SECURITIES AND EXCHANGE COMMISSION
UNITED STATES
Washington, DC 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) January 14, 1998
REGENCY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
Florida 1-12298 59-3191743
(State or other jurisdiction Commission (IRS Employer
of incorporation) File Number) Identification No.)
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (904)-356-7000
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
Regency Realty Corporation, through its wholly owned subsidiaries (together the
"Company") acquired five shopping centers (the "1998 Acquisition Properties"),
in addition to the Midland Properties described below, during the months of
January through June 1998. The individual or the aggregate purchase price of
these acquisitions, as provided below, did not individually exceed 10% of the
Company's total assets. The acquisitions were made pursuant to separate purchase
agreements, the sellers of which are unrelated to the Company. All of the
properties currently operate as neighborhood retail shopping centers, and will
continue as such. The purchase price of each shopping center was funded from the
Company's revolving line of credit with Wells Fargo Realty Advisors Funding,
Inc.
The factors considered by the Company in determining the price to be paid for
the shopping centers included historical and expected cash flow, nature of the
tenancies and terms of the leases in place, occupancy rates, opportunities for
alternative and new tenancies, current operating costs, physical condition and
location, and the anticipated impact on the Company's financial results. The
Company took into consideration capitalization rates at which it believes other
shopping centers have recently sold, but determined the purchase price on the
factors discussed above. No separate independent appraisals were obtained for
the properties acquired.
The following summarizes the 1998 Acquisition Properties:
<PAGE>
<TABLE>
<CAPTION>
Property Purchase Acquisition Occupancy at
Name Price Date GLA City/State Acquisition
<S> <C> <C> <C> <C> <C>
Delk Spectrum $13,987,236 1-14-98 100,880 Marietta, GA 100.0%
Bloomingdale $18,096,719 2-11-98 267,935 Brandon, FL 98.0%
Silverlake $ 9,283,350 6-3-98 100,500 Erlanger, KY 91.2%
Highland Square $12,501,000 6-17-98 226,682 Jacksonville, FL 90.0%
Shoppes @ 104 $12,189,650 6-19-98 108,435 Miami, FL 94.0%
=========== ========
Total $66,057,955 804,432
=========== ========
</TABLE>
In January 1998, the Company entered into an agreement to acquire shopping
centers from various entities comprising the Midland Group consisting of 21
shopping centers plus 11 shopping centers under development. The Company
acquired 13 of the Midland shopping centers during March 1998 containing 1.3
million square feet for approximately $111.0 million. Those shopping centers are
included in the Company's March 31, 1998 balance sheet. Subsequent to March 31,
1998, the Company has acquired or will acquire six additional shopping centers
for $56.1 million and during July and August 1998, expects to acquire an
additional three properties under development for $41.3 million. In addition,
during 1998, the Company expects to pay $4.6 million in additional costs related
to joint venture investments and other transaction costs related to acquiring
the various shopping centers from Midland, and during 1999 and 2000 expects to
pay contingent consideration of $23.0 million.
The Company previously filed Form 8-K dated January 12, 1998 that summarized the
transaction and provided 1996 audited financial statements of the Midland
Properties. The enclosed pro forma financial statements for the year ended
December 31, 1997 include the Midland shopping centers and their related audited
financial statements for the year then ended.
In June 1998, the Company, through an operating partnership in which it is the
general partner, sold $80 million of 8.125% Series A Cumulative Redeemable
Preferred Units to an institutional investor in a private placement. The
enclosed pro forma financial statements include the net proceeds from the
offering.
In December 1997, the Company sold one office building for $2.6 million and
recognized a gain on the sale of $451,000. During the first quarter of 1998, the
Company sold three office buildings and a parcel of land for $26.7 million, and
recognized a gain on the sale of $9.3 million. The enclosed pro forma financial
statements include adjustments to reflect the reversal of the revenues and
expenses from the office buildings generated during 1997 and 1998, including the
gains on the sale of the office buildings as if the sales had been completed on
January 1, 1997.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
A. Financial Statements
(a) DELK SPECTRUM SHOPPING CENTER
Audited Statement of Revenues and Certain Expenses for the
year ended December 31, 1997.
(b) BLOOMINGDALE SQUARE
Audited Statement of Revenues and Certain Expenses for the
year ended December 31, 1997.
(c) MIDLAND PROPERTIES
Audited Statement of Revenues and Certain Expenses for the
year ended December 31, 1997.
(d) HIGHLAND SQUARE SHOPPING CENTER
Audited Statement of Revenues and Certain Expenses for the
year ended December 31, 1997.
(e) SILVERLAKE SHOPPING CENTER
Audited Statement of Revenues and Certain Expenses for the
year ended December 31, 1997.
B. Pro Forma Financial Information
(a) REGENCY REALTY CORPORATION
Pro Forma Consolidated Balance Sheet, March 31, 1998
(unaudited).
Pro Forma Consolidated Statements of Operations for the
Three-Month Period ended March 31, 1998 and the Year ended
December 31, 1997 (unaudited).
C. Exhibits:
10. Material Contracts
* (a) Contribution Agreement dated November 3, 1997, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company
as purchaser and Cobb-Powers Ferry/Southside Associates, L.P.
as seller relating to the acquisition of Delk Spectrum
Shopping Center.
* (b) Purchase and Sale Agreement dated October 7, 1997, between
RRC Acquisitions,Inc., a wholly-owned subsidiary of the
Company as purchaser and Bloomingdale Associates, Ltd. as
seller relating to the acquisition of Bloomingdale Square.
(c) Purchase and Sale Agreement dated April 4, 1998, between RRC
Acquisitions Two, Inc., a wholly-owned subsidiary of the
Company as purchaser and Silverlake Development Co., Ltd. as
seller relating to the acquisition of Silverlake Shopping
Center.
(d) Purchase and Sale Agreement dated February 24, 1998, between
RRC Acquisitions, Inc., a wholly owned subsidiary of the
Company as purchaser and Ricardo Pines, Pines Highland Square
Associates, Ltd., and Pines Group, Inc. as seller relating to
the acquisition of Highland Square Shopping Center.
(e) Purchase and Sale Agreement dated March 20, 1998, between RRC
Acquisitions Two, Inc., a wholly owned subsidiary of the
Company as purchaser and Nationwide Life Insurance Company as
seller relating to the acquisition of Shoppes @ 104.
23. Consent of KPMG Peat Marwick LLP
* Incorporated by reference to Form 10-Q filed May 15, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REGENCY REALTY CORPORATION
(registrant)
July 20, 1998 By: /s/ J. Christian Leavitt
----------------------------
J. Christian Leavitt
Vice President and Treasurer
<PAGE>
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
Delk Spectrum Shopping Center for the year ended December 31, 1997. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this statement of revenues and certain expenses based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of Delk Spectrum
Shopping Center was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and for inclusion in a
Form 8-K of Regency Realty Corporation and excludes material amounts, described
in note 1, that would not be comparable to those resulting from the proposed
future operation of the property. The presentation is not intended to be a
complete presentation of Delk Spectrum Shopping Center revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of Delk Spectrum Shopping Center for the year ended
December 31, 1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
May 15, 1998
<PAGE>
DELK SPECTRUM SHOPPING CENTER
Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
Revenues:
Minimum rent $ 1,355,213
Recoveries from tenants 144,801
Percentage rent 10,296
-------------
Total revenues 1,510,310
Operating expenses:
Real estate taxes 87,763
Operating and maintenance 57,295
Management fees 33,966
General and administrative 12,231
-------------
Total expenses 191,255
Revenues in excess of certain expenses $ 1,319,055
=============
See accompanying notes to statement of revenues and certain expenses.
<PAGE>
DELK SPECTRUM SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
1. Basis of Presentation
The statement of revenues and certain expenses relates to the operation of
a 100,880 square foot shopping center (the "Property") located in
Marietta, Georgia.
The Property's financial statement is prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles.
Subsequent to December 31, 1997, the Property was acquired by Regency
Realty Corporation (RRC) in a transaction accounted for as a purchase. All
operations of the Property will be included in the consolidated financial
statements of RRC beginning at the acquisition date.
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Property, have been excluded. RRC is not aware of
any material factors relating to the Property that would cause the
reported financial information not to be necessarily indicative of future
operating results. Costs not directly related to the operation of the
Property have been excluded, and consist of interest, depreciation,
professional fees, and certain other non operating expenses.
2. Related Party Transaction
During the year, management fees of $33,966 were paid to a property
manager which is a related entity of the Property. The Property pays
management fees of 2.5% of total income reported on the cash basis.
3. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
DELK SPECTRUM SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
4. Operating Leases
For the year ended December 31, 1997, the following tenants paid minimum
rent which exceeded 10% of the total minimum rent earned by the Property:
Minimum
Tenant Rent Paid
A&P Food Stores $ 431,952
Blockbuster Video 149,316
Outback Steakhouse, of Georgia - I, L.P. 136,032
The Property is leased to tenants under operating leases with expiration
dates extending to the year 2016. Future minimum rent under noncancelable
operating leases as of December 31, 1997, excluding tenant reimbursements
of operating expenses and excluding additional contingent rentals based on
tenants' sales volume, are as follows:
Year ending December 31, Amount
1998 $ 1,322,718
1999 1,280,486
2000 1,250,745
2001 1,112,330
2002 724,383
<PAGE>
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of Bloomingdale
Square was prepared for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission and for inclusion in a Form 8-K of
Regency Realty Corporation and excludes material amounts, described in note 1,
that would not be comparable to those resulting from the proposed future
operation of the property. The presentation is not intended to be a complete
presentation of Bloomingdale Square revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of Bloomingdale Square for the year ended December 31,
1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
May 13, 1998
<PAGE>
- 1 -
BLOOMINGDALE SQUARE
Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
Revenues:
Minimum rent $ 1,862,950
Recoveries from tenants 458,560
Percentage rent 42,746
-------------
Total revenues 2,364,256
Operating expenses:
Operating and maintenance 214,721
Real estate taxes 209,525
Management fees 93,803
General and administrative 90,227
-------------
Total expenses 608,276
Revenues in excess of certain expenses $ 1,755,980
=============
See accompanying notes to statement of revenues and certain expenses.
<PAGE>
BLOOMINGDALE SQUARE
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
1. Basis of Presentation
The statement of revenues and certain expenses relates to the operation of
a 267,935 square foot shopping center (the "Property") located in Brandon,
Florida.
The Property's financial statement is prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles.
Subsequent to December 31, 1997, the Property was acquired by Regency
Realty Corporation (RRC) in a transaction accounted for as a purchase. All
operations of the Property will be included in the consolidated financial
statements of RRC beginning at the acquisition date.
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Property, have been excluded. RRC is not aware of
any material factors relating to the Property that would cause the
reported financial information not to be necessarily indicative of future
operating results. Costs not directly related to the operation of the
Property have been excluded, and consist of interest, depreciation,
professional fees, and certain other non operating expenses.
2. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
BLOOMINGDALE SQUARE
Notes to Statement of Revenues and Certain Expenses
3. Operating Leases
For the year ended December 31, 1997, the following tenants paid minimum
rent which exceeded 10% of the total minimum rent earned by the Property:
Minimum
Tenant Rent Paid
Wal-Mart $ 405,550
Publix 208,924
Beall's Department Stores 185,250
The Property is leased to tenants under operating leases with expiration
dates extending to the year 2006. Future minimum rent under noncancelable
operating leases as of December 31, 1997, excluding tenant reimbursements
of operating expenses and excluding additional contingent rentals based on
tenants' sales volume, are as follows:
Year ending December 31, Amount
1998 $ 1,885,581
1999 1,805,590
2000 1,580,180
2001 1,397,825
2002 1,149,187
<PAGE>
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
the Midland Properties for the year ended December 31, 1997. This financial
statement is the responsibility of management. Our responsibility is to express
an opinion on this statement of revenues and certain expenses based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of the Midland
Properties was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and for inclusion in a
Form 8-K of Regency Realty Corporation and excludes material amounts, described
in note 1, that would not be comparable to those resulting from the proposed
future operation of the properties. The presentation is not intended to be a
complete presentation of the Midland Properties revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of the Midland Properties for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
July 8, 1998
<PAGE>
- 1 -
MIDLAND PROPERTIES
Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
Revenues:
Minimum rent $ 16,468,353
Recoveries from tenants 2,239,717
Percentage rent 14,118
----------------
Total revenues 18,722,188
Operating expenses:
Operating and maintenance 1,193,921
Management fees 554,670
Real estate taxes 1,635,129
General and administrative 486,452
----------------
Total expenses 3,870,172
Revenues in excess of certain expenses $ 14,852,016
================
See accompanying notes to statement of revenues and certain expenses.
<PAGE>
MIDLAND PROPERTIES
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
1. Basis of Presentation
The statement of revenues and certain expenses combines the operations of
the following 19 shopping centers (Midland Properties), in which Midland
Development Group, Inc., or one of its affiliated entities, is the
general partner:
Square
Property Name Location Feet
Beckett Commons West Chester, OH 80,434
Bent Tree Plaza Raleigh, NC 79,503
Brookville Plaza Lynchburg, VA 63,664
Cherry Grove Plaza Cincinnati, OH 186,040
East Point Crossing Columbus, OH 86,520
Evans Crossing Evans, GA 76,580
Franklin Shopping Centers Franklin, KY 205,060
Hamilton Meadows Hamilton, OH 126,251
Lake Pine Plaza Raleigh, NC 87,690
Lake Shores Plaza Detroit, MI 85,478
Kernersville Plaza Kernersville, NC 72,590
North Gate Plaza Columbus, OH 85,100
Maynard Crossing Raleigh, NC 122,813
Shoppes at Mason Cincinnati, OH 80,880
St. Ann Square St. Ann, MO 82,498
Statler Square Staunton, VA 133,660
West Chester Plaza Westchester, OH 88,181
Windmiller Farms Columbus, OH 119,192
Worthington Park Centre Worthington, OH 93,092
This financial statement is prepared on the accrual basis of accounting
in conformity with generally accepted accounting principles.
Subsequent to December 31, 1997, the Midland Properties were acquired by
Regency Realty Corporation (RRC) in a transaction accounted for as a
purchase. All operations of the Midland Properties will be included in
the consolidated financial statements of RRC beginning at the acquisition
date.
<PAGE>
MIDLAND PROPERTIES
Notes to Statement of Revenues and Certain Expenses
1. Basis of Presentation, continued
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Midland Properties, have been excluded. RRC is
not aware of any material factors relating to the Midland Properties that
would cause the reported financial information not to be necessarily
indicative of future operating results. Costs not directly related to the
operation of the Midland Properties have been excluded, and consist of
interest, depreciation, professional fees, and certain other non
operating expenses.
2. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. Operating Leases
For the year ended December 31, 1997, Kroger Supermarkets, an anchor
tenant in all 19 of the shopping centers, paid minimum rent of
$8,363,436, which exceeded 10% of the total minimum rent earned by all
the Midland Properties.
The Midland Properties are leased to tenants under operating leases with
expiration dates extending to the year 2022. Future minimum rent under
noncancelable operating leases as of December 31, 1997, excluding tenant
reimbursements of operating expenses and excluding additional contingent
rentals based on tenants' sales volume, are as follows:
Year ending December 31, Amount
1998 $ 17,280,288
1999 16,587,478
2000 15,311,669
2001 14,285,341
2002 12,150,739
<PAGE>
MIDLAND PROPERTIES
Notes to Statement of Revenues and Certain Expenses
4. Related Party Transactions
Midland Development Group, Inc., serves as managing agent for the Midland
Properties and receives a management fee of approximately 4% of minimum
and percentage rent, as adjusted and defined, which amounted to $554,670
for the year ended December 31, 1997.
<PAGE>
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
Highland Square Shopping Center for the year ended December 31, 1997. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this statement of revenues and certain expenses based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of Highland Square
Shopping Center was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and for inclusion in a
Form 8-K of Regency Realty Corporation and excludes material amounts, described
in note 1, that would not be comparable to those resulting from the proposed
future operation of the property. The presentation is not intended to be a
complete presentation of Highland Square Shopping Center revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of Highland Square Shopping Center for the year ended
December 31, 1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
July 1, 1998
<PAGE>
- 1 -
HIGHLAND SQUARE SHOPPING CENTER
Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
Revenues:
Minimum rent $ 1,122,221
Recoveries from tenants 187,529
Percentage rent 111,154
-------------
Total revenues 1,420,904
Operating expenses:
Real estate taxes 171,358
Operating and maintenance 98,963
General and administrative 76,051
Management fees 54,111
-------------
Total expenses 400,483
Revenues in excess of certain expenses $ 1,020,421
=============
See accompanying notes to statement of revenues and certain expenses.
<PAGE>
HIGHLAND SQUARE SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
1. Basis of Presentation
The statement of revenues and certain expenses relates to the operation
of a 226,682 square foot shopping center (the "Property") located in
Jacksonville, Florida.
The Property's financial statement is prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles.
Subsequent to December 31, 1997, the Property was acquired by Regency
Realty Corporation (RRC) in a transaction accounted for as a purchase.
All operations of the Property will be included in the consolidated
financial statements of RRC beginning at the acquisition date.
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Property, have been excluded. RRC is not aware of
any material factors relating to the Property that would cause the
reported financial information not to be necessarily indicative of future
operating results. Costs not directly related to the operation of the
Property have been excluded, and consist of interest, depreciation,
professional fees, and certain other non operating expenses.
2. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
HIGHLAND SQUARE SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
3. Operating Leases
For the year ended December 31, 1997, one tenant, Winn Dixie Stores, Inc.
paid minimum rent of $223,000 which exceeded 10% of the total minimum
rent earned by the Property.
The Property is leased to tenants under operating leases with expiration
dates extending to the year 2014. Future minimum rent under noncancelable
operating leases as of December 31, 1997, excluding tenant reimbursements
of operating expenses and excluding additional contingent rentals based
on tenants' sales volume, are as follows:
Year ending December 31, Amount
1998 $ 1,052,126
1999 878,359
2000 659,175
2001 427,187
2002 334,822
4. Related Party Transactions
Pines Group, Inc., a related party through common general partners,
serves as managing agent for Highland Square Shopping Center and receives
a management fee of approximately 4% of total revenues which amounted to
$54,111 for the year ended December 31, 1997.
<PAGE>
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
Silverlake Shopping Center for the year ended December 31, 1997. This financial
statement is the responsibility of management. Our responsibility is to express
an opinion on this statement of revenues and certain expenses based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of Silverlake
Shopping Center was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and for inclusion in a
Form 8-K of Regency Realty Corporation and excludes material amounts, described
in note 1, that would not be comparable to those resulting from the proposed
future operation of the property. The presentation is not intended to be a
complete presentation of Silverlake Shopping Center revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of Silverlake Shopping Center for the year ended December
31, 1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
June 30, 1998
<PAGE>
- 1 -
SILVERLAKE SHOPPING CENTER
Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
Revenues:
Minimum rent $ 819,303
Recoveries from tenants 142,294
-----------
Total revenues 961,597
Operating expenses:
Operating and maintenance 84,650
Real estate taxes 85,302
Management fees 11,043
General and administrative 31,995
-----------
Total expenses 212,990
Revenues in excess of certain expenses $ 748,607
===========
See accompanying notes to statement of revenues and certain expenses.
<PAGE>
SILVERLAKE SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
1. Basis of Presentation
The statement of revenues and certain expenses relates to the operation
of a 100,500 square foot shopping center (the "Property") located in
Erlanger, KY.
The Property's financial statement is prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles.
Subsequent to December 31, 1997, the Property was acquired by Regency
Realty Corporation (RRC) in a transaction accounted for as a purchase.
All operations of the Property will be included in the consolidated
financial statements of RRC beginning at the acquisition date.
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Property, have been excluded. RRC is not aware of
any material factors relating to the Property that would cause the
reported financial information not to be necessarily indicative of future
operating results. Costs not directly related to the operation of the
Property have been excluded, and consist of interest, depreciation,
professional fees, and certain other non operating expenses.
2. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
SILVERLAKE SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
3. Operating Leases
For the year ended December 31, 1997, one tenant, Kroger Supermarkets,
paid minimum rent of $466,104 which exceeded 10% of the total minimum
rent earned by the Property.
The Property is leased to tenants under operating leases with expiration
dates extending to the year 2014. Future minimum rent under noncancelable
operating leases as of December 31, 1997, excluding tenant reimbursements
of operating expenses and excluding additional contingent rentals based
on tenants' sales volume, are as follows:
Year ending December 31, Amount
1998 $ 826,061
1999 711,620
2000 671,534
2001 568,221
2002 526,588
===========
4. Related Party Transactions
Oakley Properties, Inc., an affiliated entity through common general
partners, serves as the managing agent for the Property and received
management fees of $11,043 for the year ended December 31, 1997.
<PAGE>
Regency Realty Corporation
Pro Forma Condensed Consolidated Financial Statements
The following unaudited pro forma condensed consolidated balance sheet is based
upon the historical consolidated balance sheet of the Company as of March 31,
1998 as if the Company had completed the acquisition of all the Midland
Properties and the 1998 Acquisition Properties as of that date. The following
unaudited pro forma consolidated statements of operations of the Company are
based upon the historical consolidated statements of operations for the
three-month period ended March 31, 1998 and the year ended December 31, 1997.
These statements are presented as if the Company had acquired the 1998
Acquisition Properties and 13 other properties acquired during 1997 (together
the "Acquisition Properties"), as well as the Branch Properties and the Midland
Properties as of January 1, 1997. These unaudited pro forma condensed
consolidated financial statements should be read in conjunction with the
Company's annual report filed on Form 10-K for the year ended December 31,
1997, and Form 10-Q for the period ended March 31, 1998.
The unaudited pro forma condensed consolidated financial statements are not
necessarily indicative of what the actual financial position or results of
operations of the Company would have been at March 31, 1998 or December 31,
1997 assuming the transactions had been completed as set forth above, nor does
it purport to represent the financial position or results of operations of the
Company in future periods.
<PAGE>
<TABLE>
<CAPTION>
Midland Other
Historical Properties Adjustments Pro Forma
(a)
<S> <C> <C> <C> <C>
Assets
Real estate investments, at cost $ 950,050 $ 56,100 $ 33,974 (b) $ 1,040,124
Construction in progress 40,765 - - 40,765
Less: accumulated depreciation 40,833 - - 40,833
------------ ------------ ------------ ------------
Real estate rental property, net 949,982 56,100 33,974 1,040,056
------------ ------------ ------------ ------------
Investments in real estate partnerships 992 - - 992
------------ ------------ ------------ ------------
Net real estate investments 950,974 56,100 33,974 1,041,048
------------ ------------ ------------ ------------
Cash and cash equivalents 16,707 - - 16,707
Tenant receivables, net of allowance for
uncollectible accounts 9,788 - - 9,788
Deferred costs, less accumulated amortization 4,532 - - 4,532
Other assets 3,981 - - 3,981
============ ============ ============ ============
Total Assets $ 985,982 $ 56,100 $ 33,974 $ 1,076,056
============ ============ ============ ============
Liabilities and Stockholders' Equity
Mortgage loans payable $ 305,531 $ 31,732 $ (25,774)(c) $ 311,489
Acquisition and development line of credit 90,231 24,368 (18,652)(b)(c) 95,947
------------ ------------ ------------ -----------
Total debt 395,762 56,100 (44,426) 407,436
Tenant's security and escrow deposits 2,562 - - 2,562
Accounts payable & other liabilities 11,911 - - 11,911
------------ ------------ ------------ ------------
Total liabilities 410,235 56,100 (44,426) 421,909
------------ ------------ ------------ ------------
Redeemable partnership units 28,106 - - 28,106
Preferred partnership units - - 78,400 (c) 78,400
Limited partners' interest in
consolidated partnerships 7,414 - - 7,414
------------ ------------ ------------ ------------
35,520 - 78,400 113,920
------------ ------------ ------------ ------------
Common stock and additional paid in capital 553,187 - - 553,187
Distributions in excess of net income (12,960) - - (12,960)
------------ ------------ ------------ ------------
Total stockholders' equity 540,227 - - 540,227
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity $ 985,982 $ 56,100 $ 33,974 $ 1,076,056
============ ============ ============ ============
See accompanying notes to pro forma condensed consolidated balance sheet.
</TABLE>
<PAGE>
Regency Realty Corporation
Notes to Pro Forma Condensed Consolidated Balance Sheet
March 31, 1998
(Unaudited)
(In thousands)
(a) Acquisitions of Shopping Centers:
In January 1998, the Company entered into an agreement to acquire shopping
centers from various entities comprising the Midland Group consisting of 21
shopping centers plus 11 shopping centers under development. The Company
acquired 13 of the Midland shopping centers during March 1998 containing
1.3 million square feet for approximately $111.0 million. Those shopping
centers are included in the Company's March 31, 1998 balance sheet.
Subsequent to March 31, 1998, the Company has acquired or will acquire six
additional shopping centers for $56.1 million and during July and August
1998, expects to acquire an additional three properties under development
for $41.3 million. In addition, during 1998, the Company expects to pay
$4.6 million in additional costs related to joint venture investments and
other transaction costs related to acquiring the various shopping centers
from Midland, and during 1999 and 2000 expects to pay contingent
consideration of $23.0 million. The following table sets forth the
aggregate purchase price for East Point, Maxtown, Worthington, Franklin
Square, St. Ann Square and Windmiller, which have been or will be acquired
subsequent to March 31, 1998.
Purchase
Price
-------------
East Point $ 8,215
Maxtown 7,712
Worthington 10,691
Franklin Square 11,375
St. Ann Square 6,653
Windmiller 11,454
=============
$ 56,100
=============
The following table represents the properties under development which the
Company expects to acquire from Midland upon completion of construction
during 1998. These properties are not included in these pro forma condensed
consolidated financial statements.
Expected
Acquisition Purchase
Date Price
-------------- -------------
Garner Festival July-98 $ 20,571
Nashboro July-98 7,260
Crooked Creek August-98 13,471
=============
$ 41,302
=============
(b) Represents the aggregate purchase price for Silverlake Shopping Center,
Highlands Square Shopping Center and Shoppes @ 104. The other Acquisition
Properties were acquired prior to March 31, 1998 and are therefore
included in the Company's March 31, 1998 balance sheet.
Acquisition Purchase
Date Price
-------------- -------------
Silverlake Shopping Center June 3, 1998 $ 9,283
Highland Square Shopping Center June 17, 1998 12,501
Shoppes @ 104 June 19, 1998 12,190
=============
$ 33,974
=============
(c) Represents the proceeds from the offering of cumulative redeemable
preferred units completed in June 1998, less estimated offering costs of
2%. At closing, the Company used the net proceeds from the offering,
approximately $78.4 million, for the repayment of existing mortgage loans
($25.8 million) and the repayment of balances on the Line ($52.6 million).
