4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)August 11, 1998
DEAN WITTER REALTY YIELD PLUS II, L.P.
(Exact name of registrant as specified in its charter)
Delaware 0-18149 13-
3469111
(State or other jurisdiction Commission (I.R.S. Employer
of incorporation) File Number) Identification
No.)
Two World Trade Center, New York, New York 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code(212) 392-1054
(Former name or former address, if changed since
last report)
Item 2. Acquisition or Disposition of Assets
Pursuant to a Purchase and Sale Agreement dated as of July
1, 1998, the Partnership agreed to sell the building and
improvements which comprise the Century Alameda Distribution
Center property and the leasehold interest in the underlying
land to St. Paul Properties, Inc., an unaffiliated party,
for a negotiated sale price of $9.35 million.
The closing of the sale took place on August 11, 1998. At
closing, the Partnership received sale proceeds, net of
closing costs and other deductions, of approximately $9.1
million.
Subsequent to the sale, the Partnership owns only one
property interest, its investment in GCGA Limited
Partnership, the owner of the One Congress Street property.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
On a pro forma basis, if the sale of the Century
Alameda Distribution Center had been consummated on
June 30, 1998, the Partnership's Balance Sheet as of
such date would have reflected an increase in cash and
cash equivalents of $8.9 million, a decrease in
accounts payable and other liabilities of $0.1 million,
an increase in Partners' capital of $2.6 million and
the elimination of the following items: real estate
held for sale of $6.0 million, deferred expenses of
$0.3 million, other assets of $0.2 million and security
deposits of $0.1 million.
For the Income Statement for the year ended December
31, 1997, if the property was sold at the beginning of
1997, the Partnership would have had no rental income
or property operating expenses and depreciation and
amortization would have decreased by $0.2 million. As
a result, net income of $1,741,253 would have decreased
by $420,686 to $1,320,567, and net income per limited
partnership Unit of $9.05 would have decreased by $2.19
to $6.86. The pro forma adjustments to the Income
Statement exclude the Partnership's share of the non-
recurring gain on the sale of the property.
For the Income Statement for the six months ended June
30, 1998, if the property was sold at the beginning of
1998, the Partnership would have had no rental income
or property operating expenses and deprecation and
amortization would have decreased by $0.1 million. As
a result, net income of $13,603,972 would have
decreased by $392,009 to $13,211,963, and net income
per limited partnership Unit of $78.03 would have
decreased by $2.04 to $75.99. The pro forma
adjustments to the Income Statement exclude the
Partnership's share of the non-recurring gain on the
sale of the property.
(c) Exhibits
(1) Purchase and Sale Agreement, dated as of July 1,
1998, with respect to the sale of the Century
Alameda Distribution Center property.
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 YIELD PLUS
II, L.P.
By: Dean Witter Realty Yield
Plus II, Inc.
Managing General Partner
Date: August 25, 1998 By: /s/Charles M. Charrow
Charles M. Charrow
Controller
Exhibit Index for Dean Witter Realty Yield Plus II, L.P.
Exhibit
No. Description
10 Purchase and Sale Agreement, dated as of
July 1, 1998, with respect to the sale of the
Century Alameda Distribution Center property.
E-1
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
the 1st day of July, 1998, by and between DEAN WITTER REALTY
YIELD PLUS II, L.P., a Delaware limited partnership, having
an office c/o Dean Witter Realty Inc., Two World Trade
Center, 64th Floor, New York, New York 10048, (the
"Seller"), and ST. PAUL PROPERTIES, INC., a Delaware
corporation, having an office at 385 Washington Street, St.
Paul, Minnesota 55102 (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Seller is the owner of a leasehold interest
(the "Leasehold Interest") in all those certain plots,
pieces and parcels of land described in Schedule 1 hereto
(the "Land") and known and numbered as 11840-54 Alameda
Street, Lynwood, California, pursuant to a certain
Assignment and Assumption of Ground Leases with Grant Deed
of Improvements, dated May 11, 1992 (the "Assignment and
Assumption of Ground Leases"), by and between Davis Partners
Two, a California general partnership ("Davis Partners"),
and the Seller, recorded on May 13, 1992, as Instrument No.
92-863986 in the Official Records of Los Angeles County,
California (the "Registry"), pursuant to which, inter alia,
Davis Partners assigned its interest to the Seller under (i)
a certain Ground Lease, dated January 1, 1988 (the "Phase I
Ground Lease"), by and between Lynwood-Alameda Corporation,
a California corporation (the "Ground Lessor"), and Davis
Partners, as supplemented by an addendum dated January 1,
1988 and as amended by letters each captioned "Addendum to
Ground Lease" and dated June 27, 1988, September 19, 1988,
and November 1, 1988, a memorandum of which was recorded on
December 7, 1988, as Instrument No. 88-1959645 in the
Registry, and (ii) the Ground Lease, dated June 1, 1989 (the
"Phase II Ground Lease" and together with the Phase I Ground
Lease, as each may be affected by the Assignment and
Assumption of Ground Leases, are collectively referred to
hereinafter as the "Ground Leases") by and between the
Ground Lessor and Davis Partners, a memorandum of which was
recorded on December 4, 1989, as Instrument No. 89-1944778
in the Registry, as amended by a letter captioned "Addendum
to Ground Lease" dated April 16, 1990;
WHEREAS, the Seller is the owner of a fee interest (the "Fee
Interest") in and to all buildings and other improvements
situated on the Land (collectively, the "Buildings")
consisting in part of two concrete tilt-up distribution
buildings commonly referred to as the Century Alameda
Distribution Center pursuant to the Assignment and
Assumption of Ground Leases;
WHEREAS, the Seller and the Purchaser have entered into
negotiations wherein the Purchaser expressed its intent to
purchase the Property (as defined herein) from the Seller
and the Seller expressed its intent to sell the Property to
the Purchaser; and
WHEREAS, the Seller and the Purchaser now desire to enter
into an agreement whereby, subject to the terms and
conditions contained herein, the Seller shall sell the
Property to the Purchaser and the Purchaser shall purchase
the Property from the Seller.
NOW, THEREFORE, in consideration of ten ($10.00) dollars and
the mutual covenants and agreements hereinafter set forth,
and intending to be legally bound hereby, it is hereby
agreed as follows:
1. Sale of the Property.
The Seller agrees to sell and convey to the Purchaser, and
the Purchaser agrees to purchase from the Seller, at the
price and upon the terms and conditions set forth in this
Agreement, (i) the Seller's Leasehold Interest in the Land,
together with (ii) the Seller's Fee Interest in the
Buildings, (iii) all right, title and interest of Seller in
and to all easements, rights of way, reservations,
privileges, appurtenances, and other estates pertaining to
the Seller's Leasehold Interest in the Land, (iv) all right,
title and interest of the Seller in and to all fixtures,
machinery, equipment, supplies and other articles of
personal property attached or appurtenant to the Seller's
Leasehold Interest in the Land, or used in connection
therewith (collectively, the "Personal Property"), (v) all
right, title and interest of the Seller, if any, in and to
the trade names of the Buildings; (vi) all of Seller's
right, title and interest in and to the Leases (as defined
in Section 6(d)) (the Seller's Leasehold Interest, together
with all of the foregoing items listed in clauses (i)-(vi)
above being hereinafter sometimes referred to as the
"Property").
1.1. Excluded Property.
Specifically excluded from the Property and this sale are
all items of personal property not described in Section 1
(and all personal property of tenants under the Leases) and
the items described in Schedule 2 annexed hereto and made a
part hereof.
1.2. Closing Date.
The delivery of the Assignment and Assumption and the
consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of
Bingham Dana LLP, Suite 1570, 333 South Grand Avenue, Los
Angeles, California 90071-1535, at 10:00 A.M. on the date
which is five (5) days after the end of the Due Diligence
Period unless such day is not a day on which the Recorder's
Office of Los Angeles County, California is open for
business, in which case, the Closing shall take place on the
next day on which such Recorder's Office is open (the
"Closing Date") or such earlier or later date as the Seller
and Purchaser may agree in writing.
2. Purchase Price.
The purchase price to be paid by the Purchaser to the Seller
for the Property (the "Purchase Price") is Nine Million
Three Hundred Fifty Thousand Dollars and 00/100
($9,350,000.00) payable as follows:
(a) ($300,000) Dollars (the "Downpayment") shall be payable
simultaneously with the execution and delivery of this
Agreement, by delivery to First American Title Insurance
Company (the "Escrow Agent") of a certified or bank check
drawn on or by a bank which is a member of the New York
Clearing House Association (a "Clearing House Bank") or by
wire transfer of immediately available funds to the Escrow
Agent's account as set forth in the Escrow Agreement. The
Downpayment shall be held and disbursed by the Escrow Agent
in accordance with the terms of Section 15. At the Closing,
the Deposit shall be delivered to the Seller and such amount
shall be credited against the portion of the Purchase Price
payable pursuant to Section 2(b);
(b) The balance of the Purchase Price (i.e., the Purchase
Price minus the credit set forth in Section 2(a) above),
plus or minus the apportionments set forth in Section 3,
shall be received not later than 3:00 p.m. (Boston time) on
the day preceding the Closing Date by the Escrow Agent to be
held in escrow pending the Closing and shall be paid at the
Closing by bank wire transfer of immediately available funds
to the Seller's account or to the account or accounts of
such other party or parties as may be designated by the
Seller on or before the Closing Date.
