 77,720
General and administrative 853,375 -
853,375
4,856,663
(800,615) 4,056,048
Net income $36,838,054 $
(286,212) $36,551,842
Net income per Unit of Limited
Partnership interest $ 68.22 $
(0.48) $ 67.74
</TABLE>
<PAGE>
<TABLE>
Dean Witter Realty Income Partnership III, L.P.
Pro Forma Consolidated Statement of Operations
For the nine months ended July 31, 1999
The following unaudited pro forma consolidated statement of
operations has been presented as if the Westland Crossing
property was sold as of November 1, 1998. The pro forma
adjustments reflect the elimination of rental and other
revenues, property operating expenses and depreciation and
amortization expenses relating to the property sold. The
pro forma adjustments do not reflect the Partnership's
nonrecurring loss on the sale of the property.
<CAPTION>
Pro Forma
Historical
Adjustments Pro Forma
<S> <C> <C> <C>
Revenues:
Rental $ 4,363,331 $ (854,166)
$ 3,509,165
Equity in earnings of joint ventures 595,116 -
595,116
Interest and other 147,404
140 147.544
Losses on real estate (4,900,000) -
(4,900,000)
205,851
(854,026) (648,175)
Expenses:
Property operating 1,543,032
(314,879) 1,228,153
Depreciation 669,855
(80,217) 589,638
Amortization 30,229
(10,726) 19,503
General and administrative 261,573 -
261,573
2,504,689
(405,822) 2,098,867
Net income $ (2,298,838) $ (448,204)
$ (2,747,042)
Net income per Unit of Limited
Partnership interest $ (4.79) $ (0.76)
$ (5.55)
</TABLE>
<PAGE>
Exhibit Index for Dean Witter Realty Income Partnership III,
L.P.
Exhibit Sequential
No. Description Page No.
(2) Purchase
and Sale Agreement, dated as of February 16, 1999
between Dean Witter Realty Income Partnership III
L.P., Dean Witter Realty Income Partnership II,
L.P. and New Plan Excel Realty Trust, Inc.
E-1
<PAGE>
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:
LOCATION OWNER
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
<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.
The Purchase Price for each individual Shopping Center
is as follows:
Shopping Center Purchase Price
1. Pavilions at $14,000,000.00
East Lake
2. Westland $10,100,000.00
Crossing
(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.
2.1. Apportionments
The following shall be apportioned between the Sellers
and the Purchaser for all Closings as of 11:59 P.M. on the
day
<PAGE>
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; 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
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;
(e) 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;
(f) any prepaid items, including, without limitation,
fees for licenses which are transferred to the Purchaser at
the Closing and annual permit and inspection fees;
(g) 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);
(h) 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;
<PAGE>
(i) 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);
(j) New Lease Expenses as provided in Section 11.1.2;
(k) 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;
(l) 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-
1, Paragraph G.4 of the Michaels Stores, Inc. lease
regarding a payment of One Thousand
(m) 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);
(n) 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
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
<PAGE>.
2.2. 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.
2.3. Rents.
2.4. 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.
<PAGE>
2.5. 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.
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.
2.6. 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,
<PAGE>
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.
2.7. 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 will be true, complete and correct. All such
charges shall be paid to the Purchaser and adjusted and
applied as provided herein.
2.8. 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.
2.9. 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 <PAGE>
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.
2.10. 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 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 <PAGE>
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.
2.11. 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.
2.12. 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 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
<PAGE>
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;
permit the Sellers to have a representative present
during all Investigations at any Shopping Center undertaken
hereunder, provided the presence of such a
[d] representative shall not be a condition to the
Purchaser's ability to conduct Investigations;
(e) 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;
not allow the Investigations to result in any liens,
judgments or other encumbrances being filed or recorded
<PAGE>
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 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.
2.13. 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 <PAGE>
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.
2.14. 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 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, <PAGE>
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).
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 <PAGE>
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
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
<PAGE>
(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
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.
<PAGE>
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
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, <PAGE>
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.
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
<PAGE>
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.
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
<PAGE>
Control Act, 15 U.S.C. 2601 et seq.; as the
foregoing have been amended from time to
time to the date of this Agreement; and any similar
state and local laws and ordinances and the regulations
implementing such statutes 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
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.
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
<PAGE>
the Michaels Stores, Inc. at the Michigan Shopping
Center, any new construction with respect to
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.
<PAGE>
(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.
(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
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
<PAGE>
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 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
<PAGE>
constitute a default or event of default by the
Purchaser under any agreement to which the Purchaser or any
of its assets are subject or bound and will not result in a
violation of any Laws applicable to the Purchaser.
(d) 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:
Deeds (collectively, the "Deeds") conveying title to
the Shopping Centers in the form of Exhibit A annexed hereto
and made a part hereof.
<PAGE>
(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").
(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
<PAGE>
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.
A bill of sale in the form of Exhibit E annexed hereto
and made a part hereof (the "Bill of Sale") conveying,
transferring and selling to the Purchaser 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.
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
<PAGE>
(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.
(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.
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").
<PAGE>
(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.
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.
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.
<PAGE>
(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.
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
under, arising out of or in respect of such contract.
The contractor shall expressly consent to said
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:
<PAGE>
(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.
(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
of the transactions contemplated by this Agreement
certified as true and correct by the
Secretary or Assistant Secretary of the Purchaser; (ii)
a good standing certificate issued by the state of
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.
<PAGE>
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
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).
<PAGE>
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
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.
<PAGE>
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
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.
<PAGE>
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
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
<PAGE>
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.
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.
<PAGE>
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
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
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
<PAGE>
$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 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
<PAGE>
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
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
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.
<PAGE>
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,
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.
<PAGE>
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:
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
the termination of this Agreement with respect to such
Shopping Center; or
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
<PAGE>
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 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.
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
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 telecopy is expressly permitted hereunder) (for next
business day delivery), addressed as follows:
<PAGE>
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
<PAGE>
If to Escrow Agent:
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 complying with
Laws, including, without limitation, governmental
regulatory, disclosure, tax and reporting requirements, and
legal process.
<PAGE>
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
<PAGE>
case may be). After their receipt of such delivery,
the Sellers shall 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.
<PAGE>
The provisions of this Section 18 shall survive the
termination of this Agreement and the Closing.
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
<PAGE>
shall not be altered, amended, changed, waived,
terminated or otherwise modified in any respect or
particular, and no consent or approval required pursuant to
this Agreement shall be effective, unless the same shall be
in writing and signed by or on behalf of the party to be
charged.
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
<PAGE>
now or hereafter have to the bringing of any such
action or proceeding in 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.
<PAGE>
28. Sellers' Representatives.
The Sellers hereby designate (i) Ronald DiPietro as
their representative to receive notices on their behalf 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