<PAGE>
Regency Realty Corporation
Pro Forma Consolidated Statements of Operations
For the Three Month Period Ended March 31, 1998
and the Year Ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
<TABLE>
<CAPTION>
For the Three Month Period Ended March 31, 1998
Midland Acquisition Other
Historical Properties Properties Adjustments Pro Forma
(e) (f)
<S> <C> <C> <C> <C> <C>
Revenues:
Minimum rent $ 22,255 $ 3,332 $ 1,064 $ (697) (j) $ 25,954
Percentage rent 1,103 - 32 (8) (j) 1,127
Recoveries from tenants 4,821 410 208 (67) (j) 5,372
Management, leasing and brokerage fees 2,504 - - - 2,504
Equity in income of investments in
real estate partnerships 1 - - - 1
------- ------- ------- -------- -------
30,684 3,742 1,304 (772) 34,958
------- ------- ------- -------- -------
Operating expenses:
Depreciation & amortization 5,456 676 (g) 280 (g) (453) (j) 5,959
Operating and maintenance 4,116 228 109 (122) (j) 4,331
General and administrative 3,433 180 81 (25) (j) 3,669
Real estate taxes 2,789 385 131 (81) (j) 3,224
------- ------- ------- -------- -------
15,794 1,469 601 (681) 17,183
------- ------- ------- -------- -------
Interest expense (income):
Interest expense 5,215 2,058 (h) 712 (i) (1,799) (k) 6,186
Interest income (335) - - - (335)
------- ------- ------- -------- -------
4,880 2,058 712 (1,799) 5,851
------- ------- ------- -------- -------
Income before minority interest
and gain on sale of real
estate investments 10,010 215 (9) 1,708 11,924
Gain on sale of real estate investments 10,237 - - (9,336) (j) 901
Minority interest (691) (9) - 4 (696)
------- ------- ------- -------- -------
Net income 19,556 206 (9) (7,624) 12,129
------- ------- ------- -------- -------
Preferred distributions - - (1,625) (l) (1,625)
------- ------- ------- -------- -------
Net income for common stockholders $ 19,556 $ 206 $ (9) $ (9,249) $ 10,504
======== ======= ======== ========= ========
Net income per share (note (m)):
Basic $ 0.74 $ 0.37
======== =========
Diluted $ 0.69 $ 0.37
======== =========
</TABLE>
See accompanying notes to pro forma consolidated statements of operations.
<PAGE>
Regency Realty Corporation
Pro Forma Consolidated Statements of Operations
For the Three Month Period Ended March 31, 1998
and the Year Ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
<TABLE>
<CAPTION>
For the Year Ended December 31, 1997
Branch Midland Acquisition Other
Historical Properties Properties Properties Adjustments Pro Forma
(d) (e) (f)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Minimum rent $ 70,103 $ 3,596 16,482 14,452 (4,136) (j) $ 100,497
Percentage rent 2,151 167 0 299 - 2,617
Recoveries from tenants 16,601 751 2,240 3,136 (548) (j) 22,180
Management, leasing and brokerage fees 8,448 1,060 0 0 - 9,508
Equity in income of investments
in real estate partnerships 33 - 0 0 - 33
------------ ------------ ------------ ----------- ---------- ----------
97,336 5,574 18,722 17,887 (4,684) 134,835
------------ ------------ ------------ ----------- ---------- ----------
Operating expenses:
Depreciation & amortization 16,303 972 2,994 (g) 3,458 (g) (855) (j) 22,872
Operating and maintenance 14,213 595 1,194 1,999 (1,260) (j) 16,741
General and administrative 9,964 683 1,042 931 (49) (j) 12,571
Real estate taxes 8,692 404 1,635 1,922 (447) (j) 12,206
------------ ------------ ------------ ----------- ---------- ----------
49,172 2,654 6,865 8,310 (2,611) 64,390
------------ ------------ ------------ ----------- ---------- ----------
Interest expense (income):
Interest expense 19,667 1,517 10,353 (h) 9,765 (i) (7,196) (k) 34,106
Interest income (1,000) (33) 0 0 - (1,033)
------------ ------------ ------------ ----------- ---------- ----------
18,667 1,484 10,353 9,765 (7,196) 33,073
------------ ------------ ------------ ----------- ---------- ----------
Income before minority interest
and gain on sale of real
estate investments 29,497 1,436 1,504 (188) 5,123 37,372
Gain on sale of real estate investments 451 - 0 0 (451) (j) -
Minority interest (2,547) 1,010 (38) 5 52 (1,518)
------------ ------------ ------------ ----------- ---------- ----------
Net income 27,401 2,446 1,466 (183) 4,724 35,854
Preferred distributions - - 0 0 (6,500) (l) (6,500)
============ ============ ============ =========== ========== ==========
Net income for common stockholders $ 27,401 $ 2,446 1,466 (183) $ (1,776) $ 29,354
============ ============ ============ =========== ========== ==========
Net income per share (note (m)):
Basic $ 1.28 1.39
============ =========
Diluted $ 1.23 1.28
============ =========
</TABLE>
See accompanying notes to pro forma consolidated statements of operations.
<PAGE>
Regency Realty Corporation
Notes to Pro Forma Consolidated Statements of Operations
For the Three Month Period Ended March 31,
1998 and the Year ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
(d) Reflects pro forma results of operations for the Branch Properties for the
period from January 1, 1997 to March 7, 1997 (acquisition date).
(e) Reflects revenues and certain expenses for the Midland Properties for the
period from January 1, 1998 to the earlier of the respective acquisition
date of the property or March 31, 1998 and for the year ended December 31,
1997.
<TABLE>
<CAPTION>
For the period from January 1, 1998 to the Acquisition Date
Property Acquisition Minimum Recoveries Operating and Real General and
Name Date Rent from Tenants Maintenance Estate Taxes Administrative
--------- --------- -------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Windmiller Farms Jul-98 $ 289 $ 45 $ 17 $ 36 $ 16
Franklin Square 4/29/98 303 19 27 25 13
St. Ann Square 4/17/98 184 3 17 - 5
East Point Crossing 4/29/98 223 19 15 46 8
North Gate Plaza 4/29/98 181 51 12 46 22
Worthington Park 4/29/98 227 74 17 61 7
Beckett Commons 3/1/98 113 7 6 14 4
Cherry Grove Plaza 3/1/98 239 11 13 22 21
Bent Tree Plaza 3/1/98 137 11 7 59 8
West Chester Plaza 3/1/98 130 12 13 42 7
Brookville Plaza 3/1/98 95 5 5 - 4
Lake Shores Plaza 3/1/98 123 10 5 - 6
Evans Crossing 3/1/98 116 4 5 - 6
Statler Square 3/1/98 164 15 13 1 8
Kernersville Plaza 3/1/98 120 4 8 - 8
Maynard Crossing 3/1/98 272 38 13 - 15
Shoppes at Mason 3/1/98 116 27 15 33 6
Lake Pine Plaza 3/1/98 152 13 10 - 9
Hamilton Meadows 3/1/98 148 42 10 - 7
========= =========== ========== ============ ===============
$ 3,332 $ 410 $ 228 $ 385 $ 180
========= =========== ========== ============ ===============
</TABLE>
<TABLE>
<CAPTION>
For the year ended December 31, 1997
Property Acquisition Minimum Recoveries Operating and Real General and
Name Date Rent from Tenants Maintenance Estate Taxes Administrative
--------- --------- ------------------------------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Windmiller Farms Jul-98 $ 1,157 $ 181 $ 69 $ 143 $ 64
Franklin Square 4/29/98 1,270 171 158 94 98
St. Ann Square 4/17/98 741 149 60 119 42
East Point Crossing 4/29/98 821 159 50 107 51
North Gate Plaza 4/29/98 718 100 56 84 32
Worthington Park 4/29/98 862 208 67 124 59
Beckett Commons 3/1/98 687 140 38 83 47
Cherry Grove Plaza 3/1/98 1,445 175 85 131 105
Bent Tree Plaza 3/1/98 786 130 64 59 48
West Chester Plaza 3/1/98 807 70 72 84 45
Brookville Plaza 3/1/98 571 42 34 50 30
Lake Shores Plaza 3/1/98 759 156 55 96 32
Evans Crossing 3/1/98 613 84 34 50 33
Statler Square 3/1/98 913 76 43 54 60
Kernersville Plaza 3/1/98 605 58 29 51 33
Maynard Crossing 3/1/98 1,367 133 78 95 104
Shoppes at Mason 3/1/98 644 56 61 65 38
Lake Pine Plaza 3/1/98 827 93 54 51 46
Hamilton Meadows 3/1/98 889 59 87 95 75
========= =========== ========== ============ ===============
$ 16,482 $ 2,240 $ 1,194 $ 1,635 $ 1,042
========= =========== ========== ============ ===============
</TABLE>
<PAGE>
(f) Reflects revenue and certain expenses of the Acquisition Properties for
the periods from January 1, 1998 and 1997 to the respective acquisition
date of the property.
<TABLE>
<CAPTION>
For the period from January 1, 1998 to the Acquisition Date
Property Acquisition Minimum Percentage Recoveries Operating and Real General and
Name Date Rent Rent from Tenants Maintenance Estate Taxes Administrative
---- --------- --------- ----------- ------------ ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Delk Spectrum 1/14/98 $ 48 $ - $ 5 $ 2 $ 3 2
Bloomingdale Square 2/11/98 209 5 52 24 23 21
Silverlake 6/3/98 202 - 35 21 21 11
Highland Square 6/17/98 277 27 46 24 42 32
Shoppes @104 6/19/98 328 - 70 38 42 15
========= =========== ========== ============ =============== ===========
$ 1,064 $ 32 $ 208 $ 109 $ 131 81
========= =========== ========== ============ =============== ===========
</TABLE>
<TABLE>
<CAPTION>
For the period from January 1, 1997 to the Acquisition Date
Property Acquisition Minimum Percentage Recoveries Operating and Real General and
Name Date Rent Rent from Tenants Maintenance Estate Taxes Administrative
---- --------- --------- ----------- -------------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Oakley Plaza 3/14/97 $ 142 $ - $ 14 $ 13 $ 13 $ 8
Mariner's Village 3/25/97 185 6 37 45 33 7
Carmel Commons 3/28/97 297 11 63 38 35 22
Mainstreet Square 4/15/97 193 - 34 42 30 15
East Port Plaza 4/25/97 543 - 107 96 65 33
Hyde Park Plaza 6/6/97 1,702 118 339 144 265 84
Rivermont Station 6/30/97 642 - 124 65 56 34
Lovejoy Station 6/30/97 306 - 63 36 29 9
Tamiami Trails 7/10/97 508 - 163 124 66 30
Garden Square 9/19/97 671 - 232 144 99 50
Kingsdale S.C. 10/10/97 1,334 - 300 325 221 75
Boynton Lakes Plaza 12/1/97 1,159 - 391 267 250 80
Pinetree Plaza 12/23/97 279 - 51 50 37 21
Delk Spectrum 1/14/98 1,355 10 145 57 88 46
Bloomingdale Square 2/11/98 1,863 43 459 215 209 184
Silverlake 6/3/98 819 - 142 85 85 43
Highland Square 6/17/98 1,122 111 187 99 171 130
Shoppes @104 6/19/98 1,332 - 285 154 170 60
========= =========== ========== ============ =============== ===========
$ 14,452 $ 299 $ 3,136 $ 1,999 $ 1,922 $ 931
========= =========== ========== ============ =============== ===========
</TABLE>
(g) Depreciation expense is based on the estimated useful life of the
properties acquired. For properties under construction, depreciation
expense is calculated from the date the property is placed in service
through the end of the period. In addition, the three month period ended
March 31, 1998 and year ended December 31, 1997 calculations reflect
depreciation expense on the properties from January 1, 1997 to the earlier
of the respective acquisition date of the property or March 31, 1998.
<TABLE>
<CAPTION>
<PAGE>
For the period from January 1, 1998 to the Acquisition Date
Property Building and Year Building Depreciation
Name Improvements Built/Renovated Useful Life Adjustment
------------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Delk Spectrum $ 10,417 1991 34 $ 11
Bloomingdale Square 13,189 1987 30 49
Silverlake Shopping Center 7,584 1988 31 60
Highland Square 9,049 1960 20 112
Shoppes @104 6,439 1990 33 48
===============
Acquisition Properties pro forma
depreciation adjustment $ 280
===============
Midland Properties $ 131,065 Ranging from Ranging from
1986 to 1996 29 to 40 $ 676
===============
</TABLE>
<TABLE>
<CAPTION>
For the period from January 1, 1997 to the Acquisition Date
Property Building and Year Building Depreciation
Name Improvements Built/Renovated Useful Life Adjustment
------------- ---------------- ---------- ---------------
<S> <C> <C> <C> <C>
Oakley Plaza $ 6,428 1988 31 $ 41
Mariner's Village 5,979 1986 29 47
Carmel Commons 9,335 1979 22 101
Mainstreet Square 4,581 1988 31 43
East Port Plaza 8,179 1991 34 76
Hyde Park Plaza 33,734 1995 38 382
Rivermont Station 9,548 1996 39 121
Lovejoy Station 5,560 1995 38 73
Tamiami Trails 7,598 1987 30 133
Garden Square 7,151 1991 34 151
Kingsdale Shopping Center 10,023 1959 27 288
Boynton Lakes Plaza 9,618 1993 36 244
Pinetree Plaza 3,057 1982 25 120
Delk Spectrum 10,417 1991 34 306
Bloomingdale Square 13,189 1987 30 440
Silverlake Shopping Center 7,584 1988 31 245
Highlands Square 9,049 1960 20 452
Shoppes @104 6,439 1990 33 195
===============
Acquisition Properties pro forma
depreciation adjustment $ 3,458
===============
Midland Properties $131,065 Ranging from Ranging from
1986 to 1996 29 to 40 $ 2,994
===============
</TABLE>
<PAGE>
(h) To reflect interest expense on the Line required to complete the
acquisition of the Midland Properties at the average interest rate afforded
the Company (6.525%) and the assumption of $97.0 million of debt. For
properties under construction, interest expense is calculated from the date
the property is placed in service through the end of the period.
Pro forma interest adjustment for the
three month period ended March 31, 1998 $ 2,058
===============
Pro forma interest adjustment for the
year ended December 31, 1997 $ 10,353
===============
(i) To reflect interest expense on the Line required to complete the
acquisition of the Acquisition Properties at the average interest rate
afforded the Company (6.525%). The three month period ended March 31, 1998
and year ended December 31, 1997 calculation reflects interest expense on
the properties from January 1, 1997 to the respective acquisition date of
the property.
Pro forma interest adjustment for the
three month period ended March 31, 1998 $ 712
==============
Pro forma interest adjustment for the
year ended December 31, 1997 $ 9,765
==============
(j) In December, 1997, the Company sold one office building for $2.6 million
and recognized a gain on the sale of $451,000. During the first quarter of
1998, the Company sold three office buildings and a parcel of land for
$26.7 million, and recognized a gain on the sale of $9.3 million. The
adjustments to the pro forma statements of operations reflects the reversal
of the revenues and expenses from the office buildings generated during
1997 and 1998, including the gains on the sale of the office buildings as
if the sales had been completed on January 1, 1997.
(k) To reflect the reduction of interest expense on the Line and mortgage loans
from the proceeds of the issuance of the preferred units and the proceeds
from the sale of the office buildings.
Pro forma interest adjustment for the
three-month period ended March 31, 1998 $ (1,799)
===============
Pro forma interest adjustment for the
year ended December 31, 1997 $ (7,196)
===============
(l) To reflect the distribution on the offering of preferred units at an
assumed annual rate of 8.125% for the three-month period ended March
31, 1998 and year ended December 31, 1997.
(m) The following summarizes the calculation of basic and diluted earnings per
share for the three-month period ended March 31, 1998 and the
year ended December 31, 1997:
<PAGE>
<TABLE>
<CAPTION>
For the Three For the year
Months Ended Ended
March 31, 1998 December 31, 1997
--------------- ----------------
<S> <C> <C>
Basic Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding 24,727 17,424
============ ===============
Net income for common stockholders $ 10,503 $ 29,354
Less: dividends paid on Class B common stock 1,344 5,140
============ ===============
Net income for Basic EPS $ 9,159 24,214
============ ===============
Basic earnings per share $ 0.37 1.39
============ ===============
Diluted Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding for Basic EPS 24,727 17,424
Redeemable operating partnership units - 1,243
Incremental shares to be issued under common
stock options using the Treasury method 54 80
Contingent units or shares for the acquisition
of real estate - 955
------------ ---------------
Total Diluted Shares 24,781 19,702
------------ ---------------
Net income for Basic EPS 9,159 24,214
Add: minority interest of redeemable partnership units - 1,013
============ ===============
Net income for Diluted EPS 9,159 25,227
============ ===============
Diluted EPS $ 0.37 $ 1.28
============ ===============
</TABLE>
<PAGE>
The Board of Directors
Regency Realty Corporation:
We consent to the use of reports incorporated by reference in the
registration statements, (No. 3-86886, No. 333-930, No. 333-2546, and No.
333-31077) on Form S-3 and (No. 333-24971) on Form S-8, of Regency Realty
Corporation of our reports, with respect to the Statements of Revenues and
Certain Expenses for the year ended December 31, 1997, of the following
properties:
Name of Property Date of audit report
Delk Spectrum Shopping Center May 15, 1998
Bloomingdale Square May 13, 1998
Sliverlake Shopping Center June 30, 1998
Highland Square Shopping Center July 1, 1998
Midland Properties July 8, 1998
The above reports appear in the Form 8-K of Regency Realty Corporation dated
July 20, 1998.
KPMG PEAT MARWICK LLP
July 20, 1998
Jacksonville, Florida
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 24th day of February, 1998, between
RICARDO PINES, individually ("Pine"), PINES HIGHLAND SQUARE ASSOCIATES, LTD., a
Florida limited partnership ("Partnership"), and PINES GROUP, INC., a Florida
corporation ("PGI"), and RRC ACQUISITIONS TWO, INC., a Florida corporation, its
designees, successors and assigns ("Buyer").
Background
Buyer wishes to purchase a shopping center in the City of Jacksonville,
County of Duval, State of Florida, commonly known as Highland Square Shopping
Center (the "Shopping Center"). The Shopping Center is comprised of three
parcels, one of which ("Parcel One") is owned by Pine, another of which ("Parcel
Two") is owned by Highland Square, and the third is owned by Pine and PGI as
Tenants in Common.
Pine, Highland Square and PGI desire to sell the Shopping Center to
Buyer.
In consideration of the mutual agreements herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Pine,
Highland Square and PGI agree to sell and Buyer agrees to purchase the Shopping
Center on the following terms and conditions:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Agreement means this instrument as it may be amended from time to
time.
1.2 Allocation Date means the close of business on the day immediately
prior to the Closing Date.
1.3 Audit Representation Letter means the form of Audit Representation
Letter attached hereto as Exhibit .
1.4 Buyer means the party identified as Buyer on the initial page
hereof.
1.5 Closing means generally the execution and delivery of those
documents and funds necessary to effect the sale of the Property by Seller to
Buyer.
1.6 Closing Date means the date on which the Closing occurs.
1.7 Contracts means all service contracts, agreements or other
instruments to be assigned by Seller to Buyer at Closing.
1.8 Day means a calendar day, whether or not the term is capitalized.
1.9 Earnest Money Deposit means the deposit delivered by Buyer to
Escrow Agent prior to the Closing under Sections and of this Agreement, together
with the earnings thereon, if any.
<PAGE>
1.10 Environmental Claim means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material or actual or alleged Hazardous Material Activity, (c) from
any abatement, removal, remedial, corrective, or other response action in
connection with a Hazardous Material, Environmental Law or other order of a
governmental authority or (d) from any actual or alleged damage, injury, threat,
or harm to health, safety, natural resources, or the environment.
1.11 Environmental Law means any current legal requirement in effect at
the Closing Date pertaining to (a) the protection of health, safety, and the
indoor or outdoor environment, (b) the conservation, management, protection or
use of natural resources and wildlife, (c) the protection or use of source water
and groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material or (e) pollution (including any Release to air, land, surface
water, and groundwater); and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC ss.ss.9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation Act of
1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC ss.ss.6901 et
seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 USC ss.ss.1251 et seq., Clean Air Act of 1966, as amended, 42 USC
ss.ss.7401 et seq., Toxic Substances Control Act of 1976, 15 USC ss.ss.2601 et
seq., Hazardous Materials Transportation Act, 49 USC App. ss.ss.1801,
Occupational Safety and Health Act of 1970, as amended, 29 USC ss.ss.651 et
seq., Oil Pollution Act of 1990, 33 USC ss.ss.2701 et seq., Emergency Planning
and Community Right-to-Know Act of 1986, 42 USC App. ss.ss.11001 et seq.,
National Environmental Policy Act of 1969, 42 USC ss.ss.4321 et seq., Safe
Drinking Water Act of 1974, as amended by 42 USC ss.ss.300(f) et seq., and any
similar, implementing or successor law, any amendment, rule, regulation, order
or directive, issued thereunder.
- 2 -
<PAGE>
1.12 Escrow Agent means Chicago Deferred Exchange Corporation, 171
North Clark Street, Chicago, Illinois 60601 (Fax 312/223-3301).
1.13 Governmental Approval means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision, action or
approval of a governmental authority.
1.14 Hazardous Material means any asbestos, petroleum, petroleum
product, dry cleaning solvent or chemical, biological or medical waste, "sharps"
or any other hazardous or toxic substance as defined in or regulated by any
Environmental Law in effect at the pertinent date or dates.
1.15 Hazardous Material Activity means any activity, event, or
occurrence at or prior to the Closing Date involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation, handling or corrective or response
action to any Hazardous Material.
1.16 Improvements means all buildings, structures or other improvements
situated on the Real Property.
1.17 Inspection Period means the period of time which expires at the
end of business on Wednesday, March 25, 1998. Buyer may extend the Inspection
Period for an additional fifteen days by depositing an additional $50,000 with
Escrow Agent which additional deposit shall become a part of the Earnest Money
Deposit provided for in Section hereof.
1.18 Lady's Island Publix means the free-standing Publix grocery store
and related facilities on lands located at the intersection of Sea Island
Parkway and Sam's Point Road at Lady's Island Drive, in Beaufort County, South
Carolina, owned by Buyer and leased to Publix Super Markets, Inc. ("Publix"),
commonly known as "Lady's Island Publix".
1.19 Leases means all leases and other occupancy agreements permitting
persons to lease or occupy all or a portion of the Property.
1.20 Materials means all plans, drawings, specifications, soil test
reports, environmental reports, market studies, surveys, and similar
documentation, if any, owned by or in the possession of Seller with respect to
the Property, Improvements and any proposed improvements to the Property, which
Seller may lawfully transfer to Buyer except that, as to financial and other
records, Materials shall include only photostatic copies.
- 3 -
<PAGE>
1.21 Other Centers means the Lady's Island Publix and the Weems Road Winn-
Dixie.
1.22 Permitted Exceptions means only the following interests, liens and
encumbrances:
(a) Liens for ad valorem taxes not payable on or before Closing;
(b) Rights of tenants under Leases; and
(c) Other matters determined by Buyer to be acceptable.
1.23 Personal Property means all (a) sprinkler, plumbing, heating,
air-conditioning, electric power or lighting, incinerating, ventilating and
cooling systems, with each of their respective appurtenant furnaces, boilers,
engines, motors, dynamos, radiators, pipes, wiring and other apparatus,
equipment and fixtures, elevators, partitions, fire prevention and extinguishing
systems located in or on the Improvements, (b) all Materials, and (c) all other
personal property used in connection with the Improvements, provided the same
are now owned or are acquired by Seller prior to the Closing.
1.24 Property means collectively the Real Property, the Improvements
and the Personal Property.
1.25 Prorated means the allocation of items of expense and income
between Buyer and Seller based upon that percentage of the time period as to
which such item of expense or income relates which has expired as of the date at
which the proration is to be made.
1.26 Purchase Price means the consideration agreed to be paid by Buyer
to Seller for the purchase of the Property as set forth in Section (subject to
adjustments as provided herein).
1.27 Real Property means the lands more particularly described on
Exhibit , together with all easements, licenses, privileges, rights of way and
other appurtenances pertaining to or accruing to the benefit of such lands.
1.28 Release means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks, and other
receptacles containing or previously containing any Hazardous Material at or
prior to the Closing Date.
- 4 -
<PAGE>
1.29 Rent Roll means the list of Leases attached hereto as Exhibit ,
identifying with particularity the space leased by each tenant, the term
(including extension options), square footage and applicable rent, common area
maintenance, tax and other reimbursements, security deposits and similar data.
1.30 Seller means Pine, Highland Square and PGI, collectively, except
that as to particular representations and warranties, and covenants, as they are
made with respect to any particular parcel included in the Real Property (and
the improvements thereon), or to the selling entities, as the case may be, the
particular representation, warranty or covenant shall be deemed to have been
made only by the entity which owns the particular parcel, or to the particular
entity or person, as applicable.
1.31 Seller Financial Statements means the unaudited balance sheets and
statements of income, cash flows and changes in financial positions prepared by
Seller for the Property, as of and for the two (2) calendar years next preceding
the date of this Agreement and all monthly reports of income, expense and cash
flow prepared by Seller for the Property, which shall be consistent with past
practice, for any period beginning after the latest of such calendar years, and
ending prior to Closing.
1.32 Shopping Center means the Shopping Center identified on the
initial page hereof, including the 11.56 acre unimproved parcel included in the
Real Property.
1.33 Survey means a map of a stake survey of the Real Property which
shall comply with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, jointly established and adopted by ALTA and ACSM in 1992, and includes
items 1, 2, 3, 4, 6, 7, 8, 9, 10 and 11 of Table "A" thereof, which meets the
accuracy standards (as adopted by ALTA and ACSM and in effect on the date of the
Survey) of an urban survey, which is dated not earlier than thirty (30) days
prior to the Closing, and which is certified to Buyer, Seller, the Title
Insurance company providing Title Insurance to Buyer, and Buyer's lender, and
dated as of the date the Survey was made.
1.34 Surviving Mortgage means a Mortgage dated January 31, 1996, from
Seller to Allstate Life Insurance Company, with a principal balance of
$4,024,418.58 as of February 1, 1998, bearing interest at eight and forty-five
one-hundredths percent (8.45%) per annum and amortizing over a twenty (20) year
period which commenced February 1, 1996, and which matures on February 1, 2006
(subject to extension for an additional ten (10) years as provided in the loan
documents.
1.35 Tenant Estoppel Letter means a letter or other certificate from a
tenant certifying as to certain matters regarding such tenant's Lease, in
substantially the same form as attached hereto as Exhibit , or in the case of
national or regional "credit"
- 5 -
<PAGE>
tenants identified as such on the Rent Roll, the form customarily used by such
tenant provided the information disclosed is acceptable to Buyer.