3. Apportionments
The following shall be apportioned between the Seller and
the Purchaser at the Closing as of 11:59 p.m. of the day
preceding the Closing Date (the "Adjustment Date"):
(a) fixed or base rents ("Rents") which have been prepaid,
security deposits referred to in Section 8(e), Rents for the
month in which the Closing occurs and Additional Rents and
other amounts paid by tenants applicable to periods which
expire after the Closing Date, which have been received by
Seller;
(b) real estate taxes, special assessments (but only any
installment relating to the period in which the Adjustment
Date occurs), water charges, sewer rents and charges and
vault charges, if any, on the basis of the fiscal years (or
applicable billing period if other than a fiscal year),
respectively, for which same have been assessed;
(c) value of prepaid fuel belonging to the Seller stored on
the Property, at the Seller's cost, including any taxes, on
the basis of a statement from the Seller's suppliers;
(d) charges and payments under Contracts that are being
assigned to the Purchaser pursuant to the terms of this
Agreement and listed on Schedule 3 hereto or permitted
renewals or replacements thereof;
(e) any prepaid items, including, without limitation, fees
for licenses which are transferred to the Purchaser at the
Closing and annual permit and inspection fees;
(f) utilities, to the extent required by Section 3.4;
(g) deposits with telephone and other utility companies,
and any other persons or entities who supply goods or
services in connection with the Property if same are
assigned to the Purchaser at the Closing;
(h) personal property taxes, if any, on the basis of the
fiscal year for which assessed;
(i) all other revenues from the operation of the Property
other than Rents and Additional Rents (including, without
limitation, parking charges, tenant direct electrical
reimbursements, HVAC overtime charges, and telephone booth
and vending machine revenues);
(j) New Lease Expenses as provided in Section 10.1.2;
(k) all rent, charges, additional rent or expenses or other
charges under the Ground Leases; and
(l) such other items as are customarily apportioned between
sellers and purchasers of real properties of a type similar
to the Property and located in Los Angeles County,
California.
3.1. Taxes.
If the amount of real estate taxes, special assessments or
other taxes for the Property for the fiscal year during
which the Closing occurs is not finally determined at the
Adjustment Date, such taxes shall be apportioned on the
basis of the full amount of the assessment for such period
(or the assessment for the prior tax period if the
assessment for the current tax period is not then known) and
the rate for the immediately prior tax year, and shall be
reapportioned as soon as the new tax rate and valuation, if
any, has been finally determined. If any taxes which have
been apportioned shall subsequently be reduced by abatement,
the amount of such abatement, less the cost of obtaining the
same and after deduction of sums payable to tenants under
Leases or expired or terminated Leases, shall be equitably
apportioned between the parties hereto.
3.2. Rents.
3.2.1. Arrearages.
If on the Closing Date any tenant is in arrears in the
payment of Rent or has not paid the Rent payable by it for
the month in which the Closing occurs (whether or not it is
in arrears for such month on the Closing Date), any Rents
received by the Purchaser or the Seller 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 in
which the Closing occurred, (ii) second, to the months
following the month in which the Closing occurred through
the then current month, and (iii) third, to the months
preceding the month in which the Closing occurred. If Rents
or any portion thereof received by the Seller or the
Purchaser after the Closing are due and payable to the other
party by reason of this allocation, the appropriate sum,
less a proportionate share of any reasonable attorneys' fees
and costs and expenses expended in connection with the
collection thereof, shall be promptly paid to the other
party (to the extent not collected from or reimbursed by
tenants).
3.2.2. Additional Rents.
If any tenants are required to pay percentage rent,
escalation charges for real estate taxes, parking charges,
insurance charges, utility charges, operating expenses and
maintenance escalation charges, cost-of-living increases or
other charges of a similar nature ("Additional Rents") and
any Additional Rents are collected by the Purchaser from a
tenant after the Closing Date, then the Purchaser shall
promptly pay to the Seller out of the first such sums
received from such tenant the amount of all Additional Rents
which are due and payable by such tenant with respect to any
period prior to the Closing Date (whether or not such
Additional Rents first became due and payable on or after
the Closing Date), less a proportionate share of any
reasonable attorneys' fees and costs and expenses of
collection thereof (to the extent not collected from or
reimbursed by tenants).
3.2.3. Collection After the Closing.
After the Closing, the Seller shall continue to have the
right, in its own name, to demand payment of and to collect
Rent and Additional Rent arrearages owed to the Seller by
any tenant, which right shall include, without limitation,
the right to continue or commence legal actions or
proceedings against any tenant, provided, however, that
Seller shall have no right to dispossess any tenant from the
premises under such tenant's Lease. The Purchaser agrees to
reasonably cooperate with the Seller in connection with all
reasonable efforts by the Seller to collect such Rents and
Additional Rents, whether before or after the Closing Date,
including, without limitation, making available to Seller at
the Property, for Seller's review and photocopying at
Seller's expense, any relevant books and records (including
any Rent or Additional Rent statements, receipted bills and
copies of tenant checks used in payment of such Rent or
Additional Rent). If for any fiscal period which includes
the Adjustment Date tenants are paying Additional Rent based
upon estimates prepared by the Seller, such Additional Rents
shall be reapportioned when the actual expenses for the
fiscal period are known.
3.3. Water.
If there is a water meter on the Property, the Seller shall
furnish a reading to a date not more than thirty (30) days
prior to the Closing Date, and the unfixed water charges and
sewer rent, if any, based thereon for the intervening time
shall be apportioned on the basis of such last reading.
3.4. Utilities.
The Seller will attempt to obtain final cut-off readings of
fuel, telephone, electricity, and gas to be made as of the
Adjustment Date which are not billed directly to tenants
under the Leases. The Seller shall pay the bills based on
such readings promptly after the same are rendered. If
arrangements cannot be made for any such cut-off reading,
the parties shall apportion the charges for such services on
the basis of the bill therefor for the most recent billing
period prior to the Adjustment Date, and when final bills
are rendered for the period which includes the Adjustment
Date the Seller and Purchaser shall promptly readjust the
apportionments in accordance with such final bills.
3.5. Post-Closing Adjustments.
The items set forth in this Section 3 shall be apportioned
at the Closing by payment of the net amount of such
apportionments to the Seller in the manner set forth herein
for the payment of the Purchase Price if the net
apportionment is in favor of the Seller or by a credit
against the Purchase Price if the net apportionment is in
favor of the Purchaser. However, if any of the items
subject to apportionment under the foregoing provisions of
this Section 3 cannot be apportioned at the Closing because
of the unavailability of the information necessary to
compute such apportionment, or if any errors or omissions in
computing apportionments at the Closing are discovered
subsequent to the Closing, then such item shall be
reapportioned and such errors and omissions corrected as
soon as practicable after the Closing Date and the proper
party reimbursed, which obligation shall survive the Closing
for a period of one year after the Closing Date.
Notwithstanding any of the foregoing provisions of this
Section 3.5 to the contrary, the Purchaser and the Seller
agree that the one year limitation set forth in this Section
3.5 shall not apply to the parties' obligations under
Sections 3.1 and 3.2 and that such obligations shall survive
the Closing for a period of two (2) years.
4. Due Diligence Period.
Notwithstanding anything to the contrary contained herein,
the Purchaser shall have a fifteen (15) day period
commencing on the date hereof (the "Due Diligence Period")
to inspect the physical condition of the Property. Neither
the Purchaser nor the Purchaser's Representatives shall
contact any of the Seller's tenants, vendors, or employees,
prior to the Closing without obtaining the Seller's prior
written consent in each instance. Seller has furnished to
Purchaser for Purchaser's review and approval copies of the
following items: (i) the Leases; (ii) the Ground Leases;
(iii) the Contracts; (iv) current tax statements for the
Property for the current fiscal year and for the two (2)
prior fiscal tax years; and (v) certain budget, income,
expense and other financial information, and other books and
records of the Property. Purchaser expressly acknowledges
and agrees that Purchaser has fully and satisfactorily
examined the foregoing and is familiar and satisfied with
the content and condition thereof and that Purchaser shall
have no right of any kind or for any reason to terminate
this Agreement due to anything contained in the foregoing.
4.1. Access to the Property.
During the Due Diligence Period, the Purchaser and the
Purchaser's Representatives shall have the right to enter
upon the Property for the sole purpose of inspecting the
Property and making surveys, soil borings, engineering tests
and other investigations, inspections and tests
(collectively, "Investigations"), provided (i) the Purchaser
shall give the Seller not less than two (2) business days
prior written notice before the first entry and not less
than twenty-four (24) hours telephonic notice before each
subsequent entry, (ii) the first such notice shall include
sufficient information to permit the Seller to review the
scope of the proposed Investigations, and (iii) neither the
Purchaser nor the Purchaser's Representatives shall permit
any borings, drillings or samplings to be done on the
Property without the Seller's prior written consent,
provided however that the Seller acknowledges that the
Purchaser will require core sampling of the concrete slabs
in the Buildings. Any entry upon the Property and all
Investigations shall be during the Seller's normal business
hours and at the sole risk and expense of the Purchaser and
the Purchaser's Representatives, and shall not interfere
with the activities on or about the Property of the Seller,
its tenants and their employees and invitees. The Purchaser
shall:
(a) promptly repair any damage to the Property resulting
from any such Investigations and replace, refill and regrade
any holes made in, or excavations of, any portion of the
Property used for such Investigations so that the Property
shall be in the same condition as that which existed prior
to such Investigations;
(b) fully comply with all Laws applicable to the
Investigations and all other activities undertaken in
connection therewith;
(c) permit the Seller to have a representative present
during all Investigations undertaken hereunder;
(d) take all actions and implement all protections
necessary to ensure that all actions taken in connection
with the Investigations, and the equipment, materials, and
substances generated, used or brought onto the Property pose
no threat to the safety or health of persons or the
environment, and cause no damage to the Property or other
property of the Seller or other persons;
(e) if requested by the Seller, furnish to the Seller, at
no cost or expense to the Seller, copies of all surveys,
soil test results, engineering, asbestos, environmental and
other studies and reports relating to the Investigations
which the Purchaser shall obtain with respect to the
Property promptly after the Purchaser's receipt of same;
(f) maintain or cause to be maintained, at the Purchaser's
expense, a policy of comprehensive general public liability
insurance with a combined single limit of not less than
$1,000,000 per occurrence for bodily injury and property
damage, automobile liability coverage including owned and
hired vehicles with a combined single limit of $1,000,000
per occurrence for bodily injury and property damage, and an
excess umbrella liability policy for bodily injury and
property damage in the minimum amount of $3,000,000,
insuring the Purchaser and the Seller and certain of
Seller's Affiliates listed on Schedule 4, as additional
insureds, against any injuries or damages to persons or
property that may result from or are related to (i) the
Purchaser's and/or the Purchaser's Representatives' entry
upon the Property, (ii) any Investigations or other
activities conducted thereon, and (iii) any and all other
activities undertaken by the Purchaser and/or the
Purchaser's Representatives in connection with the Property,
and deliver evidence of such insurance policy to the Seller
at the earlier of ten (10) days after the date of this
Agreement or the first entry on the Property;
(g) indemnify the Seller and the Seller's Affiliates and
hold the Seller and the Seller's Affiliates harmless from
and against any and all claims, demands, causes of action,
losses, damages, liabilities, costs and expenses (including
without limitation attorneys' fees and disbursements),
suffered or incurred by the Seller or any of the Seller's
Affiliates and arising out of or in connection with (i) the
Purchaser and/or the Purchaser's Representatives' entry upon
the Property, (ii) any Investigations or other activities
conducted thereon by the Purchaser or the Purchaser's
Representatives, and (iii) any liens or encumbrances filed
or recorded against the Property as a consequence of the
Investigations or any other activities conducted thereon by
the Purchaser or the Purchaser's Representatives; provided,
however, that subject to Section 17.3 hereof, the
obligations of Purchasers set forth in this Section 4.1(g)
shall not be applicable to matters or conditions which are
only discovered by Purchaser or Purchaser's Representatives,
but not caused by, Purchaser or Purchaser's Representatives;
and
(h) not, at any time, contact or communicate with any tenant
of the Property for any reason whatsoever without the prior
written approval of the Seller, which communications,
whether by telephone, in writing or in person, Seller or its
designee shall have the right to be present at or otherwise
participate in.
The provisions of this Section 4.1 shall survive the
termination of this Agreement and the Closing.
4.2. Purchaser's Termination Notice.
Subject to the provisions of the last paragraph of this
Section 4.2, the Purchaser shall have the right to elect to
terminate this Agreement by giving written notice (the
"Purchaser's Termination Notice") of such election to the
Seller at any time prior to the expiration of the Due
Diligence Period if the Purchaser shall determine (in the
exercise of its reasonable discretion) that any of the
following conditions to termination are met as of the date
of the Purchaser's Termination Notice, in which event the
provisions of Section 14.1 shall apply:
(a) (i) The Purchaser shall have failed to obtain a letter,
in form and content satisfactory to Purchaser prior to the
date of this Agreement, from ATC Associates, Inc. indicating
that Purchaser may rely on the report entitled Phase I
Environmental Site Assessment of Century Alameda, Lynwood,
California 90262 for Dean Witter Realty Inc., Project No.
84052.0001, dated February 5, 1998, which has been delivered
to the Purchaser prior to the date of this Agreement (the
"ATC Report") or, subject to the provisions of the last
paragraph of this Section 4.2, (ii) The Purchaser shall have
determined, based upon a site assessment study conducted at
Purchaser's sole expense by a qualified engineering firm
proposed by Purchaser and approved by Seller that there is
oil, hazardous substances, hazardous materials, hazardous or
toxic waste, or friable and accessible asbestos-containing
materials present on the Property except as otherwise
disclosed in the ATC Report, the Purchaser hereby
acknowledging and agreeing that the Purchaser shall have no
right of any kind or for any reason whatsoever to terminate
this Agreement due to any defect or any other condition
disclosed or identified in such report.
(b) The Purchaser shall have determined, based upon a final
engineering study covering the Buildings and any other
existing structures on the Property by Law Engineering, that
there are material defects (as opposed to ordinary wear and
tear given the age of such Property and the materials used
at the time in the construction thereof) in any roof,
foundation, sprinkler mains, structural elements and masonry
walls of any of the Buildings or in related heating,
ventilating and air-conditioning, electrical, sanitation,
water, or mechanical systems, except as otherwise disclosed
in those reports entitled Building Evaluation Report, 11840
Alameda Avenue (sic), Lynwood, California, dated April 6,
1998, by Building Technics and Building Evaluation Report,
11854 Alameda Avenue (sic), Lynwood, California, dated April
6, 1998, by Building Technics (collectively, the "Structural
Reports"), each of which has been delivered to the Purchaser
prior to the date of this Agreement, the Purchaser hereby
acknowledging and agreeing that the Purchaser shall have no
right of any kind or for any reason whatsoever to terminate
this Agreement due to any defect or any other condition
disclosed or identified in such reports, except that the
Purchaser may deliver a Purchaser's Termination Notice if
Law Engineering determines that any condition noted in the
Structural Reports is materially worse than as set forth in
the Structural Reports.
(c) The Purchaser shall have determined, based upon a legal
opinion from its special counsel, that the Buildings as
presently constructed and used violate in a material respect
applicable federal or state law or governmental regulation,
or local ordinance, order or regulation, including but not
limited to laws, regulations or ordinances relating to land
use, zoning, building use and occupancy, subdivision
control, fire protection, public health and safety, wetlands
protection and protection of the environment.
(d) The Purchaser is dissatisfied with the status of the
Title Commitment (as the same may be revised by the Title
Company) or the Survey (as the same may be revised by Coory
Engineering).
If for any reason whatsoever the Seller shall not have
received the Purchaser's Termination Notice prior to the
expiration of the Due Diligence Period, the Purchaser shall
be deemed to have irrevocably waived the right of
termination granted under this Section 4.2, and such right
of termination shall be of no further force or effect.
Purchaser's Termination Notice shall state with sufficient
particularity the conditions precedent to the Purchaser's
obligation to purchase the Property which have not been
satisfied and the Seller shall have the option, exercisable
by giving written notice of such exercise to the Purchaser
within seven (7) days of the Seller's receipt of the
Purchaser's Termination Notice, (a) in the event that
Purchaser has sent the Purchaser's Termination Notice due to
failure to obtain a reliance letter from ATC Associates,
Inc. pursuant to Section 4.2(a)(i), to elect to require
Purchaser to have a site assessment study conducted at
Purchaser's sole expense by a qualified engineering firm
proposed by Purchaser and approved by Seller or (b) in the
event that Purchaser has sent the Purchaser's Termination
Notice pursuant to Section 4.2(a)(ii) or any other reason to
elect to use reasonable efforts (the cost of which shall not
exceed $25,000 in the aggregate) to cause the satisfaction
of such unsatisfied conditions precedent specified in
Purchaser's Termination Notice, in which event this
Agreement shall not terminate as a result of the Purchaser
delivery of the Purchaser's Termination Notice. If such
unsatisfied conditions precedent are not satisfied within
ninety (90) days of Purchaser's Termination Notice, to
Purchaser's reasonable satisfaction, Purchaser shall be
entitled to have the Downpayment returned to Purchaser in
accordance with Section 14.1 hereof.
4.2.1. Concrete Slab Floor and Air Samples.
Notwithstanding anything to the contrary contained herein,
Purchaser may, subject to the immediately preceding
paragraph, deliver a Purchaser's Termination Notice up to
six (6) days following the conclusion of Due Diligence
Period if either (i) Law Engineering determines that there
is a problem with the concrete slab or with the contiguity
of the underlying soil of the 11854 Alameda Street Building
which is materially worse than as set forth in the
Structural Reports and in the Gemini Builders work order
dated May 15, 1998 which estimates the cost of remediation
of such problem to be $21,107 (the "Gemini Work"); or (ii)
the Purchaser conducts air quality sample tests at the
Property and such tests disclose a material problem with the
air quality at the Property. Subject to Seller having the
right, if any, to recover some or all of the costs of
remediation of the concrete slabs from Goldenberg Group,
Inc. Seller shall complete the Gemini Work prior to the
Closing or Purchaser shall have a credit toward the Purchase
Price in the amount of $21,107, or such lesser amount as
Gemini Builders shall state in writing.
4.3. Estoppel Certificates.
Promptly after execution and delivery of this Agreement, the
Seller agrees to request an Estoppel Certificate from each
tenant under a Lease, but in no event shall it be deemed to
be an obligation of the Seller under this Agreement to
obtain executed Estoppel Certificates except for Estoppel
Certificates from all tenants who lease space in excess of
10% of the net rentable area of the Buildings plus one-half
of all other tenants at the Buildings. The Estoppel
Certificates shall be requested by the Seller of each tenant
under a Lease in the form annexed hereto as Exhibit G and
made a part hereof; provided, however, if any tenant is
required or permitted under its Lease to make different
statements in a certificate of such nature than are set
forth in Exhibit G, and the Seller has not received an
executed Estoppel Certificate in the form of Exhibit G from
any such tenant as of the conclusion of the Due Diligence
Period, the Seller may modify the Estoppel Certificate for
such tenant to set forth only the statements required under
such tenant's Lease to be made by such tenant in such a
certificate and request an Estoppel Certificate in such
form. If the Seller delivers to the Purchaser Estoppel
Certificates in the form of Exhibit G or in a form otherwise
contemplated by the immediately preceding sentence, the
Seller shall have satisfied its obligations under this
Section 4.3. Promptly after execution and delivery of this
Agreement, the Seller agrees to request and obtain from the
Ground Lessor the Ground Lessor's Estoppel Certificate and
Consent in the form annexed hereto as Exhibit I and made a
part hereof.
5. Title.
Subject to Buyer's termination rights as set forth herein,
the Seller shall convey and the Purchaser shall accept title
to the Property subject to those matters set forth on
Schedule 5 hereto (collectively the "Permitted
Encumbrances"). The Seller has delivered to the Purchaser,
at the Purchaser's expense, a commitment for an owner's
title insurance policy (the "Title Commitment") ") with
respect to title to the Property, i.e., (i) the Seller's
Leasehold Interest in the Land and (ii) the Seller's Fee
Interest in the Buildings, from First American Title
Insurance Company (the "Title Company"), together with
legible, true and complete copies of all instruments giving
rise to any defects or exceptions to title to the Property.
The Seller has delivered to the Purchaser, at the
Purchaser's expense, an as-built survey ("Survey") of the
Land and Buildings dated May 15, 1998 and prepared in
accordance with the "Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys" jointly established and
adopted by ALTA and ACSM in 1992.