1.36 Title Defect means any exception in the Title Insurance Commitment
or any matter disclosed by the Survey, other than a Permitted Exception.
1.37 Title Insurance means an ALTA Form B Owners Policy of Title
Insurance for the full Purchase Price insuring marketable title in Buyer in fee
simple, subject only to the Permitted Exceptions, issued by Chicago Title
Insurance Company.
1.38 Title Insurance Commitment means a binder whereby the title
insurer agrees to issue the Title Insurance to Buyer.
1.39 Transaction Documents means this Agreement, the deed conveying the
Property, the assignment of leases, the bill of sale conveying the Personal
Property and all other documents required or appropriate in connection with the
transactions contemplated hereby.
1.40 Weems Road Winn-Dixie means the free-standing Winn-Dixie grocery
store and related facilities located at the intersection of Weems Road and U.S.
Highway 90, in Tallahassee, Leon County, Florida, owned by Buyer and leased to
Winn-Dixie Stores, Inc. ("Winn-Dixie"), commonly known as "Weems Road
Winn-
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be $12,000,000. The
Purchase Price shall be payable by Buyer's assumption of the Surviving Mortgage,
the outstanding principal balance to reduce the Purchase Price and the balance
of the Purchase Price shall be paid in cash at Closing.
(b) Adjustments to the Purchase Price. The Purchase Price
shall be adjusted as of the Closing Date by:
(1) prorating the Closing year's real and tangible personal
property taxes as of the Allocation Date (if the amount of the current year's
property taxes are not available, such taxes will be prorated based upon the
prior year's assessment);
- 6 -
<PAGE>
(2) prorating as of the Allocation Date cash receipts and
expenditures for the Shopping Center and other items customarily prorated in
transactions of this sort; and
(3) subtracting the amount of security deposits, prepaid rents
from tenants under the Leases, and credit balances, if any, of any tenants, and
adding any expenses prepaid by Seller. Any rents, percentage rents or tenant
reimbursements payable by tenants after the Allocation Date but applicable to
periods on or prior to the Allocation Date shall be remitted to Seller by Buyer
within thirty (30) days after receipt, less any expenses of the Property
incurred on or prior to the Allocation Date by Seller but not paid by Seller
prior to Closing and discovered by Buyer after Closing. Buyer shall have no
obligation to collect delinquencies, but should Buyer collect any delinquent
rents or other sums which cover periods prior to the Allocation Date and for
which Seller have received no proration or credit, Buyer shall remit same to
Seller within thirty (30) days after receipt, less any costs of collection.
Buyer will not interfere in Seller's efforts to collect sums due it prior to the
Closing. Seller will remit to Buyer promptly after receipt any rents, percentage
rents or tenant reimbursements received by Seller after Closing which are
attributable to periods occurring after the Allocation Date. Undesignated
receipts after Closing of either Buyer or Seller from tenants in the Shopping
Center shall be applied first to then current rents and reimbursements for such
tenant(s), then to delinquent rents and reimbursements attributable to
post-Allocation Date periods, and then to pre-Allocation Date periods.
2.2 Earnest Money Deposit. An Earnest Money Deposit in the amount of
$50,000 shall be delivered to Escrow Agent within three (3) days after the date
of execution by the last of Buyer or Seller to execute and transmit a copy of
this Agreement to the other. This Agreement may be terminated by Seller if the
Earnest Money Deposit is not received by Escrow Agent by such deadline. The
Earnest Money Deposit paid by Buyer shall be deposited by Escrow Agent in an
interest bearing account, and shall be held and disbursed by Escrow Agent as
specifically provided in this Agreement. The Earnest Money Deposit shall be
applied to the Purchase Price at the Closing.
2.3 Closing Costs.
(a) Seller shall pay:
(1) Documentary stamp and other transfer taxes imposed upon
the transactions contemplated hereby;
(2) Cost of satisfying any liens on the Property;
- 7 -
<PAGE>
(3) Cost of title insurance and the costs, if any, of curing title
defects and recording any curative title documents;
(4) All broker's commissions, finders' fees and similar expenses
incurred by either party in connection with the sale of the Property, subject
however to Buyer's indemnity given in Section of this Agreement;
(5) Seller's attorneys' fees relating to the sale of the Property,
if any;
and
(6) One-half of the costs incurred in connection with the
assumption of the Surviving Mortgage, including assumption fees and the fees
of the lender's counsel.
(b) Buyer shall pay:
(1) Cost of Buyer's due diligence inspection;
(2) Costs of the Phase 1 environmental site assessment to be
obtained by Buyer;
(3) Cost of the Survey;
(4) One-half of the costs incurred in connection with the
assumption of the Surviving Mortgage, including assumption fees and the fees
of the lender's counsel.
(5) Cost of recording the deed; and
(6) Buyer's attorneys' fees.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Property, review the economic data, underwrite the
tenants and review their Leases, and to otherwise conduct its due diligence
review of the Property and all books, records and accounts of Seller related
thereto. Buyer hereby agrees to indemnify and hold Seller harmless from any
damages, liabilities or claims for property damage or personal injury arising
out of such inspection and investigation by Buyer or
- 8 -
<PAGE>
its agents or independent contractors. Within the Inspection Period, Buyer may,
in its sole discretion and for any reason or no reason, elect to go forward with
this Agreement to closing, which election shall be made by notice to Seller
given within the Inspection Period. If such notice is not timely given, this
Agreement and all rights, duties and obligations of Buyer and Seller hereunder,
except any which expressly survive termination, shall terminate and Escrow Agent
shall forthwith return to Buyer the Earnest Money Deposit. If Buyer so elects to
go forward, the Earnest Money Deposit shall be increased by an additional
deposit of $100,000 (to be deposited with Escrow Agent no later than three (3)
business days following the end of the Inspection Period), and shall not be
refundable except upon the terms otherwise set forth herein.
(b) Seller will promptly furnish or make available to Buyer
the documents enumerated on Exhibit attached hereto. Buyer, through its
officers, employees and other authorized representatives, shall have the right
to reasonable access to the Property and all records of Seller related thereto
which are in the custody of Seller or Seller's agents, including without
limitation all Leases and Seller Financial Statements, at reasonable times
during the Inspection Period for the purpose of inspecting the Property, taking
soil and ground water samples, conducting Hazardous Materials inspections,
reviewing the books and records of Seller concerning the Property and otherwise
conducting its due diligence review of the Property. Seller shall cooperate with
and assist Buyer in making such inspections and reviews. Seller shall give Buyer
any authorizations which may be required by Buyer in order to gain access to
records or other information pertaining to the Property or the use thereof
maintained by any governmental or quasi-governmental authority or organization.
Buyer, for itself and its agents, agrees not to enter into any contract with
existing tenants without the written consent of Seller if such contract would be
binding upon Seller should this transaction fail to close. Buyer shall have the
right to have due diligence interviews and other discussions or negotiations
with tenants.
(c) Buyer, through its officers or other authorized
representatives, shall have the right to reasonable access to all Materials
(other than privileged or confidential litigation materials) for the purpose of
reviewing and copying the same.
3.2 Hazardous Material. Prior to the end of the Inspection Period Buyer
may order environmental assessments of the Property. A copy of any assessment
report, if made, shall be furnished by Buyer to Seller promptly upon its
completion. If an assessment report discloses the existence of any Hazardous
Material or any other matters concerning the environmental condition of the
Property or its environs, Buyer may notify Seller in writing, within the
Inspection Period that Buyer elects to terminate this Agreement, whereupon this
Agreement shall terminate and Escrow Agent shall return to Buyer its Earnest
Money Deposit.
- 9 -
<PAGE>
3.3 Time and Place of Closing. Unless otherwise agreed by the parties,
the Closing shall take place at Suite 1500, 1301 Riverplace Boulevard,
Jacksonville, Florida 32207, at 10:00 A.M. on the date which is the fifteenth
(15th) day following the expiration of the Inspection Period, provided that
Buyer may designate an earlier date for Closing.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
Seller warrants and represents as follows as of the date of this
Agreement and as of the Closing and where indicated covenants and agrees as
follows:
4.1 Organization; Authority. Pine, Highland Square and PGI are duly
organized, validly existing and in good standing under the laws of the State of
Florida, and each has full power and authority to enter into and perform this
Agreement in accordance with its terms. The persons executing this Agreement and
other Transaction Documents have been duly authorized to do so on behalf of
Seller. Neither Pine, nor Highland Square, nor PGI is a "foreign person" under
Sections 1445 or 897 of the Internal Revenue Code, nor is this transaction
subject to any withholding under any state or federal law.
4.2 Authorization; Validity. The execution and delivery of this
Agreement by Highland Square and PGI and Seller's consummation of the
transactions contemplated by this Agreement have been duly and validly
authorized. This Agreement constitutes a legal, valid and binding agreement of
Pine, Highland Square and PGI enforceable against each in accordance with its
terms.
4.3 Title. Seller is the owner in fee simple of all of the Property,
subject only to the Permitted Exceptions.
4.4 Commissions. Seller has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Seller, Buyer or the Property for a brokerage commission or finder's fee or like
payment arising out of or in connection with the transaction provided herein
except for Cohen and Company, Inc., and Seller agrees to indemnify Buyer from
any such claim arising by, through or under Seller.
4.5 Sale Agreements. The Property is not subject to any outstanding
agreement(s) of sale, option(s), or other right(s) of third parties to acquire
any interest therein, except for Permitted Exceptions and this Agreement.
4.6 Litigation. There is no litigation or proceeding pending, or to the
best of Seller's knowledge, threatened against Seller relating to the Property,
except a dispute
- 10 -
<PAGE>
with Eckerd Corporation which Seller shall resolve before Closing or Seller
shall indemnify and hold Buyer harmless from any loss or damage therefrom.
4.7 Leases. There are no Leases affecting the Property, oral or
written, except as listed on the Rent Roll, and any Leases or modifications
entered into between the date of this Agreement and the Closing Date with the
consent of Buyer. Copies of the Leases, which have been delivered to Buyer or
shall be delivered to Buyer within five (5) days from the date hereof, are, to
the best knowledge of Seller, true, correct and complete copies thereof, subject
to the matters set forth on the Rent Roll. Between the date hereof and the
Closing Date, Seller will not terminate or modify existing Leases or enter into
any new Leases without the consent of Buyer. All of the Property's tenant leases
are in good standing and to the best of Seller's knowledge no defaults exist
thereunder except as noted on the Rent Roll. No rent or reimbursement has been
paid more than one (1) month in advance and no security deposit has been paid,
except as stated on the Rent Roll. No tenants under the Leases are entitled to
interest on any security deposits. No tenant under any Lease has or will be
promised any inducement, concession or consideration by Seller other than as
expressly stated in such Lease, and except as stated therein there are and will
be no side agreements between Seller and any tenant.
4.8 Financial Statements. Each of the Seller Financial Statements
delivered or to be delivered to Buyer hereunder has or will have been prepared
in accordance with the books and records of Seller and presents fairly in all
material respects the financial condition, results of operations and cash flows
for the Property as of and for the periods to which they relate. All are in
conformity with generally accepted accounting principles applied on a consistent
basis. There has been no material adverse change in the operations of the
Property or its prospects since the date of the most recent Seller Financial
Statements. Seller covenants to furnish promptly to Buyer copies of the Seller
Financial Statements together with unaudited updated monthly reports of cash
flow for interim periods beginning after December 31, 1996. Buyer and its
independent certified accountants shall be given access to Seller's books and
records at any time prior to and for one (1) month following Closing upon
reasonable advance notice in order that they may verify the financial statements
prior to Closing. Seller agrees to execute and deliver to Buyer or its
accountants the Audit Representation Letter should Buyer's accountants audit the
records of the Shopping Center.
4.9 Contracts. Except for Leases and Permitted Exceptions, there are no
management, service, maintenance, utility or other contracts or agreements
affecting the Property, oral or written, which extend beyond the Closing Date
and which would bind Buyer or encumber the Property, at Buyer's option, more
than thirty (30) days after Closing. All such Contracts are in full force and
effect in accordance with their respective terms, and all obligations of Seller
under the Contracts required to be
- 11 -
<PAGE>
performed to date have been performed in all material respects; no party to any
Contract has asserted any claim of default or offset against Seller with respect
thereto and no event has occurred or failed to occur, which would in any way
affect the validity or enforceability of any such Contract; and the copies of
the Contracts delivered to Buyer prior to the date hereof are true, correct and
complete copies thereof. Between the date hereof and the Closing, Seller
covenants to fulfill all of its obligations under all Contracts, and covenants
not to terminate or modify any such Contracts or enter into any new contractual
obligations relating to the Property without the consent of Buyer (not to be
unreasonably withheld) except such obligations as are freely terminable without
penalty by Seller upon not more than thirty (30) days' written notice.
4.10 Maintenance and Operation of Property. From and after the date
hereof and until the Closing, Seller covenants to keep and maintain and operate
the Property substantially in the manner in which it is currently being
maintained and operated and covenants not to cause or permit any waste of the
Property nor undertake any action with respect to the operation thereof outside
the ordinary course of business without Buyer's prior written consent. In
connection therewith, Seller covenants to make all necessary repairs and
replacements until the Closing so that the Property shall be of substantially
the same quality and condition at the time of Closing as on the date hereof.
Seller covenants not to remove from the Improvements or the Real Property any
article included in the Personal Property. Seller covenants to maintain such
casualty and liability insurance on the Property as it is presently being
maintained.
4.11 Permits and Zoning. To the best knowledge of Seller, there are no
material permits and licenses (collectively referred to as "Permits") required
to be issued to Seller by any governmental body, agency or department having
jurisdiction over the Property which materially affect the ownership or the use
thereof which have not been issued. The Property is properly zoned for its
present use and is not subject to any local, regional or state development
order. The use of the Property is consistent with the land use designation for
the Property under the comprehensive plan or plans applicable thereto, and all
concurrency requirements have been satisfied. There are no outstanding
assessments, impact fees or other charges related to the Property.
4.12 Rent Roll; Tenant Estoppel Letters. The Rent Roll is true and
correct in all respects. Seller agrees to use its best reasonable efforts to
obtain current Tenant Estoppel Letters acceptable to Buyer from all Tenants
under Leases, which Tenant Estoppel Letters shall confirm the matters reflected
by the Rent Roll as to the particular tenant and shall be otherwise acceptable
to Buyer in all respects.
4.13 Condemnation. Neither the whole nor any portion of the Property,
including access thereto or any easement benefitting the Property, is subject to
temporary requisition of use by any governmental authority or has been
condemned, or taken in any proceeding similar to a condemnation proceeding, nor
is there now
- 12 -
<PAGE>
pending any condemnation, expropriation, requisition or similar proceeding
against the Property or any portion thereof. Seller has received no notice nor
has any knowledge that any such proceeding is contemplated.
4.14 Governmental Matters. Seller has not entered into any commitments
or agreements with any governmental authorities or agencies affecting the
Property that have not been disclosed in writing to Buyer and Seller has
received no notices from any such governmental authorities or agencies of
uncured violations at the Property of building, fire, air pollution or zoning
codes, rules, ordinances or regulations, environmental and hazardous substances
laws, or other rules, ordinances or regulations relating to the Property. Seller
shall be responsible for the remittance of all sales tax for periods occurring
prior to the Allocation Date directly to the appropriate state department of
revenue.
4.15 Repairs. Seller has received no notice of any requirements or
recommendations by any lender, insurance companies, or governmental body or
agencies requiring or recommending any repairs or work to be done on the
Property which have not already been completed.
4.16 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby will (a) require Seller to file or register
with, notify, or obtain any permit, authorization, consent, or approval of, any
governmental or regulatory authority; (b) conflict with or breach any provision
of the organizational documents of Seller; (c) violate or breach any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Seller is a party, or by which
Seller, the Property or any of Seller's material assets may be bound; or (d)
violate any order, writ, injunction, decree, judgment, statute, law or ruling of
any court or governmental authority applicable to Seller, the Property or any of
Seller's material assets.
4.17 To Seller's knowledge, the Surviving Mortgage is presently held by
Allstate Life Insurance Company and is in good standing with no defaults
existing thereunder. The principal balance outstanding as of February 1, 1998,
is $4,024,418.58, and the monthly payment of principal and interest is
$36,315.77. The interest rate is eight and forty-five one-hundredths percent
(8.45%) per annum. Seller is not required to make deposits with the holder of
the Surviving Mortgage for taxes and insurance. The transfer of the Property to
Buyer will require the consent of the holder of the Surviving Mortgage. Prior to
Closing, Seller shall use reasonable efforts to cause the holder of the
Surviving Mortgage to execute and deliver to Buyer an estoppel letter and
consent consenting to this transaction, certifying as to the foregoing
- 13 -
<PAGE>
matters and releasing Seller from the Mortgage, in form and substance
satisfactory to Buyer and Seller. Seller will maintain the Surviving Mortgage in
good standing, without default, until Closing.
4.18 Environmental Matters.
(a) Seller represents and warrants as of the date hereof and as of the
Closing that:
(1) Seller has not, and has no knowledge of any other person
who has, caused any Release, threatened Release, or disposal of any Hazardous
Material at the Property in any material quantity;
(2) The Property does not now contain and to the best of
Seller's knowledge has not contained any: (a) underground storage tank, (b)
material amounts of asbestos-containing building material, (c) landfills or
dumps, (d) more than one dry cleaning drop off facility and one coin laundry and
cleaner tenant;; or (e) hazardous waste management facility as defined pursuant
to the Resource Conservation and Recovery Act ("RCRA") or any comparable state
law. The Property is not a site on or nominated for the National Priority List
promulgated pursuant to Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") or any state remedial priority list promulgated or
published pursuant to any comparable state law; and
(3) There are to the best of Seller's knowledge no conditions or
circumstances at the Property which pose a risk to the environment or the health
or safety of persons.
(b) Seller shall indemnify, hold harmless, and hereby waives
any claim for contribution against Buyer for any damages to the extent they
arise from the inaccuracy or breach of any representation or warranty by Seller
in this section of this Agreement. This indemnity shall survive Closing
indefinitely.
4.19 No Untrue Statement. Neither this Agreement nor any exhibit nor
any written statement or Transaction Document furnished or to be furnished by
Seller to Buyer in connection with the transactions contemplated by this
Agreement contains or will contain any untrue statement of material fact or
omits or will omit any material fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
4.20 AS-IS ACQUISITION. BUYER ACKNOWLEDGES THAT, EXCEPT AS
EXPRESSLY REPRESENTED AND WARRANTED BY SELLER IN THIS AGREEMENT,
THERE HAVE BEEN NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
- 14 -
<PAGE>
IMPLIED, UPON WHICH BUYER IS RELYING WHICH HAVE BEEN MADE BY SELLER OR UPON
SELLER'S BEHALF RELATING IN ANY WAY TO THE PROPERTY; AND THAT SUBJECT TO ANY AND
ALL CONDITIONS TO BUYER'S OBLIGATIONS DESCRIBED IN THIS AGREEMENT AND TO
SELLER'S REPRESENTATIONS AND WARRANTIES EXPRESSED IN THIS AGREEMENT, BUYER IS
ACQUIRING THE PROPERTY "AS IS". THE PROVISIONS OF THIS SECTION 4.20 SHALL
SURVIVE THE CLOSING OF THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT.
5. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
Buyer hereby warrants and represents as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
5.1 Organization; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under laws of Florida and has full power
and authority to enter into and perform this Agreement in accordance with its
terms, and the persons executing this Agreement and other Transaction Documents
on behalf of Buyer have been duly authorized to do so.
5.2 Authorization; Validity. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly and validly
authorized by the Board of Directors of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and (assuming the valid execution and
delivery of this Agreement by Seller) constitutes a legal, valid and binding
agreement of Buyer enforceable against it in accordance with its terms.
5.3 Commissions. Buyer has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Buyer or Seller for a brokerage commission or finder's fee or like payment
arising out of or in connection with the transaction provided herein except
Cohen and Company, Inc., whose commission shall be paid by Seller; and Buyer
agrees to indemnify Seller from any other such claim arising by, through or
under Buyer.
6. POSSESSION; RISK OF LOSS
6.1 Possession. Possession of the Property will be transferred to Buyer
at the conclusion of the Closing.
6.2 Risk of Loss. All risk of loss to the Property shall remain upon
Seller until the conclusion of the Closing. If, before the possession of the
Property has been transferred to Buyer, any material portion of the Property is
damaged by fire or other casualty and will not be restored by the Closing Date
or if any material portion of the Property is taken by eminent domain or there
is a material obstruction of access to the
- 15 -
<PAGE>
Improvements by virtue of a taking by eminent domain, Seller shall, within ten
(10) days of such damage or taking, notify Buyer thereof and Buyer shall have
the option to:
(a) terminate this Agreement upon notice to Seller given
within ten (10) business days after such notice from Seller, in which case Buyer
shall receive a return of its Earnest Money Deposit; or
(b) proceed with the purchase of the Property, in which event
Seller shall assign to Buyer all Seller's right, title and interest in all
amounts due or collected by Seller under the insurance policies or as
condemnation awards. In such event, the Purchase Price shall be reduced by the
amount of any insurance deductible to the extent it reduced the insurance
proceeds payable.
7. TITLE MATTERS
7.1 Title.
(a) Title Insurance and Survey. Prior to the end of the
Inspection Period Buyer's counsel shall order the Title Insurance Commitment and
a Survey (Seller having furnished Buyer copies of existing surveys and other
title information in its possession). Buyer will have ten (10) days from receipt
of the Title Commitment (including legible copies of all recorded exceptions
noted therein) and Survey to notify Seller in writing of any Title Defects,
encroachments or other matters not acceptable to Buyer which are not permitted
by this Agreement. Any Title Defect or other objection disclosed by the Title
Insurance Commitment (other than liens removable by the payment of money) or the
Survey which is not timely specified in Buyer's written notice to Seller of
Title Defects shall be deemed a Permitted Exception. Seller shall notify Buyer
in writing within five (5) days of Buyer's notice if Seller intends to cure any
Title Defect or other objection. If Seller elects to cure, Seller shall use
diligent efforts to cure the Title Defects and/or objections by the Closing Date
(as it may be extended). If Seller elects not to cure or if such Title Defects
and/or objections are not cured, Buyer shall have the right, in lieu of any
other remedies, to: (i) refuse to purchase the Property, terminate this
Agreement and receive a return of the Earnest Money Deposit; or (ii) waive such
Title Defects and/or objections and close the purchase of the Property subject
to such Title Defects.
(b) Miscellaneous Title Matters. If a search of the title
discloses judgments, bankruptcies or other returns against other persons having
names the same as or similar to that of Seller, Seller shall on request deliver
to Buyer an affidavit stating, if true, that such judgments, bankruptcies or the
returns are not against Seller. Seller further agrees to execute and deliver to
the Title Insurance agent at Closing such documentation, if any, as the Title
Insurance underwriter shall reasonably require to
- 16 -
<PAGE>
evidence that the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized and that there
are no mechanics' liens on the Property or parties in possession of the Property
other than tenants under Leases and Seller.
8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Buyer's Obligations. The obligations of
Buyer under this Agreement are subject to satisfaction or waiver by Buyer of
each of the following conditions or requirements on or before the Closing Date:
(a) Seller's warranties and representations under this
Agreement shall be true and correct as of the Closing Date, and Seller shall not
be in default hereunder.
(b) All obligations of Seller contained in this Agreement,
shall have been fully performed in all material respects and Seller shall not be
in default under any covenant, restriction, right-of-way or easement affecting
the Property.
(c) There shall have been no material adverse change in the
Property, its operations or future prospects, the Leases or the financial
condition of tenants leasing space in the Shopping Center.
(d) A Title Insurance Commitment in the full amount of the
Purchase Price shall have been issued and "marked down" through Closing, subject
only to Permitted Exceptions.
(e) The physical and environmental condition of the Property
shall be unchanged from the date of this Agreement, ordinary wear and tear
excepted.
(f) Seller shall have delivered to Buyer the following in form
reasonably satisfactory to Buyer:
(1) A warranty deed in proper form for recording, duly executed
and acknowledged so as to convey to Buyer the fee simple title to the Property,
subject only to the Permitted Exceptions:
(2) Originals, if available, or if not, true copies of the Leases and
of the contracts, agreements, permits and licenses, and such Materials as may be
in the possession or control of Seller;
(3) A blanket assignment to Buyer of all Leases and the
contracts, agreements, permits and licenses (to the extent assignable)
as they affect
- 17 -
<PAGE>
the Property, including an indemnity against breach of such instruments by
Seller prior to the Closing Date;
(4) A bill of sale with respect to the Personal Property and
Materials;
(5) A title certificate, properly endorsed by Seller, as to any
items of Property for which title certificates exist;
(6) The Survey;
(7) A current rent roll for all Leases in effect showing no
changes from the rent roll attached to this Agreement other than those set forth
in the Leases or approved in writing by Buyer;
(8) All Tenant Estoppel Letters obtained by Seller,
which must
include Publix, Winn-Dixie Stores, Consolidated Stores, Family Dollar Stores and
Eckerd Drug, and eighty percent (80%) of the other tenants who have signed
leases for any portion of the Property, without any material exceptions,
covenants, or changes to the form approved by Buyer and distributed to the
tenants by Seller, the substance of which Tenant Estoppel Letters must be
acceptable to Buyer in all respects (including specifically the Eckerd Drug
Tenant Estoppel Letter, which must reflect that the dispute between Seller and
Eckerd Drug has been resolved, or Seller shall otherwise indemnify Buyer from
any loss or damage attributable thereto);
(9) A general assignment of all assignable existing warranties
relating to the Property;
(10) An owner's affidavit, non-foreign affidavits, non-tax
withholding certificates and such other documents as may reasonably be required
by Buyer or its counsel in order to effectuate the provisions of this Agreement
and the transactions contemplated herein;
(11) The originals or copies of any real and tangible personal
property tax bills for the Property for the tax year of Closing and the previous
year, and, if requested, the originals or copies of any current water, sewer and
utility bills which are in Seller's custody or control;
(12) Resolutions of Seller authorizing the transactions described
herein;
(13) All keys and other means of access to the Improvements in
the possession of Seller or its agents;
- 18 -
<PAGE>
(14) Materials; and
(15) Such other documents as Buyer may reasonably request to
effect the transactions contemplated by this Agreement; and
(g) Receipt of the consent of the holder of the Surviving
Mortgage to this transaction, and the release of Seller, imposing such
conditions, if any, as are acceptable to each of Seller and Buyer.
In the event that all of the foregoing provisions of this Section are
not satisfied and Buyer elects in writing to terminate this Agreement, then the
Earnest Money Deposit shall be promptly delivered to Buyer by Escrow Agent and,
upon the making of such delivery, neither party shall have any further claim
against the other by reasons of this Agreement, except as provided in Article .
8.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction or waiver by Seller of
each of the following conditions or requirements on or before the Closing date:
(a) Buyer's warranties and representations under this
Agreement shall be true and correct as of the Closing Date, and Buyer shall not
be in default hereunder.