5.1. Unacceptable Encumbrances.
If the Title Commitment or the Survey indicate the existence
of any liens or encumbrances (collectively, "Liens") or
other defects or exceptions in or to title to the Property
other than the Permitted Encumbrances (collectively, the
"Unacceptable Encumbrances") subject to which the Purchaser
is unwilling to accept title and the Purchaser gives the
Seller notice of the same within ten (10) days (provided,
however, that the Seller acknowledges receipt of the letter
dated June 16, 1998 from Oppenheimer, Wolff & Donnelly LLP
to the Title Company and Coory Engineering) after receipt of
the Title Commitment or the Survey, respectively, the Seller
shall undertake to eliminate the same (or to arrange for
title insurance insuring against enforcement of such
Unacceptable Encumbrances against, or collection of the same
out of, the Property) subject to Section 5.2. The Purchaser
hereby waives any right the Purchaser may have to advance as
objections to title or as grounds for the Purchaser's
refusal to close this transaction any Unacceptable
Encumbrance which the Purchaser does not notify the Seller
of within such ten (10) day period unless (i) such
Unacceptable Encumbrance was first raised by the Title
Company subsequent to the date of the Title Commitment or
the Purchaser shall otherwise first discover same or be
advised of same subsequent to the date of the Title
Commitment or the Survey, respectively, and (ii) the
Purchaser shall notify the Seller of the same within five
(5) days after the Purchaser first becomes aware of such
Unacceptable Encumbrance. The Seller, in its sole
discretion, may adjourn the Closing one time for up to sixty
(60) days in order to eliminate Unacceptable Encumbrances.
5.2. Removal of Unacceptable Encumbrances.
The Seller shall not be obligated to bring any action or
proceeding, to make any payments or otherwise to incur any
expense in order to eliminate Unacceptable Encumbrances not
waived by the Purchaser or to arrange for title insurance
insuring against enforcement of such Unacceptable
Encumbrances against, or collection of the same out of, the
Property; except that the Seller shall satisfy Unacceptable
Encumbrances which are (i) mortgages and past due real
estate taxes and assessments secured by or affecting the
Property, and (ii) judgments against the Seller or other
Liens secured by or affecting the Property which judgments
and other Liens can be satisfied by payment of liquidated
amounts not to exceed $50,000 in the aggregate for all such
judgments and other Liens. The Seller may eliminate any
such Unacceptable Encumbrance by the payment of amounts
necessary to cause the removal thereof of record, by bonding
over such Unacceptable Encumbrance in a manner reasonably
satisfactory to the Purchaser or by arranging for title
insurance reasonably satisfactory to the Purchaser insuring
against enforcement of such Unacceptable Encumbrance
against, or collection of the same out of, the Property.
5.3. Options Upon Failure to Remove Unacceptable Liens.
If the Seller is unable or is not otherwise obligated
(pursuant to Section 5.2) to eliminate all Unacceptable
Encumbrances not waived by the Purchaser, or to bond over in
a manner reasonably satisfactory to the Purchaser any
Unacceptable Encumbrances not waived by the Purchaser, or to
arrange for title insurance reasonably acceptable to the
Purchaser insuring against enforcement of such Unacceptable
Encumbrances against, or collection of the same out of, the
Property, and to convey title in accordance with the terms
of this Agreement on or before the Closing Date (whether or
not the Closing is adjourned as provided in Section 5.1),
the Purchaser shall elect on the Closing Date, as its sole
remedy for such inability of the Seller, either (i) to
terminate this Agreement by notice given to the Seller
pursuant to Section 14.1, in which event the provisions of
Section 14.1 shall apply, or (ii) to accept title subject to
such Unacceptable Encumbrances and receive no credit
against, or reduction of, the Purchase Price.
5.4. Use of Purchase Price.
If on the Closing Date there may be any Liens or other
encumbrances which the Seller must pay or discharge in order
to convey to the Purchaser such title as is herein provided
to be conveyed, the Seller may use any portion of the
Purchase Price to satisfy the same, provided:
(a) the Seller shall deliver to the Purchaser or the Title
Company, at the Closing, instruments in recordable form and
sufficient to satisfy such Liens or other encumbrances of
record together with the cost of recording or filing said
instruments; or
(b) the Seller, having made arrangements with the Title
Company, shall deposit with said company sufficient moneys
acceptable to said company to insure the obtaining and the
recording of such satisfactions.
5.5. Franchise Taxes.
Any franchise or corporate tax open, levied or imposed
against the Seller or other owners in the chain of title
that may be a Lien on the Closing Date shall not be an
objection to title if the Title Company omits same from the
title policy issued pursuant to the Title Commitment or
excepts same but insures the Purchaser against collection
thereof out of the Property.
5.6. Transfer Taxes; Title Insurance Premiums.
At the Closing, the Seller shall pay all transfer and
recording taxes (the "Transfer Tax Payments") imposed
pursuant to the Laws of the State of California or any other
governmental authority in respect of the transactions
contemplated by this Agreement by delivery to the Title
Company of sufficient funds to pay such taxes together with
any return (the "Transfer Tax Return") required thereby
which shall be duly executed by the Seller and the Purchaser
to the extent required by applicable law. At the Closing,
the premiums due the Title Company to obtain title insurance
policies in the form contemplated by the Title Commitment
(as the same may be amended pursuant to this Agreement), the
cost of obtaining the survey and other Closing-related
expenses shall be paid in the manner set forth on Schedule 6
hereto.
6. Representations and Warranties of the Seller.
The Seller represents and warrants to the Purchaser as
follows:
(a) The Seller is a duly formed and validly existing
limited partnership organized under the laws of the State of
Delaware and is qualified under the laws of the State of
California to conduct business therein.
(b) The Seller has the full, legal right, power and
authority to execute and deliver this Agreement and all
documents now or hereafter to be executed by the Seller
pursuant to this Agreement (collectively, the "Seller's
Documents"), to consummate the transaction contemplated
hereby, and to perform its obligations hereunder and under
the Seller's Documents.
(c) This Agreement and the Seller's Documents do not and
will not contravene any provision of the limited partnership
agreement of the Seller, any judgment, order, decree, writ
or injunction issued against the Seller, or, to the Seller's
actual knowledge, any provision of any laws or governmental
ordinances, rules, regulations, orders or requirements
(collectively, the "Laws") applicable to the Seller. The
consummation of the transactions contemplated hereby will
not result in a breach or constitute a default or event of
default by the Seller under any agreement to which the
Seller or any of its assets are subject or bound and will
not result in a violation of any Laws applicable to the
Seller.
(d) There are no leases, licenses or other occupancy
agreements to which Seller is a party, affecting any portion
of the Property (collectively, the "Leases") on the date
hereof, except for the Leases listed in Schedule 7 annexed
hereto and made a part hereof. The copies of the Leases
furnished by the Seller to the Purchaser are true and
complete. To the Seller's actual knowledge, the Leases are
in full force and effect, without any material default by
the Seller thereunder. To the Seller's actual knowledge,
except as listed on Schedule 7, the Seller has not given or
received any notice of default which remains uncured or
unsatisfied, with respect to any of the Leases.
(e) To the Seller's actual knowledge, there are no pending
actions, suits, proceedings or investigations to which the
Seller is a party before any court or other governmental
authority with respect to the Property owned by the Seller
except as set forth on Schedule 8 hereto.
(f) Except as disclosed on Schedule 9 hereto, since the
date the Seller acquired legal and beneficial title to the
Property (i) to Seller's actual knowledge, neither Seller
nor any third party has engaged in the generation, use,
manufacture, treatment, storage or disposal of any Hazardous
Substance (as hereinafter defined) on the Property in
violation of Applicable Environmental Law (as hereinafter
defined), the cost of correction or remediation of which
would have a material adverse effect upon the value of the
Property, and (ii) to Seller's actual knowledge, neither
Seller nor any third party has received any written notice
from any governmental authority having jurisdiction over the
Property of any violation of Applicable Environmental Law
with respect to the Property which requires corrective
action, the cost of which would have a material adverse
effect upon the value of the Property. Disclosure of any
matter on Schedule 9 hereto shall not constitute any
admission by Seller that such matter was material or a
violation of Applicable Environmental Law. As used in this
Agreement, the term "Hazardous Substance" shall mean any
substance, chemical or waste that is currently listed as
hazardous, toxic or dangerous under Applicable Environmental
Law. As used in this Agreement, the term "Applicable
Environmental Law" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. 9601 et seq.; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901,
et seq.; the Water Pollution Control Act, 33 U.S.C. 1251
et seq.; the Clean Air Act, 42 U.S.C. 7401 et seq.; and
the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.;
as the foregoing have been amended from time to time to the
date of this Agreement; and any similar state and local laws
and ordinances and the regulations implementing such
statutes in effect on the date hereof imposing liability or
establishing standards of conduct for environmental
protection.
(g) The Seller has delivered to the Purchaser true and
complete copies of each of the Ground Leases together with
all amendments thereto to date.
(h) Each of the Ground Leases is in full force and effect.
(i) To the best of Seller's knowledge there are no defaults
or events of default in existence under either of the Ground
Leases, nor is there any condition which, with the giving of
notice or the passage of time will result in a default or
event of default under either of the Ground Leases.
(j) Schedule 3 sets forth a true and complete list of the
Contracts.
6.1. Survival of Representations.
The representations and warranties of the Seller set forth
in this Section 6 (i) shall be true, accurate and correct in
all material respects upon the execution of this Agreement
and shall be deemed to be repeated on and as of the Closing
Date (except as they relate only to an earlier date), and
(ii) shall remain operative and shall survive the Closing
and the execution and delivery of the Assignment and
Assumption for a period of six (6) months following the
Closing Date and then shall expire, and no action or claim
based thereon shall be commenced after such period. The
Seller represents and warrants that it shall maintain liquid
assets of one million dollars ($1,000,000) until the
conclusion of the six (6) month period referenced in the
immediately preceding sentence or Seller shall deliver a
guaranty of its obligations with respect to its
representations and warranties set forth in this Agreement
from Dean Witter Realty, Inc. in a form reasonably
acceptable to Seller and Purchaser.
6.2. Discovery of Untrue Representation.
If at or prior to the Closing, (i) the Purchaser shall
become aware that any of the representations or warranties
made herein by the Seller is untrue, inaccurate or incorrect
in any material respect and shall give the Seller notice
thereof at or prior to the Closing, or (ii) the Seller shall
notify the Purchaser that a representation or warranty made
herein by the Seller is untrue, inaccurate or incorrect,
then the Seller may, in its sole discretion, elect by notice
to the Purchaser to adjourn the Closing one or more times
for up to sixty (60) days in the aggregate in order to cure
or correct such untrue, inaccurate or incorrect
representation or warranty. If any such representation or
warranty is not cured or corrected by the Seller on or
before the Closing Date (whether or not the Closing is
adjourned as provided above), then the Purchaser, as its
sole remedy for such inability of Seller, shall elect either
(i) to waive such misrepresentations or breaches of
warranties and consummate the transactions contemplated
hereby without any reduction of or credit against the
Purchase Price, or (ii) to terminate this Agreement by
notice given to Seller pursuant to the provisions of Section
14.1. In the event the Closing occurs, the Purchaser hereby
expressly waives, relinquishes and releases any right or
remedy available to it at law, in equity or under this
Agreement to make a claim against the Seller for damages
that the Purchaser may incur, or to rescind this Agreement
and the transactions contemplated hereby, as the result of
any of the Seller's representations or warranties being
untrue, inaccurate or incorrect if the Purchaser had actual
knowledge that such representation or warranty was untrue,
inaccurate or incorrect at the time of the Closing and the
Purchaser nevertheless closes title hereunder.
6.3. Limited Nature of Representations.
The Purchaser acknowledges that neither the Seller nor any
of the Seller's Affiliates, nor any of their agents or
representatives, nor Broker has made any representations or
held out any inducements to the Purchaser other than those
specifically set forth in this Section 6 and Section 11.
The Purchaser acknowledges that the Seller, pursuant to the
terms of this Agreement, has afforded the Purchaser the
opportunity for full and complete investigations,
examinations and inspections of the Property and all
Property Information. The Purchaser acknowledges and agrees
that (i) the Property Information delivered or made
available to the Purchaser and the Purchaser's
Representatives by the Seller or the Seller's Affiliates, or
any of their agents or representatives may have been
prepared by third parties and may not be the work product of
the Seller and/or any of the Seller's Affiliates; (ii) the
Purchaser is relying solely on its own investigations,
examinations and inspections of the Property and those of
the Purchaser's Representatives and is not relying in any
way on the Property Information furnished by the Seller or
any of the Seller's Affiliates, or any of their agents or
representatives; and (iii) except as otherwise set forth
herein the Seller expressly disclaims any representations or
warranties with respect to the accuracy or completeness of
the Property Information furnished by Seller or Seller's
Affiliates or their agents and/or representatives, and the
Purchaser releases the Seller and the Seller's Affiliates,
and their agents and representatives, from any and all
liability with respect thereto. The Purchaser or anyone
claiming by, through or under the Purchaser, hereby fully
and irrevocably releases the Seller and the Seller's
Affiliates from any and all claims that it may now have or
hereafter acquire against any of the Seller or the Seller's
Affiliates for any cost, loss, liability, damage, expense,
action or cause of action, whether foreseen or unforeseen,
arising from or related to the presence of environmentally
hazardous, toxic or dangerous substances, or any other
conditions (whether patent, latent or otherwise) affecting
the Property, except for claims against the Seller based
upon any obligations and liabilities of the Seller expressly
provided in this Agreement.
The provisions of this Section 6 shall survive the Closing.
7. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Seller as
follows:
(a) The Purchaser is a duly formed and validly existing
corporation organized under the laws of the State of
Delaware, and is qualified under the laws of the State of
California to conduct business therein on the date hereof.
(b) The Purchaser has the full, legal right, power,
authority and financial ability to execute and deliver this
Agreement and all documents now or hereafter to be executed
by it pursuant to this Agreement (collectively, the
"Purchaser's Documents"), to consummate the transactions
contemplated hereby, and to perform its obligations
hereunder and under the Purchaser's Documents.
(c) This Agreement and the Purchaser's Documents do not and
will not contravene any provision of the organizational
documents of the Purchaser, any judgment, order, decree,
writ or injunction issued against the Purchaser, or any
provision of any Laws applicable to the Purchaser. The
consummation of the transactions contemplated hereby will
not result in a breach or constitute a default or event of
default by the Purchaser under any agreement to which the
Purchaser or any of its assets are subject or bound and will
not result in a violation of any Laws applicable to the
Purchaser.
(d) There are no pending actions, suits, proceedings or
investigations to which the Purchaser is a party before any
court or other governmental authority which may have an
adverse impact on the transactions contemplated hereby.
The representations and warranties of the Purchaser set
forth in this Section 7 and elsewhere in this Agreement
shall be true, accurate and correct in all material respects
upon the execution of this Agreement, shall be deemed to be
repeated on and as of the Closing Date (except as they
relate only to an earlier date) and shall survive the
Closing for a period of six (6) months following the Closing
Date and then shall expire, and no action or claim based
thereon shall be commenced after such period.
8. Documents to be Delivered by the Seller at Closing.
At the Closing, the Seller shall execute, acknowledge and/or
deliver, as applicable, the following to the Purchaser:
(a) An Assignment and Assumption of Ground Leases with
Grant Deed of Improvements or its equivalent (the
"Assignment and Assumption") conveying (i) leasehold title
to the Land; and (ii) fee simple title to the Buildings in
the form of Exhibit A annexed hereto and made a part hereof.
(b) The Assignment and Assumption of Leases and Security
Deposits in the form of Exhibit B annexed hereto and made a
part hereof assigning without warranty or representation all
of the Seller's right, title and interest, if any, in and to
the Leases in effect on the Closing Date, all guarantees
thereof and the security deposits thereunder in the Seller's
possession, if any (the "Lease Assignment").
(c) The Assignment and Assumption of Contracts and Licenses
in the form of Exhibit C annexed hereto and made a part
hereof (the "Contract and License Assignment") assigning
without warranty or representation all of the Seller's
right, title and interest, if any, in and to (i) all of the
assignable licenses, permits, certificates, approvals,
authorizations and variances issued for or with respect to
the Property by any governmental authority (collectively,
the "Licenses"), and (ii) all assignable purchase orders,
equipment leases, advertising agreements, franchise
agreements, license agreements, management agreements,
leasing and brokerage agreements and other service contracts
relating to the operation of the Property (collectively, the
"Contracts") not terminated by Seller pursuant to the terms
of this Agreement.
(d) The Assignment and Assumption of Intangible Property in
the form of Exhibit D annexed hereto and made part hereof
assigning without warranty or representation all of the
Seller's right, title and interest, if any, in and to all
intangible property owned by the Seller with respect to the
operation of the Property listed on Schedule 10 annexed
hereto and made a part hereof, including, without
limitation, the trade name "Century Alameda Distribution
Center" (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 of all Leases and New Leases and
any amendments, guarantees and other documents relating
thereto to which Seller is a party, together with a schedule
of all tenant security deposits thereunder and the accrued
interest on such security deposits payable to tenants which
are in the possession of or received by the Seller.
(f) A bill of sale in the form of Exhibit E annexed hereto
and made a part hereof (the "Bill of Sale") conveying,
transferring and selling to the Purchaser without warranty
or representation all right, title and interest of the
Seller in and to all Personal Property.
(g) Notices to the tenants of the Buildings in the form of
Exhibit F annexed hereto and made a part hereof advising the
tenants of the sale of the Property to the Purchaser and
directing that rents and other payments thereafter be sent
to the Purchaser or as the Purchaser may direct.
(h) Copies of the Seller's partnership agreement and
partnership certificate (if applicable) and, if required by
law or its partnership agreement, copies of partnership
resolutions and/or consents of the partners authorizing the
execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this
Agreement, all certified as true and correct by the managing
general partner of the Seller, or in the absence thereof,
then by all of the Seller's general partners; and (ii) a
legal existence certificate issued by the state of
organization of the Seller, dated within thirty (30) days of
the Closing Date.
(i) Executed originals of all Estoppel Certificates
required by Section 4.3 and any other Estoppel Certificates,
received by the Seller from tenants prior to the Closing
Date and not previously delivered to the Purchaser.
(j) To the extent in the Seller's possession and not
already located at the Property, keys to all entrance doors
to, and equipment and utility rooms located in, the
Property.
(k) To the extent in the Seller's possession and not
already located at the Property, all Licenses.
(l) To the extent in the Seller's possession, executed
counterparts of all Contracts and all warranties in
connection therewith which are in effect on the Closing Date
and which are assigned by the Seller.
(m) To the extent in the Seller's possession and not
located at the Buildings, plans and specifications of the
Buildings.
(n) The transfer tax payments together with the Transfer
Tax Return, if any.
(o) A "FIRPTA" affidavit sworn to by the Seller in the form
of Exhibit H annexed hereto and made a part hereof. The
Purchaser acknowledges and agrees that upon the Seller's
delivery of such affidavit, the Purchaser shall not withhold
any portion of the Purchase Price pursuant to Section 1445
of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
(p) A California Form 590.
(q) The Ground Lessor's Estoppel Certificate and Consent to
Assignment and Assumption of Ground Leases in the form of
Exhibit I annexed hereto and made a part hereof (the "Ground
Lessor's Estoppel Certificate and Consent").
(r) All other documents the Seller are required to deliver
pursuant to the provisions of this Agreement.
9. Documents to be Delivered by the Purchaser at Closing.
At the Closing, the Purchaser shall execute, acknowledge
and/or deliver, as applicable, the following to the Seller:
(a) The cash portion of the Purchase Price payable at the
Closing pursuant to Section 2, subject to apportionments,
credits and adjustments as provided in this Agreement.
(b) The Assignment and Assumption.
(c) The Bill of Sale.