(b) All of the obligations of Buyer contained in this
Agreement shall have been fully performed by or on the date of Closing in
compliance with the terms and provisions of this Agreement.
(c) Buyer shall have delivered to Seller at or prior to the
Closing the following, which shall be reasonably satisfactory to Seller:
(1) Delivery and/or payment of the balance of the Purchase
Price in accordance with Section at Closing;
(2) Such other documents as Seller may reasonably request to
effect the transactions contemplated by this Agreement; and
(d) Receipt of the consent of the holder of the Surviving
Mortgage to this transaction, and the release of Seller, imposing such
conditions, if any, as are acceptable to each of Seller and Buyer.
8.3 Section 1031 Exchange. Buyer acknowledges that Seller may endeavor
to effect a like-kind exchange under Section 1031 of the Internal Revenue Code
of 1986, as amended (the "Code"), such that Seller can acquire the Other
Centers, or
- 19 -
<PAGE>
other properties, with the proceeds of the sale of the Shopping Center to Buyer.
Seller expressly reserves the right to assign its rights, but not it
obligations, hereunder, to a qualified intermediary including without limitation
Escrow Agent, as provided in the Internal Revenue Code and the regulations
promulgated thereunder, including without limitation Reg. 1.1031(k)-(l)(g)(4),
on or before the Closing Date. Accordingly, Buyer agrees that (i) Buyer will
cooperate with Seller to effect a tax-free exchange or exchanges in accordance
with the provisions of Section 1031 of the Code and the regulations promulgated
with respect thereto; and (ii) it is a condition of this agreement that Buyer
and Seller enter into a mutually agreeable contract pursuant to which Buyer will
agree to sell to Seller, and Seller will agree to purchase from Buyer the Other
Centers. It is not a condition that the transactions contemplated by such other
contract actually close (eg. Seller, as Buyer under said contract, may determine
during the inspection period under such other contract that Seller does not wish
to purchase the Other Centers), but only that a mutually agreeable contract for
the sale and purchase of the Other Centers by entered into by Seller and Buyer.
Seller and Buyer agree to negotiate in good faith such that a contract for the
sale and Seller shall be solely responsible for any additional fees, costs or
expenses incurred in connection with the like-kind exchange contemplated by this
paragraph. In no event shall Seller's ability or inability to effect a like-kind
exchange, as contemplated hereby, in any way relieve Seller from its obligations
and liabilities under this Agreement. Seller hereby agrees to indemnify and hold
harmless Buyer from any liability, losses or damages incurred by Buyer in
connection with or arising out of the Section 1031 like-kind exchange, including
but not limited to any tax liability. It is not Buyer's intention to effect a
Section 1031 exchange with respect to the proceeds of Buyer's sale of the Other
Centers to Seller.
In the event that all conditions precedent to Buyer's obligation to
purchase shall have been satisfied but the foregoing provisions of this Section
have not, and Seller elects in writing to terminate this Agreement, then the
Earnest Money Deposit shall be promptly delivered to Seller by Escrow Agent and,
upon the making of such delivery, neither party shall have any further claim
against the other by reasons of this Agreement, except as provided in Article .
8.4 Best Efforts. Each of the parties hereto agrees to use reasonable
best efforts to take or cause to be taken all actions necessary, proper or
advisable to consummate the transactions contemplated by this Agreement.
9. PRE-CLOSING BREACH; REMEDIES
9.1 Breach by Seller. In the event of a breach of Seller's covenants or
warranties herein and failure by Seller to cure such breach within the time
provided for
- 20 -
<PAGE>
Closing, Buyer may, at Buyer's election (i) terminate this Agreement and receive
a return of the Earnest Money Deposit, and the parties shall have no further
rights or obligations under this Agreement (except as survive termination); (ii)
enforce this Agreement by suit for specific performance; or (iii) waive such
breach and close the purchase contemplated hereby, notwithstanding such breach.
9.2 Breach by Buyer. In the event of a breach of Buyer's covenants or
warranties herein and failure of Buyer to cure such breach within the time
provided for Closing, Seller's sole remedy shall be to terminate this Agreement
and retain Buyer's Earnest Money Deposit as agreed liquidated damages for such
breach, and upon payment in full to Seller of such amounts, the parties shall
have no further rights, claims, liabilities or obligations under this Agreement
(except as survive termination).
10. MISCELLANEOUS
10.1 Disclosure. Neither party shall disclose the transactions
contemplated by this Agreement without the prior approval of the other, except
to its attorneys, accountants and other consultants, their lenders and
prospective lenders, or where disclosure is required by law.
10.2 Radon Gas. Radon is a naturally occurring radioactive gas which,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon which
exceed federal and state guidelines have been found in buildings in the state in
which the Property is located. Additional information regarding radon and radon
testing may be obtained from the county public health unit.
10.3 Entire Agreement. This Agreement, together with the exhibits
attached hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and may not be modified, amended or
otherwise changed in any manner except by a writing executed by Buyer and
Seller.
10.4 Notices. All written notices and demands of any kind which either
party may be required or may desire to serve upon the other party in connection
with this Agreement shall be served by personal delivery, certified or overnight
mail, reputable overnight courier service or facsimile (followed promptly by
hard copy) at the addresses set forth below:
- 21 -
<PAGE>
As to Seller Ricardo Pines
3301 Ponce de Leon Boulevard, Penthouse Suite
Coral Gables, Florida 33134
Facsimile: (305) 529-0002
As to Buyer: RRC Acquisitions Two, Inc.
Attention: Robert L. Miller
Suite 200, 121 West Forsyth Street
Jacksonville, Florida 32202
Facsimile: (904) 634-3428
With a copy to: Rogers, Towers, Bailey, Jones & Gay, P.A.
Attention: William E. Scheu, Esquire
1301 Riverplace Boulevard, Suite 1500
Jacksonville, Florida 32207
Facsimile: (904) 396-0663
Any notice or demand so served shall constitute proper notice hereunder upon
delivery to the United States Postal Service or to such overnight courier. A
party may change its notice address by notice given in the aforesaid manner.
10.5 Headings. The titles and headings of the various sections hereof
are intended solely for means of reference and are not intended for any purpose
whatsoever to modify, explain or place any construction on any of the provisions
of this Agreement.
10.6 Validity. If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement by the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable shall not be affected thereby,
and every provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
10.7 Attorneys' Fees. In the event of any litigation between the
parties hereto to enforce any of the provisions of this Agreement or any right
of either party hereto, the unsuccessful party to such litigation agrees to pay
to the successful party all costs and expenses, including reasonable attorneys'
fees, whether or not incurred in trial or on appeal, incurred therein by the
successful party, all of which may be included in and as a part of the judgment
rendered in such litigation. Any indemnity provisions herein shall include
indemnification for reasonable attorneys' fees and costs, whether or not suit be
brought and including fees and costs on appeal.
10.8 Time of Essence. Time is of the essence of this Agreement.
- 22 -
<PAGE>
10.9 Governing Law. This Agreement shall be governed by the laws of the
state in which the Property is located, and the parties hereto agree that any
litigation between the parties hereto relating to this Agreement shall take
place (unless otherwise required by law) in a court located in the county in
which the Property is located. Each party waives its right to jurisdiction or
venue in any other location.
10.10 Successors and Assigns. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. No third parties, including any
brokers or creditors, shall be beneficiaries hereof.
10.11 Exhibits. All exhibits attached hereto are incorporated herein by
reference to the same extent as though such exhibits were included in the body
of this Agreement verbatim.
10.12 Gender; Plural; Singular; Terms. A reference in this Agreement to
any gender, masculine, feminine or neuter, shall be deemed a reference to the
other, and the singular shall be deemed to include the plural and vice versa,
unless the context otherwise requires. The terms "herein," "hereof,"
"hereunder," and other words of a similar nature mean and refer to this
Agreement as a whole and not merely to the specified section or clause in which
the respective word appears unless expressly so stated.
10.13 Further Instruments, Etc. This Agreement may be executed in
counterparts and when so executed shall be deemed executed as one agreement.
Seller and Buyer shall execute any and all documents and perform any and all
acts reasonably necessary to fully implement this Agreement.
10.14 Survival. The obligations of Seller and Buyer intended to be
performed after the Closing shall survive the closing.
10.15 No Recording. Neither this Agreement nor any notice, memorandum
or other notice or document relating hereto shall be recorded.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses: RRC ACQUISITIONS TWO, INC.,
a Florida corporation
______________________________ By:___________________________________
- 23 -
<PAGE>
Name:____________________________ Name:______________________________
Title:_____________________________
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No: 59-3478325
"BUYER"
PINES GROUP, INC.,
a Florida corporation
___________________________________ By:___________________________________
Name:_____________________________ Name:______________________________
Title:_____________________________
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No:____________________
"PGI"
- ----------------------------------- --------------------------------------
Name:_____________________________ RICARDO PINES
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No:____________________
"PINE"
- 24 -
<PAGE>
HIGHLAND SQUARE ASSOCIATES, LTD.,
a Florida limited partnership
___________________________________ By: Its General Partner
Name:_____________________________ PINES JACKSONVILLE MANAGEMENT,
INC., a Florida corporation
By: __________________________________
Its: President
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No:____________________
"HIGHLAND SQUARE"
- 25 -
<PAGE>
EXHIBIT
Audit Representation Letter
--------------------------
(Acquisition Completion Date)
KPMG Peat Marwick LLP
Suite 2700
One Independent Drive
Jacksonville, Florida 32202
Dear Sirs:
We are writing at your request to confirm our understanding that your
audit of the Statement of Revenue and Certain Expenses for Highland Square
Shopping Center for the twelve months ended ________________, was made for the
purpose of expressing an opinion as to whether the statement presents fairly, in
all material respects, the results of its operations in conformity with
generally accepted accounting principles. In connection with your audit we
confirm, to the best of our knowledge and belief, the following representations
made to you during your audit:
1. We have made available to you all financial records and related data
for the period under audit.
2. There have been no undisclosed:
a. Irregularities involving any member of management or
employees who have significant roles in the internal control structure.
b. Irregularities involving other persons that could have a
material effect on the Statement of Revenue and Certain Expenses.
c. Violations or possible violations of laws or regulations,
the effects of which should be considered for disclosure in the Statement of
Revenue and Certain Expenses.
3. There are no undisclosed:
a. Unasserted claims or assessments that our lawyers have
advised us are probable of assertion and must be disclosed in accordance with
Statement of Financial Accounting Standards No. 5 (SFAS No. 5).
<PAGE>
b. Material gain or loss contingencies (including oral and
written guarantees) that are required to be accrued or disclosed by SFAS No. 5.
c. Material transactions that have not been properly recorded
in the accounting records underlying the Statement of Revenue and Certain
Expenses.
d. Material undisclosed related party transactions and related
amounts receivable or payable, including sales, purchases, loans, transfers,
leasing arrangements, and guarantees.
e. Events that have occurred subsequent to the balance sheet
date that would require adjustment to or disclosure in the Statement of Revenue
and Certain Expenses.
4. All aspects of contractual agreements that would have a material
effect on the Statement of Revenue and Certain Expenses have been complied with.
Further, we acknowledge that we are responsible for the fair
presentation of the Statements of Revenue and Certain Expenses prepared in
conformity with generally accepted accounting principles.
Very truly yours,
"Seller/Manager"
---------------------------------------
Name:____________________________
Title:___________________________________
<PAGE>
EXHIBIT
Legal Description of Real Property
<PAGE>
EXHIBIT
Rent Roll
<PAGE>
EXHIBIT
Form of Estoppel Letter
_____________________, 199_
RRC Acquisitions Two, Inc.
Regency Centers, Inc.
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
RE: ___________________________ (Name of Shopping Center)
Ladies and Gentlemen:
The undersigned (Tenant) has been advised you may purchase the above
Shopping Center, and we hereby confirm to you that:
1. The undersigned is the Tenant of ___________________________,
Landlord, in the above Shopping Center, and is currently in
possession and paying rent on premises known as Store No.
_______________ [or Address:
----------------------------------------------------------------],
and containing approximately _____________ square feet, under
the terms of the lease dated ______________________, which has
(not) been amended by amendment dated ________________________
(the "Lease"). There are no other written or oral agreements
between Tenant and Landlord. Tenant neither expects nor has
been promised any inducement, concession or consideration for
entering into the Lease, except as stated therein, and there
are no side agreements or understandings between Landlord and
Tenant.
2. The term of the Lease commenced on ____________________,
expiring on ___________________, with options to extend of
________________ (____) years each.
3. As of ____________________, monthly minimum rental is
$_______________ a month.
4. Tenant is required to pay its pro rata share of Common Area
Expenses and its pro rata share of the Center's real property
taxes and insurance cost. Current additional monthly payments
for expense reimbursement total $____________ per month for
common area maintenance, property insurance and real estate
taxes.
5. Tenant has given [no security deposit] [a security deposit of
$--------------].
<PAGE>
6. No payments by Tenant under the Lease have been made for more
than one (1) month in advance, and minimum rents and other
charges under the Lease are current.
7. All matters of an inducement nature and all obligations of the
Landlord under the Lease concerning the construction of the
Tenant's premises and development of the Shopping Center,
including without limitation, parking requirements, have been
performed by Landlord.
8. The Lease contains no first right of refusal, option to
expand, option to terminate, or exclusive business rights,
except as follows:
9. Tenant knows of no default by either Landlord or Tenant under
the Lease, and knows of no situations which, with notice or
the passage of time, or both, would constitute a default.
Tenant has no rights to off-set or defense against Landlord as
of the date hereof.
10. The undersigned has not entered into any sublease, assignment
or any other agreement transferring any of its interest in the
Lease or the Premises except as follows:
11.Tenant has not generated, used, stored, spilled, disposed of, or released
any hazardous substances at, on or in the Premises. "Hazardous
Substances" means any flammable, explosive, toxic, carcinogenic,
mutagenic, or corrosive substance or waste, including volatile petroleum
products and derivatives and dry cleaning solvents. To the best of
Tenant's knowledge, no asbestos or polychlorinated biphenyl ("PCB") is
located at, on or in the Premises. The term "Hazardous Substances"
does not include those materials which are technically within the definition
set forth above but which are contained in pre-packaged office supplies,
cleaning materials or personal grooming items or other items which are
sold for consumer or commercial use and typically used in other similar
buildings or space.
The undersigned makes this statement for your benefit and protection with the
understanding that you intend to rely upon this statement in connection with
your intended purchase of the above described Premises from Landlord. The
undersigned agrees that it will, upon receipt of written notice from Landlord,
commence to pay all rents to you or to any Agent acting on your behalf.
Very truly yours,
-------------------------------------------
____________________________________(Tenant)
Mailing Address:
____________________________ By:________________________________________
Its:_________________________________
- ----------------------------
<PAGE>
Exhibit
Document Request List
Items Required from the Seller:
1) Property Specifications (Zoning)
2) As Built Plans & Specs (arch. and engineering)
3) Site Plan (including suite numbers)
4) Location maps
5) Aerial photographs
6) Demographics (including traffic counts)
7) Legal Description
8) Parking Information - Space count
9) Copy of All Leases (and amendments) & Lease Briefs
10) Certificates of Occupancy - All current tenants
11) Schedule of Security Deposits
12) Most recent Rent Roll (with suite #'s, rent escalations, and
option period info)
13) Sales Reports (most recent 3 Years) for tenants reporting 14)
Current Rent Billings (by category, base, CAM, etc.) 15) Current
Delinquency Report (with explanations for balances > $1,000) 16) Tenant
Activity Register for all Current Tenants (billings & payments) 17)
Tenant Estoppels 18) Property Operating Results - Most recent 3 Years
19) Property Capital Expenditures - Most recent 3 Years 20) Audited
Financial Statements - 3 Years 21) Real Estate and other tax bills - 3
Years 22) Year to Date Financials & YTD detail general Ledger 23)
Existing Service Agreements and Warranties 24) Three years loss history
- reported claims 25) Most Recent Year Expense Recovery Reconciliation
26) Breakdown of CAM Pools 27) Proof Sales Tax Payments are Current 28)
Appraisal (last available) 29) Seller's Budget for up-coming/current
year 30) Utility Bills for last 12 months/deposits 31) Personal
Property Inventory 32) Existing Title Insurance Policy 33) Available
Inspection Reports (environmental, roof, structural, etc.) 34) Summary
of Tenant Contacts (with address and telephone numbers)
With local (include store#) & national addresses
35) Survey
36) Tax plat map
wes\reg\highland\psa.4
<PAGE>
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
(Highland Square)
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT, dated as of the
_____ day of April, 1998, by and among RICARDO PINES, individually ("Pines"),
PINES HIGHLAND SQUARE ASSOCIATES, LTD., a Florida limited partnership (the
"Partnership") and PINES GROUP, INC., a Florida corporation (the "Corporation")
(collectively, Pine, Partnership and Corporation are referred to herein as
"Seller"), and RRC ACQUISITIONS TWO, INC., a Florida corporation ("Buyer").
Background
(i) Buyer and Seller have previously entered into that certain Purchase
and Sale Agreement dated as of February 24, 1998 (the "Agreement"), concerning
the purchase of a shopping center commonly known as "Highland Square", in
Jacksonville, Duval County, Florida, owned by Seller.
(ii) Seller and Buyer wish to amend the Agreement as hereinafter
provided.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, receipt of which is hereby acknowledged, Buyer and
Seller hereby agree as follows:
1. Definitions. All terms defined in the Agreement shall, when capitalized
in this First Amendment, have the same meanings attributed to them herein.
2. Reduction of Purchase Price. The Purchase Price shall be reduced by
the sum of $400,000.00. Accordingly, Section 2.1(a) of the Agreement is hereby
amended to read, in its entirety, as follows:
"(a) Purchase Price and Terms. The total Purchase Price for
the Property (subject to adjustment as provided herein) shall be
$11,600,000.00. The Purchase Price shall be payable by Buyer's
assumption of the Surviving Mortgage, the outstanding principal balance
thereof to reduce the Purchase Price, and the balance of the Purchase
Price shall be paid in cash at Closing.
3. Closing Date Extended. The Closing shall occur on May 31, 1998, or
on such earlier date as Buyer shall notify Seller, and Section 3.3 is amended
accordingly.
<PAGE>
4. Environmental Escrow Agreement. Buyer's inspection of the Property
has revealed certain environmental contamination caused by a drycleaning
operation at the Property. At closing Buyer and Seller shall enter into an
environmental escrow agreement pursuant to which up to $400,000.00 shall be
deposited with Escrow Agent pending remediation of such contamination by Seller
in a manner acceptable to Buyer, to be reduced to one hundred twenty-five
percent (125%) of the cost to remediate as agreed upon by Buyer and Seller prior
to Closing. The form and substance of the escrow agreement shall be mutually
acceptable to Seller, Buyer and the holder of the Surviving Mortgage. If by the
Closing Date Seller and Buyer have not agreed to the form and substance of the
environmental escrow agreement, either may terminate this Agreement, in which
event the Earnest Money Deposit shall be returned to Buyer.
5. Other Properties. It is acknowledged that Seller is acquiring from
affiliates of Buyer two properties commonly known as the "Lady's Island Publix"
and the "Weems Road Winn-Dixie" pursuant to an Agreement dated February 24,
1998, and an Eckerd Drug Store pursuant to an agreement currently being
negotiated. The sale of the Property to Buyer is conditioned upon Seller and
Buyer, and Buyer's affiliates reaching a satisfactory agreement concerning those
other properties.
6. As amended hereby, the Agreement shall remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, the Buyer and Seller have executed this Agreement
as of the day and year first above written.
Witnesses:
RRC ACQUISITIONS TWO, INC.,
Name: a Florida corporation
By:
Name: Name:
Title:
Date: , 1998
Tax Identification No. 59-3478325
"BUYER"
- 2 -
<PAGE>
PINES GROUP, INC.,
Name: a Florida corporation
By:
Name: Name:
Title:
Date: , 1998
Tax Identification No.:
Name: RICARDO PINES
Date: , 1998
Name:
Tax Identification No.:
HIGHLAND SQUARE ASSOCIATES, LTD.,
a Florida limited partnership
By Its General Partner:
Pines Jacksonville Management, Inc.,
Name: a Florida corporation
By:
Name: President
Date: , 1998
Tax Identification No.:
(collectively, "SELLER")
wes\reg\highland\psa-amd.3
<PAGE>
- 3 -
CONTRACT OF SALE
This Contract of Sale ("Contract") is effective this 20th day of
March, 1998 entered into between NATIONWIDE LIFE INSURANCE COMPANY, an Ohio
corporation ("Seller"), and RRC ACQUISITION TWO, INC. a Florida corporation,
("Buyer").
ARTICLE I
AGREEMENT OF PURCHASE AND SALE
Subject to those provisions to follow, Seller agrees to sell, and Buyer
agrees to buy, the following described properties (hereinafter referred to
collectively as the "Property"):
1.1 Fee Title. Seller's fee simple title in and to the tract of land
situated in the city of Miami and state of Florida, as described more
specifically in Exhibit "A" attached hereto and incorporated herein, together
with all and singular the Seller's rights and appurtenances pertaining to such
real property including, without limitation, all easements, streets, alleys and
rights-of-way and all rights of Seller relating to ingress and egress and all
strips and gores between such real property and adjacent land (collectively
referred to as the "Land");
1.2 Improvements. All buildings and improvements, ("Improvements") located
on the Land;
1.3 Personal Property. All mechanical systems, fixtures and equipment
including, but not limited to, compressors, and engines; electrical systems,
fixtures and equipment; plumbing fixtures, systems and equipment; heating
fixtures, systems and equipment; air conditioning fixtures, systems and
equipment; furniture, carpets, drapes and other furnishings; maintenance
equipment and tools; and all other machinery, equipment, fixtures and personal
property of every kind and character, if any, owned by the Seller and located
in, or on or used in connection with, the Land or the Improvements or the
operations thereon ("Personal Property");
1.4 Plans, Etc. All site plans, surveys, soil and substrata studies,
architectural renderings, plans and specifications, engineering plans and
studies, floor plans, landscape plans and other plans, diagrams or studies of
any kind, if any, in Seller's possession which relate to the Land, the
Improvements or the Personal Property;
1.5 Tenant Leases. Seller's interest in all leases and rental agreements
with tenants occupying, or having the right to occupy, space situated in
Improvements or otherwise having rights with regard to use of the land or the
Improvements ("Leases"), and all security deposits, if any, held in connection
with such leases.
1.6 Miscellaneous Documents. All leasing brochures, market studies,
tenant data sheets and other materials of any kind in Seller's possession solely
related to the Improvements.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Property shall be TWELVE
MILLION ONE HUNDRED TEN THOUSAND DOLLARS ($12,110,000) (the "Purchase Price").
The Purchase Price shall be payable by wire transfer or immediately available
funds at Closing (hereinafter defined).
2.2 Earnest Money Deposit. Within three (3) business days after execution
of this Contract, by Buyer and Seller, the Buyer shall deposit with the Title
Company, (hereinafter defined), as an earnest money deposit in cash an amount of
FIFTY THOUSAND DOLLARS ($50,000) ("Earnest
-1-
<PAGE>
Money Deposit") with Commonwealth Land Title Insurance Company ("Title
Company"). The Title Company shall hold and dispose of the Earnest Money Deposit
in strict compliance with this Contract. Buyer shall direct the Earnest Money
Deposit to be invested in an interest bearing account in a financial institution
insured by the Federal Deposit Insurance Corporation chosen by Buyer, with such
account having a maturity date not later than the Closing Date (hereinafter
defined). All interest earned on the Earnest Money Deposit shall be Buyer's
property prior to a default by Buyer. All interest earned after the date of a
default by Buyer shall be for Seller's account. Buyer and Seller agree that
prior to Buyer's deposit of the Earnest Money Deposit with the Title Company,
Seller shall have no obligation or liability under this Contract, and that
Buyer's obligation to deposit the Earnest Money Deposit is an express condition
precedent to Seller's obligation and liabilities under this Contract. In the
event that the Earnest Money Deposit is not received by the Title Company within
three (3) business days from the date of Buyer's and Seller's execution of this
Contract whichever is later, this Contract shall be deemed null and void with
neither party having any further obligation to the other.
ARTICLE III
REVIEW OF TITLE, SURVEY AND OWNERSHIP DOCUMENTS
3.1 Title Commitment. Within ten (10) days after the Effective Date of
this Contract, Seller shall furnish to Buyer, at Seller's expense, a current
commitment for an owner's title insurance policy ("Commitment") issued by the
Title Company, setting forth the state of title to the Property and all
exceptions including: easements, restrictions, rights of way, covenants,
reservations, and other conditions, if any, affecting the Property which would
appear in Owner's Title Policy, if issued. No representations or warranties are
made by or shall be made or given by Seller with respect to the Survey or the
information contained therein.
3.2 Ownership Documents. Within ten (10) days after the Effective Date of
this Contract, Seller shall, if available, furnish to Buyer true and correct
copies of the items listed on Exhibit "D" (collectively, the "Ownership
Documents"):
3.3 Survey. Within twenty (20) days after the Effective Date of this
Contract, Seller shall, at Seller's sole cost and expense, cause to be prepared
and furnished to Buyer and the Title Company, a current ALTA survey (the
"Survey") of the Property prepared by a duly licensed Florida land surveyor,
which shall comply with Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys, ,jointly established and adopted by ALTA and ACSM in 1992, and
includes items 1, 2, 3, 4, 6, 7, 8, 9, 10, and 11 of Table "A" thereof, which
meets the accuracy standards (as adopted by ALTA and ACSM and in effect on the
date of the Survey) of an urban survey.
3.4 Tenant Estoppel Certificates. Prior to closing, Seller shall obtain
and submit to Buyer a signed estoppel certificate from all major tenants over
5,000 square feet and 75% of the remaining tenant on such form as per attached
Exhibit "B", for the purpose of verifying the status of each lease.
ARTICLE IV
CONDITIONS
4.1 Inspection Period.
(a) Inspection Period. Buyer shall have a period commencing on
the Effective Date of this Contract and extending forty (40) days thereafter to
examine the title and Survey ("Title Inspection") and the Property and any
Ownership Documents not previously provided ("Property
-2-
<PAGE>
Inspection") (collectively the "Inspection Period"). Such examination may
include any matters that Buyer finds relevant to its decision to purchase the
Property including, without limitation, a soil, hazardous substance, engineering
and feasibility study. Buyer agrees that if it elects to have a Phase I
environmental audit on the Property that it will provide Seller with a copy of
said report. Seller shall assist Buyer in gaining access to the portion of the
Property occupied under any Leases, if applicable, so that any inspecting
engineer retained by Buyer can conduct those on-site structural inspections it
deems necessary in order to conclude that the improvements are structurally
sound. All inspections, unless otherwise stated herein, and studies conducted by
Buyer or at Buyer's direction shall be at Buyer's sole cost and expense. In
conducting such inspections, Buyer shall not unreasonably interfere with the use
or occupancy of the Property and/or Land. Buyer agrees to indemnify Seller and
hold Seller harmless from and against any injury, damage, loss, cost or expense
related to or arising out of Buyer's inspection of the Property pursuant to this
Section whether foreseen or not, including, but not limited to, costs of
repairing damage to the Property, Land, Improvement and/or Personal Property.