(d) If the Purchaser is a corporation, (i) copies of the
certificate of incorporation and by-laws of the Purchaser
and of the resolutions of the board of directors of the
Purchaser authorizing the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated by this Agreement certified as
true and correct by the Secretary or Assistant Secretary of
the Purchaser; (ii) a good standing certificate issued by
the state of incorporation of the Purchaser, dated within
thirty (30) days of the Closing Date; (iii) a qualification
to do business certificate issued by the State of
California, dated within thirty (30) days of the Closing
Date; and (iv) an incumbency certificate executed by the
Secretary or Assistant Secretary of the Purchaser with
respect to those officers of the Purchaser executing any
documents or instruments in connection with the transactions
contemplated herein.
(e) If the Purchaser is a partnership, (i) copies of the
Purchaser's partnership agreement and partnership
certificate (if applicable) and, if required by law or its
partnership agreement, copies of partnership resolutions
and/or consents of the partners authorizing the execution,
delivery and performance of this Agreement and the
consummation of the transactions contemplated by this
Agreement, all certified as true and correct by the managing
general partner of the Purchaser, or in the absence thereof,
then by all of the Purchaser's general partners; (ii) a
legal existence certificate issued by the state of
organization of the Purchaser, dated within thirty (30) days
of the Closing Date; and (iii) a qualification to do
business certificate issued by the State of California,
dated within thirty (30) days of the Closing Date.
(f) If the Purchaser is a limited liability company, (i)
copies of the Purchaser's operating agreement and, if
required by law or its operating agreement, copies of
resolutions of the manager authorizing the execution,
delivery and performance of this Agreement and the
consummation of the transactions contemplated by this
Agreement, all certified as true and correct by the manager
of the Purchaser; (ii) a good standing certificate issued by
the state of organization of the Purchaser, dated within
thirty (30) days of the Closing Date; and (iii) a
qualification to do business certificate issued by the State
of California, dated within thirty (30) days of the Closing
Date.
(g) The A & A Agreements.
(h) The Transfer Tax Payments together with the Transfer
Tax Return, if any.
(i) All other documents the Purchaser is required to
deliver pursuant to the provisions of this Agreement.
10. Operation of the Property prior to the Closing Date.
Between the date hereof and the Closing Date, the Seller
shall have the right to continue to operate and maintain the
Property in its normal and customary manner.
10.1. New Leases.
From and after the date hereof, the Seller shall not modify,
extend, renew or cancel (subject to Section 10.2) any Lease
or enter into any proposed Lease of all or any portion of
the Property if such then existing or proposed Lease demises
more than 5,000 rentable square feet of the Property without
the Purchaser's prior written consent in each instance,
which consent shall not be unreasonably withheld and shall
be given or denied, with the reasons for any such denial,
within five (5) days after receipt by the Purchaser of the
Seller's notice requesting the Purchaser's consent to the
proposed action relating to such existing or proposed Lease.
If the Purchaser fails to reply to the Seller's request for
consent in a notice given within such period or if the
Purchaser expressly denies its consent but fails to provide
the Seller with the reasons for such denial, the Purchaser's
consent shall be deemed to have been granted.
10.1.1. New Lease Expenses.
If after the date of this Agreement (and in accordance with
Section 10.1 above pertaining the Purchaser's consent), the
Seller enters into any Leases, or if there is any extension
or renewal of any Leases, whether or not such Leases provide
for their extension or renewal, or any expansion or
modification of any Leases (each, a "New Lease"), the Seller
shall keep accurate records of all expenses (collectively,
"New Lease Expenses") incurred in connection with each New
Lease, including, without limitation, the following: (i)
brokerage commissions and fees relating to such leasing
transaction, (ii) expenses incurred for repairs,
improvements, equipment, painting, decorating, partitioning
and other items to satisfy the tenant's requirements with
regard to such leasing transaction, (iii) reimbursements to
the tenant for the cost of any of the items described in the
preceding clause (ii), (iv) 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
Property).
10.1.2. Allocation of New Lease Expenses.
The New Lease Expenses for each New Lease allocable to and
payable by the Seller shall be determined by multiplying the
amount of such New Lease Expenses by a fraction, the
numerator of which shall be the number of days contained in
that portion, if any, of the term of such New Lease
commencing on the date on which the tenant thereunder shall
have commenced to pay fixed rent ("Rent Commencement Date")
and expiring on the date immediately preceding the Closing
Date, and the denominator of which shall be the total number
of days contained in the period commencing on the Rent
Commencement Date and expiring on the date of the scheduled
expiration of the term of such New Lease, without provision
for any optional extensions or renewals, and the remaining
balance of the New Lease Expenses for each New Lease shall
be allocable to and payable by the Purchaser by addition to
the Purchase Price. At the Closing, the Purchaser shall
reimburse the Seller for all New Lease Expenses theretofore
paid by the Seller, if any, in excess of the portion of the
New Lease Expenses allocated to the Seller pursuant to the
provisions of the preceding sentence. For purposes of this
Section 10.1.2, the Rent Commencement Date under a renewal,
extension, expansion or modification of a Lease shall be
deemed to be (i) in the case of a renewal or extension
(whether effective prior to or after the Closing, or in the
form of an option exercisable in the future), the first date
during such renewal or extension period after the originally
scheduled expiration of the term of such Lease on which the
tenant under such Lease commences to pay fixed rent, (ii) in
the case of an expansion (whether effective prior to or
after the Closing, or in the form of an option exercisable
in the future), the date on which the tenant under such
Lease commences to pay fixed rent for the additional space,
and (iii) in the case of a modification not also involving a
renewal, extension or expansion of such Lease, the effective
date of such modification agreement. The provisions of this
Section 10.1.2 shall survive the Closing.
10.2. Termination of Existing Leases.
During the term of this Agreement, no Lease shall be
terminated without the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld
or delayed.
10.3. Contracts.
Seller 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 without the
Purchaser's prior consent in each instance, which consent
shall not be unreasonably withheld or delayed, and if
withheld, the Purchaser shall promptly give the Seller a
notice stating the reasons therefor. If the Purchaser fails
to reply within five (5) days to the Seller's request for
consent in a notice given pursuant to this Section 10.3 or
if the Purchaser expressly denies its consent but fails to
provide the Seller with the reasons for such denial, the
Purchaser's consent shall be deemed to have been granted.
10.4. Ground Leases.
Seller shall not modify or amend either of the Ground Leases
without Purchaser's prior consent, which consent shall not
be unreasonably withheld.
11. Broker.
The Purchaser and the Seller represent and warrant to each
other that The Seeley Company (the "Broker") is the sole
broker with whom they have dealt in connection with the
Property and the transactions described herein. The Seller
shall be liable for, and shall indemnify the Purchaser
against, all brokerage commissions or other compensation due
to the Broker arising out of the transaction contemplated in
this Agreement, which compensation shall be paid subject and
pursuant to a separate agreement between the Seller and the
Broker. Each party hereto agrees to indemnify, defend and
hold the other harmless from and against any and all claims,
causes of action, losses, costs, expenses, damages or
liabilities, including reasonable attorneys' fees and
disbursements, which the other may sustain, incur or be
exposed to, by reason of any claim or claims by any broker,
finder or other person, except (in the case of the Purchaser
as indemnitor hereunder) the Broker, for fees, commissions
or other compensation arising out of the transactions
contemplated in this Agreement if such claim or claims are
based in whole or in part on dealings or agreements with the
indemnifying party. The obligations and representations and
warranties contained in this Section 11 shall survive the
termination of this Agreement and the Closing.
12. Casualty; Condemnation.
12.1. Damage or Destruction.
If a "material" part (as hereinafter defined) of the
Property is damaged or destroyed by fire or other casualty,
the Seller shall notify the Purchaser of such fact and the
Purchaser shall have the option to terminate this Agreement
upon notice to the Seller given not later than ten (10) days
after receipt of the Seller's notice; provided, however,
that the Purchaser's election shall be ineffective if within
ten (10) days after the Seller's receipt of the Purchaser's
election notice, the Seller shall elect by notice to the
Purchaser to repair such damage or destruction and shall
thereafter complete such repair within 90 days after the
then scheduled Closing Date at the time of the Purchaser's
election. If the Seller makes such election to repair, the
Seller shall have the right to adjourn the Closing Date one
time for up to 90 days in the aggregate in order to complete
such repairs and shall have the right to retain all
insurance proceeds which the Seller may be entitled to
receive as a result of such damage or destruction. If
Seller is unable to restore the Property to Purchaser's
reasonable satisfaction prior to the expiration of such
ninety (90) day period, Purchaser may elect to terminate
this Agreement and to have the Downpayment returned to
Purchaser in accordance with Section 14.1 hereof. If
(i) the Purchaser does not elect to terminate this Agreement
as to the damaged Property, (ii) the Purchaser elects to
terminate this Agreement as to the damaged Property but such
election is ineffective because the Seller elects to repair
such damage and completes such repair within such 90-day
period to the Purchaser's reasonable satisfaction as
provided above, or (iii) there is damage to or destruction
of an "immaterial" part ("immaterial" is herein deemed to be
any damage or destruction which is not "material", as such
term is hereinafter defined) of the Property, the Purchaser
shall close title as provided in this Agreement and, at the
Closing, the Seller shall, unless the Seller has repaired
such damage or destruction prior to the Closing to the
Purchaser's reasonable satisfaction, (x) pay over to the
Purchaser the proceeds of any insurance collected by the
Seller less the amount of all costs incurred by the Seller
in connection with the repair of such damage or destruction,
(y) assign and transfer to the Purchaser all right, title
and interest of the Seller in and to any uncollected
insurance proceeds which the Seller may be entitled to
receive from such damage or destruction, and (z) pay to
Purchaser in cash (or credit against the Purchase Price) the
amount of any deductible on the insurance coverage. A
"material" part of the Property shall be deemed to have been
damaged or destroyed if the cost of repair or replacement
shall be fifteen percent (15%) or more of the Purchase
Price. Notwithstanding anything contained in this Section
12.1 if a casualty results in a termination of either of the
Ground Leases, this Agreement shall terminate and the rights
of the parties shall be the same as if notice of termination
was given pursuant to Section 14.1.