After the expiration of the Inspection Period, the sole obligation of Seller,
except as provided herein, will be to deliver possession of the Property in the
same condition as existed on the date of termination of the Inspection Period
(ordinary wear and tear excepted). In the event the Buyer does not elect to
terminate the Contract (as provided herein), THE BUYER AGREES THAT THE PROPERTY,
INCLUDING BUT NOT LIMITED TO THE PERSONAL PROPERTY, IS BEING CONVEYED HEREUNDER
"AS IS, WHERE IS, AND WITH ALL FAULTS", WITHOUT ANY REPRESENTATION OR WARRANTY
BY SELLER EXCEPT AS EXPRESSLY SET FORTH HEREIN AND THE PERSONAL PROPERTY IS
BEING SOLD AND ASSIGNED HEREUNDER ONLY TO THE EXTENT THAT IT MAY BE OWNED BY THE
SELLER AND USED IN THE OPERATION OF THE PROPERTY. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, SELLER HAS NOT MADE AND IS NOT MAKING ANY EXPRESS OR IMPLIED
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE PROPERTY, INCLUDING WITHOUT
LIMITATION ANY REPRESENTATION OR WARRANTY REGARDING QUALITY OF CONSTRUCTION,
WORKMANSHIP, CONDITION, STATE OF REPAIR, SAFETY, MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE, ACCURACY OF DIMENSIONS, WHETHER THE IMPROVEMENTS ARE
STRUCTURALLY SOUND, IN GOOD CONDITION OR IN COMPLIANCE WITH APPLICABLE CITY,
COUNTY, STATE OR FEDERAL STATUTES, CODES, OR REGULATIONS, INCLUDING, WITHOUT
LIMITATION, TO HAZARDOUS MATERIALS OR ANY ENVIRONMENTAL MATTERS AND THE
AMERICANS WITH DISABILITIES ACT, OPERATION OF MECHANICAL SYSTEMS, EQUIPMENT AND
FIXTURES, SUITABILITY OF SOIL OR GEOLOGY, ABSENCE OF DEFECTS OR HAZARDOUS OR
TOXIC MATERIALS OR WASTES, ANY PAST, PRESENT OR FUTURE OPERATING RESULTS,
INCLUDING BOTH INCOME AND EXPENSES, ANY PROJECTIONS WITH RESPECT TO OPERATING
RESULTS, THE FINANCIAL VIABILITY OF THE PROPERTY, OR THE COMPLETENESS OR
ACCURACY OF ANY BOOKS OR RECORDS OF SELLER PERTAINING TO THE PROPERTY, AND BUYER
ACKNOWLEDGES THAT BUYER ACCEPTS THIS PROPERTY WITHOUT RELYING UPON ANY SUCH
REPRESENTATION OR WARRANTY BY SELLER OR BY ANY OTHER PERSON AND BASED SOLELY
UPON BUYER'S OWN INSPECTIONS, INVESTIGATIONS AND FINANCIAL ANALYSIS OF THE
PROPERTY.
(b) Seller's Cure Period. Buyer agrees to notify Seller of all
objections it may have based on Title Inspection within fifteen (15) days of its
receipt thereof. Any exceptions reflected in the Commitment to which Buyer does
not object or which are waived by Buyer shall be deemed permitted exceptions
(the "Permitted Exceptions").
4.2 Termination. Buyer agrees to notify Seller in writing on or before
the expiration of the Inspection Period of its intent to terminate the Contract.
However, if Buyer fails to notify Seller of its intent to proceed with this
Contract, the Contract shall be deemed terminated as of the expiration of the
Inspection Period. If Buyer terminates this Contract as provided herein in this
Section, The Title Company, without further authorization or direction from
Seller, will immediately refund the Earnest
-3-
<PAGE>
Money Deposit to Buyer. Thereafter, (except as expressly provided for in this
Contract) neither Buyer or Seller will have any further obligations or
liabilities under this Contract.
4.3 No Further Contracts. From the date hereof until the Closing Date or
the earlier termination of this Contract, Seller shall (a) maintain and operate
the Property in the same manner in which the Property was operated as of the
Effective Date, and will not knowingly permit to be committed any waste on the
Property, (b) continue all leases, if applicable, and insurance policies
relative to the Property in full force and effect, (c) neither cancel, amend,
enter into nor renew any lease, without the written consent of Buyer (which
consent will not be withheld unreasonably and notice of which approval or
disapproval shall be provided to Seller within five (5) days from Seller's
presentment to Buyer of the lease at issue), (d) not knowingly enter into any
agreement or instrument which would constitute an encumbrance on the Property
without prior written consent of Buyer (which consent will not be withheld
unreasonably and notice of which approval or disapproval shall be provided to
Seller within five (5) days from Seller's presentment to Buyer of the agreement
or instrument at issue) and (e) not remove Personal Property owned by Seller
from the Land, Improvements and/or Property. In the event that Buyer does not
provide Seller with notice required by this subsection within the time set forth
herein Buyer's approval shall be deemed to have been waived.
ARTICLE V
BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Seller the following statements are true
on the Effective Date of this Contract and will be true on the Closing Date:
5.1 Buyer's Power and Authority. Buyer and its representatives have all
power and authority legally necessary to enter into this Contract, execute and
deliver the Closing documents and purchase the Property in accordance with this
Contract's terms.
5.2 No Actions Against Buyer. Buyer knows of no action, suit or
proceeding, pending or threatened against Buyer, which would, if determined
against Buyer, adversely and materially affect Buyer's ability to perform its
obligations under this Contract.
Buyer's tender of performance of its obligations under this Contract
shall constitute Buyer's confirmation that the above representations and
warranties are then also true and correct.
ARTICLE VI
SELLER'S REPRESENTATIONS AND WARRANTIES
6.1 Seller warrants and represents the following is true and correct as
of the date of Closing (hereinafter defined).
(a) Seller has full power and authority to enter into this
Contract. The execution and delivery require no further action or approval in
order to constitute this Contract as binding and enforceable obligations of
Seller.
-4-
<PAGE>
(b) To the best of Seller's knowledge, no litigation or
proceeding is pending or threatened relating specifically to the Property, which
if adversely determined, could have a material adverse effect on title to and/or
the use, or which could, in any way, interfere with the consummation of this
Contract.
(c) To the best of Seller's knowledge, no person has caused a
release or threatened a release of any hazardous material on about or under the
Property. In addition Seller has no knowledge that the Property contains any
underground storage tank, asbestos building material or a drycleaning plant or
facility using drycleaning solvents.
(d) To the best of Seller's knowledge , there are no Leases
affecting the Property, oral or written, except as listed on the rent roll.
Copies of the Leases, which shall be delivered to the Buyer are true, correct
and complete copies thereof, subject to the matters set forth on the rent roll.
All of the Tenant leases are in good standing and no defaults exist thereunder
except as noted on the rent roll. No rent or reimbursement has been paid more
than one (1) month in advance and no security deposit has been paid, except as
stated on the rent roll. No tenant under any lease has been promised any
inducement, consession or consideration by Seller other than expressly stated in
such Lease, and except as stated therein there are and will be no side
agreements between Seller and any tenant.
For purposes of this Contract, the terms "to the best of Seller's
knowledge", "Seller's knowledge" and/or "knowledge" shall be limited to such
actual knowledge or written notice or report that has actually been received by
Paul H. Thomas, Jr., who is Seller's Manager of Real Estate Equity Assets or
Lawrence W. Baiamonte, who is Seller's Director of Real Estate Equity Assets.
ARTICLE VII
REQUEST FOR NONDISCLOSURE
7.1 Buyer and its representatives shall hold in strictest confidence all
data and information obtained with respect to the operation and management of
the Property, whether obtained before or after the execution and delivery
hereof, and shall not use such data or information for purposes unrelated to
this Contract or disclose the same to others except as expressly permitted
hereunder. The preceding sentence shall not be construed to prevent Buyer from
disclosing to its agents, consultants and lenders such information with respect
to the Property as is necessary for such agents, consultants and lenders to
perform their designated tasks in connection with Buyer's inspection of the
Property, so long as the Buyer causes such agents, consultants and lenders to
execute an agreement to keep such information confidential. However, neither
party shall have this obligation concerning information which: (a) is published
or becomes publicly available through no fault of either the Buyer or Seller;
(b) is rightfully received from a third party; or (c) is required to be
disclosed by law. In the event this Contract is terminated or Buyer fails to
perform hereunder, Buyer shall promptly return to Seller any statements,
documents, schedules, exhibits or other written information obtained from Seller
in connection with this Contract or the transactions contemplated hereby
(including all information which was provided to agents, consultants and/or
lenders). In the event of a breach or threatened breach by Buyer or its agents,
consultants and/or lenders of this paragraph, Seller shall be entitled to an
injunction restraining Buyer or its agents, consultants and/or lenders from
disclosing, in whole or in part, such confidential information. Nothing herein
shall be construed as prohibiting Seller from pursuing any other available
remedy at law or in equity for such breach or threatened breach.
-5-
<PAGE>
ARTICLE VIII
CLOSING
8.1 Date and Place of Closing. The Closing ("Closing") shall take place
at Commonwealth Title Insurance Company. The Closing Date ("Closing Date") shall
be within fifteen (15) days after the Inspection Period; however, Seller and
Buyer may mutually designate an earlier date for Closing. At Seller's option,
Closing may occur in escrow, in which event the Title Company shall act as
escrow agent.
8.2 Seller's Closing Obligations. At the Closing or as provided below,
Seller shall deliver to Buyer, at Seller's sole cost and expense (except as
stated below), each of the following items:
(a) An Owner's Policy of Title Insurance ("Title Policy") issued
by the Title Company in Buyer's favor in the full amount of the Purchase Price,
insuring Buyer's fee simple title to the Property and in and to any easements
and restrictions which inure to the benefit of the Property, subject only to the
Permitted Exceptions;
(b) A special warranty deed ("Deed"), duly executed and
acknowledged by Seller, and in form for recording, conveying good and
indefeasible fee simple title to the Property to Buyer, subject only to the
Permitted Exceptions;
(c) A Bill of Sale transferring all of the Personal Property "As
Is" "Where Is" and "With All Faults" and an assignment of the Personal Property.
(d) An Assignment of all Warranties, Guaranties and Service
Contracts, if any;
(e) All keys to the Property in Seller's possession;
(f) An assignment of all Leases, as per attached Exhibit "C";
(g) Executed originals of the Leases in Seller's possession;
(h) Lease files.
8.3 Adjustments at Closing. The Purchase Price shall be adjusted as of the
Closing Date ---------------------- by:
(a) Prorating the closing year's real and tangible personal
property taxes as of the the Closing Date (if the amount of the current year's
property taxes are not available, such taxes will be prorated based upon the
prior year's assessment);
(b) Prorating as of the Closing Date cash receipts and
expenditures for the Shopping Center and other items customarily prorated in
transactions of this sort; and
(c) Subtracting the amount of security deposits, prepaid rents
from tenants under the Leases, and credit balances, if any, of any tenant. Any
rents, percentage rents or tenant reimbursement payable by tenants after the
Closing Date but applicable to periods on or prior to the Closing Date shall be
remitted to Seller by Buyer within thirty (30) days after receipt, less any
expenses of the Property incurred on or prior to the Closing Date but discovered
by Buyer after the Closing Date. Buyer shall have no obligation to collect
deliquencies, but should Buyer collect any deliquent rents or other sums which
cover periods prior to the Closing Date and for which Seller has received no
proration credit, Buyer shall remit same to Seller within thirty (30) days after
receipt, less
-6-
<PAGE>
any costs of collection. Buyer will not interfere in Seller's efforts to collect
sums due it prior to the Closing Date.Seller will remit to Buyer within thirty
(30) days after receipt any rent, percentage rents or tenant reimbursements
received by Seller after Closing which are attributable to periods occuring
after the Closing Date. Undesignated receipts after Closing of either Buyer or
Seller from tenants in the Shopping Center shall be applied first to the then
current rents and reimbursements for such tenants(s), then to deliquent rents
and reimbursements attributable to post- Closing Date periods, and then to pre-
Closing Date periods.
8.4 Buyer's Closing Obligations. At Closing, Buyer shall execute those
Closing documents to which Buyer is a party and direct the Title Company to
remit to Seller the Purchase Price, plus any other sums required to be paid by
Buyer, in accordance with this Contract.
8.5 Possession and Closing. Notwithstanding anything contained herein,
exclusive possession of the Property shall be delivered to Buyer by Seller at
Closing.
8.6 Closing Costs. Unless otherwise specified in this contract, all costs
and expenses of Closing including recording fees and transfer fees shall be
allocated equally between Seller and Buyer. Each party will be responsible for
its own legal fees except in the event of default.
ARTICLE IX
TERMINATION, DEFAULTS AND REMEDIES
9.1 Buyer's Termination. If Seller is unable to convey title to the
Property, Buyer may, at Buyer's option, terminate this Contract by written
notice forwarded to Seller prior to the Closing Date or delivered to Seller on
the Closing Date or earlier date as specified in this Contract for such notice
of termination. If Buyer elects to terminate this Contract pursuant to a right
to do so expressly given to Buyer in this Contract, the Earnest Money Deposit
shall be promptly refunded to Buyer on written instruction to the Title Company
signed only by Buyer, and neither party shall have any further obligation or
liability to the other party hereunder. If the Earnest Money Deposit is to be
returned to Buyer in accordance with this Contract, Seller shall promptly, on
written request from Buyer, execute and deliver such documents as may be
required to cause the Title Company to return the Earnest Money Deposit to
Buyer.
9.2 Seller's Default; Buyer's Remedies. If Seller fails to consummate
this Contract for any reason (other than Buyer's default or a termination of
this Contract by Seller or Buyer pursuant to a right to do so expressly provided
for in this Contract), Buyer may elect to enforce the specific performance of
this Contract or terminate this Contract and receive a refund of the Earnest
Money Deposit; provided, however, in the event specific performance of this
Contract is frustrated due to Seller's conveyance of all or part of the Property
to a third party in breach of this Contract or due to Seller's intentionally
encumbering all or any part of the Property with a lien, lease, easement,
restriction or other encumbrance after the date of this contract objected to by
Buyer and not eliminated at or prior to Closing, Buyer may pursue any remedies
available to Buyer at law or in equity.
9.3 Buyer's Default; Seller's Remedy. If Buyer fails to consummate this
Contract for any reason (other than Seller's default or a termination of this
Contract by Seller or Buyer pursuant to a right to do so expressly provided for
in this Contract), Seller may, as Seller's sole and exclusive remedy, terminate
this Contract and retain the Earnest Money Deposit as liquidated damages for
breach of this Contract. Upon written notice of termination by Seller to the
Title Company and Buyer pursuant to this Section, the Title Company, without
further authorization from Buyer, shall immediately deliver the Earnest Money
Deposit to Seller. Such amount is agreed upon by and
-7-
<PAGE>
between Seller and Buyer as liquidated damages, due to the difficulty and
inconvenience of ascertaining and measuring actual damages, and the uncertainty
thereof and the payment of the Earnest Money Deposit shall constitute full
satisfaction of Buyer's obligations under this Contract. Such amount is agreed
upon by and between Seller and Buyer as a reasonable estimate of just
compensation for the harm caused by Buyer's default.
ARTICLE X
DAMAGE OR DESTRUCTION PRIOR TO CLOSING
10.1 In the event that either the Improvements or Personal Property
should be damaged by any casualty prior to Closing, and if the cost of repairing
such damage, as estimated by an independent contractor ("Independent
Contractor") retained by Buyer (and approved by Seller, which approval shall not
be withheld unreasonably or unduly delayed) is:
(a) less than FIFTY THOUSAND DOLLARS ($50,000), then, at
Seller's option: (i) Seller shall repair such damage prior to the Closing Date,
restoring the damaged Property at least to its condition immediately prior to
such damage, or (ii) elect to close the transaction and Buyer shall receive a
credit at Closing in an amount necessary to make such repairs as determined by
the Independent Contractor; or if said cost is
(b) equal to or more than FIFTY THOUSAND DOLLARS ($50,000) then
the Buyer may elect within twenty (20) days of notification to Buyer of such
occurrence to (i) terminate this Contract or (ii) require Seller to assign to
Buyer at Closing, all insurance proceeds payable for such damage, and pay to
Buyer at Closing the amount of any deductible required by Seller's insurance
policies, and the sale shall be closed without the Seller's repairing such
damage.
ARTICLE XI
CONDEMNATION
11.1 Eminent Domain. If prior to the Closing Date a material portion of
the Property shall be taken by any governmental authority under the power of
eminent domain or by any private organization possessing the power of eminent
domain, this Contract shall terminate on the date of taking and the Title
Company shall thereupon promptly return to Buyer the Earnest Money Deposit, and
the parties hereto shall thereafter be released of any obligation or liability
by reason of the execution of this Contract.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Broker's Commission. If, and when the Closing occurs, Seller hereby
agrees to pay one and one half percent (1 1/2%) of the purchase price to
Atlantic American Group in cash for their services in connection with this
Contract. Seller and Buyer each represent and warrant to the other that there
are no claims for broker's commissions or finder's fees in connection with the
execution and delivery of this Contract other than that of the Brokers named in
this Section 12.1, and Seller and Buyer each agree to indemnify the other
against and hold such party harmless from all liabilities arising from a breach
of the representation and warranty made by such party herein, including, without
limitation, reasonable attorneys' fees and related court costs.
-8-
<PAGE>
12.2 Assignment. Buyer may not assign this Contract without Seller's
prior written consent unless the Buyer remains liable for all terms and
conditions under the Contract.
12.3 Notices. Any notice, approval, waiver, objection or other
communication (for convenience "Notice") required or permitted to be given
hereunder or given in regard to this Contract by one party to the other shall be
in writing and the same shall be given and be deemed to have been served and
given (a) if hand delivered, when delivered in person to the address set forth
hereinafter for the party to whom notice is given; (b) if mailed, (except where
actual receipt is specified in this Contract) when placed in the United States
mail, postage prepaid, by Certified Mail, Return Receipt Requested; addressed to
the party at the address hereinafter specified; or (c) if by overnight delivery,
when delivered to the overnight carrier. Any party may change its address for
notices by notice theretofore given in accordance with this Section 12.3.
If to Seller: Nationwide Life Insurance Company
One Nationwide Plaza, 1-34-01
Columbus, Ohio 43215
Attention: Paul H. Thomas, Jr.
With copy to: Nationwide Life Insurance Company
One Nationwide Plaza, 1-35-04
Columbus, Ohio 43215
Attention: Philip W. Whitaker, Esq.
If to Buyer: RRC Acquisition Two , Inc.
121 West Forsyth Street, Suite 200
Jacksonville, Florida32202
Attention: Robert L. Miller
Fax: 904-354-1832
With copy to: Rogers, Towers, Bailey, Jones & Gay
1301 Riverplace Boulevard, Suite 1500
Jacksonville, Florida 32207
Attention: William E. Scheu
Fax: 904-396-0663
12.4 Entire Agreement. This contract and the exhibits attached hereto
constitute the entire agreement between Seller and Buyer, and there are no other
covenants, agreements, promises, terms, provisions, conditions, undertakings, or
understandings, either oral or written, between them concerning the Property
other than those herein set forth. No subsequent alteration, amendment, change,
deletion or addition to this Contract shall be binding upon Seller or Buyer
unless in writing and signed by both Seller and Buyer.
12.5 Headings. The headings, captions, numbering system, etc., are
inserted only as a matter of convenience and may under no circumstances be
considered in interpreting the provisions of this Contract.
12.6 Binding Effect. All of the provisions of this Contract are hereby
made binding upon the personal representatives, heirs, successors, and assigns
of both parties hereto. Where required for proper interpretation, words in the
singular shall include the plural; the masculine gender shall include
-9-
<PAGE>
the neuter and the feminine, and vice versa. The terms "heirs, executors,
administrators and assigns" shall include "successors, legal representatives and
assigns."
12.7 Time of Essence. Time is of the essence of this Contract.
12.8 Unenforceable or Inapplicable Provisions. If any provision hereof is
for any reason unenforceable or inapplicable, the other provisions hereof will
remain in full force and effect in the same manner as if such unenforceable or
inapplicable provision had never been contained herein.
12.9 Counterparts. This Contract may be executed in any number of
counterparts, each of which will for all purposes be deemed to be an original,
and all of which are identical.
12.10 Applicable Law. This Contract shall be construed under and in
accordance with the laws of the State of Florida.
12.11 Attorney's Fees. In the event either Buyer or Seller should bring
suit against the other in respect to any matters provided for in this Contract,
the prevailing party shall be entitled to recover from the other party
reasonable attorneys' fees in connection with such suit.
12.12 Authority. Each person executing this Contract, by his execution
hereof, represents and warrants that he is fully authorized to do so, and that
no further action or consent on the part of the party for whom he is acting is
required to the effectiveness and enforceability of this Contract against such
party following such execution.
12.13 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed at the Closing, Seller and Buyer agree
to perform such other acts, and to execute and/or deliver such other instruments
and documents as either Seller or Buyer, or their respective counsel, may
reasonably require in order to effect the intents and purposes of this Contract.
Further, Seller and Buyer each agree to deliver to the Title Company affidavits
and such other assurances as may reasonably be necessary or required to enable
the Title Company to issue the Title Policy as contemplated in this Contract.
12.14 Time Periods. Unless otherwise expressly provided, all periods for
delivery or review and the like shall be determined on a "calendar" day basis.
If any date for performance, approval, delivery or Closing falls on a Saturday,
Sunday or legal holiday, the time therefor shall be extended to the next
business day.
12.15 Survival. The representations, warranties and covenants (except
with respect to Section 12.1) of Buyer and Seller contained herein shall survive
the Closing for a period of six (6) months from the Closing Date and shall
thereafter be deemed void and of no force. The representations, warranties and
covenants contained in Section 12.1 shall survive the Closing for an unlimited
period and shall not merge with the delivery of the documents at Closing.
12.16 Waiver of Right to Trial by Jury. The Buyer and the Seller hereby
waive any right to trial by jury of any claim, demand, action or cause of action
(i) arising under this Contract or any other instrument, document or agreement
executed or delivered in connection herewith or (ii) in any way connected with
or related or incidental to the dealings of the parties hereto or any of them in
respect of this Contract or any other instrument, document or agreement executed
or delivered in connection herewith or the transactions related hereto, in each
case whether now existing or hereafter arising, and whether sounding in contract
or tort or otherwise. The Buyer and the Seller hereby agree and consent that any
such claim, demand, action or cause of action shall be decided by court trial
without a jury and that any party may file an original counterpart or a copy of
this Contract with any court as written evidence of the consent of the parties
hereto to the waiver of their right to trial by jury.
-10-
<PAGE>
12.17 The effective date ("Effective Date") of this Contract shall be the
date on which the Title Company acknowledges receipt of the Earnest Money
Deposit.
DATED this day of , 1998, which is the date this Contract has been signed by
whichever of Buyer or Seller is the last to sign this Contract. All references
to the "date of this Contract" or similar references shall mean this date.
SELLER:
NATIONWIDE LIFE INSURANCE COMPANY
an Ohio Corporation
By:
Date Signed by Seller Robert H. McNaghten
Vice President-Real Estate Investments
BUYER:
RRC ACQUISITION TWO, INC. a Florida
corporation
By:
Date Signed by Buyer
-11-
<PAGE>
AMENDMENT NO. 1 TO CONTRACT OF SALE
May 4, 1998
Contract of Sale dated March 23, 1998 - entered into between NATIONWIDE LIFE
INSURANCE COMPANY ("Seller") and RRC ACQUISITION TWO, INC. ("Buyer") relating to
the sale and purchase of the following described real estate situated in the
city of Miami and state of Florida as described on Exhibit "A" attached.
WHEREAS, Seller and Buyer have hereto entered into a Contract of Sale dated
March 23, 1998.
WHEREAS, Seller and Buyer now desire to amend the Contract of Sale as follows:
NOW THEREFORE, in consideration of the mutual promises contained here, Buyer and
Seller agree to amend the Contract as stated below:
The terms and definitions not herein defined shall have the meaning as defined
in the Contract of Sale dated March 23, 1998 (the "Contract").
1. Article 4.1 Inspection Period. The Inspection Period, as defined in
the Contract shall be extended for a period ending May 29, 1998.
IN WITNESS WHEREOF, Seller and Buyer have executed this amendment as of
the day and year first written above.
Seller: Buyer:
NATIONWIDE LIFE INSURANCE RRC ACQUISITION TWO, INC.
COMPANY
By: By:_______________________
<PAGE>
- 2 -
AMENDMENT NO. 2 TO CONTRACT OF SALE
THIS AGREEMENT, dated as of the ____ day of May, 1998, executed on the
date as indicated below, by and between NATIONWIDE LIFE INSURANCE COMPANY, an
Ohio corporation ("Seller") and RRC ACQUISITIONS TWO, INC., a Florida
corporation ("Buyer").
Background
Seller and Buyer heretofore entered into a Contract of Sale dated as of
March 23, 1998, concerning the sale and purchase of Shoppes @ 104 located in
Dade County, Florida, more particularly described on attached Exhibit "A", said
agreement having been amended by Amendment No. 1 to Contract of Sale dated May
4, 1998, (said contract, as amended, being herein referred to as the
"Contract"). Seller and Buyer wish to further amend the Contract as hereinafter
provided.
NOW THEREFORE, in consideration of the foregoing and for other valuable
consideration, receipt of which is acknowledged, Seller and Buyer agree as
follows:
1. Buyer and Seller ratify and reaffirm the Contract, and acknowledge
that it continues in full force and effect, as modified by Amendment No. 1 to
Contract of Sale and hereby.
2. The terms and definitions not herein defined shall have the meaning
as defined in the Contract.
3. The Purchase Price set forth in Section 2.1(a) of the Contract is
reduced to the aggregate sum of $12,050,000 subject to adjustment as provided in
the Contract.
4. Should the transaction close, Seller shall not pursue collection of
reconciliation receivables from 1995 and 1996, and at Closing will disclaim any
interest therein or right thereto.
5. Should the transaction close, Seller shall not bill or charge
tenants for any capital items in the 1997 reconciliation billings. Seller shall
allow Buyer to review and approve the reconciliation billings prior to
distribution to the tenants.
6. Should the transaction close, Seller shall not pursue outstanding
past due rent, CAM charges, and other sums due from the following tenants
currently carrying balances: Tae Kwon Do, Mailboxes, Etc., Lady of America,
Loving Child Day Care, and Wash Time. At Closing, Seller shall disclaim any
right Seller may have to any of these delinquencies paid by such tenants after
Closing, if any.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the day and year first above written.