12.2. Condemnation.
If, prior to the Closing Date, all or any "significant"
portion (as hereinafter defined) of the Property is taken by
eminent domain or condemnation (or is the subject of a
pending taking which has not been consummated), the Seller
shall notify the Purchaser of such fact and the Purchaser
shall have the option to terminate this Agreement upon
notice to the Seller given not later than ten (10) days
after receipt of the Seller's notice. If the Purchaser does
not elect to terminate this Agreement, or if an
"insignificant" portion ("insignificant" is herein deemed to
be any taking which is not "significant", as such term is
herein defined) of the Property is taken by eminent domain
or condemnation, at the Closing the Seller shall assign and
turnover, and the Purchaser shall be entitled to receive and
keep, all awards or other proceeds for such taking by
eminent domain or condemnation. A "significant" portion of
the Property means (i) 10% or more of the main office
building on the Land, (ii) a portion of the parking areas if
the taking thereof reduces the remaining available number of
parking spaces below the minimum legally required, or
(iii) a legally required driveway on the Land if such
driveway is the predominant means of ingress thereto or
egress therefrom. Notwithstanding anything contained in
this Section 12.2 if a taking results in a termination of
either of the Ground Leases, this Agreement shall terminate
and the rights of the parties shall be the same as if notice
of termination was given pursuant to Section 14.1.
12.3. Termination.
If the Purchaser effectively terminates this Agreement
pursuant to Section 12.1 or 12.2, this Agreement shall be
terminated and the rights of the parties shall be the same
as if notice of termination were given pursuant to Section
14.1.
13. Conditions Precedent to Closing.
13.1. Conditions Precedent to the Purchaser's Obligations
to Perform.
The Purchaser's obligation under this Agreement to purchase
the Property is subject to the fulfillment of each of the
following conditions: (i) the representations and warranties
of the Seller contained herein shall be materially true,
accurate and correct as of the Closing Date except to the
extent they relate only to an earlier date; (ii) the Seller
shall be ready, willing and able to deliver title to the
Property in accordance with the terms and conditions of this
Agreement; (iii) the delivery of the Estoppel Certificates
and the Ground Lessor's Estoppel Certificate and Consent in
the form required hereunder; and (iv) the Seller shall have
delivered all the documents and other items required
pursuant to Section 8, and shall have performed all other
covenants, undertakings and obligations, and complied with
all conditions required by this Agreement to be performed or
complied with by the Seller at or prior to the Closing.
13.2. Conditions Precedent to the Seller's Obligations to
Perform.
The Seller's obligation under this Agreement to sell the
Property to the Purchaser is subject to the fulfillment of
each of the following conditions: (i) the representations
and warranties of the Purchaser contained herein shall be
materially true, accurate and correct as of the Closing
Date; (ii) the Purchaser shall have delivered the funds
required hereunder and all the documents to be executed by
the Purchaser set forth in Section 9 and shall have
performed all other covenants, undertakings and obligations,
and complied with all conditions required by this Agreement
to be performed or complied with by the Purchaser at or
prior to the Closing; (iii) all consents and approvals of
governmental authorities and parties to agreements to which
the Purchaser is a party or by which the Purchaser's assets
are bound that are required with respect to the consummation
of the transactions contemplated by this Agreement shall
have been obtained and copies thereof shall have been
delivered to the Seller at or prior to the Closing; (iv) the
Ground Lessor shall have executed and delivered the Ground
Lessor's Estoppel Certificate and Consent in the form
attached as Exhibit I and (v) the additional matters set
forth in Schedule 12 annexed hereto and made a part hereof
shall have occurred or been delivered to the Seller, as
applicable, at or prior to the Closing.
13.3. Remedies Upon Failure to Satisfy Conditions.
In the event that any condition contained in Sections 13.1
or 13.2 is not satisfied on the Closing Date, the party
entitled to the satisfaction of such condition as a
condition to its obligation to close title shall have as its
sole remedy hereunder the right to elect to (i) waive such
unsatisfied condition whereupon title shall close as
provided in this Agreement or (ii) proceed as provided in
Section 14 hereof.
14. Remedies.
14.1. Seller's Inability to Perform.
If the Closing fails to occur by reason of the Seller's
inability to perform its obligations under this Agreement
which has not been waived pursuant to Section 13.3, then the
Purchaser, as its sole remedy for such inability of the
Seller, may terminate this Agreement by notice to the
Seller. If the Purchaser elects to terminate this
Agreement, then this Agreement shall be terminated and
neither party shall have any further rights, obligations or
liabilities hereunder, except for such rights, obligations
and liabilities which expressly survive termination of this
Agreement pursuant to the terms hereof (collectively, the
"Surviving Obligations"), and except that the Purchaser
shall be entitled to a return of the Deposit provided the
Purchaser is not otherwise in default hereunder. Except as
set forth in this Section 14.1, the Purchaser hereby
expressly waives, relinquishes and releases any other right
or remedy available to it at law, in equity or otherwise by
reason of the Seller's inability to perform its obligations
hereunder. Notwithstanding anything to the contrary herein,
if the Seller's inability to perform its obligations under
this Agreement is a result of any action of, or failure to
act by, the Purchaser or any of the Purchaser's
Representatives, the Purchaser shall not be relieved of its
obligations under this Agreement and Purchaser shall not be
entitled to any right or remedy provided in this Section
14.1 or elsewhere in this Agreement.
14.2. Purchaser's Failure to Perform.
In the event of a default hereunder by the Purchaser or if
the Closing fails to occur by reason of the Purchaser's
failure or refusal to perform its obligations hereunder,
then the Seller may terminate this Agreement by notice to
the Purchaser. If the Seller elects to terminate this
Agreement, then this Agreement shall be terminated and the
Seller may retain the Deposit as liquidated damages for all
loss, damage and expenses suffered by the Seller, it being
agreed that the Seller's damages are impossible to
ascertain, and neither party shall have any further rights,
obligations or liabilities hereunder, except for the
Surviving Obligations. Nothing contained herein shall limit
or restrict the Seller's ability to pursue any rights or
remedies it may have against the Purchaser with respect to
the Surviving Obligations. Except as set forth in this
Section 14.2 and the Surviving Obligations, the Seller
hereby expressly waives, relinquishes and releases any other
right or remedy available to them at law, in equity or
otherwise by reason of the Purchaser's default hereunder or
the Purchaser's failure or refusal to perform its
obligations hereunder. Notwithstanding anything to the
contrary herein, if the Purchaser's default or the
Purchaser's failure or refusal to perform its obligations
under this Agreement is a result of any action of, or
failure to act by, the Seller or any of the Seller's
Affiliates, the Seller shall not be relieved of its
obligations under this Agreement and the Seller shall not be
entitled to any right or remedy provided in this Section
14.2 or elsewhere in this Agreement.
14.3. Seller's Failure to Perform.
If the Closing fails to occur by reason of the Seller's
failure or refusal to perform its obligations hereunder
which has not been waived by the Purchaser, then the
Purchaser, as its sole remedy hereunder, may (i) terminate
this Agreement by notice to the Seller or (ii) seek specific
performance from the Seller. As a condition precedent to
the Purchaser exercising any right it may have to bring an
action for specific performance as the result of the
Seller's failure or refusal to perform their obligations
hereunder, the Purchaser must commence such an action within
ninety (90) days after the occurrence of such default. The
Purchaser agrees that its failure to timely commence such an
action for specific performance within such ninety (90) day
period shall be deemed a waiver by it of its right to
commence such an action. Notwithstanding anything to the
contrary herein, if the Seller's failure or refusal to
perform its obligations under this Agreement is a result of
any action of, or failure to act by, the Purchaser or any of
the Purchaser's Representatives, the Purchaser shall not be
relieved of its obligations under this Agreement and
Purchaser shall not be entitled to any right or remedy
provided in this Section 14.3 or elsewhere in this
Agreement.
15. Escrow.
The Escrow Agent shall hold the Downpayment and all interest
accrued thereon, if any (collectively, the "Deposit") in
escrow and shall dispose of the Deposit only in accordance
with the provisions of that certain Escrow Agreement of even
date herewith by and among the Escrow Agent, the Purchaser
and the Seller relating to the Property (the "Escrow
Agreement") in the form of Exhibit J hereto. Simultaneously
with their execution and delivery of this Agreement, the
Purchaser and the Seller shall furnish the Escrow Agent with
their true Federal Taxpayer Identification Numbers so that
the Escrow Agent may file appropriate income tax information
returns with respect to any interest earned on or credited
to the Deposit. The party entitled to the economic benefit
of the Deposit representing interest earned on the
Downpayment shall be the party responsible for the payment
of any tax due thereon.
The provisions of the Escrow Agreement shall survive the
termination of this Agreement and the Closing.
16. Notices.
All notices, elections, consents, approvals, demands,
objections, requests or other communications which the
Seller or the Purchaser may be required or desire to give
pursuant to, under or by virtue of this Agreement must be in
writing and (i) delivered by hand to the addresses set forth
below, or (ii) (a) sent by express mail or courier (for next
business day delivery), or (b) sent by certified or
registered mail, return receipt requested with proper
postage prepaid, addressed as follows:
If to the Seller:
DEAN WITTER REALTY YIELD PLUS II, L.P.
c/o Dean Witter Realty Inc.
Two World Trade Center
64th Floor
New York, NY 10048
Attention: Robert B. Austin
with copies to:
Vincent M. Sacchetti, Esq.
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
If to the Purchaser:
St. Paul Properties, Inc.
385 Washington Street
St. Paul, MN 55102
Attention: James C. Adams
with a copy to:
Oppenheimer Wolff & Donnelly LLP
Plaza VII
45 South Seventh Street, Suite 3400
Minneapolis, MN 55402-1609
Attention: Lloyd G. Kepple, Esq.
The Seller or the Purchaser may designate another addressee
or change its address for notices and other communications
hereunder by a notice given to the other parties in the
manner provided in this Section 16. A notice or other
communication sent in compliance with the provisions of this
Section 16 shall be deemed given and received (i) if by
hand, at the time of the delivery thereof to the receiving
party at the address of such party set forth above (or to
such other address as such party has designated as provided
above), (ii) if sent by express mail or overnight courier,
on the date it is delivered to the other party, or (iii) if
sent by registered or certified mail, on the third business
day following the day such mailing is made.
17. Property Information and Confidentiality.
The Purchaser agrees that, prior to the Closing, all
Property Information shall be kept strictly confidential and
shall not, without the prior consent of the Seller, be
disclosed by the Purchaser or the Purchaser's
Representatives, in any manner whatsoever, in whole or in
part, and will not be used by the Purchaser or the
Purchaser's Representatives, directly or indirectly, for any
purpose other than evaluating the Property. Moreover, the
Purchaser agrees that, prior to the Closing, the Property
Information will be transmitted only to the Purchaser's
Representatives (i) who need to know the Property
Information for the purpose of evaluating the Property, and
who are informed by the Purchaser of the confidential nature
of the Property Information, (ii) who agree to be bound by
the terms of this Section 17 and Section 6.3 and (iii) who
have executed and delivered to the Seller the letter
regarding use of the Property Information in the form of
Exhibit K hereto. The provisions of this Section 17 shall
in no event apply to Property Information which is a matter
of public record and shall not prevent the Purchaser from
complying with Laws, including, without limitation,
governmental regulatory, disclosure, tax and reporting
requirements.
17.1. Press Releases.
The Purchaser and Seller, for the benefit of each other,
hereby agree that between the date hereof and the Closing
Date, they will not release or cause or permit to be
released any press notices, publicity (oral or written) or
advertising promotion relating to, or otherwise announce or
disclose or cause or permit to be announced or disclosed, in
any manner whatsoever, the terms, conditions or substance of
this Agreement or the transactions contemplated herein,
without first obtaining the written consent of the other
party hereto. It is understood that the foregoing shall not
preclude either party from discussing the substance or any
relevant details of the transactions contemplated in this
Agreement with any of its attorneys, accountants,
professional consultants or potential lenders, as the case
may be, or prevent either party hereto from complying with
Laws, including, without limitation, governmental
regulatory, disclosure, tax and reporting requirements.
17.2. Return of Property Information.
In the event this Agreement is terminated, the Purchaser and
the Purchaser's Representatives shall promptly, in good
faith, deliver to the Seller all originals and copies of the
Property Information in the possession of the Purchaser and
the Purchaser's Representatives received from Seller,
Seller's Affiliates or their agents or representatives.
17.3. Property Information Defined.
As used in this Agreement, the term "Property Information"
shall mean (i) all information and documents in any way
relating to the Property, the operation thereof or the sale
thereof (including, without limitation, Leases, Contracts
and Licenses) furnished to, or otherwise made available for
review by, the Purchaser or its directors, officers,
employees, affiliates, partners, brokers, agents or other
representatives, including, without limitation, attorneys,
accountants, contractors, consultants, engineers and
financial advisors (collectively, the "Purchaser's
Representatives"), by the Seller or any of the Seller's
Affiliates, or their agents or representatives, including,
without limitation, their contractors, engineers, attorneys,
accountants, consultants, brokers or advisors, and (ii) all
analyses, compilations, data, studies, reports or other
information or documents prepared or obtained by the
Purchaser or the Purchaser's Representatives containing or
based, in whole or in part, on the information or documents
described in the preceding clause (i), or the
Investigations, or otherwise reflecting their review or
investigation of the Property.
17.4. Remedies.
In addition to any other remedies available to the Seller,
the Seller shall have the right to seek equitable relief,
including, without limitation, injunctive relief or specific
performance, against the Purchaser or the Purchaser's
Representatives in order to enforce the provisions of this
Section 17 and 6.3.
The provisions of this Section 17 shall survive the
termination of this Agreement and the Closing.
18. Access to Records.
For a period of two (2) years subsequent to the Closing
Date, the Seller, the Seller's 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 Seller at the Closing
for tax and audit purposes, regulatory compliance, and
cooperation with governmental investigations upon reasonable
prior written notice to the Purchaser (in any event, not
less than two (2) business days), and shall have the right,
at their sole cost and expense, to make copies of such
documents, books and records.
19. Assignments.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and to their respective heirs,
executors, administrators, successors and permitted assigns.
This Agreement may not be assigned by the Purchaser without
the prior written consent of the Seller and any assignment
or attempted assignment by the Purchaser without such prior
written consent shall constitute a default by the Purchaser
hereunder and shall be null and void
20. Entire Agreement, Amendments.
All prior statements, understandings, representations and
agreements between the parties, oral or written, are
superseded by and merged in this Agreement, which alone
fully and completely expresses the agreement between them in
connection with this transaction and which is entered into
after full investigation, neither party relying upon any
statement, understanding, representation or agreement made
by the other not embodied in this Agreement. This Agreement
shall be given a fair and reasonable construction in
accordance with the intentions of the parties hereto, and
without regard to or aid of canons requiring construction
against the Seller or the party drafting this Agreement.
This Agreement shall not be altered, amended, changed,
waived, terminated or otherwise modified in any respect or
particular, and no consent or approval required pursuant to
this Agreement shall be effective, unless the same shall be
in writing and signed by or on behalf of the party to be
charged.
21. Merger.
Except as otherwise expressly provided herein, the
Purchaser's acceptance of the Assignment and Assumption
shall be deemed a discharge of all of the obligations of the
Seller hereunder and all of the Seller's representations,
warranties, covenants and agreements herein shall merge in
the documents and agreements executed at the Closing and
shall not survive the Closing.
22. Limited Recourse.
The Purchaser agrees that it does not have and will not have
any claims or causes of action against any disclosed or
undisclosed officer, director, employee, trustee,
shareholder, partner, principal, parent, subsidiary or other
affiliate of the Seller, including, without limitation, Dean
Witter Realty Inc. and the parent and affiliates of Dean
Witter Realty Inc. (collectively, the "Seller's
Affiliates"), arising out of or in connection with this
Agreement or the transactions contemplated hereby. The
Purchaser agrees to look solely to the Seller and the
Seller's assets for the satisfaction of the Seller's
liability or obligation arising under this Agreement or the
transactions contemplated hereby, or for the performance of
any of the covenants, warranties or other agreements of the
Seller contained herein, and further agrees not to sue or
otherwise seek to enforce any personal obligation against
any of the Seller's Affiliates with respect to any matters
arising out of or in connection with this Agreement or the
transactions contemplated hereby. The total liability of
the Seller hereunder shall in no event exceed One Million
Dollars ($1,000,000).
23. Miscellaneous.
Neither this Agreement nor any memorandum thereof shall be
recorded and any attempted recordation hereof shall be void
and shall constitute a default. Each of the Exhibits and
Schedules referred to herein and attached hereto is
incorporated herein by this reference. The caption headings
in this Agreement are for convenience only and are not
intended to be a part of this Agreement and shall not be
construed to modify, explain or alter any of the terms,
covenants or conditions herein contained. If any provision
of this Agreement shall be unenforceable or invalid, the
same shall not affect the remaining provisions of this
Agreement and to this end the provisions of this Agreement
are intended to be and shall be severable. This Agreement
shall be interpreted and enforced in accordance with the
laws of the State of California without reference to
principles of conflicts of laws.
24. Time of the Essence.
Time is of the essence with respect to this Agreement,
including but not limited to the occurrence of the Closing
as of the originally scheduled date.
25. IRS Form 1099-S Designation.
In order to comply with information reporting requirements
of Section 6045(e) of the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations thereunder, the
parties agree (i) to execute an IRS Form 1099-S Designation
Agreement in the form attached hereto as Exhibit L at or
prior to the Closing to designate the Title Company as the
party who shall be responsible for reporting the
contemplated sale of the Property to the Internal Revenue
Service (the "IRS") on IRS Form 1099-S; (ii) to provide the
Title Company with the information necessary to complete
Form 1099-S; (iii) that the Title Company shall not be
liable for the actions taken under this Section 25, or for
the consequences of those actions, except as they may be the
result of gross negligence or willful misconduct on the part
of the Title Company; and (iv) that the Title Company shall
be indemnified by the parties for any costs or expenses
incurred as a result of the actions taken under this Section
25, except as they may be the result of gross negligence or
willful misconduct on the part of the Title Company. The
Title Company shall provide all parties to this transaction
with copies of the IRS Forms 1099-S filed with the IRS and
with any other documents used to complete IRS Form 1099-S.
26. Attorney's Fees.
In any event that at any time Seller or Purchaser shall
institute any action or proceeding against the other
relating to this Agreement or any default hereunder, then
and in that event the prevailing party in such action or
proceeding shall be entitled to recover from the other party
its reasonable attorneys' fees which shall be deemed to have
accrued on the commencement of such action or proceeding and
shall be payable whether or not such action is prosecuted to
judgment.
27. Counterparts.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such
counterparts shall together constitute but one and the same
instrument.
28. Tax Free Exchange.
Purchaser may consummate the purchase of the Property as
part of a so called like kind exchange (the "Exchange")
pursuant to 1031 of the Internal Revenue Code of 1986, as
amended (the "Code"), provided that: (i) the Closing shall
not be delayed or affected by reason of the Exchange nor
shall the consummation or accomplishment of the Exchange be
a condition precedent or condition subsequent to Purchaser's
obligations under this Agreement; (ii) Purchaser shall
effect the Exchange through an assignment of this Agreement,
or its rights under this Agreement, to a qualified
intermediary; (iii) Seller shall not be required to take an
assignment of the purchase agreement for the relinquished
property or be required to acquire or hold title to any real
property for purposes of consummating the Exchange; and (iv)
Purchaser shall pay any additional costs that would not
otherwise have been incurred by Purchaser or Seller had
Purchaser not consummated its purchase through the Exchange.
Seller shall not by this agreement or acquiescence to the
Exchange (1) have its rights under this Agreement affected
or diminished in any manner or (2) be responsible for
compliance with or be deemed to have warranted to Purchaser
that the Exchange in fact complies with 1031 of the Code.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above
written.
SELLER:
DEAN WITTER REALTY YIELD
PLUS II, L.P.
By: Dean Witter Realty Yield
Plus II, Inc.,
its general partner
By: /s/Robert B. Austin
Name: Robert B. Austin
Title: Vice President
PURCHASER:
ST. PAUL PROPERTIES, INC.
By: /s/James C. Adams
Name: James C. Adams
Title: President