Witnesses:
RRC ACQUISITIONS TWO, INC.,
a Florida corporation
Name:
By:
Name:
Name: Title:
Date of Execution:
"BUYER"
NATIONWIDE LIFE INSURANCE COMPANY,
an Ohio corporation
Name:
By:
Name:
Name: Title:
Date of Execution:
"SELLER"
<PAGE>
AMENDMENT NO. 3 TO CONTRACT OF SALE
May 29, 1998
Contract of Sale dated March 23, 1998 - entered into between NATIONWIDE LIFE
INSURANCE COMPANY ("Seller") and RRC ACQUISITION TWO, INC. ("Buyer") relating to
the sale and purchase of the following described real estate situated in the
city of Miami and state of Florida as described on Exhibit "A" attached.
WHEREAS, Seller and Buyer have hereto entered into a Contract of Sale dated
March 23, 1998. The original Contract of Sale was subsequently amended pursuant
to Amendment No. 1 to the Contract of Sale dated May 4,1998 and Amendment No. 2
to the Contract of Sale dated May 11,1998; and
WHEREAS, Seller and Buyer now desire to amend the Contract of Sale as follows:
NOW THEREFORE, in consideration of the mutual promises contained here, Buyer and
Seller agree to amend the Contract as stated below:
The terms and definitions not herein defined shall have the meaning as defined
in the Contract of Sale dated March 23, 1998 (the "Contract").
1. Article 4.1 Inspection Period. The Inspection Period, as defined in
the Contract shall be extended for a period ending June 5, 1998.
IN WITNESS WHEREOF, Seller and Buyer have executed this amendment as of
the day and year first written above.
Seller: Buyer:
NATIONWIDE LIFE INSURANCE RRC ACQUISITION TWO, INC.
COMPANY
By: By:_______________________
<PAGE>
-9-
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 4th day of April, 1998, between
SILVERLAKE DEVELOPMENT CO., LTD., a Kentucky limited partnership ("Seller"), and
RRC ACQUISITIONS TWO, INC., a Florida corporation, its designees, successors and
assigns ("Buyer").
Background
Buyer wishes to purchase a shopping center in the City of Erlanger,
County of Kenton, Commonwealth of Kentucky, owned by Seller, known as Silverlake
Shopping Center (the "Shopping Center");
Seller wishes to sell the Shopping Center to Buyer;
In consideration of the mutual agreements herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Seller
agrees to sell and Buyer agrees to purchase the Property (as hereinafter
defined) on the following terms and conditions:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Agreement means this instrument as it may be amended from time to time.
1.2 Allocation Date means the close of business on the day immediately prior to
the Closing Date.
1.3 Audit Representation Letter means the form of Audit Representation Letter
attached hereto as Exhibit J.
1.4 Buyer means the party identified as Buyer on the initial page hereof.
1.5 Closing means generally the execution and delivery of those documents and
funds necessary to effect the sale of the Property by Seller to Buyer.
1.6 Closing Date means the date on which the Closing occurs.
1.7 Contracts means all service contracts, agreements or other instruments to be
assigned by Seller to Buyer at Closing.
1.8 Day means a calendar day, whether or not the term is capitalized.
1.9 Earnest Money Deposit means the deposit delivered by Buyer to Escrow Agent
prior to the Closing under Sections 2.2 and 3.1 of this Agreement, together with
the earnings thereon, if any.
1.10 Environmental Claim means any investigation, notice, violation, demand,
allegation, action, suit, injunction, judgment, order, consent decree, penalty,
fine, lien, proceeding, or claim (whether administrative, judicial, or private
in nature) arising (a) pursuant to, or in connection with, an actual or alleged
violation of, any Environmental Law, (b) in connection with any Hazardous
Material or actual or alleged Hazardous Material Activity, (c) from any
abatement, removal, remedial, corrective, or other response action in connection
with a Hazardous Material, Environmental Law or other order of a governmental
authority or (d) from any actual or alleged damage, injury, threat, or harm to
health, safety, natural resources, or the environment.
<PAGE>
1.11 Environmental Law means any current legal requirement in effect at the
Closing Date pertaining to (a) the protection of health, safety, and the indoor
or outdoor environment, (b) the conservation, management, protection or use of
natural resources and wildlife, (c) the protection or use of source water and
groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material or (e) pollution (including any Release to air, land, surface
water, and groundwater); and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC ss.9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation Act of
1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC ss.6901 et seq.,
Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977,
33 USC ss.1251 et seq., Clean Air Act of 1966, as amended, 42 USC ss.7401 et
seq., Toxic Substances Control Act of 1976, 15 USC ss.2601 et seq., Hazardous
Materials Transportation Act, 49 USC App. ss.1801, Occupational Safety and
Health Act of 1970, as amended, 29 USC ss.651 et seq., Oil Pollution Act of
1990, 33 USC ss.2701 et seq., Emergency Planning and Community Right-to-Know Act
of 1986, 42 USC App. ss.11001 et seq., National Environmental Policy Act of
1969, 42 USC ss.4321 et seq., Safe Drinking Water Act of 1974, as amended by 42
USC ss.300(f) et seq., and any similar, implementing or successor law, any
amendment, rule, regulation, order or directive, issued thereunder.
1.12 Escrow Agent means Rogers, Towers, Bailey, Jones & Gay, Attorneys, whose
address is 1301 Riverplace Blvd., Suite 1500, Jacksonville, Florida 32207 (Fax
904/396-0663), or any successor Escrow Agent.
1.13 Governmental Approval means any permit, license, variance, certificate,
consent, letter, clearance, closure, exemption, decision, action or approval of
a governmental authority.
1.14 Hazardous Material means any asbestos, petroleum, petroleum product,
drycleaning solvent or chemical, biological or medical waste, "sharps" or any
other hazardous or toxic substance as defined in or regulated by any
Environmental Law in effect at the pertinent date or dates.
1.15 Hazardous Material Activity means any activity, event, or occurrence at or
prior to the Closing Date involving a Hazardous Material, including, without
limitation, the manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, Release, threatened Release,
abatement, removal, remediation, handling or corrective or response action to
any Hazardous Material.
1.16 Improvements means all buildings, structures or other improvements situated
on the Real Property.
1.17 Inspection Period means the period of time which expires at midnight on the
thirtieth (30th) day after the date on which Seller delivers to Buyer an
original of this Agreement executed by Seller. If such expiration date is a
weekend day or national holiday, the Inspection Period shall expire at midnight
on the next immediately succeeding business day.
1.18 Leases means all existing leases and other occupancy agreements permitting
persons to lease or occupy all or a portion of the Property, but excluding any
subleases or occupancy agreements to which Seller is not a party. 1.19 Master
Lease means the agreement executed by and between Cincinnati Southern Railway,
as owner, and the Cincinnati, New Orleans and Texas Pacific Railway Company, an
Ohio corporation, as lessee, dated as of January 1, 1987. 1.20 Materials means
certain information regarding the Property, including those items listed on
Exhibit B, attached hereto and incorporated by reference herein, together with
any additional information that may be provided or made available to Buyer,
including all plans, drawings, specifications, soil test reports, environmental
reports, surveys, and similar documentation, if any, in the possession of Seller
with respect to the Property, Improvements and any proposed improvements to the
Property, which Seller may lawfully transfer to Buyer. Materials shall exclude
appraisals, market studies, loan documents, financial statements, tax returns,
documents which are subject to the attorney-client privilege, documents which
relate to former tenants of the Property, documents which relate to the cost of
development of the Property and Seller's organizational documents.
<PAGE>
1.21 Permitted Exceptions means only the following interests, liens and
encumbrances:
(a) Liens for taxes and assessments, if any, not payable on or before Closing;
(b) Rights of tenants under Leases;
(c) Easements, agreements, restrictions, covenants and legal highways of record
and all other matters set forth in the Title Insurance Commitment excluding only
those Title Objections" (hereinafter defined), if any (i) which are set forth in
a "Title Objection Notice" (hereinafter defined) timely delivered to Seller
pursuant to Section 7.1(a) hereof and (ii) which Buyer has not waived pursuant
to clause (i) of Section 7.1(a) hereof.
(d) Matters which would be disclosed by an accurate survey of the Property;
(e) Zoning, building code, subdivision and other governmental rules,
regulations, requirements and laws; and
(f) Liens, encumbrances and other interests created by, suffered by or arising
out of the acts of, Buyer or any person or entity claiming by or through Buyer.
1.22 Personal Property means all of Seller's right, title and interest in and to
(a) sprinkler, plumbing, heating, air-conditioning, electric power or lighting,
incinerating, ventilating and cooling systems, with each of their respective
appurtenant furnaces, boilers, engines, motors, dynamos, radiators, pipes,
wiring and other apparatus, equipment and fixtures, partitions, fire prevention
and extinguishing systems located in or on the Improvements, and (b) all
Materials, provided the same are now owned or are acquired by Seller prior to
the Closing. Personal Property does not include any property owned by tenants or
subtenants.
1.23 Property means collectively the Real Property, the Improvements and the
Personal Property.
1.24 Prorated means the allocation of items of expense or income between Buyer
and Seller based upon that percentage of the time period as to which such item
of expense or income relates which has expired as of the date at which the
proration is to be made.
1.25 Purchase Price means the consideration agreed to be paid by Buyer to Seller
for the purchase of the Property as set forth in Section 2.1 (subject to
adjustments as provided herein).
1.26 Railroad Lease means the lease executed by and between the Cincinnati, New
Orleans and Texas Pacific Railway Company, an Ohio corporation, as lessor, and
Seller, as lessee, dated as of May 20, 1988 and recorded at lease Book 17, Page
412 of the Kenton County Clerk's records at Covington, Kentucky.
1.27 Real Property means (a) fee simple title to that portion of the Real
Property identified on Exhibit A as Parcel 1 and all easements, licenses,
privileges, rights of way and other appurtenances pertaining to or accruing to
the benefit of said Parcel 1, (b) a leasehold estate to that portion of the Real
Property identified on Exhibit A as Parcel 4, and (c) easement interests in that
portion of the Real Property identified on Exhibit A as Parcels 2, 3A and 3B.
1.28 Release means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing into the
indoor or outdoor environment, including, without limitation, the abandonment or
discarding of barrels, drums, containers, tanks, and other receptacles
containing or previously containing any Hazardous Material at or prior to the
Closing Date.
1.29 Rent Roll means the list of Leases, together with certain information
related thereto, attached hereto as Exhibit C.
1.30 Seller means the party identified as Seller on the initial page hereof.
1.31 Seller Financial Statements means the unaudited operating statements of the
Property prepared by Seller for the two (2) calendar years next preceding the
date of this Agreement and all monthly operating statements of the Property
prepared by Seller for calendar year 1998 through the date hereof.
1.32 Shopping Center means the Shopping Center identified on the initial page
hereof.
1.33 Survey means a map of a stake survey of the Real Property which shall
comply with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, jointly established and adopted by ALTA and ACSM in 1992, and includes
items l, 2, 3, 4, 6, 7, 8, 9, 10 and 11 of Table "A" thereof, which meets the
accuracy standards (as adopted by ALTA and ACSM and in effect on the date of the
Survey) of an urban survey, which is dated not earlier than thirty (30) days
prior to the Closing, and which is certified to Buyer, Seller, the Title
Insurance company providing Title Insurance to Buyer, and Buyer's lender, and
dated as of the date the Survey was made.
<PAGE>
1.34 Tenant Estoppel Letter means a letter or other certificate from a tenant
certifying as to certain matters regarding such tenant's Lease, in substantially
the same form as attached hereto as Exhibit D, or in the case of national or
regional "credit" tenants identified as such on the Rent Roll, the form
customarily used by such tenant provided the information disclosed is acceptable
to Buyer.
1.35 Title Defect means any exception in the Title Insurance Commitment or any
matter disclosed by the Survey, other than a Permitted Exception.
1.36 Title Insurance Policy means an ALTA Form B Owners Policy of Title
Insurance for the full Purchase Price insuring marketable title in Buyer in fee
simple, subject only to the Permitted Exceptions, issued by Chicago Title
Insurance Company or another title insurer acceptable to Buyer.
1.37 Title Insurance Commitment means a binder whereby the title insurer agrees
to issue the Title Insurance Policy to Buyer.
1.38 Transaction Documents means this Agreement, the deed conveying the
Property, the assignment and assumption of Leases and Contracts, the bill of
sale conveying the Personal Property, an assignment and assumption of the
Railroad Lease and all other documents required or appropriate in connection
with the transaction contemplated hereby.
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be $9,238,000.00. The
Purchase Price shall be payable by wire transfer of immediately available funds
at Closing.
(b) Adjustments to the Purchase Price. The Purchase Price shall
be adjusted as of the Closing Date by:
(1) prorating the Closing year's real and tangible personal
property taxes and assessments, if any, as of the Allocation Date (if the amount
of the current year's property taxes are not available, such taxes will be
prorated based upon the immediately preceding year's assessment).
Notwithstanding the foregoing, the portion of the real estate taxes and
assessments with respect to the Shopping Center which is payable by The Kroger
Co., which is 59.7014% of the total real estate taxes, shall not be prorated,
and there shall be no offset against the Purchase Price on account thereof;
(2) prorating as of the Allocation Date cash receipts and
expenditures for the Shopping Center, the annual rent payable under the Railroad
Lease, and other items customarily prorated in transactions of this sort; and
(3) subtracting the amount of security deposits held by
Seller and
not applied to tenant obligations under the Leases, and, prepaid rents from
tenants under the Leases and credit balances, if any, of any tenants (but only
to the extent not prorated pursuant to clause (2) above). Any rents, percentage
rents or tenant reimbursements payable by tenants after the Allocation Date but
applicable to periods on or prior to the Allocation Date shall be remitted to
Seller by Buyer within thirty (30) days after receipt, less any expenses of the
Property incurred on or prior to the Allocation Date which (a) are discovered by
the Buyer after Closing, (b) are paid for by the Buyer and (c) were not
accounted for in previous prorations or adjustments. Buyer shall use reasonable
efforts to collect delinquencies, but shall not be required to institute legal
proceedings on account thereof. Should Buyer collect any delinquent rents or
other sums which cover periods prior to the Allocation Date and for which Seller
has not received proration or credit, Buyer shall remit same to Seller within
thirty (30) days after receipt, less any direct, reasonable, out-of-pocket costs
of collection paid to unrelated third parties. Buyer will not interfere in
Seller's efforts to collect sums due it for periods prior to the Closing and
Seller shall have the continuing right after Closing to pursue delinquent rents
from tenants. Seller will remit to Buyer promptly after receipt any rents,
percentage rents or tenant reimbursements received by Seller after Closing which
are attributable to periods occurring after the Allocation Date. Undesignated
funds received after Closing by either Buyer or Seller from tenants in the
Shopping Center shall be applied first to current rents and reimbursements
attributable to post-Allocation Date periods, and then to delinquent rents and
reimbursements for such tenant(s) attributable to pre-Allocation Date periods.
2.2 Earnest Money Deposit. An Earnest Money Deposit in the amount of
$25,000.00 shall be delivered to Escrow Agent within three (3) days after the
date on which Seller delivers to Buyer an original of this Agreement executed by
Seller. This Agreement may be terminated by Seller if the Seller does not
receive, within said three (3) day period, written confirmation from Escrow
Agent that the Earnest Money Deposit has been received by Escrow Agent by such
deadline. The Earnest Money Deposit paid by Buyer shall be deposited by Escrow
Agent in an interest bearing account at First Union National Bank, and shall be
held and disbursed by Escrow Agent as specifically provided in this Agreement.
The Earnest Money Deposit shall be applied to the Purchase Price at the Closing.
2.3 Closing Costs.
(a) Seller shall pay:
(1) Documentary stamp and other transfer taxes imposed upon the
transfer of the Property to Buyer;
(2) Cost of satisfying any liens on the Property existing
as of the
Allocation Date which are not Permitted Exceptions;
(3) Cost of the Title Insurance Policy and the costs, if
any, of curing any Title Defects which Seller elects, in its discretion, to
cure, and recording any curative title documents;
(4) All broker's commissions, finders' fees and similar
expenses
incurred by Seller in connection with the sale of the Property, including the
amount due to Power Realty Advisors, subject however to Buyer's indemnity given
in Section 5.3 of this Agreement; and
(5) Seller's attorneys' fees relating to the sale of the
Property.
(b) Buyer shall pay:
(1) Cost of Buyer's due diligence inspection;
(2) Costs of the Phase 1 environmental site
assessment to be obtained by Buyer;
<PAGE>
(3) Costs of the Survey;
(4) Cost of recording the deed;
(5) All broker's commissions, finder's fees and similar
expenses incurred by Buyer in connection with the purchase of the Property,
excluding those payable to Power Realty Advisors, and subject, however,
to Seller's indemnity given in Section 4.1(c) of this Agreement; and
(6) Buyer's attorneys' fees.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Property, underwrite the tenants and review their Leases,
and to otherwise conduct its due diligence review of the Property, and the
Materials. Buyer shall indemnify and hold Seller harmless from any damages,
liabilities or claims for property damage or personal injury arising out of such
inspection and investigation by Buyer or its agents or independent contractors.
Buyer's obligation to indemnify shall expressly survive the Closing or the
termination of this Agreement and shall not be limited to the Earnest Money
Deposit. Prior to any entry on the Property by Buyer or any of its agents,
employees, consultants or contractors, Buyer shall provide to Seller evidence of
liability insurance, naming Seller as an additional insured, in form and
substance reasonably satisfactory to Seller. Within the Inspection Period, Buyer
may, in its sole discretion and for any reason or no reason, elect to go forward
with this Agreement to Closing, which election shall be made by notice to Seller
given within the Inspection Period. If such notice is not timely given, this
Agreement and all rights, duties and obligations of Buyer and Seller hereunder,
except any which expressly survive termination, shall terminate and Escrow Agent
shall forthwith return to Buyer the Earnest Money Deposit. If Buyer elects to go
forward, the Earnest Money Deposit shall be increased by an additional deposit
of $100,000.00 (to be deposited with Escrow Agent no later than the first day
after the end of the Inspection Period), and shall not be refundable except upon
the terms otherwise set forth herein.
(b) Seller will promptly furnish or make available to Buyer the
documents enumerated on Exhibit B attached hereto to the extent that they are in
Seller's possession. Buyer, through its officers, employees and other authorized
representatives, shall have the right to reasonable access to the Property,
Leases and Seller Financial Statements, at reasonable times during the
Inspection Period for the purpose of inspecting the Property, conducting
Hazardous Materials inspections and otherwise conducting its due diligence
review of the Property. Seller shall cooperate with and assist Buyer in making
such inspections and reviews provided that such cooperation shall be at no cost
to Seller. Buyer shall not interfere with the business of Seller or with any
tenants, and Buyer shall restore the Property to the same condition as it
existed immediately prior to the conducting of any such inspection, study or
investigation immediately upon completion of each such inspection, study or
investigation. Buyer shall not conduct any boring, drilling, cutting or other
intrusive tests without the prior written consent of Seller, which consent
Seller shall have no obligation to give. Buyer shall not permit any liens or
encumbrances to arise or exist against the Property in connection with or as a
result of its inspections, studies or investigations. A copy of any inspection,
study or investigation reports or test results shall be furnished by Buyer to
Seller promptly upon their completion. Buyer, for itself and its agents, agrees
not to enter into any contract with existing tenants prior to Closing. Buyer
shall have the right, with reasonable prior written notice to Seller, to have
due diligence interviews with tenants; provided, however, that Seller shall have
the opportunity to be present at all such interviews. At Seller's option, a
representative of Seller may accompany Buyer, its agents, employees and/or
representatives during any time at which any of them are on the Property. Except
as provided in this Agreement, Buyer shall not visit the Property nor make
contact with the tenants, contractors or consultants of the Property, except
that Buyer may make follow-up telephone calls to clarify issues raised during
site visits. The obligations of Buyer under this Section 3.1(b) shall survive
termination of this Agreement.
<PAGE>
(c) Buyer, through its officers or other authorized
representatives, shall have the right to reasonable access to all Materials
(other than privileged or confidential materials) with reasonable prior written
notice to Seller, for the purpose of reviewing and copying the same at its
expense.
(d) Seller has or will make the Materials available to Buyer. By
providing, and/or making available the Materials to Buyer, Seller, and its
partners, agents, attorneys, representatives, principals and affiliates are not
making, nor shall be deemed to have made, any representations or warranties,
implied or otherwise, as to the accuracy or completeness of the Materials and/or
any information or conclusions contained therein. Further, Seller, and its
partners, agents, attorneys, representatives, principals and affiliates are not
making, nor shall any of them be deemed to have made, any representations or
warranties as to the skill and care taken in the preparation of the Materials.
Seller, and its partners, agents, attorneys, representatives, principals and
affiliates are not responsible for conditions or consequences arising from
relevant facts that were concealed, withheld, or not disclosed by any third
party (including any consultant or any regulatory or governmental agency), or
any persons interviewed as part of the preparation of the Materials. Buyer also
acknowledges that the information referenced in the Materials may change over
time and that Buyer must satisfy itself as to whether or not the Materials are
accurate.
3.2 Hazardous Material. Prior to the end of the Inspection Period Buyer
may order a phase 1 environmental assessment of the Property. A copy of any
assessment report, if made, shall be furnished by Buyer to Seller promptly upon
its completion.
3.3 Time and Place of Closing. Unless otherwise agreed in writing by the
parties, the Closing shall take place at the offices of Seller's attorneys at
10:00 A.M. on the date which is the tenth (10th) day following the expiration of
the Inspection Period, provided that Buyer may designate an earlier date for
Closing if mutually agreeable to Seller.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
4.1 Warranties, Representations and Covenants. Seller warrants and
represents as follows as of the date of this Agreement and, unless Seller
notifies Buyer otherwise on or prior to Closing, as of the Closing and where
indicated covenants and agrees as follows:
(a) Organization; Authority. Seller is duly organized and validly
existing under the laws of the state of its organization and the state in which
the Shopping Center is located, and has full power and authority to enter into
and perform this Agreement in accordance with its terms, and the persons
executing this Agreement and other Transaction Documents have been duly
authorized to do so on behalf of Seller. Seller is not a "foreign person" under
Sections 1445 or 897 of the Internal Revenue Code.
(b) Authorization; Validity. The execution and delivery of this
Agreement by Seller and Seller's consummation of the transaction contemplated by
this Agreement have been duly and validly authorized. Assuming the valid
execution and delivery of this Agreement by Buyer, this Agreement constitutes a
legal, valid and binding agreement of Seller enforceable against it in
accordance with its terms, subject to the following qualifications: (1) the
effect of applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights of creditors generally; and (2) the
effect of the exercise of judicial discretion in accordance with general
principles of equity (whether applied by a court of law or of equity).
<PAGE>
(c) Commissions. Seller has neither dealt with nor does it have
any knowledge of any broker or other party who has or may have any claim against
Seller, Buyer or the Property for a brokerage commission or finder's fee or like
payment arising out of or in connection with the transaction provided herein
except for Power Realty Advisors ("Broker") and Seller agrees to indemnify Buyer
from any such claim arising by, through or under Seller.
(d) Sale Agreements. The Property is not subject to any
outstanding agreement(s) of sale, option(s) to purchase, or other right(s) of
third parties to acquire any ownership interest therein, except for Permitted
Exceptions and this Agreement.
(e) Litigation. There are no actions, suits or proceedings
pending against Seller with respect to which Seller has been served notice, or
to the best of Seller's knowledge, otherwise pending or threatened against
Seller which, if determined adversely to Seller, would (1) adversely affect its
ability to perform its obligations hereunder or (2) materially and adversely
affect the Property.
(f) Leases. To the best of Seller's knowledge, (1) Seller has
delivered or made available to Purchaser complete copies of all Leases and other
occupancy agreements affecting the Property to which Seller is a party, and (2)
the Rent Roll is true and complete in all material respects. Except as disclosed
in the Rent Roll: (a) Seller has received no written notice from any tenant
claiming that Seller is currently in default in its material obligations as
landlord under any Lease; (b) to the best of Seller's knowledge, no tenant is in
default in any material obligation under its Lease; and (c) no rent has been
paid by any tenant more than one month in advance. Notwithstanding the
foregoing, Seller does not represent or warrant that any particular Lease will
be in effect or free from default as of the Closing.
(g) Financial Statements. To the best of Seller's knowledge, each
of the Seller Financial Statements delivered or to be delivered to Buyer
hereunder has or will have been prepared in accordance with the books and
records of Seller. Seller covenants to furnish promptly to Buyer copies of the
Seller Financial Statements together with unaudited updated monthly reports of
cash flow for periods beginning after December 31, 1997. Buyer and its
independent certified accountants shall be given access to Seller's books and
records at any time prior to and for one (1) month following Closing upon
reasonable advance written notice in order that they may verify the Seller
Financial Statements for the period of January 1, 1997 through the date of
Closing. Seller agrees to execute and deliver to Buyer or its accountants the
Audit Representation Letter should Buyer's accountants audit such records of the
Shopping Center. Buyer and Seller agree that Seller is permitting such an audit
solely as an accommodation to Buyer in connection with Buyer' compliance with
regulations promulgated by the U.S. Security and Exchange Commission. Buyer
agrees that Buyer will not assert any claim against Seller as a result of any
such audit and/or Audit Representation Letter. Without limiting the generality
of the foregoing, Buyer shall not assert that Seller has breached any of its
representations or warranties under this Agreement as a result of such audit or
any information which is disclosed in connection with such audit.
(h) Contracts. Except for Leases, Contracts and Permitted
Exceptions, to the best of Seller's knowledge, there are no management, service,
maintenance, utility or other contracts or agreements affecting the Property,
oral or written, which extend beyond the Closing Date and which would bind Buyer
or encumber the Seller's interest in the Property for more than thirty (30) days
after Closing. To the best of Seller's knowledge, (1) all Contracts are in full
force and effect in accordance with their respective terms, and all obligations
of Seller under the Contracts required to be performed to date have been
performed in all material respects; (2) no party to any Contract has asserted
any claim of default or offset against Seller with respect thereto; and (3) the
copies of the Contracts delivered to Buyer prior to the date hereof are true,
correct and complete copies thereof. Between the date hereof and the Closing,
Seller covenants to fulfill all of its material obligations under all Contracts,
and covenants not to terminate or modify any such Contracts or enter into any
new contractual obligations relating to the Property without the consent of
Buyer (not to be unreasonably withheld) except such obligations as are freely
terminable without penalty by Seller upon not more than thirty (30) days'
written notice.
<PAGE>
(i) Maintenance and Operation of Property. From and after the
date hereof and until the Closing, Seller covenants (1) to keep and maintain and
operate the Property substantially in the manner in which it is currently being
maintained and operated; (2) not to cause or permit any waste of the Property
nor undertake any action with respect to the operation thereof outside the
ordinary course of business without Buyer's prior written consent (not to be
unreasonably withheld); (3) not to remove from the Improvements or the Real
Property any article included in the Personal Property outside the ordinary
course of business; and (4) to maintain such casualty and liability insurance on
the Property as it is presently being maintained.
(j) Permits and Zoning. To the best knowledge of Seller, there
are no material permits and licenses (collectively referred to as "Permits")
required to be issued to Seller by any governmental body, agency or department
having jurisdiction over the Property which materially affect the ownership or
the use thereof which have not been issued.
(k) Rent Roll; Tenant Estoppel Letters. To the best of Seller's
knowledge, the Rent Roll is true and correct in all material respects. Seller
agrees to use its best reasonable efforts (provided that Seller shall have no
obligation to incur any costs or expenses) to obtain current Tenant Estoppel
Letters during the Inspection Period acceptable to Buyer from all Tenants under
Leases, which Tenant Estoppel Letters shall confirm the matters reflected by the
Rent Roll as to the particular tenant.
(l) Condemnation. To the best of Seller's knowledge, neither the
whole nor any portion of the Property, including access thereto or any easement
benefiting the Property, is subject to temporary requisition of use by any
governmental authority or has been condemned, or taken in any proceeding similar
to a condemnation proceeding, nor is there now pending any condemnation,
expropriation, requisition or similar proceeding against the Property or any
portion thereof. Seller has received no written notice nor has any actual
knowledge that any such proceeding is contemplated.
(m) Governmental Matters. Seller has received no written notices
from any such governmental authorities or agencies of uncured violations at the
Property of building, fire, air pollution or zoning codes, rules, ordinances or
regulations, environmental and hazardous substances laws, or other rules,
ordinances or regulations relating to the Property. Seller shall be responsible
for the remittance of all sales tax for periods occurring prior to the
Allocation Date directly to the appropriate state department of revenue.
(n) Repairs. Seller has received no written notice of any
requirements of any lender, insurance companies, or governmental body or
agencies requiring any repairs or work to be done on the Property which have not
already been completed.
(o) Consents and Approvals; No Violation. To the best of Seller's
knowledge, (1) neither the execution, delivery or performance of this Agreement
nor compliance herewith (A) conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under (i) the
partnership documents of Seller, (ii) any law or any order, writ, injunction or
decree of any court or governmental authority, or (iii) any agreement or
instrument to which Seller is a party or by which it is bound or (B) results in
the creation or imposition of any lien, charge or encumbrance upon its property
pursuant to any such agreement or instrument; and (2) no authorization, consent,
or approval of any governmental authority (including courts) is required for the
execution and delivery by Seller of this Agreement or the performance of its
obligations hereunder.
(p) Environmental Matters. Except as set forth in the Materials
and any environmental reports delivered to Buyer, (I) Seller has not released
any Hazardous Materials onto or from the Property in violation of applicable
Environmental Laws and (2) to the best of Seller's knowledge, there has not been
any Release of Hazardous Materials onto or from the Property in violation of
applicable Environmental Laws.
<PAGE>
(q) SELLER'S KNOWLEDGE AND EXPERIENCE. SELLER REPRESENTS AND
WARRANTS TO BUYER THAT SELLER HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND
BUSINESS MATTERS THAT ENABLE SELLER TO FULLY EVALUATE THE MERITS AND RISKS OF
THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT. FURTHER SELLER ACKNOWLEDGES THAT
IT IS NOT IN A DISPARATE BARGAINING POSITION RELATIVE TO BUYER WITH RESPECT TO
THIS AGREEMENT.
4.2 Limitations. Notwithstanding anything to the contrary herein: (a)
whenever a representation or warranty contained in this Agreement or any of the
Transaction Documents is qualified by the phrase "to the best of Seller's
knowledge," or by words of similar import, the accuracy of such representation
shall be based solely on the actual (as opposed to constructive or imputed)
knowledge of the general partners of Seller without independent investigation or
inquiry and any liability resulting hereunder based upon such representations or
warranties shall be solely that of Seller and not, in any event, of such general
partners of Seller personally and (b) if, prior to the Closing, Buyer obtains
actual knowledge that any representation or warranty of Seller is inaccurate and
Buyer nonetheless proceeds with the Closing, Seller shall have no liability for
any such matter regarding which Buyer had actual knowledge prior to Closing.
Except as set forth in the next sentence, the representations and warranties of
Seller set forth in this Agreement shall survive the Closing for a period of six
(6) months, and no action or proceeding thereon shall be valid or enforceable,
at law or in equity, if a legal proceeding with respect to a particular breach
is not commenced within that time. The representations, warranties and covenants
set forth in the first two sentences of Section 4.1(g) shall not survive the
Closing.
4.3 "AS IS" SALE. EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES OF
SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER IS NOT MAKING, AND HAS NOT
AT ANY TIME MADE, DIRECTLY OR INDIRECTLY, ANY WARRANTIES OR REPRESENTATIONS OF
ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO
HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER
THAN SELLER'S LIMITED WARRANTY OF TITLE TO BE SET FORTH IN THE DEED), ZONING,
TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITION, OPERATING HISTORY OR
PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL REGULATIONS, THE
ACCURACY OR COMPLETENESS OF THE MATERIALS, DOCUMENTS OR ANY OTHER INFORMATION
PROVIDED BY OR ON BEHALF OF SELLER TO BUYER OR ANY OTHER MATTER OR THING
REGARDING THE PROPERTY, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN. UPON
CLOSING SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE
PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS." BUYER HAS NOT RELIED UPON AND WILL
NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY
MADE BY OR ON BEHALF OF SELLER, BROKER OR ANY REPRESENTATIVE OF SELLER WITH
RESPECT TO THE PROPERTY, SAVE AND EXCEPT THOSE REPRESENTATIONS AND WARRANTIES OF
SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT. BUYER WILL CONDUCT SUCH
INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND
ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY TO SATISFY ITSELF AS
TO THE CONDITION OF THE PROPERTY AND WILL RELY SOLELY UPON SAME AND, EXCEPT TO
THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER WILL NOT RELY UPON ANY
INFORMATION PROVIDED BY OR ON BEHALF OF SELLER, BROKER OR ANY REPRESENTATIVE OF
SELLER. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS,
INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS.
BUYER, UPON CLOSING, HEREBY WAIVES, RELINQUISHES AND RELEASES SELLER, ITS
PARTNERS, BROKER AND THEIR RESPECTIVE DIRECT AND INDIRECT OFFICERS, DIRECTORS,
SHAREHOLDERS, MEMBERS, EMPLOYEES, AGENTS, ATTORNEYS, ACCOUNTANTS, CONSULTANTS,
REPRESENTATIVES AND AFFILIATES (COLLECTIVELY, "SELLER PARTIES") FROM AND AGAINST
ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN
TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS'
FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN,
WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER PARTIES (OR ANY OF
THEM) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY CONSTRUCTION DEFECTS,
PHYSICAL OR ENVIRONMENTAL CONDITIONS, THE VIOLATION OF ANY APPLICABLE LAWS AND
ANY AND ALL OTHER MATTERS REGARDING THE PROPERTY, EXCEPT THOSE MATTERS AS TO
WHICH SELLER HAS MADE EXPRESS REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT.
THE TERMS, CONDITIONS AND OBLIGATIONS OF THIS SECTION 4.3 SHALL EXPRESSLY
SURVIVE THE CLOSING AND NOT MERGE THEREIN.
<PAGE>
5. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
Buyer hereby warrants and represents as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
5.1 Organization: Authority. Buyer is a corporation duly organized,
validly existing and in good standing under laws of Florida and has full power,
authority and financial ability to enter into and perform this Agreement in
accordance with its terms, and the persons executing this Agreement and other
Transaction Documents on behalf of Buyer have been duly authorized to do so.
5.2 Authorization; Validity. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly and validly
authorized by the Board of Directors of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and (assuming the valid execution and
delivery of this Agreement by Seller) constitutes a legal, valid and binding
agreement of Buyer enforceable against it in accordance with its terms.
5.3 Commissions. Buyer has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Buyer or Seller for a brokerage commission or finder's fee or like payment
arising out of or in connection with the transaction provided herein except
Power Realty Advisors, whose commission shall be paid by Seller; and Buyer
agrees to indemnify Seller from any other such claim arising by, through or
under Buyer.
5.4 BUYER'S KNOWLEDGE AND EXPERIENCE. BUYER REPRESENTS AND WARRANTS TO
SELLER THAT BUYER HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS
THAT ENABLE BUYER TO FULLY EVALUATE THE MERITS AND RISKS OF THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT. FURTHER, BUYER ACKNOWLEDGES THAT IT IS NOT IN A
DISPARATE BARGAINING POSITION RELATIVE TO SELLER WITH RESPECT TO THIS AGREEMENT.
6. POSSESSION; RISK OF LOSS
6.1 Possession. Possession of the Property will be transferred to Buyer
at the conclusion of the Closing subject to Permitted Exceptions.
6.2 Risk of Loss. As used in this Section 6.2, "Material Damage" shall
mean damage which would require in excess of $100,000, as reasonably and in good
faith estimated by Seller, to repair to substantially its condition as of the
date hereof; and "Material Portion" shall mean a portion of the Property valued
in excess of $100,000, as reasonably estimated by Seller. All risk of loss to
the Property shall remain upon Seller until the conclusion of the Closing. If,
before the possession of the Property has been transferred to Buyer, any
Material Damage to the Property has occurred by fire or other casualty and will
not be restored by the Closing Date or if any Material Portion of the Property
is taken by eminent domain or there is a material obstruction of access to the
Improvements by virtue of a taking by eminent domain, Seller shall, within ten
(10) days of such damage or taking, notify Buyer thereof and Buyer shall have
the option to:
(a) terminate this Agreement upon notice to Seller given within
ten (10) days after such notice from Seller, in which case Buyer shall receive a
return of its Earnest Money Deposit (provided that Buyer is not in default
hereunder); or
(b) proceed with the purchase of the Property, in which event
Seller shall assign to Buyer all Seller's right, title and interest in all
amounts due or collected by Seller under the insurance policies or as
condemnation awards (except for amounts which are (i) reimbursements to Seller
for costs incurred by Seller to preserve, protect or repair the Property or (ii)
attributable to rent loss for any period prior to Closing). In such event, the
Purchase Price shall be reduced by the amount of any insurance deductible to the
extent it reduced the insurance proceeds payable.
<PAGE>
7. TITLE MATTERS
7.1 Title.
(a) Title Insurance and Survey. Not later than three (3) days
after Buyer receives an original of this Agreement executed by Seller, Seller
shall order the Title Insurance Commitment and Buyer's counsel shall order the
Survey. In the event that the Title Insurance Commitment or Survey discloses
and/or reflects the existence of one or more matters which, in the reasonable
determination of Purchaser, has/have a material adverse impact on the current
use and/or value of the Property (each, a "Title Objection"), then the Purchaser
may, by notice received by Seller prior to the end of the Inspection Period
specifically describing each Title Objection (the "Title Objection Notice"),
notify Seller of such Title Objection(s). The Title Objection Notice shall be
accompanied by a copy of the Title Insurance Commitment or Survey clearly
depicting each Title Objection. Purchaser shall be deemed to have accepted all
matters shown on the Title Insurance Commitment and/or Survey except for matters
which are included in the Title Objections. Seller shall have five (5) business
days following receipt of the Title Objection Notice to cure or agree in writing
to cure such Title Objections, but Seller shall have no obligation whatsoever to
cure such Title Objections or to incur any cost or expense in connection
therewith. In the event that Seller agrees in writing to cure any of the Title
Objections, Seller shall cure such Title Objections on or prior to the Closing
Date. In the event that Seller has not cured or agreed in writing to cure all of
the Title Objections within the five (5) business day period specified above,
Purchaser shall either: (1) waive the uncured Title Objections by written notice
to Seller and Escrow Agent and accept the Property and title thereto subject to
the uncured Title Objections without any adjustment of the Purchase Price, or
(2) terminate this Agreement. If Purchaser's waiver notice is not received by
Seller within ten (10) business days after Seller's receipt of the Title
Objection Notice, then it will conclusively be presumed that Purchaser elected
to terminate this Agreement.
(b) Miscellaneous Title Matters. If a search of the title
discloses judgments, bankruptcies or other returns against other persons having
names the same as or similar to that of Seller, Seller shall on request deliver
to Buyer an affidavit stating, if true, that such judgments, bankruptcies or the
returns are not against Seller. Seller further agrees to execute and deliver to
the title insurance agent at Closing such documentation, if any, as the title
insurance underwriter shall reasonably require to evidence that the execution
and delivery of this Agreement and the consummation of the transaction
contemplated hereby have been duly authorized and that there are no mechanics'
liens on the Seller's interest in the Property (excluding liens arising due to
the acts of Buyer or any person or entity claiming by or through Buyer) or, to
the best of Seller's knowledge, parties in possession of the Property other than
tenants under Leases, subtenants and others claiming by or through tenants under
Leases and Seller.
8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Buyer's Obligations. The obligations of
Buyer under this Agreement are subject to satisfaction or waiver by Buyer of
each of the following conditions or requirements on or before the Closing Date:
(a) Seller's warranties and representations under this Agreement
shall be true and correct as of the Closing Date in all material respects, and
Seller shall not be in material default hereunder.
(b) All obligations of Seller contained in this Agreement, shall
have been fully performed in all material respects and Seller shall not be in
material default under any covenant, restriction, right-of-way or easement
affecting the Property.
(c) There shall have been no material adverse change in the
financial condition of The Kroger Co.
<PAGE>
(d) A Title Insurance Commitment in the full amount of the
Purchase Price shall have been issued and "marked down" through Closing, subject
only to Permitted Exceptions.
(e) The physical and environmental condition of the Property
shall be unchanged from the date of this Agreement, ordinary wear and tear and
loss due to casualty or eminent domain excepted.
(f) Buyer's receipt of Tenant Estoppel Letters from The Kroger
Co., Blockbuster, Paul Harris, Radio Shack and eighty percent (80%) of the other
tenants who have existing leases for any portion of the Property, without
material exceptions or changes to the forms approved by Buyer, the substance of
which Tenant Estoppel Certificates must be reasonably acceptable to Buyer in all
respects (Buyer acknowledges that Seller is not obligated to obtain the Tenant
Estoppel Certificates and shall have no liability or obligations in the event
that this condition (f) is not satisfied).
(g) Buyer's receipt of estoppel certificates with respect to the
Railroad Lease, and the Master Lease, substantially in the form attached hereto
as Exhibit E without material exceptions or changes, the substance of which must
be reasonably acceptable to Buyer in all respects (Buyer acknowledges that
Seller is not obligated to obtain such estoppel certificate and shall have no
liability or obligation in the event that this condition (g) is not satisfied).
(h) Seller shall have delivered to Buyer the following in form
reasonably satisfactory to Buyer:
(1) A limited warranty deed in proper form for recording, duly
executed and acknowledged by Seller in the form attached hereto as Exhibit F;
(2) Originals, if available, or if not, true copies of the
Leases
and of the contracts, agreements, permits and licenses, and such Materials as
may be in the possession or control of Seller, including without limitation all
tenant files and correspondence related to existing tenants;
(3) An Assignment of Leases and Tenancies and in the form
attached
hereto as Exhibit G duly executed by Seller;
(4) An Assignment and Assumption of Lease in the form
attached
hereto as Exhibit H duly executed by Seller;
(5) A bill of sale with respect to the Personal Property
and
Materials in the form attached hereto as Exhibit I duly executed by Seller;
(6) A current rent roll;
(7) An owner's affidavit, non-foreign affidavits, non-tax
withholding certificates and such other documents in form and substance
satisfactory to Seller and the title insurance company, as may reasonably be
required by Buyer or its counsel in order to effectuate the provisions of this
Agreement and the transaction contemplated herein, provided that such delivery
shall impose no additional cost or liability on Seller;
(8) Resolutions of Seller authorizing the transactions
described
herein;
(9) All keys and other means of access to the Improvements
in the
possession of Seller or its agents;
<PAGE>
(10) Materials; and
(11) Such other documents in form and substance
satisfactory to
Seller as Buyer may reasonably request to effect the transaction contemplated by
this Agreement, provided that such delivery shall impose no additional cost or
liability on Seller.
In the event that all of the foregoing provisions of this Section 8.1
are not satisfied and Buyer elects in writing to terminate this Agreement, then,
provided Buyer is not in default under this Agreement, the Earnest Money Deposit
shall be promptly delivered to Buyer by Escrow Agent and, upon the making of
such delivery, neither party shall have any further claim against the other by
reasons of this Agreement, except as provided in Article 3.
8.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction or waiver by Seller of
each of the following conditions or requirements on or before the Closing date:
(a) Buyer's warranties and representations under this Agreement
shall be true and correct as of the Closing Date, and Buyer shall not be in
default hereunder.
(b) All of the obligations of Buyer contained in this Agreement
shall have been fully performed by or on the date of Closing in compliance with
the terms and provisions of this Agreement.
(c) Buyer shall have delivered to Seller at or prior to the
Closing the following, which shall be reasonably satisfactory to Seller:
(1) Delivery and/or payment of the balance of the Purchase Price in
accordance with Section 2.1 at Closing;
(2) An Assignment of Leases and Tenancies in the form
attached
hereto as Exhibit G duly executed by Buyer;
(3) An Assignment and Assumption of Lease in the form
attached
hereto as Exhibit H duly executed by Buyer; and
(4) Such other documents as Seller may reasonably request
to effect
the transaction contemplated by this Agreement.
In the event that all conditions precedent to Buyer's obligation to
purchase shall have been satisfied but the foregoing provisions of this Section
8.2 have not, and Seller elects in writing to terminate this Agreement, then,
provided Buyer is not in default under this Agreement, the Earnest Money Deposit
shall be promptly delivered to Seller by Escrow Agent and, upon the making of
such delivery, neither party shall have any further claim against the other by
reasons of this Agreement, except as provided in Article 3.
8.3 Best Efforts. Each of the parties hereto agrees to use reasonable
best efforts to take or cause to be taken all actions necessary, proper or
advisable to consummate the transaction contemplated by this Agreement.
9. PRE-CLOSING BREACH: REMEDIES
9.1 Breach by Seller. In the event of a breach of Seller's covenants or
warranties herein and failure by Seller to cure such breach within the time
provided for Closing, Buyer may, at Buyer's election (i) terminate this
Agreement and receive a return of the Earnest Money Deposit, and the parties
shall have no further rights or obligations under this Agreement (except as
survive termination); (ii) enforce this Agreement by suit for specific
performance; or (iii) waive such breach and close the purchase contemplated
hereby, notwithstanding such breach, without any reduction in the Purchase
Price.
<PAGE>
9.2 Breach by Buyer. In the event of a breach of Buyer's covenants or
warranties herein and failure of Buyer to cure such breach within the time
provided for Closing, Seller's sole remedy for such breach (except as otherwise
provided in this Agreement) shall be to terminate this Agreement and retain
Buyer's Earnest Money Deposit and all interest thereon as agreed liquidated
damages for such breach, and upon payment in full to Seller of such amounts for
such breach (except as otherwise provided in this Agreement), the parties shall
have no further rights, claims, liabilities or obligations under this Agreement
(except as survive termination). Seller and Buyer agree that Seller's damages
resulting form Buyer's default are difficult if not impossible, to determine and
the Earnest Money is a fair estimate of those damages which has been agreed to
in an effort to cause the amount of said damages to be certain. In addition to
retaining the Earnest Money Deposit, Seller may recover from Buyer all amounts
due from Buyer pursuant to Sections 3.1 and 10.7 hereof.
9.3. Additional Remedies Available to Seller. Notwithstanding anything
in this Agreement to the contrary, in the event of Buyer's default or a
termination of this Agreement and in the event Buyer or any party related to or
affiliated with Buyer is asserting any claims or right to the Property that
would otherwise delay or prevent Seller from having clear, indefeasible and
marketable title to the Property, Seller shall have all remedies available at
law or in equity.
10. MISCELLANEOUS
10.1 Disclosure. Prior to Closing, neither party shall disclose the
transaction contemplated by this Agreement without the prior approval of the
other, except to its attorneys, accountants and other consultants, their lenders
and prospective lenders, or where disclosure is required by law.
10.2 Radon Gas. Radon is a naturally occurring radioactive gas which,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon which
exceed federal and state guidelines have been found in buildings in the state in
which the Property is located. Additional information regarding radon and radon
testing may be obtained from the county public health unit.
10.3 Entire Agreement. This Agreement, together with the exhibits
attached hereto, and the confidentiality agreement executed by the parties
hereto, dated as of ______________, 1998, constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and may not
be modified, amended or otherwise changed in any manner except by a writing
executed by Buyer and Seller.
10.4 Notices. Any notice, communication, request, reply or advice
(collectively "Notice") provided for or permitted by this Agreement to be made
or accepted by either party must be in writing. Notice may, unless otherwise
provided herein, be given or served (i) by depositing the same in the United
States mail, postage paid, certified, and addressed to the party to be notified,
with return receipt requested, (ii) by delivering the same to such party, or an
agent of such party, in person or by commercial courier, (iii) by facsimile
provided that a hard copy is delivered for receipt on the following business
day, or (iv) by depositing the same into custody of a nationally recognized
overnight delivery service such as Federal Express, Airborne Express, UPS, Emery
or Purolator. Notice deposited in the mail in the manner described in (i) above
shall be effective on the third business day after such deposit. Notice
delivered in the manner described in (ii) above is effective upon receipt;
Notice delivered in the manner described in (iii) above is effective when sent
via facsimile, provided that a hard coy thereof is delivered for receipt on the
next following business day. Notice delivered in the manner described in (iv)
above is effective the day of expected delivery. All Notices shall be served at
the addresses set forth below:
As to Seller: Silverlake Development Co., Ltd.
Attention: William S. Ackerman
2690 Madison Road
Cincinnati, Ohio 45208
Facsimile: (513) 631-8498
With copy to Vorys, Sater, Seymour and Pease LLP
Suite 2100, Atrium Two
221 E. Fourth Street
PO Box 0236
Cincinnati, Ohio 45201-0236
Attn.: Charles C. Bissinger, Jr.
Facsimile: (513) 723-4046
As to Buyer:RRC Acquisitions Two, Inc.
Attention: Robert L. Miller
Suite 200,121 W. Forsyth St.
Jacksonville, Florida 32202
Facsimile: (904) 354-1832
With a copy to: Rogers, Towers, Bailey, Jones & Gay
Attention: William E. Scheu, Esq.
1301 Riverplace Blvd., Suite 1500
Jacksonville, Florida 32207
Facsimile: (904) 396-0663
<PAGE>
Any notice or demand so served shall constitute proper notice hereunder. A party
may change its notice address by notice given in the aforesaid manner.
10.5 Headings. The titles and headings of the various sections hereof
are intended solely for means of reference and are not intended for any purpose
whatsoever to modify, explain or place any construction on any of the provisions
of this Agreement.
10.6 Validity. If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement by the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable shall not be affected thereby,
and every provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
10.7 Attorneys' Fees. In the event of any litigation between the parties
hereto to enforce any of the provisions of this Agreement or any right of either
party hereto, the unsuccessful party to such litigation agrees to pay to the
successful party all costs and expenses, including reasonable attorneys' fees,
whether or not incurred in trial or on appeal, incurred therein by the
successful party, all of which may be included in and as a part of the judgment
rendered in such litigation. Any indemnity provisions herein shall include
indemnification for reasonable attorneys' fees and costs, whether or not suit be
brought and including fees and costs on appeal.
10.8 Time of Essence. Time is of the essence of this Agreement.
10.9 Governing Law. This Agreement shall be governed by the laws of the
state in which the Property is located, and the parties hereto agree that any
litigation between the parties hereto relating to this Agreement shall take
place (unless otherwise required by law) in a court located in the county in
which the Property is located. Each party waives its right to jurisdiction or
venue in any other location.
10.10 Successors and Assigns. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. No third parties, including any
brokers or creditors, shall be beneficiaries hereof. Neither party shall assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign this Agreement to Regency Centers, L.P.
provided that: (a) Seller is notified of such assignment not less than ten (10)
days prior to Closing, (b) such assignment shall not release RRC Acquisitions
Two, Inc. from any of its obligations or liabilities under this Agreement and
(c) Regency Centers, L.P. assumes in writing all of the obligations and
liabilities of Buyer under this Agreement in a written instrument acceptable to
Seller.
10.11 Exhibits. All exhibits attached hereto are incorporated herein by
reference to the same extent as though such exhibits were included in the body
of this Agreement verbatim.
10.12 Gender: Plural; Singular: Terms. A reference in this Agreement to
any gender, masculine, feminine or neuter, shall be deemed a reference to the
other, and the singular shall be deemed to include the plural and vice versa,
unless the context otherwise requires. The terms "herein," "hereof,"
"hereunder," and other words of a similar nature mean and refer to this
Agreement as a whole and not merely to the specified section or clause in which
the respective word appears unless expressly so stated.
<PAGE>
10.13 Further Instruments, Etc. This Agreement may be executed in
counterparts and when so executed shall be deemed executed as one agreement.
Seller and Buyer shall execute any and all documents and perform any and all
acts reasonably necessary to fully implement this Agreement.
10.14 Limitations on Liability.
(a) In no event shall Seller, its direct or indirect general or
limited partners, owners or affiliates, any officer, director, general or
limited partner, employee or agent of any of the foregoing, or any affiliate,
controlling person or owner thereof have any liability, beyond its interest in
the Property, for any claim, cause of action or other liability arising out of
or relating to this Agreement or the Property, whether based on contract, common
law, statute, equity or otherwise.
(b) Except as provided in Section 10.10 regarding assignment of
this Agreement, in no event shall any officer, director, shareholder, employee,
agent, partner, owner or affiliate of Seller or any controlling person thereof
have any liability, beyond its interest in the Property, for any claim, cause of
action or other liability arising out of or related to this Agreement or the
Property, whether based on contract, common law, statute, equity or otherwise.
10.15 Like-Kind Exchange. Buyer acknowledges that Seller may, at its
option, seek to structure the sale of the Property as a like-kind exchange of
property within the meaning of Section 1031 of the Internal Revenue Code of 1986
(a "Like-Kind Exchange"). Buyer agrees to cooperate with Seller in effecting a
qualifying Like-Kind Exchange through a trust or other means as determined by
Seller, including the means set forth in this Section; and Buyer consents and
agrees to the following if requested by Seller and provided the same is in
furtherance of a Like-Kind Exchange: (i) Seller has the right to assign its
rights under this Agreement to a qualified intermediary without Buyer's consent,
and in such event, such qualified intermediary shall have the right to execute
and deliver the Closing Statement (which shall also be consented to by Seller)
and receive the Purchase Price from Buyer; (ii) any transactional matters and
accommodations in connection with a Like-Kind Exchange which are, in the opinion
of Seller's counsel, necessary and/or desirable to qualify the sale and purchase
transaction contemplated by this Agreement as a Like-Kind Exchange, provided,
however, that Buyer shall in no event be required to take title to any real
property (other than the Property) and Buyer and Buyer's counsel shall have
determined that such transactional matters and accommodations are without
material expense or obligation to Buyer and do not increase Buyer's liabilities
under this Agreement; and (iii) Seller shall still convey the Property to Buyer
(or a permitted assignee).
10.16 Survival. Except only those obligations which expressly survive
Closing, the rights and duties of the parties under this Agreement shall be
merged into the deed and shall not survive Closing.
10.17 No Recording. Neither this Agreement nor any notice, memorandum or
other notice or document relating hereto shall be recorded.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
RRC ACQUISITIONS TWO, INC.,
a Florida corporation
By:
Name:
Title:
Date: , 1998
Tax Identification No: 59-3478325
"BUYER"
SILVERLAKE DEVELOPMENT CO., LTD.,
a Kentucky limited partnership
By:
Name: William S. Ackerman
Title: general partner
Date: , 1998
Tax Identification No:
"SELLER"
04/16/98 - 0197196.01
<PAGE>
JOINDER OF ESCROW AGENT
1. Duties. Escrow Agent joins herein for the purpose of agreeing to
comply with the terms hereof insofar as they apply to Escrow Agent. Escrow Agent
shall receive and hold the Earnest Money Deposit in trust, to be disposed of in
accordance with the provisions of this joinder and the foregoing Agreement. The
Earnest Money Deposit shall be invested by Escrow Agent in an interest bearing
account at First Union National Bank.
2. Indemnity. Escrow Agent shall not be liable to either party except for
claims resulting from the negligence or willful misconduct of Escrow Agent or
the failure of Escrow Agent to comply with applicable terms of the Agreement and
this joinder. If the escrow is involved in any controversy or litigation, Buyer
shall indemnify and hold Escrow Agent free and harmless from and against any and
all loss, cost, damage, liability or expense, including costs of reasonable
attorneys' fees to which Escrow Agent may be put or which may incur by reason of
or in connection with such controversy or litigation, except to the extent it is
finally determined that such controversy or litigation resulted from Escrow
Agent's gross negligence or willful misconduct or the failure of Escrow Agent to
comply with applicable terms of the Agreement and this joinder.
3. Conflicting Demands. If conflicting demands are made upon Escrow Agent
or Escrow Agent is uncertain with respect to the escrow, the parties hereto
expressly agree that Escrow Agent shall have the absolute right to do either or
both of the following: (i) withhold and stop all proceedings in performance of
this escrow and await settlement of the controversy by mutual agreement between
Buyer and Seller or by final appropriate legal proceedings or otherwise as it
may require; or (ii) file suit for declaratory relief and/or interpleader in
Kenton County, Kentucky and obtain an order from the court requiring the parties
to interplead and litigate in such court their several claims and rights between
themselves. Upon the filing of any such declaratory relief or interpleader suit
in Kenton County, Kentucky and tender of the Earnest Money Deposit to the court,
Escrow Agent shall thereupon be fully released and discharged from any and all
obligations to further perform the duties or obligations imposed upon it. Buyer
and Seller agree to respond promptly in writing to any request by Escrow Agent
for clarification, consent or instructions. Any action proposed to be taken by
Escrow Agent for which approval of Buyer and/or Seller is requested shall be
considered approved if Escrow Agent does not receive written notice of
disapproval within five (5) business days after a written request for approval
is received by the party whose approval is being requested and its counsel.
Escrow Agent shall not be required to take any action for which approval of
Buyer and/or Seller has been sought unless such approval has been received. No
disbursements shall be made, other than as provided in Sections ___ and __ of
the foregoing Agreement, or to a court in an interpleader action, unless Escrow
Agent shall have given written notice of the proposed disbursement to Buyer and
Seller and neither Buyer nor Seller shall have delivered any written objection
to the disbursement within five (5) business days after receipt of Escrow
Agent's notice by such party and its counsel. No notice by Buyer or Seller to
Escrow Agent of disapproval of a proposed action shall affect the right of
Escrow Agent to take any action as to which such approval is not required.
4. Continuing Counsel. Seller acknowledges that Escrow Agent is counsel
to Buyer herein and Seller agrees that in the event of a dispute hereunder or
otherwise between Seller and Buyer, Escrow Agent may continue to represent Buyer
notwithstanding that it is acting and will continue to act as Escrow Agent
hereunder, it being acknowledged by all parties that Escrow Agent's duties
hereunder are ministerial in nature.
5. Tax Identification. Seller and Buyer shall provide to
Escrow Agent appropriate Federal tax identification numbers.
ROGERS, TOWERS BAILEY, JONES & GAY
By:
Its Authorized Agent
Date: , 1998
"ESCROW AGENT"
<PAGE>
LIST OF EXHIBITS
Exhibit A Legal Description
Exhibit B List of Materials
Exhibit C Rent Roll
Exhibit D Form of Tenant Estoppel Letter
Exhibit E Form of Ground Lessor's Estoppel Letter
Exhibit F Form of Limited Warranty Deed
Exhibit G Form of Assignment of Leases and Tenancies
Exhibit H Form of Assignment and Assumption of Lease
Exhibit I Form of Bill of Sale
Exbibit J Audit Representation Letter
<PAGE>
EXHIBIT A
Legal Description of Real Property
<PAGE>
EXHIBIT B
List of Materials
Items Required from the Seller:
1) As Built Plans & Specs (arch. and engineering)
2) Site Plan (including suite numbers)
3) Legal Description
4) Copy of All Leases (and amendments)
5) Certificates of Occupancy - All current tenants
6) Schedule of Security Deposits
7) Most recent Rent Roll
8) Sales Reports (most recent 3 Years) for tenants reporting
9) Current Rent Billings (by category, base, CAM, etc.)
10) Current Delinquency Report (with explanations for balances > 1,000)
11) Tenant Activity Register for all Current Tenants (billings &
payments) 12) Tenant Estoppels 13) Property Operating Results - Most
recent 2 Years 14) Property Capital Expenditures - Most recent 2 Years
15) Real Estate and other tax bills - 2 Years 16) Year to Date
Financials 17) Existing Service Agreements and Warranties 18) Three
years loss history - reported claims 19) Most Recent Year Expense
Recovery Reconciliation 20) Breakdown of CAM Pools 21) Seller's Budget
for up-coming/current year 22) Utility Bills for last 12 months/deposits
23) Personal Property Inventory 24) Existing Title Insurance Policy 25)
Summary of Tenant Contacts (with address and telephone numbers)
With local (incl store#) & national addresses
26) Survey
<PAGE>
EXHIBIT C
Rent Roll
<PAGE>
- 2 -
EXHIBIT D
Form of Tenant Estoppel Letter
_____________, 1998
RRC Acquisitions Two, Inc.
Regency Centers, L.P.
121 W. Forsyth St., Suite 200
Jacksonville, Florida 32202
Silverlake Development Co., Ltd.
2690 Madison Road
Cincinnati, OH 45208
Re: Silverlake Shopping Center, Erlanger Kentucky
Ladies and Gentlemen:
The undersigned ("Tenant") has been advised that RRC Acquisitions Two, Inc.
("RRC") or Regency Centers, L.P. ("Regency") may purchase the above Shopping
Center, and we hereby confirm to you that:
1. The undersigned is the Tenant of Silverlake Development Co., Ltd.
("Landlord") in the above Shopping Center, and is currently in possession and
paying rent on premises known as Store No. ________________ [or Address:
_______________________________________________], and containing approximately
______________ square feet, under the terms of the lease dated
_________________________, which has (not) been amended by amendment dated
__________________________ (the "Lease"). There are no other written or oral
agreements between Tenant and Landlord. Tenant neither expects nor has been
promised any inducement, concession or consideration for entering into the
Lease, except as stated therein, and there are no side agreements or
understandings between Landlord and Tenant.
2. The term of the Lease commenced on ______________________,
expiring on ____________________, with options to extend of
_________________ (___) years each.
3. As of __________, monthly minimum rental is $_________ per month.
4. Tenant is required to pay its pro rata share of Common Area
Expenses and its pro rata share of the Center's real property
taxes and insurance cost. Current additional monthly payments for
expense reimbursement total $_____________ per month for common
area maintenance, property insurance and real estate taxes.
5. Tenant has given [no security deposit] [a security
deposit of $---------------].
6. No payments by Tenant under the Lease have been made for more
than one (1) month in advance, and minimum rents and other
charges under the Lease are current.
7. All matters of an inducement nature and all obligations of the
Landlord under the Lease concerning the construction of the
Tenant's premises and development of the Shopping Center,
including without limitation, parking requirements, have been
performed by Landlord.
8. The Lease contains no first right of refusal, option to expand, option
to terminate, or exclusive business rights, except as follows: _____________
- -----------------------------------------------------------.
9. Tenant knows of no default by either Landlord or Tenant under the
Lease, and knows of no situations which, with notice or the
passage of time, or both, would constitute a default. To the best
of Tenant's knowledge, Tenant has no rights to off-set or defense
against Landlord as of the date hereof.
10. The undersigned has not entered into any sublease, assignment or
any other agreement transferring any of its interest in the Lease
or the Premises except as follows:
____________________________________.
11. Tenant has not generated, used, stored, spilled, disposed of, or
released any Hazardous Substances at, on or in the Premises. "Hazardous
Substances" means any flammable, explosive, toxic, carcinogenic, mutagenic, or
corrosive substance or waste, including volatile petroleum products and
derivatives and drycleaning solvents. To the best of Tenant's knowledge, no
asbestos or polychlorinated biphenyl ("PCB") is located at, on or in the
Premises. The term "Hazardous Substances" does not include those materials which
are technically within the definition set forth above but which are contained in
pre-packaged office supplies, cleaning materials or personal grooming items or
other items which are sold for consumer or commercial use and typically used in
other similar buildings or space.
The undersigned makes this statement for your benefit and protection
with the understanding that you intend to rely upon this statement in connection
with your intended purchase and sale of the above described Premises. The
undersigned agrees that it will, upon receipt of written notice from Landlord,
commence to pay all rents to RRC or to Regency or to any agent acting on its
behalf.
Very truly yours,
(Tenant)
<PAGE>
EXHIBIT E
Form of Ground Lessor's Estoppel Letter
_________, 1998
Regency Centers, L.P., and
Regency Realty Corporation, and
RRC Acquisitions Two, Inc.
Suite 200, 121 W. Forsyth St.
Jacksonville, Florida 32202
RE: Silverlake Shopping Center
Ladies and Gentlemen:
The undersigned is the Lessor under a Lease executed by and among the
Cincinnati, New Orleans and Texas Pacific Railway Company, and Ohio corporation
("Lessor"), and Silverlake Development Co. Ltd., a Kentucky limited partnership,
("Lessee"), dated as of May 20, 1988, and recorded at Lease Book 17, Page 412,
of the Kenton County Clerk's records at Covington, Kentucky, as supplemented by
that certain agreement dated May 20, 1988 (the "Three Party Agreement"), between
Lessor, Lessee, and the Trustees for the Cincinnati Southern Railway (the
"Lease"). Lessor has been advised that in connection with the acquisition by RRC
Acquisitions Two, Inc., a Florida corporation, and/or Regency Centers, L.P., a
Delaware limited partnership ("Transferee") of Silverlake Shopping Center, of
which the leased premises is a part, that Transferee requests certain
certifications from Lessor concerning various matters under the Lease. Lessor
has been further advised that Regency Realty Corporation, a Florida corporation
("Regency"), is the sole general partner of Regency Centers, L.P.
The undersigned hereby certifies to Transferee and Regency as follows:
1. The Lease has not been supplemented or amended. According to Lessor's
records, the current lessee under the Lease is Silverlake Development Co. Ltd.
2. The Lease is in good standing and in full force and effect. There is
no default existing thereunder to the knowledge of Lessor.
3. All rents and other sums payable under the Lease to Lessor through
the date hereof have been paid. The current annual rental under the Lease is
$__________, and such rate continues through _______________.
4. There exists no offset, counterclaim or defense under the Lease in
favor of Lessor.
5. To the knowledge of Lessor, no default exists under the "Master
Lease" identified in the third recital paragraph of the Three Party Agreement,
and the Master Lease is in good standing and in full force and effect.
6. Lessor hereby consents to the assignment of the Lease to Transferee
or to any affiliate of Transferee. Upon notification from Lessee and Transferee
of the closing of Transferee's acquisition of the Shopping Center, Lessor will
recognize Transferee as the lessee under the Lease, and Transferee shall be
entitled to all rights and privileges as lessee thereunder.
7. In the event that Lessor assigns the Lease to Transferee, and
Transferee accepts all rights and liabilities under the Lease, Lessor hereby
releases Silverlake Development Co. Ltd. from all further liability under the
Lease as of the effective date of such assignment.
Very truly yours,
The Cincinnati, New Orleans and Texas Pacific
Railway Company, an Ohio corporation
By:
Its:
<PAGE>
EXHIBIT F
Limited Warranty Deed
Silverlake Development Co., Ltd., a Kentucky limited partnership
("Grantor), for Nine Million Two Hundred Thirty-Eight Thousand and No/100
Dollars ($9,238,000.00) and other good and valuable consideration paid, receipt
of which is hereby acknowledged, grants, with limited warranty covenants,
Regency Centers, L.P., a Delaware limited partnership ("Grantee"), the following
real property:
Situated in the City of Erlanger, Kenton County, Kentucky, and being
more particularly described in Exhibit A which is attached hereto and
incorporated herein by reference (the "Property").
Subject to those matters set forth in Exhibit B which is attached hereto
and incorporated herein by reference.
Prior Instrument Reference: Book 948, Page 266, Kenton County, Kentucky
Records.
IN WITNESS WHEREOF, Silverlake Development Co., Ltd. has caused this deed
to be executed as of the ___ day of _________________, 1998.
Signed and acknowledged SILVERLAKE DEVELOPMENT CO., LTD.,
in the presence of: a Kentucky limited partnership
_______________________________ By:___________________________________
Print Name:______________________ _____________________, General Partner
- -------------------------------
Print Name:______________________
STATE OF OHIO
COUNTY OF HAMILTON, SS:
The foregoing instrument was acknowledged before me this ______
day of _________________, 1998, by ____________________, authorized general
partner as his free act and deed and the free act and deed of Silverlake
Development Co., Ltd., a Kentucky limited partnership.
-----------------------------------
Notary Public
CONSIDERATION CERTIFICATE
Being first duly sworn, the undersigned state that the
consideration set forth in the foregoing Deed is true and correct and is the
full consideration paid for the above described property.
STATE OF OHIO
COUNTY OF HAMILTON, SS:
The foregoing instrument was acknowledged before me this ______
day of _________________, 1998, by ____________________, authorized general
partner as his free act and deed and the free act and deed of Silverlake
Development Co., Ltd., a Kentucky limited partnership.
-----------------------------------
Notary Public
STATE OF ________________
COUNTY OF ______________, SS:
The foregoing instrument was acknowledged before me this ______
day of _________________, 1998, by ____________________, authorized general
partner as his free act and deed and the free act and deed of Regency Centers,
L.P., a Delaware limited partnership.
-----------------------------------
Notary Public
This instrument prepared by:
- --------------------------
Charles C. Bissinger, Jr., Esq.
Vorys, Sater, Seymour and Pease LLP
Suite 2100
221 East Fourth Street
Box 0236
Cincinnati, Ohio 45201-0236
<PAGE>
EXHIBIT B
(i) Liens for taxes and assessments, if any, not payable on or before the
date hereof;
(ii) Rights of tenants under existing leases and other occupancy agreements
permitting persons to lease or occupy all or a portion of the Property, but
excluding any subleases or occupancy agreements to which Grantor is not a
party.;
(iii) Easements, agreements, covenants, conditions, restrictions, and legal
highways of record.
(iv) Matters which would be disclosed by an accurate survey of the Property;
(v) Zoning, building code, subdivision and other governmental rules,
regulations, requirements and laws; and
(vi) Liens, encumbrances and other interests created by, suffered by or arising
out of the acts of, Grantee or any person or entity claiming by or through
Grantee.
<PAGE>
EXHIBIT G
ASSIGNMENT OF LEASES AND TENANCIES
THIS ASSIGNMENT is made this _______ day of ___________, 1998, by and
between SILVERLAKE DEVELOPMENT CO., LTD. a Kentucky limited partnership whose
address is 2690 Madison Road, Cincinnati, Ohio 45208 ("Assignor"), and REGENCY
CENTERS, L.P., a Delaware limited partnership, whose address is Suite 200, 121
W. Forsyth Street, Jacksonville, Florida 32202 ("Assignee").
In consideration of Ten dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Assignor hereby transfers and assigns to Assignee all of the Assignor's right
title and interest in and to the leases and tenancies set forth in Schedule 1
attached hereto (the "Leases"), including without limitation the right to
receive rentals accruing thereunder after ____________, 1998 (the "Allocation
Date"), together with all security deposits, advance rentals and all other
deposits, and any interest, if any, which has accrued thereon for the benefit of
any tenant thereof (collectively "Deposits"), relating to the following
described land, lying and being in the County of Kenton, Commonwealth of
Kentucky, to wit:
See Exhibit "A" attached hereto (the "Property")
Except as expressly set forth herein or in the Purchase and Sale
Agreement with respect to the Property between Assignor and Assignee, dated as
of __________, 1998 (the "Purchase Agreement"), this Assignment is made by
Assignor without any representations or warranties of any kind. Without limiting
the generality of the immediately preceding sentence, this Assignment shall be
subject to the provisions of Section 4.3 and 10.14 of the Purchase Agreement,
which are incorporated herein by reference.
Assignee agrees to indemnify and hold Assignor harmless from any claim
or demand first arising under the Leases (or any of them), and accruing after
the Allocation Date. Assignor agrees to indemnify and hold Assignee harmless
from any claim or demand made against the Landlord under the Leases (or any of
them) first arising and accruing on or prior to the Allocation Date.
This Assignment shall be binding upon and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date set out above.
Witnesses: SILVERLAKE DEVELOPMENT CO., LTD.,
a Kentucky limited partnership
By:
As to Assignor Name:
general partner
"ASSIGNOR"
As to Assignor
REGENCY CENTERS, L.P.,
a Delaware limited partnership
By: REGENCY CENTERS, INC., a
Florida corporation, its General
Partner
By:
As to Assignee Name:
Its:
Date: , 1998
As to Assignee
Tax Identification No.
"ASSIGNEE"
STATE OF OHIO
COUNTY OF HAMILTON
The foregoing instrument was acknowledged before me this _______ day of
_______________, 1998, by _____________________________, the general partner of
SILVERLAKE DEVELOPMENT CO., LTD., a Kentucky limited partnership, who is
personally known to me or who has produced __________________________ as
identification.
Name:
Notary Public, State of
My Commission Expires:
My Commission Number is:
<PAGE>
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this _______ day of
________________, 1998, by ____________________________, as ________________ of
REGENCY REALTY CORPORATION, a Florida corporation, the general partner of
REGENCY CENTERS, L.P., a Delaware limited partnership, on behalf of said limited
partnership, who is personally known to me or who has produced
______________________ as identification.
Name:
Notary Public, State of
My Commission Expires:
My Commission Number is:
<PAGE>
SCHEDULE 1
Rent Roll
<PAGE>
- 2 -
EXHIBIT "A"
Legal Description
<PAGE>
EXHIBIT H
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS AGREEMENT is made this _______ day of ___________, 1998, by and
between SILVERLAKE DEVELOPMENT CO., LTD., a Kentucky limited partnership, whose
address is 2690 Madison Road, Cincinnati, Ohio 45208 ("Assignor"), and REGENCY
CENTERS, L.P., a Delaware limited partnership, whose address is Suite 200, 121
W. Forsyth Street, Jacksonville, Florida 32202 ("Assignee").
In consideration of Ten dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Assignor hereby transfers and assigns to Assignee all of the Assignor's right
title and interest in and to a Lease executed by and among the Cincinnati, New
Orleans and Texas Pacific Railway Company, an Ohio corporation ("Lessor"), and
Silverlake Development Co., Ltd., a Kentucky limited partnership, ("Lessee"),
dated as of May 20, 1988, and recorded at Lease Book 17, Page 412, of the Kenton
County Clerk's records at Covington, Kentucky, as supplemented by that certain
agreement dated May 20, 1988 (the "Three Party Agreement"), between Lessor,
Lessee, and the Trustees for the Cincinnati Southern Railway (the "Lease"),
TOGETHER WITH the estates and interests created by the Lease in and to the
following described lands, lying and being in the County of Kenton, Commonwealth
of Kentucky, to wit:
(See Exhibit "A" attached hereto)
Assignee hereby assumes the obligations of the lessee under the Lease
from and after _____________, 1998 (the "Allocation Date"), and Assignee agrees
to indemnify and hold Assignor harmless from any claim or demand first arising
under the Lease and accruing after the Allocation Date. Assignor agrees to
indemnify and hold Assignee harmless from any claim or demand made against the
Landlord under the Lease first arising and accruing on or prior to the
Allocation Date.
This Assignment shall be binding upon and inure to the benefit of the
parties hereto, their heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date set out above.
Witnesses: SILVERLAKE DEVELOPMENT CO., LTD.,
a Kentucky limited partnership
By:
As to Assignor Name:
general partner
"ASSIGNOR"
As to Assignor
REGENCY CENTERS, L.P.,
a Delaware limited partnership
By: REGENCY CENTERS, INC., a
Florida corporation, its General
Partner
By:
As to Assignee Name:
Its:
Date: , 1998
As to Assignee
Tax Identification No.
"ASSIGNEE"
<PAGE>
STATE OF OHIO
COUNTY OF HAMILTON
The foregoing instrument was acknowledged before me this _____ day of
___________, 1998, by _________________________, the general partner of
SILVERLAKE DEVELOPMENT CO., LTD., a Kentucky limited partnership, who is
personally known to me or who has produced __________________________ as
identification.
Name:
Notary Public, State of
My Commission Expires:
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this ___ day of
_______, 1998, by _____________________________, as _______________________ of
REGENCY REALTY CORPORATION, a Florida corporation, the general partner of
REGENCY CENTERS, L.P., a Delaware limited partnership, on behalf of said limited
partnership, who is personally known to me or who has produced
______________________ as identification.
Name:
Notary Public, State of
My Commission Expires:
My Commission Number is:
This instrument prepared by:
- -----------------------
Charles C. Bissinger, Jr.
Vorys, Sater, Seymour & Pease LLP
Atrium Two, Suite 2100
221 East Fourth Street
Cincinnati, Ohio 45202
<PAGE>
- 2 -
EXHIBIT "A"
Legal Description
<PAGE>
EXHIBIT I
BILL OF SALE
FOR VALUE RECEIVED, this ______ day of ___________, 1998, the
undersigned, SILVERLAKE DEVELOPMENT CO., LTD., a Kentucky limited partnership,
whose address is 2690 Madison Road, Cincinnati, Ohio 45208 ("Grantor"), does
hereby sell, transfer, and assign unto REGENCY CENTERS, L.P., a Delaware limited
partnership, whose address is Suite 200, 121 W. Forsyth Street, Jacksonville
Florida, 32202 ("Grantee"), all "Personal Property" and "Materials" (as defined
in the Purchase and Sale Agreement dated April ___, 1998, as amended, between
Grantor and Grantee, (the "Purchase Agreement")), as amended, of Grantor,
located on the lands described in Exhibit "A" attached hereto.
Except as expressly set forth herein or in the Purchase Agreement, this
Assignment is made by Grantor without any representations or warranties of any
kind. Without limiting the generality of the immediately preceding sentence,
this Assignment shall be subject to the provisions of Sections 4.3 and 10.14 of
the Purchase Agreement, which are incorporated herein by reference.
Grantor warrants that the Personal Property and Materials are free of
all encumbrances created by it and that Grantor will defend the title to such
Personal Property and Materials against the claims of all persons claiming by,
through or under Grantor, but not otherwise.
IN WITNESS WHEREOF, Grantor has executed these presents as of the day
and year first above written.
Witnesses: SILVERLAKE DEVELOPMENT CO., LTD.,
a Kentucky limited partnership
By:
Name:
general partner
Name:
<PAGE>
- 3 -
EXHIBIT "A"
Lands Upon Which Personal Property or Materials, if Any, Are Located
<PAGE>
EXHIBIT J
Audit Representation Letter
-------------------------
(Acquisition Completion Date)
KPMG Peat Marwick LLP
Suite 2700
One Independent Drive
Jacksonville, Florida 32202
Dear Sirs:
We are providing this letter in connection with your audit of the
Statement of Revenues and Certain Expenses for the twelve months ended
_________________, for the purpose of expressing an opinion as to whether the
financial statement presents fairly, in all material respects, the results of
its operations of _____________________ in conformity with generally accepted
accounting principles.
Certain representations in this letter are described as being limited to
matters that are material. Items are considered material, regardless of size, if
they involve an omission or misstatement of accounting information that, in the
light of surrounding circumstances, makes it probable that the judgment of a
reasonable person relying on the information would be changed or influenced by
the omission or misstatement.
We confirm, to the best of our knowledge and belief, the following
representations made to you during your audit:
1. We have made available to you:
a. All financial records and related data relating to the subject
twelve months, which you have requested.
b. All agreements or amendments to agreements which would have a
material impact on the Statement of Revenues and Certain Expenses.
2. There have been no:
a. Known instances of fraud involving management or employees who
have significant roles in internal control.
b. Known instances of fraud involving others that could have a
material effect on the Statement of Revenue and Certain Expenses.
c. Known violations or possible violations of laws or
regulations, the effects of which should be considered for disclosure in the
Statement of Revenue and Certain Expenses or as a basis for recording a loss
contingency.
3. There are no:
a. Unasserted claims or assessments that our lawyers have advised
us are probable of assertion and would be required to be disclosed in accordance
with Statement of Financial Accounting Standards No. 5 Accounting for
Contingencies (SFAS No. 5).
b. Material gain or loss contingencies (including oral and
written guarantees) that would be required to be accrued or disclosed by SFAS
No. 5.
c. Material transactions that have not been properly recorded in
the accounting records underlying the Statement of Revenues and Certain
Expenses.
d. Events that have occurred subsequent to _______________ and
through the date of this letter that would require adjustment to or disclosure
in the Statement of Revenues and Certain Expenses, except the proposed sale of
the subject property.
4. The Company has complied with all aspects of contractual agreements
that would have a material effect on the Statement of Revenues and Certain
Expenses in the event of noncompliance.
5. All related party transactions have been properly recorded or
disclosed in the Statement of Revenues and Certain Expenses.
Very truly yours,
"Seller/Manager"
Name
Title
04/16/98 - 0197196.01
<PAGE>
